State ex rel. Employment Sec. Commission v. Monsees

• Decision Date: 17 July 1951
• Docket Number: No. 665,665
• Parties: STATE ex rel. EMPLOYMENT SECURITY COMMISSION v. MONSEES.
• Court: North Carolina Supreme Court

Page 887

65 S.E.2d 887

234 N.C. 69

STATE ex rel. EMPLOYMENT SECURITY COMMISSION v. MONSEES.

No. 665

Supreme Court of North Carolina.

July 17, 1951

W. D. Holoman, R. B. Overton and R. B. Billings, all of Raleigh, for appellant, Employment Security Commission.

T. S. Wall, Jr., Charles W. Mauze, Lexington, for appellee, C. R. Monsees.

DENNY, Justice.

As we interpret the record before us, there is no controversy between the plaintiff and the defendant as to the amount of contributions due the Employment Security Commission, if it is determined the defendant is liable for contributions under the Employment Security Law. Likewise, if it is determined that Vestal Monsees, John Arville Cross, Clay Carrick, Joe Young, and Mozelle Tysinger were employees of C. R. Monsees within the meaning of the Employment Security Law, then it is conceded that the defendant had in his employ in each of twenty different weeks in the years involved, eight or more individuals. G.S. § 96-8 (f) (1).

Therefore, the sole question for our determination is whether the above-named individuals were employees of C. R. Monsees within the meaning of the Employment Security Law.

G.S. § 96-8 (e), in pertinent part reads as follows: "Employing unit' means any individual or type of organization * * which has, on or subsequent to January first, one thousand nine hundred and thirtysix, had in its employ one or more individuals performing services for it within this state * * *. Whenever any employing unit contracts with or has under it any contractor or subcontractor for any employment which is part of its usual trade, occupation, profession, or business, unless the employing unit as well as each such contractor or subcontractor is an employer by reason of subsection (f) of this section, or § 96-11 (c), the employing unit shall * * * be deemed to employ each individual in the employ of each such contractor or subcontractor * * *. Each individual employed to perform or to assist in performing the work of any agent or employee of an employing unit, shall be deemed to be employed by such employing unit for all the purposes of this chapter, whether such individual was hired or paid directly by such employing unit or by such agent or employee, provided the employing unit had actual or constructive knowledge of such work: * * *.'

The defendant knew that his subcontractors were employing individuals to aid them in carrying out their respective contracts with him in order that he might fulfill his contractual obligations to Wall. In fact, according to the record, C. R. Monsees kept the payrolls for each of the individuals with whom he contracted to perform services for him and reported and paid the federal old age and survival benefit insurance taxes to the federal government on the earnings of Vestal Monsees, Joe Young, Clay Carrick, and on the earnings of those employed to assist them in the performance of their agreements. All the taxes so paid were later deducted from the amounts due the respective individuals under their agreements which, in effect, placed the tax burden upon Vestal Monsees, Joe Young and Clay Carrick. The defendant also advanced wages to the employees of the above men and deducted such advances in his settlement with their employers.

In 1946, the Internal Revenue Collector called upon the defendant to pay the federal unemployment tax whereupon amended social security returns were made accompanied by affidavits to the effect that Vestal Monsees, Joe Young and Clay Carrick were subcontractors and should file separate returns under the terms of the Social Security Act. The amended returns were accepted by the federal government.

The defendant contends that from and after 1st April, 1943 until the date of the hearing below, he was not a sawmill operator but merely a jobber, and that Vestal Monsees, Joe Young, Clay Carrick, John Arville Cross and Mozelle Tysinger were independent contractors, and that their work was not a part of his usual trade, occupation, profession, or business. This contention can not be upheld in the light of the defendant's own testimony, which is as follows: 'From 1937 up until the present time I have had several contracts with C. M. Wall and Son to fell trees from their property, have them logged and sawed into rough lumber, and delivered to their plant at Thomasville. I had individual contracts from time to time....