Kegley v. Vulcan Rail & Construction Co.

Henderson, J., delivered the opinion of the Court. The question presented in this appeal is whether the rule of immunity from suit of -a principal contractor, liable for the payment of workmen’s compensation to ⁴⁷⁸ the employee of his subcontractor, applies where the person sued is an intermediate subcontractor of the general contractor. Woodrow Kegley, an employee of Arthur Phillips and Company, sustained injuries on April 21, 1952, while unloading steel beams delivered to the site where a public school building was being erected. The principal contractor was Leimbach Construction Corp., which in turn had entered into a written contract with the appellee, Vulcan Rail and Construction Company, to furnish and erect the structural steel.

Vulcan in turn entered Into a written contract with Arthur Phillips and Company whereby Phillips agreed to furnish the labor, material and equipment for the erection of the steel. Kegley claimed and was awarded workmen’s compensation from his employer, Arthur Phillips and Company, and the employer’s insurer, Public Service Mutual Insurance Company. Kegley then brought a third party action, for his own use and the use of the insurer, against Vulcan, alleging negligence on the part of the defendant’s servants. Vulcan filed a general issue plea and a second plea setting up the facts that Phillips was the subcontractor of Vulcan, who was the subcontractor of Leimbach, and alleging that Vulcan was liable to pay compensation as a principal contractor of Phillips and immune to a tort action by the plaintiff under the Compensation law.

The court overruled a demurrer to this plea, and, on motion, entered a summary judgment for the defendant. Section 63, Article 101 of the 1951 Code provides as follows: “When any person as a principal contractor, undertakes to execute any work which is part of his trade, business or occupation which he has contracted to perform and contracts with any other person as sub-contractor, for the execution by or under the sub-contractor, of the whole or any part of the work undertaken by the principal contractor, the principal contractor shall be liable to pay to any workman employed in the execution ⁴⁷⁹ of the work any compensation under this Article which he would have been liable to pay if that workman had been immediately employed by him; and where compensation is claimed from or proceedings are taken against the principal contractor, then, in the application of this Article, reference to the principal contractor shall be