National Automobile Insurance v. Industrial Accident Commission

This is a petition to review an award of the Industrial Accident Commission.

On May 25, 1936, L. E. Sherbert was operating a restaurant under the fictitious name of “Dixie Club Restaurant”. J. J. Packer was employed as dishwasher. On that date a policy of workmen’s compensation insurance was issued by petitioner, National Automobile Insurance Company, in the name of “L. E. Sherbert, an individual, doing business as Dixie Club Restaurant”. On August 19, 1936, Sherbert took in Dixie Henry, his sister, as a partner, the business continuing in name as before. On August 23, 1936, Packer sustained a compensable injury. The commission made an award against petitioner as insurer of Sherbert, and against Dixie Henry, as an uninsured employer, in the total amount of $185.28.

Petitioner attacks the award on the ground that the policy did not cover the liability in question. Reliance is placed on the following provision of the policy: “If this policy is issued to an individual, it shall cover only his liability as an individual émployer and not any liability as a member of a copartnership or any other organization.” Petitioner’s theory is that it insured the liability of Sherbert, an…

I concur in the decision, but I believe that the court should expressly overrule the case of Reed v. Industrial Acc. Com., 10 Cal. (2d) 1,91 [ 73 Pac. (2d) 1212 ,114 A. L. R. 720], and disapprove the holding in Zimmerman v. Industrial Acc. Com., 119 Cal. App. 253 [ 6 Pac. (2d) 291 ], These cases reach a conclusion directly contrary to the position now taken by this court. Although the policy here considered limits the coverage to the liability of the insured as an “individual employer” to the exclusion of “any liability arising by being a member of a copartnership”, the same restriction was at least impliedly made in the policies whose terms were construed in the two earlier cases.

In the Zimmerman ease, the insured was designated as an individual doing business under a fictitious name. He took in a partner and the court held the insurer liable for a compensable injury to an employee of the' copartnership. The decision was based upon the conclusion reached in the case of First Rational Trust & Sav. Bank v. Industrial Acc. Com., 213 Cal. 322 [ 2 Pac. (2d) 347 , 78 A. L. R. 1324], although the facts in that case were entirely different. There the policy insured the liability of two…