The opinion
CARTER, J.
I dissent. In this ease the trial court found that the services performed by the employees of defendant were agricultural labor as that term is used in the California Unemployment Insurance Act. (Stats. 1935, p. 1226 as amended.) Hence, only the evidence favorable to defendant may be considered and all conflicts resolved in its favor. Therefore, I believe that at the outset the facts should be clearly stated.
Defendant is a cooperative association incorporated in 1914 under the laws providing for the organization of cooperative agricultural associations, not created to make a profit for themselves or their members as such but only for 'thevd members as producers. (Civ. Code, §§ 653m-653s, added by Stats. 1909, p. 16; now in Agr. Code, §§ 1192-1221.) Under the. above cited provisions, only persons who are producers may form such a corporation (Agr. Code, § 1193), and may admit as members only persons engaged in the production of products “to be handled by or through the association, including the lessees and tenants of land used for the production of such products and any lessors and landlords who receive as rent all or part of the crop raised on the leased premises.” (Agr. Code, § 1195.) .Defendant limited its membership to owners or tenants of a minimum quantity of land m Butte County, and all of its members are producers of agricultural products. Its membership certificates are valued at $300 each, there being 48 outstanding at the time in question. There are 25 applicants for membership who have each paid $10 on account.
Defendant owns and operates. a warehouse in which it stores grain and rice for its members, including the applicant members, but not others, except sometimes the assignees of members. Persons become assignees of members only by reason of a transfer to such persons by members of their right to the grain stored and such transfers are solely for the purpose of securing loans. The assignees do not become *641 members. It does not process or sell rice, grain or other products. At the beginning of the season it fixes a storage charge and makes rebates at the end thereof if the charge is more than the amount necessary to meet the cost of operation. No rebate is made to the applicant members unless they pay the balance due on their membership. Defendant purchased, usually upon order of its members, and sold to its members, merchandise commonly used in farming but made no profit thereon. It made a few sales of merchandise to one of its employees, not one of its members, but did not make or offer to make sales to others. It is licensed by the State Department of Agriculture to conduct a general warehouse business and authorized to issue negotiable warehouse receipts (Agr. Code, §§ 1231-1258), which are sometimes assigned by the members and the assignee pays the storage charges. The storage rates have been fixed by defendant’s directors but not by the Railroad Commission. It did not solicit business from nonmembers or permit the public to use the warehouse. And although licensed under the warehouse act defendant does not purport to operate a public warehouse.
With the foregoing factual background we turn to the statute.
The Unemployment Insurance Act was adopted in 1935. It provides for the payment of contributions to alleviate conditions of unemployment in industry generally, but exceptions from its operation are provided for therein. Section 7(a) reads in part: “The term ‘employment’ does not include: (a) Agricultural labor; ...” No definition of that term is given in the act. Plaintiff, California Unemployment Commission is created by the act (§ 75), and to it is entrusted the enforcement of the act. It is authorized, and it is its duty, to “adopt and enforce rules and regulations which to it seem necessary and suitable to carry out the provisions of this Act.” (§ 90(a).) Its first rule, and an amplification thereof defining the term “agricultural labor,” were effective in 1935. It generally embraced anyone engaged in the art or service of cultivating the ground, the harvesting, or the packing and preparation for market of products where the commodity does not change its original state. The amplification dealt with horticultural products. A rule effective in January, 1936, also exempted from the operation of the act services performed in the packing and preparation for *642 market by growers and nonprofit cooperative marketing associations, where the commodity did not change its original state, and such services were performed exclusively for members and no profit was made.
There is a clear indication in those rules that it was intended that the term “agricultural labor” should embrace more than employment in the mere cultivation and harvesting of products. Packing and preparation for market were also included when done by a nonprofit association, which may imply that services rendered in connection therewith need not be performed upon the land where the commodities were produced or for the actual producer. In the instant case the storage was an incident of the harvesting, packing and preparation of the products for market. The rule (rule 7.1) effective on February 14, 1937, which was in force during the time here involved, is quoted in the majority opinion. The rule adopted in April, 1940, added nothing material to the above quoted rule 7.1, insofar as the facts in the instant case are concerned. The Legislature evinced its approval of those rules by its action and inaction after their adoption. During the first session of the Legislature following the adoption of the act (1937), rule 7.1 became effective. At that session section 7 of the act was twice amended (Stats. 1937, pp. 2052, 2057), but the term “agricultural labor” remained the same as it had theretofore existed without amplification. Likewise, in 1939, section 7 was amended but no definition of what constituted agricultural labor was given. (Stats. 1939, eh. 628, p. 2048; ch. 1039, p. 2850.) At the 1939 session section 90(b) of the act dealing with the authority of the commission to adopt rules and regulations was amended by adding thereto the sentence: “Rules or regulations heretofore adopted shall continue in effect until amended or rescinded in accordance with the procedure prescribed by this section.” (Stats. 1939, ch. 1083.) Also during the 1939 session of the Legislature, amendments to the Federal Social Security Act dealing with unemployment insurance were being considered and such amendments were adopted by Congress on August 10, 1939; they defined agricultural labor in detail and broadly, the term having theretofore been undefined by Congress. It read in part: “The term ‘agricultural labor’ includes all service performed—(1) On a farm, in the employ of any *643 person, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wild life. . . .
“ (4) In handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to ma/)’ket 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.” ( 26 U.S.C.A. § 1607 .) A bill introduced in the Legislature providing for the adoption of the federal definition of the term, whatever it might be did not pass. However, the 1939 amendment to section 7 of the California Unemployment Insurance Act did add many of the other amendments made by Congress in 1939. At the extra session of the Legislature in 1940, a resolution directing the commission to adopt the definition given to the term by Congress in 1939 did not pass. In 1941, the Legislature again amended several sections of the act but did not amend section 7. A bill was introduced to amend section 7 so as to define the term practically the same as was done by Congress in 1939, but on recommendation of the committee to which it was assigned, the amendment was stricken. In 1943, the Legislature passed a bill amending section 7, giving the definition of the term used by Congress in the 1939 federal statute; it was vetoed by the Governor.
It should also be noted that the act was adopted in California in the light of contemplated conformity to the federal act. Because of the interrelation of the acts, the obligations imposed by them, and the necessity for the adoption of an approved state act in order that benefits under the federal act may be enjoyed, there is a strong justification for the policy that they operate uniformly and harmoniously. (See Industrial Commission v. Woodlawn Cemetery Assn., 232 *644 Wis. 527 [ 287 N.W. 750 ] ; Woods Bros. Const. Co. v. Iowa U. Compensation Com., 229 Iowa 1171 [ 296 N.W. 345 ]; Matcovich v. Anglim, 134 F.2d 834 ; Buckstaff Bath House Co. v. McKinley, 308 U.S. 358 [ 60 S.Ct. 279 , 84 L.Ed. 322 ].) That policy is evinced by the state act. Section 2 provides in part: “This act is enacted as a part of a National plan of unemployment reserves and social security, and for the purpose of assisting in the stabilization of unemployment conditions. The imposition of the tax herein imposed upon California industry alone, without a corresponding tax be imposed upon all industry in the United States, would, by the corresponding penalty upon California industry, defeat the very purposes of this act set forth in section 1. Therefore this act shall take effect only if and when there is enacted legislation by the United States Government providing for a tax upon the payment of wages by employers in this State, against which all or any part of the contributions required by this act may be credited.” Hence, heed must be given to the federal act as interpreted by the rules adopted thereunder and also by the latest amendments thereto which define agricultural labor to clearly embrace the activities involved in the instant case. The federal eases have recognized that the services need not be performed by employees of the farmer. Stuart v. Kleck, 129 F.2d 400 , and Chester C. Fosgate Co. v. United States, 125 F.2d 775 , follow the federal definition. They held that in its orthodox sense the services performed where a corporation supplied labor to cultivate the soil and do other things on the land for the owners thereof, constituted agricultural labor within paragraph (a) of the treasury regulation, and that the second sentence in paragraph (b) was not intended to qualify paragraph (a). Indeed, they applied the regulation. In line with those cases (see, also, California Employment Com. v. Bowden, 52 Cal. App.2d Supp. 841 [ 126 P.2d 972 ]) under the first paragraph of the rule the services may be agricultural labor where the employees are not employed by the owner or tenant of a farm when, however, the services performed are of the character which are clearly acts of farming. When it comes to packing, processing, transporting and storing in a warehouse off the farm we find activities which are in many respects a part of farming operations.
Applying rule 7.1 to the facts in the instant case, it clearly *645 appears that the services performed by defendant’s employees constituted agricultural labor as therein defined. True, the employees were not engaged by the farmers or tenants in person, but as above shown that was not necessary and the activities engaged in by defendant were concerned either with storage of the products of farms owned or operated by its members, or the procurement and handling of merchandise used by its members in farming operations. The corporation, the association, is nothing more than an instrumentality of the owners and tenants of the farms. None but owners or tenants are accepted as members. The corporation is nonprofit and operates for its members thus indicating its noncommercial character and that it is only an instrumentality of the members. This view finds support by implication in the law under which defendant is organized. Section 1213 of the Agricultural Code provides: “. Any exemptions under any and all existing laws applying to agricultural products in the possession or under the control of the individual producer, shall apply similarly and completely to such products delivered by its farmer members, in the possession or under the control of the association.” That clause embodies a broad statement of policy that the association ti/nd its members may be treated as one in connection with exemptions in the laws although it refers only to products. That is a policy which has been declared by the Legislature and was on the books when the act in question was adopted. The two must be read together and in so doing the only reasonable conclusion is that there was no intent to treat farmer exception provisions as applying only to instances where the farmers were not banded together in associations. In the case at bar it must be remembered that the trial court found for defendant and the evidence must be interpreted in a light most favorable to it. Only one instance is shown where a nonmember was supplied merchandise. The trial court may have disregarded that. Storage facilities were supplied only to members. The fact that defendant has a license to operate its warehouse and thus has assumed the duty to serve the public was not deemed controlling by the trial court. More vital is the actual manner in which defendant operates. The services performed are of the character that is common in conducting a farm, and a necessary part thereof, that is, handling and storage of the crops produced and handling *646 and procuring equipment. If a farmer stores his products on his property it would not be doubted that such was a part of his agricultural pursuit. It is not required that such storage he made on his farm. If he or his neighbors form a group to perform the same functions off the farms they are still engaged in agriculture. If it be said that paragraph (1) of rule 7.1 does not embrace the activity here involved because it is not performed on the farm, and that likewise paragraph (2) does not include the activities here involved, then we have an activity which is clearly agricultural in character but which is neither embraced in nor excluded by the rule. However, we believe the storage of materials produced on a farm is included within paragraph (2), and, as w;e have seen, defendant’s employees were in effect the employees of the landowners or tenants, and that the procurement of equipment for use on a farm is a farming activity. There is no commercial aspect to defendant’s activity considering the manner in which it is conducted. In arriving at this conclusion I am not disregarding the corporate entity of defendant as that phrase is commonly understood but are merely arriving at a definition of agricultural labor.
The foregoing reasoning is ably supported in the case of Industrial Commission v. United Fruit Growers Assn., 106 Colo. 223 [ 103 P.2d 15, 17 ], where the court said: “Also it is conceded that if an individual farmer member of the association marketed the fruit produced from his orchard, the labor attendant to such marketing operation would enjoy an exempt status under both regulation 6 and statute. The commission contends, however, that a transition from an exempt to a nonexempt position occurs when the association takes over the marketing function, and the labor incident thereto is performed by its employees, and not the farmers. We cannot agree with this contention. If the labor employed by one individual grower in marketing his crop is within the exception of the statute, as unquestionably is the case, it would seem that if two or more farmers pool their crops and cooperate in marketing them, their situation would not be different from that of the individual' grower. It is a matter of common knowledge that all fruit growers do not belong to cooperative associations and that such producers individually, with labor employed by them, attend to their own marketing operations. Thus we can perceive no reason for hold *647 ing that because a number of fruit farmers cause a cooperative association to be organized for the purpose of facilitating the marketing of their farm products, they should be subject to the terms of a regulatory statute which eoncededly would not apply to the labor employed by them if acting individually, or by other persons engaged in the same activity who are not members of such an association. . . . The basic conception of an agricultural cooperative association is that of a group of farmers who reside in the same vicinity acting together for their mutual benefit in the cultivating, harvesting and marketing of their agricultural products, and the association itself, with the special powers and limitations conferred by statute, is merely a convenient instrumentality in the hands of the farmers for carrying on such activities. As is stated in United States v. Rock Royal Co-op., 307 U.S. 533 , 59 S.Ct. 993, 1008 , 83 L.Ed. 1446 ; ‘These agricultural cooperatives are the means by which farmers and stockmen enter into the processing and distribution of their crops and livestock. ’ In Mountain States Assn. v. Monroe, 84 Colo. 300 , 269 P. 886 , we held that the relation between a cooperative marketing association and its members is that existing between a trustee and his beneficiary or a principal and his agent. Under our cooperative marketing law, such associations are given the power ‘to act as the agent or representative of any member or members in any of the above-mentioned activities’ (c. 106, sec. 19(c), ’35 C.S.A.), which includes ‘marketing’ (e. 106, sec. 17, ’35 C.S.A.). Section 35 of the Cooperative Marketing Act provides: ‘Any provisions of law which are in conflict with this article shall be construed as not applying to the associations herein provided for. Any exemptions whatsoever under any and all existing laws applying to agricultural products in the possession or under the control of the individual producer, shall apply similarly and completely to such products delivered by its members, in the possession or under the control of the association.’ Accordingly, because of the peculiar relationship between the cooperative association and its members, it would seem evident that such of the purely agricultural activities of the producer members as are incidental to his ordinary farming operations remain so whether they are performed by him on his farm or for him through the medium of his cooperative marketing association.”
*648 The cases of Great Western Mushroom Co. v. Industrial Commission, 103 Colo. 39 [ 82 P.2d 751 ] ; H. Duys & Co., Inc. v. Tone, 125 Conn. 300 [ 5 A.2d 23 ] ; Park Floral Co. v. Industrial Commission, 104 Colo. 350 [91 P.2d 492]; Christgau v. Woodlawn Cemetery Assn., 208 Minn. 263 [ 293 N.W. 619 ]; Unemployment Comp. Div. etc. v. Valker’s Greenhouses, 70 N.D. 515 [ 296 N.W. 143 ]; and Oak Woods Cemetery Assn. v. Murphy, 383 Ill. 301 [ 50 N.E.2d 582 ], relied upon in the majority opinion were concerned chiefly with the question of industrial as distinguished from farming activity or that the labor be performed on the farm. Those matters have heretofore been discussed. (See St. Louis Rose Co. v. Unemployment Comp. Commission, 348 Mo. 1153 [ 159 S.W.2d 249 ].) The latter factor is not required by the rule.
These views are not contrary to those expressed in Cowiche Growers, Inc. v. Bates, 10 Wn.2d 585 [ 117 P.2d 624 ]. There, although reliance was placed upon North Whittier Heights Citrus Assn. v. National Labor Relations Board, 109 F.2d 76 , the state statute required that the services be performed on the farm for the owner or tenant. (Also see Appeal of Wenatchee Beebe Orchard Co., 16 Wn.2d 259 [ 133 P.2d 283 ].)
Much reliance is placed by the majority opinion on North Whittier Heights C. Assn. v. National L. R. Board, supra. That case is clearly distinguishable from the case at bar. First, the association there was engaged in more than merely storing produets grown by its members and an incidental sale of farm equipment to its members as is true in the ease at bar. It was engaged in “receiving, handling, washing, grading, assembling, packing and shipping the citrus fruit of its members and others for marketing under a marketing contract with the Semi-Tropic Fruit Exchange, which has a marketing agreement with the California Fruit Growers Exchange. Through these agencies practically all of the fruit handled by Petitioner moves directly from its plant to vehicles for transportation under the direction of the California Fruit Growers Exchange into interstate and foreign commerce.” The point is stressed by the court that it was a big commercial enterprise a condition certainly not present in the instant case. The court said at page 79 :
“The production and marketing of citrus fruits in California have undergone changes as have various other activities in their transition from ‘one man’ affairs to ‘big business’. *649 The public regard for the product itself has changed from that of a pretty and tasty tidbit to that of a standard widely used fruit food. Large acreages, in fact large sections of the State of California, are devoted almost wholly to this horticultural product. In the early days everything connected with the product was done ‘on the farm’. Experience produced better fruit, better fruit created greater demand, greater demand impelled system in handling. Possibly the most marked change in this transition was that of systematic marketing and uniformity in preparation for marketing, and these changes brought about the desirability of separating certain processes from the service of the ‘farmer’ to specialists. The farmer also learned through bitter experience that individual grove product sale to middlemen or through consignment to independent fruit marketers resulted too often in ruin. The vast and comprehensive system which has been hereinbefore briefly alluded to was built up to adequately handle this large industry and to eliminate the practices which were so costly to the growers. Thus the growers themselves have separated from the farm, the work now done in the packing house and with which we are here concerned, and have assigned it to an incorporated organization brought into being by the growers for such particular purpose.” (Italics added.) And at page 80:
“When every detail of farming from plowing to delivering the produce to the consumer was done by the farmer and his ‘hired man’, this common denominator was present. But when in the transition of citrus fruit growing from this independent action to the great industry of the present in which the fruit is passed from the individual grower through contract to a corporation for treatment in a packing house owned and run by such corporation, to be delivered by this corporation to an allied corporation for transportation and market, we think the common denominator has ceased to exist.” (Italics added.) And at page 80:
“Industrial activity commonly means the treatment or processing of raw products in factories. When the product of the soil leaves the farmer, as such, and enters a factory for processing and marketing it has entered upon the status of ‘industry’.” (Italics added.) Second, contrary to the case at bar it held itself out to the public as serving and did serve all comers not merely members. That is indicated from the *650 foregoing quotation. Third, there was involved much more than mere storage. The court said at page 80:
“The premise laid down by petitioner in this phase of its argument is not, however, the exact situation facing us. The packing house activity is much more than the mere treatment of the fruit. When it reaches the packing house it is then in the practical control of a great selling organization which accounts to the individual farmer under the terms of the statute law and its own by-laws. ” (Italics added.) Fourth, the same court in the later case of Stuart v. Kleck, 129 F.2d 400 , held that where a corporation furnished agricultural services to be rendered to farmers on a farm, the labor was agricultural even though the employees were not hired by the farmer. In that case they were concerned with the Federal Social Security Act as distinguished from the National Labor Relations Act, involved in the Whittier Heights case. The court said in the Stuart case at page 402:
“When the Congress, in providing for an exemption from the provisions of the Act, made use of the broad term 1 agricultural labor’, this expression, used by itself, must be given a meaning wide enough to include agricultural labor of aAvy kind, as generally understood throughout the United States.
“In the recent case of Chester C. Fosgate Co. v. United) States, 5 Cir., 125 F.2d 775 , it was held that services rendered by a company in cultivating crops of citrus fruit under contracts with crop owners were agricultural labor’ rendered in connection with the cultivation of the soil, even though crop owners did not directly hire laborers but dealt with the company, which in turn put laborers to work, and the company was entitled to recover back social security taxes assessed with reference to wages paid to those laborers.” (Italics added.) Moreover, the majority opinion here stresses the point (indeed the whole basis of the opinion rests on that point) stated in the Whittier Heights case that: “The factual change in the manner of accomplishing the same work is exactly what does change the status of those doing it.” That theory was later wholly repudiated by the same court in the Stuart case. The eourt there said at page 402:
“Accordingly, the exemption attaches to the ‘services performed’, which refers to the type of work that is being done, md is not dependent on the form of the contract or whether *651 the employee is employed by the owner or tenant of the farm or an independent contractor. . . . The important question, then, is: What is the nature of the services furnished and were these performed upon a farm?” (Italics added.) Fifth, and this goes to the heart of the whole matter, all of the above factors indicate that the activity was so altered from ordinary farming operations that it became an industry. But in the case at bar those conditions do not exist. There is no answer in the Whittier Heights case or in the majority opinion in the case at bar to the simple proposition that where farmers in a confined area (Butte County here) associate themselves for the sole purpose of maintaining a storage house near their farms for storing their products they are in no different position than if each of the members maintained such a house on his land, or on the land of one of the members. To say otherwise is to ignore the realities of the situation.
The majority opinion states that in the Whittier Heights case “the cooperative’s packing-house facilities were directly available to ‘others’ than members, here the defendant association’s complete storage services are indirectly available to non-members—that is, ‘applicants for membership’ or ‘temporary members’ who, by paying the negligible application fee of $10 and without requirement to become fully paid-up ($300) members, are entitled to share in all the warehousing privileges. Such a tenuous line of demarcation between the two cases is in fact no distinction at all insofar as mode of operation is concerned.” That statement is not borne out by the record. The applicant members must have the same qualifications as the regular members and must be farmers in the area. That is quite different from a business holding itself out to the public generally.
The case really simmers down to the proposition as to whether farmers can do collectively through a nonprofit association in the legal form of a corporate entity that which they could do individually or in small groups on their individual farms without incurring liability for the unemployment insurance tax. It is conceded that the work which the employees perform for defendant is the same work which they would perform for-, the individual farmers if they had similar storage facilities on their farms, and that ■ such work would be classified as farm labor under the definition of that term pro *652 mulgated by the Unemployment Insurance Commission. This, to my mind, is the controlling factor in this case.
From what I have said in the foregoing dissenting opinion it is obvious that the judgment should be affirmed.
Edmonds, J., concurred.
Respondent’s petition for a rehearing was denied January 25,1945. Edmonds, J., and Carter, J., voted for a rehearing. Schauer, J., did not participate therein.