Sisk v. Arizona Ice & Cold Storage Co.

• Decision Date: 27 September 1943
• Docket Number: Civil 4587
• Citation: 141 P.2d 395,60 Ariz. 496
• Parties: DEAN A. SISK, ROBERT D. KENDALL and JOHN M. SAKRISON, as members of and constituting the EMPLOYMENT SECURITY COMMISSION OF ARIZONA, Appellants, v. ARIZONA ICE & COLD STORAGE COMPANY, a corporation, Appellee
• Court: Arizona Supreme Court

141 P.2d 395

60 Ariz. 496

DEAN A. SISK, ROBERT D. KENDALL and JOHN M. SAKRISON, as members of and constituting the EMPLOYMENT SECURITY COMMISSION OF ARIZONA, Appellants, v. ARIZONA ICE & COLD STORAGE COMPANY, a corporation, Appellee

Civil No. 4587

Supreme Court of Arizona

September 27, 1943

APPEAL from a judgment of the Superior Court of the County of Pima. Wm. G. Hall, Judge. Reversed and remanded.

Mr Arthur M. Davis, for Appellants.

Messrs Conner & Jones, for Appellee.

OPINION

ROSS, J.

The appellee is a corporation organized under the laws of Arizona with its principal place of business located in Tucson, Pima County. It is engaged in the business of manufacturing ice and selling it to the public. Two-thirds of its products it disposes of directly to the custom and the other one-third reaches the custom through persons selected and employed by it to deliver its products and collect the price therefor from the custom.

The Employment Security Act of Arizona, Article 10 (sections 56-1001 to 56-1022) Arizona Code 1939, as amended by Chapter 124, Session Laws of 1941, was enacted under the police powers of the state and provides "for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own." Section 56-1001, as amended by section 1, Chapter 124 supra. Under the act every employer of three or more persons (with exceptions not necessary to state) is required to pay contributions on such persons' wages into the reserve fund for use during periods of unemployment. The appellee paid to the commission contributions on the sales and deliveries of ice made directly to the custom by itself and its agents but refused to make like payments on the other sales and deliveries, contending that the retail drivers were not its employees and not under its control or direction.

The Employment Security Commission of Arizona, under section 56-1011, as amended by section 11(b) (2), Chapter 124, supra, upon its own motion, after notice and hearing, determined that the appellee corporation was an employer within the terms of the act, that the services were for it and in connection with its business and constituted it an employing unit, and that it should make contributions on all wages earned by the retail drivers from and after January 1, 1936.

From this determination the corporation appealed to the Superior Court of Pima County and after hearing upon the record the court decided that the retail drivers of the corporation "are not employees" within the meaning of the Employment Security Act and that no contributions are due or payable by it in connection with the operations of such retail drivers.

The commission has appealed from such decision, contending, of course, that the facts show the corporation to be an employing unit as defined by the act and liable for contributions on the wages of the retail drivers. This is the question that we are to decide.

Most of the states (38 or more) have acts similar to ours. Many of them have been construed but the constructions have not always been in agreement. They all recognize, however, the legislation to be in the interests and for the security of the "worker and his family." It is an effort to stabilize employment and to secure to the workman and his family an opportunity to have and enjoy the common and ordinary comforts of life during periods of depression and unemployment. The legislature, to assist in the accomplishment of that very laudable object, has provided that certain employers should contribute a percentage on the wages paid by them into a fund, and the question is, is the appellee corporation under the law and the facts required to make such contribution.

We are to determine (1) whether the retail dealers in ice performed "services for wages" for appellee within the meaning of section 56-1002, as amended by section 2(i) (1), Chapter 124, supra, which provides that

"'Employment' means any service... including service in interstate commerce, performed for wages or under any contract for hire, written or oral, express or implied";

and (2) whether if such retail dealers did perform "service for wages or under contracts of hire" nevertheless they are within the provisions of subdivision (i) (5) (A), (B) and (C) of said amended section 56-1002. Such subdivision reads as follows:

"(5) services performed by an individual for wages or under any contract of hire shall be deemed to be employment subject to this act unless and until it is shown to the satisfaction of the commission that:

"(A) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of hire and in fact; and

"(B) such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

"(C) such individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the contr a ct of service,"

The framers of this legislation evidently were familiar with the laws in the field occupied by the laboring man and the problems pertaining thereto. While the definitions therein show that before the employer can be required to contribute to the reserve fund there must exist some privity of contract or employment relationship, it quite clearly appears that the relationship need not be that of master and servant or employer and employee or principal and agent.

In Creameries of America v. Industrial Commission, 98 Utah 571, 102 P.2d 300, 302, the court, in referring to the law of that state, which is the same as our (A), (B) and (C) above, said:

"From the above provisions it seems clear to us that the legislature has endeavored to define by the Act itself a classification of individuals entitled to unemployment benefits. Hence, the statutory definition, rather than any common law concepts, if differing therefrom, govern -- insofar as they are applicable. The fact that neither the term 'employee' nor the term 'independent contractor' is used anywhere in the Unemployment Compensation Act is itself indicative that the legislature did not intend to use the relationships of 'independent contractor' or 'employer-employee,' as defined by the common law, as the criteria to determine who are entitled to benefits under the Unemployment Compensation Act. The word 'individual' is used throughout the Act to refer to the person seeking unemployment benefits. While the terms 'employer' and 'employing unit' are used, they are specifically defined by the Act so that they have a distinct meaning which may or may not coincide with the ordinary conception of 'employer.' Where words are defined in a particular statute, a nd it is clear that the legislature intended to give to such words a different meaning than the one generally and ordinarily given to such words, the statutory definition is the one to be applied....

"We adhere to our previous decision to the effect that whether applicant Foss is entitled to unemployment benefits must be determined from the tests laid down in the Unemployment Compensation Act, rather than from any common law concepts of master and servant. The first question to be determined, as hereinbefore stated, is whether the applicant 'performed services for wages' for the plaintiff." See, also, Unemployment Compensation Comm. v. National Life Ins. Co., 219 N.C. 576, 14 S.E.2d 689; Rahoutis v. Unemployment Compensation Comm., Or., 136 P.2d 426.

It appears that the services must be for wages. The contribution to be paid is based on the wages and consists of a percentage thereof. It is possible to contend the retail dealers were not paid wages, that therefore there is no basis upon which to compute contributions. It is apparent that their compensation for delivering the ice to the custom was to consist of the difference between what the appellee charged them for it and what they received from the custom, and the question is whether the legislative intent was that such remuneration should be classified as wages in construing the terms of the act. Creameries of America v. Industrial Commission, supra. Section 56-1002, as amended by section 2(n), Chapter 124, supra, reads as follows:

"(n) 'Wages' means all remuneration for services from whatever source including commission and bonuses and the cash value of all remuneration in any medium other than cash. Gratuities customarily received by an individual in the course of his work from persons other than his employing unit shall be treated as wages received from his employing unit. The reasonable cash value of remuneration in any medium other than cash, and the reasonable amount of gratuities, shall be estimated and determined in accordance with rules prescribed by the commission;...."

This definition of wages is broad enough to cover the situation here. "'Wages' means all remuneration for services from whatever source...." After this omnibus clause, and to reach and cover devices invented to defeat its intent, the statute specifically defines...