Brown v. L. A. Penn & Son

• Decision Date: 06 October 1969
• Docket Number: No. 45422,45422
• Citation: 227 So.2d 470
• Court: Mississippi Supreme Court
• Parties: Napoleon BROWN v. L. A. PENN & SON et al.

Page 470

227 So.2d 470

Napoleon BROWN v. L. A. PENN & SON et al.

No. 45422.

Supreme Court of Mississippi.

Oct. 6, 1969.

Rehearing Denied Nov. 10, 1969.

James A. White, Durant, Bernard W. N. Chill, Jackson, for appellants.

Butler, Snow, O'Mara, Stevens & Cannada, Dan McCullen, Jackson, for appellees.

ETHRIDGE, Chief Justice:

This is a workmen's compensation case, involving the employee-independent contractor distinction. The question is whether appellant, Napoleon Brown, was an employee of appellee, L. A. Penn & Son, or an independent contractor. The attorney referee held that Brown was not an employee. His order was upheld by the Workmen's Compensation Commission, and the Circuit Court of Madison County affirmed.

L. A. Penn & Son (called Penn) is a partnership which engages in farming, sawmilling, and dealing in pulpwood. Penn has four salaried employees. In connection with its other business operations, Penn operates a store and service station, sells power saws, and sells parts and makes repairs to power saws and other equipment. Penn purchases pulpwood for sale to International Paper Company in Canton, and also acquires pulpwood for several other consumers; but approximately seventy-five percent of its acquisitions are for International Paper. Penn obtains pulpwood for its various customers in several ways: By purchasing from other dealers under written bulk sales contracts, a method used principally in acquisitions from land owned by International Paper Company; by buying wood from individual landowners, this method amounting to twenty-five to thirty percent of its volume; and by getting it from individual cutters and haulers, who cut wood from tracts arranged for by the hauler.

Brown, an illiterate Negro 32 years of age, was injured on November 7, 1966. He had worked for Penn as an employee several years before that date, but had departed to work in the Delta hauling wood. A year later he returned to Madison County and asked Mr. Penn whether he would purchase Brown's wood at the Canton yard, to which Penn agreed. Brown had an old truck, for which he owed another man. Penn paid Brown's creditor, whereupon Brown returned to Madison County and began cutting and hauling wood and delivering it to International Paper Company for Penn's account. That truck was wrecked, and apparently insurance paid off Brown's debt to Penn. Penn then helped Brown buy another used truck and guaranteed the payments, which Penn deducted from Brown's pay and sent to the finance company.

Fifteen to twenty haulers cut and hauled wood for Penn's account. Penn paid for some small repairs to his haulers' trucks, and when parts were needed, Penn bought them at a discount from a dealer and sold them to his workers with a limited mark-up of ten percent, allowing them to benefit from the discount. Penn would occasionally arrange financing and guarantee payments for major repairs, and sometimes the bills were sent directly to Penn. Brown and other haulers purchased some of their power saws from Penn, and had use of its repair shop. Penn also operated a grocery store used by the haulers and others and deducted the amount of their purchases from their weekly pay for hauling. Brown, at various times, would buy gasoline, groceries, clothing, and other items from Penn; and on one occasion he purchased a power saw. Brown also had minor repairs made on his truck at Penn's repair shop. When major repairs were needed, Brown would take it to a Chevrolet dealership in Canton, which would bill him for the work; and Brown would make payments through Penn's office.

Almost every week in the year preceding the accident, Penn paid or settled with Brown on Fridays for the wood cut and hauled by him for the account of Penn for the preceding week. He was paid on a unit or cord basis. Penn also deducted from these payments a portion or all of Brown's gasoline, grocery, and clothing bills, and a portion of the payment owed by Brown to the finance company on his truck or truck repair bill.

The process of settlement following Brown's delivery of a load of logs involved International Paper Company giving him a ticket indicating the amount of the haul and the amount he was to be paid for it. Brown usually waited until Friday or Saturday to cash in all his tickets, but he was not obligated to do so. Generally Brown and the other haulers could make deliveries at any time, but occasionally they had to meet a deadline.

Penn testified that on occasions a landowner would be unhappy with the cutting method used by Brown and others and with the condition in which the premises were left. When this occurred, Penn would often require the hauler to clean up the land. Penn's annual volume of business was about $750,000. He bought wood from fifteen to twenty different haulers. Penn helped finance the trucks and repairs to them, and on many occasions the purchase of saws from him. He financed the purchase of groceries from the company store, and usually deducted this from the amount owed the haulers. Each day the haulers would be advised, either orally or by a notice on a bulletin board, of the type of wood which Penn was buying for its own account to sell to International Paper. Although Penn sold wood to other dealers, seventy-five percent of its sales were to International, which settled its account weekly. Approximately twenty-five percent of the wood sold to International by Penn was bought by Penn directly from the landowner, and the remaining seventy-five percent was bought from the haulers.

Penn did not withhold social security or income tax from payments to Brown. Where Brown 'bought' the stumpage, he frequently asked Penn to withhold the stumpage from the payment to him. That amount would be deducted and paid in a separate check to the landowner, which Brown would deliver to the landowner or Penn would hold for the landowner to pick up. All of the wood scale tickets identified the shipper as Penn, the stumpage owner as the hauler, and the tract owner as the landowner from whose property the wood had been cut, regardless of whether Penn made the initial contract and purchased the wood from the landowner, or whether the hauler made the contact and delivered the wood to the Penn yard. Brown had no written contract with Penn and either party could terminate their working agreement at any time.

During the twelve-month period before the accident, Penn's records reflect that $13,282.39 was paid to Brown, based on the total amount of cordage which he hauled. However, the amount actually paid to Brown over a fifteen-month period was $8,141.40. Total payments to owners on stumpage cut and hauled by Brown was $3,418.59. Penn explained these variations by stating that the unitemized deductions from Brown's checks included payments on his truck, his gasoline account, and grocery bills for the two men...