Shelton Hotel Co., Inc. v. Bates

• Decision Date: 10 July 1940
• Docket Number: 27979.
• Citation: 104 P.2d 478,4 Wn.2d 498
• Parties: SHELTON HOTEL CO., Inc., v. BATES, Commissioner of Unemployment Compensation and Placement of Washington.
• Court: Washington Supreme Court

104 P.2d 478

4 Wn.2d 498

SHELTON HOTEL CO., Inc., v. BATES, Commissioner of Unemployment Compensation and Placement of Washington.

No. 27979.

Supreme Court of Washington

July 10, 1940

Department 2.

Action by the Shelton Hotel Company, Inc., against Jack E. Bates Commissioner of Unemployment Compensation and Placement of the state of Washington, to obtain a judgment declaratory of the plaintiff's rights, status, and legal relations under the Unemployment Compensation Act, Laws 1937, p. 574, as amended by Laws 1939, p. 818. From a judgment for the plaintiff, the defendant appeals.

Reversed with instructions.

Appeal from Superior Court, Thurston County; D. F. Wright, judge.

G. W Hamilton, Atty. Gen., and Lyle L. Iversen and William J. Millard, Jr., both of Olympia, for appellant.

Neal, Brodie & Trullinger, of Olympia, for respondent.

JEFFERS Justice.

This action was instituted by the Shelton Hotel Company, Inc., against Jack E. Bates, Commissioner of Unemployment Compensation and Placement, under the Declaratory Judgment Act, Rem.Rev.Stat.Supp. §§ 784-1 to 784-17, to obtain a judgment declaratory of its rights, status and legal relations under the Unemployment Compensation Act, Rem.Rev.Stat.Supp. §§ 9998-101 to 9998-124; Laws 1937, chap. 162, page 574, as amended by Laws 1939, chap. 214, page 818, and particularly to obtain a judgment declaring the act last above mentioned to be not applicable to plaintiff for the calendar year of 1940, and for a further declaration that plaintiff is entitled to terminate coverage under the act.

The complaint alleges, in substance, that plaintiff is engaged in the hotel business in Shelton, Washington, and that during the years 1937 and 1938, plaintiff had in its employ eight or more persons for twenty different weeks, and therefore became an employer under Laws of 1937, chapter 162, page 609, § 19nf). The complaint further alleges that during the year 1939, plaintiff regularly employed seven persons during each week, and there were no twenty weeks in which eight or more persons were in plaintiff's employment, and that also during each quarter of 1939, plaintiff's total payroll aggregated more than one hundred dollars; that pursuant to Laws of 1937, chapter 162, § 8(b), as amended by Laws of 1939, chapter 214, page 831, § 6, plaintiff, prior to January 15, 1940, made written application to the commissioner for termination of coverage for the year 1940, based upon the showing that during no twenty weeks of the previous calendar year, or 1939, did plaintiff have eight or more persons in employment; that the commissioner declined to terminate the coverage of plaintiff, for the reason that plaintiff had employed one or more persons during more than twenty weeks of the preceding calendar year, and had an aggregate payroll in excess of one hundred dollars during each quarter of the preceding calendar year.

Defendant commissioner demurred to the complaint, on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was overruled by the trial court, whereupon defendant elected to stand on his demurrer, and on March 11, 1940, a judgment for plaintiff was entered, from which judgment we quote: 'It is hereby ordered, adjudged and decreed that the provisions of chapter 162, Laws of Washington, 1937, as amended by chapter 214, Laws of Washington, 1939, be and they are hereby adjudged as not applicable to the above plaintiff for the year 1940, and that the said plaintiff ceased to be subject to said act as of the first day of January, 1940.

'It is further ordered, adjudged and decreed that the defendant be and he is hereby directed to accept and grant the plaintiff's termination of coverage under the said unemployment compensation act and to cease from attempting to enforce any of the provisions of the said unemployment compensation law against plaintiff so long as the plaintiff does not have in his employ in any twenty different weeks of a calendar year, eight or more employees.'

The commissioner has appealed from the judgment entered.

Appellant claims the court erred in overruling his demurrer; in failing to apply the statute respecting termination of coverage in accordance with its terms; in adjudicating that the act was not applicable to respondent for the year 1940; and in directing appellant to accept respondent's application for termination of coverage.

It is apparent that the question here presented is whether or not respondent was entitled, under the act, to a termination of coverage.

Respondent contends that it must have been the intent of the legislature to provide that termination of coverage could be effected whenever the number of employees in any twenty different weeks of the preceding calendar year became less than eight. In other words, the effect of respondent's contention would be to change § 8(b), chapter 162, Laws of 1937, as amended by§ 6, Chapter 214, Laws of 1939, which now provides: 'Except as otherwise provided in sub-section (c) of this section, an employing unit shall cease to be an employer subject to this act only as of the 1st day of January of any calendar year, if it files with the commissioner prior to the 15th day of January of such year, a written application for termination of coverage, and he finds that there were no twenty different weeks within the preceding calendar year, within which such employing unit employed one or more individuals in employment subject to this act or that within said year total aggregate wages in excess of one hundred dollars did not become payable by such employing unit during any one calendar quarter,' (Italics ours.)--so that where the section now reads 'one or more,' it would read 'eight or more.'

Section 8(b), chapter 162, Laws of 1937, which § 6, chapter 214, Laws of 1939, amended, also contained the phrase one or more, in reference to termination of coverage.

Section 19(f)(1), chapter 162, Laws of 1937, defines 'employer' as follows: 'Any employing unit which in each of twenty different weeks within either the current or the preceding calendar year (whether or not such weeks are or were consecutive) has or had in employment eight or more individuals (not necessarily simultaneously and irrespective of whether the same individuals are or were employed in each such week.)' (Italics ours.)

For a review of the legislative history of § 19, chapter 162, Laws of 1937, see Ernst v. Kootros, 196 Wash. 138, 82 P.2d 126.

It will be noted, then, that by § 19(f)(1), chapter 162, Laws of 1937, an employer who had in employment eight or more individuals during the periods named in the section, came under the act, and by the provisions of § 8(b) continued to be under the act, if it appeared that there were no twenty different weeks within the preceding calendar year when the employer did not have in employment one or more individuals in employment subject to this act.

The legislature of 1939 attempted to amend § 19(f), chapter 162, page 609, Laws of 1937, by § 16, chapter 214, page 853 Laws of 1939, to read as follows: 'Any employing unit which in each of twenty different weeks within either the current or the preceding calendar year (whether or not such weeks are or were consecutive) has or had in employment one or more individuals (not necessarily simultaneously and irrespective of whether the same individuals are or were employed in each such week) and for whose employment by such employing unit during such year total wages of not less than one hundred dollars became payable during one calendar quarter,' but when chapter 214 came Before the governor for his approval, the above section was vetoed.

Section 8(b), chapter 162, Laws of 1937, was amended by § 6, chapter 214, Laws of 1939, but the provision one or more, contained in the 1937 act was not changed by the 1939 amendment, and the only change in this section was the addition of the following words: '* * * or that within said year total aggregate wages in excess of one hundred dollars did not become payable by such employing unit during any one calendar quarter.'

It will again be noticed that after the 1939 amendment and the veto of that part of § 16, chapter 214, hereinBefore referred to, the act provided, as it did in 1937, compulsory coverage for employing units which in each of twenty different weeks within the preceding calendar year had in employment eight or more individuals, and provided for termination of coverage when there were no twenty different weeks within the preceding calendar year within which an employing unit employed one or more individuals, and did not have a quarterly payroll in excess of one hundred dollars.

Section 19(f), chapter 162, Laws of 1937, which is still in full force and effect because of the veto by the governor of portions of § 16, chapter 214, Laws of 1939, further defines an employer as: 'Any employing unit which, having become an employer under paragraph (1), (2), (3), or (4), has not, under section 8, ceased to be an employer subject to this act.'

It is appellant's contention that under the plain wording of the statute, respondent, having had in its employment and subject to this act one or more individuals during twenty different weeks for the calendar year 1939, and having paid aggregate wages in excess of one hundred dollars during each quarter of such year, continues to be an employer and subject to the act for 1940, and not entitled to a termination of coverage for 1940, even though respondent may not have had eight persons in employment, subject to the act, for twenty different weeks during 1939.

We are of the opinion the facts as set up in the complaint present a situation which brings the case within the Declaratory Judgment Act. Acme Finance Co. v. Huse, 192...