Clark v. Gastonia Ice Cream Co., 180

Decision Date31 January 1964
Docket NumberNo. 180,180
Citation261 N.C. 234,134 S.E.2d 354
CourtNorth Carolina Supreme Court
PartiesDan S. CLARK, Sr., Employee, v. GASTONIA ICE CREAM COMPANY, Employer, Non-Insurer, and Lumbermens Mutual Casualty Company, Carrier.

Mullen, Holland & Cooke, O. A. Warren and Robert E. Gaines, Gastonia, for plaintiff appellee.

Garland & Alala, Gastonia, for defendant appellant Gastonia Ice Cream Co.

Hollowell & Stott, Gastonia, for defendant appellee Lumbermens Mut. Cas. Co

BOBBITT, Justice.

Plaintiff (an appellee) contends he sustained a compensable injury on May 3, 1960, for which he is entitled to a compensation award against Ice Cream Company. Plaintiff did not and does not assert any claim against Casualty Company.

Ice Cream Company (the appellant) contends: (1) Plaintiff did not sustain a compensable injury on May 3, 1960. (2) If he did, Casualty Company under its Policy No. OCL 614 140 is obligated to pay the compensation award.

Casualty Company (an appellee) contends its policy does not cover compensable injuries sustained prior to May 9, 1960, and that the Industrial Commission has no jurisdiction to reform the policy.

Finding of Fact No. 8, the only finding of fact bearing upon whether plaintiff sustained a compensable injury to which appellant excepted, states: '8. That the plaintiff suffered an injury by accident arising out of and in the course of his employment with the defendant employer on May 3, 1960.' In assigning error, appellant asserts '(t)he evidence introduced was not sufficient to warrant Finding of Fact No. 8 * * *' Appellant also excepted to Conclusion of Law No. 1, essentially the same as Finding of Fact No. 8, and to Conclusion of Law No. 2. The subject of Conclusion of Law No. 2 is the extent of plaintiff's injury and the amount of compensation to which he is entitled.

Whether plaintiff sustained an injury by accident arising out of and in the course of his employment is a mixed question of law and of fact. Sandy v. Stackhouse, Inc., 258 N.C. 194, 197, 128 S.E.2d 218, and cases cited; Horn v. Sandhill Furniture Co., 245 N.C. 173, 176, 95 S.E.2d 521, and cases cited.

The Commission's ultimate finding that plaintiff was injured by accident arising out of and in the course of his employment is based on specific findings covering crucial questions of fact on which plaintiff's right to compensation depends. There being no exception to any of the Commission's specific findings of fact, 'we consider such specific findings of fact, together with every reasonable inference that may be drawn therefrom, in plaintiff's favor in determining whether there is a factual basis for such ultimate finding.' Guest v. Brenner Iron & Metal Co., 241 N.C. 448, 451, 85 S.E.2d 596, 599; Hardy v. Small, 246 N.C. 581, 584, 99 S.E.2d 862. When so considered, we are of opinion and decide that the Commission's specific findings of fact support its Finding of Fact No. 8 and its Conclusions of Law Nos. 1 and 2. Hence, appellant's said assignments of error are overruled.

As indicated, plaintiff did not and does not assert any claim against Casualty Company. Ice Cream Company (appellant), not plaintiff, caused Casualty Company to be brought into the proceeding. The matters discussed below relate to the rights and liabilities of appellant and Casualty Company inter se.

Finding of Fact No. 14, the only finding of fact bearing on this feature of the case to which appellant excepted, states: '14. That the defendant employer was not covered by a policy of workmen's compensation insurance on May 3, 1960, the date of the plaintiff's injury by accident.' In assigning error, appellant asserts '(t)he evidence introduced was not sufficient to warrant Finding of Fact No. 14 * * *' Appellant also excepted to Conclusion of Law No. 4, essentially the same as Finding of Fact No. 14.

The Commission, citing G.S. § 97-91 and Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488, concluded it was its duty to determine the rights and liabilities of Ice Cream Company and Casualty Company inter se.

The policy, according to its express provisions, was for the period from May 9, 1960, to June 1, 1961. It appears the Commission based its ultimate finding that Casualty Company was not on the risk on May 3, 1960, on the ground appellant, notwithstanding its officers had full opportunity to discover the contents of the policy, accepted and retained the policy without protest, citing Clements v. Life Insurance Co., 155 N.C. 57, 70 S.E. 1076, and Coppersmith & Sons v. Aetna Insurance Co., 222 N.C. 14, 21 S.E.2d 838. Appellant contends this basis of decision is untenable in that there is no evidence or specific finding of fact to the effect the policy was received by appellant prior to plaintiff's injury on May 3, 1960. Be that as it may, in view of our conclusion that the Commission had no jurisdiction to determine the rights and liabilities of appellant and Casualty Company inter se, the Commission's findings of fact and conclusions of law with reference thereto are without significance and are set aside.

Appellant offered evidence tending to show Casualty Company agreed to issue to it a workmen's compensation insurance policy for a period beginning April 20, 1960. Since the decision(s) below were in favor of the Casualty Company, no question is presented on this appeal as to the competency of such evidence. Obviously, the Commission would have no jurisdiction of a cause of action by appellant against Casualty Company to recover damages on account of Casualty Company's failure to comply with such agreement. See 44 C.J.S. Insurance § 229; 29 Am.Jur., Insurance § 185.

Under the policy as written and issued, Casualty Company has no liability in connection with the compensable injury sustained by plaintiff on May 3, 1960. Hence, appellant cannot recover from Casualty Company on the policy unless and until the policy is reformed on the ground of mutual mistake (or otherwise) so as to provide for a policy period inclusive of May 3, 1960. Peirson v. American Hardware Mutual Insurance Co., 248 N.C. 215, 102 S.E. 2d 800, and cases cited. The question is whether the Commission had jurisdiction of what is essentially an action by appellant against Casualty Company to reform the policy and then recover the amount necessary to reimburse appellant as to all payments it is required to make to plaintiff under the award and judgment. The agreement asserted by appellant against Casualty Company is in the nature of an indemnity agreement and the controversy with reference thereto is not germane to the determination of plaintiff's claim against appellant. Compare Greene v. Charlotte Chemical Laboratories, Inc., 254 N.C. 680, 688, 120 S.E.2d 82; Steele v. Moore-Flesher Hauling Co., 260 N.C. 486, 489, 133 S.E.2d 197.

'The Industrial Commission is not a court of general jurisdiction. It is an administrative board with quasi-judicial functions and has a special or limited jurisdiction created by statute and confined to its terms.' Letterlough v. Atkins, 258 N.C. 166, 168, 128 S.E.2d 215, 217, and cases cited; Biddix v. Rex Mills, 237 N.C. 660, 662, 75 S.E.2d 777; Tindall v. American Furniture Co., 216 N.C. 306, 312, 4 S.E.2d 894. Whether the Commission had jurisdiction of the subject matter, to wit, said controversy between appellant and Casualty Company, depends solely upon whether such jurisdiction was conferred by statute. Hart v. Thomasville Motors, 244 N.C. 84, 92 S.E.2d 673, and cases cited. 'An absolute want of jurisdiction over the subject matter may be taken advantage of at any stage of the proceedings, even after judgment.' Pulley v. Pulley, 255 N.C. 423, 429, 121 S.E.2d 876, 880, and cases cited. Casualty Company has contended throughout this proceeding that the Commission had no jurisdiction of said subject matter.

There is no contention that our Act expressly confers upon the Commission equitable jurisdiction to determine an asserted cause of action to reform a workmen's compensation insurance policy. The question is whether there is any statutory provision which, by necessary implication, confers such jurisdiction. In resolving this question, the nature of such cause of action and traditional requirements in respect of pleadings and burden of proof must be considered.

Well established principles relating to the equitable remedy of reformation include the following: 'A proper case for the reformation of instruments must be made by the pleadings, and considerable strictness of pleadings as well as of proof is required.' 76 C.J.S. Reformation of Instruments § 72; 45 Am.Jur., Reformation of Instruments § 98. 'The power to reform an instrument is an extraordinary one whose exercise must be guarded with zealous care, and exercised with great caution. Thus, equity is slow and cautious in the exercise of this power, and will grant reformation only in a clear case of fraud or mistake.' 76 C.J.S. Reformation of Instruments § 3; 45 Am.Jur., Reformation of Instruments § 5. To reform, i. e., to correct, a written instrument on the ground of mutual mistake of the parties, the evidence must be clear, strong and convincing. Johnson v. Johnson, 172 N C. 530, 90 S.E. 516. 'Whether or not the evidence is clear, strong and convincing in a particular case is for the jury to determine.' Stansbury, North Carolina Evidence, Second Edition, § 213, and cases cited.

Unless the notice of accident required by G.S. § 97-22 and G.S. § 97-23 is so considered, our Act (G.S. § 97-1 et seq.) makes no mention of pleadings. No statutory provision suggests it would have been appropriate for appellant to have alleged a cause of action against Casualty Company for reformation of the policy on the ground of mutual mistake. Indeed, appellant did not attempt to plead or assert such cause of action. Appellant's motion of January 31, 1962, that Casualty Company be made a party to the proceedings, is based on its assertion that its liability, if any, on account of plaintiff's injury...

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