Court Opinion

ID: 7891228
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:49:10.481466+00
Date Added: 2024-06-11T16:31:55.340458
License: Public Domain

The opinion of the court was delivered by
Smith, J. :
In sustaining the constitutionality.of the act under consideration the court of appeals held that it applied only to corporations and trusts severally employing ten or more persons ; and further, that the act is constitutional as a valid exercise of legislative authority to alter and amend corporate charters. The fact has been ignored that the complaint upon which the appellant was tried and convicted does not charge that the coal company for which he was acting was incorporated under the laws of this state. The agreed statement of facts recites merely that the Kansas Commercial Coal Company was a duly organized corporation, engaged in the business of mining coal for private gain, among other places, in Crawford county, Kansas. There is neither allegation nor proof that the corporation obtained its charter in Kansas. Nor can there be a presumption in a criminal case that it was a domestic corporation, in order to sustain a conviction. While the state might prohibit a foreign corporation from doing business here, it can hardly be claimed that it could alter or amend a corporate charter granted by the laws of another state. We will proceed, however, by assuming that the coal company was a Kansas corporation.
There is no suggestion in the title of the act that the provisions of corporate charters are to be in anywise affected. The title reads :
“An act to secure to laborers and others the payment of their wages,'and prescribing a penalty for the violation of this act-, and repealing section 2441, 2442 *150and 2443 of the General Statutes of 1889, and all acts and parts of acts in conflict herewith.”
Turning to the General Statutes of 1889, we find that sections 2441, 2442 and 2443 (Gen. Stat. 1897, ch. 109, §§ 1, 2, 3), repealed, have no reference to corporate charters. The sections repealed are incorporated in the Laws of 1887, chapter 171, entitled “An act to secure to laborers in and about coal-mines and manufactories the payment of their wages at regular intervals, and in lawful money of the United States.”
A person engaged in the pursuit of information regarding the extent of corporate powers under the laws of this state would receive no hint from the title of the act of 1897 that the law in question was intended for any such purpose. In the General Statutes of 1897 the act is made a part of chapter 73, under the head, “Of Labor and the Protection of Laborers,” and nowhere appears classified in that part of the statute relating to corporations. This is mentioned as indicating that the compiler of the General Statutes saw nothing in the act which indicated to him that it in any wise affected the powers of corporations. The first section of the act makes it unlawful for any person, firm, company, corporation or trust to give any scrip, token, check or order to any employee. The application' of this section to persons, firms, companies and trusts makes it quite clear that the general scope and purpose of the law is defined in its title, and that the alteration or amendment of corporate charters was never intended by the legislature and is not expressed in the body of the act, when the true rules of construction are applied thereto.
In the concurring opinion of Mr. Chief Justice Doster, in Railway Co. v. Medaris, 60 Kan. 151, 155, 55 Pac. 875, the same reasons are employed to show *151that the “fellow-servant” law of 1874 could not be regarded as amendatory of corporate charters. To hold that corporate charters are affected is to set at naught section 16, article 2, of the constitution, which reads : “No bill shall contain more than one subject, which shall be clearly expressed in its title.” This requirement is mandatory. (Comm’rs of Sedgwick Co. v. Bailey, 18 Kan. 600.) No information appearing in the title that corporate charters are affected, such subject is not only not clearly expressed but is not expressed at all. The object of this constitutional command is “to prevent the practice of embracing in the same bill incongruous matters having no relation to each other, or to the subject specified in the title, by which measures were often adopted without attracting attention.” (Suth. Stat. Const. §§ 78-85, and cases cited; The State v. Barrett, 27 Kan. 213 ; The State v. Sholl, 58 id. 507, 49 Pac. 668.) To satisfy the constitutional requirement the language of the act should be broad enough to show that corporate rights were either increased or abridged. In the view taken by the court of appeals, the sanction of the act is visited upon corporations and trusts employing ten or more persons, treating trusts as equivalent to corporations. Our statute' defines a trust. Section 14, chapter 145, General Statutes of 1897 (Gen. Stat. 1899, § 7508), reads:
“ A trust is a combination of capital, skill, or acts, by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any or all of the following purposes.” ( Then follow the particular acts prohibited.)
Just how the court of appeals concluded that the act we are now considering did not apply to individuals, but to trusts and corporations only, when a trust may *152be composed of persons or firms associated together, we do not understand. A trust may, or may not be, endowed with corporate powers. If not, then it is a mere aggregation of individuals or partnerships, and could hardly be regulated under a law the constitutionality of which can be sustained only upon the ground that it alters and amends corporate charters. We are clearly of the opinion that a construction of the act which attributes to it a purpose to alter or amend corporate charters is erroneous.
We have no hesitation in saying that if this statute had, without defect as to title, clearly and in express terms amended corporate charters, retaining the section classifying corporations to which it was applicable by the number of men in their employ, it would be obnoxious to the fourteenth amendment to the constitution of the United States.
'The law is partial and unequal in its operation. The first section of the act makes it ‘ ‘ unlawful for any person, firm, company, corporation, or trust, or the agent, or the business manager of any such person, firm, company, corporation or trust,” to do certain things. Section 2 declares that “ all contracts to pay or accept wages in any other than lawful money, or by check or draft, as specified in section one, of this act, and any private agreement or secret understanding that wages shall be or may be paid, in other than lawful money, or by such check or draft, shall be void.” So far the act is general, and applies to all persons and aggregations of persons alike. In section 3 partiality commences. Any person, says that section, who “ shall compel, or in any manner attempt to compel, or coerce any employee of any corporation, or trust to purchase goods, or supplies, from any particular ”... store or person shall be guilty of a *153misdemeanor. If, therefore, any person compels, or attempts to compel or coerce any employee, other than an employee of a corporation or trust, he is guiltless of wrong and may proceed with his compulsion without fear of prosecution. Section 4 provides that the act “shall apply only to corporations or trusts or their agents, lessees, or business managers, that employ ten or more persons.” Not only is the attempted act of compulsion or coercion denounced in section 3 made applicable only to corporations and trusts, but the denunciation of section 4 does not touch a corporation or trust that employs less than ten men. Thus an act of an agent, or of a corporation or trust of a given class, is unlawful, while the same act of the same man is lawful if he works for an individual, or another class of corporations or trusts. Again, the same act of the same man would be unlawful to-day if his employer was a corporation or trust and emloyed ten men, while to-morrow it would be lawful provided in the meantime the corporation or trust had discharged one of its employees. (Shaver v. Pennsylvania Co., 71 Fed. [C. C.] 931.)
The obvious intent of the act is to protect the laborer and not to benefit the corporation. Why should not the nine employees Who work for one corporation be equally nrotectedwith-.tihe- eleven engaged — lurAhe same line of employment for another corporation ? If fully paid for their labor in goods at a truck store might with much reason complain that the protection of the law was unequal as to them when they saw eleven men paid in money for the same service performed for another corporation engaged in a like business. Such inequality destroys the law. In the .wage-earners in the one inbther--^TTIe nihe'men law-*154instance cited, two of the eleven men might quit the employment of the company for which they worked and by this act alone make a method of payment by the corporation lawful which was unlawful while the eleven were employed. The criminality or innocence of an act done ought not to depend on the happening of such a circumstance. Equal protection of the laws means equal exemption with others of the same class from all charges and burdens of every kind. (In re Ah Fong, 3 Sawy. 144, Fed. Cas. No. 102.) In Leeper v. Texas, 139 U. S. 462, 468, 11 Sup. Ct. 579, 35 L. Ed. 225, it is said:
“No state can deprive particular persons, or classes of persons, of equal and impartial justice under the law; . . . due process is so secured by laws operating on all alike, and not subjecting the individual to the arbitrary exercise of the powers of government unrestrained by the established principles of private right and distributive justice.”
If the classification attempted by this act is a constitutional one, it follows that the legislature might have made the law applicable only to corporations employing married men or persons over a certain age, or to corporations a proportion of whose employees were women, or applied any other arbitrary or capricious means of distinction. In the language of Mr. Justice Brewer, infra, “in all cases it must appear not only that a classification has been made, but also that it is one based upon some reasonable ground,— some difference which bears a just and proper relation to the attempted classification.” A classification of the kind attempted makes a distinction between corporations identically alike in organization, capital, and all other powers and privileges conferred by law. It is arbitrary and wanting in reason. The act in question is class legislation of the most pronounced *155character. Judge Cooley, in his Constitutional Limitations (5th ed.), 484, 486, in discussing such laws, says :
“ Every one has a right to demand that he be governed .by general rules, and a special statute which, without his consent, singles his case out as one to be regulated by a different law from that which is applied in all similar cases, would not be legitimate legislation, but would be such an arbitrary mandate as is not within the province of free governments. Those who make the laws ‘ are to govern by promulgated, established laws, not to be varied in particular cases, but to have one rule for rich and poor, for the favorite at court and the countryman at plow.’ This is a maxim in constitutional law, and by it we may test the authority and binding force of legislative enactments.
“ The doubt might also arise whether a regulation made for any one class of citizens, entirely arbitrary in its character, and restricting their rights, privileges, or legal capacities in a manner before unknown to the law, could be sustained, notwithstanding its generality. Distinctions in these respects must rest upon some reason upon which they can be defended— like the want of capacity in infants and insane persons ; and if the legislature should undertake to provide that persons following some specified lawful trade or employment should not have capacity to make contracts, or to receive conveyances, or to build such houses as others were allowed to erect, or in any other way to make such use of their property as was permissible to others, it can scarcely be doubted that the act would transcend the due bounds of legislative power, even though no express constitutional provision could be pointed out with which it would come in conflict. To forbid to an individual or a class the right to the acquisition or enjoyment of property in such manner as should be permitted to the community at large, would be to deprive them of liberty in particulars of primary importance to their ‘pursuit of happiness’; and those who should claim, a right to do so ought to be able to show a specific authority *156therefor, instead of calling upon others to show how and where the authority is negatived.”
Such legislation is violative of the fourteenth amendment of the constitution of the United States, which provides: . . . “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 laws.” Corporations are regarded as persons within the meaning of said amendment. (Santa Clara Co. v. South. Pac. Railroad, 118 U. S. 394, 6 Sup. Ct. 1132, 30 L. Ed. 118 ; Pembina Mining Co. v. Pennsylvania, 125 U. S. 181, 8 Sup. Ct. 737, 31 L. Ed. 650.) The equal protection mentioned by the enforcement of this statute is denied by making one of two men engaged in the same business, under precisely similar circumstances, in the same town or building, a criminal, and imposing no penalty whatever upon the other for the same act, the only difference being that one worked for a copartnership and the other for a corporation.
In the late case of Gulf, Colo. & Santa Fe Ry. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255, 41 L. Ed. 666, the supreme court of the United States passed on a statute of Texas which provided that any person having a bona fide claim for services, labor, damages, overcharges on freight, or for stock killed or injured by any railway company, not exceeding fifty dollars, might present the same, verified by affidavit, for payment to such corporation by filing it with the station agent; and if at the expiration of thirty days such claim was not paid he might immediately institute suit thereon, and if he should obtain judgment he should be entitled to recover the amount of the claim and all costs, and in addition thereto a reasonable attorney’s fee, not to exceed ten dollars. It was held that the statute *157deprived the railway companies of property without due process of law, and denied to them its equal protection, in that they were singled out of all citizens and corporations and required to pay in certain cases attorneys' fees to the parties successfully suing them, while it gave to them no corresponding benefit. A large number of decisions bearing upon the question are collected in this opinion. Mr. Justice Brewer, in deciding the case, among other things, said :
“If it be said that this penalty is cast only upon corporations, that to them special privileges are granted, and therefore upon them special burdens may be imposed, it is a sufficient answer to say that the penalty is not imposed upon all corporations. The burden does not go with the privilege. Only, railroads of all corporations are selected to bear this penalty. The rule of equity is ignored. . . . But a mere statute to compel the payment of indebtedness does not come within the scope of police regulations. The hazardous business of railroading carries with it no special necessity for the prompt payment of debts. That is a duty resting upon all debtors, and while in certain cases there may be a peculiar obligation which may be enforced by penalties, yet nothing of that kind springs from the mere work of railroad transportation. . But arbitrary selection can never be justified by calling it classification. The equal protection demanded by the fourteenth amendment forbids this. . It is apparent that the mere fact of classification is not sufficient to relieve a statute from the reach of the equality clause of the fourteenth amendment, and that in all cases it must appear not only that a classification has been made, but also that it is one based upon some reasonable ground — some difference which bears a just and proper relation to the attempted classification.”
In the case of State v. Goodwill, 38 W. Va. 179, 182, 10 S. E. 286, 6 L. R. A. 623, a statute prohibiting any person, firm, company, corporation or association *158engaged in mining or manufacturing from using in paj-ment for labor any order or other paper, unless redeemable for its face value in lawful money of the United States, was held to be void. The court said:
"The rights of every individual must stand or fall by the same rule of law that governs every other member of the body politic under similar circumstances ; and every partial or private law which directly proposes to destroy or affect individual rights, or does the same thing by restricting the privleges of certain classes of citizens and not all others, when there is no public necessity for such discrimination, is unconstitutional and void. Were it otherwise, odious individuals or corporate bodies would be governed by one law, and the mass of the community, and those who make the law, by another.”
Again, in Frorer et al. v. The People, 141 Ill. 171, 180, 31 N. E. 397, 16 L. R. A. 495, the court, in passing on a scrip law similar to the one in question, said:
"If the general assembly may thus deprive some persons of substantial privileges allowed to other persons under pi’ecisely the same conditions, it is manifest th^t it may, upon like principle, deprive still other persons of other privileges in contracting, which, under precisely the same circumstances, are enjoyed by all but the prohibited class. And it can hardly be admissible that the legislative determination that the facts are such as to warrant this discrimination is conclusive, . . . since, if that were so there could be nothing but its own -discretion to' control its action in regard to every liberty enjoyed by the citizen ; and it might find that the public welfare required that society should be divided into an indefinite, number of classes, each possessing or being denied privileges in contracting and acquiring property, as favoritism or caprice might dictate.”
However much the employed might profit by the necessities of the employer desiring to exchange prop*159erty for labor at a value advantageous to the former, all such beneficial agreements are prohibited by this law. In short, such legislation infringes upon natural rights and constitutional grants of liberty. It treats the laborer as a ward of the government, and dis: courages the employment of those talents which lead to success in the fields of commercial enterprise. Persons sui juris need no guardians. Those who seek to put a protector over labor reflect upon the dignity and independence of the wage-earner, and deceive him by the promise that legislation can cure all the ills of which he may complain. Such legislation suggests the handiwork of the politician, rather than of the political economist.
In the case of The State v. Loomis, 115 Mo. 307, 315, 22 S. W. 350, 21 L. R. A. 789, Mr. Chief Justice Black, in an able opinion, held a scrip law substantially like the statute under consideration to be void as an unwarranted interference with the liberty of the citizen. The Missouri statute provided that it should be unlawful for. any corporation, person or firm engaged in manufacturing or mining to issue or circulate for payment of the wages of labor any order, check or memorandum, payable otherwise than in lawful money of the United States, unless the same was negotiable, and redeemable at its face value without discount, in cash or in goods, at the option of the holder, at the store or other place of business of such firm, person, or corporation. Referring to such statutes, the learned justice said :
‘ ‘ They single out those persons who are engaged in carrying on the pursuits of mining and manufacturing, and say to such persons, you cannot contract for labor payable alone in goods, wares and merchandise. The farmer, the merchant, the builder and the numerous contractors employing thousands of men may *160make such contracts, but you cannot. They say to the mining and manufacturing employees, though of full age and competent to contract, still you shall not haye the power to sell your labor for meat and clothing alone as others may.
“ It will not do to say these sections simply regulate payment of wages, for that is not their purpose. They undertake to deny to the persons engaged in the two designated pursuits the right to make and enforce the most ordinary eyery-day contracts — a right accorded to all other persons. This denial of the right to contract is based upon a classification which is purely arbitrary, because the ground of the classification has no relation whatever to the natural capacity of persons to contract.
“ Now it may be that instances of oppression have occurred and will occur on the part of some mine owners and manufacturers, but do they not occur quite as frequently in other fields of labor? Conceding that such instances may and do occur, still that furnishes no reasonable basis for depriving all persons engaged in the two lawful and necessary pursuits of the right to make and enforce every-day contracts.
“Liberty, as we have seen, includes the right to contract as others may; and to take that right away from a class of persons following lawful pursuits is simply depriving such persons of a time-honored right which the constitution undertakes to secure to every citizen. Applying the principles of constitutional law before stated, we can come to no other conclusion than this, that these sections of the statute are utterly void. They attempt to strike down one of the fundamental principles of constitutional government. If they can stand, it is difficult to see an end to such legislation, and the government becomes one of special privileges, instead of a compact £ to promote the general welfare of the people.’ We place our conclusion on the broad ground that these sections of the statutes are not £ due process of law ’ within the meaning of the constitution.”
To the same effect see Ritchie v. The People, 155 Ill. *16198, 40 N. E. 454, 29 L. R. A. 79 ; Godcharles & Co. v. Wigeman, 113 Pa. St. 431, 437, 6 Atl. 354. The latter case was an action brought by Wigeman to recover wages as a puddler. A plea of payment was made. During the time of his employment the plaintiff asked for, and received, orders from defendants on different persons for coal and other articles, which orders were honored by the persons on whom drawn, and the defendants paid them. An act of the legislature made all orders given to their workmen by employers engaged in the business of manufacturing, payable in goods or anything but money, void. Speaking of these sections of the act, the court said:
“They are utterly unconstitutional and void, inasmuch as by them an attempt has been made by the legislature to do what, in this country, cannot be done ; that is, prevent persons who are sui juris from making their own contracts. The act is an infringement alike of the right of the employer and the employee. . . . He may sell his labor for what he thinks best, whether money or goods, just as his employer may sell his iron or coal, and any and every law that proposes to prevent him from so doing' is an infringement of his constitutional privileges, and consequently vicious and void.”
See also Low v. Rees Printing Co., 41 Neb. 127, 59 N. W. 362, 24 L. R. A. 702; Millett v. The People, 117 Ill. 294, 7 N. E. 631; Braceville Coal Co. v. The People, 147 Ill. 66, 35 N. E. 62; Pearson v. City of Portland, 69 Me. 278 ; In re House Bill No. 203, 21 Colo. 27, 39 Pac. 431; In re Eight-hour Bill, 21 id. 29, 39 Pac. 328 ; Colon v. Lisk, 153 N. Y. 188, 47 N. E. 302 ; State v. Julow, 129 Mo. 163, 31 S. W. 781; People ex rel. Tyroler, v. Warden of Prison, 157 N. Y. 116, 51 N. E. 1006 ; Matter of Application of Jacobs, 98 N. Y. 98.
Under the penal provisions of the statute in ques*162tion, a laboror who works for a corporation or trust femploying ten or more persons is deprived of his freedom of contract, in that he cannot bargain to receive anything in payment for his labor but lawful money of the United States. While it might be desirable (and profitable to the employee of such corporation to receive a horse, or a cow, or a house and lot in payment for his wages, yet the legislature prohibits payment in that way, and places the laborer under I guardianship, classifying' him in respect to freedom \ of contract with the idiot, the lunatic, or the felon in > the penitentiary. It has been sought by some judges to justify legislation of this kind upon the theory that, in the exercise of police power, a limitation necessary for the protection of one class of persons against the persecution of another class may be placed upon freedom of contract. As between persons sui juris, what right has the legislature to assume that one class has the need of protection against another? In this country the employee to-day may be the employer next year, and laws treating employees as subjects for such protective legislation belittle their intelligence and reflect upon their standing as free citizens.
I It is our boast that no class distinctions exist in /this country. An interference by the legislature with ! the freedom of the citizen in making contracts, deny- / ing to a part of the people, possessing sound minds and * memory, the right to bargain concerning the equivaI lent they may desire to receive as compensation for 1 their labor, is to create or carve out a class from the I body of the people and place that class within the pale of protective laws which invidiously distinguish them from other free citizens, thus dividing by arbitrary fiat equally free and intelligent people into distinctive classes or grades — the one marked by law as the object of legislative solicitude, the other not.
*163This discrimination has been justified by writers defending the doctrine of paternalism, and by some judges, upon the asserted fact that labor is constantly engaged in an unequal contest with capital, and that the former must be reinforced by the legislative power of the state to prevent its overthrow in the conflict. Freedom of action — liberty — is the corner-stone of our governmental fabric. Laws which infringe upon the free exercise of the right of a working man to trade his labor for any commodity or species of property which he may see fit and which he may consider to be the most advantageous, is an encroachment upon his constitutional rights and an obstruction to his pursuit of happiness. Such laws as the one under consideration classify him among the incompetents and degrade his calling. The proportion of lawful money in circulation is small compared with the value of other property in the United States. Accumulated wealth, much or little, is represented in a very small part by money.' To say that a free citizen can contract for, or agree to receive in return for his labor, one kind of property only, and that which represents the smallest part of the aggregate wealth of the country, is a clear restriction of the right to bargain and trade, a suppression of individual effort, a denial of inalienable rights.
In Tiedeman on Limitations of the Police Power, section 178, the author says :
“Laws, therefore, which are designed to regulate the terms of hiring in strictly private employments, are unconstitutional, because they operate as an interference with one’s natural liberty, in a case in which there is no trespass upon private right, and no threatening injury to the public. And this conclusion not only applies to laws regulating the rate of wages of private workmen, but also any other law, whose ob*164ject is to regulate any of the terms of hiring, such as the number of hours of labor per day, which the employer may demand. There can be no constitutional interference by the state in the private relation of master and servant except for the purpose of preventing frauds and trespasses.”
It will be noted that in the case at bar the appellant did not urge or compel the employee, Graves, to take the order for merchandise. Graves voluntarily applied for and requested that the same be given to him between pay-days. Had he been content to have waited until the regular pay-day he would have received his wages in money. It was his option to take the order, and for compliance with his request the appellant was convicted. Here was no force or compulsion on the part of the appellant, and he committed no fraud or trespass. We conclude, therefore : (1) That chapter 145, Laws of 1897 ( Gen. Stat. 1897, ch. 73, §§ 22-26), is not to be construed as altering or amending corporate charters ; (2) that it is in violation of the fourteenth amendment of the constitution of the United States,.m that it denies to persons within this state the equal protection of the laws.
The judgment of the court of appeals and of the district court is reversed and the appellant discharged.
Johnston, J., concurring.