An agreement based person of any subscription or penalty (a) to a trade union: 3. Any agreement for the application of the funds of a trade union (a) To provide benefits (b) to members; or, (b) To furnish contributions to any employer or workman not a member of such trade union, in consideration of such employer or workman acting in conformity with the rules or resolutions of such trade union; or, (c) To discharge any fine imposed upon any person by sentence of a Court of justice. 4. Any agreement made between one trade union and another; 5. Any bond to secure the performance of any of the above-mentioned agreements (c). Though the above agreements are thus rendered unenforceable by the statute, it is doubtful if an unenforce agreement based upon them, or one of them, is able agree- excepted. Thus if a trade union enter into a contract upon an ment may unenforce able. be itself to pay a member a sum in the event of his becoming totally incapacitated, and under that contract such member signs an agreement that he will repay the said sum in the event of returning to his work, then (a) It is possible that this sub-section may not comprise all things which would be called penalties at common law, and probable that it is confined to such matters as fines, or exclusion from the trade union, or from benefits, but the subsection does not extend the meaning of the word "penalty." Baker v. Ingall, [1911] 2 K. B. 132. (b) The word "benefit" is limited to such benefits as sick and strike pay; it does not include, for example, indemnity for the costs of an appeal in a compensation case (Lees v. Lancashire and Cheshire Miners' Association, (1906) Times, June 20th). (c) (1871) 34 & 35 Vict. c. 31, s. 4. 1 the subsequent agreement has been held to be a part or term of the original agreement. On the other hand, it has been held in Scotland, by the First Division, on appeal, that such subsequent agreement is enforceable, notwithstanding that the original was unenforceable, and that it is immaterial whether the original contract in the rules required the repayment in terms, or only the signing of an agreement to repay.2 stances actions fall within the ambit of the 1871 Act. It will be observed that it is only where at Circumcommon law the action would not be maintainable, stade the Court is still, in virtue of section 4, not enabled which to entertain it (a). In Swaine v. Wilson, Lord Justice Lindley observed3: "This action is brought with the object of directly enforcing an agreement for the application of the funds of the society to provide benefits to members, and the action is in fact 'a legal proceeding instituted with the object of directly enforcing or recovering damages for the breach of an agreement' of the kind mentioned in s. 4. Notwithstanding s. 3 of the Act this action therefore cannot be maintained unless it can be maintained independently of that section." "If the action," observed Lord Young, "was a good one at common law, then there was no necessity for the statute, and in the words of the section itself the statute did not require to be appealed to as ' enabling.' All general statutes are framed with 1 Per Vaughan, Williams L.J., (1911) Times, December 2nd, reversing the Divisional Court in Baker v.Ingall, [1911] 2 K. B. 132. 2 Wilkie v. King (1911), 2 4 (a) Supra, p. 82. V. Miller The jurisdic to the 1871 Act is left affected. tacit reference to the common law. . . . All the 1871 Act says, in fact, is, that if it would not have been enforceable at common law the statute will give no assistance." The operation of s. 4 is lucidly set forth in the following observations of Lord Lindley1: "(1) Section 4 extends not only to Courts of law, but also to Courts of equity. (2) The section does not prohibit wholly un- any Court from exercising in any case jurisdiction which it could have exercised before the Act passed; the section simply prevents any Court from extending its jurisdiction, and interfering in cases in which the Act would authorise interference if it were not for the direct prohibition contained in the section. (3) No legal proceeding, which might be taken, if the section did not prohibit it, is prohibited except a legal proceeding instituted with the object of directly enforcing, or recovering damages for the breach of the specified agreements. The word 6 directly' is important and limits the application of the section. Legal proceedings for other purposes than those specified are not prohibited ; although they may indirectly affect agreements on which no action can be brought." Contractual relations, though lawful, may be unenforceable. The combined effects of sections 2, 3, and 4 of the Trade Union Act, 1871, are well expressed by Lord Justice Buckley. "Assuming," he said, "a society illegal at common law by reason of having purposes in restraint of trade, 2 1 In Yorkshire Miners' Association v. Howden, [1905] A. C. 256, at p. 281. 2 In Osborne v. Amalgamated Society of Railway Servants (No. 2), [1911] 1 Ch. 540, at p. 566. section 2 of the Act renders those purposes lawful in any question of criminal liability for conspiracy. Section 3 renders those purposes lawful in any question of validity of agreement or trust. By virtue of section 3 contractual relations which would have been void for illegality become lawful contractual relations and enforceable accordingly. But this is qualified by section 4. That is a section which lawfully defines certain agreements which may form part of the contractual terms, and enacts that nothing in the Act shall enable any Court to entertain any legal proceeding to enforce those defined agreements. Notwithstanding that section 3 has rendered contractual relations which include such terms lawful, the particular defined agreements are nevertheless to be unenforceable in any Court." of the Considerable difficulties have arisen in connection Statement with the interpretation of section 4, so that its law: proper interpretation can only be pronounced on with diffidence. It may be said that : 1. An action to recover benefit money is unen- Actions forceable1; 2. An action (1) claiming a declaration that (a) a member is entitled to participate in (b) his expulsion was invalid; and 1 M'Kernan v. United Opera- 1 R. 453; Shanks v. Same, (1874) tive Masons' Association, (1874) 1 R. 823. not entertainable. Actions enter tainable; McKer nan v. (2) claiming an injunction against expulsion, and (3) claiming damages, is unenforceable1; 3. An action (1) claiming rescission of a resolution of fine and expulsion, and 1. An action claiming an injunction against uplifting or applying the funds contrary to the rules, and 2. An action claiming a declaration that a resolution authorising strike pay is ultra vires and illegal,* would appear clearly to be enforceable. It would seem, too, that 3. An action claiming a declaration, reinstating an expelled member in his membership, is enforceable, though his rights as a member, in so far as affected. by section 4, are unenforceable." 6 Authorities. In McKernan v. United Operative Masons' AssoUnited ciation the pursuer raised an action against the Operative defendant association and the central committee Associa- thereof to recover benefit money which he averred Masons' tion. 1 Rigby v. Connol, (1880) 14 Ch. D. 482. 2 Aitken v. Associated Carpenters and Joiners of Scotland, (1885) 12 R. 1206. 4 Yorkshire Miners' Association v. Howden, [1905] A. C. 256. 5 Osborne V. Amalgamated Society of Railway Servants 8 M'Laren v. Miller, (1880) (No. 2), [1911] 1 Ch. 540. 7 R. 867. 6 (1874) 1 R. 453. 3 |