Soars v. Soars-Lovelace, Inc.

• Decision Date: 04 September 1940
• Docket Number: 35442
• Parties: Gladys Child Soars et al., Appellants, v. Soars-Lovelace, Incorporated, et al
• Court: Missouri Supreme Court

142 S.W.2d 866

346 Mo. 710

Gladys Child Soars et al., Appellants, v. Soars-Lovelace, Incorporated, et al

No. 35442

Supreme Court of Missouri

September 4, 1940

Motion for Rehearing Overruled July 23, 1940.

As Modified on Motion to Transfer to Court en Banc Overruled September 4, 1940.

Appeal from Jackson Circuit Court; Hon. Albert A. Ridge Judge. Opinion filed at May Term, 1940, June 28, 1940; motion for rehearing overruled July 23, 1940; motion to transfer to Court en Banc filed; motion overruled at September Term 1940, September 4, 1940.

Affirmed.

Bert Steeper for appellants.

(1) The deceased, Charles Austin Soars, was an employee of Soars-Lovelace, Incorporated, within the meaning of the Missouri Workmen's Compensation Act. R. S. 1929, sec 3305; Laws 1931, p. 383. (a) As shown by his contract of employment. (b) As shown by the duties required of him. (c) As shown by the services he rendered. 71 C. J., pp. 421, 423, secs. 164, 165; Sawtell v. Stern Bros. & Co., 226 Mo.App. 485, 44 S.W.2d 267. (d) His company was not obligated to pay him in excess of $ 3600 per year. 6 R. C. L., p. 677, sec. 84; 13 C. J., p. 331, sec. 179; Chenoweth v. Pacific Express Co., 93 Mo.App. 185; Puller v. Royal Cas. Co., 271 Mo. 369, 196 S.W. 761; Riera v. Salo Art Metal Co., 134 A.D. 497, 119 N.Y.S. 323; Russell v. Ely & Walker D. G. Co., 332 Mo. 645, 60 S.W.2d 44; Klasing v. Schmitt Contracting Co., 335 Mo. 730, 73 S.W.2d 1015; Sayles v. K. C. Structural Steel Co., 128 S.W.2d 1046; State ex rel. Mills v. Allen, 128 S.W.2d 1043. (2) An executive officer of a corporation may also be an employee thereof and be entitled to compensation under said act. 14A C. J., p. 251, sec. 2077; Barlow v. Shawnee Inv. Co., 229 Mo.App. 1, 48 S.W.2d 46; Sweeny v. Sweeny Tire Stores Co., 227 Mo.App. 93, 49 S.W.2d 207; Milwaukee Toy Co. v. Ind. Comm., 234 N.W. 749; Skouitchi v. Chic. Cloak & Suit Co., 230 N.Y. 299, 130 N.E. 300, 15 A. L. R. 1285; Southern Surety Co. v. Childers, 25 A. L. R. 376; Ardmore P. & O. Co. v. State Ind. Comm., 109 Okla. 81, 234 P. 582; Ohio Drilling Co. v. State Ind. Comm., 26 Okla. 139, 207 P. 314, l. c. 317; Chambers v. Macon Wholesale Gro. Co., 334 Mo. 1215, 70 S.W.2d 884; Beckman v. Oelerich & Sons, 174 A.D. 353, 160 N.Y.S. 791; In re Raynes, 118 N.E. 391; Zurich Acc. & Ins. Co. v. Ind. Comm., 193 Wis. 32, 213 N.W. 630; Emery's Case, 170 N.E. 839; U.S. Cas. Co. v. Burton-Pitt Lbr. Co., 41 Ga.App. 405, 152 S.E. 919; Hodges v. Home Mtg. Co., 201 N.C. 701, 161 S.E. 223. (3) Charles Austin Soars sustained his injuries and death in performing duties and services arising out of and in the course of his employment. R. S. 1929, sec. 3301; Sweeny v. Sweeny Tire Stores Co., 227 Mo.App. 93, 49 S.W.2d 207; Sawtell v. Stern Bros. Co., 226 Mo.App. 485, 44 S.W.2d 267. (4) The insurer is estopped from claiming that said Soars cannot recover compensation as an employee under the act. (a) By its own contract of insurance. (b) By charging the premium on a basis including Soars' salary from his company and receiving payment therefor. Alsup v. Murfreesboro Bread & Ice Cream Co., 56 S.W.2d 749; Texas Employers' Ins. Assn. v. Rogers, 70 S.W. 1008; Barlow v. Shawnee Inv. Co., 229 Mo.App. 1, 48 S.W.2d 46; Conklin v. K. C. Pub. Serv. Co., 226 Mo.App. 309, 41 S.W.2d 613; Venuto v. Carter Lake Club, 178 N.W. 762; Columbia Cas. Co. v. Ind. Comm. of Wis., 227 N.W. 292; Schneider, The Mo. Workmen's Comp. Act, secs. 20, 470, pp. 181, 1593; Southern Surety Co. v. Childers, 25 A. L. R. 376; Summers v. Fidelity Mut. Aid Assn., 84 Mo.App. 610; Chambers v. Macon Wholesale Gro. Co., 334 Mo. 1215, 70 S.W.2d 885.

Roach & Brenner for respondents.

(1) The deceased, C. A. Soars, was not an employee within the meaning of the Compensation Act because his average annual earnings exceeded $ 3600 a year. Mo. Comp. Act, sec. 3305(a); Russell v. Ely & Walker D. G. Co., 332 Mo. 645, 60 S.W.2d 44; Klasing v. Schmitt Contracting Co., 73 S.W.2d 1011; State ex rel. v. Allen, 128 S.W.2d 1040; Sayles v. K. C. Structural Steel Co., 128 S.W.2d 1046. (2) The deceased, Charles Austin Soars, was not an employee of Soars-Lovelace, Inc., within the meaning of the Missouri Workmen's Compensation Act. (a) Because Mr. Soars owned most of the stock in the corporation, dictating its policy, managed its prudential affairs, took orders from no one, was not subject to discharge by anyone, and was the only person actively engaged in its affairs, he did not sustain the relation of employee to anyone within the meaning of the Compensation Act. Sec. 3305, R. S. 1929, p. 382; Barlow v. Shawnee Inv. Co., 48 S.W.2d 35; Columbia Gas Co. v. Industrial Comm., 200 Wis. 8; Skouitchi v. Chic. Cloak & Suit Co., 230 N.Y. 296, 130 N.E. 299; Dewey v. Dewey Fuel Co., 210 Mich. 370; Aitchison v. Ind. Comm., 188 Wis. 218, 205 N.W. 806, 44 A. L. R. 1213; Sec. 9521, Burns's Annotated Statutes of Indiana, 1926; Midwest Motor Coach Co. v. Elliott, 182 N.E. 539; Ryan v. State Auto Parts Corp., 255 Ill.App. 422; Donaldson v. Donaldson Co., 176 Minn. 422, 223 N.W. 772; Erickson v. Erickson Furniture Co., 179 Minn. 304, 229 N.W. 101; Brown v. Conway E. L. & P. Co., 82 N.H. 78, 129 A. 633; Hodges v. Home Mtg. Co., 201 N.C. 701, 161 S.E. 220; Enid Sand & Gravel Co. v. Magruder, 148 Okla. 67, 297 P. 271; Carville v. Bornot & Co., 288 Pa. 104, 135 A. 652; Santi v. Amer. Coal Exch., 91 Pa.Super. Ct. 271; Millers' Indem. Underwriters v. Cook, 229 S.W. 598; Chambers v. Macon Wholesale Gro. Co., 70 S.W.2d 884; Duesenberg v. Duesenberg, 187 N.E. 750; Indiana Comp. Act, 752; Sparks v. Dispatch Transfer Co., 104 Mo. 540; Sweeny v. Sweeny Tire Stores Co., 49 S.W.2d 205; Milwaukee Toy Co. v. Industrial Comm., 234 N.W. 748; So. Surety Co. v. Childers, 209 P. 927, 25 A. L. R. 373; Ardmore P. & O. v. State Industrial Comm., 109 Okla. 81; Ohio Drilling Co. v. State Industrial Comm., 26 Okla. 139, 207 P. 314; Chambers v. Macon Wholesale Gro. Co., 70 S.W.2d 884; Beckmann v. Oelerich & Sons, 160 N.Y.S. 791; In re Raynes, 118 N.E. 387; Zurich Acc. & Ins. Co. v. Industrial Comm., 193 Wis. 32, 213 N.W. 630; Emery's Case, 170 S.E. 839; United States Cas. Co. v. Burton-Pitt Lbr. Co., 153 S.E. 919; Aitchison v. Industrial Comm., 188 Wis. 218, 205 N.W. 806. (3) Insured is not estopped from claiming that Soars was not an employee within the meaning of the Compensation Act. Chambers v. Macon Wholesale Gro. Co., 70 S.W.2d 884; Alsup v. Murfreesboro Bread & Ice Cream Co., 56 S.W.2d 746; Texas Employers' Ins. Assn. v. Rogers, 70 S.W. 1007; Barlow v. Shawnee Inv. Co., 48 S.W.2d 35; Kennedy v. Kennedy Mfg. Co., 163 N.Y.S. 944; Venuto v. Carter Lake Club, 178 N.W. 706; Columbia Cas. Co. v. Industrial Comm., 227 N.W. 292; So. Surety Co. v. Childers, 205 P. 927.

Hyde, C. Bradley and Dalton, CC., concur.

OPINION

HYDE

This is an appeal from a judgment of the Circuit Court of Jackson County reversing an award of the Workmen's Compensation Commission for the death of Charles A. Soars. This award was to the widow and children of Soars, as dependents, in the total amount of $ 11,442. They have appealed from the Circuit Court's judgment.

The ground of reversal was that "there was not sufficient competent evidence in the record to warrant making the award." The issue to be determined is whether or not Soars was an employee of defendant corporation, Soars-Lovelace, Incorporated, under the provisions of Section 3305(a), R. S. 1929, 12 Mo. Stat. Ann. 8238.

The applicable part of this section is, as follows: "The word 'employee' as used in this chapter shall be construed to mean every person in the service of any employer, as defined in this chapter, under any contract of hire, express or implied, oral or written, or under any appointment or election, but shall not include persons whose annual average earnings exceed three thousand six hundred dollars." (We have italicized the controlling part.) Section 3304(a), R. S. 1929, 12 Mo. Stat. Ann. 8238, includes within the definition of employer every corporation "using the service of another for pay."

In July, 1930, Soars incorporated the Soars-Lovelace Company, "to carry on the business of designing, consulting, managing and contacting the oil refiners, the oil industry in general, and the selling of Five hundred shares of no par value stock was issued as follows: Soars, 498 shares, C. W. Lovelace, 1 share, and 1 share to their stenographer. Soars was president and treasurer of the company. Lovelace was vice-president and secretary. He did the office work until October 1, 1932, when he obtained other work because of the company's reduced income. It was understood that he might return if business improved. Soars worked principally outside the office "contacting the oil refiners, the oil industry in general, and the selling of the services of the company to such refiners, companies, or individuals." The company at first did some plant construction work having its "own construction superintendent on the job." In 1932, Soars sold 100 shares of his stock, 75 shares to H. M. Anderson, who had been employed by the company since September, 1930, and 25 shares to M. D. Overmier. Lovelace and the company's stenographer continued to hold one share each. Overmier was given an option to purchase 50 more shares at Twenty Dollars per share, in an agreement between Soars, Anderson and Overmier, dated November 12, 1932.

This agreement also contained the following provisions:

"If for any reason any one of the three parties to this agreement leaves the firm of Soars & Lovelace, Inc., he hereby agrees to sell his stock to the firm at the book value as determined by the board of directors. The sale of stock to take place at the time the party's connection with the firm is terminated.

"The salaries to be paid to the parties to this...