Ideal Hardware & Supply Co. v. Department of Employment
| Decision Date | 26 November 1952 |
| Court | California Court of Appeals Court of Appeals |
| Parties | IDEAL HARDWARE & SUPPLY CO. v. DEPARTMENT OF EMPLOYMENT et al. Civ. 18985. |
Trent G Anderson, Jr., Los Angeles, for appellant.
Edmund G. Brown, Atty. Gen., Irving H. Perluss, William L. Shaw, and Vincent P. Lafferty, Deputy Attys. Gen., for respondents.
Prior to August 1, 1946, Weston F. Kreck and C. W. Kreck conducted as copartners a wholesale and retail hardware business under the name of Ideal Hardware and Supply Co. On that date the partnership was dissolved. The partnership had conducted a wholesale business at one location and a retail business at another. Weston F. Kreck acquired the wholesale division and C. W. Kreck the retail division, and each was thereafter operated separately. On April 25, 1947, Weston F. Kreck made an equitable assignment of assets for the benefit of creditors to M. W. Engleman who operated the business with and for the benefit of Kreck. Plaintiff corporation acquired the wholesale business on September 30, 1948, and has ever since conducted the same.
The partnership had had a favorable employment record and a resulting favorable reserve account under the Unemployment Insurance Act (3 Deering's Gen.Laws, Act 8780d, Art. 4) and was entitled to a contribution rate of 1.5 per cent rather than the usual rate of 2.7 per cent. After dissolution of the partnership the Department of Employment notified Weston F. Kreck his future rate of tax contribution would be 2.7 per cent. As to Engleman, as assignee, the account was transferred with a rating of 2.7 per cent. Kreck filed a petition with the department, and later with the Appeals Board, for transfer of the partnership reserve account, claiming to be entitled to the 1.5 per cent rating of the predecessor partnership. Kreck's claim was based on § 41.5 of the act. At the time of the transfer the act provided the reserve account would be transferred to a successor employer if he acquired 'substantially all of the assets' of the predecessor employer. In 1947 the section was amended to also give the right of transfer of the former rating to one who acquired 'a distinct and severable portion of such organization, trade, or business of any employer' etc. 1 The section applies retroactively to transfers made prior to the effective date of the act. 2 The Appeals Board of the department denied the petition for reassessment on March 25, 1949. In its decision the Board found that the value of the wholesale business was $588,272.45 and the value of the retail business $233,777.29. Thereafter, Weston F. Kreck, as successor to the partnership and the Ideal Hardware and Supply Company as successor to Kreck, petitioned the superior court for a writ of mandate to compel the department to transfer the partnership reserve account and merit rating to Kreck and thence to the corporation. An alternative writ issued and after hearing on briefs and the Appeals Board record the writ was discharged. Findings were made to the effect that Kreck was not entitled to the requested transfer under § 41.5 as it existed when he took over because he did not acquire 'substantially all of the assets' of the former employer, the partnership. It was further found that the section as amended did not apply to Kreck as he was not an employer when the amendment became effective in 1947 and did not apply to the corporation because it was not a direct successor to the partnership. No appeal was taken from the denial of the peremptory writ.
The corporation brought the present action for refund of payments made at the 2.7 per cent rate, contending it was entitled to the 1.5 per cent rate of the partnership under § 41.5 of the act. The trial court concluded that all issues raised in this action were decided adversely to plaintiff in the mandate proceeding, and that under the doctrine of res judicata the prior determination was conclusive. Findings and conclusions also were against plaintiff on the merits and in accordance with those in the mandate proceeding. Judgment was for defendants and plaintiff appeals. We are of the opinion that the court correctly applied the doctrine of res judicata and that the judgment must be affirmed on that ground.
With respect to the doctrine of res judicata plaintiff contends it was incorrectly applied and advances as one of the reasons the claim that the court was without jurisdiction to try the proceeding in mandate, and that the former determination and the findings made therein should be disregarded altogether. It is further urged that the present action for the refund of taxes paid under protest is upon a different cause of action from the one prosecuted in the former proceeding to compel the transfer of the reserve account. It is therefore argued that the former judgment cannot operate as a bar and that the doctrine of estoppel does not apply for the reason that facts are relied upon in the present action as to which there was no finding in the former action.
The first point requires consideration of certain provisions of two sections of the act. §§ 41.5 and 45.11d read in part as set out below. 3, 4 Plaintiff urges a construction of § 45.11d that would apply the prohibition to petitions for transfer of reserve accounts, petitions for reassessment of contribution rate and petitions against benefit payment charges to any employer's account, and says: 'The remedies contained in Section 45.11 apply to all problems of the employer, and therefore override and cover Section 41.5 as well as the other sections, but give the employer a right to a trial de novo on his cause by claim for refund.' The conclusion plaintiff reaches is that § 41.5 is not effectual to give the employer the right to maintain a proceeding in mandate to compel the transfer of a reserve account and rating. But the statute does grant that right and mandate is a proper remedy. Code Civ.Proc. § 1094.5; Dare v. Bd. of Medical Examiners, 21 Cal.2d 790, 136 P.2d 304. Whether proceeding under the section would deprive the litigant of any privilege he might enjoy in an action for refund of taxes cannot limit the plain language and intent of the statute. We think it is clear that the court had jurisdiction to adjudicate the issues in the mandate proceeding.
It is asserted by plaintiff, and in the brief of defendants it is conceded, that the present action is upon a cause of action different from the one prosecuted in the former proceeding.
It is in this view of the case that the parties discuss the general rule of res judicata that an adjudication is conclusive and a bar to a subsequent action upon the same cause of action as to all matters that were litigated or that could have been litigated, whereas if the later action is upon a different cause of action the former adjudication is conclusive only as to matters actually or necessarily determined in the former action. Plaintiff points out that in the former proceeding the court made the following finding: 'That Weston F. Kreck did not acquire the organization, trade or business or substantially all the assets of any other employer and was not entitled to the transfer of the reserve account of any other employer or to the...
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