Polk County, Georgia v. Lincoln National Life Ins. Co.

• Decision Date: 13 January 1959
• Docket Number: No. 17234.,17234.
• Parties: POLK COUNTY, GEORGIA, Appellant, v. LINCOLN NATIONAL LIFE INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

262 F.2d 486 (1959)

POLK COUNTY, GEORGIA, Appellant, v. LINCOLN NATIONAL LIFE INSURANCE COMPANY, Appellee.

No. 17234.

United States Court of Appeals Fifth Circuit.

January 13, 1959.

Marson G. Dunaway, Jr., Rockmart, Ga., Glenn T. York, Jr., Cedartown, Ga., for appellant.

W. Colquitt Carter, Atlanta, Ga., Henry A. Stewart, Sr., Cedartown, Ga., Bryan, Carter, Ansley & Smith, Atlanta, Ga., for appellee.

Before HUTCHESON, Chief Judge, and TUTTLE and JONES, Circuit Judges.

JONES, Circuit Judge.

The appellant, Polk County, Georgia, is a body corporate. Ga.Const. Art. XI, Sec. I, Par. I. In 1952 the County, acting through its Board of Commissioners of Roads and Revenues, applied to the appellee insurance company for life insurance and health, accident, sickness and hospital insurance for employees of the County. Pursuant to the applications insurance policies were issued under a contributory plan providing for a part of the premiums to be paid by the County and the remainder of the premiums to be paid by the insured employees through wage deductions. The compensation of a few of the employees of the County was fixed by the Legislature, but for the most part the amounts of employees' pay were fixed by the Board of Commissioners. In 1957 the Board of Commissioners cancelled the policies. The County asserted that the Board of Commissioners was without power to use County funds for the payment of a part of the premiums on the policies insuring County employees. It claimed that it was entitled to have the insurance company repay to it the amount of its contribution to the premiums paid. The validity of this claim was submitted to the district court for the Northern District of Georgia and it resolved the question in favor of the insurance company. From the district court's judgment the County has appealed.

The Board of Commissioners issued a fi. fa. or execution against the insurance company at a meeting of which the insurance company had no notice and was not represented. The County claims a prima facie validity for this ex parte self serving action. We do not think it is entitled to any presumption of validity. The right of the County to recover, if it had no power to contribute to the payment of premiums, is not questioned.

The primary reliance of the County is upon the doctrine announced in Floyd County v. Scoggins, 164 Ga. 485, 139 S.E. 11, 53 A.L.R. 1286. By this case, decided in 1927, the Supreme Court of Georgia held invalid so much of the Workmen's Compensation Act of Georgia as required counties to pay compensation for personal injuries to, or death of, its employees, arising out of and in the course of their employment. The Georgia Constitution contained restrictions upon the power of counties to levy taxes in these words:

"The General Assembly shall not have power to delegate to any county the right to levy a tax for any purpose, except for educational purposes; to build and repair the public buildings and bridges; to maintain and support prisoners; to pay jurors and coroners, and for litigation, quarantine, roads, and expenses of courts; to support paupers and pay debts heretofore existing; to pay the county police, and to provide for necessary sanitation, and for the collection and preservation of records of births, death, disease and health." Ga.Const.1877, Art. VII, Sec. VI, Par. II, as amended Acts 1908, p. 33, Acts. 1910, p. 45, Acts 1926, Extra Sess., p. 30.

The Georgia Workmen's Compensation Act, as passed in 1920, defined "Employer" as including "any municipal corporation within the State, and any political division thereof." Ga.Acts 1920, p. 167, Ga.Code Ann. § 114-101. The statute also provided that:

"Neither any municipal corporation within the State, nor any political subdivision of the State, nor any employee of any such corporation or subdivision, shall have the right to reject the provisions of this Title relative to payment and acceptance of compensation * * *." Ga.Acts 1920 p. 175; Ga.Code Ann. § 114-109.

After making references to the provisions of the statute before it for construction, the Supreme Court of Georgia stated the reasons for its decision. It said:

"We do not think that under the power conferred by this provision the Legislature can authorize counties to levy taxes to compensate employees for injuries received by them, or to provide benefits for those dependent upon them in case of their death, although provisions for these purposes might render the employees more efficient, and thus indirectly benefit the employer. If the counties can be required by the state to furnish liability insurance to their employees, upon the theory that it makes them more efficient, under this provision of the Constitution, we do not see why the counties cannot be made to do many other things which will equally contribute to the welfare and efficiency of its employees. Nutritious food, proper clothing, suitable dwellings, and proper medical attention, all add to the efficiency of employees; and if the county can levy taxes to provide compensation for injuries sustained by employees, or to compensate their dependents for their death, because the doing of these things makes the employees more efficient, we see no reason why the Legislature, under this construction of the Constitution, could not authorize a county to levy taxes for any of the purposes above suggested, and for many other purposes which could be mentioned. * * *

"We do not believe that the framers of the Constitution intended that this provision of that instrument should receive a construction so comprehensive as to authorize the Legislature to impose upon a county the doing of such things as an enlightened public policy would authorize in the treatment of county employees. * * * We fully agree with learned counsel that the performance of labor involves more to an employee than the expenditure of so much brawn and brain energy. It involves the risk of being injured or killed. The Legislature, under the police power, can require ordinary employers to provide compensation for or insurance against such injuries. The same enlightened public policy might require that the counties should provide similar compensation for such injuries, or provide insurance against the same, and that the Constitution of this state should provide therefor. But under our state Constitution, counties can only expend county funds for the purposes enumerated in this provision of the Constitution". Floyd County v. Scoggins, supra, 139 S.E. 12-13.

The Supreme Court of Georgia has condensed the Scoggins rule and has thus stated it:

"It would be an unconstitutional expenditure of money by the board of education of Troup county to pay for personal injuries received by a bus driver under the circumstances herein stated, or for compensation insurance under the Workmen\'s Compensation Act." Murphy v. Constitution Indemnity Co., 172 Ga. 378, 157 S.E. 471.

The Scoggins case has been followed in Perdue v. Maryland Casualty Co., 43 Ga. App. 853, 160 S.E. 720; DeKalb County v. Grice, 51 Ga.App. 887, 181 S.E. 703; Kelley v. Newton County, 198 Ga. 483, 32 S.E.2d 99; and in the recent case of Morgan County v. Craig, 213 Ga. 742, 101 S.E.2d 714. The doctrine was recognized in Commissioners of Roads Revenues of Fulton County v. Davis, 213 Ga. 792, 793, 102 S.E.2d 180; and see 15 Ga.Bar Journ. 499 and 6 Mercer Law Rev. 287, 318. It is generally held that political subdivisions may, in the absence of an express constitutional restriction, be made subject to workmen's compensation acts. 58 Am.Jur. 658, Workmen's Compensation § 121. Georgia, in 1945, by a revised Constitution, Art. VII, Sec. IV, Par. 1, Ga.Code Ann. § 2-5701(15), has provided that the state legislature may authorize counties to avail themselves of workmen's compensation coverage for their employees.

Workmen's compensation provides indemnity, to the extent of the coverage, against injuries or death arising out of and in the course of employment. The indemnity provided by the policies issued by the appellee provided, to the extent of the coverage, indemnity for accidental injuries or death whether or not connected with employment. The insurance policies provide, in the circumstances and subject to the limitations prescribed, for sickness and hospital benefits. If a county of Georgia could not provide workmen's compensation indemnity for its employees, by insurance or as a self-insurer, against injuries and death resulting from the hazards of the employment, and it seems clear under the Scoggins and other decisions cited that it could not under the former Georgia Constitution, then it would seem to follow that a county could not, by insurance or otherwise, provide indemnity for county employees against injuries and death without regard to any causal relationship to the employment. This, however, Polk County attempted to do by the policies of insurance issued by the appellee. There are, in the portions of the Scoggins opinion quoted herein, statements by the Georgia court which clearly indicate that a county cannot provide medical care for employees nor compensate their dependents for their death. Yet the county attempted to do this by the insurance procured from the appellee.

The district court found and the appellee here asserts that the weight of authority is contrary to the conclusion we have reached. Decisions of courts of other jurisdictions are cited to sustain the proposition that counties may supplement the wages of employment by paying part of insurance premiums for employees. It is said that the county could obtain better employees, that employees would have a sense of security, that an injured employee would receive his wages from the insurance company and not from the county. These are, in substance, the arguments which were rejected by the Supreme Court of Georgia in the Scoggins case.

It is the law of Georgia that governs and, under the Conformity Act and Erie R. Co. v. Tompkins, 304 U.S....