In re Morton

• Decision Date: 19 November 1940
• Court: New York Court of Appeals Court of Appeals
• Parties: In re MORTON.

284 N.Y. 167

30 N.E.2d 369

In re MORTON.

Court of Appeals of New York.

Nov. 19, 1940.

Appeal from Supreme Court, Appellate Division, Third Department.

Proceeding in the matter of the claim of Margaret B. Morton for unemployment insurance benefits under the Unemployment Insurance Law being article 18 of the Labor Law, s 500 et seq., against the Spirella Company, Incorporated. From an order of the Appellate Division, Third Department, 259 App.Div. 771, 18 N.Y.S.2d 375, reversing an order of the Unemployment Insurance Appeal Board and dismissing the complaint, the Industrial Commissioner appeals.

Reversed, and decision of the appeal board reinstated. John J. Bennett, Jr., Atty. Gen. (W. Gerard Ryan and Francis R. Curran, Asst. Attys. Gen., of counsel), for appellant.

Edward E. Franchot, Clarence R. Runals, and Paul P. Cohen, all of Niagara Falls, for respondent.

FINCH, Judge.

The sole question presented on this appeal is whether the claimant was an employeeof the respondent company rather than an independent contractor within the meaning of the Unemployment Insurance Law (Labor Law, Consol. Laws, ch. 31, s 500 et seq.; L.1921, ch. 50, as amended by L.1935, ch. 468 and subsequent amendments). A hearing was had before a referee of the Division of Placement and Unemployment Insurance of the Department of Labor, who granted the application of claimant for benefits under the law. The employer appealed to the Unemployment Insurance Appeal Board, which also conducted a hearing and thereafter, upon findings of fact, affirmed the decision of the referee. An appeal then was taken to the Appellate Division which reversed as a matter of law the determination of the Appeal Board and dismissed the claim.

The question to be reviewed by us is not whether claimant was an employee of respondent as a matter of fact, but whether upon the basis of the record before us we must decide as a matter of law that claimant was not an employee. Neither the duty nor the power to weigh the evidence rests with the courts, for that function, by virtue of the statute, has been imposed upon the administrative authority acting in a quasi-judicial capacity. Labor Law, s 534. In referring to the procedure under a parallel statute, it has been said that ‘where from the evidence either of two conflicting inferences may be drawn, the duty of weighing the evidence and making the choice rests solely upon the Board.’ Matter of Stork Restaurant, Inc., v. Boland, 282 N.Y. 256, 267, 26 N.E.2d 247, 252. Keeping in mind the restricted scope of our inquiry, we proceed to examine the record.

Respondent manufactures and sells made-to-order ladies' undergarments. Claimant was engaged as a ‘corsetiere’ pursuant to a written contract, which, in part, provided as follows: The company agreed to grant an exclusive sales territory to claimant, ‘to give her the benefit of the Company's training in Corsetry and Salesmanship,’ ‘to furnish her with the Company's products * * * at the prices published in the Company's Wholesale Price List,’ etc. In return, claimant agreed to take the training given by the company, to practice ‘The Company's methods of corsetry,’ to master ‘its methods of salesmanship,’ ‘to keep on hand at all times a complete set of modeling garments and a representative, up-to-date assortment of demonstration models; to use modeling garments for taking measurements,’ to furnish the company with the names and addresses of all clients, and to return all samples and literature upon termination of the contract. The contract was to run for one year, and was terminable at the option of the company if the claimant failed to sell at least ten garments per month over a period of three months. Claimant also agreed that for the duration of the contract she would not sell any goods but those of the respondent company, and that for one year after the termination of the contract she would not sell any other undergarments within the assigned territory.

In addition to the foregoing, it has been found by the Appeal Board that, as a matter of practice, claimant was required to submit weekly report cards showing in detail the work performed by her each day of the week, to work at least thirty hours per week and to begin each day at nine o'clock A. M., to follow the routine prescribed by the company's manual of instructions, to deliver to each customer a receipt on forms supplied by the company which bore in large print the ‘Manufacturer's Agreement’ and the name of respondent, to attend sales and instruction meetings conducted by the respondent's city manager, etc.

It has also been found by the Board that claimant was required to sell at the retail prices ‘suggested’ by respondent, and that, although respondent held claimant responsible for the wholesale price, it was not in fact collected until payment had been made by the retail customer. Respondent takes issue sharply with the Board's finding concerning the financial arrangement which actually existed between claimant and respondent. The record contains evidence which, if believed, supports the varsion accepted by the Board, and, therefore, the Board's findings are conclusive. Labor Law, s 534. Although the manner of payment sometimes may be one of the factors to be considered in determining whether one is an employee or an independent contractor (American Law Institute, Restatment of the Law of Agency, s 220), the view which we take of the case makes it unnecessary to consider this aspect at length. Cf. Hexamer v. Webb, 101 N.Y. 377, 384, 4 N.E. 755, 54 Am.Rep. 703; Matterof Beach v. Velzy, 238 N.Y. 100, 104, 143 N.E. 805.

For the period applicable to the claimant in the case at bar, the statute provided:

‘Definitions. As used in this article:

‘1. ‘Employment,’ except where the context shows otherwise, means any employment under any contract of hire, express or implied, written or oral, including all contracts entered into by helpers and assistants of employees, whether paid by employer or employee, if employed with the knowledge actual or constructive of the employer, in which all or the greater part of the work is to be performed within this state.

‘But for the purposes of this article, ‘employment’ shall not include:

‘(1) Employment as a farm laborer;

‘(2) Employment by an employer of his spouse or minor child.

‘2. ‘Employee’ means any person, including aliens and minors, employed for hire by an employer in an employment subject to this article, except any person whose wages exceed three thousand dollars in any calendar year.' (s 502.)

The distinction between an employee and an independent contractor has been said to be the difference between one who undertakes to achieve an agreed result and to accept the directions of his employer as to the manner in which the result shall be accomplished, and one who agrees to achieve a certain result but is not subject to the orders of the employer as to the means which are used. Hexamer v. Webb, supra; Irwin v. Klein, 271 N.Y. 477, 485, 3 N.E.2d 601; Clerk & Lindsell on Torts, 9th Ed., p. 65; Pollock on Torts, 14th Ed., p. 64. ‘What then is the test of this distinction between a servant and an independent contractor? The test is the existence of the right of control over the agent in respect of the manner in which his work is to be done. A servant is an agent who works under the supervision and direction of his employer; an independent contractor is one who is his own master. The servant is a person engaged to obey his employer's orders from time...