Hansen v. Rainbow Mining And Milling Company, Ltd.

• Decision Date: 09 December 1932
• Docket Number: 5894
• Citation: 17 P.2d 335,52 Idaho 543
• Parties: H. A. HANSEN, Respondent, v. RAINBOW MINING AND MILLING COMPANY, LTD., Employer, and STATE INSURANCE FUND, Surety, Appellants
• Court: Idaho Supreme Court

17 P.2d 335

52 Idaho 543

H. A. HANSEN, Respondent, v. RAINBOW MINING AND MILLING COMPANY, LTD., Employer, and STATE INSURANCE FUND, Surety, Appellants

No. 5894

Supreme Court of Idaho

December 9, 1932

WORKMEN'S COMPENSATION LAW - CLAIMANTS' STATUS - CONTRACTS-INTENT-EVIDENCE.

1. On issue whether compensation claimant is employee or independent contractor, primary test respecting character of contract is intention of parties to be gathered from whole scope and effect of language used, disregarding mere inconsistent verbal formulas (C. S., sec. 6213 et seq., as amended).

2. Compensation claimant's status as employee or independent contractor is determinable from written contract and from all circumstances established by evidence (C. S., sec. 6213 et seq., as amended).

3. Evidence established that claimant employed to do development work was mining company's employee, not independent contractor, as respects right to compensation for injuries (C. S., sec. 6213 et seq., as amended).

4. Contract may consist of series of letters if connected and all bearing on same subject matter.

5. Whole scope of evidence is to be considered in arriving at intent of parties to contract.

APPEAL from the District Court of the Eighth Judicial District, for Kootenai County. Hon. Bert A. Reed, Judge.

Proceeding under the Workmen's Compensation Law. Judgment for claimant. Affirmed.

Judgment affirmed; costs to respondent.

H. J Hull and P. C. O'Malley, for Appellants.

Under the usual and accepted tests, the claimant was an independent contractor under the terms of the contract, Exhibit IX. (Taylor v. Blackwell Lumber Co., 37 Idaho 707, 218 P. 356; Chapin Co. v. Scott, 44 Idaho 566, 260 P 172; 1 Schneider's Workmen's Compensation, 2d ed., p 285 et seq.; 14 R. C. L., p. 67 et seq., note, 19 A. L. R. 226, 1168.)

An independent contractor is not an "employee" within the meaning of the Workmen's Compensation Act. (Chapin Co. v. Scott, supra; C. S., sec. 6320; 1 Schneider's Workmen's Compensation, 2d ed., p. 284.)

The Industrial Accident Board is a tribunal of limited jurisdiction. An independent contractor not being within the provisions of the Workmen's Compensation Act, neither the Industrial Accident Board nor the district court has jurisdiction to award compensation to an independent contractor, and such jurisdiction cannot be acquired by estoppel, agreement, waiver or conduct. (Kindall v. McBirney, 52 Idaho 65, 11 P.2d 371; London Guarantee & Accident Co. v. Sterling, 233 Mass. 485, 124 N.E. 286; Doey v. Clarence P. Howland Co., 224 N.Y. 30, 120 N.E. 53; Employers' Liability Assur. Corp. v. Industrial Acc. Com., 187 Cal. 615, 203 P. 95.)

James A. Wayne and Whitla & Knudson, for Respondent.

Plaintiff was not an independent contractor. (Opitz v. Hoertz, 194 Mich. 626, 161 N.W. 866; Tuttle v. Embury-Martin Lumber Co., 192 Mich. 385, Ann. Cas. 1918C, 664, 158 N.W. 875; Taylor v. Blackwell Lumber Co., 37 Idaho 707, 218 P. 356.)

Parties are bound by practical construction of contract. (Brown v. Industrial Acc. Com., 170 Cal. 457, 163 P. 664; Press Pub. Co. v. Industrial Acc. Com., 190 Cal. 114, 210 P. 820; Harlow v. Oregonian Pub. Co., 53 Ore. 272, 100 P. 7; Spande v. Western Life Indemnity Co., 68 Ore. 171, 136 P. 1189; State ex rel. City of South Bend v. Mountain Spring Co., 56 Wash. 176, 105 P. 243, 34 L. R. A., N. S., 196.)

GIVENS, J. Lee, C. J., and Budge, Varian and Leeper, JJ., concur.

OPINION

GIVENS, J.

By written contract, respondent agreed to perform for appellant Rainbow Mining & Milling Company, a specified amount of development work at so much per linear foot, and while so employed, suffered an injury for which he claims compensation.

Appellants contend that by reason specifically of this paragraph in the contract: "It is further agreed, that second party shall take care of and pay all charges relating to insurance or hospital charges in connection with the said work and will fully comply with the Idaho State Insurance Law in that respect and second party does hereby release and agree to save harmless and protect the said party of the first part from any and all claims or damages or injuries of whatsoever kind and description for or on account of any accident, or injury, in connection with said work or that may or might arise therefrom or on account thereof or, and, in connection with the doing of the work contemplated under the terms of this agreement," and generally as to the other terms of the contract, respondent was an independent contractor, hence not entitled to compensation.

Respondent urges that he was an employee, not an independent contractor. We may concede that if we look only to the written contract, there would be strong reason to conclude that he was an independent contractor, and hence not entitled to compensation (Taylor v. Blackwell Lumber Co., 37 Idaho 707, 218 P. 356), but "'The primary test as to the character of a contract is the intention of the parties to be gathered from the whole scope and effect of the language used, and mere verbal formulas, if inconsistent with the real intention, are to be disregarded. It does not matter by what name the parties chose to designate it.'" (Wallace Bank & Trust Co. First Nat. Bank, 40 Idaho 712, 719, 50 A. L. R. 316, 237 P. 284.)

Appellants argue that the fund had no jurisdiction to insure an independent contractor, claiming a parity of reasoning between the holdings in Southern P. Co. v. Jensen, 244 U.S. 205, Ann. Cas. 244 U.S. 205, 1917E, 900, 37 S.Ct. 524, 61 L.Ed. 1086, L. R. A. 1918C, 451, London Guarantee & Accident Co. v. Sterling, 233 Mass. 485, 124 N.E. 286, Doey v. Howland Co., 224 N.Y. 30, 120 N.E. 53, Zurich Gen. Acc. & Liability Ins. Co. v. Industrial Acc. Com., 191 Cal. 770, 218 P. 563, and similar authorities, that state workmen's compensation acts could not cover maritime workers. The distinction between the two is clear. Those cases held that the state agencies could not insure maritime employees because that was a field of industrial activity solely under federal jurisdiction; they did not hold that if the employee might have been either a maritime employee or in some other not excluded class, dependent upon the contract of employment, and that the employer and insurance carrier had treated the workman not as a maritime employee, but in such other class which could have been insured under the state laws, that the employer and carrier would not have been held to their contract. The latter is the situation herein. The trial court awarded compensation not on the basis that the workman was an independent contractor, but that the employer and carrier considered him as an employee, and that such was his status, and the above authorities recognize such distinction where a different cause of action is involved; i. e., tort, not workmen's compensation.

In Chapin v. Scott, 44 Wyo. 566, 260 P. 172, the sole question was whether under the stipulated facts, the injured party was a subcontractor. Neither the employer nor surety had at any time treated him as an employee, nor were there other facts and circumstances as herein, bearing upon his status. Kindall v. McBirney, ante, p. 65, 11 P.2d 370, 371, held that certain statutory requirements bringing under the operation of the Workmen's Compensation Act otherwise excluded employments were mandatory. Herein, it was merely a question of how the workman was employed, no statutory requirements being involved.

Respondent's status with relation to the contract of insurance between appellants and his relation to appellant mining company is to be determined not alone from the written contract, but from all the facts and circumstances established by the evidence. (Schurger v. Moorman, 20 Idaho 97, Ann. Cas. 1912D, 1114, 117 P. 122, 36 L. R. A., N. S., 313.)

Since there is no real dispute in the evidence, only a question of law is presented. (Horst v. Southern Idaho Oil Co., 49 Idaho 58, 286 P. 369.)

Mr. Austin, president of the mining company during all the period involved herein, testified that during the performance of his contract, sometimes Hansen, sometimes he, himself, hired the men working under Hansen. That the company paid all labor bills direct to the workmen, except some who took part of their pay in stock of appellant mining company. That workmen's compensation insurance was carried with the State Insurance Fund, and that the premiums were paid by the company to the fund on the entire labor account, including respondent and his colaborers. That the labor, material bills and insurance premiums were deducted from any money that would be coming to Hansen under his contract.

The insurance policy between the fund and the mining company was not introduced in evidence.

To prove the construction placed by the parties thereto on the written contract in question, respondent introduced an identical contract previously made by the mining company with parties other than respondent, and correspondence with the fund construing it. Overcoming appellants' objection that because with third parties this evidence was inadmissible direct connection between the construction placed on this contract by the fund and the one involved herein, as bearing upon respondent's status, is found in a letter, claimant's exhibit 6, dated January 30, 1925, written to the manager of the fund by appellant mining company herein. This letter was one of a series between the manager of the fund and the company, as to the precise point here, namely, whether the parties predecessor to respondent herein were independent contractors or employees. The concluding paragraph of this letter states that "The insurance covering Mr. H. A. Hansen (respondent herein), who has the present contract and his men will be taken care of...