McKenzie v. Missouri Stables, Inc.

• Decision Date: 02 December 1930
• Docket Number: No. 21398.,21398.
• Citation: 34 S.W.2d 136
• Parties: CLARENCE MCKENZIE, DEFENDANT IN ERROR, v. MISSOURI STABLES, INC., A CORPORATION, PLAINTIFF IN ERROR.
• Court: Missouri Court of Appeals

34 S.W.2d 136

CLARENCE MCKENZIE, DEFENDANT IN ERROR, v. MISSOURI STABLES, INC., A CORPORATION, PLAINTIFF IN ERROR.

No. 21398.

St. Louis Court of Appeals. Missouri.

Opinion filed December 2, 1930.

On Writ of Error to the Circuit Court of the City of St. Louis. — Hon. Charles W. Rutledge, Judge.

AFFIRMED.

Jones, Hocker, Sullivan & Angert for plaintiff in error.

The petition below did not state a cause of action against plaintiff in error because under the Missouri Workmen's Compensation Act the right of action against the defendant to recover for the injuries sustained by plaintiff was in the plaintiff's employer or the latter's insurance carrier, and not in the plaintiff. Sec. 11, Missouri Workmen's Compensation Act (Laws of Mo. for 1925, p. 375); O'Donnell v. Baker Ice Machine Co., 205 N.W. 56 (Neb.); Tandsetter v. Oscarson, 217 N.W. 660 (N.D.); Hunt v. Bank Line, 35 F. (2d) 136 (C.C.A. 4th); Whalen v. Athol Mfg. Co., 136 N.E. 600.

Judson, Green, Henry & Remmers and Jos. J. Tomasso for defendant in error.

(1) Appellate courts upon review are limited to the record proper and can only take the record as they find it. Gorka v. Gorka, 295 S.W. 516, 221 Mo. App. 1033; Bank of Tupelo v. Stonum, 281 S.W. 110, 220 Mo. App. 152; In re McMenamy's Guardianship, 270 S.W. 662, 307 Mo. 98; Rosenzweig v. Wells, 273 S.W. 1071, 308 Mo. 617. (2) Section 11 of the Workmen's Compensation Act does not presuppose that employer has paid employee compensation, and if there is nothing in record to show he has been paid he would not come within the Compensation Act under defendant's position. Sec. 11, Laws of Mo. 1925, page 375; Creamer v. Lott, 126 Atl. 488. (3) A third person against whom a common-law action for negligence has been brought by an employee of another cannot defeat the action because the employee has received payment under the Compensation Law. All apparent provisions in the act to the contrary may be ignored as not the true intendment. Under no circumstances does the act afford an opportunity to such third person to escape liability because section 11 regulates only the relations between employer and employee. Smale v. Wrought Washer Mfg. Co., 160 Wisc. 331, 151 N.W. 803; Southern Surety Co. v. Chicago P.M. & O.R. Co., 187 Iowa, 357, 174 N.W. 329; Lester v. Otis Elevator Co., 169 App. Div. (N.Y.) 613, 155 N.Y. Supp. 524; Rorvik v. North Pacific Lumber Co., 99 Oregon, 82, 195 Pac. 163; Royal Indemnity Co. v. J.G. White Eng. Co., 120 Misc. (N.Y.) 332, 198 N.Y. Supp. 264; Panhandle & S.F.R. Co. v. Hurst, 251 S.W. 538 (Texas); Goldsmith v. Payne, 300 Ill. 119, 133 N.E. 52; Hardy v. Muensch, 195 Ky. 398, 242 S.W. 586; Fox v. Dallas Hotel Co., 111 Tex. 461, 240 S.W. 517; Haynes v. Bernardt, 268 S.W. 509 (Tex. Civ. App.); Moser v. Shunk, 116 Kan. 247, 227 Pac. 784; Stamps v. Mo. Pac. R. Co., 114 Kan. 477, 218 Pac. 1116; Milosevich v. Pac. Electric R. Co., 230 Pac. 15 (Cal. App. Ct.); Hotel Equipment Co. v. Liddell, 32 Ga. App. 590, 124 S.E. 92; Chiles v. Rohl, 201 N.W. 154 (So. Dak.); Foglio v. Chicago, 229 Ill. App. 472; Trumbull Cliffs Furnace Co. v. Shackovsky, 111 Ohio St. 791, affirming 27 Ohio App. 522; Luckey v. Union P.R. Co., 117 Neb. 85, 219 N.W. 802; McArthur v. Dutee W. Flint Oil Co., 146 Atl. 484 (Rhode Island); Chesapeake & O.R. Co. v. Palmer, 149 Va. 560, 140 S.E. 831; Red Wing v. Eichinger, 163 Minn. 54, 203 N.W. 622.

BENNICK, C.

This is a proceeding by writ of error sued out in this court by Missouri Stables, Inc., hereinafter to be referred to as the defendant, which it was in the action brought against it below, by Clarence McKenzie, the plaintiff.

The petition alleged that on January 31, 1929, plaintiff, while in the employ of the J.A. Schaefer Construction Company, was engaged in dumping earth upon the premises of the defendant under the latter's direction, and that while so doing, he was injured as the direct and proximate result of defendant's negligence in several respects pointed out.

There was the further allegation that following said injuries, plaintiff's employer, the J.A. Schaefer Construction Company, had paid plaintiff certain compensation pursuant to the operation of the Workmen's Compensation Act, and in the same connection had paid for the services of his physician; and that under the law, said company was subrogated to plaintiff, and he was required to turn over to it the amount of compensation paid to him out of any amount recovered by him from defendant, as a third party responsible for his injuries and damage.

The prayer of the petition was for damages in the sum of $10,000.

Although due service of summons was had upon defendant, it filed no answer. Thereafter a default was rendered against it, and an inquiry as to damages granted, resulting in the entry of a judgment for plaintiff, and against defendant, for the sum of $3000.

Defendant has but one point for our consideration, which is that the court erred in entering judgment against it, the contention being that the petition wholly failed to state a cause of action on behalf of plaintiff, because under the Workmen's Compensation Act (Laws 1927, pp. 490-522), as counsel would have us construe it, the right of action against defendant to recover for the injuries sustained by plaintiff was in plaintiff's employer, the J.A. Schaefer Construction Company, or in the latter's insurance carrier, and not in the plaintiff himself.

The procedure to be followed in the enforcement of third-party liability has been a vexatious question for determination by the courts of every state that has adopted a compensation act. The statutes of the different states differ so widely in their terms and provisions that decisions based upon such statutes are not greatly helpful to us in the construction and interpretation of our own act. For example, in certain instances the acts provide that in case of third-party liability, the injured employee must elect between an action for damages and a claim against his employer; that if a claim against the employer is elected, the right to sue passes to the person or fund liable for compensation; and that if election is made to proceed directly against the third party, the employer's subsequent liability for compensation will be limited to the difference between the amount recovered in such action and the benefits provided by the act. Other acts provide that the employer from whom compensation has been claimed may proceed, either in his own name or in the name of the employee, to recover damages from the third party, any excess over the compensation award, with costs, to go to the injured employee or his dependents. In other instances the employee may proceed against both the third party and his employer, but shall not be entitled to both damages and compensation, and if compensation is obtained, the employer may have indemnity for such compensation from the third party. Still other acts provide that the making of a claim for compensation shall not affect the employee's right of action for damages; that the employer, having paid or become obligated to pay compensation, may likewise bring an action for damages against the third party; that if either the employee or his employer bring such action he shall forthwith notify the other of such fact, so that the other may join as party plaintiff; and that if the actions are brought by both independently of each other, the court shall consolidate them.

The particular section of our own act governing third-party liability is section 11, which reads as follows:

"Where a third person is liable to the employee or to the dependents, for the injury or death, the employer shall be subrogated to the right of the employee or to the dependents against such third person, and the recovery by such employer shall not be limited to the amount payable as compensation to such employee or dependents, but such employer may recover any amount which such employee or his dependents would have been entitled to recover. Any recovery by the employer against such third person, in excess of the compensation paid by the employer, after deducting the expenses of making such recovery shall be paid forthwith to the employee or to the dependents, and shall be treated as an advance payment by the employer, on account of any future installments of compensation."

Obviously this section was embodied in the act for the protection and benefit of the employer liable for compensation; and, as its provisions plainly imply, it gives to the employer the right of subrogation, which, primarily, is a device adopted or invented by equity to compel the ultimate discharge of a debt or obligation by the one who in fairness and good conscience ought to pay it. Though the doctrine is equitable in its origin, the right acquired is generally referred to as legal subrogation; and if the term is used without qualification, it is ordinarily legal subrogation which is meant, as distinguished from conventional subrogation, which depends upon the existence of a lawful contract, and arises by act of the parties. Undoubtedly it is the latter which is provided for by the section supra, for the entire compensation act is contractual in its nature as between employer and employee; and by the inclusion of the subrogation statute therein, the employer who is made liable by law, regardless of the fault of others, is readily afforded the protection which he would otherwise be forced to secure by a more circuitous route.

It is by section 3 of the act that the employer's liability for compensation is fixed and established, so long as the injury or death is by accident arising out of and in the course of the employment, and irrespective of the fact that the proximate cause of such injury or death may, as in this instance, be the negligence of a third party. Furthermore, the subsequent provision of that section, that the rights and remedies granted therein to the injured employee or his dependents shall exclude all other...