Noblin v. Randolph Corp.

• Decision Date: 07 December 1942
• Citation: 180 Va. 345,23 S.E.2d 209
• Parties: NOBLIN . v. RANDOLPH CORPORATION et al.
• Court: Virginia Supreme Court

23 S.E.2d 209

180 Va. 345

NOBLIN .

v.RANDOLPH CORPORATION et al.

Supreme Court of Appeals of Virginia.

Dec. 7, 1942.

Appeal From Industrial Commission.

Proceeding under the Workmen's Compensation Act by Nathaniel Noblin, claimant, opposed by the Randolph Corporation, J. L. Rarden, lessee, employer, and the insurance carrier. From an order of the Industrial Commission dismissing the claim, claimant appeals.

Reversed and remanded.

Before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, and EGGLESTON, JJ.

Allen & Allen, of Richmond, for appellant.

John C. Goddin, of Richmond, William M. Tuck, of South Boston, and John G. May, Jr., of Richmond, for appellees.

HUDGINS, Justice.

On December 25, 1940, while performing his duties as porter, Nathaniel Noblin lost an eye as the result of a kick administered by William H. Lawson, Jr., a guest of the John Randolph Hotel in South Boston. Notice of the injury was filed on January 10, 1941, with the Industrial Commission. As the parties were unable to agree on an award, a formal application was filed with the Industrial Commission and hearing was set for September 18, 1941. Before the hearing, Noblin, at the suggestion or request of his employer, instituted an action for personal injuries against Lawson and recovered a judgment in the sum of $2,000. Execution was issued on this judgment and returned, "No effects liable to levy."

The employer contended before the Commission that the judgment against Lawson constituted a bar to the claim for compensation under the Workmen's Compensation Act. This view was adopted by the Commission, and it entered an order dismissing the claim. From that order Noblin obtained this appeal.

The dominant question presented is whether an unsatisfied judgment obtained by an injured employee against a negligent third party constitutes a bar to compensation from the employer for the same injuries.

The answer to this question, is found in the construction of the 1936 amendment to section 12 of the Workmen's Compensation Act, Acts 1936, c. 369. The General Assembly of Virginia has amended this section five times since 1918, when the act was originally adopted.

As first enacted, the section read: "The rights and remedies herein granted to an employee where he and his employer have accepted the provisions of this act respectively to pay and accept compensation on account of personal injury or death by accident shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin, at common law or otherwise on account of such injury, loss of service or death." Acts 1918, c. 400.

The provisions of this section, construed with the entire act, define the relations existing between" an employee and an em ployer. The relations of an employee to other parties are not mentioned. The employee is denied the right to proceed against the employer, when the relation of master and servant exists, to recover damages for an accidental injury in any forum other than the Industrial Commission,. Under this section, an employee, who happened to be injured by the negligence of a third party while in and about the master's business, could claim compensation from his employer and also proceed in a common law action for the recovery of full damages from such third party. In such an event, an employee could obtain a double recovery for the same injuries.

This section was amended in 1920 for the purpose of eliminating the possibility of such double recovery. This amendment retained all of section 12 as it was originally enacted and added three new paragraphs. The first new paragraph provided that the mere making of a lawful claim against an employer constituted an assignment pro tanto of the amount of liability created on the employer by the act. All excess, over and above the stated amount of liability, remained the property of the injured employee. The statute expressly directed the employer to hold such excess, when recovered by him, for the benefit of the injured employee or his beneficiaries named in the act. The second new paragraph conferred upon an insurance carrier, who complied with certain conditions, the same rights and liabilities given an employer. The third new paragraph dealt with matters not germane to the question now under consideration.

The 1924 amendment made substantial changes in this section. Many of these changes were retained in the 1930 and 1932 amendments. However, the 1936 amendment, which is now in force, re-enacted the same provisions found in the 1920 amendment without substantial change. For this reason, the construction heretofore placed on the 1920 amendment by this court is vital to the determination of the question.

In Smith v. Virginia Ry. & P. Co., 144 Va. 169, 176, 131 S.E. 440, 442, the facts were that one Stratton, while performing a mission for the Virginia Railway and Power Company, was injured through the negligence of one Smith. Stratton, as an employee of the Virginia Railway and Power Company, was paid compensation under the Workmen's Compensation Act.

Later, he instituted an action at law against Smith. More than a year after the date of injury Smith claimed that Stratton was barred from maintaining the action against him because he had elected to accept an award from his employer. Thereupon Stratton offered to amend his declaration by stating that the action was brought in his name for the benefit of the Virginia Railway and Power Company. This amendment to the pleading was allowed and was the basis of one of the errors assigned. Speaking to the point, Judge Prentis said:

"The contention is that Stratton could not maintain the action because of the first clause of section 12 of the act, hereinbefore quoted. That clause, however, refers only to the remedy of an employee against his employer, and it is only his right to sue his employer for damages which is barred by the acceptance of compensation under the act. No argument to support this conclusion is necessary, as is seems to us, because he who runs may read it in the statute.

"The next clause of the section quoted refers to an entirely different right, and subrogates the employer who has paid compensation to his employee under the act to the right to enforce any legal liability against such other party as may be liable in damages for the injury. The employer is not only subrogated to any such right of the employee to enforce any such legal liability against another, but the statute in express terms provides that he may enforce it 'in his own name or in the name of the injured employee, or his personal representative.' "

The opinion quotes the following from Thomas v. Otis Elevator Co, 103 Neb. 401, 172 N.W. 53: " 'The first complaint made is that the plaintiff had no right to bring the action in his own name under section 3659, Rev.St.1913. In Muncaster v. Graham Ice Cream Co, 103 Neb. 379, 172 N.W. 52, it was decided that the statute did not take away the right of the employee to recover damages against a third person when the relation of master and servant does not exist; that the section was designed for the protection of an employer who had paid the compensation; that, if the employer's rights were protected, it was no concern of the negligent third party.' "

The opinion then continues: "The statute subrogating the employer to the rights of the employee was not enacted for the benefit of the negligent third party; he has slight interest in it. He remains liable for the entire amount of such damages as may be lawfully recovered of him. The most that he could possibly claim is that after judgment he would be interested in having the proper apportionment made between the employer who has paid the compensation and the employee if the recovery against him should exceed the amount paid to such employee under the Compensation Act. So, in this case, it was not necessary to amend the notice of motion. Every interest which the defendant had would have been fully protected by indorsing the writ or the declaration with the statement that the action of Stratton was for the benefit of the Virginia Railway & Power Company, as its interest might be shown. That this is the common and approved practice in this state is shown by several cases. * * *

"The amendment which the court allowed, while not necessary, may have been appropriate. It was only because the defendant directed attention to the statute, and that the Virginia Railway & Power Company had been thereby subrogated to the rights of the plaintiff to the extent of the compensation which it had paid him, that the amendment was allowed. This was not the institution of a new action and was germane. It follows from this that the plea of the statute of limitations was properly rejected."

Again this court, speaking through Judge Holt, in Chesapeake & O. Ry. Co. v. Palmer, 149 Va. 560, 140 S.E. 831, 835, quoted at length from the Smith case, supra, and, in addition, said:

"Into the construction of every act must be read the purpose of the Legislature, and that underlying purpose in this instance was to give relief to workmen. This relief in the nature of things had to be charged against the employer. Section 12 in the original act of 1918 (Acts 1918, c. 400) consisted only of what is now the first paragraph of that section, as amended by the act of 1920. It said that an employee who had received compensation under this act from his employer should not thereafter sue him--a declaration manifestly just.

"It soon became apparent that an employer might be mulcted in compensation who was nowise at fault. The right of the employee to sue the wrongdoer had not been affected, and it was then possible for him to duplicate his recovery and to securedamages from two sources. Such a situation called for relief, it was given in the amendment in 1920, and written into the second paragraph of section 12. It gave to the employer the right to recover from the wrongdoer whatever he had actually...