Bredeweg v. First State Bank

Plaintiff filed a claim for compensation for disability suffered from an accident on April 15, 1933. The deputy commissioner made an award in plaintiff's favor which was affirmed by the department and from which defendants appeal.

In January, 1932, a receiver was appointed for the Peoples State Bank; in February or March, 1933, the State banking department appointed a conservator for the First State Bank; and in March, 1933, a conservator was appointed for the Holland City State Bank. Prior to and during the time the three banks were in the hands of a conservator or receiver, they were joint mortgagees of the Ottawa Furniture Company; and in order to protect their interests, authorized one Vander Meulen, cashier of the First State Bank, to hire a watchman. Plaintiff was hired as a watchman and during the course of his employment suffered an injury. A report of the accident was made to Vander Meulen who at the time was employed by the receiver of the First State Bank. No report of the accident was filed with the department of labor and industry.

Prior to the appointment of the receiver and conservators, all of the above banks had elected to come under the workmen's compensation act. After the appointment of the conservators and receiver no change was made in the insurance set up except that one bank paid the insurance premiums for compensation insurance and one other bank had premiums paid just before the conservator was appointed. Neither of the conservators or the receiver filed his intention of coming under the compensation act, nor were the acceptance records by the banks withdrawn. At the time that plaintiff filed his petition for a hearing before the department of labor and industry, the receiver and conservators had been discharged and the banks were again doing business under the authority of the corporate powers that they severally had before.

It is contended by the plaintiff that the banks had contracted to come under the compensation act by filing their elections and that after the appointment of the receiver and conservators no steps were taken to terminate the arrangement regarding compensation for employees of the bank. The defendants claim that at the time of the injury to plaintiff, he (plaintiff) was employed by an entirely separate and distinct entity, namely, the receiver and conservators of the banks who had never elected to come under the provisions of the compensation act.

The relationship of the parties at the time of the accident governs the applicability of the compensation law.Shevehenko v. Railway Co., 189 Mich. 421; Thorpe v. Departmentof Labor and Industries, 145 Wash. 498 (261 P. 85); Sheldon v. Department of Labor and Industries, 168 Wash. 571 (12 Pac. [2d] 751); Gleason's Case, 269 Mass. 583 (169 N.E. 409).

"Persons engaged or retained by the receiver to assist him are his agents or employees, and not those of the owner of the property of which he is receiver, nor of the court; their acts and knowledge are imputable to the receiver, and contracts made by them are binding upon him." 53 C. J. p. 169.

In the case of contracts terminable at will, a receivership terminates the old relations between the insolvent employer and the employee because of the inability of the insolvent employer to perform. 1 Clark, Receivers, 580 et seq.

In Anderson v. Polleys, 53 R.I. 182 (165 A. 436), the court said:

"If the contract of employment — as that in the case at bar — is for an indefinite time, it may be terminated by mutual agreement or by consent, express or implied or by either party at will."

In the instant case, plaintiff was paid by the day; it was such a contract as terminated upon the appointment of the conservators and receiver and from the date of such appointment. Plaintiff was in the employ of the conservators and receiver and not the defendant banks.

In Unrine v. Railroad Co., 104 Kan. 236 (178 P. 614), Justice Burch, speaking for the court said:

"When the receivers took charge of the property and affairs of the railroad company, they did so as appointees and agents of the court instituting the receivership, and not as appointees and agents of the corporation. Contracts between the corporation and employees who were retained in service by the receivers were terminated, and such employees became employees of the receivers. (Chilletti v. Railway Co., 102 Kan. 297 [171 P. 14, L.R.A. 1918C, 1147])."

The compensation act is statutory and provides that employers shall not come under the act unless they make an election to do so. In Lester v. Auto Haulaway Co., 260 Mich. 16, we said:

" 'Acceptance' of the act by the employer, approved by the department, is an indispensable requisite to his operating under it."

Section 8412, 2 Comp. Laws 1929, provides that:

"Such election on the part of the employers mentioned in subdivision two of the preceding section, shall be made by filing with the industrial accident board⁸²²⁴ * * * a written statement. * * * The filing of such statement and the approval of said board⁸²²⁴ shall operate within the meaning of the preceding section, to subject such employer to the provisions of this act and all acts amendatory thereof for the term of one year from the date of the filing of such statement and thereafter, without further act on his part, for successive terms of one year each, unless such employer shall, at least 30 days prior to the expiration of such first or any succeeding year, file in the office of said board⁸²²⁴ a notice in writing to the effect that he desires to withdraw his election to be subject to the provisions of this act."

Nor is notice to the employee, actual or by posting, an essential factor of withdrawal from the act. Lester v. AutoHaulaway Co., supra.

The plaintiff, at the time of his accident and injury, being in the employ of the receiver and conservators and they having failed to file an election with the department of labor and industry to come under the act, is precluded from recovery.

The award of the department of labor and industry should be vacated; defendants should recover costs.

CHANDLER, J., concurred with SHARPE, J.

⁸²²⁴ The powers and duties of the industrial accident board have been transferred to the department of labor and industry and the board abolished. See 2 Comp. Laws 1929, § 8312. — REPORTER.