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Keywords

contractbreach of contractliabilitystatutetrialbaildue process
contractbreach of contractplaintiffstatutehabeas corpusleasebaildue processgrand jury

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Bailey v. State of Alabama, 219 U.S. 219, 31 S.Ct. 145, 55 L.Ed. 191

Facts

Alonzo Bailey entered into a written contract with the Riverside Company to work as a farm hand for $12 per month, receiving $15 upfront. After working for a month, he ceased to perform his duties without just cause and did not refund the money. He was charged with obtaining money under a contract with intent to defraud his employer. The trial court found him guilty based on the statutory presumption that his failure to perform constituted prima facie evidence of intent to defraud.

Having failed to obtain his release on habeas corpus, Bailey was indicted on the following charge: ‘The grand jury of said county charge that before the finding of this indictment Alonzo Bailey, with intent to injure or defraud his employer… entered into a written contract to perform labor or services for the Riverside Company…’

Issue

Does the statute under which Bailey was convicted, which allows for a presumption of intent to defraud based solely on breach of contract, violate the 14th Amendment's due process and equal protection clauses and the 13th Amendment's prohibition against involuntary servitude?

The statute upon which the conviction was based is assailed as in violation of the 14th Amendment of the Constitution of the United States upon the ground that it deprived the plaintiff in error of his liberty without due process of law and denied him the equal protection of the laws, and also of the 13th Amendment.

Rule

The statute in question allows for a presumption of intent to defraud if a person fails to perform a contract without just cause, effectively making breach of contract a criminal offense.

The section, thus amended, reads as follows: ‘Any person who, with intent to injure or defraud his employer, enters into a contract in writing for the performance of any act of service… must on conviction be punished by a fine in double the damage suffered by the injured party…’

Analysis

The court analyzed the statute's implications, noting that it allowed for a conviction based solely on the breach of contract and failure to repay a debt, without requiring evidence of fraudulent intent. This was seen as a violation of due process, as it stripped the accused of the presumption of innocence and subjected them to criminal liability for actions that could be interpreted as mere contractual disputes.

The court, after defining the crime in the language of the statute, charged the jury, in accordance with its terms, as follows: ‘And the refusal of any person who enters into such contract to perform such act or service, or refund such money, or pay for such property, without just cause, shall be prima facie evidence of the intent to injure his employer, or to defraud him.’

Conclusion

The Supreme Court reversed the conviction, holding that the statute's presumption of intent to defraud based solely on breach of contract was unconstitutional, as it effectively enforced involuntary servitude.

We cannot escape the conclusion that, although the statute in terms is to punish fraud, still its natural and inevitable effect is to expose to conviction for crime those who simply fail or refuse to perform contracts for personal service in liquidation of a debt.

Who won?

Alonzo Bailey prevailed in the case because the Supreme Court found that the statute under which he was convicted violated constitutional protections against involuntary servitude and due process.

The Supreme Court ultimately reversed the conviction, finding that the statute's presumption of intent to defraud based solely on breach of contract was unconstitutional.

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