Florida Indus. Com'n v. State ex rel. Orange State Oil Co.

• Decision Date: 27 March 1945
• Citation: 21 So.2d 599,155 Fla. 772
• Parties: FLORIDA INDUSTRIAL COMMISSION et al. v. STATE ex rel. ORANGE STATE OIL CO.
• Court: Florida Supreme Court

21 So.2d 599

155 Fla. 772

FLORIDA INDUSTRIAL COMMISSION et al. v. STATE ex rel. ORANGE STATE OIL CO.

Florida Supreme Court

March 27, 1945

Appeal from Circuit Court, Leon County; W. May Walker Judge.

J. Tom Watson, Atty. Gen., Howard S. Bailey, Asst. Atty. Gen., and Burnis T. Coleman, John P. Mack, and S. Sherman Weiss, all of Tallahassee, for appellants.

Hudson & Cason and J. Mark Wilcox, all of miami, for appellees.

BROWN, Justice.

This is an appeal from a final judgment of the Circuit Court of Leon County awarding a peremptory writ of mandamus requiring the defendant, Florida Industrial Commission, to pay the relator, Orange State Oil Company, $29,061.20 as a refund of the amounts paid by the Oil Company to the defendant for contributions under the Florida Unemployment Compensation Law upon the commissions earned by the operators of its bulk stations for the period beginning January 1 1937, and ending June 30, 1943, the court having found that said bulk station operators were not during said period employees of the Orange State Oil Company as defined by the Florida Unemployment Compensation Law.

We might at the outset call attention to the fact that it was not necessary for this action to have been brought in the name of the State on the relation of the Orange State Oil Company. It is true that such actions are frequently brought in that manner, but some years ago this court called attention to the fact that where mandamus is invoked for the enforcement of a private right, the State is not a necessary party, and all proceedings should be conducted in the name of the actual parties in interest. State ex rel. Davis v. Atlantic Coast Line R. Co., 95 Fla. 14, 116 So. 48. We also said in that case that where the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the relator need not show that he has any legal or special interest in the result, it being sufficient that he is interested as a citizen in having the law executed and the duty in question enforced. In such cases, where a public right is primarily involved, the petition for the alternative writ should be brought in the name of the State upon the relation of the person or persons instituting the proceedings as relators, it being usual in such cases, but not essential that the suit be instituted by the Attorney General or with his consent, or that the refusal of that officer to act be shown. In some jurisdictions, however the employment of the writ of mandamus as if it were a sovereign prerogative writ in all cases is found in the practice of always bringing the action in the name of the sovereign state on the relation of the real party interested, but even in those jurisdictions it is recognized that in most instances the proceeding is purely one to enforce a civil remedy in which the real party in interest is the relator, the state being merely a formal party. See also State ex rel. Chilton County v. Butler, 225 Ala. 191, 142 So. 531; 35 Am.Jur. 72 et seq.; 18 R.C.L. 323.

In its petition for mandamus the relator alleged that it was a wholesale dealer in petroleum products and owned numerous bulk stations in various parts of Florida which stations were operated by persons under contracts with relator, and that under this contract the operators of these bulk stations were independent contractors and not employees of the relator. A copy of the contract was attached to and made a part of the petition for the alternative writ. The relator also alleged that it had been required to pay to the collector of internal revenue of the United States 'social security taxes' and 'unemployment taxes' on the commissions paid to its bulk station operators, and that suit had been filed in the United States District Court for refund of such taxes which resulted in a judgment in favor of the relator. Orange State Oil Co. v. Fahs, 52 F.Supp. 509, 511. The opinion in that case was written by District Judge John W. Holland and contains a statement of the facts and the nature and effect of the contract under which the bulk station operators sold and delivered the products consigned to them by the relator. After making a full statement of the facts, the Federal District Judge reached the following conclusion:

'1. The plaintiff neither had nor exercised any control over the means and methods used by the operators in the sale and distribution of plaintiff's products. The requirement of plaintiff as to the signing of receipts, the filing of reports and the keeping of records does not constitute control over the means and methods of accomplishing the results sought by the contracts. The business contemplated by the relationship between the plaintiff and the operators in this case was the sale and distribution of petroleum products. Requirements by plaintiff that records of the quantity of the product received, the name thereof, the quantity on hand, and other similar requirements as to the form of accounting does not constitute control by the plaintiff of the means and methods employed by the operator in accomplishing the result sought, which was the sale and distribution of the product. Under the terms of the written contract and in actual practice the respective operators were free to adopt their own means and methods of accomplishing this result.

'2. Said operators are independent contractors and are not employees of the plaintiff. See Texas Co. v. Higgins, D.C., 32 F.Supp. 428, affirmed 2 Cir., 118 F.2d 636. Also, Indian Refining Co. v. Dallman, D.C., 31 F.Supp. 455, affirmed 7 Cir., 119 F.2d 417.

'3. Said operators being independent contractors and not employees of the plaintiff are not included within the provisions of either Title 8 or Title 9 of the Social Security Act, 42 U.S.C.A. §§ 1001 et seq., 1101 et seq., and plaintiff was not legally required to pay taxes upon the commissions earned by the said operators.

'4. The taxes so assessed and collected by defendant of and from the plaintiff were illegally assessed and collected. Plaintiff is entitled to judgment for the amount of said taxes so illegally assessed and collected, together with the interest paid by the plaintiff thereon.'

The collector of internal revenue appealed this judgment of the District Court to the Circuit Court of Appeals for the 5th Circuit, which Court affirmed the judgment of the District Court. See Fahs v. Orange State Oil Co., 138 F.2d 743.

Before Judge Holland's decision was affirmed, the Circuit Court of Appeals, 5th Circuit, had handed down another decision of similar import, American Oil Co. v. Fly, 135 F.2d 491, in which it was held that the bulk plant distributors of the Oil Company, which had discretionary control over the operation of such bulk plants and distribution therefrom, and bearing their own business expenses, were independent contractors, and that the Oil Company was not obligated to pay social security taxes based on commissions of so much per gallon on sales and deliveries, which compensation was lawful and paid to them by the Oil Company.

Respondents in the court below, Florida Industrial Commission and the members of its governing board, filed a motion to quash the alternative writ which the Circuit Judge denied. Then the respondents filed a return to such alternative writ in which it denied that the bulk plant operators were independent contractors and that any sums had been illegally assessed and collected from relator. A stipulation of facts was entered into between the relator and respondents and upon these pleadings and the stipulated facts the judgment in this case was rendered.

In their brief, respondents admit that for contributions paid through June 30, 1941, the issue may be precluded by two cases with reference to the liability to pay contributions based on remuneration of bulk operators, said two cases being Gentile Bros. Co. v. Florida Industrial Commission, 151 Fla. 857, 10 So.2d 568, and Florida Industrial Commission v. Peninsular Life Insurance Co., 52 Fla. 55, 10 So.2d 793. The contributions paid under protest by the relator to the respondents were claimed to be due under the Florida unemployment compensation law, based upon the theory that the commissions paid to the bulk operators should be considered as wages of employees, and cover a period from and including the year 1937 up to July 30, 1943. We think the two cases cited, the Gentile Bros. case and the Peninsular Life Insurance Co. case, based on the then existing statutory set-up, are clearly conclusive of the question that all amounts so paid up to and through June 30, 1941, should be refunded.

However the respondents vigorously contend that subsequent to July 1, 1941, the law was amended in such respect that these two decisions of this court became no longer applicable and that for the period subsequent to July 1941 a different construction of the law should apply.

Undoubtedly the distinctions between employees and independent contractors as understood at common law had long been recognized by our decisions in the sense referred to in the above cited cases. And as far back as Gulf Refining Co. v. Wilkinson, 94 Fla. 664, 114 So. 503, we had held that a contract similar to one here involved, between the appellant in that case and a merchant who sold and distributed its oil on a commission basis, and who under the contract furnished his own trucks and drivers for making deliveries of oil, resulted in making the commission merchant an independent contractor, and that he, the merchant, and not the Oil Company, was responsible for any damage done by the negligent operation by the driver of one of his trucks. It might also be observed that when statutes are claimed to be in derogation of the common law, they must be strictly construed.

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