Big Wood Canal Company, a Corp. v. Unemployment Compensation Division of the Industrial Accident Board

Decision Date19 May 1942
Docket Number7000
PartiesBIG WOOD CANAL COMPANY, a corporation, Appellant, v. UNEMPLOYMENT COMPENSATION DIVISION OF THE INDUSTRIAL ACCIDENT BOARD, Respondent
CourtIdaho Supreme Court

UNEMPLOYMENT COMPENSATION-TAXATION-EXEMPTION-COVERED EMPLOYER-CONSTITUTIONAL LAW-STATUTES, CONSTRUCTION OF.

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 the exemption was intended.

2. Services performed for a mutual non-profit association engaged in irrigation are within the provisions of the Unemployment Compensation Law excepting from "covered employment" services performed in the employ of an "individual owner or tenant operating a farm in connection with cultivation of soil, the production and harvesting of crops," since to construe the provision as confining the exception to a single individual owner or tenant would render it unconstitutional. (Sess. Laws, 1941 c. 182, p. 393, sec. 18-5 (f).)

3. The Legislature's power to make classifications for purposes of taxation is limited by the condition that the classification must be founded on some reasonable difference between the parties or conditions, and it cannot rest upon whim or caprice.

4. Where a statute is open to two constructions, one of which would render it unconstitutional, the construction which would uphold it will be adopted.

APPEAL from the Industrial Accident Board of the State of Idaho.

From an order holding appellant is a covered employer within the meaning of the Unemployment Compensation Law, the Big Wood Canal Company appealed. Reversed and remanded with directions.

Reversed and remanded, with directions. Costs awarded to appellant.

Bissell & Bird, for Appellant.

Appellant's employment constitutes "services performed in the employ of an individual owner or tenant operating a farm in connection with the cultivation of soil, the production and harvesting of crops or the raising, feeding or managing of livestock, * * * ," under sec. 18-5 (f) of the unemployment compensation law as amended by chap. 182, Sess Laws, 1941, and should have been classed as excepted employment and given immunity from the payment of the excise tax of such law: (Keeney v. Beasman, 182 A. 566, 103 A. L. R. 1515; Big Wood Canal Co. v. Unemployment Comp Div., 61 Idaho 247, 100 P.2d 49; Stratton v. R. R. Commission, 198 P. 1051; Koger v. Woods, Inc., 31 P.2d 255; Sanderson v. Salmon River Canal Co., 34 Idaho 303, 308, 200 P. 341, 26 A. L. R. 292; Culpepper v. White, 184 S.E. 349; Ganzer v. Chapman, 11 P.2d 115.)

The Industrial Accident Board, by levying the excise tax of the Unemployment Compensation Law upon appellant, and at the same time excepting such instrumentalities as highway, irrigation and drainage districts, has acted unreasonably and illogically, and the resulting classification is discriminatory, arbitrary and unconstitutional under art. 1, sec. 13, Idaho Constitution and the 14th Amendment of the federal constitution, since appellant and such districts are all of the same general class, being non-profit, mutual and non-governmental, and naturally, reasonably and intrinsically falling into the same category for legislative and taxing purposes: (12 Am. Jur. 257; Concordia Fire Ins. Co. v. People, 292 U.S. 535, 78 L.Ed. 1411, 54 S.Ct. 830; In re Mallon, 16 Idaho 737, 102 P. 374; 12 Am. Jur. Constitutional Law, sec. 481; 16 C. J. S., Constitutional Law, sec. 489; Utah Light & Traction Co. v. State Tax Commission, 68 P.2d 759.)

Thos. M. Robertson, Jr., Assistant Attorney General, for Respondent.

Appellant is not exempted from coverage under the Unemployment Compensation Law by the provisions of Sec. 18-5 (d) of said law. (Unemployment Compensation Law, Sec. 18-5 (d); 1941 Session Laws, Chap. 65, Sec. 1 (18-5(d)), page 125; 1941 Session Laws, Chap. 182, sec. 1 (18-5 (j)), page 394; Idaho Code Annotated, Sections 30-1001, 68-101, 22-301, 37-501.)

The classifications for exemption made in Sec. 18-5 (d) of the Unemployment Compensation Law are in all respects reasonable and valid in themselves and in purview of the purposes of the Unemployment Compensation Law. (Unemployment Compensation Law, Sec. 18-5 (d) (supra); Idaho Constitution, Art. I, sec. 13, Art. VII, Sec. 5; United States Constitution, Amendment XIV, Sec. 1; Carmichael v. Southern Coal and Coke Co., 301 U.S. 505, 81 L.Ed. 1245; 12 Am. Jur. 140-143; 12 Am. Jur. 207-209; 12 Am. Jur. 270.)

HOLDEN, J. Givens, C. J., and Budge and Ailshie, JJ., concur. Morgan, J., Sat at the hearing, did not participate in the decision.

OPINION

HOLDEN, J.

This proceeding is prosecuted under Section 7-5 of the Unemployment Compensation Law as amended (1941 S. L. Chap. 182, Sec. 6, pg. 409) to determine whether the Big Wood Canal Company (hereinafter called the company) is a covered employer within the meaning of the unemployment statute.

May 7, 1941, an "authorized representative" of the Industrial Accident Board determined the company was a covered employer within the meaning of the statute. June 5, 1941, the company appealed from that decision to the Board. September 23, 1941, the matter was heard on appeal by the Board. December 27, 1941, the Board found as a conclusion of law:

"That the Big Wood Canal Company is, and at all times since May 7, 1941, has been, a covered employer within the meaning of the Unemployment Compensation Law and is liable for the payment of the excise tax imposed thereby since May 7, 1941."

It was then ordered by the Board:

"That the Big Wood Canal Company, a corporation, is and since the 7th day of May has been a covered employer within the meaning of the Unemployment Compensation Law and is liable for and should pay the excise tax levied by the Unemployment Compensation Law with respect to services performed for it in connection with its business since May 7, 1941."

The appeal of the company to this court is from that order.

It is conceded by the respective parties there is no dispute as to the facts--and that the facts are identical with those in Big Wood Canal Company v. Unemployment Compensation Division, 61 Idaho 247, 100 P.2d 49, to which case attention is directed for the facts.

Whether the company is a covered employer within the meaning of the Unemployment Compensation Law depends upon the construction of Section 18-5, the pertinent part of which provides:

"The term 'covered employment' shall not include . . . (f) services performed in the employ of an individual owner or tenant operating a farm in connection with the cultivation of soil, the production and harvesting of crops. . . ." (1941 S. L. Chap. 182, Sec. 18-5, (f) pg. 393.)

At the outset it must be conceded "it is a recognized rule of construction, which has been followed in this state, that, in order to successfully claim an exemption from a general tax, whether property or excise, laid by the legislature, it must appear by either express terms or necessary implications, that an exemption was intended." (Big Wood Canal Company v. Unemployment Compensation Division, supra.)

At the time the first controversy between the company and the Board was decided by this court (case above cited), the Unemployment Compensation Law (1935 S. L. as amended by 1939 S. L. Chap. 239, Sec. 18-5) excepted or exempted "agricultural labor. " The determinative question in that case was as to whether "the...

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