Opinion
No. 34674
Decided June 27, 1956.
Private motor carriers — Driver-owner leasing truck — Servant doing work for master, when — Not engaged in business of private carrier — Section 4923.02, Revised Code.
1. The doing of work that a servant is employed to do under the control of and in the mode and manner directed by the master will be considered as something being done by the master and, if it relates to the business of the master, as part of the business of the master rather than as any business of the servant.
2. Where a driver-owner while driving his truck in carrying property is in every respect a servant of one to whom he has leased the truck, such driver-owner cannot be, by reason of the lease of such truck and the rendering of any services provided for in such lease and by reason of such driving, "engaged in the business of private carriage of * * * property * * * or of providing or furnishing such transportation service" within the meaning of those words as used in Section 4923.02, Revised Code.
APPEAL from the Public Utilities Commission.
This cause originated on the filing of a complaint by Wray Bevens, herein referred to as complainant, with the Public Utilities Commission of Ohio, herein referred to as the commission, against Lewis Van Meter, herein referred to as Van Meter, alleging that, by reason of what Van Meter was doing for Ralph Rogers Company of Ohio, Inc., herein referred to as Rogers, Van Meter was operating as a private motor carrier within the definition of that term found in Section 4923.02, Revised Code, without having the permit required of such a carrier by Section 4923.04, Revised Code.
Section 4923.04, Revised Code, reads:
" No private motor carrier shall operate any motor vehicle for the transportation of persons or property, or both, for hire, on any public highway in this state except in accordance with Chapters 4901., 4903., 4905., 4907., 4909., 4921., 4923., and 4925. of the Revised Code. No such private motor carrier shall continue or commence its operation as such in this state without obtaining a permit from the Public Utilities Commission as provided in Sections 4923.05 to 4923.07, inclusive, of the Revised Code." (Emphasis added.)
Section 4923.02, Revised Code, reads so far as pertinent:
"As used in Sections 4923.01 to 4923.17, inclusive, of the Revised Code:
"(A) `Private motor carrier' or `contract carrier by motor vehicle' includes every * * * person * * * not included in the definition * * * [of a common carrier] when engaged in the business of private carriage of persons or property, or both, or of providing or furnishing such transportation services, for hire, in or by motor-propelled vehicles of any kind, including trailers, over any public highway in this state, but does not include any * * * person * * *:
"(1) Engaged or proposing to engage, directly or indirectly, as a private owner or operator of motor vehicles employed or used by a private motor carrier, or by a motor transportation company [common carrier] * * *." (Emphasis added.)
An agreed statement of facts constitutes all the evidence. From this agreed statement, the following appears:
Rogers had a contract with the prime contractor, who was engaged in erection of the atomic energy plant near Piketon, to furnish crushed stone needed for the project. The stone was to be delivered by Rogers to the atomic energy plant so that title thereto would not pass from Rogers until it was delivered.
At first Rogers contracted with Pike County Cartage Company, herein referred to as the cartage company, for hauling stone from Rogers' quarry to the plant site for $1.16 a ton. The cartage company had a P.U.C.O. certificate but did not have enough trucks to haul the stone that Rogers had to have hauled. In order to meet Rogers' hauling requirements, the cartage company contracted with various truck owners to have them operate their trucks under a lease arrangement with and under the P.U.C.O. certificate of the cartage company. Cf. May v. James G. Pardee Co., ante, 126, 133 N.E.2d 599. Under these leases, the cartage company paid to the truck owner the $1.16 per ton it received for carrying Rogers' stone in his truck less 12 1/2 per cent which the cartage company retained as its commission for operating under its certificate.
After delays in deliveries of stone including a work stop-page. resulting from a dispute between the truck drivers' union and the cartage company, Rogers "decided to and did assume the hauling operations itself and signed" a contract with the truck drivers' union.
By this contract, it was agreed that the contract was to cover "the drivers of all trucks carrying commodities hauled by" Rogers, that the union was to be the exclusive representative of all such employees, that such employees were to "remain members in good standing of the union, as a condition of continued employment," that Rogers should deduct union dues from wages of such employees if authorized by such employees, that any truck hired or leased by Rogers was to "be driven by employees of" Rogers covered by the contract, that if a truck was leased from an individual owner Rogers should "pay the driver directly for his services as an employee and separately for the lease of his truck," that time and a half should be paid for work in excess of eight hours on any day Monday through Friday or for work on Saturday and double time for work on Sundays and certain holidays, and that the wages should be $1.80 to $2 per hour depending on specified truck sizes.
Each truck owner, including Van Meter, then executed a written lease of his truck to Rogers. By this lease, Rogers agreed to pay "as rent for the use * * * the difference between $1.16 per ton of stone transported * * * and the wages of the driver of said equipment;" and agreed "not to permit * * * the use of any of said equipment for the transportation of any property other than that belonging to or used in the business of" Rogers; and the truck owner lessor agreed "to maintain the equipment leased * * * in good repair and operating condition in all respects, to furnish all fuel and oil, and other necessary materials, equipment and accessories for the efficient operation thereof, * * * to pay the cost of all license plates * * * and all taxes * * * assessed" on such truck, and "to insure the same against loss or damage by fire, theft and collision in amounts sufficient to compensate for any loss or damage thereto," and that Rogers should "have exclusive possession and control of said equipment and that said equipment shall at all times be operated only by an employee of" Rogers, and that Rogers "shall have the sole right to designate who shall drive said equipment." The lease also provided that Rogers could "affix to the vehicles leased * * * any proper insignia * * * indicating that such vehicle" was "being used in the service of" Rogers; that Rogers "shall not be liable for damages to any of said equipment resulting from its operation;" and that Rogers "shall carry property damage and public liability insurance covering its liability for the operation of said equipment and relieving" the truck owner "from any and all responsibility to the public for the operation thereof during such times as said equipment is operating in the service of" Rogers.
"To take care of all the additional duties imposed on * * * Rogers * * * by itself assuming the hauling operations, the company built an additional wing to its office building * * *; * * * hired an additional office force of seven persons; * * * hired a truck foreman and two truck dispatchers; * * * purchased two adding machines, two calculators, a bookkeeping machine" and "set up all the necessary records for this new operation."
"* * * Rogers * * * also assumed all the obligations of an employer with respect to social security taxes, unemployment taxes, workmen's compensation, etc. Each truck driver (whether he owned the truck driven by him or not) was considered and treated in every respect as an employee of * * * Rogers" and "pursuant to the union contract it checked off driver's dues" and it "withheld for income tax purposes the tax on the driver's wages."
"Each driver who was also a truck owner * * * received two checks — one weekly for his wages * * * and the other biweekly for the truck rental * * *. * * * Van Meter generally drives" his truck himself "but on occasions the truck has been driven by another employee of * * * Rogers * * * selected and assigned by" Rogers "and not by Van Meter to drive that truck."
"The drivers were under the direction and complete control of * * * Rogers * * * in every detail of the work — as to time, as to when deliveries were to be made, as to the decision whether weather conditions permitted hauling, as to manner of operation of the trucks, as to the route to be followed, as to time for starting to work and quitting work, as to the spot where deliveries were to be made at the plant * * *."
"* * * The services of any driver, including * * * Van Meter, could be terminated at any time by * * * Rogers * * * subject only to the requirements of the contract * * * with the union * * *."
"All provisions of the lease agreement * * * have been faithfully followed in practice. To each truck, including the truck of * * * Van Meter, a sign was attached reading `Leased to Ralph Rogers Co.' * * * Van Meter has not been permitted by * * * Rogers * * * to use (and has not used) his truck for any purpose other than on business of * * * Rogers * * *. The truck has been maintained and used exclusively for the business of * * * Rogers * * *. When Van Meter operates the truck he does drive the truck home after making his last delivery for the day, but this is a convenience to the employee to enable him to get home without another vehicle, and it eliminates a parking problem for * * * Rogers * * *."
The stipulation further provides in part as follows:
"It is stipulated between the parties that all of the drivers, whether operating trucks owned by them or not, are employees of the Ralph Rogers Company; that in every respect Lewis Van Meter has at all times been a servant of Ralph Rogers Co.; and that for every legal, as well as all other purposes, a masterservant relationship has existed between Ralph Rogers Co. and Lewis Van Meter." (Emphasis added.)
By a two to one vote the commission ordered that Van Meter "cease and desist from the practice of furnishing a motor vehicle under lease arrangement, when, at the same time, he furnishes to said lessee a driver for said vehicle or himself acts as driver for said vehicle and when he furnishes in addition the necessary repairs and maintenance for such vehicle; until such time as the said citee [Van Meter] shall have first obtained a private motor carrier permit from this commission." Van Meter's application for rehearing was subsequently overruled.
The cause is now before this court on appeal by Van Meter from that order of the commission.
Messrs. Schmidt, Effron, Josselson Weber, for appellant.
Mr. C. William O'Neill, attorney general, Mr. Paul Tague, Jr., Mr. Ralph N. Mahaffey and Mr. Herbert Baker, for appellees.
The question to be determined is whether Van Meter, by reason of what he was doing for Rogers as hereinbefore described, was, within the meaning of Section 4923.02, Revised Code, " engaged in the business of private carriage of * * * property * * * or of providing or furnishing such transportation service, for hire, in or by motor-propelled vehicles * * * over any public highway."
In order to bring him within the foregoing statutory language, we must find that, in doing what he was for Rogers, Van Meter was "engaged in the business" so specified.
In a broad sense, a servant, while engaged in the business of his master, may be said to be engaged in business. Thus, it might be said that any truck driver employed for money to drive a truck carrying property, even though so employed as the servant of another, is " engaged in the business of private carriage of * * * property * * * or of providing or furnishing such transportation service, for hire." All parties concede that the statutory language cannot be given so broad a meaning. This is probably because, where one is employed to do something as a servant for another, the doing of that something by such servant is generally regarded as something being done by the master rather than as any activity of the servant. See Derrick v. Commonwealth, 122 Va. 906, 95 S.E. 392, L.R.A. 1918D, 284. The master retains control of, or the right to control, the mode and manner of the servant's doing of the work that he is employed to do. Councell v. Douglas, 163 Ohio St. 292, 126 N.E.2d 597. Hence, it is reasonable to consider the doing of such work in the mode and manner directed by the master as something being done by the one in control thereof and, if it relates to the business of the master, as part of the business of the master rather than as any business of the servant.
On the other hand, where one is employed by another to do something and the relationship of such one to his employer is that of an independent contractor, then the doing of that something is generally regarded as something being done by the independent contractor. Where the relationship is that of employer and independent contractor, the employer has not retained control of, or the right to control, the mode and manner of doing the work contracted for. Hence, it is reasonable to consider the doing of such work in the mode and manner determined by the independent contractor as being definitely an activity of the independent contractor who is in control thereof.
Without a driver, a truck cannot move. For this reason, the furnishing and providing for a monetary consideration of a truck, of the maintenance and repair therefor, of insurance with respect to its operation, and of fuel, oil, other materials, equipment and accessories necessary for its efficient operation, without furnishing or providing a driver, cannot be an engaging "in the business of * * * carriage of * * * property or of providing or furnishing of such transportation service, for hire," within the meaning of those statutory words. See Motor Haulage Co. v. United States, 70 F. Supp., 17 (affirmed without opinion, 331 U.S. 784, 91 L. Ed., 1815, 67 S. Ct., 1205). See also annotation, 7 A.L.R. (2d), 456, 468 et seq. Where, however, a driver is also furnished, then there may be an engaging in such business. See 7 A.L.R. (2d), supra, 472. However, whether there is will depend in a particular instance upon the relationship between the driver of the truck and the one to whom the truck and driver are furnished; and what that relationship is will necessarily depend upon the facts. If the driver, while driving, is "in every respect * * * a servant of" the one to whom the truck is leased (as stipulated in the instant case), then his operation of the truck is part of the business of the lessee and not an engaging in business by the driver or someone else. In such an instance, it cannot be said that even a driver-owner of the truck is " engaged in the business of private carriage of * * * property * * * or of providing or furnishing such transportation service" within the meaning of the statutory words hereinbefore quoted. See 7 A.L.R. (2d), supra, 470, 471. If anyone is engaged in such business, it is the master who is in control of the mode and manner of operating the truck. It may be noted that all parties apparently concede that one, who is carrying his own property or providing or furnishing transportation for it, is not engaged in such "business * * * for hire" within the meaning of the statutory words.
The foregoing analysis and conclusions are supported by decisions which have dealt with similar problems.
Earle, Collector of Internal Revenue, v. Babber, 180 F.2d 1016, involved a statute providing for a tax on "amounts paid to a person engaged in the business of transporting property for hire."
In the court's opinion by Orr, Circuit Judge, it is said:
"Appellees, who were general contractors * * * required the transporting of bulk construction materials from stockpiles and quarries to the job sites. To carry out this transportation, appellees entered into verbal agreements with various owners of trucks for the use of their trucks on an hourly, load or yardmile basis. * * * The Commissioner of Internal Revenue levied the tax on the theory * * * that the truck owners were persons engaged in the transportation of property for hire within the meaning of the statute. * * *
"We think * * * that it is established that the truck owners were not `person[s] engaged in the business of transporting property for hire,' in the sense of carrying on an independent enterprise * * *.
"The main fact relied upon by appellant as evidence of the truck owners' independent-contractor status is the method by which they were paid. In most instances, irrespective of whether payment was by the hour, load or yard-mile, not only gas, oil and repairs were deducted from the compensation paid for the use of the truck, but also the regular wages and `payroll insurance' (social security taxes, etc.,) of the drivers, which had been disbursed by appellees. Owners who drove their own trucks were usually paid wages which were later deducted from the truck `rental,' although in a few instances driver-owners were paid a flat hourly rate for themselves and the truck without deductions. This financial responsibility for all supplies, repairs and drivers' wages caused that remuneration of the owners to vary with the efficiency of both vehicles and drivers and thus tended, it is urged, to give them the character of individual businessmen. Each owner, furthermore, held a permit from the Oregon Public Utilities Commission of a kind issued to operators, as distinguished from owners, of trucks on the public highway, and carried the liability insurance required of the holders of such permits.
"* * * The drivers were subject to the will and control of appellees as to how the work should be done as well as what should be done. The drivers were told where to spot their trucks for loading and unloading and what routes to take. Their times of arrival and departure were recorded and each detail of the work was supervised. The right to discharge the drivers, whether owners or not, at any time, existed. And owners and drivers were at liberty to quit at any time * * *.
"The actual work of hauling done under the close supervision of appellees and their representatives and the lack of control on the part of owners over where, when or how the hauling work should be performed points up the employer-employee relationship. Another important factor is the payment of overtime to owner-drivers. We think such payment is not consistent with the independent contractor idea. On the contrary, such a requirement usually exists in cases where the employer-employee status is maintained." (Emphasis added.)
In Motor Haulage Co., Inc., v. United States, supra ( 70 F. Supp., 17), the case was heard by a three-judge court. It is said in the opinion:
"* * * The commission * * * found that even when plaintiff turned the driver and truck over to a `lessee' who then used that vehicle for its own purposes prescribing routes, there still remained a `presumption' of control by the plaintiff which brought it within the category of a contract carrier under the act.
"We are confident that the commission was right in its determination. * * *
"* * *
"We see no inconsistency in a finding that plaintiff, even though without responsibility to the shipper, is still so far in control of the movement that it is engaged in transportation under the act. * * *
"* * *
"* * * But plaintiff says the * * * limitation imposed upon it * * * that vehicles assigned to shippers must be driven by `employees' of plaintiff, will prevent it from supplementing its own equipment by renting from some other trucking concern vehicles driven by employees of the latter. * * * we believe that plaintiff could hire such vehicles and still remain within the order complained of, because undoubtedly the driver of the hired vehicle would be the `employee' of plaintiff, ad hoc at least, under its method of operation." (Emphasis added.)
In Watson Manufacturing Co., Inc., Common Carrier Application, 51 M.C.C., 223, it is said:
"In determining whether the lease of equipment to the shipper with the driver furnished is for-hire carriage * * * it is necessary to ascertain who has control of the vehicle." (Emphasis added.)
See also Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 172 A.L.R., 837; Lloyd A. Fry Roofing Co. v. Public Service Commission, 338 Mich. 544, 61 N.W.2d 783; Griffin v. Murphy et al., Board of Railroad Commrs., 51 S.D. 50, 211 N.W. 804; Setter Bros., Inc., Common Carrier Application, 51 M.C.C., 559; Bizzoso, Contract Carrier Application, 10 Federal Carrier Cases (C.C.H.), 168, paragraph 32,935; United States v. Rhodes, 97 F. Supp., 468; R.N.G. Commercial Auto Renters, Inc., Contract Carrier Application, 11 Federal Carrier Cases (C.C.H.), 553, paragraph 33, 522.
Several of the cases cited by complainant and by the commission in support of the order of the commission merely represent determinations that, under the facts involved therein, the lessee did not have control of the vehicle or of the manner or mode of its operation. See for example Georgia Truck Systems, Inc., v. Interstate Commerce Commission, 123 F.2d 210 ("no control whatever was exercised over the drivers or over the hauling by the shippers [lessees]"); Interstate Commerce Commission v. Isner, 92 F. Supp., 582 ("[lessee] at no time had sole possession and control of the leased motor vehicle equipment * * *. It was * * * [lessor] who retained control"); Re Frank Ferens (Pennsylvania Public Utility Commission), 58 P.U.R. (N.S.), 525 ("we * * * consider the element of control vital in our determination * * * and find that * * * [lessor] is the party in whom such right of control and direction rests"); Interstate Commerce Commission v. Gannoe, 100 F. Supp., 790 ("it is not clear who directed and controlled the actual operation of the vehicles * * *. There is a strong presumption that * * * the owner-driver controlled the operation and care of the tractor-trailer which he drove. * * * A strong inference arises that he retained authority to direct the manner in which his equipment should be cared for, driven and managed. In the opinion of the court, he dominated the actual operation of the trucks"); United States v. La Tuff Transfer Service, Inc., 95 F. Supp., 375 (as to contention that lessor "did not furnish and control * * * the truck driver, while he was driving the vehicle on the outbound trip which was leased" under a one-way lease, it was stated "this contention is definitely disproved * * *. [The driver] * * * was at all times the overall employee and agent of [lessor] * * *. The theory * * * that * * * the driver * * * automatically becomes the servant * * * of * * * [lessee] for * * * the one-way outbound trip lease and reverts back to being the employee and agent of * * * [lessor] upon the completion of the outbound trip, for further leasing to and driving of the truck for other shippers or carriers, is a fiction").
In view of the stipulation in the instant case "that in every respect * * * Van Meter has been at all times a servant of * * * Rogers * * * and that for every legal, as well as all other purposes, a master-servant relationship has existed between * * * Rogers * * * and * * * Van Meter," it is apparent that the above cases cannot support the order of the commission in the instant case.
Although the reasoning in Public Service Commission v. Lloyd A. Fry Roofing Co., 219 Ark. 553, 244 S.W.2d 147, tends to support the contentions advanced by complainant and the commission in the instant case, there are substantial differences between the facts of that case and those of the instant case. Also, we recognize that reasoning similar to that of the Arkansas court was used in the opinions of some of the cases relied upon by complainant and the commission but which we have hereinbefore mentioned as having been decided substantially upon a determination that their facts indicated the lessees did not have control of the vehicles or of the manner or mode of their operation. However, in our opinion it is more reasonable to make the determination, as to whether a driver-owner of a leased truck is not "engaged in the business of private carriage of * * * property * * * or of providing or furnishing such transportation service, for hire," dependent upon whether he is driving his truck as a servant of the lessee of the truck ( i. e., upon whether the lessee has control of the mode and manner of operating the truck) than to make such determination dependent upon the other guides used by the Arkansas court. Otherwise, we would be recognizing that, in leasing his truck to Rogers and providing Rogers with everything he agreed to provide for under the lease and in driving a truck carrying property of Rogers as a servant of Rogers, Van Meter would not be "engaged in" such "business," except where he happened to drive his own truck. We have difficulty in understanding why that coincidence should supply a reasonable basis for making the doing of what Van Meter did amount to engaging in such business.
Complainant argues further in effect that the General Assembly, having stated in Section 4923.02 A(1), Revised Code, that "private motor carrier" should "not include any * * * person * * * engaged * * * as a private owner or operator of motor vehicles employed or used by a private motor carrier, or by a" common carrier, indicated an intention that "private motor carrier" should include a person engaged as a private owner or operator of vehicles employed or used by someone other than a private motor carrier or a common carrier; and those statutory words, "private motor carrier," therefore include Van Meter because he was such an owner and "operator." Such an argument will necessarily lead to such obviously unsound results as to clearly indicate its fallacy. For example, the word "or" appears between the word "owner" and the word "operator." Therefore, this argument leads to the conclusion that a mere owner of a motor vehicle "employed or used" for hire by a shipper in carrying his property is a private motor carrier. As hereinbefore pointed out, unless such owner also drives or furnishes a driver for the vehicle, he can not come within the statutory definition of such a carrier. Furthermore, if "operator" is construed to include not only one employed as an independent contractor but also one employed as a servant (unless so construed, it would not include Van Meter), then this argument leads to the conclusion that a compensated servant, driving a truck owned by his master and carrying property owned by his master, is a private motor carrier. All parties concede that he is not.
Complainant further contends that, if the order of the commission is not affirmed, then truck owners will be permitted to do what Van Meter was doing for Rogers without complying with the insurance and safety requirements for private motor carriers, and the public will thereby be deprived of the protection which those requirements would provide. A similar argument might be made with respect to the desirability of having such requirements for shippers engaged in transporting their own property in their own vehicles. However, such arguments should be addressed to the General Assembly. This court has the authority to determine what the General Assembly meant by what it said; but it has no power or authority in the guise of doing that to add to legislation something which was not enacted as legislation by the General Assembly.
As observed by the dissenting member of the Public Utilities Commission, the facts are stipulated and simple; and the issue is resolved by him in the following equally simple but cogent language:
"Clearly, had Van Meter sold his truck to the Ralph Rogers Company and had subsequently been hired as an employee by the Rogers Company to operate the truck formerly owned by him there would be no question as to whether * * * said service would constitute transportation service for hire within the meaning of Section 4923.02 of the Revised Code. The only difference existent herein is that Van Meter leased his truck to the Ralph Rogers Company. However, under a bona fide lease the same general incidents of ownership such as possession, control, responsibility, etc., vest in the lessee as do under a sale and transfer of all the title and interest in the property in question * * *."
Our conclusion is that the order of the Public Utilities Commission is unreasonable and unlawful and must therefore be reversed.
Order reversed.
WEYGANDT, C.J., MATTHIAS, HART and STEWART, JJ., concur.
ZIMMERMAN and BELL, JJ., dissent.
Although the facts in Public Service Commission v. Lloyd A. Fry Roofing Co., 219 Ark. 553, 244 S.W.2d 147, are slightly different from those of the instant case, it appears to me that there is sufficient similarity to permit the application of the reasoning of the Arkansas court to this case.
I recognize that in this case it is "stipulated between the parties that all * * * the drivers * * * are employees of * * * Rogers * * *; that in every respect * * * Van Meter has at all times been a servant of * * * Rogers * * *; and that for every legal, as well as all other purposes, a master-servant relationship has existed between * * * Rogers * * * and * * * Van Meter."
In the Arkansas case "it is pointed out that it (the lessee of trucks) carries said drivers as employees, pays social security taxes on them, extends to them vacation benefits, etc., and has absolute control over them." The Arkansas court, however, rejected the control test adopted by the majority herein and held that notwithstanding the control the owner drivers were "transporting * * * property by motor vehicle for compensation." Compare Section 4923.02, Revised Code, which reads in part: "when engaged in the business of * * * furnishing * * * transportation service, for hire."
In so holding the Arkansas court quoted the following statement from Georgia Truck System, Inc., v. Interstate Commerce Commission, 123 F.2d 210, 212, which statement seems to me to be appropriate in the present case:
"It is true that the contracts, under cover of which the operations were conducted, are in most of their provisions carefully drawn to give color to appellant's claim of renting only, and if the operations had been conducted strictly within that form, there might have been some question whether the operations so conducted were transportation operations within the invoked act. When, however, the contracts are read in the light of the construction accorded them by the parties by the actual operations under them, it is clear that the scheme as a whole is a mere subterfuge, an unpermitted evasion, not a real avoidance of the provisions of the law."
That is the conclusion reached by the commission herein on the facts as stipulated by the parties. I do not think that conclusion is either unreasonable or unlawful, and the order of the commission should be affirmed.
ZIMMERMAN, J., concurs in the foregoing dissenting opinion.