Standard Acc. Ins. Co. v. Pet Milk Co.

• Decision Date: 19 April 1948
• Docket Number: 17695.
• Citation: 78 N.E.2d 672,118 Ind.App. 477
• Parties: STANDARD ACCIDENT INS. CO. v. PET MILK CO. et al.
• Court: Indiana Appellate Court

78 N.E.2d 672

118 Ind.App. 477

STANDARD ACCIDENT INS. CO. v. PET MILK CO. et al.

No. 17695.

Appellate Court of Indiana, in Banc.

April 19, 1948

John M. Miller, George C. Forrey, Jr., Edw. B Raub, Jr., Burrell Wright and Jacob S. White, all of Indianapolis, for appellant.

Rocap & Rocap, James W. Fesler, Irving M. Fauvre, Howard S Young, Jr., David L. Chambers, and Jack E. Hawkins, all of Indianapolis, for appellees.

BOWEN Presiding Judge.

This is an appeal from a judgment in an action by appellant, an insurance company, in a subrogation suit brought to recover damages from two alleged tort feasors, the appellees. The complaint alleged that appellant carried liability insurance on an employer under the Workmen's Compensation Act; that an employee was injured as a result of the torts of appellees; that the employee elected to receive benefits under the Workmen's Compensation Act; that appellant made payments to the employee under compensation agreements filed with and approved by the Industrial Board and, that by reason of the negligence of appellees, and the payment by appellant to the injured employee, appellant is entitled to recover $4000 damages from appellees.

Appellee Roy Lemon, filed an answer in five paragraphs, the fifth paragraph of which alleged appellant commenced its cause of action November 21, 1945, more than one year after said cause of action accrued on October 23, 1944, and that by reason thereof, appellant's cause of action is barred. The appellee, Pet Milk Company, filed three paragraphs of answer, the third of which raised the identical question presented by appellee Roy Lemon's fifth paragraph of answer. The appellant filed demurrers to the fifth paragraph of answer of appellee Roy Lemon and to the third paragraph of answer of appellee Pet Milk Company. The ground of each of these demurrers was that the said paragraphs of answer did not state facts sufficient to constitute a defense.

The lower court overruled both of these demurrers filed by appellant, appellant refused to plead further, and the lower court rendered judgment that appellant take nothing by its complaint.

Errors assigned for reversal are that the court erred in overruling appellant's demurrer to appellee, Roy Lemon's fifth paragraph of answer, and in overruling appellant's demurrer to appellee, Pet Milk Company's third paragraph of answer.

The issue raised by the demurrers which were overruled by the court presents a single proposition for our determination--whether a subrogation suit brought under Section 13 of the Indiana Workmen's Compensation Act is outlawed by the Statute of Limitations when it is brought within two years from the date of the accident but is brought later than one year after the acceptance of compensation awarded under the Workmen's Compensation Act.

Our determination of this question depends upon an interpretation and construction of Chapter 188, Acts of 1945, § 4 p. 585, Burns' Ann.Stat.1933, 1940 Repl., Vol. 8, § 40-1213, Pocket Supplement. This act was an amendment of Section 13 of the Indiana Workmen's Compensation Act of 1929, and added a new sentence to this section reading as follows: 'In order to collect such compensation paid or payable to the injured employee or his dependents the employer may commence an action at law for such collection against the other person in whom legal liability for damage exists at any time within one (1) year after the acceptance of compensation awarded notwithstanding the provisions of any statute of limitations to the contrary.'

The appellees contend, and the lower court in effect found, that a proper construction of the purpose and intent of the Legislature in its enactment of the 1945 amendment to Section 13 of the Workmen's Compensation Act, was to create an entirely new statute of limitation for the bringing of subrogation actions by an employer or insurance carrier for the recovery of compensation paid to the injured employee against the person in whom legal liability for damage exists, and that the 1881 two-year statute of limitations, § 2-602, Burns' Ann.Stat.1933, 1946 Replacement, Vol. 2, by reason of such 1945 amendment, is no longer applicable to such cases.

Prior to the passage of the 1945 amendment to the Workmen's Compensation Act, our courts uniformly held that the 1881 two-year Statute of Limitations was applicable to suits of this character. Employers' Liability Assur. Co. Ltd. v. Indianapolis & Cincinnati Traction Co. et al., 1924, 195 Ind. 91, 144 N.E. 615; Fidelity & Casualty Co. of N. Y. v. Miller, 1941, 111 Ind.App. 308, 38 N.E.2d 279.

Also, prior to the passage of this amendment, the Indiana rule and the greater weight of authority held that the statutory provision for the recovery by the employer or his insurance carrier from a third person did not create a new cause of action in favor of the employer or his insurance carrier, but merely subrogates him to the rights of the employee. Fidelity & Casualty Co. of N. Y. v. Miller, supra; Bebout v. F. L. Mendez & Co., 1941, 110 Ind.App. 28, 37 N.E.2d 690; American Mutual Liability Ins. Co. v. Otis Elevator Co., 1929, 160 Tenn. 248, 23 S.W.2d 245; Fidelity & Casualty Co. v. St. Paul Gas Light Co., 1922, 152 Minn. 197, 188 N.W. 265; Schlitz Brewing Co. v. Chicago Ry. Co., 1923, 307 Ill. 322, 138 N.E. 658; Employers, etc. Assurance Co. v. Indpls. Trac. Co., 1924, 195 Ind. 91, 144 N.E. 615.

The 1945 Act did not change the cause of action, but added a sentence...