Magnolia Petroleum Co. v. Pierce

• Decision Date: 10 April 1928
• Docket Number: Case Number: 17345
• Citation: 132 Okla. 167,1928 OK 245,269 P. 1076
• Parties: MAGNOLIA PETROLEUM CO. v. PIERCE.
• Court: Oklahoma Supreme Court

1928 OK 245

269 P. 1076

132 Okla. 167

MAGNOLIA PETROLEUM CO. v. PIERCE.

Case Number: 17345

Supreme Court of Oklahoma

Decided: April 10, 1928

Syllabus

¶0 1. Master and Servant--Contract for Sale of Products on Commission Held to Create Relation of Master and Servant Between Principal and Sales Agent and Agent's Employees.

Where a party by a written contract employed another to sell employer's products under his direction and control at fixed prices within certain territory to be designated by him in which the business shall be conducted by the agent and agent's employees, with the agent's compensation to be paid on a percentage or commission basis of sales made, and with the right of the employer to terminate the contract at any time and for any reason, such contract of employment, as a matter of law, created the relationship of master and servant between the employer and the agent and the agent's employees.

2. Appeal and Error--Harmless Error--Instructions--Error in Favor of Appellant.

In a case involving employment under the conditions as set forth in paragraph 1 of the syllabus of this case, submission to the jury for its determination the question of whether or not the agent was an independent contractor or servant of the employer was harmless error, since the jury found that the relationship of master and servant existed.

Commissioners' Opinion, Division No. 1.

Error from District Court, Pittsburg County; O. H. Searcy, Assigned Judge.

Action in tort by J. O. Pierce against the Magnolia Petroleum Company. Judgment for plaintiff, and defendant appeals. Affirmed.

W. H. Francis and Blakeney & Ambrister, for plaintiff in error.

Tom G. Haile and Monk & McSherry, for defendant in error.

TEEHEE, C.

¶1 In the court below J. O. Pierce, plaintiff, in an action in tort, recovered a judgment of $ 875 by a jury verdict against the Magnolia Petroleum Company, defendant. Plaintiff alleged that he suffered personal and property injuries through a collision of defendant's automobile truck, negligently operated by Stanley Neiswander and Charley Cunningham, the agents and employees of defendant, with plaintiff's buggy, in which he was traveling on a public highway in Pittsburg county.

¶2 Defendant denied the alleged relationship between it and Neiswander and Cunningham, and further interposed the defense of contributory negligence of plaintiff, and that Neiswander was an independent contractor with Cunningham as his employee under a written contract with defendant, copy of which, by exhibit, was made a part of its answer.

¶3 At the trial, upon conclusion of the evidence, defendant moved for a directed verdict. Failing in this, the defendant requested the court to instruct the jury, as a matter of law, that Neiswander was an independent contractor when the plaintiff received his injuries, and that any negligent act on the part of Neiswander or Cunningham could not be binding upon the defendant, for which reason the plaintiff could not recover for such injuries from the defendant. This was by the court refused, and thereupon the question of relationship was submitted to the jury for its determination. The jury, by its verdict, determined that the relationship of master and servant subsisted between the alleged actors contributory to plaintiff's injuries at the time of the collision, and that the defendant was liable therefor.

¶4 The rulings of the court upon the question of relationship constitute the principal assignment of error, and thus is presented for our determination the issue of whether or not Neiswander was an independent contractor, or that he and Cunningham were the agents or servants of the defendant. This is to be determined from the terms of a written commission agreement entered into between the defendant and Neiswander, who was designated in the agreement as defendant's agent, whereunder the agent agreed to market defendant's products within certain territory to be designated by defendant at prices fixed by defendant and at specified rates of commission on the sales made by the agent or his employees from stocks furnished by defendant at the agent's place of business. The controlling section of the agreement provided as follows:

"It is expressly understood and agreed that the above rates of commission apply on sales made by agents, and the commission to apply on sales made by salesmen, managers and others, and the commission to apply on transfers between agencies, on home office contracts and on railroad contracts are allowed as full compensation to agent for service to be rendered in connection with the proper handling of the company's business in the territory assigned to the agency. The duties of the agent, in return for said compensation, includes the proper care of stocks of all kinds placed in his charge, storage tanks, warehouse and other equipment, soliciting and carrying on business under the direction of the division manager, and other authorized representatives, and the making of deliveries, the collecting of accounts, the making of reports required, unloading cars, and such other services as may be required for the proper conduct of the business. Agent assumes all liabilities for losses occasioned by his employees and agrees to pay Magnolia Petroleum Company at Dallas, Tex., for all losses suffered by Magnolia Petroleum Company on account of the acts of agent's employees of whatever nature or description That Magnolia Petroleum Company has the right to terminate his contract at any time and for any reason."

¶5 Other provisions detailed the method of handling defendant's business, and prohibited sales to the agent or any concern in which he may be interested without first securing the written consent of the defendant's division manager having jurisdiction over the territory in which the agent was to operate. By another section it was provided:

"It is agreed and understood that the Magnolia Petroleum Company is to furnish free of charge the necessary forms, stationery and postage for the proper conduct of the business, all other items of expense to be assumed by the agent."

¶6 In execution of the agreement it was established by parol proof that the agent purchased an automobile truck on which was mounted an oil tank owned by defendant and a freight truck. The trucks bore defendant's name. The agent employed Cunningham as a truck driver and to otherwise assist him in handling defendant's business. Defendant furnished what it deemed to be necessary in furtherance of its business, and placed the agent in charge of its warehouse and stock at the point of distribution from which the defendant's business under the agreement was to be handled, and designated the agent's business territory. At the time of the collision the agent's employee was hauling defendant's oil storage tank, which was delivered at the filling station of a customer to whom the tank was rented.

¶7 There is no controversy as to the principles of law to be applied in the interpretation of the contract. The controversy arises from the divergent views of the parties as to the character of the relationship established thereunder.

¶8 In Standard Oil Co. v. Parkinson, 152 F. 681, 82 C. C. A. 29, which involved a state of facts in many respects identical and otherwise substantially the same as the facts in the case at bar with reference to employment, it was said:

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