Amalgamated Poofing Co. v. Travelers' Ins. Co.

• Decision Date: 22 December 1921
• Docket Number: No. 14296.,14296.
• Citation: 300 Ill. 487,133 N.E. 259
• Parties: AMALGAMATED POOFING CO. v. TRAVELERS' INS. CO.
• Court: Illinois Supreme Court

300 Ill. 487

133 N.E. 259

AMALGAMATED POOFING CO.

v.TRAVELERS' INS. CO.

No. 14296.

Supreme Court of Illinois.

Dec. 22, 1921.

Action by the Amalgamated Roofing Company against the Travelers' Insurance company. Judgment for defendant was affirmed by the Appellate Court, and, on certificate of importance, plaintiff appeals.

Reversed and remanded.

Appeal from Second Branch, Appellate Court, First District, on Appeal from Municipal Court of Chicago; Wells M. Cook, Judge.

Roy O. West, Percy B. Eckhart, William Rothmann, and William M. Klein, all of Chicago, for appellant.

Frank M. Cox and Albert N. Powell, both of Chicago (Robert J. Folonie, of Chicago, of counsel), for appellee.

DUNN, J.

The Appellate Court for the First District, having affirmed a judgment of the municipal court of Chicago in favor of the defendant, the Travelers' Insurance Company, granted a certificate of importance and appeal to the plaintiff, the Amalgamated Roofing Company.

The appellant is a corporation organized to buy and sell at wholesale and retail roofing materials and other building materials, and to construct and erect all kinds of buildings. It had a plant at Clearing, Ill., consisting of several buildings. In the spring of 1918 it undertook the erection of a new warehouse adjoining the north end of its plant, using the west wall as a part of the new structure. About the middle of May the appellant, through its president, entered into an oral contract with J. N. Colvin to lay the roof of the new warehouse at $1.50 a square, and to make some repairs on the old roof, the price of which was not agreed on, the appellant furnishing the material. The work was done under the direction of Colvin, who was told to look for instructions as to the work to the appellant's foreman, Robert McLean. Colvin hired, paid, and discharged the workmen, though one was discharged by him at McLean's request. McLean gave directions about the work, which were followed by Colvin and his workmen. On May 28, Walter M. Frame was employed by Colvin to work on the job, and on June 1, while so employed, received an injury which caused his death the same day.

The appellee, a liability insurance company, had issued to the appellant a policy whereby it agreed with the appellant--

‘as respects personal injuries sustained by his employees, including death at any time resulting therefrom, as follows:

‘ Indemnity.-I. (a) To pay to the person, and in the manner provided by the Workmen's Compensation Law, any sum due or to become due from his employer because of any such injury and the obligation for compensation therefor imposed upon or accepted by this employer under certain statutes cited and described in an indorsement attached to this policy, each of which statutes is herein referred to as the Workmen's Compensation Law. It is agreed that all of the provisions of each Workmen's Compensation Law covered hereby shall be and remain a part of this contract as fully and completely as though written herein, so far as they apply to compensation for any personal injury or death covered by this policy while this policy shall remain in force, and all premiums provided by this policy or by any indorsement hereon shall be fully earned, whether any such Workmen's Compensation Law, or any part of any such, is now or shall hereafter be declared invalid or unconstitutional. This obligation for compensation shall include all provisions of the Workmen's Compensation Law respecting funeral expenses, medical, surgical, nurse, and hospital service, medical or surgical apparatus or appliances, and medicines. Nothing herein contained shall operate to so extend this policy as to include within its terms any Workmen's Compensation Law, scheme, or plan not cited and described in an indorsement hereto attached.

‘(b) To indemnify this employer against loss by reason of the liability imposed upon him by law for damages on account of such injuries.

‘ Service.-II. (1) To serve this employer by the inspection of work places covered by the policy when and as deemed desirable by the company, and thereupon to suggest to this employer such changes or improvements as may operate to reduce the number or severity of injuries during work; and (2) upon notice of such injury by investigation thereof and by settlement of any resulting claims in accordance with the law.

‘ Defense.-III. To defend in the name and on behalf of this employer any suits or other proceedings which may at any time be instituted against him on account of such injuries, including suits or other proceedings alleging such injuries and demanding demages or compensation therefor, although such suits, other proceedings, allegations or demands are wholly groundless, false or fraudulent.

‘ Expenses.-IV. To pay all costs taxed against this employer in any legal proceeding defended by the company, all interests accruing after entry of judgment, and all expenses incurred by the company for investigation, negotiation or defense.

‘ Persons Covered.-V. This agreement shall apply to such injuries sustained by any person or persons legally employed by this employer whose entire remuneration shall be included in the total actual remuneration for which provision is hereinafter made, upon which remuneration the premium for this policy is to be computed and adjusted, and to such injuries sustained by the president, any vice president, secretary or treasurer of this employer, if a corporation; but the remuneration of any such officer may be excluded unless he personally supervises the manual or mechanical processes covered hereby.’

The policy became effective January 28, 1916, and was to remain in force until canceled by one of the parties in the manner provided by section (b) of the policy. By the terms of section (a) of the policy, which is set out above, the provisions of the Workmen's Compensation Act of 1913 (Laws 1913, p. 335), the Workmen's Compensation Act of 1915 (Laws 1915, p. 400), and any laws amendatory thereof which might become effective while the policy was in force, became a part of the contract, those acts being described in the indorsement attached to the policy mentioned in section (a).

On July 11, 1918, Rhoda Frame, the administratrix of the estate of Walter M. Frame, filed with the Industrial Commission a petition for compensation for his death, which she alleged resulted from an accident arising out of and in the course of his employment by the appellant, J. N. Colvin and the J. N. Colvin Roofing Company. A hearing before an arbitrator resulted in a finding that the deceased and the respondents on June 1, 1918, were operating under the provisions of the Workmen's Compensation Act, and on that date the deceased sustained an accidental injury which arose out of and in the course of his employment, and an award against the respondents of $10 a week for 400 weeks. On review by the Industrial Commission the award was ordered on December 2, 1918, to stand as the award of the Commission. It has not been reviewed in any proceeding for that purpose, and the appellant is performing the award. The appellee was notified of the proceeding before the Industrial Commission, but denied any liability under its policy. It did, however, through its attorney make defense in the appellant's name before the arbitrator and the Commission, but no claim is based on its action in this regard. After the confirmation of the award the appellee finally declined any further connection with the case, and disclaimed any liability by reason of its contract, as it had done from the beginning.

In its statement of claim the appellant alleged that Frame, while working for and employed by the appellant under the Workmen's Compensation Laws of the state of Illinois, received accidental injuries which caused his death; that his administratrix brought proceedings for compensation against the appellant before the Industrial Board; that the appellee had due notice of such proceedings and appeared and defended; that an award, as above mentioned, was made on December 2, 1918, and that the appellee on December 19, 1918, refused to longer defend the appellant in said proceeding and other proceedings for the review of the decision, and refused to pay the award or any part thereof, and that the appellant has paid all accrued payments on the award. The appellee's affidavit of merits denied that Frame was an employee of the appellant, but alleged that he was an employee of J. N. Colvin, an independent contractor, and that the award of the Industrial Commission was made on account of the failure of the appellant to cause Colvin and his employees to carry compensation insurance, and not on the ground that Frame was an employee of the appellant. The cause was heard by the court without a jury.

The appellee's contentions are that the policy did not insure the appellant as to Frame, because he was not, at the time he was injured, in the employ of the appellant, but was an employee of Colvin, an independent contractor, while the contract on the part of the appellee to indemnify the appellant was expressly limited to appellant's own employees.

At the time the policy was issued section 31 of the act of 1913 was in force, which provided, in substance, that any reason contracting to have done for him any work enumerated as extra-hazardous in paragraph (b) of section 3, requiring the employment of employees on the premises where such work was to be done, who did not require the person, firm, or corporation...