Journal Publishing Co. v. State Unemployment Compensation Commission

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 629 Suit by Journal Publishing Company against State Unemployment Compensation Commission of the State of Oregon for a judicial review of a decision of the commission declaring that James R. Johnston was entitled to unemployment compensation as an employee. From a decree of the circuit court affirming the commission's award, plaintiff appeals. AFFIRMED. This is an appeal from the decree of the Circuit Court affirming an award of benefits by the State Unemployment Compensation Commission in favor of one James R. Johnston. The question for decision is whether Johnston was an employe, within the meaning of the Unemployment Compensation Law, of the plaintiff, Journal Publishing Company, a corporation, and as such entitled to unemployment compensation. The following facts appear: The plaintiff publishes a daily and Sunday newspaper in Portland, Oregon, and during the years 1937, 1938 and 1939 Johnston was a carrier and distributor of its papers on rural routes in this state. He operated under written contracts, the first of which was dated July 1, 1937, and *Page 631 the second, though dated December 1, 1938, was deemed effective by the parties as of July 1, 1938. The first contract covered a route in Benton County and continued in effect until July 1, 1938, when the route was abandoned by the plaintiff. The second contract was entered into to cover a route in Linn County, and was in effect from July 1, 1938, until March 1, 1939, when the plaintiff cancelled it for what it considered good and sufficient reason. In broad outline there is no great difference between the provisions of the two contracts. In each Johnston agrees to deliver the papers of the plaintiff to subscribers on the prescribed route, to pay the plaintiff on the tenth of each month a stipulated price for the papers which he orders, and to charge the subscribers the prices fixed by the contract; he agrees to do all in his power to increase the sales of The Journal and not to contract with or sell any other newspapers; he agrees to give thirty days notice of his intention to abandon the route. The foregoing provisions are in substance common to both contracts. In the first contract is a provision authorizing the plaintiff to take over Johnston's territory without notice if he does not pay for the papers as agreed; in the second a provision authorizing the plaintiff to cancel the contract at any time "for good and sufficient reason". By the first contract Johnston agrees to "keep his books in perfect order with the correct lists of the names and addresses of all customers, with dates to which they are paid" and "that all books, lists, etc., are to be turned over by the CIRCULATOR (Johnston) to his successor promptly at such time as he surrenders the territory". By the second contract Johnston acknowledges receipt from the plaintiff "of a list *Page 632 of subscribers who purchase The Journal and who live on a certain paper route near Corvallis, Oregon, which list of subscribers and paper route is hereby leased to me by The Journal." He promises that he will not turn over said list of subscribers to any person nor disclose the name of any subscriber to The Journal without first obtaining the consent of The Journal. The contract recites that Johnston has not paid any money to any person for the list of subscribers, and he agrees that he will not sell it to any person or persons for any money, and that, upon cancellation, he will "forthwith turn over to The Journal, or its authorized representative, the names of all subscribers to whom I have been delivering The Journal", and that he will keep a written list of all such persons, with their street addresses, and that such written list shall be the property of The Journal. He further agrees not to collect in advance from any of the subscribers, "but should any subscriber choose to pay in advance I will remit to The Journal immediately." Johnston made delivery of the papers by automobile, and, according to the findings of the commission, was "granted by the company a regular cash allowance for use of his automobile on the (Benton County) route, which allowance ranged from $47.00 to $75.00 a month", while on the Linn County route "the company credited claimant's account with an automobile allowance of $78.00 a month". The commission further found the following facts as to the method by which the business was transacted under the contracts: "The claimant, from the time, ordered from the Company the amount of newspapers he currently *Page 633 needed, which amount the Company sent him until a change in number was ordered. The Company charged claimant with the agreed wholesale price and the claimant sold the newspapers at retail price to the subscribers on his rural route, delivered the same into the paper boxes along the route, collected from the subscriber the retail price, and paid monthly to the Company on its bill any difference owing the Company between the wholesale bill and the automobile allowance and other credits. During most of the time, by reason of the automobile allowance, a monthly credit was due the claimant which was paid by the Company. During the claimant's base year he also performed incidental services not included in the written agreement for which services only he was paid $6.64 by the Company. "The Company's district manager had on one or two occasions warned the Circulator or Carrier concerning being late in receiving the newspapers for delivery and had on at least one occasion demanded of the Carrier that he re-deliver a paper to some customer from whose paper box the papers had been taken by unauthorized persons. There is also some evidence to indicate that on one occasion the district manager had objected to claimant's wife taking over the deliveries. The Commission finds in these matters that any established exercise of material direction and control by such district manager did not actually go beyond the insistence that claimant fulfill the obligations of the written terms of his agreements." The commission found that Johnston performed services for remuneration within the meaning of the Unemployment Compensation Law, that a material direction and control was retained over the performance of such services by the plaintiff through the terms of its contracts, and that Johnston was not customarily or otherwise engaged in an independently established *Page 634 business of the same nature as that involved in the contract of service. An award of benefits for unemployment was made accordingly. The plaintiff thereupon commenced this suit to secure judicial review of the decision of the commission, and the circuit court, after a hearing, entered a decree affirming the commission's award. From that decree the plaintiff has appealed.