Realty Mortg. & Sales Co. v. Oklahoma Employment Sec. Com'n
| Decision Date | 16 October 1945 |
| Docket Number | 31378. |
| Parties | REALTY MORTGAGE & SALES CO. v. OKLAHOMA EMPLOYMENT SECURITY COMMISSION et al. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Jan. 15, 1946.
Application for Leave to File Second Petition for Rehearing Denied June 25, 1946.
Appeal from District Court, Oklahoma County; Lucius Babcock, Judge.
Action by Realty Mortgage & Sales Company against Oklahoma Employment Security Commission, substituted as defendant in lieu of W. A. Pat Murphy, Commissioner of Labor, and Carl B Sebring, State Treasurer of the State of Oklahoma in his capacity as ex officio the treasurer and custodian of the Oklahoma Unemployment Compensation Fund, to recover payments of contributions made to the Unemployment Compensation Fund. From a judgment denying relief, plaintiff appeals.
Reversed.
Syllabus by the Court.
By separate mutual agreements certain real estate salesmen associated themselves with plaintiff, a real estate broker under which agreements plaintiff and each salesman jointly engaged in the sale of real estate and the making of real estate loans and divided the commissions paid therefor. Plaintiff contributed its office space, equipment and personnel, and such listings of real estate as were received by it, and information received as to prospective purchasers and lenders, and closed or completed deals made by salesmen and collected and divided the commissions earned on deals made. The salesmen contributed their time and efforts to effect sales, but worked without any control or supervision by plaintiff. They were not obligated to sell property listed with plaintiff, or to devote any certain amount of time to the business. They were free to engage in other business furnished their own cars and paid their own expenses, and worked when and where they pleased. Either the plaintiff or any salesman could terminate the arrangement between them at any time, and if it was terminated by either party, the salesmen was entitled to receive his share of any commission earned prior to the termination and paid thereafter. Plaintiff paid the salesmen nothing, their share of commissions earned being their sole remuneration. Held, that the salesmen were not 'in the employment' of plaintiff, as that term is defined by the Oklahoma Unemployment Act of 1936, S.L.1936, Ex.Sess., c. 52, p. 30.
A. K. Little, of Oklahoma City, for plaintiff in error.
Burton Duncan and Mark L. Neumann, both of Oklahoma City, for defendants in error.
This action was commenced on July 11, 1940, by the plaintiff, Realty Mortgage & Sales Company, a corporation, against W. A. Pat Murphy, Commissioner of Labor of the State of Oklahoma, and Carl B. Sebring, State Treasurer, to recover payments or contributions made to the Oklahoma Unemployment Compensation Fund from January 1, 1937, to December 31, 1938. The parties will be referred to as they appeared in the trial court. The contributions so sought to be recovered were made under protest for certain real estate salesmen who were classified as employees of the plaintiff by the Labor Commissioner. On application of the Oklahoma Employment Security Commission, it was made a party defendant in lieu of the Commissioner of Labor. When the case came on for trial, both parties waived a jury, the cause was tried to the court, and judgment rendered denying the relief prayed for by the plaintiff. Plaintiff appeals.
The essential facts are undisputed and were fully established by the evidence introduced in the trial court. From that evidence it appears that plaintiff is a real estate broker, having its own office and employing certain persons whose status is not questioned in this action. It is engaged in the real estate and loan business. In addition to its regular employees, it has associated with it certain salesmen whose status is in question here. All operate under a similar agreement, which is oral.
The terms of the arrangement between plaintiff and the salesmen are substantially as follows: The salesmen are privileged to use the office of plaintiff, including telephones and desks when not in use; they have access to the office listings of properties for sale, and at times are furnished with the names of prospective borrowers or purchasers. They are under no obligation to follow any lead given them by plaintiff, or to sell only properties listed with plaintiff, but are free to pursue any lead, or to sell any properties, which come to their attention. They have no office hours, make no reports, pay their own expenses, furnish their own cars, and work when they please. Information regarding properties, and forms to be executed when a sale or loan is effected, are furnished by plaintiff or may be procured elsewhere by the salesmen. Everything else is furnished by the salesmen. Sales meetings are held occasionally, but there is no obligation to attend them. When a contract for a sale is procured by a salesman it is usually taken in the name of plaintiff and delivered to plaintiff's office, and plaintiff closes the deal and collects the commission. On loans the application is on forms furnished by the lender. The commissions are usually divided fifty percent to the salesman and fifty percent to plaintiff, and salesmen are paid their portion as soon as, but not until, the commission is collected. Salesmen may engage in other business if they wish; they may close deals if they wish; but on all sales plaintiff is entitled to its share of the commission collected. Either plaintiff or the salesmen may terminate their relationship at any time, and, in the event of temination, the salesman is entitled to his part of commissions earned by him and thereafter collected. Most of the salesmen were engaged in the real estate business before they associated themselves with plaintiff. Their only remuneration is their portion of commissions earned by them. They have no drawing account or other advance of any kind. Plaintiff carries liability insurance on the salesmen's cars to protect itself from any contingent liability, and includes them in its workmen's compensation insurance because of the requirement by the insurance company that all persons connected with plaintiff's business in any way be included in the policy.
The parties agree that the plaintiff's cause of action accrued while the Oklahoma Unemployment Compensation Law of 1936, Session Laws of 1936, Ex.Sess., c. 52, p. 30, was in force and that that act is the applicable law.
Section 2 of the act states the public policy of the state to be the cushioning against involuntary unemployment by providing for an unemployment compensation fund to be used for the benefit of persons unemployed through no fault of their own. In the following sections it provides for payments of benefits to those who are subject to involuntary unemployment computed upon a percentage of their full-time or part-time weekly wages, and provides for contributions from employers based on their annual pay rolls. It defines annual pay rolls as the total amount of wages payable by an employer for employment during a calendar year, defines an employing unit as an individual or any type of organization, including partnerships, corporations, and similar associations, having in its employ one or more individuals performing services for it within this state, and defines wages as 'remuneration payable by employers for employment.' By an amendment, S.L.1941, ch. 6, sec. 3(f)(6)(l), p. 139, 40 O.S.1941 § 229(f)(6)(l), insurance agents and solicitors were expressly excluded. This amendment may be considered by us in arriving at the intent of the Legislature. Childers v. Paul, 177 Okl. 111, 57 P.2d 872.
Section 19(g)(1) of said law defines employment as follows: "Employment' means service including service in interstate commerce, performed for remuneration or under any contract of hire, written or oral, express or implied.'
It defines remuneration as follows:
The decisive question presented is whether, under the definitions above set out, the salesmen are in the employment of plaintiff. If they are, plaintiff is liable for contributions in respect to them, and is not entitled to recover. If they are not, then plaintiff is entitled to recover such payments in this action.
This is the first case in which the question involved has been before this court. Many decisions from other states are cited by counsel for the respective parties. They are hopelessly conflicting. Plaintiff cites, among others, A. J. Meyer & Co. v. Unemployment Compensation Commission, 348 Mo 147, 152 S.W.2d 184 (real estate salesmen); Guaranty Mortgage Co. v. Bryant et al., 179 Tenn. 579, 168 S.W.2d 182 (real estate salesmen); Washington Recorder Publishing Co. v. Ernest, Director, et al., 199 Wash. 176, 91 P.2d 718, 124 A.L.R. 667 (newspaper delivery boys); Fuller Brush Co. v. Industrial Commission of Utah, 99 Utah 97, 104 P.2d 201, 129 A.L.R. 511 (brush salesmen), all holding that the parties therein involved were not 'in employment', or were excluded therefrom, under statutes similar to ours. Defendant cites Babb v. Huiet, Commissioner, 67 Ga.App. 861, 21 S.E.2d...
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