United States Fid. & Guar. Co. v. Graham & Norton Co.

• Citation: 171 N.E. 903,254 N.Y. 50
• Court: New York Court of Appeals
• Decision Date: 15 May 1930
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. GRAHAM & NORTON CO.

254 N.Y. 50

171 N.E. 903

UNITED STATES FIDELITY & GUARANTY CO.

v.GRAHAM & NORTON CO.

Court of Appeals of New York.

May 15, 1930.

Action by the United States Fidelity & Guaranty Company against the Graham & Norton Company. From a judgment of the Appellate Division (228 App. Div. 45, 239 N. Y. S. 134) affirming a judgment of the Trial Term entered upon verdict in favor of plaintiff, defendant appeals.

Judgment of the Appellate Division and that of the Trial Term reversed, and complaint dismissed, with costs in all courts.

Appeal from Supreme Court, Appellate Division, Third department.

Fred H. Rees, of New York City, for appellant.

Harry W. Williams, of Albany, for respondent.

POUND, J.

Edward Streeter died as the result of an accident arising out of and during the course of his employment, alleged to be due to the negligence of another not in the same employ. He left a widow and six children. Five of the children were included in the group of dependents under the age of eighteen years, who, with the widow, came under the protection of the Workmen's Compensation Law (Consol. Laws, c. 67). The sixth child, although belonging to the group of next of kin, did not come within the group of dependents protected by the Workmen's Compensation Law.

The widow and the five dependent children, as was their right, elected to take compensation rather than to pursue the statutory remedy, through the appointment of an administrator, against the alleged wrongdoer for causing death by negligence or wrongful act. They received an award which has been paid. The result was an assignment to the insurance carrier of their beneficial interest in such cause of action. The insurance carrier thereupon brought this action in its own name and right against the alleged wrongdoer to recover the interest of the widow and dependent children only in such a recovery as an administrator might have secured had one been appointed and instituted suit.

This court held, in Matter of Zirpola v. T. & E. Casselman, Inc., 237 N. Y. 367, 375, 143 N. E. 222, 225, overruling in this respect much that was said, if not actually decided, in Travelers' Ins. Co. v. Louis Padula Co., 224 N. Y. 397, 402,121 N. E. 348, 349, as follows: ‘If dependents electing to assign, are members of the class of next of kin * * * but not all the members of that class, their assignment will be effective to the extent of their beneficial interest and no farther, and the carrier, like any other beneficiary, must prosecute through the administrator as the statutory trustee, and may compromise or release its own interest, but no other.’

The court below was of the opinion that the rule thus definitely stated had in effect been overruled by Phoenix Indemnity Co. v. Staten Island Rapid Transit Ry. Co., 251 N. Y. 127, 167 N. E. 194.

The question in the Staten Island Case considered in this connection was one of statutory construction. Workmen's Compensation Law, § 15, subds. 8 and 9, provided that the insurance carrier shall pay to the state treasurer for every case of injury causing death in which there are no persons entitled to compensation two sums of $500 each.

Section 29 of the law provides that, in case of the payment of such an award to the state in accordance with such subdivisions, ‘such payment shall operate to give to the * * * insurance carrier liable for the award a cause of action for the amount of such payment together with the reasonable...