Rich Hill Coal Co. v. Bashore

Citation7 A.2d 302,334 Pa. 449
Decision Date27 March 1939
Docket Number1627
PartiesRich Hill Coal Company et al. v. Bashore; Monarch Anthracite Mining Company et al. v. Bashore
CourtUnited States State Supreme Court of Pennsylvania

[Copyrighted Material Omitted]

Argued January 12, 1939.

Bill in equity. Original jurisdiction, May T., 1939, Nos. 34 and 35, special certiorari to C.P. Dauphin Co., Nos. 1357 and 1414, in cases of Rich Hill Coal Company et al. v. Ralph M Bashore, Secretary of Labor & Industry, and Monarch Anthracite Mining Company et al. v. Same. Record remitted.

Wm. A Schnader, of Schnader & Lewis, with him Joseph S. Lord, III, and J. Hayden Oliver, for plaintiffs and intervening plaintiffs.

Guy K. Bard, Attorney General, and E. Russell Shockley, Deputy Attorney General, with them Oliver C. Cohen, Deputy Attorney General, and William H. Wood, Special Deputy Attorney General, for defendant.

M. Herbert Syme and Benj. R. Simons, of Syme & Simons, for Pennsylvania Federation of Labor, filed a brief under Rule 61.

Oliver K. Eaton, Roger J. Dever and Isadore Katz, for United Mine Workers of America et al., intervenors.

Before KEPHART, C.J., SCHAFFER, MAXEY, DREW, LINN, STERN and BARNES, JJ.

OPINION

MR. MAXEY JUSTICE:

This case comes to us on a bill in equity, later amended, filed by certain coal companies to restrain the Secretary of Labor and Industry from enforcing the Workmen's Compensation Acts of 1937 and 1938. These acts are: 1, the Act (No. 323) of June 4, 1937, P.L. 1552; 2, the Act (No. 552) of July 2, 1937, P.L. 2714, called the "Occupational Disease Compensation Act"; and 3, Act No. 20 of the Special Session of 1938, approved September 29, 1938, P.L. 52. "1" is an "amendment" to the Workmen's Compensation Act of 1915, P.L. 736. "2" is a "supplement" to the Act of 1915. "3" amends Article II of the Act of 1915 "by adding a new section 201.1 thereto and imposing the presumption of negligence upon employers; providing for admission of certain evidence; and providing for double damage under certain circumstances." These acts are alleged to be unconstitutional. A motion was made for a preliminary injunction; a rule to show cause was granted; and testimony was later taken, showing, inter alia, the workmen's compensation insurance rates under the Act of 1915 and by comparison under the acts challenged. These new rates, as fixed by the Pennsylvania Compensation Rating and Inspection Bureau, represent an increase of 62 1/2 per cent over the rates under the old act. This would mean to one of the plaintiffs, the Morrisdale Company, a cost of 11 1/2 cents per ton of coal mined. It was also testified that the plaintiff just named considered rejecting the compensation system imposed by Act No. 323, but it was advised by insurance brokers that no insurance carrier in Pennsylvania would insure it against the liability in actions at law under the provisions of section 201, Article II of Act No. 323, which strips employers rejecting the compensation law of the following defenses: (1) the negligence of a fellow employee, (2) assumption of risk, (3) contributory negligence. (It should be noted in this connection that the hereinafter discussed Act No. 20, passed by the legislature after being called in special session, approved September 29, 1938, amending the Act of 1915, as reenacted and amended by the Act of June 4, 1937, P.L. 1552, No. 323, provides, inter alia, that "when injury results to an employee in the course of his employment it shall be presumed that the employer's negligence caused said injury, which presumption may be rebutted by the employer.") The other plaintiff, Rich Hill Coal Company, offered evidence that as to it the insurance rates under the new law represent about the same increase as the other plaintiff showed. The President of Rich Hill Coal Company testified as follows: "A. It is impossible for us to carry our own insurance, we are not large enough, the expense would be too great, we cannot reinsure, we will have to carry our own rate below $10,000 or up to $10,000 and it is just putting the small operator out of business. Q. In other words, from a business standpoint you could not possibly afford to take the risk involved in rejecting the Act and carrying your own risk up to $10,000 per accident, is that correct? A. We couldn't do it, one major accident would put us out of business. Q. Do I understand from that that you cannot get insurance for the first $10,000 of your liability? A. No, sir; we cannot."

Upon the conclusion of the testimony, the court heard arguments upon the constitutional questions raised by the bill. On December 29, 1937, the defendant filed preliminary objections to the bill. The next day a preliminary injunction was granted. On December 31, 1937, 43 anthracite coal mining companies presented to the court a petition asking leave to intervene as parties plaintiff. The petitioners, all of whom are taxpayers, averred that, though they had all elected to pay compensation under Article III of the Workmen's Compensation Act of 1915, they had "been compelled as a matter of economic necessity to reject the system imposed by Acts Nos. 323 and 552." On December 31, 1937, leave to intervene was granted and the enforcement of Acts Nos. 323 and 552 was restrained against these intervening plaintiffs upon their posting required bonds. On January 3, 1938, the Attorney General and the attorney for plaintiffs, respectively, filed the following stipulation: "The testimony adduced in support of the rule to show cause represents all the testimony the plaintiffs have to offer, and for the purpose of this case, shall be considered as if taken on final hearing of the bill of complaint. The defendant has no testimony to offer for the purposes of this case."

On the same day, the Attorney General presented to the Supreme Court the stipulation just quoted and also a petition averring that the only question between the parties was the constitutionality of Acts Nos. 323 and 552 and praying the court to bring the record before it on special certiorari so that the case might be decided finally at an early moment. Counsel for plaintiffs then notified this court that counsel for the intervening anthracite operators desired to present certain additional facts to the court in support of their contention that Acts Nos. 323 and 552 were unconstitutional. The Attorney General declared that these facts would be stipulated by agreement. The defendant later asserted that the facts could not be stipulated. Thereupon, on May 12, 1938, certain of the intervening plaintiffs, to wit: Monarch Anthracite Mining Company, The Kingston Coal Company, Glen Alden Coal Company, The Lehigh Valley Coal Company and The Hudson Coal Company, filed a separate bill in equity in the Court of Common Pleas of Dauphin County setting up certain facts, inter alia, as follows: "The total number of persons employed in the anthracite industry in Pennsylvania is approximately 100,000. Between 1926 and 1935, the working capital of the anthracite industry shrank from $111,097,223 to $8,860,217. During the years 1932, 1933, 1934 and 1935, the industry suffered losses, respectively, of $10,507,779, $8,572,586, $1,664,142 and $10,235,977. In 1934, the total amount of workmen's compensation liability incurred by anthracite operators in Pennsylvania was $2,600,000. The anthracite industry was also conducted at a loss in 1937, and the workmen's compensation liability for 1936 and 1937 was approximately the same as in 1934. The cost of workmen's compensation to the anthracite operators of Pennsylvania would be increased by more than 100 per cent over the cost of workmen's compensation under the Act of 1915, solely by reason of the increased schedules of compensation. The features of Act No. 323 other than its schedules would increase the costs of compensation by an additional 20 per cent. In many cases of total permanent disability and death from accident, Act No. 323 would increase the compensation benefits by approximately 200 per cent. The estimated compensation liability of anthracite operators under Act No. 552 during the first year of its operation would be $8,640,000. This amount would be increased by $2,500,000 during each of the three successive years so that in the fourth year of the operation of the act the total compensation liability of anthracite operators under Act No. 552 would be $16,200,000. Under the provisions of the Workmen's Compensation Act of 1915, the plaintiffs were exempted from the requirement that insurance be carried against their liabilities under Article III. Prior to January 1, 1938, anthracite operators who applied for an exemption from the duty of insuring against liability under Article III were required by the defendant to deposit with him securities of the value of many millions of dollars in order to obtain such exemption. They were also required to carry excess insurance against such liability. If the anthracite operators were to accept the provisions of Acts Nos. 323 and 552, they would be required to deposit additional securities in the amount of millions of dollars in order to obtain an exemption from the duty of carrying insurance against workmen's compensation liability, and they would also be required to carry additional and greater amounts of excess insurance." The defendant later filed preliminary objections to the bill of the five anthracite coal companies above named.

Claiming that defendant failed to comply with Equity Rule No. 49 by neither placing the case upon the argument list for hearing nor filing an answer on the merits, plaintiffs, on July 25 1938, filed as appears from the docket entry a "suggestion for judgment pro confesso in favor of plaintiffs against defendant for failure to file an answer as provided by Equity Rule No....

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4 cases
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    • United States
    • United States State Supreme Court of Pennsylvania
    • March 24, 1952
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    • United States State Supreme Court of Pennsylvania
    • March 24, 1952
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    • Commonwealth Court of Pennsylvania
    • May 11, 1961
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  • Pinzhoffer v. Franzen
    • United States
    • Commonwealth Court of Pennsylvania
    • January 6, 1943
    ...... conclusions of the referee and the compensation board:. Hill v. Thomas S. Gassner Co. et al., 124 Pa.Super. 217; Paulin v. Williams & ... policy, the Supreme Court rendered its decision in the case. of Rich Hill Coal Co. et al. v. Bashore, 334 Pa. 449. (1939), declaring certain ......

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