Feller v. New Amsterdam Casualty Co.

• Decision Date: 03 January 1950
• Citation: 70 A.2d 299,363 Pa. 483
• Parties: FELLER et al. v. NEW AMSTERDAM CASUALTY CO.
• Court: Pennsylvania Supreme Court

70 A.2d 299

363 Pa. 483

FELLER et al. v. NEW AMSTERDAM CASUALTY CO.

Supreme Court of Pennsylvania

January 3, 1950

Argued November 16, 1949

Appeal, No. 151, Jan. T., 1949, from judgment of Court of Common Pleas No. 1 (tried in C.P. No. 7) of Philadelphia County, Sept. T., 1947, No. 4201, in case of Aaron Feller et al., trading as North Broad Motors v. New Amsterdam Casualty Company. Judgment affirmed.

Assumpsit. Before SLOANE, J.

Verdict for plaintiffs and judgment entered thereon. Defendant appealed.

Judgment affirmed.

Ralph S. Croskey , with him Croskey &amp Edwards , for appellant.

Emil F. Goldhaber , for appellees.

Before MAXEY, C.J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES JJ.

OPINION

MR. JUSTICE HORACE STERN

The question is whether a certain purchasing agent was an employee of plaintiffs within the meaning of a "blanket position bond" which defendant had issued to them. The bond agreed to indemnify them against any loss of money or other property through theft or embezzlement committed by any of their employees .

On May 12, 1947, one Edward J. Van Tassell was engaged by plaintiffs to buy and sell automobiles on their behalf, they being dealers in used cars. On May 27, 1947, he received from them the sum of $3,100 for the purpose of purchasing certain automobiles; of this amount he returned the sum of $450 but fraudulently withheld and embezzled the balance, $2,650, which he converted to his own use. Plaintiffs brought the present suit against the bonding company to recover that amount. Defendant claimed that Van Tassell was not an employee of plaintiffs within the meaning of the bond but an independent contractor.

One of the plaintiffs testified at the trial as follows: "I employed Mr. Van Tassell as a buyer of cars. He was to receive $50 commission on each car I directed him to buy. He was to work from 9:00 o'clock in the morning until 6:00 o'clock at night, and I directed him to go within an area or radius of 150 miles, to locate and inspect cars. He was to call me on the telephone, reverse the charges, describe the condition of the car, and the price that he elected, and I would then advise him to come to the office where I would give him the money for the car and he would go and bring the car in.... At the end of each day's work, he was to call me on the telephone, or report in person if he was close to the office, and tell me his day's activities. At that time I could then direct him where to go the following day to conduct the following day's work." Van Tassell paid for his own meals, hotel bills, oil and gasoline, and for the upkeep of his car. In addition to purchasing automobiles he was also to receive $25 commission for any that he sold.

The legal distinction between an employee and an independent contractor is so well established as to require little if any discussion. The characteristic of the former relationship is that the master not only controls the result of the work but has the right to direct the way in which it shall be done, whereas the characteristic of the latter is that the person engaged in the work has the exclusive control of the manner of performing it, being responsible only for the result: " McColligan v. Pennsylvania R.R. Co ., 214 Pa. 229, 232, 63 A. 792, 793; Eckert v. Merchants Shipbuilding Corp ., 280 Pa. 340, 348, 349, 124 A. 477, 480, 481; Campagna v. Ziskind , 287 Pa. 403, 407, 135 A. 124, 125, 126; Walters v. Kaufmann Department Stores, Inc ., 334 Pa. 233, 235, 5 A.2d 559, 560; Joseph v. United Workers Association , 343 Pa. 636, 638, 639, 23 A.2d 470, 472. "Broadly stated, if the contractor is under the control of the employer, he is a servant; if not under such control, he is an independent contractor.... It is not... the fact of actual interference or exercise of control by the employer, but the existence of the right or authority to interfere or control, which renders one a servant rather than an independent contractor": 27 Am. Jur. pp. 486, 487. It is the exclusive function of the the jury to determine, under the evidence, the precise nature of the relationship, except where the facts are not in dispute, in which latter event the question becomes one for determination by the court: Joseph v. United Workers Association , 343 Pa. 636, 639, 23 A.2d 470, 472, 473. In deciding whether one acting for another is a servant or an independent contractor the fact that his compensation is on a commission basis instead of in the form of wages is not a material factor: Blum Unemployment Compensation Case , 163 Pa.Super. 271, 276, 60 A.2d 568, 570; Singer Manufacturing Co. v. Rahn , 132 U.S. 518, 523; 27 Am. Jur. pp. 494, 495. On the other hand, an extremely important consideration is the power of the master to terminate the relationship at any time with or without cause, since that tends strongly to show that the person employed is not an independent contractor but a servant: 27 Am. Jur. p. 501; Dickson v. Hollister , 123 Pa. 421, 430, 16 A. 484, 487; American Writing Machine Co. v. Unemployment Compensation Board of Review , 148 Pa.Super. 299, 304, 25 A.2d 85, 87; Blum Unemployment Compensation Case , 163 Pa.Super. 271, 276, 60 A.2d 568, 570; Singer Manufacturing Co. v. Rahn , 132 U.S. 518, 523.

It would seem clear, when these principles are applied to the evidence in the present case, that Van Tassell was plaintiffs' employee. And if, instead of using the legal standards thus prescribed for the determination of the question, we turn to the provisions of the bond itself, the same result inevitably follows.

Paragraph 2 of the bond defines the term "employees"...