Idaho Times v. Ind. Acc. Bd. , 63 Idaho 720 ( 1942 )

Two contracts were introduced in evidence, one between Idaho Times Publishing Company and Wayne Cox and the other between Twin Falls News Publishing Company and Claude Norton. These contracts were written on forms like that contained in the majority opinion.

Appellants contend these contracts constitute the route carriers independent contractors under the common law, and that the common law with respect to master and servant and independent contractors is not changed, or abrogated, by the Unemployment Compensation Law. Respondent contends the statutory definition of "employment" in the Unemployment Compensation Law is broader than the common law definition of that word and that, in cases of conflict between the common law and a statute, the latter should prevail. This difference of opinion, of the parties litigant, constitutes the question of law presented to us for decision.

Idaho 1937 Session Laws, chapt. 187, p. 317, provided:

"(5) Services performed by an individual for wages shall be deemed to be employment subject to this Act unless and until it is shown to the satisfaction of the Board that —

"(A) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and

"(B) such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

"(C) such individual is customarily engaged in an independently established trade, occupation, profession, or business."

At the time this proceeding was commenced Idaho Sess. L., 1939, chapt. 239 was in force. It contained the following provisions (pages 575, 576, 577):

"Sec. 18-1 EMPLOYMENT.

"The term 'employment' where used in this Act shall, for the purpose of this Act, mean service, including service in interstate commerce, performed by one or more individuals for wages or under any contract of hire, written or oral, express or emplied."

"Sec. 18-2. WAGES.

"The term 'wages' where used in this Act shall, for the purpose of this Act, mean all remuneration payable for personal services, including commissions and bonuses and the cash value of all remuneration payable in any medium other than money. The reasonable cash value of remuneration payable in any medium other than money shall be estimated and determined as the Board shall, by regulations, prescribe."

"Sec. 18-3. COVERED EMPLOYMENT.

"The term 'covered employment' where used in this Act shall, for the purpose of this Act, mean an individual's entire service, including service in interstate commerce, but excluding service excepted by section 18-5 of this Act, performed by him for wages or under any contract of hire, written or oral, express or implied, within or both within and without this State, in the course of the trade, profession or business of a covered employer, as defined in section 7-5 of this Act, . . . ."

"Sec. 18-5. EXCEPTED EMPLOYMENT.

"The term 'covered employment' shall not include —

"* * *

"(e) Service performed by an individual if it is first shown to the satisfaction of the Board that —

"(1) He has been and will continue to be free from direction or control over the performance of his services, both in law and in fact; and

"(2) He is customarily engaged in an independently established trade, profession or business; * * *"

The 1941 session of the legislature again amended the Unemployment Compensation Law (1941 Sess. L., chapt. 182, pp. 389, 393), but it did not become effective until after the making of the order appealed from, and has no application to it. This case is governed by the 1939 enactment.

During the brief time which had elapsed since the enactment of unemployment compensation laws throughout the United States, much litigation has resulted from difference of opinion as to whether one performing service for another did so as an employee or as an independent contractor. In deciding that litigation, some courts have held unemployment compensation laws, comparable to ours, to be nothing more than restatements of the common law defining "employment" and "independent contractor." Among the cases tending to support this theory are: Gall v. Detroit Journal Co., 191 Mich. 405, 158 N.W. 36, 19 A.L.R. 1164; Hill Hotel Co. v. Kinney, 138 Neb. 760, 295 N.W. 397; Wisconsin B. I. Co. v. Industrial Comm.,233 Wis. 467, 290 N.W. 199; Washington Recorder Pub. Co. v.Ernst, 199 Wash. 176, 91 P.2d 718.

Among the cases tending to sustain the contention that unemployment compensation laws, like ours, are broader in scope than the common law defining "employment" and "independent contractor" are: Schomp v. Fuller Brush Co., 124 N.J.L. 487,12 A.2d 702, 126 N.J.L. 368, 19 A.2d 780; Industrial Com. v.Northwestern Co., 103 Colo. 550, 88 P.2d 560; SingerSewing Mach. Co. v. State U. Comp. Commissoin, (Ore.) 103 P.2d 708, 116 P.2d 744; Creameries of America, Inc. v.Ind. Comm. et al., 99 Ut. 571, 102 P.2d 300; Salt LakeTribune Pub. Co. v. Industrial Comm. et al., 99 Ut. 259,102 P.2d 307; Globe Grain Milling Co. v. Ind. Comm. et al., 98 Ut. 36, 91 P.2d 512; McDermott v. State, 196 Wash. 261,82 P.2d 568; Mulhausen v. Bates, (Wash.) 114 P.2d 995; In Re Foy, (Wash.) 116 P.2d 545.

Appellants quote from Wisconsin B. I. Co. v. IndustrialComm., 233 Wis. 467, 474, 290 N.W. 199, 202, in part, as follows:

" 'It must of course be determined whether Drews was an independent subcontractor or an employee, because it is only through his status as an employee being determined that the claimants can be held to have been employees of the company. To render the claimants employees of the company Drews must have been an employee of the company in the sense that he was hiring the claimants for and in behalf of the company as its agent. But that status is not to be determined from the language of the Unemployment Compensation Act. It must be determined as such status is determined at common law or under the Workmen's Compensation Act. The status is determined by the same consideration under the Workmen's Compensation Act as under the common law. Statutes are not to be construed as changing the common law unless the purpose to effect such change is clearly expressed therein. To have such effect "the language [of the statute] must be clear, unambiguous, and peremptory." Meek v.Pierce, 19 Wis. *300, *303. That rule has been consistently adhered to ever since it was so stated in the case cited. * * *' "

In 1881, the Idaho Territorial Legislature adopted a code of civil procedure, section 3 of which was:

"The rule of the common law, that statutes in derogation thereof are to be strictly construed, has no application to this Code. The Code establishes the law of this Territory, respecting the subjects to which it relates, and its provisions and all proceedings under it, are to be liberally construed, with a view to effect its objects and to promote justice."

That section appears in every codification of the laws of the Territory and State of Idaho and is to be found in our latest codification, Idaho Code Annotated, 1932, § 70-102. That rule of statutory construction has been consistently followed by this court throughout the judicial history of the territory and state, as will be seen by reference to the annotations following the last mentioned section. When a conflict occurs between the common law and a statute we, here in Idaho, are governed by the statute.

A study of Idaho legislation relating to unemployment compensation leaves no doubt that the legislature did not intend its application to be confined to those who occupy the position of master and servant. It is clear the legislature intended that, in order to deprive one who has performed services for another of the benefits of the law, it must not only be shown to the satisfaction of the board that "he has been and will continue to be free from direction or control over the performance of his services, both in law and in fact," but it must also be shown, to the satisfaction of the board, that "he is customarily engaged in an independently established trade, profession or business." Our statute will not bear the construction that freedom from direction and control, alone, will defeat the right of one performing service for another to unemployment compensation, or exempt the one for whom the service is performed from making the statutory contribution to the unemployment compensation fund.

The Supreme Court of Colorado, in Industrial Com. v.Northwestern Co., 103 Colo. 550, 555, 556, 557,88 P.2d 560, 563, 564, stated the law on this subject, as I understand it to be, as follows:

"Referring to the company's contention that the persons involved herein are independent contractors and therefore exempt from the operation of the act, and considering solely the legislative intent as it appears from the act itself, what do we find? When defining or referring to 'wages,' 'employment,' 'employer' and 'benefits' in the act the legislature deliberately avoids the use of the word 'employee,' and uses the much broader term, "individual.' That this indicates legislative intent as to who is covered, cannot be doubted. The terms 'independent contractor' or 'master and servant' nowhere appear. The act prescribes the statutory test, section 19 (g) (5), supra, and we must not be led astray by any other criterion. If we are controlled by the legislative intent, and we are, this is the only approach we can adopt in the determination of this problem. In this we are supported by our own decisions and those of other courts of last resort.

"* * *

"That the legislature has the power to define terms used by it and that statutory definitions control judicial interpretation cannot be doubted. Fox v. Standard Oil Co.,294 U.S. 87, 55 Sup. Ct. 333, 79 L. Ed. 780; Steinberg v. UnitedStates, 14 F.2d 564, 566. Here the statutory definition of 'employment' is broad and inclusive, and it cannot be so construed as to limit the meaning to the relationship of master and servant without violating the legislative intent.

"* * *

"The third test as to exemption from coverage is that the 'individual' is customarily engaged independently in an established trade, occupation, profession or business. This would necessitate a showing by the company to the satisfaction of the commission that its agents are established in the business of selling insurance, independent of whatever connection they may have with the company. It may also have some bearing on those who work only part time in soliciting insurance and are customarily engaged in some other profession, business or occupation. We, however, emphasize that an individual who seeks exemption must satisfy the commission that the services which are performed by others meet the requirements of all three tests, and that a failure to conform to any one of them is sufficient to create statutory 'employment,' and such an 'individual' is covered under the act."

The law requires, in order that appellants be exempted from contributing to the Unemployment Compensation Fund, not only that they show the route carriers had been, and would continue to be, free from direction or control over the performance of their services, both in law and in fact, but that they were customarily engaged in independently established trades, professions or businesses.

The burden was on appellants to prove facts which would bring them within the statutory exemption from liability, to make contributions to the Unemployment Compensation Fund, based on the earnings of their carriers. One of the requirements, in order that they be exempted, is that their carriers were customarily engaged in independently established trades, professions or businesses, during the time for which exemption is claimed. On this point, there is failure of proof, as appears from the testimony of appellants' witness, Westergren, the only one to testify, copied in the majority opinion. The evidence does not show the extent to which appellant's carriers were employed by others. So far as is shown the activities of the carriers, aside from the work they were doing for appellants, may have been occasional and negligible, and did not amount to an independently established trade, profession or business. It is not shown the carriers were employed by anyone, other than appellants, at any time after the enactment of the Unemployment Compensation Law. There is no evidence on which the board can base an order exempting appellants, or either of them, from payment of contributions on the earnings of their carriers.

The fourth paragraph of the findings of fact is:

"That under the terms of the contracts existing between the petitioners and the various 'route carriers' the route carriers' are free from control as to the method and manner of delivering the newspapers but that it has not been shown to the satisfaction of the board that the said 'route carriers' are 'customarily engaged in an independently established trade, profession or business' and that their service is not excepted from 'covered employment' as defined in Section 18-3 of the Unemployment Compensation Law."

That finding of fact is favorable to appellants as to one requirement of the law, and unfavorable to them with respect to the other.

The order of the board, copied in the majority opinion, requires appellants to prove, in order to enjoy the benefits of exemption, that the carriers "have been and will continue to be free from direction and control over the performance of their services, both in law and in fact; and are customarily engaged in an independently established trade, profession or business."

The order conforms to the requirements of the law, and the facts established will not justify any other.

Chief Justice Givens finds fault with a ruling, by the board, excluding certain evidence. The ruling has not been assigned as error. Assuming, but not deciding, it was erroneous, the error is harmless because the board found the fact sought to be established, favorably to appellants, who were seeking to establish it.