Smith v. Yellow Cab Co.

• Citation: 135 A. 858,288 Pa. 85
• Decision Date: 03 January 1927
• Docket Number: 226
• Parties: Smith v. Yellow Cab Co., Appellant
• Court: United States State Supreme Court of Pennsylvania

135 A. 858

288 Pa. 85

Smith v. Yellow Cab Co., Appellant

No. 226

Supreme Court of Pennsylvania

January 3, 1927

Argued November 29, 1926

Appeal, No. 226, Jan. T., 1926, by defendant, from judgment of Superior Court, Oct. T., 1925, No. 237, affirming judgment of Municipal Court of Phila. Co., June T., 1924, No. 16, for plaintiff in case of John Smith to use of Anna McDonnell and The Maryland Casualty Co., Insurance Carrier v. Yellow Cab Co. Affirmed. See 87 Pa.Super. Ct. 143.

Appeal from Superior Court.

The opinion of the Supreme Court states the facts.

Judgment of municipal court affirmed. Defendant appealed.

Error assigned was, inter alia, judgment of Superior Court, quoting it.

The judgment of the Superior Court is affirmed.

Frederic L. Ballard, of Ballard, Spahr, Andrews & Madeira, with him Russell Duane, for appellant. -- The right to maintain this second action upon a single tort does not exist at common law. If the right exists its basis must be found in the Compensation Act: Fields v. P.R.T. Co., 273 Pa 282.

The employer's right of subrogation mentioned in section 319 of the Compensation Act is purely contractual being created by the contract of employment: Anderson v. Steel Co., 255 Pa. 33.

The right of the injured employee against the outside tort-feasor remains complete and entire as at common law and is neither increased nor diminished by the Compensation Act: Lengle v. Twp., 274 Pa. 51; Conover v. Bloom, 269 Pa 548; Mayhugh v. Telephone Co., 265 Pa. 496; Wilson v. B. & I. Works, 85 Pa.Super. 537.

Settlement with or recovery by the injured employee terminates his right and the subrogated employer cannot (as use-plaintiff) bring a second suit upon it because there is no right left to be subrogated to: Phillips v. Israel, 10 S. & R. 391; Laughead v. Coke Co., 209 Pa. 368; Illinois Auto Ins. Ex. v. Braun, 280 Pa. 550.

Established legal doctrines as well as constitutional requirements support this view: Fields v. P.R.T., 273 Pa. 282; Beck v. Cricket Club, 45 Pa.Super. 358; Marsh v. Ry., 204 Pa. 229; Strain v. Kern, 277 Pa. 209; Books v. Boro., 95 Pa. 158.

Louis Wagner, with him W. F. Whittle, R. A. Smith, and W. F. Whittle, for appellee. -- While the policy of the common law is against the splitting of a cause of action, the common law of Pennsylvania allows the parties to a cause of action by agreement to eliminate certain elements from the controversy between them: Frankel v. Q.C.C. Co., 82 Pa.Super. 217; Marshall v. Am. Stores Co., 87 Pa.Super. 498.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE SIMPSON:

John Smith, the legal plaintiff in this case and an employee of Anna McDonnell, one of the use-plaintiffs, was injured, while in the course of his employment, through the negligence of the corporate defendant's employees. By reason thereof, she became liable to him under the provisions of section 301 of the Workmen's Compensation Law of June 2, 1915, P.L. 736, 738. The Maryland Casualty Company, the other use-plaintiff, was her insurance carrier under that statute, and was directly liable to the employee by virtue of section 1 of the Act of June 2, 1915, P.L. 736. As a result of the injury, that company paid the sum of $109.60 to or for the legal plaintiff, as required by the statute and the terms of its policy of insurance.

Subsequently the injured employee sued the defendant. On learning of it, the insurance carrier gave written notice to defendant of the payment of the above sum, claimed subrogation to the extent thereof, and requested defendant to "make no adjustment with [plaintiff] without first advising [the insurance carrier] of your intention to do so, and protecting our rights in the matter." This notice defendant wholly ignored, and settled with the legal plaintiff by paying him a sum far in excess of the $109.60, taking from him a receipt in full, a release of all claims, and an order to discontinue the pending suit, which was thereupon done.

Suit was then brought in the name of the legal plaintiff, to the use of his employer and the insurance carrier to recover said sum of $109.60. The case was tried before a judge without a jury; defendant stated that it only required plaintiff to prove its, defendant's, negligence, and, in answer to the claim, itself only proved the amount it had paid the legal plaintiff in settlement, the execution and delivery of the receipt and release, and the discontinuance of the suit. The trial judge found that the legal plaintiff's injury was caused by defendant's negligence, and that section 319 of the Workmen's Compensation Law subrogated the employer to plaintiff's right to recover for the injury, to the extent of the sums paid as prescribed by the statute, which right was not lost by defendant's voluntary settlement without notice. He, therefore, entered judgment against defendant for the amount stated, and this was affirmed by the Superior Court.

In this court, defendant attempts to raise an additional question, viz: Can such a recovery be permitted without violating article III, section 3, of the Constitution of Pennsylvania, and the Fourteenth Amendment to the Constitution of the United States? We do not propose to discuss the matter, since the question was not even suggested by the pleadings or in the trial court, and cannot be raised for the first time on appeal.

In its brief, appellant has stated a number of propositions

In its brief, appellant has stated a number of propositions supposed to lead up to, or to buttress, its conclusion that "settlement with or recovery by the injured employee terminates his right and the subrogated employer cannot bring a second suit upon it, because there is no right left to be subrogated to." This was the only question raised at the trial, and is the only one we need consider. As the subrogation existed before the "settlement with or recovery by the injured employee," there is no point in the statement that "there is no right left to be subrogated to"; and the question at issue is really this: Can a wrongdoer, who knows that an employer has a statutory right to a portion of any sum which may be recovered for injury to his employee, wholly defeat that right by stealthily settling with the employee? As regards justice and equity, surely this question answers itself.

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