Carrs Fork Coal Co. v. Johnson Drug Co.

• Citation: 60 S.W.2d 952,249 Ky. 371
• Parties: CARRS FORK COAL CO. v. JOHNSON DRUG CO.
• Decision Date: 23 May 1933
• Court: Kentucky Court of Appeals

60 S.W.2d 952

249 Ky. 371

CARRS FORK COAL CO. v. JOHNSON DRUG CO.

Court of Appeals of Kentucky

May 23, 1933

Appeal from Circuit Court, Perry County.

Suit by the Johnson Drug Company against the Carrs Fork Coal Company. From the judgment, defendant appeals.

Affirmed in part, and reversed in part, with directions.

Craft &amp Stanfill, of Hazard, for appellant.

Napier & Eblen, of Hazard, for appellee.

STANLEY Commissioner.

The opinion construes a portion of the Labor Scrip Law, section 4758b-1, Kentucky Statutes.

The appellee, Johnson Drug Company, acquired a considerable amount of scrip issued by the appellant, Carrs Fork Coal Company, to its employees. As provided in the statute, it presented the scrip for redemption on regular pay days of the company, as follows: On October 14, 1930, an aggregate of $2,464.27; on May 23, 1931, an amount of $923.15; and on August 8, 1931, a total of $1,312. Payment having been refused, suit was instituted against the coal company for $4,699.42, with interest on the several amounts from the respective dates of presentation. An issue was raised as to whether the plaintiff had paid face value for the scrip; in fact, all of the allegations of the petition were denied. On motion of the defendant, rested upon the complicated account rule, the case was transferred to equity and referred to a special commissioner. His findings were that the purchaser had complied with the provisions of the law, and, with the exception of a $2 overcharge, full value in merchandise had been paid for the scrip amounting to $4,649.02. The court confirmed the report of the commissioner and entered judgment for that sum with interest, as prayed in the petition. An allowance of $175 was made to the commissioner for his services and ordered taxed as costs. The defendant on this appeal from that judgment maintains only that the statute does not authorize the collection of interest on the scrip when it has been accepted in payment of merchandise sold the employees to whom it was issued, and that the allowance to the special commissioner is excessive.

The statute, section 4758b-1, requires redemption of the scrip issued for labor in cash upon presentation to it on regular pay days: "Provided, that any person, firm or corporation, buying said scrip or other evidence of debt which has been issued to employees for labor shall be entitled to sue the person, firm or corporation issuing the same if payment is refused and shall be entitled to recover face value therefor if it has been paid for in goods and merchandise in store, and if paid for in cash, shall be entitled to recover the amount paid for said scrip or other evidence of debt issued to employees, together with six per cent interest from date said scrip was purchased, and in the event said amount paid for said scrip or other evidence of debt issued to employees, is less than the face value thereof, and that the amount paid and interest thereon is less than face value of said scrip, the residue of the face value thereof shall be credited on the books of the employer to the employee to whom it was issued and said employee shall be entitled to receive same on any regular pay day of said employer," etc.

The question is whether the clause, "together with six per cent interest from date said scrip was purchased," applies only to the clause "if it has been paid for in cash," or applies also to the clause "if it has been paid for in goods and merchandise in store," so as to make interest payable on all scrip regardless of medium of payment. It will be observed that the first provision is for the redemption at face value if it has been paid for in merchandise. The second clause introduced by "if" provides that the purchaser shall be reimbursed, not for the face value, but for the amount paid for the scrip, and, in addition, shall be entitled to interest from the date he purchased it. The next clauses relate to redemption if less than face value has been received by the employee from the purchaser, and the difference in the medium of exchange is again recognized, interest being coupled with the purchase for cash, but omitted in the reference to the purchase with merchandise. While the grammatical structure is not as clear as it might be, we think it was intended to express the meaning that interest is collectible up to the day of presentation of the scrip to the employer only when the purchaser has paid cash for it.

Reason supports analysis. When a merchant gives merchandise for the scrip at regular sale prices, the presumption is that he has included a profit on it; hence he ought not to collect interest also. Current store accounts or unliquidated open accounts do not bear interest in the absence of an agreement. Scanlon-Thompson Coal Company v. Lick Branch Coal Company, 243 Ky. 100, 47 S.W.2d 1007. But when cash is given it is a gratuitous transaction, and, unless the purchaser can collect interest he loses in the exchange. Ordinarily where cash is given for a promissory note or other instrument evidencing a debt, the payment of interest is expected and collectible as compensation for the advancement. Henderson Cotton Manufacturing Company v. Lowell Machine Shops, 86 Ky 668, 7 S.W. 142, 9 Ky. Law Rep. 831; Murrell's Executor v. Bohannon, 229 Ky. 13, 16 S.W.2d 455. The interest contemplated by the scrip statute is chargeable to the employee up to the time of presentment to the employer.

But a different status is reached by presentation of the scrip for redemption and demand for payment made. By law wages for labor must be paid in money at stated periods. Section 244 Constitution, and sections 1350, 2738r-1, Statutes. This scrip or token is regarded by the...