Mingo v. Rhode Island Co.

103 A. 965, 41 R.I. 423, 1918 R.I. LEXIS 53

• Court: Supreme Court of Rhode Island
• Decided: July 1, 1918
• Status: Published

Opinions

Stearns, J.

This is an action at law to recover damages for negligence. The plaintiff, a truck driver in the employ of the Providence Coal Co., on the 16th day of August, 1916, was injured in a collision between his truck and a trolley car of the defendant, caused, as he alleges, by the negligence of the defendant. The defendant pleaded the general issue, and in its second plea alleges that on September 27, 1916, the plaintiff and his emplojrer entered into an agreement in accordance with the “Workmen's Compensation Act,” whereby the said coal company agreed to pay the plaintiff a certain sum for medical aid and also compensation at the rate of five and 84-100 dollars per week during the period of total incapacity resulting from said injury; that this agreement was duly approved by a justice of the Superior Court on the 5th day of October, 1916, which agreement is now on file in the officer of the clerk of said court and that said coal company paid to the plaintiff in accordance with the terms of the agreement the sum of $70.08 as compensation under the terms of the compensation act.

To this plea the plaintiff filed several replications to each of which the defendant demurred. The Superior Court sus tained the demurrers to which decision the plaintiff duly-excepted and the plaintiff now comes to this court by bill of exceptions.

The first replication does not refer to any agreement, but alleges a tender to the employer of the amount received from him and a refusal by the employer to receive the same. At the hearing before this court the plaintiff stated that he did not rely on this replication and the exception to the decision of the Superior Court in sustaining the demurrer to this replication is overruled.

In the sixth replication, which raises the main question in this case, the plaintiff alleges that the agreement with his employer was made on the express understanding and agreement between the plaintiff and his employer that the plaintiff should receive the compensation provided for in said agreement, as approved, and proceed to bring action against the defendant for the negligence of defendant, and that the plaintiff should be bound and liable to repay to his employer all moneys received by him under said agreement out of any money or damages recovered from the defendant; that this action is brought in accordance with an express agreement between the plaintiff and his employer for the purpose of recovering the compensation paid to plaintiff by his employer as well as for the benefit of the plaintiff.

(1) In the other replications the plaintiff alleges in different phraseology the agreement between the plaintiff and his employer and that before this suit was begun the plaintiff made a lawful tender to his employer of the amount which had been paid to him by his employer; that this tender was refused by his employer and that since. such tender and refusal the plaintiff has refused to accept any money from his employer under the agreement. By the demurrer the defendant claims that notwithstanding the tender and refusal to acept further compensation the agreement with the employer duly filed and approved remains in full force and effect and constitutes an election of remedies on the part of the plaintiff which bars the plaintiff from proceeding against this defendant for damages, and relies on the provisions of Section 21, Article III, “Workmen’s Compensation Act,” (1912), which is as follows: “Sec. 21. Where the injury for which compensation is payable under this act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the employee may take proceedings both against that person to recover damages and against any person liable to pay compensation under this act for such compensation, but shall not be entitled to receive both damages and compensation; and if the employee has been paid, compensation under this act, the person by whom the compensation was paid shall be entitled to indemnity from the person so liable to pay damages as aforesaid, and, to the extent of such indemnity, shall be subrogated to the rights of the employee to recover damages therefor.”

This section is substantially the same as Section 6 of the English Workmen’s Compensation Act, 1906, (Ch. 58, 6 Edw. 7), and upon comparison of the two acts it is apparent that the Rhode Island act was patterned closely after the English act.

The English Workmen’s Compensation Act of 1897 (Ch. 37, 60 & 61 Viet.), repealed by the act of 1906, provided that the injured employee might “at his option proceed” either against the third person negligent to recover damages or under the compensation act against his employer for compensation, but not against both. Each of the English acts, supra, provided that the employer should be indemnified by the negligent third person.

In view of the history of this class of legislation in England and the similarity of oür compensation act to the English act, the decisions of the English courts are of great importance in the determination of the question before us.

In the case of Oliver v. Nautilus Steam Shipping Co. 19 Times Law Reports, 607 (1903), it appears that the plaintiff, while in the employ of Rodgers & Co., ship repairers, was injured by reason.of the negligence of an employee of the defendant. The plaintiff notified his employer of the accident and some weeks later the agent of an insurance company, with whom the employer had effected insurance against accidents to workmen in their employ, paid plaintiff £4 13s 4d, being at the rate of £1 a week for four weeks and four days, and the plaintiff signed a receipt therefor stating that the money was received from his employers “on account of compensation which may be or become due to me under the Workmen’s Compensation Act, 1897.” A few days thereafter a member of his trade union cautioned the plaintiff against accepting any further payments without stipulating that he did so without prejudice; accordingly, when the insurance agent next called and tendered the plaintiff £1 as payment for one week to date, the plaintiff informed him that he could only accept that and any further payments “without prejudice” to which the agent assented. The plaintiff then accepted the £1 and signed a receipt as before though .the receipt did not itself contain the words “without prejudice.” Weekly payments of £1 a week continued to be made to him upon receipts as before for more than four months when he refused to accept any further payments and shortly thereafter brought suit against the defendant. The case was tried by a judge without a jury who held that the plaintiff was debarred by the provisions of the Workmen’s Compensation Act of 1897 from pursuing his action against defendant. On appeal the court said that the question in the case was, had the workman received compensation from his employers under the act? That upon the facts the whole of the payments, from first to last, must be treated as having been made “without prejudice,” and that “justice required that in this case the court should hold that the workman had not irrevocably bound himself by what he had done, or exercised his option under the section so as to enable the defendants to say they were not liable to him at common law.” The appeal was allowed and the decision of the lower court was reversed.

In Wright v. Lindsay & others, 49 Scot. L. R. 210 (1911), it appears that the plaintiff was injured in a collision with a motor car which belonged to the defendants, the driver of which was negligent. After the accident the plaintiff claimed and received compensation from his employers under the Workmen’s Compensation Act of 1906 and his employers paid him certain sums as compensaiton, but this was done upon the express understanding that the plaintiff was to sue the party in fault for damages and if he was successful the sums given to him in the meantime by his employers were to be returned. The defendants pleaded that the plaintiff had already received compensation from his employers and that his right to recover against them was barred by Section 6 of the English Act, 1906. On appeal it was held that plaintiff was not barred thereby from bringing his action for damages against the defendants. The court, at page 213, says: “The question is whether the pursuer’s claim against the defenders is excluded. It would certainly be odd if it should be so, seeing that both the parties to the agreement, which is said to operate as a bar, understood and intended that the pursuer, notwithstanding the payments, should be at liberty to proceed against the defenders at common law, and the defenders can show no good ground in equity why they should be absolved from their civil liability to the pursuer. Under the arrangement between the pursuer and his own employers they are secured against being called upon to make any payment to the employers after they have settled the pursuer’s claim as judicially ascertained, . . .” “Unless, therefore, the language of Section 6 admits of no other construction than that put upon it by the sheriff, there seems no good ground in principle or in equity why the pursuer should be barred from recovering damages at common law to which ex hypothesi he is otherwise entitled.”

“The sixth section of the 1906 Act is expressed in different terms from the corresponding section of the earlier Act. The workman is now entitled to take proceedings both against the third party by whose negligence he has been injured and against his own employers under the Act. In this respect it is more favourable than the earlier Act, which gave the workman only an option to proceed either at law against the third party to recover damages or against his employers for compensation under the Act, but not against both. The only limitation now is that he shall not be entitled to recover both damages and compensation. ° The Sheriffs in deciding the case against the pursuer have put a very narrow meaning upon the word 'recover.’ In their view it is enough that the pursuer has, as in question with his employers, accepted payments of money from them as in satisfaction of compensation under the Act. I do not think I should have differed from them if the payments had not been madé and accepted under reservation of the pursuer’s right to proceed against third parties. But where a payment is made by an employer to his workman on the footing that he shall be entitled to recover damages at common law against third parties, and that the sums which the employer has disbursed are to be repaid out of any damages which he may so recover, I think the case is entirely different. The compensation so paid is in the nature of an advance by the employer for the maintenance of the pursuer pending proceedings to make good his claim, and is only accepted as in full of the workman’s right under the Act against his employer in the event of his claim against the third party being unsuccessful. I cannot think that it was ever intended that the Act should make ineffectual an arrangement of this kind, eminently reasonable from the point of view of both workman and employer and in the interests of both. The English case of Oliver (1903), 2 K. B. 639, although decided under the previous Act, is a distinct authority for the contrary proposition.”

(2) The cases cited show the rule to be settled under the English Compensation Act where payments are received from the employer by the employee under a bona fide agreement that the money is to be returned if damages are obtained from the wrongdoer, that the employee is not barred thereby from proceeding against the wrongdoer for damages. The fact of tender and refusal is not of importance, as it is the agreement which is the vital thing. Inasmuch as our Workmen’s Compensation Act was enacted by the legislature in 1912, the year following the decision in the Wright case, supra, the construction placed upon the statute by the English courts, according to the established rules of statutory construction, is entitled to very great weight and in our opinion in view of the similarity of the two acts is of persuasive authority in the decision of this case. But the defendant seeks to avoid the force of these precedents and claims that, as the payments by the employer were made under an agreement filed in court and approved by the court, which agreement is in full force, the approval of the agreement by the court is a formal adjudication of the case by the court and that as a consequence thereof the employee must be held to have made an irrevocable election under the act. The proceedings authorized by our compensation act with reference to the employer’s liability are of-two kinds. First, in the case of an agreement in regard to compensation between the employer and employee, it is provided that a memorandum of the agreement signed by the parties shall be filed in the office of the clerk of the Superior Court. The clerk is directed to docket the same and at once to present the agreement to a justice of the Superior Court for his approval, and when so approved the agreement is made enforceable by any suable process. The details of the agreement which may be made are carefully defined in the statute, and it is expressly provided that such agreement shall be approved by said justice only when its terms conform to the provisions of the act. It is further provided that the Superior Court may review this agreement at any time within two years from the date of approval upon the application of either party and if the condition of the employee has subsequently changed the court in its discretion may increase, diminish or discontinue the compensation.

The agreement also may be modified at any time, by the subsequent agreement between the parties without the intervention of the court, provided that the modified agreement is subsequently approved by the Superior Court. In the second case, where the parties fail to agree as to compensation, it is provided that proceedings may be commenced by the employer, employee or any person in interest by the filing in the Superior Court of a petition in the nature of a petition in equity. The respondent must file an answer within ten days, and after assignment for' hearing on motion day, the court is directed to hear witnesses, decide the merits of the controversy and file a decision in writing with the clerk of the court with provision that a decree shall be entered thereon.

Apparently one'purpose of these provisions in regard to procedure, is to encourage the making of agreements and as far as possible to avoid the necessity of litigation between employer and employee. ' If an employee fails to reach an agreement with his employer the latter may by adversary proceedings, by petition, secure an adjudication of the employee’s claim and by Section 8, Article- III, the court in its discretion may award costs of the suit against the employee. The mere adjudication by the court of the employee’s claim cannot therefore be held in every case to bar the right of the employee to sue the negligent third person. In the case of an agreement the statute does not specify the party by whom the agreement shall be filed but simply provides that it “shall be filed in the office of the clerk of the Superior Court.” If the agreement is filed by the employer, which is the usual case, the approval of the agreement by the court in such a case cannot fairly be considered as an election of remedies by the employee. Inasmuch as the act provides that a claim against the employer shall be barred unless an agreement or petition is filed in court within two years of the date of injury it is apparent that, in some cases at least, in order to fully protect himself the employee may be compelled to file his claim before the question, of the liability of the negligent third person can be finally adjudicated in the court.

In view of these considerations it does not seem to us that the fact that the employee is the moving party in securing the approval of an agreement or the adjudication of the court in the action on petition alters the situation, as by Section 21 the employee is given express authority to take proceedings both against the employer and the negligent third person, that is to secure a legal adjudication of his claim against both parties, and the only limitation to this right to take proceedings is that the employee shall not be entitled to receive both damages and compensation. The employer is given the right of indemnity against the negligent third person with the intention that the final payment for the damage suffered by the employee shall be made not by the employer but by the negligent third person who is responsible for the injury. The effect of the agreement in question is to accomplish this purpose of the statute and to aid the employer in securing the right of indemnity given to him by the statute. It is not the purpose of this statute to lessen or to change the liability of the negligent third person who is fully protected therein from a double liability, and in our opinion it was not the intention of the legislature to restrict the right of the employee to make and act upon such an agreement as the one in question, and we do not think that the mere approval by the court of the agreement, procured by the initiative of either employee or employer, should be construed as a bar to the employee’s right of action against the person responsible for the injury.

„ As already indicated the demurrer to the first replication was properly sustained, and the exception to this ruling is overruled. The • exceptions to the rulings sustaining the demurrers to the other replications are sustained and the case is remitted to the Superior Court for further proceedings.