“.,C
OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
Ronorable~Orville S. Carpenter
Chairman and Executive Director
Tisx& Unemployment Compensation Commission
xustin, Texas
Dear Sir:
on of this Department
s predicated upon
to certain logging
You have Pomaraed
ng to present the facts
re certain l&t& to be
sound in Arts;;; ;:21-b,
t is shown to the satisfaction of the
dividual has been and will aontinue to
trol or direction over the performance
, both under his contract of service
and in fact; and
iion.cnille 5. Carpenter, Pete E
W(3) ouch IenlQe lo elthur outaldu the uswl
oourso ct ths busicerr for *hlch such ~ervlce is >er-
romed or that ruch rervloe le perfomied outofde of all
the pleoss of buslnst8 ot the enter&mire for Welch such
Beni i6 petitarmed;c&d
"(C) euoh in6lvldual is cu~toxzerllylwa eed in en
independ6notlyeatabllohed, trade, ocoupatlon, profeo-
rlori,or buainase.'
The Infornstlon rocompmylng ycur reCurnetreveals a de-
.tailed ~tetmnent of fats subniltted by ycur mdltor. You also
sIibt&ted 8tateRanta e56 affldevits prepared &Ed exeCUted by
offlolalr of Kirby Luzber Corporation sod by certaIa of the log-
ging oontraotore. You asked thet Uetermlnstion of llobllity be
barredupon a&l of the data subnltted. The conclusion ot your
z&dltor~8 roport states thet *when sworn testimony le'taksn it
plli mugport a iindlng that the indl~ld~als under eoneideretion
lre under ths supirvlsion end control oi ilrby Luzbcr torporetlcn,
thus em4 in their ~~zplopc;ent~~. So hearing was ha6 in this
lnrtanor.
Fhe statements conflict in certain lnetences, however, in
lnatakom where there 1s doubt In our mlnd;ue find eitidavlts
nade by snb on behalf oi thi Xlrby Luxber Corpcretion to eupport
their representation of facts. Thle, we think, entitles thm
~to mru credence thm indlreot lniornatlun or conclusions. The
harean of Internal ;?cvtnue had this aeme loformetiongnd relied
apon it in their ruling of July Zl, .1939. That rQuJly@aa8 that
the lndlvlduals in this iaetual situation were n6t mployeee
for the purpoea of toxae untlerTitles VIII and IX of the Social
Security 6ct.
A r sr lo u0r the data labmltted dlrrcloeer that tmo or
the contractors asntlonod in your autltor*e report have amde
affldavita regarding thelr oontraot and ralettionahlpwith the
filrby Lumber Corporation.
‘&e pork of cutting timber into logs rewires a cartaln
degree oi rklllt if the work 1s not handled la the proper manner
there 16 an unneoe+ary amount of raeto. It appear6 from the
oontreat forms and atatemcnts that tha contractors ln queetlon
oontrect to 9roduoo the result of cutting the tree8 into loee
lo aocorder,cs with the spealtioetions oi the corporation end to
promptly deltrer thaE.at deal@eted placer. Such contractors
use their own meens, methods end sculpaeot;~ ead erploy their
own help to perform such ?.Orkwithout any &ttarr?tby the corpore-
tlon to control the betel18 of ttelr xork. The contractors
Eon. Orville s. Carpenter, pagr S
purohcao and 0~x1all of the appllaaoea, cuob 68 Ease, axca, log-
6lng truoks tr66tora'lloa6ora, md otter equipmentfor do*
the work. +hb corporation dose not now, and never has, okneb.
cny 106 trucks to do its logging. The rbmuncratton of the log-
glrq oootraotora la det8rnhod upon a paantitatlve beala, In
lcoorda~oc ulth the retrb act out In the contraota botwoon the
corporatloc and the contraator.
The ltildavit ot oae Cacar Baker, dated tiotobsr ZO, 1938,
one of the contn~tora in Question, reoltee ttet he bought his
own lq ulp mnt end the Zlrby Lunbor Corporation has QO olalm
thereto; that hc taaintt~lns klis own cmp ra6iutiea ror hi8 log-
ging crcwt that ho oparatea on bla own Credit;, th a h t elployed
ncohcnloa en6 others to xdnt6ln hi6 equlpaant ah4 hs pays all
or the bill6 for such repair. ttr.Faker elco had done work ror
othor lndltlduolo but at the present tlno has autiiclent work
vlth the iilrby lumb+r Corporetlon to keep hi6 crew and all of
hlc equipment busy, but there lo no obll.getioc OL bs6 part to
eontraat ercluslvoly with thlc corporatlor. This lndltldual hat
been laalgLbd an employbr~c ldcntlfloatlcn nureberunder the
boo161 Leourlty iict tnd tier tte &%ployzent Ccmpeneatlon kct
o? TbIbr. The-,itildavltfurther certlflea thct the corporation
does not etercIso sny~dsgree ol oontrol over Lr. i3cker*a e,rrploycca
by lndlcatlng the cmployoes to be hired or dlaohcrged, or to
bbalgmt* t&e hours of work. The namaa or tie cxcployeeaare not
iurnlahe4 to the corporation. The booka end reoorde ot his
bualneaa are kept by one of hla e~loyecc rhoao errldprlt ha to
the oorrcotncas or &. Lakar.8 8tctcmnt la'alto la btldenoo.
lz. L. IZoClcnahan tlao one OS tba lo&ng
f. contrectorc
bxeouted an atildarlt under date of October 1s. 19SB, stating
that ho had dona buelneca alth the lilrby ‘Lumber Corporation, its
receiver,and its tivrtbo and.had gPa0 aontraota tree tIm to
tl&e wlth rofbrenos to logging on UliierczA tracts with tbo
Kirby Lambor Company.
Er. >.'cClancbanstetoa tbct ln the operation of there
loeglng contract8 he directs tbo details of the work unb roaelres
fro& the Klrby~LtlP;berCorporctlon only the apeciflcatloca with
whloh.he~la to co~.ply. Hc states tbat the ISlrby~LurPber Corpore-
tlon nor Its agent bed tny control over the dctalla ot his worka
that he cm8 his orn tmoka, hires and dlechargca his own cICplOyce6,
doec hi6 own tlnenclng, and merely oontraatb to do the ultIaiat0
job es bet out in the contract he la then ptrforaUg. The atflcnt
further atctea that, from tIam to tlm, ho oontra&c Mth other
lndlvlduala, and, at the present time, he he6 contracts with
571
Bon. Orvilla 5. Cerpenter, page 4
several other eoapanlea; that he carrier bit own worlfxen*a oom-
pensatlon lnsurenoa with the 'Paxasmployer*a Inauraaos Asaoole-
tion. Ur. b:oClanahanstates thet ha la en employer under the
yabaral Law and la an&earorlAg to par all tuea upon l mployeea
under both the Pe~aral and Stats Xawa.
%a lnfor&atlon supplied by Meaera. Laker amI L'OClmahaA
la certified to by lfflda~lte of dtbar persons femlller with tha
opcratfon of theaa tuo men. Ii there be other contractorsor
persona repraoaAtlAg the~aalvea es contreotors ulth the Llrby
Lumbar Corporatloa whoPa raletlonahlp wlth that corporation Is
6lfferant trot the Nlatlonshlp of ~aaara. Baker and LoClenahaa,
we have no datallad lnioraiatlonabout tbea. Kc, therCror6, take
the atatezenta of those two men and the copies 'of oontreota
exlatlng betsean tham aAd Urby Lumber Corporation as being repre-
aeatatira of the ralationahlp of the Kirby Lumber Corporatlot
and the lndlrlduala doing the logging work.
Other iArOI%&tiOA submittad di60lu668 that there la
coma writ to your irudltor*astatartsntthat thi Kirby lumber
Corporation requlrae that the loegw CoAtraotor oarry his rork-
miA*a oorzlp6naatlonlAauraAer wlth a oompany 0r its approval.
A portion of paragraph IX of t&a contraot of February 1, 1936,
ereouted by and between Oaoar Baker and the ILtrby Lumbar Corpore-
tlon provldea that *should olrouastenoea cake it neoe~aaary, In
the #&meat to Qiaoontlnue
of the uniIaralgneiI, pqo~eretlon,
cutting must be stopped inzealately rolloulng rooslpt of Aotloe
from the un4aralene&. . .-
Thla CaOtioA Of the oontraot 1AdlOataa that tha oompa~y
m&y btop the work @f the ~SrSOA.do:ly the OOAtrCOtiA~ at Amy
tlma that It, in its judgment, thlnka brat. @a entlolpate a
OOACtrUCtiOA or thla portloh 0r the oontr8ot by aome.tU be a
rather broad uerolae of power ovar~oAa whose relatlonrhlp is
that of a0 independent oontraotor.
Therr la other inforaxttlonet hand that a 8aw - forimn
of Klrby*a ohoioe is aometlmea plaood with the orewa without tha
contraotorfa oonaant. .AA lttelrpt 1s xade to explain this bf
raaeoA or the nature of the nmrk. The'tlmbsr bolng cut la, la
meny lnatanoea, on land owned in fee by the Kirby~ Lumber Cor-
poration, a~&, in other iAf3t&AO88 OR lIiAdleased by this CO+
poration, and, by having an experisnoed &LIA to pick out the trees
to be out and marklnq them for the-oonrmlence of the contractors
and their orawa, much waste la olimlnated. This la known as
8elootIre euttlng a~& has the additional advantage of glrlng the
emaller timber lbdltlonal time to mature.
&xi. Orville S. Carpenter, pace 6
+e oonienow to the teat to be l pplied to tbe feota et
hoAd. IA an OQ~A~OA by thie Cepartzeat under dare Or Jenuery
24, 194Q, to Onllle Carpenter, & 0-l2eOO,.we a&opted the OOXCIOA
lew toat of independent ooAtraotor es e beala for detemlrstlon
or liability. he think th a teatt lquallr fitticg here, end we
will AOt dCQCrt rn>X it.
The &erinitiOA of en lndepeadent oontraotor generally
used by our oourta end quoted in lone Star Ccc Coxpeny vs.
Kelly, 46 2. i%. I2d) 656, la 88 follows:
"Aa detlned by the authorltlea, eA independent
oontreotor la one, who, exeroialAg en lntlependrnt
exploymsnt, contracts to do a piece of work according
to tic OUR met&ode, an& vAtbout belat: aubbjaot to the
oontrol or hi6 employer exoept es to the result 0r
his work. 14 Z.C.L. p. 67, par. ,2.*
The editore of the Reatato~mt of the Law of bgaaoy hare
Meted a number of teats to be used in daterxlni~ the true re-
latloAahlp between eA alleged prltolpsl anC indOpeAdOnt contrac-
tor. They are enumreted in that work .$a Volmze 1, & 220, pages
483-465, ee follows I
*411 ii carvent 1s 8 psreon .elcployedto perform
aenlor for another in his atralra ona uho, with.
respect to his ph7eleal oonduot in the Q4rrOnb%AOO
or the aenloe, 16 aubjeot to the other's oontrol or
right to control.
"(2) XA deteruin~ag a-bathero&e notbig for another
is a cement or en ladepemIent~ooatreotor, the follow-
ing esttere or reot, among otham), are oonaldered~
*(a) the extent of oontrolwhloh, by the aereemmt,
the zeatar ney exercise c.irer the detella of the work;
*(a) whether or tot the one enploJe4’ls engaged
in a dlatlnct ocoupatlon or b~alaeaa;
"(a) the kind of OOOU~tiOA, with refer6nOe to
whether, ILathe looellty, the work la uaumll~ done
under th.e dlreotloa of.the eqloler or br IIapeolellat
rlthout aopenlslon;
*(a) the aklll required in the~partioular OOOUQ&-
tiOA;
57:
hr.. (rnllls 5. Carpenter, pege 6
"(8) nhothcr tha employer cc the worksan auppUaa
tbe laatrwncntalItIea, tools, 0Ad the plooe of work
ror the person doti& the Work;
*(r) the length or tlsreror whloh‘the person la
8mQlOy86 8
*(g) the method of peymeat, whathcr by tbe time or
by the job;
*(h) whether or not the work la a part of the
ragulsr bU6lAeCC of the eI%ployer~and
"(1) whether or Aot tha parties belleve they cm
oreating the reletlonrhlp of msatar IIAd atm8nt."
The case of ~eahiA&toA Eeeord ?ub. CC., ~a. Ernest, Fl
5'ao. (2d) 726, baara the closest reaenblanct to our faots~, It
has the @ape daflnltioA btfprc it that we have; it has rsota
that, in corm reep~ota, lndloctc ooritrolby the party of the
rlrst part, as 60 we; however, we tblnk the faote in that oeee
lrlbo~oc e greater degree or control ovar the workors than la
present here, Acrertheleaa the court held there was AO lleblllty
ror taxes. A.8oloac the above once for the addltloAel reaaoA
that they wart ooAatruing &A uAelEQlO)a8AtoompeAaetloA lew aA&
not a question or tort llmblllt~.
bianiroatl~,8 comparleon or ell our taota--with eeoh toet
aupplleb by the iicrstatexent of the ter 0r &sop rould be onerous
to both thla DoQertEeAt end the reader; & reauut of the orart
recta ludloate that ths co-oalled contracton hire eeploxee6 of
tbelr oholoa, fir8 th8E at their OVA 8laOtlOAl that they alone
keep pyroll raoorda~ that they furAlah all lqulpaiecnt urd it8
repaIri that they act the hours for work; that they choose thalr
om a&hod of cutting that they are aAs=erablt to the Xlrby
Lwcbar Corporation on iJ in &aapeot to delivery of a lpeolfled
amount 0r timber at the 8em8a the, and th8t they ere paid on
8 Job baala.
i%cterrlngagain to (e) (5) .(a)or the 68flAitIOA or
aerviota to detemlne whether these lndlvldunlaare free from
oontrol under the eoatrcot and lr faot. ?& think they are. The
preponderanor or the data before us lrlnoea a olear intentIon
&A& underatendlng betwetn tts Kirby Luaber Corporation at6 OOA-
*rector thct e esntrmotor relatloAahIp la IAt8Aded. %friOitAt
evldenoe 0r exerolae of company 0oAtrolof the method 0r dOiA,Q
the work is not berorc us.
574
.
Eon. Orvlllt 5, CarQtAtCr, QC&t 7
sget%OA (6) (5) (B) of OuP 6cflAltiOA rogulr:Ag t3at the
aervlca 1s outeldc the usual course of the bUSiAt66 for v.tlch
such aervlee is QtrfCrXCd or that the CervIce Is performed out-
side of the pleoea of bt;slAesaof Xlrby Luzbcr Corporctlon ofrere
AO aif ri0ulty. The 1AforratloA nubtitted by Xlrby Lumber Car-
poratlon attelrptato eeteblleh the "lo@ng coAtraotlngw es a
dlgtlnct bualneag outalde of the course of mllllng eAd atlllng
luicbtr. Xhcthcr that be true, the faote shotithet copitof the
work 1s doAt on property of Kirby LuzsbcrCorporation end other
work dons off their fee. nc think the oploicn of Justice L;lllsrd
of the Luprena Court of ~~eahingtoA,ln the heretofore cited oaat
or ~raahlngtonGecorder ?ubllshlAE Co. v. Hmat, ccxlueivt on
this QOint. The pcrformunce of ao1teabrk CA the prtzices of
iilrby Lumber Corporation doos not change the status of a OOA-
tractor to that of o servant.
The lest CtCtiOA 0r the defloltlon of Servlcc, (g) (6)
(C) thct we m6t~Satlafy 1s whether the Individual 1s cuetomrlly
en&aced in en lndeptAdaAtly eetabllrhed traEe, occupation or
bualAeaa. is meld in the XashlAgtoA Becorder Pub. Co. cece,
"if he Aever earvea t:ort than one parson there 1s usually a
presumption that he has no independent occupation; but this pre-
auAptloA la AOt coAoluslve . . . the OR8 IAdisQCAEable 8+cAtAt
to his character es a~ lAdepeAdeAt contractor 16 that he zust
have contracted to do e epeolfled work and have the right to
control. the c.odcand rzanner of dOlAg it.” ?-
1.nOUT faetuel situation both Asker &Ad KoCleAehaA are
QtEtdtted to oontrect with firm of their ohoioe,and at the time
or his 8fria~~it, IjcClaAeheA~66 doing 60. kc presume other
iAdiii&UClC contracting with Xlrby Luuber Corporation enjoyed the
aeme 'prlvIlage. The fccte t6tabllah that they were customerlly
engaged in &A indeptndtatly e6tabll6hed busiAe66.
i%ially, we will dISQO68 0r the two facts heretofore
r;eAtloacd 86 erldenoln~ a oontrol ln&loatIng e servant rcletloc-
ship. First the power of Xlrby Lumber Corporation to ttrn;lnate
lo 1~6 at rfll; aeoood the choice by Kirby LuxzberCorporation
org&he loge to be cut. ‘Such were the fcotc in the oacc of
Crosby Lumber Me. Co. v. fiurhem, 179 so. 265, xhercin~tht court
Said:
'The power given en 8Eployer under a OoAtrEtCtiOr
acrvloea to termlcats it at r:Ill 1s h fact for con-
alteration in dctcmlnlng r;het&cr the oontreot creates
the relation of xeetor a~0 cement, but, of itself
alone, is not determinative, end the Germ faot thet
whet loge Stocketlll ehculd haul were for the deter-
. ,
Eon..Gnllla s. Carpenter, psge 8
ainetion Of frorbf iuber 4. ~6lJUf6CtUritlg COQ6Xly
did nCt COUBtitUt6 EUCh OOUtrOl OI8r him 6E t0 Z&8
the rO&tiOn b6tW88n them that Of Es68t.r and 68l’V6.rit.”
‘Ph6t iS OUr 6ll8W8rt0 the prOpOSitiOn her6.
You arr, therefore, edvieed that only Upon the basis of the
laots before ~6 the indirldu616 doI% the logging work were, prior
to April 1, 1939 Independent contractors, and there 16 no liability
on blrby Lumber lorporation Sor taxes bhsed upon aoounta peld to
those p6rUOIX.
If the f&CtS Srt Cthr tti6D r8pr8S8Zlt6d :n tbt iIlfOlT~CtiOXl
b6fCI-6 ~6, we do not peas upor ths llabillty of Zlrby Lumber
COrpOrEtiOn or any other elaplcyerfor tax86.
Yours very truly