Commercial Casualty Ins. Co. v. Hilton, 1901-6432.

• Decision Date: 04 December 1935
• Docket Number: No. 1901-6432.,1901-6432.
• Citation: 87 S.W.2d 1081
• Parties: COMMERCIAL CASUALTY INS. CO. v. HILTON.
• Court: Texas Supreme Court

87 S.W.2d 1081

COMMERCIAL CASUALTY INS. CO. v. HILTON.

No. 1901-6432.

Commission of Appeals of Texas, Section A.

December 4, 1935.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by I. C. Hilton against the Commercial Casualty Insurance Company to set aside an order of the Industrial Accident Board refusing to set aside a compromise settlement of compensation theretofore approved, and to award such compensation as claimant might show himself entitled to receive. Judgment for claimant was affirmed by the Court of Civil Appeals [55 S.W.(2d) 120], and the defendant brings error.

Judgment of the Court of Civil Appeals reversed and judgment rendered.

Harris, Harris & Sedberry, of San Angelo, and Touchstone, Wight, Gormley & Price, Collins & Houston, and Lucian L. Smith, all of Dallas, for plaintiff in error.

Kerr & Gayer, of San Angelo, for defendant in error.

HICKMAN, Commissioner.

A full statement of the case is made in the opinion of the Court of Civil Appeals. 55 S.W.(2d) 120, 122. An abridged statement will be sufficient for the purposes of this decision.

I. C. Hilton was the employee and Commercial Casualty Insurance Company was the insurer, as those terms are employed in the Workmen's Compensation Law (Vernon's Ann.Civ.St. art. 8306 et seq.). The employee was injured in the course of his employment. Later a settlement was made between him and the insurer, the terms of which being reduced to writing and signed by the respective parties. After conducting an independent investigation of its own, the Industrial Accident Board entered an order approving this contract of settlement, and the insurer paid to the employee $75, the amount owing under the terms of the settlement contract. Thereafter, the employee made application to the Industrial Accident Board to set aside the compromise settlement agreement theretofore approved by it and to award him an allowance for medical and hospital services and compensation for total permanent incapacity. The board refused to set aside the contract and the order approving it, assigning as its reason for so doing that "under the decisions of the Supreme Court in the cases of Lumbermen's Reciprocal Association v. Henderson, 15 S.W.(2d) 565, and Lumbermen's Reciprocal Association v. Day, 17 S.W.(2d) 1043, we do not think we have jurisdiction to pass upon questions raised in said application, and for that reason we have today declined to set the application down for hearing."

The employee gave notice of his intention not to abide by this ruling and then filed this suit in the district court in the form of an appeal from the order of the board. Upon a hearing, the trial court set aside the compromise agreement and the order of the Industrial Accident Board approving same on the ground of fraud in their procurement and awarded the employee $2,545.57 compensation in a lump sum and $5,000 for medical and hospital services. The Court of Civil Appeals affirmed the judgment of the trial court.

It has been the law in this state since the decision in Lumbermen's Reciprocal Association v. Henderson (Tex.Com.App.) 15 S.W.(2d) 565, that the Industrial Accident Board has no jurisdiction to set aside a compromise settlement agreement. By reference to the many opinions citing the Henderson Case, it will be observed that there is confusion as to the grounds upon which that decision was based. A restatement of the grounds seems, therefore, appropriate.

The Industrial Accident Board is not a court, but an administrative body created by statute, and possessing those powers only which are conferred upon it by statute. In the opinion of the Court of Civil Appeals in this case, as well as in opinions of other courts not necessary here to cite, article 8306, § 12d, R.S. 1925, as amended by Acts 1931, 42d Leg., p. 260, c. 155, § 1 (Vernon's Ann.Civ.St. art. 8306, § 12d), is construed as conferring upon the board the power to set aside compromise settlement agreements made by the parties and the orders of the board approving same. If that article, by its terms, conveys that power, then the question presented would be one of its constitutionality. But, if the article does not, by its terms, convey that power, then a constitutional question is not reached. The article reads as follows: "Upon its own motion or upon the application of any person interested showing a change of condition, mistake or fraud, the Board at any time within the compensation period, may review any award or order, ending, diminishing or increasing compensation previously awarded, within the maximum and minimum provided in this Law, or change or revoke its previous order denying compensation, sending immediately to the parties a copy of its subsequent order or award. Provided, when such previous order has denied compensation, application to review same shall be made to the Board within twelve months after its entry, and not afterward. Review under this Section shall be only upon notice to the parties interested."

This article does not relate to the question of setting aside compromise settlement agreements or orders approving same. The only powers therein conferred upon the board are to review awards of compensation previously made and to change or revoke previous orders denying compensation. The board's approval of a compromise agreement is not an award of compensation. Lumbermen's Reciprocal Association v. Day (Tex.Com. App.) 17 S.W.(2d) 1043. Neither is it an order denying compensation. In short, the board has no authority to set aside a compromise settlement agreement or its order approving same. Were the parties to such an agreement left to look alone to the Workmen's Compensation Law, there would be no way to avoid its binding effect. The power of the courts to set aside such an agreement for fraud is not derived from the Workmen's Compensation Law, but exists by virtue of the Constitution and general statutes defining their jurisdiction. Whenever a party to such contract claims to have been induced to execute same through fraud of the other party, the court is the forum and the only forum to which he may resort.

Until the compromise settlement agreement is set aside by the court, the Industrial Accident Board is without power to pass upon a claim for compensation, and its order declining to pass on such claim until such agreement has been set aside is not an order denying compensation. It cannot deny compensation when it has no jurisdiction to pass on that question.

A court has no jurisdiction to pass upon a claim for compensation unless its jurisdiction is invoked by an appeal from an order of the Industrial Accident Board either awarding or denying compensation. It results that the only judgment which the trial court was empowered to render in this case was one setting aside the compromise agreement...