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Williams v. Summerour

Court of Appeals of Georgia
Sep 4, 1958
105 S.E.2d 489 (Ga. Ct. App. 1958)

Opinion

37222.

DECIDED SEPTEMBER 4, 1958. REHEARING DENIED SEPTEMBER 22, 1958.

Employment security tax. Gwinnett Superior Court. Before Judge Clinkscales. April 10, 1958.

Otis L. Hathcock, D. J. Ratliffe, for plaintiff in error.

James M. Roberts, contra.


Since the cotton seed had reached a terminal market within the meaning of the Employment Security Law, the services rendered and performed by the defendants in fi. fa. in relation to these seed did not come under the definition of agricultural labor as defined by the law and, therefore, the employees of the defendant in fi. fa. performing these services were not exempt from coverage of the law.

DECIDED SEPTEMBER 4, 1958 — REHEARING DENIED SEPTEMBER 22, 1958.


T. V. Williams, Georgia Commissioner of Revenue, for the use of Ben T. Huiet, Georgia Commissioner of Labor, issued an unemployment contribution fi. fa. against Summerour Seed Company, a partnership. After levy the defendants in fi. fa. filed an affidavit of illegality which was traversed by the plaintiff in fi. fa. and the issues were joined. In their affidavit of illegality the defendants in fi. fa. alleged: "1. That said execution was issued upon the basis that the defendant in execution was liable for payment of contributions with respect to wages payable for employment as required by Sections 54-620, 54-621 and 54-622 of the Code of Georgia for the calendar years 1952, 1953, 1954, and 1955. 2. That defendant in execution did not have in the calendar years 1951, 1952, 1953, 1954 nor 1955, for any portion of a day, simultaneously or not simultaneously in each of twenty different weeks, consecutive or not consecutive, in employment, eight or more individuals and therefore defendant in fi. fa. was not an `employer' as defined in Section 54-657 (g) of the Code of Georgia and therefore defendant in execution was not liable in any of the calendar years 1952, 1953, 1954, nor 1955 for payment of contributions with respect to wages paid its employees during said calendar years. 3. That at no time during the calendar years 1951, 1952, 1953, 1954 nor 1955 did defendant in execution have eight or more employees who were engaged in employment as defined in Section 54-657 (h) of the Code of Georgia."

The case was submitted to the Judge of the Superior Court of Gwinnett County without the intervention of a jury. The only testimony submitted was that of B. F. Summerour who testified as follows: "I am in business in Gwinett County with an office at Norcross. A farm and considerable degree of the cotton seed is in Fulton County. The business is a family partnership and I am the managing head. The Summerour Seed Company was operated originally by my father, starting over 50 years ago, with the breeding of cotton seed which he developed and brought out a new type at that time called half and half, Summerour's Half and Half. We have extended that operation, the breeding, contracting and all on the general procedure of breeding of pure seed, somewhat like breeding pure animals through certain generations for the reproduction and increasing of cotton.

"The partnership owns slightly over 600 acres of land and it is used for the business of the partnership breeding cotton seed and is what we classified all these years as our breeding farm. In addition to our own land we have contracts with other farmers to raise cotton seed.

"The paper identified as Defendant's Exhibit No. 1 is the form contract that is used with other farmers to whom we furnish all the seed they use. The farmer himself furnishes his land, the crop is grown on his land and he furnishes all labor, all equipment and makes arrangements either with us or others to supply fertilizer and general materials and supplies for farming. He pays for the fertilizer and that on a credit basis, usually, but he pays for it. It's his responsibility. We furnish them with planters. The reason for that is, I think you recognize the supply of special bred seed is limited, so the direct reason for it is to improve the condition of the stock so that they would go farther in reproducing and, of course, it's a mutual contract between us for the general benefit and we think it benefits the outfit, benefits the conditions for a stronger plant and therefore would work to his interest as well as ours. The contract indicates that we retain title to the whole crop until the seed is brought to our gin. The company operates a gin. We buy all the seed. If it is suitable for replanting we pay a premium and if it is not for that, we buy it anyway.

"After that seed is ginned it's stored first for an average of at least two months. Cotton seed is one seed that needs to go through a period of dormancy to cure out or dry it and then later getting the processing ready for preparing for shipment, sale. We pass it back through other machinery which we classify as delinting and cleaning which is also standard for the type work we do, and bagging and shipping on the receipt of orders. The seed that is not suitable for replanting goes to the oil mill. That is determined after the curing period, after germination has been made on the seed through the laboratories or ourself. The seed that is not suitable for planting is not delinted. It goes to the oil mill in its natural state. The replanting seed is delinted, graded, treated, put in bags and then some of it is shipped from the bagging machine right to the railroad. Some of it is temporarily stacked up and stored in our warehouses subject to filling orders, just to build up a supply ahead.

"Certain lots of that seed is used for filling orders, sold to the public. In our breeding processes, we have stock of seed that comes in from our farms from a certain selected class of contractors that are breeding stock. They are not delinted for the purpose of going to the market. One of the steps in our reproducing process, in other words, just our breeding stock, just like a herd of cattle or anything, they are not for sale under any circumstances. They are breeding stock. Those seed are stored until next spring and they are allocated either to ourself, depending on the status of them from the hand selected condition, or they go out to the same series of contractors or different ones. They are all used on the partnership land or on the land of the contracting farmers for reproducing purposes and agricultural purposes.

"The percentage of our seed that is sold to the public is approximately 75 to 80 percent. We usually try to figure what our production, that is, our reproducing is. I suppose over-all, you see, we have a stock of seed for some two or three years continuously in the process of breeding. I would say between a fifth and a fourth, that is 20 to 25 percent of the seed is our stock seed that we do not offer for sale. They are put in bags and as a general rule, they are put in the warehouse, but not in the same, that is, we keep them separate and distinct. They are separated and we tag these. Particularly the small lots that we produce on our own farm. Each bag is tagged. But, of course when you get into the larger lots, they are just tagged by lots. In fact, even the seed we sell, most of those seeds from the standpoint of storage are bagged, or at least put in the ventilating system to keep from deteriorating, or cure them out, as we call it. That is the process.

"As to selling fertilizer to parties and things like that, the fertilizer end has been a very low percentage of use. I am talking about now to the contractors. Of course, we buy the fertilizer for our own use on the farm. But the fertilizer that we sold to our contractors is limited to the top dressing or nitrate of soda or various types of nitrates, and the other commodity that we handle for the general help is poison to dust, fight the boll weevil. So far as the soda and ammonia and practically all of the poison in the years involved in this was not handled by us at all. It's been our policy and we are still doing a small amount of it and, therefore, it would be to that degree under the same provisions, but a good friend of ours, Vender Brothers in Duluth, has been handling 95 percent of our supplies to the farmer and to ourselves as well.

"We don't actually manufacture any fertilizer. There again I don't suppose it has any bearing, except we don't do it as a business enterprise. We do it as an adjunct or side line to our contract with the farmer to make it available and work to his interest and ours jointly. In other words, we are not doing that at all from the standpoint of making a profit. Actually, it's just a financial favor to our contracting farmers, we lose money on it every year, so far as that is concerned and we don't sell any fertilizer to anybody except these contracting farmers. We don't sell it to the general public. Sometime the fertilizer that we sell is hauled by our truck and sometime the farmer picks it up. If it is sold by the man at Duluth he would handle it. Mostly, I think he delivers it.

"The seed that we use and the contracting farmers use, is kept in the warehouse until it's needed the next spring and sent out on the same basis. The seeds that we sell are just sold in the regular course of business and then in the spring we have another side to our employment of services. Now, we check over and maintain these planters, which we loan to the farmers without any charge at all. In other words, no return. These pieces of equipment that we keep in shape for them to use for the planting of our seed. We will loan that to them.

"We have supervisors who go out and check on these contract farmers, check to see how the crops are getting along and render certain service in that line of production of their crop. The same supervisors supervise the planting and harvesting on our farm.

" . . . In the years 1952, 1953 and 1954 we did not have the full 600 acres in cultivation in cotton. Due to government regulation, we had for all this period — at a maximum, probably 60 to 70 acres. We were compelled to reach out and get acres for our own breeding purposes.

"The relationship of acres under cultivation in cotton in 1952, 1953, and 1954 was about 50 to about 2500. That was about 1/50. In other words there was 50 to 60 acres in cotton producing on the farm owned by the individual partnership and we had under contract with farmers about 2500 acres for the growing of cotton. The seed secured from farmers was about the same ratio with the acreage. It was not on the average. It would be somewhat less. In other words, the yield on the partnership acreage would be more than the average of the whole contract average. The partnership farm yield was more per acre.

"When the cotton is ginned the farmers agree to gin it at the company gin and the seed is taken at that time and put in the warehouse. They were stored at the same time. The seed were bought from the farmer at the time they were ginned and he, the farmer, never touches them after that. When the cotton is ginned the farmer takes the baled cotton and our company takes the seed and puts it in the warehouse. That is when the seed is bought from the farmer. The seed is then put in the warehouse where it stays for a month or two to dry and then the company starts the processing.

"In the spring the seed is given to the farmers in the sense that the contract indicates. They are simply supplied to them as planting stock and he replaces those seed out of the grown stock in tonnage or pounds. In other words, he is given so many pounds or so many bushels of seed and then he is to replace that in the fall. He does not own those seed, they belong to the Summerour Seed Company. In his contract he agrees to sell the company all the seed for a certain price and the company takes all those. Of course, we consider in the term of selling these, they are our seed and that's the basis of settlement. It's establishing a price for the services rendered us in producing our so called pedigree seed, or whatever you want to call the seed. The price means the premium over the prevailing market as indicated in the market, the $5.00 per ton over. We purchase all the seed from him at that price. Sometimes trade conditions are such we pay more, but that's between us. The seeds we sell to the public are the ones that the farmer turns back to us. They are included in the 75 percent we sell to the public. The seeds we let the farmer have at the first of the year, the stock of seed, are not included in the 75 percent that we sell to the public. The ones we furnish the farmer come out of the 25 percent. In other words, the 25 percent that was not sold is used for the purpose of furnishing our farm and the contract farmers.

"We did not handle any appreciable amount of fertilizer or poison during the years 1952, 1953, and 1954. We had an arrangement with the man at Duluth to sell that. We did not get a profit or override. It was sold to the various contracting farmers. They were responsible for it in this sense. We protected this man. If the seed didn't pay, we would pay the bill. We underwrote or was responsible to the man in Duluth for payment of any fertilizer or poison that was furnished to any of the contracting farmers. But we did not enjoy any profit in the deal in any sense. In other words, we were just, you might say, standing for the deal. As to how the orders were made, I just furnished him a list. Of course, through the years it was almost automatic because the same man used them. Sometimes he would render me a list and say this man didn't have them this year. We just got to know the men. We simply protected his sale to these fellows that bought the supplies for the cotton crop. . .

"The duties performed by the various individuals from the time the cotton is ginned and we take charge of the seed is pretty well established and there is no question about what the various people do."

The contract which was introduced in evidence is as follows:

"This contract between B. F. Summerour Seed Company, a partnership of the County of Gwinnett, of the first part, and _________________________, of the County of Gwinnett, of the second part.

"Witnesseth: That the party of the first part hereby agrees to furnish to the party of the second part ____ bushels of Summerour's Hi-Bred Cotton Seed, to be planted by the party of the second part upon the following terms and conditions:

"The party of the second part agrees to plant his entire crop from the seed so furnished and to keep them free from mixture with other seed at the gin or otherwise, and to first return to the party of the first part ____ bushels of seed grown from Summerour's Hi-Bred Cotton Seed furnished by the party of the first part, and to sell other seed grown from said seed as shall be considered good planting seed to the party of the first part at $5.00 per ton above the prevailing prices at the time of delivery and to sell to the party of the first part all other seed not considered good planting seed grown from the seed furnished by the party of the first part at the regular prices prevailing at the time and place of delivery for milling seed in wagon lots. It is mutually agreed that should more seed be used to complete the planting of the crop by the party of the second part, such seed are of course secured under same conditions and are covered by this contract the same as if they were set out in this form.

"The party of the second part agrees to have his cotton ginned at Summerour Gin in Norcross, Georgia, and that time of delivery of seed shall be at the time of ginning cotton.

"The party of the second part expressly agrees that he will not otherwise dispose of any of the seed either furnished him by the party of the first part or grown by him from seed furnished him by the party of the first part to any person, as per the terms of this contract, unless by special permission of the party of the first part, and title to all of the seed and cotton grown by the party of the second part shall remain in the party of the first part until all terms and conditions of this contract are complied with.

"It is further agreed that should the party of the second part sell or otherwise dispose of any of the seed grown from the seed furnished him by the party of the first part that his so doing shall be held and deemed a breach of his contract, and that the party of the second part shall be liable as liquidated damages to party of the first part in the sum of $5.00 per bushel (or $15.00 per hundred) for all seed so sold or otherwise disposed of; and the party of the first part is hereby given the right to seize and take possession of all cotton and seed grown from seed furnished him by the party of the first part."

The parties stipulated as follows:

"It was stipulated between the parties that the only question to be decided by the court was whether the services performed by employees of and for the Summerour Seed Company, after ginning of the cotton, was in `employment' as defined in the Employment Security Law and should be counted in determining the liability of the company or whether such services come within the definition of the term `agricultural labor' as classified in the law.

"Further, that the amount of unemployment tax, if any due by the defendant in fi. fa. would be computed by the auditors in accordance with the ruling of the court.

"It was further stipulated that the fi. fa. and levy thereon, and the bond given by the defendant in fi. fa. was admitted into evidence and that the defendant in fi. fa. assumed the burden of proof."

After a consideration of the evidence, the trial judge entered the following order:

"It is considered, ordered and adjudged that the operations of Summerour Seed Company, a partnership during the years 1952, 1953, 1954 and 1955 consisting of producing cotton seed either on the farms of the partnership or of farmers with whom it had contracts or in ginning, delinting, cleaning and processing the cotton seed to the point where such seed are placed in bags and stored in defendant's warehouse and of distributing the cotton seed to its own farms or to the farms under contract with it, were performed as an incident to ordinary farming operations and the employees of Summerour Seed Company performing and supervising these operations were engaged in `Agriculture Labor' and were not engaged in `employment' as defined in the Laws of Georgia.

"It is further considered, ordered and adjudged that the operations of Summerour Seed Company in buying and distributing fertilizer, poison, nitrate of soda and other supplies to its farm and to the farms under contract to it, were performed as an incident to ordinary farming operations and the employees of Summerour Seed Company performing and supervising these operations were engaged in `Agriculture Labor' and were not engaged in `employment' as defined in the Laws of Georgia.

"It is further considered, ordered and adjudged that the operations of Summerour Seed Company in selling and distributing seed to the general public, subsequent to said seed having been placed in its warehouse in bags were not performed as an incident to ordinary farming operations and the employees of Summerour Seed Company performing and supervising these operations were not engaged in `Agriculture Labor' and were engaged in `employment' as defined in the Laws of Georgia.

"It is therefore considered, ordered and adjudged that the levy involved in this case be and the same is hereby dismissed, the execution levied, issued by T. V. Williams on November 13, 1956 is declared null and void and the plaintiff and defendant are ordered, in accordance with their stipulation, to compute the amount of contributions, if any, due by the defendant, based on the foregoing ruling.

"It is further ordered that the defendant do have and recover of the plaintiff, for the use of the officers of this court, the sum of $............... as costs, to be computed by the clerk of this court."

The plaintiff in fi. fa. filed an amended motion for a new trial. The special grounds of that motion are more or less an elaboration of the general grounds but specifically in ground 4 the movant contended that the court erred in applying a liberal construction of the tax exemption provisions of the law whereas the law required a strict interpretation and application in order to effect the beneficent purposes of the law in the light of declared public policy, and special ground 7 which complains that the defendant in fi. fa. failed to carry the burden of proof cast upon him.

The court denied the amended motion for a new trial, and the plaintiff in fi. fa. excepts.


The question is whether the employees of the defendants in fi. fa. are agricultural laborers as to their duties after the cotton is ginned. The defendants in fi. fa. concede that the act must be construed liberally in favor of coverage and the exemption in favor of agricultural labor must be strictly construed. That portion of the act exempting agricultural labor provides that "agricultural labor" includes all services performed "in handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; but only if such service is performed as an incident to ordinary farming operations or, in the case of fruits and vegetables, as an incident to the preparation of such fruits or vegetables for market. The provisions of this paragraph shall not be deemed to be applicable with respect to service performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption." Code (Ann.) § 54-657 (h) (7) (A) (iv). It is not necessary to determine whether the services performed by the defendants in fi. fa. after ginning were performed as an incident to ordinary farming operations because as to the grower or producer the defendants' in fi. fa. facilities and warehouse constituted a "terminal market". Irrespective of the provisions of the contract between the growers and the defendants respecting advancements, cross-credit, etc., the contract amounted only to an agreement to buy and sell.

While Federal statutes and decisions are not binding on us in this matter they are persuasive and may be looked to for aid and enlightenment. In Burger v. Social Security Board, 66 F. Supp. 619, and Miller v. Burger, 161 Fed. 2d 992, the statute involved was the Social Security Act but the provisions of that act regarding the exemption of agricultural labor from coverage and defining "agricultural labor" are exactly the same as the Georgia act under consideration here. In those cases "terminal market" was held to refer to the growers' or producers' market and was one where the grower or producer parted with his economic interest in his commodity. We think the same reasoning applies in the instant case under the construction of the act which we are bound to apply. It is clear that the contract growers in the instant case parted with their economic interest in all the seed produced by them when the cotton was ginned. That was when the seed was sold by them and was bought by the defendants in fi. fa. Mr. Summerour testified in part: "When the cotton is ginned the farmers agree to gin it at the company gin and the seed is taken at that time and put in the warehouse. They were stored at the same time. The seed were bought from the farmer at the time they were ginned and he, the farmer, never touches them after that. When the cotton is ginned the farmer takes the baled cotton and our company takes the seed and puts it in the warehouse. That is when the seed is bought from the farmer." After that nothing is done to the seed that benefits the grower. The mere grading of the seed to determine what prices will be paid is not for the grower's benefit in this sense.

Since the term "terminal market" refers to the grower's market and the grower parts with all economic interest at the time of the ginning and nothing further is done to the seed for the grower's benefit, the services rendered by the defendants in fi. fa. in relation to the seed after it reaches them subsequent to the ginning are rendered after the seed reach a "terminal market" and, therefore, these services are not "agricultural labor" exempt from coverage by the act, and the court erred in finding otherwise.

The court erred in dismissing the levy and in denying the amended motion for a new trial.

Judgment reversed. Quillian and Nichols, JJ., concur.


Summaries of

Williams v. Summerour

Court of Appeals of Georgia
Sep 4, 1958
105 S.E.2d 489 (Ga. Ct. App. 1958)
Case details for

Williams v. Summerour

Case Details

Full title:WILLIAMS, Commissioner for use, etc. v. SUMMEROUR et al

Court:Court of Appeals of Georgia

Date published: Sep 4, 1958

Citations

105 S.E.2d 489 (Ga. Ct. App. 1958)
105 S.E.2d 489