work is benefited, and the liability rests on him and his principals. Where such hiring is with the principal's knowledge and acquiescence, the principal's conduct amounts to a ratification of the hiring."7

56 (Wk. Comp. Act, § 30) Paul v. Nikkel, 1 Cal. I. A. C. Dec. 648.

In Dolan v. Judson, 1 Conn. Comp. Dec. 362, where the claimant was employed by an agent of the respondent with full power and authority to do so, and the wages were paid by the respondent through such agent, he was an employé of such respondent.

Where a driver was employed to solicit sales of beer and make delivery of same, and, in performance of his duties, he was permitted to employ helpers, and a helper in performance of his duty was injured, the brewery company was liable for the injury sustained by the helper, just as though it employed the helper, paid him, directed him, and controlled his every action as an individual employé of the company. Schmidt v. William Pfeifer Berlin Weiss Beer Brewing Co., Bulletin No. 1, Ill., p. 118.

Where an expert was hired by the owner of a factory to supervise the installation of machinery, and, besides having several of the owner's employés to assist him, employed claimant and another man also, both of whom were paid by the owner, claimant was an employé of the factory owner. McNally v. Diamond Mills Paper Co., The Bulletin, N. Y., vol. 1, No. 11, p. 12 (on rehearing).

Where a town's agent, after refusing a contract, undertook the building of a bridge on the proposition that he furnish his own men and machinery and teams and be paid for his work and at a given rate per day per man for the balance of the crew, a member of the crew selected by him was an employé of the town. Peabody v. Town of Superior, Bul. Wis. Indus. Com. vol. 1, p. 99.

57 Paul v. Nikkel, 1 Cal. I. A C. Dec. 648.

Section

32.

ARTICLE II

INSURERS AND FUNDS

Distinctive insurance features of Compensation Acts.

33. Option of state insurance, private insurance, or self-insurance. 34. Rights and liabilities of insurance companies.

§ 32. Distinctive insurance features of Compensation Acts

In respect to their optional and compulsory insurance or security features, the Acts of the various states and territories may be divided into three groups, designated as those which compel employers subject to their operation to carry insurance securing payment of compensation, or to satisfactorily show that they are able to pay compensation without carrying insurance,58 those which compel insurance,59 and those which leave the matter of insurance. optional as to all employers. Several of the Acts provide insurance in a fund administered by the state. In some states this is the only compensatory insurance permitted, while in some em

60

61

58 Colorado, Connecticut, Hawaii, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming. In New York this requirement applies only in respect to hazardous employment; in Vermont it applies only to private employers, insurance being optional as to municipalities and other public employers.

59 Insurance is compulsory in Kentucky, Massachusetts, Nevada, Oregon, Texas, Washington, and Wyoming.

60 In respect to these matters, the Acts of Alaska, Arizona, California, Kansas, Louisiana, Minnesota, Nebraska, and New Jersey are optional.

61 Insurance in a state fund is compulsory under the Acts of Kentucky, Nevada, Oregon, Washington, and Wyoming.

ployers are permitted to insure in the state fund or carry their own risks under strict regulations, and in others they are given the option to insure either in the state fund or in private companies. Two of these Acts authorize insurance either in private companies or in a mutual association, state in nature, and eighteen permit insurance only in duly licensed private companies.65

63

A provision requiring insurance, or, in lieu thereof, a satisfactory showing of financial ability to pay compensation, applies to all employers, including cities and counties."

§ 33. Option of state insurance, private insurance, or self-insur

ance

The present New York Act was intended to provide a state system of insurance," of employés engaged in hazardous employment

62 Ohio and West Virginia.

63 California, Colorado, Maryland, Michigan, Montana, New York, and Pennsylvania.

64 Massachusetts and Texas.

65 Alaska, Arizona, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Minnesota, Nebraska, New Hampshire, New Jersey, Oklaoma, Rhode Island, Vermont, and Wisconsin.

* Section 42 of the Iowa Act requires that all employers under that Act insure their liability in some insurance company approved by the state department of insurance, and provides that, if they do not, they shall be liable as if they had rejected the Act (Code Supp. 1913, § 2477m41) Op. Sp. Counsel to Iowa Indus. Com. (1915) p. 13. But section 50 further provides that this insurance will not be required where the employer furnishes satisfactory proof to the insurance department and industrial commissioner that he is solvent and financially able to make the payments of compensation when necessity arises (Supp. to the Code, 1913, § 2477m49), or where he deposits satisfactory security with the department. Id. All employers must do one or the other, if they expect to avail themselves of the provisions of the Act (Code Supp. 1913, §§ 2477m41-2477m49) Id. p. 3. Cities must carry insurance, or be relieved therefrom by Industrial Commissioner and Commissioner of Insurance. (Code Supp. 1913, tit. 12, c. 8a, § 2477m41) Id. p. 7.

(Const. art. 1, § 19) Winfield v. New York Cent. & H. R. R. Co., 168 App. Div. 351, 153 N. Y. Supp. 499.

68

69

and to provide in connection therewith a system of indemnification of the state. It does not contemplate an accumulation of surplus profits to be derived from the assignment of causes of action for personal injuries. To understand the real purpose of this Act, the provisions for self-insurance and insurance carriers other than the state fund should be treated as makeshifts, adopted for the employer's convenience, and not be permitted to in any way infringe on the real spirit of the Act." An employer who becomes a self-insurer in effect takes the place of the state fund, and his liability ceases to be strictly that of an employer, and becomes that of an insurer. He has taken the place which the statute primarily intended that the state fund should take, and necessarily assumes corresponding liabilities." Likewise the fact that an em

68 (Wk. Comp. Law, §§ 95-97) United States F. & G. Co. v. New York Rys. Co., 93 Misc. Rep. 118, 156 N. Y. Supp. 615.

69 This is made evident by an examination of section 95, which provides that the premium rate shall be "the lowest possible rate consistent with the maintenance of a solvent state insurance fund and the creation of a reasonable surplus and reserve; and for such purpose [the Commission] may adopt a system of schedule rating in such a manner as to take a count of the peculiar hazard of each individual risk," and section 96, which permits the formation of employers' associations for accident prevention, and provides that "every such approved association may make recommendations to the Commission concerning the fixing of premiums for classes of hazards, and for individual risks within such group," and also section 97. United States F. & G. Co. v. New York Rys. Co., 93 Misc. Rep. 118, 156 N. Y. S. 615. This is not a law fixing liability for negligence, or fixing liability upon or creating a cause of action against the employer, but is in substance a provision that the state will make compensation to injured employés in hazardous employments from what it has collected or secured from them. It is a state system of insurance. No liability other than the premiums is imposed on the employer except by way of penalty. (Wk. Comp. Law § 21) Winfield v. New York Cent. R. R. Co., 168 App. Div. 351, 153 N. Y. Supp. 499.

70 Id.

71 Id.

The risks and changes of business are such that the ordinary individual or firm cannot qualify as a self-insurer. The large corporations whose continuous existence is assured, or who are able to deposit the securities required,

ployer makes a sufficient showing of financial ability to pay the required compensation and deposits the required securities, thereby becoming its own "insurance carrier," does not relieve it from liability for compensation for which a stock corporation or mutual association would have been liable, had it been the insurer.72

Where an employer has insured in the New York state fund, the insurance premium rests on the basis that, when at work for his employer, the employé is to be engaged in the hazardous employment all the while, and the premium having been exacted on that basis, prima facie the loss should be met on that basis.3 This law should be strictly construed, so as to give to the employé and employer alike the protection intended, and to cast on the fund the burden equitably resting upon it. The state, having compelled the employer, under heavy penalties, to pay to it his money on the promise that it will protect him from loss on account of injuries incurred in the employment, must be held strictly to its obliga

tion.74

§ 34. Rights and liabilities of insurance companies

Under a provision that no payment of insurance shall be made. unless the same shall cover the entire liability of the employer,

can qualify as self-insurers. In effect, therefore, the law requires that the ordinary individual and firm, and perhaps the great mass of employers, must insure in the state fund or otherwise. The law, therefore, should be construed on the theory that it contemplates insurance in the state fund and employers who insure in the state fund or otherwise, or who are self-insurers, should fairly be governed by the same rule. It is the right of the individual employé and of the employer that they should be treated the same as all other employés and employers within the act. McQueeney v. Sutphen & Hyer, 167 App. Div. 528, 153 N. Y. Supp. 554; Spratt v. Sweeney & Gray Co., 168 App. Div. 403, 153 N. Y. Supp. 505.

72 (Laws 1913, c. 816) Kenny v. Union Ry. Co., 166 App. Div. 497, 152 N. Y. Supp. 117.

73 McQueeney v. Sutphen & Hyer, 167 App. Div. 528, 153 N. Y. Supp. 554.