Ermola v. Hudson Paint & Varnish Co.

• Decision Date: 30 June 1961
• Docket Number: No. A--5542,A--5542
• Parties: Elizabeth ERMOLA Petitioner-Respondent, v. HUDSON PAINT AND VARNISH CO., Respondent-Appellant.
• Court: New Jersey County Court

Page 76

70 N.J.Super. 76

174 A.2d 759

Elizabeth ERMOLA Petitioner-Respondent, v. HUDSON PAINT AND VARNISH CO., Respondent-Appellant.

No. A--5542.

Essex County Court

Law Division, New Jersey.

June 30, 1961.

Samuel E. Bass, Newark, for petitioner (Fred Freeman, Newark, attorney).

John W. Taylor, East Orange, for respondent.

YANCEY, J.C.C.

The petitioner is the widow of decedent, who was an employee of respondent, The Hudson Paint and Varnish Co. The decedent was last employed on December 17, 1952 as a varnish cook, in which work he handled various chemicals and oils which caused him to be exposed to noxious and irritating fumes, gases and smoke. From this exposure he developed pulmonary tuberculosis which caused him to become disabled. He was awarded compensation in his own right. On December 17, 1952, the last date of employment and exposure, the dependency benefits were to be paid at the scheduled rate for 300 weeks, and funeral allowances were set at $250 under N.J.S.A. 34:15--13. In 1957 this statute was amended to provide dependency benefits for 350 weeks and a funeral allowance of $400. The decedent died in 1958 and it was determined that his death was causally related to his employment with respondent. The Workmen's Compensation Division awarded petitioner dependency benefits at the amended rate in effect at the decedent's death, which were for 350 weeks, and funeral allowances of $400. Respondent appeals and questions the propriety of the award made pursuant to the 1957 statutory amendment, and argues that petitioner should have been awarded dependency benefits at the scheduled rate for 300 weeks and funeral allowances of $250, which were in effect on the last day of employment.

The right to compensation provided for the petitioner-appellee herein as a dependent of the deceased employee is created by N.J.S.A. 34:15--13. N.J.S.A. 34:15--12 provides compensation benefits to the injured employee himself. It is well established that the rights of dependents to compensation are independent and separate, flowing to them from the Workmen's Compensation Act itself. Eckert v. New Jersey State Highway Department, 1 N.J. 474, 64 A.2d 221 (1949). Notwithstanding the above rule, the dependents as well as the employee must look back to the terms of the entire contract for their rights, expressed and implied by law, at and during the entire time of the employment.

The petitioner-appellee's award was based, not on N.J.S.A. 34:15--13 in effect December 1952, but on the amendment effective January 1, 1957, L.1956, c. 141. As set forth in the respondent's brief:

'The prime issue, simply put, is--is respondent's liability for dependency benefits and burial allowance assessable by the statute in effect at the time decedent suffered his compensable occupational condition and last worked for it, in December 1952, or under the statute as it was at the time of his death in 1958, by reason of the 1957 amendment?'

It would appear that the deputy director applied the aforesaid amendment retroactively in making his decision. If this be so, it is unconstitutional in view of Art. IV, § 7, par. 3 of the New Jersey State Constitution, which states:

'The Legislature shall not pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or depriving a party of any remedy for enforcing a contract which existed when the contract was made.'

An examination of numerous appellate decisions which concern themselves with the nature of a workmen's compensation action indicate that in the early years of the operation of the New Jersey Workmen's Compensation Act, it was sometimes said that the nature of the liability was Ex contractu or Ex delicto or quasi-contractual. Today there is little doubt that our courts have adopted the Ex contractu theory. In New Amsterdam Casualty Co. v. Popovich,18 N.J. 218 at page 226, 113 A.2d 666 (1955), it was emphatically held that the liability under the act is Ex contractu and not Ex delicto. In the recent and very comprehensive opinion of Biglioli v. Durotest Corp., 26 N.J. 33, 138 A.2d 529 (1958), our Supreme Court premised much of its conclusion upon this principle. It refers to prior cases which likewise premise their conclusions upon the contractual relationship. In Heldrich v. American Incubator Mfg. Co., 104 N.J.L. 492 at page 495, 141 A. 770, 771 (1928), the former New Jersey Supreme Court stated:

'The whole scheme of workmen's compensation rests upon a contractual basis whereby employer and employee voluntarily enter into a relationship carrying with it certain rights and certain obligations. These rights and obligations are necessarily agreed to In limine when the relationship of master and servant first arises.'

It was further stated by the New Jersey Supreme Court in Miller v. National Chair Company, 127 N.J.L. 414, 417, 22 A.2d 804, 807 (1941):

'Ours is an elective system of compensation, contractual in nature; and if, as found by the Deputy Commissioner, the then subsisting contract of service was made with defendant in this State, the rights of the parties in this behalf are governed by our Workmen's Compensation Act. By mere inaction, the parties to such a contract impliedly stipulate for the payment of compensation under Article 2 of that enactment, * * * for the consequences of an accident of the statutory class, no matter where it may occur. * * *

'The adoption of that scheme of compensation does not of necessity depend upon the mutual assent of the parties, for it enters by operation of law into every contract of hiring made within this state * * *.'

The contractual relationship arises at the inception of the employment relationship and continues to the last moment of employment. In this economic relationship on which the parties have contractually agreed are implicitly adopted all the workmen's compensation statutes in effect unless the parties specifically register an intention not to be bound by the terms and provisions of the act. Said statutes plus all amendments to be adopted during the period of employment become and remain a part of the employment contract as long as the employment contract itself continues. The moment the expressed employment contract stops, all conditions to it implied by law also stop.

The mere statement that the rights of the dependent to compensation are independent and separate from that of the employee and flow directly from the act itself does not mean that the dependent need not go back to the entire contract of employment in effect at the time of the employment. A dependent would have no rights whatsoever under the act were it not for the existence of the employment contract. All benefits to the dependent stem from the foundation of this contract, and if we take the employment contract away, all benefits to the dependent from the statutes are suspended in mid-air. The court must apply only those statutes benefiting the dependent which were in effect at the time of employment, notwithstanding the fact that the dependent's cause of action did not accrue until after the amendment of 1956 and the death of the employee. See Gregutis v. Waclark Wire, 86 N.J.L. 610, 92 A. 354 (E. & A. 1914).

The petitioner is asking the court to sanction her cause of action which occurred in 1958 and to rely on the facts and conditions of the contract of employment which terminated on December 17, 1952, and to apply the amendment of 1956, which is a subsequent condition of the contract. The court cannot agree with this proposition. As we rely on the facts at the time of employment, we must also be controlled by the law at the same time which governed the contract. It follows, therefore, that any law enacted by the Legislature which subsequently changes the terms of the compensation obligations and is declared to be effective on a date subsequent to the date of last employment, impairs...