Fay v. Industrial Commission

• Decision Date: 18 June 1941
• Docket Number: 6259
• Citation: 114 P.2d 508,100 Utah 542
• Court: Utah Supreme Court
• Parties: FAY v. INDUSTRIAL COMMISSION et al

114 P.2d 508

100 Utah 542

FAY v. INDUSTRIAL COMMISSION et al

No. 6259

Supreme Court of Utah

June 18, 1941

Certiorari by Mrs. Jane W. Fay, widow of R. W. Fay, deceased to review an order of the Industrial Commission denying claim for benefits on account of the death of plaintiff's husband while employed as a salesman for the B. F. Goodrich Company, which was insured by the General Accident, Fire &amp Life Assurance Corporation.

Order set aside and cause remanded.

Edward B. Twining, of Platt & Black, of Portland Or., and H. G Metos, of Salt Lake City, for plaintiff.

Joseph Chez, Atty. Gen., and Judd, Ray, Quinney & Nebeker, of Salt Lake City, for defendants.

WOLFE, Justice. MOFFAT, C. J., and McDONOUGH and PRATT, JJ., concur. LARSON, Justice, dissenting.

OPINION

WOLFE, Justice.

Certiorari to review an order of the Industrial Commission denying plaintiff benefits on account of the death of her husband, Richard W. Fay, a salesman for B. F. Goodrich Company. He was killed on March 30, 1939, in an automobile accident in the State of Idaho, while traveling in the course of his employment.

The facts are not disputed. Fay entered the employ of the B. F. Goodrich Company at his home office in Akron, Ohio, on November 6, 1933, and was continuously in its employ until his death. At first he was engaged in sales promotion work in the Midwest. In 1935 he was transferred to California to work in a similar capacity, later being promoted to missionary salesman. In the fall of 1937 he was appointed salesman for a territory covering Utah, Montana, Idaho, and sections of Nevada, Oregon and Washington. He received a salary increase at that time which was approved by the home office in Akron. About January 1, 1938, Fay assumed his new duties and thereafter maintained headquarters in Salt Lake City. His employment was then carried by the rubber company as being in this state in its reports covering Workmen's Compensation, Unemployment Insurance, and the Federal Social Security Tax. From that time on, Fay worked about 50% of the time in Utah, maintained a residence in this state, reported his itineraries to, and received his mail through Goodrich store in Salt Lake City. His travel in the other states in his territory was, to a considerable extent in contacting customers of Salt Lake City business houses through which Goodrich products were sold. He received his instructions and salary through the company's branch in Los Angeles.

There is involved the construction of Sec. 42-1-52, R. S. U. 1933, which provides as follows:

"If a workman who has been hired in this state receives personal injury by accident arising out of or in the course of such employment, he shall be entitled to compensation according to the law of this state, even though such injury was received outside of this state. If a workman who has been hired outside of this state is injured while engaged in his employer's business and is entitled to compensation for such injury under the law of the state where he was hired he shall be entitled to enforce his rights against his employer in the courts of this state." (Italics added.)

We are particularly concerned with the sentence of the above section which we have italicized, since it defines the conditions under which compensation under the law of this state may be granted. The primary requisite is that claimant be "a workman who has been hired in this state." In the case before us we have a claim under our act, not an attempt to enforce the law of another state in our courts, as provided for in the second sentence of the above-quoted section.

In this case Fay had entered the company's service several years previously in Akron, Ohio. The Commission found that when he was transferred to the Salt Lake City territory, it was not a new contract of employment and that "Mr. Fay was not hired in this state at any time." It is apparent that the Commission construed the phrase "hired in this state" to be restricted to a contract of hire by means of which the employer-employee relationship had its inception. Since it did not find that Fay's new duties were performed under a new contract of hire, or that a contract of hire had been executed in Utah, the claim was denied. In that the Commission was in error.

Heretofore our act has been held applicable in three situations: (1) Where the contract of employment was made in this state, the status maintained and localized in this state and the employee injured in this state. (2) Where the contract of employment was made in this state, the status maintained and localized in this state and the employee was injured outside this state. (3) Where the contract of employment was made outside this state, the status was maintained and localized in this state, and the employee was injured in this state. The applicability of the Act to situations 1 and 2 is at once apparent from a reading thereof. Its applicability to the third situation was determined in the case of Buckingham Transportation Company v. Ind. Comm., 93 Utah 342, 72 P.2d 1077, 1083. In the Buckingham case, Kennedy, the claimant, was employed at Denver, Colorado, by the transportation company. His headquarters were at Salt Lake City and he was injured in Utah. In applying the Utah Act to that situation, the court made the following statements:

"We have already shown that our act is one affecting the status of employer and employee and is in nowise dependent upon the provisions of the contract of employment for its operation. * * * The state of Utah has seen fit, under its police power, to regulate the status of employer and employee, with certain exceptions not material here, where that relation is sustained within this state. * * * When plaintiff sent Kennedy into this state to work for it here, it put him and itself within the reach of our act without regard to the law of the place where the employment contract was made. Likewise, whether Kennedy or plaintiff were residents of this state is immaterial. The controlling and decisive factor is that they maintained the status of employer and employee here." (Italics added.)

The court further said in that case:

"We do not think that the Legislature, after having used the broad language it did in section 42-1-40 in defining an employer as being one who has three or more workmen in his employ under 'any contract of hire,' intended to limit, by section 42-1-52, the application of the act to those cases only where the contract of hire was made in this state. Such an interpretation would furnish a means of completely nullifying the force of our act by resorting to the simple expedient of making the contract of hire in some other state."

We have quoted at length from the Buckingham case though it refers to a claim involving an injury within this state. From its language and from the language of the statute heretofore set out, it is clear that the claim under the Utah act was allowed by interpreting the phrase "hired in this state," to mean the status of being hired, or in other words, the maintenance of the status of employer and employee, in this state. By so construing that phrase, this court and others have held the statute to apply in the case of an injury within the state where the contract of employment had its inception in another state.

The case now before us presents a fourth situation. The contract of employment had its inception outside of the state, the status was maintained and localized in this state, and the injury took place outside the state. It is possible that the courts will be confronted with still other situations in the future. In the Buckingham case, supra, the court said, quoting from Ocean Accident & Guar. Corp V. Ind. Comm., 32 Ariz. 275, 257 P. 644.

"* * * the last sentence of said section [42-1-52 heretofore set out] applies only to cases where both the status of employer and employee and the injury arose outside of the state of Utah."

From the other language used, indicating that in all situations the status alone is to be considered, it is apparent that the last quoted sentence should be construed to mean that where the status of employer and employee is localized outside the state and the injury occurred outside the state, the last sentence of Sec. 42-1-52 would apply. It will be noted that by making use of the possessive, the statute is clear that the claimant must resort in such case to the courts and not to the Commission, to enforce his rights, for in such case we have true extra-territoriality. The word "status" is used and not "hired," indicating that the court considered not the inception of the contract but the relationship ensuing from the inception, as the important thing.

We hold that in all situations our Workmen's Compensation Act is intended to be "operative by virtue of the status of employer and employee, and not upon the theory of contract, express or implied, between the employer and employee." Buckingham Transportation Co. v. Ind. Comm., supra; Chandler v. Ind. Comm., 55 Utah 213, 184 P. 1020, 8 A. L. R. 930; Cudahy Packing Co. v. Parramore, 263 U.S. 418, 44 S.Ct. 153, 68 L.Ed. 366, 30 A. L. R. 532. This conclusion is also supported in decisions which consider the basic theory behind the enactment of such acts. Pickering v. Ind. Comm., 59 Utah 35, 201 P. 1029; Scranton Leasing Co. v. Ind. Comm., 51 Utah 368, 170 P. 976; American Fuel Co. v. Ind. Comm., 55 Utah 483, 187 P. 633, 8 A. L. R. 1342.

It follows from the reasoning in these cases that if the relationship is maintained in this state, our Commission has jurisdiction to make an award. The status itself, and not the place of origin thereof, determines jurisdiction. Having jurisdiction, the award may be made under our act, "even though such injury was received...