Indus. Comm'n v. Woodlawn Cemetery Ass'n

• Decision Date: 10 October 1939
• Citation: 287 N.W. 750,232 Wis. 527
• Parties: INDUSTRIAL COMMISSION v. WOODLAWN CEMETERY ASS'N.
• Court: Wisconsin Supreme Court

232 Wis. 527

287 N.W. 750

INDUSTRIAL COMMISSION

v.WOODLAWN CEMETERY ASS'N.

Supreme Court of Wisconsin.

Oct. 10, 1939.

Appeal from an order of the Circuit Court for Dane County; August C. Hoppmann, Judge.

Action by the Industrial Commission of Wisconsin against the Woodlawn Cemetery Association, a Wisconsin corporation, to recover unemployment compensation contributions alleged to be due from defendant. From an order overruling a demurrer, plaintiff appeals.

Reversed and remanded with directions.

Action by the Wisconsin Industrial Commission, plaintiff, against Woodlawn Cemetery Association, a Wisconsin corporation, defendant, commenced on October 26, 1937, under the terms of sec. 108.22, Stats., to recover unemployment compensation contributions alleged to be due from defendant. The answer in substance alleges that defendant is a corporation organized and operated exclusively for charitable purposes, and that no part of the net earnings inures to the benefit of any private shareholder or individual; that the defendant was organized and is operated exclusively for the purpose of maintaining a public cemetery open to the burial of all persons of all races and creeds; that none of its directors or officers receives a salary or compensation except a full time secretary; that no part of the net earnings of the association inures to the benefit of any private individual or shareholder; and that by the terms of sec. 108.02(5)(g) 7, Stats.1937, it is exempt from the Wisconsin Unemployment Compensation Act. Plaintiff interposed a general demurrer to the answer. The trial court on August 19, 1938, entered an order overruling the demurrer.Stanley Rector, Winfield V. Alexander, and Albert D. Nohr, all of Madison, for appellant.

North, Bie, Duquaine, Welsch & Trowbridge, of Green Bay (Wilkie, Toebaas, Hart, Kraege & Jackman and W. E. Torkelson, all of Madison, Williams & Foster, of Fond du Lac, Alex Wilmer, of Green Bay, and W. E. Torkelson, of Madison, of counsel), for respondent.

WICKHEM, Justice.

Defendant is a cemetery association incorporated under special act of the legislature, Ch. 272, Private and Local Laws of 1856. It operates a cemetery in the city of Green Bay. With respect to taxes, Ch. 272 provides as follows: “The cemetery lots and property of said corporation shall be exempt from all public taxes and assessment, and shall not be liable to be sold on execution or to be applied in payment of debts of any individual, corporator or lot owner, but the said corporation and lot owners, their heirs, legal representatives and successors, may hold the same exempt therefrom, so long as the same shall remain appropriated to the use of a cemetery; Provided, however, That nothing contained in this act shall be so construed as to exempt any real or personal estate belonging to said corporation, from taxation or sale on execution, except such real and personal property as shall be exclusively appropriated to, and used for cemetery purposes ***.” Section 7.

Sec. 70.11(8), Stats., provides:

“The property in this section described is exempt from taxation, to wit: ***

“(8) Lands owned by any cemetery association used exclusively as public burial grounds and tombs and monuments to the dead therein; including lands adjoining such burial grounds, and greenhouses and other buildings and outbuildings thereon, owned and occupied exclusively by such cemetery association for cemetery purposes; all articles of personal property owned by any cemetery association necessarily used in the care and management of such burial grounds, and all funds exclusively devoted to such purposes; all flowers and ornamental plants and shrubs raised for the decoration of such burial grounds, and which may be sold in the manner and for the purposes mentioned in section 157.09; also all property held by donation, bequest or in trust for cemetery associations under the provisions of sections 157.05 and 157.11.”

Although defendant has employees, it has failed to pay any of the contributions required by the Wisconsin Unemployment Compensation Act. Sec. 108.02(5)(g) 7, Stats.1937, reads as follows so far as material:

“The term ‘employment’ *** shall not include:

***

“Employment of any person by a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.”

The principal contentions of defendant are (1) that under the provisions of sec. 108.02(5) (g) 7, Stats., heretofore set out defendant is expressly exempted from the operation of the act, and (2) that the contributions required of employers under the Unemployment Compensation Act are taxes, and that it is exempt from taxes by the terms of the special act constituting its charter and by the provisions of sec. 70.11(8), Stats.

Plaintiff contends (1) that defendant is not a charitable association or organized for charitable purposes within the meaning of sec. 108.02(5) (g) 7, Stats.; (2) that the contributions required by the Wisconsin Unemployment Compensation Act are not taxes or at any rate are not public taxes, but are payments implementing and making effective the exercise of the police power which the act constitutes, and (3) that from such payments defendant is not exempted either by its charter or by sec. 70.11(8), Stats.

It will be convenient first to consider whether sec. 108.02(5) (g) 7, Stats.1937, expressly exempts defendant from the operation of the act. In this connection it is necessary to consider its legislative history. The Wisconsin Unemployment Compensation Act was first enacted in January, 1932. Laws 1931, Sp.Sess., c. 20. This act did not contain the exemption presently in force under the terms of sec. 108.02(5) (g) 7. It expressly applied to “any person, partnership, association, corporation (or legal representative of a deceased person, or a receiver or trustee of a person, partnership, association or corporation), including this state and any municipal corporation or other political subdivision thereof ***.” Sec. 108.02(d) was made to apply to employers thus described who had more than a prescribed number of employees in their employ. Such further limitations upon the operation of the act as were made had to do with certain types of employment. All of these need not be mentioned. It is enough to state as examples that farm labor, personal or domestic service, employment on an unemployment relief project or as an elected or appointed officer were excluded, and that the other exclusions were on the basis of the type of employment involved. Thus, the original act did not exempt cemetery associations from its terms, and defendant was within its provisions.

On August 14, 1935, the federal Social Security Act was enacted. 42 U.S.C.A. § 301 et seq. Title III of this act, 49 Stat. 626, 42 U.S.C.A. § 501, et seq., made certain grants to state which had enacted approved unemployment compensation acts. Title IX of the same act, 49 Stat. 639, 42 U.S.C.A. § 1101 et seq., levied a tax on payrolls of employers of eight or more employees and provided that a taxpayer might credit against the tax imposed by title IX 90% of such tax with payments made to a state unemployment compensation fund under an approved act. The federal act contained certain requirements which states must meet before being entitled to the benefits of the federal act, but did not prescribe uniformity as to exemptions. The federal act did set forth exemptions from the tax imposed by it in precisely the same language as that now contained in sec. 108.02(5) (g) 7, Stats. 1937. The language of this exemption as indicated by the report of the conference committee was taken from the federal income tax law to secure the advantage of previous administrative and judicial interpretations of the latter and insure uniform construction of both acts. Sec. 101 Federal Revenue Act of 1936, 49 Stat. 1673, 26 U.S.C.A. § 103, provides:

“The following organizations shall be exempt from taxation under this title [chapter]-

***

“(5) Cemetery companies owned and operated exclusively for the benefit of their members or which are not operated for profit; ***

“(6) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual **.”

On July 22, 1935, Ch. 272, Laws of 1935, the legislature introduced into the Wisconsin law an exemption of charitable, religious, scientific and educational organizations. The language of the exemption was different from that in the federal act which was enacted a month later. On September 11, 1935, c. 446, the legislature amended the subsection into substantial conformity with the...