H. N. ISENBERG, Respondent, v. CALIFORNIA EMPLOYMENT STABILIZATION COMMISSION et al., Appellants.
L. A. No. 19448
In Bank
May 2, 1947
30 Cal. 2d 34
Edmonds, J., and Traynor, J., concurred.
[L. A. No. 19448. In Bank. May 2, 1947.]
H. N. ISENBERG, Respondent, v. CALIFORNIA EMPLOYMENT STABILIZATION COMMISSION et al., Appellants.
John Moore Robinson for Respondent.
TRAYNOR, J.----Plaintiff brought this action pursuant to
During the period in question plaintiff owned a string of horses that he raced at Bay Meadows race track. He engaged free-lance jockeys to ride the horses in various races. They were not in his regular employment but were engaged separately for each race. In March, 1944, the California Employment Stabilization Commission ruled that the free-lance jockeys involved were in “employment” within the meaning of
There is no conflict in the evidence as to the facts outlined above, but plaintiff contends that defendant had the burden of showing the actual control exercised by plaintiff or his trainer over the jockeys in question, and since defendant failed to show that such control was actually exercised, the jockeys were properly held not to be employees. It is clear, however, that plaintiff made no showing that the owner or trainer did not exercise, or have the right to exercise, control except insofar as the right to exercise control was limited by the rules of the California Horse Racing Board or by the inaccessibility of the jockeys while actively engaged in the race. The only finding of fact made by the trial court on the question of employment was a general finding that during the period in question the free-lance jockeys engaged by plaintiff were not employees and the compensation paid them consisted of payments to independent contractors. The basis of this finding is clear from the memorandum opinion of the trial court. The trial court not only decided the case on the theory that the actual control exercised by the particular taxpayer over those performing services for him determines their relationship but placed the burden of proof on the defendant commission to show that control was actually exercised. It thus distinguished Drillon v. Industrial Acc. Com., 17 Cal. 2d 346, 351 (1941), upholding a determination by the Industrial Accident Commission that free-lance jockeys are employees within the meaning of
The decision in the Drillon case was based on the right of the owner to exercise control over the jockeys (supra, at 355), the principal test of employment under
It cannot seriously be contended that one who is an employee within the meaning of
It has been held that the word “employment” as defined in
It has already been observed with regard to the principal test, that the owner or trainer has the right of control except insofar as he is limited by the rules of the racing board. The right to discharge in this case is limited only by the rule that the owner may not discharge a jockey without cause unless he pays the contract price. There is no question that the owner may discharge a jockey up to the time he is out on the track and physically out of his control. As in any contract of employment for a fixed period, an employee prematurely discharged without cause may recover damages based on his wages. (W. F. Boardman Co. v. Petch, 186 Cal. 476, 483 (1921); cf. Drillon v. Industrial Acc. Com., supra, at 354.)
Among the secondary elements of the employment relation, only three are clearly absent from this case: (c) Jockeys are not unskilled workmen; however, many skilled workmen are employees. (e) Free-lance jockeys are employed for a fixed period, the duration of one race. (f) The basis of payment is the race, not the time involved. The other elements are either present or inapplicable to this case: (a) The occupation is an integral part of the owner‘s business. (b) The work is usually performed under the direction of the owner or trainer to the extent allowed by the rules of the California Horse Racing Board. (d) Although the jockey furnishes his
Plaintiff contends that the judgment cannot be reversed, since it is based on a conclusion drawn from the evidence as an inference of fact, not as a conclusion of law. There was no evidence from which the trial court could reasonably have drawn any inference inconsistent with the conclusion that the plaintiff had the right to control the activities of the jockeys except where he was prevented from doing so by the rules of the Racing Board or by the inaccessibility of the jockeys while they were actively engaged in the race. The contention that the question whether a person is an employee under
In California Emp. Stab. Com. v. Morris, 28 Cal. 2d 812, 818 (1946), this court, applying the same rule as that applied in the Drillon case, supra, held that the Real Estate Act insofar as it regulates real estate salesmen for the protection of the public is not relevant to the question whether such salesmen are employees under
The result of the application of the rules of law set forth in Empire Star Mines Co. v. California Emp. Com., supra, will depend in any particular case on the essential facts of that case. Thus, in California Emp. Com. v. Bates, 24 Cal. 2d 432, 436 (1944), the judgment of the trial court was reversed because the conclusion of the trial court from the facts was inconsistent with the decision in California Emp. Com. v. Los Angeles Down Town Shopping News Corp., 24 Cal. 2d 421, 425 (1944), where the facts were substantially the same. This holding is in accord with the rule, particularly applicable to public law cases where uniformity of decision is important, that if the essential facts are not in conflict the question of the legal relations arising therefrom is a question of law. (Leis v. City and County of San Francisco, 213 Cal. 256, 258 (1931); San Diego Trust & Savings Bank v. San Diego County, 16 Cal. 2d 142, 153 (1940).)
The judgment is reversed.
Gibson, C. J., Shenk, J., Carter, J., and Spence, J., concurred.
EDMONDS, J.----In my opinion, the decision in this case departs from the established rule that the judgment of the trial court will not be disturbed if there is substantial evidence to support its determination. Giving full effect to the evidence and the reasonable inferences to be drawn from it, the finding that an independent contractor relationship existed between the owner and the jockeys should be upheld. As stated by the trial judge in his memorandum of opinion, “there is sufficient evidence in the record to establish the fact that the jockeys in question were independent contractors although the evidence is in dispute.”
A jockey, called as a witness in behalf of Isenberg, testified, “I think the procedure is, that if an owner is willing to pay a rider his fee, that he can substitute a rider.” This was in answer to the question as to whether it was “possible for ... [the jockey] ... to be removed from that mount without the horse being taken out of the race?” As indicated by other testimony of this witness, he was not necessarily referring to the rules of the Racing Board, and it reasonably may be inferred that in his statement as to “the procedure” he was referring to the agreement of the parties or the national custom.
There was also evidence from which it reasonably could be inferred that the jockeys were not required to follow instructions given them. One jockey testified that “His trainer sometimes gave ... [him] ... instructions how he thought a horse would run best.” But, he added: “They [owner and trainer] have suggested ways of riding them [horses]. I wouldn‘t say they told me just how to ride them. That is impossible.” As to whether or not such instructions were followed, he testified, “Well, if I found out that the horse wasn‘t running under those instructions, I would try some other means of getting him to run.” This witness also testified that the owner “may leave it up to your own judgment” as to manner in which the jockey should ride. When asked whether he used his own judgment when riding in a race, he replied: “Yes, you have to use your own judgment. Instructions are followed only when you don‘t figure in your own judgment that they hinder the chances of winning.”
It is the well settled rule that when there is a conflict in the evidence, including not only objective facts but also the inferences which reasonably may be deduced therefrom, the determination of the trial court, in regard to the legal relationship of the parties to a controversy, will not be disturbed. (California Emp. Stab. Com. v. Norins Realty Co., 29 Cal. 2d 419 (1946); California Emp. Stab. Com. v.
The testimony quoted clearly warrants a conclusion of lack of control, and there is other evidence which supports the trial court‘s determination. The jockey furnished most of his own equipment. The method of payment was by the race, not according to the time involved. Jockeys are skilled workers and are employed for a fixed period, the duration of the race. Giving no effect to the rules of the Racing Board, the trial court had ample ground for deciding that an independent contractor relationship existed between the owner and the jockeys. Evidence that, by custom, the owner or trainer had the right to give instructions to the jockey, merely raised a conflict in the evidence which was resolved by the trier of fact. Furthermore, the rules of the Racing Board limit the right of the owner and trainer to control the activities of the jockeys and, therefore, support the finding of an independent contractor relationship.
Neither California Emp. Stab. Com. v. Morris, supra, nor Drillon v. Industrial Acc. Com., 17 Cal. 2d 346 (1941), is inconsistent with this conclusion. In the Morris case, the trial court found that certain real estate salesmen were independent contractors. Upon appeal from the judgment, the commission contended that the Real Estate Act gave a broker the right to control a salesman in certain ways and, therefore, as a matter of law, and regardless of a trial court‘s finding, all real estate salesmen were employees. Rejecting this contention, the court held that there was evidence to support the finding of the lack of control, and the provisions of the Real Estate Act did not compel a contrary determination. In the Drillon case, the Industrial Accident Commission decided that certain jockeys were employees. As requiring a reversal of the judgment, the taxpayer relied upon the rules of the Racing Board which restrict the right of an owner and trainer to control the activities of a jockey. These rules, it
These cases are clearly distinguishable from the situation presented in the record now under review. Here the trier of fact determined that the jockeys who rode Isenberg‘s horses were independent contractors. The commission attacks the decision upon the ground that the only evidence in the record which supports the trial court‘s finding of lack of control is the limitations found in the rules of the Racing Board. The issue in this regard, therefore, is whether the rules may be used to support a finding of the trial court. In the Morris and Drillon cases, the question was whether, when there is evidence to support the finding of the trial court or commission, may the rules of the Racing Board or the regulatory provisions of the Real Estate Act be invoked to compel a determination contrary to those findings. Both the Morris and the Drillon cases hold that the effect of such rules or regulations is, at most, to set up a conflict in the evidence; they may not be used to require findings contrary to those made by the trial court upon substantial evidence.
Also, I do not agree with the strong implication in the majority opinion that the determination of the legal relationship is primarily a question of law. This implication is found in the reference to the Workmen‘s Compensation Act, the holding, in effect, that the Drillon case controls the disposition of the present controversy, and the direction that judgment be entered in favor of the commission. Moreover, the cases of California Emp. Com. v. Los Angeles Down Town Shopping News Corp., 24 Cal. 2d 421 (1944), and California Emp. Com. v. Bates, 24 Cal. 2d 432 (1944), are cited as standing for the proposition that whether persons are independent contractors or employees is, in effect, a question of law. On the contrary, in the first of these cases the decision was based upon the proposition that “there is substantial evidence to support the findings of the trial court that the boys were employees within the meaning of the Unemployment Insurance Act....” The ground of decision in the Bates case was that there was no substantial evidence to support the trial court‘s finding of an independent contractor relationship. This is quite different from the present statement that the judgment in favor of Bates “was reversed because the conclusion of the trial court from the facts was
For these reasons, I would affirm the judgment of the trial court.
SCHAUER, J., Dissenting.----I agree with the views expressed by Mr. Justice Edmonds. I am thoroughly cognizant of the (at least to the involved agencies) administrative desirability of having a simple, absolute, and universal or rule of thumb method for classifying entire industrial or professional groups as employes or nonemployes. But that desirability certainly does not warrant this court in departing from constitutional standards. Is it the intention of the majority of this court to hold that as a matter of law all jockeys who ride horses for compensation, regardless of the more specific terms of their several contracts, are employes? If that is not the effect of the holding its avowed object is not attained. If that is the effect of the holding it means that stable owners and riders no longer are permitted the freedom of mutually contracting such reciprocal relationships as they may agree upon. No longer do they have the right or capacity to establish the character of their obligations to each other. No matter how specific may be the terms by which they agree that the rider is a skilled specialist, that he shall furnish his own equipment, that he shall undertake a single project to be performed in his own way without any supervision or direction of the owner, the result will be the same as though the converse of all those heretofore material elements were substituted.
It is difficult for me to believe that the majority actually subscribe to the doctrine above indicated. But if they do not subscribe to it then not only do they fail to achieve the assertedly desirable objective of administrative universality but the only other rational basis for their holding in this case is equally disturbing. It means not that there shall be uniformity in classifying all jockeys as employes but that the majority have weighed the evidence in this one case and have themselves elected to draw inferences contrary to those drawn by the trial court. The evidence related by Mr. Justice Edmonds is in the record. It admits of the inferences suggested by him. Those inferences support the trial court‘s judgment. The functions of trial and appellate courts are
The principles involved in this case are markedly similar to those in Cardillo v. Liberty Mutual Ins. Co. (1947), 330 U.S. 469, 67 S.Ct. 801, 91 L.Ed. 1028. There the critical question was whether the injury was one “arising out of and in the course of employment.” In a proceeding before the commissioner under the District of Columbia Workmen‘s Compensation Act it had been found that the injury which resulted in the decedent‘s death had so arisen and an award was made to the widow. The employer and insurance carrier brought action in the district court to annul the award; they contended that there was “a lack of substantial evidence” to support the essential finding. The district court held that the findings “were supported by evidence in the record” but the Court of Appeals reversed. The Supreme Court in reversing the Court of Appeals and reinstating the judgment of the district court said: (pp. 806-807 of 67 S.Ct.) “In determining whether a particular injury arose out of and in the course of employment, the Deputy Commissioner must necessarily draw an inference from what he has found to be the basic facts.... If supported by evidence and not inconsistent with the law, the Deputy Commissioner‘s inference that an injury did or did not arise out of and in the course of employment is conclusive. No reviewing court can then set aside that inference because the opposite one is thought to be more reasonable; nor can the opposite inference be substituted by the court because
“It matters not that the basic facts from which the Deputy Commissioner draws this inference are undisputed rather than controverted. See Boehm v. Commissioner, 326 U.S. 287, 293 [66 S.Ct. 120, 90 L.Ed. 78, 166 A.L.R. 708]. It is likewise immaterial that the facts permit the drawing of diverse inferences. The Deputy Commissioner alone is charged with the duty of initially selecting the inference which seems most reasonable and his choice, if otherwise sustainable, may not be disturbed by a reviewing court. Del Vecchio v. Bowers, supra [296 U.S.] 287 [56 S.Ct. 190, 80 L.Ed. 233]. Moreover, the fact that the inference of the type here made by the Deputy Commissioner involves an application of a broad statutory term or phrase to a specific set of facts gives rise to no greater scope of judicial review. Labor Board v. Hearst Publications, 322 U.S. 111, 131 [64 S.Ct. 851, 88 L.Ed. 1170]; Commissioner v. Scottish American Co., 323 U.S. 119, 124 [65 S.Ct. 169, 89 L.Ed. 113]; Unemployment Compensation Commission v. Aragon, 329 U.S. 143 [67 S.Ct. 245, 91 L.Ed. 136]. Even if such an inference be considered more legal than factual in nature, the reviewing court‘s function is exhausted when it becomes evident that the Deputy Commissioner‘s choice has substantial roots in the evidence and is not forbidden by the law.” (Italics added.)
Again, in an action which originated in a state court under the Federal Employers Liability Act (35 Stats. 65, as amended,
For the reasons above set forth I would affirm the judgment of the trial court.