In re B.H. Gladding Co.

• Citation: 120 F. 709
• Decision Date: 05 February 1903
• Docket Number: 307.
• Parties: In re B. H. GLADDING CO.
• Court: U.S. District Court — District of Rhode Island

120 F. 709

In re B. H. GLADDING CO.

No. 307.

United States District Court, D. Rhode Island.

February 5, 1903

Walter D. Brownell, for claimant.

Walter B. Vincent, for trustee.

BROWN District Judge.

This is a petition to revise the referee's decision disallowing the claim of a clerk for wages during a period when the clerk was on a vacation. The B. H. Gladding Company, the employer posted in its store a notice, the material parts of which are as follows:

'General Notice.

'No 15.

June 11th, 1902.

'The vacation period will extend from Monday, June 30th, to Sat., September 13th. Employees who have been continuously employed since January 1st, 1902, will be entitled to one week's vacation with pay. Employees continuously employed since July 1st, 1901, will be entitled to two weeks' vacation with pay. Vacation payments will be withheld, as has been the custom, until the following January, and it is understood and agreed that employees taking vacations agree that, if for any reason employment is severed, voluntarily or otherwise, before January 1st, 1903, the vacation pay will be forfeited.'

The clerk took two weeks' vacation, according to this notice. The B. H. Gladding Company became bankrupt October 18, 1902. The bankruptcy act gives priority, by section 64b (4) (U.S. Comp. St. 1901, p. 3447), to '(4) wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant. ' Upon an proper construction of this language, it includes wages owing at the date of bankruptcy, even though, by contract between the wage earner and bankruptcy. The term 'due' is one of double meaning. At times it means a sum now payable; at times it signifies a simple indebtedness, without reference to the time of payment. In U.S. v. Bank of North Carolina, 6 Pet. 36, 8 L.Ed. 308, the court said, 'Here, the word 'due' is plainly used as synonymous with owing. ' See, also, 10 Am. & Eng.Enc.Law (2d Ed.) 279. The mere fact, therefore, that payment of wages was to be deferred or withheld, would not deprive the wage earned of priority, provided the right to wages had accrued before bankruptcy.

A further question is as to the effect of the limiting cause 'which have been earned within three months before the commencement or proceedings. ' It was obviously not the purpose of this clause to make a distinction between wages due which have been earned and wages due which have not been earned; but merely to limit the priority to wages owing which had accrued within a limited period. The relation of the parties as employer and employed was not affected by the fact that the employer voluntarily released the clerk from the obligation to perform services during a vacation period. To attempt distinctions between wages due which are earned and wages due which are not earned, by an inquiry into the amount of work done by the wage earner, would be entirely impractical. If we disallow claims for a week's vacation, we must also disallow claims for half days when stores are closed, and for days and hours when there is nothing to do. Wages are 'earned,' in the sense in which that term is used in the bankruptcy act, so long as a bona fide contract of hiring exists, and the clerk or servant continues in the master's employment and does all that he is required to do. The practice of giving vacations with continued pay is very general in...