Benson v. Stenger

• Citation: 337 P.2d 338,216 Or. 318
• Parties: Tom BENSON and Adele Benson, co-partners, doing business as Tom Benson Glass Co., Appellants, v. Howard A. STENGER, Respondent.
• Decision Date: 08 April 1959
• Court: Supreme Court of Oregon

Page 338

337 P.2d 338

216 Or. 318

Tom BENSON and Adele Benson, co-partners, doing business as Tom Benson Glass Co., Appellants, v. Howard A. STENGER, Respondent.

Supreme Court of Oregon, In Banc.

Argued and Submitted Feb. 4, 1959.

Decided April 8, 1959.

Clifford E. Nelson argued the cause for appellants. On the brief were Phelps, Burdick & Nelson, Portland.

Herbert B. Galton argued the cause for respondent. On the brief were Black, Kendall & Fain and Edward L. Fitzgibbon, Portland.

ROSSMAN, Justice.

This is an appeal by the two plaintiffs who are partners and who do business under the name of Tom Benson Glass Co. from a judgment which the circuit court entered in favor of the defendant upon his motion for a directed verdict.

The plaintiffs present four assignments of error but stress only the first two. The first reads:

'The Court on examination of witness Paul B. Landry erred in sustaining objections to the following questions.'

The second challenges the ruling which directed the verdict in defendant's favor.

The complaint alleges that between May 19, 1954, and August 30, 1954, the plaintiffs 'at the special instance and request of the defendant sold and delivered to defendant certain windown glass and mirrors' of the reasonable value of $1,730. It alleges that no part of that sum has been paid. The answer denies the averments. At the times mentioned in the complaint one Burton Newton, who, as a witness for the plaintiffs, described himself as a 'building contractor,' was constructing a dwelling house for the defendant upon a cost plus basis. No written instrument evidenced the agreement between the defendant and Newton. An architect by the name of Gerald G. Scott drew the plans and specifications. The glass mentioned in the complaint became the windows of the house and the mirrors were installed in the bathrooms. The alleged value of the materials, $1,730, is not contested, and it is conceded that all of the material entered the structure. the defendant has not paid the plaintiff for the material, but the unchallenged evidence shows that he paid Newton.

We will now consider the first assignment of error which is based upon rulings that were made when the plaintiffs sought to show that the defendant through a purported telephone call to Paul B. Landry, plaintiffs' manager, made a request concerning the glass or its installation. It appears that Newton had solicited bids from other glass dealers in addition to the plaintiffs and that the latter's bid was the lowest. Landry testified that some time after he had given the plaintiffs' bid to Newton he received a telephone call from some one with whose voice he was not familiar, and a day or two later delivered the glass. The identity of the caller was not established and Landry was unacquainted with the defendant's voice. No effort was made to reveal the answer that Landry would have given had he been permitted to answer the question, and no offer of proof was made to show that the question to which the objection was sustained would have developed any fact material to the issues on trial. It is impossible to infer that the plaintiffs sought, through the question to which the objection was sustained, to prove that the defendant accepted the plaintiffs' bid for Landry swore that it was Newton who accepted their bid. Landry had conducted all of the negotiations pertaining to the glass. As a witness for the plaintiffs under examination by their counsel Landry gave the following testimony:

'Q. Well, you had your negotiations with Burt Newton, he was the one that accepted the bid? A. He is the one.'

Thus, it was Newton who accepted the plaintiffs' bid. The plaintiffs do not claim that Landry misspoke himself. To the contrary, their brief states:

'* * * However, the plaintiff submits that under the evidence in this case the jury could have found from a review of all of the evidence that Mr. Newton ordered the glass * * *.'

In view of that situation, we are unable to conceive of any material answer which Landry could have made to the question in controversy. In the absence of an offer of proof this assignment of error reveals no merit.

The second assignment of error, as we have indicated, challenges the trial judge's ruling which directed the verdict for the defendant. During the trial the plaintiffs' position appears to have been that (1) when the construction work got under way and until it was two-thirds completed the relationship between the defendant and Newton was that of owner and independent contractor and (2) when the structure was two-thirds finished the relationship was changed into that of owner-employee and Newton agreed no longer to take a percentage of the cost of construction. We add that when the house was two-thirds completed Newton discovered that the cost of construction would exceed his preliminary estimate of $40,000 by $20,000 and so told the defendant. According to the plaintiffs, they did not submit their bid to Newton until the purported change in relationship between Newton and the defendant was effected. The defendant denies that any change in his relationship to Newton was ever made except he concedes that when it developed that the cost of construction would exceed the preliminary estimate by $20,000 Newton agreed that he would no longer make a percentage surcharge as compensation for his work.

The question presented by the second assignment of error is this: does the record contain substantial evidence showing that when the glass transaction occurred Newton was the defendant's employee or agent? If the relationship between the defendant and Newton was that of owner and independent contractor the trial judge committed no error when he made the challenged ruling. The plaintiffs had the burden of proof of showing that the relationship was that of owner-employee; and unless the record contains substantial evidence showing that Newton was the defendant's employee or agent, and not an independent contractor, the challenged ruling must be affirmed.

At least three members of this court have read the transcript of evidence and examined the exhibits. The study thus given the record was conducted with great care. The case has been argued before this court twice, the second time before the entire bench. Since the issue presented by the second assignment of error calls for virtually nothing but an examination of the evidence, we find it unnecessary to detail herein the contents of the transcript.

The undisputed testimony indicates that Newton agreed to construct for the defendant a dwelling house which the parties had clearly in mind. It also indicates that the defendant agreed to pay Newton the cost of construction plus a surcharge. The house was actually built, and according to the defendant's unchallenged testimony no deviation from the original design was made. The defendant's unchallenged testimony shows that he paid Newton in full for the cost of construction, including all charges for the glass and Newton's surcharge. Our study of the record has satisfied us that the defendant retained no control over Newton, the award of subcontracts and the purchase of material. At least no control was retained which conflicted with Newton's undertaking to build the house according to his own ways and methods. There is nothing in the record which even intimates that the defendant suggested to Newton the hiring of this or that carpenter, the letting of any subcontract or the place where any material should be purchased. In short, Newton agreed to build the house which the parties had in mind as an independent contractor.

All payments to mechanics, subcontractors and material dealers were made by Newton with the possible exception of nine payments which we will presently mention. Newton, after paying the mechanics, material dealers and subcontractors, was reimbursed by the defendant. At the outset reimbursement was made by a Portland bank which had made to the defendant a mortgage loan. The bank retained in its possession the mortgage money and disbursed it to Newton upon approved vouchers. When construction was two-thirds completed the mortgage money was exhausted and thereupon the defendant paid Newton directly upon presentation to him of approved vouchers. We mentioned that there were possibly nine exceptions. Those nine payments were made a month and a half or more after Newton had done his last work. The record affords no indication as to whether those nine individuals had worked upon the house. One of the nine is the Portland Trust Bank. We do not assume that that institution performed any work upon the house. Another is a nursery concern which may have supplied some shrubbery after completion of the home. We have no knowledge as to the nature of the business in which the other individuals are engaged.

So far as the record indicates, all of the mechanics, subcontractors and material dealers dealt with Newton. The defendant through impatience may have requested the plaintiffs to make prompt installation of the glass. There is no evidence that he otherwise uttered a single word to any mechanic, material dealer or subcontractor. The record indicates that Newton was in business as an independent contractor and that in that capacity he built the defendant's home. He furnished his own crew of workmen and purchased in his own name the materials necessary for the discharge of his undertaking.

The fact that Newton's compensation was the cost of construction plus a surcharge does not, under the above facts, authorize a finding that he was the defendant's agent or employee. Kruse v. Revelson, 115 Ohio St. 594, 155 N.E. 137, 55 A.L.R. 289 and annotation at page 291. Economy Pumps v. F. W. Woolworth Co., 220 N.C. 499, 17 S.E.2d 639, 641, quoted with approval the following from Carleton v. Foundry & Machine Products Co., 199 Mich. 148, 165 N.W. 816, 19 A.L.R. 1141:

'We may take judicial notice that the arrangement of paying cost, plus a...