Marchbanks v. Duke Power Co.

• Decision Date: 09 May 1939
• Docket Number: 14876.
• Parties: MARCHBANKS v. DUKE POWER CO. et al.
• Court: South Carolina Supreme Court

2 S.E.2d 825

190 S.C. 336

MARCHBANKS v. DUKE POWER CO. et al.

No. 14876.

Supreme Court of South Carolina

May 9, 1939

The order of Judge Oxner follows:

This action was commenced by the plaintiff on September 13, 1938 seeking the recovery of damages for injuries sustained by him on June 29, 1938, while painting a pole belonging to Duke Power Company. The Power Company was, and is, engaged extensively in the business of generating, transmitting and selling electric current in the Piedmont section of the Carolinas, including the City of Greenville, this business necessitating the erection and maintenance of numerous poles and transmission lines throughout the City of Greenville. It entered into a contract with one Coln for the painting of 170 of its metal poles located in the business district of Greenville, the Power Company furnishing the paint and Coln doing the painting at the rate of One ($1) Dollar per pole. Plaintiff was employed by Coln to assist him in this work. While so engaged he came in contact with what he alleges was a defectively insulated wire, resulting in the injuries complained of.

The pleadings and the stipulation show that the Power Company was operating under the Workmen's Compensation Act, Act July 17, 1935, 39 St. at Large, p. 1231, and that the maintenance of its poles and transmission lines was a part of its regular business, ordinarily performed by its regular employees further, that the painting of said poles was an essential part of the maintenance work but that it "has been done by Coln under substantially the same arrangements as involved in this case, this having been done approximately four times," prior to this occurrence, at intervals of approximately two years each.

The Power Company, among other defenses, set up the defense that any claim which the plaintiff might have would necessarily come under the provisions of the Compensation Act. To this defense the plaintiff demurred on the grounds that it appeared that plaintiff was not an employee of the Power Company, but an agent and servant of the independent contractor Coln. Further, that the work being done was not part of the Power Company's trade, business or occupation.

At this point the parties to the action agreed upon a settlement and entered into a stipulation submitting the matter to the Court to determine: (1) Whether the plaintiff had the right to maintain the action at common law. (2) Whether a settlement of said action would bar any further claim by plaintiff or his dependents. It was agreed that if the Court answered these questions in the affirmative judgment should be rendered in favor of the plaintiff in the sum of Seven Thousand ($7,000) Dollars; otherwise, that the action would be dismissed and the plaintiff would file claim under the Compensation Act.

The only question, therefore, for determination by me is whether or not plaintiff's claim for damages against Duke Power Company comes within the terms of the Workmen's Compensation Act. The portion of the Act in controversy is as follows:

"§ 19. Rights of Employees of Sub-Contractors--Rights and Liability of Contractor and Sub-Contractors.--(a) Where any person (in this section referred to as 'owner') undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section referred to as 'subcontractor') for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Act which he would have been liable to pay if the workman had been immediately employed by him.

"Where any person (in this section referred to as 'contractor') contracts to perform or execute any work for another person, which work or undertaking is not a part of the trade, business or occupation of such other person and contracts with any other person (in this section referred to as 'subcontractor') for the execution or performance by or under the subcontractor of the whole or any part of the work untaken by such contractor then the contractor shall be liable to pay to any workman employed in the work any compensation under this Act which he would have been liable to pay if that workman had been immediately employed by him.

"Where the subcontractor, as the term is hereinbefore used, in turn contracts with still another person (in this section also referred to as 'subcontractor') for the performance or execution by or under such last subcontractor of the whole or any part of the work undertaken by the first subcontractor, then the liability of the owner or contractor, as those terms are hereinbefore used, shall be the same as the liability imposed by the preceding paragraphs of this subsection.

"Where compensation is claimed from or proceedings are taken against the owner or contractor, as those terms are hereinbefore used, then, in the application of this Act reference to the owner or contractor shall be substituted for reference to the subcontractor, except that the amount of compensation shall be calculated with reference to the earnings of the workman under the subcontractor by whom he is immediately employed.

"(b) Where the principal contractor is liable to pay compensation under this section, he shall be entitled to indemnity from any person who would have been liable to pay compensation to the workman independently of this section or from an intermediate contractor, and have a cause of action therefor.

"(c) Nothing in this section shall be construed as preventing a workman from recovering compensation under this Act from a subcontractor instead of from the principal contractor, but he shall not collect from both.

"(d) A principal contractor when sued by a workman of a subcontractor shall have the right to call in that subcontractor or any intermediate contractor or contractors as defendant or co-defendant."

The plaintiff contends that he does not come within the terms of the Act for the following reasons (using the language of plaintIff's counsel):

"(1) That the first paragraph of section 19 of the Act is not applicable as making the 'owner' liable where such 'owner' contracts to have the work done by an independent contractor, and the employee of an independent contractor is injured. The plaintiff further contends that the second paragraph of said section is not applicable, in that said section does not purport in any wise to fix liability upon the 'owner', but merely provides that an injured employee of a subcontractor may go against the independent contractor for his compensation. In that connection, it is contended by the plaintiff that for the second paragraph of said section to apply, as fixing liability on the independent contractor there must be four persons in interest: An 'owner', an independent contractor, a subcontractor under the independent contractor, and an injured employee of the subcontractor.

"(2) It is further contended by the plaintiff that, in the event it should be held that plaintiff is included in said Section 19, it would not be applicable in the present case because the work on which plaintiff was engaged was not a part of the trade, business or occupation of Duke Power Company. Further, that the Company was not undertaking 'to perform or execute' the work, but was 'having the work executed.'

"(3) Lastly, it is contended by the plaintiff that in any event, the remedy under the Compensation Act under the circumstances here involved is not exclusive and that, even though the foregoing Section of the Act should be considered applicable, the plaintiff can, nevertheless, maintain an action at common law."

These three contentions on the part of the plaintiff will be disposed of in the order stated.

Taking up the plaintiff's first contention as above set out, it seems to me that the intention on the part of the General Assembly in including Section 19 in our Compensation Act was to extend the benefits of said Act so as to cover workers who otherwise would not be entitled to the protection thereof. In an annotation found in 58 A.L.R. at page 872, it is said:

"Although many of the workmen's compensation acts did not originally include them, provisions are rapidly being added in the different jurisdictions making 'principals,' 'principal employers', 'general contractors,' etc., liable for compensation to employees of independent contractors and subcontractors. Such provisions vary in different jurisdictions, appearing in nearly as many forms as there are jurisdictions.

"It would seem that the chief purpose of the provisions of this type is to protect the employees of subcontractors who are not financially responsible and to prevent employers from relieving themselves from liability by doing through independent contractors what they would otherwise do through direct employees."

It is well settled, as was stated by the Supreme Court of this State in the case of Rudd v. Fairforest Finishing Company, 189 S.C. 188, 200 S.E. 727, 729, decided January 3, 1939, that "Compensation laws should be given a liberal construction in furtherance of the munificent purpose for which they were enacted ***." Applying this rule of construction to the section in question there can be no doubt that the plaintiff's first contention is not well founded.

It is not contended by defendant that this controversy is controlled by the second paragraph of this Section. Defendant does contend, and I think properly so, that the second paragraph as well as the remaining paragraphs of this Section, is important in determining the proper construction of the first paragraph.

One of the principal arguments advanced by plaintiff's counsel was...