Case Name: The Trumbull Cliffs Furnace Co. v. Shachovsky
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1924-12-23
Citations: 111 Ohio St. 791
Docket Number: No. 18219
Parties: The Trumbull Cliffs Furnace Co. v. Shachovsky.
Judges: Marshall, C. J., Jones, Matthias, Day, and Conn, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 111
Pages: 791–797

Head Matter:
The Trumbull Cliffs Furnace Co. v. Shachovsky.
’Workmen's compensation — Owner of premises not employer of employee of independent contractor, when — Section 1465-61 (3), General Code — Civil liability of owner of premises in action by employee.
An independent contractor was performing work for a corporation upon the premises of the said corporation by virtue of a contract between such independent contractor and such corporation, owner of the said premises. Both the owner of the premises and the independent contractor had complied with the ¡workmen’s compensation act. An employee of the independent contractor, having been injured in the course of' his employment by the alleged negligence of the owner of the premises, applied for and accepted compensation under the workmen’s compensation act and later brought a personal injury action against the owner of the premises. The owner of the premises pleaded as a complete defense the compliance with the compensation act by itself and the independent contractor and the acceptance of compensation by the employee. Held, that under Section 1465-61 (3), General Code, the owner of the ■ premises is not the employer of the said employee where the independent contractor has paid into the state insurance fund the amount of premium determined and fixed by the Industrial Commission of Ohio, for his employment or occupation.
(No. 18219
Decided December 23, 1924.)
Error to the Court of Appeals of Cuyahoga county.
This is an error proceeding asking the reversal of a judgment rendered in favor of Shachovsky by the court of common pleas of Cuyahoga county, which was later affirmed hy the Court of Appeals of the same county. The action was for personal injury arising out of the following facts:
Upon .March 14, 1921, Shachovsky was an employe of the Truseon Steel Company, and was working on the premises of the Trumbull Cliffs Furnace Company in Warren, Ohio. The Trumbull Cliffs Furnace Company was at the time constructing a power house upon its own premises in Warren, and had engaged the Truseon Steel Company by contract to install certain window sash frames in said plant. While working for his employer, the Truseon Steel Company, ¡Shachovsky was injured by an overhead traveling crane, which was electrically operated and at the time of the accident in question was run by the employes of the Trumbull Cliffs Furnace Company. Shachovsky brought an action for personal injury against the Trumbull Cliffs Furnace Company. At the trial, verdict was rendered in favor of Shachovsky, and judgment pronounced thereon.
During the trial of the case below defendant obtained leave to file an amended answer, setting up the following defenses: (1) A general denial and contributory negligence. (2) Compliance of both plaintiff in error and the employer of defendant in error with the Compensation Act, contributory negligence, assumption of risk and fellow-servant rule. (3) Compliance of both plaintiff in error and the employer of defendant in error" with the act, contractual relationship of these parties, e. g., that of owner of the premises (or principal contractor) and independent contractor; and application for and acceptance of compensation by the defendant in error as a bar to the action.
The second and third of these defenses were stricken out by the trial court upon motion of the plaintiff.
The case comes into this court upon motion to certify the record.
Mr. J. B. Kistner, for plaintiff in error.
Mr, J. H. C. Lyon and Mr. Clinton J. WaM, for defendant in error.

Opinion:
Allen, J.
The jury found for the plaintiff upon the allegations of the first defense. Since the defendant's second and third defenses set up compliance upon the part of the owner of the premises and the subcontractor with the Workmen's Compensation Act, (Gen. Code, Sections 1465-37 to 1465-108), and acceptance of compensation by the plaintiff as a complete defense to the action, raising no question of payment pro tanto, one legal problem only arises herein. This is a question of the interpretation of Section 1465-61 (3), General Code, which reads as follows:
"Every person in the service of any independent contractor or subcontractor who has failed to pay into the state insurance fund the amount of premium determined and fixed by the Industrial Commission of Ohio for his employment or occupation, or to elect to pay compensation direct to his injured, and the dependents of his killed employes, as provided in Section 1465-69, General 'Code, shall be considered as the employe of the person who has entered into a contract, whether written or verbal, with such independent contractor unless such employes or their legal representatives or beneficiaries elect, after injury or death, to regard such independent contractor as the employer."
The plaintiff in error argues that it is inequitable to permit an injured employe of an independent contractor to accept compensation under the "Workmen's Compensation Act and then sue the owner of the premises for the injury sustained, when both owner of the premises and the independent contractor have complied with the Compensation Act relative to paying premiums into the state fund, or have obtained permission to carry on their own insurance. It urges that when the owner of the premises has contractually required his independent contractor to pay into the state insurance fund the premiums necessary to protect its employes under the Compensation Law, an injured employe of the independent contractor cannot accept the benefits of this compliance and then sue the owner as a stranger.
Plaintiff in error does not contest the fact that, if the Trumbull Cliffs Furnace Company is not the employer of Shachovsky, it can be- sued by Shachovsky under the facts herein; it claims, however, that under the provisions of the Code, above quoted, the Trumbull Cliffs Furnace Company is the employer of Shachovsky and hence cannot be sued as a stranger.
The Workmen's Compensation Act (Section 1465-60, General Code) defines the term "employer" a,s "every person, firm, and private corporation that has in service five or more workmen or operatives regularly in the same business # under any contract of hire." Within this definition, for the purposes of this case, an employer is one who engages the services of a workman and agrees to pay him therefor. To establish the relationship of master and servant there must be a contract of service. It is conceded that no such relationship exists, here unless it is created by the statute above quoted, and plaintiff in error insists that the statute accomplishes that very result. However the language of the statute (Section 1465-61) is so plain that we have difficulty in following plaintiff's contention. It provides that the injured employe shall be considered the employe of the general contractor only in the case where the subcontractor or independent contractor, who actually employs the injured workman, has not complied with the law and has neither paid the premiums nor elected to give compensation direct. There is an exception to this provision, which is that if the injured employe elects to regard the independent contractor as his employer, even if the independent contractor has not complied with the law, in such case the general contractor shall not be deemed the employer of the injured employe. This exception can hardly aid the plaintiff in error. Instead of extending the statutory relationship of employment as created in the Code, it still further limits it.
Plaintiff in error asks- the court to read the statute above given as follows:
"Every person in the service of any independent contractor or subcontractor shall be considered as the employe of the person who has entered into a contract with such independent contractor
In other words, he attaches no meaning what ever to the clause "who has failed to pay into the state insurance fund the amount of the premium or to elect to pay the compensation direct."
If the Legislature of Ohio had intended to enact a statute accomplishing the result claimed by plaintiff in error, it would have been very easy to do so. However, we have to take the statute as written. In this case the record shows that the Truscon Steel Company, the independent contractor, at the time of the accident had complied with the Compensation Act, and hence the provision that every person in the service of any independent contractor or subcontractor shall be considered as an employe of the owner or principal contractor, if his own employer has failed to pay into the state insurance fund the required amount of premium, or has failed to elect to pay compensation direct, does not here apply.
Inasmuch as the subcontractor had complied with the compensation statute, the owner was not the employer of Shachovsky at the time of the accident; it had no contractual relation with Shachovsky; it was for the purpose of this suit nothing more than a third person. This fact is a complete answer to the proposition of plaintiff m error that it is inequitable to allow the workman to have two recoveries, one under the Compensation Act and one under this suit. As such third person the owner of the premises could be sued for the negligence of his own employes, which caused the accident, since the compensation provided by the Workmen's 'Compensation Law is in the nature of an occupational insurance, and, like general insurance, cannot be deducted and treated as an offset for claims for damages for wrongful injury or death. Newark Paving Co. v. Klotz, 85 N. J. Law, 432, 91 A., 91; Mercer v. Ott, 78 W. Va., 629, 89 S. E., 952; Merrill v. Marietta Torpedo Co., 79 W. Va., 669, 92 S. E., 112, L. R. A., 1917F, 1043; Shearman & Redfield on Negligence (6 ed.), Section 765.
Since the provisions of Section 1465-61 (3) are plain and unambiguous, as above set forth, the judgment of the Court of Appeals is affirmed.
Judgment affirmed.
Marshall, C. J., Jones, Matthias, Day, and Conn, JJ., concur.