Chamber of Commerce of North Kansas City v. Unemployment Compensation Com'n

• Decision Date: 21 April 1947
• Docket Number: 40012
• Citation: 201 S.W.2d 771,356 Mo. 323
• Parties: Chamber of Commerce of North Kansas City, a Corporation, Appellant, v. Unemployment Compensation Commission of Missouri, and Carl J. Henry, Harry P. Drisler and Elmer J. Keitel, Sr., Members of the Unemployment Compensation Commission of Missouri
• Court: Missouri Supreme Court

201 S.W.2d 771

356 Mo. 323

Chamber of Commerce of North Kansas City, a Corporation, Appellant, v. Unemployment Compensation Commission of Missouri, and Carl J. Henry, Harry P. Drisler and Elmer J. Keitel, Sr., Members of the Unemployment Compensation Commission of Missouri

No. 40012

Supreme Court of Missouri

April 21, 1947

Appeal from Cole Circuit Court; Hon. Sam C. Blair, Judge.

Affirmed.

James A. Potter, Judson L. Palmer and Simrall & Simrall for appellant.

(1) The services performed for or in connection with the activities of the Chamber of Commerce of North Kansas City do not constitute "employment" within the meaning of that term as defined in the Missouri Unemployment Compensation Law, because such services are excluded by reason of the provisions of Section 9423 (i) (6) (7), R.S. 1939. (2) In determining whether or not the appellant was organized exclusively for charitable and educational purposes, the articles of association of the corporation are the sole basis for such determination. Murphy v. Concordia Pub House, 348 Mo. 753, 155 S.W.2d 122; Mohawk Mills Assn., Inc., v. Miller, 260 A.D. 433, 22 N.Y.S. (2d) 993; In re First Natl. Deposit Co., 351 Mo. 423, 173 S.W.2d 403; N.Y. Mun. Assn. v. United States, 99 F.2d 460; Helvering v. Coleman-Gilbert Associates, 296 U.S. 369, 56 S.Ct. 285, 287, 80 L.Ed. 279; Wyatt v Stillman Institute, 303 Mo. 94, 260 S.W. 73. (3) To hold that the purposes set forth in the Articles of Agreement under educational purposes were not "educational purposes" within the meaning of the statute, would be putting a narrow, unnatural and unsound interpretation upon the words "educational purposes." Ancient etc., S.R. of Freemasonry v. Board of County Commissioners, 122 Neb. 586, 241 N.W. 93, 81 A.L.R. 1166; Better Business Bureau v. Jones, 34 F.Supp. 573. (4) To hold that the balance of the purposes set forth in the Articles of Agreement were not "charitable purposes" within the meaning of the statute would be putting a narrow, unnatural and unsound interpretation upon the words "charitable purposes." 14 C.J.S., sec. 1a, p. 410; International Reform Federation v. District of Columbia Unemployment Comp. Board, 131 F.2d 337, 76 U.S. App. 282, certiorari denied, District of Columbia Unemployment Comp. Board v. International Reform Federation, 63 S.Ct. 324, 317 U.S. 693, 87 L.Ed. 555; Parsons v. Childs, 345 Mo. 689, 136 S.W.2d 327; Missouri Historical Society v. Academy of Science, 94 Mo. 459, 8 S.W. 346. (5) The act contemplates findings by the Commission of the constitutive facts essential to the holdings. Whether the findings of fact made by the Commission are sustained by sufficient competent evidence is a question of law. If the evidence, although some, be not legally sufficient or lack sufficient probative force to sustain the award, the findings and award are not binding on the court and it is the duty of the court to set aside the award. The scintilla of evidence rule does not obtain in this jurisdiction. S. S. Kresge v. Unemployment Comp. Comm., 349 Mo. 475, 162 S.W.2d 838. (6) While the courts are not bound by decisions of the Federal courts in interpreting the Federal Unemployment Compensation Act, such decisions will be given weight by this court. Meyer & Co. v. Unemployment Comp. Comm., 348 Mo. 147, 152 S.W.2d 184; American Nat. Ins. Co. v. Keitel 353 Mo. 1107, 186 S.W.2d 447. (7) While the general rule is that tax-exempt statutes are to be construed strictly in favor of the government, the rule does not apply to the exemption statutes of the character here involved in view of the fact that bequests for public purposes operate in aid of good government and perform by private means what ultimately would fall upon the public. Union & New Haven Trust Co. v. Eaton, 20 F.2d 419; Harrison v. Barker Annuity Fund, 90 F.2d 286; United States v. Proprietors of Social Law Library, 102 F.2d 481; Commissioner v. F. G. Bonfils Trust, 115 F.2d 788; Ledered v. Stockton, 260 U.S. 3, 43 S.Ct. 5, 67 L.Ed. 99; Old Colony Trust Co. v. Commissioner, 301 U.S. 379, 56 S.Ct. 813, 81 L.Ed. 1169.

John L. Porter and Charles F. Moseley for respondents; Michael J. Carroll of counsel.

(1) Exemptions from taxation must be construed against the applicant for exemption. Kansas City Exposition Driving Park v. Kansas City, 174 Mo. 425, 74 S.W. 977; Wyman v. St. Louis, 17 Mo. 335; Better Business Bureau of Washington, D.C., Inc. v. United States, 148 F.2d 14; State ex rel. Y.M.C.A. v. Gehner, 320 Mo. 1172, 11 S.W.2d 30; St. Louis Y.M.C.A. v. Gehner, 329 Mo. 1007, 47 S.W.2d 766; Hudgins v. Mooresville Consolidated School Dist., 312 Mo. 1, 278 S.W. 769; State ex rel. Laundry, Inc., v. Public Service Comm., 327 Mo. 93, 34 S.W.2d 37; Section 9423(i)(6)(F), R.S. 1939, as amended; 2 Cooley on Taxation, (4th Ed.), p. 1403; 59 C.J. 1106, sec. 657; Endlich on Interpretation of Statutes, p. 142, sec. 108. (2) The fact that other governmental agencies may have administratively exempted the appellant from certain taxes is not controlling in considering the status of the appellant under the Compensation Law. Northeast Osteopathic Hospital v. E. J. Keitel, Cause No. 39,951, Division No. 1, Supreme Court, 355 Mo. 740; Park Floral Co. v. Industrial Comm., 104 Col. 350, 91 P.2d 492; American Medical Assn. v. Board of Review of Department of Labor, 392 Ill. 614, 65 N.E.2d 350; Hassett v. Association Hospital Service Corp. of Massachusetts, 125 F.2d 611. (3) Appellant is not organized exclusively for charitable or educational purposes. Murphy v. Concordia Publishing House, 348 Mo. 753, 155 S.W.2d 122; Better Business Bureau of Washington, D.C., Ins. v. United States, 66 S.Ct. 112; Round Table Club v. Fontenot, 143 F.2d 196; Colony Town Club v. Michigan Unemployment Comp. Comm., 301 Mich. 107, 3 N.W.2d 28; National Exchange Club, Inc., v. Frazier Reams, 147 F.2d 291; State ex rel. Women's Club v. Brand, 197 Wis. 32, 221 N.W. 375; Semple v. Schwarz, 130 Mo.App. 65, 109 S.W. 633; Collins v. Truman, 223 Mo.App. 186, 14 S.W.2d 526; Sec. 9423(i)(6)(F), R.S. 1939. (4) Appellant is not operated exclusively for charitable or educational purposes. Murphy v. Concordia Publishing House, 348 Mo. 753, 155 S.W.2d 122; Northeast Osteopathic Hospital v. E. J. Keitel, 355 Mo. 740, 197 S.W.2d 970; Better Business Bureau of Washington, D.C., Inc. v. United States, 66 S.Ct. 112; Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712, 54 N.E.2d 199, 152 A.L.R. 174; Jackson v. Phillips, 14 Allen, 539.

Westhues, C. Bohling and Barrett, CC., concur.

OPINION

WESTHUES

The question presented on this appeal is whether under the Unemployment Compensation Law the Chamber of Commerce of North Kansas City, Missouri, is required to make contributions with reference to wages paid individuals. The Commission decided that the Chamber of Commerce was liable. On appeal to the Circuit Court of Cole County the decision of the Commission was affirmed. From that judgment an appeal was taken to this court.

Appellant Chamber of Commerce, contends that it is exempt from making contributions by virtue of sec. 9423, Mo. R.S. Ann., R.S. Mo., 1939, as amended by Laws of Missouri, 1943, pages 920 and 921, subsections 6 and (F), which read as follows:

"(6) Shall not include:"

"(F) Service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual;"

Appellant also contends that it is organized and operated exclusively for charitable and educational purposes and that no part of its earnings inures to the benefit of any private shareholders or individuals. We may dispose of the latter clause, and not mention it further, by stating that no earnings ever accrued and therefore none were ever distributed. Appellant's only income was derived from dues of its members and voluntary contributions.

Appellant was organized by a pro forma decree under the provisions of Art. 10, chapter 33, Mo. R.S. Ann., R.S. Mo., 1939, which permits organization and incorporation for benevolent, religious, scientific, fraternal-beneficial or educational purposes. See sec. 5436, R.S. Mo., 1939, Mo. R.S. Ann. Appellant's charter reads in part as follows:

"Fourth: This association is formed for educational and benevolent purposes in North Kansas City, Missouri, and its trade territory without financial profit to its members.

"The field of education shall include gathering and dissemination of information in relation to the business, industrial, professional, home and institutional life and interests of the community it is intended to serve, providing a meeting place for the discussion of matters of interest, furnishing speakers, and furnishing music and other wholesome forms of entertainment.

"The benevolences shall include the promotion of better streets and highways, better police and fire protection, better business and trade practices, better health and labor conditions, reduction of unemployment, aid in works of charity, promotion of harmony, good will and fellowship throughout the community, encouragement of beautification of homes and public places, and to improve the civic and business life of the community generally."

The by-laws contain the following:

"The purpose of this Association shall be to promote the welfare of the trade manufacturing interests and industries of North Kansas City and Vicinity, and to contribute to the development and extension of such interests in all lawful ways: to acquire and disseminate valuable commercial and economic information, and encourage greater interest and a...