157 P.2d 547 | Idaho | 1945
Appellant seeks to recover refund of payments made to the Unemployment Compensation Division for unemployment compensation contributions on wages paid for services of persons engaged by him in packing, processing and marketing farm products. For a number of months, in the years 1941, 1942 and 1943, after the effective date of Chap. 182, 1941 Sess. Laws, appellant paid contributions to the State under the Unemployment Compensation Law. Upon appellant's application for refund, a hearing was had before the Industrial Accident Board, as administrator of the Unemployment Compensation Law. The board made findings of fact and rulings of law, and entered an order denying appellant's application, and dismissed the same, from which order this appeal is prosecuted.
The findings and rulings of the board which reflect the material facts submitted by the respective parties sufficient to a proper understanding of the questions involved herein are, as follows:
"That at or about the time of commencing to pay contributions under said Act as aforesaid, the applicant filed a protest * * *
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"The field run produce from the applicant's farming operations and the field run produce owned by other farms, as hereinbefore stated, were intermingled and went through the process together.
"In the case of potatoes the produce arrived at the sheds covered with dirt and intermingled with clods, vines, and sticks, culls, and bruised, cut, rotten, and misshaped potatoes just as dug from the ground. The vines and many of the clods were picked out by hand and other dirt screened out, and then were placed in a mechanical washer partly for the purpose of pre-cooling and partly to clean. The cooling and cleaning operation is sometimes done by spraying with hose. After being washed, the produce was placed on tables where it was hand sorted and graded and the marketable portions placed in bags which were usually branded. After the sack was sewed, it was trucked by hand into the cars where the employees packed or stacked for shipment, and the car was iced by placing ice in bunkers at the end of each car. *193
In the case of onions the same operation took place, except that the same were not washed, and payment of contributions for which refund is asked was for labor so engaged.
"In the case of lettuce, delivery field run was made by the farmer in his own truck, and the applicant's crew took over at the shed. The first operation was trimming, which consisted of cutting off the butt, clipping off surplus wrapper leaves and broken and discolored leaves, and discarding heads which were unsuitable for market. The marketable heads were then placed on a table and were divided according to size and placed in crates containing the same sized heads. During this process, any other unsuitable heads were discarded. As the lettuce was packed in the crates, ice was placed between each layer, and the crate stamped to designate the number of heads per crate. A paper pad was put on top of the crated lettuce and ice placed over it, the paper folded across the top and the cover nailed on, and the crate then conveyed into the car and loaded, and when loaded, ice was placed in the car over the tops of the crates. The employees, in addition to the above operations, prepared the ice and cleaned up the refuse, and were from time to time engaged in checking the amounts received and going into cars, and disposing of culls.
"In the case of peas, delivery field run was made from the farm in sacks, the contents of which were dumped on a table and the unmarketable peas such as those too small, ill-shaped, broken, bruised and old, were picked out by hand, usually by women. They were not sized or graded otherwise. The remaining marketable peas were placed in hampers or tubs, and in some instances the top layers were straightened out or 'faced' in order to make the hamper or tub more attractive. The hamper or tub was labeled PALS BRAND and a cover placed on it, and then went into a tank of cold water in which it was immersed for pre-cooling, after which it was taken into the car and loaded, and ice placed over the top for refrigeration.
"In the case of carrots, the farmer producer graded and tied in bunches on the farm, placed the same in crates, and the crates were delivered to the applicant. The bunches were then washed, sized, packed, and placed in cars, ice *194 being placed in the crates and in the cars as in the case of lettuce.
Since the original enactment (Sess. Laws, 1935, 3rd Ex. Sess., chap. 12) the Unemployment Compensation Law has been amended at least twelve times and is, to say the least, somewhat confusing. However, at this time we are called upon to construe the meaning of Section 18-5 of Chapter 182 of the 1941 Sess. Laws.
A determination of the questions involved depends upon a proper construction given to subsec. (f) of sec. 18-5, supra, and particularly the proviso contained therein. Said subsection reads, in part, as follows:
"(f) Services performed in the employ of an individual owner or tenant operating a farm * * * in connection with the processing, packing or marketing of the produce of such farm where such processing, packing or marketing is an incident to the ordinary farming operations of such individual owner or tenant; provided, however, that nothing in this subsection shall be construed to exclude from the term 'covered employment' services performed in the employ *195 of any person or persons who operate a farm or farms only incidental to a principal occupation or occupations which would otherwise be termed covered employment within the meaning of this Act."
Subsection (f), supra, definitely excludes payment of contributions for services performed by laborers employed by owners or tenants operating a farm in processing, packing and marketing the produce of such farm where such processing, packing and marketing is an incident to the ordinary farming operations of such individual owner or tenant. (Batt v.Unemployment C. Division,
There is no contention made here that appellant is liable for contributions under the act as it existed prior to 1941 or subsequent to 1943. In other words, respondent contends that appellant is liable for contributions under the act during the period from May 7, 1941 to February 26, 1943, relying upon the proviso in subsection (f), supra, to support his contention.
In the absence of said proviso it must be conceded that appellant would not be liable for contributions.
The board denied appellant's application for refund upon the theory, apparently, that appellant's farming operations were only incidental to his principal occupation, to wit, processing, packing and marketing of farm produce; that his extensive operations in farming 2000 acres of land were merely incidental, and therefore he is liable under the proviso for the payment of contributions on his employees.
Appellant would not be liable for contributions upon wages paid for services rendered by his employees in processing, packing and marketing farm products raised on his own farm or produce purchased or received on consignment for processing, all of which is agricultural labor. (Batt v. Unemployment C.Division, supra.) Such employees being engaged in ordinary farming operations were not covered employees. The question therefore arises, is appellant liable to pay contributions upon wages paid to employees engaged in processing and packing farm products of other land owners or tenants produced within the area where his processing plants are located?
The board in its finding VII. found, among other *196 things, that "such services (labor performed in processing and packing farm products of other land owners or tenants) were the same and identical services usually rendered in preparing commodities for market upon a farm by those farmers having large enough farms to be able to afford the necessary equipment incident to the packing and processing of their own products." In other words, had the packing and processing been done on their own farms and not in appellant's packing houses, such labor would be exempt. It would therefore follow that small farmers or tenants who are unable to build and equip a processing plant would be required to pay contributions, inasmuch as the owner of the processing plant would charge and collect from the small farmer whatever contributions he would be required to pay for processing, packing and making ready for market the farm products of the small farmer. We are not convinced the legislature in adopting the proviso contained in subsection (f), supra, intended to make possible such discrimination.
We think it was the legislative intent to exclude all services of wage earners in agriculture from the benefits of the act, and exclude from tax burden the produce of all farmers, large or small, whether processed on their own farms or at the processing plant of another, it all being agricultural labor. It clearly was not the intent of the legislature to burden the small farmer's produce with, and relieve the large farmer's produce from, a tax, nor to grant benefits to the wage earner working on the produce of small farmers and deny benefits to the wage earner working on the produce of the large farmers.
We are not called upon to determine appellant's liability, if any, under the act after the gathering, delivery, processing and packing of the farm produce is completed. The issue involved here only concerns refunds for labor performed in the first instance.
The board concluded in its rulings of law:
"That said P.G. Batt is a covered employer within the meaning of Section 7-5 of Chapter 182 of the 1941 Session Laws, and that the services rendered by individuals in the employ of P.G. Batt in processing, packing and marketing of farm products are within the term 'covered employment' as defined in Section 18-3 of Chapter 182 of the 1941 Session *197 Laws, and such services are performed in the employ of P.G.Batt whose principal occupation is processing, packing andmarketing of farm produce, and that the farming operations ofsaid P.G. Batt are only incidental to his principal occupationof processing, packing, and marketing farm produce." (emphasis ours)
Without incorporating in this opinion the testimony adduced at the hearing in an attempt to establish the fact that appellant's principal occupation is processing, packing and marketing of farm produce, as concluded by the board, in our opinion there is no evidence to support the board's conclusion.
Appellant's processing of products raised on his own farms was an adjunct to farming necessary to make marketable his produce. He incidentally processed the produce of his neighbors whose farming operations were not large enough to justify the expense of buying equipment and assembling a crew of laborers. All the labor performed either on appellant's farms or on the farms of his neighbors, of much smaller acreage, was agricultural labor and, as such, exempt under the act. There was nothing done to change the character of the farm products by reason of the processing and packing, they continued to remain farm products. What the occupation, business or profession of the employer may be is not controlling, but what type of service is rendered by the employees to the employer.
In Mundell v. Swedlund,
"Dorell v. Norida Land Timber Co., supra, (
To the same effect see Peterson v. Farmers' State Bank ofEyota (Minn.),
We are satisfied from a careful study of the record that appellant was not liable for the tax since he and his employees were engaged in agricultural labor within the meaning of the proviso contained in subsec. (f) of sec. 18-5 of Chapter 182 of the 1941 Sess. Laws. (Batt v. Unemployment C. Division, supra;Big Wood Canal Co. v. Unemployment C. Division,
From what has been said it follows that the order of the board is reversed and respondent is directed to refund to appellant the full sum of money exacted and collected from him during the period from May 7, 1941 to February 26, 1943, as unemployment compensation taxes, or contributions.
Givens and Holden, JJ., concur.
Ailshie, C.J., did not sit at the hearing nor participate in the decision. *199