Haverly v. Union Construction Co.

Much as I feel that claimant herein should receive compensation, I cannot see that she has shown her right to it in this proceeding. The majority opinion holds that there is evidence in the record to support the commissioner's finding that the contract of employment was technically made in Iowa. With this I am unable to agree, though I do not deem it decisive of the case.

The majority opinion then proceeds to hold that because the contract was technically entered into in Iowa, the injury must be compensable under the Iowa statute. I cannot concur.

I. The employer here was a copartnership composed of defendants Union Construction Company, an Iowa corporation, and Paul Reis, an individual, who resided in Iowa at the time the partnership agreement was signed on June 10, 1941. The partnership was not a general continuing one but was formed solely to carry out a contract for certain work in Oklahoma. They had entered into several similar partnership contracts before, the last one being in 1937. Reis was a bridge contractor and defendant company was engaged in road work. On those former occasions they had bid jointly and each time when successful had formed a separate partnership for each particular job.

Under the present agreement the company furnished two thirds and Reis one third of the capital and profits were to be divided in the same proportions. The partnership commenced work on the job about June 10, 1941.

Reis and Anderson, an officer of defendant company, moved their families to Oklahoma and were in charge of the work. Reis was superintendent. They maintained an office on the job, where the pay roll was made out and from which the employees were paid by checks upon a Durant, Oklahoma, bank. It is true the pay rolls were audited and approved in the office of defendant company in Des Moines. Both Reis and Anderson had charge of the employment of help in the business office there on the job.

The partnership carried workmen's compensation in defendant insurance company. It was applied for down there on the job but had to be approved by the president of the Union Construction Company in Des Moines.

On or about July 5th the Haverly family left Ames, Iowa, where they had lived for nearly ten years, and went to Denison, Texas, near the work in Oklahoma. Claimant, over objection, testified they reported at Denison at the "direction" of defendant Reis. Claimant has never met Reis. All she knew about any arrangement between him and her husband was what the latter had told her.

Claimant did not testify as to the contract of employment, nor did any other witness. There is no evidence of any prior correspondence or meeting between her husband and Reis, no evidence that the two men met in Denison or had ever met prior to that time.

The record is barren of any evidence showing who employed claimant's husband, or where or how the contract of employment was entered into. Mr. Fletter, president of defendant company, was a witness for claimant, but he had not known Haverly since the latter was a little boy. There is no evidence that he employed anyone for the Oklahoma job.

We have the bare fact that decedent and his family left Ames, arrived in Denison, Texas, and immediately commenced work on the job in Oklahoma near there, where some six weeks later he suffered the injury that resulted in his death.

The majority opinion says "that immediately before the work was begun decedent left his employment at Ames and went to Oklahoma * * *." I do not so read the record. Fletter testified: "Q. You started work on that project sometime shortly after June 10, 1941, did you? A. Yes, I think we did, I wouldn't say the date, though." Claimant testifies that decedent and she left Ames after July 4th, "I think the fifth." This is the whole record.

Is it to be assumed that Reis had employed decedent before the latter and his family moved to Oklahoma? If so, was it done in Iowa? There is no suggestion that the men had ever met except that at some remote time Reis lived in Ames. Was it done by correspondence? If so, which party initiated the negotiations? Where was the "last act" performed, referred to in the majority opinion by quotation from Chicago, R.I. P.R. Co. v. Lundquist,206 Iowa 499, 221 N.W. 228? See, also, 11 Am. Jur., Conflict of Laws, section 100. The record does not show by any direct or circumstantial evidence.

It is conceded the burden was on claimant. If the contract was made by correspondence it is just as reasonable to assume that Haverly wrote for a job as that Reis opened the correspondence. And it is just as reasonable to assume that Haverly proposed the terms upon which he was willing to come down and that Reis accepted them as to make the opposite assumption. In that case the last act will have been performed in Oklahoma. 17 C.J.S., Contracts, section 356. The circumstances shown by the record are just as consistent with an Oklahoma contract as with an Iowa one. They do not in any way meet the test that circumstantial evidence must meet. See Klumb v. Iowa State Traveling Men's Assn., 141 Iowa 519, 120 N.W. 81; Comparet v. Wm. H. Metz Co., 222 Iowa 1328, 271 N.W. 847; and cases cited in majority opinion.

It is not necessary, therefore, to assume, as do the majority, that if the contract was not made in Iowa decedent must have gone down to Oklahoma on an uncertainty. Nor is there any evidence that he abandoned his former job at Ames in order to accept this employment. The record does not show just why he quit working for Ben Cole Son. There is no suggestion in the evidence to explain the termination of that relationship.

I am forced to conclude that there is no competent evidence to support the finding that the contract of employment in this case was made in Iowa.

II. It is conceded by all that the employer-copartnership was organized solely for the one job in Oklahoma and that Haverly's employment was only for services to be performed in Oklahoma. Wherever the contract of hire may have been made, it was to be performed outside of Iowa. It was not incidental to any industry or business in Iowa. The partnership had no Iowa business. The employee relationship was clearly and entirely outside the state. The employee worked in Oklahoma and was paid there.

Under these circumstances I do not believe the claim for compensation is ruled by the Iowa statute. It did not enter into and become a part of the contract of employment.

This is not a case in which it is contended that the claimant is deprived of the right to compensation merely because the injury occurred outside the state. In cases where the employment is incident to a business in Iowa and the contract of hire is made in Iowa, the Iowa law becomes a part of the contract. Pierce v. Bekins V. S. Co., 185 Iowa 1346, 172 N.W. 191, and Cullamore v. Groneweg Schoentgen, 219 Iowa 200, 257 N.W. 561, are of that character.

In 71 C.J., Workmen's Compensation Acts, section 45, it is said:

"The test, in determining whether a state compensation law applies to a particular injury, has been held to be, in all cases, the place where the employment is located, or is to beperformed, and the place where the contract of employment is entered into has been held not decisive and not necessarily controlling, so that, without reference to the element of the place where the contract of employment was made, such authorities refuse to apply the compensation law of the state where the hiring is for work at a fixed place outside the state, even if the work is connected with a business conducted within it, or, as otherwise stated, where the contract is to be performed entirely outside the state, on the principle that the law applies only to employment within the state, and that award of compensation may be made for injuries sustained outside the state only where theyarise out of and in the course of employment which is locatedwithin it." (Italics supplied.) Citing Cameron v. Ellis Constr. Co., 252 N.Y. 394, 169 N.E. 622; Leader Specialty Co. v. Chapman,85 Ind. App. 296, 152 N.E. 872.

In Elk River Coal Lbr. Co. v. Funk, 222 Iowa 1222, 1230,271 N.W. 204, 209, 110 A.L.R. 1415, we said, after a discussion of the Bekins and Cullamore cases, supra:

"However, it must be held that if a contract of hire made in this state is to be performed wholly outside of this state, the Iowa law would not apply."

While this language may have been technical dictum, it was in a well-considered opinion and entitled to consideration. And it is to be noted that in the case of Pierce v. Bekins V. S. Co., supra, 185 Iowa 1346, 1354, 172 N.W. 191, 193, we carefully left open the very question presented here:

"With the possible exception of contracts wherein it is intended that the same shall be performed wholly without the state * * *."

The majority opinion quotes briefly from 11 Am. Jur., Conflict of Laws, section 118, but does not go further into the paragraph quoted from. A few lines farther down it is said:

"For this reason and others, in many instances the general statement that the law of the place of making governs is modified to the effect that a contract is governed by the laws of the country in which it is entered into, unless it is executed witha view to its performance in another country." (Italics supplied.)

And on the next page, but in the same section, the text writer sets out the rules laid down by the United States Supreme Court:

"(1) Matters bearing upon the execution, interpretation, and validity are determined by the law of the place where the contract is made; (2) matters connected with the performance are regulated by the law of the place where the contract by its terms is to be performed; and (3) matters relating to procedure depend upon the law of the forum." The author adds: "These three general rules have been adopted and applied by many jurisdictions in a long list of cases involving almost every conceivable kind of contract." 11 Am. Jur., Conflict of Laws, section 118.

I readily concede that the authorities are not entirely harmonious on the question presented here. It may be some of the apparent conflict is due to variations in circumstances. It is sometimes said to depend on the intention of the parties. Claimant's husband moved to Oklahoma for work that would probably last a year. He was subject to injuries that might temporarily incapacitate him and for which he would be entitled to compensation. Is it to be presumed that in such event it was intended, in case of controversy, he would have to come back to Iowa to litigate it? I cannot so hold. Regardless of the technical place of contract, this was an Oklahoma employment. The relationship of employer and employee was in that state and it seems clear to me that matters connected with the performance of the contract should be regulated by the laws there.

I would affirm the decision of the district court.

MILLER, J., joins in this dissent.