
    Floyd A. TOWNSEND, Plaintiff and Appellant, v. INTERNATIONAL PAPER COMPANY et al., Defendants and Appellees.
    No. 1201.
    Court of Appeal of Louisiana. Third Circuit.
    July 15, 1964.
    
      Martin Sanders, Jr., Winnfield, and Lewis Sleeth, Jena, for plaintiff-appellant.
    Madison, Madison & Files, by James Madison, Bastrop, and Nathan M. Calhoun, Vidalia, for defendant-appellee.
    Before TATE, SAVOY and CULPEP-PER, JJ.
   CULPEPPER, Judge.

This is a suit for workmen’s compensation. Plaintiff contends he is totally and permanently disabled from a back injury sustained while loading a pulpwood truck. There are four defendants: (1) A. M. Thomlinson, owner of the truck, is sued on the grounds that he was plaintiff’s immediate employer; (2) B. D. Wyles, owner of the “wood yard” to which the pulpwood was hauled, is sued on the grounds that Thomlinson was Wyles’s subcontractor; (3) United States Fidelity & Guaranty Company, compensation insurer for Mullins & Parker, pulpwood dealers, is sued on the grounds that Wyles was the subcontractor of Mullins & Parker; (4) International Paper Company, owner of the land on which the wood was cut and also owner of the paper mill to which the wood was shipped, is sued on the grounds that it is the principal of its independent contractor, Mullins & Parker.

A. M. Thomlinson, the alleged immediate employer, made no defense. The three remaining defendants denied any compensible accident or disability and also denied the alleged relationships. It is contended that the only relationship which existed • between these respective defendants was that of vendor and vendee of pulpwood.

After a trial on the merits the district judge held A. M. Thomlinson, B. D. Wyles and United States Fidelity & Guaranty Company liable jointly and in solido for compensation benefits at the rate of $35 per week for a period of 12 weeks only. Penalties and attorneys fees were denied. The plaintiff appealed asking permanent and total disability benefits, penalties and attorneys fees and also that International Paper Company be held liable with the other defendants. United States Fidelity & Guaranty Company answered the appeal, asking that the judgment against it be reversed.

There is little dispute as to the accident. The evidence shows clearly that on November 22, 1960, while carrying a piece of pulpwood on his shoulder, to be loaded on Mr. Thomlinson’s truck, the plaintiff stepped in a small roadside ditch and fell to his knees, suffering an immediate pain in his back, thereafter diagnosed as a lumbo-sacral sprain. Mr. Thomlinson and a fellow employee verified the occurrence of the accident and the fact that it occurred while the pulpwood in question was being produced.

The principal issues concern the relationships between the various defendants. Defendants contend each of these relationships was that of buyer and seller whereas plaintiff contends these relationships were that of principal, contractor and subcontractor, within the meaning of LSA-R.S. 23:1061. The general facts regarding these relationships are as follows: International Paper Company owns paper mills in Natchez, Mississippi and Bastrop, Louisiana, which require large supplies of pulpwood. Each mill estimates its needs for the next thirty days and this is pro rated amongst the various area woods superintendents who are responsible for procuring their allotments of pulpwood. The area superintendents then issue pulpwood purchase orders to certain pulpwood dealers for specified amounts of wood which each dealer may ship, during the following week, to one of the paper mills. International buys wood only from dealers. It does not buy direct from producers.

The particular woods superintendent involved here was Mr. Joseph Hodge, whose area included the parishes of Catahoula, Concordia, Caldwell, LaSalle and parts of Winn and Grant. In this area the International Paper Company owns about 145,000 acres of woodlands. Approximately 50% of the pulpwood obtained by International Paper Company in this particular area comes from its own lands and the other 50% is cut from lands belonging to other parties. Mr. Hodge testified that International Paper Company did not produce, that is cut and haul any pulpwood, not even from its own land, except a small experimental tract not involved here. International sold the growing pulpwood on its land to wood dealers and contends that it thereafter maintains no control or supervision whatsoever over the cutting or resale of the particular marked trees sold.

In Mr. Hodge’s area there are five or six (as best we can determine from the record) pulpwood dealers to whom International Paper Company allocates the weekly purchase orders above described. Mullins & Parker is one of these dealers.

Mr. Hodge and Mr. R. H. Parker, of Mullins & Parker, testified that by a written instrument International sold to Mr. Parker, for a lump sum price, all of the trees marked with a certain color paint, located on a certain tract of land owned by International and known as “Tract 2,” or as the “Old Joe Booth Place.” Mr. Parker was to have a certain length of time within which to remove the trees. We do not find that the written timber deed, or any copy thereof, was actually filed in evidence, but the testimony as to these provisions was received without objection or contradiction. There is no testimony as to what other provisions the deed contains.

Mr. Parker then contacted Mr. B. D. Wyles, operator of a pulpwood yard on a railroad siding at Sicily Island, and asked Wyles to see if he could find wood producers to go on Tract 2 and cut the marked trees. The agreement was verbal and to the effect that, when the pulpwood was cut and hauled to Mr. Wyles’s wood yard, he would pay the producers but withhold $2.75 per cord as stumpage for Mr. Parker. Pursuant to this arrangement, Mr. Wyles verbally authorized, several producers, including A. M. Thomlinson, to cut and haul the wood. Mr. Thomlinson and his crew, including the plaintiff, Floyd A. Townsend, were in the process of loading pulpwood, which they had cut from Tract 2, when the accident in question occurred.

The evidence also shows that all of the wood cut from Tract 2 was hauled by truck to Wyles’s wood yard. He paid the producers and withheld $2.75 per cord as stumpage for Mr. Parker. The wood was then shipped by rail to International’s mill. The bills of lading showed R. H. Parker as the shipper and International as the consignee. The wood was scaled at the mill and then International paid Parker, and Parker paid Wyles, for the number of cords so scaled.

With this general description of the various transactions in mind, let us examine in more detail the particular relationships between the respective defendants. First we will consider the relationship between International Paper Company and Mullins & Parker. Plaintiff contends the alleged sale from International Paper Company to Mullins & Parker was, in effect, the same as the disputed sale in the recent case of Redding v. Cade, 158 So.2d 880 (3rd Cir.App.1963). In the Redding case, Continental Can Company owned the land and contended it sold certain marked trees to Cade-Brewton at a certain price per cord. Cade-Brewton cut the pulpwood and resold it at a higher price per cord to Continental for use by its paper plant. We concluded, under the facts shown, that this was not simply a vendor-vendee relationship but, instead, was nothing more than a contract by which Continental paid Cade-Brewton to cut and haul Continental’s timber to Continental’s paper plant. We noted particularly some of the express provisions of the alleged timber sale: Continental reserved the right to cancel this agreement verbally through its field representative at any time, if in its opinion, “proper forest practices, including normal utilization of available timber, are not being carried out * * * ”; Continental had the right to inspect the cutting operations at any time; Cade was required to cut and remove the trees “in one continuous operation;” Cade had to pay damages if he cut an unmarked tree; Cade was paid by the cord, which meant that the alleged “price” of the sale was nothing more than payment for harvesting, by the cord. We noted also the evidence which showed that actually all of the timber cut on Continental’s land by Cade-Brewton was delivered to Continental’s paper plant. We concluded that “because of the explicit and implicit contractual control exercised by Continental over the pulpwood operations and the pulpwood so produced, including Continental’s power to terminate or to cease to renew the short-term agreement if Cade did not deliver to Continental all of the pulpwood produced * * * ” the relationship was that of principal-contractor and not that of vendor-vendee.

In the present case we do not have in evidence the written contract of sale from International Paper Company to Mullins & Parker and therefore it is not shown that this timber deed contained provisions similar to those noted in the Redding case, which would give International control over the harvesting and resale of the wood. Also, it is not disputed that International sold the timber for a lump sum price, rather than by the cord. Mr. Parker testified that if he didn’t get all of the timber cut within the time specified in the contract or if any of the pulpwood was lost in the cutting, hauling or shipping to the mill, it was Parker’s loss. Actually, Mr. Thompson, an employee of Mullins & Parker, who, as will be pointed out hereinafter, supervised the harvesting operation, testified that due to bad weather they were unable to cut all of the timber on Tract 2 before the contract ended and some of the timber purchased by Mr. Parker was still there. Under these circumstances, Parker was not just being paid by the cord for services rendered in cutting and hauling the wood.

Furthermore, we have the uncontradicted testimony of the International officials as well as that of Mr. Parker that International had no right of control, nor did it actually exercise any control whatever over the harvesting or resale of this timber. Mr. Hodges, International’s area superintendent, testified that on several occasions dealers in his area had sold to other parties pulpwood purchased from International’s land.

We certainly recognize that since International owned the land, sold the -timber, and ultimately bought it back in ■the form of pulpwood, the transaction is -suspicious. But, this factor alone is not -sufficient to negative a vendor-vendee relationship. Counsel have not cited, nor have we been able to find, any case from the appellate courts of this state denying .a vendor-vendee relationship on this ground alone.

In the case of Owers v. Louisiana Longleaf Lumber Company, 14 So.2d 275 (1st Cir.App.1943), cited by plaintiff, the lumber ■company owned the land and contracted with plaintiff’s immediate employer to cut .and haul fence posts from this land at a fixed price per post. The posts were used by the lumber company to fence its plant. The court held this was not a vendor-vendee relationship but was instead nothing more than a contract to pay for services rendered.

The case of Ball v. Keyser Aluminum & Chemical Corporation, 112 So.2d 741 (Orleans App.1959) must have been cited by plaintiff through inadvertence. It holds that an employee of an electrical subcontractor of the prime contractor, engaged in the construction of a new aluminum plant, was not entitled to workmen’s compensation .against the manufacturer of aluminum who was to occupy the plant after completion, -on the grounds that the manufacturer was the principal. The case does not involve vendor-vendee relationships.

Next we will consider the relationship between Mullins & Parker and Mr. B. D. Wyles. As stated above, after Mr. Parker bought the timber from International he contacted Wyles and asked him to find wood producers to cut and haul the pulpwood. Wyles paid the producers and withheld the sum of $2.75 per cord as •stumpage for Mr. Parker. Wyles was paid by Parker a certain price per cord for all wood shipped from his yard to International’s mill.

The evidence also shows that Mr. Parker’s woods foreman, a Mr. Thompson, actually supervised the cutting of the trees to see that only marked trees were cut and, more important, to see that all of the marked trees were cut before the contract time expired. Under the circumstances we have no difficulty in deciding that this was not a vendor-vendee relationship but, instead, was a contract whereby Parker compensated Wyles by the cord for services rendered in seeing that the wood was cut and hauled. Stevens v. Mitchell, 234 La. 977, 102 So.2d 237 (La.Supreme Court 1957); Jones v. Hennessy, 232 La. 786, 95 So.2d 312 (La.Sup.Ct.1957); Kline v. Dawson, 230 La. 901, 89 So.2d 385 (La.Sup.Ct.1956).

Under this same reasoning it is apparent that the relationship between Wyles and A. M. Thomlinson, plaintiff’s immediate employer, was not that of vendor-vendee. As stated above, Wyles authorized Thomlinson, and several other producers, to go on the land and cut and haul the pulpwood at a certain compensation per cord of wood delivered to Wyles’s yard. Thomlinson never became the owner of the trees or the pulpwood, anymore than Wyles did. Thomlinson was simply a subcontractor who was compensated for his services.

The next issue is the duration of plaintiff’s disability. As noted above, the district judge found disability for only a period of 12 weeks. The accident occurred on November 22, 1960 and plaintiff first sought medical attention on November 24, 1960, on which latter date Dr. Thomae, a general practitioner in Jonesville, diagnosed a lumbo-sacral strain. Plaintiff was hospitalized 4 days and then was instructed to go home and stay in bed. Dr. Thomae continued to see and treat plaintiff until January 3, 1961 on which daté he discharged him as being able to return to work.

Following his discharge by Dr. Thomae, plaintiff actually did return to work at various jobs, including driving a pulpwood truck for his brother and operating a drag-line, but contends he still had residual pain in his back. On December 5, 1961 plaintiff, was examined by Dr. Jack H. Phillips, an orthopedic surgeon of Natchez, Mississippi, who found no objective symptoms and was of the opinion that if plaintiff had suffered a lumbo-sacral sprain he had fully recovered. Plaintiff was also examined by Dr. T. D. White of Jonesville on October 10, 1962. This doctor agreed with Dr. Phillips that plaintiff had ample time to recover from any lumbo-sacral sprain suffered in the accident and that he showed no residual symptoms and was able to return to work.

Plaintiff was also examined by Dr. Phillip Bonn, a neurosurgeon of Shreveport, Louisiana, on September 1, 1961 and subsequently, after the trial of this case, on April 19, 1963. On the first examination Dr. Bonn found minimal muscle spasm in the lumbar area, but on the last examination he found no such condition. Dr. Bonn noted particularly the absence of any atrophy which indicated to him that plaintiff had been using his back and legs. He did not think that plaintiff was “a good candidate for heavy manual labor” because of his history of back trouble but he was unable to find any permanent residuals of the accident.

Dr. Heinz K. Faludi, also a neurosurgeon of Shreveport, examined plaintiff on September 1, 1961 and again on April 19, 1963. On the first examination Dr. Faludi felt that Townsend was “still somewhat symptomatic and that he should be able to return to some type of work, but I did not believe that he should lift very heavy objects.” After the second examination Dr. Faludi thought plaintiff should not return to work involving the lifting of heavy objects but did think that he could drive a truck and load it with light objects.

Thus we see that the expert medical testimony is in conflict as to whether plaintiff could have returned to work as. a pulpwood loader. However, we note-that none of the doctors found injury to> any bone or intervertebral disc. Nor did! they find any nerve root involvement or muscular atrophy. The symptoms relied on-by Dr. Faludi and Dr. Bonn were almost entirely subjective. The doctors were generally in agreement that 12 weeks was. ample time within which such a lumbo-sacral sprain should have completely healed. Under the circumstances, we are unable to-say that the trial judge was manifestly erroneous in concluding that plaintiff’s disability was limited to 12 weeks.

The next issue is penalties and attorneys fees, which were denied by the district court. Mr. Wyles testified that he-had no knowledge of plaintiff’s injury, or the fact that he claimed to have been hurt while working on Tract 2, until about May-of 1961, which was 5 or 6 months after the-accident. At that time Wyles received a letter from plaintiff’s attorney. Mr. Wyles. testified he answered the letter, but the nature of this response is not in the records This suit was filed on July 27, 1961. The record does not show that any demand was actually ever made on any of the defendants until suit was filed, except possibly the letter to Mr. Wyles. In view of these circumstances and in view of the doubt and uncertainty regarding the relationship between Thomlinson and Wyles, and between Wyles and Mullins & Parker, we are unable to say that the vendor-vendee defense was not, reasonable or that the defendants were arbitrary in failing or refusing to pay workmen’s compensation. We find no manifest, error in the trial court’s denial of penalties, and attorneys fees.

For the reasons assigned, the judgment: appealed is affirmed. All costs of this appeal are assessed against the plaintiff appellant.

Affirmed.

TATE, Judge

(concurring).

I have no difficulty agreeing with any part of the majority opinion, except its conclusion that International Paper Company, one of the defendants, is not liable in workmen’s compensation as a statutory principal under LSA-R.S. 23 :1061.

Under this statutory provision, when a principal contracts out to subcontractors any of the work which is part of the principal’s trade, business, or occupation, then such principal shall be liable in workmen’s compensation to the contractor’s employees injured while in the execution of such work. The purpose of this statutory liability is to prevent a principal engaged in a hazardous business from contracting out his work in order to evade the principal’s liability for workmen’s compensation benefits to employees utilized in such work. See Malone, Louisiana Workmen’s compensation, 1951. Chapter 6, page 140.

In the present case, International Paper contends it is not a principal contracting out part of its work. The majority has sustained this defense on the ground that the evidence shows that International sold its own standing timber to one of its dealers and then merely repurchased same after the dealer had processed the timber into pulpwood.

On the basis of the limited evidence in the record, I cannot say that the majority commits error in holding that these transactions were in reality bona fide sales, and that International had absolutely no control over the harvesting of the timber, so that therefore its sale and the re-purchase of its own timber were only open market transactions. I will therefore concur.

The conclusion that International was not contracting out part of its work is possibly supported by the jurisprudence. However, it seems to me to be supported by a kind of Alice in Wonderland reasoning for an imaginary world.

From any commonsense point of view, International actually paid Mullins & Parker for the services of Mullins & Parker in harvesting International’s timber and delivering it at the railhead cut into pulpwood for International’s use; even though on paper Mullins & Parker was an alleged “purchaser” from and then a re-“seller” to International of the same International timber.

International had several large paper mills requiring enormous amounts of pulpwood to be delivered weekly. To assure an adequate supply, International not only purchased pulpwood on the local market, but it also maintained extensive acreages on which it grew its own timber for the express purpose of manufacturing it into pulpwood.

In the present case, for example, International grew pulpwood on 145,000 acres of land in the five-parish area with which we are concerned. International’s tracts supplied approximately 50% of the pulpwood used by International from this five-parish area.

To harvest its own pulpwood, International did not directly hire the crews who cut and delivered the timber as pulpwood. No, it “sold” the timber on each tract in bulk to one of five dealers, each of whom had standing arrangements to supply International by means of weekly purchase orders of pulpwood, by reason of which these dealers’ entire economic activities were directed towards procuring pulpwood for International as directed by it by these weekly purchase orders. The dealers were given “title” to only those trees on each tract which had been previously marked by paint as selected by International’s foresters as suitable for pulpwood harvesting at that time. (It is immaterial to the present question that, since undesired by International, insignificant amounts of non-pulpwood products were sold to other plants, instead of being wasted or burned.)

• After Mullins & Parker “bought” International’s timber from International, this partnership may have been “free” to sell the timber cut into pulpwood to one of International’s competitors. However, it does not take the eye of a prophet to predict that the profitable connection of Mullins & Parker with International, existing for some twelve years, would soon thereafter have been terminated; and Mullins & Parker would then be out in the cold, cruel world, instead of existing as a well-paid service organization for International, with the responsibility of directing the producing and delivery of pulpwood to International’s plants as requested by International’s weekly purchase orders.

As a matter of fact, the evidence indicates that, while a Mullins & Parker partner believed he could have diverted International’s pulpwood to another market, he also admitted that as a matter of fact he never had. Tr. 128; see also Tr. 120.

Realistically viewed, International Paper was not growing pulpwood timber on hundreds and hundreds of thousand of acres, attended by foresters and with scientific care, for the purpose of furnishing pulpwood to International’s competitors. Undoubtedly, the sole purpose of growing these extensive acreage of pulpwood timber was in order to supply International’s paper plants with the amounts of pulpwood needed by it for the manufacture of paper.

From any realistic sense, International was not “selling” its timber on the open market and then re-“purchasing” it after it was cut into pulpwood. These transactions by International were with its select few dealers, tied into International’s operations by a longstanding and continuous relationship, which International could terminate at will. Although on paper the dealers may have seemed free to dispose of International’s timber, the dealers were in fact only another branch of International’s operations. What International was really paying these dealers for, by the differential between the “selling” and ‘buying” price of the same timber, was for the dealer’s services in having the timber cut, processed into pulpwood, and delivered to International.

Because on the surface of the paper relationship, the dealers were theoretically bona fide purchasers from and re-sellers to International of International’s timber, we are holding International was not a principal contracting out a part of its business. In reality, although the paper transactions are slightly dissimilar, International had exactly the same control and was contracting out the harvesting of its pulpwood in the exactly same manner as were the defendant paper mills held liable in workmen’s compensation to pulpwood producers of timber on paper mill acreages in Redding v. Cade, La.App. 3 Cir., 158 So.2d 880, certiorari denied, and in Hatten v. Olin Mathieson Corp., La.App. 2 Cir., 112 So.2d 135, certiorari denied.

In the Stevens, Jones, and Kline cases cited by the majority, our state Supreme Court has shown an increasingly realistic view that the ultimate recipient of timber products may be responsible in compensation to those injured in harvesting it, where in fact the timber harvesting operations were conducted with the sole aim of supplying the “buyer” (only) with the timber in question, and where in fact the timber harvesting operations were economically controlled by the ultimate “buyer”.

Just as in those decisions the true principal was prevented from shielding himself from compensation liability by what on paper were buyer-seller relationships, so in the present case the Supreme Court may wish to re-examine prior jurisprudence and to hold that, within the meaning of the compensation act, International Paper is a principal herein liable in compensation to the workman injured in producing pulpwood for International’s account, irrespective of whether the paper arrangements between International and its puppets could for some purposes be characterized as bona fide sales. As Professor Wex Malone, the eminent authority on Louisiana workmen’s compensation, has stated in the most recent supplement to his authoritative work: “Apparently it is assumed that a person cannot be a 'seller’ and a ‘contractor’ at the same time, although this writer has never understood why both these relationships cannot exist simultaneously.” Louisiana Workmen’s Compensation (1951), 1964 Pocket Part, Section 123, at p. 47.  