Geerdes v. J. R. Watkins Co.

• Decision Date: 10 June 1960
• Docket Number: No. 37926,37926
• Parties: Jennie GEERDES, widow of Raymond Geerdes, deceased employe, Respondent, v. J. R. WATKINS COMPANY et al., Relators.
• Court: Minnesota Supreme Court

Page 641

103 N.W.2d 641

258 Minn. 254

Jennie GEERDES, widow of Raymond Geerdes, deceased employe, Respondent, v. J. R. WATKINS COMPANY et al., Relators.

No. 37926.

Supreme Court of Minnesota.

June 10, 1960.

Syllabus by the Court

1. The distinction between an employee and an independent contractor is largely the difference between one who undertakes to achieve a given result under an arrangement with another who has authoritative control over the manner and means in which and by which the result shall be accomplished and one who agrees to achieve a given result but is not subject to the orders of another as to the method or means to be used.

2. Under the facts of this case the evidence is conclusive that a relationship of vendor-vendee and not of employer-employee existed between the parties.

Brehmer & McMahon, C. Stanley McMahon, Winona, McLeod & Gilmore, Minneapolis, for relators.

Benjamin Vander Kooi, Luverne, for respondent.

KNUTSON, Justice.

Certiorari to review a decision of the Industrial Commission awarding compensation to the Dependents of a decedent allegedly employed by one of the relators.

Relator the J. R. Watkins Company is a manufacturer and wholesaler of various household products and farm supplies. The home office of the company is at Winona, Minnesota. It has manufacturing plants in that city and in Memphis, Tennessee; Montreal and Winnipeg, Canada; Spring, South Africa; Melbourne, Australia; and Wellington, New Zealand. Its products are sold in every state of the Union, including Alaska and Hawaii, and in every province in Canada, as well as in Australia and New Zealand, the Union of South Africa and Rhodesia, and in parts of the Caribbean Islands. It employs about 1,250 people in its manufacturing plants and in some 25 sales offices and warehouses. The company products are sold to independent dealers or to independent distributors, who, in turn, sell to retailing dealers. There are about 320 of such distributors in the United States and Canada, located in the larger cities, such as the Twin Cities and Duluth in Minnesota. Altogether there are about 15,000 dealers. Of these, some 3,600 dealers in the United States and Canada purchase directly from the company, and some 9,000 purchase from distributors. In rural areas, the products are sold directly to dealers. The company does not sell any of its products at retail and has no fixed retail prices on its products, except at a store in Winona where it is done for the convenience of employees only.

Petitioner's decedent, Raymond Geerdes, started in business as a rural Watkins dealer in 1920, when he bought all of the stock of a former dealer, George Schultz. He then entered into his first contract with the Watkins company by which sureties guaranteed the payment of his purchases from the company. When he purchased the Schultz merchandise for $660.97, both he and Schultz signed a transfer form authorizing the company to charge Geerdes' account and credit Schultz' account, which was done. From the time of the purchase of the Schultz merchandise until the date of his death, December 28, 1955, Geerdes continued doing business with the Watkins company under the terms of a contract, which was renewed from time to time until September 1, 1933. The last contract under which he operated, entered into on that date, reads:

'This Agreement, Made at Winona, Minnesota, this 1st day of September, 1933 between the J. R. Watkins Company, a corporation, hereinafter called 'the Company,' Raymond Geerdes of Edgerton, Minnesota, hereinafter called 'the Purchaser,' and The Winona National and Savings Bank, hereinafter called 'the Bank,' witnesseth,

'1. That in consideration of the promises and Agreements of the Purchaser hereinafter contained, to be kept and performed by him, the Company agrees, unless prevented by fire, strikes, or other cause, to sell and deliver to the Purchaser, at its current wholesale prices, free on board cars at Winona, Minnesota, or at its option, at any of its other regular places of shipment, such goods and other articles manufactured or sold by it, as the Purchaser may reasonably require for sale, for a term commencing the date hereof and continuing until terminated by any of the parties hereto, as hereinafter provided, in the locality in which he is now engaged, or intends to engage, in business, a description of which locality he agrees to furnish and deliver to the Company in writing prior to its acceptance of this agreement; but the furnishing of such description may be waived by the Company at its election, without notice to the Purchaser or the Bank.

'2. And in consideration thereof, the Purchaser agrees to buy from the Company the goods reasonably required by him as aforesaid; and agrees to furnish to it complete, regular, weekly, written reports showing separately the amounts of his cash sales, time sales, and collections; which reports, however, or any of them, may be waived by the Company, and he also agrees to furnish a complete financial statement when requested to do so.

'3. The Purchaser further agrees to pay the Company its current wholesale prices for the goods and other articles sold to him, as herein provided, and also the prepaid transportation charges thereon, if any, by remitting to the Company each week at least sixty per cent (60%) of the amount received by him from his cash sales, and from his collections on sales previously made, at the time and in the manner and in accordance with the provisions of the weekly report blanks of the Company to be furnished to him; and, at the expiration or termination of this Agreement, to pay the whole amount therefor then remaining unpaid; or the Purchaser may pay for such goods in cash, less the usual cash discount allowed for such payments; but such payments, or any of them, may be waived or extended by the Company without prejudice to its rights or interests.

'4. If the Purchaser shall not pay cash for said goods and other articles so sold and delivered to him, and the payments at the time and in the manner hereinbefore provided are insufficient to pay therefore, or if the Purchaser shall fail to pay from time to time on the indebtedness now due, amounts satisfactory to the Company, the Company may, in its discretion, thereafter either limit the sales herein agreed to be made, or discontinue the same, or require cash with each order, or cash upon delivery, until the Purchaser's indebtedness is paid, or reduced, as the Company may require.

'5. And to secure the payment of such indebtedness, and for the goods, and any transportation charges thereon, the Purchaser deposits * with the Bank, at the time of the delivery of this agreement, the sum of Five Hundred ($500.00) Dollars, which the Bank agrees to receive and hold in trust as security for the payment of any indebtedness, now due, or which may hereafter become due from the Purchaser to the Company; and, in case of default in the payment of the indebtedness hereunder, at the time provided herein, the Purchaser hereby authorizes and directs the Bank, and the Bank hereby promises and agrees, to pay to the Company the said sum, with any accrued interest thereon, or so much thereof as shall be necessary to pay all indebtedness then due hereunder, the amount of which shall be determined by the oath of an officer of the Company verifying the same, and to pay any remaining balance thereof to the Purchaser; and the Company guarantees the payment of any such remaining balance by the Bank to the Purchaser.

'6. The payment of such sum, as provided above, shall constitute and be a full release, satisfaction and discharge of the Bank from any and all liability or responsibility hereunder, it being expressly agreed, by and between all the parties hereto, that the Purchaser, his heirs, executors or administrators, shall have no power or authority to control, assign, transfer, incumber, or withdraw said deposit, or any part thereof, until the indebtedness due the Company under this agreement has been fully paid; and that, until such payment, the said sum shall be held by the Bank in trust as security for the payment thereof. And, if the Purchaser's deposit shall be held by the Bank for six months or more, the Bank agrees to pay interest thereon at the rate of three (3%) per cent per annum on the first days of January and July of each year; or, in case of the termination of this Agreement by any party thereto, the Bank agrees to pay such interest until the end of the month preceding such termination, but no interest shall be payable for parts of a month.

'7. The Purchaser may, within thirty days after the termination of this agreement, return, by prepaid freight, to the Company, at Winona, Minnesota, Memphis, Tennessee, Newark, New Jersey, or Oakland, California, in as good condition as when delivered to him at point of shipment, any goods purchased by him from the Company, which he may then have on hand; and the Company agrees to accept such goods, if in such condition when received by it, and pay or credit the Purchaser therefor at the then prevailing wholesale prices. And, if the goods returned by the Purchaser are not in a salable condition, when received by the Company at any of the places above named, the Company will restore them to such condition, if that can reasonably be done, making a reasonable charge therefor, and deduct such charge from the value of such goods, and pay or credit the Purchaser with the balance. But the Purchaser shall not return, nor the Company allow any credit for, any advertising matter of any kind, or for any goods or articles which have been used, or for any goods which cannot reasonably be restored to a salable condition.

'8. The Purchaser shall have no power or authority to make any statement or representation in the name of the Company; or to incur any debt, obligation, or liability of any kind whatsoever in the name of, or for, or on account of the Company. And the Company...