Washel v. Tankar Gas, Inc.

¹ Reported in 2 N.W.2d 43. Certiorari by each relator to review an award by the industrial commission.

There is not much dispute as to the main facts, which may be thus summarized: Respondent's husband, Raymond Washel, was killed February 18, 1939, while at work in a filling station at 1101 South Eighth street in the city of Minneapolis. Death was caused by an accident (explosion) arising out of and in the course of Washel's employment. The controversy is as to whether Washel at the time was in the employ of C. Wesley Wilson or relator Tankar Gas, Inc. The commission dismissed the proceeding as to Wilson, and no error is assigned as to that action. Wilson leased the filling station mentioned of Tankar Gas, Inc. on May 17, 1938, by written lease. He hired Washel to attend the station for the wage of $30 per week, and a part-time assistant at 30 cents per hour, and paid these men out of his own pocket. The Tankar Gas, Inc. is a wholesale and retail dealer of gasoline and petroleum products. For this purpose, it had in May 1938, in the Twin Cities, a main office, a bulk plant, and 22 filling stations. Of the latter, it leased out 16 and operated 6, hiring, paying, and discharging the attendants at pleasure. The relator insurer carried its workmen's compensation risk under a policy which specified and covered each of the stations operated by it, but did not specify or include any of its 16 leased filling stations. Before obtaining the lease herein involved, Wilson had for some time operated a filling station at 3700 Cedar avenue in Minneapolis, under a written lease from Tankar Gas, Inc. Washel had also worked there.

From the decision of the majority (of the commission), it appears that the lease was considered a scheme or device by which the Tankar Gas, Inc. sought to evade the obligation imposed by the workmen's compensation law to provide insurance for accidental injuries or death of those engaged in carrying on its business. So concluding, the commission did not regard as conclusive this test or definition: An employer "shall mean every person not excluded by section 8, who employs another to perform a service for hire and to whom the 'employer' directly pays wages" (Mason St. 1927, § 4326[d]). The written lease to Wilson consists of five pages of closely spaced typewriting. The lessee must procure from the lessor all products handled at the station. The lessee must daily report to the lessor all sales made. While the lessee is at liberty to cut prices to some extent, it must not sell for less than invoice. The lessor made a monthly check of the lessee's tank records. There is much in the lease indicating that the lessor was much interested in the business of the filling station leased, and to that end supervised, directed, and counseled the lessee. So far as the evidence goes, the lessor supervised the leased filling stations much the same as the six it operated itself. It is true that the pleadings contained no allegations that the lease was a scheme or device to evade the compensation law, nor are there any specific findings to that effect. But the ultimate finding that Washel was the employe of Tankar Gas, Inc. at the time of his accidental death is based on that theory by the majority opinion; that Wilson was an agent or servant in charge of the filling station and not a lessee thereof, and therefore authorized to employ Washel for Tankar Gas, Inc. We think the following decisions sustain the finding that Washel was the employe of Tankar Gas, Inc. when he met death: Angell v. White Eagle O. R. Co. 169 Minn. 183,210 N.W. 1004; Nesseth v. Skelly Oil Co. 176 Minn. 373, 223 N.W. 608. It makes little difference whether the agreement between the parties is in form of an agency contract or a lease. So far as Tankar Gas, Inc. is held to be the employer of Washel, we also cite Bolin v. Scheurer, 210 Minn. 15, 297 N.W. 106; Byhardt v. Ballord, 209 Minn. 391, 296 N.W. 504; Rice v. Keystone View Co. 210 Minn. 227, 297 N.W. 841.

The relator insurer is in a different situation from that of relator employer. The insurer was not a party to the scheme or device to evade the burdens of the workmen's compensation law. The lease was dated May 17, 1938, and the policy of relator insurer was not issued until July 1, 1938, and covers numerous specifically named filling stations in this and other states, but not either of the two stations leased to Wesley Wilson, nor, so far as disclosed, any leased filling station. The lease involved was not recorded, and there is no evidence that relator insurer ever knew of this filling station or who operated it. The portions of our workmen's compensation law that might apply to the situation here are Mason St. 1927, §§ 4288, 4289, and 4290(1). Section 4288 makes it obligatory on the employer to carry compensation insurance, and a violation carries a penalty. There is no claim that the policy violated § 4289. And of course the insurer did not in any way participate or know of the scheme or device denounced by § 4290(1). Skuey v. Bjerkan, 173 Minn. 354, 355, 217 N.W. 358, is relied on by relator insurer. But there the employer did not question the employment, his insurer only denied coverage, and the court thus stated the question for decision: "Our inquiry is whether, under our compensation law, the coverage may be limited solely by agreement between the insurer and the insured." The inquiry was answered in the negative. In the instant case there was no agreement between relators to violate the law. As before stated, the insurer had no knowledge of the lease. Neither Wilson nor Washel was on the insured's payroll which the insurer audited to determine its premium. The workmen's compensation laws of other states are not so framed as to afford much help from decisions there rendered on a question like the present. However, the following to which we have been cited aid the insurer's contention: American Mut. L. Ins. Co. v. Chodosh, 123 N.J.L. 81,8 A.2d 64; In re Claim of Simpkins v. Steffen, 255 N.Y. 65,174 N.E. 64.

Our conclusion is that as to relator insurer the proceeding is dismissed, but as to relator Tankar Gas, Inc. the writ is discharged and the decision of the industrial commission is affirmed.

Respondent may tax $100 as attorney's fees.