New York Central & Hudson River Railroad v. Williams
New York Central & Hudson River Railroad v. Williams
Opinion of the Court
The purpose of this litigation is to test the constitutionality of a recently-enacted statute requiring railroad corporations in this state to pay the wages of their employees semi-monthly and in cash. In order to present the question to the courts for determination the plaintiffs have brought suit in equity against the state commissioner of labor to restrain him from instituting actions to recover the penalties prescribed by the statute for non-compliance with its provisions. Judgment was rendered in favor of the defendant at Special Term, and affirmed, by a divided court, at the Appellate Division. The plaintiff has appealed to this court.
In the briefs of counsel and in the argument at the bar it has been assumed that the provisions of the Labor Law which arc the subject of attack operate not only to introduce the requirement of semi-monthly payments into all contracts between the railroad company and its employees in which there is no express stipulation as to the time when wages shall be payable, but also to prohibit such corporations from making any contracts with their employees which shall vary the time of payment from that prescribed in the statute. This view is sustained by the amendment to the Penal Law enacted in 1909 when section 1272 was made to provide that a corporation which does not pay the wages of all its emplojmes in accordance with the provisions of the Labor Law is guilty of a misdemeanor. (Laws of 1909, chap. 205.) It is true
The section of the Labor Law requiring the cash payment
These enactments are attacked as unconstitutional on three grounds. It is contended, first, that they deprive the plaintiff and its employees of liberty and property without due process of law; secondly, that they deny them the equal protection of the laws; and, thirdly, that they constitute a restriction upon interstate commerce. Although the argument has covered a wide field an analysis of the discussion resolves the defense into two propositions of law: (1) That the legislation which is the subject of attack is a proper exercise of the reserved power to amend corporate charters contained in the state constitution; and (2) that it constitutes a proper and legitimate exercise of the police power of the state. If either of these propositions is sound the legislation is constitutional and the judgment must be affirmed.
In this state, since the enactment of chapter 381 of the Laws of 1889, many classes of corporations, including steam surface railroad companies, have been required by law to pay their employees in cash. An act to provide for the weekly payment of wages by corporations was passed in the following year (Laws of 1890, cli. 388) and amended three years later (Laws of 1893, ch. 717), but steam surface railroads were expressly excepted from its operation. In 1895, however, the act of 1890 was amended so as to provide, among other things, as follows:
“ Every person or corporation operating a steam surface railroad shall on or before the twentieth of each month pay the employees thereof the wages earned by them during the
The monthly payment system thus prescribed for steam surface railroads continued down to the time of the enactment of the provision of the Labor Law which is now assailed providing that the wages of the employees of such corporations shall be paid semi-monthly. The term employee as used in the Labor Law is defined by the statute itself to mean “ a mechanic, workingman or laborer who works for another for hire ” (section 2); and a question is raised as to whether this definition is broad enough to include conductors, trainmen or locomotive engineers. It is alleged by the appellant and conceded by the respondent that it will cost the railroad company $5,000 a month more to pay its employees semi-monthly than it does to pay them monthly.
In the briefs of counsel the constitutionality of the semimonthly cash payment law (which term I use for convenience in referring to the provisions of the statute prescribing the time of payment and requiring it to be in cash) is discussed in two aspects : (1) As an exercise of the police power of the legislature, and (2) as an exercise of the reserved power to amend the charters of corporations. In the view which I have taken of the case I shall proceed to consider only the question of its validity as warranted by the reserved power to, amend.
It is true as has already been pointed out that the statutory requirement of semi-monthly payments applies to every person as well as to every corporation operating a steam surface railroad, thereby referring no doubt to the operation of short branch lines by individuals or partnershij)s in connection with the great railroads of the state, for convenience in sending freight to and from the premises of extensive manufacturing concerns. Such branch lines are only incidental to the general railroad business of the state and the number of employees thereon must be comparatively few. The constitutionality of
In exercising the reserved power to amend corporate charters the legislature may not deprive a corporation of property already acquired or the proceeds of lawful contracts previously made or destroy or substantially impair the purposes of the grant or rights which are vested in the corporation thereunder; but it may make any alteration or amendment of a charter “ which will not defeat or substantially impair the object of the grant, or any rights vested under it, and which the legislature may deem necessary to secure either that object or any public right.” (Close v. Glenwood Cemetery, 107 U. S. 466, 476.) In the case of corporations such as railroad companies which are clothed to some extent with a public trust and are under an obligation to discharge duties which affect the community at large the legislature may make amendments in furtherance of the public interest for the benefit of their employees even though such amendments operate as limitations upon the exercise of the right to contract. Such is substantially the doctrine enunciated in the case of St. Louis, Iron Mountain & St. Paul Ry. Co. v. Paul (173 U. S. 404), where the Supreme Court of the United States was called upon to pass on the constitutional validity of an act of the Arkansas legislature which required railroad companies whenever they discharged an employee to pay him his unpaid wages then earned at the contract rate without abatement or deduction on the day of his discharge. The state court upheld this legislation as a valid exercise of the power to amend corporate charters
In the Sinking Fund Cases (99 U. S. 700, 720) the same court in discussing the power reserved to Congress to amend the charters of the great Pacific railroads, reviewed the earlier decisions on the general subject and held that the reservation of the power of amendment “ affects the entire relation between the State and the corporation, arid places under legislative control all rights, privileges and immunities derived by its charter directly from the State,” citing Tomlinson v. Jessup (15 Wall. 459).
In this state the same rule has been laid down with equal emphasis. As illustrations of the extent to which the legislature might subject corporations to new restrictions or increased burdens in the exercise of its reserved power to amend corporate charters, Judge Denio in Albany Northern R. R. Co. v. Brownell (24 N. Y. 345) called attention to one case in which the Court of Appeals had held that the line of a plankroad might be extended and its capital increased and to another in which a banking corporation chartered under the general act of 1838 without personal liability on the part of the shareholders was so changed as to render the shareholders liable for all the debts of the company to an amount equal to the stock held by them respectively. (See Schenectady & S. Plankroad Co. v. Thatcher, 11 N. Y. 102; Matter
In New York a special charter may be amended by a general act which does not refer specifically to such charter. (Pratt Institute v. City of New York, 183 N. Y. 151; People ex rel. Cooper Union v. Gass, 190 N. Y. 323.) The case of State v. Haun (61 Kans. 146) is cited as authority against this method of amendment, but it is in opposition to the view repeatedly asserted and assumed in this court, and is also opposed to decisions on the subject in other jurisdictions, where it is held that the fact that an act of the legislature is general in its terms and makes no direct or express reference to the charter of any particular corporation does not prevent it from operating as an amendment to the charter of any corporation comprehended in the classes to which it refers. Such was the effect given by the Supreme Court of the United States to a general statute of Kentucky which was construed as operative to amend the charter of Berea College, although it was not in terms designated as an amendment thereof. (Berea College v. Kentuclcy, supra.)
In ¡Massachusetts a general statute relative to railroad crossings was held to operate as an amendment to the act incorporating the Boston and Providence Railroad Corporation,
The semi-monthly payment clause of the Labor Law being applicable to all steam surface railroad corporations in the state operated as a repeal of all the charters of such corporations, if there were any, which provided for a different time of payment for employees and as an amendment or addition to all charters in which no time of payment was prescribed. That the legislature by enactments designed to operate prospectively, and not interfering with vested rights, may .thus regulate contracts between corporations and their employees in regard to the times when their wages shall be paid, has been expressly held in Massachusetts and Vermont. Statutes requiring corporations to pay their employees in lawful money have been sustained as falling within the reserved power to amend charters in Vermont and Maryland and by the Supreme Court of the United States as falling within the police power in a case which arose in Tennessee. (Knoxville Iron Co. v. Harbison, 183 U. S. 13.)
In 1895, under a provision of the Constitution of Massachusetts permitting such procedure, the justices of the Supreme Judicial Court of that state were requested to give their opinion to the house of representatives upon the question whether it was within the constitutional power of the legislature to extend the application of an existing law relative to the weekly payment of wages by corporations to private individuals and partnerships as provided in a bill then pending before the legislature. In response to the request the justices transmitted to the house of representatives an opinion in which .their conclusion was expressed as follows:
The Weekly Payment Act of Vermont (1906) 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 business in the state shall pay each week, in lawful money, each employee engaged in the business, the wages earned by such employee to a date not more than six days prior to the date of such payment; provided that if at any time of payment an employee is absent from his regular place of labor, he shall be entitled to such payment on demand. It prohibits the payment of the employees of any such corpora
In the case cited, while the reserved power of amendment was most strongly asserted, it was said to be, like the police power, limited by the requirements of the public good. (Page 383.) “ And that the Act is within the scope of that power cannot be doubted, for its requirement, especially as far as it relates to the defendant and to the class to which it belongs, which are clothed with a public trust, and discharge duties of public concern, affecting the community at large,— is promotive of the public good in protecting their employees to the limited extent it does.”
In the same case it is held that the medium of payment is as much within the scope of the reserved power of amendment as the time of payment. The opinion deals so fully and admirably with every substantial question involved in the present appeal that it is difficult to add anything of value to the argument of Chief Justice Bowell in support of legislation of this character.
An act of the Maryland legislature passed in 1880 provided that every corporation engaged in mining or manufacturing or operating a railroad in Allegany county and employing ten hands or more, should pay its employees the full amount of their wages in legal tender money of the United States. The Union Mining Company, a corporation within the purview of the act, was the defendant in a suit brought to test its constitutionality. It was conceded that the legislature when it incorporated the Union Mining Company reserved the right to alter or amend its charter at pleasure. Hence, said the Maryland Court of Appeals, there could be no doubt “ that the legislature could •enact a law prohibiting the corporation from paying its employees otherwise than in money, and that it could forbid the corporation from making contracts with them for payment
The discussion thus far has related to the contention of the appellant that the enactments in question deprive the parties of liberty and property without due process of law. The objection that they operate .as a denial of the equal protection of the laws is equally untenable. A classification of corporations with reference to their relations to the public is manifestly reasonable. No other corporations occupy precisely the same relation to the public as steam surface railroad companies, and the fact that no other corporations may have been subjected to the same requirement in respect to the payment of wages does not invalidate the requirement. As long as the classification has a basis in reason and all corporations of the same class are treated alike, the action of the legislature may not be condemned by the courts for inequality.
As to the objection that the semi-monthly payment law constitutes an unconstitutional interference with interstate commerce, it is to be observed that it is not in conflict with any legislation by Congress, nor does it affect interstate commerce directly. It relates to the wages of railway servants employed wholly within the state of New York as well as to the wages of those whose duties take them from this state into others. The subject is one upon which Congress has not undertaken to act. The eases in which state legislation has been judicially condemned for interference with the commercial power of Congress have been cases where the interference was direct. “ In conferring upon Congress the regulation of commerce, it was never intended to cut the States off from .legislating on all subjects relating to the health, life and safety of their citizens, though the legislation might indirectly affect the commerce of the country. Legislation, in a great variety of ways, may affect commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Constitution.” (Sherlock v. Alling, 93 U. S. 99, 103.) If its effect upon interstate commerce is only incidental a state law is not forbidden by the
In reaching the conclusion that the New York statute requiring steam surface railroad corporations to pay their employees semi monthly and in cash is a valid enactment under the reserved power of the legislature to amend corporate charters, I have not overlooked the cases in which similar legislation has been condemned in other jurisdictions. I will' now refer to the decisions of this character which seem most worthy of notice.
The case of Godcharles v. Wigeman (113 Pa. St. 431) involved the constitutionality of the Pennsylvania Store Order Act of 1881, which declared that all orders given by manufacturers to their workmen payable in goods or anything other than money to be void, and prohibited the use of such orders in the payment of wages by manufacturers to their employees.
An act to provide for the weekly payment of wages by corporations passed by the Illinois legislature in 1891 was held to be unconstitutional in the case of Braceville Coal Co. v. People (147 111. 6G) on the ground that it did not apply to all corporations existing within the state or to all that had been or might be organized for pecuniary profit under the general incorporation laws of the state. The Constitution of Illinois provides : “ 17o corporation shall be created by special laws or its charter extended, changed or amended * * * but the General Assembly shall provide, by general laws, for the organization of all corporations hereafter to be created.” The Supreme Court of Illinois held that this provision of the Constitution required all amendments to charters of existing corporations to be made by general laws applicable alike to all existing under the same conditions; and that inasmuch as the weekly payment law could apply to particular corporations only and not to the general body of corporations it could not be upheld.
The Revised Statutes of 1889 in Missouri made it a misdemeanor for any corporation, person or firm engaged in manufacturing or mining to issue in payment of the wages of laborers any order, check, memorandum, token or evidence of indebtedness payable otherwise than in lawful money of the United States, unless the same were negotiable and
An Indiana statute requiring all employers of labor to make weekly payment of the wages due their employees was adjudged unconstitutional as not falling within the police power in Republic Iron & Steel Co. v. State (160 Ind. 379). There, as the court said, the statute took away “ from both the employer and employe, whether in the shop, in the store or on the farm, all power to contract for labor, except upon terms of weekly payment of wages in cash,” and this was pronounced an unreasonable and. therefore unconstitutional restriction. Uo question of the reserved power to amend corporate charters appears to have been considered.
Perhaps the strongest authority in favor of the appellant in any state court of last resort is Johnson v. Goodyear Mining Company (127 Cal. 4), which invalidated a California statute requiring every corporation doing business in the state to pay
Again and again the courts of this country have asserted the proposition, in almost every form in which the English language can phrase it, that it is their duty to uphold a statute enacted by the legislature as constitutional if it is possible to do so without disregarding the plain command or necessary implication of the fundamental law. If the lawmakers have not violated the Constitution their work must stand until they themselves destroy it, no matter what the courts may think of its wisdom or probable effect. “ The courts have no right to set aside, to arrest or nullify a law passed in relation to a subject within the legislative authority on the ground that it conflicts with their notions of natural right, absolute justice or sound morality.” (Slack v. Jacob, 8 W. Va. 612.) There is an irreconcilable conflict in the decisions in different jurisdictions as to the constitutional validity of labor legislation Axing the medium and time of payment of the wages of those who work for corporations. After the foregoing review of the leading cases, I find no difficulty in sustaining our Flew York statute on the ground which has been stated. It does not confiscate corporate property directly or indirectly. It does impose a greater future burden upon the corporations to which it relates; but that, I think, is within the power of the legislature to the extent to which it has been exercised in this case.
For the foregoing reasons I advise the affirmance of this judgment, with costs.
Cullen, Ch. J., Gray, Werner, Hisoock and Chase, JJ., concur.
Judgment affirmed.
Reference
- Full Case Name
- The New York Central and Hudson River Railroad Company v. John Williams, as Commissioner of Labor of the State of New York
- Cited By
- 10 cases
- Status
- Published