Halverson v. Sonotone Corp., 8850

• Decision Date: 19 May 1947
• Docket Number: 8850
• Parties: G. L. HALVERSON, Respondent, v. SONOTONE CORPORATION, Appellant.
• Court: South Dakota Supreme Court

71 SD 568, 27 NW2d 596 (1947)

G. L. HALVERSON,

Respondent,

v. SONOTONE CORPORATION,

Appellant.

South Dakota Supreme Court

Appeal from Circuit Court, Union County, SD

Hon. L. L. Fleeger, Judge

#8850—Affirmed

A. J. Beck, Elk Point, SD

Shull & Marshall, Sioux City, SD

Attorneys for Appellant.

O. C. Donley, Elk Point, SD

Attorney for Respondent.

Opinion Filed May 19, 1947

RUDOLPH, Judge.

Following our decision on the prior appeal of this case, Halverson v. Sonotone Corporation, 70 SD 489, 19 NW2d 14, 161 ALR 292, the motion to quash the service of the summons and complaint was brought on for hearing before the trial court and resulted in an order refusing to quash the service. At the time of the hearing on the motion to quash service, the court considered an application of the plaintiff to amend the affidavit of service which application the court granted and accepted in lieu of the original affidavit of service, an amended affidavit. It is from the order refusing to quash the service of the summons and complaint that this appeal is taken.

The motion to quash the service of the summons and complaint was based upon the grounds, first, that the car operated by the defendant, Inez Blackstone, at the time of the accident, was owned by her individually and not by Sonotone Corporation; second, that at the time of the accident Inez Blackstone was not the agent of the Sonotone Corporation.

Many states have statutes such as our SDC 33.0809 providing for constructed or substituted service of process on a nonresident in an action growing out of an automobile accident. The question here presented has been before the courts of a number of jurisdictions and under statutes in all respects similar to ours it has generally been held that service under the statute is not dependent upon ownership of the car but rather upon “use or operation by a nonresident or his agent. ...” State v. District Court of Sixth Judicial Dist., 112 Mont. 253, 114 P2d 1047; Skutt v. Dillavou, 234 Iowa 610, 13 NW2d 322, 155 ALR 327; Jones v. Pebler, 371 Ill. 309, 20 NE2d 592, 125 ALR 451; Covert v. Hastings Mfg. Co., D. C., 44 FSupp 773 (construing Neb. statute). Annotations 82 ALR 768, 96 ALR 594, 125 ALR 457. Our statute, unlike the Michigan statute construed in Brown v. Cleveland Tractor Co., 265 Mich. 475, 251 NW 557, refers to the “use or operation by a nonresident or his agent.” Nowhere in our statute is the word “owner” or “ownership” used. Had the legislature intended to restrict the effect of the statute to ownership language to express its purpose would undoubtedly have been incorporated in the statute. The purpose of the statute is, no doubt, to give persons injured by the use and operation of motor vehicles upon the highways of this state an effective means of relief against nonresidents liable for such injury. Should the injured person be compelled to seek relief in the courts of the state where personal service may be made upon the nonresident, the cost of such relief would in many instances be prohibitive. This purpose would be in part thwarted should we limit the application of the statute to nonresident owners. We are of the opinion that under our statute, ownership is not material. The decisive issue, so far as this case is concerned, is whether at the time plaintiff was injured by the car operated by Inez Blackstone she was an agent of Sonotone and engaged as such.

On the question of agency there was before the trial court on this motion the transcript of the testimony taken at the trial referred to in our prior opinion. No proof other than this transcript was offered. We deem the following facts established by this record. Sonotone is a world wide organization dealing in hearing aids and hearing service. It maintains offices in many cities throughout the nation including Sioux City, Iowa, and maintains its home office in New York. The office at Sioux City is under the control and management of a Mr. Richter who testified that he is the “district manager for Sonotone at the Sioux City office.” This office is in charge of certain allotted territory including Union County, SD, the county in which the accident occurred. Mrs. Blackstone was employed by Mr. Richter to sell Sonotone products throughout the territory. Before engaging upon her duties it was required that Mrs. Blackstone take a rather comprehensive training course. Sonotone furnished all forms and sales literature, fixed the price of its product, and required that it approve all conditional sales contracts. The conditional sales contract furnished by the company specifically provides that the agreement is between “Sonotone Corporation, Seller” and the buyer; it further provides that title to the property purchased shall remain in the “Seller” until the purchase price in full has been paid. Mrs. Blackstone was hired for no specific time but was subject to discharge at any time, she was paid on a commission basis, drove her own car, paid her own expenses, and from the commissions she earned Sonotone made deductions under the Social Security Act. 42 USCA, § 301 et seq. Mrs. Blackstone solicited sales in the territory assigned to her during the week and reported at the Sioux City office each week.

The above facts pose a rather typical case involving the question of whether a salesman is an independent contractor or whether the relationship between the company represented and the salesman is that of master and servant or principal and agent. This question has been before the courts of many jurisdictions, and while each apparently applies the same test to determine the relationship, the results reached are not in accord. Without attempting to cite all of the many cases where the question has been presented, we cite the following for the purpose of showing the different results reached in similar cases. Holding that the relationship is that of master and servant are the following: Pickens & Plummer v. Diecker & Brother, 21 Ohio St. 212, 8 Am. Rep. 55; Singer Mfg. Co. v. Rahn, 132 US 518, 10 SCt 175, 33 LEd 440; Lewis v. National Cash Register Co., 84 NJL 598, 87 A. 345; Aisenberg v. C. F. Adams Co., 95 Conn. 419, 111 A. 591; United States Fidelity & Guaranty Co. v. Lowry, Tex. Civ. App., 231 SW 818; Dishman v. Whitney, 121 Wash. 157, 209 P. 12, 29 ALR 460; Dunbaden v. Castles Ice Cream Co., 103 N. J. L. 427, 135 A. 886; Hiner v. Olson et al., 23 Cal. App. 2d 227, 72 P2d 890, 73 P2d 945; Baldwin v. Singer Sewing Machine Co., 49 Idaho 231, 287 P. 944; Wilson v. Times Printing Co., 158 Wash. 95, 290 P. 691.

Holding contrary are the following: Aldrich v. Tyler Grocery Co., 206 Ala. 138, 89 So. 289, 17 ALR 617; Dohner v. Winfield Wholesale Grocery Co., 116 Kan. 237, 226 P. 767; Stover Bedding Co. v. Industrial Commission et al., 99 Utah 423, 107 P2d 1027, 134 ALR 1006; Kruse v. Weigand et al., 204 Wis. 195, 235 NW 426.

The test generally used is the control test. This court has consistently used the control test for the purpose of determining the relationship. In the case of Cockran v. Rice, 26 SD 393, 128 NW 583, 585, Ann. Cas. 1913B, 570, it was said:

“A test of the relationship between the employer and the employee is the right of the employer under the contract to control the manner and continuance of the particular service and the final result. No single fact is more conclusive as to the effect of the contract of employment, perhaps, than the unrestricted right of the employer to end the particular service whenever he chooses, without...