Hodges v. Home Mortg. Co.

• Decision Date: 25 November 1931
• Docket Number: 338.
• Parties: HODGES v. HOME MORTGAGE CO. et al.
• Court: North Carolina Supreme Court

161 S.E. 220

201 N.C. 701

HODGES v. HOME MORTGAGE CO. et al.

No. 338.

Supreme Court of North Carolina

November 25, 1931

Appeal from Superior Court, Durham County; Daniels, Judge.

Proceeding under the Workmen's Compensation Act by Mrs. Sam T Hodges, widow of Sam T. Hodges, deceased, claimant, opposed by the Home Mortgage Company, employer, and United States Fidelity & Guaranty Company, insurance carrier. An award by the Industrial Commission was set aside by the superior court, and claimant appeals.

Affirmed.

Sam T Hodges, executive vice president of the Home Mortgage Company, died on June 13, 1930, as a result of an automobile accident. A claim for compensation was filed and a hearing was held in Durham on March 16, 1931. An award was made by the hearing commissioner, and thereupon the defendants, Home Mortgage Company and United States Fidelity & Guaranty Company, carrier, appealed to the full commission, as provided by statute. The full commission affirmed the award and the defendants appealed to the superior court of Durham county.

Hodges, the deceased, at the time of his death, was executive vice president and directing head of the Home Mortgage Company. He had no immediate superior. No one issued orders to him. He was responsible to the board of directors. All of the employees were subject to his orders. There was a contract made between Mr. Hodges and the Home Mortgage Company, dated April 5, 1927, which provided that Mr. Hodges was "to enter upon the production of mortgages for the said company, *** to devote his entire time to the production of mortgage loans for the said Home Mortgage Company through agencies to be established and directed by him. The said Sam T. Hodges hereby agrees that through his local agents he will produce loans for the said Home Mortgage Company, the borrower to furnish and pay for a photograph of the premises, survey of the property, examination of title," etc.

In return for his services the contract further provided: "The said Home Mortgage Company hereby agrees to pay to the said Sam T. Hodges a commission of one per cent. on all loans accepted by the Home Mortgage Company." Said contract further specified: "It is hereby agreed that this contract is to remain in force so long as the said Sam T. Hodges produces minimum business after the first year, of at least three million dollars a year on good first mortgage applications. It is the sense of this contract that Sam T. Hodges, as vice-president of the Home Mortgage Company is to be in charge of the production of business subject, in his relations with the company to the executive committee and board of directors as any employee would be and in the event that said Sam T. Hodges should become undesirable as vice-president of the said company this contract may be cancelled by the board of directors upon a basis reasonable to both parties. *** Should the volume of desirable and acceptable monthly repayment applications for loans procured through the efforts of said Sam T. Hodges and the agents set up by him after two months from this day fall below three million dollars a year the directors are to have the right to cancel this contract upon reasonable notice to the said Sam T. Hodges, and should the mortgage company be unable to handle the volume of business offered by the said Sam T. Hodges to the company, the said Sam T. Hodges is to have the right to cancel the contract with the company upon reasonable notice."

The evidence disclosed that the commissions earned by deceased from June, 1929, to June, 1930, amounted to $31,957. Mr. Hodges was not on the pay roll of the company, and hence his commissions or earnings were not included in ascertaining the premium to be paid to the carrier in the compensation policy of insurance. On June 12, 1930, the deceased had come to Hendersonville for the purpose of "lining up the sale of protected investment bonds all over the state. *** He expected to spend a week over there organizing and getting sales force completed. We had distressed mortgages in Western North Carolina. *** He was to assume the bond end of directing the company's affairs, and after we had corrected the frozen situation we were in at that time, then the matter of compensation would be taken up, but until that time he was to actively direct the company's affairs without compensation."

On June 9 the treasurer of the company went to New York on business for the company. He testified: "While up there I ran into some complications in connection with our trusts and found it necessary to come back to Durham to assemble some figures, and because Mr. Hodges was intimately acquainted with the work I was on in New York, I thought it necessary that he go back with me to get the matter adjusted. So after I got my data assembled, I called him over long distance to get him to go back with me that night to complete the work in connection with the trust with the Metropolitan Casualty Insurance Company. Mr. Hodges agreed to meet me in Greensboro." On the way to Greensboro to catch the train for New York Mr. Hodges was killed in an automobile accident.

The Industrial Commission found as a fact that the death of claimant was caused by accident at a time when he was on official business for the Home Mortgage Company, and that his average weekly earnings exceeded $30. The commission further found that he "was an employee of the Home Mortgage Company, working on a commission basis in lieu of a salary."

Upon the foregoing facts, the Industrial Commission made an award, from which award the Home Mortgage Company and the United States Fidelity & Guaranty Company, carrier, appealed to the superior court. The trial judge was of the opinion that at the time of his death the claimant was not an employee of the Home Mortgage Company within the contemplation of the Workmen's Compensation Act and set aside the award made by the Industrial Commission, and the plaintiff appealed to the Supreme Court.

W. S. Lockhart, of Durham, for appellant.

Biggs & Broughton, of Raleigh, for appellee.

BROGDEN J.

Is an executive vice president and managing head of a corporation an employee thereof within the contemplation of the Workmen's Compensation Act?

Section 2 (b) of the Compensation Act (Pub. Laws 1929, c. 120) provides: "The term 'employee' means every...