Bordson v. N. Dakota Workmen's Comp. Bureau

• Decision Date: 26 January 1923
• Parties: BORDSON v. NORTH DAKOTA WORKMEN'S COMPENSATION BUREAU.
• Court: North Dakota Supreme Court

49 N.D. 534

191 N.W. 839

BORDSON

v.NORTH DAKOTA WORKMEN'S COMPENSATION BUREAU.

Supreme Court of North Dakota.

Dec. 30, 1922.

Rehearing Denied Jan. 26, 1923.

Syllabus by the Court.

The primary object of all insurance contracts is to afford indemnity, and forfeiture provisions will be construed, if possible, so as to avoid forfeiture and afford indemnity. This rule is applicable to obligations created by the North Dakota Workmen's Compensation Act as regards claims for injury or death.

For reasons stated in the opinion it is held, that the plaintiff has established a valid claim against the workmen's compensation fund.

Appeal from District Court, Ramsey County; Buttz, Judge.

Proceedings under the Workmen's Compensation Act by Dora Bordson for the death of her husband, opposed by the St. Anthony & Dakota Elevator Company, employer. From an order of the Compensation Bureau denying an award, petitioner appeals. Reversed and remanded.H. A. Libby, of Grand Forks, for appellant.

S. W. Thompson, of Devils Lake, and Philip Elliott and L. J. Wehe, both of Bismarck, for respondent.

CHRISTIANSON, J.

On September 9, 1920, plaintiff's husband, J. W. Bordson, was accidentally killed at Hampden, N. D. At the time of his death he was in the employ of the St. Anthony & Dakota Elevator Company, and he was killed while engaged in the performance of his work. The plaintiff duly presented a claim to the Workmen's Compensation Bureau. The claim was rejected on the ground that, at the time the accident occurred, viz. on September 9, 1920, “the employer (the St. Anthony & Dakota Elevator Company) was not insured, the insurance having been duly cancelled prior to” that date. Plaintiff thereupon appealed to the district court from the decision of the Bureau. The district rendered judgment in favor of the Bureau, and plaintiff has appealed to this court.

Most of the facts in the case were stipulated upon the trial. It is admitted that the deceased, at the time of his death, was engaged in an occupation covered by the provisions of the Workmen's Compensation Act. It is also admitted that the deceased was covered by insurance in the Workmen' Compensation Bureau, from July 1, 1919, up to September 4, 1920. But, it is contended by the defendant Bureau, that the insurance covering the employees of the St. Anthony & Dakota Elevator Company, was canceled on that date, and was not reinstated until September 13, 1920, and that, in the period intervening these two dates, there was no insurance covering the deceased, or any of the employees of the St. Anthony & Dakota Elevator Company.

The Workmen's Compensation Act was enacted by the Legislative Assembly in 1919 (Laws 1919, c. 162). It became operative so as to afford insurance protection July 1, 1919. The St. Anthony & Dakota Elevator Company operates a number of grain elevators in this state, wherein it employs a number of employees. Some time prior to July 1, 1919, the elevator company duly prepared and caused to be filed with the Bureau pay roll reports, it also paid the Bureau an advance premium upon an estimated pay roll, for the yearly period commencing July 1, 1919, and ending June 30, 1920, as based upon the rates adopted and published by the Bureau. The Bureau adopted certain rules to become effective July 1, 1920, among which were the following:

“Remittance of the premium of each and every employer should be in the hands of the Bureau not later than ten days after the date which appears on the settlement sheet statement.”

“Failure of any employer to have his premium payment in the hands of the Bureau within sixty days after expiration date, shall automatically cancel his insurance, whereupon such employer be declared in default.”

On or about June 18, 1920, the Bureau sent the elevator company a blank pay roll report with directions to fill them out and return them to the Bureau. The purpose of these reports is to enable the Bureau to estimate the premium for the next year, and also to compute the additional premium, if any, due for the past year. The elevator company caused the report to be prepared and returned to the Bureau. The Bureau returned it with request that the corporate seal be attached. The corrected report reached the Bureau on or about August 16, 1920. On August 24, 1920, the Bureau prepared and sent a settlement sheet to the elevator company. According to such settlement sheet there was a balance of $1,896.58 coming to the Bureau on premium for the insurance carried from July 1, 1919, to June 30, 1920, inclusive; and the estimated premium for the year July 1, 1920, to June 30, 1921, was $4,112.50, making a total of $6,009.08.

The settlement sheet statement was divided into two parts. The first part dealt with the period beginning July 1, 1919, and ending June 30, 1920. The second part dealt with the period following, and reads as follows:

“For period beginning Juy 1, 1920, ending June 30, 1921:

+-----------------------------------------------------------------------------+
                ¦Manual.                           ¦Advance Estimate  ¦Rate.¦Advance Estimate ¦
                ¦                                  ¦Pay Roll.         ¦     ¦Premium.         ¦
                +----------------------------------+------------------+-----+-----------------¦
                ¦8304                              ¦$125,000.00       ¦2.75 ¦$3,437.50        ¦
                +----------------------------------+------------------+-----+-----------------¦
                ¦8207                              ¦20,000.00         ¦2.25 ¦675.00           ¦
                +----------------------------------+------------------+-----+-----------------¦
                ¦                                  ¦                  ¦     ¦$4,112.50        ¦
                +----------------------------------+------------------+-----+-----------------¦
                ¦Amt. of Prem. due the State Ins.  ¦                  ¦     ¦                 ¦
                ¦Fund. $6,009.08.”                 ¦                  ¦     ¦                 ¦
                +-----------------------------------------------------------------------------+
                

We do not have before us the original exhibits, but it appears that there appeared on the back of such settlement sheet certain “instructions,” among which were, that the premium payment must reach the Bureau not later than ten days after the date appearing on the settlement sheet, and that failure to do so would cancel the insurance protection. It is the custom of the elevator company to pay its current bills about the 10th of each month, and on receipt of the settlement sheet it was placed with current bills, to be paid at the usual time according to its custom, which would be about September 10th. No employee of the company had any actual knowledge of the “instructions” purported to be given on the back of the settlement sheet, or of the rules which we have quoted above. The evidence further shows that on September 7, 1920, the Workmen's Compensation Bureau wrote a letter to the elevator company, stating that the protection afforded by the fund was canceled, also, that questions of rates or classification did not permit delay in payment of renewal premium, and further, that, if the amount due was not paid immediately, the name and amount due would be certified to the office of the Attorney General for collection as provided in the regulations of the Bureau. It appears that this letter was received by the defendant on September 8th or 9th, and that the defendant at once prepared a check, or voucher, in payment of the premium, in accordance with the settlement sheet, which check was in the amount of $6,009.08; that is, it included the total amount of the additional premium from July 1, 1919, to June 30, 1920, inclusive; and the estimated premium from July 1, 1920, to June 30, 1921, inclusive, as per the settlement sheet. The voucher issued by the elevator company, on its face, specifically stated that it was payment, as per such statement. The check or voucher did not reach the Bureau until after the accident in controversy here. The check was cashed by the Bureau in due course. The employees of the Bureau, however, testify that the check was not received in payment of premium for the period intervening July 1, 1920, and September 13, 1920. They say that the insurance was reinstated or put in force as of, and to begin on, September 13, 1920, and to continue for a period of one year from that date. And it is said that this is the practice of the Bureau in dealing with cases where insurance is canceled for failure on the part of the employer to pay premium.

After the accident had been reported, the Bureau, in a letter written by its director of claims, dated September 17, 1920, forwarded claim forms to the superintendent of the elevator company. Special attention was called to the fact that “there must be information as to the day, month, and year, on which the dependents were born.” On September 29th, the director of claims wrote the superintendent of the elevator company, as follows:

“We acknowledge receipt of certain reports in connection with the death of J. W. Bordson while in your employ at Hampden, North Dakota. We return...