American Oil Co. v. Wheeless

• Decision Date: 10 April 1939
• Docket Number: 33522
• Citation: 187 So. 889,185 Miss. 521
• Court: Mississippi Supreme Court
• Parties: AMERICAN OIL CO. v. WHEELESS et al

187 So. 889

185 Miss. 521

AMERICAN OIL CO. v. WHEELESS et al

No. 33522

Supreme Court of Mississippi

April 10, 1939

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER Chancellor.

Suit in equity by the American Oil Company against Leon L. Wheeless and others, comprising the Mississippi unemployment Compensation Commission, to enjoin collection of contributions to unemployment compensation fund. From a decree dismissing the bill, plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Hannah & Simrall, of Hattiesburg, for appellant.

The question of whether or not the contract creates the relation of employer and employee between the American Oil Company and its distributors, or whether it creates the relation of independent contractor is to be determined by the ordinary meanings of these words unaffected by the Mississippi unemployment Compensation statutes.

Chapter 176, Laws of 1936; Article 205 of Regulation 90 of United States Act of Congress approved June 6, 1933; Prentice-Hall Unemployment Insurance Service, secs. 37-196, note .03; Metcalf v. Mitchell, 269 U.S. 514, 46 S.Ct. 172, 70 L.Ed. 384.

Each case involving the question of whether a person is an independent contractor or an employee must be determined according to the particular facts of that particular case.

The contract does not vest in the American Oil Company the right to control the distributors in the performance of their duties; but purposely avoids doing so in order to preclude the American Oil Company from being held liable for acts of the distributors.

Gulf Refining Co. v. Nations, 167 Miss. 315, 145 So. 327; Texas Co. v. Mills, 171 Miss. 231, 156 So. 866; Shell Petroleum Corp. v. Linham, 163 So. 839; Texas Co. v. Jackson, 165 So. 546; Cook v Wright, 177 Miss. 644, 171 So. 686; Crosby Lbr. & Mfg Co. v. Durham, 179 So. 285.

Greek L. Rice, Attorney-General, J. A. Lauderdale, Assistant Attorney-General, and Harry K. Bryan, of Jackson, for appellees.

All basic constitutional questions affecting the act have been put at rest by this Honorable Court in Tatum v. Wheeless, 180 Miss. 900, 178 So. 95.

See, also, Charles C. Steward Machine Co. v. Herwell G. Davis (1937), 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A. L. R. 1293, wherein Title IX of the Social Security Act (Federal Unemployment Compensation Law), was upheld by the United States Supreme Court, and Carmichael v. Southern Coal & Coke Co. (1937), 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1243, 109 A. L. R. 1327, wherein the same court upheld the constitutionality of the Alabama Unemployment Compensation Law.

The written agreement controls in determining the status of the parties, the relationship between appellant and its distributors (and their helpers) thereunder is that of employer-employee.

Benjamin v. Davidson-Gulfport Fertilizer Co., 159 Miss. 162, 152 So. 839; Buchholz v. Standard Oil Co., 244 S.W. 973; Callahan v. Rayburn, 110 Miss. 107, 69 So. 667; Caver v. Eggerton, 157 Miss. 88, 127 So. 727; Crosby Lbr. & Mfg. Co. v. Durham, 179 So. 285; Fischer v. Havelock, 25 P.2d 864; Gibson v. Texas Co., 20 S.W. 349; Goff v. Sinclair Refining Co., 162 So. 452; Gulf Refining Co. v. Nations, 167 Miss. 315, 145 So. 327; Gulf Coast Motor Express Co. v. Diggs, 174 Miss. 650, 165 So. 292; Gulf Refining Co. v. Brown, 93 F.2d 870, 116 A. L. R. 449; Hinton & Walker v. Pearson, 142 Miss. 50, 107 So. 275; Johnson v. Steele, 59 P.2d 237; Kisner v. Jackson, 159 Miss. 424, 132 So. 90; Life and Casualty Ins. Co. v. Curtis, 174 Miss. 768, 165 So. 435; Louisiana Oil Co. v. Renno, 173 Miss. 609, 157 So. 705; Magnolia Petroleum Co. v. Pierce, 269 P. 1076; Mallinger v. Webster City Oil Co., 228 N.W. 41; Nesseth v. Skelly Oil Co., 223 N.W. 608; Pan-American Petroleum Corp. v. Pate, 157 Miss. 822, 126 So. 480; 1 Restatement, Agency, 490; Rogers v. Lewis, 144 So. 373; Sawmill Construction Co. v. Bright, 116. Miss. 491, 77 So. 316; Sec. 19 (g), Unemployment Compensation Law; Tatum v. Wheeless, 180 Miss. 800; 178 So. 95; Texas Co. v. Mills, 171 Miss. 231, 156 So. 866; Texas Co. v. Jackson, 174 Miss. 737, 165 So. 546.

We believe that brief reference should be made to the question of status of distributors and their helpers as the same has arisen under workmen's compensation acts. In those states having such laws, contracts of distributorship have been construed to determine whether the relation of employer-employee existed, and, therefore, whether claimants should recover as "employees." The cases under the workmen's compensation acts referred to are of interest and highly persuasive, in that the courts were not dealing with tort questions per se; they were determining status in order to decide whether or not claimants were entitled, as "employees, " to the benefits of such acts.

Maryland Casualty Co. v. Kent, 3 S.W.2d 414; Angell v. Eagle Oil & Refining Co., 169 Minn. 183, 210 N.W. 1004; U.S. F. & G. Co. v. Ind. Com., 42 Ariz. 422, 26 P.2d 1012; Roberts v. U.S. F. & G. Co., 42 Ga.App. 668, 157 S.E. 537; Heisey v. Tide Water Oil Co., 92 S.W.2d 922; Crowder v. State Compensation Comr., 115 W.Va. 12, 174 S.E. 480; Shell Petroleum Corp. v. Garnett, 228 Mo.App. 256, 65 S.W.2d 1052.

On July 5, 1938, the commissioner of internal revenue passed upon the form of contract in existence between the American Oil Company and its distributors to determine whether or not the latter and their helpers were employees of the company and therefore, whether the company was liable for the taxes paid upon employers under Titles VIII and IX of the Social Security Act. The federal authorities held such distributors and their helpers to be employees, under the status of employer-employee, not only as between the Petroleum Company and its distributors, but as between it and the latter's helpers. This ruling we deem important here, not only because of the fact that it is in accord with the holdings of this Honorable Court cited hereinabove but because of its effect generally upon the question of status under the federal act and unemployment compensation laws of the state.

This Honorable Court has laid emphasis upon the value of departmental and administrative construction in the following cases:

State v. Wheatley, 113 Miss. 55, 74 So. 427; I. C. R. R. Co. v. Middleton, 109 Miss. 199, 68 So. 146; State v. Grenada Compress Co., 123 Miss. 191, 85 So. 137; Robertson v. Texas Oil Co., 141 Miss. 356, 106 So. 449; Furniture Co. v. Tax Com., 160 Miss. 185, 133 So. 652.

In the Wheatley case, supra, the court said in part: ". . . the construction which a department of government has placed upon the very law under which it was created and which it is sworn to enforce should be both suggestive and persuasive with the court."

Argued orally by T. C. Hannah, for appellant, and by Harry M. Bryan, for appellee.

McGehee, J., Ethridge, J. dissenting.

OPINION

McGehee, J.

The question presented for decision on this appeal involves the consideration of numerous features of the contract between the oil company and its distributors of petroleum products which was in issue in the case of Texas Company v. Leon L. Wheeless et al. (Miss.), 185 Miss. 799, 187 So. 880, this day decided; and wherefore, the opinion in that case should be read in connection herewith, since in each case the determination of the relation of the oil company to its distributors, and to the assistants or employees of the latter, within the meaning of chapter 176 of the General Laws of 1936, as supplemented by chapter 3 of the Laws of the First Extraordinary Session of 1936, and as amended by chapter 147 of the General Laws of 1938, known as the Unemployment Compensation Act, is the legal inquiry with which the Court is dealing. Likewise, the proceedings in the court below, as well as the relief sought and decree rendered, in each case, were the same in all material particulars. We shall therefore refrain from repeating what we have said in Texas Company v. Wheeless et al., supra, regarding the objects and purposes of the Act, the construction of its provisions, and the authorities governing the decision as to whether the relation of employer and employee is created within the moaning of said Unemployment Compensation Act by such provisions of the contract there discussed, as are present in the contract in the instant case. In other words, in this opinion we shall be content to call attention only to those features of the contract in the case at bar not found in the other contract; and which are asserted to be sufficient to distinguish the two cases.

Those provisions are: (1) The appellant oil company owns and agrees to maintain the bulk station plant and its equipment. (2) The restrictive covenant as to the distributor not engaging in the business of selling other petroleum products is confined to the life of the contract in question, whereas in the case of Texas Company v. Wheeless et al., supra, the covenant extended beyond the termination of the contract. (3) All contracts with retail customers relating to the equipment furnished them by the oil company and installed by the distributor must be in the name of the oil company. (4) The oil company reserves the right to select certain persons in the territory served by distributor to whom the distributor may sell on credit without...