Howell v. Division of Employment Sec., Department of Labor & Indus. Relations of State

• Citation: 222 S.W.2d 953,240 Mo.App. 931
• Parties: Charles M. Howell, Jr., et al., Appellants, v. Division of Employment Security, et al., Respondents
• Decision Date: 13 June 1949
• Court: Court of Appeals of Kansas

222 S.W.2d 953

240 Mo.App. 931

Charles M. Howell, Jr., et al., Appellants, v. Division of Employment Security, et al., Respondents

Court of Appeals of Missouri, Kansas City

June 13, 1949

Delivered

Appeal from Circuit Court of Cole County; Hon. Sam C. Blair, Judge.

Reversed and remanded.

Lewis H. Cook, Howell, Jacobs & Howell, Floyd E. Jacobs and Dean Wood for appellants.

Section 9426A(d) R. S. Mo., 1939, as amended in Laws, 1941, p. 566 Sec. 3, does not apply to this case. Sec. 9432A(a), R. S Mo., 1939, as amended in Laws, 1941, p. 566, Sec. 10; A J. Meyer & Co. v. Unemployment Compensation Commission, 348 Mo. (Division 1) 147, l. c. 162, 152 S.W. 2d 184, l. c. 191; Peerless Fixture Co. v. Keitel, 195 S.W. 2d 449, l. c. 450-1, 451-2 (Mo. Division 2). Defendant Commission was without jurisdiction to reopen plaintiffs' case, for lack of statutory authority. Peerless Fixture Co. v. Keitel, 195 S.W. 2d 449, l. c. 452-3 (Mo. Division 2); Sec. 9432A, R. S. Mo., 1939, as amended in Laws, 1943, p. 917, Sec. 7; Jacoby v. Mo. Valley Drainage District, 349 Mo. (en banc) 818, l. c. 831, 163 S.W. 2d 930, l. c. 938; Cardinal Bus Lines v. Consolidated Coach Corp., 72 S.W. 2d 7, l. c. 10 (Ky. App.); 34 C. J., Judgments, Sec. 1287, pp. 878-9. The new 1945 Missouri Constitution, in Article V, Section 22, is self-enforcing and provides for review of defendant Commission's decision to determine whether the same is supported by competent and substantial evidence upon the whole record, any statute notwithstanding. Scott v. Wheelock Bros., 209 S.W. 2d 149, l. c. 150 (Mo. en banc); Wood v. Wagner Electric Corporation, 197 S.W. 2d 647, l. c. 649 (Mo. en banc); Seabaugh's Dependents v. Graver Lumber Mfg. Co., 200 S.W. 2d 55, l. c. 62 (Mo. en banc); Buecker v. Roberts, 200 S.W. 2d 529, l. c. 532 (St. L. Mo. App.). The common law test of an independent contractor is recognized by this Court as applicable in unemployment compensation cases. A. J. Meyer & Co. v. Unemployment Compensation Commission, 348 Mo. (Division 1) 147, l. c. 156, 157, 158-9, 159-60, 164, 152 S.W. 2d 184, l. c. 187, 188, 189-90, 192; Sec. 9423(i) (5) A-C, R. S. Mo., 1939, as amended in Laws, 1941, p. 566, Sec. 2. This Court has established this common law test. Rutherford v. Tobin Quarries, 336 Mo. (Division 2) 1171, l. c. 1175, 1177, 1178, 1180, 82 S.W. 2d 918, l. c. 922-3, 920-1; Bass v. Kansas City Journal Post Co., 347 Mo. (Division 1) 681, l. c. 687, 688-9, 148 S.W. 2d 548, l. c. 552-3. A practising attorney is not a clerk but a licensed practitioner and when he is engaged as assistant counsel or associate lawyer by a law firm, and is held responsible to them only for results in matters or cases placed in his charge or control, he is not an employee of said law firm but an independent contractor, even though he is furnished office facilities. Nelson v. Massman Construction Co., 120 S.W. 2d 77, l. c. 88 (K. C. Mo. App.) prohibition denied; State ex rel. Massman Construction Co. v. Buzard, 346 Mo. (Division 1) 1162, l. c. 1166-7, 1169, 145 S.W. 2d 355, l. c. 356, 357-8; Kingsbury v. Joseph, 94 (St. L.) Mo.App. 298, l. c. 306, 68 S.W. 93, l. c 95; 5 American Jurisprudence, Section 3, pages 262-3, Section 4, page 264, Section 5, page 264, Section 8, page 266; In accord, Pickett, v. U.S., 100 F.2d 909, l. c. 914 (C. C. A. 8); Burnet v. Jones, 50 F.2d 14, l. c. 15 (C. C. A. 8); Burnet v. McDonough, 46 F.2d 944, l. c. 945, 947 (C. C. A. 8); Rule 4, Canon of Ethics, of Missouri Supreme Court, 4.03, page 33; 4.33, page 43; 4.34, page 43; 4.35, page 43. That the associate attorney is paid on a salary basis for such results is not significant, so long as the law firm leaves him in control of the manner and method of achieving the results, pursuant to the understanding between them. Rutherford v. Tobin Quarries, 336 Mo. (Division 2) 1171, l. c. 1178, 82 S.W. 2d 918, l. c. 922; Meigs v. U.S., 115 F.2d 13 (C. C. A. 1), l. c. 17. The Unemployment Compensation Law, Article 2, Chapter 52, R. S. Mo., 1939, as amended, is strictly construed by this Court, as a taxing statute, and should not be applied to plaintiffs under the facts of this case. A. J. Meyer & Co. v. Unemployment Compensation Commission, 348 Mo. (Division 1) 147, l. c. 162, 152 S.W. 2d 184, l. c. 191.

George Schwartz, John L. Porter and Michael J. Carroll for respondents.

The Commission's denial of the application, which it had previously approved on the basis of information set forth in the appellants' application, was within its authority. The Commission's initial approval of the application did not purport to be its final action thereon. Section 9428(b), R. S. Mo. 1939, as amended, Laws 1941, p. 566, Sec. 5. The Commission's reconsidered action was in any event authorized by Section 9426A(d). Section 9426A(d), R. S. Mo. 1939, as amended, Laws 1941, p. 566, Sec. 3; Peerless Fixture Company v. Keitel, 355 Mo. 144, 195 S.W. 2d 449; State ex rel. Buttiger v. Haid et al., 330 Mo. 1030, 51 S.W. 2d 1008; Wagner v. Unemployment Compensation Commission, 355 Mo. 805, 198 S.W. 2d 342; S. S. Kresge Company v. Unemployment Compensation Commission, 349 Mo. 590, 162 S.W. 2d 838; A. J. Meyer and Company v. Unemployment Compensation Commission, 348 Mo. 147, 152 S.W. 2d 184. There is no irreconcilable conflict between Section 9426A(d) and Section 9432A(a). Section 9426A(d), R. S. Mo. 1939, as amended, Laws 1941, p. 566, Sec. 3; Section 9432A(a), R. S. Mo. 1939, as amended, Laws of Missouri, 1941; Wagner v. Unemployment Compensation Commission et al., 355 Mo. 805, 198 S.W. 2d 342. The doctrine of res adjudicata is of no importance in this case. Scott Timmons did perform services in "employment" for appellants during 1942, and appellants therefore did not qualify for termination of coverage effective January 1, 1943. Timmons -- in relation to appellants -- was not an independent contractor. Burnet v. Livezey, 48 F.2d 159 (C. C. A. 4th, 1931); Ryan v. Wisconsin department of Taxation, 242 Wisc. 491, 498, 8 N.W.2d 393, 397; American Law Institute's Restatement of the Law of Agency, Section 223 (comment a.); National Optical Stores Co., Inc. v. Bryant, 181 Tenn. 266, 181 S.W. 2d 139; Skidmore v. Haggard, 341 Mo. 837, 110 S.W. 2d 726; U.S. v. Butler, 49 F.2d 52 (C. C. A. 5th, 1931); Commissioner v. Hindman, 88 F.2d 44 (C. C. A. 3rd, 1937). Even if Timmons was an independent contractor as to appellants, he was nevertheless in "employment" subject to the Unemployment Compensation Law. Section 9423, R. S. Mo. 1939, as amended, Laws of 1941, p. 566, Sec. 2d 182, 183; Singer Sewing Machine Company v. Industrial Commission, 348 Mo. 147, 152 S.W. 2d 184; 55 Yale Law Journal, 76 l. c. 102-106; Guaranty Mortgage Company v. Bryant (Tenn.), 168 S.W. 2d 182, 183; Singer Sewing Machine Company v. Industrial Commission, 104 Utah 175, 134 P.2d 479; 104 Utah 196, 141 P.2d 694; Seattle Aerie No. 1 of Fraternal Order of Eagles v. Commission, 123 Wash. 158, 160 P.2d 614.

Boyer, C. Sperry, C., concurs.

OPINION

BOYER

This is an appeal from a decree of the circuit court of Cole County, affirming a decision of the Unemployment Compensation Commission which denied plaintiffs' application for termination of coverage effective January 1, 1943, under the Unemployment Compensation Law, and holding that plaintiffs did not cease to be an employer subject to the law as of said date. The appeal was to the Supreme Court, and according to an opinion of that court in its case No. 40906, it was held that the Supreme Court did not have jurisdiction of the appeal, contrary to the contentions of both appellants and respondents, and the case was accordingly transferred to this court.

As a background of the action for judicial review these facts appear: On January 8, 1943, plaintiffs filed an application for termination of coverage as an employer, subject to the law as of January 1, 1943, on the ground that they did not have the required number of employees for a sufficient period during the calendar year 1942 to render them subject to the payment of contributions to the Compensation Commission, and that they were therefore entitled to termination of coverage which had previously existed. On the 19th day of March 1943 the Commission, without notice or hearing, by resolution approved the application and on April 8, 1943, notified plaintiffs by mail of the action taken and enclosed formal notice of termination to be signed by plaintiffs' employees and to be posted conspicuously by plaintiffs for a period of ninety days and returned to the Commission properly executed, all of which was done by plaintiffs. That was the last plaintiffs heard of the matter until March 20, 1944, when they received a letter advising them that their application for termination of coverage had been reconsidered by the Commission and denied by resolution on March 10, 1944, because the application did not include certain individuals, known as "associates," who must be included in the total count of persons performing services in covered employment for the purpose of determining eligibility for termination of coverage. Plaintiffs were notified that this determination would become final ten days from the date of the letter if no application for a rehearing or reconsideration had been filed with the Commission within that time, and the letter then proceeds to state: "It will, therefore, be necessary for you to file quarterly contribution and wage reports and pay contributions thereon during the year 1943 and thereafter, unless and until this determination is reconsidered and reversed by the Commission." There was no notice to the plaintiffs or any opportunity for a hearing afforded them in reference to the reconsideration and decision of the Commission made on March 10, 1944.

Plaintiffs filed their petition for...