Gingell v. Walters Contracting Corp.

• Decision Date: 06 May 1957
• Docket Number: No. 22592,22592
• Citation: 303 S.W.2d 683
• Parties: Wayne Everett GINGELL, Respondent, v. WALTERS CONTRACTING CORPORATION and American Surety Company of New York, Appellants.
• Court: Missouri Court of Appeals

Page 683

303 S.W.2d 683

Wayne Everett GINGELL, Respondent, v. WALTERS CONTRACTING CORPORATION and American Surety Company of New York, Appellants.

No. 22592.

Kansas City Court of Appeals, Missouri.

May 6, 1957.

Robert S. McKenzie, Stubbs, McKenzie, Williams & Merrick, Kansas City, for appellants.

Roy A. Larson, Jr., Sprinkle, Knowles & Carter, Kansas City, for respondent.

CAVE, Judge.

This is an appeal from a judgment of the circuit court affirming an award of the Industrial Commission of $29.99 for necessary medical aid, 240 weeks' compensation at $30 per week, and $500 for disfigurement, or a total of $7,729.99. The compensation is payable weekly, beginning April 29, 1953, and at the time of the appeal there was due and payable 157 weeks' compensation, together with the special amounts for medical aid and disfigurement, or a total of $5,239.99. The appeal was originally taken to the supreme court, but that court sustained a motion to transfer the cause to this court.

The basis for this order of transfer is that it does not affirmatively and definitely appear that the amount involved exceeds $7,500, as required by Art. V, Sec. 3, Constitution of 1945, V.A.M.S. In deciding the question of jurisdiction in an identical factual situation, the supreme court, in Hogue v. Wurdack, 292 S.W.2d 576, held that it did not have jurisdiction because the claimant might die, without leaving dependents surviving, before a sum in excess of $7,500 had accrued.

This cause was initiated by claimant, Gingell, filing a claim for compensation against the Pipemasters Construction Corporation, alleging that he was injured in an automobile accident while employed by such corporation. He subsequently filed an amended claim joining, as an additional employer, the Walters Contracting Corporation. When the cause came on for hearing before a referee of the Division of Workmen's Compensation, the claim against Pipemasters was dismissed by the claimant, and the cause proceeded to trial against the Walters Corporation. The referee denied compensation because the disability was not the result of 'an accident arising out of and in the course of the employment * * *'.

Upon review the commission found, among other things, that Gingell 'was the actual employee of Walters Contracting Corporation on April 29, 1953, * * *'; that on that date he sustained an accident, 'arising out of and in the course of his employment as an actual employee of Walters * * *', and reversed the award of the referee and made the allowances referred to supra. The circuit court affirmed the commission's award, and Walters Company and its insurer perfected their appeal.

They contend that the court and the commission erred: (1) in holding that Gingell was an employee of Walters Company; and (2) in holding that the accident arose out of and in the course of his employment.

The facts relating to both issues are unusual, and no similar case having been decided in this state, we shall detail the evidence at greater length than usual.

Walters Company argues that the evidence establishes that Pipemasters Company was its subcontractor; and that Gingell was an employee of Pipemasters at the time of the accident; consequently, Walters is not liable under the compensation act.

The evidence on this issue is substantially as follows: Walters Company was a New York Corporation, licensed to do business in this state; that it contracted with the Corps of Engineers of the air force to install certain piping and tanks on the Air Force Base located near Knobnoster, Missouri, sometimes referred to as the Sedalia Air Base; that the officers and sole stockholders of the Walters Company were Edward J. Walters, president, Janet Walters, his wife, vice president, and Louis Kohl, secretary-treasurer; that the officers and stockholders of Walters Company incorporated the Pipemasters Company; that it 'was set up for the operating convenience of Walters Contracting Company with respect to employing (union) members of the pipe trades * * *'; that Pipemasters had no 'formal contract' as a subcontractor with Walters; it owned no property or assets; its sole purpose and function was to contract with the labor union to supply pipe fitters--'We had to use the device of a separate corporation to hire the men'; so states Leo Kohl, superintendent for Walters Company.

After Walters contracted with the air force, it sent Leo Kohl, son of Louis Kohl, from New York to Missouri to superintend the work to be done under the contract. He was sent by Walters Company; he was its superintendent, as well as a stockholder; and all the employees on the job were under his supervision and control. He called the union office and asked that a number of pipe fitters be sent onto the job, and Gingell was one of those who was given a referral 'slip' or written direction to report to Leo Kohl at the air base. Gingell did not remember whether this written direction was in the name of Pipemasters Company or Walters Company, and the instrument itself was not produced in evidence. He did report for work, and received his orders and directions from Leo Kohl.

In addition to Leo Kohl, the Walters Company had in its office at the air base a Mr. Henderson, who was general office manager. He prepared the weekly payrolls which, according to an exhibit introduced, originally had the printed name of 'Walters Contracting Corp.' as its caption, but on this exhibit the words 'Walters Contracting' had lines drawn through them and inserted 'Pipemasters Const. Corp.'. Leo Kohl and Henderson both testified that this weekly payroll was made out in the name of Pipemasters and sent to Walters Company in New York; that Walters Company would forward a check to them payable to Pipemasters; that the check would be deposited in the bank at Knobnoster in the name of Pipemasters, and then the pay checks drawn against that account; that Pipemasters had no other property, assets, income, duties or responsibilities in connection with the work being done at the air base; and that all other expenses incurred in connection with the work were paid directly by Walters; that the tools and instruments used by the workers were owned and furnished by Walters Company. Leo Kohl was asked,

'Q. In what capacity were you acting for the Pipemasters Construction Company? A. I was acting for Walters Contracting Corporation and any efforts that I made in behalf of Pipemasters Company were also representing the best interests of Walters Corporation, so that I was acting in a dual capacity, even though I was employed solely by Walters Contracting Corporation * * * I guess I could be considered as acting as their (Pipemasters') agent, although there was never any formal letter or appointment to that effect. I was primarily out there to see that the job was completed, whether I acted as an agent for Pipemasters * * * or the superintendent of Walters Contracting Corporation * * *.

'Q. There is no written contract between Walters Contracting Corporation and Pipemasters Corporation? A. No, * * * there is no contract. In fact, there were no terms of compensation agreed to * * *.

'Q. Do you know, Mr. Kohl, whether or not the Pipemasters Construction Company has any income at all? A. No, sir, it has no income at all, just acts as an agency for transmitting money from Walters Contracting Corporation to the men that are employed by Pipemasters * * *.

'Q. And any profit that is made out of the work of these men on the payroll of Pipemasters * * * is actually made by the Walters Contracting Corporation? A. That is right. * * *

'Q. Has the Pipemasters Company ever entered into a contract with anyone for any type of construction? A. No, sir, never has.'

From this evidence, we think it is perfectly apparent that Pipemasters was not a 'subcontractor' of the Walters Company within the usual and accepted meaning of that word. The most that can be said is that the sole function of Pipemasters, as an agent, was to arrange with the labor union for the supply of certain workmen, and to act as paymaster of those specific workmen, for Walters. Pipemasters had no authority or obligations concerning the work to be done. The workmen were under the exclusive direction and control of Leo Kohl, who was Walters' general superintendent.

The right of control is an important factor in determining the question of whether the relationship of employer and employee exists. Glynn v. M. F. A. Mut. Ins. Co., 363 Mo. 896, 254 S.W.2d 623, 36 A.L.R.2d 256. The test of existence of the relationship is the right to control the means and manner of the service as distinguished from controlling the ultimate results of the service. Coy v. Sears, Roebuck & Co., 363 Mo. 810, 253 S.W.2d 816. Of course, the fact of control standing alone is not conclusive, but we have detailed other facts which lend support to the conclusion that Walters Company was the real employer.

The rapidity with which Leo Kohl seeks to shift his affiliation from Walters to Pipemasters should not blind us to the true factual situation. Pipemasters did not have sufficient employees (if it had any at all) to come under the compensation law, but Walters Company is under the Act. It has been held that one of the purposes of Sec. 287.040 RSMo 1949, V.A.M.S., is to prevent an employer from avoiding liability for accidents occurring in the course of the operation of his usual business by resorting to the fiction of contracting for the doing of his work with persons of no financial responsibility. Gholson v. Scott, Mo.App., 130 S.W.2d 216, 219; Baker v. Iowa-Missouri Walnut Log Co., Mo.App., 270 S.W.2d 73, 78; De Lonjay v. Hartford Accident & Indemnity Co., 225 Mo.App. 35, 35 S.W.2d 911, 912.

We hold that there is substantial evidence to support the finding that Gingell was, in fact, an employee of Walters Company. To hold otherwise would be emasculating the broad and beneficial purposes of the compensation act, which must be given a liberal...