State ex rel. Employment Sec. Commission v. Paul's Young Men's Shop, Inc., 56--67--043

• Citation: 231 S.E.2d 157,32 N.C.App. 23
• Decision Date: 05 January 1977
• Docket Number: No. 764SC382,No. 56--67--043,56--67--043,764SC382
• Court: Court of Appeal of North Carolina (US)
• Parties: In the Matter of STATE of North Carolina ex rel. EMPLOYMENT SECURITY COMMISSION of North Carolina v. PAUL'S YOUNG MEN'S SHOP, INC. (Employer), et al.

Page 157

231 S.E.2d 157

32 N.C.App. 23

In the Matter of STATE of North Carolina ex rel. EMPLOYMENT SECURITY COMMISSION of North Carolina v. PAUL'S YOUNG MEN'S SHOP, INC. (Employer No. 56--67--043), et al.

No. 764SC382.

Court of Appeals of North Carolina.

Jan. 5, 1977 Certiorari Denied by Supreme Court March 7, 1977.

Howard G. Doyle, H. D. Harrison, Jr., Garland D. Crenshaw, and Thomas S. Whitaker, Raleigh, for Employment Security Commission of North Carolina, appellant.

Atkins, Harrell, Mann & Pike, by Bernard A. Harrell, Raleigh, for defendant appellees.

PARKER, Judge.

Appellant's first assignment of error is directed to following language in the judgment of the Superior Court from which this appeal has been taken:

'While the Court is aware that it is bound by such findings of fact of the Commission as are supported by competent evidence (G.S. Sec. 96--4(m)), and while the Court makes no additional findings of fact, it is observed that, according to the evidence, the method of reporting the employee contributions of the three employing units involved was originally established with the advice of the Commission employees. Further, it appears from the evidence that the taxpayer, while paying and reporting under an erroneous method, nevertheless paid the taxes due on all employees. Regular review and audits by the Commission did not disapprove the method of paying all employees through Ricky's.'

Appellant contends that by including this language in its judgment the Superior Court, despite its disclaimer, made an independent finding of fact which it had no power to do and that it thereby committed reversible error. We do not agree.

The Employment Security Commission has been vested by statute with 'the power and authority to determine any and all questions and issues of fact' arising under the Employment Security Law. G.S. 96--4(m). The same statute provides that on appeal to the Superior Court from a decision of the Commission in a matter over which it has jurisdiction, the decision or determination of the Commission 'shall be conclusive and binding as to all questions of fact supported by any competent evidence.'

Interpreting similar provisions in our Workmen's Compensation Act, our Supreme Court has held that in appeals from the Industrial Commission the reviewing court may determine upon proper exceptions whether the facts found by the Commission were supported by competent evidence and whether the findings so supported sustain the legal conclusions and the award made, but in no event may the reviewing court consider the evidence for the purpose of finding the facts for itself. Byers v. Highway Comm., 275 N.C. 229, 166 S.E.2d 649 (1969); Pardue v. Tire Co., 260 N.C. 413, 132 S.E.2d 747 (1963); Brice v. Salvage Co., 249 N.C. 74, 105 S.E.2d 439 (1958). 'If the findings of fact of the Commission are insufficient to enable the Court to determine the rights of the parties upon the matters in controversy, the proceeding must be remanded to the end that the Commission make proper findings.' Pardue v Tire Co., supra, 260 N.C. p. 416, 132 S.E.2d p. 749. The same principles govern the scope of judicial review on appeal from decisions of the Employment Security Commission. See, Employment Security Com. v. Kermon, 232 N.C. 342, 60 S.E.2d 580 (1950).

Applying these principles in the present case, we find that, although there was uncontradicted evidence from which the Employment Security Commission could have found as a fact that 'the method of reporting the employee contributions of the three employing units involved was originally established with the advice of the Commission employees,' and that '(r)egular review and audits by the Commission did not disapprove the method of paying all employees through Ricky's,' the Commission made no such findings. Indeed, the Commission made no findings, one way or the other, with regard to these matters. If findings as to these matters were necessary for a proper determination of this case, the case should have been remanded to the Commission to the end that the Commission make proper findings. In our opinion, however, factual findings with respect to the matters referred to in that portion of the Superior Court's judgment to which appellants' first assignment of error is directed are not necessary for a proper determination of this case. All parties recognize that for many years an erroneous method of reporting and paying contributions was followed by the several defendants. The essential problem presented by this case concerns what measures may now be lawfully applied to correct the error, now that it has been recognized. To solve that problem it is not necessary that the source of the original error be determined. Therefore, the language in the Court's judgment which is the subject of appellant's first assignment of error may be treated as surplusage. The inclusion of this language in the judgment, even if it be viewed as constituting an independent factual finding which the Court had no authority to make, was at most harmless error. Accordingly, appellant's first assignment of error is overruled.

Although, as above noted, it is not necessary to determine the source of the erroneous method of reporting and paying contributions, which was for so many years followed by the defendants in this case and was for an equally long time accepted without question by the plaintiff, we do feel it pertinent to observe that there was no finding by the Commission, nor was there any evidence to support a finding, that defendants ever acted in bad faith. Indeed, the evidence is quite to the contrary, for it shows without question, and the Commission found as a fact, that two of the defendants, Diamond Outlet, Inc., and Gems, Inc., reported wages paid to their...