California Employment Stabilization Commission v. Morris

172 P.2d 497, 28 Cal. 2d 812, 1946 Cal. LEXIS 264
CourtCalifornia Supreme Court
DecidedSeptember 11, 1946
DocketL. A. No. 19368
StatusPublished
Cited by24 cases

This text of 172 P.2d 497 (California Employment Stabilization Commission v. Morris) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Employment Stabilization Commission v. Morris, 172 P.2d 497, 28 Cal. 2d 812, 1946 Cal. LEXIS 264 (Cal. 1946).

Opinion

EDMONDS, J.

The California Stabilization Commission asserts that in 1940 and 1941, certain salesmen and brokers associated with Everett Marshall Morris, a licensed real estate broker, were “in employment” within the meaning of the Unemployment Insurance Act (Stats. 1935, p. 1226, as amended; 3 Deering’s Gen. Laws, Act 8780d) and sued for contributions assessed accordingly. The appeal from the judgment in favor of Morris presents for decision the question as to the status of these persons.

There is no conflict in the evidence. During the period for which contributions are claimed, Morris, doing business under the fictitious name of “State Development Company,” engaged the services of six licensed salesmen and two licensed [814]*814brokers to sell land owned by him. Before the salesmen began their work, Morris, on behalf of each of them, signed either an application for a salesman’s license or an application for the transfer of the salesman’s license to himself as broker. He also aided prospective associates in reinstating dormant licenses. Bach applicant paid his own license fee.

Morris had no formal written or oral agreement with any of his salesmen, except as to the amount of commissions payable upon each transaction. The brokers associated with Morris operated in the same manner as did the salesmen and they received the same commissions. Morris had an office which the salesmen used in making sales, but they had no particularly assigned space, nor did any one of them have a desk exclusively for his own use. It was the practice of a salesman to bring his prospects to the office, or to ask them to call there. But Morris did not bear any of the expenses of the salesmen in selling, and the only compensation paid to them was a commission based upon the amount of the transaction. The salesmen furnished their own telephones and paid for their own stenographic work, stationery, postage, and business cards. At times, stenographers regularly employed by Morris worked at their own homes after regular hours for the salesmen; some salesmen employed other persons as secretaries. Telephone messages for salesmen were recorded by an employee of Morris and later given to them in writing or by telephone.

The salesmen carried cards bought by them bearing the words “State Development Company” and the address and telephone number of its place of business. However, Morris supplied the salesmen with contract blanks for use in making sales.

No sales instruction manuals or rules directing the manner in which the salesmen were to perform their.duties were ever issued, but they were instructed not to make any misrepresentation concerning the property offered for sale. The salesmen were not required to be present at any specified place for any given number of hours. ■ None of them agreed to continue with Morris for any definite period of time. No specific territory was assigned to any of them, and they were not required to follow any sales route, to adhere to any schedule of calls or to call upon any particular number of prospects. Each salesman obtained his own leads. At least three of the salesmen worked on transactions for the purchase or sale of land other than that owned or listed by Morris.

[815]*815The salesmen were not required to submit, nor did they submit, any written report as to their activities for any given period of time. They were not required to report personally to the office of Morris or at any other place, nor were they required to make collections, investigations, or to perform any duties of that kind. They were not required to attend sales meetings, conferences, or consultations, and no such meetings were held. Salesmen wrote letters in regard to pending matters but Morris did not supervise their correspondence or sign the letters. They were not written in the name of “State Development Company” or “E. M. Morris” and the letterheads used did not bear either of these names.

Each salesman closed his own deals and he was authorized to receive the down payment from the prospect, but all sales were subject to confirmation by Morris within 10 days. Morris made no advances upon commissions. All amounts received from a purchaser were turned into the Morris office, which paid the salesman his commission. One-half of each installment payment was credited to the salesman until he had received his commission in full. Termination of the relationship did not terminate the salesman’s rights to commissions. No salesman was ever discharged by Morris, but frequently a member of the selling staff, following a letter or other notice, would transfer his license to some other broker. Morris signed transfers of salesmen’s licenses as a matter of courtesy.

Upon this evidence, the trial court found that the salesmen and the brokers were independent contractors, and as Morris had only one employee during the taxable period in controversy, he was not subject to the Unemployment Insurance Act.

The attorney general contends that the Unemployment Insurance Act is social legislation and as such must be liberally construed to the end that its purpose may be accomplished. The court may not accept the common law definition of master and servant as the measure of the relationship of the parties herein, he says, but must apply the definition which will accomplish the purposes for which the legislation was enacted. Under the statutory definition the salesmen and brokers performing services for Morris were “in employment.” The attorney general also relies upon the requirements of the California Real Estate Act (Stats. 1919, p. 1252, as amended; Deering’s Gen. Laws, 1937, Act 112; now Bus. & Prof. Code, §§ 10000-10221), and argues that its provisions clearly gave [816]*816Morris the right of control over the salesmen sufficient to meet all of the tests of an employer-employee relationship even under the common law. Finally, it is argued, there being no conflict in the evidence, as a matter of law, the salesmen and brokers working for Morris were his employees.

Morris takes the position that it was neither the intent nor the purpose of the Legislature to include an independent contractor within the purview of the Unemployment Insurance Act, and the common law concepts of independent contractor are controlling. The Real Estate Act was not promulgated for the purpose of establishing the status of employment so that either salesmen or brokers would be subject to and be benefited by the Unemployment Insurance Act. The respondent was selling his own property, consequently he was not a “broker” as that term is defined in the Real Estate Act and the parties were not governed by the terms of this legislation. Morris also asserts that real estate salesmen may or may not be independent contractors, depending upon the facts in each case. As requiring the affirmance of the judgment in his favor, Morris rests upon the findings and conclusions of the trial court which, he declares, are fully supported by the evidence.

The factors to be considered in making a determination as to whether, in a particular case, one performing services for another is an employee or an independent contractor have been fully stated by this court in recent decisions. Contributions to the Unemployment Insurance Act, it was held, may be assessed only upon amounts paid to employees; a principal for whom services are rendered by an independent contractor does not come within the scope of that legislation. (Empire Star Mines Co. v. California Emp. Com., ante, pp. 33, 43 [

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Bluebook (online)
172 P.2d 497, 28 Cal. 2d 812, 1946 Cal. LEXIS 264, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-employment-stabilization-commission-v-morris-cal-1946.