Humble Oil & Refining Co. v. Martin

GARWOOD, J.

Petitioners Humble Oil & Refining Company and Mrs. A.C. Love and husband complain here of the judgments of the trial court and the Court of Civil Appeals in which they were held in damages for personal injuries following a special issue verdict at the suit of respondent George F. Martin acting for himself and his two minor daughters. The injuries were inflicted on the three Martins about the noon hour on May 12, 1947, in the City of Austin, by an unoccupied automobile belonging to the petitioners Love, which, just prior to the accident, had been left by Mrs. Love at a filling station owned by petitioner Humble for servicing and thereafter, before any station employee had touched it, rolled by gravity off the premises into and obliquely across the abutting street, striking Mr. Martin and his children from behind as they were walking into the yard of their home, a short distance downhill from the station.

The trial court rendered judgment against petitioners Humble and Mrs. Love jointly and severally and gave the latter judgment over against Humble for whatever she might pay the respondents. The Court of Civil Appeals affirmed the judgment after reforming it to eliminate the judgment over in favor of Mrs. Love, without prejudice to the right of contribution by either defendant. . . . The petitioners here respectively complain of the judgment in favor of the Martins, and each seeks full indemnity (as distinguished from contribution) from the other.

The apparently principal contention of petitioner, Humble, is that it is liable neither to respondent Martin nor to petitioner Mrs. Love, since the station was in effect operated by an independent contractor, W. T. Schneider, and Humble is accordingly not responsible for his negligence nor that of W. V. Manis, who was the only station employee or representative present when the Love car was left and rolled away. In this conncetion, the jury convicted petitioner Humble of the following acts of negligence proximately causing the injuries in question: (a) Failure to inspect the Love car to see that the emergency brake was set or the gears engaged; (b) failure to set the emergency brake on the Love car; (c) leaving the Love car unattended on the driveway. The verdict also included findings that Mrs. Love "had delivered her car to the custody of the defendant Humble Oil & Refining Company, before her car started rolling from the position in which she had parked it"; that the accident was not unavoidable; and that no negligent act of either of petitioners was the sole proximate cause of the injuries in question. We think the Court of Civil Appeals properly held Humble responsible for the operation of the station, which admittedly it owned, as it did also the principal products there sold by Schneider under the so-called "Commission Agency Agreement" between him and Humble which was in evidence. The facts that neither Humble, Schneider nor the station employees considered Humble as an employer or master; that the employees were paid and directed by Schneider individually as their "boss", and that a provision of the agreement expressly repudiates any authority of Humble over the employees, are not conclusive against the master-servant relationship, since there is other evidence bearing on the right or power of Humble to control the details of the station work as regards Schneider himself and therefore as to employees which it was expressly contemplated that he would hire. The question is ordinarily one of fact, and where there are items of evidence indicating a master-servant relationship, contrary items such as those above mentioned cannot be given conclusive effect. . . . Even if the contract between Humble and Schneider were the only evidence on the question, the instrument as a whole indicates a master-servant relationship quite as much as, if not more than, it suggests an arrangement between independent contractors. For example, paragraph 1 includes a provision requiring Schneider "to make reports and perform other duties in connection with the operation of said station that may be required of him from time to time by Company." (Emphasis supplied). And while paragraph 2 purports to require Schneider to pay all operational expenses, the schedule of commissions forming part of the agreement does just the opposite in its paragraph (F), which gives Schneider a 75% "commission" on "the net public utility bills paid" by him and thus requires Humble to pay three-fourths of one of the most important operational expense items. Obviously the main object of the enterprise was the retail marketing of Humble's products with title remaining in Humble until delivery to the consumer. This was done under a strict system of financial control and supervision by Humble, with little or no business discretion reposed in Schneider except as to hiring, discharge, payment and supervision of a few station employees of a more or less laborer status. Humble furnished the all important station location and equipment, the advertising media, the products and a substantial part of the current operating costs. The hours of operation were controlled by Humble. The "Commission Agency Agreement", which evidently was Schneider's only title to occupancy of the premise, was terminable at the will of Humble. The so-called "rentals" were, at least in part, based on the amount of Humble's products sold, being, therefore, involved with the matter of Schneider's remuneration and not rentals in the usual sense. And, as above shown, the agreement required Schneider in effect to do anything Humble might tell him to do. All in all, aside from the stipulation regarding Schneider's assistants, there is essentially little difference between his situation and that of a mere store clerk who happens to be paid a commission instead of a salary. The business was Humble's business, just as the store clerk's business would be that of the store owner. Schneider was Humble's servant, and so accordingly were Schneider's assistants who were contemplated by the contract. Upon facts similar to those at bar but probably less indicative of a master-servant relationship, the latter has been held to exist by respectable authority, which seems to reflect the prevailing view in the nation. Gulf Refining Company v. Brown, supra, and cases cited therein. If the Brown case be said to conflict with the later decision of the 5th Circuit in Bartle v. Travellers Insurance Co., . . . the facts of the latter are yet more persuasive of an independent contractor type of relationship than the instant case, so the decision is not contrary to our holding.

The evidence above discussed serves to distinguish the instant case from The Texas Company v. Wheat . . . upon which petitioner Humble principally relies. In that case the evidence differed greatly from that now before us. It clearly showed a "dealer" type of relationship in which the lessee in charge of the filling station purchased from his landlord, The Texas Company, and sold as his own, and was free to sell at his own price and on his own credit terms, the company products purchased, as well as the products of other oil companies. The contracts contained no provision requiring the lessee to perform any duty The Texas Company might see fit to impose on him, nor did the company pay any part of the lessee's operating expenses, nor control the working hours of the station. From the court's comments in distinguishing Texas Co. v. Freer . . . (Tex. Civ. App., writ dism., judgm. cor.), and Gulf Refining Co. v. Rogers . . . the differences between the Wheat case and the instant case became still more evident. Much the same may be said of The Texas Company v. Grant,. . . decided on the strength of the Wheat case but involving very meagre evidence on the point in question and even less proof of a master-servant relationship than the Wheat case. American National Insurance Company v. Denke, . . . denied liability of the insurance company to third parties injured by an automobile driven by a soliciting agent of the company in the course of calling on policyholders or "prospects" and owned by the agent's wife. While that case does illustrate that tight control by the alleged "master" over the primary sphere of the alleged "servant's" work does not of itself entail responsibility for his acts in a sphere which is not subject to control, we think the factual situation is essentially different from that before us which, as stated, resembles one of a clerk in a store owned and controlled by the alleged "master".

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The judgment of the Court of Civil Appeals is reversed as to that portion of it which merely eliminates the part of the trial court judgment granting recovery over against petitioner Humble Oil & Refining Company in favor of petitioner Mr. and Mrs. A. C. Love and adjudicates the rights between these defendants to be determinable on the basis of contribution under Art. 2212 Vernon's Annotated Civil Statutes, rather than on an indemnity basis. The judgment of the trial court is modified to allow the petitioner first named recovery against petitioner Mrs. A. C. Love by way of indemnity for such sums as it may pay and be required to pay to the plaintiffs, George F. Martin et al, or any of them under the judgment rendered against it in their favor and so as to allow said petitioner Humble Oil & Refining Company, recovery against petitioner Mrs. Love for all court costs incurred by the former. In all other respects the judgments of the trial court and Court of Civil Appeals are affirmed.

Associate Justice Sharp, Chief Justice Hickman, and Associate Justice Taylor concur in part and dissent in part, Associate Justice Hart disqualified and not sitting.