Big Wood Canal Co. v. Unemployment Compensation Division of the Industrial Accident Board of the State, 6765

• Court: United States State Supreme Court of Idaho
• Writing for the Court: AILSHIE, C. J.
• Citation: 100 P.2d 49,61 Idaho 247
• Parties: BIG WOOD CANAL COMPANY, a Corporation, Appellant, v. UNEMPLOYMENT COMPENSATION DIVISION OF THE INDUSTRIAL ACCIDENT BOARD OF THE STATE OF IDAHO, Respondent
• Docket Number: 6765
• Decision Date: 09 March 1940

100 P.2d 49

61 Idaho 247

BIG WOOD CANAL COMPANY, a Corporation, Appellant,
v.
UNEMPLOYMENT COMPENSATION DIVISION OF THE INDUSTRIAL ACCIDENT BOARD OF THE STATE OF IDAHO, Respondent

No. 6765

Supreme Court of Idaho

March 9, 1940

TAXATION-EXEMPTIONS-UNEMPLOYMENT COMPENSATION LAW-AGRICULTURAL LABOR.

1. To successfully claim an exemption from a general tax, whether property or excise, it must appear by either express terms or necessary implication that exemption was intended.

2. The service performed for mutual nonprofit corporation engaged in operating irrigation system was "agricultural labor" within provision of Unemployment Compensation Law excepting "agricultural labor" from operation thereof. (Sess. Laws, 1939, chap. 239, sec. 18-5 (f).)

APPEAL from Industrial Accident Board.

From an order denying appellant's claim for refund of employer's excise tax contributions paid to respondent, and denying petition for termination of coverage, under the Unemployment Compensation Law, the Big Wood Canal Company appealed. Reversed and cause remanded to board with directions to allow refund.

Reversed and remanded with directions.

Bissell & Bird, for Appellant.

"A water right in Idaho is exempt from all forms of taxation." (Bennett v. Twin Falls N. S. L. & W. Co., 27 Idaho 643, 150 P. 336.)

"Under the provisions of the Statutes, completing said work is supervised by the State, and ultimately such works must be turned over to settlers, thereby providing kind of a municipal ownership." (State v. Twin Falls Canal Co., 21 Idaho 410, 121 P. 1039.) "The company is merely an incorporated watermaster." (City of Twin Falls v. Harlan, 27 Idaho 769, 151 P. 1191.)

As respects the use of the word "agriculture" in the statute, agriculture, in its common and appropriate sense is used to signify that species of cultivation, which is intended to raise grain and other useful crops for man and beast, is the art or science of cultivating the ground in fields or large quantities. (Great Western Mushroom Co. v. Industrial, etc., (Colo.) 82 P.2d 751; also see 2 C. J. 988 and cases there cited.)

Irrigation and drainage districts are exempt from the provisions of the Social Security Act. (Hagar v. Reclamation Dist., 111 U.S. 701, 4 S.Ct. 663, 28 L.Ed. 569.)

Vestal P. Coffin, for Respondent.

Tax exemption provisions found in an act of the legislature are to be strictly construed and no claim of exemption can be sustained unless it is within the express letter or the necessary scope of the exempting clause. (Bistline v. Bassett, 47 Idaho 66, 272 P. 696, 62 A. L. R. 323; Knoxville & Ohio R. Co. v. Harris, 99 Tenn. 684, 43 S.W. 115, 53 L. R. A. 921; Bank of Commerce v. State of Tenn., 161 U.S. 134, 135, 146, 16 S.Ct. 456, 40 L.Ed. 645, 649; Ford v. Delta etc. Land Co., 164 U.S. 662, 666, 17 S.Ct. 230, 41 L.Ed. 590, 592.)

Service performed by an individual for a Carey-Act Operating Company in the operation and maintenance of its irrigation system is not agricultural labor. (Social Security Act. Title 42, U. S. C., chap. 7; Unemployment Compensation Law of Idaho, Laws of 1935, 3d Extra Sess., chap. 12, as amended by Laws of 1937, chaps. 9, 183, 187 and 188 and Laws of 1939, chaps. 202 and 239; Rulings of the Bureau of Internal Revenue, S. S. T. 125, 277; Schneider on Workmen's Compensation Law, 2d ed., vol. 1, p. 257; Cook v. Massey, 38 Idaho 264, 220 P. 1088, 35 A. L. R. 200; Mundell v. Swedlund, 59 Idaho 29, 80 P.2d 13.)

AILSHIE, C. J. Givens, Morgan and Holden, JJ., concur.

OPINION

[61 Idaho 249] AILSHIE, C. J.

August 21, 1907, a contract was entered into between the state of Idaho and the United States, and the state in turn entered into a contract with the Idaho Irrigation Co., Ltd., for the construction of an irrigation system, to cover approximately 155,000 acres of land in Blaine, Lincoln, and Gooding counties. As soon as the irrigation system was completed, it was turned over for operation to the Big Wood River Reservoir & Canal Company, Ltd., its name being changed later to the "Big Wood Canal Company," appellant herein. The company was organized and existed under the general corporation laws relating to Carey Act operating companies, as a mutual non-profit corporation; its only function being to maintain and operate a system for the distribution of water for domestic and irrigation purposes to its approximately nine hundred members. Assessments were made upon its shareholders pro rata to collect actual expenses for maintenance and operation of the system. The amount of water made available for use by the stockholders, being insufficient to irrigate and reclaim all the lands, the American Falls Reservoir District No. 2 was organized and entered into a contract with appellant and the United States. By the terms of this latter contract, the stockholders waived all rights, possessed under the terms of the Carey Act, federal and state, and assumed the status of water users on a federal reclamation project.

Petition by appellant was filed with the Industrial Accident Board, showing operation of the irrigation project under the direction, rules and regulations of the Department of the Interior of the United States. Tabulation is set out showing moneys paid out as excise taxes covering payrolls for 1936, [61 Idaho 250] 1937, 1938, and first quarter of 1939, making a total payment of $ 2,332.48; all of which...