Seattle Aerie No. 1 of Fraternal Order of Eagles v. Commissioner of Unemployment Compensation and Placement

• Decision Date: 28 June 1945
• Docket Number: 29492.
• Citation: Seattle Aerie No. 1 of Fraternal Order of Eagles v. Commissioner of Unemployment Compensation and Placement, 160 P.2d 614, 23 Wn.2d 167 (Wash. 1945)
• Parties: SEATTLE AERIE NO. 1 OF FRATERNAL ORDER OF EAGLES v. COMMISSIONER OF UNEMPLOYMENT COMPENSATION AND PLACEMENT.
• Court: Washington Supreme Court

160 P.2d 614

23 Wn.2d 167

SEATTLE AERIE NO. 1 OF FRATERNAL ORDER OF EAGLES v. COMMISSIONER OF UNEMPLOYMENT COMPENSATION AND PLACEMENT.

No. 29492.

Supreme Court of Washington, En Banc.

June 28, 1945

Proceeding by Seattle Aerie No. 1 of the Fraternal Order of Eagles against the Commissioner of Unemployment Compensation and Placement of the State of Washington for refund of unemployment compensation taxes. From a judgment of the superior court affirming the appeal tribunal's decision which upheld the commissioner's denial of claims for refund, the taxpayer appeals.

Reversed with instruction.

GRADY and BLAKE, JJ., dissenting.

Appeal from Superior Court, King County; Hon. Clay Allen, judge.

Cornelius C. Chavelle, of Seattle, for appellant.

Smith Troy, George W. Wilkins, and Bernard A. Johnson, all of Olympia, for respondent.

SIMPSON Justice.

This appeal involves two applications made by Seattle Aerie No. 1 of the Fraternal Order of Eagles for refund of unemployment compensation taxes paid by it from March 16 1937, to June 30, 1942. Claims for refund were properly made by the lodge and denied by the commissioner of unemployment compensation and placement. Thereafter a hearing was had Before the appeal tribunal. The appeal tribunal decided that the denial of refund as pronounced by the commissioner was just and correct and therefore affirmed his decision, whereupon the lodge appealed to the superior court of King county. The record of the department reviewed by the court resulted in the entry of a judgment affirming the order of the appeal tribunal. Seattle Aerie then appealed to this court.

Its assignments of error are: Sustaining the findings of the commissioner and the appeal examiner and in decreeing that the findings were not arbitrary or capricious; sustaining the commissioner's and appeal examiner's determination that the individuals involved were in employment within the meaning of the unemployment compensation act; sustaining the correctness of the commissioner's and appeal examiner's application of the law to the facts; and entering the judgment of dismissal.

The undisputed facts are these: Appellant is a fraternal organization incorporated under the laws of the state of Washington and affiliated with the Grand Aerie of the Fraternal Order of Eagles, or which appellant is the parent member. At the time of the hearing the membership of appellant was about fifteen thousand four hundred, while the national order, which includes twelve hundred twenty aeries has approximately seven hundred fifty thousand members. Appellant is a non-partisan and non-sectarian organization and its fundamental purposes are social, fraternal, beneficial, humanitarian, and patriotic. It owns a large building at 1416 Seventh avenue in Seattle, in which are centered its social and lodge activities. During the period in question, March 16, 1937, through June 30, 1942, appellant conducted public dances in its building. During that period of time three orchestras supplied music for the dances. The orchestras performing at different times were under the leadership of Bill Winters, Arden Stevens, and Kenneth Cloud and were known as 'BILL WINTERS' SENATORS,' 'ARDEN STEVENS' coMmodORes,' and 'the commodOres'. In each instance Before a contract was made, application for the business was made by the orchestra leader to the manager of the dances. The dances were managed by J. M .Hooper, who was a member of the board of trustees of appellant lodge. At the conclusion of the dances, which occurred on Saturday nights, Mr. Hooper gave to the leader a check covering the wages of the members of the orchestra who had played that evening. The check was made payable to the orchestra leader. The musicians were members of the musicians' union and were employed by the leaders of the orchestras.

Mr. Hooper testified:

'Q. During the entire period involved here, did you have any occasion or did you have the right or did you discharge any individual members of any of these orchestras? A. I had no occasion or had no right to discharge or hire any member of the orchestra.

'Q. Under whose control were the individual members? A. The leader's control.

'Q. Did you furnish any instruments for Arden Stevens' orchestra? A. We did not.

'Q. Did you tell him the type of music to be played? A. Nope.

'Q. Did you set the intermissions? A. No.

'Q. Did you furnish the sheet music? A. I did not. * * *

'Q. This may be repetitious, but I will ask you it again. During the period of time that Arden Stevens played for the Seattle Aerie No. 1, Fraternal Order of Eagles, or Kenneth Cloud and Bill Winter, did you or anybody on behalf of Seattle Aerie No. 1 ever fire any individual members of those orchestras? A. We had no right to.

'Q. Did you ever hear of any individual members being fired or by whom he was fired during the period of time that you were managing the dance there? A. No, I couldn't, they made some changes though.

'Q. Who made the changes? A. The leader. * * *

'Q. And you don't know what amounts were paid to each member? A. I don't know what he paid them. I know what the scale was per man, what he should pay them is or was.

'Q. All of the members of the orchestra were members of the union? A. They were all members of the union.

'Q. Did you always have a minimum number of musicians ? A. Always had the minimum. Sometimes the leader got an extra man from time to time.

'Q. And that usually ran eight, nine or ten? A. Yes, whatever he happened to want at the particular time, although we had to limit him, had to keep him from hiring any more.

'Q. Is that because you were bound by the amount that you were to pay the orchestra leader or is that for purposes of your own? A. Sometimes he wanted better instrumentation and he wanted to put on more men. We allowed him to do that from time to time. * * *'

The oral contracts made with the leaders of the orchestras could be terminated upon two weeks' notice by either the managing trustees or the orchestra leaders. The proceeds from the dances found their way into the various funds into which appellant allocated its revenues. So far as the record discloses the orchestras did not play for other lodges or organizations.

The single question presented by appellant's assignments of error is, were the members of the orchestras employees of appellant lodge within the meaning of our unemployment compensation statute?

It is the contention of appellant that the orchestra leaders were independent contractors and that the members of the orchestras were employees of the leaders and not of the appellant lodge. In none of our compensation cases so far decided have we had a situation in which one man (orchestra leader in this case) contracted to do a certain thing and then hired others to assist him in fulfilling his agreement. The unemployment compensation statute does not define independent contractor.

In the following cases this court has defined who are independent contractors and that the principal is not liable to men engaged by independent contractors: Boyle v. Great Northern Railway Co., 13 Wash. 383, 43 P. 344; Ziebell v. Eclipse Lumber Co., 33 Wash. 591, 74 P. 680; Miller v. Moran Bros. Co., 39 Wash. 631, 81 P. 1089, 1 L.R.N.,N.S., 283, 109 Am.St.Rep. 917; Engler v. Seattle, 40 Wash. 72, 82 P. 136; Larson v. American Bridge Co., 40 Wash. 224, 82 P. 294, 111 Am.St.Rep. 904; Kendall v. Johnson, 51 Wash. 477, 99 P. 310; Seattle Lighting Co. v. Hawley, 54 Wash. 137, 103 P. 6; Campbell v. Jones, 60 Wash. 265, 110 P. 1083, 20 A.L.R. 671; Cary v. Sparkman & McLean Co., 62 Wash. 363, 113 P. 1093; Bowen v. Smyth, 68 Wash. 513, 123 P. 1016; Watson v. Hecla Mining Co., 79 Wash. 383, 140 P. 317; Johnston v. Seattle Taxicab & Transfer Co., 85 Wash. 551, 148 P. 900; Machenheimer v. Department of Labor & Industries, 124 Wash. 259, 214 P. 17; Reynolds v. Addison Miller Co., 143 Wash. 271, 255 P. 110; Nettleship v. Shipman, 161 Wash. 292, 296 P. 1056; Amann v. Tacoma, 170 Wash. 296, 16 P.2d 601; Hollingsworth v. Robe Lumber Co., 182 Wash. 74, 45 P.2d 614; Mitchell v. Maytag-Pacific-Intermountain Co., 184 Wash. 342, 51 P.2d 393; Sills v. Sorenson, 192 Wash. 318, 73 P.2d 798; Hubbard v. Department of Labor & Industries, 198 Wash. 354, 88 P.2d 423; Washington Recorder Pub. Co. v. Ernst, 199 Wash. 176, 91 P.2d 718, 124 A.L.R. 667; White v. J. R. Watkins Products Co., 1 Wash.2d 466, 96 P.2d 456; Apenese v. Department of Labor & Industries, 3 Wash.2d 45, 99 P.2d 629; McFarland v. Commercial Boiler Works, 10 Wash.2d 81, 116 P.2d 288; Miles v. Pound Motor Co., 10 Wash.2d 492, 117 P.2d 179.

These cases define an independent contractor to be one who, exercising an independent employment or occupation, contracts to do a piece of work according to his own idea or in accordance with plans previously furnished to him by his employer and has the right to select his own assistants, the employer having no control over the hands doing the work further than to require that it should be done in compliance with the plans and specifications under which it is contracted to be done, the contractor representing his employer only as to the results of his work and not as to the means whereby it is to be accomplished. A reservation by the employer of the right by himself to supervise the work for the purpose of merely determining whether it is being done in conformity to the contract does not affect the independence of the relationship.

The cases also lay down the rule that there is no privity between the original employer and the employees of the independent contractor and that the employer is not liable to the workers for their pay nor for the negligence of the independent contractor.

Obviously the band leaders were independent...