Meredith Pub. Co. v. Iowa Employment Security Commission, 45921.

CourtUnited States State Supreme Court of Iowa
Citation6 N.W.2d 6,232 Iowa 666
Docket Number45921.
Decision Date27 October 1942

6 N.W.2d 6

232 Iowa 666


No. 45921.

Supreme Court of Iowa

October 27, 1942

[6 N.W.2d 7] [Copyrighted Material Omitted] [6 N.W.2d 8]

[232 Iowa 668] J. Charles Crawley and Homer M. Lyon, both of Des Moines, and George Finch, of Sioux City, for appellants.

Stipp, Perry, Bannister & Starzinger, of Des Moines, for appellee.

BLISS, Justice.

The facts are not in dispute. The controversy arises over the application of the provisions of this statute to the situation before us. The commission contends that the employment relation of the appellee and Brumbaugh was such that the latter was within the benefit coverage of the statute, while it is the contention of the appellee that Brumbaugh was not its employee, in the common acceptation of that term, but was an independent contractor, and therefore, excluded from the provisions of the Act.

The appellee is an Iowa corporation with its office and place of business in Des Moines, and is engaged in publishing two magazines, one of which is "Successful Farming." This publication has a very large number of subscribers. To obtain and retain subscribers it employs agents to solicit subscriptions on a commission basis. On or about June 20, 1938, Brumbaugh signed a written application to appellee for his appointment as an agent only to solicit subscriptions for Successful Farming on a commission basis. This application provided that the applicant agreed to comply with the provisions of the agency contract, and to solicit subscriptions pursuant to the contract and in accordance with printed forms to be furnished him by the appellee. The application also stated that Brumbaugh agreed to correctly account each day for all subscription payments received.

On the same day an agency contract was executed by Brumbaugh and by Speckman, branch manager of the appellee. It provided that: Brumbaugh was to solicit subscriptions to [232 Iowa 669] Successful Farming in accordance with subscription offers issued by the company during the term of the contract; nothing in the contract should be construed as creating the relation of employer and employee between the agent and the company or its branch manager; "Said subscription agent shall be free to exercise his own judgment as the time, method, manner, and place of solicitation but The Company or its Branch Manager may from time to time prescribe such rules and regulations respecting the conduct of the business, not interfering with such freedom of action of the subscription agent and which rules and regulations shall be observed and conformed to by him."; "The Company may prescribe the form, plan, and terms governing all subscriptions solicited and may, from time to time, change, modify, or discontinue any subscription plan or plans or the terms governing the same."; the authority granted to the agent is limited solely to the solicitation of subscriptions to the company's publication, for which he shall be entitled to the retention of commission for each subscription secured by him at the rate now or hereafter fixed by the company; he shall keep, on the forms furnished, correct records of all subscriptions secured by him and report thereon as required; the contract and no rights therein shall be subject to assignment by the subscription agent; the contract can be terminated by either party at any time without assigning any cause or giving any prior written notice.

It was the plan of the company to send a number of these agents into a city or town, of suitable location, so that the entire county could be thoroughly canvassed for subscribers. One of their number, experienced in the work, was placed at the head of the group, although he was merely [6 N.W.2d 9] a solicitor of subscriptions operating under an agency contract as set out above. He would assign to each solicitor a rural mail route to be canvassed by that solicitor alone. It usually took from a week to two weeks to work a mail route. The agents were asked to contact at least 70 per cent of those on the mail route. Each agent took with him subscription blanks furnished by the appellee. One copy was given to the subscriber, and one copy was retained by the agent for the appellee. All subscriptions were for cash, and no credit was extended. Each agent was required to [232 Iowa 670] furnish his own transportation over the route, and to pay the expense thereof, and also for lodging, food, and all other expenses. Each night he accounted to the solicitor in charge of the group for all subscriptions taken during the day. He gave to him the signed subscription orders, and after retaining as his commission 80 per cent of each subscription, he delivered to him the remaining 20 per cent thereof. He also reported to him the number of hours he worked each day or whether he worked at all. The agent was at liberty to work only such time as he wished and when he wished, although the branch manager and the solicitor in charge suggested to them that they put in eight hours a day and impressed upon them that the more diligently they worked the more money they would receive. A bonus was paid if an agent sold over 60 subscriptions in a week. Each agent was required to confine himself to the mail route assigned to him. He made no report as to those upon whom he made calls. At times he did not solicit 70 per cent of the route patrons. The only remuneration he received was the commission retained by him. He traveled his route alone and was not directed, supervised or controlled by anyone in doing this. The agents were assigned separate mail routes so that there would be no conflict in their canvassing. The solicitor in charge received the same commission as the others for each subscription, and a small percentage of the subscriptions procured by the others for the service which he rendered the appellee. No deductions were made by the appellee from the earnings of any agent, nor was any part of the Social Security Act taxes paid therefrom. The agents sold no subscriptions for any publication other than Successful Farming. There was never any discussion about their selling any other subscriptions.

Brumbaugh, before taking this job, had done some work for road building contractors in Iowa and Kansas. After he signed the contract with appellee, he was given a three-day course of instructions respecting the method of securing subscriptions. The branch manager went with him one day. The solicitor in charge traveled with him one day, and the latter's son went out with him once. Occasionally the solicitor in charge, sometimes referred to as the crew manager, or the branch manager, would give the agents a sales talk.

[232 Iowa 671] The same general method which we have outlined was followed in each county. The group canvassed several counties. Brumbaugh worked about three months. His commissions were $300. There is nothing in the record as to how many hours he put in each week, excepting for the last two weeks. During the next to the last week he worked 12 hours and procured 26 subscriptions, for which he retained as commissions $20.40. He should have remitted $5.10 which he did not do, but he claimed he was entitled to hold it out. During the last week he worked 19 hours and produced five subscriptions, and made no remittance to the company. Other solicitors of the group during these two weeks worked an approximate average of 30 hours a week. Brumbaugh voluntarily gave up his contract and quit work wholly of his own accord. He gave as a reason for his quitting that his expenses exceeded his receipts. Francisco, the solicitor in charge of this particular group, had been soliciting subscriptions for the appellee on a commission for over seven years.

We have set out substantially all of the evidence. There is no evidence that anyone connected with the appellee exercised any control over Brumbaugh in the performance of the services which he agreed to perform, or that anyone exercised any direction, or control over him in his daily work of canvassing his territory, or any detail of that work. His physical efforts were not controlled, nor the time, place, method, or character of his work. He did nothing but solicit. No other work of any kind was performed by him for the appellee. His earnings depended very largely upon his own efforts. This is apparent from the amount of money which he received during the few hours he worked during his last two weeks. Not only did the appellee exercise no control over him [6 N.W.2d 10] in fact, but there is no evidence that it had any right to exercise control over him. Whatever direction, supervision, or suggestions which it gave to him were with respect to the general result to be accomplished. Of course, the appellee was interested in retaining and increasing the number of its subscribers. It was interested in the diligent effort and efficiency of its subscription agents to accomplish that end by contacting prospects in every county as widely and as [232 Iowa 672] effectively as possible. It had a right to plan the most effective campaign to that end, and fix the terms of subscription. Such plans are in no way different from the plans and specifications of an owner who lets a lump-sum building contract to an independent contractor to furnish the material and labor to construct a building. Such a one may have an architect supervise the work, or may make suggestions, or see to it that the work is done properly or according to the plans, but the builder, nevertheless, is an independent contractor. There is nothing in the record which has the slightest tendency to establish that the appellee exercised or had the right to exercise the control or direction over this agent in the solicitation of subscribers, which the employer or master exercises or has the right to exercise over his servant.

I. The principles of law applicable to this proposition are so uniformly recognized every where,...

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