I-L Logging Co. v. Manufacturers and Wholesalers Indem. Exchange, I-L

• Decision Date: 21 September 1954
• Docket Number: I-L
• Citation: 273 P.2d 212,202 Or. 277
• Parties: LOGGING CO. v. MANUFACTURERS & WHOLESALERS INDEMNITY EXCHANGE.
• Court: Oregon Supreme Court

Page 212

273 P.2d 212

202 Or. 277

I-L LOGGING CO. v. MANUFACTURERS & WHOLESALERS INDEMNITY EXCHANGE.

Supreme Court of Oregon, En Banc.

Argued and Submitted Oct. 21, 1953.

Decided July 13, 1954.

Rehearing Denied Sept. 21, 1954.

See 275 P.2d 226.

Robert F. Maguire and Howard K. Beebe, of Portland, William E. Walsh, of Coos Bay, and Maguire, Shields, Morrison & Bailey, of Portland, on the brief, for appellant.

George Black, Jr., Portland, Black & Kendall, of Portland, and McKeown & Newhouse, of Coos Bay, on the brief, for respondent.

ROSSMAN, Justice.

This is an appeal by the plaintiff from a declaratory decree of the circuit court, which held that a policy of liability insurance issued by the defendant to the plaintiff did not protect the latter against the liability which it incurred June 21, 1947, when a motor vehicle operated by the plaintiff, and in which some of its employees were being transported from their place of employment to their living quarters, overturned, resulting in the death of some and in the injury of others. Following the misadventure, many actions were filed against the plaintiff. The challenged decree was entered after trial. The plaintiff submits 19 assignments of error.

The policy of liability insurance which the defendant issued to the plaintiff bound the defendant

'to pay on behalf of the Insured [appellant] all sums which the insured shall become obligated to pay by reason of the liability imposed upon him by law * * *, for damages * * *, because of bodily injury, * * * including death at any time resulting therefrom, sustained by any person or persons'.

The policy also contained this provision:

'This policy does not apply * * * to (a) * * * any employee of the Insured while engaged in the employment of the Insured * * *, or (b) any obligation for which the Insured or any company as his insurer may be held liable under any workmen's compensation law'.

The defendant contends that the exclusion clause just quoted rendered the defendant nonliable for the losses which the plaintiff suffered June 21, 1947. The plaintiff takes the opposite position. The resulting issue is the principal one submitted by this suit.

The first and fifth assignments of error read as follows:

'The trial court erred in finding that the injuries and deaths of appellant's employees were sustained while engaged in appellant's employment.'

'The court erred in refusing to find that the liability and obligation of appellant for the injuries and deaths was not a liability under nor an obligation imposed by any workmen's compensation law.'

We will now consider the first of those assignments of error and, ancillary to it, the second. At the time of the accident which caused the injuries and deaths that gave rise to the actions against the plaintiff, the latter was engaged in logging operations in rough, rugged country. Many years ago when it began its operations, the timber was within walking distance of the camps which the plaintiff maintained for its employees, but, as more and more trees were felled, the distance between the areas where the men worked and where they lived increased to such an extent that the plaintiff faced a transportation problem. At the time of the accident which we have mentioned some of the plaintiff's loggers lived in a camp six miles from where they worked and some in homes 25 or 30 miles from their work. When the plaintiff first faced the transportation problem, it rented to the men a truck which they used in going to and from their work. The men operated the vehicle through an employees' association, but, due to the recurrent turnover in their ranks, the maintenance of the association proved difficult. Eventually the plaintiff resorted to the means of transportation which it employed when the accident which we have mentioned took place. The method which it adopted was to haul the men back and forth in busses, known as 'crummies'.

Mr. John L. Hawkins, plaintiff's manager, explaining in part the evolutionary process which led to the plaintiff's inauguration of bus service, gave this testimony:

'It started during the war when tires and gasoline were rationed and the men couldn't get to and from their work by their own automobiles and car pools were formed and it was still not satisfactory, and most all of the companies put on busses at that time and the men liked it so well that we were never able to get rid of them and we continued after the war.'

According to Mr. Hawkins, the plaintiff had eight busses which were used solely for the transportation of the men. The one which brought death and injury to its occupants carried 18 men at the time of the misadventure. The plaintiff owned the busses, paid the drivers and all other expenses. No charge was made to the men who rode in the busses. When a bus became disabled, the plaintiff at times substituted a vehicle which the witnesses termed a flatbed.

The evidence warrants a belief that the plaintiff supplied the bus service to its men because it was good business for it to do so. For example, Mr. Hawkins made this statement:

'Q. Now, you, I-L Logging Company, considered that the furnishing of this crummy transportation was in the best interests of the I-L Logging Company and in the promotion of its business, did you not, that is why you did it? A. I believe that is a fair statement.

'Q. And it is also a fair statement to say that you, I-L Logging Company, furnished this transportation to assist the men in connection with their employment with you, that is a fair statement, too, isn't it? A. I believe so.'

A belief is justified that the busses were the only practical means whereby the men could go to and return from the place of their employment. One of the employees gave this testimony:

'Q. Was there any way for you to go up there and get back, other than the crummy? A. No.'

The following is taken from the testimony of one of the crummy drivers 'Q. Do you know of any way that was available to the men, to get up to the Cox Creek landing, other than riding in your crummy? A. It was either in my crummy or else in the boss's pick-up truck.

'Q. Sometimes somebody rode with the boss? A. Sometimes. They hardly ever did.

* * *

* * *

'Q. Were the men urged to ride in the crummies? A. It was either ride in it or don't, there was no other way of getting up there unless it was with the boss in the pick-up.

'Q. It was either ride in it or not work? A. That is right.'

We do not believe that the foregoing and other testimony to like effect indicating that the crummies were the only practical means of going back and forth is questioned by the plaintiff.

The record indicates that when men were taken into the plaintiff's employ they were told, in the event they inquired concerning the subject, that the plaintiff furnished transportation to and from the woods. For example, the plaintiff's foreman, who had charge of the hiring of the men, testified:

'Q. When men would ask you for a job, they would discuss the job and ask how they would get to and from their work? A. Some of them.

'Q. Some of them did that? A. Yes.

'Q. And those that asked you how they got to and from their work, you would tell them as part of the employment arrangement that I-L Logging Company would agree to transport them? A. Yes.'

The crummies, their safety, and grievances arising out of them were at times features of negotiations between the plaintiff and the labor union which represented its employees. One witness swore that a labor contract negotiated by the union granted the men the right to free transportation.

At the place where the accident which underlies this suit occurred, the bus was running upon a private logging road which the plaintiff had constructed and over which it had exclusive control. Access to the road was controlled by a gate and a watchman in the plaintiff's employ. Parts of the road were planked and other parts were dirt. It was a single-lane road although at places turnouts were provided so that in the event a log truck met another vehicle, such as a crummy, the two could pass. The following part of the findings of fact is fully justified by the evidence:

'* * * it was not too safe or practical a practice for the men to use their own cars to go to and from said logging operations and this was not generally done; that there was not sufficient parking space for private vehicles at the place of actual logging operations and that said road and access to said operations was not suitable for private cars.'

The accident under review occurred upon a severe grade and happened when the vehicle was returning the men to their homes at the close of the day's work. Somehow it escaped from the driver's control, plunged over an embankment and overturned. Several of the men were killed and many were injured.

The wages of the plaintiff's employees started when they reached the place of their work in the woods and stopped when the whistle blew at the landing, except for men who were deep in the woods. Those few were paid for walk-out time. The men who rode in the busses were not paid for the time so spent and performed for the plaintiff no duties while riding.

The findings of fact state:

'At all times material herein, plaintiff was engaged in a hazardous occupation within the purview of the Workmen's Compensation Law of Oregon; that prior to the issuance of defendant's policy of insurance to the plaintiff, plaintiff herein had elected not to contribute to the industrial accident fund of Oregon, and had insured its liability to its employees by securing an employer's liability policy, issued to plaintiff by Lloyd's Underwriters at London, * * *.'

The findings of fact also state:

'* * * the injuries to or death of the workmen, referred to in the plaintiff's complaint and supplemental complaint, were received at said time and place while engaged in the employment of the plaintiff, under the circumstances aforesaid, and also arose out of and in the course of...