Shriver v. Carlin & Fulton Co.

Oeeutt, J., delivered the opinion of the Court. These appeals present two questions.: (1) "Whether an older, filed by the plaintiff in 'an action on a construction bond in which a judgment had been entered against the principal and sureties, to enter the judgment “agreed and settled” as to- ohe of the defendants1 “only”, operated as a release of the other defendants; and (2) whether the compensation paid to the officer of a corporation for services rendered to it and expenses incidental thereto., where such services were ⁵³ not connected with nor a part of his duties as an officer, is “salary,” “wages” or “hire” of an “employee” within the meaning of the Code, art. 9, sec. 33. And they arise in this way : On October 5th, 1917, Alfred Jenkins Shriver, Esq., sued the Roland Park Realty Company, G-. Howard White, David M. Fulton, Charles L. Fulton, and Joshua E. Franklin, in the Co'urt of Common Pleas, under the Speedy Judgment Act of Baltimore City, on a construction bond, and on June 20th, 1920, a judgment absolute in his favor for $5,273.75 was entered in that case against all of the defendants.

On July 26th, 1920, by his attorneys, he filed in the case the following order: “Please enter this ease agreed and settled as to Gr. Howard White only, upon payment of co’sts by the said G-. Howard White.” On June 24th, 1925, an attachment issued on that judgment was laid in the hands of the Carlin & Fulton Company, the effect of which was to bind any assets in its hands belonging to David M. Fulton, properly subject to attachment, because, so far as the record disr closes, no' other • defendant was in any way connected with that company. Upon the laying of the attachment the garnishee appeared, and pleaded nulla bona.

Issue was joined short on that plea, the case was tried before a jury, and on October 3rd, 1927, judgment absolute was entered for the plaintiff for $135. From that judgment both sides appealed, the plaintiff on the ground that the instructions of the court prevented the jury, in estimating the damages, from considering the compensation payable by the garnishee to Fulton after the attachment was laid, and the defendant on the ground that Fulton had been fully released by the order to which we have referred, and that the judgment should have been for the defendant. The only material fact witness sworn in the case was Walter Gr. Heim, president of the Carlin & FultoU Company.

He in effect testified that Fulton held fifteen shares of the capital stock of the company and that since the laying of the attachment he had received $135 in dividends on that stock; that Fulton was a director and vice-president of the com ⁵⁴ pany, and was also a salesman and sales manager for it; that, as director and vice-president, he exercised various functions of an administrative character in connection with the corporation, hut that for such services he received no* compensation. He further testified that, as salesman and sales manager, Fulton received $250 a month as salary and $50 a month for his travelling expenses; that as sales manager he had supervision of all the outside force, in seeing that the orders are gotten out properly, and he is, in other words, general sales manager, and looks after, not only the salesmen, but the clerks in the outside store, and also occasionally sells himself, “goes out”; that his supervision extended to the work of six clerks and nine salesmen employed by the corporation, but that he had no authority to extend credit to a purchaser or to. authorize the other salesmen to do so, except in the absence of the president; that the volume of business in 1925 was about $450,000, but not quite so good in 1926; that the compensation paid Fulton was for his services as salesman and sales manager; that the fact that Fultoin was a director and vice-president had nothing to do with his being selected as a salesman and sales manager; that the $50 was paid each month, to cover Fulton’s travelling expenses, that he did not have to account for his travelling expenses, but he had to take care of them out of that allowance. The plaintiff also offered in evidence an extract from, the by-laws of the garnishee relating to the duties of its officers, and proved the docket entries and proceedings in the original case of Shriver v. White, et al. Upon this evidence the garnishee offered two. demurrer prayers (Nos. 1 and 2) which were refused, two prayers (3 and 4) limiting the plaintiff’s recovery to the dividends paid to Fultoin pending the attachment, which were granted, and two (5 and 6) which asked the court to instruct the jury that the order of satisfaction as to White also, released the other defendants, which were refused. The plaintiff excepted to the granting of the garnishee's 3rd and 4th prayers, and the garnishee excepted to the refusal of its remaining prayers.

In Addition to- these rulings the garnishee also ⁵⁵ excepted to certain, rulings oil the admissibility of evidence, but these exceptions were not pressed in this court, certainly do not involve any reversible error, and need not be further noticed. (1) In granting the garnishee’s third and fourth prayers the trial court held in effect that the compensation payable to Fulton by the garnishee was: exempt from attachment under Code, art. 9, sec. 33, and the questioii presented by the plaintiff’s: appeal is whether it erred in that ruling. The statute exempts from attachment the “wages”, “hire”, or “salary” of “any laborer or employee”, and the immediate question is whether the money payable by the garnishee to Fulton as salary or for expenses is the salary or hire of an employee within the meaning of the statute. With respect to that question appellant contends.

(1) that Fulton was not an “employee” of the: garnishee within the meaning of the statute, and (2) that, even if he was, the allowance to him for expenses was not a part of his salary, wages, or hire. In referring to that statute1, Judge McSherry said in American Casualty Ins. Co.'s Case, 82 Md. 567 : “The Act of 1854, creating an exemption in favor of a class of persons least able to protect themselves and largely dependent on their wages for support, was given a liberal and not a technically strict construction that might perhaps have been placed upon it.” If, as stated in that ease, the object of the statute was to protect a class of persons “least able to protect themselves and largely dependent on their wages, for support,” and it should be liberally construed to accomplish that purpose, then it is obvious that the meaning of the word “employee” is not narrowed or limited by the word “laborer” which accompanies it, but that it is designed to include persons who could not he described as “laborers,” as that word used as a generic term is ordinarily understood. In its broadest sense the word “laborer” would include every one who performed any kind of mental or physical labor, but as: commonly and customarily used and understood it only applies to ohe engaged in some form of manual or physical labor (Oxford Dictionary; Words and ⁵⁶ Phrases), although it has been given a broader meaning in some cases referred to in Words and Phrases, under the title “Laborer.” But if the purpose of the statute was to' protect such persons as were “largely dependent oh. their wages for support,” then the Legislature must have used the word “employee” to cover such persons in that class as would not be described by the term “laborer,” and that construction appears to be reasonable and logical, since the reason for the exemption is the -same in both cases, to wit, the fact that the employee whether laborer or not depends largely upon his wages for support, for there is no apparent reason to' distinguish between the necessities of one engaged in manual or physical toil and one engaged in a clerical capacity, and to give to one an immunity denied to the other, when both alike are wage earners depending upon their wages for support.

And that is the construction given the statute in Moore v. Heaney, 14 Md. 562 , where this court said: “With reference to the persons entitled to exemption under the laws referred to, can it be a proper construction of those laws, to say, the Legislature intended to include laborers only when the language used is, ‘a laborer or other employee’ ? A laborer, when engaged in service, under contract for compensation, is an employee, but after saying a ‘laborer’ there is added, ‘or other employee’. Surely, in this was meant more than a laborer, or else, why, after using that word, add those which follow? If they only mean persons who are included within the meaning of the word laborer, they are mere tautology and useless,” and there it was held that the defendant, who was employed for a consideration of five per cent, of the cost of construction to superintend the erection of a certain building was an employee and that the five per cent, commission was wages.

The same view was taken in Conlee Lumber Co. v. Ripon Lumber Co., 66 Wis. 488 , where the court said, in referring to a claim for preference in the distribution of the assets of a corporation made by its general manager: “He was an active business man, put his whole time in the business, ⁵⁷ took charge of selling lumber and measuring out and piling it, and all that. His being a stockholder and a manager on a salary did not prevent him from being an employee for wages within the meaning of the act. If the words ‘servants’ or ‘employes,’ in the elause of the act quoted, mean nothing more nor different than the word ‘laborers’ therein, then they are extremely tautological, and a useless repetition. It seems to us that the three words were used for the purpose of extending and broadening the exception made in the statute.” And the construction given the act in Moore v. Heaney, supra, has so far as we know never been departed from in this state.

An attempt was made in Wilmer v. Mann, 121 Md. 239 , to lessen its force by confining the decision in that case to the construction of the statute as it then stood, where the phrase under consideration was “laborer or other employee,” the appellant- contending that the decision was based upon the use of the word “other” as qualifying “employee,” but the court rejected that proposition, and quoting an expression used by Judge McSherry in American Casualty Ins. Co.’s Case, said that “this court gave a wide and liberal meaning to the word ‘employee’, so as to bring as large a class of persons as possible within the provision which created an exemption, in favor of laborers and other employees, from the stringent terms of the attachment law and from the equally harsh effects of an attachment levied by way of execution on wages,” and held that a salesman for a piano dealer was an employee within the meaning of the language of that statute, which in that respect is the same as the statute now under consideration. The appellant apparently relies to some extent on such cases as Lewis v. Fisher, 80 Md. 139 , and Perkins v. Barr, 126 Md. 92 , but for the reasons pointed out by Judge McSherry in American Casualty Ins. Co.’s Case, supra, those cases cannot affect the question in issue here, because they involved the construction of a statute which gave to certain classes of creditors of an insolvent a preference in the distribution of the insolvent estate, and tended to disturb and de ⁵⁸ stroy that equality amongst all the creditors which the statute was intended to promote and preserve.

For that reason, in those and similar cases the court felt constrained to give a strict construction to those provisions of the statute creating such preferences, in order to promote and carry out the manifest purpose of the entire statute, but where the purpose of the statute under consideration, as in this case, was to exempt laborers and employees from the “harsh effects of an attachment levied by way of execution on wages,” to gratify that purpose, the court gave a “wide and liberal” meaning to the word “employee,” so as to bring as large a class as possible within the benefit of the statute. Moore v. Heaney, supra. But even when used in statutes giving the claims of “employees, laborers and operatives” a preference in the distribution of an insolvent estate, the word “employee” has been held to include a salesman employed at a salary of $100 a month to sell and set up mowing machines. Palmer v. Van Santvoord, 153 N. Y. 612 .

And in Re Lawler, 110 Fed. 136 , it was held that, liberally construed, the word “employee” included a traveling salesman for a lumber company, and other cases to the same effect may be found collected in 20 O. J. 1241. In our opinion, therefore, without further laboring the point, Fulton was an employee of the garnishee, unless his status as such was affected by the fact that he was also a stockholder, director and vice-president of the corporation which employed him. It is true that a director nor any other officer of a corporation is by virtue of his office its employee, but there seems to be no valid reason why his occupancy of such office should disqualify him from serving the corporation in some other and different capacity, or from becoming its employee, where the duties and incidents of his employment are separate and distinct from those pertaining to his office. In this case Fulton was employed under a definite contract to render specified services at a stated wage or hire, payable at fixed intervals, and his employment was neither connected with, nor the result of, his tenure of the office of director or vice-president of the corporation, and ⁵⁹ in onr opinion the fact that he was an officer of the corporation did not prevent him from being at the same time its employee. 14 A. C. J. 137; Waters v. Amer.

Finance Co., 102 Md. 216 ; McGowan v. Finola Mfg. Co., 120 Md. 340 ; Santa Clara Min. Assn. v. Meredith, 49 Md. 400 . The second question is whether the allowance of $50 per month for traveling expenses was a part of Fulton’s “wages,” “salary” or “hire.” The three words “wages,” “salary” and “hire,” although varying perhaps in their scope, nevertheless express one idea common to them, all — compensation for personal services of some kind.

And when thus used