Pillatos v. Hyde

Millard, J. This action was instituted to recover wages alleged to be due for labor performed for defendants by plaintiff in a coal mine in King county. Trial of the cause to the court resulted in findings of fact and judgment in favor of plaintiff. Defendants appealed. The facts are as follows: Samuel Hyde, who later organized a domestic corporation (Hyde Mines, Inc.) for exploitation of a coal mine in King county, employed respondent September 15, 1938, as a laborer in that mine which Hyde then held under option for lease. October 15, 1938, which was prior to the incorporation of the coal mine, Samuel Hyde entered into a written agreement, reading as follows, with respondent under which respondent obligated himself to receive one-half of his compensation in cash and to leave the remainder of his compensation on deposit with Hyde for the purpose of developing the coal mine in question; and, if the property were later incorporated, respondent agreed to subscribe for stock in that corporation and pay par value therefor to the amount of one-half of his wages, left on deposit with Hyde: “For and in consideration of the sum of One Dollar ($1.00), to me in hand paid, the receipt whereof is hereby acknowledged, I do hereby agree to and with Samuel Hyde, of the City of Seattle, King County, Washington, as follows: “First: That I have been and will continue to be in the employ of said Samuel Hyde, in the opening and developing of a coal mine in Section 29, Township *405 21, North Range 7, E.W.M., in King County, Washington, and I agree as follows: “Second: To receive one-half of my compensation in cash and to leave the balance of my compensation on deposit with Samuel Hyde, for the purpose of open-, ing up and developing a coal mine in the property hereinafter described, and if and when he incorporates a corporation to operate a coal mine in Section 29, Township 21, North Range 7, East W.M., I agree to subscribe for stock in said corporation to be formed, and pay par value therefor to the amount of one-half of my compensation or wages, which I have left on deposit with said Samuel Hyde. “Third: If, however, it shall develop, that in the opinion of Samuel Hyde, it should not be advisable to open up said coal mine on said property and he shall abandon the same for any reason, then in such an event, I agree to waive, charge off and loose the money so left by me with him on deposit for the purpose of purchasing said stock, it being my intention to contribute one-half of my income or my salary, that shall be coming to me as aforesaid from said Samuel Hyde towards the opening and development of said coal mine. “Dated this 15th day of October, 1938. (Signed) Harry Pillatos “In the event a satisfactory showing should be made in the coal mine I am now opening up, or causing to be opened up in Section 29, Township 21, North Range 7, E.W.M., in King County, Washington, I agree to incorporate said mine and to give to $500.00, stock at par value to the amount of his salary that he has left with me for the purpose of developing said mine and to purchase stock therein, in the event it should develop in my opinion that said coal mine is of sufficient value to incorporate. (Signed) Samuel Hyde” July, 1939, Hyde and others incorporated the mine for fifty thousand dollars. By September 15, 1939, respondent had on deposit with the company, according to its books, five hundred dollars, which represented one-half of his earnings and entitled him to five hundred shares of stock of the company. December 31, *406 1939, according to the company’s books, respondent had on deposit one-half of his earnings for the remainder of 1939 which entitled him to one hundred and twenty-eight shares of stock of the company. Respondent was discharged April 30,1940, because the mining company no longer needed his services. March 12, 1940, appellant company issued in the name of respondent certificate No. 6 for five hundred shares and certificate No. 12 for one hundred and twenty-eight shares of its stock, but did not then deliver the shares to him. May 8, 1940 (when respondent voluntarily or involuntarily ceased to work for the company), those certificates, together with a check in the amount of $23.30 for his wages, were handed to respondent, who objected to acceptance of the shares of stock in payment of his wages. His request that he be given cash for the shares of stock was answered by Hyde to. the effect that the stock was not worth its face value then; that the company did not wish to redeem it; and that rer spondent would have to sell it the same as others were doing. That same day respondent called on his present attorneys, who returned the stock certificates and check to appellant Hyde and demanded that respondent be paid in money as required by Rem. Rev. Stat., § 7594 [P. C. § 3548] et seq. The demand was refused, whereupon respondent commenced this action, which resulted as recited above. The pertinent portion of the applicable statute reads as follows: “It shall not be lawful for any corporation, person or firm engaged in . . . mining, ... or any business or enterprise of whatsoever kind in this state, to issue, pay out or circulate for payment of wages of any labor, any order, check, memorandum, token or evidence of indebtedness, payable in whole or in part otherwise than in lawful money of the United States, unless the same is negotiable and redeemable at its face value, without discount, in cash or on demand, *407 at the store or other place of business of such firm, person, or corporation when the same is issued, and the person who, or company which may issue any such order, check, memorandum, token or other evidence of indebtedness shall upon presentation and demand redeem the same in lawful money of the United States. And when any laborer performing work or labor as above shall cease to work whether by discharge or by voluntary withdrawal the wages due shall be forthwith paid either in cash or by order redeemable in cash at its face value on presentment at bank, store, commissary, or other place in the county where the labor was performed: ...” (Italics ours.) Rem. Rev. Stat, § 7594 [P. C. § 3548], The statute plainly prohibits any person or corporation, engaged in any business or enterprise of whatsoever kind within this state from paying to any laborer who shall cease to work for such person or corporation the wages due in anything other than lawful money of the United States, or by an order or check payable in lawful money of the United States in the county where the labor was performed. The contract in the case at bar comes within the ban of Rem. Rev. Stat., § 7594, which declares a rule of public policy in this state designed to protect wage earners who are employed in certain industries; and where an employer and his or its employee attempt to make a contract of employment in violation of the clearly expressed provision of the statute, the natural right of the employer and the employee to contract between themselves must, as stated in Burdette v. Broadview Dairy Co., 123 Wash. 158, 212 Pac. 181, yield to what the legislature has established as the law. The statute is mandatory that wages be paid forthwith, on ceasing work, in lawful money of the United States or by order or check redeemable in cash at its face value in the county where the labor was performed. *408 An apt authority is Hancock v. Yaden, 121 Ind. 366, 23 N. E. 253, 6 L. R. A. 576. The Indiana statute requires that wages be paid in lawful money of United States. In an 'action by the plaintiff for value of services rendered in the coal mines of the defendants, the answer admitted the employment and services rendered, but pleaded as a defense the existence of a Contract antecedent to the employment, whereby the plaintiff expressly waived his right to demand and receive his wages and pay for mining coal in lawful money of the United States. The court held that the antecedent contract was void in so far as it assumed to waive the- plaintiff’s right to receive his wages in money. In principle, the case cited and the case at bar are indistinguishable. Respondent Pillatos agreed to accept shares of stock for a portion of his wages, or, in other words, to waive his right to demand and receive a part of his wages for mining coal in lawful money of the United States when he voluntarily or involuntarily ceased to work for appellants. That antecedent contract was illegal and void, as it was in contravention of the public policy of this state declared by the legislature in Rem. Rev. Stat., § 7594. Appellants assign as error the entry of a judgment against Samuei Hyde and Rachel Hyde, his wife, individually. It is contended that legally respondent was never in the employ of Samuel Hyde. The action was brought against Samuel Hyde and Jane Doe (Rachel) Hyde, his wife, and Hyde Mines, Inc., a corporation. Judgment was entered against “the defendants for the sum of $628, and for plaintiff’s costs and disbursements.” Prior to employment of respondent by the corporation — presumably in July, 1939, when the mine was incorporated — he was an employee of Hyde, with whom he made the contract *409 which is before us on this appeal. The judgment is not entered against Samuel Hyde and wife individually, but only against the “defendants.” The judgment is, in effect, against Samuel Hyde and Rachel Hyde, a marital community, and Hyde Mines, Inc., a corporation. Appellant wife is bound by the acts of her husband, but she is not bound individually. The mining venture in which Samuel Hyde was engaged was a community venture, as he and Rachel Hyde were husband and wife. The unpaid compensation of respondent for the period from September, 1938, to July, 1939, when respondent was an employee of Samuel Hyde, is an obligation of the marital community of Samuel Hyde and Rachel Hyde. That portion of unpaid compensation due to respondent for services performed fpr the mining corporation from July, 1939, to April 30, 1940, is an obligation of the corporation, a legal entity separate and apart from its stockholders. The judgment is reversed and the cause remanded, with direction to the trial court to determine the amount of compensation the marital community and the corporation, respectively, owe to respondent and to enter judgment accordingly. Respondent will recover costs in this court. Main, Beals, Blake, and Driver, JJ., concur.