Todeva v. Oliver Iron Min. Co.

• Decision Date: 19 January 1951
• Docket Number: No. 35259,35259
• Citation: 232 Minn. 422,45 N.W.2d 782
• Parties: TODEVA v. OLIVER IRON MINING CO. et al.
• Court: Minnesota Supreme Court

Page 782

45 N.W.2d 782

232 Minn. 422

TODEVA v. OLIVER IRON MINING CO. et al.

No. 35259.

Supreme Court of Minnesota.

Jan. 19, 1951.

Syllabus by the Court.

1. A widow of an employe who dies as the result of a compensable accident, pursuant to M.S.A. § 176.12, acquires at the time of her husband's death a fixed statutory right to weekly compensation benefits in an aggregate total of not to exceed $7,500, and this fixed statutory right continues unimpaired as long as she survives and does not remarry.

2. Once an award of compensation has been made to the dependent of a workman who has died as a result of a compensable accident, the dependent's right to compensation thereunder, both as to accrued and as to future compensation installments--subject to the exercise by the industrial commission of a sound discretion in supervising the manner of payment--becomes vested in the individual as a constitutionally protected property right which cannot be impaired by the industrial commission or by future legislative enactment.

3. Although the Workmen's Compensation Act is to be administered for both the welfare of disabled workmen and their dependents and for the protection of the public, in time of war the protection of the public, from the standpoint of the national welfare as a whole, becomes paramount and overrides any and all other considerations with respect to compensation awards in favor of nonresident nationals of an enemy country.

4. Any property in this country of an enemy national may be summarily reduced to possession by the United States in the furtherance of the war effort, and under the war power such enemy-owned property may be confiscated or vested in the national government.

5. The issuance of a vesting order operates to transfer immediately to the United States the property right and interest described in the order and to divest the former owner of every right therein.

6. The moment the vesting takes place, the custodian steps into the shoes of the alien beneficiary of the compensation award and thereby acquires the exclusive possession of all rights of the original owner without impairment or change, and the rights so acquired by the custodian are not limited to the duration of the war and are not terminated by any subsequent declaration of peace.

7. Once the compensation rights are vested in the custodian, the industrial commission must thenceforth recognize him as the permanent successor and alter ego of the original compensation beneficiary, and the proper disposal of the Proceeds of compensation payments, accrued and unaccrued, becomes exclusively a federal question.

8. Although no interest was payable on the accrued compensation installments while the President's freezing order prevented the employer from making any disbursement under the award, once the custodian was vested with the right to receive the compensation installments which had accrued, he became entitled not only to the accrued principal, but also to receive interest thenceforth upon any accrued amount which was thereafter withheld, and no action of the industrial commission, by continuation of its order of suspension or otherwise, could deprive him of such principal or interest.

C. U. Landrum, U.S. Dist. Atty., Clifford F. Hansen, Asst. U.S. Dist. Atty., St. Paul, Harold I. Baynton, Acting Director Office of Alien Property, Washington, D.C., James L. Morrisson, Robert B. McKay and Ralph S. Spritzer, Department of Justice, all of Washington, D.C., J. A. A. Burnquist, Atty. Gen., Victor H. Gran, Asst. Atty. Gen., and James J. Giblin, Asst. U.S. Atty., St. Paul, for relator.

Arthur R. Smythe of Smythe & Lindquist, Duluth, for petitioner-respondent.

W. O. Bissonett, Duluth, for respondent Oliver Iron Mining Co.

MATSON, Justice.

Certiorari to review an order of the industrial commission denying the demand of the alien property custodian for the payment and delivery to him of the accrued and unaccrued compensation benefits awarded to a nonresident alien widow, which order of denial further directed the employer to resume payment of such compensation benefits to the widow.

On October 11, 1938, Nick Evanoff was killed in the course of his employment. His sole surviving dependent was his wife, Katerina Nicolova Evanova Todeva who was then, and ever since has been, an alien residing in Bulgaria. On September 22, 1939, the industrial commission awarded the widow compensation at the rate of $13.29 per week commencing October 11, 1938, and to continue thereafter--subject to the provisions of the workmen's compensation act--during her dependency, but not to exceed the sum of $7,500. The controversy over whether the alien property custodian or the widow is entitled to the death compensation benefits arises out of the application of a war measure known as the Trading With the Enemy Act. ¹ The act creates powerful, swift, and summary procedures for the seizure and sequestration of property rights and interests owned or controlled by enemy countries and their nationals. See, Stoehr v. Wallace, 255 U.S. 239, 41 S.Ct. 293, 65 L.Ed. 604 and Central Union Trust Co. of New York v. Garvan, 254 U.S. 554, 41 S.Ct. 214, 65 L.Ed. 403. Pursuant thereto, 50 U.S.C.A.Appendix, § 5(b), the President on April 10, 1940, issued Executive Order No. 8389, 5 F.R. 1400, 12 U.S.C.A. § 95a note, which froze and immobilized all property rights and interests owned or controlled by enemy countries and their nationals and specifically prohibited any transport, exportation, dealing in, or the exercise of, any right, power, or privilege with respect to such property rights and interests. After Germany invaded and took control of Bulgaria, this freezing order was extended to Bulgaria and its nationals by Executive Order No. 8701, issued March 4, 1941, 6 F.R. 1285, 12 U.S.C.A. § 95a note, or seven months before the suspension of compensation payments to Mrs. Todeva. This country declared war on Bulgaria on June 5, 1942. Executive Order No. 9095, dated March 11, 1942, 7 F.R. 1971, ² established the office of alien property custodian and authorized the custodian to take such action as he deemed necessary in the national interest, inclusive of the power to direct, manage, supervise, control, or Vest in himself--'(c) any * * * property or interest within the United States of any nature whatsoever owned or controlled by, payable or deliverable to, held on behalf of or on account of, or owing to, or which is evidence of ownership or control by, a designated enemy country or national thereof: * * *.'

In express recognition of the President's freezing of the property rights and interest of enemy countries and their nationals and upon petition of the employer, the industrial commission by order dated October 1, 1941, authorized the employer To suspend further payments of compensation to Mrs. Todeva until peace had been declared in Europe or until further order of the commission. In its order of suspension, after referring specifically to Executive Order No. 8389, the commission, apparently as a further basis for its action, said that there appeared to be no practical or lawful method available whereby payments to Mrs. Todeva could be made with reasonable certainty that they would reach her and not be appropriated by German authorities, and that it was for the best interests of both parties (Mrs. Todeva and the employer) that such payments be suspended until peace had been restored. At the time of the order of suspension, Mrs. Todeva had received under the compensation award, weekly payments from October 11, 1938, until July 1, 1940, in an aggregate total of $1,193.90 which, assuming that the widow continued to live and did not remarry, left an unpaid balance of $6,306.10 due her under the award.

A treaty of peace with Bulgaria did not become effective until September 15, 1947, 61 Stat. Part 2, p. 1915. On February 26, 1946, the alien property custodian, ³ having determined that Mrs. Todeva was a national of Bulgaria, issued Vesting Order No. 5974 whereby he vested in himself 'All right, title, interest, and claim of any kind or character whatsoever' in and to Mrs. Todeva's compensation award. Shortly thereafter the custodian made demand upon the employer for the payment and delivery to him of all the property described in the vesting order. This was followed by the custodian's application to the commission for an order directing the employer to pay to him all accumulated compensation payments then owing under the award to Mrs. Todeva, as well as all future payments as they should accrue.

Upon review of the industrial commission's order denying the custodian's application, which order directed the resumption of payment of compensation benefits to Mrs. Todeva, we have the following issues:

(1) Subject to the statutory limitations as to total amount, does a widow who is the sole surviving dependent of her husband, who was accidentally killed while covered by the Minnesota workmen's compensation act, immediately upon her husband's death, acquire a fixed statutory right to the payment of compensation benefits which continues unimpaired as long as she survives and does not remarry?

(2) Is the widow's right to compensation benefits upon the death of her husband, the employe, a property right, and, if so, does it extend to installments which have not accrued or become payable under the industrial commission's award?

(3) Did the widow's rights to compensation benefits under the award vest in and come under the control of the alien property custodian?

It is admitted that Mrs. Todeva is a nonresident alien who still survives and who has not remarried.

1--2. A widow of an employe who dies as the result of a compensable accident, pursuant to M.S.A. § 176.12, acquires at the time of her husband's death a fixed statutory right to weekly compensation benefits in an aggregate total of not to exceed $7,500 changed to $10,000 by L.1949, c. 540, § 4, and this fixed statutory...