Case Name: In the Matter of Rumsey Manufacturing Corporation, Respondent. Edward Corsi, as Industrial Commissioner of the State of New York, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1947-01-16
Citations: 296 N.Y. 113
Docket Number: 
Parties: In the Matter of Rumsey Manufacturing Corporation, Respondent. Edward Corsi, as Industrial Commissioner of the State of New York, Appellant.
Judges: 
Reporter: New York Reports
Volume: 296
Pages: 113–126

Head Matter:
In the Matter of Rumsey Manufacturing Corporation, Respondent. Edward Corsi, as Industrial Commissioner of the State of New York, Appellant.
Argued October 11, 1946;
decided January 16, 1947.
Nathaniel L. Goldstein, Attorney-General (Francis B. Curran, Wendell P. Brown and Otto W. G. Marquard of counsel), for appellant.
I. It was error for the Appellate Division to reverse the appeal board’s decision on the law, since there was sufficient evidence to sustain the board’s finding of fact that respondent’s failure to file the reports on time was not attributable to circumstances beyond its control. (Labor Law, § 575; Matter of Electrolux Corporation, 288 N. Y. 440; Matter of Carroll N. Y. Military Academy], 288 N. Y. 447; Matter of Daus v. Gunderman & Sons, Inc., 283 N. Y. 459; Pioneer Automobile Service Co. v. Commissioner of Internal Revenue, 36 B. T. A. 213; Merritt v. Earle, 29 N. Y. 115; People ex rel. Hirschberg v. Seeger, 100 Misc. 51, 179 App. Div. 792; Matter of Kelleher. 283 N. Y. 664.) II. The Court of Appeals should not consider the constitutional question sought to be reviewed by respondent. The order appealed from should be reversed, and the decision of the appeal hoard reinstated. (Matter of Helfrick v. Dahlstrom Metallic Door Co., 256 N. Y. 199, 284 U. S. 594; Nod-Away Co. v. Carroll, 240 N. Y. 252; Matter of Andersen, 178 N. Y. 416; Paul v. Delaware, Lackawanna & Western Railroad Co., 175 N. Y. 478; Dodge v. Cornelius, 168 N. Y. 242; Purdy v. Erie R. R. Co., 162 N. Y. 42.)
Albert Auerbach for respondent.
I. The Appellate Division found that the evidence was insufficient as a matter of law to sustain the board’s findings of fact and it was therefore not error to reverse the board’s decision, on the law. (Matter of Gnerich, 41 N. Y. S. 2d 292; Matter of Electrolux Corp., 288 N. Y. 440; Matter of Morton, 284 N. Y. 167; Matter of Sullivan Co., Inc., 289 N. Y. 110.) II. Section 575, subdivision 2, of the Labor Law is unconstitutional, as it violates article I, section 6, of the State Constitution and Amendments V and XIV of the United States Constitution, for the reason that said section is so arbitrary and unreasonable on its face as to show that it deprives an employer of his property without “ due process of law ” and denies him the equal protection of the laws. (Chamberlin, Inc., v. Andrews, 271 N. Y. 1.) III. Section 623 of the Labor Law is unconstitutional, as it violates article I, section 6, of the State Constitution and Amendments V and XIV of the United States Constitution and article I, section 1, of the Bill of Rights, for the reason that said section is so arbitrary and unreasonable on its face as to show that it deprives an employer of his property without “ due process of law ” and denies him the equal protection of the laws. IV. The decision of the board being arbitrary, the Court of Appeals is empowered to determine the questions of fact so as to prevent the violation of the “ due process clauses ” of the New York State and Federal Constitutions. (People ex rel. Consol. Water Co. v. Maltbie, 275 N. Y. 357.)

Opinion:
Desmond, J.
Section 575 of the Labor Law requires every employer aa71io is within the coverage of the unemployment insurance statutes (Labor Leav, art. 18), to keep accurate payroll records. Regulations made by the State Industrial Commis sioner, pursuant to statute, prescribe that quarterly statements of such payrolls be filed with the commissioner not later than the last day of the month following the close of each' quarter-year. Respondent, a covered employer, failed to file such a report for the second quarter of 1944 on or before July 31,1944, the critical date under the regulations aforesaid, and failed also to file the third quarter report on or before its due date: October 31,1944. Section'575 of the Labor Law, above mentioned, says, in its second subdivision, that any employer who, having failed to file a wage statement as required by the regulations, fails thereafter to comply with the commissioner's demand for such filing, within twenty days after the delivery of such demand, " shall pay " a penalty computed according to a stated formula, but not exceeding certain maxima. After respondent had failed, in the two instances above cited, to file its statements in time,- the commissioner, in each instance, mailed respondent the statutory twenty-day notice. Respondent, however, did not file either of those past-due quarterly reports within those further twenty-day periods. The commissioner thereupon imposed on respondent, for each such default, the maximum penalty of $500. Respondent, as permitted by section 620, subdivision 2, of the Labor Law, applied to the commissioner for a hearing on the matter. The. hearing was held before a departmental referee. All the testimony of importance was given by one of respondent's officers. He told of the extreme difficulty experienced by respondent, during the war years, in assembling a sufficient force of employees. The witness pointed out that respondent, a manufacturer, had, before the war, done a business of only about $70,000 a year and then had only twenty-five .employees, three or four of whom did all its office work. Beginning in 1942, however, war orders increased respondent's annual volume of business to about $7,000,000 or $8,000,000, and resulted in an increase to about six hundred or seven hundred employees, of whom forty or fifty did office work. An adequate supply of trained office workers, he testified, was not available in respondent's village, so the office work, including the preparation of these payroll records, fell behind. This testimony was not directly disputed but it was, of course, self-serving and it did not point, unerringly and of necessity, to only one possible factual conclusion. The referee regarded it as a sufficient excuse for the admittedly tardy filings and overruled the commissioner's direction that the penalties were to be paid.
The Industrial Commissioner, dissatisfied with the referee's decision, appealed therefrom, under subdivision 3 of section 621 of the Labor Law, to the Unemployment Insurance Appeal Board, which consists of three members appointed by the Governor (Labor Law, § 534). The Appeal Board, after a hearing, reversed the referee and sustained the commissioner, holding that respondent had failed to prove that its delays were " attributable to circumstances beyond its control sufficient to entitle it to be excused as a matter of law."
Respondent-employer then appealed to the Appellate Division, as permitted by section 624 of the Labor Law. The Appellate Division, calling the Appeal Board's decision " arbitrary ", reversed that decision and annulled the penalties. We hold that the Appellate Division exceeded its power in so doing.
The pertinent statute (Labor Law, § 623) says that " a decision of the appeal board shall be final on all questions of fact and, unless appealed from, shall be final on all questions of law. ' ' Respondent failed to file its reports on time and was fined therefor by the commissioner. Contending that it had a sufficient excuse for its delays, respondent applied for, and got, a hearing at which it presented its excuse. It showed that war-time conditions made it difficult for it to recruit an adequate force of efficient office workers. Persuasive and impressive as that testimony was, it did not show, conclusively and beyond doubt, that filing of the reports within the time allowed was actually impossible. From the end of the second quarter of 1944 to the end of the time allowed by the regulations and by the subsequent demand, was sixty-five days. As to the third quarter report, the total time available was sixty-seven days. During those periods respondent's office staff, short-handed and inexperienced though it was, was working at something. This is not a case of an individual owner, with no helpers at all and himself incapable through sickness, of preparing the reports (see Opinions of Attorney-General for 1943, p. 313). It may have been most inconvenient or troublesome for respondent to file these papers on time. It was not shown, as matter of law, to have been impossible. Impossibility was a permissible, but surely not a necessary, inference from the testimony. " Only where the circumstances' admit of only one inference may the court decide as a matter of law what inference shall be drawn " (Camardo v. New York State Railways, 247 N. Y. 111, 118; see Matter of Trotcbridge, 266 N. Y. 283, 293). The Appeal Board's refusal to accept respondent's explanation as a sufficient excuse was a ruling on a question of fact (Matter of Albano v. Hammond, 268 N. Y. 104, 108) and, not being without support in the record, was " final " (Labor Law, § 623, supra; see Matter of Electrolux Corporation, 288 N. Y. 440; Matter of Carroll [N. Y. Military Academy], 288 N. Y. 447, 451; Matter of Morton, 284 N. Y. 167, 170).
We readily assent to the statements quoted by Judge Thachek from leading cases, of the duty of the courts to set at naught arbitrary and unfounded administrative holdings. But we see nothing. " arbitrary " in this Appeal Board's refusal to accept respondent's ipse dixit that it was " impossible " for it to prepare and file so simple a report in sixty-five (or sixty-seven) days. The report merely copied the same payroll data already set up by respondent for its own use in paying its employees.
It is unnecessary to enlarge upon the importance of the prompt filing of these reports. They are basic in the administration of the law. It is the commissioner's responsibility to get the reports filed, and it is not for the courts to instruct or control his judgment in such administrative matters. Analogous hereto are the cases where we have held that, where a civil service employee is tried on a charge the truth of which is admitted, the sufficiency of an explanation or excuse is a question of fact for the removing officer (see People ex rel. Regan v. Enright, 240 N. Y. 194, 198; Matter of Albano v. Hammond, supra; Matter of Kelly v. Morgan, 245 App. Div. 59, affd. 272 N. Y. 666).
We see no substance to respondent's contention that section 623 of the Labor Law is unconstitutional insofar as it denies to the courts any power to reverse the Appeal Board's determinations on questions of fact (see Matter of Helfrick v. Dahlstrom M. D. Co., 256 N. Y. 199, affd. 284 U. S. 594).
The order of the Appellate Division should be reversed and the determination-of the Unemployment Insurance Appeal Board confirmed, with costs in this court and in the Appellate Division,