Home Ins. Co. v. Henderson Lodge

• Decision Date: 21 December 1923
• Citation: 201 Ky. 522,257 S.W. 422
• Parties: HOME INS. CO. v. HENDERSON LODGE, NO. 732, LOYAL ORDER OF MOOSE.
• Court: Kentucky Court of Appeals

257 S.W. 422

201 Ky. 522

HOME INS. CO. v. HENDERSON LODGE, NO. 732, LOYAL ORDER OF MOOSE.

Court of Appeals of Kentucky.

December 21, 1923

Rehearing Denied Feb. 8, 1924.

Appeal from Circuit Court, Henderson County.

Action by Henderson Lodge, No. 732, Loyal Order of Moose, against the Home Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Bruce Bullitt & Gordon and F. M. Drake, all of Louisville, and J L. Dorsey, Jr., of Henderson, for appellant.

F. J Pentecost, of Henderson, for appellee.

CLARKE J.

Appellant insured appellee's automobile against theft, etc "excepting by any person or persons * * * in the assured's service or employment." The automobile was stolen by one Louis Rubenstein, and the only question presented by this appeal is whether or not Rubenstein was in the assured's service or employment. It is agreed by counsel that this question turns upon whether or not Rubenstein, under his written contract to conduct an automobile contest for the assured, was an independent contractor. The contract reads as follows:

"Contract, made and entered into this 7th day of October, 1920. By and between Louis Rubenstein, hereinafter known as the party of the first part, and the Moose Lodge of Henderson, Kentucky, hereinafter known as the party of the second part.

Party of the first part is to manage and give his time to contest known as 'Auto Contest' and to have complete charge of managing and directing. Party of the second part has appointed three members of said lodge to assist party of the first part, with power to sign contracts and any other papers, so forth, in behalf to be signed for said contract.

Party of the first part agrees to pay party of the second part sixty-six and two-thirds (66 2/3) per cent. of the net profits and keep thirty-three and a third per cent. (33 1/3 per cent.) for himself. It is further agreed by both parties that there will be no member whatsoever, except committee appointed, will have any right to inspect books or in any way to interfere with the management or direction of contest.

It is further agreed by the party of the first part to turn in all money received by him daily to person named by party of the second part, taking receipt for same. It is further agreed that the party of the first shall not make any debts without consent of party of the second part.

It is understood that there is no verbal understanding whatever changing or modifying this contract; any amendments must be in writing.

This contract signed in duplicate on the day and year first above written by both parties hereto."

In support of the contention that Rubenstein was not an independent contractor, appellant relies chiefly upon Williams v. N.C. R. Co., 157 Ky. 836, 164 S.W. 112. It is confidently asserted that this case forecloses the question and necessitates a ruling that Rubenstein was not an independent contractor. In the course of that opinion, we quoted with approval a definition of an independent contractor from 26 Cyc. 1546, in which it is stated:

"The test of the relationship is the right to control. It is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent."

We did not, however, adopt this as the only infallible test, as counsel assume and assert, for the determination of whether or not an employee is an independent contractor or a servant. This excerpt is not the whole of our quotation, nor of the test as therein stated, neither is it by itself a correct statement of the rule, since it is not the right of interference by the owner which renders the employee a servant, but only the right to interfere with the means to be employed, and not as to the result of the work. This is clearly stated in that part of our quotation from Cyc. in the Williams Case, to which appellant does not refer, and which reads:

"To enlarge the test is whether the employee represents his employer as to the result of the work only, or as to the means as well as the result. If the employee is merely subject to the control or direction of the owner or his agent as to the result to be obtained, he is an independent contractor. If the employee is subject to the control of the employer as to the means, he is not an independent contractor."

It then does not follow that because the contract provides:

"No member whatsoever, except committee appointed, will have any right to inspect books or in any way to interfere with the management or direction of the contest,"

--that Rubenstein was not an independent contractor, as is the contention, even if it be conceded that this provision necessarily implies a right upon the part of the committee to interfere with the management or direction of the...