Lyon & Sons v. North Carolina State Bd. of Educ.

• Decision Date: 12 June 1953
• Docket Number: No. 750,750
• Citation: 76 S.E.2d 553,238 N.C. 24
• Court: North Carolina Supreme Court
• Parties: LYON & SONS, INC. v. N.C. STATE BOARD OF EDUCATION et al.

Page 553

76 S.E.2d 553

238 N.C. 24

LYON & SONS, INC. v. N.C. STATE BOARD OF EDUCATION et al.

No. 750.

Supreme Court of North Carolina.

June 12, 1953.

Henry Bane, Durham, for plaintiff, appellant.

Harry McMullan, Atty. Gen., Claude L. Love, Asst. Atty. Gen. and Gerald F. White, Member of Staff, Raleight, for defendant, appellees.

PARKER, Justice.

This question is presented for our decision: Does the right of subrogation exist under the provisions of Ch. 1059, Session Laws N.C. 1951, codified as G.S. § 143-291 et seq. and known as Tort Claims against State Departments and Agencies? The exact question presented is of first impression in our State.

The pertinent parts of Ch. 1059, N.C. Session Laws 1951, are as follows: Sec. 1: The State Industrial Commission is hereby constituted a court for the purpose of earing and passing upon tort claims against the State Board of Education, the State Highway & Public Works Commission, and all other departments, institutions, and agencies of the State. The Industrial Commission shall determine whether or not each individual claim arose as a result of a negligent act of a State employee while acting within the scope of his employment and without contributory negligence on the part of the claimant or the person in whose behalf the claim is asserted. If the Commission finds that there was such negligence on the part of a State employee while acting within the scope of his employment proximately causing the injury and no contributory negligence on the part of the claimant or the person in whose behalf the claim is asserted, the Commission shall determine the amount of damages the claimant is entitled to be paid, including medical and other expenses, and direct the payment of such damages by the department, institution or agency concerned but the damages awarded shall not exceed $8,000. Sec. 3 provides for an appeal from the full Commission to the Superior Court, and from the Superior Court to the Supreme Court: such appeal shall be for errors of law only, and the findings of fact of the Commission shall be conclusive if there is any competent evidence to support them. Sec. 11 reads as follows: "All claims against any and all State departments, institutions, and agencies, except the claims enumerated in Section 13 of this Act, shall be forever barred unless a claim be filed with the Industrial Commission within two years after the accident giving rise to the injury and damage, and if death results from the accident, the claim for wrongful death shall be forever barred unless a claim be filed by the personal representative with the Industrial Commission within two years after such death." Sec. 13 reads as follows: "The following claims against the various departments, institutions, and agencies of the State indicated below shall be heard and determined by the Industrial Commission as provided in this Act, and each claimant upon request shall furnish the Industrial Commission the information provided for in Section 9 of this Act, as follows ". Then follows a list of 276 claims. The 194th claim listed is plaintiff's claim, and is as follows:

Claimant Unit County Amount

Lyon & Sons,Inc. Sampson Co.Bd. of Ed. Sampson $121.55

Some 33 of these claims are for less than $25. The claims range in amounts from $3, $11.06, $14.03, $69.86 to $25,000.

It is frequently stated that while the decisions are not uniform, most courts hold that statutes waiving the Government's immunity from suit, should be strictly construed. 49 Am.Jr. p. 314; 81 C.J.S., States, § 215, p. 1306. However, the current trend of legislative policy and of judicial thought is toward the abandonment of the monarchistic doctrine of governmental immunity, as exemplified, for instance, in Tort Claims Acts enacted by the congress and the Legislatures of the various States. We think that the legislative attitude in passing a Tort Claims Act, or waiving a State's immunity from suit, is more accurately reflected by Cardozo, j., in Anderson v. John L. Hayes Construction Co., 243 N.Y. 140, 147, 153 N.E. 28, 29, quoted with approval in U.S. v. Aetna Cas & Sur. Co., 338 U.S. 366, 70 S.Ct. 207, 94 L.Ed. 171: "The exemption of the soverign from suit involves hardship enough, where consent has been withheld. We are not to add to its rigor by refinement of construction, where consent has been announced." The Washington & Lee Law Review, Vol. VI, p. 116, says: "The opinion of Justice Cardozo in Anderson v. John L. Hayes Construction co. properly states the general rule to be applied to those cases involving the construction of a waiver of immunity statute" and goes on to quote the language of Cardozo, J., quoted above.

When a State consents to be sued or waives its governmental immunity, it occupies the same position as any other litigant, and a plaintiff has the same right that he would have to sue an ordinary person. The State in such circumstances is not entitled to special privileges. 81 C.J.S., States, § 215, p. 1310 and cases cited; State v. Stanolind Oil & Gas Co., Tex.Civ.App., 190 S.W.2d 510; Com. v. Bowman, 267 Ky. 50, 100 S.W.2d 801; Murrain v. Wilson Line, Inc., 270 App.Div. 372, 59 N.Y.S. 750, affirmed 296 N.Y. 845, 72 N.E.2d 29, reargument denied 296 N.Y. 995, 73 N.E.2d 572.

The Federal Tort Claims Act--formerly 28 U.S.C. § 931, which is now divided and, with immaterial changes, appears in 28 U.S.C. §§ 1346(b) and 2674--provides in pertinent part that " * * * the United States district court for the district wherein the plaintiff is resident or wherein the act or omission complained of occurred * * * sitting without a jury, shall have exclusive jursidiction to hear, determine, and render judgment on any claim against the United States, for money only * * * on account of damage to or loss of property or on account of personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person would be liable to the claimant for such damage, loss, injury, or death in accordance with the law of the place where the act or ommission occurred. Subject to the provisions of this chapter, the United States shall be liable in respect of such claims, to the same claimants, in the same manner, and to the same extent, as a private individual underlike circumstances".

Courts of Appealsin seven circuits have upheld the right of subrogees to sue under the Tort Claims Act. State Farm Mut. Liability Ins. Co. v. United States, 1 Cir., 1949, 172 F.2d 737; Aetna Casualty & Surety Co. v. United States, 2 Cir., 1948, 170 F.2d 469; Yorkshire Ins. Co. v. United States, 3 Cir., 1948, 171 F.2d 374; United States v. South Caroline State Highway Dept., 4 Cir., 1948, 171 F.2d 893; Old Colony Ins. Co. v. United States, 6 Cir., 1948, 168 F.2d 931; National American Fire Ins. Co. v. United States, 9 Cir., 1948, 171 F.2d 206; United States v. Chicago, R.I. & P. R. Co., 10 Cir., 1949, 171 F.2d 377. The Court of Appeals for the Fifth Circuit reached a contrary conclusion, United States v. Hill, 171 F.2d 404, Hutcheson, J., dissenting. Reargument was ordered before the full bench and, upon reconsideration, the original opinion was modified, 174 F.2d 61, 63, Hutcheson, J., concurring in the result "as in substantial accordance with the views the dissent express."

In discussing the word "claimant" under the Federal Tort Claims Act the Court said in Old Colony Ins. Co. v. United States, supra : "The Act does not limit the meaning of the word 'claimant' to one who has sustained damage to his property and we are not justified in reading such limitation into it * * * To do so would be tantamount to amendment by us of the statuting, a function which of course is not ours. * * * If Congress had intended to exclude subrogees from the benefits of the Act it could readily have included them in the lsit of the twelve specified exemptions." In Spelar v. United States, 2 Cir., 171 F.2d 208, 209, in speaking of the Federal Tort Claims Act the Court said: "When after many years of discussion and debate Congress has at length established a general policy of governmental generosity toward tot claimants, it would seem that that policy should not be set aside or hampered by a niggardly construction based obn formal rules made obsolete by the very purpose of the Act itself." In Aetna Casualty & Surety Co. v. United States, supra , the Court stated: "Defendant's arguments, in effect, rest on the following basis: (1) The United States enjoys immunity from suit without its consent * * . (2) This doctrine * * * is so important and subborn that any consent given by the United States (as a sort of monarch) must be construed is as niggardly fashion as possible." The Court further said: "We cannot accept this narrow interpretation of the Act." In State Farm Mut. Liability Ins. Co. v. United States, supra , the Court said: "Extended discussion would be superfluous in view of the numerous recent decisions in other circuits adverse to contentions of the Government for a narrow interpretation of the Federal Tort Claims Act." Citing numerous Federal cases.

"Transfers by subrogation of claims against the United States are upheld by most courts. Subrogation to tort claims against the United States which can now be asserted under the Federal Tort Claims Act are generally considered to be transfers by operation of law and so not within the prohbition of the Federal Anti-Assignment Statute." Annotation 12 A.L.R.2d 480, where cases are cited.

In United States v. Aetna Casualty & Surety Co., 1949, 338 U.S. 366, 70 S.Ct. 207, 208, 94 L.Ed. 171, the Supreme Court of the United States had laid at rest the diversity of opinion among some of the lower courts as to the application of the Federal Tort Claims Act. The Supreme Court said this important question was presented under the Federal Tort Claims Act: "May an insurance...