Duesenberg v. Duesenberg, Inc.

Smith, J. This is an appeal from an award made by the majority of the Full Industrial Board of Indiana. There was a finding against appellant, and an order *641 entered by a majority of the Full Industrial Board, denying compensation to appellant. Appellant filed her application before the Industrial Board asking compensation for the death of her husband, caused by an accidental injury arising out of and in the course of his employment, on the second day of July, 1932, which resulted in his death on the 26th day of July, 1932. From the award denying compensation, appellant appeals to this court, and assigns as error that the award of the Industrial Board is contrary to law. The case was submitted to the Industrial Board upon an agreed statement of facts, and no further evidence was introduced. The facts, as agreed upon, show that one Frederick S. Duesenberg died on the 26th day of July, 1932, as a result of an accidental injury sustained in an automboile wreck on July 2, 1932, at about 11:30 o’clock a. m., in the state of Pennsylvania, while the decedent was driving a Duesenberg automobile owned by appellee from Philadelphia, Pennsylvania to Indianapolis, Indiana; that said decedent left surviving him as his only dependent under the Indiana Workmen’s Compensation Law of 1929, his widow, the appellant herein, with whom he was living at the time of his injury and death; that the only question in dispute between appellant and appellee is whether or not Frederick S. Duesenberg was an employee of Duesenberg, Incorporated, within the meaning of “employee” as used in the Indiana Workmen’s Compensation Act; that about 1920, the Duesenberg Automobile and Motor Company, Incorporated was organized and part of the stock was owned by appellant’s decedent who was president of the company; that in 1924, after said company went into receivership, a new company called Duesenberg Motors Company was formed, with appellant’s decedent as president, and took over the property and business of the first com *642 pany; that in 1926, this second company became financially embarrassed, and a new company, the appellee herein, was organized, and took over the assets and liabilities of the Duesenberg Motors Company; that its authorized capital stock was 75,000 shares of class “A,” and 200,000 shares of class “B” stock, all without par value; that at the time of decedent’s death, 45,300 shares of class “A” and 86,991 shares of class “B” stock had been issued, and were outstanding; that of this stock, the Auburn Automobile Company owned the controlling interest; that the Cord Corporation owned a large interest in the Auburn Company, and had outstanding 2,260,000 shares of common stock, of which the decedent owned 200 shares; that the decedent at the time of his death owned 78 shares of class “B” stock of appellee, and “held the legal but not the equitable title” to 5,000 more shares of class “B” stock; that appellant’s decedent had never received any dividends on any of the stock, and his family relied for its livelihood wholly upon the compensation received by decedent from appellee; that compensation paid to appellant’s decedent by appellee was $15,000 per year and was paid in monthly installments. That, following said reorganization and until his death, decedent was a vice-president of appellee, and the services which he rendered appellee “consisted solely of carrying on defendant’s engineering and experimental work, of which he was in charge, he being subject, however, to the supervision and directions” of other officers of appellee and “indirectly of Messrs. Cord and Manning, officers of the Cord Corporation with regard to the general engineering and experimental policies and programs” of appellee, and frequently reported to them; that the decedent handled the details of the engineering and experimental work with the assistance of five draftsmen and designers who worked under him; that *643 a part of the duties of decedent was the employing and discharging of these assistants, subject, however, to the approval of Mr. Ames, or Mr. Watson, who were officers of the appellee; that nearly all of decedent’s time was spent in drawing plans for automobiles and motors, in supervising the construction of newly designed motors, and in developing new automotive devices ; that in drawing plans the decedent worked entirely with drafting instruments, and in his other work he frequently handled and used other tools and instruments; that decedent was not free to work when and if he chose, but in the performance of his duties he worked every day the factory worked; that neither he, nor any other of the several persons who worked in the office of appellee, punched a time clock; that he absented himself from work only upon obtaining consent of the said Ames or Watson; that on June 30, 1932, said decedent was instructed by the other officers to go to Philadelphia for the purpose of making an inspection of some government engines in the Philadelphia Navy Yard; that decedent left Indianapolis by train for Philadelphia to perform this service for the purpose of learning some facts relative to the construction of an airplane motor which was then in use by the Navy; that such facts would be helpful to said decedent in his design of a similar motor, the building of which was then being contemplated by appellee. It appears that said decedent had designed and perfected a new motor which had been placed in a new model automobile which was then in the possession of appellee’s agency in New York City; that a report had been made that the engine was defective in some way, and the decedent sent a telegram from the train at Columbus, Ohio, telling appellee if it still wanted this automobile from New York to instruct the agency in New York to deliver the car to Philadelphia, and he *644 would drive same home; that such arrangements were made, and on July 2, 1932, under the direction of appellee, the decedent started for Indianapolis with said automobile, and, while in the act of driving it on highway No. 30 in Pennsylvania, the accident happened which resulted in his death; that said decedent’s working hours were spent entirely in engineering and experimental work for Duesenberg, Incorporated, he occasionally working overtime at the factory or his home without compensation. Upon this' agreed statement of facts, the hearing member found against appellant, and entered an order denying compensation, from which order an application for review was made to the full board. On the 20th day of March, 1933, a majority of the members of said Board found “That on July 2, 1932, one Frederick S. Duesenberg sustained an accidental injury while in the service of the defendant and that at the time of said accidental injury, the said Duesenberg was being compensated by the defendant in the sum of $288.46 a week; that the said Frederick S. Duesenberg was not an employee of the defendant within the meaning of the Indiana Workmen’s Compensation Act.” The Board entered an order that appellant take nothing by her complaint and pay the costs of this proceedings. A similar question to the one herein presented was before this court in the recent case of Holycross & Nye v. Nye (1933), 97 Ind. App. 372, 186 N. E. 915, in which it was said that: “The difficulty in laying down a hard and fast rule defining just when an officer, director and stockholder, or any of them, may be an employee within the Workmen’s Compensation Act lies in the fact that each individual case must depend largely upon its own particular facts and circum-■ stances.” *645 In Holycross & Nye v. Nye, supra, this court cited and quoted from the case of In re Raynes (1917), 66 Ind. App. 321, 118 N. E. 387, in which this court said upon the subject of who is an employee under the Workmen’s Compensation Act: “In a general way, it is an employee whose remuneration is popularly designated as wages rather than salary; whose compensation for service is not munificent; . . . whose labor is manual, or of a like degree of industrial or commercial importance as manual labor when viewed from the standpoint of individual accomplishment.” It was further said by the court “that neither of these tests is decisive,” but they do form some basis for a rule which may be applied to determine when one is an employee under the Act. Appellant’s decedent did not own the controlling interest in the appellee corporation, but was an officer therein, and owned a small portion of its capital stock, and was receiving compensation at the rate of $15,000 per year, and was paid upon a monthly basis. It could scarcely be claimed that his remuneration could be designated as wages, and that his compensation for services was not munificent, nor could it be said that his services were manual labor, or of a like degree of industrial or commercial importance as manual labor, when viewed from the standpoint of individual accomplishment. He spent his time entirely in the engineering and experimental work for appellee, and was in charge of that work, and had the authority to employ and discharge his helpers subj ect to the approval of other officers. He was not a workman in the sense that is meant by the Indiana Workmen’s Compensation Act, nor by the decisions in this state. It is not necessary in determining this case to look outside of our own state and our own court for authority. The question here presented has been passed upon by this *646 court in the following cases, which we think support the conclusion reached herein: In re Raynes, supra; Manfield & Firman Co. v. Manfield (1932), 95 Ind. App. 70, 182 N. E. 539; Holycross & Nye v. Nye, supra; Holycross & Nye v. Holycross (1933), 97 Ind. App. 706, 187 N. E. 55. Appellant cites numerous decisions from other jurisdictions than our own. These cases have all been reviewed, and many of them were cited in the briefs in Holycross & Nye v. Nye, supra, and were considered by the court in that case. In many of the cases cited by appellant where compensation was given to an officer, stockholder, or director of a corporation, an insurance carrier was involved, and the salary or compensation paid to such a person was taken into consideration by the insurance carrier in fixing the insurance premium. No insurance carrier is involved in the instant case. Following the reasoning of our own court, we adhere to the doctrine that one may be an officer, director, and stockholder of a corporation, and still be an employee entitled to compensation under the Workmen’s Compensation Act. In the instant case, there being no dispute as to the facts, the question whether appellee is an employee within the meaning of the Workmen’s Compensation Act, is a question of law. Upon the authority of the cases of our own court above cited, we hold that the award of the Industrial Board herein is not contrary to law, and is therefore affirmed. Kime, J., Dudine, J., dissent.