Source: http://masscases.com/cases/sjc/348/348mass447.html
Timestamp: 2019-04-21 22:04:09+00:00

Document:
The case was heard by Bolster, J.
Arthur W. Nichols, Jr., for the insurer.
Remsen M. Kinne, III, for the claimant.
accordance with a decision of the reviewing board which adopted the findings and decision of the single member.
the mailing of . . . [such] notice . . . the Trustees shall determine the value of such shares and their determination shall be conclusive and binding. . . . For a period of twenty (20) days after the mailing of notice of valuation by the Trustees . . ., [they] . . . on behalf of the Trust, shall have an option to have all or any part of such shares conveyed at the value determined, without interest, to any nominee . . . of the Trustees . . .." The declaration of trust can be altered or amended, "except as to exemption of Trustees and shareholders from personal liability, by . . . instruments in writing signed by the holders of at least 60% of the common shares then outstanding, and delivered to the Trustees."
By "Action of Trustees" on February 27, 1959, the claimant became "President and Treasurer" of the trust, and 500 shares of stock were issued to him. On December 29, 1959, the trustees "accept[ed]" the claimant's shares for transfer and reissued 400 shares to the claimant and 100 shares to one Donald D. Hayes. The claimant regarded this transaction as "a gift" of 100 shares from him to his son. On February 10, 1960, in exchange for certain assets which the claimant transferred to the trust, the trustees "issued" 152 additional shares to him. His work in the trust business consists of "[g]eneral supervision of the whole farm," waiting on customers, and performing "most of the jobs in processing . . . the ducks." His annual salary has been $10,000. He received the same amount in 1961 even though he performed none of his ordinary duties after the accident mentioned below. There are "[a]bout 80" employees with the trust.
"[U]nder the name of Pinecrest Duck Farm Trust," the claimant obtained workmen's compensation insurance with the insurer in 1959. On July 11, 1961, while "waiting on a customer," the claimant "slipped and fell," hurting his "right ankle and . . . [breaking] both bones of . . . [his] right leg." He was hospitalized and given medical treatment. Prior to the accident he had been told by agents of the insurer that he was "covered by Workmen's Compensation."
Sometime after the accident, the insurer told the claimant that he was not covered by the workmen's compensation policy. It is stipulated that "the annual premium [under the policy] was from June 30, . . . , to June 30, 1962, and that the Pinecrest Duck Farm Trust was billed on July 11, 1961, in the amount of $1,748.96; that this premium was based on a payroll record submitted which included . . . [the claimant]; [and] that the premium was paid on August 4, 1961. It is further agreed that subsequently following audit of the payroll a credit memorandum was issued on August 16, 1962, and an amount of $367.19 was returned to Pinecrest Duck Farm Trust because of elimination and removal of coverage by the insurer."
The single member found that the trust "is a legal entity capable of hiring employees and that [the] claimant is such an employee within the meaning of the Act." He also found that the claimant "sustained an injury on July 11, 1961, which occurred in and arose out of his employment as managing Trustee . . . and . . . by reason . . . [of which] he was partially incapacitated . . .; and further, that during . . . [the] period of partial incapacity he received his regular weekly wages." The single member concluded that "no award of weekly incapacity compensation is due . . ., [but] directed [the insurer] to pay reasonable medical bills in accordance with the provisions of the Act."
1. According to G. L. c. 152, Section 30, "[t]he insurer shall furnish to an injured employee adequate and reasonable medical and hospital services, and medicines if needed, together with the expenses necessarily incidental to such services." An "employee" is "every person in the service of another under any contract of hire, express or implied, oral or written . . .." G. L. c. 152, Section 1 (4). The insurer contends that the claimant cannot recover reasonable medical expenses under the act because the claimant was not an "employee." It thus argues that the claimant in his capacity as managing trustee of the Pinecrest Duck Farm "is in actual possession of all the powers of the employer," and therefore cannot also be an "employee" within the meaning of Section 1 (4). We agree.
In Ryder's Case, 341 Mass. 661, "the claimant, together with a son . . . and the latter's wife, assumed to enter into a business association under a `Declaration of Trust.' By its terms `they purported to form, and did subsequently operate, . . . [a realty trust], of which they were the sole beneficiaries. . . . [The claimant and his son] were named trustees, to whom in such capacity and for the purposes set forth in the declaration `certain funds, credits and other assets' would thereafter be conveyed. . . . The claimant, who had been employed as a carpenter by his son prior to the formation of the trust, continued to work for the trust in the same capacity after its formation, for which he was paid a weekly wage of $50. The claimant took orders from his son and did not participate in the management of the business." Id. at 662-663. We held that the "claimant was not in the service of another when working for himself and another under . . . [the] declaration of trust [and that t]here . . . [was] no basis for holding that the instrument created an entity independent of the claimant." Id. at 664. "That the claimant worked under the direction of his son, a cotrustee, did not make him an employee. He had all the powers of management that his son had and in contemplation of law was no less an employer." Id. at 666.
tasks, and that it was in the course of performing such tasks that he became injured. "[But] the work, to qualify as employment, should be done under the control of someone. If the officer is himself the ultimate wielder of control, it is difficult to see how even his performance of menial work could be termed employment." Larson, Workmen's Compensation Law, Section 54.21. It is argued that the present case is different from Ryder's Case, because the shares are transferable. Such business trusts are regulated to some extent by G. L. c. 182 and in many respects have great similarity to corporations. Nevertheless, they have not been treated by our decisions as separate entities like corporations. See State St. Trust Co. v. Hall, 311 Mass. 299, 303-304; Swartz v. Sher, 344 Mass. 636, 639. Their trustees have not been regarded as employees. See Griswold v. Director of the Div. of Employment Sec. 315 Mass. 371, 373-374; United States v. Griswold, 124 F. 2d 599, 601-602 (1st Cir.). In the light of these decisions and the Ryder case, if there is practical reason for treating managing trustees of such business trusts as employees for purposes of workmen's compensation (G. L. c. 152), we think that this is a matter for the Legislature to consider. Hence, we hold that the claimant cannot qualify as an "employee" under G. L. c. 152, Section 1 (4). Ryder's Case, 341 Mass. 661. See Cohen v. Best Made Mfg. Co. 92 R. I. 370; Duvick v. Industrial Commn. 22 Wis. 2d 155. But see Queen City Furniture Co. v. Hinds, 274 Ala. 584, 589; Hirsch v. Hirsch Bros. Inc. 97 N. H. 480. Compare Mahoney v. Nitroform Co. Inc. 20 N. J. 499, 506.
with the assistance of the Superior Court . . ., and as such possesses only such authority and powers as have been conferred upon it by express grant or arise therefrom by implication as necessary and incidental to the full exercise of the granted powers. . . . It follows that full performance of the conditions of the act are essential prerequisites to the jurisdiction of the board, and that its authority and the statutory limitation upon the exercise of it cannot be enlarged, diminished or destroyed by express consent or waived by acts of estoppel." Levangie's Case, 228 Mass. 213, 216-217. Perkins's Case, 278 Mass. 294, 299. Soars v. Soars-Lovelace Inc. 346 Mo. 710, 719-720. Nagy v. Ford Motor Co. 6 N. J. 341, 349. Chadwick v. North Carolina Dept. of Conservation & Dev. 219 N. C. 766, 767. Superior Ins. Co. v. Kling, 160 Texas, 155, 159.

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