Nature of the Case
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Facts
The Footes, father, and son, operated two grocery stores. The stores were operated under the name of Foote's Grocery, Inc. In 1971, it was decided for business reasons that a separate corporation should be formed. One store was transferred to P, a new corporation, and a majority of that corporate stock was taken by the son. The older corporation, Foote's Grocery, Inc., had a good rating with D because of its experience. Ratings by the Employment Security Division are based on, among other things, the number of claims made against contributions by a particular employer. Fewer claims result in a favorable rating. Nothing but the name changed at P. It had the same employees, same management, and the same location. A certified public accountant who handled all of the P's business talked to Mr. Yates, a field auditor at D, about the procedures the new corporation should use in complying with employment security law. Nothing but the name changed at P. It had the same employees, same management, and the same location. A certified public accountant who handled all of the P's business talked to Mr. Yates, a field auditor at D, about the procedures the new corporation should use in complying with employment security law. The C.P.A. testified that the auditor told him, (1) nothing should be done except to report that a new name was being used and, (2) that the same number which the old corporation used should be retained in all reports. Yates was not called as a witness and the chancellor found as a fact, 'That Mr. Yates, field auditor for the D, did in 1971 inform P's agent that no further documentation was necessary to utilize the favorable rate. In 1972, P acquired a new Federal Identification Number and began putting this new number on its reports to D. The supervisor for D admitted that P was certified as a multiple unit under Foote's Grocery. Five years, passed and nothing happened. In 1975, Yates retired and a new auditor was assigned. He discovered that P had never filed a request back in 1971 asking for a transfer of the favorable rating. D claimed that over $ 20,000.00 in additional contributions were due. P sued D. The law said P had 30 days to make its transfer. D never did call its auditor, Mr. Yates, as a witness. No inquiry was made of Yates as to whether he had, in fact, told Foote's accountant that a report did not have to be filed or a request made for a transfer. There is no doubt that the transfer would have been made if a request had been filed. The court gave the verdict to D and P appealed.
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