Town of Kewanna Water Works v. Indiana Employment Sec. Bd.

Decision Date09 January 1961
Docket NumberNo. 2,No. 19156,19156,2
Citation171 N.E.2d 262,131 Ind.App. 400
PartiesTOWN OF KEWANNA WATER WORKS, Town of English Municipal Water Works, Appellants, v. INDIANA EMPLOYMENT SECURITY BOARD and Douglas J. Morris, Liability Referee, Appellees
CourtIndiana Appellate Court

Donald E. Bowen, Bowen, Kivett, Northam & Clancy, Indianapolis, Howard T. Batman, Marshall, Batman & Day, Terre Haute, Kenneth J. Luckett, English, for appellants.

Edwin K. Steers, Atty. Gen., C. B. McCuiston, Asst. Atty. Gen., Keith Campbell, Deputy Atty. Gen., for appellees.

BIERLY, Judge.

The Town of Kewanna Water Works of Kewanna and the Town of English Municipal Water Works of English, both in Indiana, appellants herein perfected this appeal from an adverse decision rendered by one Honorable Douglas J. Morris, Liability Referee, as representing the Indiana Employment Security Board. The holding of the Referee, as objected to by he appellants, was to the effect that the employees of appellants were subject to the Indiana Employment Security Act, and that services performed by the employees during second quarter of 1959 came within the purview of said Act requiring contributions to Employment Security Fund.

The Director of the Employment Security Division notified appellant, Town of Kewanna Water Works, on July 30, 1959, that an assessment had been levied upon its payroll of $405 for said second quarter in the sum of $12.08 representing contributions, interest and penalty alleged due and unpaid. Furthermore, the said Director notified the Town of English Municipal Water Works on September 11, 1959, that an assessment had been levied upon its payroll of $874 for said second quarter in the sum of $26.20 representing contribution, interest and penalty alleged due and unpaid. Both appellants filed protests against said assessments.

As grounds for said protests, appellant, Town of Kewanna Water Works, alleged that it has employed only one half time employee, while in its protest, Town of English Municipal Water Works alleged it has employed only two employees. Both appellants asserted they were not within the purview of the Act.

The appellants--protestants--maintained that the Employment Security Act as amended by Section 803, subsection (t) does not include a municipally owned public utility liable to come under the provisions of said Act, unless said utility has in its employ four or more employees. Each of said appellants requested a hearing. The protest of each appellant challenges the construction of the statutes as applied and invoked by the Director in rendering the assessments in question as heretofore set out. Section 701 of the Act (Burns 1959 Suppl. 52-1531); Acts 1947, Ch. 208, Sec. 701, p. 673; 1955, Ch. 317, Sec. 2, p. 971; also Sec. 801 of the Act (Burns 1951, Repl. 52-1532); Acts 1947, Ch. 208, Sec. 801, p. 673; also Sec. 803 and 803(t) of the Act (Burns 1959 Suppl. 52-1532b); Acts 1947, Ch. 208, Sec. 803, p. 673; 1951, Ch. 295, Sec. 4, p. 955; 1957, Ch. 299, Sec. 13, p. 795; 1959, Ch. 305, Sec. 1, p. 769.

The decision of the Liability Referee was to the effect that the amending Act of 1959 embraced municipal utilities employing fewer than four employees, and thus the appellants--protestants--are subject to the provisions of the Act and thereby requiring contributions by the appellants into the fund.

The paramount issue involved in this appeal is the interpretation of Sec. 801(a) and Sec. 803(t) of the Indiana Employment Security Act. The controversial question arose over the meaning of Chapter 305 of the Acts of 1959 more particularly as to whether the amendment thereto required contributions from municipally owned public utilities employing less than four persons.

A careful search fails to disclose any decision by an appellate tribunal in reference to the interpretation of this amendment.

In the construction of statutes, this court is bound by those definitions which are set out in the act and in this particular amendment, unless it appears that they are inconsistent or are repugnant to the manifest intention of the Legislature.

In construing an Act of the Legislature, its intention from a consideration of the Act as a whole will prevail over the literal meaning of the terms used therein. Stated differently it appears that the spirit or intention of the law prevails over the letter thereof. Brown v. Grzeskowiak, 1951, 230 Ind. 110, 101 N.E.2d 639, 102 N.E.2d 372; Combs, et al. v. Cook, 1958, 238 Ind. 392, 151 N.E.2d 144. (Numerous other cases may be cited.) It likewise has been held that in a construction of a statute, the important object is to seek, determine and carry out the purpose and intent of the Legislature, and in order to determine that aim, the language used should first be considered in its literal and ordinary signification, and, if by giving the words used such a signification, the meaning of the whole instrument is rendered doubtful, or is made to lead to contradictions or absured results, the intent, as collected from the whole instrument, must prevail over the literal import of the terms and control the strict letter of the law. Decatur Twp. v. Board of Com'rs. of Marion Co., 1942, 111 Ind.App. 198, 39 N.E.2d 479. Northern Indiana R. Co. v. Lincoln Nat. Bank, 1910, 47 Ind.App. 98, 92 N.E. 384. (Other cases may be cited.)

It has likewise been held that the rule of construction according to the spirit of the law is especially applicable where adherence to the letter of the law would lead to injustice, absurdity, or contradictory provisions. City of Indianapolis v. Evans, 1940, 216 Ind. 555, 24 N.E.2d 776; Peoples Trust & Savings Bank v. Hennessey, 1926, 106 Ind.App. 257, 153 N.E. 507.

Furthermore, we conclude that in the interpretation of statutes and their meaning, it is imperative that the interpreter does not twist words so as to express what he concludes should have been expressed, also, when a statute is clear and unambiguous, a court has an imperative duty not to substitute or change its meaning.

It appears that Section 803, subsection (a) of the 1959 Amendatory Act (Burns 52-1532b) was added for the sole purpose of including municipally owned public utilities previously not subject to the Employment Security Act. The amendment inserted the words 'other than service performed in the employ of a municipally owned public utility as hereinafter defined' in subsection (t) which reads:

'A 'municipally owned public utility' means a public utility, including, but not limited to, any gas, electric, water, heat and fuel, transportation, filtration and sewage disposal works, plant, or system, operated wholly or partly from earnings or revenues and which is owned, managed, operated or controlled by a political subdivision or by a body politic or by a public entity or by any public body or by any instrumentality of any of them; the phrase is intended to include all public utilities other than those privately owned and operated; the phrase includes any public utility owned or operated under the terms of a trusteeship for the benefit of any political subdivision or body politic or public body or public entity or the residents thereof. An 'employee' of a municipally owned public utility includes any natural person hired as an employee of a municipally owned public utility and it includes foremen, supervisors, and superintendents and their assistants but it excludes executives and independent contractors; all employees of any municipally owned public utility shall be entitled to receive unemployment compensation benefits to the same extent as any employee of a private employer; each such municipally owned public utility shall be subject to this act [§§ 52-1525-52-1563b] as an employer and shall pay all taxes and contributions established, levied and assessed pursuant to this act or any other act, state or federal, as may be necessary to qualify the employees thereof for unemployment compensation benefits. The Indiana employment security division, its board, director, officers and subordinates, shall have the same authority and duty in regard to municipally owned public utilities and their employees as it and they have to private employers and their employees.'

(Out emphasis.)

Appellees' interpretation is to the effect that Subsection (t) means that all employees of a municipally owned public utility are subject to the provisions of the Indiana Employment Security Act regardless of the number of employees.

As we have heretofore stated by the terms of the Act to which the 1959 Act was amendatory, private employers were not required to come within the purview of the Employment Security Act unless the employer had four or more employees.

It appears to us that Subsection (t) as so stated was not intended to set off the municipally owned public utility as an especial exception to the Act, but rather the Legislature had for its purpose in enacting Subsection (t) adding municipally owned public utilities to that category of organizations set forth in the original Employment Security Act and on a similar basis as relating to employers and employees.

On the other hand the appellees argue that the words 'all' and 'any' as used in this Subsection (t) entitles any and all employees irrespective of number of a municipally owned public utility to receive unemployment compensation and that it is obligatory that contributions be collected and reported quarterly as pursuant to said Act for private employers coming thereunder having four or more employees. In support of this contention, appellees cite the Liability Referee interpretation of the words 'all' and 'any' as follows:

'The indefinite...

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