Union-May-Stern Co. v. Industrial Commission of Mo.

• Decision Date: 06 December 1954
• Docket Number: No. 22098,UNION-MAY-STERN,22098
• Parties: COMPANY, Appellant, v. INDUSTRIAL COMMISSION OF MISSOURI, Division of Employment Security, and Carson-Union-May-Stern Company, a Corporation, Respondents.
• Court: Missouri Court of Appeals

Page 766

273 S.W.2d 766

UNION-MAY-STERN COMPANY, Appellant, v. INDUSTRIAL COMMISSION OF MISSOURI, Division of Employment Security, and Carson-Union-May-Stern Company, a Corporation, Respondents.

No. 22098.

Kansas City Court of Appeals, Missouri.

Dec. 6, 1954.

Burnett, Stern & Liberman, St. Louis, for appellant.

Lloyd G. Poole, George Schwartz, Howard L. McFadden, Jefferson City, for respondent Division of Employment Security Industrial Commission of Missouri. Max Sigaloff, for Carson-Union-May-Stern Co.

BROADDUS, Judge.

This is an appeal from the judgment of the Circuit Court of Cole County affirming a decision of the Industrial Commission. The question to be determined is whether the respondent, Carson-Union-May-Stern Company is a 'successor' to appellant, Union-May-Stern Company, within the provisions of the Missouri Employment Security Law, Sect. 288.110, V.A.M.S.

Here is how the question arose. On November 17, 1952, the Division of Employment Security notified appellant, Union-May-Stern Company, that its account with the Division was being transferred as of May 24, 1952, to the respondent, Carson-Union-May-Stern Company, as successor, and that its successor, Carson-Union-May-Stern Company, should stand in the position of appellant, in all respects, under the provisions of the Missouri Employment Security Law, V.A.M.S. Sec. 288.010 et seq. At the time of the transfer the contribution rate of appellant was 0.2%.

On the same date, november 17, 1952, the Division notified appellant that it had established liability as a new employer under the Act as it was subject to the Federal Unemployment Tax Act, 26 U.S.C.A. Sec. 1600 et seq. for the current year. Sect. 288.030, subd. 14(7), V.A.M.S. The contribution rate as a new employer was established at 2.7%.

On November 18, 1952, appellant protested, requesting a hearing and reconsideration. A hearing was held before an Appeals Tribunal of the Division of Employment Security in St. Louis on March 24, 1953. On April 14, 1953, the Appeals Tribunal entered its decision holding that respondent, Carson-Union-May-Stern Company, should stand in the position of its predecessor, the appellant Union-May-Stern Company, in all respects under the provisions of Sect. 288.110, V.A.M.S. Appellant made timely application for review to the Industrial Commission. The Commission denied appellant's application. Whereupon appellant presented its Petition for Review to the court below. The latter, as we have stated, affirmed the decision of the Industrial Commission.

The findings of fact made by the Appeals Tribunal (Honorable Peter A. May) are supported by the record. They are:

'For a number of a years prior to May 23, 1952, Union-May-Stern Company, a corporation, the appellant, was engaged in the retail furniture business in St. Louis, Missouri. It sold both new and used house furnishings. Most of the furniture was sold on the installment plan. The corporation had three stores and a warehouse. Its office and one of its stores were located at Twelfth & Olive Streets, in the City of St. Louis, Missouri. J. D. Carson Company, Inc., hereinafter referred to as the Carson Co., was engaged in a similar business at 1016 Olive Street, St. Louis, Missouri.

'On May 23, 1952, the Carson Co. purchased from the appellant its good will, all of its fixtures and furniture, and its stock of house furnishings. The Carson Co. also assumed leases which the appellant had on buildings which it occupied. The Carson Co. was permitted to use the name 'Carson-Union-May-Stern'. The assets transferred were valued at approximately $700,000. The appellant retained its accounts receivable valued at $1,800,000; insurance policies valued at $200,000; stocks and bonds of other corporations valued at $500,000; and from $200,000 to $300,000 in cash.

'Immediately prior to the sale the appellant had from 280 to 300 workers. It retained 60 of these workers and used them in collecting its accounts receivable. The appellant has not sold any furniture since May 23, 1952, and has not financed any furniture purchases. At the time of the hearing the accounts receivable had been reduced to about $300,000. The number of employees had dropped to 20. The Carson Co. offered work to all of the employees not retained by the appellant, and all but about 35 accepted the offer. Immediately after the transfer the Carson Co. moved its office to the store at Twelfth & Olive Streets. It continued the appellant's retail furniture business without without interruption.

'The Referee finds that the Carson-Union-May-Stern Company acquired substantially all of the business of Union-May-Stern Company on May 23, 1952, and that immediately after such a change the business of the predecessor was continued without interruption by the successor. The appellant was engaged in the business of selling house furnishings at retail and financing the purchases. This business was acquired by the Carson Co. The fact that the assets retained by the appellant exceeded those transferred is not controlling. These assets, including the accounts receivable, were not an essential part of the business and would not have been of particular value to the purchaser in the continuation of the business.'

The material part of Section 288.110, is as follows:

'Any individual, type of organization or employing unit which has acquired substantially all of the business of an employer, excepting in any such case any assets retained by such employer incident to the liquidation of his obligations, and in respect to which the division finds that immediately after such change such business of the predecessor employer is continued without interruption solely by the successor, shall stand in the position of such predecessor employer in all respects, including the predecessor's separate account, actual contribution and benefit experience, annual payrolls, and liability for current or delinquent contributions, interest and penalties.'

The phrase 'substantially all of the business' was not in the section pertaining to transfers of accounts prior to July 1951. The transfer section prior to that date read: 'Any individual, firm, corporation or employing unit which acquires the organization, trade, or business, or all of the assets thereof, of an employer * * *.' R.S.1949, Sec. 288.060.

The rules governing the scope of judicial review in cases of this sort are the same as those applicable in workmen's compensation cases. Wood v. Wagner Electric Corporation, 355 Mo. 670, 197 S.W.2d 647; Meyer v. Industrial Commission, 240 Mo.App. 1022, 223 S.W.2d 835. In the latter case the St. Louis Court of Appeals stated, loc. cit. 839:

'It was stated by this court in Moore v. International Shoe Co., Mo.App., 213 S.W.2d 215, 220, that the court upon review '* * * is authorized to determine, upon the whole record, whether the Industrial Commission could reasonably have made its findings and reached its result. * * * This does not mean that we are to arrive at our conclusion solely upon a review of the whole evidence and with a total disregard of the fact that the Commission made its final award in favor of the employee, and thereby substitute our judgment on the evidence for that of the administrative tribunal. It is our duty to decide from the whole of the evidence whether the Commission could have reasonably found in favor of the employee as it did. We are not to set aside that finding unless it was clearly contrary to the overwhelming weight of the evidence.' Williams v. International Shoe Co., Mo.App., 213 S.W.2d 657. These cited cases deal with Workmen's Compensation but the same rule applies to the review of Unemployment Compensation cases as the Constitution of Missouri, 1945, Art. V, Sec. 22, Mo. R.S.A., is applicable to both.'

The Court also reaffirmed the rule that where the triers of fact have reached one of two possible conclusions from the evidence, the Court may not substitute its contrary conclusion even if it can be said that such conclusion might have been reasonably reached.

Based chiefly upon the fact that appellant retained its accounts receivable it contends that: 'The assets retained by appellant were substantial in amount and nature. If a greater portion is retained by the predecessor than is acquired by the successor, how can it reasonably be argued that the (purported) successor acquired 'substantially all of the business' of appellant?' Such an argument is based upon the assumption that the words 'assets' and 'business', as used in the section of the statute under discussion, have the same meaning. If the Legislature had intended that the acquisition of 'substantially all the assets' would be the guide as to when transfers of accounts should occur, it would have plainly so indicated by using such words. By eliminating in 1951 the phrase 'acquires the organization, trade, or business, or all of the assets thereof' and substituting therefore the phrase, 'acquired substantially all of the business', it is apparent that the Legislature no longer desired that such a phrase be used as the test. Under such circumstances, we do not think it can be reasonably argued that a transfer of account will occur only when there is an acquisition of substantially all the assets.

What was the business of appellant? Was it a life insurance...