Northern States Contracting Co. v. Swope

• Citation: 111 S.W.2d 610,271 Ky. 140
• Parties: NORTHERN STATES CONTRACTING CO. et al. v. SWOPE, Judge. [*] MASSACHUSETTS BONDING CO. v. SAME. SWORDS-McDOUGAL CO. v. SAME.
• Decision Date: 17 December 1937
• Court: Court of Appeals of Kentucky

111 S.W.2d 610

271 Ky. 140

NORTHERN STATES CONTRACTING CO. et al. v. SWOPE, Judge. ^[*]

MASSACHUSETTS BONDING CO. v. SAME.

SWORDS-McDOUGAL CO. v. SAME.

Court of Appeals of Kentucky

December 17, 1937

Original proceeding by the Northern States Contracting Company and others, by the Massachusetts Bonding Company, and by the Swords-McDougal Company, for writs of prohibition against King Swope, Judge of the Fayette Circuit Court.

Writs of prohibition granted.

Stoll Muir, Townsend & Park, of Lexington, Doherty, Rumble &amp Butler, of St. Paul, Minn., and R. W. Kennon, of Lexington for petitioners.

J. A Edge, of Lexington, for interveners.

Richard J. Colbert, of Lexington, for King Swope.

STANLEY Commissioner.

These are original proceedings in this court seeking writs of prohibition against the Honorable King Swope, Judge of the Fayette Circuit Court, restraining him from trying a number of like suits pending in that court against the petitioners. The respondent, Judge Swope, has answered that in overruling the petitioners' plea to the jurisdiction of his court and in proceeding to try the cases, he has performed what he conceives to be his duty to do justice to all parties, and submits the issue to this court without opposition. A demurrer has been filed to the response. The petitioners expressly disavow any intention of questioning the good faith of the judge.

The cases involved have been instituted and prosecuted by several hundred plaintiffs against the petitioners seeking to recover of them, in the aggregate, a large sum of money, claimed to be balances due them, severally, as wages for work performed for the contractors in the construction of the new sewer system of Lexington.

We shall refer to the parties as designated in the circuit court.

The plaintiffs have tendered petitions to be made parties in these proceedings which they ask to be considered as their answers to the petitioner's pleadings. They object to the motion to grant the writ of prohibition. The petitioners object to the filing of these answers, asserting that the plaintiffs are neither necessary nor proper parties here. They argue these are special proceedings, authorized by sections 474-479, Civil Code of Practice, and are not civil actions in which, under the terms of sections 22, 23, and 28 of the Code, persons having an interest in the subject-matter may intervene. Several authorities are cited in support of and in opposition to these objections.

The law as to parties in a proceeding to obtain a writ of prohibition, as given in 22 R.C.L. 28, is that under the common law and the prevailing rule in the United States, where not abolished by statute or controlled by a rule of court, when the suit complained of is brought by a private person, he may be joined as a defendant; but when it is a suit or prosecution in behalf of the government, the writ of prohibition may go to the court only. It has been our practice to permit interested parties other than the judge to file amici curiæ briefs. Since the pertinent and legitimate portions of the tendered pleadings of the interveners only deny the legal effect of the allegations of the petitions and of the several documentary exhibits, we overrule the objections and permit the pleadings to be filed, subject to the consideration of their legal sufficiency, which the objections will be regarded as challenging. It is not required that the court rule upon the question whether a private party may intervene and raise an issue of fact in such a proceeding.

On November 7, 1933, the City of Lexington voted to issue bonds for $1,312,500, the proceeds of which, with the aid of the Federal Government under the provisions of title 2 of the National Industrial Recovery Act of June 16, 1933, 48 Stat. 200, 40 U.S.C.A. § 401 et seq., were used in the construction and reconstruction of the sewer system and the making of certain other public improvements. The bonds were held valid in McDonald v. City of Lexington, 253 Ky. 585, 69 S.W.2d 1065, and McDonald v. City of Lexington, 253 Ky. 770, 70 S.W.2d 534. Contracts were let to Connelly Brothers and to the petitioners herein, Northern States Contracting Company and Swords-McDougal Company by the City of Lexington and the United States for the construction of the sewers. The contractors duly executed bonds for the faithful performance of their undertakings, and special bonds relating to the payment of labormen's wages, with the other petitioners herein as sureties. The contract stipulated:

"All employees directly employed on this work shall be paid just and reasonable wages, which shall be compensation sufficient to provide for the hours of labor as limited, a standard of living in decency and comfort. The contractor and all subcontractors shall pay not less than the minimum hourly wage rates for skilled and unskilled labor prescribed by the Federal Emergency Administration of Public Works, viz:

"Skilled Labor,--$1.10;

"Unskilled Labor,--$0.45."

The contractors posted and maintained in conspicuous and easily accessible places upon the site of the work a schedule of labor classifications of skilled and unskilled labor, with three intermediate degrees, and with minimum rates for the several groups ranging from $1.10 an hour for skilled labor to 45 cents an hour for unskilled labor. This schedule was prepared and promulgated by the Federal Emergency Administration of Public Works, commonly called PWA. A copy was attached to and made a part of each of the construction contracts. The workmen were paid accordingly.

All the contracts had been fully executed and the work duly accepted by the City of Lexington and the federal authorities by May, 1935. The contractors had moved away and their foremen, as well as the government inspectors and engineers, had scattered over the country. The government had paid to the city as its contribution $392,155.11, representing 30 per cent. of the cost. Six months thereafter the first of these suits was filed in the Fayette circuit court by a group of plaintiffs against the contractors and the sureties on their bonds. It was alleged that the contracts were made for the use and benefit of the plaintiffs; that they were skilled laborers during the terms of their employment; and that the defendants had not paid them wages at the rate of $1.10 an hour, but lesser wages as unskilled workmen. From time to time other suits of like nature were filed either as original actions or as amendments to suits pending. It appears there are 410 plaintiffs. Although the suits were brought in groups, each plaintiff would have to be regarded individually. In one suit it is asked that 1,700 other persons, who, it is stated, had similar claims against the contractors, be summoned to appear and required to assert their claims. In some suits the validity of the city's bonds and of the construction contracts is challenged and it is prayed that the contractors be required to refund to the city the money paid them. The trial court overruled the defendants' demurrers to the petitions and their several motions to elect and to strike. The defendants then filed pleas to the jurisdiction of the court, which were overruled. This has been followed by the filing in this court of the petitions and motions for writs of prohibition as above stated.

The grounds of the pleas to the jurisdiction are in substance and effect the grounds upon which the writs of prohibition are sought.

Title 2 of the National Industrial Recovery Act was not affected by the decision in what is commonly called the NRA case, in which the Supreme Court held as unconstitutional title 1 of that act, 15 U.S.C.A. § 701 et seq., under which Codes of Fair Competition of industry had been promulgated and were being enforced. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947. This portion of the act authorized the establishment of a Federal Emergency Administration of Public Works. It granted very broad powers to the President of the United States and to those individuals and agencies whom he might delegate or appoint as his representatives in order to effectuate the purpose of the act "to increase employment quickly" by loaning and granting financial aid in the construction of public works. Through a series of executive and administrative orders, that power is shown to have been delegated to those agencies with whom the City of Lexington dealt in these projects. See "Executive Orders" appended as notes to 40 U.S.C.A. § 414. It appears to have been originally agreed that the government should not only contribute a portion of the cost of the sewers but should also purchase the bonds issued by the city. However, by and with the consent of the government authorities, the bonds were sold to private investors. Nevertheless, under the terms of the "Grant Agreements" it was required that the city should carry out the purposes of title 2 of the National Industrial Recovery Act and that the contracts for the work should be subject to and in accordance with the orders, rules, and regulations of the government, inter alia, in respect of the payment of minimum wages and the observance of maximum hours, and as well for the adjustment of disputes arising between the contractors and the workmen. The laws and the regulations of the government agency thereby became essential portions of the contracts both by implication and, in a large measure, by express inclusion or reference.

We have already quoted a portion of the contracts relating to minimum wages paid the workmen, and have referred to the schedule or classification promulgated by the Federal Administrator as authorized by Presidential Executive Order No. 6252, 40 U.S.C.A. § 414 note. Under the authority...