State ex rel. Red Jacket Coal Corp. v. Stokes, 10784

• Decision Date: 23 October 1956
• Docket Number: No. 10784,10784
• Citation: 94 S.E.2d 634,142 W.Va. 126
• Court: West Virginia Supreme Court
• Parties: STATE ex rel. RED JACKET COAL CORPORATION v. George W. STOKES, State Compensation Commissioner.

Page 634

94 S.E.2d 634

142 W.Va. 126

STATE ex rel. RED JACKET COAL CORPORATION v. George W. STOKES, State Compensation Commissioner.

No. 10784.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 5, 1956.

Decided Oct. 23, 1956.

Syllabus by the Court

1. A person, firm, association or corporation, regularly employing other persons for the purpose of carrying on any business in this State within the usual meaning of those words, who holds himself or itself out to be an employer, and is accepted as such by the State Compensation Commissioner, is an 'employer' within the meaning of the Act.

2. Where a person, firm, association or corporation holds himself or itself out to be an employer within the meaning of the Workmen's Compensation Act, is accepted as such by the State Compensation Commissioner, and thereafter complies with all provisions of the Act, in the absence of fraud or collusion, it is immaterial whether such employer is, in fact, an independent contractor in allocating charges incurred under the provisions of the Act.

Slaven & Staker, Lant R. Slaven, Williamson, Frederick P. Kopp, Columbus, Ohio, for relator.

John G. Fox, Atty. Gen., Franklin W. Kern, Secretary, Workmen's Compensation Fund, Charleston, George G. Burnette, Jr., Asst. Atty. Gen., for respondent.

BROWNING, President.

In this original proceeding in mandamus, the relator, Red Jacket Coal Corporation, seeks to compel the respondent, State Compensation Commissioner, hereinafter referred to as Commissioner, to delete certain charges, allegedly unlawfully transferred by the Commissioner from the account of another subscriber to the Workmen's Compensation Fund to relator's account, and to not consider such charges in computing relator's merit rating for the fiscal year 1955-1956.

The issue arose in the following manner: On May 18, 1953, relator purchased all standing timber on a tract of land from W. M. Ritter Lumber Company, and obligated itself to cut the merchantable saw timber on the tract and deliver it to Ritter. On the same day it entered into an agreement with Tazewell Lumber & Coal Corp., a corporation, organized and existing under the laws of the State of Virginia, which, beginning about May 18, 1953, was engaged solely in the business of logging and operating a sawmill in West Virginia, by which Tazewell agreed to log the tract, deliver mine timber to relator, and to deliver the saw timber to Ritter. Among other provisions, the agreement between relator and Tazewell provided:

'Second: The said Contractor (Tazewell) shall do all work in a first-class workmanlike manner * * * in such a way as to produce the highest percentage of the best grades of lumber, mine timbers, headers and ties possible to be produced from said logs, and to this end, all work of felling the trees and cutting of same into logs, and the manufacture thereof shall be done under the supervision and direction of the representative of Red Jacket. However, this provision shall not change the status of the party of the second part as an independent contractor, and shall not relieve it of any liability or responsibility to perform the work it has obligated itself herein to do and perform.

'* * * * * *.

'Seventh: The said contractor agrees and covenants that it is an independent contractor.

'Eighth: The said contractor agrees and binds itself to comply fully and at all times with all provisions of:

'(1) All Workmen's Compensation Laws * * *

'* * * * * *.

'Thirteenth: Red Jacket shall have no right to supervise, control or direct any part of the work or labor of the Contractor or any of Contractor's employees, performed in producing and delivering said timbers, headers, ties, lumber, wedges and logs. Nor shall Red Jacket have any right to interfere with Contractor's hiring, discharge, payment or supervision of the work of any person employed by the Contractor.'

On July 28, 1953, Tazewell applied to the Commissioner to become a subscriber to the Workmen's Compensation Fund, but was denied because of not being qualified to do business in this State. It thereafter qualified, a second application, on September 3, 1953, was approved and it became a subscriber to the Fund as of September 4, 1953.

The charges complained of in the instant proceeding arose out of injuries sustained by employees after Tazewell became a subscriber to the Fund were processed against Tazewell, and charged to Tazewell's account until transferred by the Commissioner to relator's account in the spring of 1955. This transfer was made upon the basis of the claim of one Justus, an alleged employee of Tazewell, who was injured on September 2, 1953. On September 1, 1954, he instituted an action in the Circuit Court of Wyoming County against Tazewell, relator and Ritter, which action was subsequently dismissed as to Ritter.

After the presentation of the evidence, but prior to the court's decision, counsel for both sides sought determination of the claim by the Commissioner, the trial court, by letter to the Commissioner, having indicated that it believed Justus to be an employee of relator within the meaning of the Workmen's Compensation Act, and that the Commissioner should assume jurisdiction. After relator complied with the Commissioner's request that relator include the wages of all employees of Tazewell, from the date of the agreement to September 4, 1953, the Commissioner entertained the claim of Justus, made disbursements from the fund in his behalf, and charged such to relator's account.

The relator avers that it accepted the charge in the Justus claim for two reasons: (1) The conduct of one Keiling a forester employed by relator, who, without specific authority, attempted to exercise supervision and control over the employees of Tazewell inconsistent with Tazewell's status as an independent contractor, and that as a result of such conduct by Keiling, as developed in the testimony in the law action in the Circuit Court of Wyoming County, he was discharged on April 30, 1954, and thereafter there was no supervision or control in behalf of relator, inconsistent with Tazewell's status as an independent contractor; and (2) that Tazewell was not a subscriber in good standing to the Workmen's Compensation Fund at the time of the injury to Justus, but was a subscriber in good standing when injury occurred to the six employees whose injuries resulted in the charges being made first against the account of Tazewell, and subsequently transferred to the account of the relator.

The Commissioner answered, denying the material allegations of relator's petition, and further alleging Tazewell's status as an agent of relator, and not as an independent contractor.

Two questions are raised by this record: (1) Whether the Workmen's Compensation law of this State in using the word 'employer' restricts the meaning of that word to an employer who is an independent contractor; and (2) assuming that the answer to that question is in the affirmative, whether the account of the relator may be charged with...