Johnson, Lytle & Co. v. Spartan Mills

47 S.E. 695, 68 S.C. 339, 1904 S.C. LEXIS 54

• Court: Supreme Court of South Carolina
• Decided: March 28, 1904
• Status: Published

Opinion

The opinion of the Court was delivered by

Mr. Justicr Jonrs.

1 We affirm the judgment of the Circuit Court upon this ground. The Circuit Court has found as matter of fact that the testimony does not bear out the conclusion of the magistrate that the checks in question were issued in payment for labor. This being an appeal in a case at law, the finding of the Circuit Court on a question of fact is not reviewable. We do not think that it can be said that the only inference from the testimony is that the checks were issued in payment for wages of labor. One of the plaintiffs, Mr. Lytle, testified that when he demanded payment of the checks in cash from the assistant treasurer of the mills, he said he would redeem them in goods but not in cash; that fie did not issue them for labor, but that they were issued for the convenience of the operatives and the store. The assistant treasurer, Mr. Montgomery, testified that the checks were sold to the operatives and a charge made of them against the operatives on the store books of the company as merchandise checks; that on the regular pay days, which were the 12th and 27th of each month, the operatives would be paid for their labor the balance due after deducting the store account; that no contract was ever made between the mill and any of its employees for the payment of their labor in checks; that no checks were ever issued to any operative in payment for his labor; that checks were frequently issued before any labor was performed; that it was optional with the employees to buy checks or coupon books, or have merchandise charged. This was the substance of the testimony on this point, and it cannot be said that the Circuit Court committed error of iowinholding upon the testimony that the checks were not issued in payment of labor. Since the undisputed testimony was that these metal checks were redeemable on their face only in merchandise at the store of the defendant, and that defendant offered and stood ready to redeem them in merchandise and plaintiff refused to accept same, plaintiff cannot recover in this action. Plaintiffs claim the right to recover because of the statute cited, but have failed to bring themselves within the terms of the statute as the holder of checks issued in payment for labor. Under this view, it is immaterial to the disposition of this case whether the act in question is constitutional or not; and defendant is not in a position to assail the constitutionality of the act, since the record does not show a case arising under the act.

2 Inasmuch, however, as the Circuit Court has declared secs. 2719 and 2720, Civil Code, unconstitutional, and the matter has been strenuously argued before us, and an expression of our view is deemed important, we will not withhold consideration of the question. The view of the Circuit Court is presented in the Circuit decree, which, with the exceptions thereto, is herewith reported.

In the first place, as this is not an action to recover any penalty imposed under sec. 2720, quoted in the decree of the Circuit Court, a consideration of such section is not involved. The plaintiffs’ action is based solely upon sec. 2719, and our consideration should be confined to that. As to that section, it is contended that the proviso', “that the provisions of this section does not apply to agricultural contracts or advances made for agricultural purposes,” renders the act unconstitutional. The authority mainly relied on to sustain this view, Connolly v. Union Sewer Pipe Co., 22 Sup. Ct. Rep., 431, does not appear to us to be at all conclusive. Under the Illinois Trust Act,- condemned in that case, all, except producers of agricultural commodities and raisers of live stock, who combine their capital, skill or acts for any of the purposes named in the act, to destroy competition and control prices, may be punished as criminals, while agriculturalists and live stock raisers, in respect of their products or live stock in hand, are exempted from the operation of the statute, and may combine and do that which,- if done by others, would be a crime against the State.

As was stated by this Court in Simmons v. Telegraph Company, 63 S. C., 430, 41 S. E., 521, “Legislation is not unequal or discriminatory, in the sense of the equality clause of the Constitution, merely because it is special or limited to> a particular class. The decisions of the United States Supreme Court establish that the legislature has power to make a classification of persons or property for public purposes, provided such classification is not arbitrary and bears reasonable relation to the purpose to be effectuated, and that the equality clause is not violated when all within the designated class are treated alike. In the case of Barbier v. Connolly, 113 U. S., 27, 5 Sup. Ct. Rep., 537, the Court said: ‘Class legislation, discriminating against some and favoring others, is prohibited, but legislation which in carrying out a public purpose is limited in its operation, if within the sphere of its operation it affects alike all persons similarly situated, is not within the (14th) amendment * * * Neither the amendment, broad and comprehensive as it is, nor any other amendment, was designed to interfere with the power of the State, sometimes termed its police power, to prescribe regulations to promote the health, peace, morals, education and good order, and to legislate so as to increase the industries of the State, develop its resources and add to its wealth and prosperity.’ In Soon Hing v. Crowley, 113 U. S., 703, 5 Sup. Ct. Rep., 730, the Court said: ‘The specific regulations for one kind of business, which may be necessary for the protection of the public, can never be a just ground of complaint, because like restrictions are not imposed upon the business of a different kind. The discriminations, which are open to objection, are those where persons engaged in the same business are subjected to different restrictions or are held entitled to different privileges under the same conditions.’ In the case of Railway v. Mackey, 127 U. S., 205, 8 Sup..Ct. Rep., 1161, the Court affirmed the constitutionality of a Kansas statute imposing upon railroad corporations future liabilities for damages to employees by negligence of their fellow-servants, notwithstanding no such liability existed against any other person or corporation, because the Court considered that the legislation met a particular necessity, and all railroad corporations without distinction were made subject to the same liability.”

In the case of St. Louis etc. Ry. Co. v. Matthews, 165 U. S., 1, 17 Sup. Ct. Rep., 241, which accords with McChand lers v. R. R. Co., 38 S. C., 116, it was held that a statute, making railroad companies liable for property destroyed by fire communicated from their locomotives, did not violate the 14th amendment, even though the liability did not depend on any negligence of the railroad company. Let it be noticed that in the two. last named cases, the classification for the imposition of special liability was not affected by the fact that there were other common carriers operating with steam, which might communicate fire, or whose employees might sustain injuries through the negligence of their fellow-servants ; thus showing that a classification need not include all engaged in a general business, as the business of carrying freight and passengers, but may simply embrace a more limited class, who carry freight and passengers in a particular way, or by particular instrumentalities.

So, in the case of Holden v. Hardy, 169 U. S., 366, 18 Sup. Ct. Rep., 383, the Court sustained as not violative of the 14th amendment, a Utah statute forbidding the employment of workingmen for more than eight hours per day in mines and in the smelting reduction, or refining of ores or metals, although, no doubt, it would be easy to point out in Utah other occupations, wherein it might be proper and advisable to prescribe limitations of the hours of labor. It is no fatal objection to a classification that it is not perfect, that it is unwise, that it is inexpedient. Toi be obnoxious to the 14th amendment, the classification must be manifestly unreasonable, without basis or any reasonable difference or distinction among the objects of classification, with respect to the purpose of classification, must be arbitrary. The solution of this question in many cases is-confessedly difficult and delicate, and it must always be borne in mind, as a vital principle, that a statute should not be declared unconstitutional unless it is a clear, unmistakable violation of the fundamental law.

In the case of Otis v. Parker, 187 U. S., 606, 23 Sup. Ct. Rep., 169, the Court held that the California Constitution, art. IV., sec. 26, avoiding the contracts for the sale of shares of corporate stock oil margin, did not violate the equal protection of the law, because the provision strikes only at some and not all objects of possible speculation. In delivering the opinion of the Court in that case, Mr. Justice Holmes uses these wise and appropriate words: “While the Courts must exercise a judgment of their own, it by no means is true that every law is void which may seem to the judges who pass upon it excessive, unsuited to. its. ostensible end, or based upon conceptions of morality with which they disagree. Considerable latitude must be allowed for difference of view as well as for possible peculiar conditions which this Court can know but imperfectly, if at all. Otherwise, a constitution, instead of embodying only relatively fundamental rules of right, as generally understood by all English-speaking communities, would become the partisan of a particular set of ethical or economical opinions, which by no means are held semper ubique et ab omnibus

The meaning of the proviso, to sec. 2719, as I suppose, is that the provisions of the section shall not apply to agricultural labor contracts, or advance's for agricultural purposes made to laborers. I think there are substantial reasons why the. legislature deemed it proper to insert the proviso. In the first place, a previous statute, sec. 358, Crim. Code, had already made provisions for the protection of farm laborers. That statute provides: “Any person or persons who shall offer to any laborer or employee at the time when the wages of such laborer or employee are due and payable by agreement, unless otherwise provided for by special contract, as compensation for labor or services, performed, checks or scripts of any description, known as plantation checks, payable at some future time, or in the shops or stores of employers, in lieu of lawful money, shall be liable to. indictment and punishment by a fine not exceeding $200, or by imprisonment not exceeding one year or both, according to. the discretion of the Court: Provided, The word ‘checks’ herein shall not be construed so. as to. prohibit the giving- of checks upon any of the authorized banks of deposit or issue in this State.” So, also, provision for the protection of farm laborers are made in other statutes, as in sections 2715, 2717, vol. 1, Code. The object of both statutes quoted construed together is to protect all laborers from coercion by employers to compel laborers to receive, as wages for labor, goods, wares or merchandise or supplies in lieu of lawful money. It is true, there is a distinction between the two statutes in this: that persons or corporations engaged in manufacturing or mining may incur a penalty for refusing to. redeem checks issued in payment of wages, in lawful money, even though the laborer may possibly have contracted to receive his wages in whole or in part -in goods, &c.; whereas, persons engaged in agriculture incur no penalty for paying, or offering to pay, the wages of farm laborers in goods, &c., provided a special contract with the laborer authorizes payment of wages in that way. But this distinction is reasonably based upon differences in the general conditions surrounding farm labor as a class and manufacturing and mining laborers as a class.

The testimony shows that no contract between the manufacturer in this case and the laborer was made by which the laborers were to receive their wages in goods or merchandise checks, and I venture to say that it is rarely, if ever, the case for manufacturing or mining establishments to contract to pay wages otherwise than in money. But, from the nature of the business and the large number of employees, it is no doubt necessary to have regular pay days, at reasonable intervals, usually twice per month, as in the case of defendant mill. Naturally, many operatives, by reason of their necessities, would frequently want- means of providing for themselves and families before the arrival of pay day, hence arose the practice of issuing checks, or coupon books, or some form of .credit, by which the operatives could secure supplies in advance of pay day, said checks or coupons being in certain denominations, and redeemable at the mill store in merchandise. Here arose an opportunity for apprehension in enabling an unscrupulous employer to take advantage of the necessities of the laborer, and demand extortionate prices for the merchandise. The statute seeks to remove this inequality between the employer and employee by making such checks, &c., negotiable and redeemable in cash under specified conditions and at stated times. Such legislation was undoubtedly intended to meet what was regarded an evil particularly affecting laborers in mills and mines, for which no' remedy had been devised, as in the case of farm laborers. Farm laborers having previously been classified for purposes of legislation in their protection, and there being no suggestion that such classification was unreasonable, it could hardly be said that legislation designed to protect other laborers is void for unreasonableness, merely because a distinct class already provided for is excluded from the statute. A very different situation was presented to the Court in Connolly v. Union Sewer Pipe Co., supra. .It must be remembered that every classification, in the nature of things, involves some inequality as between a member of one class and a member of another class, for otherwise there would be no such thing as classification. But in law there is no inequality, if the members of a class, reasonably designated, are given the same rights or made subject to the same restrictions. Hence, it is no objection to this legislation, in so< far as equal protection of the law is involved, to1 point out that sections 2719 and 2720 interfere to some extent with the right of mill owners and their operatives to contract that labor shall be paid otherwise than in lawful money; whereas, sec. 358, as to farm laborers, does not interfere with the right of land owners and farm laborers to make such contract. The right of contract is not absolute, and is subject to the police power of the State. Of course, the right of contract cannot be arbitrarily interfered with.

In Holden v. Hardy, 169 U. S., 366, a statute fixing the period of employment in underground mines at eight hours per day, was held as not to unlawfully restrict the right of employer and employee to contract for a longer period per day.

In Orient Ins. Co. v. Daggs, 172 U. S., 557, where a con tract of insurance provided for liability not exceeding the cash value of the property at the time of loss, and where a Missouri statute provided that the insurance company should not be permitted to deny that the property was worth the full amount insured at the time of the insurance, and in case of total loss the measure of damages shall be the amount for which the property was insured, less depreciation in value since insurance, the Court held that the statute was within the police power of the State, even though it placed a limitation upon the right of contract.

In Otis v. Parker, cited supra, the Court held that the California Constitution avoiding all contracts for sales of shares of corporate stock on margin, and providing for recovery of money paid on such contracts, did not unconstitutionally interfere with the right of contract, although this provision may be construed to apply to bona ñde as well as gambling contracts. See, also; Avent Beattywith Coal Co. v. Kentucky, 28 L. R. A., 276; Hancock v. Yaden, 121 Ind., 366, showing that similar legislation does not unlawfully interfere with the right of contract. • If we admit that placing farm labor contracts into one class and mill and mine labor contracts in another class, is a reasonable classification so as not to violate the principle of equality, then the case of Knoxville Iron Co. v. Harbison, 183 U. S., 13, 22 Sup. Ct. Rep., 1, is conclusive that legislation of the kind in question does not unlawfully interfere with the right of contract.

This brings us back to the real question as to whether the two statutes, which, construed together, embrace all labor contracts, constitute an arbitrary classification. The two1 systems of labor engaged in farming on the one hand and manufacturing on the other, and the conditions surrounding' each, are distinct in many ways. The large number of mill operatives, aggregated into communities, as contrasted with the few laborers in the employ of the average farmer and scattered throughout the country; the daily output of the mills, as contrasted with the yearly product of the farm; the resources of aggregated wealth to command ready cash, com pared with the ability to pay always in cash of the average farmer dependent for his cash upon crops once a year; the consequent ease with which manufacturers may carry out a system, involving regular pay days in cash at brief intervals throughout the year, as contrasted with the difficulties in the way of the farmer to comply with such a system'; the rarity of contracts to pay mill laborers in anything- but money; the prevalence of farm labor contracts involving payment of wages in supplies or farm products; are some of the considerations which would make it reasonable to have some differences in the regulations made for the protection of the respective classes of labor. It is well known that many agriculturists contract to pay a portion of the wages of labor in supplies obtained through orders upon merchants. A very prevalent system of farming exists in this State, under which the farm laborer agrees toi receive a share of the crops grown or cultivated by him as compensation for his labor, but in the meantime, until the crops are gathered and divided, the landowner undertakes to make advances in supplies to- be deducted from the laborer’s share of the crop. The necessities of the average farmer often compel him to' make arrangements with some merchant to fill his orders for supplies to such laborers. Now, but for the proviso in section 2719, all orders for supplies, which could be construed to be in payment for labor' issued by landowners to farm labcwers under these circumstances, would he redeemable in cash in the. hands and at the option of the laborer, if presented for redemption, as required by the statute, notwithstanding the laborer’s contract to the contrary, although such contract is a part of a prevalent system advantageous to both landowner and laborers. To place orders of landowners, made under such circumstances, in the category of merchandise checks, &c., redeemable in cash, as prescribed in the statute, would very seriously affect the system of labor contracts on farms, Hence the proviso. We hold, therefore, that the statute in question is not unconstitutional.

The judgment of the Circuit Court is affirmed.