Peairs v. State, 4855

• Decision Date: 21 January 1957
• Docket Number: No. 4855,4855
• Citation: 297 S.W.2d 775,227 Ark. 230
• Parties: Allen M. PEAIRS, Appellant, v. STATE of Arkansas, Appellee.
• Court: Arkansas Supreme Court

Page 775

297 S.W.2d 775

227 Ark. 230

Allen M. PEAIRS, Appellant, v. STATE of Arkansas, Appellee.

No. 4855.

Supreme Court of Arkansas.

Jan. 21, 1957.

McMath, Leatherman & Woods, Little Rock, for appellant.

Tom Gentry, Atty. Gen., Ben J. Harrison, Asst. Atty. Gen., for appellee.

WARD, Justice.

This appeal challenges the constitutionality of the criminal provision of Ark.Stats. § 51-601 as being in violation of Art. 2, Sec. 16 of the constitution of the State of Arkansas, presenting a question of first impression to this court.

The section above mentioned consists of two legislative acts, viz.: Act 146 of 1895 and Act 563 of 1923. The first act provides generally that laborers and materialmen shall have a lien on the property constructed or repaired, and provides how said lien shall be perfected and enforced. The second act added to the first act a criminal provision for failure of the contractor to satisfy the lien, reading as follows:

'Any original or principal contractor or his assignee who shall be paid the contract price or any portion thereof, and who shall fail or refuse to discharge the liens created by this section, to the extent of the contract price received by him, shall be deemed guilty of an offense and punishable as follows:' (If the amount received by the contractor exceeds $10, he shall be deemed guilty of a felony, and if less than $10, he shall be deemed guilty of a misdemeanor.)

An information charged appellant with a violation of the above criminal statute based on the following factual situation: Appellant, Allen M. Peairs, entered into a contract with the Pan-Am Southern Corporation to build certain large oil tanks in El Dorado. Peairs subcontracted the work to the Baker Tank Company, which furnished the materials and built the oil tanks in question. The Pan-Am Company paid appellant the contract price, but appellant failed to pay the Baker Tank Company. The Baker Tank Company (perfected its lien against the property of Pan-Am but appellant failed to discharge the lien.

Appellant was tried and convicted of violating the criminal portion of Section 51-601, and was sentenced to one year in the penitentiary. It is his contention on this appeal that the said criminal statute violates Article 2, Section 16, of the Arkansas Constitution, which reads as follows: 'No person shall be imprisoned for debt in any civil action, on mesne or final process, unless in cases of fraud.' After careful consideration we have concluded that appellant's contention must be sustained.

At the very outset we are forcibly impressed with the absence of any language in Section 51-601 which makes fraud or fraudulent intent a part or prerequisite of the criminal offense. It is the absence of such language in the statutes which makes it violative of that portion of the constitution above quoted. As the statute now reads, a contractor would be guilty of a felony if he fails, for any reason, 'to discharge the liens', or in other words, if he fails to pay a debt. It is not difficult to imagine many situations in which a contractor might be prevented from paying the subcontractor or laborers even though he may have acted in all good faith and without any intent to defraud anyone, yet, under the wording of the statute, he could be convicted of a felony.

Although this court has not had occasion to pass upon the question under consideration, other jurisdictions have, and those decisions support the conclusion we have reached. In the case of Commercial National Bank of Sturgis v. Smith, 60 S.D. 376, 244 N.W. 521, 523, the Supreme Court of South Dakota, in dealing with a statute, Rev.Code 1919, § 4229, as amended by Laws 1921, c. 217, somewhat similar to ours, had this to say: 'In our opinion the Legislature is without authority to provide that a contractor shall be deemed guilty of a crime punishable by imprisonment for failure to pay the claims of creditors furnishing labor and materials from money paid to him under contract', holding said statute unconstitutional. In this opinion the court referred to People v. Holder, 53 Cal.App. 45, 199 P. 832, and quoted therefrom as follows: 'In our opinion the Legislature is without the power to do either of these things. That is, the Legislature has not the power to provide that a contractor who breaches his agreement to pay a certain class of debts with money that is his own shall, for that reason alone, be deemed guilty of a crime punishable with imprisonment.'

In an early case, the Supreme Court of Minnesota, in the case of Meyer v. Berlandi, 39 Minn. 438, 40 N.W. 513, 514, 1 L.R.A. 777, in speaking of the criminal provision of a lien statute, Gen.Laws 1887, c. 170, had this to say:

'Section 3, if not unconstitutional on other grounds, is clearly repugnant to section 12, art. 1, of the constitution of the state, prohibiting imprisonment for debt. It is not necessary that a contractor be guilty of any fraud or other tort in order to subject him to the penalties of this section. If he has received his pay from the owner of the property, and owes a debt due on contract to one of his laborers or material-men which he is unable to pay, he is guilty of obtaining money on false pretenses, and liable to imprisonment in the penitentiary. No matter how honestly he may have paid over the last dollar which he has received on his contract, yet if, through honest mistake, he took the job too cheap, or if by unforeseen accident it cost more than he...