In re Refund of Contributions of Batt

• Citation: 123 P.2d 1004,63 Idaho 572
• Decision Date: 19 March 1942
• Docket Number: 6964
• Parties: In re refund of contributions of P. G. BATT under the Unemployment Compensation Law, P. G. BATT, Appellant, v. UNEMPLOYMENT COMPENSATION DIVISION OF INDUSTRIAL ACCIDENT BOARD OF IDAHO, Respondent
• Court: Idaho Supreme Court

123 P.2d 1004

63 Idaho 572

In re refund of contributions of P. G. BATT under the Unemployment Compensation Law, P. G. BATT, Appellant, v. UNEMPLOYMENT COMPENSATION DIVISION OF INDUSTRIAL ACCIDENT BOARD OF IDAHO, Respondent

No. 6964

Supreme Court of Idaho

March 19, 1942

TAXATION-UNEMPLOYMENT COMPENSATION - EXEMPTION-AGRICULTURAL LABOR.

The processing of farm products, consisting in washing, sorting grading and packing and crating them, so as to make them marketable but involving no physical or chemical change in substance or structure, constituted "agricultural labor" within meaning of unemployment compensation law and hence employer was not liable for contributions under the law upon wages paid for such work, whether the products processed were purchased by employer or received on consignment to be processed and sold, a charge for processing and a brokerage charge being deducted from sale price before paying balance to producer. (Sess. L., 1935, 3rd Ex. Sess. c 12.)

APPEAL from the Industrial Accident Board.

From an order of the board denying application for a refund applicant appeals. Reversed.

Order of the Board reversed, both as to the products purchased and those received for processing and consignment. Cause remanded to the Board, with instructions. Costs awarded to appellant.

W. H. Langroise, Sam S. Griffin, Laurence E. Baird for appellant.

The type of service performed by the laborer, and not by whom he is employed, is the determining factor as to whether wages are or are not taxable. (Sec. 7 (a) 3rd Extra Session 1935, p. 27; Sec. 7 (a), 1937 Sess. Laws, p. 304; Sec. 19 (g) 3rd Extra Sess. 1935, pp. 43-44; Secs. 7-1, 7-5 7-6 (a) 18-3, 18-5, 1939 Sess. Law, pp. 398, 400, 575-7; Melendez v. Johns, 76 P.2d 1163 (Ariz.)

Where the wages are paid for a service agricultural in nature, unemployment compensation tax is not payable. Processing of field run vegetables essential to a marketable farm product is "agricultural labor" whether the labor therefor be directly employed by the farmer, or by a processor whom the farmer pays, and whether the resulting marketable produce is purchased by the processor, or others, or shipped by the farmer on consignment through the processor as consignment agent. (Melendez v. Johns, 76 P.2d 1163 (Ariz.); State ex rel. Bykle v. Dist. Ct., 168 N.W. 130, L. R. A. 1918 F. 198 (Minn.); Cook v. Massey, 38 Idaho 264, 220 P. 1088; Big Wood Canal Co. v. Unemploy. Comp. Div., 61 Idaho 247, 100 P.2d 49; Mundell v. Swedlund, 59 Idaho 29, 80 P.2d 13. 2 Am. Juris, 395-6.)

Bert H. Miller, Attorney General, Thos. M. Robertson, Jr., and Paul B. Ennis, Assistant Attorneys General, for Respondent.

The term "agricultural" as commonly understood consists of things inherently agricultural such as raising crops and things which may be agricultural depending upon whether or not they were done incidental to the conduct of an inherently agricultural enterprise. Both courts and administrative officials have recognized these distinctions. (Webster's New International Dictionary, Second Edition, Unabridged; Regulations 90, United States Treasury Dept., Bureau of Internal Revenue; Cook v. Massey (supra); Mundell v. Swedlund 59 Idaho 29, 80 P.2d 13; Dorell v. Norida Land & Timber Co. 53 Idaho 793, 27 P.2d 960; Gloubitz v. Smeed Brothers, 53 Idaho 7, 21 P.2d 78.)

Unless there are cogent reasons to the contrary the Court should not disturb administrative interpretations and regulations when the same have been made pursuant to law and have been in effect for considerable length of time. (H. Van Duys & Co. v. Tone (supra); Logan v. Davis 233 U.S. 613, 59 L.Ed. 121, 34 S.Ct. 685; 11 Am. Jur. 956.)

AILSHIE, J. Budge, J., concurs. GIVENS, C.J., Holden, J., MORGAN, J., concurring in part and dissenting in part.

OPINION

AILSHIE, J.

A statement of the facts of this case, upon which our decision on the merits of the appeal must rest, is set forth in sufficient detail in the opinion of the Chief Justice ("Concurring in part and dissenting in part"); and, for that reason, no further statement of facts will be made in this opinion.

In this case, where no one is questioning the jurisdiction of the court, but, on the contrary, every party to the proceeding is invoking the jurisdiction and urging the court to exercise it, the writer feels, as he did in the case of Hull v. Cartin, 61 Idaho 578, at 596, 105 P.2d 196, wherein he said:

"Since the question [jurisdictional] was not raised by either party to the litigation and no assignment of error has been specified thereon, it is the opinion of the writer that the question is not properly before us for decision." A like conclusion, on a constitutional question not assigned as error, was reached in Big Wood Canal Company v. Unemployment C. Div., 61 Idaho 247, at 253, 100 P.2d 49, where it is said:

"We have not considered and do not pass upon any jurisdictional question in this case since both appellant and respondent contend that the Industrial Accident Board had the jurisdiction to pass on this matter in the first instance; and that the appellate jurisdiction is vested in this court to review all such orders."

In the matter of In re Brainard, 55 Idaho 153, 157, 39 P.2d 769, this court also said:

"Based upon firm grounds of public policy, this court has ofttimes reiterated that the constitutionality of an act or statute will not be determined in any case, unless such determination is absolutely necessary in order to determine the merits of the case in which the constitutionality of such statute has been drawn in question." After citing a long list of cases and quoting from authorities, the court concluded:

"According to these well-defined principles of law, no one has the right to question the constitutionality of an act, unless he is injuriously affected thereby, and then only when such party has properly challenged the law." To the same effect, see Garrity v. Board of Commissioners, 54 Idaho 342, 34 P.2d 949.

For the foregoing reasons, the writer thinks any discussion of the jurisdictional and constitutional questions merely dicta.

As I understand this appeal, the only controversy before us is as to whether the appellant, Batt, is liable for contributions under the Unemployment Compensation Law, upon wages for (a) labor of individuals performed upon farm products purchased by him from farmers; and (b) for the same kind of labor performed on farm products handled on so-called "consignment."

The opinion of the Chief Justice seems to recognize a difference between the work done on (a) purchased farm products and (b) consigned farm products. I am unable to distinguish any material or legal difference between the two.

The stipulation of facts covering this phase of the question is as follows:

"That aside from the produce raised by the applicant the balance of such produce which are processed as hereinafter set forth are secured in the following ways:

The applicant purchases from the farmer grower the portion of his crop which is marketable when sorted and graded. To enable applicant to determine the part purchased and to prepare the same for market the farmer delivers such produce at the applicant's shed or warehouse, contained in half bags as taken by the farmer directly from the field as harvested.

The applicant also handles a comparatively small part of potatoes on consignment, in which case the farmer delivers the potatoes from the field as harvested, and after the applicant has processed the same as hereinafter stated and sold the same there is deducted from the sale price the expenses, including a charge for processing and a brokerage charge, and the balance is paid to the farmer.

In the case of all produce the culls or other non-marketable produce are owned by and go back to the farmer producer or are disposed of as he directs, and does not go into market."

It is further stipulated that

"Such products are not salable, and there is no market for them without having been processed, graded and packed as hereinafter stated, and they are not salable in bulk to ultimate consumers as or in the condition in which they are harvested in the fields; that the United States government will not purchase said products for distribution on relief unless the same are so processed."

It appears, from the stipulation of facts, and is admitted, that this so-called processing merely consists of sorting, washing and grading these several farm products and packing or crating them for shipment and market. It is further stipulated and found as a fact, that the same laborers do the work on both the purchased and the consigned products; and that the work is identical on both.

It is clear that the appellant does, for hire, just such work as the farmer would have to do himself or hire someone else to do, on the farm or elsewhere, in preparation of his products for market. For this labor, the appellant received and deducted from the sale price "the expenses including a charge for processing and a brokerage charge," and paid the balance to the farmer. It further appears that all culls and unsalable portions of the products consigned were returned to the owner, after the so-called processing was completed.

I fail to see wherein the work done upon consigned products is any less "agricultural labor" than that done upon the same kind of products purchased by appellant, or grown by him on his own farm. It was all agricultural labor.

The order of the Board should be reversed, both as to the products purchased and those received for processing and consignment, and it is so ordered. The cause is hereby remanded to the Board, with instructions to take further proceedings in accordance with the views herein expressed. Costs awarded to appellant.

Budge J., concurs...