Commonwealth v. Perkins
| Decision Date | 04 November 1940 |
| Docket Number | 1 |
| Citation | 41 Pa. D. & C. 55 |
| Parties | Commonwealth v. Perkins |
| Court | Pennsylvania Commonwealth Court |
Commonwealth docket, 1940,
Affidavit and supplementary affidavit of defense raising questions of law.
David R. Perry, for Commonwealth.
Samuel Kagle, for defendant.
This case involves the constitutionality of the Pennsylvania Unemployment Compensation Law of December 5, 1936, P. L. (1937) 2897, 43 PS § 751.
The Commonwealth, in its own name and for the use of the Unemployment Compensation Fund, brought suit against defendant, Fred C. Perkins, individually and trading as Perkins Battery Company, for the contributions which the Commonwealth claimed were due under the act. Defendant filed an affidavit of defense raising questions of law and attacking the constitutionality of the act.
Act of assembly
The statute is patterned after the Federal Social Security Act of 1935, title IX, sec. 901, 49 Stat. at L. 639, 42 U.S.C. § 1101.
Provisions of the statute
The act creates an Unemployment Compensation Board of Review in the Department of Labor and Industry and provides elaborate machinery for referees and advisory councils to carry out the act. It requires the department to take appropriate steps to attempt to stabilize employment, encourage vocational training, assist in the establishment locally of reserves for public works, and to make studies of unemployment situations. The purpose is to create a system of unemployment compensation in cooperation with the Federal Government. It requires the department to " cooperate to the fullest extent with the Social Security Board" established by act of Congress and
The statute sets up an unemployment compensation fund into which contributions of employers are to be paid, and the funds therein are to be deposited in the Unemployment Trust Fund of the United States Government created by the Social Security Act of Congress. The act also creates an administration fund for the administration of the act and provides that the costs of such administration and operation shall be paid out of the administration fund, which fund consists of moneys or property received by the department from the Federal Government.
The act requires employers of eight or more employees, who have worked for the time specified in the act, to make contributions prescribed in the act so that the same may be " no more and no less than the maximum credit allowable under the Social Security Act against such Federal excise tax, which shall be equal to the following percentages of wages...." Then follow percentages varying for different years.
Employers who do not employ eight or more employees are also brought within the act, although not within the Federal system, and the same percentages of their total monthly payrolls are exacted. There is no liability on the part of the State beyond the amounts paid into or earned by the fund. The benefits, in the event of unemployment, are payable upon prescribed conditions and at prescribed rates.
A number of constitutional attacks have been raised in the pleadings, only five of which are pressed and will be considered.
1. That the act violates article III, sec. 18, of the Pennsylvania Constitution, which prohibits appropriations for benevolent purposes to any person or community;
2. That sections 308 and 309 violate section 7 of article III of the Pennsylvania Constitution, prohibiting the passage of any local or special law fixing the rate of interest;
3. That section 307 taxes employers engaged in inter-state commerce, in violation of section 8 of article I of the Pennsylvania Constitution and the Tenth Amendment to the Constitution of the United States;
4. That the act violates article IX, sec. 12, of the Pennsylvania Constitution, providing that moneys of the State over and above the necessary reserve shall be used in payment of the debt of the State; and
5. That the statute violates the Tenth Amendment to the Federal Constitution.
In determining the constitutionality of a statute it must be construed in every possible way to sustain it, and every presumption is to be indulged in favor of it: Busser et al. v. Snyder et al., 27 Dauph. 231; Sinking-Fund Cases, 99 U.S. 700, 25 L.Ed. 496; Mugler v. Kansas, 123 U.S. 623, 31 L.Ed. 205; and it will only be declared unconstitutional " when it violates the constitution clearly, palpably, plainly; and in such manner as to leave no doubt or hesitation on our minds" : Sharpless et al. v. Philadelphia, 21 Pa. 147, 164; Railroad Co. v. Riblet, 66 Pa. 164; Commonwealth ex rel. v. Liveright et al., 308 Pa. 35, 56. The burden is upon him who asserts its invalidity: Gottschall v. Campbell, 234 Pa. 347, 363. It is no part of the business of the court to discuss the wisdom of the legislation, however vicious in principle the court may regard it. Its plain duty is to enforce it if it is not in conflict with the fundamental law: Scowden's Appeal, 96 Pa. 422; Commonwealth v. Moir, 199 Pa. 534; Sharpless et al. v. Philadelphia, supra, p. 164. " It [the court] cannot run a race of opinions upon the points of right, reason, and expediency with the lawmaking power" ; Commonwealth v. Moir, supra, p. 542. Our duty is to determine whether the act is plainly prohibited by the Constitution itself.
This statute seems to be at the parting of the ways. A generation ago its policy of paternalism would have perhaps been unthinkable as a constitutional exercise of power. At that time it would hardly have been conceivable that the State could take the money of a man in Philadelphia, who happens to employ eight or more persons, put it into a fund to be handled by an agency of the Federal Government until it happened to be needed by some man in Erie who was entirely unknown to the employer in Philadelphia, and who perhaps worked in an entirely different line of work, when it was to be withdrawn and placed in the fund controlled by the State agency created by this act, and distributed to the recipient.
The evolution of constitutional law has made tremendous and rapid advancement in recent years. " The ancient landmarks which our fathers have set" have been obliterated by a liberality of interpretation which would have formerly been thought impossible, and by many is still thought dangerous to American ideals.
In State ex rel. v. Switzler, 143 Mo. 287, 322, 323, 45 S.W. 245, 251, decided in 1898, it is said:
We have apparently traveled a long way in the path of constitutional jurisprudence since the declaration just quoted. And we must consider this case in the light of the present-day constitutional interpretation.
If we follow the cases of Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, and Beeland Wholesale Co. v. Kaufman (Ala.), 174 So. 516, in which an almost identical statute of Alabama was under attack; the cases of Howes Bros. Co. v. Massachusetts Unemployment Compensation Commission (Mass.), 5 N.E.2d 720, Gillum v. Johnson (Cal.), 62 P.2d 1037, and Tatum v. Wheeless (Miss.), 178 So. 95, in all of which unemployment compensation statutes are involved; and the case of Steward Machine Co. v. Davis, 301 U.S. 548, which sustained the Social Security Act of Congress, we must be led to the conclusion that this act of assembly is constitutional. If, however, we rigidly adhere to the principles declared in the cases of Busser et al. v. Snyder et al., 27 Dauph. 231, 282 Pa. 440, and Commonwealth ex rel. v. Liveright et al., 35 Dauph. 179, 308 Pa. 35, we may be led to a different conclusion.
Lying at the threshold of this discussion is the question of whether this statute is a proper exercise of the police power, and whether the police power thus exercised is paramount to the Constitution.
The legislature has declared in section 3 of the statute: " Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of the Commonwealth... and the general welfare of the citizens of this Commonwealth require the exercise of the police powers of the Commonwealth in the enactment of this act for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own."
The mere legislative declaration as to what is a proper exercise of the police power does not preclude the judicial inquiry into that question.
In Pennsylvania Railroad v. Driscoll et al., 330 Pa. 97, 105, it was held that there can be no " legislative absolutism" as to what steps are necessary to secure safety of railroad employees and protection to the public. To the same effect are the cases of In re Harrisburg Bridge Co., 48 Dauph. 274, Tyson & Bro. v. Banton, 273 U.S. 418, 431, Wolff Packing Co. v. Industrial Court, 262 U.S. 522, 536, and Edelman v. Boardman, 332 Pa. 85, 95.
So while the legislative declaration is entitled to the gravest consideration (Mahon et al. v. Penna. Coal Co., 274 Pa. 489),...
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