“.,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 

sound in Arts;;; ;:21-b, 

t is shown to the satisfaction of the 

dividual has been and will aontinue to 

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 >erromed or that ruch rervloe le perfomied outofde of all 

the pleoss of buslnst8 ot the enter&mire for Welch such 

Beni i6 petitarmed; c&d 

"(C) euoh in6lvldual is cu~toxzerlly l wa eed in en 

independ6notly eatabllohed, trade, ocoupatlon, profeorlori, 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 logging 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 a iindlng that the indl~ld~als under eoneideretion 

l 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 by snb on behalf oi thi Xlrby Luxber Corpcretion to eupport 

their representation of facts. Thle, we think, entitles thm 

~to mru credence thm indlreot lniornatlun or conclusions. The 

harean of Internal ;?cvtnue had this aeme loformetiongnd relied 

apon it in their ruling of July Zl, .1939. That rQuJly@ aa8 that 

the lndlvlduals in this iaetual situation were n6t mployeee 

for the purpoea of toxae untler Titles VIII and IX of the Social 

Security 6ct. 

A r sr lo u 0r the data l abmltted dlrrcloeer that tmo or 

the contractors asntlonod in your autltor*e report have amde 

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 the 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 to 

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 by the corporetlon to control the betel18 of ttelr xork. The contractors 
Eon. Orville s. Carpenter, pagr S 

purohcao and 0~x1 all of the appllaaoea, cuob 68 Ease, axca, log6lng truoks tr66tora'l loa6ora, md otter equipment for do* 

the work. +hb corporation dose not now, and never has, okneb. 

cny 106 trucks to do its logging. The rbmuncratton of the logglrq 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 l tildavit ot oae Cacar Baker, dated tiotobsr ZO, 1938, 

one of the contn~tora in Question, reoltee ttet he bought his 

own l q ulp mnt end the Zlrby Lunbor Corporation has QO olalm 

thereto; that hc taaintt~lns klis own cmp ra6iutiea ror hi8 logging crcwt that ho oparatea on bla own Credit;, th a he t 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 

hlc equipment busy, but there lo no obll.getioc OL bs6 part to 

eontraat ercluslvoly with thlc corporatlor. This lndltldual hat 

been l aalgLbd an employbr~c ldcntlfloatlcn nureber under the 

boo161 Leourlty iict tnd tier tte &%ployzent Ccmpeneatlon kct 

o? TbIbr. The-,itildavlt further certlflea thct the corporation 

does not etercIso sny~dsgree ol oontrol over Lr. i3cker*a e,rrploycca 

by lndlcatlng the cmployoes to be hired or 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 by one of hla e~loyecc rhoao errldprlt ha to 

the oorrcotncas or &. Lakar.8 8tctcmnt la'alto la btldenoo. 

lz. L. f. IZoClcnahan tlao one OS tba lo&ng contrectorc 

bxeouted an atildarlt under date of October 1s. 19SB, stating 

that ho had dona buelneca alth the lilrby ‘Lumber Corporation, its 

receiver, and its tivrtbo and.had gPa0 aontraota tree tIm to 

tl&e wlth rofbrenos to logging on UliierczA tracts with tbo 

Kirby Lambor Company. 

Er. >.'cClancban stetoa tbct ln the operation of there 

loeglng contract8 he directs tbo details of the work unb roaelres 

fro& the Klrby~LtlP;ber Corporctlon only the apeciflcatloca with 

whloh.he~la to co~.ply. Hc states tbat the ISlrby~LurPber Corporetlon 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 
571 

Bon. Orvilla 5. Cerpenter, page 4 

several other eoapanlea; that he carrier bit own worlfxen*a oompensatlon lnsurenoa with the 'Paxas mployer*a Inauraaos Asaooletion. Ur. b:oClanahan states thet ha la en employer under the 

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 repreaeatatira 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 rorkmiA*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 Corporetlon provldea that *should olrouastenoea cake it neoe~aaary, In 

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 the work @f the ~SrSOA.do:ly the OOAtrCOtiA~ at Amy 

tlma that It, in its judgment, thlnka brat. @a entlolpate a 

OOACtrUCtiOA or thla portloh 0r 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 a 8aw - forimn 

of Klrby*a ohoioe is aometlmea plaood with the orewa without tha 

contraotorfa oonaant. .AA l 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 by the Kirby~ Lumber Corporation, a~&, in other iAf3t&AO88 OR lIiAd leased by 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 l bdltlonal time to mature. 
&xi. Orville S. Carpenter, pace 6 

+e oonie now to the teat to be l pplied to tbe feota et 

hoAd. IA an OQ~A~OA by thie Cepartzeat under dare Or Jenuery 

24, 194Q, to Onllle Carpenter, & 0-l2eOO,.we a&opted the OOXCIOA 

lew toat of independent ooAtraotor es e beala for detemlrstlon 

or liability. he think th a teat t l quallr fitticg here, end we 

will AOt dCQCrt rn>X it. 

The &erinitiOA of 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 

to 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 relatloAahlp between eA alleged prltolpsl anC indOpeAdOnt contractor. They are enumreted in that work .$a Volmze 1, & 220, pages 

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 the 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 following esttere or reot, among otham), are oonaldered~ 

*(a) the extent of oontrolwhloh, by the aereemmt, 

the zeatar ney exercise c.irer the detella of the work; 

*(a) whether or tot the one enploJe4’ls engaged 

in a dlatlnct ocoupatlon or b~alaeaa; 

"(a) the kind of OOOU~tiOA, with refer6nOe to 

whether, ILa the looellty, the work la uaumll~ done 

under th.e dlreotloa of. the eqloler or br II apeolellat 

rlthout aopenlslon; 

*(a) the aklll required in 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 of work 

ror the person doti& the Work; 

*(r) the length or tlsre ror whloh‘the person la 

8mQlOy86 8 

*(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 by the party of the 

rlrst part, as 60 we; however, we tblnk the faote in that oeee 

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 

that they wart ooAatruing &A uAelEQlO)a8At oompeAaetloA lew aA& 

not a question or tort llmblllt~. 

bianiroatl~, 8 comparleon or ell our taota--with eeoh toet 

aupplleb by 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 

repaIri that they act the hours for work; that they choose thalr 

om a&hod of cutting that they are aAs=erablt to the Xlrby 

Lwcbar Corporation on i J in &aapeot to delivery of a l peolfled 

amount 0r timber at the 8em8a the, and th8t they ere paid on 

8 Job baala. 

i%cterrlng again to (e) (5) .(a) or the 68flAitIOA or 

aerviota to detemlne whether these lndlvldunla are free from 

oontrol under the eoatrcot and lr faot. ?& think they are. The 

preponderanor or the data before us l rlnoea a olear intentIon 

&A& underatendlng betwetn tts Kirby Luaber Corporation at6 OOA- 

*rector thct e esntrmotor relatloAahIp la IAt8Aded. %friOitAt 

evldenoe 0r exerolae of company 0oAtrolof the method 0r dOiA,Q 

the work is not berorc us. 
. 

574 

Eon. Orvlllt 5, CarQtAtCr, QC&t 7 

sget%OA (6) (5) (B) of OuP 6cflAltiOA rogulr:Ag t3at the 

aervlca 1s outeldc the usual course of the bUSiAt66 for v.tlch 

such aervlee is QtrfCrXCd or that the CervIce Is performed outside of the pleoea of bt;slAesa of Xlrby Luzbcr Corporctlon ofrere 

AO aif ri0ulty. The 1AforratloA nubtitted by Xlrby Lumber Carporatlon 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 

work dons off their fee. nc think the oploicn of Justice L;lllsrd 

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 OOAtractor 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 preauAptloA 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 

QtEtdtted to oontrect with firm of their ohoioe,and at the time 

or 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 in &A indeptndtatly e6tabll6hed busiAe66. 

i%ially, we will dISQO68 0r the two facts heretofore 

r;eAtloacd 86 erldenoln~ a oontrol ln&loatIng e servant rcletlocship. First the power of Xlrby Lumber Corporation to ttrn;lnate 

lo 

g& 

1~6 at rfll; aeoood the choice by Kirby Luxzber Corporation 

or he loge to be cut. ‘Such were the fcotc in the oacc of 

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 conalteration in dctcmlnlng r;het&cr the oontreot creates 

the 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- 
. , 

Eon..Gnllla s. Carpenter, psge 8 

ainetion Of frorbf iuber 4. ~6lJUf6CtUritlg COQ6Xly 

did nCt COUBtitUt6 EUCh OOUtrOl OI8r him 6E t0 Z&8 

the 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 to 

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