Associated Indemnity Corporation v. Scott

• Decision Date: 14 April 1939
• Docket Number: No. 8945.,8945.
• Citation: 103 F.2d 203
• Parties: ASSOCIATED INDEMNITY CORPORATION v. SCOTT.
• Court: U.S. Court of Appeals — Fifth Circuit

103 F.2d 203 (1939)

ASSOCIATED INDEMNITY CORPORATION v. SCOTT.

No. 8945.

Circuit Court of Appeals, Fifth Circuit.

January 6, 1939.

On Rehearing April 14, 1939.

Sam Holliday, of Houston, Tex., for appellant.

Major T. Bell, of Beaumont, Tex., for appellee.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit was under the extra-territorial¹ provision of the Texas Workmen's Compensation Act, for disability and medical benefits. The claim was that, though injured in Louisiana, plaintiff was within the Texas Compensation statute, "an employee, who has been hired in this State."

The defenses were a general denial and special defenses; (1) that plaintiff was not injured under a contract of hire made in Texas, but under one made in Louisiana;² (2) that plaintiff had a remedy under Louisiana law to collect compensation from the Traders & General Insurance Company, the insurance carrier as to injuries in Louisiana; that he did receive payments from the Traders & General Insurance Company, and within the meaning of the Texas statute, he did thereby elect to pursue his remedy, and did recover, in Louisiana.

At the trial it was proven that plaintiff received his injury while working on an oil well at Ringgold, Louisiana, as an employee of H. J. DeArman, doing business under the name of H. J. DeArman Drilling Contractor, with his office in Houston, Texas. All of DeArman's prior drilling operations had been in Texas, and the job at Ringgold, on which plaintiff was hurt, was the only job DeArman had in Louisiana. He did not establish an office in that State for paying the men, or for doing any other character of business there. He did, however, have two policies of workmen's compensation insurance, one insuring his employees and work in Texas, with the Associated Indemnity Corporation, the other insuring employees and work done in Louisiana, with Traders & General Insurance Company. Both of these companies are Texas corporations, both have offices in Texas, the insurance in both companies was written in Texas. It was proven, too, that, as to the employment and services of his men, DeArman's method of conducting business was that each of them, except the drill pusher, were employed from job to job and from day to day, and when a particular job was finished, the payrolls would be closed, and the men would be off the payroll until another job was commenced, and they began work on it. Though, however, employees were not carried on the payroll between jobs, it was customary, if he was satisfied with the men on the job, for the tool pusher to speak to them while still at work about reporting to the next job for work, there, when it began. In such event, however, their employment, service, and pay would start not from the time of this arrangement, but from the time of their actually beginning work on the new job.

As to the plaintiff, it was shown that he had worked for DeArman for ten days on a drilling rig at Corpus Christi, Texas. That while at that job, and before August 10, when the well at Corpus Christi was abandoned, the foreman told him and other members of the crew that there would be another job for them at Ringgold, Louisiana, if they wanted it and asked them if they would like to work on it. Plaintiff and others agreed, and arrangements were made to notify plaintiff from Houston when the work would begin, and he was notified. Upon receipt of the notice he reported to Ringgold for work, and on August 14 was placed upon the payroll and went to work there. Between the shutting down of the Corpus Christi job and his reporting for the Ringgold job, he was not in the employ of the company, or upon its payroll. His reporting there had, however, been arranged for in Texas, and upon reporting he was placed at work. After working there for approximately forty days, he was on September 24, injured severely. Carried unconscious to a hospital in Shreveport, he remained there until March 9.

While he was in the hospital he received eighteen weekly checks of $20 from Traders & General Insurance Company, the Louisiana insurance carrier. It is appellant's claim that the receipt of these checks constituted an election and recovery under the Louisiana law, barring suits for compensation under the Texas law; appellee insists that there was neither election nor recovery, but merely weekly payments voluntarily made by the Traders & General, and received by plaintiff under the mistaken belief that these payments were being made under the Texas Compensation Law. These are the facts on the issue of election.

On September 28, DeArman's office in Houston filed notice with the Industrial Accident Board of the State of Texas, reporting plaintiff's injury, and advising that Traders & General Insurance Company had the Texas coverage. Though he later corrected this advice to the Board, he never advised plaintiff, or his brother and sister, who were acting for him, that the first report was a mistaken one.

On October 16, without any investigation by it, or any claim from or agreement with plaintiff, Traders & General mailed to DeArman, in Houston, a check for $20, drawn upon Traders & General Insurance Company at Dallas. This was sent to plaintiff, who forwarded it to his brother for deposit in the Bank at Sour Lake, where his brother worked, as he did the other weekly checks sent him thereafter. There was nothing in the check or in the correspondence to show that the check was sent under the Louisiana law.

On October 16 Traders & General wrote a letter about the medical bill, with copy to plaintiff in the hospital, in which it was stated that the company elected to be bound by the Louisiana law. On October 20 plaintiff's brother wrote him that he was entitled to $20 per week under the Texas law, and only $18 under the Louisiana law, and that they had better claim under Texas law. On October 22 plaintiff's brother wrote the Traders & General that he would not accept their statement that they would be governed by the law of Louisiana, but notwithstanding this letter, Traders & General continued until January 20, 1937, to send each week a check for $20.

In the meantime, plaintiff's sister filed claim for him under the Texas law, with the Texas Industrial Accident Board, and that Board duly notified defendant the Texas carrier, and in due course, and upon due notice, set the claim before it for hearing.

There is no testimony whatever that plaintiff knew that in taking the payments from Traders & General he was electing under the Louisiana law, or that he intended to do so. Everything in the case shows that he thought he was claiming and was receiving payments under the Texas Compensation law.

Plaintiff testified that he received the payments from that company, thinking it was the Texas carrier, that he never had any intention of claiming except under the Texas Compensation Act, and that he received such payments as he did receive under the belief that they were under that Act.

All of the correspondence and all of the testimony of plaintiff and his relatives is to the same effect, so that on the issue of election and recovery under the Texas statute the question on the record comes down to this; whether the receipt and retention of the payments without returning them to the Traders & General, was an election.

There was an issue too, on conflicting evidence, as to whether plaintiff's injuries were not confined to, and his compensation should not be limited to, that provided for, the loss of a particular member.

At the conclusion of all the evidence defendant filed a motion for a directed verdict, setting out as grounds for it —

(a) That there is no substantial evidence that L. A. Scott was employed in Texas, for the job in Louisiana on which he was injured.

(b) The evidence is undisputed that L. A. Scott received some compensation for his injuries received in Louisiana, from Traders & General Insurance Company, the insurance carrier of H. J. DeArman on the latter's Louisiana operations and that L. A. Scott elected to pursue his remedies in Louisiana and under Louisiana law.

The motion was made without prejudice to the right to have submitted to the jury issues (1) as to whether plaintiff was employed in Texas for the job at Ringgold, Louisiana, where he was injured, (2) in various forms, whether he elected to pursue his remedy under the Louisiana law, and (3) as to whether his injuries were confined solely to his right arm and hand, and defendant, after its overruling requested this charge:

"If you find that after the completion of the job at Corpus Christi L. A. Scott was discharged as an employee of H. J. DeArman before going to Ringgold, Louisiana, and that there was no new contract of employment made in Texas, whereby he was employed for the job at Ringgold, Louisiana, you will return your verdict in favor of Associated Indemnity Corporation."

In addition it requested a number of special charges on the issue of election, an instruction that plaintiff could not recover for anything more than the loss of his arm and hand, and an instruction that if the jury found that his injury was only to his arm and hand, his recovery should be limited to the compensation provided for such specific members.

The court refused these requests, and allowed exceptions to them; but in his general charge, submitted to the jury fairly enough, if the evidence raised the issues: (1) whether plaintiff was employed in Texas for the work in Louisiana; (2) whether defendant had shown that plaintiff had elected his remedy in Louisiana and recovered under it within the meaning of the statute; (3) whether plaintiff's injuries were confined to the loss of his arm and hand, or he was otherwise injured so as to be totally incapacitated. There was a verdict and judgment for plaintiff for total, permanent incapacity.

Defendant has appealed, assigning error on the refusal, of its request for a directed verdict, and of its...