Cermak v. Milwaukee Air Power Pump Co.

• Decision Date: 07 December 1926
• Citation: 192 Wis. 44,211 N.W. 354
• Parties: CERMAK v. MILWAUKEE AIR POWER PUMP CO.
• Court: Wisconsin Supreme Court

192 Wis. 44

211 N.W. 354

CERMAK

v.MILWAUKEE AIR POWER PUMP CO.^a1

Supreme Court of Wisconsin.

Dec. 7, 1926.

Appeal from Circuit Court, Milwaukee County; August E. Braun, Judge.

Common-law action in tort for personal injuries, brought by Andrew Cermak against the Milwaukee Air Power Pump Company. From an order sustaining demurrer to one of the defenses pleaded, defendant appeals. Affirmed.--[By Editorial Staff.]

Common-law action in tort to recover for injuries sustained in the construction of a building for the defendant. From an order sustaining a demurrer to one of the defenses pleaded in the answer, the defendant appealed.

Rosenberry, Eschweiler, and Crownhart, JJ., dissenting.

The answer of the defendant alleges that the Universal Construction Company and the defendant company were Wisconsin corporations subject to its Workmen's Compensation Act (St. 1925, §§ 102.01-102.41), that the Universal Construction Company carried compensation insurance and was engaged as an independent contractor in erecting the building for the defendant company, and that the plaintiff, an employee of the Universal Construction Company, had received and accepted compensation from the insurance carrier of the Construction Company for injuries sustained in the course of his employment while engaged in constructing defendant's building. The plaintiff demurred to the portion of the answer which states the foregoing facts on the ground that these facts do not constitute a defense.

Upon the argument, counsel stipulated in open court that the portion of the answer here in question should be considered as amended by adding the allegation that the Construction Company had assigned to the plaintiff any cause of action in tort which it might have against the defendant by reason of the fact that compensation had been paid to the plaintiff.Shaw, Muskat & Sullivan, of Milwaukee (Bottum, Hudnall, Lecher & McNamara, of Milwaukee, of counsel), for appellant.

Padway, Skolnik & Morgan, of Milwaukee (A. L. Skolnik, of Milwaukee, of counsel), for respondent.

STEVENS, J.

The plaintiff seeks to recover damages from a person other than his employer for the same injuries for which compensation had been paid to him by his employer, under the Workmen's Compensation Act.

[1][2] So far as the Workmen's Compensation Act determines the procedure by which an employee may recover for injuries sustained in the course of his employment, that act provides the workman's sole and exclusive remedy. But in all cases that do not come within the provisions of the Workmen's Compensation Act, the injured employee may still resort to an action in tort to enforce his rights against one, other than his employer, whom he alleges was guilty of negligence proximately causing his injuries. Unless the Compensation Act has taken away plaintiff's right to maintain such a tort action, the facts stated in the portion of the answer here under consideration do not state a defense.

[3] The legislative purpose, as embodied in the Workmen's Compensation Act, is plain. The controlling thought was to insure the prompt payment of compensation to employees injured in the course of their employment, in all cases, regardless of who was responsible for the act causing the injury, provided that the employer and the employee were subject to the act and that the injury was proximately caused by accident at a time when the employee was performing services growing out of and incidental to his employment. Section 102.03 of the Statutes. To make certain that this compensation will always be paid, employers subject to the act are required to carry compensation insurance. Section 102.28 of the Statutes. To further insure the payment of compensation in all cases, the act makes every employer liable to pay compensation to the employee of any contractor or subcontractor under him in all cases where such contractor or subcontractor is not subject to the act or does not carry compensation insurance. Section 102.06 of the Statutes.

The purpose in making the employer liable for all injuries, sustained in the course of the employment through the tortious acts of other persons, was not to relieve such other persons of liability, but merely to insure the prompt payment of compensation without compelling the injured workman to await the outcome of a tort action against another person than his employer who was responsible for the injury. The Workmen's Compensation Act clearly evidences a legislative intent that the payment of compensation by an employer shall not relieve the one whose tortious act caused this injury from liability therefor. This intent is shown by section 102.29 of the Statutes, which carefully preserves the right to maintain an action in tort against such other person whose acts caused the injury. The employee has the option of claiming compensation of his employer or of prosecuting an action in tort against the person whose wrongful act caused his injury. If the employee sues in tort, he waives his claim for compensation. Thus his employer is relieved of the obligation to pay compensation, and the employer has no claim against the person who is responsible for the injury. On the other hand, if the employee claims compensation of his employer, the making of such claim for compensation operates as “an assignment of any cause of action in tort which the employé * * * may have against any other party for such injury.” Section 102.29, subd. (1) of the Statutes. But it will be noted that this assignment is merely for the purpose of repaying to the employer the amount of the compensation paid the injured employee and that the surplus over the amount of the compensation paid, after deducting the reasonable cost of collection, belongs to the injured employee, and that, in any event, the injured employee is to receive one-third of the amount recovered in the tort action, after deducting the cost of collecting the same. It will thus be seen that the Workmen's Compensation Act preserves to the injured workman his interest in the damages recovered in the tort action, regardless of whether he claims compensation or sues in tort. If he sues in tort, the entire recovery belongs to him. If he accepts compensation and his employer sues in tort, all sums recovered belong to the injured employee after his employer has repaid the sums spent by him. This intent to preserve the employee's right to sue in tort is made even clearer by the provision which gives the injured employee, who has accepted compensation, the right to maintain an action in tort in his own name, if his employer or the compensation insurer shall not pursue that remedy within 90 days after written demand by the injured workman. Section 102.29 of the Statutes.

These provisions of the Workmen's Compensation Act leave no doubt that the Legislature intended to preserve the right to maintain an action in tort against any person, other than the employer, who is responsible for the acts causing injury to a workman situated as was the plaintiff in this case, unless such other person is made liable to pay compensation, under section 102.06 of the Statutes. The law does substantial justice in that it makes the one whose act caused the injury responsible, either to pay compensation to the employee or to respond in damages for the benefit of both the employer and the employee. Thus does the act put the burden on the shoulders of the one responsible for the injury--the one who ought to pay for the injury sustained.

“The purpose and effect of the Workmen's Compensation Act is to control and regulate the relations between an employer and his employees. As between them, the remedies there provided are exclusive when both are under the act at the time of the accident. The law does not attempt in any way to abridge the remedies which an employee of one person may have at law against a third person for a tort which such third person commits against him, unless it be in a case such as is provided for by sections 2394, 2396, Stats. 1913 (c. 599, Laws of 1913). The present case does not come within that section, and hence it is unnecessary to consider its effect.” Smale v. Wrought Washer Mfg. Co., 160 Wis. 331, 334, 151 N. W. 803, 804.

The fact that the defendant is subject to the provisions of the Workmen's Compensation Act does not deprive the plaintiff of his right to recover of the defendant in tort. In order to make the remedy provided by the Compensation Act the exclusive remedy of the plaintiff, as against the defendant, it must further appear that the Compensation Act makes the defendant liable to pay compensation to the plaintiff. Sheban v. A. M. Castle & Co., 185 Wis. 282, 286, 201 N. W. 379. It affirmatively appears that defendant is not liable to the plaintiff under section 102.06 of the Statutes because it is alleged that the contractor, plaintiff's employer, is subject to the act and that he has insurance, as required by subdivision (2) of section 102.28 of the Statutes.

[4] The Workmen's Compensation Act deals only with the relationship of employer and employee. The defendant Pump Company was not the employer of the plaintiff. No relationship of employer and employee ever existed between plaintiff and defendant. That relationship alone is the one that brings the parties under the Compensation Act and limits liability to the compensation provided by the act. Section 102.06 of the Statutes does not create the relationship of employer and employee, where it does not exist as a matter of fact. The purpose of this section is to insure the payment of compensation--to put the defendant Pump Company in the place of an insurance carrier in case compensation insurance is not carried. The fact that the defendant Pump Company is made the insurer of compensation does not make it an employer under the statute, any more than any insurance carrier is put in the relationship of an employer of an injured employee by the fact that it has insured the...