Richards v. Nationwide Homes

Annotate this Case

139 S.E.2d 645 (1965)

263 N.C. 295

J. P. RICHARDS, Employee, v. NATIONWIDE HOMES, Employer, Shelby Mutual Casualty Co., Carrier.

No. 173.

Supreme Court of North Carolina.

January 15, 1965.

*649 J. Harvey Turner, Kinston, for claimant appellant.

Poisson & Barnhill, by M. V. Barnhill, Jr., Wilmington, for defendant appellees.

PARKER, Justice.

Claimant has one assignment of error and that is `that the court erred in signing and entering the judgment."

The parties stipulated that claimant on 29 November 1961 sustained an injury by accident. The decisive question presented for decision is whether claimant at the time he sustained his injury by accident was an employee of Nationwide Homes, as contended by claimant, or an independent contractor, as contended by defendants, or a subcontractor, who was an independent contractor as to his contractor Nationwide Homes when he was injured.

A person who seeks to recover benefits under our Workmen's Compensation Act must come within its terms, and must be held to proof that he is in a class embraced in the Act. Hayes v. Board of Trustees of Elon College, 224 N.C. 11, 29 S.E.2d 137.

An injured person is entitled to compensation under our Act only if he is an employee of the party from whom compensation is claimed at the time of his injury or death. G.S. § 97-2; Scott v. Waccamaw Lumber Co., 232 N.C. 162, 59 S.E.2d 425; Hart v. Thomasville Motors, 244 N.C. 84, 92 S.E.2d 673.

An independent contractor is not a person included within the terms of our Act, and the Industrial Commission has no jurisdiction to apply the Act to a person who is not subject to its provisions. Hayes v. Board of Trustees of Elon College, supra; Perley v. Ballenger Paving Co., 228 N.C. 479, 46 S.E.2d 298; Hart v. Thomasville Motors, supra.

*650 A subcontractor employed to do certain work may be an independent contractor as to certain parts of the work and merely a servant or employee of the one employing him as to the residue of the work. When a subcontractor is an independent contractor, the relation of master and servant, or employer and employee, does not exist between the contractor and subcontractor. Greer v. Callahan Construction Co., 190 N.C. 632, 130 S.E. 739; 57 C.J.S. Master and Servant §§ 582, 583. In the Greer case, the Court said:

"One for whom work is done is not the master or employer of him who has contracted to do the work when, by virtue of the terms of the contract, the latter is an independent contractor; nor does the relationship exist between a contractor and his subcontractor when the latter is an independent contractor."

G.S. § 97-19 of our Act imposes liability, under certain specified circumstances, on the principal contractor or employer for injuries and death to employees of his independent contractor or of his subcontractor, but the provisions of G.S. § 97-19 do not extend to his independent contractor personally or to his subcontractor personally when he is an independent contractor. Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488; Bryson v. Gloucester Lumber Co., 204 N.C. 664, 169 S.E. 276; Francis v. Franklin Cafeteria, 123 Conn. 320, 195 A. 198; Centrello's Case, 232 Mass. 456, 122 N.E. 560; Miles v. West Virginia Pulp & Paper Co., 212 S.C. 424, 48 S.E.2d 26, 32; Houston Fire & Casualty Ins. Co. v. Farm Air Service, Tex.Civ.App., 325 S.W.2d 860, rehearing denied July 1, 1959; 99 C.J.S. Workmen's Compensation § 107, f, pp. 370-371.

In the absence of pertinent statutory definitions, whether a person is an independent contractor, or a subcontractor who is an independent contractor, or an employee within the meaning of our Workmen's Compensation Act is to be determined by the application of the ordinary common law tests. Scott v. Waccamaw Lumber Co., supra; Hayes v. Board of Trustees of Elon College, supra; 58 Am.Jur., Workmen's Compensation § 138.

In Bryson v. Gloucester Lumber Co., supra, the Court said:

"Generally speaking an independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the orders or control of the person for whom he does it, and may use his own discretion in matters and things not specified. [Citing authority.] "One who represents another only as to the results of a piece of work, and not as to the means of accomplishing it, is an independent contractor and not a servant or employee. Powell v. [Virginia] Const. Co., 88 Tenn. [692] 696, 13 S.W. 691."

In Scott v. Waccamaw Lumber Co., supra, the Court said:

"An independent contractor is one who exercises an independent employment, and contracts to do specified work for another by his own methods without subjection to the control of his employer, except as to the result of his work. His one indispensable characteristic is that he contracts to do certain work, and has the right to control the manner or method of doing it. The test to be applied in determining whether the relationship of the parties under a contract for the performance of work is that of employer and employee, or that of employer and independent contractor is whether the party for whom the work is being done has the right to control the worker with respect to the manner or method of doing the work, as distinguished from the right merely to require certain definite results conforming to the contract. If the employer has the right *651 of control, it is immaterial whether he actually exercises it."

A challenge to jurisdiction may be made at any time. Baker v. Varser, 239 N.C. 180, 79 S.E.2d 757; Spaugh v. City of Charlotte, 239 N.C. 149, 79 S.E.2d 748; Miller v. Roberts, 212 N.C. 126, 193 S.E. 286; Johnson v. Finch, 93 N.C. 205, 208. If a court finds at any stage of the proceedings that it is without jurisdiction over the subject matter of a proceeding or case, it cannot enter a judgment in favor of either party; it can only dismiss the proceeding or case for want of jurisdiction. Burgess v. Gibbs, 262 N.C. 462, 137 S.E.2d 806; In re Davis, 248 N.C. 423, 103 S.E.2d 503; Henderson County v. Smyth, 216 N.C. 421, 5 S.E.2d 136; Branch v. Houston, 44 N.C. 85; New Orleans & Bayou Sara Mail Co. v. Fernandez, 12 Wall (U.S.) 130, 20 L. Ed. 249; Corbett v. Boston & M. R. Co., 219 Mass. 351, 107 N.E. 60, 12 A.L.R. 683.

When a defendant-employer challenges the jurisdiction of the Industrial Commission, the findings of fact made by the Commission, on which its jurisdiction is dependent, are not conclusive on the superior court, but the superior court has the power, and it is its duty, on appeal, to consider all the evidence in the record, and to make therefrom independent findings of jurisdictional facts. "This is necessary, to prevent the court from being forced into an act of usurpation, and compelled to give a void judgment." (Branch v. Houston, supra). Hart v. Thomasville Motors, supra; Aylor v. Barnes, 242 N.C. 223, 87 S.E.2d 269; Buchanan v. State Highway & Public Works Commission, 217 N.C. 173, 7 S.E.2d 382; Young v. Maryland Mica Co., 212 N.C. 243, 193 S.E. 285; Francis v. Carolina Wood Turning Co., 204 N.C. 701, 169 S.E. 654; Aycock v. Cooper, 202 N.C. 500, 163 S.E. 569; Strong's North Carolina Index, Vol. 3, Master and Servant § 93, pp. 290-91.

"As a general rule the court will not accept as conclusive findings of fact of the Commission concerning a jurisdictional question, but will weigh evidence relating thereto and make its own independent findings of fact." 100 C.J.S. Workmen's Compensation § 763(7), p. 1216. In 58 Am.Jur. Workmen's Compensation § 533, it is stated: "It is well established that findings of fact entering into the establishment of jurisdiction of a compensation commission or other tribunal to make an award are subject to review by the courts."

These facts appear in the record: On 22 November 1961 claimant signed what is entitled a "Sub-contractor's Workmen's Compensation Form," which is marked defendant's Exhibit A, in which he states in substance that he is an individual engaged in the carpentry contracting business, and that in entering into a contractual relationship with Nationwide Homes to build for it certain homes to their specifications as agreed in the contract, he understands that, in respect to workmen's compensation insurance as required by the North Carolina Workmen's Compensation Act, such workmen's compensation insurance as is carried by Nationwide Homes does not apply to him, an independent contractor, that such insurance does apply to injuries sustained by any employees that may be engaged by him in the completion of the contract. Claimant's signature to this form was witnessed by A. G. Truelove, Jr., District Supervisor for Nationwide Homes. It is true claimant testified he did not read this form before he signed it. However, there is no evidence that he was illiterate, and there is no evidence that it was misrepresented to him, or that he was prevented from reading it. Mr. Truelove, a witness for the defendants, testified: "I am sure that I explained the meaning of Exhibit A to Mr. Richards before he signed it. * * * I told him Exhibit A meant that he and Mr. Saunders were working together. I told him that they had built the other house together; and I told him whichever one signed this would not *652 be protected; and anybody else working on the job would be protected by Workmen's compensation but that whoever signed this contract would not be protected by Workmen's Compensation." On 23 November 1961 claimant entered into the subcontract agreement heretofore set forth. It is crystal clear from the "Sub-contractor's Workmen's Compensation Form" signed by claimant, and from the subcontract agreement entered into by and between him and Nationwide Homes, that he was engaged in an independent business, to wit, "carpentry contracting business," and that he was not in the regular employ of Nationwide Homes; that he contracted to construct a certain specified house at a fixed price; that he had the right to control the manner and method of doing the work without subjection to the control of Nationwide Homes except as to the result of his work, to wit, that it was to be done in a satisfactory manner. Claimant's subcontract agreement with Nationwide Homes reserved to Nationwide Homes no control whatever as to the manner or method of claimant's doing the work.

Claimant testified in substance, except when quoted: He had built one other house for Nationwide Homes of the same type as the house in the instant case. In respect to the house in the instant case, A. G. Truelove, Jr., District Supervisor of Nationwide Homes, told him how he wanted it built, gave him the plans, and if there were any alterations or additions to be made he would advise him. He had a written contract to build this house. Truelove saw that all the materials were on the job and if he needed anything extra, Truelove would order it. On the job in the instant case Truelove said if there were any additional changes inside, they would get together and go ahead and do it, and they did. He cut it from a three bedroom to a two bedroom house, and moved a bathroom over enough to accommodate the space he had left. Truelove told him to do that. That was a variation from the specifications first called for. "As far as I know, that was about it insofar as Mr. Truelove supervising or telling me what changes to make or how to vary workmanship or things like that. Mr. Truelove came around to look at the house and check on the work two or three times a week. When he did come around, he would look the job over and see if it was okay. If things weren't going okay, I am sure he would have said something." Mr. Truelove told him what to do, and he did it. Claimant testified in substance on cross-examination: Truelove gave him the plans and specifications, came by to check and see if he was following the plans and specifications, and notified him of any changes in the plans and specifications. He did not tell him what time to go to work, nor how long to work during the day. He did not tell him what tools to use. He supplied his own tools. He did carpentry work for anybody that asked him. Joe Shingleton helped him build the house, and he paid him out of the contract price.

A. G. Truelove, Jr., District Supervisor for Nationwide Homes testified in substance for defendants: He told claimant what changes W. C. Graham wanted made in the house.

It is stated in Strong's North Carolina Index, Vol. 3, Master and Servant, § 3, p. 189: "But where it is admitted or established that the contract provided that the party was to do certain work in accordance with plans and specifications furnished by the owner for a stipulated sum, the contract creates the relationship of principal and independent contractor as a matter of law."

The case of Brown v. Bottoms Truck Lines, 227 N.C. 299, 42 S.E.2d 71, relied on by claimant, is clearly distinguishable. Claimant contends that in that case there was a contract similar to the one in the instant case, and that the Court held that under that contract the relationship was that of employer-employee. The contracts in the two cases are entirely different. In *653 the Brown case a carrier licensed to transport goods by truck in interstate commerce leased a vehicle from an owner not so licensed and attached its plates to the vehicle while engaged in transporting goods in interstate commerce. Under such circumstances the Court held that the contract of lease will be presumed to have been made in contemplation of the pertinent Federal Statutes and regulations of the Interstate Commerce Commission, requiring retention of control over the vehicle by the franchise owner, and drivers of such vehicle, as a matter of public policy, will be held employees of the carrier and not independent contractors for the purpose of determining liability of the carrier. In its opinion the Court said:

"The operation of the truck was in law under the supervision and control of the interstate franchise carrier and could be lawfully operated only by those standing in the relationship of employees to the authorized carrier. Brown had no franchise right independent of the defendant."

Tested by the standard set forth in Bryson v. Gloucester Lumber Co., supra, and in Scott v. Waccamaw Lumber Co., supra, we are of opinion that the evidence in the record fully supports Judge Hubbard's independent findings of fact, and that these findings of fact support his conclusions of law that claimant at the time of his injury by accident was an independent contractor and not an employee of Nationwide Homes, and that consequently the Industrial Commission was without jurisdiction over his claim, and these in turn support his judgment remanding the proceeding to the Industrial Commission with direction that it should be dismissed, though Judge Hubbard would have been more technically accurate if he had designated claimant a subcontractor who was an independent contractor in constructing the house in the instant case. The judgment of Judge Hubbard is