Reliance Mfg. Co. v. Board of Prison Com'rs

• Citation: 161 Ky. 135,170 S.W. 941
• Parties: RELIANCE MFG. CO. ET AL. v. BOARD OF PRISON COM'RS.
• Decision Date: 19 November 1914
• Court: Court of Appeals of Kentucky

170 S.W. 941

161 Ky. 135

RELIANCE MFG. CO. ET AL. v. BOARD OF PRISON COM'RS.

Court of Appeals of Kentucky.

November 19, 1914

Appeal from Circuit Court, Franklin County.

Action by the Reliance Manufacturing Company and others against the Board of Prison Commissioners. From a judgment for defendant plaintiffs appeal. Reversed and remanded.

Helm Bruce, Bruce & Bullitt, and W. W. Davies, all of Louisville and H. L. Stern, of Chicago, Ill., for appellants.

James Garnett, Atty. Gen., and Chas. H. Morris, Asst. Atty. Gen for appellee.

CARROLL J.

The board of prison commissioners have control of the penitentiaries of the state and convict labor therein confined. By section 3807 of the Kentucky Statutes it is provided that:

"It shall be the duty of the commissioners to hire out to a contractor or contractors all the convicts able to perform manual labor, to be worked within the walls of the penitentiaries. Such hiring shall be to the highest and best bidder, after due advertising, and the labor in both penitentiaries may be hired to one person, or the labor in whole or in part in each penitentiary may be hired to different contractors. * * * The price agreed to be paid shall be paid in monthly or quarterly installments by the contractor as the commissioners may determine, and it is hereby made a condition precedent to the contract that on failure of lessee or lessees to pay any installment within one month after same is due, the commissioners may elect to declare the lease forfeited for nonpayment of rent, giving the lessees thirty days' notice in writing declaring a forfeiture thereof, and the commissioners may take possession without further notice. The term for which said convicts may be hired shall not be more than four years, with the privilege of renewal, and the contractor shall obligate himself to faithfully conform to all the rules and regulations that may be established by the commissioners touching all sanitary and police matters, and for the government of the prison. Upon the execution of the bond as above required, and the acceptance of the bid, the contractor shall be entitled to the labor of said convicts, the various shops and power therein belonging to the state. But if, after due advertisement as above set forth, the commissioners fail to secure such a bid as is acceptable to them, then they may hire the convicts to a contractor or contractors by private contract, and such contract, when made, shall be consummated in all respects, and shall contain the same stipulations and provisions, as are required in this section for a contractor who hires said convicts by public bid."

Under the power thus conferred, the board in October, 1908, leased to William Goodbar a specified number of the convicts confined in the Eddyville Penitentiary. The contract stipulated that the commonwealth should clothe and feed and keep under discipline the convicts so leased, and further provided that:

"The discipline of the entire penitentiary shall be under the control of the state authorities and all employés of said second party, Goodbar, shall be governed by the rules and regulations of the penitentiary which may be promulgated from time to time by the authorities representing the state."

It was further stipulated in the contract that:

"This contract is to be continued in force for four years from April 19, 1909, then at the option of the second party, and provided the party of the second part gives three months' notice in writing of his intention to renew this contract before the expiration of the contract, a new contract shall be entered into for a period of four years at the same price and upon the same terms as in this contract."

It was further stipulated that:

"It is distinctly understood that the party of the second part shall not sublet any of the labor of the 175 convicts hereby leased without consent of the party of the first part."

Some time after the execution of this contract, Goodbar assigned the benefit of the contract to one J. W. McMullen, and soon thereafter McMullen assigned the contract and all benefits arising thereunder to the Sterling Manufacturing Company, and thereafter the Sterling Manufacturing Company assigned the contract to the present appellant.

Each of these assignments was consented to in writing by the board of prison commissioners, and the consent to the assignment by the Sterling Manufacturing Company to the Reliance Manufacturing Company was as follows:

"Said commonwealth further consents to the transfer and assignment by said Sterling Manufacturing Company to the Reliance Manufacturing Company, a corporation, of all the rights of said Sterling Manufacturing Company under the William M. Goodbar contract, dated October 16, 1908, and that said Reliance Manufacturing Company enjoy all of the rights of said Sterling Manufacturing Company upon giving to said commonwealth the bond required under said Goodbar contract and described in the previous written consent given by said commonwealth, dated December 7, 1910."

The various assignees of Goodbar, including the Reliance Manufacturing Company, complied with all the rules and regulations of the board of prison commissioners and executed all bonds required. In short, they took the place of Goodbar, and discharged all of the obligations he assumed by virtue of the contract with him.

In January, 1913, the Reliance Manufacturing Company exercised its option to renew the contract, and gave to the board of commissioners written notice of its desire, as provided for in the second clause of the Goodbar contract. Upon receiving this notice, or soon thereafter, the board notified the Reliance Manufacturing Company that it declined to renew the contract, and thereupon this suit was brought, asking that the board of commissioners be restrained from ousting the Reliance Company from the prison or from failing or refusing to furnish it the labor stipulated in the contract; and it was further prayed that the board be compelled to renew the contract with the Reliance Manufacturing Company for an additional period of four years from April 19, 1913.

There being really no issue of fact involved in the case, it was submitted upon the pleadings, exhibits, and some evidence that had been taken, and judgment rendered dismissing the petition upon the ground, as stated in the judgment, that the several assignments of the contract were void as against the public policy of the state, and, this being so, the contract with the Reliance Manufacturing Company should not have been renewed, as there was no obligation upon the part of the board to renew it.

It is the contention of counsel for the Reliance Company that, as the board of prison commissioners had the power and did consent to the several assignments of the Goodbar contract, the Reliance Company occupies the same position as would Goodbar if he were asking a renewal of his contract, and further insisted that as the contract, as well as the statute under which it was made, stipulated that it should be renewed for a term of four years at the election of the lessee, the board of prison commissioners had no right or authority to refuse to renew the contract, and should have been compelled to do so by the processes of the court.

In behalf of the commonwealth, the argument is made that the prison commissioners did not have the power to consent to the various assignments of the Goodbar contract, and therefore the assignments conferred no rights on the assignees, and besides were void as contrary to public policy. And further that this suit cannot be maintained against the board, as it is in fact a suit against the commonwealth. It is also maintained that the stipulation in the contract for its renewal is not binding on the board, and, this being so, the board cannot be compelled to renew it.

That the board had authority to make the contract with Goodbar is not disputed, nor could it be. This contract was made under express legislative sanction, and that the Legislature had power to grant this authority must be conceded, as the power is conferred by sections 253 and 254 of the Constitution, providing, in substance, that convicts shall be confined at labor within the walls of the penitentiaries, and the General Assemly shall not have power to authorize their employment elsewhere, except upon the public works of the commonwealth, or in case of pestilence or the destruction of the prison building. These sections further provide for the leasing of the convict labor with the condition that the commonwealth shall maintain control of the discipline, and provide for all supplies and for the sanitary condition of the convicts.

The question is: Did the board have authority to consent to the assignments, and were these assignments against public policy? We think this question really resolves itself into a question of power rather than public policy. If the board had the power to approve the assignments, and in the exercise of this power created contract rights by virtue of the assignments, these contract rights cannot be disturbed or upset upon grounds of public policy. Indeed, we think the attack on these assignments on the ground that they were against public policy is not well founded. The Legislature of the state has for many years continuously and by the enactment from time to time of various laws authorized its boards, having charge of the penitentiaries of the state, to lease the convict labor, and these laws were in force when the Goodbar contract was made, when each of the assignments were made, when the renewal by the Reliance Company was sought, and when the judgment appealed from was rendered, as well as now. This authority on the part of the Legislature was, as we have seen, conferred by...