TOMLIN v. CALIFORNIA EMPLOYMENT COMMISSION

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District Court of Appeal, First District, Division 2, California.

TOMLIN et al. v. CALIFORNIA EMPLOYMENT COMMISSION (two cases).

Civ. 13102, 13103.

Decided: October 21, 1946

B. E. Kragen, of San Francisco, and Lionel B. Benas, of Oakland (Hillard Goldstein, of San Francisco, of counsel), for appellants. Robert W. Kenny, Atty. Gen., Clarence A. Linn and Doris H. Maier, Deputy Attys. Gen., for respondent.

The plaintiffs filed two actions against defendant for the recovery of separate sums collected as contributions under the California Unemployment Insurance Act. Deering's Gen.Laws, Act 8780d. The actions were consolidated for trial, but two separate judgments were entered. An appeal was taken from each, but thereafter the parties returned to the consolidation and filed one reporter's transcript and one set of briefs to cover the two appeals. The difference between the cases goes only to the amount of taxes paid, hence they may be treated as one appeal.

Rex Novelty Company is a partnership consisting of C. H. Tomlin and others, which owns amusement machines known as ‘crane’ or ‘digger’ type machines. During the taxable years in question the company entered into agreements with various individuals who were denominated lessees for the operation of such machines at places chosen by the lessees. Each agreement provided that it was an agreement ‘of strict rental only, and shall in no way be construed or considered as creating the legal relationship of a partnership, or the legal relationship of principal and agent, or the legal relationship of employer or employee.’ Each agreement was for an indefinite period of time to extend until terminated by either party upon written notice to the other party of the intention to so terminate. The lessees agreed to lease a specified number of these machines and to devote their time exclusively to their operation unless it was otherwise agreed in writing. The lessees placed the machines in various locations chosen by themselves and gave the ‘location owner’ a specified percentage of the money collected after deducting the cost of any merchandise vended from the machine. The residue was then divided between the Rex Novelty Company and the lessees. The lessees had employees, denominated operators, who did the collecting and made minor repairs on the machines. Each operator was required to get a signed receipt from the location owner as to the amount he received. The lessees were required to send these receipts and a report of the location and amount taken in by each machine to the Rex Novelty Company each week on a form prepared by it. One of the partners of the company visited the various territories to see if the machines were properly located, and if the machines were not bringing in sufficient revenue the lessee was advised to either change its location or to return the machien and relinquish his lease.

The California Employment Commission assessed taxes on the ground that the Rex Novelty Company was an employer. On December 31, 1942, the Rex Novelty Company paid $809.40 and $7,027.80 under written protest. On June 15, 1943, a hearing was had before a referee who found in favor of the commission. The Appeals Board then approved the assessment. The Rex Novelty Company then instituted the present proceedings in the superior court. The trial court held that it was an employer as defined by the act and entered separate judgments in favor of the commission.

The judgments are contrary to all the authorities and must be reversed. Empire Star Mines Co. v. California Employment Com., 28 Cal.2d 33, 168 P.2d 686; Briggs v. California Employment Co., 28 Cal.2d 50, 168 P.2d 696; Twentieth Century Lites v. California Dept. of Emp., 28 Cal.2d 56, 168 P.2d 699; California Employment Stabilization Com. v. Morris, 28 Cal.2d 812, 172 P.2d 497; California Employment Stabilization Com. v. Gusmeroli, 75 Cal.App.2d 735, 171 P.2d 913; Isenberg v. California Employment Stabilization Com., 76 Cal.App.2d ——, 172 P.2d 527; California Employment Stabilization Com. v. Wirta, 75 Cal.App.2d 739, 171 P.2d 728.

The facts to be taken into consideration in determining whether one who performs services for another is an employee or an independent contractor are outlined in detail in the Empire Star Mines case, supra, and it would serve no purpose to repeat them here. More closely allied in its facts is the Briggs case, supra, and we could rest our opinion on a slight paraphrase of the language of that case found on page 698 of 168 P.2d: The uncontradicted evidence concerning the contracts and the operations carried on pursuant to these agreements clearly shows that the appellant had no right to control nor did it in practice control the manner or means by which the lessees operated the machines delivered to them. Each of them was free to do as he pleased. He worked few or many hours with no requirement that he must produce any fixed result. He received no instructions; he did all the work himself or hired helpers whom he paid. The appellant had no right to discharge any of the lessees nor any of the helpers hired by the lessees. Under these circumstances in every respect these lessees were independent contractors.

The judgments are reversed with directions to enter judgment in both cases for appellants.

NOURSE, Presiding Justice.

GOODELL and DOOLING, JJ., concur.

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