Psutka v. Michigan Alkali Co.

Ample consideration to defendants to support their benefit plan as a contract with their employees is found in the attraction of more competent workmen to defendants' employ, the inducement of better and more continuous service and the avoidance of expense of labor turnover.

The promises of the plan to pay pensions to certain employees are as positive as the engagements in ordinary insurance policies. Other promises are expressly made discretionary. And there is a general provision that pensions may be withheld or terminated in case of misconduct of beneficiaries or for other cause sufficient in the judgment of the committee. The death benefit rules, which are separately set up, are positive in their promises, definite in their conditions, and do not commit the payment to the judgment or discretion of anyone. They incorporate pension rules 23, 24, 25 and 26 by reference. The incorporation is not wholly consistent with the declared purpose of rule 24, that the plan is a voluntary provision "for the benefit of employees superannuated or totally incapacitated after long and faithful service," because the death benefit rules provide specifically for payment to dependents according to the period of employment, with a minimum of six months and without reference to the character of the service.

If rule 24 wholly negatives the contractual character of the plan, it conflicts with the clauses for death benefits and, under the rule that the first of the conflicting clauses in the instrument shall be received and the latter rejected, 13 C. J. p. 535, 6 Rawle C. L. p. 847, rule 24 must fall. However, the rule of conflicting clauses applies only where it is impossible fairly to reconcile them.

To disregard the positive promises and permit rule 24 to dominate the instrument is to brand the plan as a deceptive gesture of ostensible generosity, works a result repugnant to the general purpose of the instrument, and ignores the rule that the plan must be read as a whole and ambiguities resolved against defendants. If rule 24 is given the effect claimed, rules 25 and 26 were wholly superfluous. It is to be noted also that, while the right to change the rules is reserved to defendants, there is no suggestion of a right to pay or withhold payments in individual cases of death. Reading the plan as a whole and under established rules of construction, the reasonable interpretation, as well as the evident purpose of defendants, is that the quoted sections were intended to exclude claims of inchoate rights under the plan, not to mulct the employees or their dependents of accrued death benefits.

Reversed, with costs to plaintiffs, and remanded for trial upon the issue of fact.

BUTZEL, BUSHNELL, and POTTER, JJ., concurred with FEAD, J.