Olson v. Idora Hill Mining Co.

BUDGE, J.

Appellant is a corporation organized under the laws of Washington and owning and heretofore operating a group of mining claims in Beaver Mining District, Shoshone County, known as the Idora Mine. Respondents were employed by appellant as laborers in connection with said operations prior to the commencement of these proceedings.

Respondents were discharged from time, to time by appellant, their wages being due at the time of the discharge, but they were not paid the respective amounts due them. Promises of settlement were made to respondents by one of the officials of the appellant corporation, and at his request, and relying upon his promises, respondents remained in Wallace for a period of more than forty days waiting for their money.

On April 29, 1914, the liens embodied in the case of Harry Olson et ah, were filed and on May 1, 1914, action was commenced to foreclose them. On April 14, 1914, respondent Clark G. Norris filed his claim of lien and entered suit to foreclose the same on May 16,1914. On May 21 and 24, 1914, respectively, Peter Probach and J. H. Smith filed their liens for record and immediately instituted an action to foreclose them.

On October 8, 1914, by order of the court, the above eases were consolidated for trial. On October 16, 1914, the eases were tried before the court without a jury. An attorney fee of $50 was agreed upon in the Probach and Smith case. Proof was offered in the other cases for the purpose of establishing what would be a reasonable attorney fee; and the court found in the case of Harry Olson et al., $725, and in the case of Norris, $75, to be reasonable attorney fees. Appellant in the trial court admitted the respective amounts claimed by respondents to be correct, but denied the validity of the penalties and the reasonableness of the attorney fees except in the Probach-Smith case.

On December 1, 1914, judgment was entered in favor of respondents for the amount of wages due and unpaid, together with costs and attorney fees, including penalties in favor of each of the respondents for a period of thirty days in an amount equal to the wages which they were receiving without rendering services therefor. This is an appeal from the judgment.

In this case a motion to dismiss the appeal and a motion to strike from the records and files exhibits A, B, C, and D, and the trial judge’s notes of evidence were argued and submitted. We have carefully considered both these motions and reached the conclusion that they will be denied.

Appellant specifies and relies upon nine assignments of error. A number of these assignments might have been consolidated, and instead of discussing each of them separately, we will discuss only such as we deem necessary in order to reach what in our opinion is a proper determination of this ease.

The serious question in this case, raised by appellant’s first assignment of error, is that chapter 170 of the act of the legislature of this state as contained in Session Laws of 1911, page 565, is unconstitutional, in that it violates the provisions of sec. 10, art. 1 of the constitution of the United States and of secs. 13 and 16, art. 1 of the constitution of Idaho, and also of see. 1 of the 14th amendment to the constitution of the United States. And appellant contends that the trial court erred in rendering judgment against it and in favor of either or any of the respondents for any penalty or Knm of money claimed under said various liens for an amount equaling the wages for a period of thirty days which they were receiving at the time of their discharge, or for any length, of time, as a penalty for nonpayment of wages at the time they were discharged.

The body of chapter 170 of the 1911 Session Laws reads as follows:

“Section 1. "Whenever any employer of labor shall hereafter discharge or lay off his or its employees without first paying them the amount of any wages or salary then due them, in cash, lawful money of the United States, or its equivalent, or shall fail or refuse on demand to pay them in like money, or its equivalent, the amount of any wages or salary at the time the same becomes due and owing to them under their contract of employment, whether employed by the hour, day, week or month, each of his or its employees may charge and collect wages in the sum agreed upon in the contract of employment for each day his employer is in default until he is paid in full, without rendering any service therefor; Provided, however, he shall cease to draw such wages or salary thirty (30) days after such default.

‘ ‘ Sec. 2. Every employee shall have such lien and all other rights and remedies for the protection and enforcement of such salary or wages as he would have been entitled to had he rendered services therefor in manner as last employed.”

Section 10 of article 1 of the United States constitution to which counsel for appellant refers is evidently the first subdivision thereof, which reads as follows:

“No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coih money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility. ’ ’

Section 13 of article 1 of the constitution of Idaho reads in part as follows:

“No person shall be ... . deprived of life, liberty or property without due process of law.”

Section 16 of article 1 of the Idaho constitution provides:

“No bill of attainder, ex post facto law, or law impairing the obligation of contracts shall ever be passed.”

Section 1 of tbe 14th amendment to the constitution of the United States reads as follows:

“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the law.”

Statutes similar in many respects to chapter 170, supra, have been enacted in a great number of the states of this country, and many of them have been before the supreme courts of the respective states, and numerous decisions have been handed down, some of which have upheld the provisions of the laws and others have pronounced them unconstitutional.

Labor legislation is a product of, and has in a measure kept pace with, civilization. The enactment of such laws is evidently occasioned by the peculiar conditions that exist in the various states affecting labor. The object of such legislation is to require employers of labor to pay their men promptly and in lawful money when they are discharged or quit, and this object is grounded in the broad principle that labor is property for which due compensation is to be paid upon the performance thereof, and that the laborer is worthy of his hire and should not be required to wait beyond a reasonable time for money he has earned, or for which he has sold his labor. A laborer’s economic condition is usually such that to deprive him of his earnings for any considerable period of time brings into his home poverty and privation.

Some of the numerous statutes to which our attention has been directed and which have been held unconstitutional are materially different in their provisions from the one upon which this action is based, by reason of the limitations placed upon the right of both the employer and the employee to contract and by reason of the legislature’s having undertaken to make contracts for persons such as those persons might not be willing to make themselves and to forbid the making of contracts which they would otherwise make. But in recent years the trend of authority seems to be that the legislature has the power to regulate the time of payment of wages to within a reasonable time after the services have been rendered according to the terms of the contract and after demand, and thus avoid serious injury and injustice to the working class as a result of undue delay in the payment of wages. Such legislation has been sustained as being within the police power of the state. (Chicago, B. & Q. R. Co. v. McGuire, 219 U. S. 549, 31 Sup. Ct. 259, 55 L. ed. 328; Johnson, Lytle & Co. v. Spartan Mills, 68 S. C. 339, 47 S. E. 695, 1 Ann. Cas. 409.)

In the case of International Text-book Co. v. Wessinger, 160 Ind. 349, 98 Am. St. 334, 65 N. E. 521, 65 L. R. A. 599, a statute which provided for regular pay-days and payment of wages in lawful money of the United States by every person, company, corporation or association employing any person to labor and prohibited any assignment of future wages, was attacked on the ground of infringement of the liberty of contract, the attack being particularly directed against the assignment of future wages. The supreme court, in upholding -that act and overruling the objection on the ground stated, said in part: “A large portion of the persons affected by these statutes of labor are dependent upon their daily or weekly wages for the maintenance of themselves and their families. Delay of payment or loss of wages results’ in deprivation of the necessaries of life, suffering, inability to meet just obligations to others, and, in many cases, may make the wage-earner a charge upon the public. The situation of these persons renders them peculiarly liable to imposition and injustice at the hands of employers, unscrupulous tradesmen, and others who are willing to take advantage of their condition. Where future wages may be assigned, the temptation to anticipate their payment, and to sacrifice them for an inadequate consideration, is often very great. Such assignments would, in many cases, leave the laborer or wage-earner without present or future means of support. By removing tbe strongest incentive to faithful service, — tbe expectation of pecuniary reward in tbe near future, — their effect would be alike injurious to tbe laborer and bis employer. It is clear that tbe object of tbe act of 1899, supra, was tbe protection of wage-earners from oppression, extortion, or fraud on tbe part of others, and from tbe consequences of their own weakness, folly, or improvidence. ’ ’

One of the latest cases involving tbe constitutionality of a statute on tbe ground of restriction of tbe rights of parties to make contracts is that of McLean v. State, 81 Ark. 304, 126 Am. St. 1037, 98 S. W. 729, 11 Ann. Cas. 72. Tbe statute there attacked prohibited tbe screening of coal in mines before it was weighed to determine tbe wages tbe miner would be entitled to, and provided suitable penalties for a violation of tbe act. This statute was upheld against tbe attack that it was obnoxious to tbe provisions of tbe constitution of Arkansas and tbe 14th amendment of tbe constitution of tbe United States, securing to all persons equality before tbe law, tbe court stating, among other things, that it was a valid exercise of tbe police power to protect tbe miner from fraud and oppression.

Tbe case was appealed to the supreme court of tbe United States (McLean v. Arkansas, 211 U. S. 539, 29 Sup. Ct. 206, 53 L. ed. 315) and there affirmed. Tbe court, speaking through Justice Day, said: “That tbe constitution of tbe United States, in tbe 14th amendment thereof, protects tbe right to make contracts for tbe sale of labor, and tbe right to carry on trade or business, against hostile state legislation, has been affirmed in decisions of this court, and we have no disposition to question those cases in which tbe right has been upheld and maintained against such legislation. (Allgeyer v. Louisiana, 165 U. S. 578, 17 Sup. Ct., 427, 41 L. ed. 832; Adair v. United States, 208 U. S. 161, 28 Sup. Ct. 277, 52 L. ed. 436, 13 Ann. Cas. 764.) But, in many cases in this court, tbe right of freedom of contract has been held not to be unlimited in its nature, and when the right to contract or carry on business conflicts with laws declaring tbe public policy of the state, enacted for the protection of the public health, safety, or welfare, the same may be valid, notwithstanding they have the effect to curtail or limit the freedom of contract. ’ ’

In the case of State v. Missouri Pac. Ry. Co., 242 Mo. 339, 147 S. W. 118, the court sustained the constitutionality of a statute of that state requiring all corporations doing business in Missouri to pay their employees as often as semi-monthly, and fixing penalties for violation thereof. It was substantially held that such statute did not violate section 1 of the 14th amendment of the constitution of the United States, nor did it conflict with section 10, article 1, of the United States constitution as destroying the right of defendant to make legitimate contracts with its employees in respect to matters which are not a violation of any criminal law, and which do not relate in any manner to the safety, health or public welfare of such employees, as the law does tend to promote the welfare of defendant’s employees and the general public, and is not needlessly injurious or oppressive to corporations. It was also held that the law did not violate the Missouri constitution as depriving the companies of their natural right and liberty to contract, or of the gains of their own industry, or of their property without due process of law, or of the charter right to employ labor upon any reasonable terms agreed upon; nor did it violate such constitution as taking the company’s private property and appropriating the same to the private use of certain of its employees, nor as granting irrevocable privileges to certain persons, nor as special or class legislation.

In the ease of Erie R. Co. v. Williams, 233 U. S. 685, 686, 34 Sup. Ct. 761, 58 L. ed. 1155, 51 L. R. A., N. S., 1097, wherein a statute which required an interstate carrier to pay its employees semi-monthly was attacked on the ground of unconstitutionality, one of the contentions made was that the statute violated section 1 of the 14th amendment of the constitution of the United States, in that it denied to employees of the Erie Railroad Company the equal protection of the law. The supreme court, speaking through Mr. Justice McKenna, said that the defendant railroad company eonld not be heard to complain on this ground, in view of the fact that the employees were not complaining.

In the case of Re House Bill 1230 (Opinion of Justices), 163 Mass. 589, 40 N. E. 713, 28 L. R. A. 344 (in which are cited numerous cases involving the validity and effect of statutes regulating the payment of wages), it was held that a statute requiring manufacturers to pay wages of their employees weekly, although applying to individuals as well as to corporations, is, under the Massachusetts constitution, within the power of the legislature to enact. In this ease the court said: "It is well known that in some of the states of this country legislation similar to that proposed has been held unconstitutional by the courts, sometimes on the ground that it is partial in its character, but more frequently on the ground that it interferes with what is called the liberty of contract. .... In some of these decisions a distinction has been suggested or made between the rights of natural persons and the rights of corporations, and such legislation has been deemed valid with respect to corporations whose charters were subject to alteration, amendment, or repeal by the legislature, or which, being foreign corporations, were permitted to do business in the state under such conditions as the legislature might impose, while the legislation has been deemed void with respect to natural persons.” But in another part of this opinion the court says: "We know of no reason derived from the constitution of the commonwealth or of the United States why there must be a distinction máde in respect to such legislation between corporations and persons.....”

And in Commonwealth v. Dunn, 170 Mass. 140, 49 N. E. 110, a statute regulating the time of payment of wages by persons, partnerships and corporations engaged in any manufacturing business, was assumed to be constitutional for the reasons stated in the Opinion of Justices, supra.

In Hancock v. Yaden, 121 Ind. 366, 16 Am. St. 396, 23 N. E. 253, 6 L. R. A. 576, the validity of a statute requiring the wages of employees engaged in mining or manufacturing to be paid at least once every two weeks by all persons, firms, corporations, etc., engaged in such business, was fully sustained.

The case of Seelyville Coal etc. Co. v. McGlosson, 166 Ind. 561, 117 Am. St. 396, 77 N. E. 1044, 9 Ann. Cas. 234, is in point with the ease at bar. It sustains the contention of respondent here and is supported by numerous authorities, both state and federal. The statute of Indiana upon which the action in that case was based required certain employers to pay their employees at least once every two weeks the amount due for labor on the demand of the employee, and provided that each employer who failed for ten days after demand of payment to pay the employee the amount of wages then due for labor, should be liable to the employee for the value of the labor, together with a penalty of one dollar for each succeeding day, not to exceed double the amount of wages due. The court in discussing that statute and distinguishing it from one involved in a former ease in that state said: “The invalidity of the statute involved in Republic Iron & Steel Co. v. State, supra, [160 Ind. 379, 66 N. E. 1005, 62 L. R. A. 136], was, by this court, attributed to the fact that the act deprived both the employer and the employee in all lines of labor of .the right to contract for employment, except upon the condition that the wages earned by the employee should be paid weekly. The right of the legislature' reasonably, or to a limited extent, to regulate the payment of wages, as is done under the statute in the case at bar, was not in that appeal denied by the court.

“It will be observed that the act of 1887 does not profess to restrict or abridge the right of contract, except as against its express requirement that the amount due the employee for labor shall be paid in lawful money of the United States. This is the only express provision thereof which prohibits the right to contract.....”

In the ease of Shortall v. Puget Sound Bridge & Dredging Co., 45 Wash. 290, 122 Am. St. 899, 88 Pac. 212, an amendment to an act which forbade corporations, etc., from paying employees by order, draft, etc., or otherwise than in lawful money, unless such orders or drafts were negotiable and redeemable in money, providing that wages earned by laborers should be payable whenever the laborer ceased work, whether of his own volition or because discharged by his employer, was attacked on the ground that it was in contravention of both the state and federal constitutions. The contention was made that the act was unsupported by any principle of public policy. But the court held the act to be constitutional, and said: “But we think the practice pursued by certain employers of labor, of paying the wages of their employees in orders drawn upon stores redeemable in commodities other than lawful money of the United States, and of postponing the day of payment until long after the wages were earned, was a real evil, operating to the detriment of the wage-earner, and consequently to the detriment of the state. As such practices were subject to correction by the legislature, .... its act in that regard was well within the rules of sound public policy. ’ ’ That court cited numerous cases in support of the doctrine there announced.

In cases where such statutes have been attacked and upheld the courts have, as a rule, taken the position that the statutes are subject to a reasonable construction, and that the intention is not to be gathered from a statute of this nature that the employer shall be penalized for the failure to pay what is not a just debt, nor for the failure to pay when the discharged laborer, after demanding payment, prevents compliance with the demand by his own conduct, nor to deny nor preclude the right of the employer to interpose any valid counterclaim or defense to the claim of such laborer. Nor, under such interpretation, can an action be maintained for a penalty alone after a settlement for loss or damage before suit. The statute being penal in its nature, should receive such construction as would not defeat the obvious intent of the legislature.

Viewed in this light, chapter 170, Sess. Laws 1911, cannot be assailed on the ground that it in any manner interferes with the right of the employer to agree in advance with the employee upon the terms and conditions of the contract of employment, or the date of payment, or the equivalent that he will receive in lieu of lawful money of the United States ; that it affords the employee the right to maintain an action for wages or salary until the same becomes due and owing under the terms of the contract, express or implied; or that it singles out any particular class of debtors and punishes it for failure to perform certain duties — duties which are equally obligatory upon all debtors — as it applies to all employers of labor, whether corporations, partnerships, associations or individuals.

In the case of Ingard v. Barker, 27 Ida. 124, 147 Pac. 293, this court held that “In passing upon the constitutionality of statutes generally, no matter from what standpoint the assault thereon may be made, nothing but a clear violation of the constitution will justify the courts in overruling the legislative will, and where there is reasonable doubt as to the constitutionality of the act, it must be resolved in favor of the act.” (See to same effect Noble v. Bragaw, 12 Ida. 265, 85 Pac. 903; Ex parte Gale, 14 Ida. 761, 95 Pac. 679; Grice v. Clearwater Timber Co., 20 Ida. 70, 117 Pac. 112.)

And as we are of the opinion that it is the province of the legislature, within reasonable bounds, to determine whether certain legislation is necessary or expedient for the safety, health, morality, comfort and welfare of the people of this state, we feel justified in holding that chapter 170, Sess. Laws 1911, p. 565, is a legitimate exercise of the police power of the state; that it is not a violation of the liberty of contract in respect of labor; that it does not deprive the employer or the employee of the liberty or right to enter into any contract, nor take property from the employer without due process of law; and, therefore, that it is not unconstitutional as being in violation of see. 10, art. 1, of the constitution of the United States, secs. 13 and 16, art. 1, of the constitution of this state, or of see. 1 of the 14th amendment to the constitution of the United States.

In going into the record of this case it appears that the judgment in favor of Morris Pearson for the sum of $623.20 is excessive, and not supported by the evidence. The trial court, in entering the respective amounts due respondents, inadvertently entered judgment in that sum, when, as a matter of fact, judgment should have been entered in favor of respondent Pearson for $247.70 together with costs, $2.28, and attorney fee, $50. And the trial court is hereby directed to modify said judgment in accordance with’the proof submitted upon the trial of the cause.

All the other assignments of error have been considered by this court and found to be without merit. Therefore, the judgment of the trial court, except as above modified, is affirmed, with costs in favor of respondents.

Sullivan, C. J., and Morgan, J., concur.

Case Details

Case Name: Olson v. Idora Hill Mining Co.

Court Name: Idaho Supreme Court

Date Published: Feb 5, 1916

Citation: 155 P. 291

Court Abbreviation: Idaho