L. B. Price Mercantile Company, a Corp. v. Industrial Commission of Arizona

• Decision Date: 12 March 1934
• Docket Number: Civil 3372
• Citation: 43 Ariz. 257,30 P.2d 491
• Parties: L. B. PRICE MERCANTILE COMPANY, a Corporation, Defendant Employer, Petitioner, v. THE INDUSTRIAL COMMISSION OF ARIZONA, J. NEY MILES, HOWARD KEENER, L. C. HOLMES, Members of Said Commission, LEONA PEARL EVANS, Widow of L. D. EVANS, Deceased, AUDREY NAOMA EVANS and WANDA JEAN EVANS, Their Minor Children, Applicants, Respondents
• Court: Arizona Supreme Court

30 P.2d 491

43 Ariz. 257

L. B. PRICE MERCANTILE COMPANY, a Corporation, Defendant Employer, Petitioner, v. THE INDUSTRIAL COMMISSION OF ARIZONA, J. NEY MILES, HOWARD KEENER, L. C. HOLMES, Members of Said Commission, LEONA PEARL EVANS, Widow of L. D. EVANS, Deceased, AUDREY NAOMA EVANS and WANDA JEAN EVANS, Their Minor Children, Applicants, Respondents

Civil No. 3372

Supreme Court of Arizona

March 12, 1934

APPEAL by Certiorari from an award of The Industrial Commission of Arizona. Award set aside.

Messrs Armstrong, Kramer, Morrison & Roche, for petitioner.

Mr. D L. Cunningham (Mr. Don C. Babbitt and Mr. Emil Wachtel, on the Brief), for Respondent Industrial Commission of Arizona.

Mr Frank H. Lyman, for the Widow and Daughters of L. D. Evans Deceased.

OPINION

McALISTER, J.

The petitioner, L. B. Price Mercantile Company, brings before us for review an award of the Industrial Commission in favor of the wife and two daughters of L. D. Evans, who was killed in an automobile accident on January 19, 1933, while working for the petitioner. The Commission found that the injuries causing his death were sustained in an accident which arose out of and in the course of his employment, and the petitioner contending that the evidence does not support this finding asks that the award be set aside.

It appears that on September 14, 1932, L. D. Evans entered into a written contract with the petitioner by the terms of which he agreed to sell on commission for the latter certain articles of household goods such as blankets, bed linens and other fittings for the home, at prices furnished him by the petitioner who was designated throughout the contract as employer while Evans was referred to as employee. The goods were furnished him by the Phoenix manager of the company and were sold by him on weekly or monthly installments, though a purchaser could pay in full at the time of sale and occasionally did. When a sale was made the buyer signed a lease-agreement covering the transaction and Evans turned these in to the local manager of the petitioner each Saturday with the collections thereon less his commissions. At the same time he returned the unsold goods and the following week received a new consignment. Upon turning in a lease, his connection with that transaction ceased. The company collected the balance of the purchase price through another representative and if the down payment was not sufficient to take care of his commission it was paid him when collected, though the testimony discloses that the company gave him the balance of his commission when he turned in the lease without waiting for other payments. If, however, the purchaser defaulted the goods were charged back to Evans and he had either to resell them or pay for them. No sale became binding on the employer until approved by it and in case of rejection the employee agreed to repossess and deliver the goods to the employer or in lieu thereof to account for them in cash. Evans was prohibited from selling to certain classes of people; for instance, sporting people, unmarried employees living away from their parents, transient people, or persons designated from time to time by their employers as unreliable.

In addition to the regular commission Evans was allowed five per cent. on each sale for compensation for maintaining his automobile for transporting the merchandise and for instructing other salesmen of the employer. The right to designate in what cities, towns and localities its goods could be sold only on monthly payments, or only on weekly or monthly payments was reserved by the employer. The employee, however, was free to come and go and to sell the goods when and to whom he saw fit in the communities where he was engaged to work, though he was required to give his entire time and energy to the work.

According to paragraph 16 of the contract it could be terminated on one day's notice at the option of either party, though the Phoenix manager of the petitioner testified that he could not discharge Evans except by declining to furnish him goods to sell.

The evidence discloses that on January 19, 1932, about 1 P.M., Evans was driving south on Sixteenth Street and that in approaching McDowell Road he failed to observe just north of it a large stop sign on Sixteenth but drove into the intersection at a speed of thirty-five or forty miles an hour, and in so doing struck the side of a car going west on McDowell Road. The collision caused his car to skid across the street and overturn, killing him almost instantly.

About twenty minutes before this occurred, the Phoenix manager of petitioner, E. D. McCamy, had a conversation with Evans at Osborn Road and Seventh Street. He testified that he noticed Evans was under the influence of intoxicating liquor and told him that he, McCamy, would save him time by collecting some money due him by a Mrs. Thompson who lived north of Osborn Road and had purchased some blankets from him.

One Robert Hayes testified that he saw Evans about 10 o'clock that morning and that he was under the influence of liquor and unfit to drive a car.

The testimony of the wife and brother-in-law of Evans who saw him every day, however, was that he did not drink; that they never had known of his drinking and that Mr. McCamy told them a day or so following the accident that there was nothing the matter with him when he, McCamy, saw him about twenty minutes before the accident.

The petitioner contends that these facts show that Evans was not an employee but an independent contractor, for the reason that in selling its goods he was not subject to its rule or control, except in effecting the result sought in accordance with its desires. About the only matter left to him to decide was the amount of the down payment on any sale, whether more, equal to, or less than his commission. The petitioner, it is true, suggests that it was his duty to determine also whether the purchaser should pay the whole amount in cash, or in monthly or weekly installments. There was in reality nothing for him to decide on this point, because deferred payments were contemplated and the money of any person desiring to pay cash was not refused, and the petitioner reserved to itself the determination of the question whether the payment should be made by the week or by the month. While it was in a sense up to him what particular hours of the day he worked, yet the contract required him to give the job all his time and energy.

It is clear from the facts that the company exercised control over Evans not merely in effecting the results desired but also in the manner of bringing them about and that independence of action was allowed him in only one or two minor particulars. He agreed to and did dispose of the goods of the petitioner in the manner directed by it which was in substance this: He procured each week at its place of business in Phoenix a consignment of merchandise, sold it in and around the city of Phoenix at prices fixed by the company and on lease forms prepared by it, turned in each Saturday the leases and unsold goods together with the amount collected, less his commission, and made on each Monday a report to the company on forms prescribed by it of the previous week's work. He was at all times subject to discharge by the company if it decided it no longer needed his services, for either party to the contract could terminate it on one day's notice. It is true the Phoenix manager of the company testified that he could not discharge Evans but admitted that he could decline to furnish him any more goods to sell, and it is difficult to imagine a more effective method of terminating a contract of this character than to refuse him the necessary merchandise with which to carry on his work. The petitioner contends that it could not discharge him because there were or might be due him commissions on sales already made. The testimony is that in practice Evans was paid in full on each sale when he turned in a lease, but if this were not true the fact that he may have had something coming on sales theretofore made did not prevent the company from refusing to allow him to make new sales, and such a refusal could not have rendered the petitioner liable for a breach of its contract with Evans but merely have necessitated a satisfaction of any unpaid commissions.

These facts clearly bring the case within the rule announced by this court more than once that whether a person is an employee or an independent contractor depends upon the answer to the query, Did the company for whom he was working retain supervision or control over the work he was performing? In Grabe v. Industrial Com., 38 Ariz. 322, 299 P. 1031, 1034, this language was used:

"Under section 1418, supra, if A procures B to do certain work for him which is a part or process in A's trade or business, and retains ...