Lawrence v. Rutland R. Co.

• Court: Vermont Supreme Court
• Writing for the Court: ROWELL, C. J.
• Citation: Lawrence v. Rutland R. Co., 80 Vt. 370, 67 A. 1091, 13 Ann.Cas. 475 (Vt. 1907)
• Decision Date: 16 November 1907
• Parties: LAWRENCE, State's Atty. of Rutland County, v. RUTLAND R. CO.

67 A. 1091

80 Vt. 370

LAWRENCE, State's Atty. of Rutland County,

v. RUTLAND R. CO.

Supreme Court of Vermont. General Term.

Nov. 16, 1907.

Exceptions from City Court of Rutland; N. K. Farnsworth, Judge.

Action by Robert A. Lawrence, state's attorney, against the Rutland Railroad Company to recover a penalty for a violation of the weekly payment law. Acts 1906, p. 114, No. 117. Heard on agreed statement of facts and general demurrer. Judgment for plaintiff, and defendant excepts. Affirmed.

Argued before ROWELL, C. J., and TYLER, MUNSON, and WATSON, JJ.

C. C. Fitts, Atty. Gen., and R. A. Lawrence, State's Atty., for plaintiff. H. Henry Powers, for defendant.

ROWELL, C. J. The question is whether the weekly payment act (act Dec. 10, 1906, p. 114, No. 117) is constitutional. It provides that a mining, quarrying, manufacturing, mercantile, telegraph, telephone, railroad, or other transportation corporation, and an incorporated express, water, electric light or power company, doing and transacting business in this state, shall pay each week, in lawful money, each employé engaged in the business the wages earned by such employé to a day not more than six days prior to the date of such payment, provided that, if at any time of payment an employé is absent from his regular place of labor, he shall be entitled to such payment on demand. It further provides that no such corporation shall pay its employés in script, vouchers, duebills, nor store orders, except it be a cooperative corporation in which the employé is a stockholder, but shall, on request of such shareholding employé, pay him as provided in the act. It further provides that no assignment of future wages payable thereunder shall be valid, if made to the corporation from which such wages are to become due, or to any one in its behalf, or if made or procured to be made to any one for the purpose of relieving such corporation from the obligation to pay according to the act; and that no corporation shall require an agreement from an employé to accept wages at any other period as a condition of employment. The act penalizes each failure to pay as therein required, and this action is brought to recover a penalty for one such failure. As the case is presented, the defendant does not question its liability if bound by the act The defendant's charter, granted in 1867, provides that it "shall be subject to the action of any future Legislature to amend, alter, or repeal as the public good may require." Before and at the time of this grant, the general law was, even since has been, and still is, to the same effect as to all acts creating, continuing, altering, or renewing a corporation or body politic The plaintiff claims that, as to changing the defendant's charter, the act in question does not go beyond the scope of the power therein reserved for that purpose; nor beyond the general law in that behalf, which, being in force when the charter was granted and still in force, must be read into it as a part of it; and, besides, that the act is a proper exercise of the police power of the state. The defendant denies this, and contends that the act contravenes both the federal Constitution and the state Constitution—the federal Constitution, because it deprives the defendant of liberty and property without due process of law, and denies to it the equal protection of the laws; the state Constitution, because it contravenes the declaration of the Bill of Rights that "all men are born equally free and independent, and have certain natural, inherent, and unalienable rights, amongst which are the enjoying and defending of life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining happiness and safety," and also because it contravenes the further declaration of the Bill of Rights that "every member of society hath a right to be protected in the enjoyment of life, liberty, and property."

The questions arising under the federal Constitution will be first considered, for their determination will largely dispose of those arising under the state Constitution. It is needless to say that on the federal questions the decisions of the federal Supreme Court are controlling, so we shall not go much outside of them. And it may be said, in limine, that they settle that a corporation is a person, within the meaning of the dueprocess clause and the equality clause of the fourteenth amendment; and that a corporate charter is a contract between the state and the corporators, and protected by the federal Constitution, like any other contract, from legislation impairing its obligation. To show that the act in question is within the power to amend reserved in the defendant's charter and in the general law, the plaintiff relies largely on St. Louis, Iron Mountain & Southern Railway Co. v. Paul, 173 U. S. 404, 19 Sup. Ct. 419, 43 L. Ed. 746, which was error to the Supreme Court of Arkansas, and involved the constitutionality of a statute of that state providing that when any railroad company, or any company, corporation, or person engaged in the business of operating or constructing any railroad or railroad bridge, or any contractor or subcontractor engaged in the construction of any such road or bridge, discharged, with or without cause, or refused further to employ, any servant or employé, the unpaid wages of such servant or employé then earned at the contract rate, without abatement or deduction, should be and become due and payable on the day of such discharge or refusal, and, if not paid on such day, then, as a penalty for nonpayment, the wages should continue at the same rate until paid, but not more than 60 days, unless an action was brought therefor within that time. The action was to recover both wages and penalty. The Constitution of that state provided that corporations might be formed under general laws, which might be altered or repealed from time to time; that the General Assembly should have power to alter, revoke or annul any charter of incorporation then existing and revocable, or any that might thereafter be created, whenever, in its opinion, it might be injurious to the citizens of the state; in such manner, however, that no injustice should be done to the corporators. The federal Supreme Court affirmed the judgment below, which sustained the statute as within this reserved power of amendment, as far as it affected corporations, and as not violative of the fourteenth amendment nor of the Constitution of the state, which is substantially like the declarations of our Bill of Rights relied upon, following the case of Leep v. Same Defendant, 58 Ark. 407, 25 S. W. 75, 23 L. R. A. 264, 41 Am. St. Rep. 109, in which the statute was held unconstitutional as to subjects of contract purely and exclusively private, unaffected by any public interest or duty to person, society, or government, and the parties are capable of contracting, as to which, it was said, no condition can exist warranting legislative interference for the purpose of prohibiting the contract or controlling its terms. It was contended above in the Paul Case that, as to railroad corporations organized before its passage, the act was void because it violated the fourteenth amendment. But the court said that corporations are creatures of the state, endowed with such faculties as the state bestows, and subject to such conditions as the state imposes, and, if the power to modify their charters is reserved, the reservation is a part of the contract, and no change within the legitimate exercise of the power can be said to impair its obligation, and that as the amendment then in question rested on reasons deduced from the peculiar character of the business of the corporations affected, and the nature of their functions, and applied to all alike, the equal protection of the laws was not denied. The further question was whether the amendment should have been held unauthorized because amounting to a deprivation of property forbidden by the federal Constitution. The court said that the power to amend could not be used to take away property already acquired under the operation of the charter, nor to deprive a corporation of the fruits of contracts lawfully made that had been reduced to possession; but that alterations or amendments could be made that would not defeat, nor substantially impair, the object of the grant nor any rights that had vested under it and which the Legislature might deem necessary to secure that object, or other public or private rights; that the act in question was purely prospective, and did not interfere with vested rights, existing contracts, nor destroy, nor sensibly encroach upon, the right to contract, although it did impose a duty in relation to the payment of wages actually earned that restricted future contracts in the particular named. In view of the fact that the corporations embraced in the act were clothed with a public trust, and discharged duties of public consequence, affecting the community at large, the court below held the regulation promotive of the public interest in the protection of employés to the limited extent stated, and properly within the reserved power to amend. The court above said that inasmuch as the right to contract was not absolute, but might be subjected to the restraints demanded by the safety and welfare of the state, it did not think that the conclusion below in its application to the power to amend could be disputed on the ground of infraction of the fourteenth amendment But it is said that the case is not authority, because when the defendant in error was discharged, his wages earned became due and payable at once at the common law, and that the action was maintainable on that ground alone. But, however that was as to the wages, it was scarcely so as to the penalty, for that would not accrue at common law, and recovery was had for both. And, besides, no such question was suggested in the case, which was put exclusively on the...