Case Name: JOURNAL PUBLISHING CO. v. STATE UNEMPLOYMENT COMPENSATION COMMISSION et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1945-01-23
Citations: 175 Or. 627
Docket Number: 
Parties: JOURNAL PUBLISHING CO. v. STATE UNEMPLOYMENT COMPENSATION COMMISSION et al.
Judges: Before Bailey, Chief Justice, and Belt, Rossman, Kelly, Lusk, Brand and Hay, Associate Justices.
Reporter: Oregon Reports
Volume: 175
Pages: 627–710

Head Matter:
Argued February 15;
reargued September 19, 1944;
affirmed January 23, 1945
JOURNAL PUBLISHING CO. v. STATE UNEMPLOYMENT COMPENSATION COMMISSION et al.
(155 P. (2d) 570)
Before Bailey, Chief Justice, and Belt, Rossman, Kelly, Lusk, Brand and Hay, Associate Justices.
Fletcher Roclcivood, of Portland (Hart, Spencer, McCulloch & Eockwood, of Portland, on the brief), for appellant.
H. Lawrence Lister, Assistant Attorney General, for respondent State Unemployment Compensation Commission of the State of Oregon.
George Black, Jr., of Portland (Black, Johnson & Kendall and John W. Kendall, all of Portland, on the brief), amicus curiae.

Opinion:
LUSK, J.
This is an appeal from the decree of the Circuit Court affirming an award of benefits by the State Unemployment Compensation Commission in favor of one James E. Johnston. The question for decision is whether Johnston was an employe, within the meaning of the Unemployment Compensation Law, of the plaintiff, Journal Publishing Company, a corporation, and as such entitled to unemployment compensation.
The following facts appear: The plaintiff publishes a daily and Sunday newspaper in Portland, Oregon, and during the years 1937, 1938 and 1939 Johnston was a carrier and distributor of its papers on rural routes in this state. He operated under written contracts, the first of which was dated July 1, 1937, and the second, though dated December 1,1938, was deemed effective by the parties as of July 1,1938.
The first contract covered a route in Benton County and continued in effect until July 1, 1938, when the route was abandoned by the plaintiff. The second contract was entered into to cover a route in Linn County, and was in effect from July 1,1938, until March 1,1939, when the plaintiff cancelled it for what it considered good and sufficient reason.
In broad outline there is no great difference between the provisions of the two contracts. In each Johnston agrees to deliver the papers of the plaintiff to subscribers on the prescribed route, to pay the plaintiff on the tenth of each month a stipulated price for the papers which he orders, and to charge the subscribers the prices fixed by the contract; he agrees to do all in his power to increase the sales of The Journal and not to contract with or sell any other newspapers; he agrees to give thirty days notice of Ms intention to abandon the route. The foregoing provisions are in substance common to both contracts. In the first contract is a provision authorizing the plaintiff to take over Johnston's territory without notice if he does not pay for the papers as agreed; in the second a provision authorizing the plaintiff to cancel the contract at any time "for good and sufficient reason". By the first contract Johnston agrees to "keep his books in perfect order with the correct lists of the names and addresses of all customers, with dates to which they are paid" and "that all books, lists, etc., are to be turned over by the CIRCULATOR (Johnston) to his successor promptly at such time as he surrenders the territory". By the second contract Johnston acknowledges receipt from the plaintiff "of a list of subscribers who purchase The Journal and who live on a certain paper route near Corvallis, Oregon, which list of subscribers and paper route is hereby leased to me by The Journal." He promises that he will not turn over said list of subscribers to any person nor disclose the name of any subscriber to The Journal without first obtaining the consent of The Journal. The contract recites that Johnston has not paid any money to any person for the list of subscribers, and he agrees that he will not sell it to any person or persons for any money, and that, upon cancellation, he will "forthwith turn over to The Journal, or its authorized representative, the names of all subscribers to whom I have been delivering The Journal", and that he will keep a written list of all such persons, with their street addresses, and that such written list shall be the property of The Journal. He further agrees not to collect in advance from any of the subscribers, "but should any subscriber choose to pay in advance I will remit to The Journal immediately."
Johnston made delivery of the papers by automobile, and, according to the findings of the commission, was "granted by the company a regular cash allowance for use of his automobile on the (Benton County) route, which allowance ranged from $47.00 to $75.00 a month", while on the Linn County route "the company credited claimant's account with an automobile allowance of $78.00 a month".
The commission further found the following facts as to the method by which the business was transacted under the contracts:
"The claimant, from the time, ordered from the Company the amount of newspapers he cur rently needed, which amount the Company sent him until a change in number was ordered. The Company charged claimant with the agreed wholesale price and the claimant sold the newspapers at retail price to the subscribers on his rural route, delivered the same into the paper boxes along the route, collected from the subscriber the retail price, and paid monthly to the Company on its bill any difference owing the Company between the wholesale bill and the automobile allowance and other credits. During most of the time, by reason of the automobile allowance, a monthly credit was due the claimant which was paid by the Company. During the claimant's base year he also performed incidental services not included in the written agreement for which services only he was paid $6.64 by the Company.
"The Company's district manager had on one or two occasions warned the Circulator or Carrier concerning being late in receiving the newspapers for delivery and had on at least one occasion demanded of the Carrier that he re-deliver a paper to some customer from whose paper box the papers had been taken by unauthorized persons. There is also some evidence to indicate that on one occasion the district manager had objected to claimant's wife taking over the deliveries. The Commission finds in these matters that any established exercise of material direction and control by such district manager did not actually go beyond the insistence that claimant fulfill the obligations of the written terms of his agreements."
The commission found that Johnston performed services for remuneration within the meaning of the Unemployment Compensation Law, that a material direction and control was retained over the performance of such services by the plaintiff through the terms of its contracts, and that Johnston was not customarily or otherwise engaged in an independently established business of the same nature as that involved in the contract of service. An award of benefits for unemployment was made accordingly.
The plaintiff thereupon commenced this suit to secure judicial review of the decision of the commission, and the circuit court, after a hearing, entered a decree affirming the commission's award. From that decree the plaintiff has appealed.
LUSK, J.
This case has been twice argued. After the original submission counsel for Oregonian Publishing Company, which has a similar case pending here, at the invitation of the court filed a brief as friends of the court and participated in the reargument. The court is indebted to all the counsel engaged for the thoroughness, industry and ability which have marked their presentation of the important question to be decided.
The Unemployment Compensation Law contains its own definition of employment in the following provisions of § 126-702, O. C. L. A.:
"(f) 'Employment' means service for an employer performed for remuneration or under any contract of hire, written or oral, express or implied.
"(E) Services performed by an individual for remuneration shall be deemed to be employment subject to this act unless and until it is shown to the satisfaction of the commission that:
"(1) 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
" (2) Such individual customarily is engaged in an independently established business of the same nature as that involved in the contract of service."
We have heretofore held that the test of coverage under the law is whether a case falls within the statutory definitions, which are "broader than the scope of the employer-employee relation or that of master and servant as those terms are known to the common law. ' ' Rahoutis v. Unemployment Compensation Commission, 171 Or. 93, 113, 136 P. (2d) 426; Singer Sewing Machine Company v. State Unemployment Compensation Commission, 167 Or. 142, 149, 164, 176, 103 P. (2d) 708, 116 P. (2d) 744, 138 A. L. R. 1398. The Rahoutis case is also authority for the proposition (which follows from the plain terms of the law) that, once it is shown that the individual has performed services for remuneration for an employer, the burden is cast upon the one who claims that such individual is not under the act to satisfy the commission that he comes within the exceptions provided in § 126-702 (f), (E), O. C. L. A. (171 Or. 119).
These general rules of construction (with some reservation on plaintiff's part as to the latter) are accepted by the parties as controlling, and it has not been contended here, as it was in the cited cases, that, because the individual whose status is in question might have been deemed an independent contractor at common law, he would necessarily, for that reason, be excluded from the class of employes within the meaning of the Unemployment Compensation Law.
The main contention here is that the relationship between Johnston and the plaintiff was not one of service, and in any event not of service for remuneration, but simply that of vendor and vendee. The plaintiff, it is said, sold its papers to Johnston, who resold them to the subscribers, and Johnston did not receive a wage, but a profit consisting of the difference between the retail and wholesale prices of the papers. The meaning of service for remuneration, it is said, was not determined by our prior decisions, which assumed rather than expressly decided the existence of a service relationship in those cases.
The word "service", as counsel suggests, varies in meaning according to the context in which it is found, and it would be impracticable, in our opinion, to attempt a definition by which to test every case that may arise. In Creameries of America, Inc. v. Industrial Commission, 98 Utah 571, 102 P. (2d) 300, presently to be considered, the court said:
"It includes generally any act performed for the benefit of another under some arrangement or agreement whereby such act was to have been performed."
We agree with the statement in that case that the way "service" is used in the Act "indicates an intention on the part of the legislature to use the term in its broad general sense". It is a broad term of description "evidencing a legislative intent to give to the Act a broad and liberal coverage to the end that the far-reaching effects of unemployment may be alleviated." Unemployment Compensation Commission v. Jefferson Standard Life Insurance Co., 215 N. C. 479, 483, 2 S. E. (2d) 584. And the scope and limitation of the phrase "service for remuneration" must at the last be determined by the traditional method of judicial inclusion and exclusion. See Noble State Bank v. Haskell, 219 U. S. 104, 55 L. Ed. 112, 31 S. Ct. 186, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A 487.
Whether the work done by Johnston was service for the plaintiff is a question that might well be con sidered settled on the authority of the Singer and Rahoutis cases, in both of which the services rendered consisted of making sales for the employer on commissions. It is true that the opinions in those cases contain no discussion of the meaning of the word ' ' service" as used in the statute, but this is probably for the reason, as stated in the Rahoutis case, that "it is clear that the salesmen in the case at bar performed services for remuneration" (171 Or. 119). It may be assumed that we thought it clear because the business of Rahoutis, the employer, was selling real estate and the employe aided him in carrying on of that business by procuring sales of real estate owned by Rahoutis and his clients. Likewise, in the Singer case, part of the business of the Singer Sewing Machine Company was selling sewing machines, vacuum sweepers, etc., and the services of the employe consisted in aiding the company to dispose of its products to the purchasing-public. It is doubtful whether discussion or definition in either case could have made the matter any clearer than the naked statement of the facts themselves.
It is not urged that we were in error in the Rahoutis and Singer cases in holding or assuming the existence of the service relationship, but the contention is that this case is to be distinguished from those precedents because here the alleged employe, instead of selling-property which belonged to the employer, sold his own property. This fact is said to liken Johnston somewhat to the ordinary retail merchant, who, of course, is not an employe of the manufacturer from whom he purchases a stock of goods, although he may in a sense render the latter a service by providing a retail outlet for his product. It puts Johnston, the argument proceeds, very much in the category of the automobile dealer whose contract requires him to handle the cars of a single manufacturer and to sell them in a defined territory and at prices fixed by the seller. Other facts referred to as heightening the analogy to the automobile dealer are that Johnston furnished his own facilities for distribution, paid his own expenses, assumed the risk of loss if patrons failed to pay, accepted payment for the subscribers in any medium that he chose, and made no reports to the plaintiff of his business dealings with the subscribers.
The foregoing catalogue of Johnston's activities is not wholly accurate. A substantial part of his expenses was paid by the plaintiff through the automobile allow-. anee. He did not assume the risk of loss on Sunday papers, for the evidence shows that he was given credit by the plaintiff for all such papers that he was unable to sell. And, under the first contract — which is material for the reason that it was in effect during the first nine months of Johnston's base year (§ 126-702 (n), O. C. L. A.) — Johnston was required to keep accurate books of account and to make them available to the plaintiff at its pleasure and to turn them over to his successor on termination of the contract.
But, putting these matters to one side for the present, we think that the argument of counsel loses all its force when the real nature of the contracts between Johnston and the plaintiff is uncovered. For they provide for something quite different than the bare purchase and sale of a commodity, and the case is not to be disposed of by attaching the label "vendorvendee" to the transaction. It cannot be denied that the sale of the plaintiff's papers to its carriers has very unusual features. Ordinarily, when a person becomes the owner of personal property by purchase he may do with it what he chooses. He may use it himself, bell it to another for whatever price he pleases, or, if he be so minded, destroy it. But Johnston had no such rights in the papers he purchased from the plaintiff. He was not merely limited in his right of resale with respect to price and territory, as the automobile dealer may be, but he was bound by contract to sell and deliver the papers promptly to a list of subscribers which was the property of the plaintiff and to repeat the process daily. This, in our opinion, is the central meaning and purpose of the contracts. The circulation of a newspaper is its lifeblood; increase in circulation is valuable to the publisher because, as the circulation manager of the plaintiff testified, "the greater the circulation the greater demand the paper has as an advertising medium." And it goes without saying that subscribers who do not receive their papers would soon cease to be subscribers. The purpose of these contracts was to secure the services of Johnston as a circulator or carrier of the plaintiff's papers, to the end that promptly each day the subscriber should receive the copy to which he is entitled under his subscription contract. Whatever title to the papers was vested in Johnston was encumbered with this duty. As the New York court said in a similar case:
"While this carrier paid the appellant's inspector for the papers which he had delivered, his ownership was qualified, as they could be used only in fulfilling the publisher's contract with its subscribers and in furthering the effort of the publisher to obtain new subscribers." In re Scatola, 257 App. Div. 471, 472, 14 N. Y. S. (2d) 55, affirmed 282 N. Y. 689, 26 N. E. (2d) 815.
The Scatola case and Salt Lake Tribune Publishing Co. v. Industrial Commission, 99 Utah 259, 102 P. (2d) 307, Creameries of America, Inc. v. Industrial Commission, supra, and Sisk v. Arizona Ice & Cold Storage Co., 60 Ariz. 496, 141 P. (2d) 395, all involved contracts similar to that with which we are now dealing and the application of provisions of unemployment compensation laws similar to those in this state, and in our opinion provide conclusive answers to the contentions now under consideration. With the possible exception of the Scatola ease, it is not urged by counsel for plaintiff that these cases are not in point, but simply that they were not correctly decided.
The definition of employment in the Utah Act is in substance identical with ours, and it is further provided that:
"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 commission 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."
The Utah court has construed these provisions to mean that if it appears that an individual has rendered services for an employer for wages, he is under the Act, unless all the questions suggested by the three enumerated tests be answered in the affirmative. Globe Grain & Milling Co. v. Industrial Commission, 98 Utah 36, 91 P. (2d) 512: Fuller Brush Co. v. Industrial Commission, 99 Utah 97, 104 P. (2d) 201, 129 A. L. R. 511; Creameries of America, Inc. v. Industrial Commission, supra.
Creameries of America, Inc. v. Industrial Commission, supra, involved a contract called a "franchise agreement" between a corporation engaged in the production and sale of dairy products and one Foss, by which the company agreed to sell such products to Foss at a price fixed at a discount "from the retail price posted on the Company's bulletin board", or if no price be posted then "a reasonable price shall be used as determined by the Company for similar products in the same neighborhood." The company, by a provision in the contract, loaned to the dealer a list of names, addresses and requirements of the persons who, at the. date of the contract, were purchasing its products at retail within the franchise area. The company reserved to itself the good will of the retail trade within the area, a provision being made by the agreement for the "purchase" by the dealer, upon the termination of the contract, of any customers or business acquired by the latte]' during the life of the contract after deducting any loss thereof suffered under such period. The contract term was for one year and "thereafter from year to year, unless otherwise can-celled or terminated." The agreement was terminable by either party upon giving the other two weeks written notice. The dealer agreed not to handle products other than those of the company within the area and not to handle any such products therein, or in any wise deal with the customers relative to sale of such products for a period of two years after termination of the contract. Upon the dealer's failure, to carry out any of the provisions of the contract the company reserved the right to terminate the agreement upon twenty-four hours' written notice thereof. The agreement was not assignable without the written consent of the company, and expressly provided that it should not be construed to create the relationship of principal and agent or employer and emphrye, or any relationship other than buyer or seller.
The court held that this was a contract to perform personal services for remuneration, saying:
"It is clear that Foss was performing services for the plaintiff. Although by his contract Foss was supposedly 'buying' dairy products from plaintiff and 'reselling' to certain customer*, still the purchasers of the dairy products were customers of the company and not of the distributor. The customers were receiving plaintiff's products through the 'distributor'. The plaintiff never relinquished its right to those customers, and at the termination of a contract with a distributor the company had a right not only to a list of all old customers so that it could continue to supply its products to them through some other distributor, it also had the right to purchase for one dollar each the. names of any new customers obtained by the distributor during his contract with the company. The dealer could acquire no customers for himself; though he was entitled to remuneration for any he might acquire for the employing unit. Certainly the distribution or 'reselling' of plaintiff's dairy products to plaintiff's customers was performing 'services' for plaintiff within the meaning of the Act.
"That the income received by Foss from the distribution of products for plaintiff comes within the definition of 'wages' is also evident. All remuneration payable for personal services is 'wages'. We have .just concluded that Foss performed 'services' for plaintiff which 'services' were per formed by him personally. The remuneration, therefore, which he received for those 'services' constituted wages. This remuneration was the difference between what Foss had to pay the company for the products and what he was permitted to charge for such products. He was required to pay plaintiff a fixed price for products and the appeal tribunal might reasonably find from the evidence that as a matter of fact the retail sale price was fixed by the plaintiff. The difference between those prices constituted his 'commission'."
The balance of the opinion was directed to showing that under the evidence the Commission was warranted in finding that the claimant was not free from control and supervision under his contract, and that he was not engaged in an independently established business.
The Salt Lake Tribune case involved a contract between the publisher of a newspaper and a circulator or carrier, under which the company was to furnish all newspapers required by the circulator at certain fixed prices, the papers "to be and become the property of said circulator". The latter agreed to sell and distribute the papers "as he may see fit" to purchasers or subscribers, the business to be "solely under the control and direction of said Circulator". He was required to sell the papers at a certain fixed price. He agreed to deliver them "regularly and promptly and in an acceptable manner to those purchasing them or subscribing therefor by agreement made by or in behalf of said Circulator as aforesaid." Settlement with the company for all papers delivered to the circulator was to be made every month. The contract was to run from month to month unless terminated by either party "with or without cause upon 15 days' notice in writing". Upon termination of the contract the circulator was required to turn over to the com pany "all paid-in-advance subscriptions, together with the names and addresses of all subscribers and the expiration of their subscriptions, with a full statement of the Circulator's claims against the Publisher, that a prompt settlement may be had as between the Publisher and Circulator."
The court held that "under the terms of such a contract it is clear that Cushing (the carrier) was to perform 'personal services' for the publishing company", citing Creameries of America, Inc. v. Industrial Commission, supra, decided the'same day; that the amount to be received for such services constituted "wages" as that term is defined by the Unemployment Compensation Act; and that the difference between the price paid by the carrier for the papers and the price at which he sold them was remuneration "payable for personal services" which the Act defines as wages. The court then proceeded to consider the contention that even though the circulator was performing-services for wages for the publisher still the three conditions set out in the statute were concurrently present so as to preclude his right to receive unemployment benefits. Upon a review of the evidence, which showed a considerable degree of supervision on the part of the publishing company's district managers of the duties of the carriers, their insistence upon prompt deliveries and diligent efforts by the carriers to get new subscribers, as well as direct contacts between the company and subscribers, as by mailing subscription cards where a new subscription was sent in by the carrier, sending out letters to delinquent subscribers to secure payment of past due accounts, and other matters, it was concluded that there was evidence sufficient to support the commission's finding that the claimant was not free from direction and con trol over the performance of services rendered under his contract.
Sisk v. Arizona Ice & Gold Storage Co., supra, arose under the Employment Security Act of Arizona, the provisions of which appear to be identical with those of the Unemployment Compensation Law of Utah. The company there entered into an arrangement for the delivery of ice to its customers, somewhat similar to the arrangement in the Creameries of America case. Written contracts provided for the purchase of ice by the alleged employes and its resale to the company's customers over prescribed routes. We deem it unnecessary to go into detail concerning the terms of the contracts and the evidence. It is sufficient to say that, notwithstanding the agreement for sale and purchase of the company's products, the court held that the individuals who delivered the ice performed services for the company, that the difference between what the company charged them for it and what they received from the customer constituted wages, and that the company was an employer subject to the Act.
In re Scatola, supra, was also a case in which a carrier of newspapers to the publisher's subscribers was compensated for Ms services by the difference between the amount he paid for the papers and the amount he collected from the subscribers. The Appellate Division of the New York Supreme Court, in an opinion from wMch we have already quoted, held that the carrier was not an independent contractor, but an employe and under the Unemployment Insurance Law. The Court of Appeals affirmed in a memorandum decision. Amici curiae say the case is distinguishable because the publisher gave the carrier a guaranty against loss; but we can find nothing in the opinion which supports that statement. They also suggest that there are differences in the New York statute (Labor Law, Consol. Laws c. 31, § 500, et seq.) that might account for the decision. The state of the decisions in New York construing the Unemployment Insurance Act is, as we observed in the Singer case, "unsettled", but we are confident that the definitions of employment and remuneration in our statute are as broad as anything to be found in the New York law. And, in deciding the Scatola case, the court apparently applied common law standards.
Washington Recorder Publishing Co. v. Ernst, 199 Wash. 176, 91 P. (2d) 718, 124 A. L. R. 667, is contrary to the decisions just reviewed. It is not relied on by the plaintiff, whose counsel say in their brief that it "is of no assistance to the court one way or the other in answering the question now presented." We are inclined to agree with this statement. The basis of the decision, as we read the opinion, is that the common law test of master and servant governed and that the carriers were independent contractors. The court said that "in drafting the statute the legislators attempted to codify the common law", and suggested that if the term "employment" were extended to include independent contractors there would be a question as to the constitutionality of the Act. The decision is in obvious conflict with the earlier case of McDermott v. State, 196 Wash. 261, 82 P. (2d) 568, and the subsequent adjudications in Washington. Sound Cities Gas & Oil Co. v. Ryan, 13 Wash. (2d) 457, 125 P. (2d) 246; In re Foy, 10 Wash. (2d) 317, 116 P. (2d) 545; Mulhausen v. Bates, 9 Wash. (2d) 264, 114 P. (2d) 995. Amici curiae seek to make something out of the statement in the Mul hausen case that the basis for the Washington Recorder decision was "that the relation of vendor and purchaser existed between the publishing company and the paper carriers; that the carriers bought and became the owners of the commodity (newspapers) and sold it on their own account." It is, of course, for the Washington court to construe its own decisions; but, whatever value the Washington Recorder ease may have as authority in that state, we think it can be accorded none here.
Idaho Times Publishing Co. v. Industrial Accident Board, 63 Idaho 720, 126 P. (2d) 573, is another case cited in the briefs which passed upon the employment status of newspaper carriers, who were held to be not under the Idaho Unemployment Compensation Law. It is conceded on all sides that, for a variety of reasons, the case is not in point here, and it, therefore, calls for no discussion. This is likewise true (so far as the question of what constitutes "service for remuneration" is concerned) of California Employment Commission v. Los Angeles Down Town Shopping Netos Corp., 24 Cal. (2d) 421, 150 P. (2d) 186, and California Employment Commission v. Bates, 24 Cal. (2d) 432, 150 P. (2d) 192.
We think that no good purpose would be served by examining eases at common law in which the question of a publishing company's liability for the tort of its carrier is at issue. They can have but little materiality to the present inquiry. Scarcely more pertinent are decisions under Workmen's Compensation Acts. A number of these have arisen in California, and it has been held that the carriers are not employes within the meaning of the act involved. See State Compensation Insurance Fund v. Industrial Accident Commis sion, 216 Cal. 351, 14 P. (2d) 306; New York Indemnity Co. v. Industrial Accident Commission, 213 Cal. 43, 1 P. (2d) 12; Batt v. San Diego Sun Publishing Co., 21 Cal. App. (2d) 429, 69 P. (2d) 216. But these cases were decided under definitions of employment less inclusive than that contained in our Unemployment Compensation Act, and the courts' opinions, moreover, evidence a tendency to adhere to the common law notion of master and servant.
Globe Indemnity Co. v. Industrial Accident Commission, 208 Cal. 715, 284 P. 661, is not without Value because of a feature which it has in common with the instant case. A typical newspaper carrier contract seems to have been involved. The court said that the record showed that the carrier "paid to the Tribune Publishing Company $1.50 per hundred for the newspapers and collected eighty-five cents per month from each subscriber, which he retained and for which he receipted on printed forms furnished by the Tribune Publishing Company. He was also paid $3 a month additional, which was intended to compensate him for the extra expense of distribution because of the large and scattered territory." It was held that an employment relationship existed within the meaning of the Workmen's Compensation Law. This case was reviewed in New York Indemnity Co. v. Industrial Accident Commission, supra, and distinguished from the latter ease with the statement that, "the evidence showed that an express relation of agency for the distribution of the daily issues of the Oakland Tribune to its subscribers in San Rafael existed between the applicant for an award and the publishers of said newspaper, in pursuance of which the applicant not only received a percentage of the monthly price which the subscribers paid, but was also paid a regular sum in addition thereto to cover the cost of distribution in outlying territory." See, also, State Compensation Insurance Fund v. Industrial Accident Commission, supra.
Tlie "percentage" thus referred to was, as the language which has been quoted from the Globe Indemnity case shows, the difference between what the carrier paid for the papers and what he sold them for, and the emphasis placed by the court upon the payment of $3.00 a month to the carrier is of particular interest here because Johnston likewise was paid a sum of money "to compensate him for the extra expense of distribution because of the large and scattered territory". This was the automobile allowance, which, according to the evidence of Mr. Peterson, circulation manager of The Journal, was granted "in order to make it possible for the auto route carrier to make a profit similar to the little merchant" (i. e., the city carrier). The Commission found that this allowance ranged from $47.00 to $78.00 a month. It varied in accordance with changes in the size of the territory which Johnston was required to cover, and was based approximately on an estimated expense of three cents a mile for operation of Johnston's automobile, an amount which, we may almost take judicial knowledge, would not be adequate to cover such expense.
Concerning this allowance the Commission found:
"The amount of the automobile allowance was predicated upon the estimated expense of operating an automobile over the routes designated, and such allowance was changed from time to time as the route was changed. While the claimant was not required by the contracts to use an automobile, he did use such vehicle and it would be practically impossible for him to have covered the routes by any other method. The automobile allowance was intended for and accepted in the nature of payment of rental for use of such vehicle, and not for services rendered. In the event the cost of operating the automobiles was either more or less than the allowance granted therefor, nevertheless such gain or loss was not in respect to wages for services performed since it was not predicated upon labor as service but rather on estimated costs of operations. ' '
Only the first two sentences just quoted contain findings of fact. The rest comprise conclusions of law, which, in our opinion, are not justified by anything in the evidence. We have quoted the testimony which shows why the allowance was granted. If an employer pays his employe more than he otherwise would because of expense that the employe incurs in rendering-services, the amount so paid is part of the employe's remuneration for his services. There is no basis for the rental theory adopted by the Commission, and the facts concerning the automobile allowance constitute substantial evidence, as in the Globe Indemnity case, that Johnston performed services for the plaintiff for remuneration.
The recent decision of the Supreme Court of the United States in National Labor Relations Board v. Hearst Publications, Inc., 322 U. S. 111, 88 L. Ed. 1170, 64 S. Ct. 851, also has its bearing on the question in this case. It was there held, without the aid of broad statutory definition, that newsboys selling newspapers on the streets of Los Angeles, who bought the papers and resold them at a price fixed by the publisher, were "employees" within the meaning of the term as used in the National Labor Relations Act. Construing the term in the light of the objectives sought to be achieved by Congress the court rejected the technical distinctions which have grown up in the law of master and servant, saying:
"Enmeshed in such distinctions, the administration of the statute soon might become encumbered by the same sort of technical legal refinement as has characterized the long evolution of the employee-independent contractor dichotomy in the courts for other purposes."
Amici curiae seek to support the contention that Johnston did not perform services for an employer with the assertion (which, incidentally, counsel for plaintiff do not make) that the subscribers are not the customers of the plaintiff but of the carrier. We think this is an untenable position. No authority has been cited for it, and in the only cases we have seen where the question is discussed at all, the courts, under a like state of facts, have treated the contracts of subscription as contracts between the publisher and the subscribers. In the case of In re Scatola, supra, the court said that the papers furnished to the carrier "could be used only in fulfilling the publisher's contract u:ith its subscribers" (italics supplied). In Bohanon v. James McClatchy Publishing Co., 16 Cal. App. (2d) 188, 201, 60 P. (2d) 510, the court said of a provision of the contract requiring the carrier to turn over to the publisher advance subscription payments (there is a similar provision in the second contract in this case):
"If Engebreeht (the carrier) should collect some considerable amount of money in subscription payments for appellant's paper from subscribers who should elect to pay for several months or, conceivably, for years in advance and Engebreeht's relationship with appellant should be terminated prior to the expiration of the time covered by sucli payments, appellant's business might be seriously handicapped if such advance payments had not been turned over to it. Subscribers who had made such advance payments would be entitled to receive delivery of newspapers by carrier and appellant would be obligated to make such delivery without perhaps receiving any compensation for its product." (Italics supplied.)
In Salt Lake Tribune Publishing Co. v. Industrial Commission, supra, 99 Utah at p. 265, the court said:
"The evidence further shows that the subscribers were the customers of the company rather than of the individual carriers. A carrier received nothing from his route other than what was received by the distribution of newspapers to subscribers during the life of his contract with the company. At the termination thereof all paid in advance subscriptions had to be turned over to the company, together with a list of all subscribers who continued to receive the newspaper from some other carrier. In its effort to maintain these subscribers and obtain new ones, the company was continually offering inducements to the carriers, 'supervising' their work, and requiring them to do particular acts designed to effectuate the ends of the company."
We think that the view expressed in these decisions is the only permissible one. The clause in the second contract requiring advance payments to be remitted to the plaintiff is a clear recognition by it of its obligation to the subscribers. As to subscription contracts already 'in existence before Johnston took over the route, it would seem to be idle to assert that they were contracts between the subscribers and some prior circulator of The Journal who was unable to fulfill them. If they were not the plaintiff's contracts, what did it mean by undertaking to "lease" them to Johnston? And, since, as the record indicates, upon the termina tion of the contract with Johnston the plaintiff entered into a similar arrangement with his successor, it follows that it treated in the same fashion any additional subscriptions which Johnston obtained. It is no doubt true, as counsel for Oregonian Publishing Company say, that, with the possible exception of advance payments, the plaintiff had no right to collect from the subscribers as long as Johnston's contract continued in effect. But that was because of the terms of a contract to which the subscribers Avere not a party and which could in no Avay affect the legal relations betAveen them and the plaintiff. Both the right of the carrier to terminate the contract on thirty days' notice and the plaintiff's poAver to cancel it for good and sufficient reason, are inconsistent Avith the theory that any subscriptions Avhieh Johnston might obtain would create contracts between himself and the subscriber, rather than contracts between the subscriber and the plaintiff; and, it is to be observed in this connection that the circulation manager of the plaintiff testified that the carriers, both in the city and on rural routes, Avere paid commissions on such subscriptions.
The decisions in the American Creameries ease and Arizona Ice & Cold Storage case are, also, authority opposed to the contention under consideration; and there was ample warrant, in our opinion, for the Commission's conclusion that Johnston performed services for the plaintiff within the meaning of the Act.
We take up next the contention that Johnston's earnings did not constitute "remuneration" or "wages". It is argued that these Avords mean something that moves from the alleged employer to the alleged employe for the sendees rendered, and for which the latter could sue the former; AAdiereas John ston received Ms compensation from Ms customers for merchandise sold to them and not for services for an employer. Certain provisions of the statute are said to sustain this contention. Thus, it is provided that contributions to the unemployment compensation trust fund "regularly payable by each employer shall be an amount equal to 2.7 per cent of the payroll of employers as herein defined", § 126-716 (a), O. C. L. A., and payroll is defined in §126-702 (i) to mean and include "all wages, salaries and remuneration payable to employes in any employment subject to this act". Provision is made for computation of future contributions to the fund in the light of "benefit experience", and in that connection the statute speaks of "average annual payroll", which is defined as "the average total amount of wages payable annually by an employer", §126-716 (b), (2), (3). Again, by §126-721 (a) every employing unit is required to keep true and accurate records of all persons employed by it, and such records of hours worked, wages paid, and other statistics as prescribed by the commission, and it is provided that such records shall be open to inspection by the commission, and that the commission may require from any employing unit reports on wages, hours, employment, unemployment and related matters concerning its employes.
It is argued that the last requirement is impossible of application to this case because the plaintiff has no means of getting the information necessary for keeping such records, and that the other provisions referred to clearly show that the remuneration of which the statute speaks must be something payable only by the employer.
We think that this is too narrow and technical a view and one which has not met judicial approval in closely analagous eases. In addition to cases herein-before discussed, we call attention to the following: In Kaus v. Unemployment Compensation Commission, 230 Iowa, 860, 299 N. W. 415, the question was whether certain taxicab drivers were covered by the Iowa compensation law. The alleged employer furnished the cabs, and the drivers operated under an oral arrangement by which they furnished the gasoline and tire repairs and paid the alleged employer $3.00 for each twelve-hour period, retaining as their compensation all sums collected by them from passengers in excess of $3.00 and the cost of the gasoline. The definition of wages in the Iowa law is "all remuneration payable for personal services, including commissions and bonuses, and the cash value of all remuneration payable in any medium other than cash." This provision has substantially the same meaning as §126-702 (g), O. C. L. A., which reads: " 'Wages' means all remuneration for employment, including the cash value as determined by the commission under its regulations, of all remuneration payable in any medium other than cash." And the Iowa statute contains a provision that " contributions shall accrue and become payable by each employer with respect to wages payable for employment as defined in ". Addressing itself to an argument similar to that now under consideration, the court said:
"Nor is the fact that the drivers are not paid a stated wage by appellee necessarily inconsistent with the claim made by the Commission. It is to be noticed that the statutory definition of the term 'wages' contained in the law (section 1551.25(M) ) is 'all remuneration payable for personal services, including commissions, ' etc. It is not required that the remuneration be paid by the employer. It has frequently been held that payment by the employer is not necessary. Remuneration of an employee may consist of the difference between the price which he pays his employer for goods and the price at which he sells them, a percentage of the sale price of goods sold by the employee to customers and collected by him from them, and various other methods of collecting compensation from customers rather than directly from the employer. (Citing cases) The earnings of the drivers over and above the $3 and cost of the gasoline constitute the remuneration of wages for their services and it is not necessary that they be paid directly by appellee."
Jones v. Goodson, 121 Fed. (2d) 176, a decision of the Circuit Court of Appeals for the Tenth Circuit, opinion by Circuit Judge Bratton, involves the construction of the Oklahoma Unemployment Compensation Law and its application to taxicab drivers operating under an arrangement similar to that in the Kaus case, and announces the same principle as that case does with respect to the point now under consideration.
In Power's Case, 275 Mass. 515, 176 N. E. 621, 75 A. L. R. 1220, (opinion by Rugg, C. J.) it was held that tips received from patrons by a waitress in a restaurant, with the knowledge and approval of the employer, should be considered in determining the amount of the waitress's average weekly wages for the purpose of fixing the employer's contributions under the Massachusetts Workmen's Compensation Act.
In Jack & Jill, Inc., v. Tone, 126 Conn. 114, 9 Atl. (2d) 497, salesmen for a manufacturer of ice cream, who operated under a contract by which they bought the ice cream from the employer and whose compensa tion consisted of the difference between the price at which the products were sold and the price paid to the company, were held to be employes within the meaning of the Unemployment Compensation Act of Connecticut.
Matter of Glielmi v. Netherland Dairy Co., Inc., 254 N. Y. 60, 171 N. E. 906, opinion by Judge Cardozo, is a decision to the same effect involving similar facts in a case arising under the New York Workmen's Compensation Act.
Numerous other cases containing similar holdings are cited in Jones v. Goodson, supra.
' 'Remuneration' ' in the statute is not a word of narrow significance. That it includes commissions has already been determined in the Singer and Rahontis cases. The provisions of the statute, § 126-702 (g) that "for the purpose of determining the contribution of an employer if a workman is not employed at a fixed wage, after a fair hearing, the commission may establish a minimum wage at which such workman shall he carried on the payroll of the employer" and that " 'payroll' means and shall include all wages, salaries and remuneration" (italics supplied), §126-702 (i), conclusively show that remuneration includes compensation other than wages or salaries. In our opinion, the word was used advisedly as one of broad meaning in order that the objects of the Act might be achieved. The provisions of the statute on which counsel rely cannot be held to restrict this meaning so as to put outside the scope of the Act cases such as this which fall within its spirit and purpose. It must not be forgotten "that, this remedial legislation should be liberally construed to the end that employees receive the benefits intended and thereby effectuate the pur pose of the act." (Puget Sound B. & D. Co. v. S. U. C. C., 168 Or. 614, 620, 126 P. (2d) 37.)
The plaintiff cites Fuller Brush Co. v. Industrial Commission, supra, where it was held that salesmen selling the products of Fuller Brush Company were not under the Utah Act. The basis of the decision was that under the facts the salesmen did not perform services for wages for an employer. In the course of the opinion the court had the following to say concerning the nature of wages:
"The essential elements of wages are that they form a direct obligation against the employer, in favor of the employee; that when the service is performed the compensation, if any, accrues and becomes payable regardless of the success or failure of the undertaking; that any profits or earning over and above costs of the service accrues to the employer, and any loss as a result of the undertaking or service must be borne by the employer. It is not essential that the wage move directly from the employer to the employee, as where the employee works on commissions, deducts his commission from a collection and remits the 'nets', but it is essential that the remuneration accrues from the product or service of the employer, and would accrue to him except for the fact that the employee is entitled to retain or receive it as remuneration under his contract of hire."
The court found that the salesmen for Fuller Brush Company made outright purchases of the company's products, resold them at retail prices which they could fix themselves, furnished the company no list of customers, and built up their own good will and not that of the company. It was held that, since there was no obligation on the part of the company to pay the plaintiff anything for his services but he was obliged to get Ms remuneration, if any, from Ms ability to sell the company's products at an advanced price over tbe cost to Mm, the claimant did not render service for wages or under a contract of hire.
We will not stop to dwell upon the obvious points of distinction between the Fuller Brush case and the case at bar. The Utah court itself made these plain in distinguishing its prior decisions in the Salt Lake Tribune case and Creameries of America case, and there is no warrant, in our judgment, for asserting that those decisions were overruled. Some of the language used by the court in defining wages seems to be out of harmony with the law as we understand it and as it has been announced in numerous cases herein-before cited, though it may not be so when considered in the light of the facts with which the court was dealing.
However that may be, we cannot accept the doctrine that wages, or remuneration, as used in our Unemployment Compensation Law, necessarily connotes a direct obligation from employer to employe, or that compensation for sendees ceases to be remuneration because the individual performing the services agrees, in effect, to assume a measure of risk of loss resulting from the delinquencies of his employer's customers. See, L. B. Price Mercantile Co. v. Industrial Commission, 43 Ariz. 257, 260, 30 P. (2d) 491.
As to the argument respecting the duty of the employer to keep records and make reports to the Commission, we think the following quotation from the Powers case, supra, furnishes an adequate answer:
"Some difficulty may arise in fixing the rate of insurance to be charged by the insurer to the employer over that existing in cases where the pay roll of the employer discloses all the earnings of the employee. Bnt that cannot affect the principle. The employee, a part of whose earnings comes from tips received in consequence of his service to the employer, is bound to make full disclosure for the purpose of enabling just insurance rates to be fixed."
Johnston was under a like duty, and it is worthy of note that the first contract contains a clause requiring him to furnish the plaintiff much of the information called for by the statute.
We conclude that the plaintiff's contract with its carrier is a contract for the performance of services for remuneration. The distinctions between this case and the Singer and Rahoutis cases suggested by counsel are based on the form of the transactions rather than their substance. That they might be deemed important if we were dealing with the subtleties of the law of independent contractor in a tort action (see, e. g., Bohanon v. James McClatchy Publishing Co., supra, 16 Cal. App. (2d) at p. 196) is no reason why they should be determinative of questions of coverage under the Unemployment Compensation Law. And to give them controlling effect here would open the way for evasions of the Act.
In any event there is ample, substantial evidence to support the Commission's findings that Johnston performed services for remuneration for the plaintiff, and, that being so, we are without power to disturb those findings. Rahoutis v. Unemployment Compensation Commission, supra; Puget Sound B. & D. Co. v. S. U. C. C., supra, 168 Or. at p. 625; Layman v. S. U. C. C., 167 Or. 379, 385, 117 P. (2d) 974, 136 A. L. R. 1468.
While the distinction between Johnston and the automobile dealer to whom he is compared may be somewhat obscured by certain points of resemblance, it is none the less real and vital, because the automobile dealer may sell when he pleases and to whom he pleases. He sells for himself to his own customers, not the manufacturer's, and is not hired to deliver a new car every day to a list of customers of the manufacturer. He is in fact in the same class, so far as the present question is concerned, with the proprietor of a newsstand who buys the plaintiff's papers and resells them in the regular course of his business. The newsstand proprietor acquires absolute title to the papers and disposes of them as he sees fit. His relations with the plaintiff, it may be assumed, terminate upon the completion of each transaction of sale and purchase, and he is under no obligation, continuing or otherwise, to serve the plaintiff in any way.
Logically, if Johnston worked for commissions, designated as such, as in the Singer and Bahoutis cases, the basis for the attempted differentiation would vanish. But, if the plaintiff's argument were to prevail, it would be entirely possible that, as between two men doing precisely the same work as carriers of the plaintiff's papers, one would be under the Act and the other would not, merely because of the method adopted for the payment of their compensation, notwithstanding that in each case the measure of such compensation was the difference between the Avholesale and retail prices of the papers. We think that no such result aauis within the 1 egislative purpose.
Counsel amici curiae call our attention to the provision of subdivision (e) of § 126-702, O. C. L. A., which authorizes an employing unit, for which services that do not constitute employment as defined in the Act are performed, to file with the Commission a written election that all such services performed by individuals in its employ shall be deemed to constitute employment for all the purposes of the Act. It is argued that even though Johnston was performing services for the plaintiff, still these services were not for remuneration, and that it was cases of this type that the legislature had in mind when this elective provision was put into the law. It may be observed in passing that the contention is inconsistent with counsel's argument based on the supposed impossibility in this case of complying with the provisions respecting the employer's payroll, the keeping of records, and the making of reports to the commission, since those provisions would be still applicable even though the employer became subject to the Act by his own election. We think, however, that the elective provisions were not enacted to meet cases of this kind, but that it is more probable that they were intended to apply to those classes of service, such as agricultural, domestic, etc., which are expressly excluded from the term "employment" by subparagraph (F) of subdivision (f), § 126-702. In any event, the suggestion is of no aid in determining Johnston's status, for it does no more than beg the question Avhether he performed services for remuneration.
Since, in our opinion, the evidence shows, and the Commission was warranted in finding, that Johnston performed services for remuneration for the plaintiff, it follows that he was covered by the Act unless the plaintiff has met the tests prescribed in § 126-702 (f), (E). Counsel for the plaintiff concede the absence of proof that Johnston Avas engaged in an independently established business of the same nature as that involved in the contract of service. But they urge that he was free from control or direction over the performance of his services, and that in some cases, at least, of which this is said to be one, even though the test of an independently established business cannot be met, if the individual is free from control he is not to be deemed an employe. We are unable to follow the argument advanced in support of this contention (which is opposed to what we said on the question in the Rakoutis case), but it is unnecessary to pursue the matter because we are of the opinion that there is substantial evidence in the record that Johnston was not free from control by the plaintiff in the performance of his services.
The reservation in an alleged employer of the power of control, whether actually exercised or not, constitutes control; for the statute demands freedom from control "both under his contract of service and in fact". The test is the same as that applied by the courts in determining whether one is a servant or an independent contractor, that is to say, it is not "the fact of actual interference or exercise of control by the employer, but the existence of the right or authority to interfere or control", 27 Am. Jur., Independent Contractors, 487, § 6; Larkins v. Utah Copper Co., 169 Or. 499, 506, 127 P. (2d) 354. And in ascertaining whether this right or authority exists "no single fact is more conclusive than the unrestricted right of the employer to end the particular service whenever he chooses, without regard to the final result of the work itself": Cockran v. Rice, 26 S. D. 393, 397, 128 N. W. 583, Ann. Cas. 1913B, 570. To the same effect see L. B. Price Mercantile Co. v. Industrial Commission, supra; Industrial Commission v. Bonfils, 78 Colo. 306, 241 P. 735; Bowen v. Gradison Construction Company, 236 Ky. 270, 32 S. W. (2d) 1014; 217 Am. Jur., ibid., 501, § 21. There are authorities to the effect that stipulations authorizing the employer to terminate the contract under certain specific circumstances have a tendency to show that the person employed is a mere servant, though there are decisions to the contrary: 20 A. L. R. 763. In Press Publishing Co. v. Industrial Accident Commission, 190 Cal. 114, 210 P. 820, where the question was whether a newspaper carrier, who was paid a weekly salary, was an employe, within the meaning of a Workman's Compensation Act, it was held that the right reserved to the employer to discharge the carrier "for unsatisfactory services" "made obligatory any instructions given, for it gave to the Press Publishing Company the power to require obedience to those instructions and insured their being-carried out."
The representatives of the plaintiff evidently so interpreted their powers under the clause in the second contract which authorized the plaintiff to "cancel this lease at any time for good and sufficient reason". There is evidence that the plaintiff's district manager, having jurisdiction over the territory which included Johnston's routes and whose duty it was to see that the contracts with the carriers and dealers were lived up to, discontinued the Benton County route while the first contract was in effect and offered Johnston his choice of two other routes. The circulation manager of the plaintiff testified that the plaintiff had the right to discontinue a route if it decided that it was not profitable. There is evidence that the district manager took- away from Johnston a part of his territory, at the same time reducing his automobile allowance.
Other indicia of the exercise of control disclosed by the evidence are that Johnston -was required to attend meetings of the carriers at which pep talks were made and instructions given as to how to build up the circulation of The Journal; that the district manager directed him to be on time to receive his papers when they arrived by bus so that they would be delivered promptly to the subscribers; that, while working on the Linn County route, he was required to, and did, depart from his regular course and pick up bundles of the Albany Democrat-Herald and a mail-sack and deliver them at various designated towns along the route, receiving no additional remuneration for this service other than an increase in his automobile allowance; and that on at least one occasion he was instructed by the district manager to redeliver a paper to a customer from whose paper box the paper had been taken by unauthorized persons. The evidence also shows that Johnston was finally discharged because the district manager considered that he was not producing results nor using sufficient diligence in soliciting new subscribers.
With respect to some of the foregoing facts the Commission said in its findings:
"The Commission finds in these matters that any established exercise of material direction and control of such district manager did not actually go beyond the insistence that claimant fulfill the obligations of the written terms of his agreement."
This, of course, is not a finding of fact binding on this court, but a conclusion of law based on the Commission's interpretation of the contract; and it is our opinion that the evidence discloses that in some of the particulars enumerated the control exercised by the plaintiff over Johnston's services did in fact go beyond the provisions of the contract.
Moreover the plaintiff was under no contractual obligation to pay the automobile allowance and could have discontinued it at any time, thus making it impossible for Johnston to perform the services without loss and effectually terminating the contract.
It should be borne in mind that under these contracts, "a continuity of service was contemplated rather than a definite specified job": Press Publishing Co. v. Industrial Accident Commission, supra. In view of this fact we think that the right reserved by the plaintiff to terminate the contract for good and sufficient reason carried with it the power of direction and control over the carriers' services; and we cannot say that there is no foundation in the evidence for the finding of the Commission that such direction and control were in fact exercised.
The plaintiff contends that the evidence before the Commission does not support a finding that claimant's earnings were sufficient to entitle him to unemployment benefits. Under § 126-704 (e) an unemployed individual is eligible for benefits if the Commission finds that "he has during his base year earned wages for employment by employers equal to not less than two hundred dollars ($200)". This provision is an amendment, passed in 1989, of § 4, Ch. 70, Oregon Laws 1935, Special Session, as amended by § 3, Ch. 398, Oregon Laws 1937. See Ch. 515, § 3, p. 1070, Oregon Laws 1939. By the terms of the 1937 amendment an unemployed individual is eligible for benefits if the Commission finds that "he has in his base year earned wages of not less than sixteen times his weekly benefit amount." Johnston was awarded a weekly benefit of $7.00, and, if the latter amendment is applicable, he must have earned $112.00 in his base year in order to be eligible for benefits. It would seem that this case is governed by the 1937, rather than the 1939, amendment, but the point need not be decided because the Commission could properly find, under the evidence, that the wages earned by Johnston were sufficient to qualify him for benefits under either provision. In determining the question the Commission took into consideration only the difference between the price charged Johnston for the newspapers furnished btm by the plaintiff and the retail price charged the customers. It ignored the automobile expenses as well as the allowance made by the plaintiff on that account. In other words, the Commission based its finding on the amount of Johnston's gross earnings, which were in excess of the amount required to make him eligible for unemployment benefits under either of the provisions referred to.
The plaintiff says that this was error. It argues that the wages of which the statute speaks means the employe's net earnings, that any expense incurred in performing the services must be deducted from what he receives for his services, and that the evidence as to the cost of operation of the automobile is so vague and speculative that it is impossible to determine the amount of Johnston's net earnings.
Regardless of this criticism of the evidence, we think that the Commission was justified in the course it took. We are not dealing with an income tax law. The statute does not speak of net wages, and the wages or remuneration earned by an employe, in our opinion, means the amount he receives for his services even though he may incur expense as an incident to their performance. The administrative difficulties — pointedly illustrated by the instant case — which would be encountered, were plaintiff's contention to be sustained, furnish additional reason for holding that it is not in accord with the intent of the legislature.
The same question arose under the Unemployment Compensation Law of Illinois in the case of Rozran v. Durkin, 381 Ill. 97, 45 N. E. (2d) 180, 144 A. L. R. 735. The employe in that case delivered packages for a partnership engaged in the general pickup and delivery service under an agreement by which he was to receive a fixed percentage of the gross income from deliveries. He furnished his own truck and paid the cost of its operation. The evidence as to that cost was speculative. In answering an objection similar to that which the plaintiff has made here, the court said:
"We do not think there is merit in the contention of plaintiff in error that Kuehl did not earn sufficient wages to qualify for benefits. During the period he was employed, he earned $378.78 in wages. The sum of $225 was necessary to be earned by him during the base period in order to entitle him to compensation. There was nothing in the contract for employment that considered anything but gross earnings, and a speculative amount for net earnings will not be entertained. ' '
See, also, 48 Am. Jur., Social Security, 522, § 14.
There was basis in the evidence, in our opinion, for the Commission's finding as to the amount of Johnston's wages, and, since, as we have concluded, Johnston was an employe of the plaintiff within the meaning of the Unemployment Compensation Act, the award of compensation to him should not be disturbed.
The decree of the Circuit Court sustaining the award is therefore affirmed.