Court Opinion

ID: 3985920
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:05.89808+00
Date Added: 2024-06-11T07:44:19.251416
License: Public Domain

I concur in the result. While the Commission may not be able to order an alleged employer to appear except as a witness by subpoena, it is the duty of the deputy to "notify the claimant and any other interested party of the decision [on the Initial Determination] and the reasons therefor." Sec. 6(b). It would be difficult to conceive of a party, besides the claimant, who was more interested than the alleged *Page 55 
employer. On the basis of said decision he may be required by the Tax Commission to "contribute" a percentage of the wage paid to that applicant and his "benefit experience" rating is affected by the finding that he was the applicant's employer. Even though notified as provided for in Sec. 6(b), the alleged employer may choose not to appear, but if he does so choose he is bound by the Commission's finding that he was an employer of the applicant. If he does appear and protest he may appeal to the Supreme Court under Sec. 6(i). He is bound to resort to the administrative procedure provided for in the Act, to have determined the question of whether he is an "employer" as defined by the Act. And such finding is res adjudicata in any proceeding against him by the Tax Commission to collect "contributions." The plaintiff correctly argues that the alleged employer is not an indispensable or necessary party to enable the Commission to determine whether the applicant is entitled to participate in the fund. The fact of whether the plaintiff was an employer of applicant as defined by the Act under Sec. 19(i) and Sec. 19(j) must be found by the Commission but it may be found upon any proper evidence without the alleged employer's being a party. But where the employer is notified of the initial determination as provided under Sec. 6(b) and that he has been found to be an "employer," it is incumbent upon him, if he desires to contest such finding, to proceed under the administrative procedure of the Act or as to such question he is bound. State Tax Commissionof Utah v. Katsis, 90 Utah 406, 62 P.2d 120, 107 A.L.R. 1477.
As to plaintiff's fourth proposition: The Commission is without power to order the plaintiff to pay contributions. Power to enforce collection lies with the Tax Commission. Sec. 9 (c) and Sec. 14. But certainly the Industrial Commission has power to determine the fact that the alleged employer is an "employer" as defined by the Act which finding will be a thing adjudicated as far as any proceedings of the Tax Commission are concerned. The order to pay *Page 56 
contributions would seem to embody this finding. Moreover, such order is effective at least to start interest running (Sec. 14) and may be of value in notifying the Tax Commission to proceed to collect. The most that could be said against such an order is that it is mere surplusage. The order does not invalidate the award.
In connection with another case the question of the constitutionality of such finding by the Industrial Commission as binding at least on the employer, if not on the Tax Commission, in view of Art. 13, Sec. 11 of our Constitution, may be discussed. It suffices here to say that even if the so-called "contribution" is construed to be a tax so as to give the Tax Commission the right and duty to "administer and supervise" the tax law imposing it, such power goes only to matters dealing with the law as applied to those who fall into the tax class. There is nothing in Art. 13, Sec. 11 of the Constitution which prevents the legislature from placing in some other agency the right and duty to find the fact upon which an individual or object may fall in or out of the class subject to the tax. See Title 80, chapter 5, R.S.U. 1933. For the above reasons I cannot concur in the statement that "until the employing unit comes in and claims to be aggrieved and submits to the jurisdiction of the commission the determinations of the commission will not be binding upon it." For the same reasons I cannot agree with the statement that "the district court will then determine if the claimant be employed by the employing unit within the meaning of the act." I think that when the fact of "employment" is found for the purpose of determining benefits it is meant to be binding as to the question of determination of "contributions" at least as far as that part is involved. Otherwise, it would be like a man astride the two portions of a draw bridge. As long as the parts stayed together by perfect articulation of Tax Commission and Industrial Commission he might stand in comfort, but if there were any pulling apart he would find himself falling between administrations into the deep. A few examples will suffice also *Page 57 
to show the awkwardness of such holding. Y makes application for benefit payments naming X as his "employer." X is found by the Industrial Commission not to be an employer within the Act. The applicant appeals. The Supreme Court sustains the finding of the Industrial Commission. The Tax Commission nevertheless sues X for "contributions." The trial court, if we assume that it is not bound in the tax case by the decision of the Supreme Court in the appeal from the Industrial Commission, may find for the Tax Commission. The matter is appealed to the Supreme Court which is then confronted with the necessity of passing on the correctness of its former decision. Or take the opposite situation where the Industrial Commission finds that X is an "employer" within the meaning of the Act. The employer appeals. The Supreme Court reverses. But the Tax Commission, on the theory that this question is not at rest, sues for "contributions." The District Court finds for X, so the Tax Commission appeals to the Supreme Court. Various awkward situations may by the reader be conceived. The scheme of the Act seems indubitably to point to the purpose of requiring those "employers," whose "employees" are granted benefits, to contribute to the fund. One may well conceive, too, of a situation where one applicant's case would be a test for many more in like position. If the Industrial Commission may be sure that the appeal to this court from its findings as to that applicant will set the question at rest, it will be guided by the decision in said appeal in determining the question of benefits for the entire class. There is some chance, at least, to obtain in such proceedings a decision of this court before the Fund is depleted by many payments to alleged employees whose alleged "employers" need not contribute. If, however, the question is not set at rest until the Tax Commission sues and the matter is tried out in the District Court subject to appeal here, no such result may be prevented.
Where one of two constructions of the law would render an Act unworkable, or only haltingly workable, or would *Page 58 
fail to effectuate the obvious intent of the legislature, and another construction equally, or nearly, as feasible would bring opposite results, it is our duty to adopt the latter. I see nothing in logic or precedent that requires us to accept the construction of the main opinion. This is a case in which we are dealing with the administration of a public act designed to benefit a class and society as a whole by cushioning the effect of unemployment. It is not the case of a private controversy involving only the rights of A against B. But even in judicial actions a finding in favor of A in the matter of status or title in a suit by A against B serves in an action of A vs. C at least to establish A's right against B if that be material in the action against C. On the question of when a board acts as a public agency in the public interest, see Amalgamated UtilityWorkers v. Consolidated Edison Co. of New York, Feb. 26, 1940,60 S. Ct. 561, 84 L. Ed. 493.
I am somewhat concerned about the statement:
"The question to be determined is whether `contributions' be a tax for revenue purposes under the general taxing power of the state, whether `contributions' be a tax under the police power to alleviate `economic insecurity due to unemployment' which is a `serious menace to the health, morals, and welfare of the people of this state' or whether `contributions' be a license or fee incident to the regulation of employment." (Italics added.)
In my dissenting opinion in the case of Carter v. State TaxCommission, 98 Utah 96, 96 P.2d 727, I endeavored to point out that the legislature does not consciously operate in terms of police and taxing power. It has a certain situation in regard to which it legislates. In order to accomplish its objective it may in the same Act use powers which the text book writers have denominated, taxing power, police power, and power of eminent domain. It may under its police power regulate an industry such as the liquor industry or confer benefits upon a class as in the Act under consideration. But the two are quite different. Regulation and the granting of benefits should not be confused because *Page 59 
the "classifiers" have chosen to include them under one comprehensive head entitled "police power." While applicants for benefits, in order to obtain such benefits, must meet certain requirements and follow certain rules and regulations, such legislation is not "regulatory" although it is an exercise of the police power. A man standing in a bread line is subject to the regulation necessary to control the line but we do not think of him as being "regulated." Certainly there is a distinction between "contributions" to a fund which is designed for the welfare of a class and a tax for general purposes, although both are "exactions," and even though the effect of both is the same on the payer. It is important, to keep our nomenclature correct but more important that our concepts not be confused. It may well be that the type of contribution which is exacted for the Unemployment Insurance Fund is not a "tax" in the sense that that term was used in the constitutional provision which gave the Tax Commission administration and supervision of tax laws. Certainly the contributions may be looked at as payments into a fund for specific purposes — the whole encompassed by the police power even though not regulatory. The error I think is dramatically illustrated in Carter v. State Tax Commission, supra. There registration of automobiles was made a part of a chapter said to be regulatory. Since registration of automobiles was a means of regulation, it was properly, if not necessarily, placed with regulation. But for coercive reasons payment of a ton mile tax for the privilege of using the highways by Diesel fuel trucks was made a condition of registration, the tax itself being a method of equalizing the cost for using the roads between vehicles using gasoline fuel and those using Diesel fuel. We held the tax on Diesel trucks unconstitutional by somehow confusing taxation with regulation, whereas the tax was only a revenue raising part of a Chapter said to be devoted to regulation. In the instant case where "contributions" are raised for the sole purpose of constituting a fund out of which unemployment compensation is payable and are part *Page 60 
of the warp and woof of the whole Act, they may well be conceived of as just a part of the whole plan by the State to provide unemployment insurance. I see no essential difference between a required contribution toward an unemployment insurance fund and a required payment of a percentage of a payroll into a compulsory State Insurance Fund for disability compensation as is done in Ohio. If we had the Insurance Fund plan, would such premiums be considered a tax? See Howes Brothers Co. v. MassachusettsUnemployment Compensation Commission, Mass., 5 N.E.2d 720, 729. In the Carter case the ton mile tax went in part into a fund not to regulate but to trace car thieves and to pay the cost of transfer of titles, and other miscellaneous outlays. If the owners whose cars had been stolen or the owners of cars who wanted to transfer title had been required to pay fees into a fund to pay such costs, I do not think it would have been a revenue measure but merely a fee for services. In the Carter case the ton mile tax collected from Diesel trucks did not go into a special fund to pay for benefits to the business of driving Diesel trucks or to meet any responsibility to its employees or the public placed upon the business firms driving Diesel trucks. The tax went into a fund which was, in effect, an appropriation of the tax for general purposes. All taxes are in the end devoted to, or appropriated for, some special purpose. In the Carter case the tax went in part into a fund which was to be used to trace stolen cars, to cover the cost of transferring titles to automobiles, and to meet other miscellaneous outlays, not for the benefit of owners of Diesel driven trucks alone, but for the benefit of all automobile owners. It was a tax collected from Diesel truck owners and devoted to one part of the general purposes of the law. That is only what happens to all taxes.
The Unemployment Compensation Act sets up a plan which places on the employing class the duty of bearing one of the burdens which the law in its march now considers one of the hazards of industry, to wit: unemployment. Disability *Page 61 
by accident in industry has long been considered one of the incidents which industry must be prepared to meet. Unemployment may be considered in the same light although in it the relation of cause and effect is not so clear as in cases of disability through accident which occurred during employment. Industry may be thought of as responsible for an individual's unemployment in the sense that such unemployment is caused by industry's failure to absorb him. To borrow the language in my concurring opinion inMcGrew v. Industrial Commission, 96 Utah 203, 85 P.2d 608, at page 622:
"The raise in wages by the minimum wage law makes a money contribution to the welfare of a group. It provides more by which to live, and affects therein the lives of the workers which in turn affects the public welfare. Thus indirectly the business is supposedly contributing to the betterment of conditions. This is in keeping with the expanding idea of the responsibility of business to the public; with the idea that business is not something self-contained but a part of all society; that it is the numerator in one of a series of fractions all of which have the government as representative of society for their common denominator; that the integration of business with society demands that it be not sovereign in its field but that it serve the public both by the manner of its production and by making its contribution in the form of a living wage and thus become not only a profit making and goods producing or distributing agency but a vital factor in the upbuilding of a better society."
The same idea holds in unemployment compensation. Unemployment is considered a responsibility of industry. Hence, industry is required to contribute to a fund to relieve it. The whole scheme of unemployment compensation, including the raising of a fund, may be considered as an integrated whole, all of which falls under police power since only the employee class benefits and only industry, upon whom society puts the direct responsibility, contributes to alleviate this condition of unemployment of its workers. In that sense the plan is a unit, an integrated whole, a self-contained scheme, under the police power. Howes BrothersCo. v. Massachusetts Unemployment Compensation Commission, *Page 62 
supra; Tatum v. Wheeless, 180 Miss. 800, 178 So. 95. If the general public, regardless of the employer-employee relationship, were taxed the situation might be different. The difference in the last analysis, may be one in degree between the relation of the unemployed and industry and the relation of the unemployed and the public. Whether the "contribution" of the employer be considered a tax ear-marked for a certain purpose or just one of the elements in a self-contained system for requiring industry to care for its unemployed, may be a difference in conception only, with exactly the same practical results. But it is just these differences in degree and in conception which make differences in legal holdings and preserve the logical fabric of the law in so far as it is possible to maintain it. In Globe Grain  MillingCo. v. Industrial Commission, 98 Utah 36, 91 P.2d 512, rehearing denied 97 P.2d 582, this court considered the constitutionality of the Unemployment Compensation Act both under the theory that the contribution was a tax and under the theory that it was part of the police power. It must be sensed that there may be a real difference between the "tax" levied by the Federal Government on payrolls under the Social Security Act and the "contributions" to the State Fund required by our Unemployment Compensation Act although said "contributions" may be used to offset up to 90% of the Federal tax. The Federal Social Security Act (42 U.S.C.A. § 301 et seq.) does not specify that the employer may only offset a tax levied by the state for the purposes of providing for an unemployment insurance fund, but provides that any "contributions with respect to unemployment" made by such employer taxpayer, may be credited against the Federal tax. And it will be noted that there is not complete articulation between the "Federal tax" and the "contributions" required by our State Act. Only employers with eight or more employees are taxed by the Federal Government, whilst the State Act of 1936 (sec. 19(f) was made applicable to employers having four or more employees, and the 1939 State *Page 63 
Act (chapter 52, § 19(h) makes liable for contributions those having one or more employees. It follows, therefore, that under the 1936 Act those employers in Utah having between four and eight employees are not liable for the Federal tax, although they are liable for contributions to the State Fund, whereas Utah employers with eight or more employees are liable for "contributions" to the State and also are liable for an excise tax to the Federal Government, which excise tax may be offset up to 90% by such employer's "contributions."
But we do not in this case need to decide whether the "contribution" is a tax or simply one of the elements in an integrated plan under the police power. If it is a tax I cannot agree that it is necessary under Art. 13, § 11 of our Constitution that the Tax Commission be given the power to decide who is or who is not in the taxable class. Under the Act the Tax Commission is given the duty to make collections. Supervision and administration of the tax laws does not necessarily include the right to determine who falls in or out of the taxable class.
In this case the Industrial Commission made an order requiring plaintiff to pay contributions to the fund. If the employer accepts the finding and pays, that ends the matter. If it does not pay, the Industrial Commission cannot enforce the order. The Tax Commission must collect. If it brings suit it may prove the relationship and the other facts found by the Industrial Commission on which liability for "contributions" depends, provided the employer was properly notified and provided such facts were competently introduced. I opine that the Tax Commission might prove such facts whether or not the findings of the Industrial Commission were followed by an order that the employer contribute. Such an order, even if it be considered mere surplusage, does not invalidate the findings and award of benefits by the Industrial Commission, and the Tax Commission may proceed to enforce the liability whether or not Industrial Commission has made an order to contribute. In *Page 64 
fact, there is nothing to prevent the Tax Commission from proceeding to collect from those employers which it decides should contribute, regardless of any application for unemployment compensation. Certainly the liability to "contribute" does not depend on whether someone applies for unemployment compensation.