CURTIS, J. This action was instituted by the California Employment Commission under authority of the California [628]Unemployment ■ Insurance Act (Stats. 1935, p. 1226; as amended, Deering’s Gen. Laws, 1937, Act 8780d) to recover unemployment compensation contributions, together with interest and penalties, from the Butte County Bice Growers Association upon the basis of wages paid by the association to- certain employees during the period February 14, 1937, to September 30, 1939. The trial court upheld the position of the defendant that the labor involved in the activities of the association constituted “agricultural labor” and was therefore exempt from the coverage provisions of the act. From the adverse judgment accordingly entered, the plaintiff prosecutes this appeal.
The defendant is a cooperative association incorporated in 1914 under the laws providing for the formation of “nonprofit” farmers’ organizations. (Civ. Code, §§ 653m-653s, added by Stats. 1909, p. 16; now in Agr. Code, §§ 1191-1221.) It owns and operates a large warehouse located near a railroad siding at Bichvale, Butte County, where it stores rice and grain for shipment to market, serving alike “members” (persons who own membership certificates valued at $300 each) and “applicants for membership” (persons who have, made an initial payament of $10 each). Membership is limited to owners or tenants of a minimum quantity of land in said county. At the time in question there were forty-eight paid-up members and twenty-three applicants; or according to the defendant’s corporate accounts, approximately one-third of the persons entitled to use its storage facilities were so privileged upon proceeding to file an application for membership and making a nominal payment of $10. As a further part of its service, the defendant purchases and sells without profit to “members” and “applicants” certain merchandise commonly used in connection with farming operations. On occasion, according to testimony of the defendant’s secretary, sales of these commodities were made to employees and might be made to other persons in the district calling at its warehouse. The defendant also operates a public scale for checking weights on truck loads of rice and other commodities incident to their movement over the highway.
At the beginning of each season it is the defendant’s practice to fix a storage charge, and at the end thereof the amount collected in excess of the cost of operation is divided in the form of “rebates” among the fully paid-up members. “Ap[629]plicants for membership” do not share in this refund. The defendant 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 subject to assignment and nonmember assignees pay storage charges. By reason of its maintenance of a bonded warehouse under state license, the defendant has assumed the following legal duty:
“Every warehouseman conducting a licensed warehouse shall receive for storage therein, so far as its capacity permits, any product of the kind customarily stored therein by him which may be tendered to him in a suitable condition for warehousing in the usual manner in the ordinary and usual course of business, without making any discrimination between persons desiring to avail themselves of warehouse facilities.” (Agr. Code, § 1242.)
Except for its warehouse manager and bookkeeper each working on a yearly basis, the defendant’s employees are seasonal laborers hired by its manager, who has complete supervision and control over their varied warehouse activities. It is the classification of these general services in furtherance of the defendant’s enterprise that is' here in question. The defendant carries Workmen’s Compensation Insurance on all its employees.-
The California Unemployment Insurance Act expressly excepts “agricultural labor” but does not expand the term in any detail. (§ 7(a).) However, plaintiff, as the administrative agency created by the act and entrusted with its enforcement (§75), is authorized#to “adopt and enforce rules and regulations which to it seem necessary and suitable to carry out the provisions of this act.” (§ 90(a).) Upon this basis the plaintiff promulgated rule 7.1, effective February 14, 1937, and in force during the period here involved, which administrative aid defined the term “agricultural labor” as including all services performed:
“(1) By an employee on a farm, in connection with the cultivation of the soil, the raising and harvesting of crops, the raising, feeding, management of livestock, poultry, and bees; which includes, among others, the spraying, pruning, fumigating, fertilizing, irrigating, and heating which may be necessary and incident thereto;
' “ (2) By an employee in connection with the drying, proc[630]essing, packing, packaging, transportation, and marketing of materials which are produced on the farm or ..articles produced from such materials, providing such drying, processing, packing, packaging, transporting, or marketing is carried on as an incident.to ordinary farming operations as distinguished from manufacturing or commercial operations.
“The services hereinabove set forth do not constitute agricultural labor unless they are performed by an employee of the owner or tenant of the farm on which the materials in • o their raw or natural state were produced. Such services, however, do not constitute agricultural labor if they are carried on as an incident to manufacturing or commercial operations.
“As used herein the.term ‘farm’ includes, among others, stock, dairy, poultry, fruit ■ and truck farms, plantations, ranches, ranges, orchards and vineyards.
“Forestry and lumbering are not included within the exemption of agricultural labor.”
Preliminary to the discussion of the questions raised on this appeal, there are two general points of observation to be noted. First, in evaluating the defendant’s activities to determine whether its employees are engaged in “agricultural labor,” it must be remembered that the issue of classification arises in connection with the extension of an exemption from the provisions of a general welfare statute designed to reduce economic insecurity from unemployment by the levy of .“contributions” or taxes upon employers and their employees for the accumulation of a reserve fund from which “benefits” can be paid to such latter persons as may become unemployed. The tax feature as to the reciprocal contributions of employers and their employees is but an incident, not the essence of the state unemployment insurance law, which in turn is integrated with the operation of comparable federal legislation. (Gillum v. Johnson, 7 Cal.2d 744 [62 P.2d .1037, 63 P.2d 810,108 A.L.R. 595].) Such legislation is remedial in character, subject to a liberal construction to effectuate its purpose and to coincide with its reflection of public policy. (County of Los Angeles v. Frisbie, 19 Cal.2d 634 [122 P.2d 526]; California Employment Com. v. Black-Foxe Military Inst., 43 Cal.App.2dSupp. 868 [110 P.2d 729].) In the latter case the broad coverage intent of the act here involved is recognized in the following language at page 872: ‘ ‘ The income [631]tax law is purely a revenue measure, and upon the rule of strict construction- applied to such laws, its.scope may well be restrained to such matters as are clearly covered by it. Here we have a statute which, while it requires a ‘contribution’ that in itself may possibly be regarded as a tax, has a much broader object than the mere raising of revenue. It sets up a scheme for ameliorating the hardships of unemployment, and undertakes, in conjunction with the United States Government, to pay unemployment benefits to those who, without fault of their own, are out of work, to impose the financial burden of doing this upon both employers and employees, and to measure both burden and benefits by the amount of compensation paid to employees when they are working. ... In view of the purpose of these provisions they should not he whittled down hy narrow construction, nor should exceptions not clearly justified hy their language he engrafted upon them hy judicial interpretation. ’ ’ (Italics ours.)
Second, the principal reason for exempting “agricultural labor” from social and industrial benefits resulting from remedial legislation has been administrative difficulties and accounting inconveniences in farm work (Carmichael v. Southern Coal & C. Co., 301 U.S. 495 [57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.B. 1327]), but with relation to employment in and operation and management of packing houses by respective associations, no such practical impediment exists. On the contrary, the usual economy, efficiency and skill with which such association units, functioning as adjuncts to agricultural pursuits, are operated by boards of directors and expert business managers, complemented with systematic office service, place them on no different level than other business enterprises insofar as concerns ability to comply with administrative computation procedure under unemployment compensation insurance laws. (H. Duys & Co., Inc. v. Tone, 125 Conn. 300 [5 A.2d 23].)
Now to consider the controversial issues on this appeal— the propriety of the judgment discharging the defendant from liability under the California Unemployment Insurance Act for contributions based upon wages paid to its general warehouse employees depends in the main upon the validity, interpretation and application of rule 7.1 as aboye quoted. The plaintiff maintains that the rule is a proper administrative aid in carrying out the intent of the act in, .question, and that [632]under such labor classification the services of the defendant’s ■ employees must be deemed commercial, not agricultural, in nature, as performed for a corporate enterprise. In opposition to' these views the defendant argues that the rule unreason■ably restricts the statutory- labor exemption and to that extent constitutes illegal administrative legislation; and further, even accepting the challenged definition as of controlling force, the character and organization of the defendant’s activities would nevertheless exclude it from the operative force of the act.
Considering at the outset the challenge of the validity . of:rule 7.1, the objection is not well taken. Where the Legislature has by its enactments declared policies and fixed primary standards, as it did in the Unemployment Insurance Act, there can be no question but that it may validly confer on administrative officers power to “fill up the details” by prescribing rules and regulations to promote the spirit and purpose of the legislation and its complete operation. In . its general form of distinction, rule 7.1 appears to be a practical, workable definition in amplification of the unexpanded statutory exemption here presented. Practically all of the courts that have been required to pass upon regulations identical with or very similar to rule 7.1 have upheld' the same-as proper interpretations of the statutes involved. (Great Western Mushroom Co. v. Industrial Commission (1938), 103 Colo. 39 [82 P.2d 751]; H. Duys & Co., Inc. v. Tone (1939), 125 Conn. 300 [5 A.2d 23]; Park Floral Co. v. Industrial Commission (1939), 104 Colo. 350 [91 P.2d 492]; Christgau v. Woodlawn Cemetery Assn. (1940), 208- Minn. 263 [293 N.W. 619]; Chester C. Fosgate Co. v. United States, 5th Cir., 125 F.2d 775, writ of certiorari denied in 1942, 317 U.S. 639 [63 S.Ct. 31, 87 L.Ed. 515]; Employment Security Commission v. Arizona Citrus Growers (1944), -—- Ariz.-—- [144 P.2d 682].) In view of the harmony of judicial decisions on the point, it is unnecessary to discuss the matter further.
Turning now to the correlation of rule 7.1 with the present record, strikingly pertinent in both factual and legal features involved is the case of North Whittier Heights Citrus Assn. v. National Labor Relations Board, 109 F.2d 76, decided by the Circuit Court of Appeals, Ninth Circuit, in 1940. . There the association was engaged in the business of receiving, .'handling, washing, grading, assembling, packing and ship[633]ping the citrus fruits of it's members and others for marketing. The proceeding was instituted by the Citrus Packing House Workers Union Local No. 21,091, charging the association with unfair practices under the National Labor Relations Act, commonly called the “Wagner Act.” (29 U.S.C.A. § 151 et seq.) Following a hearing before the National Labor Relations Board, the association was ordered to desist from certain practices, and to do certain other things. The association petitioned the court to review the action of the board, and one of the questions raised was whether the employees in the packing house were “agricultural laborers” and as such exempt from the provisions of the act. In sustaining the board’s jurisdiction over the association’s employees by reason of the character of their work, the court points out distinguishing features in the consideration of remedial statutes in the industrial relationships of packing house services performed by employees of an individual grower upon his own products in his own physical plant and packing house and packing house services rendered by employees of an association or confederation of individual growers working in a packing house distant from the producing orchards and operated and conducted by an entity legally separate and distinct from the individual growers whose fruit such employees are processing and preparing in such packing houses for marketing. Thus, after noting in its opinion at page 79 that “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,” the court aptly observes 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’. In this status of this industry there would seem to be as much need for the remedial provisions of the Wagner Act, upon principle, as for any other industrial activity.
“Petitioner [the association] maintains that the nature of the work is the true test. Perhaps it would more nearly conform to the true test to say that the nature of the work modified by the custom of doing it determines whether the worker is or is not an agricultural laborer.” (Italics ours.)
[634]With reference to the transition that has taken place in activities incident to the preparation of farm products for marketing, the opinion in language peculiarly applicable to the factual situation here involved continues at page 80: “Petitioner argues that if each member of the non-profit cooperative corporation that runs the packing house were to personally hire and direct those doing his own packing and sorting, the work would be agricultural and his employees would be agricultural laborers; that it follows, therefore, that in the case of the same members acting under a single organization to accomplish the same result there can be no change in the nature of the work nor in the status of the persons doing it. The conclusion does not follow. The factual change in the manner of accomplishing the same work is exactly what does change the status of those doing it. 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 ours.)
In concluding this phase of the case the court quotes with approval at page 81 the following “apt language” in Pinnacle Packing Co. v. State Unemployment Com., an unreported decision of the Circuit Court of Jackson County, Oregon, rendered in 1937: “ ‘ The fruit growers who are engaged in the care, cultivation, picking, and delivery of the products of the orchard to be processed, graded, packed and marketed are engaged in agricultural labor and are exempt from the provisions of the statute. As soon as the fruit is delivered by the growers to the plaintiff for processing, grading, packing, and marketing, then the exemption ceases. The plaintiffs engaged in processing, grading, and packing and marketing the fruits are engaged in industry and are, therefore, subject to the provisions of the act and are not exempt as being engaged in agricultural labor.’ ”
The North Whittier case represents a realistic appraisal of modern development in business methods whereby many activities formerly embraced in farming operations or in intimate connection therewith have become specialized and removed from the farm, so that as the result of such evolution[635]ary process the work may properly be regarded as industrial in nature rather than agricultural in the common conception of that term. Moreover, contrary to the defendant’s claim, that case cannot be differentiated from the facts involved here as to service of nonmembers by the association. While there 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 nonmembers—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 dll 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. In addition, the defendant association under its state license as a bonded warehouse is prohibited from “making any discrimination between persons desiring to avail themselves of warehouse facilities.” In the light of these observations the North Whittier case has particular significance here.
The defendant association is placed on no different plane from a legal standpoint because it is smaller in size than the large citrus fruit packing house involved in the North Whittier case. The important consideration is the comparable record here prevailing: (1) Divorced from the farm, the defendant as a corporate entity engages in one main business function—the acceptance, storage and releasing of rice and grain deposited in its warehouse, and the handling and sale of certain miscellaneous merchandise; (2) The defendant’s employees are subject to its exclusive right of direction and control, stand in an employment relationship with it alone, and perform services customarily and usually performed by warehousemen in preparing commodities for shipment and disposition in the market; (3) Purporting to restrict its services to members, the defendant permits others upon the payment of a nominal application fee to use its storage and shipping facilities; (4) Purporting to be a nonprofit organization, the defendant “rebates” to members alone all storage fees collected in excess of operating expense—thus including the profitable overcharge from nonmembers using the warehouse; (5) The defendant issues negotiable warehouse receipts and operates under a license requiring that its storage facilities [636]be available without discrimination to anyone desiring to avail themseives thereof; and (6) General load-weighing service performed by the defendant for the public upon request. Upon this record the conclusion seems inescapable that the defendant association is in essence a commercial enterprise—a profitable public warehouse business.
While the North Whittier case was decided in the light of the statutory language alone, the rationale of that decision becomes even more persuasive when correlated with the administrative definition of the term “agricultural labor” embodied in rule 7.1, above quoted. Concededly, the services performed by the defendant’s employees are not “on a farm” and so do not meet the specification of subdivision (1) of said rule. Equally exclusive is the plain language of ■subdivision (2), for it requires that services rendered “in connection with the drying, processing, packing, packaging, transportation, and marketing of materials which are produced on the farm” be “incident to ordinary farming operations as distinguished from manufacturing or commercial operations” and be “performed by an employee of the owner or tenant of the farm.” (Italics ours.) Thus, to come within the “agricultural labor” exemption, off the.farm services must be an integral part of farming operations performed for the farmer as such—not for a third person separate and apart ■from such fundamental concept. Regardless of any argument as to the commercial nature of the defendant association’s enterprise, it admittedly is not the owner, tenant of operator .of any farm land. To overcome the barrier of the qualifying employment provision of said subdivision (2), the defendant argues that “the corporation, the association, is nothing more than an instrumentality of the owners and tenants of the farms,” and “defendant’s employees were in effect the employees of the landowners or tenants. ” • ■ Such observation is not only squarely at variance with the facts of this case—demonstrating that the defendant association in all its services functions as a unit wholly independent of the farmers comprising its membership—but is likewise contrary . to the elementary legal principle that a corporation is a complete legal entity separate and apart from the' individuals who own it. The nature of the defendant’s corporate structure is immaterial for “cooperative corporations . . . are just as distinct an entity as are other private ■ corpora[637]tions.’’ (Fletcher’s Cyclopedia of Corporations (perm, ed.), vol. I, § 25, p. 90.) The doctrine of separate entity will be disregarded only to prevent fraud or grave injustice. (Hollywood Cleaning etc. Co. v. Hollywood Laundry Service, 217 Cal. 124 [17 P.2d 709].) Obviously no such reason exists here for ignoring the plain language of the effective administrative definition—but, on the contrary, to treat the defendant corporation nevertheless as the alter ego of its individual farmer members would, in fact, promote injustice by unnecessarily restricting the operative scope of the unemployment insurance law of this state, a limitation wholly out of line with the beneficent purpose of such legislation that, consistent with its terms, the coverage provisions have a broad application. (California Employment Com. v. Black-Foxe Military Inst., supra.)
In support of its contrary view on this phase of the case, the defendant cites Industrial Commission v. United Fruit Growers Assn. (1940), 106 Colo. 223 [103 P.2d 15], wherein the Colorado Supreme Court interpreted their somewhat similar state regulation as exempting employees of a cooperative marketing association from’ the operation of the Unemployment Compensation Act as being “agricultural laborers.” Regardless of the point of factual distinction there prevailing in that the association was a nonprofit cooperative association limiting its operations “solely [to] marketing the fruit crops of its members,” that case nevertheless stands alone in its disregard of the corporate entity of a cooperative even under those circumstances, and its rationale has been expressly rejected as unrealistic when the precise question has been raised in analogous situations before the courts of other states. (Cowiche Growers, Inc. v. Bates (1941), 10 Wn.2d 585 [117 P.2d 624]; Employment Security Commission v. Arizona Citrus Growers (1944), - Ariz. - [144 P.2d 682].) Moreover, it should be noted that these last-cited cases, though concerning nonprofit cooperatives performing marketing services for members only, make extensive reference to the North Whittier opinion and hold that the fundamental principles there determinative of the separate legal entity of the citrus fruit packing house serving members and others, apply with equal force to preclude cooperative associations organized for the exclusive benefit of their members, and not for profit, from claiming exemption on the ground here involved with respect to state unemployment insurance legislation. (See, [638]also, In re Yakima Fruit Growers Assn. (1944), 20 Wn.2d 202 [146 P.2d 800].) The authoritative discussion in these cases regarding the substantial point of corporate entity wholly accords with settled rules of law and cannot be successfully attacked.
Nor does section 1213 of the Agricultural Code, to which the defendant refers as lending implied, support to its claim of exemption, have any bearing on the issue in controversy here. It expressly provides for the same treatment for an association as for its farmer members only as to those “exemptions under any and all existing laws applying to agricultural products”—for example, exemptions with reference to inspection (Agr. Code, § 307) and standards (Agr. Code, § 830). But such statutory language has no logical application to the question of whether an individual is engaged in agricultural labor as the problem is here presented. Moreover, the cooperative marketing statutes were enacted in 1923 and compiled in the Agricultural Code in 1933; the Unemployment Insurance Act (as now designated) was passed in 1935. (Stats. 1935, p. 1226.) By the terms of the latter act, as amended in 1937 (Stats. 1937, p. 2052), exactions are levied upon an “employer” (§38); an “employer” means “any employing unit” (§ 9(a)); and “an employing unit” means “any individual or type of organization, including any partnership, association, trust, . . .” (§ 9(e).) If despite this inclusive language, the Legislature nevertheless intended to exclude cooperative associations from the application of the act, it is but reasonable to assume that it would have so stated. Such specific exemption not having been declared in the particular legislation here involved, it should not be “engrafted . . . therein by judicial interpretation” in defeat of the law’s beneficent purpose. The later expression of legislative intent should prevail. (United Milk Producers v. Cecil, 47 Cal.App. 2d 758 [118 P.2d 830].)
Courts as courts should not shut their eyes to what they know of the common affairs of business and industry. Farmer cooperative associations have become increasingly numerous as the result of changing economic conditions. Organized to secure definite financial advantages by performing certain functions at a smaller cost per unit than would be possible for the individual farmer acting in his own right, such associations are commendable in modern economy and to [639]be encouraged; but where they operate as distinct entities in activities such as warehousing, conducted separate and apart from farming operations and at a distance from them, such enterprises, while helpful, are “not an incident to ordinary farming operations as distinguished from . . . commercial operations” and should not be treated in a different manner from any other business concern insofar as bearing their share of the social responsibilities flowing from the state unemployment insurance law. The duties of the employees of the defendant association are in all respects identical with the duties of any commercial warehousemen; and the fact that such services are performed by individuals in the employ of a farmers’ cooperative association is immaterial, for it is “the nature of the work modified by the custom of doing it” which determines whether it falls within the “agricultural” or “industrial” field. The defendant’s employees are in need of the same insurance protection against the hazards of unemployment; and the practical reason motivating the exemption in question—not a paramount purpose to benefit and encourage agriculture as such, but the avoidance of administrative difficulties in ascertaining and collecting the tax, involving expense disproportionate to the resulting advantage—does not exist here where the defendant association maintains a central place of business easily accessible to the taxing authorities and is equipped to keep adequate employment records. Having in mind, then, these points— (1) the stated purpose of the California Unemployment Insurance Act and the administrative interpretation thereof embodied in rule 7.1, (2) the persuasive reasoning of the pertinent decisions following the well-considered opinion in the North Whittier case, analyzing the structure and functions of a farmers’ cooperative association, and (3) the commercial aspect of the defendant’s enterprise in relation to its features of profit-sharing and service to nonmembers as disclosed by the record—the conclusion seems inescapable that it was not the intent of the Legislature that the services here involved should be excluded from the operation of the act as constituting “agricultural labor.” It therefore follows that the defendant association may not claim the exemption sought but is liable for “contributions” computed on the wages paid to its employees as provided by the statute.
The judgment is reversed, with directions to the trial court [640]to enter judgment against the defendant association in accordance with' the plaintiff commission’s claim under the provision of- the California Unemployment Insurance Act.
Gibson, C. J., Shenk, J., Traynor, J., and Spence, J. pro tern., concurred.