Case Name: The State of Washington, on the Relation of Ray Crabb, Plaintiff, v. Jay Olinger, as Supervisor of Industrial Insurance, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1938-09-22
Citations: 196 Wash. 308
Docket Number: No. 27170
Parties: The State of Washington, on the Relation of Ray Crabb, Plaintiff, v. Jay Olinger, as Supervisor of Industrial Insurance, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 196
Pages: 308–339

Head Matter:
[No. 27170.
En Banc.
September 22, 1938.]
The State of Washington, on the Relation of Ray Crabb, Plaintiff, v. Jay Olinger, as Supervisor of Industrial Insurance, Respondent.
John Geisness, for relator.
The Attorney General and T. H. Little, Assistant, for respondent.
Todd, Holman & Sprague and Lowell P. Mickelwait, amici curiae.
Reported in 82 P. (2d) 865.

Opinion:
Millard, J.
— On December 19, 1932, while in the course of his employment as an employee of the Washington Pulp and Paper Corporation in an extrahazardous industry, Ray Crabb sustained an accidental injury to his neck. On February 2, 1937, the supervisor of industrial insurance of the department of labor and industries entered an order that the claim of Crabb be closed, and that he be awarded time loss compensation in the amount of $1,275, and permanent partial disability compensation in the amount of $960.
The review of the above mentioned order by the joint board of the department on application of Crabb's employer, resulted in the entry of an order, April 11, 1938, by the joint board sustaining the action of the supervisor. The employer appealed to the superior court for King county from the order made by the joint board. The supervisor of industrial insurance refused to accede to the demand of Crabb for payment of the amount awarded to Crabb by the joint board. The reason assigned for refusal to make the payment is that Crabb's employer appealed to the superior court from the order made by the joint board, which appeal ousted the department of jurisdiction in the case, and that the relator has a plain, speedy, and adequate remedy at law by way of appeal.
Based on the foregoing, relator seeks a writ of mandate requiring the supervisor to transmit voucher to the state auditor in order that relator may receive the compensation awarded him by the joint board of the department, April 11, 1938.
Counsel for respondent argue that the employer's exercise of its right of appeal from the order of the joint board to the superior court pursuant to the statute (Rem. Rev. Stat., § 7697 [P. C. § 3488]) divested the department of jurisdiction; that the department cannot make a valid and enforcible order in the cause until disposition by the courts (superior and supreme) of the employer's appeal from the joint board's order awarding compensation to relator, and then only such orders as the courts may direct; and that to grant the relief for which the relator prays would deprive the employer of property without due process of law.
The determination of the question whether an employee may by mandamus compel the supervisor of industrial insurance to pay an award for workmen's compensation after the employer has appealed to the superior court from the order by the joint board allowing the claim, is dependent upon the effect that is to be given to the italicized portion of the following language of Rem. Rev. Stat., § 7697:
"Within thirty days after the final order of the joint board upon such application for rehearing has been communicated to such applicant, or within thirty days after rehearing is deemed denied as herein provided, such applicant may appeal to the superior court of the county of his residence, . No bond shall be required on such appeal or on appeals to the supreme court, except that an appeal by the employer from a decision of the department under section 7683 [a provision relating to employer's responsibility for safeguard] shall be ineffectual unless, within five days following the service of notice thereof, a bond, with surety satisfactory to the court, shall be filed, conditioned to perform the judgment of the court. Except in the case last named an appeal shall not he a stay.
The provision denying a stay on appeal has relation to appeals from orders of the joint board to the su perior and supreme courts. In the case at bar, we are not concerned with appeals under § 7683 [P. C. § 3477] referred to above.
While we held in Mud Bay Logging Co. v. Department of Labor & Industries, 189 Wash. 285, 64 P. (2d) 1054; id., 193 Wash. 275, 75 P. (2d) 579, that employers were entitled under the workmen's compensation act to appeal from orders awarding compensation to workmen, the question was not presented whether, in the absence of a bond superseding the order, an appeal "shall not be a stay" of execution.
An appeal to this court from a judgment of the superior court will not stay proceedings on that judgment unless a supersedeas bond is given. Execution may issue immediately after judgment unless execution is stayed by supersedeas bond. The statute (Rem. Rev. Stat., § 1722 [P. C. § 7296]) gives to a judgment debtor the legal right to stay an execution.
In the absence of a bond superseding the order of which the employer complains in the case at bar — in view of Rem. Rev. Stat., § 7697, granting the right of appeal but denying the right to supersede the order — relator may enforce payment by writ of mandamus.
The workmen's compensation act is highly remedial and beneficent in purpose and should be liberally construed, if necessary, so as to accomplish its evident intent and purpose. Declaring the common law system governing the remedy of workmen against employers for injuries received in hazardous work was inconsistent with modern industrial conditions, the state of Washington, in order to afford a remedy to the workmen that would be certain, expeditious, and adequate, declared, in the exercise of its police and sovereign power,
". . . that all phases of the premises are withdrawn from private controversy, and sure and certain relief for workmen, injured in extrahazardous work, and their families and dependents is hereby provided regardless of questions of fault and to the exclusion of every other remedy, proceeding or compensation, except as otherwise provided in this act; and to that end all civil actions and civil causes of action for such personal injuries and all jurisdiction of the courts of the state over such causes are hereby abolished, except as in this act provided." Rem. Rev. Stat., § 7673 [P. C. §3468].
An administrative body may be empowered to give final decisions without a right of appeal to the courts. Mott, Due Process of Law, 238. It follows that the legislature may, to accomplish the evident intent and purpose of the workmen's compensation act — certain, expeditious, and adequate relief to injured workmen— regulate, as it has, the right of appeal.
The section (§4, chapter 74, Laws of 1911, p. 349, as amended by § 1, chapter 104, Laws of 1931, p. 297, Rem. Rev. Stat., § 7676 [P. C. § 3471]) of the workmen's compensation act on the subject of schedule of contribution opens with the declaration that, inasmuch as industry should bear the greater portion of the burden of the cost of its accidents, each employer shall, prior to January 15th of each year, pay into the state treasury, in accordance with the schedule in the act provided, a sum equal to a certain percentage of his total pay roll for that year, which is deemed the most accurate method of equitable distribution of burden in proportion to relative hazard. That declaration has been carried into every amendment of the section subsequent to 1911.
Following that declaration in § 4 of the act are the rates of contribution, which are inflexible but subject to "future adjustment by the legislature." The industries are divided into a number of classes, but the classifications are subject "to rearrangement following
any relative increase or decrease of hazard shown by experience."
In State ex rel Davis-Smith Co. v. Clausen, 65 Wash. 156, 117 Pac. 1101, 37 L. R. A. (N. S.) 466, the character of the contribution imposed under this section was defined as follows:
"It is the consideration which the owners of the industries pay for the privilege of carrying them on. It is, therefore, in the nature of a license tax, and can be justified on the principle of law that justifies the imposition and collection of license taxes generally. In this state, such taxes may be imposed, either as a regulation or for the purpose of revenue, the only limitation upon the power being that such taxes when imposed on useful trades and industries shall not be unreasonable, and if a class of trades or industries is selected from the whole, and the tax imposed upon the class selected alone rather than upon the whole, that there be some reasonable ground for making the distinction. . . .
"The sums exacted from the several industries named we think may be treated as partaking both of the nature of a license for revenue and regulation; as such, however, we find nothing in the principle inimical to either the state or Federal constitutions."
And it was upheld as such in the face of the contention that it amounted to a taking of property without due process of law, in that it rested an equally heavy hand upon the careful and careless employer — requiring the same measure of contribution from the one who had no, or few, accidents and the one who had many.
The opinion is rested wholly on the taxing and police power. In sustaining our position, we did not resort to the provision of the section designed to meet the suggested objection, that the rates are subject to future adjustment by the legislature, and the classifications of industries are subject to rearrangement following any relative increase or decrease of hazard shown by experience.
The idea of conforming rates to accident experience was more clearly expressed in the amendment of § 4, chapter 74, Laws of 1911, p. 349, in § 1, chapter 188, Laws of 1915, pp. 674, 677. That amendment provides:
"In that the intent is that the fund created under this section shall ultimately become neither more nor less than self-supporting, exclusive of the expense of administration, the rates named in this section are subject to future adjustment by the industrial insurance department, in accordance with any relative increase or decrease in hazard shown by experience, and if in the judgment of the industrial insurance department the moneys paid into the fund of any class or classes shall be insufficient to properly and safely distribute the burden of accidents occurring therein, the department may divide, rearrange or consolidate such class or classes, making such adjustment or transfer of funds as it may deem proper."
The section as amended, as well as the workmen's compensation act as a whole, was again subjected to attack. State v. Mountain Timber Co., 75 Wash. 581, 135 Pac. 645, L. R. A. 1917D, 10. In upholding the act and sustaining compulsory contribution to the accident fund as an occupational tax, we said:
"The legislature has adopted the idea of industrial insurance, and seen fit to make that idea a workable one by putting its execution, as well as its administrative features, in the hands of a commission. It has abolished rights of actions and defenses and in certain cases denied the right of trial by jury. The legislature has said to the man whose business is a dangerous one and the operation of which may bring injury to an employee, that he cannot do business without waiving certain rights and privileges heretofore enjoyed, and it has said to the employee that, inasmuch as he may become dependent upon the state, that he must give up his personal right of contract when about to engage in a hazardous occupation and contract with reference to the law. These demands are the fundamentals of our industrial insurance law. If the law is not administered as therein provided, it is not likely that a compulsory law such as it is could ever be adequately administered; for, aside, from its humane purpose, it was adopted in order that the delay and frequent injustice incident to civil trials might be avoided.
" 'The remedy of the workman has been uncertain, slow and inadequate. Injuries in such works, formerly occasional, have become frequent and inevitable.' Laws 1911, page 345.
"To uphold the law in the sense of sustaining the idea of industrial insurance, and to deny the right of executing it without the intervention of the courts, would throw us back on the original ground and we should then, if consistent, hold the idea of industrial insurance to be beyond the limit of the police power."
That case was appealed to the supreme court of the United States, which sustained the act in all particulars and' specifically adopted the view of this court with respect to the character of the contributions exacted of employers and with respect to the power of the state to administer the fund. Mountain Timber Co. v. Washington, 243 U. S. 219, 61 L. Ed. 685, 37 S. Ct. 260, Ann. Cas. 1917D, 642. The court said:
"We are clearly of the opinion that a State, in the exercise of its power to pass such legislation as reasonably is deemed to be necessary to promote the health, safety, and general welfare of its people, may regulate the carrying on of industrial occupations that frequently and inevitably produce personal injuries and disability with consequent loss of earning power among the men and women employed, and, occasionally, loss of life of those who have wives and children or other relations dependent upon them for support, and may require that these human losses shall be charged against the industry, either directly, as is done in the case of the act sustained in New York Central R. R. Co. v. White, supra [243 U. S. 188, 61 L. Ed. 667], or by publicly administering the compensation and distributing the cost among the industries affected by means of a reasonable system of occupation taxes. The act cannot be deemed oppressive to any class of occupation, provided the scale of compensation is reasonable, unless the loss of human life and limb is found in experience to be so great that if charged to the industry it leaves no sufficient margin for reasonable profits. But certainly, if any industry involves so great a human wastage as to leave no fair profit beyond it, the State is at liberty, in the interest of the safety and welfare of its people, to prohibit such an industry altogether.
"To the criticism that carefully managed plants are in effect required to contribute to make good the losses arising through the negligence of their competitors, it is sufficient to say that the act recognizes that no management, however careful, can afford immunity from personal injuries to employees in the hazardous occupations, and prescribes that negligence is not to be determinative of the question of the responsibility of the employer or the industry. Taking the fact that accidental injuries are inevitable, in connection with the impossibility of foreseeing when, or in what particular plant or industry they will occur, we deem that the State acted within its power in declaring that no employer should conduct such an industry without making stated and fairly apportioned contributions adequate to maintain a public fund for indemnifying injured employees and the dependents of those killed, irrespective of the particular plant in which the accident might happen to occur. In short, it cannot be deemed arbitrary or unreasonable for the State, instead of imposing upon the particular employer entire responsibility for losses occurring in his own plant or work, to impose the burden upon the industry through a system of occupation taxes limited to the actual losses occurring in the respective classes of occupation."
The idea of readjusting rates and rearranging classifications to conform to loss or accident experience continued to develop. In the amendment of 1917 (Laws of 1917, chapter 120, § 2, pp. 477, 482), the idea is expressed in the following language:
". . . The industrial insurance commission shall on or before the 30th day of September, 1917, and semi-annually thereafter make corrections of classifications as between classes of industries if and as experience shall show error or inaccuracy therein, and, under and conformably to the foregoing rule of classification and premium rating, shall at the same time lower the premium rate of any establishment or plant if and as experience shall show it to maintain such a high standard of safety or accident prevention as to differentiate it to that extent from other like establishments or plants, or shall raise the premium rate of any establishment or plant if and as experience shall show it to maintain so low a standard of safety or accident prevention as to justly warrant its being subjected to that extent to a greater contribution to the accident fund."
The amended section of 1917 further provides:
"From the original classification or premium rating or any change made therein any employer claiming to be aggrieved may upon application, have a hearing before the industrial insurance commission upon notice to the interested parties and in the manner provided in section 6604-20 a review by the courts. If, at the end of any year, it shall be seen that the contribution to the accident fund by any class of industry shall be less than the drain upon the fund on account of that class, the deficiency shall be made good to the fund on the 1st day of February of the following year by the employers of that class in proportion to their respective payments for the past yéar."
Section 6604-20, Rem. & Bal. Code, appeared as § 20, p. 368, of the original act and has been carried forward, amended in some particulars, as Rem. Rev. Stat., § 7697. By the 1917 amendment of § 4, chapter 74, Laws of 1911, the employer was given the right of appeal to protect his classification or to show that he was entitled to a lower rate than other employers in the same class, showing that in his plant he maintained such a high standard of safety or accident prevention as to differentiate it to that extent from other like establishments or plants. Up to this time, the change in the method of levying the "license tax" and the granting of a right of appeal from the order of levy wrought no fundamental change in the "idea of industrial insurance," as conceived by the legislature in the act of 1911 and interpreted by us and by the supreme court of the United States in the cases cited above.
The "idea of industrial insurance" conceived by the legislature and interpreted by the courts in those cases was that extrahazardous industry must bear the cost of injury and death of workmen; that, as a condition precedent to the right to engage in extrahazardous industry, the employer must pay a license or occupation tax; that the revenues derived from this license tax are subject to administration by the state.
True, we subsequently described the revenues as a "trust fund." They are a "trust fund" only in that the "idea of industrial insurance" imposes upon the state the moral and legal obligation to use the revenues for the declared purpose for which it collects them.
Section 4, chapter 74, Laws of 1911, p. 349 (Rem. Rev. Stat., § 7676) was amended by § 1, chapter 104, Laws of 1931, p. 297. The 1931 amendment, which provides in greater detail a method of adjustment of rates and rearrangement of classification, requires the department, prior to the first day of January each year, to determine for each class a basic premium rate for the ensuing calendar year. In fixing the basic rate of premium, the department is directed to take into consideration, first, the cost experience of each class and sub-class over the two year period immediately preceding September first of the year, in which the basic rate is being fixed; second, the then condition of each class and sub-class account. It is then provided:
"The department of labor and industries shall also, prior to the first day of January, 1932, and prior to the first day of January of each year thereafter, determine the percentage of the payroll to be paid into said accident fund during the ensuing year by each employer to be credited to each class and/or sub-class account applicable to the employer's operations of business, and in so doing shall take into consideration the average cost experience of each employer for each one-hundred dollars of payroll in each such class or sub-class over the two year period immediately preceding September first of the year in which the percentage rate is being determined, and in so computing the cost experience of any employer the fixed sum of four thousand dollars ($4,000) shall be charged against his experience for each injury resulting in the death or total permanent disability of a workman instead of the actual cost to the accident fund of such injury. The actual rate or per cent of payroll which any employer shall be required to pay for the accident fund shall be twenty-five per cent (25%) of the basic rate, plus seventy-five per cent (75%) of the employer's cost rate for each one hundred dollars ($100) of payroll over the two year period next preceding the then last September first, but in no case shall the total rate exceed one hundred seventy-five per cent (175%) of the basic rate. . . ." Rem. Rev. Stat., § 7676.
The result of the provision is to more nearly require each employer to bear the cost of accidents in his own plant — to fix the rate of contribution in accordance with the high or low, as the case may be, standard of safety in his plant operation. There is nothing in the section as amended indicative of a purpose of the legislature to abandon the "idea of industrial insurance." Neither is there anything in the section as amended to disclose that the legislature conceived the contribution exacted to be of any different character than it was held to be under the original act, namely, a license tax. That the legislature still conceived the contribution to be a license tax, is evinced by the direction to the department to "take into consideration . . . the then condition of each class and sub-class account." It is patent that the state was exercising its sovereign power of taxation to meet the necessities of the various accounts of the accident fund.
The statute as amended classifies the taxpayer by a different method, than theretofore provided. The basic principle of industrial insurance is maintained. The basis of classification is reasonable. If it is not unreasonable to exact the tax from proprietors of "carefully managed plants . to contribute to make good the losses arising through the negligence of their competitors" (Mountain Timber Co. v. Washington, supra), it cannot be unreasonable to exact contribution from the employer on the basis of the standard of safety by which his own plant is operated. The contribution retains the character of a license tax; and since the basis of classification among taxpayers is reasonable, there is no violation of the constitutional guaranty of uniformity and equality in taxation nor of that prohibiting the taking of property without due process of law. [Const. Art. I, § 3; Art. VII, § 2; Federal constitution 14th amendment.]
Appeal to the courts in taxing processes is a matter of grace, not of right. Unless it is found in the statutes, it does not exist. In re Yakima Amusement Co., 192 Wash. 174, 73 P. (2d) 519.
The appeal granted to the employer does not, under the plain language of the statute, operate as a stay; therefore, the compensation awarded by the joint board should be paid without regard to the question whether the appeal of the employer may be successful.
If the employer is successful upon its appeal, the employer will then have the right to require charged off of its cost experience any disbursement made to the claimant. The employer of relator would be in the same position as all other employers in the class so far as the effect of the disbursement to the claimant is concerned; the base rate would be increased as to all employers in the class. If the employer of the injured relator may successfully urge that he has a constitutional right to have his appeal operate as a stay, every other employer in the class may make the same contention, because all would be equally affected by the disbursement to the claimant. Each and every employer in the particular class would have a right of appeal from each award by the department of labor and industries, and each appeal would operate as a stay, despite the specific language of the statute that "an appeal shall not be a stay."
An analogous authority is State ex rel. Weyerhaeuser Timber Co. v. State Tax Commission, 189 Wash. 56, 63 P. (2d) 494, in which we held that, under the statute providing that any taxpayer feeling aggrieved by the action of the board of equalization may appeal to the state tax commission, the right of appeal is confined to the owner of property involved in the record and who feels aggrieved, and the grievance must relate to an interest that is direct and not indirect or theoretical. In that case, certain taxpayers in Sno-homish county attempted to appeal to the state tax commission to review the assessment and valuation of the property of the Weyerhaeuser Timber Company. The appealing taxpayers insisted that the assessment of the Weyerhaeuser Timber Company's property was too low, and that this undervaluation would increase the tax upon their property. We granted a writ of prohibition restraining the tax commission from entertaining the appeal upon the ground that the grievance of the appealing taxpayers was so indirect and remote as not to give them a right of appeal.
The base rate payable by employers into the industrial insurance fund may be, as held by the supreme court of the United States, compared to a tax. A disbursement to the relator may increase the base rate of all employers of the class in question, but no more directly than a decrease in the assessed valuation of the property of the Weyerhaeuser Timber Company would operate to increase the tax upon the property of the other taxpayers in the county.
A reading of the provision that an appeal shall not be a stay can lead to no other reasonable conclusion than that it was the intention of the legislature that payment of an award, like the one in the case at bar, should not be stayed. To hold that compensation such as that awarded to the relator can be stayed pending judicial review on appeal by the employer from the order making the award, would nullify the very purpose of the compensation act to furnish certain, expeditious, and adequate relief to the injured workman.
The relator does not seek in this proceeding to establish his right to compensation — that has been determined, and is conceded by respondent. The purpose of this proceeding is to require the immediate payment of the compensation that has been awarded to him.
Relator has no right of appeal. He was awarded that with which he is content. His only possible remedy is one that will compel immediate payment of that which has been awarded to him. Even if he had a remedy by appeal, it would not constitute a bar to relief by mandamus, which is the only plain, speedy, and adequate remedy the relator has to enforce his right to the award.
An apt authority is § 1375, Spelling on Extraordinary Relief, reading as follows, which we quoted with approval in State ex rel. Dudley v. Daggett, 28 Wash. 1, 68 Pac. 340.
"In order that the existence of another remedy shall constitute a bar to relief by mandamus, such other remedy must not only be an adequate remedy in the general sense of the term, but it must be specific and appropriate to the circumstances of the particular case. It must be such a remedy as is calculated to afford relief upon the very subject of the controversy. For if it is not adequate to afford the party aggrieved the particular right which the law accords him, mandamus will lie, notwithstanding the existence of such other remedy. In other words, it is not merely the absence of other legal remedies, but their inadequacy coupled with the danger of failure of justice, that would result without interference by an extraordinary remedy which usually determines the propriety of this species of relief."
The writ is granted.
Holcomb, Geraghty, and Blake, JJ., concur.
Main and Beals, JJ., concur in the result.