Title: Jernigan v. Clark and Day Exploration Company
Citation: 337 P.2d 614, 65 N.M. 355
Docket Number: 6464
State: new-mexico
Issuer: new-mexico Supreme Court
Date: April 2, 1959

337 P.2d 614 (1959) 65 N.M. 355 Max O. JERNIGAN, Plaintiff-Defendant in Error, v. CLARK AND DAY EXPLORATION COMPANY and New Amsterdam Casualty Co., Defendants-Plaintiffs in Error. No. 6464. Supreme Court of New Mexico. April 2, 1959. *615 Rodey, Dickason, Sloan, Akin &amp; Robb, James C. Ritchie, Albuquerque, for defendants-plaintiffs in error. Bingham &amp; Klecan, William J. Bingham, Eugene E. Klecan, Albuquerque, for plaintiff-defendant in error. SADLER, Justice. The plaintiffs in error complain before this Court of a judgment rendered against them by the district court of Bernalillo County in favor of the defendant in error in purported compliance with the New Mexico Workmen's Compensation Act, 1953 Comp. § 59-10-1 et seq. for compensation at the rate of $30 per week for the period of 550 weeks as and for total permanent disability. Since the position of the parties as movants is reversed in this Court from what it was below, the parties will henceforth be designated in this opinion as they were below. The plaintiff filed two complaints below for workmen's compensation. One alleged a compensable accident on December 10, 1956, and was given a docket No. 70,719 in the district court. The other alleged a compensable accident on August 15, 1957, and was docketed as cause No. 70,716. Both joined Clark and Day Exploration Company, a partnership, as employers and New Amsterdam Casualty Company, as insurer. On December 2, 1957, in response to the complaint in cause No. 70,716, the employer and insurer, defendants, filed a motion to dismiss. They alleged as grounds therefor that plaintiff was a partner of Clark and Day Exploration Company; that as such he was an employer and that the compensation act of New Mexico did not contemplate any such combination of employer and employee in one person. Thereafter, on December 27, 1957, a request for admission of facts was directed to plaintiff and his attorneys, to which answers were filed on January 21, 1958. In effect the answers admitted that the partnership existed as claimed but that it was effective July 1, 1955, instead of July 21, as indicated in the admissions sought. The answers also admitted said partnership was in effect on December 10, 1956. On January 23, 1958, an order was entered, consolidating the two claims for trial. On the same date, attorneys for plaintiff filed a reply to the motion to dismiss with an affidavit of one of the attorneys attached setting forth that the defendant New Amsterdam Casualty Company, acting through its agent, promised plaintiff that he was covered by the workmen's compensation insurance policy issued by it to Clark and Day Exploration Company; that he had relied upon said promise as protecting him in the event of injury within the scope of his employment. Likewise, on the same date, to-wit, January 23, 1958, the plaintiff filed a pleading designated "Amendment to Original Claim" whereby he sought to add as an amendment Count II to the original claims filed alleging that defendant, New Amsterdam Casualty Company, knew that plaintiff was a partner of Clark and Day Exploration Company prior to issuing its policy; that the policy was issued for the express purpose of protecting plaintiff as a workman or employee under the Workmen's Compensation Act of New Mexico; that the casualty company was now estopped to deny its liability to claimant under the policy it had issued to Clark and Day Exploration Company. *616 On March 11, 1958, after a hearing on the motion to dismiss and the reply thereto, the court entered an order denying the motion without prejudice and providing in the order that the defendant casualty company could raise the issues argued in support of the motion to dismiss at the time of trial and by answer to the complaint. In due course and on March 12, 1958, the defendants answered the claims denying the accidents, and as a fourth defense alleged respecting the amendment to the original claims that it failed to state a claim upon which relief could be granted under the Workmen's Compensation Act of New Mexico; and, among other things, that the court had no jurisdiction to hear the issues raised by the alleged amendment. Prior to trial defendants moved for separate trials which the court denied. The consolidated causes came on for trial before the court without a jury. It appeared from testimony of the plaintiff, after relating the history of the two accidents on account of which he claimed compensation, that he had nothing to do with the purchase of the two policies, nor did he discuss provisions of the policy with Frizell, the partner who actually procured the policy. Counsel for defendants in cross-examining plaintiff limited themselves to questions concerning the issue of the relationship of plaintiff to the partnership. At the conclusion of this limited cross-examination of plaintiff, attorney Ritchie, as one of defense counsel, moved orally for dismissal on the ground it was evident from testimony of plaintiff he was a partner of Clark and Day Exploration Company and not a workman or employee thereof under Workmen's Compensation Act. The motion was taken under advisement by the trial judge until he had heard Werntz, the insurance agent through whom the policy was procured. Attorney Ritchie announced at this time he had not finished his cross-examination of plaintiff, having confined himself to issue of the partnership, but that they would defer further cross-examination until the court had ruled on their motion. The direct examination of Mr. Werntz was then conducted, defense counsel persisting in the objection to any questions regarding the workmen's compensation policy as being immaterial to the issues. At the conclusion of the testimony of Werntz, a physician was called and testified regarding plaintiff's physical condition, which is irrelevant to the issues on this appeal. The trial court, after having heard Wertnz' testimony indulged in the following colloquy with counsel, to-wit: After this announcement by the court, the defendants put on no further evidence, merely concluding their cross-examination of plaintiff and limiting that to the disability of plaintiff. Court was recessed during such cross-examination until 9:30 a.m., the following day. Upon reconvening the following morning, a colloquy between court and counsel took place, as follows, to-wit: The judgment in the state district court was signed one hour before the petition for removal was filed in the federal court. As a consequence of this fact counsel on opposing sides to this controversy devote numberless pages of their brief for and against a want of jurisdiction in the state court to enter any judgment against New Amsterdam Casualty Company resulting from a transfer of the cause to the federal court. In like fashion, both defendants insist there was a want of jurisdiction in the state court to support the plaintiff in a recovery under the New Mexico Workmen's Compensation Act. For purposes of our decision in this appeal, without deciding the nice questions of jurisdiction posed, as governed by the question of timeliness in a transfer of jurisdiction from the state to federal court, we shall *619 assume with plaintiff that jurisdiction remained in the district court of Bernalillo County to determine plaintiff's case, when it did. Nevertheless, we must hold it had no jurisdiction whatever to render the judgment it did in awarding compensation and attorneys' fees to the plaintiff under the New Mexico Workmen's Compensation Act. It is well established that a working partner is not eligible to compensation as an employee under modern workmen's compensation acts. The question has never been squarely presented in this jurisdiction but has frequently been before the courts in sister states. See 71 C.J. 504, § 234, also, page 399, § 131; 99 C.J.S. Workmen's Compensation § 79, p. 300; In re W.A. Montgomery &amp; Son, 91 Ind.App. 21, 169 N.E. 879; Pederson v. Pederson, 229 Minn. 460, 39 N.W.2d 893; Rasmussen v. Trico Feed Mills, 148 Neb. 855, 29 N.W.2d 641; Auten v. Michigan Unemployment Comp. Comm., 310 Mich. 453, 17 N.W.2d 249. Indeed, the trial court in this very case correctly found and held that as a working partner and, hence, occupying the status of an employer, the plaintiff was not covered by the Workmen's Compensation Act of New Mexico. Still, the court as shown above, supported recovery upon a theory of contract and estoppel. Our Act defines "workman," as follows: Additional cases from other jurisdictions holding a working partner not eligible to compensation as an employee are Chandler v. Harris, 47 Ga. App. 535, 171 S.E. 174; Fink v. Fink, Fla., 64 So. 2d 770; Brinkley Heavy Hauling Co. v. Youngman, 223 Ark. 74, 264 S.W.2d 409; Le Clear v. Smith, 207 App.Div. 71, 202 N.Y.S. 514; Lyle v. H.R. Lyle Cider &amp; Vinegar Co., 243 N.Y. 257, 153 N.E. 67, 47 A.L.R. 840; Dube v. Robinson, 92 N.H. 312, 30 A.2d 482; Thomas v. Industrial Comm., 243 Wis. 231, 10 N.W.2d 206, 147 A.L.R. 103; Berger v. Fidelity Union Cas. Co., Tex.Civ. App., 293 S.W. 235; Cooper v. Ind. Accident Comm., 177 Cal. 685, 171 P. 684; Rockefeller v. Ind. Comm., 58 Utah 124, 197 P. 1038; McMillen v. Ind. Comm., 13 Ohio App. 310; Wallins Creek Lumber Co. v. Blanton, 228 Ky. 649, 15 S.W.2d 465; Gebers v. Murfreesboro Laundry, 159 Tenn. 51, 15 S.W.2d 737; Chambers v. Macon Wholesale, 334 Mo. 1215, 70 S.W.2d 884, and Harris v. State Ind. Acc. Comm., 191 Or. 254, 230 P.2d 175. In In re W.A. Montgomery &amp; Son, the Supreme Court of Indiana spoke on the subject, as follows [91 Ind. App. 21, 169 N.E. 880]: And in Wallins Creek Lumber Company v. Blanton, supra [228 Ky. 649, 15 S.W.2d 466], the Supreme Court of Kentucky said: We could go on indefinitely quoting authorities from the courts of sister states holding a working partner can not recover compensation as an "employee." But it is enough to say that an overwhelming weight of authority supports the proposition that he can not. Hence, we are compelled to conclude the trial court erred in imposing liability upon defendants under the terms of the New Mexico Compensation Act. If the partnership, as employer, was not liable, then its insurer was not. Counsel for plaintiff assert in argument the defendants are denied the right to raise the question presented on this appeal by reason of having declined to participate at a certain point in the proceedings below. It was the insurer which declined, after giving notice of intention to remove the cause, to participate further. Both defendants prior to that time had plainly and unmistakably challenged the jurisdiction of the trial court, by motions, objections to testimony and otherwise, to transform the cause from one in workmen's compensation to something else. Their position was well known to the court. Furthermore, this Court has held that the objection that the complaint fails to state a cause of action may be raised at any stage of the proceedings, even for the first time in the Supreme Court. In Michael v. Bush, 26 N.M. 612, 195 P. 904, 905, we said: See, also, Baca v. Perea, 25 N.M. 442, 184 P. 482; Sais v. City Electric Co., 26 N.M. 66, 188 P. 1110; In re Field's Estate, 40 N.M. 423, 60 P.2d 945. In the instant case, the claims as filed, and even as amended, formally, or by the proof taken, disclose an application of the Workmen's Compensation Act to plaintiff's claim for compensation, "not under the Workmen's Compensation Act as the employee and working partner" but, as stated by the court, "under the Workmen's Compensation Act through a contractual relationship between the agent, Clark and Day, the insurance company and the partnership * * *." The establishment of any such state of facts as that recited and the application to it of the doctrine of estoppel, invokes the civil jurisdiction of the district court, quite apart from any possessed by it under a due administration of the act invoked and, accordingly, was in excess of any jurisdiction attaching to the claims as filed and amended. Compare, In re Porter's Estate, 47 N.M. 122, 138 P.2d 260 and McCann v. McCann, 46 N.M. 406, 129 P.2d 646. It follows from what has been said that the judgment is erroneous and should be reversed and remanded with a direction to the trial court to set aside its judgment and dismiss the claims sued upon. It is so ordered. LUJAN, C.J., McGHEE and CARMODY, JJ., and SAMUEL Z. MONTOYA, District Judge, concur.