Smith v. Van Noy Interstate Co.

• Decision Date: 07 June 1924
• Citation: 262 S.W. 1048,150 Tenn. 25
• Parties: SMITH v. VANNOY INTERSTATE CO. et al.
• Court: Tennessee Supreme Court

262 S.W. 1048

150 Tenn. 25

SMITH v. VANNOY INTERSTATE CO. et al.

Supreme Court of Tennessee.

June 7, 1924

Appeal from Circuit Court, Shelby County; Ben L. Capell, Judge.

Petition by John Thomas Jefferson Smith against the Van Noy Interstate Company and another. Judgment for defendants, and plaintiff appeals. Reversed and rendered.

J. O. Bomer, Jr., of Memphis, for petitioner.

M. E Lesser, of Mephis, for defendants.

HALL J.

The petitioner, John Thomas Jefferson Smith, is a resident of the city of Memphis, Shelby county, Tenn.

The Van Noy Interstate Company is a corporation with an office and agent in the city of Memphis, Shelby county, Tenn., and is engaged in the operation of railroad hotels and eating houses in a number of the states of the union.

The Ocean Accident & Guaranty Insurance Company of London is an English corporation, but is domesticated and qualified to do business in this state.

On March 2, 1922, the agent of the Van Noy Interstate Company at Memphis employed the petitioner, John Thomas Jefferson Smith to work for that company as a house carpenter in its railroad hotel, located at Wynne, Ark., at a wage of $90 per month. At the time this contract of employment was entered into, Smith lived in memphis and the contract was made in Memphis. The contract of employment was for work outside the state.

The Van Noy Interstate Company was operating under the Workmen's Compensation Act (chapter 122, Acts of 1919). The Ocean Accident & Guaranty Insurance Company carried its risk or insurance.

On March 6, 1922, at about the hour of 3 p. m., Smith, while in the performance of his duties at the Van Noy Interstate Company's hotel inthe city of Wynne, Ark., fell from a ladder and sustained a fracture of his left hip. He was thereafter sent to St. Joseph Hospital at Memphis, where the fracture was set, and he was placed in a plaster of paris cast, where he remained for some 10 weeks. He is now totally and permanently disabled as a result of said injury. Notice of said injury was given both to the Van Noy Interstate Company and te insurance company within 30 days after said accident, in accordance with the provisions of the Workmen's Compensation Act. Defendants having refused to pay Smith compensation for his injury, he instituted the present action by petition in the circuit court of Shelby county to recover the same.

Defendants deny petitioner's right to recover, on the ground that he was injured while engaged in the performance of his duties under his contract with the Van Noy Interstate Company outside of the state of Tennessee, and therefore the Tennessee Workmen's Compensation Act has no application and petitioner is not entitled to recover from defendants compensation under said act.

The circuit judge dismissed Smith's petition, being of the opinion that the Tennessee Workmen's Compensation Act was not applicable to his injury, but that the law of the state where he sustained the injury alone was applicable.

From this judgment Smith has appealed to this court, and has assigned the action of the circuit judge dismissing his petition and denying him compensation for his injury under the Tennessee Workmen's Compensation Act for error.

Section 19 of our act provides:

'That when an accident happens while the employee is elsewhere than in this state, which would entitle him or his dependents to compensation had it happened in this state, the employee or his dependents shall be entitled to compensation under this act if the contract of employment was made in this state, unless otherwise expressly provided by said contract.'

The contention of defendant that the act does not apply where the accident occurs outside of the state finds support in the English cases. See Hicks v. Maxton, 1 B. W. C. C. 150; Tomalin v. S. Pearson & Son, 2 K. B. 61, 100 L. T. N. S. 685; Schwartz v. India Rubber, G. & Teleg. Works Co., 2 K. B. 299, 106 L. T. N. S. 706. These cases unequivocably hold that no liabilityexists where the accident occurs outside of the British empire.

The first case to be decided in this country is Gould's Case, 215 Mass. 480, 102 N.E. 693, Ann. Cas. 1914D, 372. In that case the Massachusetts court followed the English holding. That case, however, has not been followed, in many states, and the rule announced therein has met much adverse criticism, as will be demonstrated by an examination of the later cases.

Mr. Bradbury followed the rule announced in the Massachusetts case in the first edition of his work (Bradbury, Workmen's Comp. [1st Ed.] p. 44), but when the second edition appeared he had modified his views (1 Bradbury, Workmen's Comp. [2d Ed.] pp. 50, 51), and in the third edition (Bradbury, Workmen's Comp. [3d Ed.] p. 92), he said:

'Therefore, now, as in the second edition of this work, partially receding from the position taken in the first edition of this work, although that position has been sustained by eminent authority, it is believed that the doctrine which must be established finally will be, in effect, that the law of the place where a contract of employment is made will govern the rights and liabilities of employees and employers to claim and to pay compensation.'

That Mr. Bradbury was convinced that the weight of authority was against the Massachusetts holding, and that it should not be followed, is evidenced by a note prepared by him to the case of Spratt v. Sweeney & G. Co., 168 A.D. 403, 153 N.Y.S. 505, found in 9 N. C. C. A. 918. After citing the Gould Case and other earlier cases, he said:

'Upon more mature deliberation, however, other courts came to a contrary conclusion. They held that, inasmuch as the liability of an employer to pay compensation for injury to an employee was essentially a contractual one under the Workmen's Compensation Acts, such statutes had extraterritorial effect, to the extent that, where the employer and the employee were both residents of the state where the contract of employment was made, the law of that state would be applied, even though the accident happened without the state.'

The Illinois court also sustains the contention of defendant. Union Bridge & Constr. Co. v. Industrial commission, 287 Ill. 396, 122 N.E. 609. Whie it is true that by the title to the Illinos act (Laws 1913, p. 335) it is limited to 'accidental injuries or deaths suffered * * * within the state,' the court did not rest its decision on this fact alone, but followed the doctrine of the Gould Case.

The Supreme Court of California, in North Alaska Salmon Co. v. Pillsbury, 174 Cal. 1, 162 P. 93, L. R. A. 1917E, 642, held that the act of that state did not cover accidents occurring outside the state. But the California act is a compulsory one--not optional, as is ours. This undoubtedly had much to do with the result in this case, which was disposed of on rehearing.

We shall now consider the decisions of some of the states sustaining the contention of petitioner (appellant here). The gist of the later decisions is quite well stated by the Supreme Court of Colorado in Industrial Commission v. AEtna Life Insurance Co., 64 Colo. 480, 174 P. 589, 3 A. L. R. 1336, where the question was before the court. After considering the case and quoting from Bradbury's second edition, it is said:

'The later authorities in this country base the conclusion chiefly on the proposition that, under voluntary compensation statutes such as ours, the cause of action of petitioner is ex contractu, and that the lex loci contractus governs the construction of the contract and determines the legal obligations arising under it.

'The provisions of the Compensation Act are to be construed as written into the contract, and therefore a part of it.'

The question has been before the courts of New Jersey on several occasions. In Rounsaville v. Central R. Co., 87 N. J. Law, 371, 94 A. 392, it was said:

'We are now dealing with the simpler question whether a New Jersey court will enforce a New Jersey contract according to the terms of a New Jersey statute. The question hardly calls for an answer. The place where the accident occurs is of no more relevance than is the place of accident to the assured in an action on a contract of accident insurance, or the place of death of the assured in an action on a contract of life insurance.'

The Supreme Court of Rhode Island fully considered the question in an exhaustive opinion in Grinnell v. Wilkinson, 39 R.I. 447, 98 A. 103, L. R. A. 1917B, 767 Ann. Cas. 1918B, 618, and concluded:

'We are of the opinion that the reasoning of the cases above cited from New York, New Jersey, and Connecticut is quite applicable to the case at bar; that under the Workmen's Compensation Act of Rhode Island the relation of employer and employee is contractual, and the terms of the act are to be read as a part of every contract of service between those subject to its terms; that on principle those reason, and in view of the purpose, scope, and character of the act, it should be construed and held to include injuries arising out of the state as well as those arising within it; and that the weight of authority upon acts similar to our own gives full support to our conclusion.'

The question was before the Supreme Court of Iowa in Pierce v. Bekins Van & Storage Co., 185 Iowa, 1346, 172 N.W. 191. In that case the court said:

'We hold that we are not...