Court Opinion

ID: 3507767
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:18:09.440174+00
Date Added: 2024-06-11T14:24:12.960939
License: Public Domain

From the procedural viewpoint, this decision in result admittedly does some violence to elementary principles. Everything by way of pleading is silent concerning the supposed subterfuge of Tankar Gas, Inc., upon which alone the decision must stand. The referee made no such finding. All he did was by way of note appended to his decision which is but a citation of the statute. The decision of the industrial commission does not make, as it should, the explicit finding of fact without which its decision has no support. However, the majority opinion by Commissioner Williams manifests the intention to hold that there was an illegal *Page 408 
"artifice or device"2 to enable Tankar Gas, Inc. to "execute work without" itself being responsible to the workmen.
That holding nullifies what the parties thought was a lease, and it does so by naked assertion rather than reasoning. Able effort is made to demonstrate that the statute's adjective "fraudulent" does not qualify all the nouns that follow, that is, that while it does modify "scheme" it does not in similar fashion require that "artifice or "device" be fraudulent in order to come within the statutory condemnation. With that I cannot agree. It seems to me that the intention was to distinguish between any "scheme, artifice or device" which is fraudulent and those which are not.
Putting all that aside, how can it be said that the lease from Tankar Gas, Inc. to Wilson was not a lease, attended with the usual incidents and results of a lease? How can it be said that, after Wilson went into possession under the lease, Tankar Gas, Inc. was "executing" any work on the leased premises. It was executing some work there but only as lessor in conducting the supervision of accounting (nothing more) which it was entitled to conduct.
Tankar had no right of control over Washel as employe or otherwise. Hence I concur in what Commissioner Debel said in dissenting from the opinion of his associates:
"I am of the opinion that the evidence shows that defendant Wilson was engaged in a business venture of his own; that he hired Raymond Washel as his employe at wages fixed by agreement between them; that he exercised direction and control over Washel in respect to the work done by the latter; that he paid Washel wages out of earnings made by him in the operation of the stations; that the Tankar Gas Company, the other defendant, had no part in the hiring of Washel, did not exercise any direction or *Page 409 
control over him, and did not pay him wages or any other compensation for his work. Under these circumstances I do not think it is proper to determine that Washel was an employe of the Tankar Gas Company."
Denial of compensation in this case would tend in no wise, as said for the majority of the commission, to "relieve the oil industry of its financial responsibility for the death" of employes arising out of and in the course of employment. It would shift some burden from the wholesale to the retail end of the industry. In that is nothing unlawful.
It would be regrettable from the standpoint of Washel's dependents to deny compensation. It is not an agreeable thing to suggest that it should be denied. But our duty is to apply the statute as it reads. We are dealing with a highly important question that may return to vex in other sorts of litigation. Suppose that Wilson, the lessee, or an employe of his, had committed an assault on a customer, occasioned by the station's business and committed in the course of it. This decision, if followed, would compel a holding that Tankar Gas, Inc. was liable under the rule respondeat superior.
If "such words as 'right' are a constant solicitation to fallacy" (Mr. Justice Holmes in Jackman v. Rosenbaum Co.260 U.S. 22, 31, 43 S. Ct. 9, 10, 67 L. ed. 107), all the more so are such words as "scheme, artifice or device." They are especially so, and easily become prolific source of error, when, appearing in a statute, they are arbitrarily separated from and denied the limiting effect of such qualifiers as "fraudulent."
Of all treacherous words, none is more so than "scheme, artifice or device." Law itself has much of all three. Without them, it simply would not work. Neither can business. The words alone or together mean nothing precise and nothing illegal. Qualified by "fraudulent," they take on a workable significance. But that cannot be fraudulent which is obedient to law. *Page 410 
Just as delusive, if carelessly handled, is "evasion." All of us are constantly evading undesirable consequences in the sense that we avoid them. In evasion alone is nothing unethical or unlawful. But "evasion" is too easily and too often used to denounce lawful attempt to keep without its reach as violation of law. Action is lawful when both its process and result are without rather than within the law's condemnation. In such case, it is idle to talk of "evasion." As said in Bullen v. Wisconsin, 240 U.S. 625, 630, 36 S. Ct. 473, 474,60 L. ed. 830:
"We do not speak of evasion, because, when the law draws a line, a case is on one side of it or the other, and if on the safe side is none the worse legally that a party has availed himself to the full of what the law permits. When an act is condemned as an evasion what is meant is that it is on the wrong side of the line indicated by the policy if not the mere letter of the law."
The lease bound Wilson to sell only the lessor's fuel and lubricating oils. But it left him free to procure other merchandise, for sale at the station, from any other source agreeable to him. It does not prohibit him from conducting on the premises any other legitimate business. Except that he was restricted in the purchase of oils to the lessor, he had all the freedom that any lawabiding lessee could have. It may be assumed that by the lease Tankar Gas, Inc. deliberately intended to avoid liability for compensation to its lessee and his employes. The lease expressly made the lessee liable for a chain-store tax, if any, in respect to the operation of the station. So far as possible, the lessor contracted against liability of any kind arising from operation of the station. But what of it? There is nothing unlawful about any contract until in purpose or effect it violates law. I cannot see wherein this lease did so. Hence I see no reason why it should not be given the same effect that it would have in any other sort of litigation. Nobody claims that there was anything "fraudulent" about it. *Page 411 
By necessary implication, this decision denounces and largely invalidates what has heretofore been considered both legitimate business practice and lawful disposition of property. It is common for owners of large establishments with many branches to lease some of the latter. The result is an independent contract, insulating the owner lessor from many of the liabilities which otherwise it might incur from its own operation of the leased branch. The contract is none the less a lease where, as here, it has special provisions concerning source and payment of rent, which require the lessor as matter of sound practice to reserve some right to supervise the lessee's accounting.
Things of that sort give to the lessor no right of control over the lessee in hiring and supervision of the lessee's employes. They remove from the case, so far as the lessor is concerned, that right of control over the lessee's servants which heretofore and all through our cases has been considered essential to the relation of employer and employe between the controller and the controlled. Absent such right of control, the relation of employer and employe simply cannot exist.
Because there was no contract of employment between Tankar Gas, Inc. and the deceased, because over the conduct of the latter Tankar Gas, Inc. had no control, it is respectfully submitted that it is not liable for compensation.
2 "Any person who creates or carries into operation any fraudulent scheme, artifice or device to enable him to execute work without himself being responsible to the workman for the provisions of this act, shall himself be included in the term 'employer' and be subject to all the liabilities of the employers under this act." Mason St. 1940 Supp. § 4290(1).