Utah Idaho Sugar Co. v. Temmey
| Decision Date | 29 August 1942 |
| Docket Number | 8495. |
| Citation | 5 N.W.2d 486,68 S.D. 623 |
| Parties | UTAH IDAHO SUGAR CO. v. TEMMEY, Industrial Com'r, et al. |
| Court | South Dakota Supreme Court |
Ashby D. Boyle, of Salt Lake City, Utah, and Dan McCutchen, of Belle Fourche, for appellant.
Hayes & Rentto, of Deadwood, Leo A. Temmey, Atty. Gen., and R A. Smiley, of Belle Fourche, for respondents.
Plaintiff sought a declaratory judgment on a single issue, namely "Was it operating under the Workmen's Compensation Act on August 13, 1937, the date of defendant employee Umenthum's injury?" Umenthum maintained the negative of this proposition. The trial court concluded as a matter of law that plaintiff had manifested an election not to operate under the act. It entered judgment however dismissing the action. In reviewing the record we seek to determine whether the entry of such judgment was prejudicial to the plaintiff.
This action was instituted prior to the commencement of another action now pending in which Umenthum seeks to recover damages from plaintiff on the theory that the negligence of plaintiff was the proximate cause of his injury.
The controversy has its setting in a background of law and fact. Our Workmen's Compensation Act is of the elective type. Stevenson v. Douros, 58 S.D. 268, 235 N.W. 707. The legislature has implemented a purpose to induce employers and employees to elect to operate under its provisions by weakening the position of a rejecting employer or employee in actions wherein employees seek to recover damages for personal injuries or death. Sections 9444, 9445, Revised Code 1919. The failure of an employer to carry insurance as provided by the act, unless he has been relieved therefrom as therein provided, constitutes an election not to operate under its provisions. Richardson v. Farmers' Cooperative Union, 45 S.D. 357, 187 N.W. 632; Bower v. Nunemaker, 46 S.D 607, 195 N.W. 506; Collins v. Chicago, Milwaukee and St. Paul Railway Company, 49 S.D. 411, 207 N.W. 460 and Stevenson v Douros, supra.
After providing that every employer shall secure the payment of compensation to his employees in one of three described ways the act as amended by Chapter 271, Laws of 1931, provides that:
"(d) Whenever an employer coming under the provisions of this act furnishes satisfactory proof to the Commissioner of Insurance, and the Industrial Commissioner, of such employers solvency and financial ability to pay the compensation required by this act and to make such payments to the parties when entitled thereto, he shall be relieved from the provisions of this act herein mentioned, provided that it shall be considered satisfactory proof of the employers solvency and financial ability to pay the compensation required by this act and satisfactory security therefor, when the employer shall show that he is a member of an association as provided for herein and shall submit a financial statement showing such association to be in a solvent condition." Another pertinent provision of the act grants power to the Industrial Commissioner to "make rules and regulations" not inconsistent with the laws of this state for carrying out the provisions of this act. Section 9466, Revised Code 1919.
For use by employers in making application for relief from the provisions of the act dealing with insurance under the terms of the statute quoted supra, the Industrial Commissioner prepared a printed form and incorporated therein a notice entitled and reading as follows:
There was also prepared a form "Certificate of Exemption." This form included a statement as follows: "This certificate shall be valid until the last day of August, A.D. 19___, unless sooner revoked."
On February 1, 1932, plaintiff made a financial showing and there was issued to it certificate No. 120 which stated that it was exempted until August 31, 1932. It made a further showing in August, 1932, and received certificate No. 161, stating that it was exempted to August 31, 1933. On November 5, 1935, a further showing was made and thereupon certificate No. 304 was delivered to plaintiff. This certificate was dated back to September 1, 1933, the expiration date of its former certificate and recited that plaintiff was exempted to August 31, 1936. No further showing was made until April 2, 1940, whereupon certificate No. 569 was issued dated April 2, 1940, and recited that plaintiff was exempted until August 31, 1940. It will be observed that this certificate was not dated back so as to cover the period intervening between its issue and the expiration date of the preceding certificate. It will be remembered that Umenthum was injured during this period on August 13, 1937. After a further showing made in August, 1940, certificate No. 15 was issued. This certificate recited it "shall be valid until the last day of ----- A.D. 19---, unless sooner revoked." In making these several applications for exemption plaintiff used the above described printed form in each instance, and received a Certificate of Exemption containing the above quoted statement with reference to its expiration.
During the period between August 31, 1936, the date on which according to its terms certificate No. 304 expired, and April 2, 1940, when the next certificate, No. 569, was issued, plaintiff reported about 116 separate injuries of employees to the Industrial Commissioner. These reports were followed by supplemental reports showing payments to doctors and hospitals and of compensation. Twenty-six of these injuries were reported prior to the date of the Umenthum injury. In at least two cases the Industrial Commissioner acted on reports made during this period. The record further shows that during the described period the office of the Industrial Commissioner made notations on his records describing plaintiff as a self-insurer. It also reveals that 29 other certificates were dated back to cover the hiatus between the expiration date and the issuance of a new certificate. At least five of these dated-back certificates had been issued before the date of the Umenthum injury.
The injury to Umenthum was promptly reported to the office of the Industrial Commissioner; hospital, X-ray, and doctor bills were promptly paid and there was paid to Umenthum as compensation provided by the act an amount equal to 55% of his wages from the period August 13, 1937, to October 5, 1938. The aggregate of these payments to or on behalf of the employee during this period exceeded $1,000. As payments were made to Umenthum he receipted therefor on forms which described them as for compensation and in several instances, when the payments were somewhat delayed, he called at the office and sought payment. The record, however, indicates that he had no knowledge during this period of the fact that the last Certificate of Exemption issued to plaintiff had by its terms expired. According to the record that information came to him prior to the time in 1939 when plaintiff sought to negotiate a final settlement with him. Ever since that time Umenthum has maintained the position that, because plaintiff had neither provided insurance nor been relieved from so doing, it had elected not to operate under the act and had therefore become liable to him in an action at law for damages occasioned by its negligence. This action was instituted by plaintiff to secure an adjudication of its controverted status. As indicated, the trial court held that plaintiff had manifested an election to reject the act.
The first contention of plaintiff deals with the nature and boundaries of the power delegated to the Commissioner of Insurance and the Industrial Commissioner by Section (d), Chapter 271, Session Laws 1931 quoted supra. According to the view of plaintiff the power granted was merely to make a determination or finding as to the "solvency" and "ability to pay compensation" of the employer and in case of an affirmative finding as to such qualifications, the statute operated ipso facto to permanently exempt or relieve the employer. Reasoning from this premise, plaintiff concludes that the commissioners were without power to delimit the period of the employer's exemption, and contends that having made a showing of solvency and ability to pay, and that fact having been determined by the commissioners, the conclusion must follow that it was operating under the act as a self-insurer at the time of the Umenthum injury. This view is predicated upon the words used by the legislature as follows: "whenever an employer *** furnishes satisfactory proof *** of *** solvency and financial ability to pay the compensation *** he shall be relieved ***." In our opinion the contention is inadmissible.
That there is no constitutional objection to the delegation to an administrative agency of quasi-legislative duties, so long as the applicable statute promulgates a legislative policy and outlines the standard to be followed in its execution, has become a settled principle of American jurisprudence. Application of Dakota Transportation, Inc., 67 S.D. 221, 291 N.W. 589; Panama Refining Company et al....
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