Ben Kanowsky, Inc. v. Arnold, 16603.

• Decision Date: 10 December 1957
• Docket Number: No. 16603.,16603.
• Citation: 250 F.2d 47
• Parties: BEN KANOWSKY, Inc., Appellant, v. John W. ARNOLD, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

250 F.2d 47 (1957)

BEN KANOWSKY, Inc., Appellant, v. John W. ARNOLD, Appellee.

No. 16603.

United States Court of Appeals Fifth Circuit.

December 10, 1957.

G. H. Kelsoe, Jr., Johannes & Kelsoe, Dallas, Tex., for appellant.

Joe H. McCracken, III, Carrington, Gowan, Johnson, Bromberg & Leeds, Dallas, Tex., for appellee.

Before CAMERON, JONES and WISDOM, Circuit Judges.

CAMERON, Circuit Judge.

Suing under the Fair Labor Standards Act.¹ "which creates the cause of action herein asserted by the plaintiff," appellee Arnold recovered judgment against appellant Ben Kanowsky, Inc. for overtime wages and attorney's fee² for the hours in excess of forty per week worked as appellant's employee. The appeal is based upon appellant's contention that the Federal statute did not apply to its operations, and in the alternative, that appellant's business was exempted from the provisions of the Act.³ The appeal will be decided on the exemption, the terms of which are quoted in the footnote. The facts are simple and largely undisputed.

Ben Kanowsky, operating under appellant's corporate title, had conducted the business of furniture and interior decorating in the City of Dallas in a building next door to his residence for more than sixteen years. The business decorated the interiors of homes and offices, repaired and upholstered furniture, and made furniture to order and delivered it to its customers in Dallas.

Because its business was somewhat seasonal, he tried through the years to hit upon a side line "to take up the slack." He experimented with manufacturing for local sale chairs, screens and other items; and, at the time of appellee's employment, the side line consisted of "the fabrication of phenolic."⁴ Appellant obtained these phenolic sheets from various sources in the State of Texas. Utilizing its lathes, saws and other machinery installed in connection with its furniture business, it fabricated the phenolic sheets into parts for airplanes and automobiles,⁵ and it sold sheet phenolic to customers who desired to purchase it. Practically all of the items handled by appellant were delivered at its place of business, and less than three per cent were shipped out of the State.

To counter the undisputed proof of the basic nature of appellant's business as a retail furniture and decorating establishment, appellee testified that he spent nearly all of the period of a little less than a year he worked for appellant in the fabricating of these phenolic parts. He put on, as a part of his case, employees of the appellant and representatives of two airplane manufacturing companies to show that the parts purchased by them at appellant's place of business⁶ were installed in airplanes manufactured for the United States Government; and from this and appellant's proof, it appeared that the dollar volume of phenolic sales was slightly in excess of twenty-five per cent of appellant's total sales during the period covered by this testimony.⁷ This was the only evidence in the record tending to bring in question the proof of the fundamental character of appellant's business. This proof did not show the portion of the phenolic sales which consisted of bulk phenolic, the portion which was sold for use locally in automobile repair, and it failed to show that any of it was for "resale."

Appellee kept his own time, turning in a ticket each day showing the hours worked, and was paid weekly. There is no evidence that he ever mentioned to his employer that he claimed time and one-half for overtime work, or that either he or the employer ever conceived or expressed any idea that the relationship between them was covered by the Fair Labor Standards Act.

The question of whether a business is within the Fair Labor Standards Act and, if so, whether it comes within the quoted exemption, remains an issue of fact to be decided according to the evidence presented in each case. The decisions of this Court bearing closest resemblance to this one on the facts are White Motor Co. v. Littleton, 5 Cir., 1941, 124 F.2d 92; Mitchell v. T. F. Taylor Fertilizer Works, Inc., 5 Cir., 1956, 233 F.2d 284, and Boisseau v. Mitchell, 5 Cir., 1955, 218 F.2d 734. In White, mechanics employed by the Dallas branch of a large truck manufacturing concern sued under the Fair Labor Standards Act for wages alleged to be due them, and this Court held that the case should have been dismissed because the operation was not subject to the Act. Some of the language of the opinion⁸ is applicable here:

"Section 13(a) (2) of the Act provides that Section 6 thereof shall not apply with respect to any employee engaged in any retail or service establishment, the greater part of whose selling or servicing is in intrastate commerce. The establishment in which these employees were engaged sold the products manufactured by the parent organization elsewhere, serviced and performed specified changes in those products, and conducted a repair and reconditioning department. * * *

"The word retail is not defined by the Act. Given its common and ordinary acceptation when used in sales parlance, it means a sale in small quantity or direct to the consumer, as distinguished from the word wholesale, meaning a sale in large quantity to one who intends to resell. The character of the sale is not altered by the use to which the consumer may put the purchased commodity. These sales were preponderantly retail although the products sold were used subsequently for commercial purposes."⁹

Much of the argument contained in appellee's brief stresses the contention that he was engaged in manufacturing, in that he spent most of his time in fabricating phenolic parts which found their way into the hands of aircraft manufacturers.¹⁰ This, he contends, nullifies appellant's claim that it was a retail sales establishment. That argument is answered by our decision in Taylor, supra. There, the employer was conducting a dry mixing plant in which the various chemicals entering into fertilizer were assembled and mixed, and when the manufacturing process was completed, the fertilizer was delivered to customers from its plant in Georgia. While deliveries were so made from the plant, all sales were made either from an office several blocks away or by...