Travelers Ins. Co. v. Sneddon

• Decision Date: 17 December 1957
• Docket Number: No. 49234,49234
• Citation: 86 N.W.2d 870,249 Iowa 393
• Parties: The TRAVELERS INSURANCE COMPANY, Appellant, v. Charles SNEDDON, Charles Crain, d/b/a Crain Ditching & Piping, Defendants, Charles Sneddon, Appellee.
• Court: Iowa Supreme Court

Page 870

86 N.W.2d 870

249 Iowa 393

The TRAVELERS INSURANCE COMPANY, Appellant, v. Charles SNEDDON, Charles Crain, d/b/a Crain Ditching & Piping, Defendants, Charles Sneddon, Appellee.

No. 49234.

Supreme Court of Iowa.

Dec. 17, 1957.

Bannister, Carpenter, Ahlers & Cooney, Des Moines, for appellant.

Neal E. Smith, Des Moines, for appellee.

GARFIELD, Justice.

The question presented by this appeal is the jurisdiction of the district court to hear a controversy pending before the Iowa industrial commissioner as to whether the insurance carrier had effectively canceled its policy issued to an employer before his workman was injured. The district court held the industrial commissioner had exclusive jurisdiction over the controversy and the court was not at liberty to interfere therewith. We affirm the decision.

Plaintiff Travelers Insurance Co. brought this action in the district court against Sneddon, the injured workman, and Crain d/b/a Crain Ditching & Piping, the insured employer, for declaratory judgment under 58 I.C.A. Rules of Civil Procedure 261-269 that the insurance was canceled and not in effect when the injury occurred. Plaintiff's petition, filed February 16, 1957, alleges the policy was issued April 6, 1956, Sneddon claims to have been injured July 18, 1956, while employed by insured, and filed application with the industrial commissioner for arbitration of his claim naming insured as employer and plaintiff as insurance carrier, plaintiff mailed notice of cancellation of the policy to insured effective June 18, 1956, and thereby it was canceled. The petition prays that if necessary the proceedings before the industrial commissioner be stayed until the determination of this cause.

The insured employer Crain made no appearance in the district court nor has he appeared here. The workman Sneddon filed special appearance under R.C.P. 66, for the sole purpose of attacking the jurisdiction of the court, on the ground the (industrial) commissioner had exclusive jurisdiction over the controversy which was then pending before him and the court was not at liberty to interfere with such jurisdiction. Plaintiff has appealed from the sustaining of the special appearance.

When the special appearance was submitted it was shown plaintiff carrier's answer to Sneddon's petition for arbitration filed with the commissioner makes the same contention as to cancellation of its policy that is alleged in its petition herein and that Sneddon's reply to such answer before the commissioner denies the policy was canceled. The issue evidently had not been submitted to the commissioner when this action was brought.

It is true the industrial commissioner has only such powers as are expressly conferred by statute and those reasonably to be implied therefrom. 'The Industrial Commissioner possesses such powers as are expressly granted, together with those arising from implications because necessary to the full exercise of the granted powers. (Citation.).' Comingore v. Shenandoah Art. Ice, etc., Co., 208 Iowa 430, 434, 226 N.W. 124, 126.

We have so often held the compensation act should be liberally construed that precedents for the proposition are not called for. Code sections 4.2 and 86.18 (all references are to the Code of 1954, I.C.A.) are sufficient authority for our statement. '* * * a court should not restrict the terms and provisions of the statute or the implied power incident to the exercise of his (commissioner's) jurisdiction.' Comingore case, supra, at page 440 of 208 Iowa, at page 129 of 226 N.W.

The jurisdiction of the commissioner to award compensation against an insurance carrier where the validity of its policy is not denied has never been questioned in this state so far as we can learn. It is not now challenged. Plaintiff concedes Code section 87.10, I.C.A. confers such jurisdiction upon the commissioner. Plaintiff says, however, this provision applies 'only to those cases where admittedly a contract of insurance exists.'

The argument amounts to this: if the insurer denies the binding force of its policy at the time the workman was injured the commissioner is thereby deprived of jurisdiction he would otherwise have to determine its liability. We think the argument unsound. The statutes place no such limitation upon the commissioner's jurisdiction and we should not do so. Acceptance of the argument would introduce many unnecessary and undesirably complications into the administration of the compensation act.

Section 87.10 provides: '* * * jurisdiction of the insured shall be jurisdiction of the insurer, and the insurer shall be bound by every agreement, adjudication, award or judgment rendered against the insured.' Among the duties enjoined upon the commissioner by section 86.8 is: '5. In general to do all things not inconsistent with law in carrying out said provisions (of chapters 85, 86 and 87) according to their true intent and purpose.' Section 86.14 provides for making special defenses to the claimant's petition for arbitration. Sections 86.23 and 86.24 clearly contemplate that the deputy commissioner or board of arbitration and the commissioner shall make not only findings of fact but also rulings of law and 86.25 requires the commissioner to set forth not only findings of fact but also conclusions of law.

Appeal may be taken to the district court from any decision or order of the commissioner (86.26). That the legislature intended controversies within the commissioner's jurisdiction to be speedily determined is indicated by the provision (86.28) that the first term after the appeal is taken shall be the trial term in the district court. The statutes contain several other such indications.

Any order of the commissioner may be modified, reversed or set aside by the district court: '1. If the commissioner acted without or in excess of his powers. * * * 3. If the facts found by the commissioner do not support the order or decree. 4. If there is not sufficient competent evidence * * * to warrant the making of the order or decision.' 86.30. Appeals may be taken from the district court to this court where they must be speedily submitted. §§ 86.33 and 793.12.

The provisions of chapter 87 requiring insurance of liability except in certain instances, providing penalties for failure to insure, policy requirements and kindred matters are too long to set out here and it is unnecessary to do so. It is evidence these statutes with respect to insurance are intended to do more than merely protect the employer against liability for injuries to his employees. They are also intended principally to guarantee payment of compensation to the injured employee in accordance with terms of the act. Maryland Casualty Co. v. Industrial Commission, 198 Wis. 202, 209, 221 N.W. 747, 223 N.W. 444, 445, cited with approval in Bates v. Nelson, 240 Iowa 926, 933, 38 N.W.2d 631, 635.

Unlike courts of several other jurisdictions we have never squarely decided the question presented by this appeal. However, one of our early precedents upon the construction of the Compensation Act, Flint v. City of Eldon, 191 Iowa 845, 849, 183 N.W. 344, 346, says: 'The authority of the Industrial Commissioner in matters coming within his jurisdiction necessarily involves the right to decide all questions properly arising out of the controversy before him.' And Comingore v. Shenandoah Art. Ice, etc., Co., supra, 208 Iowa 430, 439-440, 226 N.W. 124, 129, states: '* * * the Industrial Commissioner is delegated with full authority to act in all compensation matters, * * *.'

In Conrad v. Midwest Coal Co., 231 Iowa 53, 300 N.W. 721; Id., 3 N.W.2d 511, the insurance carrier contended before the commissioner its policy was not in effect because of a change in personnel of the insured employer-partnership (a claim frequently made in such cases), failure of the claimant workman to take alleged necessary steps to come under its terms and lapse of the policy due to nonpayment of premium. Our opinion, modified upon rehearing, contains no hint the commissioner was without jurisdiction to hear and determine these questions. The insurance carrier was represented by able counsel who often appeared before us in behalf of compensation insurers.

Of course the commissioner is not a court in the accepted sense. Nevertheless it is clear he is empowered to decide law questions that arise in matters properly before him. His duties are not limited to finding facts. Many compensation cases involve the question whether the claimant was an employee entitled to benefits of the law or an independent contractor who is not. § 85.61, subd. 3, par. b. Determination of the issue requires not only finding the facts but also applying rules of law thereto. Sometimes, as in Mallinger v. Webster City Oil Co., 211 Iowa 847, 234 N.W. 254, solution of this issue depends largely upon construction of a written contract under which the workman performed the service. Construction of writings is of course ordinarily a law question for courts, not a fact question for juries.

Since our compensation act does not define 'independent contractor' we have uniformly held resort to common law principles for its meaning is necessary. Taylor v. Horning, 240 Iowa 888, 891, 38 N.W.2d 105, 107, and citations; Hassebroch v. Weaver Const. Co., 246 Iowa 622, 627, 67 N.W.2d 549, 552.

We cannot agree with plaintiff that the law questions the commissioner is frequently called upon to decide are less difficult of solution than the question whether its policy was canceled before Sneddon was injured. Nor is the difficulty of deciding an issue a satisfactory test of jurisdiction to decide that issue.

Although we will refer again to Iowa decisions we consider now those from other jurisdictions. They are fairly summarized in 71 C.J., Workmen's Comp.Acts, section 652, in this way: 'Ordinarily, under the provision of the various workmen's compensation acts, the commission * * * has jurisdiction to hear and...