Carnes v. Industrial Commission

• Decision Date: 11 February 1952
• Docket Number: No. 5540,5540
• Citation: 240 P.2d 536,73 Ariz. 264
• Parties: CARNES v. INDUSTRIAL COMMISSION et al.
• Court: Arizona Supreme Court

Page 536

240 P.2d 536

73 Ariz. 264

CARNES v. INDUSTRIAL COMMISSION et al.

No. 5540.

Supreme Court of Arizona.

Feb. 11, 1952.

Rehearing Denied March 4, 1952.

Laney & Laney, of Phoenix, for petitioner.

H. S. McCluskey, of Phoenix (Robert E. Yount and Robert W. Pickrell, Phoenix, of counsel), for respondent Industrial Commission of Arizona.

Darrell R. Parker, of Phoenix, for respondent Agro Phosphate Co., a California corporation.

STANFORD, Justice.

On April 28, 1950, Elton Ernest Carnes, Jr. sustained fatal injuries from an accident arising out of and in the course of his employment. He left surviving him his widow, Edna Florence Carnes, petitioner, and three minor children. The accident was caused by an explosion which occurred while Carnes was welding a liquid fertilizer tank owned by the Arizona Agro Phosphate Company, an Arizona corporation, on its premises in Phoenix.

Petitioner duly filed her application for compensation with the Industrial Commission of Arizona. In due course a hearing was held and, on April 28, 1951, the commission entered its finding and award, denying compensation to the petitioner on the ground that decedent, at the time of his injury, was the employee of the Agro Phosphate Company, a California corporation. Upon rehearing, the commission handed down its decision affirming its prior award denying compensation.

For about three years prior to the date of the accident Carnes had been steadily employed in California by a California corporation known as the Agro Phosphate Company, working on liquid fertilizer tanks owned by it. The business of the California corporation, as well as that of the Arizona corporation, was the sale and distribution of liquid fertilizer. The officers and controlling stockholders of both corporations were members of the Greening family, of California.

A few days before the date of the accident, Reymond Laine, the manager of the Arizona corporation, telephoned Gordon Greening, who was president of the California corporation, and also secretary-treasurer of the Arizona corporation, and asked Greening to loan Carnes to him to do some welding on tanks of the Arizona corporation which were in need of repair. During the previous two years it had been the custom of the Arizona corporation on occasion to borrow skilled employees from the California corporation. On all these occasions the employees would remain on the payroll of the California corporation, although the wages for the time they worked for the Arizona corporation and a proportionate share of withholding and social security taxes, together with a small amount for bookkeeping, would be charged to the Arizona corporation on an open account and later paid by the Arizona corporation. Carnes agreed to go to Arizona and do the work for the Arizona corporation, whereupon Greening, acting as secretary-treasurer of the Arizona corporation, drew a check for fifty dollars on the Arizona corporation in favor of Carnes, as expense money for his trip. Two years previous to this, Carnes, under the same arrangement, had worked for the Arizona corporation in Phoenix, building storage tanks under Laine's direction.

On April 27, 1950 Carnes arrived at the plant of the local company in Phoenix. He asked to see Laine, the manager, but the latter was out. When Laine returned to the plant he outlined the work he wanted done. He showed Carnes the tanks he wanted welded and where the leaks were in those tanks. Laine furnished Carnes a welding machine with which to work and had some of his men assist Carnes in preparing the tanks that were to be welded. Laine stayed after normal quitting time that evening and directed Carnes in his work until about 7 o'clock when they both quit for the day. The explosion which was fatal to Carnes took place the following evening. The tank on which Carnes was welding at the time of the explosion had developed a leak after Carnes had arrived on the job and Laine had asked Carnes to repair the same.

This appeal is from the award of the industrial commission denying petitioner's claim for compensation under the Arizona workmen's compensation law.

The industrial commission's award is based upon its contention that Carnes was an employee of the California corporation at the time the fatal accident occurred. Petitioner contends Carnes was a 'loaned employee', under the supervision of the Arizona corporation, and comes within the provision of the Arizona workmen's compensation law. The general issues involved in this case are well stated in 58 Am.Jur. 812, § 343, which reads in part as follows: '* * * In the absence of any controlling statutory, or any express or implied contractual, provision to the contrary, the rule may be stated to be that a general employer, that is, the employer contracting directly with the employee, is liable for workmen's compensation is the event of an injury to the employee unless it is shown by the terms of a loan hiring or similar arrangement that the general employer relinquished for the time being all primary benefits to and substantial right to control the work; and if, on the other hand, it is shown by any such arrangement that the general employer relinquishes the services and control of an employee so that the employee becomes for the time being subject to the supervision with another, the latter becomes liable for compensation for an injury sustained in the course of such work, and the general employer is absolved from liability therefor. As stated in several cases, the employee must look for compensation to the employer under whose direction and control he was working at the time of the injury. * * *'

First let us define the word employee by referring to the Arizona workmen's compensation law. Section 56-928, A.C.A.1939, states in part:

'* * * For the purposes of this section 'regularly employed' includes all employments, whether continuous throughout the year, or for only a portion of the year, in the usual trade, business, profession, or occupation of an employer.

'(b) When an employer procures work to be done for him by a contractor over whose work he retains supervision or control, and such work is a part or process in the trade or business of the employer, then such contractors and the persons employed by him, and his subcontractor, and persons employed by the subcontractor, are within the meaning of this section, employees of the original employer. * * *'

Section 56-929(a) 2 of our code states as follows: '(a) In this article, unless the context otherwise requires, the terms 'employee,' 'workman,' and 'operative' mean: * * * 2. every person in the service of any employer subject to the provisions of this article, including aliens and minors legally or illegally permitted to work for hire, but no including a person whose employment is casual and is not in the usual course of trade, business or occupation of the employer.'

We have often been called upon to construe the effect and meaning of the above cited sections of our code. We will now apply the facts of the case at bar to the law in this jurisdiction.

The first question to consider is whether Carnes work was in the usual course of trade, business or occupation of the employer. In S. H. Kress & Co. v. Industrial Comm., 38 Ariz. 330, 299 P. 1034, we held that the making of repairs to a building were in the usual course of trade, business or occupation of the employer and allowed compensation as an employee to a carpenter engaged solely to make such repairs as then were needed. Raymond Laine, the manager of the Arizona corporation, testified that he had on several occasions employed local...