Dias v. California Employment Stabilization Commission

• Decision Date: 30 September 1952
• Citation: 113 Cal.App.2d 374,248 P.2d 427
• Court: California Court of Appeals Court of Appeals
• Parties: DIAS v. CALIFORNIA EMPLOYMENT STABILIZATION COMMISSION et al. Civ. 15254.

Page 427

248 P.2d 427

113 Cal.App.2d 374

DIAS v. CALIFORNIA EMPLOYMENT STABILIZATION COMMISSION et al.

Civ. 15254.

District Court of Appeal, First District, Division 2, California.

Sept. 30, 1952.

Rehearing Denied Oct. 30, 1952.

Hearing Denied Nov. 25, 1952.

Norman A. Eisner, Haskell Titchell, San Francisco, for appellant.

Edmund G. Brown, Atty. Gen. of California, Irving H. Perluss, Deputy Atty. Gen., William L. Shaw, Deputy Atty. Gen., for respondents.

GOODELL, Justice.

This appeal is from a judgment for defendants entered on their motion for judgment on the pleadings. Appellant filed an action to recover $2,062.20 paid under the Unemployment Insurance Act, Stats.1935, p. 1226 as amended, 3 Deering's General Laws 1944, Act 8780d, covering the period from September 30, 1946 to September 30, 1949. Of this sum $1,229.71 represents employer contributions, $455.44 wage-earner contributions, and the remainder penalties and interest. Before making payment appellant exhausted his administrative remedies by petitioning for a reassessment, which was denied. His exceptions thereto were then disallowed. After payment, his claim for refund was denied. Such claim, then treated as a petition for review by the Appeals Board, was denied. This litigation followed.

In addition to the foregoing matters the complaint alleges:

'That said assessment, and the whole thereof, was illegally made and said claim for refund was illegally and erroneously denied, for the following reasons:

'1. Plaintiff is, and was during the period involved, engaged in the business of hay baling and the employees involved, and whose compensation constitutes the basis of the assessment, performed labor in connection with said hay baling operations. The hay was baled by plaintiff under contract for farmers, who produced the crops, and in all instances was performed upon the farm upon which the crop was grown.

'2. Agricultural labor is expressly exempted by Section 7 of said Act. The labor in which said employees were engaged was agricultural labor.

'3. Section 43, Title 22, California Administrative Code defines agricultural labor as including services performed in connection with raising or harvesting of any agricultural or horticultural commodity. The baling of the hay is a part of the harvesting of the hay, and constitutes agricultural labor as defined in said section.

'4. Labor performed in connection with the baling of hay is in its nature and in truth and in fact agricultural, and any regulation that would purport to exclude it from the benefits of the exemption contained in Section 7(a) of the Unemployment Insurance Act would be unauthorized, in conflict with the statute, illegal and void.

'5. That plaintiff in good faith and upon reasonable grounds believed and still believes that labor engaged in hay baling is agricultural and exempt under said statute.'

Shortly after the complaint was filed respondents, without filing either a demurrer or an answer, moved for judgment on the pleadings on the ground 'that plaintiff's complaint does not state a cause of action in favor of the plaintiff but rather affirmatively indicates that the tax obligation upon which plaintiff has filed complaint upon claim for refund is due to the defendants as a matter of law; that as grounds for this motion, this court may take notice that California law establishes that contract hay baling is nontax exempt under the Unemployment Insurance Act and that the plaintiff is tax subject and that hay baling is not a part of the harvesting of an agricultural commodity.'

In support of the motion respondents filed two affidavits introducing matters which went beyond the face of the complaint. Under settled rules this is not permissible and such extraneous matters cannot be considered either on the hearing or on appeal. As was recently said in Stockton Morris Plan Co. v. Mariposa County, 99 Cal.App.2d 210, 212, 221 P.2d 232, 234, 'the sole question is whether or not the complaint stated a cause of action. As the Supreme Court said in Rannard v. Lockheed Aircraft Corp., 26 Cal.2d 149, 151, 157 P.2d 1, 2: 'In considering whether the judgment on the pleadings was properly granted, it is but necessary to determine the sufficiency of the complaint upon the same principle as though it had been attacked by general demurrer. In other words, it is only where there is an entire absence of some essential allegation that a motion for judgment on the pleadings may be properly granted.' See also Bates v. Escondido Union High School Dist., 133 Cal.App. 725, 727, 24 P.2d 884, 885, in which the court, after stating the foregoing principle, said: 'This court cannot consider anything outside of the complaint itself * * *'.'

We have given no consideration whatever to the affidavits or to any stipulations which might have been entered into.

The allegations of paragraph 1 just quoted are all allegations of fact. They show that plaintiff is not a farmer but a contractor engaged in the business of baling hay for others, under contract.

The allegation of paragraph 2 that 'Agricultural labor is expressly exempted by Section 7 of said Act' is true. That section provides that 'The term 'employment' does not include: (a) Agricultural labor; * * *.' The next allegation of paragraph 2 that 'The labor in which said employees were engaged was agricultural labor' is claimed by appellant to be an allegation of fact, but it is simply a statement of appellant's principal contention in this case. It is part of his contention, elaborated in paragraph 3, that 'The baling of the hay is a part of the harvesting of the hay, and constitutes agricultural labor' as defined in § 43 of the California Administrative Code.

Section 43 went into effect on June 1, 1945 and was in effect during the 3-year period in question. It provided that 'Agricultural labor exempted from 'employment' by Section 7(a) of the act includes all services performed:

'a. On a farm, in the employ of any person, in connection with cultivating the soil, or in connection with raising or harvesting of any agricultural or horticultural commodity; * * *.

'b. In the employ of the owner or tenant of a farm on which the materials in their raw or natural state were produced, in connection with the drying, processing, packing, packaging, transporting, and marketing of such materials.

'c. In the employ of the owner or tenant of a farm with respect to ordinary farming operations in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment, if substantially all of such services are performed on a farm.

'd. The provisions of subsections (b) and (c) are not applicable with respect to the services referred to unless such services are carried on as an incident to ordinary farming operations as distinguished from manufacturing or commercial operations. Nor are the provisions of said subsections applicable to services performed in commercial canning or commercial freezing * * *.'

Section 90 of the Act empowered the Commission to adopt rules, and it pomulgated Rule 7.1 effective February 14, 1937, which remained in effect until June 1, 1945 when § 43 was adopted to replace it. Rule 7.1 is set forth in the footnote. ¹

The Supreme Court in California Employment Commission v. Butte County Rice Growers Ass'n, 1944, 25 Cal.2d 624, at page 632, 154 P.2d 892, at page 895, examined rule 7.1 and said:

'Considering at the outset the challenge of the validity of rule 7.1, the objection is not well taken. Where the Legislature has by its enactments declared policies and fixed primary standards, as it did in the Unemployment Insurance Act, there can be no question but what it may validly confer on administrative officers power to 'fill up the details' by prescribing rules and regulations to promote the spirit and purpose of the legislation and its complete operation. In its general form of distinction, rule 7.1 appears to be a practical, workable definition in amplification of the unexpanded statutory exemption here presented. Practically all of the courts that have been required to pass upon regulations identical with or very similar to rule 7.1 have upheld the same as proper interpretations of the statutes involved. (Citations.) In view of the harmony of judicial decisions on the point, it is unnecessary to discuss the matter further.'

There is no essential difference between rule 7.1 and section 43 as far as the present problem is concerned. The former was the parent of the latter and both provisions define agricultural labor. Subsection (1) of rule 7.1 dealt with services performed in the cultivation of the soil and the raising and harvesting of crops; paragraph 'a' of section 43 does likewise. Subsection (2) of rule 7.1 dealt with services subsequent to the harvesting of crops and provides that such services do not constitute 'agricultural labor' unless 'performed by an employee of the owner or tenant of the farm'; paragraph 'b' of section 43 does likewise.

Subsection (1) of rule 7.1 dealing with services constituting agricultural labor opened with the words 'By an employee on a farm'. Paragraph 'a' of sec. 43 opens with the words 'On a farm, in the employ of any person'. The second paragraph of subsection (2) of rule 7.1 provided that 'The services hereinabove set forth do not constitute agricultural labor unless they are performed by an employee of the owner or tenant of the farm on which the materials * * * were produced.' Paragraph 'b' of sec. 43 opens with the words 'In the employ of the owner or tenant of a farm on which the materials * * * were produced.' Thus these owner-tenant limitations are not found in subsection (1) of rule 7.1 or in paragraph 'a' of sec. 43, but are found in subsection (2) of rule 7.1 and in paragraph 'b' of sec. 43. In other words the framers of both rule 7.1 and sec. 43 drew a sharp line in these respective sets of provisions.

In the Butte County case, supra,...