In re B. H. Gladding Co.

Citations

• 120 F. 709
• 1903 U.S. Dist. LEXIS 374

Syllabus

<p>1. Bankruptcy — Debts Entitled to Priority — Wages oe Clerks During Vacation.</p> <p>“Wages due to workmen, clerks or servants which have been earned within three months” given priority by Bankr. Act, § 64b (4) [XT. S. Comp. St. 1901, p. 3447], means wages which are owing at the time of the bankruptcy, although they may not then be “due” in the sense of being immediately payable, and which have accrued within three months. It was not the purpose of this clause to make a distinction between wages due which have been earned and wages due which have not been earned, or to determine the wage earner’s right by an, inquiry into the amount of work done during the period of employment. The purpose is merely to limit priority to wages which have accrued within three months. The fact that during the three months clerks of a bankrupt were given vacations “with pay,” such pay to be withheld, however, until the.end of the year, during which time the employer became bankrupt, does not deprive the clerks of the right to prove their claims for such pay nor to priority.</p> <p>2. Same — Construction of Contract.</p> <p>A notice was posted by an employer that its clerks would be entitled to vacations with pay according to length of service, but that vacation payments would be withheld until the following January, and further stating that “it is understood and agreed that employes taking vacations agree that if for any reason employment is severed, voluntarily or otherwise, before January 1st, the vacation pay will be forfeited.” Prior to the succeeding January the employer became bankrupt. Held, that the condition subsequent was solely for the benefit of the employer, its object being to secure a continuance of service from the clerks; that such object having been defeated by the bankruptcy, the court would not enforce the forfeiture and deprive the clerks of pay to which they were equitably entitled.</p>