California Employment Stabilization Commission v. Lund

NOURSE, P. J. Two actions were consolidated for trial— one brought by the commission to recover contributions, penalties and interest, the other brought by Lund to recover taxes, or contributions, paid under protest. Lund recovered in both on one judgment and the commission appeals on one record and one set of briefs.

Lund had been for a number of years the owner and operator of the Campus Garage in Palo Alto. He held the local-agency for the Chrysler and Plymouth ears and maintained the garage as a storeroom and salesroom for these cars, for the storage or parking of cars generally, and for the servicing and repair of all cars brought in. The rear of the garage was set apart for the repair work and this space was divided into five stalls separated by fences or partitions and each containing benches and racks for the storage of tools and equipment of the individual workmen.

Prior to 1939 Lund managed the entire garage and employed mechanics to service and repair the cars brought in. During that year he had trouble with labor unions and abandoned the repair business. Some of his mechanics requested leave to rent space in the garage where they could operate the repair business independently. Leases were executed in March, 1939, which were superseded by others executed in November of that year. It is under these leases that respondent contends that these mechanics are independent contractors.

Taking the lease with R. E. Mailly, which is fairly typical of the others, we find these pertinent provisions: The lease covers stall “B” designated on the attached floor plan. Tbie term is for one year with leave to the lessor to terminate at the end of a six months’ period upon given 30 days’ written notice. The lessee engages to pay all taxes, license fees, and other charges levied against his equipment or in connection with the business. The lessee agrees to care for the property leased to him and to make all repairs and improvements at his own expense. “The lessee may conduct his business as he sees fit and none of the provisions of this lease shall be construed as reserving to lessor any right to exercise any control or management over the business or operations of the lessee, and neither lessee, nor any person performing any duties or engaged in any work at the request of lessee upon the leased premises, shall be an employee or agent of lessor. ’ ’ The lessee undertakes to hold the lessor harmless from all claims on account of injury to or death of any person, including his em[569]ployees, and from all claims on account of injury to property arising out of the operation of the leased premises.