Court Opinion

ID: 7819056
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:47:14.658165+00
Date Added: 2024-06-11T16:30:41.280733
License: Public Domain

Conley Byrd, Justice, dissenting. For the reasons hereinafter stated, I disagree with so much of the majority opinion as treats the $3000 per month advance as salary. In the first place the parties conducted themselves toward one or the other more in the relationship of prime contractor and subcontractor than they did as master and servant.1 The record shows that appellee had some two to three hundred thousand dollars worth of equipment with offices in Farmersville, Louisiana and Warren, Arkansas. At the time here involved, appellee had other jobs of his own going at the same time that he was also supervising.2 The proof shows that appellee not only used his equipment with the same discretion he would have used as an independent contractor but that he also used and hired as employees the people who had worked for him over the years. In fact, M. G. McLemore3 testified that he had worked for appellee since 1958, and that appellee hired him to work on the Crawford County job. Furthermore, the contract, while describing appellee as “a superintendant in connection with the three jobs,” recognizes that appellee can use his equipment on the jobs and by our ruling today we have recognized that appellee was entitled to the fair rental value thereof.4  Thus we have an agreement in which appellee used his equipment but at the same time continued to work on his own job. Consequently, I cannot apply the laws applicable to the master and servant relationship where the employee is expected to give his full time to the master’s services. The cases recognize a distinction between an independent contractor such as a manufacturer’s representative and an employee who devotes his full time to his master’s services. See Argonaut Builders v. Dare, 145 Colo. 424, 359 P. 2d 366 (1961) and Strauss v. Cohen Bros. Co., 169 Ill. App. 337 (1912). In Argonaut Builders, supra, Dare had been engaged in soliciting building and remodeling contracts whereby he received 60% of the profit. The trial court ruled at the close of Argonaut’s case that it could not recover advances made in excess of profits realized by Dare. In reversing the case the Colorado Supreme Court ruled that under the evidence presented it appeared that Dare was an independent contractor rather than an employee and that if such should be found to be true, Argonaut would be entitled to recover. In so ruling, however, it said: “The general rule, on which the trial court based its decision and on which the defendant relies here, is that where a contract of employment provides for advances to the employee to be charged to and deducted from the commission agreed upon as the same may accrue, the employer cannot, in the absence of an express or implied agreement or a promise to repay any excess of advances or commission earned, recover such excess advances from the employee. Numerous cases supporting this doctrine are collected in 165 A.L.R. 1367 in a note on Sutton v. Avery, 132 Conn. 397, 44 A. (2d) 701, and also in 57 A.L.R. 33. It would seem from the cases referred to and an analysis of the rule reported in 56 C.J.S. 561, Master and Servant, Sec. 120c, that the basis for the doctrine is that the payments are made in regular amounts in consideration of continued activity by the employee and are thus in the nature of salary or wages. Because of this regularity of payment ana the requirement that the employee give his full time to the employment, the presumption arises that the advances are recoverable only from commissions and thus the excess cannot be collected by the employer.” In Strauss v. Cohen Bros. Co., supra, Strauss as . a traveling salesman handled not only the Cohen Bros.’ line of merchandise but also a different line of merchandise of one Monarch. His contract with Cohen Bros, provided: “In consideration of the good and faithful performance of said duties by the party of the second part (Strauss) he at all times fully complying with the instructions of party of the first part, said Cohen Bros. Co. agrees to advance to the second party from time to time as may be necessary, reasonable traveling expenses and to further advance to second party on the first of each month, commencing with the second month of this contract, and continuing while same shall be in force between the parties, the sum of $100.00 — One Hundred Dollars with the understanding that the sum of such advances for any year shall not exceed (--) per cent of the sales of said second party; and if at the close of the year’s shipments, the amount shown by computing-per cent on the sales of said second party, shall show an excess over and above the sum of moneys advanced by first party for traveling expenses, together with the drawing account, then any such excess sum shall be paid to second party by first party.” The court construed this contract as purely a commission contract and in so doing construed the word “advance” in its common acceptance as: “To advance is to supply beforehand; to loan before the work is done or the goods are made.” In so doing the court reversed a judgment in favor of Strauss. Illinois, however, recognizes and applies the rule of law upon which Strauss relied for affirmance — see Eagle v. Hoffman, 258 Ill. App. 234 — where the services rendered are exclusively those for the master. Furthermore, I do not agree that the reasoning in the case of Landry v. Huber, (La. App.) 138 S. 2d 449, 95 A.L.R. 2d 499 (1962), should be adopted by this court. The reasoning there is somewhat syllogistic.5 The court there reasons that if advances to an employee in excess of commissions cannot be recovered, then such advances must be wages or salary and it therefore follows that such advances must be made in the absence of commissions during the entire term of the contract. When we remember that, in dealing with such cases, we are interpreting a contract between the parties, it at once becomes obvious that the court in the Landry case overlooked the real reason for denying a recovery for excess advances over commissions — i.e., that there is an implied agreement that the advances are to be paid only from commissions and that no personal liability is to be incurred. See Argonaut Builders v. Dare, supra, and Hibbs-Kiefer Hat Co. v. Schneiderhan, 236 Ky. 470, 33 S.W. 2d 304 (1930). In denying a recovery for excess advances to be charged against commissions in Hibbs-Kiefer Hat Co. v. Schneiderhan, supra, the Kentucky court said: “No contract can be implied under which personal indebtedness will be created, for the express contract alleged in this petition is that those sums were to be deducted from the commission which the employee might earn. There is no reference to any personal liability. The sole source of reimbursement was the commissions. It was the belief of the parties that these would be sufficient, not only to reimburse the companies, but to compensate the salesman in addition. To that extent the enterprise was in the nature of a joint speculative adventure from which both parties expected to profit. Not unlike in principle is the case of Fox v. Buckingham, Trustee, 228 Ky 176, 14 S.W. 2d 421, in which it was held that a party undertaking to satisfy certain obligations out of the proceeds of oil wells to be developed by him was not personally liable where the particular fund was not realized, unless the failure of realization was due to his negligence or inactivity. So it is in this case that the contract limits the right of recovery of sums paid for traveling expenses and as a drawing account to a particular fund to be realized in a particular way. The agreement permitting a deduction of the advancements cannot be enforced, since that fund or a sufficiency was not realized, and no recovery can be held of the employee personally, since there is nothing to show that such failure was attributable to any action or inaction on his part.” Consequently it does not follow as a matter of logic that an agreement to make advances is an agreement to pay a salary. In any view the agreement to advance here is nothing more than an agreement to loan against anticipated profits. As an independent contractor, appellee has no right to recover more than the profits he expected to make and would be liable, had appellant prayed for the repayment, for the advances made. As an employee he is not entitled to be loaned more than his part of the profits. It follows that I consider instruction No. 14 erroneous. For the reasons herein stated, I would reverse and remand for new trial. Harris, C. J., and Brown, J., join in this dissent.   Neither the trial court nor this court found any trouble in treating the contract as amended to conform to the conduct of the parties on the equipment rental.    Record page 152, appellant’s abstract page 50.    McLemore and appellee married sisters.    Appellee testified that he fixed the rental from a book used by the rental people, just like anybody else would rent it.    Because of the terms of the contract involved in Landry I agree with the result there reached.