E. B. Jones Motor Co. v. Industrial Commission of Mo., Division of Employment Sec.

• Decision Date: 07 October 1957
• Docket Number: No. 22659,22659
• Citation: 305 S.W.2d 889
• Parties: E. B. JONES MOTOR COMPANY, a corporation, Appellant, v. INDUSTRIAL COMMISSION OF MISSOURI, DIVISION OF EMPLOYMENT SECURITY, Respondents.
• Court: Missouri Court of Appeals

Page 889

305 S.W.2d 889

E. B. JONES MOTOR COMPANY, a corporation, Appellant, v. INDUSTRIAL COMMISSION OF MISSOURI, DIVISION OF EMPLOYMENT SECURITY, Respondents.

No. 22659.

Kansas City Court of Appeals, Missouri.

Oct. 7, 1957.

Lowenhaupt, Mattingly, Chasnoff, Freeman & Holland, Richard D. FitzGibbon, Jr., St. Louis, for appellant.

George Schwartz, Division of Employment Security, Jefferson City, for respondents.

BROADDUS, Presiding Judge.

This case arises out of the Missouri Employment Security Law. (Section 288.010, etc., V.A.M.S.)

On February 12, 1955, separate petitions were filed in the Circuit Court of Code County for judicial review of three administrative decisions of the Division of Employment Security of the Industrial Commission of Missouri. Two of these decisions of the Industrial Commission were adverse to the E. B. Jones Used Car Arena, Inc., and the other to the E. B. Jones Bargain Center, Inc. On June 22, 1954, these two corporations were merged into another corporation, the E. B. Jones Motor Company. On June 20, 1955, a hearing was held in the Circuit Court and on September 22, 1955, that court entered its order affirming the decision of the Commission in each of the cases. Thereupon the E. B. Jones Motor Company appealed to the Supreme Court. In the latter court, the three appeals, pursuant to stipulation, were consolidated for the purpose of hearing. Thereafter, on February 11, 1957, the Supreme Court held it was without jurisdiction of the cause and transferred the same to this court. See E. B. Jones Motor Co. v. Industrial Commission, 298 S.W.2d 407.

Two of the cases here involved originated in separate administrative determinations by the Division of Employment Security that E. B. Jones Bargain Center, Inc., and E. B. Jones Used Car Arena, Inc., became liable as employers subject to the Missouri Employment Security Law, the former on October 1, 1950, and the latter on January 1, 1948. It also determined that the contribution rate applicable to each of the companies was 2.7%, the maximum permitted by law. The third case originated as a claim for unemployment compensation by a former employee of the E. B. Jones Used Car Arena, Inc., one Raymond Fernandes. No issue was made as to Fernandes's claim, it being stipulated that his claim would be governed by the outcome of the other issues of the hearing.

It stands admitted that during all the times in question the E. B. Jones Motor Company was an employer under the terms of the Missouri Employment Security Law. Its contribution rate for the calendar year 1950 was 1.4%, for the year 1951 it was 2%, for the year 1952 it was .4%, and for the year 1953 it was .2%.

The transcript also contains the following: Mr. Mosley, (Appeals Referee) 'Is it conceded for the purpose of determining liability under the Law, that either E. B. Jones, an individual, or the E. B. Jones Motor Company own controlling stock in each of these corporations, namely, E. B. Jones Used Car Arena, Inc., and E. B. Jones Bargain Center, Inc.? Mr. Fitzgibbon (attorney for appellant) For the Used Car Arena, Inc., from '50 on, and for the Bargain Center from its inception to the date of merger, yes.'

The two corporations, the E. B. Jones Bargain Center and the E. B. Jones Used Car Arena, contend that they would be entitled to use the same contribution rate as the E. B. Jones Motor Company since they were liable under what is known as the 'affiliate clause' of the Statute, Section 288.030, subd. 14(4), V.A.M.S.1949. That clause reads as follows:

'(4) Any employing unit which, together with one or more other employing units, is owned or controlled, directly or indirectly, by legally enforceable means by the same person, or which owns or controls one or more other employing units by legally enforceable means and which, if treated as a single unit with such other employing unit or person, or both, would be an employer under subdivision (1) of this subsection (and for the purposes of this definition ownership by the same person of the majority of the voting shares of stock of an employing unit shall, among other things, constitute prima facie evidence of control by legally enforceable means).' (Emphasis supplied.)

Appellant's brief puts the question this way: 'It is the contention of the Appellant that, liability having been determined or admitted, as the case may be under the above quoted section, they are then one common employing unit for the purposes of the Employment Security Law, and since the one employing unit in this particular factual situation had established an experience rating, the additional contributions required by the inclusion of the other two corporations must be made at the rate established by the original employer.'

The question presented is one of first impression in this State. An extensive search on our part discloses but one decision in the country which bears upon the question. That is the case of State ex rel. Oklahoma Employment Security Commission v. Speed's Inc., 302 P.2d 115, decided by the Oklahoma Supreme Court on October 2, 1956. The books are full of cases which have been decided under the 'successor' theory. But those cases are not helpful here. ...