Case Information
*1 “.,C OFFICE OF THE AlTORNEY GENERAL OF TEXAS AUSTIN
Ronorable~Orville S. Carpenter
Chairman and Executive Director
Tisx& Unemployment Compensation Commission
xustin, Texas
Dear Sir:
on of this Department s predicated upon to certain logging You have Pomaraed ng to present the facts re certain l&t& to be in Arts;;; ;:21-b, sound t is shown to the satisfaction of the dividual has been and will aontinue trol or direction over the performance , both under his contract of service and in fact; and
iion. cnille 5. Carpenter, Pete E
W(3) ouch IenlQe lo elthur outaldu the uswl oourso ct ths busicerr for *hlch such ~ervlce is >er- romed or that ruch rervloe le perfomied outofde of all the pleoss of buslnst8 ot the enter&mire for Welch such i6 petitarmed; c&d Beni
"(C) euoh in6lvldual is cu~toxzerlly l waeed in en independ6notly eatabllohed, trade, ocoupatlon, profeo- rlori, or buainase.'
The Infornstlon rocompmylng ycur reCurnet reveals a de- .tailed ~tetmnent of fats subniltted by ycur mdltor. You also sIibt&ted 8tateRanta e56 affldevits prepared &Ed exeCUted by offlolalr of Kirby Luzber Corporation sod by certaIa of the log- ging oontraotore. You asked thet Uetermlnstion of llobllity be barred upon a&l of the data subnltted. The conclusion ot your z&dltor~8 roport states thet *when sworn testimony le'taksn it plli mugport iindlng that the indl~ld~als under eoneideretion re under ths supirvlsion end control oi ilrby Luzbcr torporetlcn, thus em4 in their ~~zplopc;ent~~. So hearing was ha6 in this lnrtanor.
Fhe statements conflict in certain lnetences, however, in lnatakom where there 1s doubt In our mlnd;ue find eitidavlts nade snb on behalf oi thi Xlrby Luxber Corpcretion to eupport their representation of facts. Thle, we think, entitles thm ~to mru credence thm conclusions. The indlreot lniornatlun harean of Internal ;?cvtnue had this aeme loformetiongnd relied apon it in their ruling of July Zl, .1939. That rQuJly@ aa8 that lndlvlduals in this iaetual situation were n6t mployeee for purpoea toxae untler Titles VIII and IX of the Social Security 6ct. A rsrlou the data abmltted dlrrcloeer that tmo or your autltor*e report have amde
the contractors asntlonod affldavita regarding thelr oontraot and ralettionahlp with the filrby Lumber Corporation.
‘&e pork of cutting timber into logs rewires a cartaln degree oi rklllt if work 1s not handled la the proper manner there 16 an unneoe+ary amount of raeto. It appear6 from the oontreat forms and atatemcnts that tha contractors ln queetlon oontrect to 9roduoo the result of cutting the tree8 into loee lo aocorder,cs with the spealtioetions oi the corporation end promptly deltrer thaE. at deal@eted placer. Such contractors use their own meens, methods end sculpaeot;~ ead erploy their own help to perform such ?.Ork without any &ttarr?t the corpore- tlon to control the betel18 of ttelr xork. The contractors *3 Eon. Orville s. Carpenter, pagr S
purohcao and 0~x1 all of the appllaaoea, cuob 68 Ease, axca, log- tr66tora'l loa6ora, md otter equipment for do* 6lng truoks work. +hb corporation dose not now, and never has, okneb. cny 106 trucks to do its logging. The rbmuncratton of the log- glrq oootraotora la det8rnhod upon a paantitatlve beala, In l coorda~oc ulth the retrb act out In the contraota botwoon the corporatloc and the contraator. The tildavit ot oae Cacar Baker, dated tiotobsr ZO, 1938,
one of the contn~tora in Question, reoltee ttet he bought his own l qulpmnt end the Zlrby Lunbor Corporation has QO olalm thereto; that hc taaintt~lns klis own cmp ra6iutiea ror hi8 log- ging crcwt that ho oparatea on bla own Credit;, that h e l ployed ncohcnloa en6 others to xdnt6ln hi6 equlpaant ah4 hs pays all or the bill6 for such repair. ttr. Faker elco had done work ror othor lndltlduolo but at the present tlno has autiiclent work vlth the iilrby lumb+r Corporetlon to keep hi6 crew and all of lo no obll.getioc OL bs6 part hlc equipment busy, but there eontraat ercluslvoly with thlc corporatlor. This lndltldual hat been aalgLbd an employbr~c ldcntlfloatlcn nureber under boo161 Leourlty iict tnd tier tte &%ployzent Ccmpeneatlon kct The-,itildavlt further certlflea thct the corporation o? TbIbr. does not etercIso sny~dsgree ol oontrol over Lr. i3cker*a e,rrploycca lndlcatlng the cmployoes to be hired dlaohcrged, or to bbalgmt* t&e hours of work. The namaa or tie cxcployeea are not iurnlahe4 to the corporation. The booka end reoorde ot his bualneaa are kept one of hla e~loyecc rhoao errldprlt ha to the oorrcotncas or &. Lakar.8 8tctcmnt la'alto la btldenoo. contrectorc
lz. L. f. IZoClcnahan tlao one OS tba lo&ng bxeouted an atildarlt under date of October 1s. 19SB, stating that ho had dona buelneca alth lilrby ‘Lumber Corporation, its receiver, and its tivrtbo and.had gPa0 aontraota tree tIm to tl&e wlth rofbrenos logging on UliierczA tracts with tbo Kirby Lambor Company.
Er. >.'cClancban stetoa ln the operation of there tbct loeglng contract8 he directs tbo details of unb roaelres fro& the Klrby~LtlP;ber Corporctlon only the apeciflcatloca with whloh.he~la to co~.ply. Hc states tbat the ISlrby~LurPber Corpore- tlon nor Its agent bed tny control over the dctalla ot his worka that he cm8 his orn tmoka, hires and dlechargca his own cICplOyce6, doec hi6 own tlnenclng, and merely oontraatb to do the ultIaiat0 job es bet out in the contract he la then ptrforaUg. The atflcnt further atctea that, from tIam to tlm, ho oontra&c Mth other lndlvlduala, and, at the present time, he he6 contracts with
Bon. Orvilla 5. Cerpenter, page 4
several other eoapanlea; that he carrier bit own worlfxen*a oom- pensatlon lnsurenoa with the 'Paxas mployer*a Inauraaos Asaoole- tion. Ur. b:oClanahan states thet ha la en employer under yabaral Law and la an&earorlAg to par all tuea upon l mployeea under both the Pe~aral and Stats Xawa.
%a lnfor&atlon supplied by Meaera. Laker amI L'OClmahaA la certified to by l fflda~lte of dtbar persons femlller with tha opcratfon of theaa tuo men. Ii there be other contractorsor persona repraoaAtlAg the~aalvea es contreotors ulth the Llrby Lumbar Corporatloa whoPa raletlonahlp wlth that corporation Is 6lfferant trot the Nlatlonshlp of ~aaara. Baker and LoClenahaa, we have no datallad lnioraiatlon about tbea. Kc, therCror6, take the atatezenta of those two men and the copies 'of oontreota exlatlng betsean tham aAd Urby Lumber Corporation as being repre- aeatatira of the ralationahlp of the Kirby Lumber Corporatlot and the lndlrlduala doing the logging work.
Other iArOI%&tiOA submittad di60lu668 that there la coma writ to your irudltor*a statartsnt that thi Kirby lumber Corporation requlrae that the loegw CoAtraotor oarry his rork- miA*a oorzlp6naatlon lAauraAer wlth a oompany 0r its approval. A portion of paragraph IX of t&a contraot of February 1, 1936, ereouted by and between Oaoar Baker and the ILtrby Lumbar Corpore- that *should olrouastenoea cake it neoe~aaary, In tlon provldea the #&meat of the uniIaralgneiI, to Qiaoontlnue pqo~eretlon, cutting must be stopped inzealately rolloulng rooslpt of Aotloe from the un4aralene&. . .-
Thla CaOtioA Of the oontraot 1AdlOataa that tha oompa~y m&y btop @f the ~SrSOA.do:ly the OOAtrCOtiA~ at Amy tlma that It, in its judgment, thlnka brat. @a entlolpate a OOACtrUCtiOA or thla portloh the oontr8ot by aome.tU be a rather broad uerolae of power ovar~oAa whose relatlonrhlp is that of a0 independent oontraotor.
Therr la other inforaxttlon et hand that 8aw - forimn Klrby*a ohoioe is aometlmea plaood with the orewa without tha contraotorfa oonaant. .AA ttelrpt 1s xade to explain this bf raaeoA or the nature of the nmrk. The'tlmbsr bolng cut la, la meny lnatanoea, on land owned in fee Kirby~ Lumber Cor- poration, a~&, in other iAf3t&AO88 OR lIiAd leased this CO+ poration, and, by having an experisnoed &LIA to pick out the trees to be out and marklnq them for the-oonrmlence of the contractors and their orawa, much waste la olimlnated. This la known as 8elootIre euttlng a~& has the additional advantage of glrlng the emaller timber bdltlonal time mature.
&xi. Orville S. Carpenter, pace
+e oonie now to the teat to be pplied to tbe feota et hoAd. IA an OQ~A~OA thie Cepartzeat under dare Or Jenuery 24, 194Q, to Onllle Carpenter, & 0-l2eOO,.we a&opted OOXCIOA lew toat of independent ooAtraotor es e beala for detemlrstlon or liability. he think that teat quallr fitticg here, end we will AOt dCQCrt rn>X it.
The &erinitiOA en lndepeadent oontraotor generally used by our oourta end quoted in lone Star Ccc Coxpeny vs.
Kelly, 46 2. i%. I2d) 656, la 88 follows:
"Aa detlned by the authorltlea, eA independent oontreotor la one, who, exeroialAg en lntlependrnt exploymsnt, contracts to do a piece of work according tic OUR met&ode, an& vAtbout belat: aubbjaot to the oontrol or hi6 employer exoept es to the result 0r his work. 14 Z.C.L. p. 67, par. ,2.* The editore of the Reatato~mt of the Law of bgaaoy hare Meted a number of teats to be used in daterxlni~ the true re- latloAahlp between eA alleged prltolpsl anC indOpeAdOnt contrac- They are enumreted in that work .$a Volmze 1, & 220, pages tor. 483-465, ee follows I
*411 ii carvent 1s 8 psreon .elcployed to perform aenlor for another in his atralra ona uho, with. respect to his ph7eleal oonduot in Q4rrOnb%AOO or the aenloe, 16 aubjeot to the other's oontrol or right to control.
"(2) XA deteruin~ag a-bather o&e notbig for another is a cement or en ladepemIent~ooatreotor, the follow- ing esttere or reot, among otham), are oonaldered~ *(a) the extent of oontrolwhloh, the aereemmt, the zeatar ney exercise c.irer the detella of the work; *(a) whether or tot the one enploJe4’ls engaged in dlatlnct ocoupatlon or b~alaeaa; with refer6nOe "(a) the kind of OOOU~tiOA, whether, ILa the looellty, the la uaumll~ done under th.e dlreotloa of. the eqloler br II apeolellat rlthout aopenlslon;
*(a) the aklll required the~partioular OOOUQ&- tiOA;
57: hr.. (rnllls 5. Carpenter, pege 6
"(8) nhothcr tha employer cc the worksan auppUaa tbe laatrwncntalItIea, tools, 0Ad the plooe work ror the person doti& the Work;
*(r) the length or tlsre ror whloh‘the person la 8mQlOy86
*(g) the method of peymeat, whathcr by tbe time or by the job;
*(h) whether or not the work la a part of the ragulsr bU6lAeCC of the eI%ployer~ and "(1) whether or Aot tha parties belleve they cm oreating the reletlonrhlp of msatar IIAd atm8nt." The case of ~eahiA&toA Eeeord ?ub. CC., ~a. Ernest, Fl 5'ao. (2d) 726, baara the closest reaenblanct to our faots~, It has the @ape daflnltioA btfprc it that we have; it has rsota that, in corm reep~ota, lndloctc ooritrol the party of the faote in that oeee rlrst part, as 60 we; however, we tblnk l rlbo~oc e greater degree or control ovar the workors than la present here, Acrertheleaa the court held there was AO lleblllty ror taxes. A.8 oloac the above once for the addltloAel reaaoA they wart ooAatruing &A uAelEQlO)a8At oompeAaetloA lew aA& that not a question or tort llmblllt~.
bianiroatl~, 8 comparleon or ell our taota--with eeoh toet aupplleb the iicrstatexent of the ter 0r &sop rould be onerous to both thla DoQertEeAt end the reader; & reauut of the orart recta ludloate that ths co-oalled contracton hire eeploxee6 of tbelr oholoa, fir8 th8E at their OVA 8laOtlOAl that they alone keep pyroll raoorda~ that they furAlah all l qulpaiecnt urd it8 that they act the hours for work; that they choose thalr repaIri om a&hod of cutting that they are aAs=erablt to the Xlrby of a peolfled on i J &aapeot delivery Lwcbar Corporation amount timber at the 8em8a the, and th8t they ere paid on 8 Job baala.
i%cterrlng again to (e) (5) .(a) or 68flAitIOA or aerviota to detemlne whether these lndlvldunla are free from oontrol under the eoatrcot and lr faot. ?& think they are. The preponderanor data before us rlnoea a olear intentIon betwetn tts Kirby Luaber Corporation at6 OOA- &A& underatendlng *rector thct e esntrmotor relatloAahIp la IAt8Aded. %friOitAt evldenoe 0r exerolae of company 0oAtrolof the method 0r dOiA,Q is not berorc us. *7 .
Eon. Orvlllt 5, CarQtAtCr, QC&t 7
sget%OA (6) (5) (B) of OuP 6cflAltiOA rogulr:Ag t3at aervlca 1s outeldc the usual course of the bUSiAt66 for v.tlch such aervlee is QtrfCrXCd or that the CervIce Is performed out- side of the pleoea of bt;slAesa of Xlrby Luzbcr Corporctlon ofrere AO aif ri0ulty. The 1AforratloA nubtitted Xlrby Lumber Car- poratlon attelrpta to eeteblleh the "lo@ng coAtraotlngw es a dlgtlnct bualneag outalde of the course of mllllng eAd atlllng luicbtr. Xhcthcr that be true, the faote shoti thet copit of the work 1s doAt on property of Kirby Luzsbcr Corporation end other nc think the oploicn of Justice L;lllsrd work dons off their fee. of the Luprena Court of ~~eahingtoA ,ln the heretofore cited oaat or ~raahlngton Gecorder ?ubllshlAE Co. v. Hmat, ccxlueivt on this QOint. The pcrformunce of ao1te abrk CA the prtzices of iilrby Lumber Corporation doos not change the status of a OOA- tractor to that of o servant.
The lest CtCtiOA 0r the defloltlon of Servlcc, (g) (6) (C) thct we m6t~Satlafy 1s whether the Individual 1s cuetomrlly en&aced in en lndeptAdaAtly eetabllrhed traEe, occupation or bualAeaa. is meld in the XashlAgtoA Becorder Pub. Co. cece, "if he Aever earvea t:ort than one parson there 1s usually a presumption that he has no independent occupation; but this pre- auAptloA la AOt coAoluslve . . . the OR8 IAdisQCAEable 8+cAtAt to his character es a~ lAdepeAdeAt contractor 16 that he zust have contracted to do e epeolfled work and have the right to ?- control. the c.odc and rzanner of dOlAg it.” 1.n OUT faetuel situation both Asker &Ad KoCleAehaA are oontrect with firm of their ohoioe,and at the time QtEtdtted his 8fria~~it, IjcClaAeheA ~66 doing 60. kc presume other iAdiii&UClC contracting with Xlrby Luuber Corporation enjoyed the aeme 'prlvIlage. The fccte t6tabllah that they were customerlly engaged &A indeptndtatly e6tabll6hed busiAe66. we will dISQO68 the two facts heretofore
i%ially, r;eAtloacd 86 erldenoln~ oontrol ln&loatIng e servant rcletloc- ship. First the power Xlrby Lumber Corporation to ttrn;lnate 1~6 at rfll; aeoood the choice by Kirby Luxzber Corporation lo or he loge to be cut. ‘Such were the fcotc in the oacc of g& Crosby Lumber Me. Co. v. fiurhem, 179 so. 265, xhercin~tht court Said:
'The power given en 8Eployer under a OoAtrEtCt iOr acrvloea to termlcats it at r:Ill 1s h fact for con- in dctcmlnlng r;het&cr the oontreot creates alteration relation of xeetor a~0 cement, but, of itself alone, is not determinative, end the Germ faot thet whet loge Stocketlll ehculd haul were for the deter- *8 . , Eon..Gnllla s. Carpenter, psge 8
ainetion Of frorbf iuber 4. ~6lJUf6CtUritlg COQ6Xly did nCt COUBtitUt6 EUCh OOUtrOl OI8r him 6E t0 Z&8 rO&tiOn b6tW88n them that Of Es68t.r and 68l’V6.rit.” ‘Ph6t iS OUr 6ll8W8r t0 the prOpOSitiOn her6.
You arr, therefore, edvieed that only Upon the basis of the laots before ~6 the indirldu616 doI% the logging work were, prior to April 1, 1939 Independent contractors, and there 16 no liability on blrby Lumber lorporation Sor taxes bhsed upon aoounta peld those p6rUOIX.
If the f&CtS Srt Cthr tti6D r8pr8S8Zlt6d :n tbt iIlfOlT~CtiOXl b6fCI-6 ~6, we do not peas upor ths llabillty of Zlrby Lumber COrpOrEtiOn or any other elaplcyer for tax86.
Yours very truly