Shillinglaw v. Owen Shillinglaw Fuel Co., 6900

• Decision Date: 04 April 1962
• Docket Number: No. 6900,6900
• Citation: 70 N.M. 65,1962 NMSC 47,370 P.2d 502
• Parties: Deborah SHILLINGLAW, Claimant, Plaintiff-Appellee, v. OWEN SHILLINGLAW FUEL COMPANY, Inc., Employer, and American Employers Insurance Company, Insurer, Defendants-Appellants.
• Court: New Mexico Supreme Court

Page 502

370 P.2d 502

70 N.M. 65

Deborah SHILLINGLAW, Claimant, Plaintiff-Appellee, v. OWEN SHILLINGLAW FUEL COMPANY, Inc., Employer, and American

Employers Insurance Company, Insurer,

Defendants-Appellants.

No. 6900.

Supreme Court of New Mexico.

April 4, 1962.

Rodey, Dickason, Sloan, Akin & Robb, Albuquerque, for appellants.

Lorenzo A. Chavez, Arturo G. Ortega and Melvin L. Robins, Albuquerque, for appellee.

MOISE, Justice.

This is a workmen's compensation case in which the trial court concluded that Owen Shillinglaw sustained an accidental injury in the course of his employment and from which he died, and that at the time of the injury he was an employee of Owen Shillinglaw Fuel Company, Inc.; that the claimant, Deborah, is his widow and sole dependent and as such entitled to the benefits of the Workmen's Compensation Act. A judgment was entered in accordance with these conclusions against the Owen Shillinglaw Fuel Company, Inc., the employer, and against the American Employers Insurance Company, its insurer. This appeal followed.

The facts out of which the controversy arose are briefly these. Prior to October 28, 1954, Owen Shillinglaw was the sole owner and operator of Owen Shillinglaw Fuel Company, a business engaged in selling fuels, applicances, paints, hardware, livestock feed, minerals and concentrates. On that date the business was incorporated, pursuant to an agreement theretofore entered into between Owen Shillinglaw and William and Gertrude N. Shillinglaw, his father and mother, one of the express purposes of which was to maintain in Owen Shillinglaw an 80% control of the business. When Owen Shillinglaw died the capital stock was held 150 shares by Owen Shillinglaw, 100 shares by William Shillinglaw, 100 shares by his wife, Deborah Shillinglaw, and 650 shares jointly by Owen and William Shillinglaw. Management decisions were made after Owen and William conferred, the two of them sharing in the managment of the business. William Shillinglaw managed the coal and wood yard branch of the business; hired, fired and supervised the men working in the yard.

Owen performed such duties as going out on service calls with other employees, selling and clerking in the store, selling over the telephone, taking inventory, collecting accounts, assisting in the making of estimates on heating installations, supervising employees in the store and on service calls. He was President of the corporation, and by virtue thereof it was provided in the by- laws he should be general manager of the business.

Owen Shillinglaw was seriously crippled with arthritis, and was blind except that he could distinguish between light and dark. Although his hours were not fixed, he was at the place of business full time, except that he might leave the place of business at will. His compensation, in the nature of drawings, was fixed after consultation between himself, William, and the company auditor. At the time of his death the amount fixed as his salary was $6,000.00 per year. He drew at this rate either monthly or semi-monthly ordinarily, although there was nothing to prevent his drawing more, and when he did so shortly prior to his death, the overdraft was considered a debt to the company. From the amounts paid him the corporation withheld for the payment of income taxes and social security benefits and he was included as an employee in the returns made to the State of New Mexico for unemployment compensation benefits.

On September 13, 1958, a display was being prepared to be sent to Albuquerque in connection with a sales meeting and school to be held there. Owen had participated in the preparation of the same, and had contributed to the design. On this date, in the afternoon, Owen went with one Reece Wilkinson, company engineer, to rent a trailer to be used in hauling the display to Albuquerque. He arranged for the renting of the trailer and then returned to the office of the Owen Shillinglaw Fuel Company, Inc., to pick up the display. Mr. Wilkinson backed the trailer to a side door, got out and went into the building. As Owen started to the door he stepped on a block and fell backward, striking the trailer bumper when he fell. He died thirteen days later as a result of the injuries sustained.

The first question raised by the appeal is whether or not Owen Shillinglaw, by virtue of his stock ownership, presidency and membership on the Board of Directors of defendant corporation was an employee entitled to the benefits and protection of the Workmen's Compensation Act.

Appellants strenuously urge that he should be classified as an employer and not as an employee, and that the Act was not intended to include executives of corporations performing executive duties. That this has been held under certain circumstances and the peculiar facts present in particular cases cannot be denied. Korovilas v. Bon Ton Renovating Co. Inc. 219 Minn. 294, 17 N.W.2d 502; Ben-Jay Food Distributors Inc. v. Worshaw (Fla.), 70 So.2d 564; Leigh Aitchison Inc. v. Industrial Commission, 188 Wis. 218, 205 N.W. 806, 44 A.L.R. 1213; Hodges v. Home Mortgage Co., 201 N.C. 701, 161 S.E. 220. However, that under somewhat different facts and circumstances, a corporate officer may nevertheless be considered an employee under the Workmen's Compensation Act, particularly when he is injured while performing a duty which was ordinarily done by employees, has been decided in cases from these same jurisdictions, as well as from many others. Delaney v. Dan Delaney Inc., 227 Minn. 572, 36 N.W.2d 12; Claude H. Wolfe Inc. v. Wolfe, 154 Fla. 633, 18 So.2d 535; Fruit Boat Market v. Industrial Commission, 264 Wis. 304, 58 N.W.2d 689; Hirsch v. Hirsch Bros., 97 N.H. 480, 92 A.2d 402; Mahoney v. Nitroform Company, 20 N.J. 499, 120 A.2d 454; Stevens v. Industrial Commission, 346 Ill. 495, 179 N.E. 102, 81 A.L.R. 638. Also see cases set forth in the note in 81 A.L.R. commencing on page 644. From an examination of these and many other cases it would seem manifestly clear that although the decisions turn on the particular facts in each case, if the claimant was not in fact sole owner of the corporation, and was performing nonexecutive work ordinarily performed by employees, he is generally held to be an employee covered by the act, notwithstanding the corporate office held by him. 1 Larson, Workmen's Compensation Law, Sec. 54.21.

Clearly, in arriving at a correct conclusion the language of the Workmen's Compensation Act and the legislative intent as expressed in the enactment must be taken into account. Differences in language used by the several state legislatures may very well result in diversity of interpretation.

Our act provides in Sec. 59-10-13, N.M.S.A.1953, that the compensation provided for therein 'shall be paid by the employer to any injured workman entitled thereto * * *.' and in the event of death of the 'workman' payment shall be made to beneficiaries entitled thereto. Sec. 59-10-17, N.M.S.A.1953.

'Employer' and 'workman' are defined in Sec. 59-10-12(h) and (i), N.M.S.A.1953, as follows:

"Employer' includes any person, or body of persons, corporate or incorporate and the legal representative of a deceased employer or the receiver or trustee of a person, corporation, association or partnership engaged in or carrying on for the purpose of business, or trade or gain any of the occupations or pursuits to which this act [59-10-1 to 59-10-37] is applicable, and also includes the state and each county, city, town, school district, drainage, irrigation or conservancy district and public institution and administrative board thereof employing workmen under the terms of this act, although not engaged in carrying on for the purpose of business, trade or gain any of such occupations or pursuits.

"Workman' means any person who has entered into the employment of or works under contract of service or apprenticeship, with an employer, except a person whose employment is purely casual and not for the purpose of the employer's trade or business. The term 'workman' shall include 'employee' and shall include the singular and plural of both sex.'

From an examination of the quoted language can we say that under the facts of this case deceased was an 'employer' and not a 'workman' or 'employee' or that the legislature intended such a conclusion?

As has been ofttimes stated by this court, the Workmen's Compensation Act is to be given a liberal construction in favor of claimants. Mann v. Board of County Commissioners of Bernalillo County, 58 N.M. 626, 274 P.2d 145; Stevenson v. Lee Moor Contracting Co., 45 N.M. 354, 115 P.2d 342.

Our definitions quoted above are for all practical purposes the same as those being construed in Lichty v. Lichty Const. Co., 69 Wyo. 411, 243 P.2d 151, and although there the court found a guide in its interpretation of the definitions and the legislative intent in an amendment to the Act passed after the case under consideration had arisen, it was concluded that the defendant corporation was an 'employer' and the deceased president, director and owner of 447 shares of capital stock out of a total of 586, was an employee when injured, and accordingly compensation was payable.

We find nothing in our Workmen's Compensation Act indicative of an intention to exclude from its benefits anyone who is in fact performing duties of a 'workman.' That Owen Shillinglaw was in the employment of the corporation is to our minds beyond cavil. This is true notwithstanding his large stock ownership and his offices of president and director. He was the general manager, performed all kinds of duties ordinarily performed by employees, including those he was engaged in when injured; he was paid a salary; and although he was the principal executive engaged in carrying forward the purposes of the corporation, he was subject to the policies as laid down by the directors, of which he was only one.

A corporation and a stockholder are separate entities. This is true even...