Hudspeth v. Esso Standard Oil Co.

• Decision Date: 10 November 1948
• Docket Number: 13693.,No. 13692,13692
• Parties: HUDSPETH v. ESSO STANDARD OIL CO. THOMPSON v. ESSO STANDARD OIL CO.
• Court: U.S. Court of Appeals — Eighth Circuit

170 F.2d 418 (1948)

HUDSPETH v. ESSO STANDARD OIL CO.

THOMPSON v. ESSO STANDARD OIL CO.

Nos. 13692, 13693.

United States Court of Appeals Eighth Circuit.

November 10, 1948.

David R. Boatright, Asst. U. S. Atty., of Fort Smith, Ark. (R. S. Wilson, U. S. Atty. and Charles A. Beasley, Jr., Asst. U. S. Atty., both of Fort Smith, Ark., on the brief), for appellants.

Frank E. Chowning and J. Merrick Moore, both of Little Rock, Ark., C. Horace Tuttle, of New York City, and A. M. Curtis, of Baton Rouge, La., for appellee.

Before SANBORN, WOODROUGH, and COLLET, Circuit Judges.

SANBORN, Circuit Judge.

These appeals are from judgments of dismissal in actions brought by the plaintiffs (appellants), which were consolidated for trial and tried to the District Court. The actions were brought under § 8(e) of the Selective Training and Service Act of 1940, as amended, 50 U.S.C.A.Appendix, § 308(e). Each plaintiff asserted, in effect, that at the time of his induction into the armed service of the United States he held a nontemporary position as a Commission Agent in the employ of the defendant (appellee), to which position, upon his honorable discharge from the service, he was entitled to be reinstated, by virtue of § 8(b) of the Act, 50 U.S.C.A.Appendix, § 308 (b); that, after his discharge, he duly demanded reinstatement; and that the defendant wrongfully refused to restore him to the position. The relief prayed for by each plaintiff was an order compelling the defendant to reinstate him and to compensate him for the loss of wages suffered by reason of its refusal to reinstate him. The defendant denied that either of the plaintiffs held a position in its employ at the time of his induction into the service.

The controlling issue of fact in each case was whether, at the time of induction, the plaintiff "left * * * a position * * * in the employ of" the defendant within the meaning of § 8(b) of the Act. The plaintiffs asserted, and at the trial endeavored to prove, that each of them held such a position. The defendant contended, and sought to establish, that the plaintiffs did not hold positions in its employ, but were in business for themselves or were independent contractors. The District Court filed findings of fact and conclusions of law in each case.¹ The court determined that "The relationship of the plaintiff to the defendant on and prior to the date of his induction into the armed forces of the United States was that of an independent contractor and as such is not within the provisions of the Selective Training and Service Act of 1940, as amended"; and that "The plaintiff has failed to prove that prior to his induction into the United States Navy, he held a position in the employ of the defendant and is not entitled to recover herein." Judgment in favor of the defendant was thereupon entered in each case, and these appeals followed.

Counsel for the appellants in their brief state that the question to be decided by this court is "whether or not these veterans left positions in the employ of the defendant or whether they were independent contractors." That, of course, was the ultimate question of fact tried by the District Court and determined by it adversely to the plaintiffs.

Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., precludes this Court from setting aside a finding of fact of a trial court in a nonjury case unless the finding is clearly erroneous. This Court has consistently ruled that a finding of fact is not clearly erroneous unless it is without adequate evidentiary support or results from a misconception or misapplication of the law. See Aetna Life Ins. Co. v. Kepler, 8 Cir., 116 F.2d 1, 4, 5; Travelers Mutual Casualty Co. v. Rector, 8 Cir., 138 F.2d 396, 398; Cleo Syrup Corporation v. Coca-Cola Co., 8 Cir., 139 F.2d 416, 417, 150 A.L.R. 1056; Voss Bros. Mfg. Co. v. Voss, 8 Cir., 157 F.2d 263, 266. Compare, United States v. United States Gypsum Co., 333 U.S. 364, 394, 395, 68 S. Ct. 525.

While it is true that, by virtue of Rule 52(a) of the Federal Rules of Civil Procedure, this Court now acts as a court of review in all nonjury cases, in accordance with the practice which formerly prevailed in equity appeals, it does not retry cases or substitute its judgment for that of the trial court with respect to fact issues if the trial court's determination of such issues is not demonstrably wrong. Storley v. Armour & Co., 8 Cir., 107 F.2d 499, 513, and compare McComb v. McKay, 8 Cir., 164 F.2d 40, 49. And this was true in equity cases prior to the promulgation of the Federal Rules of Civil Procedure. Treat v. Rogers, 8 Cir., 35 F.2d 77, 78; Kennedy v. City of White Bear Lake, 8 Cir., 39 F.2d 608, 610; Karn v. Andresen, 8 Cir., 60 F.2d 427, 429.

The precise question for decision by this Court, then, is whether the determination of the District Court that the plaintiffs were independent contractors at the time they were inducted into the service, is clearly erroneous. The findings of that court with respect to the evidentiary facts are unchallenged. We assume, therefore, that the real contention of the appellants is that the conclusion reached by that court in each case is wrong because induced by a misapplication of the law to the evidentiary facts.

There is no substantial distinction between the two cases. For the sake of clarity, we shall deal with the case of Verl Hudspeth as being typical of both.

From November 13, 1940, to August 1, 1943, Hudspeth was a Commission Agent of the defendant at its bulk plant in Harrison, Arkansas. The "Commission Agency Agreement" referred to the defendant as "principal" and to Hudspeth as "agent." It provided that "Principal does hereby engage Agent to superintend, manage and operate its bulk plant for the receipt, storage and sale in the areas specified in Schedule `A' of kerosene, gasoline and other motor fuels, lubricating oils, greases and other petroleum products and other merchandise dealt in by Principal for account of Principal upon the premises situated in the City of Harrison, County of Boone, State of Arkansas * * *." This agency agreement required the "agent" to pay for lights, heat, water, power, telephone and other expense "pertaining to the efficient operation of this Bulk Plant"; to operate it "and such motor vehicles as are used," in compliance with the rules and directions of the "principal" and in a manner satisfactory to it; to keep the plant open for business during such hours as the "principal" should specify; to push the sale and sell products supplied by it; to hold the "principal" harmless for claims, damages or loss occasioned by the acts of the "agent", his assistants or employees; to pay to the "principal" 20% of the manual rate for public liability and property damage insurance procured by the "principal" on motor vehicles used by the "agent"; to accept liability for the payment of "all contributions and taxes for unemployment compensation insurance, of old age pensions or annuities, now or hereafter imposed by any Federal or State governmental authority, which are imposed with respect to or measured by the wages, salaries or other remuneration paid to persons employed by Agent, * * *." The agreement also provided that, upon its termination, all customers served by the "agent" should revert to the "principal", and the "agent" should have no rights with respect to business thereafter done with such customers; and that the "agent" should turn over to the "principal" the entire plant together with the merchandise then on hand and the equipment furnished by the "principal". For his services as Commission Agent, Hudspeth was to receive, by the terms of the agreement, certain specified commissions. The agreement contained other provisions, but enough has been said to indicate its nature and legal effect.

The defendant took the position that under this "Commission Agency Agreement," the "Commission Agent" was not its employee; but the federal taxing authorities ruled to the contrary. The defendant was obliged to pay social security taxes and to withhold income taxes with respect to such "agents".

The "Commission Agency Agreement" of November 13, 1940, was, on August 1, 1943, superseded by a different arrangement (evidenced by a lease and a "Bulk Plant Consignment Agreement"), obviously intended to give Hudspeth an independent status. On July 27, 1943, Hudspeth leased from the defendant its bulk plant and equipment at Harrison, Arkansas. The lease ran from August 1, 1943, to July 31, 1944. It was to be automatically renewed from year to year "unless and until either party" gave "to the other thirty (30) days' prior written notice of its intention to terminate the lease at the end of the first year or at the end of any...