Baker & Conrad Inc. v. Chicago Heights Const. Co.

• Decision Date: 02 December 1936
• Docket Number: No. 23500.,23500.
• Citation: 364 Ill. 386,4 N.E.2d 953
• Court: Illinois Supreme Court
• Parties: BAKER & CONRAD, Inc., v. CHICAGO HEIGHTS CONST. CO.

364 Ill. 386

4 N.E.2d 953

BAKER & CONRAD, Inc.,

v.CHICAGO HEIGHTS CONST. CO.

No. 23500.

Supreme Court of Illinois.

Oct, 14, 1936.

As Modified on Denial of Rehearing Dec. 2, 1936.

Appeal from Third Branch Appellate Court, First District, on Appeal from Superior Court, Cook Country; Peter H. Schwaba Judge.

Action in trespass on the case by Baker & Conrad, Inc., against the Chicago Heights Construction Company. The judgment of the superior court was affirmed by the Appellate Court (Baker & Conrad, Inc., for Use of New Amsterdam Casualty Co. v. Chicago Heights Construction Co., 282 Ill.App. 459), and the plaintiff on leave granted appeals.

Judgments of the superior court and the Appellate Court reversed, and the cause remanded to the superior court with directions.McKenna, Harris & Schneider, of Chicago (Abraham W. Brussell, of Chicago, of counsel), for appellant.

Kirkland, Fleming, Green, Martin & Ellis, of Chicago (David Jacker, John M. O'Connor, Jr., and William H. Symmes, all of Chicago, of counsel), for appellee.

HERRICK, Chief Justice.

The Chicago Heights Construction Company (hereinafter called construction company) on or about January 1, 1929, by contract with Montgomery Ward & Co., undertook to remodel and reconstruct a certain building in Chicago Heights, Ill. Prior to March 12, 1929, Baker & Conrad, Inc. (hereinafter called Baker & Conrad), made a contract with the construction company to do certain of the excavating work undertaken by it on the premises under its contract with Montgomery Ward & Co. Subsequent to the making of the contract between the construction company and Baker & Conrad, John Cordes made a contract with Baker & Conrad to move the excavated material from the premises. Luther Storey was employed by Cordes to supervise a certain portion of such work. On March 12, 1929, while working on the premises, Storey received injuries arising out of and in the course of his employment which caused his death. He left a widow as his sole dependent. The construction company, Baker & Conrad, and Cordes severally came automatically under the provisions of the Workmen's Compensation Act, each being engaged in a business at the time of the injury and death of Storey declared to be extrahazardous under the provisions of subsections 1 and 2 of section 3 thereof. Smith-Hurd Ill.Stats. c. 48, § 139, subds. 1, 2; Ill.Rev.Stat.1935, c. 48, p. 1590, par, 202, subds. 1, 2. Cordes did not carry insurance. The widow of Storey filed a claim with the Industrial Commission against Baker & Conrad for compensation under the provisions of section 31 of the Workmen's Compensation Act (Smith-Hurd Ill.Stats. c. 48, § 168; Cahill's Rev.Stat.1933, p. 1393, c. 48, par. 231). She was allowed an award. The New Amsterdam Casualty Company (hereinafter called the casualty company) was the insurance carrier of Baker & Conrad and paid so much of the award as had accrued at the time of the commencement of this suit. On May 22, 1930, an action in trespass on the case was brought in the superior court of Cook county in the name of Baker & Conrad, for the use of the casualty company, against the defendant construction company to recover as damages the compensation paid by the casualty company because of the award made by the Industrial Commission against Baker & Conrad.

The declaration is quite voluminous, consisting of three counts. These counts charged in apt language the foregoing facts which preceded the commencement of the suit; also averred the portion of the award theretofore paid by the casualty company, its liability to pay the remainder not yet accrued, and that Baker & Conrad, as the subcontractors, were liable under the provisions of section 31 of the compensation act. The declaration further charged the death of Storey was not caused by the negligence of Cordes nor any of his employees, but averred certain acts of negligence on the part of the construction company and its employees in that behalf by which Storey sustained the injuries which occasioned his death. It alleged that by the provisions of section 29 (Smith-Hurd Ill.Stats. c. 48, § 166; Cahill's Rev.Stat.1933, c. 48, pp. 1392, 1393, par. 229), and from the facts charged by the declaration, there was a liability for damages against the person causing the injury, and Baker & Conrad was subrogated to the right of the personal representative of Storey to recover against the construction company, it being the person whose negligence brought about the injury which resulted in Storey's death. It was further alleged that under the provisions of the policy of insurance issued by the casualty company to Baker & Conrad, and under the provisions of section 29, the casualty company became the subrogee of the right of action which Baker & Conrad had by virtue of section 29. The provisions of section 18 of the Practice Act (Smith-Hurd Ill.Stats. c. 110, Appendix, § 18) were invoked and compliance therewith alleged.

The defendant filed a plea of not guilty. After the trial had commenced, by leave of the court the plea was withdrawn had the defendant demurred ore tenus. The demurrer was sustained. Plaintiff abided its declaration. Judgment in bar and for costs followed. That judgment was affirmed by the Appellate Court. Baker and Conrad, Inc., v. Chicago Heights Construction Co., 282 Ill.App. 459. The cause comes here on leave to appeal granted by this court.

The plaintiff claims the declaration states a cause of action under two theories: (1) Under the provisions of sections 29 and 30 of the compensation act by virtue of the facts charged by the declaration and admitted by the demurrer; and (2) independent of the provisions of the compensation statute, that under the law of this state as it existed on March 12, 1929, an insurer which has paid its insured for loss suffered by the insured occasioned by the negligence of a third party is subrogated to the rights of its insured against the negligent third party. In the view we take of the cause it will be necessary to dispose only of the first proposition advanced by the plaintiff.

In considering the proceeding, we hold that the demurrer ore tenus amounted to a general demurrer, only. A general demurrer challenges only matters of substance. It does not reach matters of form. Massachusetts Mutual Life Ins. Co. v. Kellogg, 82 Ill. 614. Matters of form may be questioned only by special demurrer specifically designating the defects. People v. Holden, 91 Ill. 446.

The decision of the case requires a construction of sections 29 and 31 of the compensation act in order to arrive at the legislative intent. Those sections are:

‘Sec. 29. Where an injury or death for which compensation is payable by the employer under this act was not proximately caused by the negligence of the employer or his employees, and was caused under circumstances creating a legal liability for damages in some person other than the employer to pay damages, such other person having also elected to be bound by this act, or being bound thereby under section three (3) of this act, then the right of the employe or personal representative to recover against such other person shall be subrogated to his employer and such employer may bring legal proceedings against such other person to recover the damages sustained, in an amount not exceeding the aggregate amount of compensation payable under this act, by reason of the injury or death of such employe. Where the injury or death for which compensation is payable under this act was not proximately caused by the negligence of the employer or his employes and was caused under circumstances creating a legal liability for damages on the part of some person other than the employer to pay damages, such other person having elected not to be bound by this act, then legal proceedings may be taken against such other person to recover damages notwithstanding such employer's payment of, or liability to pay compensation under this act, but in such case if the action against such other person is brought by the injured employee or his personal representative and judgment is obtained and paid, or settlement is made with such other person, either with or without suit, then from the amount received by such employe or personal representative there shall be paid to the employer the amount of compensation paid or to be paid by him to such employe or personal representative: Provided, that if the injured employe or his personal representative shall agree to receive compensation from the employer or to institute proceedings to recover the same or accept from the employer any payment on account of such compensation, such employer shall besubrogated to all the rights of such employe, or personal representative and may maintain, or in case an action has already been instituted, may continue an action either in the name of the employe, or personal representative or in his own name against such other person for a recovery of damages to which but for this section the said employe or personal representative would be entitled, but such employer shall nevertheless pay over to the injured employe or personal representative all sums collected from such other person by judgment or otherwise in excess of the amount of such compensation paid or to be paid under this act and all costs, attorneys' fees and reasonable expenses incurred by such employer in making such collection and enforcing such liability.’

‘Sec. 31. Any one engaging in any business or enterprise referred to in subsections 1 and 2 of section 3 of this Act who undertakes to do any work enumerated therein, shall be liable to pay compensation to his own immediate employees in accordance with the provisions of this Act, and in addition thereto if he directly or indirectly engages any contractor whether principal or sub-contractor to do any such work, he shall be liable to pay compensation to the employees of any such contractor or sub-contractor unless such contractor or...