Opinion ID: 1759090
Heading Depth: 1
Heading Rank: 6

Heading: labor and management activities

Text: Progress Pig claims the district court erred in determining that the labor and management activities conducted by Zahn do not meet the requirements of article XII, § 8(1)(A). While the district court determined that Zahn was engaged in the labor and management of Progress Pig, the court concluded that Zahn was not actively engaged in the `day to day labor and management' of the hog operation. Progress Pig claims that Zahn's activities of maintaining, enhancing, and continuing the ongoing production of the operation were essential to the success of the corporation and that his ongoing labor and management activities regarding administration, finance, personnel, nutrition/feeding, genetics, herd health, operations, maintenance, and marketing involved him in the day-to-day affairs of the farm such that the requirements of article XII, § 8, were met. This case requires us to examine the constitutional provision actively engaged in the day to day labor and management of the farm or ranch. See Neb. Const. art. XII, § 8. Like statutes, constitutional provisions are not open to construction as a matter of course; construction is appropriate only when it has been demonstrated that the meaning of the provision is not clear and therefore construction is necessary. Hall v. Progress Pig, Inc., 254 Neb. 150, 575 N.W.2d 369 (1998). Constitutional interpretation is a question of law on which the Nebraska Supreme Court is obligated to reach a conclusion independent of the decision by the trial court. Millennium Solutions v. Davis, 258 Neb. 293, 603 N.W.2d 406 (1999). Although, generally, the rules governing the interpretation of legislative enactments apply to constitutional provisions adopted by the people, such constitutional provisions are to receive a broader and more liberal construction than statutes. Hall v. Progress Pig, Inc., supra . In ascertaining the intent of a constitutional provision from its language, the words must be interpreted and understood in their most natural and obvious meaning unless the subject indicates or the text suggests that they are used in a technical sense. Pig Pro Nonstock Co-op. v. Moore, 253 Neb. 72, 568 N.W.2d 217 (1997). The court may not supply any supposed omission, or add words to or take words from the provision as framed. It must be construed as a whole, and no part will be rejected as meaningless or surplusage, if it can be avoided. If the meaning is clear, the court will give to it the meaning that obviously would be accepted and understood by the layperson. Id. Ultimately, the issue is whether Zahn, the sole shareholder of Progress Pig, was actively engaged in the day-to-day labor and management of the farm as required by article XII, § 8(1)(A). In our interpretation, the terms actively engaged, day to day, labor, and management should be given their most natural and obvious meaning, since there is nothing to suggest that these terms are used in a technical sense. Every clause in a constitution has been inserted for a useful purpose and should receive even broader and more liberal construction than statutes. Hall v. Progress Pig, Inc., supra . In the context of article XII, § 8, the phrase day-to-day labor and management refers to those activities that occur as a routine part of the farm or ranch operation. Day-to-day is defined as occurring each day; daily. Webster's Encyclopedic Unabridged Dictionary of the English Language 370 (1989). Active[ly] means constantly engaged. Id. at 15. Webster's Encyclopedic Unabridged Dictionary of the English Language at 798 defines labor as work, esp. of a hard or fatiguing kind; toil. Historically, the term labor has been associated with physical activity. See Walsh v. International Fidelity Insurance Co., 55 Misc.2d 565, 285 N.Y.S.2d 327 (1967). In American Surety Co. of New York v. Stuart, 151 S.W.2d 886, 887 (Tex.App.1941), the court noted: `In legal significance labor implies toil; exertion producing weariness; manual exertion of a toilsome nature.' This would imply that labor involves physical activity which would be necessary in the day-to-day workings of the farm or ranch. Management is the act or manner of managing. Webster's Encyclopedic Unabridged Dictionary of the English Language at 870. To manage means to take charge or care of. Id. at 869. The terms labor and management, as they would commonly be interpreted, would encompass all the activities pertaining to a farm or ranch. Use of the terms labor and management in conjunction is meant to include all the activities that must be done in the operation of the particular farm or ranch. Thus, to be actively engaged in the day-to-day labor and management of the farm or ranch requires that such person be involved on a daily or routine basis in all aspects of the farm or ranch activities, be it labor or management. Labor would encompass the physical chores attendant to the farm, and management would encompass the mental and business activities of the operation. This interpretation is consistent with the requirement that a shareholder either reside on the property or be actively engaged in the day-to-day labor and management of the farm. What labor and management activities will be required depends in large part on the type of farm or ranch operation that is being conducted. A schedule prepared by Zahn's former manager, Wamstad, divides the operation of the farm into four divisions: farrowing, old nursery, prenursery, and grower-finisher. There are numerous chores to be completed daily in each division. As required by article XII, § 8, the shareholder must be actively engaged in both labor and management. Labor on the hog farm included farrowing activities, checking the condition of the hogs and sows, cleaning the pens, moving the hogs, administering medications, and various other activities. To be actively engaged as understood by the common layperson would require that a person actually conduct such activities on a daily basis, not designate such activities to other individuals. The evidence established that in addition to Zahn's activities, there were numerous chores that had to be completed each day, as described by Wamstad. In the farrowing activities, the morning routine included walking through the youngest room and checking for new litters, feeding various rooms of sows, recording information, checking temperatures, checking the physical condition of the sows, creep feeding as needed, administering sow mix, rechecking the sows that may be farrowing, sorting and processing the litters born the previous night, checking every new piglet for certain conditions, and administering medications and feed supplements. Zahn did none of these tasks, except when called upon on an infrequent basis. At the time of trial, Zahn had a full-time manager, Beach, who lived on the site of Progress Pig, plus two assistant managers who oversaw the operation of the facility. Beach stated in his deposition, I oversee the production and employees.... I'm just basically in charge of it all. Wamstad testified regarding the amount of time Zahn spent on the premises as far as running the facility day in and day out, that Zahn pretty well let Wamstad take care of all the shots. He saw Zahn once a week regularly and, most of the time, two or three times a week. In addition, he talked to Zahn two or three times per week on the telephone. The evidence shows that Zahn spent no time working with the hogs and approximately one-quarter of an hour per month cleaning or repairing buildings or working outside. Most of the functions that took place on the farm were those activities which involved the actual handling, feeding, and nurturing of the piglets. Zahn was not involved in this aspect of the farm, except for an infrequent or an on-call basis. In Pig Pro Nonstock Co-op. v. Moore, 253 Neb. 72, 568 N.W.2d 217 (1997), we made it clear that article XII, § 8, read as a whole, reflected an intent to prohibit individuals who are not members of the same family or a Nebraska Indian tribe from forming and utilizing a corporation to own and operate farm or ranch land for their personal economic gain, other than for the specific uses set forth in § 8(1)(E) through (N). Being actively engaged in the day-to-day labor and management of the farm or ranch requires that the shareholder be involved in all aspects of the activity, whether it be labor or management, on a daily basis. Although the district court concluded that Zahn was engaged in labor and management, but not on an active, daily basis, we conclude that most, if not all, of Zahn's activities were involved in the management end of the operation and that the amount of labor performed by Zahn in direct relationship to the hograising activities was minimal. If the management and labor activities can be performed by a shareholder who does not reside on the farm or ranch, then absentee ownership and management is possible. It is the absentee ownership and operation of farm and ranch land by a corporate entity which the plain language of article XII, § 8, prohibits. Pig Pro Nonstock Co-op., 253 Neb. at 91, 568 N.W.2d at 228. Article XII, § 8, requires that the shareholder must be on the farm or ranch, either by residing on the site or being actively engaged in the day-to-day labor and management. In an appeal of an equitable action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided that where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another, Hall v. Progress Pig, Inc., 254 Neb. 150, 575 N.W.2d 369 (1998). According to our review of the record, we conclude that Zahn is involved in minimal labor as that term is defined under the amendment. Article XII, § 8, requires that both labor and management activities be performed on an active, day-to-day basis. Zahn has not established that he has met that requirement.