Commercial Motor Freight v. Ebright
| Decision Date | 29 March 1944 |
| Docket Number | 29730. |
| Citation | 54 N.E.2d 297,143 Ohio St. 127 |
| Parties | COMMERCIAL MOTOR FREIGHT, Inc., v. EBRIGHT, State Treasurer, et al. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
1. Indivisible compensation for service under a contract which calls for both personal service and the use of equipment furnished by the party rendering such service, is not 'wages' within the meaning of that term as defined by the state Unemployment Compensation Act, Sections 1345-1 to 1345-35, inclusive, General Code.
2. The three tests provided by the Ohio Unemployment Compensation Act by which it may be determined that one employing another shall be exempt from the operation of the act, to the effect that (i) the person employed is free from control or direction over the performance of his service (ii) that such service is outside the usual course of the business for which such service is performed and (iii) that such individual so employed is customarily engaged in an independently established trade, occupation, profession or business do not serve to widen the scope of the term 'employment' as used in the statute so as to include persons not otherwise included, but to exclude from the definition of the term 'employment,' persons who perform incidental service and who, but for such limitations might be classed as employees of the person for whom such incidental service is rendered.
3. A motor truck operator who, under contract, furnishes his own motor truck, including its fueling and maintenance, to a freight distributing corporation to haul with such motor truck the trailers of such corporation from point to point as directed, and for which he is compensated according to the service rendered, determined either by the mileage covered or by the tonnage hauled, is an independent contractor and, as such, is not within the coverage of the state Enemployment Compensation Act.
Appeal from Court of Appeals, Franklin County.
This action was brought by the appellant, the Commercial Motor Freight, Inc., in the Common Pleas Court of Franklin county under favor of Sections 12075 and 12077, General Code, to recover $12,623.62 assessed against and paid under protest by it to the Bureau of Unemployment Compensation, which sum was turned over to the state treasurer and held by him in a special fund as provided by Section 1345-2, General Code. This assessment represented premiums alleged by the Bureau of Unemployment Compensation to be owing by appellant on account of wages paid by it to truckers in its employ, the validity of which premiums and their payment is denied by the appellant under claim that such compensation was not paid to such truckers as and for wages in contemplation of the Unemployment Compensation Act.
The case was submitted to the court on an agreed statement of facts together with the testimony, insofar as it was applicable, taken in the Court of Common Pleas in the case of State ex rel. Herbert, Atty. Gen., v. Commercial Motor Freight, Inc., 11 Ohio Supp. 31, which became cause No. 29434 in this court (motion to certify overruled, February 24 1943), relating to workmen's compensation coverage of the same persons.
The record discloses that the appellant, for the period of time under consideration, was engaged in transporting merchandise by trucks as a common carrier having its principal offices and place of business at Columbus. It owned certain motor equipment of its own and hired persons to operate it. It also employed certain persons owning tractors to haul its trailers in the transportation of freight between the city of Columbus and other cities within and without the state. These persons were designated as 'over-the-road operators' who were paid, as compensation for trucking service, $.07 or $.08 per mile of travel. Appellant also hired other owners of trucks who picked up and delivered merchandise for it in Columbus and other cities. It also hired still other truckers who transported merchandise for it within limited or local areas, who were designated 'peddle operators' and who were paid on a tonnage basis.
The 'over-the-road operators' attached their tractors to the trailers of appellant at appellant's docks in various cities and there received orders from appellant's dispatchers as to the point or city to which the trailers were to be delivered. At the delivery point such operators received orders as to further movements. As a rule, these trucks left dock in the evening to reach their destinations by the next morning and made the return trip the next evening.
The contracts between the appellant and the truck operators were oral. By such contracts the operators agreed to furnish the equipment and to maintain the same, paying all expense of operation, maintenance, repairs and storage. The operators were privileged to perform their contracts by personal operation of their trucks or by substitute or assistant employees whom they employed and paid. The appellant exercised no control over the operators of the equipment whether operated by the owners of the trucks or their employees, except in directing them as to the freight to be hauled and as to the point of its delivery. None of the 'over-the-road operators' performed any service on the premises or at the terminals of the appellant, all loading and unloading being performed by regular employees of appellant, whose right to unemployment compensation is not here involved.
In case of a breakdown, appellant sent out its own trucks and completed the work of carrying the freight to its destination and paid the owner-operator for the transportation up to the point of the breakdown. All contracts were terminable at the will of either party after the delivery of any particular load of freight and both parties had the right to make similar contracts with others. A few of such contract-operators operated more than one truck in the work of the appellant, but most of them operated a single truck only.
Payment were made to the truck haulers on the basis of the service rendered and there was no attempt to segregate the compensation into wages and truck rental or service. The administrator of the Bureau of Unemployment Compensation, in making the assessment, computed the 'wages' as the basis of assessment by determining that out of the payments made to the operators on a mileage basis, $.029 per mile represented wages. As to city operators paid on a weight basis of $1 per ton, wages were determined at the rate of $.426 per ton of freight hauled. The latter rate was also applied to determine the wages of the 'peddle operators.'
The Common Pleas Court found for the appellant and ordered a refund of the money paid by it. The case was appealed to the Court of Appeals, 51 N.E.2d 293, on questions of law, which court reversed the judgment of the Common Pleas Court and sustained the assessment. The case is now in this court for review by reason of the allowance of a motion to certify the record.
Wilbur E. Benoy and Arthur M. Sebastian, both of Columbus, for appellant.
Thomas J. Herbert, Atty. Gen., and John M. Woy, of Columbus, for appellees.
The determination of this controversy turns upon the construction to be given to the Unemployment Compensation Act, sections 1345-1, to 1345-35, inclusive, General Code (), as applied to the facts presented by the record.
Section 1345-1, General Code, of the amended act, containing definitions, then provided:
'b (1) 'Employer' means any individual or * * * corporation * * * who [which] has * * * in employment three or more individuals at any one time within the current calendar year * * *. Each individual employed to perform or to assist in performing the work of any agent or employee of an employer shall be deemed to be employed by such employer for all the purposes of this act, whether such individual was hired or paid directly by such employer or by such agent or employees, provided the employer had actual or constructive knowledge of the work. * * *
'c. 'Employment' means service, including service performed in interstate commerce, performed for remuneration under any contract of hire, written or oral, express or implied. The term 'employment' shall include an individual's entire service performed within or both within and without the state * * *.
'(D) Services performed by an individual for remuneration shall be deemed to be employment subject to this act unless and until it is shown to the satisfaction of the administrator that (i) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact, and (ii) such service is outside the usual course of the business for which such service is performed, and (iii) such individual is customarily engaged in an independently established trade, occupation, profession, or business.
'(E) The term employment shall not include: * * *
'(7) Service performed by an individual for one or more principals who is compensated on a commission basis, and who in the performance of the work is master of his own time and efforts, and whose remuneration is wholly dependent on the amount of effort the chooses to expend. * * *
'e. 'Wages' means remuneration payable to an employee by each of his employers * * *.
(Italics ours.)
Section 1345-4(a) (1), 117 Ohio Laws, p. 294, then provided:
'* * * Such contributions shall become due and be paid by each employer * * * and shall not be deducted, in whole or in part, from the remuneration of individuals in his employ.' (Italics...
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