Murphy v. Limpp

• Decision Date: 27 September 1940
• Docket Number: 37047
• Parties: Andrew J. Murphy, Sr., Chairman, Edward C. Crow and Harry P. Drisler, Members of the Unemployment Compensation Commission of Missouri, Appellants, v. Rufus H. Limpp
• Court: Missouri Supreme Court

147 S.W.2d 420

347 Mo. 249

Andrew J. Murphy, Sr., Chairman, Edward C. Crow and Harry P. Drisler, Members of the Unemployment Compensation Commission of Missouri, Appellants, v. Rufus H. Limpp

No. 37047

Supreme Court of Missouri

September 27, 1940

Rehearing Denied December 3, 1940.

Motion to Transfer to Banc Denied February 1, 1941.

Appeal from Gentry Circuit Court; Hon. Ellis Beavers Judge.

Affirmed on the merits and that part assessing cost against the State reversed.

Harry G. Waltner, Jr., Chief Counsel, and Edward D Summers, Assistant Counsel, for appellants.

(1) The defendant in this case is an employer within the meaning of the Unemployment Compensation Law and therefore required to make contributions to the Unemployment Compensation Fund. Secs. 2, 3 (g), 3 (h) (1) (2) (3) (4) (5), 7 (a), (b), Laws 1937, pp. 574, 576, 587; Murphy v. Hurlbut Undertaking & Embalming Co., 346 Mo. 405; Sec. 6 (b), (1), (2), Laws 1937, p. 585. (2) All acts of the Legislature are presumed to be constitutional and the burden rests upon the party questioning the law's constitutional validity to establish such unconstitutionality beyond a reasonable doubt. Graves v. Purcell, 337 Mo. 574, 85 S.W.2d 543; State v. Kennedy, 343 Mo. 786, 123 S.W.2d 118. (3) The Unemployment Compensation Law, in making employers who have had certain employment experience during the year 1936 subject to its provisions, is not retrospective in operation within the meaning of Section 15, Article 2, of the Constitution. State ex rel. Ross v. General Amer. Life Ins. Co., 336 Mo. 829, 85 S.W.2d 68; Cox v. Hart, 260 U.S. 427, 67 L.Ed. 332, 43 S.Ct. 154; Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 78 L.Ed. 1425, 54 S.Ct. 848; Sec. 9756, R. S. 1929; State ex rel. Flaugh v. Jaudon, 286 Mo. 181, 227 S.W. 48; Secs. 4642, 4643, R. S. 1929; Squaw Creek Drain. Dist. v. Turney, 235 Mo. 80, 138 S.W. 12. (4) The Unemployment Compensation Law is not retrospective in its operation within the meaning of Article 2, Section 15, of the Constitution in respect to the tax imposed for the year 1937. Smith v. Dirckx, 283 Mo. 188, 223 S.W. 104; Koeln v. S.W. Bell Tel. Co., 316 Mo. 1008, 292 S.W. 1037; United States v. Martin Co., 60 S.Ct. 32, 84 L.Ed. 51; Cooley on Taxation (4 Ed.), sec. 523, p. 1157; Carroll v. Wright, 131 Ga. 728, 63 S.E. 260; Page v. Samson, 184 Ga. 623, 192 S.E. 203; Cadena v. State ex rel. Leslie, 185 S.W. 367; American Refrigerator Transit Co. v. Adams, 28 Colo. 119, 63 P. 410; McClellan v. Ry. Co., 11 Lea, 336; People v. Spring Valley Hydraulic Gold Co., 92 N.Y. 383; People v. Goldfogle, 205 N.Y.S. 870; Drexel & Co. v. Commonwealth, 46 Pa. St. 31; State ex rel. v. Pub. Serv. Comm., 317 Mo. 172, 295 S.W. 86; Cranor v. School Dist. No. 2, 151 Mo. 119, 52 S.W. 232. (5) The lower court's action in sustaining respondent's motion for costs, and in rendering judgment for costs against the plaintiffs herein is erroneous because costs are not recoverable against the State. 59 C. J., sec. 503, p. 332; 14 Am. Jur., p. 22, sec. 34; Humphrey v. McKown, 217 S.W. 851; Chicago, M. & St. P. Ry. Co. v. Pub. Utilities Comm. of Idaho, 275 P. 780, 47 Idaho 346; Washington Recorder Co. v. Ernst, 91 P.2d 718.

Culver, Phillip, Kaufmann & Smith for respondent.

(1) The Missouri Unemployment Compensation Act which was passed and became effective on June 17, 1937, in so far as it imposes the tax on employers of labor prior to the date of its enactment, is retrospective in its operation and violative of Section 15, Article II, of the Constitution of Missouri. Graham Paper Co. v. Genker, 332 Mo. 155, 59 S.W.2d 49; Smith v. Dirckx, 283 Mo. 188, 223 S.W. 104; Unemployment Comp. Comm. of North Carolina v. Wachovia Bank & Trust Co., 215 N.C. 491, 2 S.E.2d 592. (2) The act is violative of Section 3, Article X, of the Constitution of Missouri, in that it is not uniform upon the same class of subjects. State ex rel. v. Ashbrook, 154 Mo. 375, 65 S.W. 627. (3) The act is also violative of the 14th Amendment to the Federal Constitution which prohibits any State from making or enforcing a law that denies the citizen of the equal protection of the law or deprives him of his property without due process of law. The Federal courts have uniformly held that arbitrary classification offends against this amendment and that classification for any purpose must be based upon substantial differences so that all persons similarly circumstanced are treated alike. The rule in the Federal courts is the same as in the Missouri courts. 277 U.S. 32, 72 L.Ed. 770; Great A. & P. Tea Co. v. Morrissett, 58 F.2d 991.

Westhues, C. Cooley and Bohling, CC., concur.

OPINION

WESTHUES

The following statement of appellants is adopted by the court:

"This action was brought by the members of the Unemployment Compensation Commission under Section 15 (h) of the Unemployment Compensation Law (Laws 1939, p. 925), against Refus H. Limpp in the Circuit Court of Gentry County for the purpose of collecting contributions under the provisions of the Unemployment Compensation Law. The petition, in six counts, was filed on August 25, 1939, and the cause was returnable to the December, 1939 term of such Court. On the first day of the return term the defendant filed his motion to require plaintiffs to give security for costs, and on December 12, 1939, the Court sustained such motion. Thereafter, on December 12, 1939, defendant filed his answer, denying his liability under the act and alleging that the Unemployment Compensation Law is unconstitutional as applied to him. A Stipulation and Agreed Statement of Facts was then filed and the cause was submitted, the Court taking it under advisement on the agreed facts. On February 1, 1940, the Court rendered judgment against the plaintiffs and in favor of the defendant. After timely motions for new trial and in arrest of judgment were filed and overruled, an appeal was duly allowed to this Court on February 1, 1940.

"The defendant is an individual engaging in the retail oil business at King City, Missouri, and has at all times mentioned in the petition had one and more persons in his employ. During the year 1936 the defendant had eight and more individuals in employment on some portion of a day in each of twenty different weeks. This employment experience during 1936 constitutes the basis of plaintiffs' contention that the defendant is liable to make contributions under the Unemployment Compensation Law with respect to wages payable by him during the year 1937, the four calendar quarters of 1938 and the first calendar quarter of 1939. The contributions sued for are computed upon the basis of a percentage of wages payable by the defendant and are in the amounts, for the periods, and became due as follows:

Period.

Amount.

Due Date.

Year, 1937

$ 119.25

January 20, 1938

1st Quarter, 1938

40.91

April 30, 1938

2nd Quarter, 1938

41.04

July 31, 1938

3rd Quarter, 1938

45.63

October 31, 1938

4th Quarter, 1938

26.73

January 31, 1939

1st Quarter, 1939

26.73

April 30, 1939

"The plaintiffs contend that the defendant is an employer within the meaning of Sections 3 (h) (1) and 3 (h) (5) of the Unemployment Compensation Law and therefore liable to make contributions in accordance with such law to the Unemployment Compensation Fund. Defendant does not admit that he is an employer as claimed by the plaintiffs, and claims that if the law may be construed as being applicable to him, it is violative of the following provisions of the Constitution: Article 2, Section 15; Article 2, Section 4; Article 2, Section 30; Article 3, Section 10; and the 14th Amendment of the Constitution of the United States."

In the stipulation referred to it was admitted that respondent had in his employ eight or more individuals during the year 1936 on some portion of a day in each of twenty different weeks; that respondent did not have in his employ eight or more employees on any day since January 1, 1937. Appellants contend that the following sections of the Unemployment Compensation Law subjected respondent to the provisions of the act. Section 3 (g), 3 (h) (1), and 3 (h) (5), Laws 1937, pages 575 and 576. These sections read in part as follows:

"(g) 'Employing unit' means any individual or type of organization, . . . which has or subsequent to January 1, 1936, had in its employ one or more individuals performing services for it within this state."

"(h) 'Employer' means:

"(1) Any employing unit which for some portion of a day, but not necessarily simultaneously, in each of twenty different weeks, whether or not such weeks are or were consecutive, within either the current or the preceding calendar year, has or had in employment, eight or more individuals irrespective of whether the same individuals are or were employed in each such day."

"(5) Any employing unit which, having become an employer under paragraph (1), (2), (3) or (4), has not, under Section 7, ceased to be an employer subject to this Act."

Section 7, Laws 1937, page 587, referred to in Section 3 (h) (5), insofar as involved in this case, reads as follows:

"(b) Except as otherwise provided in subsection (c) of this section, an employing unit shall cease to be an employer subject to this Act as of the first day of January of any calendar year, if it files with the commission, prior to the fifth day of January of such year, a written application for termination of coverage, and the commission finds that there were no thirteen different days, each day being in a different week within the preceding calendar year, within which such employing unit employed eight or more individuals in employment subject to this Act."

The above law, enacted by the Legislature of 1937, contained an emergency clause and became effective on June 17, 1937. Respondent ...