Opinion
Hearing Granted Dec. 31, 1942.
Petition by Guarantee Insurance Company, Limited Mutual, to review an order of the Industrial Accident Commission awarding compensation for death to the dependents of Lowell Havener, which was opposed by Bessie Novak and another.
Award annulled.
MOORE, P.J., dissenting.
COUNSEL
J. L. Kearney and Herbert S. McCartney, Jr., both of Los Angeles, for petitioner.
Everett A. Corten and Dan Murphy, Jr., both of San Fransisco, for respondents.
OPINION
McCOMB, Justice.
Petitioner seeks to annul an order of respondent Industrial Accident Commission directing petitioner to pay compensation benefits to the dependents of Lowell Havener, which order is predicated upon a finding that petitioner was the insurance carrier for respondent Al Novak.
The evidence being viewed in the light most favorable to respondents, the essential facts are:
Respondent Bessie Novak operated a junk business known as the Gate City Junk Company in the city of San Bernardino. Respondent Al Novak, Bessie Novak’s son, operated a similar business known as the Gate City Wrecking Company, in the city of Ontario. Respondent Bessie Novak, learning that a quantity of pipe was to be sold at auction in the city of Sacramento, asked respondent Al Novak to go to said city and attempt to buy some of the pipe for her. This the latter did, purchasing a quantity of pipe at the auction sale. He then telephoned his mother, telling her the facts and asking her to send a conveyance to take the material to San Bernardino. She told him that she had no truck available and asked him to have one of his trucks operated by men regularly in his employ go to Sacramento and transport the material to San Bernardino. This her son objected to, for the reason that he had no workmen’s compensation insurance. His mother then asked him why he was operating his business without workmen’s compensation insurance, to which he replied he was short of money. Mrs. Novak then told him that she would pay the premium on a workmen’s compensation insurance policy for him and that he could reimburse her later. After the telephone conversation Mr. Novak telephoned his place of business at Ontario and told his manager to arrange for two of his employees to come to Sacramento with one of his trucks to transport the purchased material for his mother. This was done, Mr. Novak’s manager sending two employees named Mike Williams and Lowell Havener. The understanding between the respondents Novak was that the employees were to be paid for their work by Mrs. Novak.
October 14, 1941, Mrs. Novak telephoned Mr. Carroll Strachota, an agent who had sold her a policy of workmen’s compensation insurance covering her business, in which petitioner was the insurer. She requested Mr. Strachota to write a policy of workmen’s compensation insurance for her son covering her son’s business, and gave him a check for $195 on account of the premium.
October 16, 1941, while the pipe which Mr. Novak had purchased was being brought to San Bernardino on one of Mr. Novak’s trucks, an accident occurred resulting in the death of Lowell Havener. October 17, 1941, Mr. Strachota wrote petitioner asking it to write a workmen’s compensation insurance policy dated October 14, 1941, with respondent Mr. Novak as employer. This petitioner declined to do.
It is necessary for us to determine two questions, which will be stated and answered hereunder seriatim.
First: Was there substantial evidence to support the finding of respondent commission that Carroll Strachota was the agent of petitioner with authority to make an oral contract of insurance?
This question must be answered in the negative. The record is devoid of any evidence that Mr. Strachota was the agent of petitioner or that he had any authority to write, issue, or deliver an insurance policy binding petitioner. It is true that he had obtained from petitioner as insurer a workmen’s compensation insurance policy for Mrs. Novak. However, this fact could only support a finding that he was a mere soliciting agent, if anything, for petitioner. The rule is established in California that a mere soliciting agent or other broker operating between the insured and the insurer has only authority to initiate contracts and does not have authority to consummate them, neither can he bind the principal by anything he may say or do during the preliminary negotiations. (Iverson v. Metropolitan Life Insurance Co., 151 Cal. 746, 751, 91 P. 609, 13 L.R.A., N.S., 866). It is therefore immaterial that Mr. Strachota told Mrs. Novak that "her son would be covered," when he accepted a check for $195 as a deposit on the premium for the insurance policy she had requested. Stark v. Pioneer Casualty Co., 139 Cal.App. 577, 34 P.2d 731, is inapplicable in the present case, for the reason that in such case it was conceded that the alleged agent was in fact an agent of the alleged insurer, while in the present case the very question in issue is whether or not the alleged agent was in fact an agent of petitioner.
Second: Was respondent Al Novak the general employer and respondent Bessie Novak the special employer of Mr. Havener at the time of his death, thereby causing petitioner to be liable by the terms of the workmen’s compensation insurance policy they had issued to Mrs. Novak?
This question must likewise be answered in the negative and is determined by the following rule which is succinctly and accurately stated in Campbell’s Workmen’s Compensation (1935), volume 1, 410, section 454, as follows:
"The real test of what constitutes special employment lies in the character of the control and supervision exercised by the alleged special employer over the work and the employee engaged in its performance. It must appear, either by the terms of the contract or during the course of its performance, that the employee of the general employer came under the direction and control of the other party to the contract and suffered injury as the result of such direction and control. The right to or the actual exertion of control must exist. The alleged employer must be in control of the work so that he can at any time stop or continue it and determine the way in which it shall be done, not merely in reference to the result to be reached but as to the method of reaching the result." (Italics added.)
Applying the foregoing rule to the facts of the instant case, it is apparent that the deceased employee Mr. Havener went to Sacramento at the direction of respondent Al Novak, and received and took his instructions from the same respondent at all times to and including the time of the injury which resulted in his death.
There is no evidence that either by the terms of an agreement with her son or during the performance of his work did Mr. Havener come under the direction or control of Mrs. Novak.
There is likewise a total absence of evidence that the injury he suffered was the result of the direction or control of Mrs. Novak. It is therefore clear that Mrs. Novak was not the special employer of the deceased employee, and his dependents may not avail themselves of the Workmen’s Compensation Insurance policy petitioner had issued in favor of Mrs. Novak.
For the foregoing reasons the award of the Industrial Accident Commission dated March 24, 1942, against petitioner is annulled.
GOULD, J., concurred.
MOORE, Presiding Justice (dissenting).
I dissent. Stark v. Pioneer Casualty Co., 139 Cal.App. 577, 34 P.2d 731.