Val Blatz Brewing Co. v. Gerard

• Decision Date: 29 April 1930
• Citation: 230 N.W. 622,201 Wis. 474
• Parties: VAL BLATZ BREWING CO. ET AL. v. GERARD ET AL.
• Court: Wisconsin Supreme Court

201 Wis. 474

230 N.W. 622

VAL BLATZ BREWING CO. ET AL.

v.GERARD ET AL.^a1

Supreme Court of Wisconsin.

April 29, 1930.

Appeal from a judgment of the Circuit Court for Dane County; August C. Hoppmann, Circuit Judge. Reversed.

Action by Val Blatz Brewing Company and Employers' Mutual Liability Insurance Company against Alma Gerard and the Industrial Commission of Wisconsin begun December 14, 1927, to vacate an award of death benefits made to Alma Gerard on November 26, 1927, by the Industrial Commission for the death of her husband, which occurred on October 24, 1926. From a judgment entered May 9, 1929, vacating the award, the defendants appealed.

The Val Blatz Brewing Company, doing business in Milwaukee, Wis., entered into a contract in Wisconsin with the deceased husband of Alma Gerard to sell its products in Missouri and Arkansas. The deceased was struck by an automobile while crossing a street in Fort Smith, Ark., during the evening of October 23, 1926. Deceased had gone to Fort Smith to call on the trade for his employer. The commission found that he was performing services growing out of and incidental to his employment at the time that he was struck by the automobile.John W. Reynolds, Atty. Gen., and Mortimer Levitan and Herbert H. Naujoks, Asst. Attys. Gen., and I. B. Padway, of Milwaukee, for appellants.

Richmond, Jackman, Wilkie & Toebaas, of Madison, for respondents.

STEVENS, J.

[1] 1. The proof shows that the deceased was accustomed to solicit orders for his employer during the evening, as well as during the day; that he had in fact called upon customers of his employer during the evening shortly prior to the time that he was struck by the automobile; and that at the time of the accident he was near the place of business of one of these customers whom he had said that he was going to call on that evening. The proof is sufficient to sustain the finding of the Industrial Commission that he was injured while performing services growing out of and incidental to his employment.

2. The principal question presented is whether the Wisconsin Compensation Act applies to an employee who enters into a contract of employment in Wisconsin to perform services entirely outside of the state.

A study of the cases that have arisen under the Workmen's Compensation Acts of the various states discloses that courts did not at first fully appreciate the fundamental change wrought by the adoption of these acts. In the earlier cases there was a tendency to construe these laws in the light of the rules that were applied in the old common-law tort action, which it was the purpose of these acts to replace, just as the common-law lawyers and judges, who interpreted our Code of 1856, read into it the technical rules of the old procedure which it was the purpose of the Code to supersede.

This tendency is illustrated by Gould's Case, 215 Mass. 480, 102 N. E. 693, Ann. Cas. 1914D, 372, which was the first American case to consider the question whether compensation could be awarded for injuries sustained outside the state. Applying the rules which prevailed in tort actions, the Massachusetts court concluded that compensation could not be awarded for an injury sustained outside the state. The Massachusetts court followed the decisions of the English courts which held that the British act did not apply to injuries which occurred outside Great Britain. But the English courts did not deal with the problem which is here presented, because its act covered all cases that arose in the British Isles, excluding only those that occurred beyond the seas. The English cases therefore did not deal with the question of the effect of state boundaries upon the right to compensation.

American courts, however, soon came to appreciate that the Workmen's Compensation Act is not a mere substitute for common-law liability for tort. This court was one of the first to declare that “the liability of the employer under the Compensation Act rests upon an entirely different basis than that of his liability at common law.” Anderson v. Miller Scrap Iron Co., 169 Wis. 106, 117, 170 N. W. 275, 279, 171 N. W. 935.

The case just cited was one of the first to clearly demonstrate that liability under the Workmen's Compensation Act “grows out of and is incidental to a relationship based upon contract; but that does not make it contractual, any more than it made the liability of the employer at common law contractual; * * * [that] the Workmen's Compensation Act of Wisconsin is so far a part of every contract of employment that the rights and liabilities of the parties thereto in case of injury to the employee, both being subject to it, must be determined in accordance with its provisions, whether such injuries occur within or without the state.” Anderson v. Miller Scrap Iron Co., 169 Wis. 106, 113, 118, 170 N. W. 275, 277, 171 N. W. 935.

[2] Liability for compensation arises out of the relationship of employer and employee. The act imposes no obligation to pay compensation on any one who is not an employer or who does not stand in the shoes of an employer. It grants no right to compensation except in those cases where the injury is sustained by one who is an employee. Compensation is limited to accidents which occur while “the employee is performing service growing out of and incidental to his employment.” Subdivision (2) of section 102.03 of the Statutes. The right to receive and the liability to pay compensation grow out of and are incidental to the status created by the employment. It is the creation of this status which brings the employer and the employee within the provisions of the Compensation Act and, under sanction of the act, attaches, as an incident to this status, the obligation to pay compensation.

Liability under the Workmen's Compensation Act is, strictly speaking, neither tortious nor contractual in its nature. It is an obligation imposed by law which arises out of the status created by the employment. The liability arises out of the law itself, rather than out of the contract of the parties. The law operates upon the status and attaches certain rights and obligations to that status. The relationship of employer and employee has its origin in the contract of employment, but when that relationship is created by the contract, the respective rights and liabilities with reference to compensation depend upon the provisions of the law, not upon the contract of the parties. The fundamental idea upon which liability is imposed is that an injury to an employee, like damage to a machine, is a burden that should be borne by the product of the industry and ultimately paid by those who consume this product.

In the exercise of its police power, the state, by the enactment of the Compensation Act, has measurably limited freedom of contract with reference to the matter of compensation for human life or limb lost or disability incurred in the course of employment, and the public has a direct interest in this as affecting the common welfare. “ ‘The whole is no greater than the sum of all the parts, and when the individual health, safety, and welfare are sacrificed or neglected, the state must suffer.’ * * * One of the grounds of its concern with the continued life and earning power of the individual is its interest in the prevention of pauperism, with its concomitants of vice and crime. And, in our opinion, laws regulating the responsibility of employers for the injury or death of employees, arising out of the employment, bear so close a relation to the protection of the lives and safety of those concerned that they properly may be regarded as coming within the category of police regulation.” New York Central R. R. Co. v. White, 243 U. S. 188, 206, 207, 37 S. Ct. 247, 254, 61 L. Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 629.

The interest of the state in the protection of the health and lives of its citizens and “in the prevention of pauperism, with its concomitants of vice and crime,” is the same whether its citizens be injured in their employment in this state or outside its borders. Business has scant respect for state boundaries. Employees cannot hope to retain their employment if they refuse to go outside the state to perform service when directed so to do by...