Fidelity & Casualty Co. of New York v. Industrial Accident Commission

216 P. 578, 191 Cal. 404, 43 A.L.R. 1304, 1923 Cal. LEXIS 466

• Court: California Supreme Court
• Decided: July 5, 1923
• Docket: L. A. No. 7477.
• Status: Published

Opinions

MYERS, J.

This is a proceeding in certiorari to review an award of compensation for the death of one Guy Y. Edwards, who was killed on November 3, 1921, by the overturning of a motor-truck which he was driving while in the course of his occupation. The only question presented upon this review is whether decedent was an employee of the petitioner Haydis, or whether he was an independent contractor.

Haydis carried on the business of transporting freight by motor-trucks between Los Angeles and San Diego. In September, 1921, decedent bought a truck and on October 22, 1921, entered into a written contract with Haydis to carry freight for him between San Diego and Los Angeles. By its terms Haydis, the party of the first part, “hereby engages and employs the exclusive services of the party of the second part [decedent] together with and to operate and run” the motor-truck and trailer therein described for the purpose of transporting freight for the party of the first part for a specified period of fourteen months. Decedent agreed to furnish the truck and trailer, keep them in repair, pay all operating expenses, including the driving, and to make one trip between Los Angeles and San Diego, or between San Diego and Los Angeles, each twenty-four hours, unless detained by breakdowns, wrecks, or other causes that could not reasonably be guarded against. He was to receive not less than forty cents per hundred pounds for freight carried, Haydis guaranteeing him an average of not less than $700 a month. At the end of each month a balance between the receipts and the guaranteed compensation was to be struck. Haydis was to provide the loads of freight shipped, to furnish warehouses and assume all responsibility of the billing and collecting of charges, for which he was to be paid by decedent fifteen per cent of his gross receipts. At the option of decedent (which he exercised) Haydis was to assume and perform all services in connection with the loading, unloading, distributing, and assembling of the loads, and was to have the use of the truck for that purpose, and was to be paid $50 per month by decedent for those services. It was provided that when “trip prices” were received, the weight of the load should have no bearing on the amount decedent was to receive for it, that payment for the “services rendered herein” by decedent- should be made between the 1st and 10th of each month, and that Haydis should furnish decedent with duplicate trip sheets showing the amount of all shipments. The contract was transferable to a third party, subject to the approval of Haydis, and provided that it was “understood at this time that there are no other agreements, either written or verbal, between the parties hereto.” It was agreed upon the hearing that the services rendered were governed exclusively by the contract, and it appeared in evidence that the decedent had operated exclusively thereunder from the time of the making of the contract to the time of his death, and that he had not been engaged in the trucking business except during the few weeks intervening between the purchase of this truck and the making of the contract.

The distinction between an employee and an independent contractor under the Workmen’s Compensation, Act has been considered by this court on numerous occasions. It is settled that the accepted interpretation of those terms has not been altered by the addition of section 21, article XX, of the constitution, nor by the amendment of that section in 1918. (Pacific G. & E. Co. v. Industrial Acc. Com., 180 Cal. 497 [181 Pac. 788]; Flickenger v. Industrial Acc. Com., 181 Cal. 425 [19 A. L. R. 1150, 184 Pac. 851] ; Employers’ Liability Assur. Corp. v. Industrial Acc. Com., 187 Cal. 615, 618 [203 Pac. 95]). The Workmen’s Compensation Act defines an independent contractor as one “who renders service, other than manual labor, for a specified recompense for a specified result, under the control of his principal as to the result of his work only, and not as to the means by which such result is accomplished.” (Stats. 1917, p. 831.) The legislature in including the phrase “other than manual labor” in this definition attempted to place an unconstitutional restriction upon the accepted and settled meaning of the terms, and the definition is therefore to be considered for the purposes hereof as if it read: “One who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only, and not as to the means by which such result is accomplished.” (Flickenger v. Industrial Acc. Com., supra.)

In determining in any given case whether a person was an employee or an independent contractor there are usually present various circumstances which are persuasive to one conclusion, and other circumstances persuasive to the opposite conclusion. But an analysis of the cases makes it plain that the determinative factor is usually found in the solution of the question: Who has the power of control, not as to the result of the work only, but as to the means and method by which such result is accomplished? In Luckie v. Diamond Coal Co., 41 Cal. App., at page 480 [183 Pac. 183], after an extensive review of the eases, the court said:

“The accepted doctrine is that where the essential object of the employment is the performance of work, the relation of master and servant does not exist unless the employer retains the right to direct the mode and manner in which the job shall be done; or, in other words, not only what shall be done, but how it shall be done. (Labatt on Master and Servant, sec. 64; Western Indemnity Co. v. Pillsbury, 172 Cal. 807 [159 Pac. 721].) ‘The chief consideration which determines one to be an independent contractor is the fact that the employer has no right of control as to the mode of doing the work contracted for.’ (Green v. Soule, 145 Cal. 96, 99 [78 Pac. 337, 339].) He is deemed to be the master who has the supreme choice, control, and direction of the servant, and whose will the servant represents, not merely in the ultimate results of the work, but in all the details. The legal test for the determination of the question is stated by Thompson as follows: ‘An independent contractor, within the meaning of this rule, is one who renders service in the course of an occupation, representing the will of his employer only as to the result of his work, and not as to the means by which it is accomplished.’ (1 Thompson on Negligence, secs. 621, 622.)” (See, also, Barton v. Studebaker Corp., 46 Cal. App. 707, 717 [189 Pac. 1025], and cases there cited; Flickenger v. Industrial Acc. Com., supra; Pryor v. Industrial Acc. Com., 186 Cal. 169 [198 Pac. 1045].)

Respondents contend that the instant case comes within the rules applied in Eng-Skell Co. v. Industrial Acc. Com., 44 Cal. App. 210 [186 Pac. 163], and Press Publishing Co. v. Industrial Acc. Com., and General Acc. etc. Corp. v. Industrial Acc. Com., 190 Cal. 114 [210 Pac. 820], in each of which eases the applicant was held to be an employee and not an independent contractor. The former of those cases is radically different from the case at bar. In that case the injured man was employed, together with the use of his truck, not to make certain trips designated in the contract, nor to transport certain specified freight between specified terminals for a compensation dependent upon the results accomplished by him, as in the instant case, but was employed to furnish the services of himself and his truck each day from 8 A. M. until 6 P. M. and to do within those hours whatever he should be directed by his employer to do. Under his contract if he presented himself and his truck for work from 8 until 6 he was entitled to" his pay, regardless of whether he was given any work to do on that day or not. In the instant case it was immaterial whether the decedent worked five hours or fifteen hours during the twenty-four. If he got through with a load of freight he was entitled to be paid. If he did not get through with it from one terminal to the other he was entitled to no pay, even though he may have been working at that job the whole twenty-four hours. The determinative factor in the Eng-Skell ease was “that in the performance of such service and the use of said truck Rogers [the applicant] was at all times under the control and direction of the Eng-Skell Company.” The two cases of Press Publishing Co. and General Acc. etc. Corp. more nearly approach in their facts the ease at bar. In each of those cases the applicant was employed and paid not for the rendition of services during specified hours, but rather for the accomplishment of certain specified results. The decision of this court in each of those cases holding that the applicant was an employee rather than an independent contractor was grounded upon the circumstance that it was an admitted fact in each case that the employer had the power to discharge him at any time, and therefore had the power to control him, not only with respect to the results to be accomplished, but also with respect to the manner and method of their accomplishment. This court said with respect to one of those employers: “This power of the employer to terminate the employment at any time is a strong circumstance tending to show the subserviency of the employee, since it is incompatible with the full control of the work usually enjoyed by an independent contractor. Perhaps no single circumstance is more conclusive to show the relationship of an employee than the right of the employer to end the service whenever he sees fit to do so.” With respect to the other employer it said: “The circumstances attending the hiring of Benefiel [the applicant] warrant the inference that he was subject to the direction and control of the Press Publishing Company in the performance of his work. The most significant fact in this regard and one which points towards the relation of employee rather than to the status of an independent contractor is the fact that Benefiel was hired on the same terms as the other carriers, and the Press Publishing Company had the right to exercise the same direction and control over Benefiel as it did over the other carrier boys, concededly employees. . . . One of the means of ascertaining whether or not this right to control exists is the determination of whether or not if instructions were given they would have to be obeyed.” Applying this test to the case at bar, let us suppose that Haydis had said to the decedent, “You must start each trip not later than 7 A. M. and must not drive at a greater rate than ten miles per hour during any part of the trip. ’ ’ If the decedent had been an employee it would have been his plain duty to obey .those instructions. But it is clear that under his contract he was under no obligation so to do. Or suppose Haydis had said, “You must start not earlier than 10 A. M. and must complete your trip within eight hours thereafter.” If decedent had been an employee it would have been his duty to obey this instruction. But such was not his duty under the contract herein. If Haydis had directed decedent to follow a certain route in making these trips and decedent had preferred a different route, can anyone doubt that under their contract the right and power to select the route was vested in decedent? Under the contract decedent was responsible to Haydis only as to the result of the work to be accomplished, namely, the transportation of one load of freight between the two terminals specified during each twenty-four hours. The contract herein was for the definite term of fourteen months and no right was reserved therein to Haydis to terminate it prior to that time for any cause whatsoever. It has been suggested that if the decedent had violated his contract Haydis could then have terminated it, from which it is argued that Haydis had the power of coercion and control over decedent, but it is equally true that if Haydis had violated his part of the contract decedent would have had an equal right to terminate it, and it could just as well be argued, so far as this aspect of the contract is concerned, that decedent had the power of control over Haydis.

The circumstance that under the contract decedent was to render nondelegable personal services may be persuasive, but it is in no sense conclusive or determinative. Contracts for the rendition of nondelegable personal services are of common occurrence which do not constitute the contractor an employee. For example, the ordinary contracts between attorney and client. The same may be said of the use of the phrase “engages and employs.”

In Shearman and Redfield on Negligence it is said: “The true test of a ‘contractor’ would seem to be that he renders the service in the course of an independent occupation, representing the will of his employer only as to the result of his work and not as to the means by which it is accomplished” (6th ed., see. 164). Respondents emphasize the phrase “in the course of an independent occupation” and argue that the decedent was not pursuing an independent occupation because he was not doing hauling for anyone else, and was not permitted so to do under the provisions of his contract for the term thereof. This is a non sequitwr. The question whether or not one is pursuing an independent occupation does not depend upon whether he is serving one person or many persons, but whether in the pursuit of his occupation he is acting upon his own behalf or as the servant of another. This is pointed out by the authors last quoted from in the same section: “If he never serves more than one person there is usually a presumption that he has no independent occupation; but this presumption is not conclusive. A single large railroad company, for example, might find work enough for a contractor to occupy his whole lifetime, yet leave him to work in perfect independence, accepting the results of his labor without ever interfering with his choice of the mode and instruments of working. On the other hand, one may have many employers within a short space of time, yet be a mere servant to each of them in turn. . . . The one indispensable element of his character as an independent contractor is that he must have contracted to do a specified work and have the right to control the mode and manner of doing it.” Decedent had been working with this truck a little over a month before making this contract.

The question of the burden of proof is wholly immaterial herein for the reason that the facts are all in evidence and the evidence is without conflict. It was stipulated at the hearing that the services rendered were governed exclusively by the written contract which is in evidence. The question whether the decedent was an employee or an independent contractor is thus a pure question of law to be resolved from the terms of the contract itself, considered in the light of the situation of the parties. But if we go further and consider what was done by them in carrying it out, there is no evidence that Haydis ever exercised any' control over the truck while it was being operated by decedent. Mrs. Edwards testified that it was understood that decedent should not carry anyone else upon the truck. But she immediately explained this statement by saying: “I mean— as I understood it no insurance would be good in any way if there was anyone outside, or anyone else driving.” There is no evidence that Haydis ever demanded, or even suggested, that decedent should not carry anyone else upon the truck. Neither is there any evidence that Haydis ever made any demand or request or suggestion with respect to the mode of operation of the truck by decedent.

By the contract herein Haydis also agreed to render services in providing the loads, freight, and shipping, in the billing and collecting of charges, and in the loading, unloading, distributing, and assembling of the loads, for which he was to receive a specified recompense from decedent. It might, therefore, be argued with almost equal justice that under this contract Haydis was the employee and decedent was the employer. But taking the contract herein by its four corners, and considering it in the light of the sitúa tion of the parties, and in the light of what was done by each of them in its performance, our conclusion is that the decedent was “under the control of his principal as to the result of his work only, and not as to the means by which such result is accomplished,” and was, therefore, an independent contractor.

The award is annulled.

Kerrigan, J., Waste, J., and Wilbur, C. J., concurred.