Stover Bedding Co. v. Industrial Commission

McDONOUGH, justice. Review of an order of the Industrial Commission awarding compensation to Olga F. Knudsen on account of the accidental death of her husband. Two questions are raised by plaintiffs: (1) Whether the evidence supports the finding of the Commission that the deceased, George A. Knudsen, was at the time of the accident an employee of Stover Bedding Company, hereinafter called the plaintiff; and (2) whether the evidence supports the finding that Smith and Davis Company was not subject to the Workmen’s Compensation Act of Utah, Rev. St. 1938, 42-1-1 et seq. Prior to his death George A. Knudsen was a salesman for plaintiff company. He was also a salesman for Smith and Davis Company, manufacturers of, iron beds and couches. Each company knew of, and acquiesced in, Knudsen’s relationship with the other, the products which each company manufactured being non-competitive. Knudsen endeavored to sell the products of the two companies throughout his territory. It is undisputed that at the time of his death he was returning from a sales trip in Idaho where he had made sales for both companies. The first question to be determined is whether Knudsen was an employee of Stover Bedding Company, or whether his relationship with plaintiff was that of independent contractor. We have on several occasions held that such is a jurisdictional question, which we must decide upon a preponderance of the evidence. Angel v. Industrial Comm., 64 Utah 105, 228 P. 509; Luker Sand & *425 Gravel Co. v. Industrial Comm., 82 Utah 188, 23 P. 2d 225; Norris v. Industrial Comm., 90 Utah 256, 61 P. 2d 413; Holt v. Industrial Comm., 96 Utah 484, 87 P. 2d 686; Miller v. Industrial Comm., 97 Utah 226, 92 P. 2d 342. However, as will presently appear, the competent evidence in this case is essentially uncontradicted. The task presented, therefore, is not strictly that of examining the record to determine whether the evidence preponderates against the conclusion of the Commission but that of determining whether the Commission drew the correct legal conclusion therefrom. There was no written contract between deceased and plaintiff company, but much of the evidence is undisputed. Knudsen was supposed to sell plaintiff’s products, together with the products of Smith and Davis Company. He was not specifically limited as to territory, but he confined his efforts to Utah, Idaho and Wyoming. He received no instructions as to where he should go, when he should go, or how he should conduct his work. He furnished his own means of transportation, paid all his own expenses, and used his own judgment concerning what trips he should make and when he should make them. Mr. Stover, of the plaintiff company, testified that he had no right to control deceased’s movements or manner of doing his work — and that he did not in fact do so. Applicant herself stated that her husband could work where and when he chose.' It is to be noted that the testimony of applicant relative to the work done by deceased and as to his compensation, hereinafter adverted to, is hearsay based upon conversations had with deceased. The only dispute in the evidence, hearsay or other, arises as to how Knudsen was paid for his services and whether he was required to work at plaintiff’s factory when not out on sales trips. As to the latter question, Mr. Stover testified that deceased was never required to do any work around the factory; that deceased did some work voluntarily but only with respect to prospective buyers or for the purpose *426 of making sales. Mrs. Knudsen testified that her husband had done work at the factory and that he had been called there for that purpose; that the only work which she knew he had done was to answer the phone at the factory office, take care of prospective buyers, and prepare certain exhibits of furniture. All of these acts may have been done for the purpose of making sales, and are therefore equally consistent with the relationship of independent contractor as with that of master and servant. There is no evidence that Knudsen was required to do any work at the factory or that he did so, except what he might voluntarily do in furtherance of his own interests — that of making additional sales. With respect to the manner and rate of pay, and the basis on which Knudsen was supposed to be paid, there appears to be more dispute. In fact, the record discloses that the parties seemed to feel that whether Knudsen was paid a salary or a commission was the important element in determining whether he was an employee or an independent contractor. While it is true that the manner and basis of payment is one element to be considered in determining the relationship, it is by no means conclusive. Rockefeller v. Industrial Comm., 58 Utah 124, 197 P. 1038. It appears that the basis on which deceased received compensation for his services was the amount of his sales, but instead of receiving a strict commission on such sales, he was given a definite allowance each month. While this allowance was based on the amount of sales made over a given period, it was nevertheless a specific sum received monthly, irrespective of sales made during that month. At various times the deceased and plaintiff company would make a settlement, and if the amount of sales made by deceased was greater or less than anticipated, adjustment was made as to future payments to deceased to equalize the difference. Thus, the amount deceased was to receive each month for the first three months of 1939 was reduced from $250 to $200 because he had not made as many sales in *427 1988 as anticipated — on the basis of which he had been receiving $250 per month. The testimony of the bookkeeper and auditor of plaintiff company supports this view. The auditor testified that there was a definite understanding that if the amount of sales fluctuated the amount Knudsen was to receive would vary, but that he was to receive around $250 per month. Mr. Stover himself testified that Knudsen had been allowed a drawing account of $250 per month, based on amount of previous sales. At various times, usually at the end of the year, they would get together and make a settlement or adjustment, but that such settlement or adjustment applied only as to future payments to deceased. Applying to the facts the tests heretofore laid down by this court for determining whether an individual is an independent contractor or an employee under the Workmen’s Compensation Act, we must conclude that George A. Knudsen was an independent contractor, engaged in selling the products of plaintiff company. The competent evidence shows that there was no control or right of control over the details of Knudsen’s work as a salesman. Nor was Knudsen paid a definite specific salary for his services (although the evidence indicates that deceased was paid a specific sum over certain periods of time, which sum was based on the amount of estimated sales.) The evidence also shows that Knudsen was engaged in selling for other companies while selling for the Stover Bedding Company. A case very similar to the one here involved is Badger Furniture Co. v. Industrial Commission, 200 Wis. 127, 227 N. W. 288, 289. The salesman in that case received a commission for all sales made; he paid his own expenses and furnished his own car. He was allowed to sell anywhere in Wisconsin and was not required to make any daily report to the company. The court set out the tests to be followed for determining whether an individual was an employee or independent contractor as follows: *428 “In reaching a conclusion, of course, there are other things to he considered besides the question of control, to wit: The nature of the business or occupation; which party furnishes the instrumentalities and tools; the place of work; the time of employment; the method of payment; and the intent of the parties to the contract.” Applying those tests to the facts in that case, the court held that the salesman was an independent contractor. See also Peters v. California, Building-Loan Ass’n, 116 Cal. App. 143, 2 P. 2d 439; Arne v. Western Silo Co., 214 Iowa 511, 242 N. W. 539. Contra, see Maltz v. Jackoway-Katz Cap Co., 336 Mo. 1000, 82 S. W. 2d 909. Applicant cites the case of Commercial Casualty Co. v. Industrial Comm., 71 Utah 395, 266 P. 721, as controlling in this case. However, it is readily distinguishable. There the books of the company listed deceased along with other employees as a soliciting agent at a rate of compensation of $200 per month and the company in its reports to the Industrial Commission and the insurer listed the deceased as an “employee.” Having concluded that deceased, George A. Knudsen, was an independent contractor under the Workmen’s Compensation Act, it becomes unnecessary for us to discuss the other question involved. The decision of the Industrial Commission awarding benefits to the applicant, Olga F. Knudsen, is reversed. MOFFAT, C. J., and LARSON and PRATT, JJ., concur.