Herbruck v. Burger Iron Co.

The Polsky Company entered into a contract with the Carmichael Construction Company for the construction of a large business building, and the Carmichael Company entered into a contract with the Burger Iron Company, defendant in error, for the furnishing and erecting of the structural steel upon said building, and, while the work of said principal contractor and said independent subcontractor was in progress, Russell T. Herbruck, plaintiff in error, an employee of said principal contractor, was injured by the claimed negligent act of an employee of said subcontractor, both of said employees being at the time engaged in the work of their respective employers in the construction of said building.

Both of said employers had complied with the Workmen's Compensation Law (Section 1465-37 et seq., General Code), and Herbruck was compensated under the compensation law for such injury by his employer, said principal contractor.

Herbruck then brought an action against said subcontractor, seeking damages for said injury, and as one defense to said action said subcontractor pleaded that Herbruck received said compensation under the circumstances hereinbefore referred to, and by reply Herbruck admitted the receipt of said compensation under said circumstances.

The trial court held that the receipt of said compensation was a complete defense to the action, and rendered judgment on the pleadings in favor of said subcontractor, and by this error proceeding is presented the question of whether said defense asserted in the answer, and undenied in the reply, is a good defense in law.

At common law Herbruck could maintain the action because said subcontractor, being an independent contractor, was a "third party" as to Herbruck, and was in no sense the employer of Herbruck; and, if Herbruck had had accident insurance, and had been paid the amount of the same on account of said injury, that fact would not defeat his action nor lessen the amount he would be entitled to recover, and hence, if Herbruck's action against said subcontractor is defeated or affected by his acceptance of said compensation, it is because of the provisions of the Workmen's Compensation Law.

In the brief in this court on behalf of such subcontractor it is stated: "We are willing to concede that before the constitutional enactment of 1923, the judicial declarations in Ohio gave to the employee a right to sue the third person inflicting injury upon him and recover the full amount of damages occasioned to him without any reference whatever to the amount of compensation which he, the employee, had received from the workmen's compensation fund."

It is claimed, however, that in the cases so holding "the third person was genuinely a stranger to the injured employee and was not engaged in any part of the same work in which the employee was himself engaged," and it is insisted that an injured employee who has received compensation under the Workmen's Compensation Law cannot maintain an action against a "third party" if said third party and the injured employee's employer were engaged in a common enterprise and the injury was caused in the prosecution of such enterprise.

We do not find that, previous to the constitutional amendment of 1923, an injured employee who received compensation from his employer was denied a right of action against a third party who had injured him simply because the injured employee's employer and such third party were engaged in the performance of independent contracts which were necessary to the completion of a certain enterprise, such as the construction of a building.

We regard the case of Trumbull Cliffs Furnace Co. v.Shachovsky, 111 Ohio St. 791, 146 N.E. 306, as authority against the contention made by counsel for defendant in error in this case, that, in order to be liable as a "third party," the party sued must be a "genuine stranger" to the injured party. In that case, according to the opinion of the Supreme Court, the Furnace Company was building a building and the Truscon Steel Company was engaged, as an independent contractor, to do a certain part of the work of building said building; the employees of both companies were working on said building — one company doing a part of the work as owner, which corresponds to a principal contractor, and the other as a contractee of the owner, which corresponds to a subcontractor; both had complied with the Workmen's Compensation Law; an employee of the Steel Company was injured by the negligence of an employee of the Furnace Company, while both of said employees were engaged in the actual construction of said building, and, after receiving compensation through the Steel Company, such injured employee sued said Furnace Company, and the Supreme Court held that his acceptance of such compensation did not defeat his right of action against the Furnace Company.

The theory of the case is that the compensation received was in the nature of an occupational insurance, and its receipt did not affect the rights of the injured employee receiving the same against any one who was not his employer. The fact that the employer of the injured employee and the party sued were engaged in a common enterprise, and that the injury was caused in the prosecution of such enterprise, was not considered of any importance so long as the circumstances established that the party sued was not the employer of the party injured, and we regard that case as authority for the conclusion that, before the constitutional amendment of 1923, compensation under said law being in the nature of insurance, the injured employee who received such compensation was not deprived of his common-law action against the party responsible for his injury unless the circumstances were such as to create the relation of master and servant between them, even though the party sued had complied with the Workmen's Compensation Law for the benefit of his employees, and as an independent contractor under the injured employee's employer, was engaged with the latter in the enterprise of building a building. While the court said that the statute under consideration (Section 1465-61 (3), General Code), did not create the relation of master and servant between the party sued and the injured employee of an independent contractor, both of whom were engaged in the construction of a building, it also plainly said, it seems to us, that, so far as the right of an injured employee to sue a third party is concerned, a principal contractor is a third party to an employee of a subcontractor of said principal contractor, even though both of said contractors and their employees are engaged in the construction of a building and the injury is received while said parties are carrying out said enterprise — otherwise the judgment would not have been justified.

In this connection we do not see how the situation is affected at all by the fact that the injured employee's employer was a contractee of the owner of the building, instead of being a contractee of a principal contractor, as in the instant case. The owner was actually engaged in the work of constructing the building, and was, so far as this question is concerned, performing the functions of a principal contractor. And, likewise, we cannot find that the situation is affected by the fact that in the instant case the injured employee was working for the principal contractor and sued the subcontractor instead of the suit being one brought by an employee of the subcontractor against the principal contractor.

After the decision in the case we have been considering(Furnace Co. v. Shachovsky, supra), the constitutional amendment of 1923 was adopted. The provision in the Constitution (Section 35, Article II) now reads, in part, as follows: "Such compensation shall be in lieu of all other rights to compensation, or damages, * * * and any employer who pays the premium or compensation provided by law, passed in accordance herewith, shall not be liable to respond in damages at common law or by statute for such death, injuries or occupational disease."

Thereafter the Supreme Court, in the case of Ohio PublicService Co. v. Sharkey, Admr., 117 Ohio St. 586, 160 N.E. 687, held, it seems to us, that said amendment does not relate to or affect the liability or nonliability of a third person for injury of an employee when the employee's employer and the third person have complied with the Workmen's Compensation Law and the injured employee has received compensation under the law, and that, so far as our question is concerned, the law as applied in TrumbullCliffs Furnace Co. v. Shachovsky, supra, was not changed by said amendment.

In said case (Ohio Public Service Co. v. Sharkey, Admr.,supra.) the injured employee was working for the Youngstown Sheet Tube Company, which was engaged in the operation of its manufacturing plant, and the party sued, a power company, was engaged in furnishing electric current for the operation of said manufacturing plant. The power company erected a substation on the premises of the manufacturing company, and in said building owned and operated certain oil switches, and in said building, but on a different floor, the manufacturing company owned and operated certain electrical equipment. The injured employee, while working for the manufacturing company, received an injury in the part of the building where the power company's oil switches were; said injury resulted in his death; and it was claimed that his death was caused by the negligence of the power company. His dependents applied for and received full compensation under the Workmen's Compensation Law for said death, and thereafter the administrator of his estate sued the power company for causing said death, and the power company answered, alleging that both companies had complied with the Workmen's Compensation Law, and that full compensation had been paid under said law for said death.

The Supreme Court affirmed the lower court's holding that said receipt of compensation was no defense to the action.

In the instant case it is urged, on behalf of the defendant in error, the alleged negligent subcontractor, that neither of the aforementioned Supreme Court cases is decisive of the instant case, and, as one reason for so claiming, it is said that in each of said cases the party sued was not only a third party to the injured party, but was a stranger to him in the sense that the party sued in each case was performing a task which had nothing whatever in common with the task being performed by the injured party, while in the instant case there was a definite relationship between the injured employee and the party sued, in that they were engaged in a common task, with a common risk which each employee in the enterprise had in common with every other employee on the job.

We are unable to make any such distinction between said cases and the instant case. It seems to us that in the Shachovsky case the injured party, as an employee of an independent contractor, and the party sued were engaged in the common task of constructing a building, just as much as the party injured and the party sued in the instant case were engaged in a common enterprise; in fact, the common enterprise in both instances was the construction of a building; and in the Sharkey case the injured party and the party sued were engaged in the common enterprise of operating a manufacturing plant — the party injured as an employee of the owner or principal contractor, and the party sued as a contractee of said owner or principal contractor.

But, if the claimed distinction existed, we think that the logic of said Supreme Court cases requires us to hold that it would make no difference so long as the circumstances are not such as to create the relation of master and servant between the party sued and the injured party.

In the Shachovsky case it is declared, so far as our question is concerned, that to establish the relationship of master and servant there must be a contract of service or some statutory enactment, and that in that case there was no statutory enactment creating that relationship; and in that case it was not claimed that there was a contract of service between the party sued and the injured party.

Our holding in the instant case may be expressed as follows:

In Ohio, the receipt by an injured employee of compensation under the Workmen's Compensation Law is not a defense to his common-law action to recover damages for his injury from any one who is not his employer under the provisions of said law.

The decisions in other states construe the different statutory or constitutional provisions relating to a situation where an employee sustains injuries because of the act of a person other than his employer and accepts compensation from his employer, but such provisions are dissimilar to the provisions in Ohio on the subject, and we therefore make no mention of the cases in other states.

For error in rendering judgment on the pleadings in favor of said subcontractor, defendant in error, the judgment is reversed, and the cause remanded for trial.

Judgment reversed and cause remanded.

FUNK, J., concurs.

STEVENS, J., not participating.