{ "id": 8629986, "name": "In the Matter of the Receivership of PORT PUBLISHING COMPANY. Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON PRINTING PRESSMAN AND ASSISTANT'S UNION, No. 186, and Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON TYPOGRAPHICAL UNION, No. 556", "name_abbreviation": "In re the Receivership of Port Publishing Co.", "decision_date": "1950-02-03", "docket_number": "", "first_page": "395", "last_page": "399", "citations": [ { "type": "official", "cite": "231 N.C. 395" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "160 F. 2d 762", "category": "reporters:federal", "reporter": "F.2d", "opinion_index": 0 }, { "cite": "120 Fed. Rep. 709", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 3822767 ], "opinion_index": 0, "case_paths": [ "/f/120/0709-01" ] }, { "cite": "78 F. Supp. 565", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 652384 ], "opinion_index": 0, "case_paths": [ "/f-supp/78/0565-01" ] }, { "cite": "171 F. 2d 195", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1185723 ], "opinion_index": 0, "case_paths": [ "/f2d/171/0195-01" ] }, { "cite": "172 F. 2d 400", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1182105 ], "opinion_index": 0, "case_paths": [ "/f2d/172/0400-01" ] }, { "cite": "86 S.E. 184", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "169 N.C. 512", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659794 ], "opinion_index": 0, "case_paths": [ "/nc/169/0512-01" ] }, { "cite": "37 S.E. 476", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "127 N.C. 461", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "81 S.E. 606", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "165 N.C. 453", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659598 ], "opinion_index": 0, "case_paths": [ "/nc/165/0453-01" ] }, { "cite": "94 S.E. 514", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "175 N.C. 38", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656927 ], "opinion_index": 0, "case_paths": [ "/nc/175/0038-01" ] }, { "cite": "195 S.E. 9", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "212 N.C. 75", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8599897 ], "opinion_index": 0, "case_paths": [ "/nc/212/0075-01" ] }, { "cite": "63 S.E. 304", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "149 N.C. 293", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11270423 ], "opinion_index": 0, "case_paths": [ "/nc/149/0293-01" ] }, { "cite": "12 L.R.A. 409", "category": "reporters:federal", "reporter": "L.R.A.", "opinion_index": 0 }, { "cite": "12 S.E. 829", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "108 N.C. 357", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8650844 ], "opinion_index": 0, "case_paths": [ "/nc/108/0357-01" ] }, { "cite": "124 S.E. 859", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "188 N.C. 419", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653978 ], "opinion_index": 0, "case_paths": [ "/nc/188/0419-01" ] }, { "cite": "130 S.E. 609", "category": "reporters:state_regional", "reporter": "S.E.", "opinion_index": 0 }, { "cite": "190 N.C. 829", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8615769 ], "opinion_index": 0, "case_paths": [ "/nc/190/0829-01" ] }, { "cite": "42 S.E. 2d 77", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "227 N.C. 307", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8624454 ], "opinion_index": 0, "case_paths": [ "/nc/227/0307-01" ] }, { "cite": "45 S.E. 2d 45", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "228 N.C. 195", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625073 ], "opinion_index": 0, "case_paths": [ "/nc/228/0195-01" ] }, { "cite": "93 L. Ed. 301", "category": "reporters:federal", "reporter": "L. Ed.", "opinion_index": 0 }, { "cite": "335 U.S. 525", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6160224 ], "opinion_index": 0, "case_paths": [ "/us/335/0525-01" ] }, { "cite": "45 S.E. 2d 860", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "228 N.C. 352", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626473, 8626365 ], "opinion_index": 0, "case_paths": [ "/nc/228/0352-02", "/nc/228/0352-01" ] } ], "analysis": { "cardinality": 615, "char_count": 12331, "ocr_confidence": 0.475, "pagerank": { "raw": 1.9229320098800874e-07, "percentile": 0.7332249872482913 }, "sha256": "9b94e9128520a1f17c6db2a7ce79f20f001f6d5e3528805632e70ee73fa77deb", "simhash": "1:9909924a28d7588d", "word_count": 2040 }, "last_updated": "2023-07-14T22:38:15.383158+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Barnhill, J., concurs in result." ], "parties": [ "In the Matter of the Receivership of PORT PUBLISHING COMPANY. Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON PRINTING PRESSMAN AND ASSISTANT\u2019S UNION, No. 186, and Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON TYPOGRAPHICAL UNION, No. 556." ], "opinions": [ { "text": "Denny, J.\nAn agreement entered into by and between an employer and its employees, in which it is agreed that the employer will only employ members of a union, or that it will only employ non-union members, is void in this jurisdiction, in so far as it makes union membership or non-union membership a prerequisite to employment. Chapter 328, 1947 Session Laws of North Carolina, G.S. 95-79 to 95-84; S. v. Whitaker, 228 N.C. 352, 45 S.E. 2d 860, which decision was affirmed by the Supreme Court of the United States, and reported in 335 U.S. 525, 93 L. Ed. 301.\nA provision in a contract which is against public policy will not be enforced. Glover v. Ins. Co., 228 N.C. 195, 45 S.E. 2d 45; Cauble v. Trexler, 227 N.C. 307, 42 S.E. 2d 77; Waggoner v. Publishing Co., 190 N.C. 829, 130 S.E. 609; Phosphate Co. v. Johnson, 188 N.C. 419, 124 S.E. 859; Burbage v. Windley, 108 N.C. 357, 12 S.E. 829, 12 L.R.A. 409. Even so, when such agreement contains provisions which are severable from an illegal provision and are in no way dependent upon the enforcement of the illegal provision for their validity, such provisions may be enforced. Glover v. Ins. Co., supra; Annuity Co. v. Costner, 149 N.C. 293, 63 S.E. 304, 17 C.J.S., Sec. 289, p. 674, et seq., and 12 Am. Jur., Sec. 220, p. 738, et seq., where the general rule governing such contracts is stated in the following language: \u201cIt is well established that the fact that a stipulation is unenforceable because of illegality does not affect the validity and enforceability of other stipulations in the agreement, provided they are severable from the invalid portion and capable of being . construed divisibly. Moreover, it makes no difference whether there are two distinct promises, whether there is one promise that is divisible, or whether the consideration for the two promises is entire or apportionable. At least this is true where the illegal provision is clearly separable and severable from the other parts which are relied upon and does not constitute the main or essential feature or purpose of the agreement. If, however, any part of a nonseparable agreement is void for illegality or reasons of public policy, the taint extends to every part of it and neither party can enforce any of its provisions against the other.\u201d\nIn the instant case, the \u201cclosed shop\u201d agreement between the Port Publishing Company and the Wilmington Typographical Union was legal and valid until the contract was extended on 1 December, 1947, at which time it became eo instante null and void, being in contravention of the provisions contained in G.S. 95-78 to 95-84. Likewise, the agreement which was entered into between the Port Publishing Company and the Wilmington Typographical Union, on 1 October, 1947, containing a \u201cclosed shop\u201d agreement, was void in so far as it provided for a \u201cclosed shop.\u201d Therefore, the provision in these respective contracts providing for a \u201cclosed shop,\u201d being in violation of the above statutes, and contrary to public policy, such provision could constitute no part of the consideration for the execution or extension of the agreements. And likewise, any right under the terms of the respective contracts which must be bottomed on the validity of the \u201cclosed shop\u201d agreement cannot be enforced.\nHowever, it is only when the illegal element in a contract permeates the entire agreement that such contract is void in its entirety. Shoe Co. v. Department Store, 212 N.C. 75, 195 S.E. 9; Marshall v. Dicks, 175 N.C. 38, 94 S.E. 514; Fashion Co. v. Grant, 165 N.C. 453, 81 S.E. 606; Culp v. Love, 127 N.C. 461, 37 S.E. 476. In each of these cases, the relief sought was bottomed on an illegal contract, one prohibited by law or contrary to public policy, consequently the relief sought was denied.\nIt is the declared public policy of North Carolina \u201cthat the right of persons to work shall not be denied or abridged on account of membership or non-membership in any labor union or labor organization or association.\u201d But there is nothing in this policy to indicate that the Legislature intended to restrict the power of an employer and its employees to contract in the field of labor relations, in any respect, except as to certain matters set forth in G.S. 95-79 to 95-84. And the provisions contained in the contracts under consideration relative to working conditions, hours, rate of pay, training of journeymen, overtime, vacation and severance pay, are not violative of the above statutes, and are, therefore, severable and may be sustained irrespective of the invalidity of the \u201cclosed shop\u201d provisions in the contracts.\nThere is no dispute between the parties as to the terms of the respective agreements relative to hourly wages, \u201cvacation\u201d or \u201cseverance\u201d pay. Therefore, the determinative question presented is whether or not the petitioners are entitled to a prior lien for \u201cvacation\u201d and \u201cseverance\u201d pay, within the provisions of G.S. 55-136, the pertinent part of which reads as follows: \u201cIn case of the insolvency of a corporation, partnership or individual, all persons doing labor or service of whatever character in its regular employment have a lien upon the assets thereof for the amount of wages due to them for all labor, work, and services rendered within two months next preceding the date when proceedings in insolvency were actually instituted and begun against the corporation, partnership or individual, which lien is prior to all other liens that can be acquired against such assets. . . .\u201d\nIt was the intent of the Legislature to create a lien on the assets of an employer in favor of his employees who come within the purview of the statute, for the amount of all wages earned during the two months next preceding the date of the institution of insolvency proceedings. Iron Co. v. Bridge Co., 169 N.C. 512, 86 S.E. 184. And these petitioners earned one-sixth of their vacation pay during such period. This view is in accord with the interpretation given to priority payments for wages under our Bankruptcy Act, 11 U.S.C. 104 (a) (2). State of California v. Sampsell (Ninth Circuit), 172 F. 2d 400; Kavanas v. Mead (Fourth Circuit), 171 F. 2d 195; In re Kinney Aluminum. Co. (Cal.), 78 F. Supp. 565; In re B. H. Gladding Co. (R. I.), 120 Fed. Rep. 709.\nOn the other hand, \u201cseverance\u201d pay is in the nature of liquidated damages which was agreed upon in advance, as compensation for any loss that might be sustained by the employees of the Port Publishing Company \u201cin the event of the consolidation or suspension\u201d of the corporation, and not for wages earned. Such pay, in our opinion, does not come within the purview and meaning of the provisions of G.S. 55-136. In re Public Ledger (Third Circuit), 160 F. 2d 762, upon which the appellees are relying, does not sustain their position. The decision does not purport to construe our statute nor does it hold that the priority given to the payment of certain wages due by a bankrupt estate, under the priority provisions of our Federal Bankruptcy Act, may include \u201cseverance\u201d pay. The Court held that since the Trustees of the bankrupt estate continued the operation of the business and ratified the labor contract, which had been entered into theretofore by and between the bankrupt and its employees, \u201cseverance\u201d pay was allowable, not as a preferred lien but as an administrative expense.\nIt follows, therefore, that the judgment entered below will be modified to conform to this decision.\nModified and affirmed.\nBarnhill, J., concurs in result.", "type": "majority", "author": "Denny, J." } ], "attorneys": [ "Clayton C. Holmes for Typographical Union, No. 556.", "Elbert A. Brown for Wilmington Printing Pressman and Assistant\u2019s Union, No. 186.", "E. H. Bellamy, C. D. Hogue, Sr., Wallace C. Murchison, and B. E. Calder for Port Publishing Company." ], "corrections": "", "head_matter": "In the Matter of the Receivership of PORT PUBLISHING COMPANY. Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON PRINTING PRESSMAN AND ASSISTANT\u2019S UNION, No. 186, and Claim of Petitioners Under Contract Between the PORT PUBLISHING COMPANY and the WILMINGTON TYPOGRAPHICAL UNION, No. 556.\n(Filed 3 February, 1950.)\n1. Master and Servant \u00a7 2a\u2014\nAn agreement between an employer and its employees wMcb. makes union membership or non-union membership a prerequisite of employment, is void in this jurisdiction. G.S. 95-79 et seq.\n2. Contracts \u00a7 7\u2014\nWhile a provision in a contract which is against public policy will not be enforced, it will not affect other valid provisions of the contract when such provisions are severable and may be enforced entirely independently of the illegal provision.\n3. Master and Servant \u00a7 2a\u2014\nProvisions for a \u201cclosed shop\u201d in agreements executed subsequent to the effective date of Chap. 328, Session Laws of 1947, and such provisions in extensions of prior contracts executed subsequent to that date, are contrary to public policy and void.\n4. Same\u2014\nWhile G.S. 95-79 et seq. preclude \u201cclosed shop\u201d agreements, the statute does not preclude provisions relating to working conditions, hours, rates of pay, training of journeymen, overtime, vacation and severance pay, and such provisions are severable and may be sustained irrespective of the invalidity of a \u201cclosed shop\u201d provision in the contract.\n5. Receivers \u00a7 12c\u2014\nEmployees under a contract providing for paid vacations have a lien against the receiver of the employer for % of their vacation pay, since this amount was earned during the two months nest preceding the institution of insolvency proceedings. G.S. 55-136.\n6. Same\u2014\nEmployees under a contract providing for severance pay are not entitled to a lien for such pay against the receiver, since severance pay is not wages earned. G.S. 55-136.\nBarnhill, J., concurs in result.\nAppeal by C. D. Hogue, Jr., Receiver, from Nimochs, J., at June Term, 1949, of New Hanovee.\nThe Port Publishing Company, a North Carolina corporation, ceased operations on 8 May, 1948, and went into receivership on 14 May, 1948.\nThe Port Publishing Company entered into a labor contract with the \"Wilmington Printing Pressman and Assistant\u2019s Union, No. 186, on 1 October, 1947, and extended an existing labor agreement with the Wilmington Typographical Union, on 1 December, 1947. Roth contracts, in addition to provisions concerning wages, hours, overtime, vacations, severance pay, etc., contained a \u201cclosed shop\u201d agreement.\nThe agreement between the Port Publishing Company and the \"Wilmington Printing Pressman and Assistant\u2019s Union contains the following provisions relative to \u201cvacation\u201d and \u201cseverance\u201d pay: \u201cEmployees who have held situations during the twelve months ending April 1, 1948, shall be entitled to two weeks vacation with pay. ... In event of consolidation or suspension, all employees affected shall receive severance pay of not less than two weeks pay at their regular rate of pay.\u201d The contract of the other Union provides for a two weeks vacation with pay and not less than three weeks\u2019 severance pay. All the petitioning employees had been with the Port Publishing Company long enough, on 8 May, 1948, to be entitled to \u201cvacation\u201d and \u201cseverance\u201d pay under the terms of the respective contracts.\nAll the petitioning employees were paid their regular salaries up to the date the corporation ceased operations, but the Receiver declined to pay the amounts claimed by the employees as \u201cvacation\u201d and \u201cseverance\u201d pay. The amounts claimed are not in dispute.\nThis cause came on for hearing before his Honor, at the June Term, 1948, of the Superior Court of New Hanover County, and all parties agreed that the judgments might be signed nunc pro tunc, out of term and out of the District. Judgments were signed and filed 5 July,. 1949, in favor of the petitioning employees under the respective contracts, in which the trial judge held the petitioning employees were entitled to priority payment out of the funds in the hands of the Eeceiver for \u201cvacation\u201d and \u201cseverance\u201d pay within the meaning and purview of Gr.S. 55-136; and that the contracts between these respective Unions and the Publishing Company were valid and enforceable, except the provisions in the contracts establishing a \u201cclosed shop.\u201d The vacation pay was limited to the pro rata part thereof which the respective employees earned in the two months next preceding the date when the corporation was placed in receivership.\nThe Eeceiver appeals and assigns error.\nClayton C. Holmes for Typographical Union, No. 556.\nElbert A. Brown for Wilmington Printing Pressman and Assistant\u2019s Union, No. 186.\nE. H. Bellamy, C. D. Hogue, Sr., Wallace C. Murchison, and B. E. Calder for Port Publishing Company." }, "file_name": "0395-01", "first_page_order": 445, "last_page_order": 449 }