Savitt v. L. & F. Const. Co.

• Decision Date: 25 January 1940
• Docket Number: No. 40.,40.
• Citation: 10 A.2d 728
• Parties: SAVITT v. L. & F. CONST. CO. et al.
• Court: New Jersey Supreme Court

10 A.2d 728

SAVITT

v. L. & F. CONST. CO. et al.

No. 40.

Court of Errors and Appeals of New Jersey.

Jan. 25, 1940.

Appeal from Supreme Court.

Proceedings under the Workmen's Compensation Act by Morris Savitt, petitioner, opposed by the L. & F. Construction Company, employer, and the New Jersey Manufacturers Casualty Insurance Company, insurance carrier. From a judgment of the Supreme Court, 123 N.J.L. 149, 8 A.2d 110, which dismissed a writ of certiorari to review a judgment of the court of common pleas, 17 N.J.Misc.R. 65, 4 A.2d 692, affirming a judgment of the New Jersey Department of Labor, 16 N.J.Misc.R. 462, 1 A.2d 752, the employer and insurance carrier appeal.

Judgment modified, and, as modified, affirmed, and cause remanded.

Kellogg & Chance, of Jersey City (R. Robinson Chance, of Jersey City, of counsel), for appellants.

David Roskein, of Newark (Harry Cohn, of Newark, of counsel), for respondent.

HEHER, Justice.

We concur in the view expressed by Mr. Justice Perskie for the Supreme Court that section 34:15-40 of the Revised Statutes of 1937, N.J.S.A. 34:15-40, as applied in this proceeding, is not repugnant either to the contract clauses of the Federal and State Constitutions U.S.C.A. Const, art. 1, § 10; Const.N.J. art. 4, § 7, par. 3, or to the due process clause of the Fourteenth Amendment of the Federal Constitution, U.S.C.A.

As pointed out in the opinion, the statute concerns the remedy rather than substantive contractual rights. Evidently, its purpose was to correct a manifest and unintentional injustice in the earlier statute, under which the injured employee could receive substantially less compensation where there was a recovery from a third-party tort-feasor than where there was none. In essence, the statutory provision under review merely places upon the employer the burden of the counsel fee payable for service rendered in the third-party action to his ultimate profit. After all, these provisions have nothing to do with the compensation to be paid under the basic statutory scheme of compensation. Clearly, it was not the legislative purpose to vary the compensation payments, i. e., to create two classes with essentially different rights—one where a third-party recovery is had and the other where there is none such. The design of all these provisions relating to credit for a third-party recovery was to advantage the employer —to give him the benefit of the moneys thus paid. The regulation of this incidental phase of the compensation statute cannot reasonably be said to impair the obligation of the basic contract.

And, while not reading the statute as limiting the counsel fee to one-third of the sum actually paid to the injured employee "in release or in judgment", as appellants maintain, we are of the view that it does not bear the meaning given in the courts below.

The employer is entitled to credit only for the sum actually received by the injured employee from the third party tort-feasor. In the ascertainment of the quantum of the credit, the "expenses of suit" and the "attorney's fee" are to be deducted from the recovery; and the "attorney's fee", as defined by the...