First Nat Bank v. Barnum

• Citation: 160 F. 245
• Decision Date: 09 March 1908
• Docket Number: in Bankruptcy.,1.022
• Parties: FIRST NAT. BANK OF WILKES-BARRE v. BARNUM.
• Court: U.S. District Court — Middle District of Pennsylvania

160 F. 245

FIRST NAT. BANK OF WILKES-BARRE v. BARNUM.

No. 1.022, in Bankruptcy.

United States District Court, M.D. Pennsylvania.

March 9, 1908

W. S McLean and Lawrence B. Jones, for petitioning creditors.

George H. Troutman, for alleged bankrupt.

ARCHBALD District Judge.

These are involuntary proceedings, and are resisted by the respondent on the grounds: (1) That he is a wage-earner; and (2) that the petitioners are not creditors. It appears, as to the first, that the respondent is a music teacher, giving lessons on the piano, organ, violin, and mandolin, at 50 cents an hour, earning from $35 to $40 a month, or a little less than $500 a year, some pupils coming to his house for instruction, and others being taught at their own homes. This constitutes his livelihood, in addition to which, however, he has a summer cottage at Harvey's Lake, which he rents for $175 a season, and another property from which he gets $150, besides which he has divided up certain land that he owns, and is selling it off in lots.

The question is whether under these circumstances he is a wage-earner within the meaning of the law, so as not to be subject to involuntary bankruptcy.

A wage-earner is defined by the bankruptcy act as one 'who works for wages, salary, or hire, at a rate of compensation not exceeding one thousand five hundred dollars per year ' By this it is evidently intended to relieve from adverse proceedings those who, not being engaged in business or trade, depend for a living upon the result of individual labor or effort, without the aid of property or capital. But not all of this class are exempt, as is shown by the limit of $1,500. And the work done must be such as is compensated by wages, salary, or hire, other earnings not being put in the same category. These terms mean much the same thing, and are no doubt collectively used in order to cover the different possible kinds of employment comprehended within the general idea. Wages, as distinguished from salary, are commonly understood to apply to the compensation for manual labor skilled or unskilled, paid at stated times, and measured by the day, week, month, or season. Commonwealth v. Butler, 99 Pa. 535; Lang v. Simmons, 64 Wis. 525, 25 N.W. 650; Campfield v. Lang (C.C.) 25 F. 128; Henry v. Fisher, 2 Pa.Dist.R. 7; Louisville, etc., R.R. v. Barnes, 16 Ind.App. 312, 44 N.E. 1113; Fidelity Ins. Co. v. Shenandoah Valley R.R., 86 Va. 1, 9 S.E. 759, 19 Am.St.Rep. 858; State v. Haun, 7 Kan.App. 509, 54 P. 130. And also by the piece. Pennsylvania Coal Co. v. Costello, 33 Pa. 241; Swift Mfg. Co. v. Henderson, 99 Ga. 136, 25 S.E. 27; Ford v. St. Louis R.R., 54 Iowa, 728, 7 N.W. 126; Seider's Appeal, 46 Pa. 57; Adcock v. Smith, 97 Tenn. 373, 37 S.W. 91, 56 Am.St.Rep. 810. But not by the job. Heebner v. Chave, 5 pa. 115; Berkson v. Cox, 73 Miss. 339, 18 So. 934, 55 Am.St.Rep. 539; Morse v. Robertson, 9 Hawaii, 195; Henry v. Fisher, 2 Pa.Dist.R. 7. Nor including profits on the services of others. Smith v. Brooke, 49 Pa. 147; Sleeman v. Barrett, 2 H. & C. 934; Riley v. Warden, 2 Exch. 59. Neither is it so broad a term as 'earnings,' which comprehend the returns from skill and labor in whatever way acquired. People v. Remington, 45 Hun (N.Y.) 338; Matter of Stryker, 73 Hun, 327, 26 N.Y.Supp. 209; Id., 158 N.Y. 526, 53 N.E. 525, 70 Am.St.Rep. 489; Jenks v. Dyer, 102 Mass. 236; Nuding v. Urich, 169 Pa. 289, 32 A. 409; Goodhart v. Pennsylvania R.R., 177 Pa. 1, 35

Atl. 191, 55 Am.St.Rep. 705; Hoyt v. White, 46 N.H. 45. Indeed the act itself in exempting wage-earners recognizes that there are other kinds. Salary, on the other hand, has reference to a superior grade of services. Hartman v. Nitzel, 8 Pa.Super.Ct. 22. And implies a position or office. Bell v. Indian Live Stock Co. (Tex.) 11 S.W. 346. By contrast, therefore, 'wages' indicate inconsiderable pay for a lower and less responsible character of employment. South Alabama R.R. v. Falkner, 49 Ala. 115; Gordon v. Jennings, 9 Q.B.Div. 45. Where salary is suggestive of something higher, larger, and more permanent. Meyers v. N.Y., 69 Hun, 29, 23 N.Y.Supp. 484; White v. Koehler, 70 N.J.Law, 526, 57 A. 124; State v. Duncan, 1 Tenn.Ch.App. 334; Palmer v. Marquette Rolling Mill, 32 Mich. 274.

The word 'hire' is rather associated with the act of employment than the reward for services done; and in the latter connection is more on the plane of wages than of salary, although in a sense it comprehends both; and is also applied to engaging the use of property. We hire a coachman, a gardener, or a cook; or a carriage to take a ride. And may also be said to hire a superintendent, a bookkeeper, or a clerk, although it would seem more correct, in the latter instances, to say engage or employ. In some communities, a farm hand is called a hireling, without intending any reflection, although in general speech the term is one of reproach. As further defining its use, a laborer, according to Sacred Writ, is said to be worthy of his hire. And coming up from the people, as the word thus does, it is sometimes applied, out of place, to the securing of professional services, as where one is said to hire a lawyer, a doctor, or a person of that class.

The cases directly decided under the bankruptcy act confirm these views. Thus, it is held that a person doing hauling with his team by the day-- which affords a good example of what may in strictness be termed a hiring-- is a wage-earner. In re Yoder (D.C.) 11 Am.Bankr.Rep. 445, 127 F. 894. Although it is said that, in allowing the priority given to wages by the act, the amount due for the use of the team must be distinguished from that for the services of the person himself. In re Winton Lumber Co., 17 Am.Bankr.Rep. 117. So money due for piece work, paid weekly, is held to be wages. In re Gurewitz, 10 Am.Bankr.Rep. 350, 121 F. 982, 58 C.C.A. 320. And a bookkeeper, in the employ of others, receiving a salary of $65 or $70 a month, is a wage-earner within the meaning of the law. In re Pilger (D.C.) 9 Am.Bankr.Rep. 244, 118 F. 206. And so, as we may assume-- applying the same principle--would be the chorister of a church, paid a specified yearly sum for his services. Catlin v. Ensign, 29 Pa. 264. Or a traveling salesman receiving a percentage commission o n the amount of his sales. Hamberger v. Marcus, 157 Pa. 133, 27 A. 681, 37 Am.St.Rep. 719. But not a factor or broker, engaged in the business of selling goods on commission. Id. Nor a millowner, who saws lumber for others at so much a thousand. Campfield v. Land (C.C.) 25 F. 128. Nor one who builds a house or other structure, by contract, even though he does a part of the work himself. Berkson v. Cox, 73 Miss. 339, 18 So. 934, 55 Am.St.Rep. 539; Henry v. Fisher, 2 Pa.Dist.R. 7; Morse v. Robertson, 9 Hawaii, 195. Nor one who tows a canal boat. Ryan v. Hook, 34 Hun, 191. Or threshes out grain by the job. Johnston v. Barrills, 27 Or. 251, 41 P. 656, 50 Am.St.Rep. 717. Nor are the fees of lawyers, physicians, and the like to be classed as wages. Vane v. Newcombe, 132 U.S. 220, 10 Sup.Ct. 60, 33 L.Ed. 310; People v. Myers (Sup.) 11 N.Y.Supp. 217. Nor the debts due to a blacksmith from his customers for his services. Tatum v. Zachry, 86 Ga. 573, 12 S.E. 940. Nor is a school teacher a laborer or servant; however, we may speak of one, at times, as being hired. School District v. Gautier, 13 Okl. 194, 73 P. 954.

From these considerations, as it deems to me, but one conclusion can be drawn. A person, like the respondent, giving music lessons at so much an hour, is not a wage-earner within the meaning of the act.

Teaching is a profession, denoting a nicer relation and involving a finer character of work, and entitled, like that of the lawyer, doctor, the engineer, the architect, or the minister, to be regarded as upon a higher plane. His work is mental, not physical. He labors with his head, not his hands. And while that may not be distinctly conclusive, it has its weight. He is the tutor, or instructor, of his pupil, not his servant; his, of the two, being the master mind. This is not to say that one who works for a salary, like the teachers in our public schools, may not be wage-earners, within the meaning of the bankruptcy law. The fact of being under a salary makes a difference, and brings the case squarely within the act, although it may be noticed in passing that, in the school laws of the state, teachers are said to be appointed, not employed or hired. But the compensation received by the respondent, in the present instance, is certainly not a salary. Neither is it wages. And notwithstanding the misuse of the term, alluded to above, neither can he be said to work for hire. He is simply paid a stipulated sum or stipend in return for the instruction which he gives, which he holds himself out as competent to impart, being engaged so to do by his pupils or their parents, but not hired, any more than the lawyer, doctor, or others in professional life. The returns from his teachings may be earnings, which as we have seen is a comprehensive term, but not wage-earnings, and so not effective to exempt him from liability here.

The case turns, therefore, on whether the petitioners are creditors, as to which it appears that their claims are based on certain promissory notes, indorsed by the respondent, J B. Barnum, for the accommodation of his brother, B. F. Barnum, the maker, for whom they were discounted by the petitioners, who are Wilkes-Barre banks. The genuineness of the respondent's indorsement is not contested, but he claims to be released, because, after it was affixed, the notes were materially altered without his authority, by changing the name of the bank where they were originally made payable. These notes were the last of a series of discounts at each of the banks...