Holmes v. Cook

• Decision Date: 20 May 1970
• Docket Number: 6 Div. 6
• Citation: 45 Ala.App. 688,236 So.2d 352
• Parties: Richard L. HOLMES, Director, Department of Industrial Relations, State of Alabama, and Pullman Inc., v. Haney COOK. ,
• Court: Alabama Court of Civil Appeals

Page 352

236 So.2d 352

45 Ala.App. 688

Richard L. HOLMES, Director, Department of Industrial Relations, State of Alabama, and Pullman Inc., v. Haney COOK.

,6 Div. 6.

Court of Civil Appeals of Alabama.

May 20, 1970.

J. Eugene Foster, Montgomery, General Counsel Dept. of Industrial Relations, James R. Solomon, Jr., Abbeville, Asst. Gen. Counsel, Dept. of Industrial Relations, for appellants.

Huey, Stone & Patton, Bessemer, for Pullman Inc.

Lipscomb & Lipscomb, Bessemer, for appellee.

WRIGHT, Judge.

Appellee, Haney R. Cook, was a supervisory employee of appellant, Pullman incorporated. He had been an employee for many years and on July 3, 1966, at age 65, retired under a compulsory retirement rule of the company. For several years, prior to retirement, appellee had been a participant in a voluntary retirement plan made available by the Pullman Corporation to its employees. The contributions made by employee and employer under the 'Plan' were used to purchase an annuity contract from Prudential Life Insurance Company. It was stipulated that there had been paid into the Plan the sum of $42,478.18, of which amount the employee had contributed $6,039.13, and Pullman Corporation had contributed $36,439.05. Upon retirement, appellee began to receive payments under the 'Plan' in the amount of $228.51 per month. First payment was made August 1, 1966.

The 'Plan' in its entirety was made a part of the record.

Mr. Cook, upon retirement, signed for benefits under the Unemployment Compensation Law of Alabama (Title 26, Chapter 4, Code of Alabama Recompiled 1958). After denial of benefits by the State Department of Industrial Relations, upon the basis of disqualification under the provisions of Title 26, Section 214, subd. H, Cook appealed to the Circuit Court of Jefferson County, Bessemer Division. The case was tried de novo under stipulation of facts, with Pullman Corporation, by agreement, being made a party defendant. It was stipulated that benefits, if judgment favored claimant, would be in the amount of $300. Judgment in favor of claimant was rendered by the court on November 12, 1968. An appeal was taken from the judgment by appellants, Richard L. Holmes, as Director of the Department of Industrial Relations and Pullman Incorporated, to this Court.

Since the facts were stipulated and are undisputed, the sole question presented on this appeal is whether appellee, an involuntary retired employee of Pullman Incorporated, otherwise fully eligible for benefits under the provisions of the Unemployment Compensation Law, is disqualified from receiving such benefits under the provisions of Title 26, Section 214, subd. H, because he received the sum of $228.51 monthly under a voluntary retirement plan made available by Pullman Incorporated, and jointly contributed to by employee and employer.

Title 26, Section 214, subd. H reads as follows:

'H. For any week with respect to which or a part of which he has received or is seeking a pension payment pursuant to an employment contract or agreement, provided that if it is finally determined he is not entitled to such pension payment of this disqualification shall not apply; and provided further, that no claimant shall be disqualified from receiving benefits by virtue of the provisions of this subsection when his benefits are based entirely on wages earned from employment other than that from which he retired. If the retirement pay, the receipt of which is disqualifying under this subsection, is less than the weekly benefit which would otherwise be due under this chapter, he shall be entitled to receive, if otherwise eligible, weekly benefits reduced by the amount of such retirement pay.'

The trial court in its written opinion based its determination that appellee was entitled to benefits on the premise that the payments under the 'Plan' to appellee were not disqualifying under the provisions of Section 214, subd. H because such payments were not pursuant to an employment contract or agreement. It appears the determination of the court was based upon the provisions of the 'Plan' in Paragraph 14.1 thereof, which stated as follows:

'14.1 No Enlargement of Employee Rights--

'This Plan is strictly a voluntary undertaking on the part of each Participating Company and shall not be deemed to constitute a contract between any Participating Company and any Employee, or to be consideration for, or an inducement to, or a condition of, the employment of any Employee. Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of any Participating Company or to interfere with the right of any Participating Company to discharge or retire any Employee at any time * * *' The question presented by the factual situation and the interpretation of the legislative intent in the enactment of Section 214, subd. H, is apparently of first impression in this State. There have been cases in other states, with somewhat similar facts, and statutes, which we shall examine in the course of this opinion.

We begin our consideration with two principles in mind which have been long and often enunciated by the appellate courts of this and other states. The first principle is the Unemployment Compensation Act is remedial in character, and its beneficent purpose should be liberally construed, and its provisions of disqualification from benefits should be narrowly construed. Department of Industrial Relations v. Stone, 36 Ala.App. 16, 53 So.2d 859.

The second principle is that in construing a statute, it is our duty to find the intent of the legislature if there is ambiguity in the words of the statute. In finding such intent, we will look to the entire act in the light of the evident purposes of its enactment. Department of Industrial Relations v. Stone, supra; Akers v. State ex rel. Witcher, 283 Ala. 248, 215 So.2d 578; Standard Dredging Corp. v. State, 271 Ala. 22, 122 So.2d 280.

From our study of the respective positions of the parties to this case, it appears there are some areas of agreement as to the meaning of Section 214, subd. H. It is contended by appellants and conceded by appellee, that the word 'pension' as found in the statute does not have the narrow meaning commonly given. That is, the meaning is not confined to a gratuity, wholly given or financed by an employer. It is not a mere bounty springing from the appreciation and graciousness of an employer. It may be these, but in modern or recent terminology, it has been used broadly in the sense of retirement pay or an annuity. Such retirement or annuity may be wholly financed by the employer on may have been contributed to by the employee.

In the leading cases from other jurisdictions, such pensions or retirement payments, when paid fully, or substantially contributed to by the employer, have been held to be compensation for loss of wages or a substitution for wages lost by reason of the employee's loss of his job. Kneeland v. Administrator, Unemployment Comp. Act, 138 Conn. 630, 88 A.2d 376, 32 A.L.R.2d 896; Barclay v. Administrator, Unemployment Comp. Act, 139 Conn. 569, 95 A.2d 797.

In light of the apparent agreement of the parties and the authority of the above cited cases, we conclude that the word 'pension' as it appears in Section 214, subd. H imports within its meaning, retirement pay or annuity.

The major point of disagreement as to the interpretation or intent of the statute appears to be the meaning of the following words '* * * pursuant to an employment contract or agreement * * *.'

Appellants contend the meaning of the above quotation is not limited to contracts for hire, but means a contract, agreement, or understanding between employer and employee which arises out of or is placed in effect because of the employer-employee relationship.

Appellee takes the position that even should such construction be placed on the statute, it would not apply to his claim. It is his argument that (1) The 'Plan' is not a contract between him and Pullman Incorporated, for Paragraph 14.1 thereof specifically says that it is not. (2) The money paid to appellee as pension or retirement pay under the 'Plan' is in reality only a refund or repayment of the amount he contributed thereto until such amount is exhausted.

As stated in the beginning, in order to construe the meaning of a statute, we must look to the intent and purpose of its enactment and to the evils it intended to correct. Alabama was among the first states to adopt an Unemployment Compensation statute. The enactment of the Federal Social Security Act made such a state law possible and feasible. It was in implementation of the Social Security Act that our statute was passed by the legislature in 1935. One of the most often cited cases in the fields of taxation, police power and general constitutional law is the Alabama case of Beeland Wholesale Co. v. Kaufman, 234 Ala. 249, 174 So. 516, decided by our Supreme Court in 1937. This case held the Alabama law constitutional even before the constitutionality of the Federal Social Security Act was determined. It was from cases begun in Alabama that the Supreme Court of the United States first held the Federal Social Security Act constitutional in May of 1937. Chas. C. Steward Mach. Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293.

The purposes of the law were clearly set out in the case of Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327, another case arising in Alabama. The Social Security Act and its implementation by state unemployment compensation laws was enacted in the midst of a deep depression when the evil results of unemployment were only too evident. The Congress and most state legislatures were determined that the tragic and economic social effect of sudden and prolonged periods of unemployment would be remedied so far as possible. It was stated in Carmichael v. Southern Coal & Coke Co., supra, that ...