Bucklin Coal Mining Co. v. Unemployment Compensation Com'n
Decision Date | 21 April 1947 |
Docket Number | 40002 |
Citation | 201 S.W.2d 463,356 Mo. 313 |
Parties | Bucklin Coal Mining Company, a Corporation, Appellant, v. Unemployment Compensation Commission of Missouri, and Carl J. Henry, Elmer John Keitel, Sr., and Harry P. Drisler, as Members of said Commission, and Michael J. Carroll, as Director of the Division of Employment Security of the Department of Labor and Industrial Relations of Missouri |
Court | Missouri Supreme Court |
Appeal from Cole Circuit Court; Hon. Sam C. Blair, Judge.
Affirmed.
Ragland Otto, Potter & Embry and Ralph W. Street for appellant.
(1) The United States has priority of payment for taxes due over claims for State Unemployment taxes. People of the State of Illinois v. United States, 66 S.Ct. 841. (2) The assessment by respondent of September 1, 1942, is unconstitutional and void, because it violates the provisions of the 14th Amendment to the Constitution of the United States, and Sections 4, 15 and 30 of Article II of the Constitution of Missouri. 16 C.J.S. 505; 12 Am. Jur. 129; Independent Gasoline Co. v. Bureau, 190 Ga. 613, 10 S.E.2d 58; certiorari refused, 311 U.S. 701, 85 L.Ed. 459, 61 S.Ct. 175; Royster Guano Co. v. Commonwealth of Virginia, 253 U.S. 412, 64 L.Ed. 989, 40 S.Ct. 560; Hartford Steam Boiler, etc. Co. v. Harrison, 301 U.S. 459, 81 L.Ed. 1273, 57 S.Ct. 838; Southern Ry. v Green, 216 U.S. 400, 54 L.Ed. 536, 30 S.Ct. 287; Frost v. Corporation Commission, 278 U.S. 513, 73 L.Ed. 483, 49 S.Ct. 235; Quaker City Cab Co. v Pennsylvania, 277 U.S. 402, 72 L.Ed. 927, 48 S.Ct. 553; Louisville Gas & Elec. Co. v. Coleman, 277 U.S. 32, 72 L.Ed. 770, 48 S.Ct. 423; Colgate v. Harvey, 296 U.S. 404, 56 S.Ct. 252; Power Mfg. Co. v. Saunders, 274 U.S. 499, 71 L.Ed. 1165, 45 S.Ct. 676; Benner-Coryell Lbr. Co. v. Unemployment Comp. Bureau, 218 Ind. 20, 29 N.E.2d 776; State v. Tulsa Flour Exchange, 135 P.2d 46. (3) The Missouri Unemployment Compensation Act, approved June 13, 1937, as amended, is unconstitutional, because it provides for the members of the Commission to act in a judicial and quasi-judicial capacity, thus denying to this appellant due process of law as guaranteed to it by the 14th Amendment to the Constitution of the United States, and Section 30 of Article II of the Constitution of Missouri. College of Physicians Case, 133 Eng. Rep. 928; Tumey v. State of Ohio, 47 S.Ct. 437. (4) The assessment by respondent of September 1, 1942, is retroactive and impairs the obligation of contract, being in conflict with Section 15, Article II of the Constitution of Missouri, and of Section 10, Article I of the Constitution of the United States. Smith v. Dircks, 283 Mo. 188, 223 S.W. 104; Graham Paper Co. v. Gehner, 332 Mo. 155, 59 S.W.2d 49; Murphy v. Limpp, 347 Mo. 249, 147 S.W.2d 420; Lucas v. Murphy, 338 Mo. 1078, 156 S.W.2d 686.
Charles F. Moseley and John L. Porter for respondents; Michael J. Carroll of counsel.
(1) Respondents' findings of fact in their decision and order of reassessment are supported by competent and substantial evidence. Subsec. 9432B(c), R.S. 1939, as amended 1943, Laws 1943, p. 940; Trianon Hotel Co. v. Keitel, 350 Mo. 1041, 169 S.W.2d 891; Atkisson v. Murphy, 352 Mo. 644, 179 S.W.2d 27. (2) The respondents' decision and order of reassessment correctly applied the law to the facts found. Subsec. 9427(h), R.S. 1939, as amended 1941, Laws 1941, p. 596; Arado v. Keitel, 353 Mo. 223, 182 S.W.2d 176; Subsec. 9427(c)(3)(B), R.S. 1939, as amended 1941, Laws 1941, p. 594. (3) Whether the United States does or does not have priority of payment for taxes due over claims for state unemployment taxes is irrelevant to any possible issue in this case. (4) The Missouri Unemployment Compensation Law, as approved on June 17, 1937, and as amended, did not provide for the members of the Unemployment Compensation Commission to act in a judicial capacity in violation of state and federal constitutional provisions. Secs. 9433, 9434, R.S. 1939, as amended; Sec. 9424(c), R.S. 1939; Federal Social Security Act, 42 U.S.C.A., Secs. 301-1305; Charles C. Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327. (5) The respondents' decision and order of reassessment does not violate the provisions of the Fourteenth Amendment to the Constitution of the United States and Sections 4, 15 and 30 of Article II of the Constitution of Missouri. Subsec. 9427(j), R.S. 1939, as amended 1943, Laws 1943, p. 915; Pratt & Whitney Aircraft Corp. of Mo. v. Unemployment Comp. Comm., 193 S.W.2d 1; Subsec. 9427(h), R.S. 1939, as amended 1941, Laws 1941, p. 596; Subsecs. 9423(h)(1)(4), R.S. 1939; Kellogg v. Murphy, 349 Mo. 1165, 164 S.W.2d 285; Krisman v. U.C.C., 351 Mo. 18, 171 S.W.2d 575; Peerless Fixture Co. v. Keitel, 195 S.W.2d 449; Bucklin Coal Mining Co. v. U.C.C. of Mo., 53 F.Supp. 484; Independent Gasoline Co. v. Bureau of U.C., 190 Ga. 613, 10 S.E.2d 58; Brenner-Coryell Lumber Co v. Indiana U.C. Bd., 218 Ind. 20, 29 N.E.2d 776. (6) The respondents' decision and order of reassessment is not retroactive and it does not impair the obligation of contract in conflict with Section 15, Article II of the Constitution of Missouri and Section 10, Article I of the Constitution of the United States. Sec. 5075, Mo. R.S.A., Vol. 14; Darby v. Cook, Commissioner, 2 C.C.H. Unemp. Ins. Serv., sec. 8175; Spitcaufsky v. Hatton, 353 Mo. 94, 182 S.W.2d 86; Abbott v. Marion Mining Co., 255 Mo. 378, 164 S.W. 563; Pratt & Whitney Aircraft Corp. of Mo. v. Unemployment Comp. Comm., 193 S.W.2d 1; Lucas v. Murphy, 348 Mo. 1078, 156 S.W.2d 686; Murphy v. Limpp, 347 Mo. 249, 147 S.W.2d 420; Vincent Realty Co. v. Brown, 344 Mo. 438, 126 S.W.2d 1162. (7) The burden of showing that Subsection 9427(h) is unconstitutional rests upon the appellant, the subsection is presumed to be constitutional unless and until its unconstitutionality has been established beyond a reasonable doubt, and any remaining doubt as to the constitutionality must be resolved in favor of the statute's validity. Graves v. Purcell, 337 Mo. 574, 85 S.W.2d 543; State v. Kennedy, 343 Mo. 786, 123 S.W.2d 118.
Bohling, C. Westhues and Barrett, CC., concur.
In this proceeding the Bucklin Coal Mining Company, appellant, attacks the assessment against it on September 1, 1942, by the Unemployment Compensation Commission of Missouri of certain past due contributions, with interest, of the Bucklin Coal Company and the resort to the experience of the Bucklin Coal Company in arriving at the rate of 3.6% of the wages paid for contributions by the Bucklin Coal Mining Company for the first two calendar quarters of 1942. Both companies were Missouri corporations. The assessment covered contributions due and unpaid for the years 1937 through June 30, 1942 (in the principal sum of $ 4,252.78 and interest of $ 1,553.92, total $ 5,806.70 as of August 29, 1942). Appellant contends that the Unemployment Compensation law and the action of the Commission violates State and Federal constitutional provisions in that it deprives appellant of its property without due process of law, denies to appellant the quiet protection of the law, impairs the obligation of contracts and operates retrospectively. Contributions payable under the Unemployment Compensation law have been considered: "'An excise upon the relation of employment.'" Streckfus Steamers, Inc. v. Keitel, 353 Mo. 409, 412, 182 S.W. 2d 587, 588[2].
An important factual feature of the case is that the Commission found appellant, Bucklin Coal Mining Company, hereinafter referred to as Mining Company, to be the "successor employing unit" of Bucklin Coal Company, hereinafter referred to as Coal Company, within the provisions of Laws 1941, p. 596, Subsec. 9427(h).
E. J. Rychel, Jr., owned a majority of the stock of the Coal Company. Its property consisted of certain personal property useful in its mining activities, title to a 58 acre tract of land on which the mine was located, subject to a balance-due indebtedness of approximately $ 3500 secured by a mortgage, and coal mining rights on an adjoining 22 acres. C. W. Miller made an investigation of the business and affairs of the Coal Company for a month or more and personally inspected its property. He learned that the property was subject to between $ 10,000 or $ 12,000 in back taxes, penalties and interest, including the fact the Coal Company was in default on contributions due under the Unemployment Compensation law. Nevertheless, on or about June 25, 1941, he exchanged his equity valued at $ 27,500 in certain real estate for the controlling stock in the Coal Company, Mr. Rychel, Jr.'s interest. Sometime thereafter a meeting was held at which new directors and officers were elected, the former officers having resigned. In September, 1941, Mr. Miller purchased Mr. Cantwell's (another stockholder) interest and held all the stock, except qualifying shares, of the Coal Company.
Appellant, the Bucklin Coal Mining Company, was incorporated July 25, 1941. Mr. Miller owned all the stock of the Mining Company, except qualifying shares, was the managing head of the Mining Company and designated its officers et cetera.
The Federal Government seized the personal property the first part of July and the Collector of Internal Revenue sold it on July 22, 1941, under a warrant of distraint for $ 1005, Mr. Miller bidding in the property. The rights of the Coal Company in the 22 acres of land were also seized under a warrant of distraint and sold in October, 1941, by the Collector to Mr. Miller, who bid it in at $ 50. Mr. Miller transferred this personal property and also the mining rights in the 22 acres to the Mining Company.
The Coal Company still held the 58 acre tract. After...
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