Witherspoon Oil Co. v. State

COMBS, Justice. The majority do not concur in that part of the opinion prepared by Mr. Chief Justice WALKER wherein it is held that appellant’s failure to file written application for termination of coverage rendered it liable for the unemployment compensation tax for the year 1939. We all agree that appellant on the record was liable for the tax for the years 1936 and 1937, by reason of the fact that appellant and C. L. Witherspoon should be treated as a single taxing unit, and said unit had enough employees during said two years to make it liable for the tax. Also, on our construction of the statute, it was liable for the tax for the year 1938 by reason of the fact that it was covered by the Act of the preceding year, Sec. 17(f) (1). But on the undisputed facts it was not liable for the tax for the year 1939 unless it was rendered liable by the mere fact that it failed to file written application for termination of coverage, as provided by the Unemployment Compensation Act, Art. 5221b — 6(c). The provision is quoted in the opinion of Chief Justice WALKER and need not be repeated here. It is our view that on the record before us the provision should not be given the effect of rendering the appellant liable for the tax. As pointed out by Chief Justice WALKER, the requirement for written application for the termination of coverage is to aid the Commission in administering the Unemployment Compensation Law by requiring an employer subject to the Act to make such application and have his status determined before being relieved from coverage in order that the records of the Commission may at all times correctly reflect those who are subject to the provisions of the Act. To our minds, this provision has application only where the status of the applicant is that of an employer subject to the Act, as reflected by the records of the Commission. There are other provisions of the statute which prescribe penalties for failure of an employer subject to the Act to make proper reports to the Commission. See, Art. 5221b —12(c) (d) (f) (g) and (k). The provision here in question is penal in nature and imposes the tax in the form of a penalty for the failure of the employer to report his change of status, when he ceases to have the number of employees which render him subject to the Act. In the present case the status of the appellant was, upon the records of the Commission, that of an employer not covered by the Act. It had paid the tax for the year 1936, which tax was subsequently refunded to it at the suggestion of. the Commission, which notified appellant that it was not covered by the Act. It was therefore unnecessary for it to file application for a termination of coverage when the very agency to which such application would be made had already notified appellant that it was not covered. It should be noted, as pointed out by Chief Justice WALKER, that there is no suggestion of fraud on the part of appellant in submitting its report upon which the Commission based its ruling of non-coverage, or that it intentionally sought in any way to avoid any tax which might be due by it. The record is perfectly consistent with the good faith belief that it should not be considered with C. L. Witherspoon as a single unit in determining the question of coverage by the Act. Indeed, it strongly contends in the present case that it should not be so considered and even though that issue has been determined against it,, the record is perfectly consistent with its good faith belief that it was not subject to the Act. Consequently, it is our view that since the records of the Commission, without any fraud or misrepresentation on the part of the appellant, reflected its status as that of non-coverage by the Act, it rested under no duty to file application for termination of coverage when the number of employees employed by the taxing unit fell below [581] the number which subjected it to the Act. The statute being penal -in nature, it should be given a strict construction consistent with the attainment of the end sought, which is the making of written application for termination of coverage by employers who are classed by the records of the Commission as being subject to the provision of the Act. It would be wholly unjust in this case to inflict the penalty upon the appellant when its status upon the records of the Commission was that of non-coverage. It would be to penalize it for failure to make application for a change of status, which it was justified in assuming needed no changing. It follows that the judgment of the trial court should be reformed by striking therefrom the item of $57.58 for Unemployment Compensation tax for the year 1939, and that as so reformed the judgment should be affirmed. Reformed and affirmed.