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McManus v. Industrial Commission of State of Arizona

Supreme Court of Arizona

December 5, 1938

W. J. McMANUS, Doing Business Under the Name and Style of the FAR WESTERN PLACEMENT BUREAU, Appellant,

APPEAL from a judgment of the Superior Court of the County of Maricopa. Levi S. Udall, Judge. Judgment reversed and cause remanded with instructions.

Mr. Harold J. Janson and Mr. Frank Hotchkiss, for Appellant.

Mr. Albert M. Garcia and Mr. Howard A. Twitty, for Appellees.


[53 Ariz. 23] LOCKWOOD, J.

W. J. McManus, doing business under the name and style of Far Western Placement Bureau, hereinafter called plaintiff, brought suit against the Industrial Commission of the State of Arizona and its members, hereinafter called defendants, asking for a declaratory judgment as to the constitutionality of certain provisions of chapter 33 of the laws of the regular session, 1937. The trial court found part of the act to be constitutional, and part to be unconstitutional, and plaintiff has appealed.

The defendants assigned cross-errors in their brief which challenge the determination of the trial court [53 Ariz. 24] that part of the act was unconstitutional, and the question is, therefore, whether any or all of said act is constitutional.

The facts necessary for a determination of the legal issue may be stated as follows: At its regular session in 1931, the legislature adopted chapter 112, which added to the first five articles of chapter 24 of the Revised Code of 1928 an article

Page 55

numbered 6, regulating employment agents. The new article provided, in substance, that all persons who furnished information to those seeking employment and who charged a fee therefor must be licensed by the state to engage in such business. They were required, as a condition to the issuance of a license, to execute a bond in the sum of one thousand dollars, conditioned that the licensee would conform to the provisions of the article. The Industrial Commission was given authority to supervise all employment agents and to enforce the laws governing them. The fees to be charged of those seeking employment through an agent, were to be fixed by a schedule filed with, and approved by, the commission, and it was further provided that under certain circumstances any fee paid to the employment agent by the applicant for work should be returned to him, and that if the agent failed to comply with all of the provisions of the act or the orders of the commission, his license might be revoked. In 1937 the legislature became convinced that the law was deficient in some parts, and amended it by chapter 33, supra. The amendments required that the employment agent, instead of giving a bond as under the original act, should deposit with the Industrial Commission five hundred dollars in cash, and, after setting up the circumstances under which the fee charged by the employment agent of an applicant for employment should be returned, provided as follows in section 3, subdivision (e) of chapter 33:

[53 Ariz. 25] "Should the employment agent refuse or fail to make prompt refund, upon demand, as provided in this section, the applicant may apply to the commission for a hearing, and if the commission, upon investigation, finds that the applicant is entitled to a refund it shall issue an order to that effect, and shall pay such refund to the applicant out of the cash deposited by the employment agent. Either party to any such controversy may appeal, within five days from the issuance of any such order, to the superior court of the county in which the business of the employment agent is located."

The chapter also contained this section:

"Sec. 5. Severability. If any provision of this act be held invalid, such invalidity shall not affect other provisions which can be given effect without the invalid provision, and to this end the provisions of the act are declared to be severable."

Plaintiff challenged the constitutionality of the provision of the act authorizing the commission to return the fees of applicants for employment out of the five hundred dollars cash deposit made with it, for the reason that nowhere in the act was there any provision for a hearing before the commission on the question of whether the applicant for employment was entitled to a return of his fee, which required that the employment agent be given notice of such hearing and an opportunity to appear and defend against the charge. He further contended that since the clause requiring a deposit was only adopted to provide money for refunds, if the clause which allowed the commission to use such fund for that purpose was unconstitutional, the one requiring the deposit must necessarily fall also.

As we have stated, the trial court held the clause authorizing the commission to use the deposit for refunding purposes unconstitutional, but determined that the one requiring a cash deposit was valid. We [53 Ariz. 26] shall, therefore, consider whether the holding of the lower court declaring part of the act unconstitutional was correct, for if it was not and the clause authorizing the commission to use the cash deposit for the ...

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