Davidson v. American Drug Stores, Inc.

• Decision Date: 14 June 1937
• Docket Number: 16619
• Court: Court of Appeal of Louisiana — District of US
• Parties: DAVIDSON v. AMERICAN DRUG STORES, Inc., et al

175 So. 157

DAVIDSON v. AMERICAN DRUG STORES, Inc., et al

No. 16619

Court of Appeal of Louisiana, Orleans.

June 14, 1937

Rehearing denied Oct. 4, 1937.

Hugh M Wilkinson, A. Miles Coe, and George M. Leppert, all of New Orleans, for appellants.

St Clair Adams & Son, of New Orleans, for appellee.

WESTERFIELD Judge. JANVIER and McCALEB, Judges (concurring).

OPINION

WESTERFIELD Judge.

Mrs. Ida M. Davidson, widow of Charles M. Morales, brought this suit against the American Drug Stores, Inc., and the Owners Automobile Insurance Company, Inc., its insurance carrier, for the sum of $ 24,400 as damages for the negligent injury and resulting death on September 21, 1934, of Charles M. Morales, as a result of a collision with a motorcycle which, at the time of the accident, was being driven by David Matthews, who is alleged to have been an employee of the American Drug Stores, Inc., acting within the scope of his employment.

Before the case was heard below, the Owners Automobile Insurance Company of New Orleans became insolvent and the case was conducted against the American Drug Stores, Inc., alone.

The suit was originally defended upon the ground that Matthews, the driver of the motorcycle, was not guilty of primary negligence and, in the alternative, that Morales, the deceased, was guilty of contributory negligence barring recovery. By supplemental answer the further defense was set up that David Matthews was an independent contractor and not the servant of defendant for whose actions or negligence defendant cannot be held responsible.

The case was tried without a jury and resulted in a verdict in favor of plaintiff in the sum of $ 5,000. Defendant has appealed. Plaintiff has answered the appeal and asked that the amount of the judgment be increased to $ 10,000.

We shall first consider whether Matthews was defendant's servant. Matthews owned a motorcycle and applied to defendant for employment in connection with the delivery of packages. The following agreement was executed:

"New Orleans,

"September 7th, 1934

"Agreement between David Matthews and the American Drug Stores, Inc.

"David Matthews agrees to deliver packages for the American Drug Stores, Inc., at the rate of one (1-) cent per package plus Fifteen ($ 15.00) Dollars per week to be advanced for gasoline, repairs, and other expenses.

"David Matthews agrees to furnish motorcycle and all help necessary.

"It is understood that David Matthews is working solely on contract and that he is entirely responsible for any accident which may occur while handling the American Drug Stores' deliveries.

"David Matthews also agrees to take out proper insurance and to deposit policy with the American Drug Stores, Inc.

"David Matthews Signed

"1565 Chippewa St."

"Servants" are defined by the Code as those "who let, hire or engage their services to another in this State, to be employed therein at any work, commerce or occupation whatever for the benefit of him who has contracted with them, for a certain price or retribution, or upon certain conditions." Revised Civil Code, art. 163.

Article 164 of the Code divides servants into three classes:

"1. Those who only hire out their services by the day, week, month or year, in consideration of certain wages; the rules which fix the extent and limits of those contracts are established in the title: Of Letting and Hiring.

"2. Those who engage to serve for a fixed time for a certain consideration, and who are therefore considered not as having hired out but as having sold their services.

"3. Apprentices, that is, those who engage to serve any one, in order to learn some art, trade or profession."

The following definition of an "independent contractor "is quoted in Ravare v. McCormick & Co., 166 So. 183, 185, decided by our brethren of the Second Circuit:

"What is an independent contractor? It is defined as "one who is rendering services, an independent employment or occupation, and represents the employer only as to the results of his work, and not as to the means whereby it is to be done.' 39 C. J. §1517, p. 1315. The most generally applied test of the relationship is the "right of control as to the mode of doing the work contracted for.' Id. §1316; Faren v. Sellers, 39 La.Ann. 1011, 3 So. 363, 4 Am. St. Rep. 256; Gallagher v. Southwestern Exposition Ass'n, 28 La.Ann. 943."

The control of the conduct of the individual and the authority or power to discharge is an important consideration. In 5 Ruling Case Law, Permanent Supplement 3519 (supplementing 14 Ruling Case Law, 72, §9), is found the following: "The right to control the conduct of another implies the power to discharge him from the service or employment for disobedience; and, accordingly, the power to discharge has been regarded as the test by which to determine whether the relation of master and servant exists. Montain v. Fargo, 38 N.D. 432, 166 N.W. 416, L. R.A.1918C, 600, Ann. Cas.1918D, 826."

The fact that there was a written contract between Matthews and the American Drug Stores is a circumstance to be considered in the determination of the relationship between them, but it is in no sense conclusive. The true test is, as the name "independent contractor" suggests, the degree of independence or subserviency which the terms of the contract would reasonably create. There is also to be considered the question of good faith, that is to say whether the contract was prepared, as suggested by counsel, solely for the purpose of evading responsibility for accidents due to the operation of the motorcycle by Matthews.

Considering first the second point raised by counsel, that is as to the sincerity of the parties to the agreement, we find from the evidence that the contract was prepared by a Mr. W. T. Hall, an insurance agent who represented an insurance company doing business with the American Drug Stores. It also appears from the evidence that Matthews was not an ideal person with whom to enter into a contract of any sort. He was a penniless young man with subnormal mentality, whose sole possession appeared to be a secondhand motorcycle which he had acquired while working for the United States Works Progress Administration. He was or had been subject to epileptic seizures, due, we are told, to the fact that when he was ten years old, he sustained a severe blow on his head. He was unable to pay for the premium on the insurance policy which the contract obligated him to do, so it had to be advanced by the American Drug Stores. At the time of the accident he had only paid $ 2 on account of the $ 42.50 which had been paid, though it is fair to say that he had not been in the defendant's employ more than two weeks. The contract obligated Matthews to supply all necessary help required in the delivery of the packages. The record indicates that he supplied no help. The compensation mentioned in the contract of one cent per package would, according to the testimony, enable Matthews to earn about $ 2.50 per week, since it appears that about 250 packages were delivered each week. One of the managers of the defendant company testified that the $ 15 allowed for gasoline and other expenses in connection with the operation of the motorcycle was to be applied also to living expenses. If so, there is nothing in the contract to indicate it or to authorize it and the effect would be to cast suspicion upon the frankness of the transaction. The contract states that: "David Matthews is working solely on contract and is entirely responsible for any accident which may occur while handling the American Drug Stores' deliveries." This clause is the most suspicious provision in the agreement. In the first place, it can add nothing to or subtract nothing from the status of Matthews as an independent contractor and neither increase nor decrease the extent of his responsibility for accidents which might occur while handling the deliveries for the American Drug Stores. If Matthews was, in fact, an independent contractor, he would, of course, be responsible for the result of accidents arising in the course of the execution of his contract, but the fact that this statement appears in the contract itself could only have the effect of creating suspicion as to the actual relationship between the parties. Moreover, Matthews' responsibility was a minus quantity.

Finally, the contract is for no definite term and may be ended at any time by the American Drug Stores. The right to terminate a contract of employment at will is a strong indication that the relation created by the contract is that of master and servant.

In 14 Ruling Case Law, p. 72, is found the following:

"Power to Terminate Contract. The power of an employer to terminate the employment at any time is incompatible with the full control of the work which is usually enjoyed by an independent contractor, and hence is considered as a strong circumstance tending to show subserviency of the employee. Indeed, it has been said that no single fact is more conclusive, perhaps, that the unrestricted right of an employer to end the particular service whenever he chooses without regard to the final result of the work itself. On the other hand, the fact that the employer cannot terminate the employment strongly tends to show that the contractor is independent. The relation between the parties is, however, to be determined from all the surrounding indicia of control, and the sole circumstance that the employer has reserved the right to terminate the work and discharge the contractor does not necessarily make the contractor a mere servant. The contractor does not generally lose his independence because the contract empowers the employer to terminate the employment upon the happening of some contingency, such as a breach of the...