Summary
holding that builder who was in the business of building and selling homes and who had a contract for the building of a home in which employee of subcontractor was injured was to be considered a principal contractor for purposes of workers' compensation even though at the time of injury, he was the owner of the house being built
Summary of this case from Para v. Richards Group of Washington Ltd. PartnershipOpinion
C. Allen High and C. Houston Sager, Nashville, for Thomas clendening.
Manier, Crouchs&sWhite, Nashville, for London Assurance Co.
FELTS, Justice.
Defendant has filed a petition to rehear complaining of our holding, and asserting that our opinion is based upon misinterpretations of the proof in a number of particulars:
(1) Petitioner complains that we stated (supra, op. 336 S.W.2d at page 537) that Jones, Cantrells&sJones employed plaintiff to help lay the brick 'at so much per thousand,' while the proof showed it was 'at $2.25 an hour.' This was an inadvertence on our part, but it was not material; for in either case, under the proof, plaintiff was their 'employee' (D. M. Roses&sCo. v. Snyder, supra, 185 Tenn. 499, 206 S.W.2d 897), as the petition itself concedes (Pet. 2-3).
(2) Another complaint is upon our statement that Trammel was a contractor in the business of building houses; that in the course of such business he would have a lot transferred to himself and wife, and would contract with another person to build a house on it and convey it to him; and that, during the period involved, Trammel 'did this in the case of nine different lots, including the one here in question.'
It is said that the quoted part of the above statement is unsupported by the proof; that the stipulation (Ex. 3 to B. E.) shows that though the nine lots mentioned were transferred to Trammel and wife, only four of them were shown to have been conveyed by them to others, and there was no proof that he built on any of them except the one here involved.
It is true this part of the statement was not accurate as to the other eight lots but it was correct as to the one here in question; and, we think, this inaccuracy was immaterial in view of the admissions in defendant's answer and of plaintiff's proof, which show that its insured, Trammel, was a contractor in the building business, operating under the Workmen's Compensation Act, with defendant as his insurer; and that he built this house as contractor for Peace and wife.
This contract was made on a printed form which appears to have been in regular use by Trammel in his business. It consisted of a promise by him (and wife) to Peace and wife (1) to convey to them a 'house to be built' on the lot (describing the lot) and (2) 'to build said house according to attached plans and specifications,' or $15,150, $3,650 to be paid in cash and the rest by the proceeds of a GI Loan on the house for $11,500.
The contract was conditioned upon Peace obtaining this GI Loan on the property; and it was understood that when the loan was approved, the Union Trust Company, then owner of the lot, would deed it to Trammel and wife, and he would build the house and deed it to Peace. This condition was fulfilled and the contract performed.
The contract was dated June 8, 1958, the GI Loan approved August 15th, the lot deeded to Trammel and wife August 27, 1958, and in a month or so he began building the house for Peace and wife under his contract to build it or them. He sublet the brick work to Jones, Cantrells&sJones, they employed plaintiff, and while doing this work, he was injured on the premises, Trammel being present.
It appears from the record this case was tried below upon the theory that the above facts were the truth of the case, and the only defense relied on by defendant was that since its insured, Trammel, held the legal title, he was building the house 'as owner,' and not as 'general or principal contractor,' under section 15 of the Act (T.C.A. § 50-915); and that the relation between him and Jones, Cantrells&sJones was as 'owner' and 'independent contractor,' and he was not liable to their employee, plaintiff, under section 15.
This theory of its defense was stated by defendant's learned counsel a number of times in the course of the trial, in substance as follows:
'* * * Our proof will be in accord with the answer, that this was his own property and he was building the house on it for himself. I don't mean to live in, I never said that at all, but he was building it with the anticipation of selling it, and he did sell it, but he was the one that was constructing the house. He was not building it for anybody' (italics ours) (B.E., p. 3).
Also:
'* * * the issue in this lawsuit is that this house was Mr. Trammel's own house, that he was the owner, not the principal contractor, and I think that [proof of other houses he built] would tend to confuse it. If he [witness Clendening] knows how many he constructed as a contractor, which we admit that he did on certain jobs, or if he knows how many as owner, that would be proper, but if he doesn't he is throwing the whole thing into a pot and that is very sharply controverted' (B.E., p. 17).
Again:
'It's my position * * * that in this particular transaction Mr. Trammel * * * was the owner of the house * * * that he took the title * * * in his and his wife's name, that it was his property, for the sole purpose of being able to get a construction loan as the Loan Companies demanded that it be handled that way' (italics ours) (B.E., p. 30).
And it appears this theory of defense was submitted to the Trial Judge and he viewed the case as presenting only a question of law, viz.: whether Trammel, in building the house in the method adopted by him, should be held to have acted as 'owner,' outside the Workmen's Compensation Act, or, as 'general or principal contractor,' within section 15 of the Act. Among other things, the Trial Judge said:
'This involves a whole method of doing business of a great section of our business community here. * * * So this is not an isolated instance at all. This is the gateway into what might be a series of decisions involving the whole system of doing business of these house builders' (italics ours) (B.E. sec. 64).
And the Trial Judge apparently concluded that, by taking title in himself while building this house for Peace and wife, under his contract to build it for them, Trammel was building it as 'owner,' not as 'contractor'; and that by this 'method of doing business,' he put himself outside the Workmen's Compensation Act.
Defendant defends this ruling by treating Trammel's taking title to himself as the decisive factor in the case. It says in its petition that our 'opinion, when analyzed, necessarily holds that an owner can be a principal contractor with himself, and certainly if as all the evidence shows by stipulation that Trammel was the owner, then this Court cannot hold that he can contract with himself, so as to become the principal contractor.'
We did not hold he could contract with himself. We held he contracted with Peace and wife to build this house on this lot for them and deed it to them. In our opinion, his taking title to it while building it for them, was merely a method of financing the construction and securing his interest pending construction. His position was more like that of mortgagee than owner.
We know that the construction of houses, financed largely by governmental aid, is a large part of our industry, in which many are employed. If by merely taking title to themselves pending performance of their contracts, if by the method of doing business here pursued by Trammel, building contractors may exempt themselves from the Workmen's Compensation Act, many employees for whose protection the Act was intended would be deprived of its benefits.
It is our duty to construe the Act liberally in favor of those entitled to its benefits. Mazwell v. Beck, supra, 169 Tenn. 315, 87 S.W.2d 564; Brady v. Reed, supra, 186 Tenn. 556, 212 S.W.2d 378; Giles County v. Rainey, supra, 195 Tenn. 239, 258 S.W.2d 774. So construing it, we think that, merely by taking title in themselves during performance of their contracts, building contractors may not evade the Act and deprive employees of its benefits.
Finally, petitioner insists that we should remand the case for a new trial, because it was disposed of on its motion to dismiss at the close of plaintiff's proof; and that to enter a decree in this Court, adjudging defendant liable, would deprive it of its day in court.
We do not think so. It does not appear that defendant denied, but instead admitted, in its answer and on the trial, the essential facts on which the case was submitted. Its defense was rather one of law: that, by taking title in himself while building the house under his contract with Peace and wife, Trammel acted as 'owner,' not as contractor, so as to exempt himself from the Workmen's Compensation Act.
On these facts, we think defendant is liable, and that justice would not be furthered by remanding the case for a new trial on this issue of liability; for on such a remand, we think, defendant could not take a position inconsistent with its theory on which the case was tried below and here. In Heggie v. Hayes, 141 Tenn. 219, 227, 208 S.W. 605, 607, 3 A.L.R. 150, Mr. (later Chief) Justice Green said:
"A new trial will not be granted * * * to enable a defendant to avail himself of a defense which was within the issues but not presented at the trial; or to make a defense inconsistent with the one presented, or contradictory to admissions made, as points tacitly conceded.' 29 Cyc., 852.'
Also, this is a workmen's compensation case, which should be 'expedited,' speedily determined, and not prolonged and delayed by continued litigation (T.C.A. § 50-1018), and should not be remanded for a new trial in the absence of a showing of good cause.
Moreover, the statute requires us, on reversal, to render such judgment here, without a remand, as should have been rendered by the court below, 'except where the damages to be assessed are uncertain * * *' (T.C.A. § 27-326), and except where we can see that injustice would be done thereby. Sledge v. Hunt, 157 Tenn. 606, 612, 12 S.W.2d 529; Brooks v. Memphis Compresss&sStorage Co., 188 Tenn. 115, 216 S.W.2d 746, 749.
For these reasons, the petition to rehear is denied at the cost of petitioner.