In re Liability of Batt

• Decision Date: 14 March 1945
• Docket Number: 7214
• Citation: 66 Idaho 188,157 P.2d 547
• Parties: In re Liability of P. G. BATT for Unemployment Compensation excise taxes
• Court: Idaho Supreme Court

157 P.2d 547

66 Idaho 188

In re Liability of P. G. BATT for Unemployment Compensation excise taxes

No. 7214

Supreme Court of Idaho

March 14, 1945

Rehearing denied April 16, 1945.

1. Unemployment Compensation

The proviso of Unemployment Compensation Law, excluding contributions for services of laborers processing, packing and marketing farm produce excludes all services of agricultural wage-earners' and produce of all farmers whether processed on their own farms or at others' processing plants. (Sess. Laws 1941, chap. 182, p. 392, sec 18-5 (f).

2. Unemployment Compensation

Whether employer and his employees are engaged in "agricultural labor" within proviso of Unemployment Compensation Law excluding contributions for services of laborers processing packing and marketing farm produce, depends on type of employees' service, not employer's occupation, business or profession. (Sess. Laws 1941, chap. 182, p. 392, sec. 18-5 (f).

3. Unemployment Compensation

A farmer and his employees, processing, packing and marketing produce of his own and his neighbors' farms, were engaged in "agricultural labor" within proviso of Unemployment Compensation Law, excluding contributions for such services as incident to employers' ordinary farming operations. (Sess. Laws 1941, chap. 182, p. 392, sec. 18-5 (f).

Rehearing Denied April 16, 1945.

Appeal from the Unemployment Compensation Division of the Industrial Accident Board.

Reversed.

Sam S. Griffin and W. H. Langroise for appellant.

Section 18-5 (f) of the 1941 amendment of the Unemployment Compensation Law, deals solely with services rendered by employees, does not refer to the occupations of employer, and means that services in the employ of any owner or tenant operating a farm (whether or not such owner or tenant be exclusively by occupation a farmer, or engages in other occupations) in connection with crop cultivation, production or harvesting, livestock operations, or in processing, packing or marketing produce of such farm (whether the service be on or off the farm) is excluded from covered employment services and not subject to tax or contributions. The proviso to that section does not condition, nor limit such services, but is a rule of construction; and merely means that other services of different type from the above, and which are of a type only incidental to a laborers principal occupation, which by provisions of the Act, other than Section 18-5, would be covered employment when performed for other employers, remains covered employment though performed in the employ of a farm operator.

Prior and subsequent to the 1941 amendment, and during its existence also, services performed in processing, and packing vegetables, were not subject to the Act or to tax under it, and where the Division nevertheless collected a tax, the amount should be refunded. The legislative intent in this respect has been uniform and unchanged since the inception of the statute. (Batt v. Unemployment Compensation Division, 63 Ida. 572, 123 P.2d 1004; Big Wood Canal Co. v. Unemployment Compensation Division, 63 Ida. 785, 126 P.2d 785, 789; Big Wood Canal Co. v. Unemployment Compensation Division, 61 Ida. 247, 100 P.2d 49; Carstens Packing Co. v. Unemployment Compensation Division, 63 Ida. 613, 123 P.2d 1001; 1935 S. L. (3d Extra Session), chap. 12; 1939 S. L., pp. 575, 577; 1941 S. L., pp. 391-394; 1943 S. L., pp. 58-61.)

Bert H. Miller, former Attorney General; Frank Langley, Attorney General, and Thos. Y. Gwilliam, Assistant Attorney General, for respondent.

The operations of P. G. Batt in packing and processing are within the meaning of "covered employment" as that term is defined in the Unemployment Compensation Law. (Chapter 182 of the 1941 Session Laws, Section 18-5; Employment Security Commission of Arizona v. Arizona Citrus Growers, 144 P.2d 682; Growers Equipment Co. v. Florida Industrial Commission, et al, 12 So.2d 889; North Whittier Heights Growers Association v. National Labor Relations Board, 109 F.2d 76; Cowiche Growers v. Bates (Wash.), 117 P.2d 624; In re Butler, 16 N. Y. Sup. (2d) 965; In re Yakima Fruit Growers Association (Wash.), 146 P.2d 800.)

Budge, J. Givens and Holden, JJ., concur. Ailshie, C. J., did not sit at the hearing nor participate in the decision.

OPINION

Budge, J.

Appellant seeks to recover refund of payments made to the Unemployment Compensation Division for unemployment compensation contributions on wages paid for services of persons engaged by him in packing, processing and marketing farm products. For a number of months, in the years 1941, 1942 and 1943, after the effective date of Chap. 182, 1941 Sess. Laws, appellant paid contributions to the State under the Unemployment Compensation Law. Upon appellant's application for refund, a hearing was had before the Industrial Accident Board, as administrator of the Unemployment Compensation Law. The board made findings of fact and rulings of law, and entered an order denying appellant's application, and dismissed the same, from which order this appeal is prosecuted.

The findings and rulings of the board which reflect the material facts submitted by the respective parties sufficient to a proper understanding of the questions involved herein are, as follows:

I.

"That P. G. Batt has from time to time since the Unemployment Compensation Law of Idaho (1941 S. L. at pp. 393-4, Sec. 18-5 (f), effective May 7, 1941) and until exempt therefrom by Amendment, 1943 S. L. at p. 60, Sec. 19 E (f) effective February 5, 1943, and by Amendment, 1943 S. L. at p. 186, Sec. 19 E (f), effective February 26, 1943, made payments under protest of contributions or taxes during the years in the amounts and at the times stated in his application for Refund, and that the computation of such contributions or taxes, and the amounts so paid, were for and upon wages for services of individuals employed by P. G. Batt in connection with the processing operations hereinafter detailed * * *

"That at or about the time of commencing to pay contributions under said Act as aforesaid, the applicant filed a protest * * *

III.

"That P. G. Batt is the owner of approximately 2,000 acres of land upon which he raises potatoes, onions, carrots, lettuce, and other vegetables; that the said P. G. Batt is the owner of processing sheds at Wilder and Homedale, Idaho, located at the trackage thereat and not on the farm lands of the said P. G. Batt.

V.

"That P. G. Batt goes to the farmer who raises vegetables that are packed and processed by P. G. Batt and purchases the farmer's produce with the understanding that such portion of his produce that meets the State and Federal statutes or regulations and is salable shall be paid for by P. G. Batt; that sometime such products are sold only on consignment, depending upon the condition of the market at the time, that is, if the market is strong, P. G. Batt buys outright from the farmer, paying the farmer so much for number one and so much for number two graded vegetables, the price depending upon how the produce packs out; if the market is weak, P. G. Batt takes such products upon consignment, and if the market goes down, the farmer takes the loss, and Batt charges the farmer a per cent for packing and processing, and also a brokerage fee; that none of the products packed and processed are returned to the farmer for sale by the farmer, but all of such produce is marketed by P. G. Batt under the trade name of Idaho Pals Brand, which brand is owned and belongs to P. G. Batt.

VII.

"That all services herein set out and performed by individuals for and in behalf of the applicant were performed exclusively within the State of Idaho and within and upon the premises of the applicant, and that all of said work was performed for the applicant in his business as a processor and packer; that none of the services hereinbefore mentioned were rendered upon a farm, but were performed in packing houses and warehouses owned and operated by the applicant, although such services were the same and identical services usually rendered in preparing commodities for market upon a farm by those farmers having large enough farms to be able to afford the necessary equipment incident to the packing and processing of their own products; * * * (emphasis ours)

VIII.

"The operations which took place at the applicant's sheds were as follows:

"The field run produce from the applicant's farming operations and the field run produce owned by other farms, as hereinbefore stated, were intermingled and went through the process together.

"In the case of potatoes the produce arrived at the sheds covered with dirt and intermingled with clods, vines, and sticks, culls, and bruised, cut, rotten, and misshaped potatoes just as dug from the ground. The vines and many of the clods were picked out by hand and other dirt screened out, and then were placed in a mechanical washer partly for the purpose of pre-cooling and partly to clean. The cooling and cleaning operation is sometimes done by spraying with hose. After being washed, the produce was placed on tables where it was hand sorted and graded and the marketable portions placed in bags which were usually branded. After the sack was sewed, it was trucked by hand into the cars where the employees packed or stacked for shipment, and the car was iced by placing ice in bunkers at the end of each car.

In the case of onions the same operation took place, except that the same were not washed, and payment of contributions for which refund is asked was for labor so engaged.

"In the case of lettuce, delivery field run was made by the farmer in his own truck, and the applicant's crew took over at the shed. The first operation was trimming, which consisted of cutting off the butt,...