Real-estate salesmen working under a broker, as provided by the act of this State regulating real-estate brokers, are, under the facts here appearing, employees rendering services for the broker, and fall within the provision of the unemployment compensation act, which provides that, for such employees, the brokers shall make contributions.
DECIDED JULY 16, 1942. REHEARING DENIED JULY 28, 1942. Ben T. Huiet, commissioner of the Department of Labor and ex-officio administrator of the unemployment compensation law, instituted suit against Charles Babb and E. E. Nolan, real-estate brokers, to recover contributions which it is alleged were due by the defendants pursuant to the provisions of the unemployment compensation law, and which it is alleged the plaintiff is entitled to recover, and that demand for payment had been made on the defendants and payment refused.
The defendants alleged that they are not indebted for such contributions. They alleged that unless certain real-estate salesmen working under them are covered by this act the defendants have not in their employ a total of eight or more employees, and are therefore not liable to make the contributions. It was further alleged in effect that if such salesmen are employees and are covered by the act the defendants have in their employ eight employees.
The defendants further alleged that the status of these salesmen is defined by a written contract between them and the defendants which is attached to the plea and answer as an exhibit; that the defendants have no control over these salesmen other than as to results; that the salesmen are paid out of commissions received from sales as set forth in the contract; that the defendants do not require the salesmen to attend any meetings or to be in the place of business at any time, and neither do the defendants require the *Page 862 salesmen to be in the office at any time, and any remuneration received by the salesmen is paid out of commissions made and collected by these salesmen as per the contract; that the salesmen receive no instructions; that they furnish their own transportation, handle any real estate belonging to the general public, and sell the same according to the prices set by the owners of the various properties sold; that the salesmen do not devote any particular time to the defendants' business and are not required to produce a minimum volume; that they have no fixed hours of employment, are not required to make any special number of calls on particular customers or prospects, and are not required to keep records of business transactions; that they are allowed no drawing accounts and are paid only when a sale is made.
It was further alleged that the salesmen perform their work of selling real estate outside the offices of the defendants, and independently of the office, other than using the defendants' telephone to make appointments and to receive calls; that the salesmen use their telephones at home for the purpose of making appointments and receiving calls, and transact their business whenever and wherever convenience and opportunity prevails; that they sometimes use the office of the defendants in closing a sale of real estate for the convenience of the buyer and seller, but for no other purpose, and that such use is optional; that these salesmen engage in independent occupations, professions, or businesses; that they are required by the laws of Georgia to obtain a separate license in order to sell real estate, and are required to submit proof of good character and knowledge of real estate and values and other requirements, and must stand an examination prescribed by the real-estate commission, and are then licensed, after proof of their qualifications, and are charged a fee for said license, and that the salesmen employed by these defendants are licensed under the provisions of said laws of the Georgia Real-Estate Commission; "that all of the salesmen are engaged in an independent business and as such only use part time in selling real estate," and that one of the salesmen is engaged in an independent rent business, and as such takes care of several pieces of real estate belonging to him, does repair work on his own property, and also does any other and further work that he may be able to obtain for profit in his line of work. *Page 863
The written contract between the defendants and one of their salesmen, which is attached as an exhibit to the plea and answer, and is illustrative of the agreement between the defendants and their salesmen, is in substance as follows: It is contracted between the defendants Babb and Nolan as "broker" and S. D. Mullinaux as "salesman," that, whereas, the broker is duly registered as a real-estate broker and is duly qualified to and does procure the listing of real estate for sale, and maintains an office properly equipped with furnishings and staffed by employees suitable to serving the public as a real-estate broker, and that whereas the salesman is a duly-registered real-estate salesman and properly qualified to deal with the public as such, and whereas it is deemed to the mutual advantage of the broker and salesman to form the "association hereinafter agreed to;" therefore the broker agrees to make available to the salesman all current listings of the office and agrees to assist the salesman in his work with advice, instructions, and full co-operation; that the broker agrees that the salesman may share with other salesmen such facilities as the office may be able to furnish in connection with the subject-matter of this contract; that the salesman agrees to work diligently and to exert his best efforts to sell real estate which is listed with the broker, and to solicit additional listings and customers for the broker, and to otherwise promote the business of serving the public in real estate transactions, to the end that each of the parties may derive the greatest profit possible; that the salesman agrees to regulate his habits so as to maintain the good will and reputation of the broker; that the usual and customary commissions shall be charged for services performed; that when the salesman shall perform any service whereby a commission is earned the commission will be divided between the broker and the salesman in proportions indicated; that in no case shall the broker be liable to the salesman for any commissions unless the same has been collected from the person for whom the services were performed; that the broker is not liable to the salesman for any expenses incurred by him, or for his acts, nor shall the salesman be liable to the broker for office help or expenses, and the salesman shall have no authority to bind the broker by any promises or representations unless specifically authorized. It is expressly provided in the contract as follows: "Suits for commissions shall, agreeable to law, be maintained only *Page 864 in the name of the broker, and the salesman shall be construed to be a sub-agent only with respect to the clients and customers for whom services shall be performed, and shall otherwise be deemed to be an independent contractor and not a servant, employee, joint adventurer, or partner of the broker."
The plea and answer further alleged that the provision of the unemployment compensation act as contained in the Code, § 54-657, which it quotes, is unconstitutional, in that said section violates the provision of the State constitution which is referred to and identified by the number of the article, section, and paragraph, and § 1-815, the contents of which are not disclosed, and is in violation of the constitution of the United States in that this section violates the equal-protection clause of the State constitution and amendment 14 of the constitution of the United States, without disclosing the contents of the amendment, in that "it imposes a tax upon this defendant, wherein there is no tax against the subcontractor or the independent contractor, as the case may be, and violates the equal-protection clause as set out herein." It is further alleged that the exception in the act which imposes a tax on persons employing eight persons or more and does not impose a tax on persons not employing as many as eight persons is an arbitrary and unreasonable classification and void as being in conflict with the designated article, section, and paragraph of the constitution of Georgia and of the equal-protection clause of the constitution of the United States and the Code, § 1-815, without disclosing the contents of the article, section, and paragraph of the constitution of Georgia or the contents of the fourteenth amendment to the constitution of the United States or the contents of the Code, § 1-815.
The plaintiff demurred generally to the plea and answer as amended as setting up no defense, and specially to the portions purporting to set up the unconstitutionality of the act on the grounds that the allegations in one of the paragraphs were not matters of defense and that in one of the other paragraphs, which attempted to set up a constitutional question, the particular portion of the constitution alleged to have been violated was not set out with the requisite particularity. The judge sustained the general demurrer and then rendered judgment for the plaintiff in the amount sued for. To the judgments sustaining the demurrer and finding for the plaintiff the defendants excepted. *Page 865 The unemployment compensation act (Ga. L. 1937, p. 806) and all amendments thereto, Code, cumulative pocket part, chapter 54-6, fixes the status of what constitutes an employer and an employee under the act and the circumstances which render the employer liable to pay the contributions required. The line of demarcation is not necessarily that which exists between masters and servants and independent contractors. As provided in Code § 54-657, "services performed by an individual for wages shall be employment subject to this chapter unless" certain things appear to the satisfaction of the commissioner. Under that same section "wages" are defined as "all remuneration for personal services, including commissions." See Young v. Bureau of UnemploymentCompensation, 63 Ga. App. 130 (10 S.E.2d 412). It clearly appears from the allegations in the plea and answer that the salesmen in question were under contract to perform services for the defendants, and did in fact perform services, for which they were paid commissions. While it appears that these salesmen had great latitude in working independently of the defendants in selling property, it nevertheless appears from the allegations and from the contract attached that they sold to customers from listings held by the defendants, and that the salesmen received a portion of the commissions and the defendants received a portion. Manifestly, in selling to prospects from which sales the defendants would obtain a portion of the commissions, the salesmen were performing services for the defendants. Under the terms of the contract the legal right to collect commissions on sales made by the salesmen was in the defendants and not in the salesmen. The salesmen were bound to look to the defendants for the payment of their proportionate part of the commissions. The defendants were under obligation to pay the commissions to the salesmen. These commissions were necessarily paid for services rendered. The salesmen therefore were, as provided in the act, performing services for "wages," which term includes commissions, for the defendants.
The salesmen, therefore, come under the act unless there be shown, to the satisfaction of the commissioner, three things conjunctively. Code, § 54-657. Young v. Bureau of Unemployment *Page 866 Compensation, supra. One of these (A) is that the salesman "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." It does not appear from the allegations of the plea as amended, or from the contract that the salesmen at any time are free from control or direction as to the performance of their services. They are under obligation to the defendants to regulate their habits so as to maintain the good will and reputation of the defendants, and to abide by the law, and to exert their best efforts to sell real estate listed with the defendants. As to these matters the salesmen are necessarily under some control and direction of the defendants. The salesmen have the right to sell only property listed with the defendants. Therefore, the defendants have a control and direction over the salesmen as respects what property the salesmen shall sell. The salesmen are under the control of the defendants in so far as commissions are paid to the salesmen. As has been pointed out, the salesmen have no right to collect commissions from the owners of property sold, but this right is reserved in the defendants.
Another of the provisions (B) is that the services performed by the salesmen are "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." All the services performed by the salesmen, although perhaps they are not performed in the central office of the defendants, are performed within the limits, territorially or otherwise, of the contract. Another of the provisions (C) is that the salesmen are "customarily engaged in an independently established trade, occupation, profession or business." It does not appear from the allegations in the plea that any of these salesmen "customarily" engaged in an independently established trade, occupation, profession or business. It is alleged only that the salesmen are engaged in an independent business and as such only use part time in selling real estate. Whether or not, under the provisions of this subsection C, it is contemplated that the individual, as in this case a salesman, in customarily engaging in an independently established trade, occupation, profession or business, must not perform any service or give any time to the performance of services for his alleged employer, Babb and Nolan, *Page 867 and whether or not his mere engagement in an independent business, as alleged in the plea, without its appearing that he was "customarily" so engaged, are questions which it is not necessary for the purposes of this case to answer. Since, in order to exempt the person performing services for wages from coming under the act it is essential to establish to the satisfaction of the commissioner conjunctively the three conditions indicated under A, B, and C, the salesmen here are not exempt from the operation of the act since all of these conditions do not apply to them. It is sufficient if they, as here, fail to fall within the conditions prescribed in A and B.
It appears that upon the application of the provisions of the act these salesmen performed services for the defendants for commissions which are wages under the definition of the act, and that they come under the act unless the three exceptions quoted above are shown "to the satisfaction of the commissioner." It does not appear anywhere in the plea and answer that the facts in the three exceptions were shown to the satisfaction of the commissioner. In fact, the commissioner himself is bringing this suit on the ground that the salesmen are performing services under the act.
Certain decisions and rulings of departments relied on by counsel for the plaintiffs in error are not necessarily binding on this court. Some of these decisions are distinguishable on the facts. Besides, the questions herein involved seem to be settled as here ruled in Young v. Bureau of UnemploymentCompensation, supra.
There appears nothing unconstitutional in the act as being an unjust and arbitrary classification, thereby denying the defendants the equal protection of the laws and due process of law. See Camp v. State, 171 Ga. 25 (154 S.E. 436).
The judge did not err in sustaining the demurrer to the plea and answer as amended, and in entering judgment for the plaintiff.
Judgment affirmed. Sutton and Felton, JJ., concur.