Traders & Gen. Ins. Co. v. Frozen Food Exp.

• Decision Date: 21 January 1953
• Docket Number: No. 10077,10077
• Citation: 255 S.W.2d 378
• Parties: TRADERS & GEN. INS. CO. v. FROZEN FOOD EXPRESS.
• Court: Texas Court of Appeals

Page 378

255 S.W.2d 378

TRADERS & GEN. INS. CO. v. FROZEN FOOD EXPRESS.

No. 10077.

Court of Civil Appeals of Texas, Austin.

Jan. 21, 1953.

Rehearing Denied Feb. 18, 1953.

Thompson & Coe, Will C. Thompson, Vernon Coe, W. S. Barron, Jr., by Vernon Coe, all of Dallas, for appellant.

Phinney, Hallman, Reed & Holley, Carl L. Phinney, Leroy Hallman and Pat Reed, by Leroy Hallman, all of Dallas, for appellee.

HUGHES, Justice.

Traders and General Insurance Company, appellant, brought this suit against appellee, Frozen Food Express, a corporation, to recover premiums alleged to be due it under workmen's compensation insurance policies issued by appellant to appellee.

Premiums under such policies, generally speaking, are calculated on the remuneration paid employees of the insured.

Basically the issue here is whether certain truck drivers and their helpers are as a matter of fact employees of the insured or as a matter of law are to be considered as such employees by reason of application of section 6, Article 8307, V.A.C.S.

Appellee's defense to this suit is primarily that such truck drivers and their helpers were not its employees but were employees of an independent contractor and, in any event, appellant was estopped to contend otherwise.

Appellee's principal business is that of transporting frozen foods in trucks for others for compensation.

Such trucks are leased by appellee under written agreements which are in the following form:

'Frozen Food Express

Lease and Operating Agreement

'1. ________ (Name of Owner of Automotive Equipment), hereinafter termed the lessor, hereby leases and delivers complete possession and control to Frozen Food Express of the following equipment.

'Truck or tractor

(Form requires detailed description)

Semi-trailer

(Form requires detailed description)

'2. The term of said lease shall be continuous until cancelled by either party on five days written notice.

'3. Frozen Food Express agrees to pay the lessor for the use of the above equipment described above as follows:

'Basis of Compensation

'Basis: ________

'4. Lessor agrees to maintain said equipment in first class and safe operating condition and at lessor's expense procure all license and permit tags or plates required for the operation of equipment, and pay all taxes assessed against the equipment, pay all operating expenses, assume and indemnify Frozen Food Express against liability or expense for work done, materials or appliances used or purchased in discharge of lessor's covenants and loss or damage to the property of Frozen Food Express, or damage to any cargo being transported by lessor for Frozen Food Express that may result from defective equipment or the negligence of lessor.

'5. Lessor further agrees to observe all safety and other requirements of the Interstate Commerce Commission and all other regulatory bodies having jurisdiction and to pay all fines due to overload, overlength, overweight, lack of permits and plates, speeding and other fines which may be assessed against him for his failure to live up to such rules and regulations of the Interstate Commerce Commission and other regulatory bodies having jurisdiction.

'6. It is further understood and agreed that while the foregoing equipment is under the direction and control of Frozen Food Express it shall be operated only by the lessor or his representatives while in the employ of Frozen Food Express, and lessor will haul no freight not authorized under the certificates and permits of Frozen Food Express.

'7. Frozen Food Express further agrees to procure liability and property damage and cargo insurance as required by law, but no fire, theft, or collision insurance on the equipment described above.

'8. In the event of the wreck of the vehicle or its inability expeditiously to continue operation with the load to destination, the parties agree that Frozen Food Express shall forward the load or any part thereof as may be necessary by any means or vehicle with the least possible delay, and shall deduct from any amount due lessor as provided above, the cost and expense thereof, except that Frozen Food Express shall not be entitled to reimbursement for services (other than transportation) in handling and salvaging damaged freight.

'9. In the event lessor hires a driver during the term of this lease, lessor agrees: (a) To furnish at his expense Workmen's Compensation Insurance to cover said driver; ¹ (b) To pay all Social Security, Old Age Benefits and Unemployment Compensation taxes and assessments; (c) To pay all costs and expenses of operations, maintenance, and upkeep of said equipment, and that lessee shall not be liable for any such items; (d) That lessee shall not be liable for any loss or damage to or destruction of said leased equipment while it is being operated by or is in the care of said driver; (e) To idemnify lessee against any loss resulting from the injury or death of said driver; (f) To indemnify lessee against any loss or damage resulting from the negligence, incompetence or dishonesty of said driver.

'Date _____ Lessor _____

'Frozen Food Express (A Corporation)

'Address ________

'Terminal __ Town _____ State ___

'By _____ Telephone _____'

Under such lease lessor received 70% and lessee 30% of the gross income of the trucks.

Concerning the operation of the business of Frozen Foods its President testified:

'A. Our operation is based on the handling of perishables, primarily low temperature perishables such as frozen foods, shrimp, fish, frozen meats, frozen eggs; and then we handle a lot of perishables over what we classify light refrigerator commodity nature, like cheese, fresh meats, oleomargarine, butter, items of that kind. We operate between primarily the Texas area on the one hand, and all of the states in the middle west on the other; secondarily between Texas on the one hand, and California on the other; and then to a lesser extent from Texas on one hand, to the Eastern Seaboard states on the other. We transport-now the standpoint of day-to-day operation, our operation is conducted in this manner: The shippers call us for movement of merchandise and we dispatch trucks, load it-it's loaded primarily at warehouse points, packing points, and goes primarily to warehouse points and packing points at the destination.

'Q. Now the Interstate Commerce Commission requires the driver and the equipment to be under the control of the person under whose permit they are carrying, does it not? A. The Interstate Commerce Commission requires that the equipment be under the control of the party who has the permit.

'Q. (By Mr. Coe) Now, the trucks which operated for you under such a lease agreement were to be operated exclusively for you, is that not correct, during the terms of the lease contract? A. They were exclusively under lease to Frozen Food Express, yes, sir.

'Q. And the only people for whom they were to haul, other than Frozen Food Express, were such persons as you might authorize them to haul for, during the term of that lease? By 'person whom you might authorize them to haul for' I mean on through hauls you had associated companies who would take over the supervision and control of the equipment and the driver. A. We were operating under the authority of the Interstate Commerce Commission, and such hauls as we were authorized to make under that authority or in connection with that authority were the only hauls that they were authorized to make under that lease.

'Q. Now, as far as the permit to haul is concerned, that was your responsibility? A. That's correct, sir.

'Q. And these trucks all operated under your carrier's permit? A. That's correct, sir.

'Q. Now, with reference to fines, despite this provision in here you actually, as I understand it, had the men pay their speeding fines and violations of that sort, but for overloading you split that on the same basis as you did the commission? A. That's right, sir.

'Q. Now, all of these trucks operating under this type of agreement were required by you to have two operators, were they not? A. Yes, sir.

'Q. How do you term those, a driver and a helper, or were they both drivers, or what is your terminology for them? A. Well, they are usually referred to as the operator and his swamper.

'Q. Now before a man could drive one of those trucks under your permit, and under one of those lease contracts, you uniformly required of them that they have a doctor's examination, did you not? A. That was required under the Interstate Commerce Commission rules and regulations, Mr. Coe, and we uniformly required it due to those regulations.

'Q. In other words, you required that yourself, of the driver, because the Interstate Commerce regulations required it of an operator under a carrier's permit such as you had? A. That's right.

'Q. Now, you also required them to make a log of their trip, did you not? A. That's right, sir.

'Q. And you required them to report to the branch office nearest them when they completed a load, did you not? In other words, when they completed delivery of a load, they were required to report to the nearest branch office, were they not? A. They weren't required to, but as a matter of practice it was-in other words, to be available to load their equipment why they would have to check in to the office notify them that they were ready.

'Q. All right. A. The term 'require' that you use there is the product of custom. In other words you couldn't load a piece of equipment until you knew it was ready to go, and you didn't know it was ready to go until you had information to that effect.

'Q. And they regularly did report promptly when they were ready to load, to the nearest branch office? A. That's right.

'Q. Now, you required them to comply with all the safety rules and regulations that are put out by the Interstate Commerce Commission, did you not? A. That's correct, sir.

'Q. And you posted a notice in your place of business that they should not exceed so many miles an hour speed limit, is that...