State ex rel. Taylor v. Robinson

• Decision Date: 25 October 1938
• Docket Number: 6600
• Citation: 83 P.2d 983,59 Idaho 485
• Parties: STATE ex Rel. J. W. TAYLOR, Attorney General, Plaintiff, v. W. L. ROBINSON, G. W. SUPPIGER, and FRANK LANGLEY, Constituting and Being the INDUSTRIAL ACCIDENT BOARD OF THE STATE OF IDAHO, and MYRTLE P. ENKING, Treasurer of the State of Idaho, Defendants
• Court: Idaho Supreme Court

83 P.2d 983

59 Idaho 485

STATE ex Rel. J. W. TAYLOR, Attorney General, Plaintiff, v. W. L. ROBINSON, G. W. SUPPIGER, and FRANK LANGLEY, Constituting and Being the INDUSTRIAL ACCIDENT BOARD OF THE STATE OF IDAHO, and MYRTLE P. ENKING, Treasurer of the State of Idaho, Defendants

No. 6600

Supreme Court of Idaho

October 25, 1938

UNEMPLOYMENT COMPENSATION FUND-STATE TAX-PUBLIC MONEYS-TRUST FUNDS - CLAIMS AGAINST STATE - APPROVAL OF STATE BOARD OF EXAMINERS.

1. The Unemployment Compensation Fund created by excise taxes on employers in certain businesses and occupations, and maintained in co-operation with federal government constitutes "public moneys," and claims against the fund must be passed upon by the State Board of Examiners as provided for by Constitution, as against contentions that tax is collected from a limited class, and is not strictly a state tax, and that because federal government makes contributions it is a trust fund not under the board. (Sess Laws, 1935, 3d Ex. Sess., chap. 12; Const., art. 4, sec. 18.)

2. Under statute creating the Unemployment Compensation Fund by excise taxes on employers in certain businesses and providing for co-operation with the federal government to ameliorate unemployment, state has sufficient property interest, and, by reason of its declared and extended fraternal activities, a personal interest in seeing that the fund is collected and properly disbursed. (Sess. Laws, 1935, 3d Ex. Sess., chap 12; Const., art. 4, sec. 18.)

3. That State Board of Examiners has not skill and necessary help and office force to properly pass upon claims against Unemployment Compensation Fund would not justify dispensing with the necessity of the Board of Examiners passing on such claims, since, if change is desired remedy is with the people and not the courts. (Sess. Laws, 1935, 3d Ex. Sess., chap 12; Const., art. 4, sec. 18.)

Original application for writ of prohibition.

Original application for writ of prohibition to restrain defendants from making payments out of the Unemployment Compensation Fund of the State of Idaho without presentation to and approval thereof by the Board of Examiners under art. 4, sec. 18, Idaho Constitution. Permanent writ issued.

Judgment for plaintiff and permanent writ issued.

J. W. Taylor, Attorney General, and R. W. Beckwith, E. G. Elliott and Lawrence B. Quinn, Assistant Attorneys General, for Plaintiff.

All claims against the State of Idaho must be presented to and examined by the State Board of Examiners, and, if approved, paid upon warrants of the state auditor upon the State Treasury. (Art. 4, sec. 18, I. C.; secs. 65-901, 65-1101, 65-1103, 65-1111, 65-1201, 65-1203 and 65-2411, I. C. A.; State v. National Surety Co., 29 Idaho 670, 116 P. 1026, 2 A. L. R. 251; State v. Parsons, 57 Idaho 775, 69 P.2d 788; State v. Board of Education, 33 Idaho 415, 196 P. 201.)

The Unemployment Compensation Fund in the State Treasury is state moneys and payments therefrom can only be made by presenting claims therefor to the State Board of Examiners, and, if approved, paid by the state auditor's warrants drawn upon the State Treasury. (Chap. 12, 3d Extra. Sess., 1935, Sess. Laws of the State of Idaho, secs. 9 (a), (b), (c), (d), (e); 49 Stat. 620; 42 U.S.C. A., secs. 301 et seq., 1104 (Pub. Law No. 271, 74th Congress); Gillum v. Johnson, 7 Cal. (2d) 744, 62 P.2d 1037, 63 P.2d 810, 108 A. L. R. 595; Charles C. Steward Mach. Co. v. Davis, (Alabama, 1937) 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A. L. R. 1293, affd. 89 F.2d 207, certiorari granted 1937, 300 U.S. 652, 57 S.Ct. 673, 81 L.Ed. 863; Helvering v. Davis, 301 U.S. 619, 57 S.Ct. 904, 81 L.Ed. 1307, 109 A. L. R. 1319; State v. Board of Education, 33 Idaho 415, 196 P. 201; State v. Parsons, 57 Idaho 775, 69 P.2d 788.)

Vestal P. Coffin, for Defendants.

A trust fund in the custody of a state board or officer, in which the state does not have a property interest, is not subject to the provisions of section 18 of article 4 of the Constitution of Idaho, nor to the acts of the legislature pursuant thereto. (State v. State Board of Education, 33 Idaho 415, 196 P. 201.)

The Unemployment Compensation Fund, established by section 9 of the Unemployment Compensation Law, is a trust fund in which the state does not have a property interest and may be disbursed by the state treasurer upon proper warrants for the payment of benefits issued by the Industrial Accident Board. (Social Security Act, 49 U. S. Stat. 620; Title 42, chap. 7, U. S. Code; Unemployment Compensation Law, 1935 Sess. Laws, 3d Extra. Sess., chap. 12, as amended by chaps. 9, 183, 187 and 188, Sess. Laws, 1937; Charles C. Steward Machine Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A. L. R. 1293; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A. L. R. 1327.)

GIVENS, J. Holden, C. J., and Morgan, Ailshie, and Budge, JJ., concur.

OPINION

GIVENS, J.

Chapter 12, 1935 Session Laws, Third Extraordinary Session, page 20, provides, in cooperation with the Federal Government under 42 U.S.C. A., sec. 501 et seq., for so-called unemployment compensation, whereby employers in certain business and occupations in this state pay a graduated excise tax into the State Treasury which is thence turned over to the Federal Government, and where there is, as herein, cooperation between the two sovereignties, 90 per cent of the funds thus collected are returned to the state for compensation benefit payments, 10 per cent being retained by the Federal Government for expenses of administration (herein by the Industrial Accident Board and its appointees) of the state act, relieving the State from the same.

A comprehensive plan for the determination of payments is contained within the act and the Industrial Accident Board is authorized to withdraw from the unemployment trust fund with the Secretary of the Treasury of the United States Government such amounts not exceeding the amounts standing to the credit of the State therein, as the board deems necessary for the payment of current benefits, such withdrawals carried into the State Treasury to be used solely for the payment of benefits as determined by the unemployment officials under the jurisdiction of, and as approved by, the Industrial Accident Board.

In the case at bar the Attorney General contends the ensuing individual unemployment benefit claims against the fund must be approved by the State Board of Examiners, while the Industrial Accident Board takes the position that while in the custody of the state treasurer after return from the United States Treasury the unemployment compensation fund is, in effect, a trust fund in which the state has no property interest and that therefore any claim against the fund is not a "claim against the state" within the meaning of article 4, section 18, Idaho Constitution. Defendant's statement that "the question here presented for decision is whether the Unemployment Compensation Fund is a trust fund in which the State has no property interest, or merely public moneys belonging to the State in which it has the entire property interest," is not quite correct. The question is whether a claim against such fund is, under the above constitutional provision, a claim against the State.

Defendants rely largely on State v. State Board of Education, 33 Idaho 415, 196 P. 201, which held charges against the University of Idaho were not claims against the State within the meaning of the above constitutional provision. The court, however, therein so held on two grounds: First, that the State Board of Education was a constitutional corporation, succeeding by the Constitution to all the rights and privileges of the Board of Regents brought into existence at the time the University was established by the Territorial Legislature prior to the adoption of the Constitution, and that as such constitutional corporation, therefore the highest form of juristic person known to the law and of independent authority, had its own treasurer and fiscal set-up and thus within the scope of its authority in regard thereto was of equal dignity with the State, the State Board of Examiners, and not subservient thereto; that to require such claims to go before the State Board of Examiners, would place the State Board of Examiners in control of, in effect, a coordinate constitutional board; and second, that the endowment funds were trust funds. There is nothing in State v. State Board of Education, supra, which indicates the court would have decided as it did merely on the ground the funds there involved were trust funds, and if the State Board of Education had not been a constitutional board. The Industrial Accident Board is a statutory, not a constitutional body. (Sec. 43-1301, I. C. A.)

The language of the statute herein does not in express terms provide that payments should or should not go before the State Board of Examiners. It does provide the funds shall be placed in the State Treasury, and no additional bond is required of the state treasurer in connection therewith, whence it would appear the legislature considered them as public funds and that the treasurer's general bond would be liable therefor (sec. 57-807, I. C. A.), otherwise they might be unprotected.

It is argued because the tax is collected from a limited class it is not strictly a state tax and not being derived as a general or public tax, is, therefore, not public monies and constitutes only a proprietary trust fund so private in its nature that it could not be the basis for claims against the state. There are, however, numerous taxes limited as to those liable for the payment thereof, which have always been considered state funds and require claims against the same to be passed upon by the State...