The case was argued during the November term, 1911, and during the April term, 1912, by order of the Court was reargued before the Court en Banc. *Page 18
July 12, 1912. The opinion of the Court was delivered by This appeal is from an order of the Court of General Sessions refusing to quash an indictment against the defendant containing counts charging disposition by him of money subject to a statutory lien in violation of sections 337 and 338 of the Criminal Code. Section 337 is the familiar statute which in general terms made a criminal offense the disposition of any personal property upon which a lien exists without paying the lien debt or depositing the amount of it with the clerk of the Court.
The case turns mainly on the constitutionality of the penal provisions of section 338, which reads as follows: "It shall be the duty of any contractor or contractors, in the erection, alteration or repairing of buildings in the State of South Carolina, to pay all laborers, subcontractors and material men for their lawful services and material furnished out of the money received for the erection, alteration or repairs of buildings upon which said laborers, subcontractors and material men are employed or interested, and said laborers, as well as all subcontractors and persons who shall furnish material for said building, shall have a first lien on the money received by said contractor or contractors for the erection, alteration or repair of said buildings in proportion to the amount of their respective claims. Nothing herein contained shall make the owner of the building responsible in any way: Provided, That nothing contained in this section shall be construed to prevent any contractor or contractors or subcontractors from borrowing money on such contract.
"Any contractor or contractors or subcontractors who shall for other purposes than paying the money loaned upon said contract expend and on that account fail to pay to any or all laborers, subcontractors and material men out of the money received as provided in this section and as *Page 19 admitted by such contractor or contractors, or as may be adjudged by any Court of competent jurisdiction, shall be deemed guilty of a misdemeanor, and upon conviction, when the consideration for such work and material shall exceed the value of one hundred dollars, shall be fined not less than one hundred dollars nor more than five hundred dollars, or imprisonment not less than three months nor more than twelve months; and when such consideration shall not exceed the value of one hundred dollars, shall be fined not more than one hundred dollars or imprisoned not longer than thirty days: Provided, Said contractor or contractors or subcontractors may have the right of arbitration by agreement with said laborers, subcontractors and material men."
The specific charge against the defendant under this section is that as a contractor for the alteration and repair of certain buildings of W.S. Mowry he collected $1,723.12, and expended it for other purposes than paying the money loaned on the contract, and on that account failed to pay R.J. Easterling Company for material furnished to the amount of $606.62.
Defendant contends that the criminal enactment of section 338 is unconstitutional, in that (1) it provides imprisonment for debt without proof of fraud, and (2) it arbitrarily discriminates against contractors for buildings for creating a lien on money received by them, in favor of subcontractors, laborers and material men, and by making them criminally liable for failure to apply the money received on their contracts to the discharge of the lien, while no such burdens are imposed on other contractors.
If the Court can discern in the statute any reasonable meaning consistent with the Constitution, it must adopt that as the true meaning in order to uphold the statute. Taking the section in its entirety it cannot fairly be construed to provide for imprisonment for the mere failure to pay a *Page 20 debt. The first paragraph impresses on the money received by the contract a lien in favor of laborers, subcontractors and material men. The second paragraph enacts that if the contractor shall pay out the specific fund which has come into his hands and which must remain there subject to the lien, for other purposes than paying the money loaned on his contract, and on that account fail to pay laborers, subcontractors and material men out of the money so subject to their lien, then he shall be deemed guilty of a misdemeanor. This being so, the natural and indeed the only reasonable construction of the statute is that it makes penal not the mere failure to pay a debt, but the disposition by the contractor of a specific sum of money held by him under a lien so as to defeat the lien. Under this construction the statute does not violate the constitutional inhibition against imprisonment for debt except in cases of fraud. On this point the case falls entirely outside the principle on whichEx parte Hollman, 79 S.C. 9, 60 S.E. 19, 21 L.R.A.N. S. 242n, was decided, and within the rule laid down in State v. Bardin, 64 S.C. 207, 41 S.E. 959.
Unsound also is the objection that the statute violates thefourteenth amendment of the Constitution of the United States and section 5, article I, of the Constitution of this State. The rules with respect to the legislative power under the fourteenth amendment have been thus restated by the Supreme Court of the United States in the recent case ofLindsley v. National Carbonic Gas Co., 220 U.S. 61,55 L.Ed. 369: "1. The equal protection clause of thefourteenth amendment does not take from the State the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety, or because in practice it results in some inequality. *Page 21 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary."
A like construction has been placed by this Court on section 5, article I, of the State Constitution, which on this point is like the fourteenth amendment of the Constitution of the United States. Simmons v. Western Union Tel. Co.,63 S.C. 430, 41 S.E. 521, 57 L.R.A. 607; Johnson v.Spartan Mills, 68 S.C. 339, 47 S.E. 695. The classification here is far from being arbitrary. Contractors for the erection, alteration and repair of buildings in the main do work on a much smaller scale than contractors for railroads or streets or other works. Many, if not the majority, of the former are men of small means, and generally their laborers, subcontractors and material men must be paid, if paid at all, from the funds received on the contract. Without casting about for other reasonable grounds of classification, it is enough to say that the defendant has not discharged the burden which the law places on him of showing that the classification is altogether arbitrary.
The motion to quash the third count of the indictment framed under section 337 of the Criminal Code we think should have been granted. Section 337 contains the general law for punishment of the offense of disposing of personal property under liens. Section 338, enacted later, contains the special provisions on the same subject applicable only to liens in favor of certain persons on certain moneys in the hands of contractors for the erection, repair and alteration of buildings. Construing the two statutes together it is manifest that section 338 must be regarded as taking the special liens and the disposition of money subject to them out of the general provision *Page 22 of law contained in section 337, and providing a different and an exclusive punishment for the disposition of money subject to such liens. It follows that for the criminal disposition of money subject to the lien provided for in section 338, a contractor can be indicted only under that section.
The point that the statute now standing in the Criminal Code as section 338 was not enacted as required by the Constitution because the penal provision is a subject not expressed in the title of the act as passed in 1896, not having been made in the Circuit Court, is not available to the defendant in this Court.
The judgment of the Circuit Court is modified according to the views herein expressed.
MR. JUSTICE HYDRICK and MESSRS. CIRCUIT JUDGES ERNEST GARY, GEO. E. PRINCE, GEO. W. GAGE, R.W. MEMMINGER, JOHN S. WILSON, T.S. SEASE, FRANK B. GARY concur.