Cato v. Grendel Cotton Mills ( 1925 )

The opinion of the Court was delivered by

Mr. Acting Associate Justice J. W. Johnson.

This action was brought under Section 5592 of Volume 3, Code 1922, for the recovery of wages alleged to be due plaintiff by defendant, and for the statutory penalty for failure of defendant to pay the same after due demand in writing. The case was tried before a magistrate, who gave judgment for plaintiff for the full amount claimed, less $18 accrued rent. An appeal was taken from this judgment to the County Court for Greenwood County, and' resulted in an order of his Honor, H. C. Tillman, dismissing the appeal, and affirming the judgment of the magistrate. From this judgment defendant appeals to this Court, and alleges error on the part of the County Judge by two exceptions :

(1) That his Honor erred in holding that the defendant was liable for the penalty under the statute; the error being that plaintiff being in possession of the defendant’s house as a part of his compensation, defendant had the right to demand the surrender of possession of same as a condition precedent to the payment of wages.

(2) That his Flonor erred in holding that plaintiff’s wages were due, within the meaning of the statute, so as to make defendant liable for the penalty for its failure to pay such wages within 24 hours after written demand, notwithstanding that under plaintiff’s contract of employment he enjoyed the possession of defendant’s house as a part of his compensation; the error being that under such contract, and by virtue of the well-understood custom, defendant was entitled to the surrender of possession of the house, and plaintiff’s wages did not become due until such possession was surrendered.

The record shows that on August 13, 1923, plaintiff, Cato, was in the employ of defendant, Grendel Cotton Mills; that on that day he was discharged by defendant; that defendant then owed plaintiff $19.12; that on September 1, 1923, Cato-made written demand on defendant for his wages; that defendant refused to pay until Cato should vacate the house of defendant then occpied by Cato, defendant alleging that by a custom of the mill a discharged employee is not entitled to his pay until he vacates the house of the company occupied by him.

The section of the Code mentioned supra is as follows:

“When any corporation carrying on any business in this State in which laborers are employed, whose wages, under the business rule or custom of such corporation, are paid monthly or weekly on a fixed day beyond the end of the month or week in which the labor is performed, shall discharge any such laborer, the wages which have been earned by such discharged laborer shall become immediately due and payable. And if not so paid within twenty-four hours after written demand therefor, then such laborer shall recover in addition thereto a penalty of as much per day for the time said wages shall remain unpaid, not exceeding thirty days, as he was receiving at the time of his discharge.”

When the defendant hired Cato, the statute just quoted formed a part of the contract. It wrote the condition that in the event of defendant’s discharge his wages became immediately due and payable. But defendant says that plaintiff agreed to waive his statutory rights by accepting employment subject to the condition that his wages should not become due and payable until he vacated plaintiff’s house. The evidence adduced to prove this allegation is the statement of the magistrate, in his return, that “this practice is a well-understood and universal custom or usage with this defendant.” If it be conceded that the magistrate’s finding of fact as to the custom of this defendant was equivalent to a finding that plaintiff, Cato, knew of the custom, and acquiesced in and was bound by it, then his conclusion of law must rest upon the proposition that Cato could not legally waive his right to immediate payment of his wages, or could not, by contract, add to the statute something the Legislature did not see fit to write into it.

The question then arises: Was Cato’s right upon discharge to immediate payment of his wages a right he could either expressly or impliedly waive or contract away? The statute the Court is called upon to .construe was'passed, no doubt, to meet an evil prevalent at the time of its passage. W'e have corporations in this State employing thousands of laborers. Most of these laborers are employed in the cotton mills. Defendant’s counsel say in their printed argument, in substance, that most of these employees are impecunious. I think this is true. Some of these corporations employed their help either by the week or month, and if the employee was discharged before his wages became due he had to wait until “pay day” before he could get his wages. It is easy to picture the consequences to the impecunious laborer of this mode of settlement. To remedy the hardships that, no doubt, followed this practice by corporations, the statute in question was enacted.

To recur to the question hereinbefore propounded: Was Cato’s right, upon discharge, to immediate payment of his wages, a right he could either expressly or implidely waive or contract away? We answer, No; that, in the light of the reason for the enactment of the statute, it would be against public policy to allow him to do so. The following authorities bear upon the question at issue:

“The public policy of the government is to be found in its statutes, and, when they have not directly spoken, then in the decisions of the Courts and the constant practice of the government officials; but, when the lawmaking power speaks upon a particular subject, over which it has constitutionál power to legislate, public policy in such a case is what the statute enacts.” United States v. Trans-Missouri Freight Ass’n, 166 U. S., 290; 17 S. Ct., 540; 41 L. Ed., 1007.

“Courts must refuse to sustain that which is against the public policy of the State, when such public policy is manifested by the legislative or fundamental law of the State.” People ex rel. Peabody v. Chicago Gas Trust Co., 130 Ill., 268; 22 N. E., 798; 8 L. R. A., 497; 17 Am. St. Rep., 319.

“Contracts contravening the established policy of the State cannot be enforced in the Courts thereof.” Commonwealth Mut. Fire Ins. Co. v. Hayden, 60 Neb., 636; 83 N. W., 922; 83 Am. St. Rep., 545.

“Parties are permitted, by contract, to make a law for themselves only in cases where their agreements do not violate the express provisions of any law, nor injuriously affect the interests of the public.” Little Rock & Ft. S. Ry. Co. v. Eubanks, 48 Ark., 460; 3 S. W., 808; 3 Am. St. Rep., 248.

“And it is for the welfare of society that their employers shall not be permitted, under the guise of enforcing contract rights, to abdicate their duties to them. The consequence would be that every railroad company, and every owner of a factory, mill, or mine, would make it a condition precedent to the employment of labor, that the laborer should release all right of action for injuries sustained in the course of the service, whether by the employer’s negligence or otherwise.” Id, 249.

“The Courts of no State will hold valid any contract that is injurious to the public rights of its people, offends their morals, contravenes their policy, or violates a public law.” 87 Am. St. Rep., 737.

“An agreement which discloses an intention to contravene a statute is vicious and unenforceable.” Id.

A railroad company “cannot make a valid contract whereby it will be exempt from liability for negligence.” Wallingford v. Columbia & G. R. Co., 26 S. C., 258; 2 S. E., 19. Johnson v. Charleston & S. F. Ry. Co., 55 S. C., 152; 32 S. E., 2; 33 S. E., 174; 44 L. R. A., 645. Reed v. Southern Ry., 75 S. C., 170; 55 S. E., 218. Kirkland v. Charleston & W. C. Ry., 79 S. C., 276; 60 S. E., 668; 128 Am. St. Rep., 848.

Our present Chief Justice delivered the opinions in the Reed and Kirkland Cases, and he bases his decisions on the doctrine of public policy. In Magwood v. Duggan, 1 Hill, Law, 182, we find this:

“It is a universal rule that contracts, which have for their object anything which is repugnant to justice, or against the general policy of the common law, or contrary to the provisions of a statute, are void.”

The case of McConnell v. Kitchens, 20 S. C., 430; 47 Am. Rep., 845, was an action on a contract. The consideration of the contract was the purchase price of fertilizers. In discussing the law applicable to the facts of this case, Mr. Justice (afterwards Chief Justice) Mclver said:

“Now, while it is true that the Legislature has not, in so many words, declared that it shall not be lawful to sell any commercial fertilizer in this State, unless the regulations above prescribed have been complied with, or that a contract for the sale of such fertilizer, without complying with such regulations, shall be illegal and void, yet it seems to us manifest that the real object of the legislation set out above was to prohibit the sale of commercial fertilizers unless the prescribed regulations are complied with, in order to protect the farming interest from deceit or imposition in the sale of an article which has come to be so extensively, if not universally, used by the farmers of the country, as commercial fertilizers.”

Continuing, he says:

“In 2 Benj. Sales, § 825, the writer, after commenting at length upon the cases, deduces the following rules therefrom : ‘First. That where a contract is prohibited by statute it is immaterial to inquire whether the statute was passed for revenue purposes only or for any other object. It is enough that parliament has prohibited it, and it is therefore void. Secondly. That where • the question is whether a contract has been prohibited by statute', it is material in construing the statute to ascertain whether the Legislature had in view solely the security and collection of the revenue, or had in view, in whole or in part, the protection of the public from fraud in contracts or the promotion of some object of public policy/ ”

The Court held in this case that, where a party sold prepared agricultural lime in this State without a tag stating the chemical composition of such fertilizer and the date of analysis, as required by law, and took a note for the purchase price, that the contract was illegal and void. This case is not exactly on all fours, with the case we are considering, as the statute in this case provided a penalty for its violation. However, I think the reasoning employed by that eminent jurist, Chief Justice Mclver, applicable to the facts of the case we are considering.

This statute has been before this Court for construction in several cases. Wynne v. Seaboard Air Line Ry., 96 S. C., 1; 79 S. E., 521, Ann. Cas., 1916B, 133. Champion v. Hermitage Cotton Mills, 98 S. C., 418; 82 S. E., 672. Trammell v. Victor Mfg. Co., 102 S. C., 483; 86 S. E., 1057. Burden v. Woodside Cotton Mills, 104 S. C., 435; 89 S. E., 474. In the Trammell Case the Court says:

“We should not overlook the fact that the statute is remedial as well as penal. In so far as it is remedial, it should be construed liberally, to suppress the mischief it was designed to remedy. And, while it is true that, in so far as it is penal, it should be strictly construed to prevent injustice or oppression, the rule of strict construction does not require a narrow, verbal or unreasonably techñical construction, such as would defeat the clear intention of the lawmakers”—citing Mills v. Southern Ry., 82 S. C., 242; 64 S. E., 238. Brown v. Atlantic Coast Line R. Co., 91 S. C., 377; 74 S. E., 754.

At the time of the passage of this act corporations discharged their impecunious employees, no doubt, in many cases, with large families, who had nowhere to go and no means with which to defray their expenses while seeking other employment. They were, under the custom mentiond, compelled to wait until pay day.for their wages. In the meantime expenses were mounting, and the situation of the laborer became more precarious each day. The statute in question was passed to remedy this state of affairs. Now, if the object of the statute can be thwarted'by custom or contract, then the statute might as well be repealed, because it will not be long before the owner of every factory, mill, or other corporation employing labor, subject to the provisions of the statute, will establish customs and enter into contracts that will completely nullify the statute.

The views herein expressed do not in any way conflict with the decision of this Court in the Wynne Case. I do not contend that a corporation should be penalized “for 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 or preclude the right of the corporation to interpose any valid counterclaim or defense to the claim of such laborer;” but I hold that when a laborer is discharged, and the corporation at that time owes him money, and there is no valid defense to his claim, the corporation cannot interpose as a defense to such claim a custom of, or even a contract with, the corporation whereby the laborer must vacate his house before he will be entitled to his pay. Such a condition would contravene the plain intention of the statute, and, as I have said, be against public policy.

A majority of the Court concurring in this opinion, the judgment of this Court is that the exceptions be overruled, and the judgment of the County Judge affirmed.

'Mr. ChiEE Justice Gary and Mr. Justice Marion concur. Mr. Justice Watts dissents. Mr. Justice Cothran did not participate.