State v. Hertzog , 92 S.C. 14 ( 1912 )

I do not see my way clear to concur in either of the opinions which have been prepared in this case. It would be a needless waste of time and space to again copy the statutes. I know the Supreme Court in State v. Bordin, 64 S.C. 207, 41 S.E. 959, held that section 337 is constitutional, but be it remembered that we are now in the Court en Banc, the great Constitutional Court of this State, and if the Courten Banc is bound by any other decision, it certainly is bound by its own decision. Ex parte Hollman, 79 S.C. 13,60 S.E. 19, 21 L.R.A.N. S. 242n. "We shall not discuss at length the doctrine of stare decisis. It seems obvious it has less force when the constitutional rights of the citizen to his personal liberty is involved, than in those cases involving the fixedness of property rights and the regularity of procedure. With the profoundest respect for the Judges who delivered and concurred in these opinions, we cannot avoid the conclusion that the statute in question provides for imprisonment for debt without proof of fraud, and, therefore, attempts to deprive the citizen of one of the personal rights guaranteed by the Constitution of the State."

It seems to me we are bound to follow the Hollman case and not the Bordin case, which, in my judgment, is overruled by the Hollman case. In my opinion the cases are hopelessly in conflict and the decision of the Court en Banc must govern. In the Hollman case, at page 16, this Court says: "The legislative power to make acts criminal and punishable by imprisonment cannot be extended to an invasion of the rights guaranteed the citizen by the Constitution. It is impossible to frame a valid statute punishing by imprisonment the exercise of the right to religious liberty, or the right to petition for the redress of grievances, or the right to be exempt from imprisonment for debt except in a case of fraud. These are all constitutional rights which cannot be abridged under the guise of legislation against crime. The exercise of them cannot be crime."

The province of this Court is to decide principles rather than cases. The principle decided in the Hollman case is that imprisonment for nonpayment of debts is allowed only in cases of fraud. In the Reeder case the Court held that motive or intent is immaterial. No other construction is possible. Intent is not in the statute and no Court is justified in supplying it.

Section 337, in short, provides, that if any one (with knowledge of the existence of the lien) shall sell any personal property, without the written consent of the lienee, and shall fail to pay the debt within ten days (deposit is equivalent to payment) he shall be guilty of a misdemeanor and be fined or imprisoned, or both.

The statute in the Hollman case provided for a wilful default without just excuse and yet the statute was declared to be unconstitutional because wilfulness and inexcusable conduct did not necessarily mean fraudulent conduct. Section 337 contains no such modifying words. Let me illustrate. A mortgagor has in his possession personal property worth one thousand dollars, covered by a mortgage for seven hundred dollars. By the act of God two-thirds of it is destroyed. The mortgagor finds a purchaser for the remnant at a price far beyond its market value. He is offered six hundred dollars for the remnant, today. He cannot raise the other hundred dollars. What shall he do? Shall he sell and save the mortgagee as much as possible, and take the imprisonment and the inheritable shame of a convict to himself and family, or shall he refuse and save himself at the expense of his creditor?

He meets the mortgagee and tells him the condition of affairs. The mortgagee verbally urges the sale, not merely consents. The sale is made. The entire purchase price is delivered to the mortgagee. The mortgagor not being able to pay the balance of the mortgage debt, within ten days, is under this statute liable to imprisonment. Why is he imprisoned? I know of no other answer than that he did not pay the other hundred dollars, i. e. the debt. There certainly is no fraud here. Imprisonment for failure to pay a debt in the absence of fraud is declared in the Hollman case to be unconstitutional and beyond legislative power. For these reasons I am unable to concur in the opinion which sustains section 337.

Section 338, in my judgment, is even worse. This section gives a lien on the money received by contractors for the erection, alteration or repair of buildings in favor of laborers, subcontractors and material men who have taken part in the construction, etc., of buildings. Why not bridges, roads, factories, etc.? Is not the finished product just as much the result of their labor, attention and material in the one case as the other? But it is said that there would be too many involved in one case and only a few in the other. I do not think the classification is based on fact. It seems to me that it depends on the size of the bridge and the size of the house. I have seen the statement in an industrial paper that a skyscraper is a bridge on end. It seems to me that there are many kinds of workmen required for the perpendicular bridge, that have no necessary place in the horizontal bridge. For instance, stonemasons, brickmasons, electricians, plumbers, decorators, painters, etc., and yet if the bridge be perpendicular there is a lien, but if the bridge be horizontal, there is none.

I fail to see the reasonableness of the classification. But even if the one is complex and the other simple, it is new doctrine to me that the law can deal only with simple questions.

Again it is said that the true basis of criminality is that the law makes the contract price a trust fund, and when the contractor does not pay the lien debt, he has committed a breach of trust. If that be granted, it still would not sustain the statute because a breach of trust to be criminalmust be with fraudulent intent. Neither fraud nor anything that imports fraud is contained in this statute. Indeed the whole intent of the statute, as I see it, is to procure imprisonment for failure to pay the debts without the necessity to prove fraud. While the statute opens wide the door for fraud, it has only bonds and imprisonment for an honest but unfortunate contractor.

Again let me illustrate my view. A. contracts to build a house. Those with whom he has contracted for his supplies have failed. The price of supplies has risen and so has labor. The contract price is ten thousand dollars. It has cost A. eleven thousand dollars to build and he has no other money with which to pay the debts. Under section 337 we have seen that debt means all that is due, every cent. A. has collected five thousand dollars on his contract and paid it every cent to the laborers, subcontractors and material men. What is A. to do? If he collects the remaining five thousand dollars and prorates that among the three classes, he is to be fined or imprisoned for the failure to pay these debts in full. If A. still had the ten thousand dollars of course he could pay the six thousand dollars. The excuse that he has paid the first five thousand dollars to these very people does not avail. The statute allows one and only one excuse. A. can borrow money on the contract and repay that, but there is no other excuse allowed. If A. is dishonest his way is clear. He borrows on his contract, puts the money in his pocket and goes unwhipped of the law. The honest man who simply miscalculates or is unfortunate is imprisoned for nonpayment of his debt, while the real criminal is unpunished.

With all of its harshness, section 337 does provide that its provisions shall not apply to those who have no knowledge or notice of the lien. Not so with section 338. No knowledge or notice is necessary. Where a contractor has several contracts in different cities or widely separated places, he must have a foreman on each contract, authorized to contract bills in emergencies. To a knowledge of each of these bills the contractor is held by a criminal liability. More marvelous still, the contractor is charged with prophetic knowledge of the future determination of Courts and juries. These, too, he must pay or be imprisoned. Hollman, 79 S.C. 15, 60 S.E. 19, 21 L.R.A.N. S. 242n. "However completely he may show his good faith, and however fully the Court and jury may be convinced of his good faith, conviction must follow unless the jury think he had just cause to abandon the contract or that the service required was not reasonable."

Under section 338 the contractor is denied the mercy or justice of the jury. His condemnation is sure, absolute, and unescapable. It makes no difference what the Court and jury may think. They do not have to think at all. The questions for them are, did the prisoner get money on the contract? Did he pay all the debts? If he did not pay all the debts, was he prevented solely because he paid it on a loan on the contract? (It makes no difference for what purpose the money was borrowed or what he did with the proceeds of the loan.)

It seems to me that the statute allows the contractor to divest the vested lien of the three classes. It violates the equal protection of the laws and provides imprisonment for the nonpayment of debts.

For these reasons I cannot concur in any opinion which sustains the conviction of the defendants.

CIRCUIT JUDGE J.W. DeVORE concurs for the reason,that sections 337 and 338, of Criminal Code, are unconstitutional,in that they authorize imprisonment for debt, even ifthere be no fraud involved in the act or acts condemned, bysaid two sections, and made misdemeanors.