State ex rel. Parsons v. Workmen's Compensation Exchange

• Citation: 81 P.2d 1101,59 Idaho 256
• Decision Date: 28 July 1938
• Docket Number: 6544
• Court: Idaho Supreme Court
• Parties: STATE, on the Relation of HARRY C. PARSONS, State Auditor, Respondent, v. WORKMEN'S COMPENSATION EXCHANGE, and POTLATCH FORESTS, INC., Appellants

81 P.2d 1101

59 Idaho 256

STATE, on the Relation of HARRY C. PARSONS, State Auditor, Respondent, v. WORKMEN'S COMPENSATION EXCHANGE, and POTLATCH FORESTS, INC., Appellants

No. 6544

Supreme Court of Idaho

July 28, 1938

WORKMEN'S COMPENSATION-PAYMENT OF $1,000 INTO STATE TREASURY IN CASE THERE ARE NO DEPENDENTS-CONSTITUTIONAL LAW.

1. The compensation statute providing for payment by employer of $1,000 into state treasury where there are no dependents of employee killed by accident in course of employment is not void as being a revenue measure which did not originate in House of Representatives, since payment of sum is "compensation" and not an excise or license tax. (I. C. A., sec. 43-1101, subd. 6 as amended by Sess. Laws, 1935, chap. 147; Const., art. 3 secs. 14, 16; art. 7, sec. 5.)

2. The compensation statute providing for payment by employer of $1,000 into state treasury where there are no dependents of deceased employee contemplates that compensation should be paid by the employer or his surety for every employee killed by accident while engaged in course of his employment, and where there are no dependents who can qualify within the definition of the statute, the state, as the sovereign or parens patriae, asserts its right to recover for the death of an employee. (I. C. A., sec. 43-1101, subd. 6, as amended by Sess. Laws, 1935, chap. 147.)

3. The compensation statute providing for payment by employer of $1,000 into state treasury where there are no dependents of employee killed by accident in course of employment is not invalid as being discriminatory in that it penalizes the employer who employs workmen who have no dependents. (I. C A., sec. 43-1101, subd. 6, as amended by Sess. Laws, 1935, chap. 147.)

4. The compensation statute providing for payment by employer of $1,000 into state treasury where there are no dependents of employee killed by accident in course of employment is not violative of the due process clause of the federal Constitution. (I. C. A., sec. 43-1101, subd. 6, as amended by Sess. Laws, 1935, chap. 147; U.S. C. A., Const., Amend. 14, sec. 1.)

APPEAL from order of the Industrial Accident Board.

Proceeding by State for compensation, under Workmen's Compensation Law, for death of John Anderson, an employee who left no dependents. Order awarding compensation to the state affirmed.

Order affirmed with costs to respondent.

Ralph S. Nelson, Spencer Nelson and J. R. Smead, for Appellants.

Section 43-1101, amended by Laws 1935, chapter 147, imposes a tax on the persons coming within the classification fixed by that statute. Payment is required to be made into the public treasury to defray the expense of government. Enforced contributions for the purpose of raising revenue are taxes. (Kinney, Law Dictionary, "Tax"; Bryant v. Lindsay, 96 N.J.L. 268, 110 A. 447; Yosemite Lumber Co. v. Industrial Acc. Com., 187 Cal. 774, 204 P. 226, 20 A. L. R. 994; People v. Yosemite Lbr. Co., 191 Cal. 267, 216 P. 39; School Dist. No. 1 v. Industrial Com., 66 Colo. 580, 185 P. 348.)

The classification made by a statute must be reasonable, based upon intrinsic consideration and facts pertaining to the class established. It must be natural in view of the facts to be considered in determining who shall be included in the classification. The classification made by sec. 43-1101, as amended, is neither natural, intrinsic, nor reasonable. (Crom v. Frahm, 33 Idaho 314, 193 P. 1013; Southern Ry. Co. v. Greene, 216 U.S. 400, 30 S.Ct. 287, 54 L.Ed. 536; In re Mallon, 16 Idaho 737, 102 P. 374, 22 L. R. A., N. S., 1123.)

The statute is violative of section 1 of the Fourteenth Amendment to the United States Constitution. It abridges the privileges and immunities of employers who furnish employment to workmen having no dependents, by attempting, by means of a tax, to penalize them, in the event of accidental death of such an employee, for having employed him. (In re Case, 20 Idaho 128, 116 P. 1037; In re Parrott, 1 F. 481, 6 Sawy. 349.)

J. W. Taylor, Attorney General, E. G. Elliott and R. W. Beckwith, Assistant Attorneys General, for Respondent.

A law raising money as a mere incident to its main purpose as for the purpose of paying expenses of administration of the law is not a revenue law. (Millar v. Roberts, 202 U.S. 429, 26 S.Ct. 674, 50 L.Ed. 1090; Twin Falls Canal Co. v. Foote, 192 F. 583; Chicago B. & Q. R. R. Co. v. School Dist. No. 1, 63 Colo. 159, 165 P. 260; Twin City Nat. Bank v. Nebeker, 167 U.S. 196, 17 S.Ct. 766, 42 L.Ed. 134; Evers v. Hudson, 36 Mont. 135, 92 P. 462, 35 L. R. A. 188.)

Legislature possess plenary power, except as such power may be limited or restricted by the Constitution. The payment required by section 43-1101, I. C. A., as amended by chapter 147 of the 1935 Session Laws, of the $ 1,000 into the Industrial Administration Fund is not a tax as contemplated by section 5 of article 7 of the Idaho Constitution. (State v. Nelson, 36 Idaho 713, 213 P. 358; In re Kessler, 26 Idaho 764, 146 P. 113, Ann. Cas. 1917A, 228, L. R. A. 1915D, 322.)

The limitations contained in the Fourteenth Amendment of the federal Constitution were not designed to limit or in any way interfere with the exercise of the state's police power, and workmen's compensation laws are the exercise of police powers of the states enacting them. (School Dist. No. 1 v. Industrial Com., 66 Colo. 580, 185 P. 348; New York Central R. R. Co. v. White, 243 U.S. 188, 37 S.Ct. 247, 61 L.Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 629.)

AILSHIE J. Holden, C. J., Budge, Givens, JJ., and MORGAN, J., concurring.

OPINION

AILSHIE, J.

John Anderson was an employee of the Potlatch Forests, Inc., and while engaged in course of his employment September 7, 1935, was struck by a falling tree and died September 9th. At the time of his death he had no dependents and no claim by anyone purporting to be a dependent has ever been made. Accordingly, at the expiration of a period of one year after the accident, as provided by sec. 43-1101, I. C. A. (as amended by chap. 147, 1935 Sess. Laws), the State of Idaho, on relation of the state auditor, filed a claim for the sum of $ 1,000 compensation, under the statute above cited. The facts were stipulated and thereupon the board entered an order directing the payment of $ 1,000 to the state treasurer for deposit in the Industrial Administration Fund. The employer and the surety have both appealed.

The appeal is predicated on the ground that the portion of subd. 6 of sec. 43-1101, as amended by chap. 147 of the 1935 Sess. Laws, reading as follows:

"In case . . . . no claim for compensation is made by a dependent of deceased employee and filed with the Industrial Accident Board within one year after the death or in case a claim is made and filed within such year and no dependency proven the employer shall pay into the State Treasury to be deposited in the Industrial Administration Fund the sum of $ 1,000.00",

is unconstitutional and void. The specific complaint made against the constitutionality of the foregoing provision of the statute, is that it violates section 5, article 7, of the state Constitution, relating to uniformity of taxation; and also that it violates section 1 of the Fourteenth Amendment to the Constitution of the United States. It is argued by appellant that the specific provision of the statute to which objection is made, in providing that $ 1,000 shall be paid into the state treasury in case there are no dependents, renders the act a revenue act; and consequently this part of the act must fail, because the compensation statute did not originate in the House of Representatives as required by section 14, article 3 of the Constitution, in regard to revenue measures; and that it is also unconstitutional, for the reason that the title to the act was insufficient to cover a revenue measure as required by section 16, article 3, Constitution.

It will be unnecessary to consider these latter aspects of the argument presented by appellants, for the reason as hereinafter stated, that we do not consider this provision of the act, either in part or as a whole, as a revenue act or as an act levying a tax. As we view this statute and understand the intent of the legislature, the provision in question is neither a license nor an excise tax. It seems clearly to be "compensation" as that term is employed and applied by the legislature in the Workmen's Compensation Law. (Pacific Employers' Ins. Co. v. Pillsbury, 14 F.Supp. 156.)

The statute, sec. 43-1101, supra, is divided into six subdivisions. The introductory part of the statute preceding the first subdivision, reads as follows:

"If death results from the injury within two years the employer or the surety shall pay to the person entitled to compensation, or, if there are none, then to the personal representative of the deceased employee, burial expenses not to exceed $ 200.00, and shall also pay to or for the following persons for the following periods, a weekly compensation equal to the following percentages of the deceased employee's average weekly wages as defined in Section 43-1118."

The first five subdivisions deal with different grades and classes of dependents and subdivision 6 provides for "two or more classes of persons entitled to compensation under this section and the apportionment of such compensation," etc.; and then follows the sentence above quoted. The statute does not limit the payment of compensation to "dependents"; it rather says that "the employer or the surety shall pay . . . . to or for the following persons for the following periods compensation." After enumerating the various classes of persons who may in any way be deemed dependents, it then provides that "in case no claim for compensation is made ...