Court Opinion

ID: 3256431
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:28:16.752826+00
Date Added: 2024-06-11T13:40:34.457813
License: Public Domain

I am unable to concur in the conclusion reached by my colleagues and will state briefly why.
We have held consistently since the first decision under the Minimum Wage Law, State v. Anklam, 43 Ariz. 362, 31 P.2d 888, that the minimum per diem wage set by the highway commission for those performing manual or mechanical labor for the state or any of its political subdivisions must be paid from the day the commission fixes it. In fact, it has been pointed out several times that it is unlawful for the employee to work for less, and that section 7, chapter 12, Session Laws of 1933, goes so far as to make it a *Page 91 
criminal offense on the part of an officer having charge of employment, or any person acting under or for him, to pay less than the minimum. State v. Anklam, supra; City of Glendale v.Dixon, 51 Ariz. 86, 75 P.2d 42. And this is true whether the rate be that fixed originally or subsequently, because any order by the highway commission changing the per diem becomes automatically and immediately effective, though this provision of chapter 12 was amended by the fourteenth legislature in such a way as to require the highway commission to determine and publish the minimum fixed by it not later than April 15th of each odd numbered year, the purpose evidently being to prevent in the future a change in the wage rate during any fiscal period. Chapter 42, Session Laws of 1939. However, even though the minimum was raised by the commission after appellee and his assignors began working and the city's duty to pay them the increase each month thereby arose, they could nevertheless continue to work under the rate existing when they started without depriving themselves of the right to the increase, provided they initiated action therefor within the one-year limitation. City of Phoenix v. Drinkwater, 46 Ariz. 470,52 P.2d 1175; City of Glendale v. Coquat, 46 Ariz. 478,52 P.2d 1178, 102 A.L.R. 837. While it would have been unlawful for them to work for less than the minimum, it was not unlawful for them to accept the old rate and merely postpone claiming the increase to such time as they saw fit, provided they acted before it was barred by the one-year statute.
It is urged by the city, however, that the order of the highway commission, dated August 1, 1937, fixing a new minimum for the class of labor appellee and his assignors were performing, could not have been complied with by the city without producing a conflict *Page 92 
between the Minimum Wage Law and the budget law in that it would have caused the city to exceed the amount it budgeted July 20, 1937, and my colleagues uphold this contention, though they state that there would have been no conflict between the two laws if the Minimum Wage Law had been lived up to until the budget was exhausted. Their holding in effect is, that the city was bound to pay appellee and his assignors the wages fixed by the highway commission until the amount it had budgeted for the work they were doing was exhausted and that when this occurred the contract by which they were employed, being one depending for its fulfillment upon the amount budgeted, was automatically terminated by operation of law, and any attempt to extend or ratify it was void. In other words, it was the duty of the city to pay appellee and his assignors the per diem fixed by the highway commission on August 1, 1937, until the amount budgeted for the work they were doing was exhausted, in which event it would have been compelled to pursue one of these two courses: Either discharge appellee and his assignors or part of them or, in case their work was such that it was thought necessary to carry it on, apply through its governing body to the tax commission under the emergency provision of the statute, section 3099 of the Revised Code of 1928, for permission to incur an additional liability for that purpose, and if this right had been granted, appellee and his assignors could have continued work at the increased wage, but if refused it would have been necessary that the city lay them off for the remainder of the fiscal year. The majority view is that by following this course both laws would have been preserved and made effective.
Even if the correctness of this proposition be conceded, it has no application here, because the city did *Page 93 
not pay the wage fixed August 1, 1937, for any part of the fiscal year beginning July 1, 1937, but declined to obey the law in this respect, thereby forcing appellee and his assignors to quit work or continue under the old rate and sue for the increase within the one-year period of limitation. By its refusal to live up to the positive language of the Minimum Wage Law, the city placed itself beyond the protection this rule might have given it, because it could not refuse to pay appellee and his assignors the new per diem as long as there were budgeted funds for that purpose, and later on be heard to say in defense of any action that might be brought against it to recover the increase, that to have paid it from August 1, 1937, would have exhausted the budget before the end of the fiscal year. In the face of the Minimum Wage Law that was no concern of the city. The fact that living up to the plain requirements of that law would have depleted the budget before June 30, 1938, was a matter the city could not consider in determining whether it would do what my colleagues say it was bound to do, that is, pay appellee and his assignors the new wage, because that had already been fixed by the highway commission and to pay less was not only against the public policy of the state (State v. Anklam, supra; Wright v. State,223 N.Y. 44, 119 N.E. 83; Larsen v. Rice, 100 Wash. 642,171 P. 1037) but an express violation of the statute itself. So, no other alternative was open to the city as long as there were funds in that particular budget.
This being true, it is clear that from August 1, 1937, until the budget would have been exhausted under the new rate appellee and his assignors earned the amount the increase in the per diem gave them and were just as much entitled to it as they were to that the city paid them under the old rate. These earnings had merely *Page 94 
accumulated from August 1, 1937, until some time in April, 1938, when the budget under the new rate was exhausted and under the majority opinion the contract of employment automatically terminated. In so far, therefore, as this action seeks to recover the increase up to the date the budget would have been depleted under the new rate, it is not one seeking "payment for services for labor rendered after the amount budgeted for that purpose had been exhausted" but one asking merely for that admittedly earned while there was money in the budget to pay it.
The majority say, however, if I understand their view correctly, that the city paid appellee and his assignors these accumulated earnings between the date the budget would have been exhausted under the increased rate and the close of the fiscal year, and that while it may be true that both parties intended these payments, as they were made each month, to be for services performed during this period, they could not be used for this purpose because the services were illegally rendered, since, under the limitations of the budget law, the contract of employment terminated when the budget was exhausted and any extension of it beyond that date was absolutely void. The theory seems to be that the city could not pay for these services because they were performed pursuant to a void contract but that it could pay appellee and his assignors what they had earned before it was terminated, and that, this being true, these payments, though intended by the parties when made and received to be for services performed after the budget was exhausted, should be treated as payments of the amounts already earned and admittedly due when that occurred.
I cannot agree with this view. If the contract of employment was void as to appellee and his assignors after the budget was exhausted, it was void also as to *Page 95 
the city. If the services rendered by them during that time were illegal, the payments for such services were likewise illegal. The city bore the same relation to these payments that appellee and his assignors bore to the services for which they were made. Neither's rights under this void contract were greater than the other's. There was no way by which appellee and his assignors could get back their services from the city nor was there any method by which the city could force return from them of that which it had paid them for their labor. The status quo could not be restored. So, inasmuch as the work performed after the budget was exhausted must be treated as a gift from appellee and his assignors to the city, the payments made them by the city for these services must be regarded in the same light, though to do so means the city gets the better of the bargain, since it paid only the old rate when appellee and his assignors were entitled to the new. No one would contend for a moment that if appellee and his assignors had ceased to work when the budget was exhausted and others had taken their places, the payment to the latter of the amounts remaining in the budget but which appellee and his assignors had earned before the budget was depleted would defeat their action to recover these sums merely because to force the city to pay them would compel it to exceed its budget. And the same is true of appellee and his assignors, for their relation to those payments was in no sense different from that new people doing their work after the depletion of the budget would have sustained, because the employment of the latter would have been just as illegal and void under the budget law as was that of the former.
The city, it is true, had no legal right to employ appellee and his assignors, nor anyone else in their stead, after April 1, 1938, or thereabouts, when the *Page 96 
funds budgeted for the work they were doing were exhausted, that is, after the greater part of them had been paid to appellee and his assignors at the per diem existing prior to August 1, 1937, and the balance, representing the increase, had been earned by them but allowed to accumulate up to that time and were, therefore, legally applicable to no other purpose. But notwithstanding the budget law prohibits the city from incurring liability beyond the funds budgeted for the particular purpose, it did so anyway by employing appellee and his assignors, or at least some of them, during April, May and June, 1938, after the depletion of the budget, and since the funds with which it paid them for these services were those they had earned while there was still money in the budget, the city is not only morally but legally obligated to appellee and his assignors for these earnings, and should not now be heard to say, in effect, to appellee and his assignors:
"You had no right to work for me after the budget was exhausted nor I to pay you for your work but, notwithstanding this, you did work for me and I paid you for it. Both acts were illegal but I will treat the unlawful payments I made you as though they were payments of the wages you had already earned and were due you when the budget was exhausted. You have my thanks for your work during April, May and June, but nothing else, for if the payments I made you for that work are not regarded and treated as the earnings you permitted to accumulate up to the day the contract was terminated, I will be forced to pay them to you now and in so doing compelled to exceed my budget."
Whatever transpired between them after the budget was depleted and the contract terminated, that is, all that was done pursuant to the void contract, faded from the picture at that time, and the rights of the parties should be determined from the facts as they existed when that event took place and not otherwise. *Page 97 
To interpret the relations between the parties in any other light means merely that the city may use the budget law as a means of avoiding a just and legal obligation incurred under the Minimum Wage Law, and it is certain that no such use of it was ever intended by the legislature. These laws should be construed in such a way as to accomplish the purpose that brought them into being. Counties, cities and towns should be kept within their budgets but they should also be compelled to pay the minimum per diem wage fixed by proper authority for those employed by them in manual or mechanical labor. Both laws represent the public policy of the state in their respective fields and while both are important, the fact remains that the legislature has provided a much more serious penalty for a violation of the Minimum Wage Law than it has for a failure to comply with the budget law. The maximum for the former is a fine of one thousand dollars or imprisonment for six months, or both, while that of the latter is a fine of three hundred dollars, no imprisonment at all being prescribed. To hold, therefore, that the city is under no obligation to pay the wages earned by appellee and his assignors while there were funds in the budget to pay them, because to do so would force it to exceed its budget, is, to my mind, not only attaching to the budget law greater importance than the Minimum Wage Law enjoys, but virtually treating it as sacrosanct. It is important, but not so much so that cities, towns or counties should be permitted to use it as a justification for refusing to comply with the Minimum Wage Law.
The amounts sought by appellee for himself and assignors were earned between August 1, 1937, and July 1, 1938, but the record nowhere discloses what particular months each worked, though it does show the number of hours, and it is plain therefrom that *Page 98 
some were employed much less than a year. Those whose work did not extend throughout this full period but was completed before the budget was exhausted would, even under the majority opinion, be entitled to recover the increase for the time they actually worked prior to the termination of the contract of employment about April 1, 1938.
In my opinion the judgment should be sent back with direction to the trial court to ascertain the amount due appellee and his assignors at the time the budget was, or under the increased rate would have been exhausted, and render judgment accordingly.