
    The Cleveland Commercial Auto Body Co. v. Frank.
    
      Negligence — Corporation president injured while not complying with company safety regulations — Not entitled to damages after accepting compensation from company— Agreement not submitted to or approved by Industrial Commission.
    
    President of corporation, under duty to see that rules of shop were obeyed, who refused to comply with own orders, and who was injured while working at machine, without using guard provided for safety, could not recover damages against his company, after accepting compensation in accordance with agreement with company, not submitted or approved by Industrial Commission.
    (Decided December 13, 1926.)
    Error: Court of Appeals for Cuyahoga county.
    
      Mr. O. F. Goudy, and Mr. Lex Kintner, for plaintiff in error.
    
      Messrs. Preusser & Morris, for defendant in error.
   Vickery, J.

This cause comes into this court on a petition in error to the common pleas court of Cuyahoga county. In that court John W. Frank brought an action to recover damages from the Cleveland Commercial Auto Body Company for personal injuries resulting to him from an accident, while he was employed, as he claims, as a workman in the shop of said company.

An examination of the record discloses that Frank, with four others, first carried on this body making business as partners. They subsequently incorporated under the laws of the state of Ohio. John W. Frank became president of the corporation and was such at the time of the accident thereafter occurring. It seems that this was a very closed corporation, composed of five members, of which Frank was one, and that all of the stockholders, save perhaps one, were officers of the corporation. They entered into an agreement among themselves, apparently to avoid the necessity of complying with the requirements of the Workmen’s Compensation Law (General Code, Sections 1465-37 to 1465-108), to the effect that each of the four members of the corporation would perform work and labor in the various crafts represented by each severally. Frank did the woodwork, another the blacksmithing, another some other line of work, and so on. It was further agreed amongst them that each was to receive the sum of $35 a week for such work performed by him, and that, in the event of any of them being injured, the expense of doctor’s bills and hospital bills, if any, should be borne by the corporation. In addition, the injured person should receive $15 a week compensation while incapacitated from pursuing his work.

In passing, it might be well to say that this provision of the contract was not approved by, nor was it submitted to, the Industrial Commission, but it was carried into effect by the parties, and, if any one of the members of the corporation was injured, his expenses were paid, and, in addition,' compensation in the amount of $15 per week was awarded him.

John W. Frank was elected president of the corporation, and was the executive officer by reason of such election. Mr. Schuld was general manager, and the record indicates that Schuld gave the orders which ran the business, and, according to Frank’s testimony, he himself received' instructions from Schuld.

At the time of the accident, Frank was working at a ripsaw, sawing boards into strips. A guard had been provided to protect the user of the saw, but Frank had declined to use it and refused to use it. The manner in which he handled the boards upon the table which contained the ripsaw was such that, in bringing the board back over the saw, it caught in the teeth of the saw and threw it forward towards Frank, the end of it striking him in the abdomen, from which resulted a hernia. He went to the hospital, his doctor and hospital bills being paid by the corporation, and he was paid and received the $15 per week, as already set forth.

Subsequently Frank transferred his interest in the corporation by selling his stock to Schuld for the sum of $800. After that time, when he was no longer a member of the corporation, he brought this action to recover damages. On the trial of the action, he was awarded by the jury a verdict of $2,500. A motion for new trial was made and overruled, and judgment was entered on this verdict. It is to reverse this judgment that the proceedings are brought here.

The case is rather a novel one. Whether these men, all being officers of the corporation save one, come within the provisions of the Workmen’s Compensation Law, might be questioned, inasmuch as, if you eliminate the officers, they did not employ three or more workmen. If you treat these officers as workmen, then, of course, they would be within the Compensation Law, but, not having complied by either paying into the fund such sum as might be required of them, or by giving a bond and self-insuring their men, they subjected them selves to the penalty of being sued by a workman who was injured, and, whether that was broad enough to include the president of the corporation, who was working as a workman, is still unsettled in this state.

There are two cases decided in New York, under a compensation law similar to our own, which held in effect that an officer, to wit, the president of a corporation, was not a workman within the meaning of the Compensation Law. Subsequently, however, in the case of Irving Skouitchi v. Chic Cloak & Suit Co., 230 N. Y., 296, 130 N. E., 299, 15 A. L. R., 1285, these other cases were distinguished, and the court held that where an officer of a corporation is employed as a workman, and receives a salary as a workman aside from his position as president, he may be regarded as a workman within the meaning of the Compensation Law and be entitled to receive compensation.

Applying that doctrine to the instant case, it would seem from this record that Frank, although president, was performing manual work, and perhaps was injured while thus employed, and by a parity of reasoning would be entitled to compensation if this agreement between the parties had not already provided for that. That being so, his being entitled to compensation under the Compensation Law, or, perhaps we had better put it, being eligible to draw compensation as a workman by reason of his relation with this corporation, even though he was president of the company, would seem to justify his right to maintain suit for the damages received by him in an action at law.

But the corporation of which he was president not having complied with the Workmen’s' Compensation Law brings about a singular situation. In such event the corporation could not plead the assumption of risk, or contributory negligence, or any of the defenses which it might have pleaded in case the workman was injured where less than three men were employed, and where it did not have to comply with the Workmen’s Compensation Law. The proposition is singular, for in the instant case the record shows that Frank was president of this corporation, and it was his duty, as the executive officer of the corporation, to see that the machinery was properly equipped with such things as the statute contemplates to protect the workmen from the hazards of dangerous machinery in a shop. The record in this case shows that a guard for this saw had' been provided, but that Frank refused to use this guard, and insisted upon bringing the boards back over the saw in such a way that his own act resulted in injury to him.

Now we have, then, the president and executive officer of the corporation, whose duty it was to see that the laws and rules of the shop were obeyed, and that the machinery had proper safety devices to protect the workmen, utterly refusing to comply with his own orders, issued in the exercise of his duties as executive president, and thus working at a machine which he himself made dangerous. It would seem that it were almost contrary to public policy to permit a man to recover damages in such a case.

If Frank had remained president of this corporation, he would still be entitled to recover as much as he did under the arrangement that existed at the time this action was brought, and then we would have this singular proposition: He as an individual workman suing the company of which he himself was president, and service of summon? under our statute to be made upon him as president. It would seem that the stating of the proposition would be all that is necessary to show its absurdity. As a matter of fact, in the instant case, Frank had transferred his stock before the suit was brought, and, I believe, the record shows he had made an agreement to sell it prior to the happening of the accident, and subsequently did sell it and transfer it to Schuld.

It must be borne in mind that this agreement for compensation was entered into freely between these people, and that Frank had received his compensation in accordance with the agreement. Now if they had been insured, or if they had complied with the Workmen’s Compensation Law and Frank had been injured, assuming under the latest citation from the New York reports that he would be regarded in the instant case as a workman and entitled to compensation, had he made application for compensation, and had he drawn compensation, it would have forever foreclosed his right to maintain a suit. In other words, an application for and receiving compensation would have barred him from an action at law in a court to recover damages for any injury that might result to him by reason of the accident. If that would be true in the case where the officers complied with the law, it would seem that where the officers of a corporation, of which Frank was one, sought to evade, if such was their purpose, complying with the Compensation Law and paying into the fund, by entering into this agreement whereby each was to get his compensation, which probably would be as much as or more than he could have received, based upon wages earned, from the Industrial Commission, he, by accepting this compensation under and by virtue of the agreement, should be barred from maintaining this suit. Whether that was true or not I am not prepared to say, but we are prepared to say that, in our own judgment, to permit a president of a corporation to recover under the condition of the record in the instant case operated as a wrong, and we think the judgment of the court below was wrong as being contrary to law.

The judgment is therefore reversed.

Judgment reversed.

Levine, P. J., and Sullivan, J., concur.  