120 F. 709 | U.S. Circuit Court for the District of Rhode Island | 1903
This is a petition to revise the referee’s decision disallowing the claim of a clerk for wages during a period when the clerk was on a vacation. The B. H. Gladding Company, the employer, posted in its store a notice, the material parts of which are as follows:
“General Notice.
“No. 15. June 11th, 1902.
“The vacation period will extend from Monday, June 30th, to Sat., September 13th. Employees who have been continuously employed since January 1st, 1902, will be entitled to one week’s vacation with pay. Employees continuously employed since July 1st, 1901, will be entitled to two weeks’ vacation with pay. Vacation payments will be withheld, as has been the custom, until the following January, and it is understood and agreed that employees taking vacations agree that, if for any reason employment is severed, voluntarily or otherwise, before January 1st, 1903, the vacation pay will be forfeited.”
The clerk took two weeks’ vacation, according to this notice. The B. H. Gladding Company became bankrupt October 18, 1902. The bankruptcy act gives priority, by section 64b (4) [U. S. Comp. St. 1901, p. 3447], to “(4) wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant.” Upon a proper construction of this language, it includes wages owing at the date of bankruptcy, even though, by contract between the wage earner and bankrupt, payment is to be deferred to a date later than the date of bankruptcy. The term “due” is one of double meaning. At times it means a sum now payable; at times it signifies a simple indebtedness, without reference to the time of payment. In U. S. v. Bank of North Carolina, 6 Pet. 36, 8 L. Ed. 308, the court said, “Plere, the word ‘due’ is plainly used as synonymous with owing.” See, also, 10 Am. & Eng. Enc. Law (2d Ed.) 279. The mere fact, therefore, that payment of wages was to be deferred or withheld, would not deprive the wage earner of priority, provided the right to wages had accrued before bankruptcy.
A further question is as to the effect of the limiting clause, “which have been earned within three months before the commencement of
A further question arises as to the legal effect of the following paragraph :
“Vacation payments will be withheld, as has been the custom, until the following January, and it is understood and agreed that employees taking vacations agree that, if for any reason employment is severed, voluntarily or otherwise, before January 1st, 1903, the vacation pay will be forfeited.”
This language must be construed as a provision for the benefit of the employer, designed to protect him in case an employé should leave, or be discharged, after vacation, and to secure the continuance of the services of his employés. It shows clearly on its face that the contract or regulation was one made in contemplation of the continuance of business, for it says, “Vacation payments will be withheld, as has been the custom, until the following January.” The expressions, “vacation payments will be withheld,” “vacation pay will be forfeited,” when construed in connection with the statements, “Employees who have been continuously employed since January ist, 1902, will be entitled to one week’s vacation with pay. Employees continuously employed since July ist, 1901, will be entitled to two weeks’ vacation with pay” — indicate that vacation wages, like other wages, accrue and are owing as each week passes. The employé is to have a “vacation with pay.” That the payments are to be withheld, and subject to forfeiture, affords no indication whatever that there is any failure of consideration; if the employé does not continue to work until January 1, 1903. The employés are, by the terms of the notice, entitled to a vacation and pay in accordance with the length of past services. They are liable to a forfeiture of pay upon the happening of a condition subsequent.
The decision of the referee is reversed, and the claim is allowed as a claim having priority. A like order will be made in each of the cases involving similar claims.