American Mut. Liability Ins. Co. of Boston v. State Highway Commission

• Decision Date: 10 July 1937
• Docket Number: 33318.
• Citation: 146 Kan. 239,69 P.2d 1091
• Parties: AMERICAN MUT. LIABILITY INS. CO. OF BOSTON v. STATE HIGHWAY COMMISSION.
• Court: Kansas Supreme Court

69 P.2d 1091

146 Kan. 239

AMERICAN MUT. LIABILITY INS. CO. OF BOSTON v. STATE HIGHWAY COMMISSION.

No. 33318.

Supreme Court of Kansas

July 10, 1937

Syllabus by the Court.

Prior to 1935 amendment, the Workmen's Compensation Act had no application to state highway commission, and subrogation provisions of such act furnished no basis for recovery from state highway commission by insurance carrier of amount of compensation paid by it for injuries sustained by an employee because of defect in state highway (Laws 1935, c. 202; Gen.St. 1935, 44-504, 44-505, 44-532).

The state, being regarded as sovereign, cannot be sued in its own courts by persons or private corporations without its consent.

Permission to sue state may be granted with respect to certain causes of action and with respect to certain claimants only.

As respects right to maintain action, an action against state highway commission for damages resulting from defect in state highway is an action against state (Gen. St.1935, 68-404 et seq., 68-419, 74-2001).

A suit by an insurance carrier against state highway commission to recover amount of compensation paid by it for injuries sustained by an employee because of defect in state highway being a suit against state, could not be maintained where statute authorizing suits against highway commission did not explicitly authorize such a suit (Gen.St.1935, 68-419).

A legislative act granting certain persons privilege of suing state on certain causes of action should not be enlarged by judicial interpretation to permit suits by other persons on other causes of action.

1. An action for damages, permitted by G.S.1935, 68-419, to be brought against the State Highway Commission is an action against the state.

2. The state, being regarded as a sovereign, cannot be sued in its own courts by persons or private corporations without its consent. An act of the Legislature granting to certain persons the privilege of suing the state on certain causes of action should not be enlarged by judicial interpretation to permit suits against the state by other persons, or on other causes of action.

3. Our statutes (G.S.1935, 44-504), in so far as it provides for the assignment of an employee's claim to his employer, and (G.S. 1935, 44-532), in so far as it provides subrogation to the employer's insurer, being parts of our Workmen's Compensation Act (G.S.1935, 44-501 to 44-565), which by its terms applies only to employment in the course of an employer's trade or business (G.S.1935, 44-505), cannot be read together with our statute (G.S.1935, 68-419), which permits certain persons to bring actions against the state upon certain causes of action, so as to enable the insurance carrier of an employer, whose employee sustained damage by reason of a defect in a state highway, to maintain an action against the state for the amount it has paid the employer under its insurance contract.

Appeal from District Court, Jewell County; W. R. Mitchell, Judge.

Action by the American Mutual Liability Insurance Company of Boston against the State Highway Commission of the State of Kansas. From an order sustaining defendant's demurrer to the petition, plaintiff appeals.

Charles L. Hunt and Frank C. Baldwin, both of Concordia, for appellant.

Lester M. Goodell, Asst. Atty. Gen., and Wint Smith and Otho W Lomax, both of Topeka, for appellee.

HARVEY Justice.

This was an appeal from an order sustaining defendant's demurrer to plaintiff's petition. Briefly stated, and omitting details, the petition alleged that in April, 1934 one Glenn Calder was in the employ of the Concordia Creamery Company as a truck driver; that both were operating under the Workmen's Compensation Act; that plaintiff was the employer's insurance carrier; that on a date named Calder, while driving a truck for his employer on a state highway, and without contributing negligence on his part, started to drive across a certain bridge, which was a part of the highway, when the bridge gave way, precipitating him and the truck to the bottom of the creek bed; that the bridge was defective in described respects, which defects were known by the highway commission officials more than five days prior thereto; that as a result Calder sustained certain personal injuries; that he gave written notice thereof to the director of the State Highway Commission in the form and within the time provided by statute (G.S.1935, 68-419); that Calder did not pursue his remedy against the State Highway Commission, but elected to take compensation from his employer, as he was authorized to do by statute (G.S.1935, 44-504); that Calder duly made his claim for compensation to the compensation commissioner; that such compensation was allowed after a hearing, and that plaintiff, as the insurance carrier, paid the compensation, which, with medical attention and expenses incident to the hearing, aggregated $1,506.22, for which sum, with interest from a date named, plaintiff prayed judgment.

As a basis for its authority to maintain this action plaintiff cites one section of our statutes relating to state highways (G.S. 1935, 68-419) and two sections of our Workmen's Compensation Act (G.S.1935, 44-504, 44-532). The pertinent portions of these sections read as follows:

"Any person who shall without contributing negligence on his part sustain damage by reason of any defective bridge *** may recover such damages from the state of Kansas; that is to say, such recovery may be from the state when the director of highways," or other named officials, "shall have had notice of such defects five days prior to the time when such damage was sustained, and for any damage so sustained the injured party may sue the state highway commission, *** Provided, That no such action shall be maintained unless within ninety days after the sustaining of such damage, written notice, stating the date, when, and place where such damage was sustained, the name and correct postoffice address of the person sustaining such damage, and the character of the damage sustained, shall be served upon the director of highways." G.S. 1935, 68-419.

"When the injury or death for which compensation is payable under this act was caused under circumstances creating a legal liability against some person other than the employer to pay damage, the injured workman or his personal representative shall within ninety (90) days of the date of receiving said injury elect whether to take compensation under this act or to pursue his remedy against such other person. Such election must be in writing and must be delivered to the employer in person or by registered mail, and the acceptance of compensation by an injured workman shall be construed as a positive election to accept compensation under this section. Failure on the part of the injured employee or his personal representative to file a written election with the employer within ninety (90) days that he will pursue his remedy against the negligent third party shall operate as an election to accept compensation and as an assignment of any cause of action in tort which the employee or his personal representative may have against any other party for such injury or death, and such employer may enforce in his own name, or the name of the workman, the liability of such other party for their benefit as their interests may appear." G. S.1935, 44-504.

"Where the payment of compensation of the workman, or his dependents, is insured, by a policy or policies, at the expense of the employer, the insurer shall be subrogated to the rights and duties under this act of the employer so far as appropriate." G.S.1935, 44-532.

Upon behalf of appellant it was argued that the petition states facts sufficient to constitute a cause of action; that under the facts alleged Calder had a cause of action against the state, with authority to sue the State Highway Commission; that he elected to take compensation, and that his employer, the Concordia Creamery Company, by paying him compensation, or causing it to be paid, became the assignee of Calder's claim against the state, which claim it could pursue by an action against the State Highway Commission, brought either in the name of Calder or in its own name, and that the plaintiff, being the insurer of the Concordia Creamery Company under a policy of insurance, and having paid the compensation and expenses awarded against the Concordia Creamery Company, and incurred by it, was subrogated to the rights of the Concordia Creamery Company; that this subrogation carried with it the assignment of Calder's claim against the State Highway Commission and the right to sue in its own name, or the name of Calder, for the damages it had sustained, namely, the compensation and expenses it had paid as a result of Calder's injury.

Supporting this argument appellant cites Maryland Casualty Co. v. Ladd, 121 Kan. 659, 249 P. 687. There an employee of Ammerman, who operated under the Workmen's Compensation Act, was injured by an automobile negligently operated by one Ladd. The Maryland Casualty Company was Ammerman's insurance carrier and was obliged to pay the compensation awarded the employee. It thereafter brought suit against Ladd to recover the amount paid. It was held the plaintiff had a right to recover except for the fact that he had brought the action too late, the statute of limitations having run, a feature not present here. Since the accident which gave rise to that case the statute there considered (R.S. 44-504) was amended (Chapter 232, Laws 1927) and appears now as G.S. 1935, 44-504. We deem it unnecessary to consider whether this amendment requires any different construction in so far as the case before us is concerned.

Plaintiff in its petition also pleaded it was subrogated to the...