Hart v. Thomasville Motors, Inc.

• Citation: 92 S.E.2d 673,244 N.C. 84
• Decision Date: 09 May 1956
• Docket Number: No. 383,383
• Court: United States State Supreme Court of North Carolina
• Parties: F. T. HART, Employee, v. THOMASVILLE MOTORS, Inc., Employer, and The Travelers Insurance Company, Carrier.

Page 673

92 S.E.2d 673

244 N.C. 84

F. T. HART, Employee, v. THOMASVILLE MOTORS, Inc., Employer, and The Travelers

Insurance Company, Carrier.

No. 383

Supreme Court of North Carolina.

May 9, 1956

Armistead W. Sapp, Greensboro, for Thomasville Motors, Inc., Employer, and The Travelers Ins. Co., Carrier, defendants, appellants.

W. H. Steed, Thomasville, and Walser & Brinkley, Lexington, for plaintiff, appellee.

PARKER, Justice.

The plaintiff has challenged the jurisdiction over the subject matter of the Industrial Commission in making an award to him based upon prior agreements between him and the defendants, on the ground that he is not subject to the provisions of the North Carolina Workmen's Compensation Act, G.S. § 97-1 et seq., for the reason that at the time of his injury he was not an employee of Thomasville Motors, Inc., but was an independent contractor.

The defendants contend that the Industrial Commission had no power or authority to hear and determine this challenge, because, one, there was no showing of a change of condition as set forth in G.S. § 97-47, and two, the plaintiff was bound by his prior agreements and receipt of compensation, and is estopped to attack the jurisdiction of the Commission.

The North Carolina Industrial Commission has a special or limited jurisdiction created by statute, and confined to its terms. Viewed as a court, it is one of limited jurisdiction, and it is a universal rule of law that parties cannot, by consent, give a court, as such, jurisdiction over subject matter of which it would otherwise not have jurisdiction. Jurisdiction in this sense cannot be obtained by consent of the parties, waiver, or estoppel. State ex rel. Hanson v. Yandle, 235 N.C. 532, 70 S.E.2d 565; Anderson v. Atkinson, 235 N.C. 300, 69 S.E.2d 603; Chadwick v. North Carolina Dept. of Conservation and Development, 219 N.C. 766, 14 S.E.2d 842; Reaves v. Earle-Chesterfield Mill Co., 216 N.C. 462, 5 S.E.2d 305; Hollowell v. North Carolina Dept. of Conservation and Development, 206 N.C. 206, 173 S.E. 603; Dependents of Thompson v. Johnson Funeral Home, 205 N.C. 801, 172 S.E. 500; Burroughs v. McNeill, 22 N.C. 297; Hartford Accident and Indemnity Co. v. Thompson, 167 Ga. 897, 147 S.E. 50; Woolsey v. Security Trust Co., 5 Cir., 74 F.2d 334, 97 A.L.R. 1081; Gavin v. Hudson & Manhattan R. Co., 3 Cir., 185 F.2d 104, 27 A.L.R.2d 739; 14 Am.Jur., Courts, sec. 184; 19 Am.Jur., Estoppel, sec. 77.

However, the doctrine has been announced that one who procures or gives consent to a decree, even though it is void as beyond the powers of the court to pronounce, is estopped to question its validity, at least where he has obtained a benefit from the act of the court. Dean v. Dean, 136 Or. 694, 300 P. 1027, 86 A.L.R. 79; 19 Am.Jur., Estoppel, sec. 77. The basis of this doctrine is that whether the court had jurisdiction either of the subject matter of the action or of the parties is not important, but that such practice will not be tolerated.

While the defendants in their brief assert 'plaintiff was bound by his agreements and estopped to attack the jurisdiction upon the grounds asserted,' they have favored us with neither reason, argument nor citation of authorities in support of their statement.

These were the facts in Reaves v. EarleChesterfield Mill Co., supra. An agreement for compensation for plaintiff's disability was entered into by plaintiff and both defendants, supposedly in pursuance of the provisions of the North Carolina Workmen's Compensation Act. This memorandum was examined and approved by the Industrial Commission, which made an award. Compensation was paid for about 38 weeks. The defendants then ceased payment, and challenged the jurisdiction of the Industrial Commission on the ground that at the time of his injury the plaintiff was not a resident of this State. The plaintiff then applied to the Commission for the enforcement of the award. This Court denied plaintiff's application holding that the Industrial Commission did not have jurisdiction over the original claim, and the parties could not confer jurisdiction by consent or agreement, because the Commission's jurisdiction over contracts for the settlement of claims is limited to those made under and within the purview of the Workmen's Compensation Act. This Court in its opinion said [216 N.C. 462, 5 S.E.2d 306]: 'We think it is clear that neither the agreement entered into by the plaintiff and the defendants nor the subsequent payments of the defendant thereupon amounted to a waiver of jurisdiction.'

A decision of the Industrial Commission is only conclusive when it is acting within its jurisdiction. Voehl v. Indemnity Ins. Co., 288 U.S. 162, 53 S.Ct. 380, 77 L.Ed. 676, 87 A.L.R. 245; Uphoff v. Individual Board, 271 Ill. 312, 111 N.E. 128, L.R.A. 1916E, 329, Ann.Cas.1917D, 1.

The jurisdiction of the Industrial Commission in relation to the subject matter over which it may exercise authority is limited by the North Carolina Workmen's Compensation Act, and this jurisdiction can be enlarged or extended only by the General Assembly its creator. It is not necessary for us to decide whether under all circumstances a party to a proceeding before the Industrial Commission can, or cannot, be estopped to attack its jurisdiction over the subject matter, for the reason that under the facts of this case no such estoppel arises here. It is to be noted that this occurred during the hearing before the Hearing Deputy Commissioner. The Deputy Commissioner said to defendants' counsel: 'Mr. Edwards, you say you will not hold the plaintiff to the agreement?' Mr. Edwards replied: 'No, so far as getting a dismissal. If he wants to contend they are not bound by the Act, that is all right with us.' At that time counsel for defendants made other statements of similar import.

The defendants contend that the Industrial Commission could not hear and determine plaintiff's challenge to its jurisdiction over the subject matter, because 'the only basis for reopening a matter before the North Carolina Industrial Commission is upon the ground of change of condition,' and cite in support of their statement, G.S. § 97-47; Murray v. Nebel Knitting Co., 214 N.C. 437, 199 S.E. 609; Larson's Workmen's Compensation Law, Vol. 2, p. 330, sec. 81, et seq.

The authorities cited are not in point. G.S. § 97-47 reads in part: 'Upon its own motion or upon the application of any party in interest on the grounds of a change in condition, the Industrial Commission may review any award, and on such review may make an award ending, diminishing, or increasing the compensation previously awarded * * *.' This statute applies where the Industrial Commission has jurisdiction. In Murray v. Nebel Knitting Co., supra, the Commission had jurisdiction.

The defendants further contend that the plaintiff is barred from challenging the jurisdiction of the Commission over the subject matter by reason of Rule XV of the Commission, the pertinent part of which reads as follows: 'No party to any agreement for compensation approved by the Industrial Commission shall thereafter be heard to deny the truth of the matters therein set forth unless it shall be made to appear to the satisfaction of the Commission that there was error due to fraud, misrepresentation, undue influence, mutual mistake, or other sufficient reason.' Such a contention is untenable. The Commission cannot enlarge its jurisdiction, or prevent a challenge to its jurisdiction over the subject matter, by one of its rules. Its limited jurisdiction is fixed by the Act.

A challenge to jurisdiction may be made at any time. Baker v. Varser, 239 N.C. 180, 79 S.E.2d 757; Spaugh v. City of Charlotte, 239 N.C. 149, 79 S.E.2d 748; Anderson v. Atkinson, supra; Miller v. Roberts, 212 N.C. 126, 193 S.E. 286; Johnson v. Finch, 93 N.C. 205, 208.

A judgment is void, when there is a want of jurisdiction by the court over the subject matter of the action, State ex rel. Hanson v. Yandle, supra, and Clark v. Carolina Homes, 189 N.C. 703, 708, 128 S.E. 20, and a void judgment may 'be disregarded and treated as a nullity everywhere', City of Monroe v. Niven, 221 N.C. 362, 20 S.E.2d 311, 312.

In Stafford v. Gallops, 123 N.C. 19, 31 S.E. 265, 266, the Court said: 'A void judgment is, in legal effect, no judgment. No rights are acquired or divested by it. It neither binds nor bars any one, and all proceedings founded upon it are worthless.'

The plaintiff had a legal right to challenge the jurisdiction of the Industrial Commission over the subject matter, and, when such challenge was made, it was the duty of the Industrial Commission to hear and determine it.

The jurisdiction of a court does not relate to the rights of the parties as between each other, but to the power of the court to hear and adjudicate. The question of its existence precedes the question of the rights of the parties to avail themselves of its jurisdiction, if it exists. A universal principle as old as the law is that proceedings of a court without jurisdiction over the subject matter are a nullity and its judgment without effect either on the person or property. City of Monroe v. Niven, supra; Downing v. White, 211 N.C. 40, 188 S.E. 815; Clark v. Carolina Homes, supra; Card v. Finch, 142 N.C. 140, 54 S.E. 1009; 14 Am.Jur., Courts, sec. 167.

A court without jurisdiction over the subject matter of a proceeding or case cannot enter a judgment in favor of either party: it can only dismiss the proceeding or case for want of jurisdiction. New Orleans [Bayou Sara] Mail Co. v. Flanders (Fernandez), 12 Wall. 130, 20 L.Ed. 249; Corbett v. Boston & M. R. R., 219 Mass. 351, 107 N.E. 60, 12 A.L.R. 683.

In Mail Co. v. Flanders (Fernandez), supra, the Court said: 'Where the circuit court is without jurisdiction, it is in general irregular to make any order in the cause except to dismiss the suit; but that rule does not apply to the action of the court in setting aside such orders as had been...