Toomey v. Waterman SS Corporation, 40.

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit
• Citation: Toomey v. Waterman SS Corporation, 123 F.2d 718 (2nd Cir. 1941)
• Decision Date: 24 November 1941
• Docket Number: No. 40.,40.
• Parties: TOOMEY v. WATERMAN S. S. CORPORATION et al.

123 F.2d 718 (1941)

TOOMEY v. WATERMAN S. S. CORPORATION et al.

No. 40.

Circuit Court of Appeals, Second Circuit.

November 24, 1941.

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Jacob Rassner, of New York City, for plaintiff-appellant Michael Toomey.

Barry, Wainwright, Thacher & Symmers, of New York City (John C. Crawley, of New York City, of counsel), for appellees Waterman S. S. Corporation and Waterman S. S. Agency, Ltd.

Alexander & Ash, of New York City (Edward Ash and Joseph M. Meehan, both of New York City, of counsel), for appellee Ryan Stevedoring Co., Inc.

Before L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

The questions raised by this appeal are whether the plaintiff by acceptance of the compensation paid under the Longshoremen's Act elected to abandon his right to recover indemnity from third persons and whether, irrespective of a conscious election, such an acceptance operated as an assignment to his employer, Ryan Stevedoring Company, of all his rights to recover damages against Waterman Steamship Corporation and Waterman Steamship Agency, Ltd.

Under Title 33, Section 914 (a) U.S.C.A. the act provides: "Compensation * * * shall be paid periodically, promptly, and directly to the person entitled thereto, without an award, except where liability to pay compensation is controverted by the employer."

Section 933 (a) provides that: "If on account of a disability or death for which compensation is payable under this chapter the person entitled to such compensation determines that some person other than the employer is liable in damages, he may elect, by giving notice to the deputy commissioner in such manner as the commission may provide, to receive such compensation or to recover damages against such third person."

Section 933 (b) (prior to amendment on June 25, 1938) provided as follows: "Acceptance of such compensation shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person, whether or not the person entitled to compensation has notified the deputy commissioner of his election." 44 Stat. 1440.

After amendment on June 25, 1938, the last subdivision read as follows: "Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person."

Merrick's testimony which we have quoted showed that he informed the plaintiff that if he accepted compensation under the Longshoremen's Act he could not sue third parties for damages arising from his accident. While the master did not make a formal finding that the plaintiff understood that by accepting compensation he was releasing his rights to recover damages against third parties, such was evidently the master's opinion or he would not have said "it is incredible that the talk with Merrick about the accident, the weekly compensation rate and other matters could have proceeded without some inquiries from the plaintiff about where he stood." In other words, it is plain that the master credited the testimony of Merrick that the plaintiff was informed that he could not sue third parties if he accepted compensation under the Longshoremen's Act.

But irrespective of whether there was proof of a conscious exercise of the election given by Section 933 (a) to receive compensation instead of recovering damages against third parties, under Section 933 (b) "acceptance of such compensation operated as an assignment to the employer of all right * * * to recover damages against such * * * person, * * *" and plaintiff accordingly lost his cause of action against the third parties.

In Sciortino v. Dimon S. S. Corporation, 2 Cir., 44 F.2d 1019, affirming D.C., 39 F.2d 210, we held that an employee who accepted compensation thereby lost his right to sue third parties. The Third Circuit reached the same conclusion in The Nako Maru, 101 F.2d 716, as did Judge Caffey in the District Court in Freader v. Cities Service Transp. Co., 14 F.Supp. 456. There can be no doubt that the plaintiff was well aware that he was receiving compensation. Under Section 933 (b) the acceptance effected a transfer which ended his right to bring the present action. In Johnsen...