THURN, Plaintiff, vs. LA CROSSE LIQUOR COMPANY and others, Defendants.
Supreme Court of Wisconsin
January 11—February 6, 1951
Motion for rehearing denied April 3, 1951
[Two appeals.]*
“In any action or proceeding brought to the supreme court by appeal or writ of error, if it shall appear to that court from the record, that the real controversy has not been fully tried, or that it is probable that justice has for any reason miscarried, the supreme court may in its discretion reverse the judgment or order appealed from, regardless of the question whether proper motions, objections, or exceptions appear in the record or not, and may also, in case of reversal, direct the entry of the proper judgment or remit the case to the trial court for a new trial, . . .”
Consequently, under these provisions the judgment is reversed and the case remanded to the trial court for a new trial.
By the Court.—Judgment reversed with costs to be paid by defendants; and cause remanded for a new trial.
For the defendants La Crosse Liquor Company and Hartford Accident & Indemnity Company there was a brief by Toebaas, Hart, Kraege & Jackman of Madison, and oral argument by W. L. Jackman.
For the defendant New York Casualty Company there were briefs by Johns, Roraff, Coleman & Pappas of La Crosse, and oral argument by Peter Pappas.
Carl Neprud Otjen of Milwaukee, for the impleaded defendant Liberty Mutual Insurance Company.
HUGHES, J. The plaintiff testified that the highway was icy and that he observed Martindale approaching from the opposite direction at a high rate of speed; that he pulled his car onto the shoulder of the road and had virtually stopped when the accident occurred; that the Martindale car went into a skid and struck plaintiff‘s car with great force, causing serious injury to plaintiff. This was sufficient to warrant the jury in finding that Martindale was negligent
Appellant Thurn contends that the issue as to whether Martindale was an employee of the La Crosse Liquor Company was a question of fact and that the trial court erred in changing the jury‘s answer to question 3 of the special verdict pertaining to control.
This question was submitted in unusual form, but all parties seem to be satisfied that it properly presented the question of whether Martindale was an employee of La Crosse Liquor Company at the time of the accident. Since its form was more favorable to La Crosse Liquor Company than to plaintiff, no one appears injured.
The trial court concluded that the facts concerning the relationship between the company and Martindale were not in dispute and that they clearly establish that Martindale was an independent contractor.
The test used in determining the question of whether one is an employee or an independent contractor is well defined:
“. . . the most significant indicium of an independent contractor is his right to control the details of the work. The principal test to be applied in determining whether one rendering services for another is an employee or an independent contractor is whether the employer has the right to control the details of the work. This is the dominant test, although there are other things to be considered, such as the place of the work, the time of the employment, the method of payment, and the right of summary discharge of employees.” Kolman v. Industrial Comm. (1935), 219 Wis. 139, 141,
262 N. W. 622. See also Employers Mut. Liability Ins. Co. v. Brower (1937), 224 Wis. 485, 490, 272 N. W. 359.
“Where the inference is clear that there is, or is not, a master and servant relationship, it is made by the court; otherwise the jury determines the question after instruction by the court as to the matters of fact to be considered.” Restatement, 1 Agency, p. 484, sec. 220.
In the instant case the salesman was dead at the time of trial and the nature of his relationship to the company had to be determined from the testimony of the general manager of the La Crosse Liquor Company, as amplified by the testimony of another salesman covering his own relationship.
The manager, Czeskleba, testified that the company reserved no right to control the activities of Martindale and that when it gave him a territory to cover he was free to do so in whatever manner he saw fit, receiving commissions on sales made. He also testified that Martindale and the other salesmen attended sales meetings on Monday mornings to learn about the new price lists and the goods that were to be pushed during the following week, and that Martindale was free to attend those or not as he saw fit. He usually did attend. These circumstances, standing alone, would establish the relationship of independent contractor. Henry Haertel Service, Inc., v. Industrial Comm. (1933), 211 Wis. 455, 248 N. W. 430; Kruse v. Weigand (1931), 204 Wis. 195, 235 N. W. 426; James v. Tobin-Sutton Co. (1923), 182 Wis. 36, 195 N. W. 848.
There was other testimony of Czeskleba, however, which might well lead to the opposite conclusion. He testified that Martindale came to him looking for a “job” and that he “hired” him as a salesman.
Martindale called on the trade in a certain area. If orders were phoned to the company from his area Martindale was credited with the sales.
He was permitted to collect accounts and issue receipts in the company‘s name.
Czeskleba further testified that, “the salesmen in our outfit have a great deal of leeway in price fixing, in the event that they can further their sales and build a volume sale out of what we call a limited sale, by discounting, they are to use their own discretion in the amount of discount that they give, but there are limitations.” Czeskleba fixed those limitations.
While Czeskleba testified that there was no fixed quota of sales for Martindale to meet, he also testified that if his sales fell down for a month he called that to his attention.
He also testified that after the accident Martindale reported to him and told him that he had a headache and did not think he would make any more calls that day.
Robinson, a salesman who worked under an arrangement similar to Martindale‘s, testified that in his area the trucks made delivery of orders taken by him on established routes on certain days of each week and that he was expected to call on those customers a couple of days ahead of the truck so that orders taken by him could be delivered.
We conclude that on the entire record in this case the inferences were properly for the jury.
In Crossett v. Goelzer (1922), 177 Wis. 455, 469, 188 N. W. 627, where the question was whether the son had taken his father‘s car for his own amusement or for the benefit of the father, the court said:
“While the facts are practically undisputed, it cannot be said that the inferences to be drawn therefrom are so plain that the minds of reasonable men cannot come to different conclusions in regard to them.”
The court there held it to be a question for a jury.
With reference to the testimony of Czeskleba that the company reserved no right to control the activities of its salesmen, the statement of this court in Drakenberg v. Knight (1922), 178 Wis. 386, 392, 190 N. W. 119, is pertinent:
“It is true that it was necessary for the plaintiff to establish that the injury occurred in the scope of Hale‘s employment and that the car was then used with Knight‘s consent. The jury were not bound to accept as conclusive the denials of authority by the interested parties, qualified as they were by their other testimony, and we cannot say as a matter of law that there was not credible evidence to meet both of the conditions of liability.”
Counsel for respondents and the trial court place great weight upon State ex rel. J. A. Sexauer Mfg. Co. v. Grimm (1935), 217 Wis. 422, 259 N. W. 262; Kassela v. Hoseth (1935), 217 Wis. 115, 258 N. W. 340; and Employers Mut. Liability Ins. Co. v. Brower, supra.
In the latter two cases the determination of the relationship rested upon the interpretation of written contracts, and no question was submitted to the jury.
In the Sexauer Case the question presented was whether substitute service upon the secretary of state was binding upon a foreign corporation, which depended upon whether one France was an agent of the company. The corporation appeared specially and contended that its written contract with France disclosed the relationship of independent contractor. The trial court refused to dismiss the action. The corporation then sought a writ of prohibition to prevent the trial court from continuing the case. After examining the relationship by which France took orders for plumbing supplies manufactured by relator, this court concluded that France was not the agent of the manufacturer but an independent contractor. The court said (p. 425):
“The facts of this case make a clearer case of an independent contractor than those in the case of Kassela v. Hoseth,
ante, p. 115, 258 N. W. 340. Under that case and the authorities cited in the opinion therein we hold that France was not an agent of the relator in respect to the operation of his automobile, but an independent contractor, if he can be considered as a ‘contractor’ in any sense in that regard. The term ‘independent contractor’ is perhaps a misnomer as so applied. It would be more exact to say that no contractual relations whatever existed between France and the relator as to the operation of the automobile. Whether France was a ‘contractor’ or not, his operation of the automobile was entirely ‘independent’ of the relator, and, this being so, the relator is not responsible for his conduct in operating it. As counsel have treated the matter as if France operated his automobile either as an agent of the relator or as an independent contractor, we have treated the question from the same viewpoint, regardless of whether the point of view is correctly taken.”
The trial court apparently relied upon this language and was confused thereby. The language is confusing and cannot be considered authority upon the question of employer-employee or independent-contractor relationship.
Since the evidence supports the inference drawn by the jury, the answer of the jury must be reinstated and judgment rendered upon the verdict.
By the Court.—That portion of the judgment appealed from by the New York Casualty Company is affirmed. That portion of the judgment appealed from by the plaintiff is reversed and cause remanded with directions to enter judgment in accordance with the opinion.
FAIRCHILD, J. (dissenting in part). I am dissenting from that portion of the decision which holds that there was a jury question as to the nature of the contract, that is, as to the intent of the parties. The evidence, which is without dispute, was given by the manager of the La Crosse Liquor Company who made the contract with Martindale and is corroborated by one other witness who had a similar contract and acted
“Q. If you purchase it yourself does the salesman later reimburse you? A. Yes.
“Q. You don‘t know what you did with reference to that in this specific case? A. . . . I don‘t remember whether he had his license fee at that time or not; . . . it would have been a matter that would have been straightened out at a later date; it is the salesman‘s obligation. . . . He was paid a commission and was definitely interested in getting those orders out as fast as he could. His obligation to us was to definitely create a volume in monthly sales every month so that he was deriving enough volume so it was profitable to him as well as us. . . . He was expected to further his business. . . .
“Q. But if he had no such excuse as that you would have discharged him? A. If it‘s largely neglect he would have been discharged.
“Q. You reserved the right to do that? A. Yes. . . . If he wasn‘t salesman enough to create enough volume to make a living, it was a matter for us to either give him more opportunities, . . . or let him decide what he wanted to do. . . .
“Q. And if he wasn‘t producing in sufficient volume to satisfy you, you reserved the right to discharge? A. Yes.
“Q. That‘s part of your original hiring agreement? A. Yes.
“Q. Was there any quota fixed for him to meet per week or per month? A. No, sir.
“Q. In other words, that was left entirely to your discretion? . . . You and your superiors? A. That‘s right.”
The evidence is that both parties were interested in “volume.”
There was an agreement entered into between Martindale and the La Crosse Liquor Company. Under the evidence in the record, some of which has already been referred to, can it be said that there is contained in the express agreement terms under which Martindale could not assume to act on his own as an independent contractor? The trial court in construing the contract reached the conclusion that he was an independent contractor. In judging the testimony, I am convinced that he was correct in so holding. There are no circumstances here which compel reading into the arrangement that Martindale entered into the relation of master and servant. One construction would be for services of and by an independent contractor. If the other is to be accepted, he would be within the employer-employee relationship.
We are dealing with an oral contract. It does not differ in its effectiveness from a written contract. It likewise gathers its force from the mutual assent of the parties to the terms and conditions. “. . . it is not only necessary to interpret those terms for the purpose of ascertaining the intention of the parties in entering into the agreement, but also so to construe them as to give legal effect and operation to such intention. The importance of a reasonable and just construction of every instrument or contract is quite evident and certain. So, too, it is equally important that the rules of construction should be regulated by law, and be governed by
Much that is said in the opinion of the majority is argument overlooking, it seems to me, the rule controlling construction of contracts. It is true the courts have recognized the difficulty of drawing the distinction between contracts which create independent contractors and those creating the relationship of employers and employees. There have been many attempts at stating a rule, and the generally accepted one is that an independent contractor is one who renders service and represents the will of his employer only as to the result of his work and not as to the means whereby it is accomplished. This has resulted in describing a test by which to determine whether a person is to be classified as a servant or an independent contractor. “The most important test is . . . the control over the work which is reserved by the employer. . . . It is not, however, the fact of actual interference or exercise of control by the employer, but the existence of the right or authority to interfere or control, which renders one a servant rather than an independent contractor.” 27 Am. Jur., Independent Contractors, p. 486, sec. 6.
The engagement of Martindale to work for the La Crosse Liquor Company required him to perform certain services in the interest of that company. The contract is the important
Under a commission method of compensation of a salesman, the character of the contract depends upon the reservation of the right of supervision in the employer, the nature of the work, the service calls, and the duties with regard to collections, as well as to respond on demand to orders of an employer. The fact that one is working on a commission, owns his own car, and pays his own expenses may be of importance. The agreement must be given full consideration, for as said in the cases where this difficult question has arisen, each case must stand on its own facts. The rule or test for distinguishing between the two classifications has been phrased differently by different writers. An acceptable statement is found in Neitzke v. Industrial Comm. (1932), 208 Wis. 301, 303, 242 N. W. 163: “The relation of employer and employee exists where one, performing work for another, does so under a contract express or implied, which compels the one performing to do work under the control of the employer and at the same time gives to the employer the right to direct the other‘s conduct, to dismiss him from the service, and to have at all times authoritative control over the work.” Instances have arisen where the differences between an independent-contractor and the employer-employee relationship are so definite that no question as to the character of the employment is raised. The two kinds of employment do exist, are recognized in the law; and neither one, so far as the courts are concerned, is to be favored over the other.
The learned trial judge, in dealing with the problem in the case at bar, particularly as to whether Martindale was an employee of the La Crosse Liquor Company or an independent contractor, found a standard in Kassela v. Hoseth (1935), 217 Wis. 115, 258 N. W. 340: The general doctrine to which he adhered is supported by the decision in Employers Mut. Liability Ins. Co. v. Brower (1937), 224 Wis. 485, 272 N. W. 359, where the question is also considered. In his memorandum decision, the trial judge said:
“In the case at bar all the La Crosse Liquor Company wanted was volume of orders. Naturally, the relationship could be terminated for violation of law on the part of the one selling the company‘s products so as to implicate the company with the state or federal government. That would be true in almost any similar contractual relationship. Likewise, either party could conclude the relationship at will unless it was for a definite time or for a definite quantity of work. . . . While the relationship may have been at will, while it lasted it was a relationship of independent contractor and the fact that it could be terminated at any time under the authorities would not defeat the relationship. It seems to the court without any question that the Martindale-La Crosse Liquor Company relationship had all the required incidents of an independent contractor and not that of employer and employee.”
The evidence warrants the conclusion reached by the trial court, which is to the effect that the contract, although designating a territory in which Martindale was to engage his efforts, still allows him to work according to his own methods in an automobile owned and maintained by him, but being subject to control of employer only as to result of work. This places him in the classification of independent contractor.
As to the other questions involved, we agree with the trial court that a jury question exists as to the negligence of Martindale being the cause of the accident, and we are of the opinion that the ruling with relation to the admission of evidence that the La Crosse Liquor Company carried workmen‘s compensation insurance protecting it against injury to any of its employees was not error. Employers Mut. Liability Ins. Co., supra.
I am authorized to state that Mr. Chief Justice FRITZ and Mr. Justice BROWN concur in this dissent.