Idaho Mutual Benefit Ass'n v. Robison

154 P.2d 156, 65 Idaho 793, 1944 Ida. LEXIS 105

• Court: Idaho Supreme Court
• Decided: December 15, 1944
• Docket: No. 7166.
• Status: Published

Opinions

GIVENS, J.

The Industrial Accident Board had apparently indicated it would require appellant to pay unemployment compensation premiums on certain of its agents. Appellant, not being acquiescent, instituted the present suit under the declaratory judgment law asking the court to construe the unemployment compensation statute (Chap. 12, Third Extraordinary Session of 1935, as amended by Chapters 9, 183, 187, and 188 of the 1937 Sess. Laws; Chaps. 202, 203, and 239, 1939 Sess. Laws; Chaps. 65, 175, and 182, 1941 Sess. Laws; Chaps.' 29, 68, 92, 1943 Sess. Laws) and attacking the same. A demurrer was interposed and sustained, hence the appeal, in which appellant makes these principal contentions: that the law is unconstitutional because it constitutes the board both investigator and trier of the facts without, in the first instance, a hearing where the employer is present before the examiner; that a direct appeal does not lie from orders of the Industrial Accident Board covering questions under the unemployment compensation law; that the penalties provided by the act are so severe as to render the statute unconstitutional; that the agents are not employees within the scope of the statute; that plaintiff is not engaged in any business or profession within the unemployment compensation law. Other questions were raised which by reason of the disposition of this case need not be considered herein.

Respondent took the position the court did not have jurisdiction under the declaratory judgment statute to entertain the controversy but entire jurisdiction was wholly in the Industrial Accident Board.

The declaratory judgment statute 1 is broad and comprehensive. Conceding the Industrial Accident Board may determine its jurisdiction and attendant questions antecedent to enforcing the unemployment compensation law, as to the matters determined herein such right is not exclusive. (Inland Empire Rural Elec. v. Dept. of Pub. Service, 199 Wash. 527, 92 P. (2d) 258; Union Pac. R. Co. v. Bean, 167 Ore. 535, 119 P. (2d) 575.) There is nothing to indicate the power to construe statutes granted in chap. 70, supra, did not and was not intended by the legislature to include the unemployment compensation statute as well as all others. Its interpretation ánd applicatory scope as outlined by this court are sufficiently broad to encompass this controversy (Sweeney v. American National Bank, 62 Ida. 544, 115 P. (2d) 109), and the district court did have jurisdiction to entertain the suit and determine the meaning and scope of the statute to the extent herein indicated.

The constitutional amendment authorizing direct appeal from orders of the Industrial Accident Board to the supreme court was proposed by the legislature, House Joint Resolution No. 1, February 16, 1935, 1935 Sess. Laws, p. 377; before it was ratified the social security or unemployment compensation statute had been passed by the legislature, August 6, 1936, Chap. 12, Third Ex. Sess. of 1935, p. 20. Thereafter the amendment was submitted by the secretary of state, October 3, 1936, and ratified by the people November 6,1936. Therefore, at the time of the ratification and approval by the people of the constitutional amendment the Industrial Accident Board had by the legislature been given the duty of administering the unemployment compensation statute (Ch. 12, 3d Ex. Sess. 1935, sec. 10, p. 37), expressly providing that the procedure generally applied in workmen’s compensation cases, i. e., industrial accidents, should be applicable to the functions of the board in connection with the unemployment compensation statute (Ch. 12, 3d Ex. Sess. 1935, sec. 6, p. 27) and authorizing appeals from the board as in industrial accident cases (Ch. 12, 3d Ex. Sess. 1935, sec. 6, p. 27; 1941 S. L., Ch. 182, sec. 6(g), p. 405.)

The people, not the legislature, amend the constitution. (Art. 20, sec. 1.) True, in the absence of a constitutional convention, the proposal must be initiated by the legislature, but the amendment becomes effective when ratified by the people and not otherwise. (McBee v. Brady, 15 Ida. 761, 100 P. 97; Utter v. Moseley, 16 Ida. 274, 100 P. 1058; Johnston v. Wolf, 208 Cal. 286, 280 P. 980; Andrews v. Reidy, (Cal.) 54 P. (2d) 30; State v. Duncan, 108 Mont. 141, 88 P. (2d) 73; Porter v. First Nat. Bank of Panama City, 96 Fla. 740, 119 So. 130; Matheny v. Independence County, 169 Ark. 925, 277 S. W. 22.)

The legislature in passing a statute is presumed to have in mind the law that exists at the time the legislature enacts the statute. (State v. Fite, 29 Ida. 463, at 469, 159 P. 1183; Phipps v. Boise St. Car Co., 61 Ida. 740, 107 P. (2d) 148; Morrison v. Cottonwood Development Co., 38 Wyo. 190, 266 P. 117; Sandahl v. Dept. of Labor & Industries, 170 Wash. 380, 16 P. (2d) 623; State v. State Highway Comm., 38 N. M. 482, 35 P. (2d) 308; People v. Bucchierre, 57 Cal. App. 153, 134 P. (2d) 505; McLeod v. Santa Fe Trail Transp. Co., 205 Ark. 225, 168 S. W. (2d) 413; Nebraska Central Bldg. & Loan Ass’n. v. Yellowstone, Inc., 141 Neb. 679, 4 N. W. (2d) 762; Mandel v. Brooklyn Nat. League Baseball Club, 179 Misc. 27, 37 N. Y. S. (2d) 152; State v. Keedy, 124 W. Va. 408, 20 S. E. (2d) 468; Johns v. Town of Sheridan, 44 Ind. App. 620, 89 N. E. 899; Steiert v. Coulter, 54 Ind. App. 643, 102 N. E. 113; Ascher & Baxter v. Edward Moyse & Co., 101 Miss. 36, 57 So. 299; McKenzie v. Missouri Stables, (Mo.) 34 S. W. (2d) 136; Gully v. Harrison County, 173 Miss. 402, 162 So. 166; The Penza. 9 F. (2d) 527; Baker v. White, 251 Ky. 691, 65 S. W. (2d) 1022; T. M. Crutcher Dental Depot v. Miller, 251 Ky. 201, 64 S. W. (2d) 466; 59 C. J. 1038, sec. 616.)

The general rules of statutory construction apply to the amendment of a constitution. (Fletcher v. Gifford, 20 Ida. 18, at 26, 115 P. 824; Phipps v. Boise Street Car Co., supra; Zancanelli v. Central Coal & Coke Co., 25 Wyo. 511, 173 P. 981; People v. Denault, 81 Cal. App. 1, 253 P. 151; Badger v. Hoidale, 88 F. (2d) 208, 109 A. L. R. 798; Shepherd v. City of Little Rock, 183 Ark. 244, 35 S. W. (2d) 361; State v. Stewart, 57 Mont. 397, 188 P. 904; Wendell v. Lavin, 246 N. Y. 115, 158 N. E. 42; Wingate v. Flynn, 139 Misc. Rep. 779, 249 N. Y. S. 351; Hodges v. Dawdy, 104 Ark. 583, 149 S. W. 656; State v. Imel, 242 Mo. 293, 146 S. W. 783; Leach v. Auwell, 154 App. Div. 170, 138 N. Y. S. 975; Hoffman v. W. H. Worden Co., 2 F. Supp. 353; State v. Leslie, 100 Mont. 449, 50 P. (2d) 959; 12 C. J. 699, sec. 42.)

Since the people are the ones who give life to a constitutional amendment, the state of the law at the time they vote upon the proposed constitutional amendment is that which is controlling and must be considered as that which the people had in mind; therefore, when the people voted upon the amendment they perforce intended that direct appeals should be from the board concerning all matters of which the board had jurisdiction, and indeed there is no reason to think they did not intend such direct appeal to apply to any prospective- duties though not then in contemplation, as well as prior, otherwise, every time additional jurisdiction is given to any body, board, or court from which a direct appeal lies to this court, there would have to be an additional constitutional amendment.

Since the amendment was all inclusive, it would seem reasonable to conclude the amendment was thought sufficient to encompass appeals from the board to this court in both industrial accident cases and unemployment compensation matters and was so understood a,nd prospectively intended by the legislature and presently the people. There is as much reason and necessity for short-cutting appeals in the one as the other.

Furthermore, no possible advantage or reason can be advanced why there should be direct appeals from the board in regard to workmen’s compensation and not with regard to unemployment compensation or occupational diseases, which latter statute (1939 S. L., Ch. 161, p. 286) was passed after the amendment. Constitutional provisions must be read in the light of the law existing at the time of the adoption of .the constitution (amendment.) Christensen v. Hollingsworth, 6 Ida. 87, at 93, 53 P. 211. It has been universally held by this court prior to the constitutional amendment that upon such appeals the district court and this court are bound by the findings of fact made by the board. (McNeil v. Panhandle Lumber Co., 34 Ida. 773, 203 P. 1068, 67 A. L. R. 797; Kaylor v. Callahan Zinc-Lead Co., 43 Ida. 477, 253 P. 132; Butler Anaconda Copper Min. Co., 46 Ida. 326, 268 P. 6; Burchett v. Anaconda Copper Min. Co., 48 Ida. 524, 283 P. 515; Delich v. Lafferty Shingle Mill Co., 49 Ida. 552, 290 P. 204; Vaughn v. Robertson & Thomas, 54 Ida. 138, 29 P. (2d) 756; Fields v. Buffalo-Idaho Min. Co., Inc., 55 Ida. 212, 40 P. (2d) 114; Bybee v. Idaho Equity Exchange, 57 Ida. 396, 65 P. (2d) 730; Bower v. Smith, 63 Ida. 128, 118 P. (2d) 737; Stroscheim v. Shay, 63 Ida. 360, 120 P. (2d) 267; In re Cain, 64 Ida. 389, 133 P. (2d) 723; Jensen v. Bohemian Breweries, 64 Ida. 679, 135 P. (2d) 442.) The same provision is in the unemployment statute. (Ch. 182, 1941 S. L., sec. 6 (g), p. 405.) The supreme court then is as much bound by the proviso in one appeal as the other. There would be no trial de novo in the district court, the witnesses would not be called, and there would be no reexamination of the facts except to determine whether there are facts sufficient to uphold the order. (Brady v. Place, 41 Ida. 747, 242 P. 314.) Double appeals would double expense, and many times this would be an onerous burden without any benefit to any one, and no doubt actuated the amendment. No jurisdiction was taken from the courts in placing the administration of the unemployment compensation law in the Industrial Accident Board because this is purely a statutory proceeding and right and did not exist at common law. (Shields v. Johnson, 10 Ida. 476, at 482, 79 P. 391; People v. Burnham, 35 Ida. 522, 207 P. 589; Morton v. Morton Realty Co., 41 Ida. 729, 241 P. 1014; Brady v. Place, supra, at 751.

It is further urged the statute denies due process of law in this, that the board having administrative charge of the unemployment compensation statute would be determining status and imposing and exacting these charges, in the first instance, through the board’s employees, and in passing upon their legality would be functioning as prosecutor, jury, and judge; that it is one of the concomitant and essential elements of due process that a person’s cause be heard before an impartial tribunal, which the board would not be. The point assertedly is emphasized by the other provision of the constitutional amendment specifying that upon such appeals the board’s findings as to questions of fact are binding upon the courts. Reliance is had upon Abrams v. Jones, 35 Ida. 532, 207 P. 724. In the first place, however, the court there decided that the statute contained no provision authorizing the department of law enforcement to revoke licenses issued prior to the passage and approval of the act. The licenses therein considered had been issued prior to the passage of the statute, and the vital holding was “that respondent’s license is not subject to revocation by the department of law enforcement, upon the grounds and in the manner provided in the present dental law, the license having been issued prior to the passage and approval of said law.” The court continued: “We will, nevertheless, proceed to discuss the second question presented,” that is, as to whether or not the procedure before the board was due process on the ground stated herein. It would seem clear therefore that this discussion was in the nature of dictum because the court itself said, “we do not decide whether a procedure might be had under the law which would safeguard and protect the rights of the accused.” It was evidently considered that Abrams v. Jones was not authority for holding that due process was not afforded, in view of the point involved, by proceedings before the Industrial Accident Board. Such procedure- was an admonition requiring adherence to constitutional safeguards being inferentially approved. (Cook v. Massey, 38 Ida. 264, at 277, 220 P. 1088, 35 A. L. R. 200, on reargument.

Courts have quite uniformly considered hearings before a board, as the Industrial Accident Board herein, which has no personal interest in the controversy though its employees have made investigations and orders, are not a denial of due process. (City of Pocatello v. Murray, 21 Ida. 180, at 204-5, 120 P. 812; In re Edwards, 45 Ida. 676, 266 P. 665.) The board is not in the true sense of the word an adversary. (Berry v. Alderson, 59 Cal. App. 729, 211 P. 836; Winning v. Board of Dental Examiners, 114 Cal. App. 658, 300 P. 866; Employees of Utah Fuel Co. v. Industrial Commission, 99 Utah 88, 104 P. (2d) 197.) Similar provisions with regard to the finality of administrative fact finding exist in other statutes and have been held no denial of due process. (Public Utility Commission, secs. 59-502, 59-612. 59-629. I. C. A., 51 C. J. 60, 61. secs. 111. 112. and sec. 138 at p. 76; workmen’s compensation statutes, 43-1404, 43-1406-9, I. C. A., 71 C. J. 1372, sec. 1331; Federal Trade Commission, 15 U. S. C. A. 334, sec. 45 (c); National Labor Relation Board, 29 U. S. C. A. 239, sec. 160(f); Precision Castings Co. v. Boland, 13 F. Supp. 877, 85 F. (2d) 15.)

While the district court had jurisdiction to declare whether an appeal would lie directly from the board to this court and to pass upon certain constitutional questions, it did not have jurisdiction to determine whether or not appellant or its agents were within the scope of the act, since they involve fact finding. In other words we hold that the district court had jurisdiction to construe the law and pass upon its constitutionality, but that it had no jurisdiction to investigate the facts, to make findings thereon or to determine the weight of the evidence or credibility of witnesses. (Abelleira v. District Court, 17 Cal. (2d) 295, 109 P. (2d) 942, 132 A. L. R. 715; In re Persons Employed at St. Paul & Tacoma Lumber Co., 7 Wash. (2d) 580, 110 P. (2d) 877; Knestis v. Unemployment Compensation and Placement Division, 16 Wash. (2d) 577, 134 P. (2d) 76; In re Morton, 284 N. Y. 167, 30 N. E. (2d) 369; South v. Railroad Retirement Board, 43 F. Supp. 911; Johnson v. Pratt, 200 S. C. 315, 20 S. E. (2d) 865; Craig v. Kansas State Labor Commissioner, 154 Kan. 691, 121 P. (2d) 203.) These were questions to be determined by the Industrial Accident Board in the first instance reviewable on appeal. We will therefore not determine these phases of the controversy but leave them for the appropriate tribunal and consequent attendant procedure.

No penalties have yet been imposed, hence the question of whether or not such excessive penalties are authorized as to render the statute unconstitutional is not properly before us.

Appellant contends that sec. 7-5 2 , as amended by sec. 6 of ch. 182 of the 1941 S. L., p. 405, is unconstitu tional. While the authorities are not unanimous, we believe the better rule is to the effect that in connection with hearings before • administrative boards of this kind unless an' appeal is provided therefrom to a court, even though the scope of review be limited, due process is not satisfied. (Zachos v. Huiet, 195 Ga. 780, 25 S. E. (2d) 806; Precision Castings Co. v. Boland, supra; Warren v. Indiana TelePhone Co., 217 Ind. 93, 26 N. E. (2d) 399; Miller v. Price, 282 Ky. 611, 139 S. W. (2d) 450; Union Indemnity Co. v. Saling, 166 Okla. 133, 26 P. (2d) 217.) The requirement that any appellant by appeal submit to the jurisdiction of a board in an appeal wherein he might be questioning jurisdiction is violative of this principle. This portion of the act (“The filing of an appeal under this section by any person shall constitute a submission by such person to the jurisdiction of the Board and”) is therefore unconstitutional and cannot be sustained. In view of the legislative declaration and also because it does not in and of itself appear to be an integral or indispensable part of the act it may be stricken therefrom without affecting the balance of the act.

The other claimed constitutional defects bearing on the passing of the statute and its lack of clarity are without merit. (State v. Taylor, 58 Ida. 656, 78 P. (2d) 125; Idaho Gold Dredging Co. v. Balderston, 58 Ida. 692, 78 P. (2d) 105; Fisher v. Masters, 59 Ida. 366, 83 P. (2d) 212; Ada County v. Wright, 60 Ida. 394, 92 P. (2d) 134; State v. Headrick, 65 Ida. 148, 139 P. (2d) 761.)

The judgment of the trial court therefore, insofar as the sustaining of the demurrer was based on the conclusion that it did not have jurisdiction to entertain the action for declaratory judgment is reversed. Insofar as the demurrer was sustained on the ground that it did not have jurisdiction of the determination of the factual question involved, namely, whether or not the appellant’s agents were employee’s within • the contemplation of the statute is sustained, and this feature of the case with all attendant questions as indicated above is to be determined by the Industrial Accident Board, with right of appeal by any party deeming himself adversely affected thereby.

Holden, C. J., and Ailshie, J., concur.

1 Chapter 70, 1933 Session Laws, page 113.

“Sec. 1. Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations, whether or not further relief is or could be claimed. No action or proceeding shall he open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect, and such declarations shall have the force and effect of a final judgment or decree.

“Sec. 2. Any person interested under a deed, will, written contract or other writings constituting a contract or any oral contract, or whose rights, status or other legal relations are affected by statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder.

# ‡ ;}: sj: s}:

“Sec. 12. This Act is declared to be remedial; its purpose is to settle and afford relief from uncertainty and insecurity with respect to rights, status and other legal relations, and is to be liberally construed and administered.”

2 “(a) The term ‘covered employer’ where used in this Act shall, for the purpose of this Act, mean an employer as defined in Sec. 7-6 of this Act, who in any calendar quarter paid or became liable to pay for services rendered to him in covered employment occurring on or after January 1, 1939, wages amounting to $78.00 or more. Determination with respect to whether an employer is a covered em ployer and whether services performed for or in connection with the business of an employer constitutes covered employment shall be made by authorized representatives of the Board. Any person aggrieved by such a determination may file with the Board an appeal from such determination. Such an appeal shall be heard and decided by the Board consistent with the provisions of this Act with the procedure for handling disputed claims for compensation under the Workmen’s Compensation Law and review of the decision of the Board may be had in the Supreme Court in accordance with the procedure set forth in section 6, subsection (g), of this Act. The filing of an appeal under this section by any person shall constitute a submission of such person to the jurisdiction of the Board and whenever a certified copy of a final decision of the Board or of the Supreme Court under the appeal procedure herein set forth shall be filed in hny court, the matters determined in such decision shall be deemed to be conclusively established, as to the rights of the parties to such appeal, in the court wherein such certified copy is filed.”