Steen v. Potts

• Decision Date: 30 December 1953
• Docket Number: No. 9379,9379
• Citation: 75 S.D. 184,61 N.W.2d 825
• Parties: STEEN v. POTTS.
• Court: South Dakota Supreme Court

Page 825

61 N.W.2d 825

75 S.D. 184

STEEN v. POTTS.

No. 9379

Supreme Court of South Dakota.

Dec. 30, 1953.

Arend E. Lakeman, Mobridge, for plaintiff and respondent.

W. M. Potts, Mobridge, for defendant and appellant.

SMITH, Judge.

The plaintiff, Paul Steen, a contractor and builder, pursuant to conversations had with W. M. Potts, a lawyer, repaired three houses in Mobridge, South Dakota. When the work was completed Mr. Steen rendered a separate bill for each house for labor at the rate of $2.50 per hour, and materials at retail price. Mr. Potts paid the amount claimed for the repair of one of the houses when the statement was rendered. Thereafter he ascertained that Mr. Steen had paid his help varying rates of from $1 to $1.75 per hour, and had received a contractor's 10% discount on some of the materials supplied. Thereupon he refused to pay the amount claimed on the two remaining accounts, and sought a readjustment of the settled account. He asserted that the work was done pursuant to an agreement that Mr. Potts would pay the actual cost of labor and materials and an hourly rate for the labor and services of Mr. Steen. This action resulted.

In his complaint Mr. Steen sought to recover for labor and materials on the basis set forth in his two unsettled statements of account, and Mr. Potts defended by alleging the above described agreement, and counterclaiming for the amount he claimed to have overpaid in settling the first described account. Throughout the trial Mr. Steen, on the one hand, claimed that his employment created the relationship of independent contractor and contractee, and on the other hand, Mr. Potts took the position that the agreement created the relationship of master and servant. The trial court instructed the jury that Mr. Steen 'was an independent contractor in performing services and furnishing material' for Mr. Potts, and that he was entitled to recover the reasonable value thereof. This appeal is grounded principally upon the exception reserved to that instruction. It is urged here that under this record it was for the jury to say whether the relation created by the agreement of the parties was that of master and servant, or independent contractor and contractee.

A universally recognized rule is formulated in 56 C.J.S., Master and Servant, Sec. 3(2), page 45, as follows: 'In determining whether the relationship is that of master and servant or contractee and independent contractor, each case must be determined on its own facts and all the features of the relationship are to be considered.'

In Cockran v. Rice, 26 S.D. 393, at page 397, 128 N.W. 583, 585, this court said,

'* * * To constitute an 'independent contractor,' the contract itself must be one the performance of which will produce a certain understood and specified result--a contract which contemplates a definite beginning, continuance, and ending. A test of the relationship between the employer and the employe is the right of the employer under the contract to control the manner and continuance of the particular service and the final result. No single fact is more conclusive as to the effect of the contract of employment, perhaps, than the unrestricted right of the employer to end the particular service whenever he chooses without regard to the final result of the work itself.'

In Baer v. Armour & Company, 63 S.D. 299, 258 N.W. 135, 137, this court quoted with approval from Mallinger v. Webster City Oil Co., 211 Iowa 847, 234 N.W. 254, at page 256,

'* * * An independent contractor under the quite universal rule may be defined as one who carries on an independent business and contracts to do a piece of work according to his own methods, subject to the employer's control only as to results. The commonly recognized tests of such a relationship are, although not necessarily concurrent or each in itself controlling: (1) The existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price; (2) independent nature of his business or of his distinct calling; (3) his employment of assistants with the right to supervise their activities; (4) his obligation to furnish necessary tools, supplies, and materials; (5) his right to control the progress of the work, except as to final results; (6) the time for which the workman is employed; (7) the method of payment, whether by time or by job; (8) whether the work is part of the regular business of the employer. * * *'

The matters which among others are considered determinative in deciding whether one acting for another is an independent contractor or a servant are listed in Restatement, Agency, Sec. 220, as follows:

'(a) the extent of control which, by the agreement, the master may exercise over the details of the work;

'(b) whether or not the one employed is engaged in a distinct occupation or business;

'(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

'(d) the skill required in that particular occupation;

'(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

'(f) the length of time for which the person is employed;

'(g) the method of payment, whether by the time or by the job;

'(h) whether or not the work is a part of the regular business of the employer; and

'(i) whether or not the parties believe they are creating the relationship of master and servant.'

The tests catalogued by these authorities are not exclusive. The circumstances of a case may reveal other outstanding features which tend to support an inference that one working for another is an independent contractor. Moreover, none of these factors supplies an infallible test, and, with the possible exception of the element of 'control of the details of the work'--which has been aptly referred to as the essence of the relation of contractee and independent contractor--the absence of any of these indicia is not necessarily controlling. Most of the authorities place special emphasis upon the features of 'control' and 'independent calling'. Halverson v. Sonotone Corporation, 71 S.D. 568, 27 N.W.2d 596, and cases cited therein. And see annotations 19 A.L.R. 226, 19 A.L.R. 1168, 20 A.L.R. 684, and 75 A.L.R. 725. For an instructive discussion of the authorities and of their historical background see the dissenting opinion of Mr. Justice Wolfe in Stover Bedding Co. v. Industrial Commission, 99 Utah 423, 107 P.2d 1027, 134 A.L.R. 1006.

In the absence of a controlling specific provision of an unambiguous express contract, the conduct of the parties and all of the surrounding circumstances may be looked to in determining their relationship. 56 C.J.S., Master and Servant, Sec. 3(2), page 47. Where the inference is clear the relationship is determined by the court, otherwise the jury decides the question under instructions from the court as to the matters of fact to be considered. Carlson v. Costello, S.D., 48 N.W.2d 825, McCarthy v. City of Murdo, 68 S.D. 12, 297 N.W. 790, and Biggins v. Wagner, 60 S.D. 581, 245 N.W. 385, 85 A.L.R. 776.

We turn to the facts. In considering the ruling determining the nature of the relation as a question of law, we must accept the testimony of Mr. Potts, where conflict exists.

At the times in question Mr. Potts was engaged in the practice of law at Mobridge, South Dakota, and he was the owner of about fourteen houses, including his own home. For some time he had used a certain John Grace in making repairs on his property. In 1951 Mr. Grace moved from Mobridge. Thereupon Mr. Potts sought an arrangement with defendant Steen for the making of repairs upon his home and on two of his other properties. Mr. Steen was engaged in an independent calling as a builder and contractor. He rented and operated a woodworking shop equipped with machinery. During 1951 he had crews at work building houses in Mobridge. When first approached, Steen indicated that they were busy but would try to make the repairs. Potts told him they could be made at Steen's convenience as he could work them in with his other work. The work to be done was specified as a new roof on the kitchen, the tearing down of a chimney and putting in an air vent on the Pott's home; build a cement floor foundation under an east porch and a storm window on another house; and re-shingle and build a cement block foundation under a six-foot square entrance of the third house. As cold weather approached Mr. Potts urged Steen to make the repairs. Mr. Steen hired two additional carpenters, shifted some of his men from houses he was building and completed the repairs. One change was made as the work progressed. Steen saw Potts and suggested that the old shingles be removed from the kitchen of his home before applying a new roof. After looking at the old shingles, Mr. Potts told the men on the job to take them off.

Use was made of a ladder and a shovel owned by Potts during the progress of the work on his home. Aside from the hammers supplied by the workmen, the other tools were supplied by Steen including his truck, jacks, saws, etc. Because the size was not in stock at the lumberyard, a storm window was made in Steen's shop. All of the materials were ordered and paid for by Steen.

Mr. Steen hired and paid the wages of the several men employed in doing the work. He also serviced their unemployment compensation and social security, and covered them with workmen's compensation insurance. He spent only a few hours in actual work on each of the jobs, but exercised complete control of the details of all of the work. Mr. Potts exercised no control over the details of the work. He saw the men working on his home, and thinks he was at one of the houses at a time when the workmen were placing some cement blocks. He was in California a portion of the time while the men were doing the work. After the repairs were...