United States Fidelity and Guaranty Company v. The Industrial Commission of Arizona

Decision Date22 November 1933
Docket NumberCivil 3385
Citation42 Ariz. 422,26 P.2d 1012
PartiesUNITED STATES FIDELITY AND GUARANTY COMPANY, a Corporation, Petitioner, v. THE INDUSTRIAL COMMISSION OF ARIZONA, J. NEY MILES, HOWARD KEENER and L. C. HOLMES, as Members of Said Industrial Commission of Arizona, OCEAN ACCIDENT AND GUARANTEE CORPORATION, LTD., and FLORA FRANCES HAWES, SHELDON HAWES, KATHLEEN HAWES and DORIS LEE HAWES, Surviving Widow and Minor Children of RALPH W. HAWES, Deceased, Respondents
CourtArizona Supreme Court

APPEAL by Certiorari from an award of the Industrial Commission of Arizona. Award affirmed.

Messrs Moore & Shimmel, for Petitioner.

Mr. Don C. Babbitt and Mr. D. L. Cunningham, for Respondent Industrial Commission.

Mr. C H. Young and Mr. H. S. McCluskey, for Respondent Ocean Accident and Guarantee Corporation, Limited.

Messrs Rice & Mathews, for Hawes' Dependents.

OPINION

LOCKWOOD, J.

This matter comes before us on a writ of certiorari sued out by United States Fidelity and Guaranty Company, a corporation, hereinafter called petitioner, against Industrial Commission of Arizona, the Ocean Accident and Guarantee Corporation, Limited, a corporation, hereinafter called the company, and Flora Frances Hawes, Sheldon Hawes, Kathleen Hawes and Doris Lee Hawes, hereinafter called the claimants, to review an award made by the Industrial Commission in favor of the claimants and against the petitioner and the company jointly.

The material facts of the case are nowise in dispute, the only question before us being as to the legal construction to be put on such facts. We therefore state them as follows: On the first day of June, 1932, one I. P. Fraizer together with Ralph W. Hawes were killed by the explosion of a tank of gasoline occurring at a certain oil plant being operated by Fraizer at Miami, Arizona, under the terms of a certain contract with the Texas Company, the owner of the plant. The claimants made application to the commission for compensation for the death of Hawes. The matter came before the commission in the usual manner without a formal hearing, upon the claim of the widow and the affidavit of a witness to the accident and an award was made against the company, it being the insurance carrier for Fraizer. Thereafter the company filed a petition for rehearing denying liability on its part and alleging that the liability arising out of the death of Hawes was in the petitioner, which was the insurance carrier for the Texas Company. Petitioner asked leave to appear, which was granted, and on the 28th of January, 1933, a full hearing was held at which evidence in support of the claims of the respective parties was introduced and on the twenty-fourth day of May the commission made its findings and award allowing claimants a certain amount "payable . . . by the defendant insurance carriers," and finding the following facts:

"6. That R. W. Hawes was employed by I. P.Frazier and his wages were fixed and paid by said I. P. Fraizer, and that the plant wherein he was employed was owned and operated by the Texas Company.

"7. That I. P. Fraizer was under a written agency contract with the Texas Company of California, in conducting the business of receiving, unloading, storing and distributing petroleum products of said company. That the work which I. P. Fraizer was performing under said contract, and the work which R. W. Hawes was performing at the time of his death, was a part or process in the trade or business of the Texas Company, and that said company retained supervision and control over said work, and said I. P. Fraizer and his employees in the performance thereof."

Thereafter and in due from application was made by petitioner for the writ of certiorari on which this matter is before us, the company not joining in the application, although after the writ was granted and the matter set down for hearing, it appeared and filed a brief in support of its contention made before the commission that it was in no manner liable to pay compensation for the death of Hawes.

So far as the right of claimants to compensation, or the amount of the compensation awarded, no issue is raised, it being admitted by all parties that an award is proper and that it is in the correct amount, the only question being as to who is obliged under the law to pay it. At the hearing before us the position taken by the parties was triangular, the claimants insisting that the company and the petitioner were jointly and severally responsible and the company and petitioner each urging that the other was solely liable.

The only question, therefore, before us is as to who should pay the award. It is urged by the claimants that the company is not in a position to object to the award made against it, in view of the fact that it was a party to the proceedings before the commission and did not join in the application for the writ of certiorari. We have previously held that while the Industrial Commission is not a court, nevertheless in making an award it acts in a judicial capacity. Zagar v. Industrial Com., 40 Ariz. 479, 14 Pac. (2d 472; Doby v. Miami Trust Co., 39 Ariz. 228, 5 P.2d 187. We have also held that the findings of the Industrial Commission are in effect similar to the findings of the court or the verdict of a trial jury. Blankenship v. Industrial Com., 34 Ariz. 2, 267 P. 203; Federal Mutual Liability Ins. Co. v. Industrial Com., 31 Ariz. 224, 252 P. 512. And that the proceedings on certiorari from an award of the Industrial Commission are in substance an appeal and should ordinarily be governed by the same principles as appeals from the superior courts. Maryland Casualty Co. v. Industrial Com., 33 Ariz. 490, 266 P. 11.

The usual rule, of course, is that where a judgment is rendered against two or more defendants and one of them does not appeal, the latter is not entitled to the benefit of a reversal. 2 Freeman on Judgments, § 1167, pp. 2418, 2419, and that the judgment against the nonappealing defendant is final. John Brickell Co. v. Sutro, 11 Cal.App. 460, 105 P. 948; continental Paper Bag Co. et al. v. Bosworth, (Tex. Com. App.) 269 S.W. 83. This rule has been approved and applied by us in the case of Town of Flagstaff v. Gomez, 23 Ariz. 184, 202 P. 401, 23 A.L.R. 661. We are of the opinion that, applying the general principles above set forth, the Ocean Accident and Guarantee Corporation, Limited, is not in a position to question in this proceeding the justice of the award of the commission against it, and such award must therefore be sustained.

We consider, then, the question of the award against petitioner. Sections 1421, 1422 and 1433, Revised Code 1928, read in part as follows:

"§ 1421. Payment of Compensation. Every employee, hereinbefore designated, who is injured, and the dependents of every such employee who is killed, by accident arising out of and in the course of his employment, wheresoever such injury has occurred, unless purposely self-inflicted, shall be entitled to receive, and shall be paid such compensation. . . .

"§ 1422. Securing Compensation; Alternative Methods; Regulations. Employers, but not including the state or its legal subdivisions, shall secure compensation to their employees in one of the following ways: . . . By insuring and keeping insured the payment of such compensation, with a corporation or association authorized to transact the business of workmen's compensation insurance in the state. . . .

"§ 1433. Liability of Employer Failing to Comply. Employers subject to and who fail to comply with the provisions of section 1422 shall not be entitled to the benefits of this article during the period of non-compliance, but shall be liable in an action under any other law of the state. . . . An employee of such employer, or his dependents in case death ensued, may, in lieu of proceeding against his employer by civil action in the courts, file his application with the commission for compensation in accordance with the terms of this article, . . . and the compensation so determined shall be paid by such employer to the person entitled thereto. . . ."

It will be seen by these sections that it is the "employer" and no one else who is authorized to secure compensation insurance, and that he is responsible for such compensation, if he has not secured a carrier of insurance therefor, in the manner allowed by statute.

The question then for consideration is, who was the "employer" of Hawes at the time of his death, within the meaning of the compensation act, the claimants insisting both Fraizer and the Texas Company were deceased's employer, while petitioner urges the employer was Fraizer alone, and the company with equal earnestness applies that term to the Texas Company only. The act does not attempt to define the general term "employer," but does in section 1418, Revised Code 1928, establish a test for an independent contractor, such as petitioner claims Fraizer was, as follows:

". . . Where an employer procres work to be done for him by a contractor over whose work he retains supervision or control, and such work is a part or process in the trade or business of the employer, then such contractor and the persons employed by him, and his sub-contractor and the persons employed by the sub-contractor, are, within the meaning of this section, employees of the original employer. A person engaged in work for another, and who while so engaged, is independent of the employer in the execution of the work, not subject to the rule or control of the person for whom the work is done, but engaged only in the performance of a definite job or piece of work, and subordinate to the employer only in effecting a result in accordance with the employer's design, is an independent contractor and an employer within the meaning hereof."

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