Harbison v. Knoxville Iron Co.

56 L.R.A. 316, 103 Tenn. 421
CourtTennessee Supreme Court
DecidedNovember 8, 1899
StatusPublished
Cited by53 cases

This text of 56 L.R.A. 316 (Harbison v. Knoxville Iron Co.) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harbison v. Knoxville Iron Co., 56 L.R.A. 316, 103 Tenn. 421 (Tenn. 1899).

Opinion

Caldwell, J.

The bill in tbis case was filed to collect an alleged indebtedness of $1,678. The Chancellor granted the relief sought, and the Court of Chancery Appeals affirmed his decree.

The defendant is a domestic corporation engaged in the manufacture and sale of iron and in the mining and sale of coal. It employs about two hundred laborers, and has one regular pay day each month, being that Saturday which is the nearest to the 20th of the particular month. On this day each employe is paid in cash the amount due him up to the first day of the month, but never up to the day of payment. On every Saturday in the month, however, the defendant holds itself in readiness to pay all of its employees the fall amount then due them if they will receive it in orders for coal, at twelve cents per bushel, and the afternoon of every Saturday, from 1 o’clock to 5 o’clock, is set apart" for that purpose. About 75 per cent, of all the wages earned by the laborers is paid in these coal orders. The orders are in the following form:

“Let bearer have-bushels of coal, and charge to my account.
“Signed,-.
“Accepted ■-- — ., 1899.
“Knoxville Iron Company.”

The complainant ’ purchased six hundred and fourteen of these orders, aggregating $1,678, and [425]*425thereafter presented them to the defendant on a regular pay day and demanded payment in cash. Payment being refused, he brought this • suit to collect the several orders. He bases his " action on Sections 1 and 2 of Chapter 11 of the Acts of 1899, which are in the following language, namely:

“SectioN 1. Be it enacted by the General Assembly of the State of Tennessee, That all persons, firms, corporations, and companies using coupons, scrip, punchouts, store orders, or other evidences of indebtedness to pay their or its laborers and employees, for labor, or otherwise, shall, if demanded, redeem the same ■ in the hands of such laborer, employe, or bona fide holder, in good and lawful money of the United States; Provided, The same is > presented and redemption demanded of such person, firm, coihpany, or corporation using same as aforesaid, at a regular pay day of such person, firm, company, or corporation to laborers or employes, or if presented and redemption demanded as aforesaid by such laborers, employees, or bona fide holders, at any time not less than thirty days from the issuance or delivery of such coupon, scrip, punchout, store order, or other evidences of indebtedness to such employees, laborers, or bona fide holder, such redemption to be at the face value of said scrip, punchout, coupon, store order, or other evidence of indebtedness; Provided ,further, Said face value shall be in cash the. same as its purchasing power in goods, wares, and merchandise [426]*426at the commissary, company store, or other repository of such company, firm, person, or corporation aforesaid.
“Sjbc. 2. Be it further . enacted, That any employe, laborer, or bona fide holder, referred to in Section 1 of this Act, upon presentation and demand for redemption of such scrip, coupon, punch-out, store order, or other evidence» of indebtedness aforesaid, and upon refusal of such person, firm, corporation, or company to redeem the same in good and lawful money of the United States, may maintain in his, her, or their own name, an action before any Court of competent jurisdiction against such person, firm, corporation, or company using same as aforesaid, for the recovery of the value of such coupon, scrip, punchout, store order, or other evidence of indebtedness, as defined in Sec. 1 of this Act.”

The company defends upon three grounds:

(1) That the Act does not apply to’ a case like this: ■

(2) That complainant is not a bona fide holder; and

(3) That the Act is unconstitutional.

These defenses will be considered in the order named.

First. The substance of the first contention is that, by a correct construction, it must be held that “All persons, firms, croporations, and companies using coupons, scrip; punchouts, store or[427]*427ders, or other evidences of indebtedness to pay their or its laborers or employees,” means only such persons, firms, corporations, and companies as are accustomed to use coupons, scrip, punchouts, store orders, or other evidences of indebtedness to pay their or its laborers or employees, and as so use them arbitrarily; and that the defendant has no such custom, and is therefore not included in the terms of the Act. No reason is perceived by the Court for so restricting and limiting the broad and unqualified words of the statute. The evident intention of the Legislature was to include every person, firm, corporation, and company using coupons, scrip, punchouts, store orders, or other evidence of indebtedness to pay their or its laborers and employes, whether such use be habitual and arbitrary, or only occasional and without constraint.

But, if this were not true, the defendant is included by its own construction. The Court of Chancery Appeals found that the defendant is so accustomed to use coal orders; that it in that “way pays off about seventy-five per cent, of the wages earned by its employees,” and that its course of business in th.at respect is one “whereby employes are systematically, in the main, settled with in coal orders instead of cash, and where, though there is no compulsion in form, yet, in fact, by holding back their wages such a motive power is brought to bear upon their freedom of choice as to practically amount to coercion;” that the facts [428]*428of the case “show a species of compulsion whereby the defendant tabes advantage of the necessities or the improvidence of its employees, and so places them in a position where they feel compelled to take their wages in coal orders.”

So that, by the true construction, and also by that suggested by the defendant, it is included in the provisions of the statute.

Second. It is next contended that complainant is not a bona fide1 holder, because he purchased the coal orders sued upon at a discount of fifteen cents on the dollar. It is true that complainant gave only eighty-five cents on the dollar for these orders, but that does not prevent him from' being a bona fide • holder within the meaning of the statute. He made the purchases upon the open market, fairly and honestly, and gave ten cents more on the dollar 'for the orders than they had usually sold for. To constitute him a bona fide holder, it is only necessary that he should have bought the orders fairly, honestly, and for a reasonable price, in good faith, as contradistinguished from bad faith.

The suggestion that complainant’s ' recovery, if allowed at all, should be limited to the price paid, is -conclusively answered by the provision of the statute that the redemption or recovery shall be for “the face value of such scrip, punch-outs, coupons, store orders, or other evidences of indebtedness.”

[429]*429Third. Pin ally, it is said that the Act abridges the right of contract, and for that reason it is.

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Bluebook (online)
56 L.R.A. 316, 103 Tenn. 421, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harbison-v-knoxville-iron-co-tenn-1899.