Stevens v. Indus. Comm'n

• Court: Illinois Supreme Court
• Writing for the Court: DUNN
• Citation: Stevens v. Indus. Comm'n, 346 Ill. 495, 179 N.E. 102 (Ill. 1931)
• Decision Date: 17 December 1931
• Docket Number: No. 20958.,20958.
• Parties: STEVENS v. INDUSTRIAL COMMISSION et al.

346 Ill. 495

179 N.E. 102

STEVENS

v.INDUSTRIAL COMMISSION et al.

No. 20958.

Supreme Court of Illinois.

Dec. 17, 1931.

Error to Circuit Court, Cook County; H. S. Pomeroy, Judge.

Proceedings under the Workmen's Compensation Act by Amanda Stevens for the death of her husband, Fred B. Stevens, opposed by T. C. Dolan & Co., a corporation, employer, and the General Accident, Fire & Life Assurance Corporation, Limited, insurer. To review an order confirming an order of the Industrial Commission, which set aside an award by an arbitrator of compensation to claimant, the claimant brings error.

Reversed and remanded, with directions.

ORR and JONES, JJ., dissenting.West & Eckhart and Sanders, Childs, Bobb & Wescott, all of Chicago (William L. Bourland and John Neal Campbell, both of Chicago, of counsel), for plaintiff in error.

John A. Bloomingston, of Chicago, for defendants in error.

DUNN, J.

The circuit court of Cook county confirmed an order of the Industrial Commission which set aside an award by an arbitrator of compensation to Amanda Stevens against T. C. Dolan & Co., a corporation, on account of the death of Fred B. Stevens, her husband, caused by accidental injuries received by him while in the employ of Dolan & Co. On the petition of Mrs. Stevens a writ of error was awarded to review the judgment of the circuit court.

There is no question of fact in the case, and the question of law on which the decision depends is whether, on the established facts, the deceased was an employee of T. C. Dolan & Co. entitled to the benefit of the provisions of the Workmen's Compensation Act (Smith-Hurd Rev. St. 1927, c. 48, § 138 et seq.). The following is a statement of the facts:

Dolan & Co. is a corporation which was organized in 1907 by T. C. Dolan and Fred B. Stevens, who had for three of four years been conducting the business to which the corporation succeeded. The capital stock consisted of 100 shares, of which Dolan owned 50, Stevens [346 Ill. 497]48, and Fred B. Stevens, Jr., his son, 2. Dolan was president, Stevens secretary and treasurer, and the three stockholders were the directors. The business of the corporation was conducted in a building about 20 feet wide at 2953 West Lake street, in Chicago, on the south side of the street, between Francisco and Sacramento streets, and was that of a printing shop. The corporation had four presses and a power cutter, stitching machine, and the necessary amount of type. The printing presses were operated by electrically-driven motors and the cutter was also operated by electricity. The corporation was therefore under the Workmen's Compensation Act (Field & Co. v. Industrial Comm., 305 Ill. 134, 137 N. E. 121), and it carried workmen's compensation liability insurance. Dolan and Stevens did all the mechanical work of the corporation, and each received $25 a week as wages for his work. Stevens was a typesetter. He set the type, locked it in the forms, and turned them over to Dolan, who was a printer or pressman. Stevens looked after the books, and they both went out soliciting and collecting. Neither received any salary beyond his wages, $25 a week. Prior to the last three years, dividends were declared and paid according to the shares held. For the last three years no dividends were declared. During those years wages were paid out of the reserve in the bank. That was done when they could not make it from the business. The General Accident,Fire & Life Assurance Corporation, Limited, which had issued a policy insuring the liability of Dolan & Co., was made a party to the application for compensation under section 28 of the Workmen's Compensation Act (Smith-Hurd Rev. St. 1927, c. 48, § 165). On November 15, 1928, Dolan gave Stevens a bill to collect from a debtor of the corporation about four blocks away, and Stevens went to the debtor's place of business for that purpose. While returning from this errand he was struck by an automobile and died from the injury. The accident clearly arose out of and in the course of the corporation's business in which Stevens was engaged, and, if the relation of employer and employee existed between them, his widow was entitled to compensation.

The only circumstance which has any tendency to distinguish this from the ordinary case of employer and employee or master and servant is the fact that Stevens was a stockholder and director and held the office of secretary and treasurer of the corporation. Section 5 of the Workmen's Compensation Act (Smith-Hurd Rev. St. 1927, c. 48, § 142) declares that ‘the term ‘employee’ as used in this act, shall be construed to mean: * * * Second-Every person in the service of another under any contract of hire, express or implied, oral or written.' Stevens was included within the terms of this definition. The act applies automatically not only to the corporation, but to all its employees, regardless of the kind of work in which they may be engaged. Illinois Publishing & Printing Co. v. Industrial Comm., 299 Ill. 189, 132 N. E. 511;McNaught v. Hines, 300 Ill. 167, 133 N. E. 53;Porter Co. v. Industrial Comm., 301 Ill. 76, 133 N. E. 652;Ascher Bros. v. Industrial Comm., 311 Ill. 258, 142 N. E. 488.

It is well established that the directors of a corporation cannot receive compensation for the performance of their duty as directors or as officers of the corporation unless compensation is provided for by a by-law or resolution of the board of directors before the services are rendered. This rule applies to a director who is the president, vice president, secretary, or treasurer of a corporation, but it does not apply to a director or officer who has performed necessary services entirely outside the scope of his duties as a director or officer, at the instance of the officers of the corporation having general authority over the affairs of the corporation, under an express promise of payment for such services or under such circumstances as raise an implied promise to pay for them. Rockford, Rock Island & St. Louis Railroad Co. v. Sage, 65 Ill. 328, 16 Am. Rep. 587;Cheeney v. Lafayette, Bloomington & Mississippi Railway Co., 68 Ill. 570, 18 Am. Rep. 584;Holder v. Lafayette, Bloomington & Mississippi Railway Co., 71 Ill. 106, 22 Am. Rep. 89;Chicago Macaroni Mfg. Co. v. Boggiano, 202 Ill. 312, 67 N. E. 17;Pew v. First Nat. Bank, 130 Mass. 391; Fitz gerald & Mallory Construction Co. v. Fitzgerald, 137 U. S. 98, 11 S. Ct. 36, 34 L. Ed. 608.

The defendants in error base their defense on the proposition that Stevens was engaged in an official capacity at the time he was injured and that the relation of employer and employee did not exist between him and the Dolan Company, and it is said that he was several blocks away from the plant for the purpose of collecting a bill-a function which had nothing to do with the manual or mechanical part of the plant, but was peculiarly and exclusively a part of his official duties as secretary and treasurer of the corporation. The question is not, however, whether the duty he was performing was mechanical or manual in its nature, but whether it was an official duty imposed upon him by the nature of his office as secretary and treasurer. We have already seen that the act applies to all the employees of a corporation, regardless of the nature of their duties or the character of the work in which they were engaged. Whether it applies to the general executive officers of a corporation has never been decided or considered by this court. It was considered by the Appellate Court for the First District in Ryan v. State Auto Parts Corp., 255 Ill. App. 422, which was an action for personal injuries received by the plaintiff through the negligence of the defendant. The defense relied upon by the defendant was that the plaintiff was in the employ of the Motor Transportation Company, and that the plaintiff, his employer and the defendant were all operating under the Workmen's Compensation Act (Smith-Hurd Rev. St. 1927, c. 48, § 166), and that under section 29 of the act the action at law by the plaintiff could not be maintained. The business of the Motor Transportation Company was hauling material by truck, and it used between sixty and sixty-five trucks in the conduct of its business. The plaintiff had been connected with the company about fifteen years, was a stockholder and also its superintendent, secretary, and purchasing agent. He hired all its employees, bought all necessary motor parts, made charges for services, entered them on the books of the company, and checked all bills. The bookkeeper made out and signed all checks, and the plaintiff checked them, and, if correct, countersigned them. He received a monthly salary paid by checks countersigned by himself. He signed contracts of the corporation, as the president also did. He did not drive any of the trucks, but was the executive officer of the company. He was injured by falling down an open elevator shaft on the defendant's premises negligently left unguarded. He had gone to the defendant's premises to examine some secondhand motortrucks which he had learned that the defendant had for sale, with a view to the purchase of them for his company, The Appellate Court held that in doing this the plaintiff was acting in his official capacity as the executive manager of his company and was not doing the work of an employee, and therefore was not under the Workmen's Compensation Act. We regard this decision as giving a proper construction to the Workmen's Compensation Act in accordance with the weight of judicial authority.

In Bowne v. S. W. Bowne Co., 221 N. Y. 28, 116 N. E. 364, the claimant was the owner of a majority of the stock of the S. W. Bowne Company, a corporation engaged in the manufacture of cattle foods, and its president and principal executive officer, receiving a salary of $70 a week. While performing manual labor,...