West Chandler Farms Co. v. Industrial Commission, 4861

• Citation: 64 Ariz. 383,173 P.2d 84
• Decision Date: 07 October 1946
• Docket Number: 4861
• Parties: WEST CHANDLER FARMS CO. v. INDUSTRIAL COMMISSION et al
• Court: Arizona Supreme Court

173 P.2d 84

64 Ariz. 383

WEST CHANDLER FARMS CO. v. INDUSTRIAL COMMISSION et al

No. 4861

Supreme Court of Arizona

October 7, 1946

Appeal by Certiorari from Award of Industrial Commission.

Proceeding under the Workmen's Compensation Law by Lowell E. Webb, a minor, and others, opposed by the West Chandler Farms Company, employer. From an award by the Industrial Commission of Arizona in favor of the applicant, the employer appeals by certiorari.

Award set aside.

Moeur &amp Moeur and Charles N. Walters, all of Phoenix, for petitioner.

H. S McCluskey and John R. Franks, both of Phoenix, for Industrial Commission.

Guynn &amp Twitty, of Phoenix, for respondent Trout.

Jennings Salmon & Trask, Henry S. Stevens, and J. A. Riggins, Jr., all of Phoenix, amici curiae.

Morgan, Judge. Stanford, C. J., and La Prade, J., concur.

OPINION

Morgan, Judge.

During the year 1944 petitioner was engaged in operating and managing the business enterprises of George Taylor & Sons, consisting of farming and cattle raising. In the spring of that year it entered into a verbal agreement with James G. Trout, providing that Trout, who owned a hay baler, would furnish it, his own crew and equipment, and bale all hay suitable on the Taylor ranches, for $ 4 per ton. This was later changed to provide a bonus of 25 cents per ton. Trout was allowed the use of certain houses on the ranch where the crew lived and were fed. One baler being insufficient, petitioner delivered a second baler to Trout under a verbal conditional sales agreement, and the latter operated both balers, furnishing all equipment and supplies. He hired all employees and paid their compensation and other expenses out of the contract price. Under the agreement the hay was not to be baled when too green or too dry. Bales were to be approximately 150 pounds in weight.

About July first, Trout employed the applicant, Lowell E. Webb, a boy of the then age of fourteen and one-half years, as the baler tractor operator, his compensation being 25 cents for each ton baled by the baler upon which he was working. Trout spent little time on the job. George Taylor, representing the petitioner, visited the operation frequently, and at times almost daily. He objected to the manner in which the work was being done. Sometimes he was there two or three times a day. The evidence disclosed that Taylor gave orders respecting the stacking of bales, their packing and wiring, gave directions to tighten the baler, and the effect of Trout's testimony is that petitioner had the right to terminate the work at any time. A. E. Coplan, petitioner's foreman, stopped the baler on two or three occasions, and also gave instructions with respect to how the work was to be done, when to start and when to stop, as to the piling of bales, and other matters.

On August 5th, while operating the tractor, applicant was injured by a pitchfork hurled from a moving belt, the tine of which punctured one eye, resulting in the loss of its sight. At the time of this accident petitioner held a policy of insurance with the Industrial Commission of Arizona, covering all of its employees protected by the Workmen's Compensation Law, but which contained the following provision: "Independent contract plowing and other independent contract work is not covered under this policy unless same is requested."

Petitioner considered Trout an independent contractor. No premiums were paid by it on Trout and the baling crew.

The applicant personally and through his guardian duly elected to pursue his remedy under the Workmen's Compensation Law. Claim filed by applicant with the commission against petitioner and others was resisted by petitioner on the ground that it was not his employer, since applicant was an employee of Trout, an independent contractor. The commission rejected this claim and entered an award against petitioner as the defendant employer. The petitioner then offered to pay to the commission premiums due on Trout and his baling crew, on the theory that they were its employees as found by the commission, but upon the understanding that the commission, as insurance carrier, would assume payment of the award. This offer was rejected by the commission. From the award and from denial of petitioner's motion for rehearing, petitioner has brought this appeal.

The commission made rather elaborate findings, but we think it necessary to notice only the following which, in the interest of brevity, we paraphrase:

(3) Applicant at the time of the accident was employed in Arizona upon the premises of petitioner in the regular and usual course of its business, and it had in its service applicant and three or more workmen employed in the use of machinery who were subject to the Arizona Workmen's Compensation Law;

(8) The right of supervision and control was reserved and exercised by petitioner, and, therefore, James G. Trout was not an independent contractor;

(13) The petitioner employer is estopped to claim benefits of any insurance coverage under the policy issued to it by the commission;

(14) To (17) inclusive: The defendant employer, West Chandler Farms, Inc., is liable to the applicant for accident benefits, including medical services, hospitalization, temporary total disability and compensation for total loss of the sight of the right eye, and for such other disability as may be incident thereto;

(18) The commission, defendant insurance carrier, is secondarily liable to the applicant.

Findings based upon illegality of the minor's services, as being in violation of the child labor laws, present no issuable controversy, and will therefore be disregarded.

The appeal, as we see it, presents only two questions: (1) Does the evidence support the commission's finding that Trout was not an independent contractor; (2) is the petitioner estopped, under the circumstances, to claim the benefits of insurance coverage under its policy of insurance.

It is settled by numerous decisions of this court that the findings of the commission are to be given the same consideration as those of a jury or trial judge. When there is reasonable evidence to support the award, or the facts are such that reasonable men might draw either of two inferences therefrom, the findings of the commission must be sustained. Grabe v. Industrial Comm., 38 Ariz. 322, 299 P. 1031; King v. Orr, 59 Ariz. 234, 125 P.2d 699; Smith v. Aluminum Co. of America, 62 Ariz. 160, 155 P.2d 628; Tashner v. Industrial Comm., 62 Ariz. 333, 157 P.2d 608. The statute, sec. 56-928, A.C.A.1939, as amended by Chap. 33, Laws of 1945, sets out the rules for determining whether a contractor is independent or an employee of the original employer:

"(b) When an employer procures 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 contractors and the persons employed by him, and his subcontractor, and persons employed by the subcontractor, are within the meaning of this section, employees of the original employer.

"(c) 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 is 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 of this section."

The court has had occasion to consider the above provision in determining whether a contractor was an employer or an employee. There would appear to be considerable conflict in the decisions. We think, however, that the statements of the court in Grabe v. Industrial Comm., supra, and in Alexander v. Alexander, 51 Ariz. 269, 76 P.2d 223, are determinative of the situation here. In the former case it was said [38 Ariz. 322, 299 P. 1034]:

"Under section 1418 supra (56-928, ACA1939) if A procures B to do certain work for him which is a part of process in A's trade or business, and retains supervision or control over the work, then B and all B's employees and subcontractors to the nth degree are, for the purposes of the Compensation Act, employees of A, no matter what the terms or method of employment or compensation. It is obvious that were this not so the beneficent purposes of the act could and would be easily defeated or evaded by unscrupulous employers through the aid of various dummy intermediaries. The statute therefore brushes aside all forms and subterfuges and provides that one just, simple, and definite test. If the work be part of the regular business of the alleged employer, does he retain supervision or control thereof? All other matters are of importance only as they throw light on this question."

The facts in the Alexander case are very similar to those before us. In that case the owner of an asparagus farm entered into an agreement with one John Alexander for the use of a machine for the cutting and chopping of asparagus fern into short lengths preparatory to working it into the ground for a mulch. As here, the agreement was oral and the compensation paid was upon an acreage basis. We quote [51 Ariz. 269, 76 P.2d 224]:

"* * * No written agreement was ever made between John Alexander and respondent in regard to the terms and manner in which the machine was to be operated. The compensation paid was on an acreage basis, and not per diem, but this, of itself, is not decisive of the issue. The true test, as stated in the Grabe case, supra, is whether the alleged employer retains supervision or control of the manner of the work. The testimony of Brown on this point is not positive, and it would...