McDonald v. Levinson Steel Co

• Decision Date: 24 November 1930
• Docket Number: 203
• Citation: 302 Pa. 287,153 A. 424
• Parties: McDonald, Appellant, v. Levinson Steel Co
• Court: Pennsylvania Supreme Court

153 A. 424

302 Pa. 287

McDonald, Appellant, v. Levinson Steel Co

No. 203

Supreme Court of Pennsylvania

November 24, 1930

Argued October 7, 1930

Appeal, No. 203, March T., 1930, by plaintiff, from judgment of C.P. Allegheny Co., Oct. T., 1928, No. 1396, for defendant n.o.v., in case of Howard C. McDonald v. Levinson Steel Company. Reversed.

Trespass at common law for personal injuries. Before MACFARLANE, J.

The opinion of the Supreme Court states the facts.

The portions of the Workmen's Compensation Act of June 2 1912, P.L. 736, construed by the Supreme Court in its opinion, are:

Article I, section 105, reads: "The term 'contractor' as used in article two, section two hundred and three, and article three, section three hundred and two (b), shall not include a contractor engaged in an independent business other than that of supplying laborers or assistants, in which he serves persons other than the employer in whose service the accident occurs, but shall include a subcontractor to whom a principal contractor has sublet any part of the work which such principal contractor has undertaken."

Article II, section 203, reads: "An employer, who permits the entry, upon premises occupied by him or under his control, of a laborer or an assistant hired by an employee or contractor, for the performance upon such premises of a part of the employer's regular business entrusted to such employee or contractor, shall be liable to such laborer or assistant in the same manner and to the same extent as to his own employee."

Article III, section 302 (b), reads: "An employer who permits the entry, upon premises occupied by him or under his control, of a laborer or an assistant hired by an employee or contractor, for the performance upon such premises of a part of the employer's regular business entrusted to that employee or contractor, shall be conclusively presumed to have agreed to pay to such laborer or assistant compensation in accordance with the provisions of article three, unless the employer shall post in a conspicuous place," [etc.].

Verdict for plaintiff for $20,000. Judgment was entered for defendant n.o.v. by MACFARLANE and MARSHALL, JJ.

Error assigned was judgment for defendant n.o.v., quoting record.

The judgment of the court below is reversed and it is directed that judgment be entered on the verdict. Costs to be paid by appellee.

C. J. Tannehill, with him Esther I. Katten, for appellant.

A. L. Weil of Weil, Christy & Weil, with him Dickie, Kier & McCamey, for appellee.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE KEPHART:

The Levinson Company, hereinafter called Levinson, was erecting a steel crane shed for its own occupancy on ground that was in its possession under a lease. It contracted with Uhl for the construction of the steel work, Dunn for the concrete piers, and a third party for the roofing. While working on the steel structure, McDonald, an employee of Uhl, was injured due to the breaking of a concrete pier. Compensation was awarded to the employee through Uhl as employer under the Workmen's Compensation Act. McDonald then brought an action against Levinson for damages resulting from the injury, alleging neglect of duty in providing a defectively constructed pier on which Uhl's work was to be done: Gallivan v. Wark, 288 Pa. 443; Kelly v. Northampton, etc., Society, 286 Pa. 97. See Anderson v. London, etc., Co., 295 Pa. 368. The questions submitted to the jury were: (1) was the construction sufficiently strong to stand the stress and strain of the steel work to be erected, (2) was such construction built by Dunn according to Levinson's plans and specifications, and (3) did Levinson exercise due care in preparing such plans and specifications. The jury found for the plaintiff but the court below entered judgment n.o.v., holding Levinson an employer within the Compensation Act and not responsible in damages.

This appeal by McDonald presents an oft recurring difficulty. On the one hand we have persons before us, such as Levinson, endeavoring to escape the effect of the Compensation Act so that they will not be compelled to pay compensation or carry insurance, and, on the other hand, as here, when faced with liability at common law, they strive vigorously to come under the sheltering protection of the act. Appellee is now endeavoring to do the latter as a statutory employer.

A statutory employer is a master who is not a contractual or common law one but is made one by the act. There is no difficulty in determining in most cases whether or not one is a statutory employer. The law has been fairly well settled by this court, and the zones of liability or nonliability rather well defined. There are cases, however, like the one before us, where no clear chart has been laid down, although many of the decisions are helpful. It will be better for the efficient administration of the Compensation Act to construe it literally as to the obligations created, leaving those under the common law that were apparently intended to be so, and under the Compensation Act those intended.

Levinson contends that he is not liable at common law but is a statutory employer for two reasons: first, because, in pursuit of his "regular business" of erecting steel buildings, he was constructing this shed as an owner for his use on leased ground or ground occupied by him and under his control and was doing everything a principal contractor would do, if the work had been let out to him, when the injury took place, and the Compensation Act did not intend to prohibit an owner from becoming a principal contractor in all cases; second, because of his lease he was a builder or principal contractor, subletting his various contracts and exercising supervision over the work, being paid by the lessor for the materials and services furnished by not being charged any additional rent; the building was the property of the owner-lessor at the end of the term.

Appellant urges that Levinson is liable at common law because an owner can never be a statutory employer and Levinson was in the position of an owner; furthermore, to hold him under the Compensation Act would create confusion as to those lawfully and logically statutory employers, and also as to when owners should take out insurance.

The difficulty arises chiefly in determining who the legislature intended should be included within the class of statutory employers, as distinguished from master and servant at common law, which is taken care of elsewhere by the act. It depends on the construction of article I, section 105, article II, section 203, and article III, section 302 (b), of the Act of June 2, 1915, P.L. 736, which will be found in the report of this case. Section 302 (b) merely carries into effect section 203. Section 105 modified "contractor" in section 203 so as to exclude a contractor engaged in an independent business, or an independent contractor, but includes a subcontractor to whom a principal contractor has sublet part of the work. A "contractor" other than an "independent contractor" could mean nothing but a dependent or subcontractor. We know of no other classification of contractors in this connection than independent and subcontractors. Though contractors are often referred to as general, original, principal and independent, the sense here used indicates their relation to the work as dependent or independent. "Contractors" as used in section 105 is synonymous with "subcontractors" ( Gallivan v. Wark, supra, and other cases); though, as stated in Qualp v. Stewart Co., 266 Pa. 502, subcontractors are still regarded as independent contractors under certain conditions.

As the term "contractor" as used in section 203 means subcontractor, or a contractor other than an independent one, then there must be a principal contract or one on which the subcontract is dependent since subcontractor presupposes a principal contract. Here again section 105 helps out for it describes the person in whom the principal contract is lodged as being the principal contractor. "Employer" is the only other person named in section 203 in connection with "contractor" and the employer must be a party to the principal contract. Employer includes principal contractor, and as most generally used in sections 105 and 203 they must be regarded as synonymous: Qualp v. Stewart Co., supra.

If the term "employer" in section 203 means the owner or one in the position of owner, and a lessee is none the less in the position of an owner when he builds or erects for himself or for his own use a structure on the property leased, then the section would read: "an owner who permits on his premises employees hired by a subcontractor . . . shall be as to such employees a statutory employer." The owner would not be liable to the employees of an independent contractor since the act specifically excludes an owner from liability to the employees of an independent contractor (section 105 and section 203: Brooks v. Buckley & Banks, 291 Pa. 1; McGrath v. Sugar Co., 282 Pa. 265; Simonton v. Morton, 275 Pa. 562; Smith v. Insurance Co., 262 Pa. 286), but he would be liable to those of a subcontractor under such contractor. Such construction not only would create an arbitrary classification but also would lead to an impossible result. By holding that an owner is not a statutory employer and that employer and principal contractor are synonymous, these sections are workable.

As thus understood section 203 would read: "An employer [principal contractor] who permits the entry upon premises occupied by him or under his control of a laborer . . . hired by . . . a contractor [subcontractor], for the performance upon such premises of a part of the employer's ...