Scott v. Alsar Co.

• Decision Date: 08 June 1953
• Docket Number: No. 16,16
• Citation: 58 N.W.2d 910,336 Mich. 532
• Parties: SCOTT v. ALSAR CO. et al.
• Court: Michigan Supreme Court

Page 910

58 N.W.2d 910

336 Mich. 532

SCOTT v. ALSAR CO. et al.

No. 16.

Supreme Court of Michigan.

June 8, 1953.

Alexander, Cholette, Buchanan, Perkins & Conklin, by David V. Martin, Detroit, for appellants.

Bernstein & Bernstein, Detroit (David Bernstein and Edwin S. Moag, Detroit, of counsel), for appellee.

Before the Entire Bench.

BOYLES, Justice.

We are here called upon to answer the following question:

Is the plaintiff, as an independent contractor, entitled to an award of compensation under section 7, subdivision 2, part 1 of the Workmen's Compensation Act, as amended, ¹ in the light of article 5, § 21, of the Michigan Constitution?

On August 30, 1950, plaintiff was injured by falling from a roof while doing work for the defendant Alsar Company. Both parties here concede that he was an independent contractor. The commission so found (quoting from its opinion):

'It is obvious that plaintiff had a contract for completed job which did not require his personal service. It was not a contract of hire which created an employer-employee relationship. We think the record conclusively established the status of the plaintiff at the time of the injury as that of an independent contractor.'

Section 7, part 1, of said act, as last amended by P.A.1949, No. 284, provides in part as follows:

'The term 'employee' as used in this act shall be construed to mean:

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'2. Every person in the service of another, under any contract of hire, express or implied, including aliens, including working members of partnerships, receiving wages irrespective of profits from such, including any person insured for whom and to the extent premiums are paid based on wages, earnings or profits, and also including minors, * * *.'

It is conceded that the plaintiff could not furnish compensation insurance coverage when he first contracted with the defendant Alsar Company to do roofing work, and that workmen's compensation insurance premiums were deducted from his pay by said company. Such deductions were based upon the gross amount paid for labor performed under the contract, not necessarily that of the plaintiff, inasmuch as plaintiff's contract was not one for personal service. The work could be performed by persons that plaintiff might choose to employ.

Plaintiff claims that the payment of such premiums by the Alsar Company brought the plaintiff within the definition of an employee in said section 7, subd. 2, pt. 1, of the act, as a person in the service of the Alsar Company under a contract of hire by reason of the aforesaid provision in said section--'including any person insured for whom and to the extent premiums are paid based on wages, earnings or profits'.

The commission held with the plaintiff and awarded compensation. The defendants appeal. Their claim is that if plaintiff is allowed workmen's compensation as an independent contractor, not as an employee, it would render said provision unconstitutional under article 5, § 21, of the Michigan Constitution 1908, wherein it provides that:

'No law shall embrace more than 1 object, which shall be expressed in its title.'

The title of the Workmen's Compensation Act is as follows:

'An Act to promote the welfare of the people of this state, relating to the liability of employers for injuries or death sustained by their employes, providing compensation for the disability or death resulting from occupational injuries or disease or accidental injury to or death of employes and methods for the payment, and apportionment of the same, establishing an industrial accident board, defining its powers, providing for a review of its awards, making an appropriation to carry out the provisions of this act, and restricting the right to compensation or damages in such cases to such as are provided by this act.'

The distinction between the relationship of employer and employee, and the relationship of an independent contractor, has long been recognized by this Court. Bacon v. Candler, 181 Mich. 372, 148 N.W. 194; Utley v. Taylor & Gaskin, Inc., 305 Mich. 561, 9 N.W.2d 842; Brown v. Standard Oil Co., 309 Mich. 101, 14 N.W.2d 797; Brinker v. Koenig Coal & Supply Co., 312 Mich. 534, 20 N.W.2d 301. Unless a different rule of law is to be applied under the Workmen's Compensation Act, the finding of the commission that the plaintiff was an independent contractor negatived the possibility of finding that the plaintiff was an employee of the defendant Alsar Company.

There can be no doubt but that prior to the amendment of said section 7, pt. 1, of the Workmen's Compensation Act by P.A.1949, No. 284, the plaintiff as an independent contractor would not have been entitled to an award of compensation. This Court has so held.

'The Michigan workmen's compensation statute applies to employer and employee in the sense of such relation at common law, and not at all to the relation of an independent contractor to a job or jobs.' Dennis v. Sinclair Lumber & Fuel Co., 1928, 242 Mich. 89, 218 N.W. 781, 782.

'Mr. Slessor was exercising an independent employment, contracting to perform particular pieces of work for others, according to his own methods, with his own employees, and without subjection to control of his employer, except as to the result called for by his undertaking. His employees worked for him, looked to him for their pay, he collected compensation due him for their labor and his own, and, from his contract earnings, paid his help. He was not required to do the work himself, and, in fact, at the time of accident, was using the labor of others in his employ, and he alone could have discharged any one of his employees.

'An injured independent contractor does not come within any provision of the Workmen's Compensation Act.' Slessor v. Board of Education of Kalamazoo, 1932, 256 Mich. 389, 240 N.W. 13, 14.

'It is fundamental that the relation of employer and employee must be either admitted or proved. Glenn v. Mc.Donald Dairy Co., 270 Mich. 346, 259 N.W. 288.' Lynch v. R. D. Baker Construction Co., 1941, 297 Mich. 1, 296 N.W. 858, 859.

'To entitle plaintiff to compensation, he must have been in the employ of defendant at the time of the accident, under a contract of hire, express or implied. 2 Comp.Laws 1929, § 8413, as amended by Act No. 204, Pub.Acts 1937 and Act No. 107, Pub.Acts 1939; [Comp.Laws Supp.1940, § 8413] Stat.Ann. [1941 Cum.] Supp. § 17.147. It is fundamental in this type of proceeding that before plaintiff can recover, the relationship of employer and employee must be admitted or proved.' Powell v. Twin Drilling Co., 1942, 300 Mich. 566, 2 N.W.2d 505, 506.

The language in section 7, subd. 2, pt. 1, of the act was changed by P.A.1949, No 284, to that hereinbefore quoted. Plaintiff claims that under its changed provisions he is entitled to compensation, although admittedly an independent contractor. The defendant appellants claim that such a construction would necessarily require that by including independent contractor, said section would be unconstitutional because outside the title of the act.

The title of the act expressly refers to the liability of employers for injuries or death sustained by their employees. It provides for compensation for disability or death resulting from occupational injuries or disease or accidental injury to or death of employees. Had the legislature so intended, it would have been a simple matter to add 'independent contractor' to those cases and those persons within the express provisions of the title. While we have frequently held that article 5, § 21, of the Constitution is not to be given a narrow or strained construction, Mackin v. Detroit-Timkin Axle Co., 187 Mich. 8, 153 N.W. 49, we conclude that the inclusion of independent contractor within the title of the act could not at this time be accomplished except by judicial fiat. For a recent precedent where this Court has declined to enlarge the title and scope of the act by judicial fiat, see Arnold v. Ogle Construction Co., 333 Mich. 652, 53 N.W.2d 655.

To support plaintiff's position that independent contractor is within the purview of the title of the act, his counsel point to our decisions holding that working members of a copartnership are within the title. ² The distinction is plain. Section 7, subd. 2, pt. 1, of the act expressly provides that working members of partnerships receiving wages irrespective of profits as such, shall be considered as employees of the partnership. A copartnership is a separate and distinct legal entity from that of its component members. Chisholm v. Chisholm Construction Co., 298 Mich. 25, 298 N.W. 390; Lobato v. Paulino, 304 Mich. 668, 8 N.W.2d 873. Under the Workmen's Compensation Act, a partner may become an employee of the partnership of which he is a member, and be entitled to compensation as such employee, the legislature having expressly so declared. It has not declared that an independent contractor is an employee of the other party to his contract. To place such a construction on the provision in section 7, pt. 1, of the acr on which the plaintiff relies would put it outside the title of the act. It embraces the relationship of employer and employee, but not that of an independent contractor.

The legislature, at least by implication, has indicated in the act an intention not to include an independent contractor within the definition of an employee. In section 10, pt. 1, of the act, ³ the legislature has provided the circumstances under which the principal who contracts with a contractor will be held liable for compensation to an injured employee of the contractor or subcontractor, and be entitled to be indemnified by the contractor or subcontractor for such liability. This has been held valid. Burt v. Munising Woodenware Co., 222 Mich. 699, 193 N.W. 895; Michigan Boiler & Sheet Iron Works, for Use and Benefit of American Mutual Liability Co., v. Dressler, 286 Mich. 502, 282 N.W. 222; Currier Lumber Co., for Use and Benefit of...