Mutual Credit Union v. Mississippi Employment Sec. Commission

• Decision Date: 29 June 1961
• Docket Number: No. 41695,41695
• Citation: 131 So.2d 444,241 Miss. 432
• Parties: MUTUAL CREDIT UNION v. MISSISSIPPI EMPLOYMENT SECURITY COMMISSION.
• Court: Mississippi Supreme Court

Page 444

131 So.2d 444

241 Miss. 432

MUTUAL CREDIT UNION v. MISSISSIPPI EMPLOYMENT SECURITY COMMISSION.

No. 41695.

Supreme Court of Mississippi.

June 29, 1961.

Dabney & Dabney, W. E. Hudson, Jr., Vicksburg, for appellant.

Gordon L. Smith, Jackson, for appellee.

KYLE, Justice.

This case is before us on appeal by the Mutual Credit Union of Vicksburg, Mississippi, hereinafter referred to as the appellant, from a judgment of the Circuit Court of Hinds County rendered on February 15, 1960, affirming an order of the Mississippi Employment Security Commission sustaining the registration of the appellant as an employer under the Mississippi Employment Security Law (Ch. 176, General Laws of Miss. 1936, as amended, Sections 7368 to 7446, inc., Miss.Code of 1942, Rec.), and requiring payment by the appellant to the Employment Security Commission of contributions assessed against the appellant under authority of said act for the years 1958-1959.

The record shows that the appellant is a state chartered credit union chartered pursuant to Ch. 177, Laws of 1924 (Section 5391 et seq., Miss.Code of 1942, Rec., as amended), and domiciled in the City of Vicksburg. The articles of association or incorporation were duly executed on April 7, 1931, and were duly filed for record and recorded in the office of the Secretary of State, as provided in said Chapter 177. The corporate name of the association was stated in the original Articles of Incorporation as the Federal Credit Union. But the name of the organization was changed by charter amendment in 1934 to The Mutual Credit Union. The par value of shares was fixed in the charter at $5 per share.

On May 4, 1959, the executive director of the Mississippi Employment Security Commission issued a certificate of registration to the appellant, which stated that the appellant had been registered as an employer under the Mississippi Employment Security Act, Chapter 176, Laws of 1936, as amended; and on May 8, 1959, a form letter was issued by the executive director on behalf of the Commission advising the appellant that the contribution rate to be paid by the appellant to the Employment Security Commission would be 2.7 per cent of the taxable payrolls of the appellant for the tax years 1957, 1958 and 1959.

On May 12, 1959, the appellant addressed a letter to the Mississippi Employment Security Commission, acknowledging receipt of a copy of the certificate of registration of the appellant as an employer under the Mississippi Employment Security Act, and also the formal notice that the appellant was liable for the payment of contributions under the Mississippi Employment Security Law at the rate of 2.7 per cent for the years mentioned above; and in its letter of that date, the appellant's treasurer protested the registration made by the Commission for reasons as follows: (1) That the Commission as a matter of policy had treated all Federal chartered credit unions as exempt employers, and the Federal chartered credit union which was serving employees of the Commission had not been registered under the act of assessed taxes, unless it had 'voluntarily' submitted to the act; (2) that the appellant, although state chartered, was chartered only to serve Federal government employees in Vicksburg and members of their immediate families, and if Federal credit unions were exempt from the provisions of the act the appellant should be exempt; (3) that the reasons for excluding Federal credit unions as a Federal agency from the provisions of the act were applicable to the exclusion of state credit unions under the state agency exemption; (4) that a credit union is organized for the sole purpose of promoting thrift among a group of people who have some community of interest, and there should be no discriminatory treatment of state-chartered credit unions. The appellant in its letter of protest requested a full scale hearing on the matter by the Commission.

On May 15, 1959, the executive director of the Mississippi Employment Security Commission, pursuant to the provisions of Section 14 of the Employment Security Law (Code, Secs. 7424), and the rules and regulations of the Commission, gave notice by certified mail to the appellant that unless it filed with the Commission, within fifteen days from that date, contribution and wage reports for the period beginning January 1, 1957, and ending March 31, 1959, it would be the duty of the executive director to determine the amount of the contributions due, if any, on the basis of such information as was readily available to him, and to assess the appellant with the amount of contributions so determined, to which there might be added as damages an amount equal to ten per cent thereof. The appellant failed to file with the Commission the contributions and wage reports referred to, within the time required by said notice, and thereupon the Executive Director, on the basis of information available to him, made a determination of the amount of contributions due by the appellant to the Commission on June 1, 1959, and assessed the appellant for contributions due for the period from January 1, 1957, through March 31, 1959, in the amount of $607.50, with interest thereon in the sum of $64.99, making a total of $672.49; and the executive director made demand upon the appellant for the amount stated. The executive director also advised the appellant that the assessment would become final at the expiration of fifteen days from that date, unless the appellant filed with the Commission a written protest and a petition for a hearing thereon.

Such protest was filed, and after due notice of the time and place of the hearing had been given to the appellant, the Commission at its meeting on Friday, September 18, 1959, heard and considered the appellant's protest. The appellant was represented by counsel and the testimony was taken on behalf of the respective parties. The Commission took the matter under advisement, and briefs were filed with the Commission; and on November 13, 1959, a final order was entered.

The Commission found that on the basis of the evidence submitted the employer did not have four or more employees during the year 1957, and that the assessment of contributions for that year should be revoked and cancelled. The Commission found that the employer did have four or more covered employees for the four quarters of 1958 and for the first quarter of 1959, and that the appellant was subject to registration and assessment of contributions under the Employment Security Law, at the rate of 2.7 per cent of the taxable payrolls for the tax year beginning January 1, 1958, and the quarter year ending March 31, 1959. It was therefore ordered by the Commission that the protest of the appellant be sustained with regard to the payment of any assessments for the four quarters of 1957, and that the assessment of contributions for the year 1957 be revoked and cancelled. It was further ordered that the protest be denied with respect to the four quarters of 1958 and the first quarter of 1959, and the rate of such contributions was fixed at 2.7 per cent of the taxable payrolls for the covered period. It was further ordered by the Commission that the amount of contributions due and payable by the employer for the period from January 1, 1958, through March 31, 1959, be fixed at $337.50, with interest to be added in the sum of $54.

From that order the appellant prosecuted an appeal by writ of certiorari to the Circuit Court of the First Judicial District of Hinds County. The cause was heard by the circuit court and a judgment was entered on February 15, 1960, affirming the order of the Mississippi Employment Security Commission. From that judgment the appellant has prosecuted this appeal.

The first point argued by the appellant's attorneys as ground for reversal of the judgment of the lower court is that the court erred in its holding that the tax exemption provisions of Section 5423, Miss.Code of 1942, Rec., as the section appeared in the Code at the time the judgment in this case was rendered, were not applicable to the contributions assessed against the appellant under the authority of the Mississippi Employment Security Law. It is argued that the holding of the trial judge was based upon the erroneous conclusion that the legislature, by the enactment of the Social Security Law, had effected an implied repeal of the tax exemption granted to state credit unions by said Code Section 5423.

But we think there was no error in the holding of the circuit court that the appellant was not exempt, by virtue of the provisions of said Code Section 5423, from payment of contributions under the Mississippi Employment Security Law.

Sections 5422 and 5423, Code of 1942, Rec., were enacted as a part of Chapter 177, General Laws of Mississippi 1924, and were brought forward as a part of Chapter 5 of Title 21, Code of 1942, Rec., same being the code chapter on state credit unions. The two sections have been amended by Chapter 185, Laws of 1960, which was enacted after the rendition of the judgment from which this appeal was taken. But we are not concerned here with the 1960 amendments.

Code Section 5422, prior to the 1960 amendments, provided for the payment of a graduated privilege license tax by each credit union, which was an annual tax to be paid to the sheriff and tax collector in the county in which the principal place of business of such credit union was...