Case Name: Daniel Kirby, Respondent, v. The Lackawanna Steel Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-11
Citations: 109 A.D. 334
Docket Number: 
Parties: Daniel Kirby, Respondent, v. The Lackawanna Steel Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 109
Pages: 334–339

Head Matter:
Daniel Kirby, Respondent, v. The Lackawanna Steel Company, Appellant.
- Fourth. Department,
November, 1905.
Master and servant — when relation not created by. contract to manufacture machinery.
The plaintiff was injured while in the employ of an. .engineering company, engaged in manufacturing machinery for the.defendant under a. contract containing, among others, the following items : The engineering company was to' make machinery as ordered by defendant. Defendant was jto furnish materials on the requisition of the engineering company. ' Number of employees of engineering company and.rate of wages were subject to approval of defendant. Defendant was to pay engineering company the amount of payrolls for wages of said employees, etc. Defendant was to pay salary of' engineering company’s manager. Engineering company was. to keep buildings in repair while the expense of ordinary repairs. to buildings and to machinery was to be paid by defendant. The engineering company was to pay taxes on the plant and not to sell same so as to interfere with work under the contract. . The engineering company agreed to assume all liabilities for personal injuries at the plant and'to save defendant harmless therefrom; but defendant was to.pay premiums on policies' of insurance taken out by the engineering company to cover such • risks, etc.
Held, that Under siich contract the engineering company was not the agent or servant of the defendant and the defendant was notliablefor personal injuries received by an employee of-the engineering company."
McLennan, P. J., and Spring, J., dissented.
Appeal by the defendant, The Lackawanna Steel Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Erie on thé 22d day of March, 1905, upon th,e verdict ■ of a jury for S^OO, and also from an order entered in said clerk’s office on the 23d day of March,' 1905, denying the defendant’s motion for a new trial made upon the minutes.
Clarence M. Bushnell and J. H. Metcalf for the appellant.
Eugene M. Bartlett, for the respondent.

Opinion:
Williams, J.:
The judgment and order should be reversed upon questions of law only, and a new trial directed, with costs to appellant to abide event. ' -
The action is for damages for personal injuries alleged to have been received as a result of the defendant's negligence.
There seems to be no controversy as to the accident and injuries, and the verdict should not be disturbed, if the defendant is the party liable to the plaintiff at all.
The claim is that the "Lake Erie. Engineering Works" alone is liable, and this is the only question involved on this appeal.
The business in which the plaintiff, was engaged at the time of the accident was being carried on under a written agreement between the defendant and the engineering works, and the question is which of these two corporations was plaintiff's employer.
At the close of the evidence the trial court held, as matter of law, that under the contract the relation of master and servant existed between the two corporations, the defendant being the master, and the engineering company the servant, and that the plaintiff was the servant of the defendant!
We think the court was wrong in that conclusion. The question rests, under the decision, solely upon a construction of the contract. It cannot be aided in any way by parol evidence as to the manner in which the business was carried on under the contract.
The contract shows that the engineering company was the owner of the plant, the real estate and the machinery and tools with which the same was then equipped, and that the same should be operated by that company for the following two years exclusively for the making of machinery for the defendant, and it was agreed in brief that: . x
1. The engineering company should make such machinery and to such stage of completion as should be ordered by the defendant in writing signed ,or countersigned by its. inspector; and should employ enough men to do the work with .reasonable promptness and dispatch. , '
2. The defendant should furnish all materials and supplies necessary for the operation'of the plant and doing the work on the . requisition of the superintendent of the engineering company approved by the inspector of the defendant.
3. The number of men employed by the engineering company and their wages and competency should be subject to the approval. of the defendant, and its inspector should have fhd power to direct, the increase, decrease, or change of the fofice and prescribe the scale of wages, and his direction in stich matters should.be carried out by the engineering company. The defendant's inspector should control the order in which the work was to be done, the cutting speed of tools, the distribution of men on the work, the methods of handling the men and material, and the system- of keeping the time of all. employees, and his orders should be given to the manager or superintendent of the engineering company.
' 4. The defendant should pay the engineering Company the amount of..the payrolls for the wages of all employees and salaries of the office' .force, except that of the manager and superintendent; the payrolls to be certified as correct by the accountant of deféndant at the engineering company's plant, and should be paid within five days of their presentation so certified to the defendant. . .The timekeeper should be employed only with the approval of the defendant's inspector, and should be discharged on such inspector's request.'
. 5. The defendant should pay the engineering company six cents for every hour of labor performed about its Work by the engineering company's employees (exclusive of the office force and the man- ' ager and superintendent) if the number of houz-s did not exceed • 625,000 per year. If in excess of that number and less than '150,000 the amount payable should be $31,000. If. in excess of the latter ánd less than 810,000 the aznouUt should be five cents per hour. If in excess of the latter and less than 900,000, the amount should be $40,500. If in excess of the latter the amount should be four and oné-hálf Cents-per hour, and generally the. azziount should not be less ' than $32,000, nor more than $45,000, and the times,when payments Should be made Were prescribed. ,
Defendant should also pay salary of the engineering company's manager, fixed at $6,000, and superintendent, not exceeding $3,000, provided their appointments were approved by defendant's general manager. "Whenever approval of superintendent should be withdrawn a new appointment should be made. The superintendent should give his whole time to the business. The general manager as much time as should be necessary.
6. The engineering company should keep buildings in good repair; the expense of ordinary repairs of buildings and machinery and renewal of tools should be borne by the defendant, and deficiencies existing at the end of the term should be supplied by the defendant. •
7. The defendant should have the right at its own expense to furnish new machines for the purposes of the work; keep them in repair, and remove them at the end of the term.
8. The defendant should have the right to keep at the plant its inspector, an accountant, and the necessary clerical force; the engineering company to furnish rooms for -this force; and the accountant should have free access to all the engineering company's books, papers and memoranda concerning the operation of the plant and the prosecution of the work under the contract.
9. " The engineering company should furnish defendant monthly statements of the amount and cost of all labor done, and kind and quantity of material used, in the operation of the plant and prosecution of the work under the contract.
10. An inventory of the property connected with the plant should be made soon after the contract was made.
11. The engineering company should pay the taxes on plant, and any payments due on incumbrances, promptly, and not make or permit any sale or disposition of the plant that would interfere with the performance of the work under the contract.
12. (Provision was made for the contingency of a fire in the plant, sufficient to interfere with the efficiency of the same, the contract to be terminated and settlement to be made.)
13. The engineering company should assume all liability for personal injuries at the plant, and save the defendant harmless from such liability. The defendant should pay premium on any insur anee policies taken out by the engineering company to cover such risks, and both companies should be named as -the assured in such policies. lii case a recovery for such injuries should be had solely: against the defendant, it should seek indemnity in the first instance from the insurance company, and if so indemnified the engineering company should incur no liability therefor.
Under this agreement it is quite apparent that the engineering company occupied the position, not of an agent or' servant of the defendant, but that of an independent contractor, There was no suggestion any where, of agency. The engineering,company owned' the plant, and did not lease it to the defendant. It agreed with the defendant to run it entirely for the manufacture of defendant's work for two years; to keep it in repair, and not permit fit to be sold for taxes; or, upon incumbrances, to pay itself all expenses, to'; do the work as directed by defendant' so that it would' be satisface tory; and the defendant agreed to repay to' the engineering company all expenses for supplies and Wages' of employees, and for repairs to the machinery and tools, and for insurance against' accidents. In fact, to pay all expenses of every kind' incurred by the engineering company ;' and then for the use of the plant,-furniture and tools, to pay a.gross sum based upon the number of days' work done by employees. It was not agreed that the defendant should hire, pay or discharge employees, or that the engineering company, should do so, as the servant or agent of the defendant. There were provisions as to the engineering company's following the directions of the defendant as to the-number of mén employed and what work, they should do, and the rate of wages to be paid them and others of a similar nature, but they were not inconsistent with- the absence of agency, and were made because the defendant had to pay the engineering company the amount expended by the latter for wages, and it desired to make sure that its work would be promptly and. satisfactorily donó, and that no unnecessary expense would be incurred by the engineering company for defendant to pay.' The provision as to liability for personal injuries was plainly .and -distinctly .that the engineering company should protect the defendant against stich liability. This was provided as a matter of safety to the. defendant. It might be claimed, as it is here, that defendant was liable on some, theory. The engineering company was ultimately to protect the defendant against such liability. Insurance was provided for and defendant agreed to pay the premiums therefor as one of the expenses of the business, but in the end, if the insurance company did not afford defendant protection, the engineering , company was bound to do so. "
A careful examination and consideration of the various provisions of the contract lead us to conclude that the court erred in holding that the relation of master and servant existed between the two corporations, and that the defendant was liable to plaintiff in this case. ,
All concurred, except McLennan, P. J., and Spring, J., who dissented.
Judgment and order reversed and new trial ordered, with costs to the appellant to abide event, upon questions of law only, the facts having been examined and no error found therein.