Industrial Commission v. Watson Bros. Transp. Co.

• Decision Date: 11 May 1953
• Docket Number: No. 5713,5713
• Citation: 256 P.2d 730,75 Ariz. 357
• Parties: INDUSTRIAL COMMISSION v. WATSON BROS. TRANSP. CO., Inc.
• Court: Arizona Supreme Court

Page 730

256 P.2d 730

75 Ariz. 357

INDUSTRIAL COMMISSION v. WATSON BROS. TRANSP. CO., Inc.

No. 5713.

Supreme Court of Arizona.

May 11, 1953.

Robert E. Yount, of Phoenix (Perry M. Ling and Robert W. Pickrell, Phoenix, of counsel), for appellant.

Jack C. Caveness, of Phoenix, for appellee.

PHELPS, Justice.

This cause comes to us on both an appeal and a cross-appeal from a judgment of the superior court of Maricopa County.

The cause of action arose out of an order of appellant Industrial Commission directing Watson Bros. Transportation Co., Inc., a corporation, appellee, to pay to the appellant the sum of $22,174.79 as a total premium claimed to be due for coverage of its employees in Arizona under the Workmen's Compensation Act in this state, A.C.A.1939, § 56-901 et seq., plus $8,370 for an advance deposit based upon its payrolls, and $68.52 premium on occupational disease insurance, making a total of $30,613.31 claimed to be due. The parties will be hereinafter referred to as the commission and Watson Bros. respectively.

Watson Bros. is a corporation organized under the laws of the state of Nebraska with its principal place of business located in the city of Omaha. Insofar as we are concerned it is engaged in interstate trucking in Colorado, New Mexico, Arizona and California. It maintains offices in Nebraska, Colorado, California and Arizona. It employs more than three persons in this state and carries industrial insurance on all employees whose duties are confined within the territorial limits of Arizona and also on all drivers employed in Arizona and operating trucks between termini in Arizona and out of state points. It does not, however, carry such coverage on drivers engaged in interstate commerce between Denver and Los Angeles, or upon drivers employed in Colorado or California who drive trucks to termini in Arizona.

The $22,174.79 premium assessed by the commission against Watson Bros. is broken down in the commission's order as follows:

'(a) For employees employed within the state of Arizona whose duties are confined to the territorial limits of the state of Arizona, the sum of $3,642.56;

'(b) For employees employed within the state of Arizona whose duties require travel within and without the state of Arizona, the sum of $6,646.43;

'(c) For employees employed outside the state of Arizona whose duties involve travel via terminal points within the state of Arizona the sum of $4,893.10;

'(d) For employees employed without the state of Arizona whose terminal point is outside the state of Arizona but whose travel requires employment in passing through the state of Arizona, the sum of $7,061.22.'

Watson Bros. brought an action in the superior court of Maricopa County to set aside the order of the Industrial Commission directing payment of the above premiums and an advance deposit therein set forth, to which the commission filed an answer amounting in effect to a general denial. In its complaint Watson Bros. does not question the right of the commission to collect premiums on the classifications upon which items (a) and (b) are based but does question the amount of the premium assessed. It also protests items (c) and (d) because it claims such employees were hired either in Denver or Los Angeles and are engaged exclusively in interstate commerce and covered 100% either by the Colorado or the California Workmen's Compensation Act, '35 C.S.A.C. 97, § 280 et seq., Labor Code Cal. § 3201 et seq. It alleges, insofar as these items are concerned, that they do not come under the provisions of the Arizona Workmen's Compensation Act; that the commission is without jurisdiction to assess and to collect such premiums; and to require it to pay premiums on industrial insurance for such employees would constitute an undue burden upon interstate commerce. It further raises the constitutionality of the provisions under which the commission purports to act.

After a hearing before the trial court it entered its judgment in favor of the commission for the collections of premiums shown in items (a) and (b) of the commission's order, and in favor of Watson Bros. on premiums shown in items (c) and (d) thereof, and for an adjustment of the advance deposit demanded by the commission. Each party appeals from that portion of the judgment entered against it.

We will first consider the appeal of the commission. It has presented five assignments of error which raise the one question: Has the commission authority under the Workmen's Compensation Act, section 56-943, A.C.A.1939, to levy and to collect premiums from a foreign corporation engaged in interstate commerce whose employees were hired outside Arizona and are not 'regularly employed' in Arizona, even though such employees may be injured in this state? Section 56-943, supra, provides:

'If a workman who has been hired or is regularly employed in this state receives a personal injury by accident arising out of and 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 against his employer his rights in this state if his rights are such that they can reasonably be determined and dealt with by the commission and the courts in this state.'

Section 56-928, A.C.A.1939, defines the term

'* * * 'regularly employed,' as herein used, includes all employments, whether continuous throughout the year or for only a portion of the year, in the usual trade, business, profession or occupation of an employer. * * *'

We had section 56-943, supra, before us for construction in Ocean Accident & Guarantee Corp. v. Industrial Commission, 32 Ariz. 275, 257 P. 644, 647. Justice Lockwood after quoting the section, had this to say:

'There are three, and only three, cases in which the question of liability under a Compensation Act might be brought before our tribunals. In the first, the status of employer and employee would arise and the accident occur in this state; in the second, one of those events would occur in this state and one without; while in the third both events would occur out of the state. In the first case, obviously our tribunals recognize our act, and it alone, both as to procedure and benefits. In the second case, since our statute is one regulating the status, if the injury occur in the state our law governs, and under the first sentence of section 59, supra [56-943], if the status of employer and employee arises in Arizona, so far as our tribunals are concerned, it will also govern, even though the accident...