author: Mr. Justice Clark Mr. Justice White,

text:
    MEYER v. UNITED STATES.
    No. 61.
    Argued October 24, 1963.
    Decided December 16, 1963.

      Samuel W. Sherman argued the cause for petitioner. With him on the brief was Martin A. Oettinger.

      Joseph Kovner argued the cause for the United States. With him on the brief were Solicitor General Cox, Assistant Attorney General Oberdorfer and Louis F. Claiborne.

      Richard Katcher filed a brief for Lillian Wintner, as amicus curiae, urging reversal.
   Mr. Justice Clark

delivered the opinion of the Court.

The ultimate issue in this case is the applicability of the doctrine of marshaling of assets. The Government urges that it be applied to effect the collection of its junior income tax lien on the cash surrender value of certain life insurance policies. The senior lien is secured by the entire proceeds of the policies and absorbs practically all of their cash surrender value. The proceeds of the policies are exempt from levy by creditors of the insured under state law.

In 1943 the deceased, Peter Meyer, pledged his insurance policies to a bank as collateral security for a loan, giving the bank the right to satisfy its claim out of the “net proceeds of the policy when it becomes a claim by death.” When Mr. Meyer died, the insurance company paid the amount of the loan to the bank and the balance to the petitioner, Mr. Meyer’s widow and beneficiary. The Commissioner claims, however, that the insurance proceeds must be marshaled, that the Government’s admittedly junior tax lien must be paid from the cash surrender value of the policies and the bank from the remaining proceeds. The District Court agreed, 202 F. Supp. 606, and the Court of Appeals affirmed, 309 F. 2d 131. We granted certiorari because of the importance of the question in the administration of the income tax laws. 372 U. S. 934. We disagree with both courts and reverse the judgment.

I.

Peter Meyer owned four life insurance policies which named the petitioner, his wife, as beneficiary. Their face amount was $50,000 and their cash surrender value at his death was $27,285.87. He had retained the usual powers under such policies, namely, to change the beneficiaries, demand the cash surrender value and assign the policies. In 1943, long before the tax assessments in this suit, he assigned the policies as collateral security for the repayment of a loan from the Huntington National Bank of Columbus, Ohio. The bank was given the right, in the event of death, to satisfy its claim out of the “net proceeds of the policy when it becomes a claim by death.” At the time of Meyer’s death, $26,844.66 was due on this loan.

It is not disputed that the Commissioner assessed deficiencies covering income taxes due by Mr. Meyer for the years 1945 and 1946, with a balance of $6,159.09 plus interest due at his death, and that notice of lien was filed in 1955. Meyer died on December 28, 1955, and petitioner was named executrix of his estate. After the insurance company paid the full amount of the loan to the bank and the balance remaining due on the policies to the petitioner, this suit was begun against petitioner, individually and as executrix, for the recovery of the full amount of the taxes due. Petitioner tendered the sum of $441.21, the difference between the cash surrender value and the amount paid to the bank, but claimed the remainder as exempt under New York Insurance Law § 166. The District Court, however, granted summary judgment for the Government on the theory that the tax lien could be satisfied out of that portion of the proceeds that represented the cash surrender value by marshaling the funds and paying the bank’s claim from the remainder of the proceeds. It followed the holding of the Second Circuit in United States v. Behrens, 230 F. 2d 504. The Court of Appeals affirmed on the same basis. We cannot agree.

II.

This Court has held and the parties do not dispute that: absent a lien, recovery of unpaid federal income taxes from a beneficiary of insurance can be had only to the extent that applicable state law permits such recovery by other creditors of the insured, Commissioner v. Stern, 357 U. S. 39, 46-47 (1958); the insured taxpayer’s “property and rights to property” under § 3670 of the Internal Revenue Code of 1939 are measured by the policy contract as enforced by applicable state law, United States v. Bess, 357 U. S. 51, 55-56 (1958); the cash surrender value of an insurance policy, where subject to the control of the insured, is “property and rights to property” under the section, id., at 59; finally, the priority of liens is determined by the principle “first in time, first in right,” United States v. New Britain, 347 U. S. 81 (1954). Applying New York law, this results in the bank’s lien being the senior one on the entire proceeds of the policies with the tax lien only attaching to the cash surrender value subject to the bank’s claim. The narrow question remaining is whether in such a situation the doctrine of marshaling ,of assets is compelled.

III.

This Court has said that “[t]he equitable doctrine of marshalling [sic] rests upon the principle that a creditor having two funds to satisfy his debt, may not by his application of them to his demand, defeat another creditor, who may resort to only one of the funds.” Sowell v. Federal Reserve Bank, 268 U. S. 449, 456-457 (1925). The Courts of Appeals of two Circuits have applied the doctrine, despite state law, to the collection of federal tax liens. United States v. Behrens, supra, and United States v. Wintner, 200 F. Supp. 157, aff’d 312 F. 2d 749 (C. A. 6th Cir.). We note, however, that Behrens antedates our Stern and Bess opinions as well as those in Aquilino v. United States, 363 U. S. 509 (1960), and United States v. Durham Lumber Co., 363 U. S. 522 (1960). These latter two cases held that competing liens of the Government for taxes and of subcontractors for labor and materials to a fund due the taxpayer under a general construction contract were controlled by applicable state law. This Court has never applied the doctrine of marshaling to federal income tax liens although it did deny the petition for certiorari filed in the Behrens case, supra, 351 U. S. 919. Nor has the Congress seen fit to lay down any rules with reference to the application of the doctrine, apparently leaving the problem to this Court.

IV.

In considering the relevance of the doctrine here it is well to remember that marshaling is not bottomed on the law of contracts or liens. It is founded instead in equity, being designed to promote fair dealing and justice. Its purpose is to prevent the arbitrary action of a senior lienor from destroying the rights of a junior lienor or a creditor having less security. It deals with the rights of all who have an interest in the property involved and is applied only when it can be equitably fashioned as to all of the parties. Thus, state courts have refused to apply it where state-created homestead exemptions would be destroyed, Sims v. McFadden, 217 Ark. 810, 233 S. W. 2d 375; or where the rights of insurance beneficiaries would be adversely affected, Bruns v. First Trust & Deposit Co., 250 App. Div. 370, 295 N. Y. Supp. 412; or where the rights of third parties having equal equity would be prejudiced, Barbin v. Moore, 85 N. H. 362, 159 A. 409; or where the “head of the household” exemption was involved, Westgrove Savings Bank v. Dunlavy, 190 Iowa 1054, 181 N. W. 404, and Pugh v. Whitsitt & Guerry, 161 S. W. 953 (Tex. Ct. Civ. App.). Federal courts have likewise accepted this principle of the nonapplicability of the doctrine where, as here, one of the funds is exempt under state law. See In re Bailey, 176 F. 990, where a state legislative homestead exemption was held to be a superior equity in the hands of a bankrupt, preventing the marshaling of assets to his disadvantage; Robert Moody & Son v. Century Savings Bank, 239 U. S. 374, 378 (1915), where Iowa’s requirement that a homestead, even when validly mortgaged, may be sold only for a deficiency remaining after exhausting all other property was declared available to a junior mortgagee to prevent a marshaling of assets; and Lockwood v. Exchange Bank, 190 U. S. 294, 300-301 (1903), where a waiver of state exemption statutes was held to have no effect in bankruptcy since the title to the exempted property remained in the bankrupt and never reached the trustee’s hands. It, therefore, seems clear that the courts have considered state exemption statutes when weighing the equities between parties to determine the applicability of the marshaling doctrine. This is in line with that deference to state law of our recent cases, discussed above, holding that state law controls the determination of what is included within the “property or right to property” covered by § 3670 and upon which the federal tax lien could attach. In addition, this Court in United States v. Brosnan, 363 U. S. 237 (1960), when faced with a comparable problem involving collection of federal taxes, found

“it desirable to adopt as federal law state law governing divestiture of federal tax liens, except to the extent that Congress may have entered the field. It is true that such liens form part of the machinery for the collection of federal taxes .... However, when Congress resorted to the use of liens, it came into an area of complex property relationships long since settled and regulated by state law. . . . We think it more harmonious with the tenets of our federal system and more consistent with what Congress has already done in this area, not to inject ourselves into the network of competing private property interests, by displacing well-established state procedures governing their enforcement, or superimposing on them a new federal rule.” At 241-242.

Congress has not seen fit to change the rules this Court fashioned in these cases. Indeed, it has not only permitted them to stand but, as was said in Holden v. Stratton, 198 U. S. 202, 213-214 (1905), “It has always been the policy of Congress, both in general legislation and in bankrupt acts, to recognize and give effect to the state exemption laws.” There are many examples, among which is the incorporation in the bankruptcy law of the exemptions made available by the State of a bankrupt’s domicile. See 52 Stat. 847, 11 U. S. C. § 24. This includes the exemption of life insurance proceeds. See Holden v. Stratton, supra, at 212-213. In addition, other exemptions have been added from time to time, such as the exclusion from taxation of the benefits from life insurance policies, Internal Revenue Code of 1954, § 101 (a), and the exception of life insurance benefits in which the surviving spouse has exclusive power of appointment from the rule that terminal interests may not qualify for the marital deduction, Internal Revenue Code of 1954, §2056 (b)(6).

We cannot overlook this long-established policy. In the absence of a definitive statutory rule to the contrary we therefore adopt the state rule and refuse to extend the equitable doctrine of marshaling assets to this situation. New York has a specific statute which exempts insurance benefits of a widow from the claim of creditors of her husband’s estate and its courts have refused to marshal assets where to do so will diminish those rights. Bruns v. First Trust & Deposit Co., supra. To apply marshaling in this case would overturn New York’s beneficent policy and, in addition, would enlarge the federal tax lien that the Congress has provided in § 3670. This we will not do. The judgment is therefore

Reversed.

Mr. Justice White,

with whom Mr. Justice Harlan and Mr. Justice Stewart concur,

dissenting.

I cannot for several reasons join the Court in reversing the decision of the Court of Appeals.

1. It is, of course, federal law which should rule this case. We are dealing here with a federal income tax lien, created by congressional enactment. Problems of interpretation under that legislation are federal problems, and should be governed as nearly as may be, by principles of uniform application throughout the various States. Determining the priority of § 3670 liens by reference to state law may permit the United States to assert its lien in one State but forbid it in another in precisely the same circumstances.

The very proposition upon which the Court’s decision seems to rest — that the Government’s lien under § 3670 depends on whether state law recognizes similar liens asserted by private creditors — was rejected in United States v. Bess, 357 U. S. 51, where it was argued that the United States had no claim against the cash surrender value of insurance policies because a New Jersey statute barred the similar claims of private creditors. This Court looked to local law to determine whether the taxpayer had “sufficient interests ... to satisfy the requirements of § 3670” but declared state law “inoperative to prevent the attachment of liens created by federal statutes in favor.of the United States. . . . The fact that in § 3691 Congress provided specific exemptions from distraint is evidence that Congress did not intend to recognize further exemptions which would prevent attachment of liens under § 3670.”

The basic principle in Bess was further amplified by Aquilino v. United States, 363 U. S. 509, and United States v. Durham Lumber Co., 363 U. S. 522, where the following guidelines were laid down:

“[A]s we held only two Terms ago, Section 3670 'creates no property rights but merely attaches consequences, federally defined, to rights created under state law . . . .’ United States v. Bess, 357 U. S. 51, 55. However, once the tax lien has attached to the taxpayer’s state-created interests, we enter the province of federal law, which we have consistently held determines the priority of competing liens asserted against the taxpayer’s 'property’ or 'rights to property.’ [Citing cases in this Court.] The application of state law in ascertaining the taxpayer’s property rights and of federal law in reconciling the claims of competing lienors is based both upon logic and sound legal principles. This approach strikes a proper balance between the legitimate and traditional interest which the State has in creating and defining the property interest of its citizens, and the necessity for a uniform administration of the federal revenue statutes.” 363 U. S., at 513-514.

Undoubtedly the deceased taxpayer here possessed property — the cash surrender value of insurance policies — to which the tax lien attached by the force of federal law. The problem remaining is the reconciliation of the competing claims to the proceeds. Under Bess, Aquilino and Durham the problem must be solved as a matter of federal law. State law may be one of the sources guiding the formation of federal policy, but according to prior cases in this Court, it is not controlling and does not have the compelling force given it by the Court.

2. Whatever force local law is to have, however, I find it difficult to accept the Court’s exposition of New York policy.

Section 166 of the New York Insurance Law, the Court says, protects insurance benefits from the claims of creditors of the deceased insured. Obviously, however, no part of the proceeds of the policy, whether cash surrender value or otherwise, is protected from the claims of the secured creditor who has taken an assignment of the policy as collateral security during the lifetime of the insured. This is apparent from the face of the statute itself, and in this very case no question has been raised about the rights of the bank, surely a creditor, to collect every dollar owed to it from the proceeds of the policy. Likewise, had there been no bank loan here, or had it been paid by the insured prior to his death, it is conceded that the federal tax lien would be satisfied from the proceeds to the extent of the cash surrender value. In fact, the beneficiary in this case paid over to the United States the portion of the cash surrender value remaining after the debt of the bank had been paid.

New York, therefore, cannot be said to have a policy of insulating the proceeds of insurance policies from the claims of creditors who have acquired a security interest in the proceeds during the lifetime of the insured. The insured in this case, the owner of the policy, could change the beneficiary and destroy the latter’s interest entirely. He could likewise encumber the proceeds and limit the beneficiary’s rights to the net amount remaining after the payment of creditors with liens on the proceeds. The protected interest of the beneficiary extends only to the net proceeds. In re Kelley’s Estate, 251 App. Div. 847, 296 N. Y. Supp. 923. The beneficiary has an unsecured claim, inferior to that of encumbrancers, but good as against unsecured creditors of the insured. This is what the New York policy is, as it seems to me.

Neither is there anything in Bruns v. First Trust & Deposit Co., 250 App. Div. 370, 295 N. Y. Supp. 412, which validates the Court’s definition of New York policy. In that case a bank held both insurance policies and other property as collateral security for debts owed it by the insured. The Appellate Division refused to permit collection of the bank loan from the insurance proceeds in order that unsecured creditors could resort to the other property held by the bank. The case prefers the beneficiary to the unsecured creditor who has no independent claim to the proceeds, but it does not suggest that those with security interests in the proceeds would be likewise subordinated.

Moreover, further question about New York policy is raised by In re Kelley’s Estate, supra, a case which is difficult to reconcile with Bruns. In that case, as in Bruns, the insured had assigned a policy and had pledged shares of stock as security for a bank loan. Upon his death the bank was paid from the insurance proceeds and the stock remained available to the executor and the insured’s estate. The Appellate Division apparently saw nothing wrong with such an application of the insurance proceeds, denied that the widow had any interest in them to the extent they were necessary to pay the bank loan and further denied the widow’s claim to be subrogated to the bank’s rights in the stock.

Twice — in this case and in United States v. Behrens, 230 F. 2d 504 (C. A. 2d Cir.) — the Court of Appeals has ordered payment of both the lien of a bank and the inferior federal tax lien. In neither case did it indicate it was trenching upon an established state policy involving marshaling of assets. If the result is to depend upon state policy, which at the very least is shrouded in doubt and which it seems to me is not what the Court says it is, I would follow our usual custom of leaving to the Court of Appeals the ascertainment of the local law in which it specializes. Pitching the result upon state law, even as a guide to the governing federal law, should lead to a remand rather than to decision here.

3. The deceased made the assignment to the bank in 1943. Deficiencies in federal income taxes for the years 1945 and 1946 were assessed on May 22,1946, and June 17, 1947, respectively. Partial payments were made upon the 1945 assessments, none on the 1946. The deceased in 1951 extended the time for collection of the 1945 deficiencies until 1956 and of the 1946 deficiency until 1957. He submitted an offer of compromise in 1955 which was rejected by the Government in May of that year. Notice of tax lien was filed in July 1955, and the deceased died the following December. At that time the cash surrender value of the policies had grown to $27,285.87 and the amount due on the bank loans totaled $26,844.66. The insurance company remitted the amount of the loans to the bank and paid the remainder of the proceeds to the named beneficiary of the policies. There are no facts or findings to indicate that the amount paid to the bank by the insurance company was paid from the cash surrender value. In these circumstances I see no reason for assuming that it was and no basis for forbidding collection of the tax lien from the amounts paid the beneficiary.

The deceased first reduced the beneficiary’s interest in the proceeds of the policies by making the assignment to the bank. He then allowed another lien to attach by his own default, thereby further invading the proceeds. Where there is no prior assignment, it is clear that the government lien effectively diminishes the proceeds in the hands of the beneficiary since the Government’s interest in the proceeds is superior to that of the beneficiary. It is unsound to hold, as the Court does, that the lien may not have like effect when the insured has given a prior lien on the proceeds to secure a bank loan. True, paying the tax lien from the cash surrender value results in the bank’s being paid from the remainder. But this is precisely what the insured arranged for since the loan, by its very terms, was collectible from any part of the proceeds, which were more than sufficient to pay both the loan and government lien.

Nor is there any superior equity in the beneficiary to prevent the application of the well-established rule of marshaling, a rule long recognized by this Court. It is not unreasonable to suppose that the beneficiary enjoyed the benefits of the bank loan which is here used to insulate the cash surrender value from the government lien. What is more, the insured and his family used and spent the income which should have been used to pay federal taxes which had been due and payable for many years. Paying both the bank and the tax lien from the proceeds is wholly consistent with the arrangements made by the insured and with this Court's holding in Bess.

Finally, the federal revenue deserves more protection than it receives today. The Court may now protect a widow, but the rule announced will protect all beneficiaries, varied as they may be. Congress has declared that the United States shall have a lien on the assets of those persons who do not discharge their federal tax obligations. This Court now creates an exception to that policy by holding that the tax lien may not be paid from the cash surrender value of the insurance policy, solely because prior to the attachment of the tax lien Mr. Meyer had assigned the entire proceeds as collateral for a bank loan. I would not invite or validate the utilization of continuing and growing bank loans for the sole purpose of insulating insurance proceeds from the federal tax lien which otherwise would be satisfied from the policy proceeds.

There are in this case two secured creditors and two funds. The total assets are sufficient to satisfy the claims of both creditors, but the junior claimant has a lien on only one of the funds. It is entirely appropriate here to require the payment of both liens.

For the foregoing reasons, I respectfully dissent.

       “1. If any policy of insurance has been or shall be effected by any person on his own life in favor of a third person beneficiary, or made payable, by assignment, change of beneficiary or otherwise, to a third person, such third person beneficiary, assignee or payee shall be entitled to the proceeds and avails of such policy as against the creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts of the person effecting the insurance.” New York Insurance Law § 166.

       Section 166 is quoted in part in the footnote to the Court’s opinion. It obviously protects assignees, even creditor-assignees, from the other creditors of the insured.

       “When the husband executed his certificate on August 15, 1932, revoking the designation of his wife as the absolute beneficiary and redesignating her as beneficiary subject to the assignment to the Manufacturers Trust Company, he thereby diminished' her interest in the policy pro tanto and, in effect, constituted the trust company the primary beneficiary to the extent necessary to satisfy its loan to him and appellant, the secondary beneficiary, as to any residue which may remain. Under section 52 of the Domestic Relations Law and section 55-a of the Insurance Law, the wife may acquire a vested irrevocable right to the proceeds of the policy, free from the claims of the husband’s creditors and representatives, only if the husband die without exercising his reserved right to change the beneficiary in accordance with the provisions of the policy. Here the husband exercised that right to the extent necessary to satisfy his loan. Hence, when the trust company applied the proceeds of the policy to the payment of the loan, it was not utilizing appellant’s property and she could not be subrogated to the rights of the bank with respect to the stock of the Fairview Foundry Incorporated.” In re Kelley’s Estate, 251 App. Div. 847-848, 296 N. Y. Supp. 923-924.

        United States v. Durham Lumber Co., 363 U. S. 522, 526-527; Propper v. Clark, 337 U. S. 472, 486-487.

       The Court of Appeals has frequently dealt with § 166 of the New York Insurance Law. See for example Fried v. New York Life Ins. Co., 241 F. 2d 504; United States v. Behrens, 230 F. 2d 504, cert. denied, 351 U. S. 919; Rowen v. Commissioner, 215 F. 2d 641.

       Where the tax lien is inferior to local lien A but superior to local lien B, the tax lien is to be paid even though lien A, superior to the federal lien, is cut out because under local law it is inferior to lien B. United States v. Buffalo Savings Bank, 371 U. S. 228; United States
        v. City of New Britain, 347 U. S. 81. In the case at bar there is more reason to recognize and pay the tax lien; for if it is paid, it is only an inferior interest, that of the beneficiary, which is invaded.

       “The equitable doctrine of marshalling rests upon the principle that a creditor having two funds to satisfy his debt, may not by his application of them to his demand, defeat another creditor, who may resort to only one of the funds.” Sowell v. Federal Reserve Bank, 268 U. S. 449, 456-457. See also Merrill v. National Bank of Jacksonville, 173 U. S. 131, 138; Scruggs v. Memphis & Charleston R. Co., 108 U. S. 368; Savings Bank v. Creswell, 100 U. S. 630, 641; Fenwick v. Chapman, 9 Pet. 461, 474 ; 2 Story’s Equity Jurisprudence, §§ 758, 760, 853-871; 2 Pomeroy's Equity Jurisprudence, §§396, 410; 4 Pomeroy’s Equity Jurisprudence, § 1414.

       Since § 166 would not protect the insurance proceeds from creditors’ claims where the insured or his estate is the beneficiary, I would suppose the Court’s opinion would likewise permit payment of the tax lien in such circumstances. Would the same apply to where the executor or administrator is the beneficiary? And what is the result when the beneficiary is the insured’s partner or business associate, or a corporation in which he has an interest?


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    FIELDS et al. v. CITY OF FAIRFIELD.
    No. 30.
    Argued December 10-11, 1963.
    —Decided December 16, 1963.

      Melvin L. Wulf argued the cause for appellants. With him on the brief were Charles Morgan, Jr. and Richard J. Medalie.

      Frank B. Parsons argued the cause and filed a brief for appellee.

      Assistant Attorney General Marshall, by special leave of Court, argued the cause for the United States, as amicus curiae, urging reversal. With him on the brief were Solicitor General Cox, Louis F. Claiborne, Harold H. Greene and Howard A. Glickstein.

      Jack Greenberg, James M. Ndbrit III and Shirley Fingerhood filed a brief for the N. A. A. C. P. Legal Defense and Educational Fund, Inc., as amicus curiae, urging reversal.
   Per Curiam.

The judgment of the Supreme Court of Alabama is reversed. Thompson v. City of Louisville, 362 U. S. 199; Garner v. Louisiana, 368 U. S. 157.


text:
    ALDRICH v. ALDRICH et al.
    No. 55.
    Argued October 24, 1963.
    —Decided November 12, 1963, that questions be certified to Supreme Court of Florida.
    Questions certified to Supreme Court of Florida December 16, 1963.

      Herman D. Rollins for petitioner.

      Charles M. Love for respondents.
   Per Curiam.

This Court, on its own motion, hereby certifies to the Supreme Court of Florida, pursuant to Rule 4.61, Florida Appellate Rules, the questions of law hereinafter set forth;

Statement of Facts.

Petitioner, Marguerite Loretta Aldrich, was granted a divorce from M. S. Aldrich by the Circuit Court of Dade County, Florida, by decree entered on May 31,1945. The jurisdiction of that court to award the divorce was not contested then, nor is it contested in this action.

The divorce decree awarded alimony to the plaintiff, in the following provision:

“4. That the defendant, Moriel Simeon Aldrich, be and he is hereby ordered and required to pay to the plaintiff, Marguerite Loretta Aldrich, the monthly sum of $250.00 as and for her permanent alimony, said sum to be paid to her monthly at the office of the Clerk of the Circuit Court of Miami, Dade County, Florida, and in the event the defendant, Moriel Simeon Aldrich, shall predecease the plaintiff, Marguerite Loretta Aldrich, said monthly sum of $250.00 shall, upon the death of said defendant, become a charge upon his estate during her lifetime; and this Court retains jurisdiction in respect thereto . . . .”

There was no prior express agreement between the parties that the estate would be bound. Subsequently, the divorce defendant petitioned the Florida court for a rehearing, which was denied, but the court reduced alimony from $250 to $215 per month. No appeal was taken by either party.

M. S. Aldrich died testate, a resident of Putnam County, West Virginia, on May 29, 1958. His will was duly probated in Putnam County and petitioner filed a claim against the estate for alimony which accrued after the death of M. S. Aldrich. The appraisal of the estate showed assets of $7,283.50. Petitioner commenced this action in the Circuit Court of Putnam County, West Virginia, in order to have her rights in the estate determined. She also demanded that certain allegedly fraudulent transfers of real and personal property made by M. S. Aldrich be set aside and the properties which were the subject of such transfers administered as a part of the estate, so as to be subject to her claim for alimony under the Florida divorce decree.

The defendants are identified as follows: William T. Aldrich is a son of M. S. Aldrich and petitioner, and Natalie Aldrich is the wife of William T. Aldrich. Angela Aldrich is the widow of M. S. Aldrich. M. S. Aldrich & Associates, Inc., is a corporation which petitioner alleges was principally, if not solely, owned by M. S. Aldrich during his lifetime or until shortly before his death. Aldrich-Slicer Company is a corporation, one of the organizers of which was William T. Aldrich. John C. White is executor of the last will and testament of M. S. Aldrich.

On motion for summary judgment by the defendants, the Circuit Court of Putnam County held that the decree of the Florida divorce court was invalid and unenforceable insofar as it purported to impose upon the estate of M. S. Aldrich an obligation to pay alimony accruing after his death. On appeal, the Supreme Court of Appeals of West Virginia affirmed the decision of the lower court, one judge dissenting. The majority and minority opinions of the West Virginia court are reported in Aldrich v. Aldrich, 147 W. Va. 269, 127 S. E. 2d 385. Review by this Court was sought and obtained on the basis of Art. IV, § 1, of the Constitution of the United States, which provides that “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial proceedings of every other State.” The case was heard on October 24, 1963, and on November 12, 1963, the Court issued a per curiam opinion, 375 U. S. 75, pursuant to which the following questions are certified to the Supreme Court of Florida:

1. Is a decree of alimony that purports to bind the estate of a deceased husband permissible, in the absence of an express prior agreement between the two spouses authorizing or contemplating such a decree?

2. If such a decree is not permissible, does the error of the court entering it render that court without subject matter jurisdiction with regard to that aspect of the cause?

3. If subject matter jurisdiction is thus lacking, may that defect be challenged in Florida, after the time for appellate review has expired, (i) by the representatives of the estate of the deceased husband or (ii) by persons to whom the deceased husband has allegedly transferred part of his property without consideration?

4. If the decree is impermissible but not subject to such attack in Florida for lack of subject matter jurisdiction by those mentioned in subparagraph 3, may an attack be successfully based on this error of law in the rendition of the decree?


author: Per Curiam. Mr. Justice Harlan,

text:
    EICHEL v. NEW YORK CENTRAL RAILROAD CO.
    No. 480.
    Decided December 16, 1963.

      Arnold B. Elkind and Richard C. Machcinski for petitioner.

      Gerald E. Dwyer for respondent.
   Per Curiam.

Petitioner, who had been employed by respondent New York Central Railroad for 40 years, brought this action against respondent under the Federal Employers’ Liability Act, 35 Stat. 65, as amended, 45 U. S. C. § 51 et seq., in the District Court for the Southern District of New York. The complaint alleged that in 1960, as a result of respondent’s negligence, petitioner suffered a permanently disabling injury. The jury returned a verdict of $51,000 for petitioner and the District Court entered judgment in accordance with that verdict. Respondent offered evidence that petitioner was receiving $190 a month in disability pension payments under the Railroad Retirement Act of 1937, 50 Stat. 309, as amended, 45 U. S. C. § 228b (a) 4. This evidence was offered for the purpose of impeaching the testimony of petitioner as to his motive for not returning to work and as to the permanency of his injuries. The trial court excluded the evidence in response to the objection of petitioner’s counsel. The Court of Appeals for the Second Circuit reversed, holding it prejudicial error to exclude the evidence of the disability pension, and remanded “for a new trial, limited, however, to the issues of injury and resulting damages . . . .” 319 F. 2d 12, 14. The court affirmed the judgment “as to the determination of negligence.” Ibid. We grant certiorari and reverse the judgment of the Court of Appeals.

Respondent does not dispute that it would be highly improper for the disability pension payments to be considered in mitigation of the damages suffered by petitioner. Thus it has been recognized that:

“The Railroad Retirement Act is substantially a Social Security Act for employees of common carriers. . . . The benefits received under such a system of social legislation are not directly attributable to the contributions of the employer, so they cannot be considered in mitigation of the damages caused by the employer.” New York, N. H. & H. R. Co. v. Leary, 204 F. 2d 461, 468, cert. denied, 346 U. S. 856.

Respondent argues that the evidence of the disability payments, although concededly inadmissible to offset or mitigate damages, is admissible as bearing on the extent and duration of the disability suffered by petitioner. At the trial counsel for respondent argued that the pension would show “a motive for [petitioner’s] not continuing work, and for his deciding not to continue going back to work after the last accident.” On the basis of this argument the Court of Appeals concluded that the disputed evidence should have been admitted because: “Its substantial probative value cannot reasonably be said to be outweighed by the risk that it will . . . create substantial danger of undue prejudice through being considered by the jury for the incompetent purpose of a set-off against lost earnings.” 319 F. 2d, at 20.

We disagree. In our view the likelihood of misuse by the jury clearly outweighs the value of this evidence. Insofar as the evidence bears on the issue of malingering, there will generally be other evidence having more probative value and involving less likelihood of prejudice than the receipt of a disability pension. Moreover, it would violate the spirit of the federal statutes if the receipt of disability benefits under the Railroad Retirement Act of 1937, 50 Stat. 309, as amended, 45 U. S. C. § 228b (a) 4, were considered as evidence of malingering by an employee asserting a claim under the Federal Employers’ Liability Act. We have recently had occasion to be reminded that evidence of collateral benefits is readily subject to misuse by a jury. Tipton v. Socony Mobil Oil Co., Inc., 375 U. S. 34. It has long been recognized that evidence showing that the defendant is insured creates a substantial likelihood of misuse. Similarly, we must recognize that the petitioner’s receipt of collateral social insurance benefits involves a substantial likelihood of prejudicial impact. We hold therefore that the District Court properly excluded the evidence of disability payments. Accordingly, the judgment of the Court of Appeals is reversed and the case remanded for proceedings consistent with this opinion.

Reversed and remanded.

Mr. Justice Douglas concurs in the result.

Mr. Justice Harlan,

concurring in part and dissenting in part.

Once again, I am obliged to record' my view that cer-tiorari should not have been granted in a case of this kind, involving only a question of the admissibility of evidence in a suit under the Federal Employers’ Liability Act, 35 Stat. 65, as amended, 45 U. S. C. § 51. See my dissenting opinion in Tipton v. Socony Mobil Oil Co., Inc., earlier this Term, ante, p. 37.

On the merits, I agree with the majority that the judgment below should be reversed, but for different reasons. Whether or not evidence that the petitioner was receiving disability pension payments under the Railroad Retirement Act of 1937, 50 Stat. 307, as amended, 45 U. S. C. § 228a, should have been admitted depends on a balance between its probative bearing on the issue as to which it was offered, in this case the respondent’s claim that petitioner was a malingerer, and the possibility of prejudice to the petitioner resulting from the jury’s consideration of the evidence on issues as to which it is irrelevant. When a balance of this sort has to be struck, it should, except in rare instances, be left to the discretion of the trial judge, subject to review for abuse. See Uniform Rules of Evidence, Rule 45; Model Code of Evidence, Rule 303. It is he who is in the best position to weigh the relevant factors, such as the value of the disputed evidence as compared with other proof adducible'to the same end and the effectiveness of limiting instructions. Believing that this rule should have been followed here, I concur in reversing the judgment below, which not only held the evidence not inadmissible as a matter of law but also directed its admission on retrial.

For the same reasons, however, I dissent from the majority’s holding that the evidence is required to be excluded. I see no reason why evidentiary questions should be given different treatment when they arise in an F. E. L. A. case than when they arise in other contexts.

       See Sinovich v. Erie R. Co., 230 F. 2d 658, 661; Page v. St. Louis S. R. Co., 312 F. 2d 84, 94. See also Gregory and Kalven, Cases and Materials on Torts (1959), pp. 480-482; McCormick, Damages (1935), p. 310, n. 2; Comment, 38 Mich. L. Rev. 1073.

       Cf. McCormick, Evidence (1954), c. 19; 2 Wigmore, Evidence (1940), § 282a.

       See Kalven, The Jury, the Law, and the Personal Injury Damage Award, 19 Ohio St. L. J. 158, 169.

       See notes 1-3, supra.


text:
    FAIR DRAIN TAXATION, INC., et al. v. CITY OF ST. CLAIR SHORES et al.
    No. 604.
    Decided December 16, 1963.

      Wilson M. Jackson, William L. Sanders and Raymond M. Jacobson for appellants.

      John H. Yoe and Charles R. Moon for appellees.
   Per Curiam.

The motion to affirm is granted and the judgment is affirmed.


text:
    MACON v. INDIANA.
    No. 37,
    Misc.
    Decided December 16, 1963.
    Petitioner pro se.

      Edwin K. Steers, Attorney General of Indiana, for respondent.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. The judgment is vacated and the case is remanded to the Supreme Court of Indiana for further consideration in light of Lane v. Brown, 372 U. S. 477.


text:
    SMITH v. CALIFORNIA.
    No. 72.
    Decided December 16, 1963.

      Stanley Fleishman and Sam Rosenwein for petitioner.

      Roger Amebergh, Philip E. Grey and Wm. E. Doran for respondent.
    Briefs of amici curiae, urging reversal, were filed by Edward de Grazia for Allen et al.; by Thomas M. Thomas for American Library Association, and by Nathan L. Schoichet, A. L. Wirin and Fred Okrand for American Civil Liberties Union of Southern California.

      Charles H. Keating, Jr. for Citizens for Decent Literature, Inc., et al., as amici curiae, in support of respondent.
   Per Curiam.

The motion of Citizens for Decent Literature, Inc., et al., for leave to file a brief, as amici curiae, is granted. The judgment is vacated and the case is remanded to the Appellate Department of the Superior Court of California, County of Los Angeles, for further consideration in light of the decision of the Supreme Court of California in Zeitlin v. Arnebergh, 59 Cal. 2d 901, 383 P. 2d 152.


text:
    McALLISTER v. LOUISIANA.
    No. 721,
    Misc.
    Decided December 16, 1963.

      Ernest A. Carrere, Jr. for appellant.
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for writ of certiorari, certiorari is denied.


author:
Mr. Justice Douglas
      Mr. Justice Harlan, Mr. Justice Black,

text:
    CAREY, PRESIDENT OF THE INTERNATIONAL UNION OF ELECTRICAL, RADIO & MACHINE WORKERS, AFL-CIO, v. WESTINGHOUSE ELECTRIC CORP.
    No. 21.
    Argued December 11-12, 1963.
    —Decided January 6, 1964.

      Benjamin C. Sigal argued the cause for petitioner. With him on the briefs were David S. Davidson and Isadore Katz.

      John F. Hunt, Jr. argued the cause for respondent. With him on the brief was James F. Smith.

      Solicitor General Cox, by special leave of Court, argued the cause for the United States, as amicus curiae, urging reversal. With him on the brief were Arnold Ordman, Dominick L. Manoli and Norton J. Come.

   Mr. Justice Douglas

delivered the opinion of the Court.

The petitioner union (IUE) and respondent employer (Westinghouse) entered into a collective bargaining agreement covering workers at several plants including one where the present dispute occurred. The agreement states that Westinghouse recognizes IUE and its locals as exclusive bargaining representatives for each of those units for which IUE or its locals have been certified by the National Labor Relations Board as the exclusive bargaining representative; and the agreement lists among those units for which IUE has been certified a unit of “all production and maintenance employees” at the plant where the controversy arose, “but excluding all salaried technical . . . employees.” The agreement also contains a grievance procedure for the use of arbitration in case of unresolved disputes, including those involving the “interpretation, application or claimed violation” of the agreement.

IUE filed a grievance asserting that certain employees in the engineering laboratory at the plant in question, represented by another union, Federation, which had been certified as the exclusive bargaining representative for a unit of “all salaried, technical” employees, excluding “all production and maintenance” employees, were performing production and maintenance work. Westinghouse refused to arbitrate on the ground that the controversy presented a representation matter for the National Labor Relations Board. IUE petitioned the Supreme Court of New York for an order compelling arbitration. That court refused. The Appellate Division affirmed, one judge dissenting, 15 App. Div. 2d 7, 221 N. Y. S. 2d 303. The Court of Appeals affirmed, one judge dissenting, holding that the matter was within the exclusive jurisdiction of the Board since it involved a definition of bargaining units. 11 N. Y. 2d 452, 230 N. Y. S. 2d 703. The case is here on certiorari. 372 U. S. 957.

We have here a so-called “jurisdictional” dispute involving two unions and the employer. But the term “jurisdictional” is not a word of a single meaning. In the setting of the present case this “jurisdictional” dispute could be one of two different, though related, species: either — (1) a controversy as to whether certain work should be performed by workers in one bargaining unit or those in another; or (2) a controversy as to which union should represent the employees doing particular work. If this controversy is considered to be the former, the National Labor Relations Act (61 Stat. 136, 73 Stat. 519, 29 U. S. C. § 151 et seq.) does not purport to cover all phases and stages of it. While § 8 (b) (4) (D) makes it an unfair labor practice for a union to strike to get an employer to assign work to a particular group of employees rather than to another, the Act does not deal with the controversy anterior to a strike nor provide any machinery for resolving such a dispute absent a strike. The Act and its remedies for “jurisdictional” controversies of that nature come into play only by a strike or a threat of a strike. Such conduct gives the Board authority under § 10 (k) to resolve the dispute.

Are we to assume that the regulatory scheme contains a hiatus, allowing no recourse to arbitration over work assignments between two unions but forcing the controversy into the strike stage before a remedy before the Board is available? The Board, as admonished by § 10 (k), has often given effect to private agreements to settle disputes of this character; and that is in accord with the purpose as stated even by the minority spokesman in Congress — “that full opportunity is given the parties to reach a voluntary accommodation without governmental intervention if they so desire.” 93 Cong. Rec. 4035 ; 2 Leg. Hist. L. M. R. A. (1947) 1046. And see Labor Board v. Radio Engineers, 364 U. S. 573, 577.

As Judge Fuld, dissenting below, said: “The underlying objective of the national labor laws is to promote collective bargaining agreements and to help give substance to such agreements through the arbitration process.” 11 N. Y. 2d 452, 458, 230 N. Y. S. 2d 703, 706.

Grievance arbitration is one method of settling disputes over work assignments; and it is commonly used, we are told. To be sure, only one of the two unions involved in the controversy has moved the state courts to compel arbitration. So unless the other union intervenes, an adjudication of the arbiter might not put an end to the dispute. Yet the arbitration may as a practical matter end the controversy or put into movement forces that will resolve it. The case in its present posture is analogous to Whitehouse v. Illinois Central R. Co., 349 U. S. 366, where a railroad and two unions were disputing a jurisdictional matter, when the National Railroad Adjustment Board served notice on the railroad and one union of its assumption of jurisdiction. The railroad, not being able to have notice served on the other union, sued in the courts for relief. We adopted a hands-off policy, saying, “Railroad’s resort to the courts has preceded any award, and one may be rendered which could occasion no possible injury to it.” Id., at 373.

Since § 10 (k) not only tolerates but actively encourages voluntary settlements of work assignment controversies between unions, we conclude that grievance procedures pursued to arbitration further the policies of the Act.

What we have said so far treats the case as if the grievance involves only a work assignment dispute. If, however, the controversy be a representational one, involving the duty of an employer to bargain collectively with the representative of the employees as provided in §8 (a)(5), further considerations are necessary. Such a charge, made by a union against the employer, would, if proved, be an unfair labor practice, as § 8 (a) (5) expressly states. Or the unions instead of filing such a charge might petition the Board under § 9 (c)(1) to obtain a clarification of the certificates they already have from the Board; and the employer might do the same.

Thus in Kennametal, Inc., 132 N. L. R. B. 194, a union was certified to represent “production and maintenance employees” excluding, among others, “technical” and “laboratory” employees. It filed a motion for clarification of its certificates, contending that certain employees in the laboratory were “an accretion to the existing certified production and maintenance unit and are not embraced in the classification of laboratory employees excluded from the established unit.” Id., at 196-197. The employer contended that the laboratory operation in question was still in the research and development stage. The Board found that some of the employees in question were performing production rather than experimental laboratory work and constituted an accretion to the existing unit; and it clarified the certification by specifically including those employees in the production and maintenance unit. What a union can do, an employer can do, as evidenced by numerous Board decisions. See Western Cartridge Co., 134 N. L. R. B. 67; Blaw-Knox Co., 135 N. L. R. B. 862; Lumber & Millwork Industry Labor Committee, 136 N. L. R. B. 1083.

If this is truly a representation case, either IUE or Westinghouse can move to have the certificate clarified. But the existence of a remedy before the Board for an unfair labor practice does not bar individual employees from seeking damages for breach of a collective bargaining agreement in a state court, as we held in Smith v. Evening News Assn., 371 U. S. 195. We think the same policy considerations are applicable here; and that a suit either in the federal courts, as provided by § 301 (a) of the Labor Management Relations Act of 1947 (61 Stat. 156, 29 U. S. C. § 185 (a); Textile Workers v. Lincoln Mills, 353 U. S. 448), or before such state tribunals as are authorized to act (Charles Dowd Box Co. v. Courtney, 368 U. S. 502; Teamsters Local v. Lucas Flour Co., 369 U. S. 95) is proper, even though an alternative remedy before the Board is available, which, if invoked by the employer, will protect him.

The policy considerations behind Smith v. Evening News Assn., supra, are highlighted here by reason of the blurred line that often exists between work assignment disputes and controversies over which of two or more unions is the appropriate bargaining unit. It may be claimed that A and B, to whom work is assigned as “technical” employees, are in fact “production and maintenance” employees; and if that charge is made and sustained the Board, under the decisions already noted, clarifies the certificate. But IUE may claim that when the work was assigned to A and B, the collective agreement was violated because “production and maintenance” employees, not “technical” employees, were entitled to it. As noted, the Board clarifies certificates where a certified union seeks to represent additional employees; but it will not entertain a motion to clarify a certificate where the union merely seeks additional work for employees already within its unit. See General Aniline & Film Corp., 89 N. L. R. B. 467; American Broadcasting Co., 112 N. L. R. B. 605; Employing Plasterers Assn., 118 N. L. R. B. 17. The Board’s description of the line between the two types of cases is as follows:

“... a Board certification in a representation proceeding is not a jurisdictional award; it is merely a determination that a majority of the employees in an appropriate unit have selected a particular labor organization as their representative for purposes of collective bargaining. It is true that such certification presupposes a determination that the group of employees involved constitute an appropriate unit for collective bargaining purposes, and that in making such determination the Board considers the general nature of the duties and work tasks of such employees. However, unlike a jurisdictional award, this determination by the Board does not freeze the duties or work tasks of the employees in the unit found appropriate. Thus, the Board’s unit finding does not per se preclude the employer from adding to, or subtracting from, the employees’ work assignments. While that finding may be determined by, it does not determine, job content; nor does it signify approval, in any respect, of any work task claims which the certified union may have made before this Board or elsewhere.” Plumbing Contractors Assn., 93 N. L. R. B. 1081, 1087.

As the Board’s decisions indicate, disputes are often difficult to classify. In the present case the Solicitor General, who appears amicus, believes the controversy is essentially a representational one. So does Westinghouse. IUE on the other hand claims it is a work assignment dispute. Even if it is in form a representation problem, in substance it may involve problems of seniority when layoffs occur (see Sovern, Section 301 and the Primary Jurisdiction of the NLRB, 76 Harv. L. Rev. 529, 574-575 (1963)) or other aspects of work assignment disputes. If that is true, there is work for the arbiter whatever the Board may decide.

If by the time the dispute reaches the Board, arbitration has already taken place, the Board shows deference to the arbitral award, provided the procedure was a fair one and the results were not repugnant to the Act. As the Board recently stated:

“There is no question that the Board is not precluded from adjudicating unfair labor practice charges even though they might have been the subject of an arbitration proceeding and award. Section 10 (a) of the Act expressly makes this plain, and the courts have uniformly so held. However, it is equally well established that the Board has considerable discretion to respect an arbitration award and decline to exercise its authority over alleged unfair labor practices if to do so will serve the fundamental aims of the Act.
“The Act, as has repeatedly been stated, is primarily designed to promote industrial peace and stability by encouraging the practice and procedure of collective bargaining. Experience has demonstrated that collective-bargaining agreements that provide for final and binding arbitration of grievance and disputes arising thereunder, 'as a substitute for industrial strife,’ contribute significantly to the attainment of this statutory objective.” International Harvester Co., 138 N. L. R. B. 923, 925-926.

Thus the weight of the arbitration award is likely to be considerable, if the Board is later required to rule on phases of the same dispute. The Board’s action and the awards of arbiters are at times closely brigaded. Thus where grievance proceedings are pending before an arbiter, the Board defers decision on the eligibility of discharged employees to vote in a representation case, until the awards are made. See Pacific Tile & Porcelain Co., 137 N. L. R. B. 1358, 1365-1367, overruling Dura Steel Products Co., 111 N. L. R. B. 590. See 137 N. L. R. B., p. 1365, n. 11.

Should the Board disagree with the arbiter, by ruling, for example, that the employees involved in the controversy are members of one bargaining unit or another, the Board’s ruling would, of course, take precedence; and if the employer’s action had been in accord with that ruling, it would not be liable for damages under § 301. But that is not peculiar to the present type of controversy. Arbitral awards construing a seniority provision (Carey v. General Electric Co., 315 F. 2d 499, 509-510), or awards concerning unfair labor practices, may later end up in conflict with Board rulings. See International Association of Machinists, 116 N. L. R. B. 645; Monsanto Chemical Co., 97 N. L. R. B. 517. Yet, as we held in Smith v. Evening News Assn., swpra, the possibility of conflict is no barrier to resort to a tribunal other than the Board.

However the dispute be considered — whether one involving work assignment or one concerning representation — -we see no barrier to use of the arbitration procedure. If it is a work assignment dispute, arbitration conveniently fills a gap and avoids the necessity of a strike to bring the matter to the Board. If it is a representation matter, resort to arbitration may have a pervasive, curative effect even though one union is not a party.

By allowing the dispute to go to arbitration its fragmentation is avoided to a substantial extent; and those conciliatory measures which Congress deemed vital to “industrial peace” (Textile Workers v. Lincoln Mills, supra, at 455) and which may be dispositive of the entire dispute, are encouraged. The superior authority of the Board may be invoked at any time. Meanwhile the therapy of arbitration is brought to bear in a complicated and troubled area.

Reversed.

Mr. Justice Goldberg took no part in the consideration or decision of this case.

Mr. Justice Harlan,

concurring.

I join the Court's opinion with a brief comment. As is recognized by all, neither position in this case is without its difficulties. Lacking a clear-cut command in the statute itself, the choice in substance lies between a course which would altogether preclude any attempt at resolving disputes of this kind by arbitration, and one which at worst will expose those concerned to the hazard of duplicative proceedings. The undesirable consequences of the first alternative are inevitable, those of the second conjectural. As between the two, I think the Court at this early stage of experience in this area rightly chooses the latter.

Mr. Justice Black,

with whom Mr. Justice Clark joins,

dissenting.

The International Union of Electrical Workers (IUE), of which petitioner is president, and another union, the Federation, each have collective bargaining contracts with and are certified bargaining agents for employees of the respondent, Westinghouse Electric Corporation. IUE’s contract covers “all production and maintenance” employees, but not “salaried technical” employees. Federation’s contract covers “all salaried, technical” employees but not “production and maintenance” employees. IUE demanded that Westinghouse stop permitting a number of Federation employees to do certain work, claiming that what they were doing was “production and maintenance” work and that therefore IUE’s members, not Federation’s, were entitled to these jobs. Westinghouse refused to make the change, whereupon IUE, instead of filing an appropriate proceeding to have the dispute decided by the National Labor Relations Board (as I understand the Court to hold that it could have done), called on Westinghouse to arbitrate the dispute with IUE. This demand rested on a provision of the IUE-Westinghouse contract agreeing to arbitration of grievances growing out of the “interpretation, application or claimed violation” of the contract. Westinghouse resisted arbitration, contending that the dispute ought to be resolved by the National Labor Relations Board, and the Court of Appeals of New York, agreeing with Westinghouse, refused to compel Westinghouse to arbitrate.

I agree with the New York court and would affirm its judgment. Stripped of obscurantist arguments, this controversy is a plain, garden-variety jurisdictional dispute between two unions. The Court today holds, however, that the National Labor Relations Act not only permits but compels Westinghouse to arbitrate the dispute with only one of the two warring unions. Such an arbitration could not, of course, bring about the “final and binding arbitration of grievance [s] and disputes” that the Court says contributes to the congressional objectives in passing the Labor Act. Unless all the salutary safeguards of due process of law are to be dissipated and obliterated to further the cause of arbitration, the rights of employees belonging to the Federation should not, for “policy considerations,” be sacrificed by an arbitration award in proceedings between IUE and Westinghouse alone. Although I do not find the Court’s opinion so clear on the point as I would like, I infer that it is not holding that this misnamed “award” would be completely final and binding on the Federation and its members. What the Court does plainly hold, however — that “the weight of the arbitration award is likely to be considerable, if the Board is later required to rule on phases of the same dispute” — seems only a trifle less offensive to established due process concepts. And this means, I suppose, that this same award, ex parte as to Federation, must be given the same or greater weight in any judicial review of the Board’s final order involving the same “phases of the same dispute.”

Moreover, the Court holds that suits for damages can be filed against the employer in state courts or federal courts under § 301 of the Taft-Hartley Act, 29 U. S. C. § 185, for the “unfair labor practice” of failing to bargain with the right union when two unions are engaged in a jurisdictional dispute. The employer, caught in that jurisdictional dispute, is ordinarily in a helpless position. He is trapped in a cross-fire between two unions. All he can do is guess as to which union’s members he will be required by an arbitrator, the Labor Board, or a court to assign to the disputed jobs. If he happens to guess wrong, he is liable to be mulcted in damages. I assume it would be equally difficult for him to prophesy what award an arbitrator, the Labor Board, or a judge will make as to guess how big a verdict a court or a jury would give against him. It must be remembered that the employer cannot make a choice which will be binding on either an arbitrator, the Board, or a court. The Court’s holding, thus subjecting an employer to damages when he has done nothing wrong, seems to me contrary to the National Labor Relations Act as well as to the basic principles of common everyday justice.

The result of all this is that the National Labor Relations Board, the agency created by Congress finally to settle labor disputes in the interest of industrial peace, is to be supplanted in part by so-called arbitration which in its very nature cannot achieve a final adjustment of those disputes. One of the main evils it had been hoped the Labor Act would abate was jurisdictional disputes between unions over which union members would do certain work. The Board can make final settlements of such disputes. Arbitration between some but not all the parties cannot. I fear that the Court’s recently announced leanings to treat arbitration as an almost sure and certain solvent of all labor troubles has been carried so far in this case as unnecessarily to bring about great confusion and to delay final and binding settlements of jurisdictional disputes by the Labor Board, the agency which I think Congress intended to do that very job.

I would affirm.

       §8 (b)(4)(D):
      “It shall be an unfair labor practice for a labor organization or its agents—
      “(4)(i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is—
      “(D) forcing or requiring any employer to assign particular work to employees in a particular labor organization or in a particular trade, craft, or class rather than to employees in another labor organization or in another trade, craft, or class, unless such employer is failing to conform to an order or certification of the Board determining the bargaining representative for employees performing such work.” 29 U. S. C. (Supp. IV) § 158 (b) (4) (D).

       Section 10 (k) provides:
      “Whenever it is charged that any person has engaged in an unfair labor practice within the meaning of paragraph (4) (D) of section 8 (b), the Board is empowered and directed to hear and determine the dispute out of which such unfair labor practice shall have arisen, unless, within ten days after notice that such charge has been filed, the parties to such dispute submit to the Board satisfactory evidence that they have adjusted, or agreed upon methods for the voluntary adjustment of, the dispute. Upon compliance by the parties to the dispute with the decision of the Board or upon such voluntary adjustment of the dispute, such charge shall be dismissed.” 29 U. S. C. §160 (k).

       Section 10 (k), supra, note 2, provides that the Board shall determine the dispute, “. . . unless . . . the parties to such dispute submit to the Board satisfactory evidence that they have adjusted, or agreed upon methods for the voluntary adjustment of, the dispute.”

       See United Brotherhood of Carpenters, 96 N. L. R. B. 1045; Wood, Wire & Metal Lathers Union, 119 N. L. R. B. 1345; Millwrights Local 1102, 121 N. L. R. B. 101, 106-107; Ironworkers Local No. 708, 137 N. L. R. B. 1753, 1757. Section 201 of the Labor Management Relations Act of 1947 declares the national policy to be the use of governmental facilities for conciliation, mediation, and voluntary arbitration of disputes between employers and employees. 61 Stat. 152, 29 U. S. C. § 171 (b). Section 203 (d) provides:
      “Final adjustment by a method agreed upon by the parties is hereby declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement. The Service is directed to make its conciliation and mediation services available in the settlement of such grievance disputes only as a last resort and in exceptional cases.” 61 Stat. 154, 29 U. S. C. § 173 (d).

       Senator Murray of Montana. And see S. Rep. No. 105, 80th Cong., 1st Sess., p. 27, 1 Leg. Hist. L. M. R. A. (1947) 433.

       Section 8 (a) (5) provides, “It shall be an unfair labor practice for an employer— ... to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9 (a).” 29 U. S. C. §158 (a)(5).
      Section 9 (a) provides that the representatives shall be chosen by the majority of employees “in a unit appropriate” for collective bargaining. 29 U. S. C. § 159 (a). Section 9 (b) gives the Board authority to determine what unit is the appropriate one — “the employer unit, craft unit, plant unit, or subdivision thereof.” 29 U. S. C. §159 (b).
      Section 9 (c)(1) provides:
      “Whenever a petition shall have been filed, in accordance with such regulations as may be prescribed by the Board—
      “(A) by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a substantial number of employees (i) wish to be represented for collective bargaining and that their employer declines to recognize their representative as the representative defined in section 9 (a), or (ii) assert that the individual or labor organization, which has been certified or is being currently recognized by their employer as the bargaining representative, is no longer a representative as defined in section 9 (a); or
      “(B) by an employer, alleging that one or more individuals or labor organizations have presented to him a claim to be recognized as the representative defined in section 9 (a); the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice. Such hearing may be conducted by an officer or employee of the regional office, who shall not make any recommendations with respect thereto. If the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof.” 29 U. S. C. § 159 (c) (1).

       See, e. g., Raley’s, Inc., 143 N. L. R. B. 256, 258-259:
      “In the recently decided International Harvester Company case, a majority of the Board indicated that it would give ‘hospitable acceptance to the arbitral process’ in order 'to promote industrial peace and stability by encouraging the practice and procedure of collective bargaining.’ Relying on various statutory provisions, particularly Section 203(d) of the Labor-Management Relations Act, 1947, and on decisions of the United States Supreme Court which recognize arbitration as ‘an instrument of national labor policy for composing contractual differences,’ the Board concluded that it would withhold its undoubted authority to adjudicate unfair labor practice charges and give effect to arbitration awards involving the same subject matter ‘unless it clearly appears that the arbitration proceedings were tainted by fraud, collusion, or serious procedural irregularities or that the award was clearly repugnant to the purposes and policies of the Act.’ While it is true that International Harvester, as well as other cases in which the Board honored arbitration awards, involved unfair labor practice proceedings, we believe that the same considerations which moved the Board to honor arbitration awards in unfair labor practice cases are equally persuasive to a similar acceptance of the arbitral process in a representation proceeding such as the instant one. Thus, where, as here, a question of contract interpretation is in issue, and the parties thereto have set up in their agreement arbitration machinery for the settlement of disputes arising under the contract, and an award has already been rendered which meets Board requirements applicable to arbitration awards, we think that it would further the underlying objectives of the Act to promote industrial peace and stability to give effect thereto. It is true, of course, that under Section 9 of the Act the Board is empowered to decide questions concerning representation. However, this authority to decide questions concerning representation does not preclude the Board in a proper case from considering an arbitration award in determining whether such a question exists.”

        Monsanto Chemical Co., 97 N. L. R. B. 517; Wertheimer Stores Corp., 107 N. L. R. B. 1434.

       11 N. Y. 2d 452, 184 N. E. 2d 298, 230 N. Y. S. 2d 703.

       See Labor Board v. Radio & Television Broadcast Engineers Union, 364 U. S. 573; cf. Order of Railway Conductors v. Pitney, 326 U. S. 561, 567.