Scott v. Alsar Company

58 N.W.2d 910, 336 Mich. 532, 1953 Mich. LEXIS 501

• Court: Michigan Supreme Court
• Decided: June 8, 1953
• Docket: Docket 16, Calendar 45,536
• Status: Published

Opinions

Boyles, J.

We are here called upon to answer the-following question:

Is the plaintiff, as an independent contractor, entitled to an award of compensation under section 7, subdivision 2, part 1, of the workmen’s compensation act, as amended,

* in the light of article 5, § 21, of the Michigan Constitution,?

On August 30,1950, plaintiff was injured by falling, from a roof while doing work for the defendant Alsar Company. Both parties here concede that he was an independent contractor. The commission so-found (quoting from its opinion):

“It is obvious that plaintiff had a contract for a completed job which did not require his personal service. It was not a contract of hire which created an employer-employee relationship. We think the record conclusively established the status of the.plaintiff at the time of the injury as that of an independent contractor.”

Section 7, part 1, of said act, as last amended by PA 1949, No 284, provides in part as follows:

“Tbe term ‘employee’ as used in this act shall be ■construed to mean: * * *

“2. Every person in the service of another, under any contract of hire, express or implied, including .aliens, including working members of partnerships, receiving wages irrespective of profits from such, including any person insured for whom and to the extent premiums are paid based on wages, earnings or profits, and also including minors.”

It is conceded that the plaintiff could not furnish ■compensation insurance coverage when he- first contracted with the defendant Alsar Company to do roofing work, and that workmen’s compensation insurance premiums were deducted from his pay by said company. Such deductions were based upon the .gross amount paid' for labor performed under the contract, not necessarily that of the plaintiff, inasmuch as plaintiff’s contract was not one for personal .service. The work could be performed by persons that plaintiff might choose to employ.

Plaintiff claims that the payment of such premiums by the Alsar Company brought the plaintiff within the definition of an employee in said section 7, subd 2; pt 1, of the act, as a person in the service ■of the Alsar Company under a contract of hire by reason of the aforesaid provision in said section — “including any person insured for whom and to the •extent premiums are paid based on wages, earnings •or profits.”

The commission held with the plaintiff and awarded compensation. The defendants appeal. Their claim is that if plaintiff is allowed workmen’s compensation as an independent contractor, not as an •employee, it would render said provision unconstitutional under- article 5, § 21, of the Michigan 'Constitution (1908), wherein it provides that:

“No law shall embrace more'thaii one object, which shall be expressed in its title.”

The title of the workmen’s compensation act is as follows:

“An act to promote the welfare of the people of this State; relating to the liability of'employers for injuries or death sustained by their employees, providing compensation for the disability or death resulting from occupational injuries or disease or accidental injury to or death of employees and methods for the payment, and apportionment of the. same, establishing an industrial accident board, defining its powers, providing for a review of its awards, making an appropriation to carry out the provisions of this act, and restricting the right, to compensation or damages in such' cases to such as are provided by this act.” '

The distinction between the relationship of employer and employee, and the relationship of an independent contractor, has long been recognized by this Court. Bacon v. Candler, 181 Mich 372; Utley v. Taylor & Gaskin, Inc., 305 Mich 561; Brown v. Standard Oil Co., 309. Mich 101,; Brinker v. Koenig Coal & Supply Co., 312 Mich 534. Unless a different rule of law is-to be applied under the workmen’s compensation apt, .the finding of the commission that the plaintiff was an independent contractor negatived the possibility of finding that the plaintiff was an employee of the defendant Alsar Company.

, There can be no doubt but that prior to the amendment of said section 7, pt 1, of th,e workmen’s compensation act by PA 1949, No 284, the plaintiff as an independent contractor would not have been entitled to an award of compensation. This Court has so held.

• . “The Michigan workmen’s compensation statute applies to employer and employee in the sense of such relation at common law, and not at all to the relation of an independent contractor to a job or jobs.” Dennis v. Sinclair Lumber & Fuel Co. (1928), 242 Mich 89.

“Mr. Slessor was exercising an independent employment, contracting to perform-particular pieces, of work for others, according to his own 'methods, with his own employees, and without subjection to control of his employer, except as to the result called for by his undertaking. His employees worked for him, looked to him for their pay, he collected compensation due him for their labor and his own, and, from his contract .earnings, paid his help. He was not required to do the work himself, and, in fact, at the time of accident, was using the labor of others in his employ, and he alone could have discharged any one of his employees.

“An injured independent contractor, does not come-within any provision of the workmen’s compensation act.” Slessor v. Board of Education of Kalamazoo (1932), 256 Mich 389.

“It is fundamental that the relation of employer and employee must be either admitted or proved. Glenn v. McDonald Dairy Co., 270 Mich 346.” Lynch v. R. D. Baker Construction Co. (1941), 297 Mich 1.

“To entitle plaintiff to compensation, he must have been in the employ of defendant at the time of the accident, under a contract of hire, -express or implied. CL 1929, § 8413, as amended by PA 1937, No 204, and PA 1939, No 107 (CLS 1940, § 8413, Stat Ann 1941 Cum Supp § 17.147). It is fundamental in this type of proceeding that before plaintiff can recover, the-relationship.of employer and employee must be admitted or .proved.” Powell v. Twin Drilling Co. (1942), 300 Mich 566.

The language in section 7, subd 2, pt 1, of the act was changed by PA 1949, No 284, to that hereinbefore quoted. Plaintiff claims that under its changed provisions lie is entitled to compensation, although, admittedly an independent contractor. The defendant appellants claim that such a construction would necessarily require that by including independent contractor, said section would he unconstitutional because outside the title of the act.

The title of the act expressly refers to the liability of employers for injuries or death sustained by their employees. It provides for compensation for disability or death resulting from occupational injuries or disease or accidental injury to or death of employees. Had the legislature so intended, it would have been a simple matter to add “independent Contractor” to those, cases and those persons within the express provisions of the title. While we have frequently held that article 5, § 21, of the Constitution is not to he given a narrow or strained construction (Machin v. Detroit-Timkin Axle Co., 187 Mich 8), we conclude that the inclusion of independent contractor within the title of the act could not at this time he accomplished except by judicial fiat. For a recent precedent where this Court has declined to enlarge the title and scope of the act by judicial fiat, see Arnold v. Ogle Construction Co., 333 Mich 652.

To support plaintiff’s position that independent -contractor is within the purview of the title of the ■act, his counsel point to our decisions holding that working members of a copartnership are within the title.* The distinction is plain. Section 7, suhd 2, pt 1, of the act expressly provides that working members of partnerships receiving wages irrespective of profits as such, shall he considered as employees of the partnership. A copartnership is a separate and distinct legal entity from that of its component members. Chisholm v. Chisholm Construction Co., 298 Mich 25; Lobato v. Paulino, 304 Mich 668. Under the workmen’s compensation act, a partner may become an employee of the partnership of which he is a member, and be entitled to compensation as snch employee, the legislature having expressly so declared. It has not declared that an independent contractor is an employee of the other' party to his contract. To place such a construction on the provision in section 7, pt 1, of the act on which the plaintiff relies would put it outside the title of the act. It embraces the relationship of employer and employee, but not that of an independent contractor.

The legislature, at least by implication, has 'indicated in the act an intention not to include an independent contractor within the definition of an employee. In section 10, pt 1, of the act,* the legislature’ has provided the circumstances under which the principal who contracts with a contractor will be held liable for compensation to an injured employee of the contractor or subcontractor, and be entitled to be indemnified by the contractor or subcontractor for such liability. This has been held valid. Burt v. Munising Woodenware Co., 222 Mich 699; Michigan Boiler & Sheet Iron Works, for use and benefit of American Mutual Liability Co., v. Dressler, 286 Mich 502; Currier Lumber Co., for use and benefit of Fidelity & Casualty Co. of New York, v. Van Every, 312 Mich 375.

See, also, Rinebold v. Bray, 248 Mich 321.

Nor are we impressed by plaintiff’s argument that the defendant company and its compensation insurance carrier are estopped from raising the question. It is a fair inference that the reason why the Alsar Company paid the premiums was because of its doubt whether plaintiff might or might not be considered as an employee, under the act.

■ Reversed and remanded for entry of -an order denying compensation.

Dethmers, C. J., and Btjtzel, Carr, 'Sharpe, and Reid, JJ.-, concurred with Boyles, J.

CL 1948, § 411.7, as amended by PA 1949, No 284 (Stat Ann 1950 Bév § 17.147).

Callie v. Detroit Auto Accessory Co., 224 Mich 703; Auten v. Unemployment Compensation Commission, 310 Mich 453; Chisholm v. Chisholm Construction Co., 298 Mich 25.

CL 1948, § 411.10 (Stat Ann 1950 Rev § 17.150).