National Automobile Insurance v. Industrial Accident Commission

SPENCE, J. Petitioner seeks the annulment of an award made by the respondent commission in favor of Eddie S. Higdon and against the petitioner.

[337]Higdon was originally employed as a “floor manager and bouncer” by H. E. Schmidt and Oscar Mester, as copartners doing business under the name of Bal Masque Ballroom in San Francisco. He left their employ, but returned later and was reemployed by Schmidt at the Bal Masque Ballroom after the dissolution of the copartnership. The business was then being conducted by Schmidt individually. Thereafter Higdon was injured while so employed by Schmidt.

During the existence of the copartnership, petitioner issued its policy of insurance to “Oscar Mester and H. E. Schmidt, jointly and not severally, a copartnership d. b. a. Bal Masque Ballroom”. The commission found that “Eddie S. Higdon, applicant, while employed as a floor manager and bouncer on December 31, 1936, at San Francisco, by H. E. Schmidt, also known as Whitie Smith, and Oscar Mester, doing business under the firm name and style of Bal Masque, sustained injury . . . ”. In denying a petition for rehearing, the commission stated in its order, “This commission is of the opinion that a transfer of partnership interests by defendant Mester to defendant Schmidt (alias Smith) prior to injury would not avoid a valid and existing compensation insurance policy issued to them jointly, as partners, and that the finding that the applicant was at the time of his injury in the employ of Schmidt and Mester, doing business under the firm name and style of Bal Masque Ballroom, if erroneous, is nevertheless not one which prejudices or gives cause for grievance to defendant carrier.”

Petitioner contends that there was no evidence to sustain the finding of the commission to the effect that the copartnership was the employer at the time Higdon was injured. This contention must be sustained but we are still confronted with the question of whether that finding was a material finding under, the circumstances before us.

Section 304 of the Insurance Code provides, “In the ease of partners, joint owners, or owners in common, who are jointly insured, a transfer of interest by one to another thereof does not avoid insurance, even though it has been agreed that the insurance shall cease upon the alienation of the subject insured.”

Said section is based upon the former section 2557 of the Civil Code. In First Nat. Trust & Sav. Bank v. Industrial Acc. Com., 213 Cal. 322 [2 Pac. (2d) 347, 78 A. L. R 1324],