“.,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; andiion.cnille 5. Carpenter, Pete E

W(3)ouch IenlQe lo elthur outaldu **the uswl**  ooursoct ths **busicerr** for *hlch such ~ervlce is >erromed or **that** ruch rervloe le perfomied outofde of all thepleoss of buslnst8 ot the enter&mire for Welch such **Beni i6**  petitarmed; **c&d** "(C) euoh in6lvldual is cu~toxzerlly

### l waeed

in en independ6notly

eatabllohed, trade, ocoupatlon,profeorlori, or buainase.' The Infornstlon rocompmylng ycur reCurnet reveals a de- .tailed~tetmnentof fats subniltted by ycur mdltor. You also sIibt&ted 8tateRanta e56 affldevits prepared **&Ed exeCUted**  by offlolalrof Kirby Luzber Corporation sod by certaIa of the logging oontraotore. You **asked**thet Uetermlnstion of llobllitybe barredupon

### a&lof 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~alsunder eoneideretion lre under ths supirvlsion end control oi ilrby Luzbcr torporetlcn, thus em4 in their ~~zplopc;ent~~.So hearingwas 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 representationof facts. Thle, we think, entitles thm ~tomru 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 situationwere n6t mployeee for the

### purpoeaof toxae untler Titles **VIII** and IX of the Social Security 6ct.

A rsrlou

**0r** the data l

abmltted dlrrcloeer that tmo or the contractors asntlonod in 

### yourautltor*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 16an 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 promptlydeltrer 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 contractorsEon. 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* 

### thework. +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 thecontn~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 logging crcwt that ho oparatea on bla own Credit;, 

### that he 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 

### othorlndltlduolo 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 OLbs6 part 

### to eontraat ercluslvoly with thlc corporatlor. This lndltldual hat been 

### l aalgLbd an employbr~c ldcntlfloatlcnnureberunder the boo161 Leourlty iict **tnd** tier tte &%ployzent Ccmpeneatlon kct **o? TbIbr.**  The-,itildavltfurther 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

### arenot 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 

### thatho 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 apeciflcatlocawith whloh.he~la to co~.ply. Hc states tbat the ISlrby~LurPber

### Corporetlonnor Its agent bed tny control over the dctalla ot his **worka** that he cm8 his orn tmoka, hires and dlechargcahis 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 contractswith571

Bon. Orvilla 5. Cerpenter, page 4

several other eoapanlea; that he carrier bit ownworlfxen*aoompensatlon lnsurenoa with the 'Paxas mployer*a Inauraaos Asaooletion. Ur. b:oClanahanstates 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~lteof dtbar persons **femlller** with tha opcratfon of theaa tuomen. Ii there be other contractorsor persona repraoaAtlAg the~aalvea es contreotorsulth the Llrby **Lumbar**CorporatloawhoPa 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 'ofoontreota 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 statartsntthat thi **Kirby** lumber Corporation requlrae that the loegw CoAtraotor oarry his rorkmiA*a oorzlp6naatlon lAauraAerwlth 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 olrouastenoeacake 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 1AdlOataathat 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.** @aentlolpate a OOACtrUCtiOA or thla portloh 0r the oontr8otby aome.tU be a rather broad uerolae of power ovar~oAawhose relatlonrhlp is that of a0 independent oontraotor.

Therr la other inforaxttlon et hand that 

### a 8aw - forimn of Klrby*a ohoioe is aometlmeaplaood with the orewawithout tha contraotorfa oonaant. .AA

### l ttelrpt1s 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 lIiAdleased by this CO+ poration, and, by having an experisnoed &LIAto pick out the trees tobe 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 oonienow **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 

### that teat 

### l quallr fitticg here, end we will AOt dCQCrt rn>X it.

The &erinitiOA 

### ofen 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 Lawof bgaaoy hare Meted a number of teats to be used in daterxlni~ the true relatloAahlpbetween eA alleged prltolpsl anC indOpeAdOnt contractor. They are enumreted in that **work**.$aVolmze 1, & 220, pages 483-465, ee followsI

*411 iicarvent 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-bathero&e **notbig for**  another is a cement **or** 

### en ladepemIent~ooatreotor, the following esttere or 

### reot,amongotham), 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, ILathe looellty, thework la uaumll~ done under **th.e**dlreotloa of.the eqloler **or** br IIapeolellat 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& theWork; *(r) the length or tlsre ror whloh‘the

### personla **8mQlOy86**8 *(g) the **method**of peymeat,whathcr **by** tbe 

### timeor by the job; 

### *(h)whetheror not thework la a partof the ragulsrbU6lAeCC of 

### theeI%ployer~ and "(1)whetheror Aot tha

### partiesbelleve 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 cormreep~ota, lndloctcooritrol by the 

### party of 

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

### thatoeee l rlbo~oc e greater degree or control ovar 

### theworkorsthan 

### la present here, Acrertheleaa the court held there was AO lleblllty ror taxes. A.8oloac 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 comparleonor 

### ellour taota--with 

### eeohtoet aupplleb**by** 

### the iicrstatexent 

### of theter 0r 

### &sop rouldbe onerous 

### toboth thlaDoQertEeAt 

### endthe reader; &reauut of 

### theorart recta 

### ludloatethat 

### ths co-oalledcontracton hireeeploxee6of tbelr oholoa, fir8 th8E at their OVA 8laOtlOAl that they alone keep pyroll raoorda~ that they furAlah all 

### l qulpaiecnt

urd it8 repaIri that 

### theyactthehours for work; that they choose thalr om a&hod of 

### cutting that they are aAs=erablt to the 

### Xlrby Lwcbar Corporation oni J in &aapeot to delivery of a 

### l peolfled amount 0r 

### timberat the 

### 8em8a the, and th8ttheyere **paid on**  8 **Job**baala.



### i%cterrlng

againto (e) (5).(a) or 

### the 68flAitIOA or 

### aerviota

### todetemlne whethertheselndlvldunlaare freefrom 

### oontrolunder 

### the eoatrcotand lr faot. ?& think they are. The preponderanor or the data before us l rlnoea a olear intentIon &A& underatendlng betwetn tts Kirby 

### LuaberCorporationat6 OOA- 

### *rectorthcte esntrmotorrelatloAahIp la IAt8Aded. %friOitAt evldenoe 0r exerolae of company 0oAtrolof the method 0r dOiA,Q the work 

### is

### notberorcus.. 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;slAesaof 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 copitof the work 1s doAt on property of Kirby LuzsbcrCorporation end other work dons off their fee. nc think the oploicn of Justice L;lllsrd of the Luprena Court of ~~eahingtoA,lnthe 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**Corporationdoos 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 IAdisQCAEable8+cAtAt to his character es a~ lAdepeAdeAt contractor 16 thathe zust have contracted to do e epeolfled work and have the right to control.the c.odcand**rzanner**of dOlAg it.” ?-

1.nOUT faetuel situation both Asker &Ad KoCleAehaA are QtEtdtted to oontrectwith firm of their ohoioe,andat the time or his 

## 8fria~~it, IjcClaAeheA~66 doing 60. kcpresume other iAdiii&UClC contractingwith Xlrby Luuber Corporation enjoyed the aeme 'prlvIlage. The fccte t6tabllah that theywere customerlly engaged in &A indeptndtatly e6tabll6hed busiAe66.

i%ially, we will dISQO68 0r the two facts heretofore r;eAtloacd86 erldenoln~ a oontrol ln&loatIng e servant rcletlocship. First the power of Xlrby Lumber Corporationto ttrn;lnate log&**1~6** at rfll; aeoood the choice by Kirby Luxzber Corporation or he loge to be cut. ‘Suchwere 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:Ill1s h fact for conalteration indctcmlnlng r;het&crthe 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 EUChOOUtrOl 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 elaplcyerfor tax86. Yours very truly