Muscatine City Water Works v. Duge

• Decision Date: 15 December 1942
• Docket Number: 46081.
• Citation: 7 N.W.2d 203,232 Iowa 1076
• Parties: MUSCATINE CITY WATER WORKS et al. v. DUGE et al.
• Court: Iowa Supreme Court

7 N.W.2d 203

232 Iowa 1076

MUSCATINE CITY WATER WORKS et al. v. DUGE et al.

No. 46081.

Supreme Court of Iowa

December 15, 1942

Miller, Huebner & Miller, of Des Moines, for appellants.

Matthew Westrate, of Muscatine, for defendants-appellees, Muscatine Municipal Electric Plant and Board of Water and Light Trustees of the City of Muscatine, Iowa.

Robert K. Stohr, of Muscatine, for defendant-appellee, City of Muscatine, Iowa.

Harold E. Wilson, of Muscatine, for claimant-appellee, Blanche E Duge.

HALE Justice.

Proceeding under the Workmen's Compensation Law, Code 1939, § 1361 et seq., by the Muscatine City Water Works and Employers Mutual Casualty Company, its insurer, to determine liability for compensation payments arising out of the death of Leonard E. Duge, alleged to have been an employee of the water works but claimed by appellants to have been an employee of the Muscatine Municipal Electric Plant at the time of his death and not within the coverage of the policy of the casualty company issued to the water works. Neither party disputes the right of Blanche E. Duge, widow of said Leonard E. Duge, to compensation for the death of her husband, all parties conceding that the death arose out of and in the course of his employment within the provisions of the Workmen's Compensation Law and there being no question as to the amount of such compensation.

The Muscatine Municipal Electric Plant denied that Leonard E. Duge was an employee of the electric plant at the time of his death and alleged that he was an employee of the water works at such time. The Deputy Industrial Commissioner, as sole arbitrator held that Leonard E. Duge's fatal injury arose out of and in the course of his employment by the city of Muscatine which had been made a party by the Commissioner. The holding of the Deputy Commissioner also was that at the time of his death Duge was an employee of the water works and of the city of Muscatine and that the city of Muscatine, the water works and Employers Mutual Casualty Company, as insurance carrier, should pay compensation to the surviving spouse. On review the Industrial Commissioner awarded compensation against the city of Muscatine, the Board of Trustees, who had intervened before the review hearing, and the Employers Mutual Casualty Company. On appeal to the district court the award of the Industrial Commissioner was affirmed.

The case was tried largely on the stipulation of facts between the parties. The appellants in their brief set out a statement of facts, which in part is conceded to be substantially correct by the appellees.

Leonard E. Duge was killed while operating a cement mixer in the course of his employment with some employer. There is no question but that some entity is liable to pay compensation to his surviving spouse. The only question is, which one. The Employers Mutual Casualty Company and its assured, Muscatine City Water Works, brought this action under Section 1437, Code of 1939, asking for a board of arbitration. Prior to the hearing the Industrial Commissioner made the city of Muscatine a party. It denied being the employer. The co-ordinated board of trustees, as provided in Chapter 329.1, Code of 1939, intervened before the review hearing and became a party. From this relatively simple beginning the case has become more complex in form, all of the parties still admitting that someone is liable to pay Mrs. Duge compensation, but denying that they themselves have that duty.

The city of Muscatine is a special charter city. In 1900 it purchased from a private concern the Muscatine City Water Works and has operated it since that time. In 1922 the Muscatine Municipal Electric Plant was approved by the city and service was begun in 1924. Prior to 1929 the electric plant and the water works were each operated under a separate board of trustees, each having three members. From March 31, 1929, through and including the time of the fatal injury in question the management and control of the Muscatine City Water Works and the Muscatine Municipal Electric Plant have been a co-ordinated board of trustees as provided by Chapter 329.1, Code of 1939. Since both the water works and electric plant are municipally owned the final ownership of both utilities is in the city of Muscatine. The actual control is vested in the co-ordinated board of trustees, consisting of five members, and the management of the utilities was entrusted to Wilbur R. Thorson, General Manager of both the electric plant and the water works. Walter Molis was the Superintendent of Distribution of the water works and Charles Erdman was the Superintendent of Distribution for the electric plant. The two organizations are entirely separate and distinct in their character, each keeping a separate set of books, each operating as a separate entity, the funds of each plant being kept apart and deposited in separate accounts, the employees of each being under separate management, and each plant maintaining a separate pay roll.

The water works had no bonded indebtedness at the time of the fatal injury. The light plant had a bonded indebtedness of between $76,000 and $91,000. The assets of the water works were approximately $500,000. The assets of the electric plant were approximately $1,400,000.

The Muscatine Municipal Electric Plant carried a workmen's compensation reserve fund from which they pay all workmen's compensation claims made against it.

The members of the co-ordinated board of trustees were paid $25 per month by the electric plant and $25 per month by the water works. The salaries of the meter readers and the help in the administration plant were all paid by the electric plant, but some amounts so paid were reimbursed to the electric plant by the water works for its share of administration expense, the division of expense being based on the ratio of the number of water works customers as compared to the number of electric plant customers.

On March 9, 1939, the Muscatine City Water Works requested the Employers Mutual Casualty Company to issue to it a workmen's compensation policy, and filed with said insurance company its declarations. On April 1, 1939, in response to said request and based on said declarations, the Employers Mutual Casualty Company issued its standard workmen's compensation policy to the Muscatine City Water Works as employer covering water works operations. The casualty company did not issue a policy to the city of Muscatine, to the Muscatine Municipal Electric Plant or to the Board of Water and Light Trustees.

In 1936 Duge was employed by the electric plant and learned how to operate the cement mixer which was owned by said plant, the same mixer he was operating at the time he was killed. He worked for said plant only until the fall of that year. In 1939 Walter Molis, as Superintendent of Distribution of the water works, employed Duge for the water works and he worked for Molis and the water works until October 17, 1939.

Leonard E. Duge, the decedent, on the 6th of June, 1939, was employed by Molis, the superintendent of the water works distribution, as an employee of the works. He was assigned to the duty of operating a cement mixer and performing other work for the water works. On October 17, 1939, by order of Mr. Molis he went to the electric plant and thereafter until his death on November 6, 1939, Duge, with the exception of four hours on November 3, 1939, operated the cement mixer in the construction of a storage warehouse situated at the rear of the electric powerhouse sub-station in Muscatine. During the four hours on November 3, 1939, he was directed by Mr. Molis to work, and did work, on the new suction line at the plant of the water works, and when that was completed Molis, who at the time had such authority, directed him to go back to work at the storage warehouse. Mr. Erdman was at the time manager of the electric light plant. From June 6, 1939 up to and including November 6, 1939, Duge was carried on the pay roll of the water works as one of its employees and received the warrants of the water works in payment of his wages. For the time he worked on the storage warehouse he was paid by the water works, but such amount so paid was reimbursed to the water works by the electric plant.

One Wilkinson, an employee of the water works, was also sent down to superintend and direct the building of the warehouse. The water works was later reimbursed by the electric plant for Wilkinson's services. This warehouse was built on land owned by the electric plant, of materials paid for by the electric plant, and part of the laborers thereon were paid by the electric plant. The cement mixer which Duge operated was the property of the electric plant. There was testimony that it was intended that the building should be used by both the water works and the electric plant for storage, but was so used for storage by the water works for only a short time.

In August, 1940, the pay roll of the water works was audited by an auditor apparently acting for the Employers Mutual Casualty Company. His report showed a total of $13,609.80, including the total amount of wages paid to Duge, as shown by the pay roll sheets, and after such an audit a statement of the premium due the Casualty Company based upon said audit was received by the water works and checked against the pay roll by a water works employee, H. S. Mueller, an auditor, who found it corresponded with the total of the pay roll of outside labor, including the wages paid to Duge.

It is the contention of appellants that at the time of the injury Duge was working for the electric plant or the Board of Water and Light Trustees in its capacity as trustee for the electric plant and that his widow should therefore be paid from the workmen's...