Updike Advertising System, Inc. v. State Industrial Commission

1955 OK 19, 282 P.2d 759, 1955 Okla. LEXIS 453

• Court: Supreme Court of Oklahoma
• Decided: February 1, 1955
• Docket: 35637
• Status: Published

Opinions

ARNOLD, Justice.

This is an original proceeding brought by Updike Advertising System, Inc., and its insurance carrier to review an award made under the death benefit provisions of the Workmen’s Compensation Law, 85 O. S. 1951 § 1 et seq., to the dependent heirs, consisting of the widow and minor children, of the deceased employee of said advertising company, James M. Updike.

The evidence is not in conflict and is as follows:

Updike Advertising System, Inc., was a family corporation, all of its stock being owned by the deceased, .his mother and two brothers. James M. Updike, deceased, was the president and manager of'said company and assisted in the making, repairing, and inspecting of the outdoor billboards manufactured by said company; on June 15, 1951, deceased, his wife and child, and his mother started an automobile trip in a company-owned car for the purpose of inspecting and repairing billboard signs of the company in both Oklahoma and Iowa; proper tools, paint, and equipment- were carried in the car for the purpose of'making such repairs; near Sapulpa another automobile -struck the automobile which deceased was .driving,'killing him instantly; James M. Updike was listed on the contract of insurance issued by the insurance carrier herein to the corporation providing for coverage on liabilities incurred by said corporation under the Workmen’s Compensation Law and his employment and compensation therefor was used and- considered in determining the amount of premiums charged by said insurance carrier and paid by said respondent corporation.

Claimant herein, the dependent widow of James M. Updike, déceased,'filed an action for wrongful death in the District Court of Creek County on behalf of herself and minor children' against the driver of the other automobile; that action was settled by an agreed judgment for $10,000 and costs and that judgment had been fully satisfied prior to the hearing before the Industrial Commission on claimant’s death benefit claim, though the record does not show how the amount of the judgment was disbursed or the amount of attorney fees paid for prosecution of the claim for wrongful death.

The trial Commissioner on February 26, 1952, entered an order finding that at the time of his death deceased was engaged in a hazardous employment subject to and covered by the Workmen’s Compensation Law; that his death arose out of and in the course of such employment; that claimant and the two minor children were the sole and only dependent heirs of said deceased, and entered an award in their favor in the amount of $13,500. On appeal to the Commission en banc the award was afi&rmed. The employer, Updike Advertising System, Inc., and its insurance carrier, The Hardware Mutual Casualty Company, bring this proceeding for a review of that award.

.[1-5] Petitioners contend that the deceased was not engaged in an employment covered by the Workmen’s Compensation Law at the time of his death because his work was merely executive in nature. An officer in a corporation may serve both as an officer and workman under circumstances making him an employee within the meaning of the Workmen’s Compensation Law and, if he sustains injuries while performing duties in the latter capacity, he is entitled to compensation under said act. Southern Surety Co. v. Childers, 87 Okl. 261, 209 P. 927, 25 A.L.R. 373. The business of an outdoor advertising company in making, altering, or repairing outdoor billboards constitutes the “alteration or repair of structures” within the meaning of the provision of the Compensation Act defining the alteration of “structures” as hazardous. Switzer Advertising Co. v. White, 188 Okl. 567, 111 P.2d 815. An employee who is employed in a hazardous employment and has duties partly clerical and partly manual and mechanical is covered, though his duties for the most part be clerical. Mason Lumber Co. v. Andruss, 188 Okl. 365, 110 P.2d 605; it is the nature of the employment in which the employee is engaged, rather than the specific act which he may be performing at the time of an injury, which determines his right or lack of right to compensation under the Workmen’s Compensation Act. Pawnee Ice Cream Co. v. Price, 164 Okl. 120, 23 P.2d 168; Sheffield Steel Corporation v. Barton, 183 Okl. 624, 84 P.2d 17. The evidence shows that the deceased’s work was partly executive and partly manual and mechanical; that he assisted when needed in the repair and manufacture of billboards; that he often made inspection trips, such as the one he was engaged in at the time of his death, to check on the condition of the billboards of the company and made any such repairs as were needed; that he was carrying proper tools, paint, and other equipment for this purpose in the company car at the time of his death; that the primary reason for the trip was to check on the condition of and make repairs to the company’s billboards. Under the rules above announced the Commission’s finding that at the time of his death deceased was engaged in a hazardous occupation covered by the Workmen’s Compensation Act and that his death resulted from an accidental injury arising out of and in the course of his employment is sustained by competent evidence, and such finding,, being one of fact and amply sustained by the evidence, will not be disturbed by us. Oklahoma Gas & Electric Co. v. Santino,. 158 Okl. 70, 12 P.2d 221.

Petitioners next contend that where a claimant for death benefits has made a recovery against a third party for the wrongful death of the decedent the employer and insurance carrier are entitled to credit for such recovery on the death benefit award; they contend that 85 O.S. 1951 § 44(b), which specifically provides:

“There shall be no subrogation to recover money paid by the employer or his insurance carrier for death claims or death benefits under this Act from third (3d) persons * * *”

is unconstitutional in that it deprives them of their property without due process of law and is violative of Article II, Section 7 (due process) and Article II, Section 23 (private property shall not be taken without compensation) of the Oklahoma Constitution and Section 1 of the 14th Amendment to the Constitution of the United States (the due process clause).

Some basic, pertinent and controlling facts should be kept, in mind.

All employers in businesses falling within the purview or categories of the Workmen’s Compensation Law must carry insurance to pay liabilities thereunder or get permission to carry their own risk. Liability under the act requires only a showing that an accidental event occurred causing a certain loss or decreased earning capacity by reason of such loss to a specific member of the body catalogued in the act. All common-law defenses are taken away from the employer and his insurance carrier and no negligence need be shown. In other words, the employer must insure against loss, and the insurance company who contracts to pay is in the same position as an insurance company insuring the life of an individual or insuring against accidental injury to an individual. There would be no subrogation without statutory provision. Such subrogation was provided by the Legislature in the original Workmen’s Compensation Act as to the only liability provided therein and that was for loss of earning capacity by reason of injury to specific members of the body or permanent total disability. Without this provision no employer and no insurance carrier would have had subrogation. 58 Am.Jur. Sec. 358, page 818; Larson’s Workmen’s Compensation Law, Vol. 2, Sec. 74.11; State ex rel. Industrial Commission v. Pressley, 74 Ariz. 412, 250 P.2d 992 ; 46 C.J.S., Insurance, § 1209; 29 Am. Jur. 1340; Crab Orchard Improvement Co. v. Chesapeake & Ohio Railroad Co., 4 Cir., 115 F.2d 277, certiorari denied 312 U.S. 702, 61 S.Ct. 807, 85 L.Ed. 1135; Maryland Casualty Co. v. Paton, 9 Cir., 194 F.2d 765.

At the time that the Workmen’s Compensation Law was written and until July 4, 1950 (the date of the adoption of the constitutional amendment) the right of recovery for death could not be limited by the Legislature, Article 23, Section 7. The Constitution, as indicated above, was amended so that a death benefit in a specified amount and under the same circumstances and conditions provided in the Workmen’s Compensation Law for recovery for specific injury or disability could be fixed by the Legislature. So the Legislature by House Bill No. 312, Session Laws 1951, 85 O.S.1951 §§ 3.1, 11, 12, 22, 24, 43, 44, 48, 84, 109, 122, provided a death benefit under the Workmen’s Compensation Law of $13,500 on the same showing that specific liability arose under the original act, that is, a showing merely that an accident occurred in an employment covered by the act which produced death and that there were dependent heirs. As in the original act, no negligence need be shown and all common-law defenses are taken away and the act further provides that his remedy or very different cause of action shall be exclusive as far as the employer is concerned. Theretofore the employer could be sued by the same persons (that is, dependent heirs)' for wrongful death .of .an employee' under our statute but, of course, negligence would have to be shown. Now a negligent employer cannot be sued nor recovery had against him except for the amount provided by the Workmen’s Compensation Law as amended and the act specifically, and without ambiguity, provides that there shall be no subrogation. (Subrogation would not have existed without this specific inhibition against it, this being insurance, otherwise; but here there is a specific provision that says subrogation shall not exist on the death benefit.)

The reason the Legislature made the provision is obvious from what has herein-before been said. The employer got a definite benefit when the Legislature took away from the persons who get the death benefit their right to sue the employer for wrongful death caused by the employer’s negligence; so, of course, the provision is not arbitrary and capricious.

It is also obvious, therefore, that there is no constitutional question involved here. The right of the Legislature not .to give the right of subrogation is .unquestionable and its right to provide specifically against it is in no manner arbitrary and capricious. On the other hand, to permit subrogation, and this no doubt is the reason the Legislature did not permit it, would amount to this in at least many cases: a negligent employer, who theretofore was suable in an unlimited amount, would be permitted to recoup the $13,500.

The cases cited by the petitioners are cases that arose under the Workmen’s Compensation Law before the amendment of the Constitution and the passage of the act providing a death benefit and have absolutely no bearing on the question before us and none of them shed any light on the question. The right of subrogation at common law, or under our statute, never existed in any case such as we have here except by specific provision of the Legislature as to specific injuries as set forth, supra, because the insurance required is in the nature of accidental death insurance. The Legislature can take away a common-law right, 12 O.S.1951 § 2; Harrington v. Miles, 11 Kan. 480, 15 Am.Rep. 355, if it exists unless in doing so the act by which the right is taken away can be said to be arbitrary and capricious, which certainly cannot be said here because as pointed out above the employer got a very great advantage when the Legislature fixed on him a liability of only $13,500 for death, which in some cases would be negligent death.

This court has heretofore given a definition of the doctrine of subrogation in State ex rel. Com’rs of Land Office v. Mobley, 208 Okl. 342, 255 P.2d 945, 948, opinion by Welch, J., as follows:

“The doctrine of subrogation is governed and controlled in its operation by principles of equity, rather than by strict legal rules, and one of the conditions of subrogation in all cases, in the absence of specific contract, is that the subrogee discharge the obligation of another for the protection of his own rights.”

citing 50 Am.Jur., Subrogation, 10, and Johnson v. Gillett, 66 Okl. 308, 168 P. 1031. Under this definition the employer could have no subrogation at common law, for by paying the death benefit he does not discharge the obligation of another for the protection of his own rights; he is bound to pay the death benefit regardless of whether the death may have been caused in whole or in part by the wrongful act of another; he is absolutely bound to pay the death benefit when an accidental death of an employee arises out of and in the course of an employment covered by the Workmen’s Compensation Law.

There is no inhibition at common law or otherwise against the recovery of a death benefit on the basis here provided and a recovery for wrongful death. It is not a double recovery because there are two causes of action, based on entirely different grounds.

No one contends here that the death benefit provision is not constitutional. That was decided in Capitol Steel & Iron Co. v. Fuller, 206 Okl. 638, 245 P.2d 1134. The only contention now made is that the provision denying subrogation is unconstitutional because it abrogates the right of action of employers for damages on account of liability imposed upon them by the negligence of third ’ parties and amounts to a taking of their property without due process of law. This contention is not tenable, for as pointed out above, the liability is not imposed upon the employer by reason of the negligence of 'third parties but is -imposed regardless -of negligence of anybody, whether the negligence of the employer himself or a third party, when an employee is killed in an accident arising out of and in the course of an employment covered by the act, and is in- the nature of insurance. The liability imposed, as is true in all Workmen’s Compensation Acts, is for decreased earning capacity or disability arising out of an accident .occurring in an employment specifically classified as hazardous in the act and not damages' for a tort.

No doubt the employers who fall within the purview of the Workmen’s..Compensation Law have paid premiums for accidental death without subrogation; as pointed out above the specific liability for death under the act is exclusive and such employers can no longer be sued under the wrongful death statute, supra. There is no other limitation on the maximum amount that dependent widows, and orphans can receive for the death of their husband and father. Any such limitation except in favor of employers falling within the purview of the Workmen’s Compensation Act would be unconstitutional. So, if subrogation had been provided by the Legislature such provision would have to be declared unconstitutional because in conflict with the provision of the constitution which yet inhibits limitation of recovery for wrongful death.

Award sustained.

JOHNSON, C. J., WILLIAMS, V. C. J., and CORN and BLACKBIRD, JJ., concur. WELCH, DAVISON, HALLEY and JACKSON, JJ., dissent.