Cashman's Case

Carroll, J. Daniel Cashman, while superintending the moving of the machinery of the plant of Gray and Davis, at Amesbury, was injured by a heavy weight falling on him, when the chain which held it parted. The work was done by Cashman Brothers Company, a corporation of which the claimant was the president and a director, and of whose capital stock he owned twenty-five shares; his brother, Michael Cashman, was its treasurer and a director, and owned twenty-four shares; the remaining one share was held by their counsel. The policy of insurance under the workmen’s compensation act, insured the Cashman brothers both as a corporation and as individuals. The policy provided if the subscriber was a corporation “the remuneration of the president, any vice-president, secretary or treasurer not actually engaged in connection with, or in the personal superintendence of, the manual or mechanical operations described in such declarations need not be included.” The remuneration received by the claimant was excluded in determining the amount of the premium. The Industrial Accident Board found that Daniel Cashman was an employee, and “the fact that the insurer, for any reason, did not include the earnings of the claimant in its payroll audit, has no [602] bearing upon the rights of the claimant as an employee.” Compensation was awarded him. Assuming, but not deciding, that Daniel Cashman might have been found to be an employee under the workmen’s compensation act, when he was injured he was engaged in the “personal superintendence, of the manual or mechanical operations” of the corporation. The premium paid was based on the payroll in which his remuneration was not included, and, as he was not within the terms of the policy, he cannot recover. The business of Cashman Brothers Company was conducted as a partnership. There was evidence that before the issuance of the policy other policies under the workmen’s compensation act had been taken out in the name of the corporation, in which the income received by the Cashmans had not been included. Michael Cash-man had charge of the financial affairs of the concern, and the greater part if not all of the conversation regarding the policies was between him and the agents of the insurer. The remuneration of Michael and that of his brother were expressly excluded because of their objection and representation, their reason being “that they were practically a partnership and owned practically all the business.” Under these circumstances the claimant, who was the president and a director of the corporation and the owner of half of its capital stock, must be presumed to have assented to the contract of insurance made by the treasurer of the corporation who also owned half of its capital stock. The policy by its express terms does not cover the president while doing the work which Daniel • Cashman was doing when injured. The policy provided, “ This agreement shall apply only to such injuries so sustained by any person or persons in the service of the subscriber under a legal contract of hire express or implied, oral or written and whose entire remuneration is included in the declarations hereinafter contained and upon which the premium for this policy is computed; such injuries being sustained by reason of the business operations described in said declarations conducted at the places and in the manner therein described. If the subscriber is a corporation, the remuneration of the president, any vice-president, secretary or treasurer not actually engaged in connection with, or in the personal, superintendence of, the manual or mechanical operations described in such declarations need not [603] be included, this policy covering such officers nevertheless.” The interpretation of this clause under the circumstances here disclosed is that a president, vice-president, secretary or treasurer, who is injured while actually engaged in the manual or mechanical operations of the corporation, is not included as a beneficiary under the policy, unless his remuneration has been included as the basis of the premium to be paid on the policy, and the workmen’s compensation act cannot be construed so as to afford the claimant compensation contrary to this agreement. While insured as an individual, he was an employer and could not claim compensation as an employee. Assuming he was an employee of the corporation of which he was the president, his remuneration not being included in the payroll, it would be manifestly- unjust to require the insurer to pay him compensation. See in this connection Monitor Mutual Fire Ins. Co. v. Buffam, 115 Mass. 343. In Cox’s Case, 225 Mass. 220, it was decided that with certain exceptions there mentioned, the workmen’s compensation act does not permit an employer carrying on a business which is in substance one business, to become a subscriber as to one part of it and to remain a non-subscriber as to the rest. That case is not applicable to the case at bar. It follows that the decree must be reversed and a decree entered in favor of the insurer. So ordered.