Clemons v. Bearden Lumber Co.

• Decision Date: 20 May 1963
• Docket Number: No. 5-2968,5-2968
• Citation: 236 Ark. 636,370 S.W.2d 47
• Parties: Lorene CLEMONS et al., Appellants, v. BEARDEN LUMBER CO. et al., Appellees.
• Court: Arkansas Supreme Court

Page 47

370 S.W.2d 47

236 Ark. 636

Lorene CLEMONS et al., Appellants, v. BEARDEN LUMBER CO. et al., Appellees.

No. 5-2968.

Supreme Court of Arkansas.

May 20, 1963.

McMath, Leatherman, Woods & Youngdahl, and John P. Sizemore, Little Rock, for appellants.

Mahony & Yocum, El Dorado, for appellees.

WARD, Justice.

Barney Clemons (either as an employee or as an independent contractor) was working for the Bearden Lumber Company (hereafter called company) when he suffered a heart attack and later died. His widow and minor children filed a claim for death benefits under the Workmen's Compensation Act. The question of whether Clemons' death resulted from his employment was not presented to the commission and it is not an issue here. The commission (and the circuit court) disallowed the claim on the ground that Clemons was not covered by the act because he was an independent contractor and not an employee of the lumber company. This appeal challenges the substantiality of the evidence to support the findings of the commission.

The Bearden Lumber Company is a lumber manufacturing concern. In the course of providing logs from the forest to keep its mill operating, the company employs a number of persons whom it (here) calls 'contractors' to cut logs and haul them to the mill. Barney Clemons was one of these 'contractors' whose duty it was to haul the logs from the woods to places on the highway or road so they would be accessible to other trucks which would haul them to the mill. It is not disputed that Clemons had less than five men under his supervision. The testimony tending to show the relationship between Clemons and the company (whether employee or independent contractor) is not materially in dispute. The problem then largely becomes one of determining the legal effect of definitely determined facts. A summary of the testimony pertinent to the indicated issue is set out below.

Mrs. Clemons (the widow) understood her husband worked for the company; he got one check for labor and another for his one truck and a one-half interest of another truck; the company took deductions for social security, etc., from what he earned at $1.00 per hour. They had three children under age. Waymon Clemons, twenty-two year old son of deceased, had worked with his father six to eight months; was paid $1.00 per hour by check from the company; his father had worked for the company ten years; Charley Crawford, employee of the company, directed his father's work in these particulars--scaling the logs, saw to it that land was cleaned up good, told where to get logs; told them when they were doing a poor job; his father told him and the two other men (I. J. and John Mays) what to do; the work hours were turned in to the company and they were paid by company checks. I. J. Mays worked with the deceased five years and was paid by the hour by company check--took orders directly from deceased. John Mays' testimony was the same. Larkin Clemons, brother of deceased; they owned three trucks as partners; all men paid same as other company employees; deceased got one check for wages and another one for use of trucks; Crawford was the company supervisor over deceased; he (Crawford) came out on job nearly every day, and gave instructions in detail; when deceased did anything wrong Crawford got after him; the men (including deceased) were paid by company check, and the company held out for social security; the company told us we had to pay men $1.00 per hour--we never paid any more than that--our working agreement was oral.

The only testimony offered by the company to sustain its contention that Clemons was not an employee but was in fact an independent contractor was that given by its manager, Garland Anthony, Jr. He did not deny any of the testimony given by claimant's witnesses, and none of his own testimony was refuted. This testimony is long and much of it is repetitious, but the essence may be summarized as follows: The contract with deceased was verbal--whereby he was to be paid $8.00 per thousand feet for logs 'banked'; they had similar contracts with men other than the deceased; he had no control over deceased, but did direct his operation--such as choosing the banking area; deceased turned in the payroll (for himself and three men under him) after Crawford scaled the logs. According to a typical week (actually shown by company books) 27,468 thousand feet of logs were banked--$219.74 due at $8.00 per thousand feet--deceased and three men received (gross) $28 each or a total of $112--after deductions deceased got a check for $94.69 on the 'contract' and $26.11 for salary (at $1.00 per hour)--the other men received $24.36, $27.16, and $26.11 respectively.

The record further reflects that the payroll sheets kept for deceased and the three men under him were just like those for other regular company employees, and that the company had only one insurance carrier to cover its employees and the insurance deductions made from the paychecks (of the deceased and the three men) were the same as deducted from the paychecks of regular millworkers.

In the face of the above (undisputed) testimony the full commission made the following decisive announcement:

'After a careful study of all the evidence of record, we are of the opinion that the Referee's finding is supported by a preponderance of the evidence and should be and is herewith affirmed because the evidence clearly establishes that the deceased was free to choose the means and methods by which the details of the work was to be performed and there is no evidence that would indicate that the deceased was not in full agreement with the bookkeeping system employed by the Bearden Lumber Company.' (Emphasis added.)

We fully agree that there is substantial evidence to support the commission in finding (a) Clemons had control of the details of his work and (b) he had no fault with the manner in which the company kept its books. Even so, those findings, in our opinion, fall far short of proving (by substantial evidence) that Clemons was an independent contractor.

For convenience, we first dispose of finding (b). Certainly and without doubt no employee of a large corporation would be expected to object to its 'book-keeping system'. So, we say, that finding in no way proves Clemons was an independent contractor, and that it was not substantial evidence of such fact.

(a) Let us, then, examine the finding that Clemons was 'free to choose the means and methods by which the details of his work was to be performed'. The only 'details' connected with Clemons' job that the company did not control were insignificant things such as would normally be left to any employee.

Most important, we think, is the fact that it is not denied the company had the right to discharge Clemons at any time. This is most persuasive that the company really had effective control over every detail of Clemons' activities. In the case of Irvan v. Bounds, 205 Ark. 752, 170 S.W.2d 674, in considering this same question of control, we quote with approval this statement:

'By virtue of its power to discharge, the company could, at any moment, direct the minutest detail and method of the work. The fact, if a fact, that if it did not do so is immaterial. It is the power of control, not the fact of control, that is the principal factor in distinguishing a servant from a contractor.'

Further on in the same opinion we again quoted as follows:

"'The power to discharge has been regarded as the test by which to determine whether the relation of master and servant exists. While it is not the sole test, it is the best test upon the question of control."'

Also, it is undisputed that the company instructed Clemons to pay his men (and himself) $1.00 per hour. Realizing this was a strong implication that Clemons (and his men) were employees, the company attempts to explain away the implication by showing it was only a matter of bookkeeping and was only a precautionary measure. The same situation arose in the cited case where Irvan was contending Bounds was an independent contractor, but he had to see to it that Bounds was paid in compliance with the Wage-Hour Law. The Court, however, said:

'A reasonable interpretation of this statement is that Irvan was complying with the Federal Wage-Hour Law as to the pay of these men, and it indicates that Irvan considered Bounds to be an employee, because, if Bounds was an independent contractor, and not an employee, it was not necessary, in order to comply with the federal law, to guarantee him any minimum wage.'

In reaching the conclusion that the record fails to contain substantial evidence to sustain a finding that Clemons was an independent contractor, we take into consideration not only what we have heretofore said, but we consider as highly significant the following facts and circumstances: (a) We find many facts, heretofore pointed out, to indicate Clemons was an employee; (b) There is really no fact or circumstance shown by the record to indicate Clemons was an independent contractor that is not also consistent with an employee relationship; and, (c) any other conclusion than the one we have reached could result in serious injustices to laboring people whom the law intended to protect. It is in the record that the company has several other 'contractors' like Clemons. It is not unreasonable to expect that many of these 'contractors' are judgment proof, and they cannot be forced to carry insurance. Therefore, if we permit employers like appellee to escape liability, there will be no way injured employees and (in case of death) their wives and minor children can be protected. Not only so, but, in this case, there appears another injustice or inequity. The company and the insurance carrier are each receiving part of the laborer's pay each week which they will (apparently) be allowed to keep without any liability to anyone.

The law imposes on us the duty to interpret the Workmen's Compensation...