Texas Co. v. Wheeless

Decision Date10 April 1939
Docket Number33562
Citation187 So. 880,185 Miss. 799
CourtMississippi Supreme Court
PartiesTEXAS CO. v. WHEELESS et al

APPEAL from the chancery court of Hinds county HON. V. J. STRICKER Chancellor.

Suit in equity by the Texas Company against Leon L. Wheeless and others, comprising the Mississippi Unemployment Compensation Commission, to enjoin collection of contributions to unemployment compensation fund. From a decree dismissing the bill, plaintiff appeals. Reversed and remanded.

Reversed and remanded.

Watkins & Eager, of Jackson, W. O. Crain and F. T. Baldwin, both of Houston, Texas, and A. E. Van Dusen, of New York City, for appellant.

While appellant's distributors may be agents for the appellant under certain circumstances, they are not employees within the meaning of the statute. They are factors, or selling agents, in the nature of independent contractors engaged in their own independent occupation, or business.

Ahbol v. Harden Contracting Co., 270 N.Y.S. 515, 193 N.E. 322; American Savings Life Ins. Co. v. Riplinger, 60 S.W.2d 115; Beck v. Dubach, 131 So. 196, 171 La 423; Carter v. Davis, 68 S.W.2d 640; Casement v Brown, 148 U.S. 615, 37 L.Ed. 582; Cook v Wright, 171 So. 686, 177 Miss. 644; Cotton v. Hiller, 52 Miss. 7; Coutrie v. Roensch, 134 S.W. 413; Crosby Lbr. Co. v. Durham, 179 So. 285; 20 C. J., page 1241, notes 71, 72, 73; 25 C. J., pages 340, 342, 343, 347, 348, 350, 353, 357, 368 and 374; 2 C. J., sec. 1029; Gadsden v. Countiss Tobacco Co., 137 So. 255; Giroud v. Stryker Transportation Co., 140 A. 305; Gridley, Maxon & Co. v. Turner, 176 So. 733, 179 Miss. 890; Gulf Refining Co. v. Nations, 167 Miss. 315, 145 So. 327; Hammond v. Mercantile, 222 S.W. 27, 144 Ark. 108; Holleman v. Taylor, 158 S.E. 88; In re Robin Gray, 53 F.2d 1037; Khoury v. Edison Co., 164 N.E. 77, 60 A. L. R. 1159; Kingan v. Silvers, 37 N.E. 413; Klar v. Erie R. Co., 162 N.E. 793; Kuhn v. P. J. Carlin Constr. Co., 278 N.Y.S. 635; Leland v. Oliver, 255 P. 775; Losee v. Paramount Corp., 242 N.Y.S. 608; Louisiana Oil Co. v. Renno, 173 Miss. 609, 157 So. 705; Metcalfe v. Mitchell, 70 L.Ed. 384, 269 U.S. 514; Moore v. Charles, 165 N.E. 835, 250 N.Y. 426; Social Security Act, par. (g) and (n), Section 19; Pate Lbr. Co. v. Weathers, 167 Miss. 228, 146 So. 443; Pribulo v. Chiarelli, 157 A. 420; Restatement, Agency, sections 1d, 2d, 14b, 220c, 220g, 250a; Rogers v. Lewis, 144 So. 373; Rothschild Bros. v. Northern Pacific R. R. Co., 123 P. 1011, 40 L. R. A. (N. S.) 773; Sams v. Arthur, 133 S.E. 205, 135 S.C. 123; Shell Petroleum Co. v. Linham, 163 So. 839; Texas Co. v. Mills, 171 Miss. 231, 156 So. 866; Texas Co. v. Jackson, 174 Miss. 737, 165 So. 546; Webster's New International Dictionary.

The contributions required by the Social Security Act are excise taxes, and in determining the application of the act to the appellant every doubt will be resolved against the taxing power and liability will not be imposed upon the appellant for commissions paid to its consignees unless clearly included within the spirit and purpose of the act.

Beeland Wholesale Co. v. Kaufman, 174 So. 516; Standard Machine Co. v. Davis, 81 L.Ed. 863, 109 A. L. R. 1293; Tatum v. Wheeless, 178 So. 95, 180 Miss. 800; Planters Lbr. Co. v. Wells, 112 So. 9, 147 Miss. 279; Railroad Co. v. State, 62 Miss. 107; State v. Simmons, 70 Miss. 485; Wilbe v. State, 93 Miss. 767; Restatement, Agency, par. c of Section 2, and par. d of Sec. 220; State v. J. J. Newman Lbr. Co., 60 So. 215, 103 Miss. 263, 45 L. R. A. (N. S.) 858; Town of Union v. Ziller, 118 So. 293, 151 Miss. 467, 60 A. L. R. 1155; Warburton-Beacham Supply Co. v. City of Jackson, 118 So. 606, 151 Miss. 503.

The statute must be so construed as to accomplish the legislative purpose. In the present act the legislature intended to make provision only for the immediate and direct employees of the employer likely to get out of employment.

Board of Supervisors of Quitman County v. Carrier Lbr. Co., 60 So. 326, 103 Miss. 324; Carmichael v. Southern Coal, etc., Co., 81 L.Ed. 858; Crenshaw Lbr. Co. v. Norton, 72 So. 240, 111 Miss. 720; Eaton v. Koler Lbr. Co., 46 So. 70; Fulgham v. Burnet, 117 So. 514, 151 Miss. 111; Gandy v. Public Service Corp., 140 So. 687, 163 Miss. 187; Hamner v. Yazoo Delta Lbr. Co., 56 So. 456, 100 Miss. 349; Helvering v. Davis, 109 A. L. R. 1319, 81 L.Ed. 1307; Huber v. Freret, 103 So. 3, 138 Miss. 238; Ingram v. Speed, 30 Miss. 410; Myers v. Martinez, 48 So. 291, 95 Miss. 104; N. O. J. & G. N. R. Co. v. Hemphill, 35 Miss. 17; Patterson v. Clingan, 47 So. 503, 93 Miss. 310; Smith v. Chickasaw County, 125 So. 96, 156 Miss. 171; Steward Machine Co. v. Davis, 81 L.Ed. 863, 109 A. L. R. 1293; Tatum v. Wheeless, 178 So. 95, 180 Miss. 800; White v. Miller, 162 Miss. 296, 139 So. 611; Wm. R. Moore Dry Goods Co. v. Rowe, 53 So. 626, 97 Miss. 775.

The Social Security Act and the various sections thereof under discussion violate the Fourteenth Amendment to the Constitution of the United States, as well as the Fourteenth Section of the Bill of Rights of the State of Mississippi, if such act or any section thereof shall be construed or enforced so as to impose liability upon the appellant for the tax upon commissions paid its consignees.

Railroad Retirement Board of Alton R. Co., 295 U.S. 330, 79 L.Ed. 1468.

J. A. Lauderdale, Assistant Attorney-General, and Harry M. Bryan, of Jackson, for appellees.

The applicable provisions of the Mississippi Unemployment Compensation Law are: Chapter 176 of the Laws of 1936, amended by House Bill No. 10, first Extraordinary Session of 1936, and by Chapter 147 of the Laws of 1938; Sections 2(a), 7(a) (1), 19(h) and (i) and (n), and 7(b), of the Act.

All basic constitutional questions affecting the act have been put at rest by this Honorable Court in Tatum v. Wheeless, 180 Miss. 800, 178 So. 95.

Charles C. Steward Machine Co. v. Harwell G. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A. L. R. 1293; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A. L. R. 1327.

The written agreement controls in determining the status of the parties, the relationship between appellant and its distributors (and their helpers) thereunder is that of employer-employee.

American Oil Co. v. Wheeless, No. 33522; Benjamin v. Davison-Gulfport Fertilizer Co., 159 Miss. 162, 152 So. 839; Buchholz v. Standard Oil Co., 244 S.W. 973; Callahan v. Rayburn, 110 Miss. 107, 69 So. 667; Caver v. Eggerton, 157 Miss. 88, 127 So. 727; 20 C. J. 1241; Crosby Lbr. & Mfg. Co. v. Durham, 179 So. 285; Fischer v. Havelock, 25 P.2d 864; Gibson v. Texas Co., 20 S.W. 349; Gulf Refining Co. v. Brown, 93 F.2d 870, 116 A. L. R. 449; Goff v. Sinclair Refining Co., 162 So. 452; Gulf Refining Co. v. Nations, 167 Miss. 315, 145 So. 327; Gulf Coast Motor Express Co. v. Diggs, 174 Miss. 650, 165 So. 292; Hinton & Walker v. Pearson, 142 Miss. 50, 107 So. 275; Johnson v. Steele, 59 P.2d 237; Kisner v. Jackson, 159 Miss. 424, 132 So. 90; Life & Casualty Ins. Co. v. Curtis, 174 Miss. 768, 165 So. 435; Louisiana Oil Co. v. Renno, 173 Miss. 609, 157 So. 705; Magnolia Petroleum Co. v. Pierce, 269 P. 1076; Mallinger v. Webster City Oil Co., 228 N.W. 41; Nesseth v. Skelly Oil Co., 223 N.W. 608; Pan-American Petroleum Corp. v. Pate, 157 Miss. 822, 126 So. 480; 1 Restatement, Agency, 490; Rogers v. Lewis, 144 So. 373; Sawmill Construction Co. v. Bright, 116 Miss. 491, 77 So. 316; Section 19(g) of Unemployment Compensation Law; Tatum v. Wheeless, 180 Miss. 800, 178 So. 95; Texas Co. v. Mills, 171 Miss. 231, 156 So. 866; Texas Co. v. Jackson, 174 Miss. 737, 165 So. 546; Angell v. Eagle Oil & Refining Co., 169 Minn. 183, 210 N.W. 1004; Crowder v. State Compensation Commissioner, 115 W.Va. 12, 174 S.E. 480; Heisey v. Tide Water Oil Co., 92 S.W.2d 922; Maryland Cas. Co. v. Kent, 3 S.W.2d 414, 271 S.W. 229; Roberts v. U.S. F. & G. Co., 42 Ga.App. 668, 157 S.E. 537; Shell Petroleum Corp. v. Garnett, 228 Mo.App. 256, 65 S.W.2d 1052; Sec. 19 (i) (1), Miss. Unemployment Compensation Law; U.S. F. & G. v. Ind. Comm., 42 Ariz. 422, 26 P.2d 1012.

This Honorable Court has laid emphasis upon the value of departmental and administrative construction in the following cases:

State v. Wheatley, 113 Miss. 55, 74 So. 427; I. C. R. R. Co. v. Middleton, 109 Miss. 199, 68 So. 146; State v. Grenada Compress Co., 123 Miss. 191, 85 So. 137; Robertson v. Texas Oil Co., 141 Miss. 356, 106 So. 449; Furniture Co. v. Tax Commission, 160 Miss. 185, 133 So. 652.

The basic test for determining whether or not an individual is customarily engaged in an independently established trade, occupation or business is whether he is able to hold himself out as ready or willing to exercise his special skill for all those who come to purchase his services.

Comer v. State Tax Commission of New Mexico, 69 P.2d 936.

The Texas Company's distributors, under the contract, do not meet this test.

The distributors have no specific job to complete. When a contract is terminated they will have no chose in action excepting perhaps for unpaid balances.

Price Mercantile Co. v. Industrial Commission, 43 Ariz. 257, 30 P.2d 491.

This fact, taken in connection with the other provisions of the contract makes the conclusion inescapable that the distributors are not independent business men on their own account, but representatives of the distributing department of the company's business. Upon the termination of the contract they no longer have a distributing business. Moreover, and significantly, they agree not to engage directly or indirectly in the business of selling or distributing petroleum products within the area of their operations for a stated term of years after the termination of the contract.

So that, what appellant's argument amounts to is...

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