Rudy v. McCloskey & Co.

• Decision Date: 10 March 1943
• Docket Number: 45-1942
• Citation: 30 A.2d 805,152 Pa.Super. 101
• Parties: Rudy v. McCloskey & Company, Appellant
• Court: Pennsylvania Superior Court

30 A.2d 805

152 Pa.Super. 101

Rudy v. McCloskey & Company, Appellant

No. 45-1942

Superior Court of Pennsylvania

March 10, 1943

Argued October 27, 1942.

Appeal from judgment of C. P. Centre Co., Dec. T., 1940 No. 244, in case of Sarah A. Rudy, widow, v. McCloskey & Company.

Appeal by defendant from decision of Workmen's Compensation Board making award of additional compensation.

Order of board affirmed and judgment entered for claimant, opinion by Walker, P. J. Defendant appealed.

Judgment reversed.

John W Kephart, with him Arthur C. Dale, for appellant.

William W. Litke, of Fleming & Litke, for appellee.

Before Keller, P. J., Cunningham, Baldrige, Rhodes, Hirt and Kenworthey, JJ. (Stadtfeld, J., absent).

OPINION

Hirt, J.

Defendant McCloskey & Company, in the course of constructing a building in the Borough of State College, requested a local labor union to supply workmen. George Albert Rudy was among those who appeared. He had been admitted to membership in the union on his representation that he was over 18 years of age, the minimum age requirement, and on October 26, 1938 when questioned, told defendant's employment agent that he was born on May 10, 1920. Relying on this representation defendant employed him as a laborer. On November 16, 1938 when Rudy was about to remove a wheelbarrow filled with concrete from a construction elevator, it was set in motion by someone from below; he was thrown from the platform and fell fifty feet to the ground and was killed instantly. Thereafter, Bellefonte Trust Company was appointed guardian of his minor widow and their two children and on their behalf entered into an agreement with defendant providing for normal workmen's compensation amounting to $ 10,129.56 payable in accordance with the act. There is no dispute as to that. The controversy arose over the claim for additional compensation in like amount under $ 320 of the Compensation Act, as amended June 4, 1937, P. L. 1552, § 1, 77 PS 672, ^[1] on the ground that at the time of his death, decedent was under 18 years of age and was illegally employed. He, in fact, was then only a few days over 17 1/2 years of age; he was born on May 10, 1921. The Board found that defendant was liable for double compensation and the lower court entered judgment on the award.

Decedent's employment by defendant was unlawful but not merely because he was under 18. The law was violated only in that defendant failed to procure an employment certificate in accordance with the Child Labor Act. ^[2] Decedent was eligible for employment on certification. He was not employed "in the operation or management of hoisting machines" contrary to § 5 of the Act, 43 PS 44, and he could have been employed legally to do the work in which he was engaged at the time of his death, if this formality had been observed. There is no evidence that he was physically unfit and with the responsibility of a family to support an employment certificate undoubtedly would have been issued as a matter of routine. If these essentials, which do not go to the factual merits of the claim, had been complied with, only normal compensation would have been demanded. This appeal raises the single question of the constitutionality of § 320 of the act as applied to the class of claims such as here presented. Although not bearing on the question, (Mitchell v. Mione Mfg. Co., 112 Pa.Super. 394, 171 A. 114; § 306(b) of the 1937 amendment, supra, 77 PS 421) it may be observed that if the judgment is valid, claimant's wards will benefit to the extent of over $ 10,000 as the fruits of decedent's deceit and fraud.

It is appellant's contention that double compensation is unconstitutional because unreasonable; that the additional payment is a penalty, and in any event was reduced to 10% of normal compensation by the amendment of June 21, 1939, P. L. 520. ^[3] Appellee maintains that the doubled amount is all workmen's compensation; that as such it is reasonable and therefore the provisions of the section are constitutional.

The subject of minors in industry in relation to workmen's compensation had been under consideration by a number of commissions appointed for that purpose. ^[4] And it may be that a provision for double compensation was written into the laws of a number of the States from mingled motives: To provide quid pro quo by approximating the value to the minor of the common law and statutory remedies which were taken from him; because normal compensation for death or for serious permanent injury, reducing earning power for life was considered inadequate when measured by the small wages the minor received; to enforce the Child Labor Law by compelling the employer himself to pay the excess over normal compensation.

Legislative authority to enact workmen's compensation laws in our State rests upon the constitutional amendment of November 2, 1915, Art. III, § 21. ^[5] The title of the basic Workmen's Compensation Act of 1915, P. L. 736 stamps it a purely compensation measure. Its purpose was to provide recompense commensurate with the damage from accidental injury, as a fair exchange for relinquishing every other right of action against the employer. Blake v. Wilson, 268 Pa. 469, 474, 112 A. 126, 112 A. 126. The act which the amendment authorized is social legislation. "Its purpose is to relieve to some extent the employee .... from the economic consequences of his injury and make them a part of the cost of operation of the business, to be paid ultimately by the consuming public, and it should be so construed as to carry this purpose into effect": Hale v. Savage Fire Brick Co., 75 Pa.Super. 454. The effect of the constitutional amendment, with the accent upon "reasonable" compensation, which it authorized, is to limit legislative power and to keep it within bounds.

The basic Compensation Act of 1915 did not include minors employed in violation of the Child Labor Laws, within the classes of employees governed by it. Such minor still had the common law remedy of an action in trespass with the advantages incident to his status as a minor. Lincoln v. National Tube Co., 268 Pa. 504, 112 A. 73. This was the law until the amendment of April 14, 1931, P. L. 36, when § 320 was first added to the Compensation Act. But since children of this class were brought under the act, the theory of workmen's compensation must apply to them as well as to the adult workman. What the child receives must have some reasonable relation to the schedules of compensation payable generally under the act.

Considered as 'compensation' the award in this case when added to the normal payments provided by the agreement, is excessive in amount. Decedent's weekly wage was found to be $ 21.45 (based upon a daily wage of $ 3.90 multiplied by 5 1/2 days) although his actual earnings ranged from $ 16 to but $ 20. The basic weekly compensation payment is $ 13.94. Thus, if compensation is doubled, decedent's dependents will receive $ 27.88 weekly or $ 6.43 more than decedent's theoretical weekly wage and $ 17.88 more than he actually earned in any week while employed by defendant. Compensation payable generally, under the act, is subject to the limitation that it may not be in excess of what the deceased employee was regularly earning by way of wages, out of which he supported himself and his dependents. Ware v. Northern Metal Co., 147 Pa.Super. 102, 24 A.2d 119. Considered from the viewpoint of decedent's former earnings the provisions of § 320 produce an unreasonable result. "A law which requires an employer to pay a disabled employee .... more than the employee earned before his disability arose, does not conform to the constitutional test of reasonableness": Rich Hill Coal Company v. Bashore, 334 Pa. 449, 461, 7 A.2d 302.

Whatever prompted similar legislation in other States, it seems clear that the additional payment required by our 1937 Act was essentially a penalty imposed upon the employer for violating the Child Labor Laws. From the language of § 320 it is apparent that it was aimed at the employer and was not enacted wholly in the interest of the minor or his dependents. It is unimportant that the amendment provides that the amount exacted "may be referred to as 'additional compensation.'" Its essential nature cannot be changed by a name authorized by the legislature. If it were what it purports to be, there would be no need to give it a name. ^[6] The dominant intent of the section, to penalize the employer is indicated by the provision that the employer alone "shall be liable for the additional compensation" and "any provision in an insurance policy undertaking to relieve an employer from such liability shall be void." This provision is significant when considered in connection with the general policy of the act not only to provide compensation but to see to it that it is paid. § 305, 77 PS 501 provides that every employer liable, shall insure the payment of compensation in the State Workmen's Insurance Fund or in some insurance company unless of sufficient financial ability to qualify for self insurance. Under § 320 the employee would have to take the chances of his employer's insolvency with no insurance to protect him.

Considered either as 'compensation' or as a 'penalty', or a combination of both, the award in this case cannot be justified on the ground of classification of workmen entitled to benefit in different degrees under the compensation act. ^[7] The constitutional amendment authorizes "fixing the basis of ascertainment of such compensation and the maximum and minimum limits thereof." Since compensation is the purpose of the amendment both the basis and the limits, in general, should be uniform in legislation authorized by it. To justify deviation from uniformity in the operation of...