Scales v. First State Bank

• Decision Date: 30 April 1918
• Citation: 172 P. 499,88 Or. 490
• Parties: SCALES v. FIRST STATE BANK.
• Court: Oregon Supreme Court

172 P. 499

88 Or. 490

SCALES v. FIRST STATE BANK.

Supreme Court of Oregon

April 30, 1918

Department 1.

Appeal from Circuit Court, Multnomah County; C. U. Gantenbein Judge.

Action by Alice Scales against the First State Bank, a corporation. From a judgment of nonsuit, plaintiff appeals. Affirmed.

Alice Scales brought this action against the First State Bank, a corporation, to recover the price of groceries, meats, and other supplies. The plaintiff prosecuted the action on the theory that the goods were purchased by Harry J. Ewing as an agent of the defendant. The bank asserted that Ewing was an independent contractor. At the conclusion of the testimony for the plaintiff the court allowed the defendant's motion for a nonsuit, and the plaintiff appealed from the consequent judgment.

The defendant had caused to be cut, ricked, and corded about 6,000 cords of red fir wood on a tract of land located about one-half mile from the Sandy river. On April 14, 1915, Harry J. Ewing entered into a contract with the bank to transport to Troutdale all the wood except such sticks as were doty soggy, or otherwise unfit for the market, and also except such portions as the bank might reserve. The portions reserved were to be marked in some appropriate manner. The contract required Ewing to place all the cordwood not excepted or reserved, in the Sandy river at a designated point and then to drive the wood down the river in a careful and prudent manner to Troutdale where he was properly and securely to boom the wood. Ewing agreed that immediately after booming the wood he would remove it from the river by means of a conveyor and load it on cars or wagons to be provided by the defendant, or, if the bank so directed, rick and cord the wood on certain premises. Ewing specifically agreed to construct all roadways and chutes necessary for moving the wood to the river and at his own expense to construct all booms and dams necessary for driving the wood or for holding it in the river. The contract obligated Ewing to pay the defendant $3 per cord for all the wood left on the bars and banks of the river, and to exercise "the greatest of care and precaution" so as to prevent any wood from escaping from the boom. The defendant agreed to furnish and install the conveyor and an engine to drive it but it is also stipulated in the writing that the First State Bank does not assume or retain any control or supervision over the same while being operated and used by Ewing. It is also agreed that Ewing shall make all repairs to the conveyor and engine while in use, and that he "will furnish all wagons, sleds, horses and all materials and labor of every kind and description which shall be used by" him "in complying with and carying out the terms and conditions of this contract, all at the expense of" Ewing and without cost and expense to the First State Bank. The bank agreed to pay Ewing $1.15 per cord for all wood delivered by him at Troutdale; but advance payments were to be made as follows: 40 cents per cord "as soon as all said cord wood is placed in" the river, and an additional 50 cents per cord payable between the 1st and 10th days of May, June, and July, 1915, for every cord ricked for storage or loaded on cars and wagons at Troutdale "during the preceding month." Ewing agreed to place at least 2,000 cords in the river on or before May 10, 1915 and to place all the wood in the river on or before June 1 1915. The contract obligated Ewing to make two drives. He was to start the first drive on or before May 10, 1915, and finish it on or before May 20, 1915; and he was to start the second drive June 1, 1915, and finish it on or before June 15, 1915. Time is declared to be of the essence of the contract and the writing states that "all the terms and conditions herein stated must be completed on or before July 15, 1915." Ewing also agreed to save the bank "harmless from any and all labor and materialmen's liens," to pay "all railroad demurrage which may be incurred because of any fault, negligence, or carelessness on his part," and to "exercise the greatest of care and precaution in avoiding any and all fires in and about the premises which would in any way cause the wood" to be damaged or destroyed. The writing contains a paragraph which states that the bank shall not be held responsible for any personal injuries sustained by any person employed by Ewing in transporting and delivering the wood. The concluding stipulation empowers the bank "to take full control and possession," and to prosecute the work to completion in the event Ewing fails to comply with any of the terms or conditions of the contract.

Ewing entered upon the performance of his contract on April 15, 1915. Three different camps appear to have been established. John Dellis was the foreman of one camp, one Bosh was the foreman of the second camp, and Daugherty, Garthers, and Habbard seem to have been the persons who acted successively as foreman of the third camp. Ewing continued with the work until June 23, 1915, when he had placed about 3,000 cords in the river, and the bank then terminated the contract and took charge of the wood.

After reciting that the defendant owned about 6,000 cords of wood which it undertook to transport to Troutdale, the complaint avers that Ewing was at all times the agent of the defendant, with authority to supervise the transportation of the wood, to establish camps, to employ men, and to purchase supplies. It is then alleged that at the "request of the defendant and of defendant's said agent" J. Scales sold and delivered groceries and supplies "unto the defendant and said agent" at each of the three camps, and that E. R. Leaf sold and delivered meats "unto defendant and said agent" at the Dellis camp. There are appropriate allegations showing the assignment of the claims to the plaintiff; and, after crediting certain payments, the complaint concludes with a demand for a judgment against the defendant for the balance due.

The answer denies that Ewing acted as an agent of the bank; and for an affirmative defense the defendant alleges that Ewing was an independent contractor.

The plaintiff replied by averring that the defendant is estopped from claiming that Ewing was an independent contractor, because: (1) The bank held Ewing out as its agent in all matters appertaining to the removal of the wood, inquired about the bills, examined the statements of articles sold and delivered at the camps, required all checks to be approved by A. Myers, the president of the bank, employed, discharged, and paid men who worked under the supervision of Ewing and the plaintiff's assignors relied upon the bank for payment when selling the goods; (2) the bank was guilty of fraud in causing and permitting the goods to be sold, and then receiving and retaining all the benefit of the goods, when it knew that Ewing was insolvent and the sellers were not aware of his insolvency; (3) by taking control of the work on June 23, 1915, and undertaking to complete it and by retaining the benefit of the work done by Ewing as well as the benefits resulting from the use of the goods sold by the plaintiff's assignors, the bank ratified Ewing's purchase of the meats, groceries, and supplies so as to make the bank liable for the acts of Ewing.

Henry S. Westbrook, of Portland, for appellant. J. E. Bronaugh, of Portland (Bronaugh & Bronaugh and Carl M. Little, all of Portland, on the brief), for respondent.

HARRIS, J. (after stating the facts as above).

Harry J. Ewing was the first witness called by the plaintiff. After asking a few preliminary questions the attorney for plaintiff handed the witness the written contract, signed by Ewing and the bank, and asked him to "state whether or not that is the agreement you said you made." The witness answered thus, "Yes, sir; that is it;" and he subsequently added that he entered upon the work about April 15th "under that agreement." The writing was offered in evidence by the plaintiff and received by the court, and for the sake of brevity will be called Exhibit A. The bank contended, and the court ruled, that Exhibit A created the relation of employer and independent contractor, and not that of master and servant or principal and agent. The plaintiff contends that Exhibit A "by its terms makes Harry J. Ewing no more than a foreman, overseer and agent of the defendant."

The language of Exhibit A is plain and unambiguous; and it is therefore the province of the court to determine its legal effect. Section 136, L. O. L.; Simonds v. Wrightman, 36 Or. 120, 125, 58 P. 1100; Sharp v. Kilborn, 64 Or. 371, 374, 130 P. 735; d v. Johnson, 38 Colo. 440, 88 P. 439, 8 L. R. A. (N. S.) 896; 14 R. C. L. 78; 2 C.J. 964; 1 Mechem on Agency (2d Ed.) § 294. An examination of the writing will disclose that, standing alone and by itself, it indisputably creates the relation of employer and independent contractor. In Powell v. Construction Co., 88 Tenn. 692, 13 S.W. 691, 17 Am. St. Rep. 925, 928, Mr. Justice Lurton says that:

"An independent contractor is one who, exercising an independent employment, contracts to do a piece of work according to his own methods, and without being subject to control of his employer, except as to the result of his work."

While it is not always easy to frame a definition which accurately states essential elements, and at the same time is capable of being applied to all cases, the one just given has the merit of being concise, and also has the prestige that follows from frequent judicial approval. Pottorff v. Fidelity Coal Mining Co., 86 Kan. 774, 122 P. 120; Humpton v Unterkircher et al., 97 Iowa, 509, 66 N.W. 776; Good v. Johnson, 38 Colo. 440, 88 P. 439, 8 L. R. A. (N. S.) 896. Stated broadly, the test for determining whether a person...