I dissent. The question we have before us is this: Does this mining lease create the service relationship contemplated by our Unemployment Compensation Law?
The purpose of the law is declared in section 2, Laws 1936, Sp. Sess. c. 1. That section reads:
"As a guide to the interpretation and application of this act, the public policy of this state is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. The legislature, therefore, declares that in its considered judgment the public good, and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own."
As stated in the first sentence, this section is a "guide" to the "interpretation" and "application" of the law.
Were we to find in this section 2 that the "menace" to the "health, morals, and welfare of the people of this state" *Page 240 was an epidemic of typhoid fever, and were we to find that the sections following prescribed sanitary and medical methods to ascertain and eradicate the individual instances of disease which together constituted the epidemic, we would have little difficulty in appreciating that the law was enacted for the benefit of the public and not the individual, nor the group of individuals. The locating and curing of the individual case would appeal to us simply as an incident in the enforcement of the law for the public good. That the individual received personal benefit from the law enforcement, though a pleasing fact, would not be the inducement for enforcing the law. Furthermore, the individual with an ailment in no way connected to the epidemic would be one upon whom neither public expense nor public time would be expended as part of the law enforcement. To afford him relief would not be a step toward relieving the public of its typhoid menace.
The fact that section 2 refers to the menace as "unemployment" rather than typhoid fever does not change the principles enunciated above. Unemployment as contemplated by the law is an economic menace to the public. If the individual case of unemployment is not of the type which is an economic menace to the public it is comparable to the case of the individual whose ailment is not connected to typhoid fever — we do not concern ourselves with it, be the individual's plight ever so pathetic.
The unemployment Compensation Law has laid down rules whereby we may determine whether or not a given case is one to receive the benefits of its enforcement. Those rules may be classed generally as of two kinds: (1) Those limiting the law to a certain class of relationships, and (2) those exempting from that class lesser classes.
Sections 19(j)(1) and 19(p) are of the first kind; section 19(j)(5) is one of the second. Section 19(j)(1) reads:
"`Employment,' subject to the other provisions of this subsection, means service, including service in interstate commerce, performed *Page 241 for wages or under any contract of hire, written or oral, express or implied."
Section 19(p) reads:
"`Wages' means all remuneration payable for personal services, including commissions and bonuses and cash value of all remuneration payable in any medium other than cash. Gratuities customarily received by an individual in the course of his employment from persons other than his employing unit shall be treated as wages payable by his employing unit. The reasonable cash value of remuneration payable in any medium other than cash and the reasonable amount of gratuities shall be estimated and determined in accordance with rules prescribed by the commission."
These two sections define generally the contractual relationships which are believed to be the bases from which springs the kind of unemployment that in numbers is by section 2 declared to be an economic menace to the public. These two sections define contractual relationships which we term service relationships. Examples of these are: employer and employee, master and servant, principal and agent, and principal and independent contractor. They are distinguished from non-service relationships such as vendor and vendee, or lessor and lessee, in that the factor that induced their execution is the desire of one contracting party for the service of the other, and the desire of the latter to render that service. The non-service relationships mentioned, however, arise from a desire to dispose of and a desire to acquire either permanently or temporarily property interests. For example: I learn that my neighbor wants to sell his automobile; he learns that I want to buy a second-hand car. We get together, it matters not how. I agree to buy and he agrees to sell. The factor that induced this contract was our desires as to a property transfer. Suppose that I, for reasons best known to myself — Scotch if you wish — desire to pay for the car in labor, the labor to be performed under his control and direction. He is agreeable. Has the contract become any the less a contract of sale? No. The fact that the consideration has become in *Page 242 whole or in part labor instead of cash does not change the contract. Furthermore, an unexpected termination of that sales contract does not produce a case of unemployment which is an economic menace to the public.
Contrast the above illustration with the following: I am a carpenter. My neighbor wants a chicken coop built. I want to build it. We get together. He is short of cash but is willing to give me his automobile in payment. I don't want an automobile, but as I can sell it and get my pay that way, I accept. What induced the contract? A desire for and a desire to render services. The fact that the consideration was payable in whole or in part by property instead of cash did not change the nature of the contract. I take the automobile as "remuneration payable in any medium other than cash" (quoting from section 19(p) above).
In each illustration the important question is: what induced the parties to enter into the contractual relationship? If the service factor, it falls within sections 19(j)(1) and 19(p); if the non-service factor, then those sections exclude the contractual relationship from the benefits of the Unemployment Compensation Law.
It is clear that the provisions of section (19(j)(5) have no bearing upon the application of sections 19(j)(1) and 19(p). Section 19(j)(a), (b), (c), (5) reads:
"Services performed by an individual for wages or under any contract of hire, written or oral, express or implied, 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." *Page 243
There are service relationships unquestionably within the definitions of section 19(j)(1) and 19(p), but which, if terminated, are not, in the eyes of this law, productive of the kind of unemployment which in numbers, and according to section 2, is an economic menace to the public. We may not agree with this legislative classification here; but that classification has been made. Section 19(j)(5) excludes from service relationships generally within the law, those whose occupations are in the nature of a business of engaging in many separate service relationships, with the expectation of losing some and gaining others — such as the professional man in private practice. In the eyes of the Unemployment Compensation Law, to give him its benefits would not be a step toward eradicating the public menace of unemployment, be his financial condition ever so pathetic. To illustrate the fallacy of attempting to use the provisions of 19(j)(5) in applying sections 19(j)(1) and 19(p), this is suggested: Paragraphs (a), (b), and (c) are in the conjunctive. They must all exist to exclude the case from the benefits of the law. Applied to the assumed case of my purchase of my neighbor's second hand car, they would place me, upon unexpected termination of that contract, as a beneficiary of the law simply because as part of the consideration in the sale of the automobile, I had submitted myself to the control of the vendor. It would change our contractual relationship from a non-service to a service relationship. Such a misapplication of the provisions of section 19(j)(5) would change the purpose of the law as outlined in section 2 quoted above.
Keeping these thoughts in mind, what should be said of the mining lease? No one contends that the mere label, "lease," governs the case. The true relationship between the parties is always subject to inquiry. In the recent case of National Tunnel Mines Co. v. Industrial Commission, 99 Utah 39,102 P.2d 508, we decided that a lease similar to the one in the present case created the service relationship *Page 244 contemplated by the Unemployment Compensation Law. In so deciding, such expressions as these were used:
"* * * there are definite provisions made for the control and direction over the performance of the service * * *" and "There is provided in the lease a general right of control and direction over the relationship created under the contract."
Paragraph (a) of section 19(j)(5) is the paragraph covering "control" as an element in determining whether or not a given service relationship is one to be excluded from the act. It, however, assumes the relationship to be one of service, whereas the question in issue here is: Is there a service relationship?
I concurred in that part of the National Tunnel Mines Company case, but I am now of the opinion that it was error to do so. The provisions of the wrong section of the law were applied. It has been suggested that the facts of the present case may be distinguished from the Tunnel Mines case in that certain elements of control present there are lacking here. The objection the writer has to such an argument is that it, too, applies the wrong provision of the law to answer the question of whether or not the relationship is one of service.
The mining lease is not an instrument that has come into being as a result of the enactment of the Unemployment Compensation Law. Its historical background is not necessarily determinative of its character. It is an element however, deserving of consideration, along with other facts, in an effort to solve the question in issue.
The mining lease has provisions consistent with both the service and the non-service relationships. Viewed in one light it has the appearance of a business venture on the part of the lessee wherein he, as consideration for the right to occupy and work the lessor's land, is willing to share the profits, if profits there be, from the sale of ore mined. Viewed in another light, it is just another method the lessor has of obtaining services to develop its property. Arguments *Page 245 may be given both ways. Under such circumstances the character of the relationship as custom and usage have developed it should be the guiding factor. That character is a fair indication of what induced the execution of such an instrument.