Case Name: WILSON v. DOEHLER-JARVIS DIVISION OF NATIONAL LEAD COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1960-01-04
Citations: 358 Mich. 510
Docket Number: Docket No. 27, Calendar No. 48,104
Parties: WILSON v. DOEHLER-JARVIS DIVISION OF NATIONAL LEAD COMPANY.
Judges: Smith, Black, Edwards, and Kavanagh, JJ., concurred with Voelker, J.
Reporter: Michigan Reports
Volume: 358
Pages: 510–529

Head Matter:
WILSON v. DOEHLER-JARVIS DIVISION OF NATIONAL LEAD COMPANY.
1. Courts — Stare Decisis. ■
The Supreme Court will not blindly perpetuate a possible error it may have committed in the past, notwithstanding the doctrine of stare decisis.
2. Workmen’s Compensation — Interest on Awards.
The workmen’s compensation act neither provides for, nor forbids, the allowance of interest on awards thereunder by the circuit court prior to time judgment becomes final (CL 1948, §§ 413.13, 438.7).
3. Interest — Judgment—Statutes.
A persuasive consideration in determining whether an obligation created by statute shall bear interest prior to final judgment thereon is the relative equities between the beneficiaries of the obligation and those upon whom it has been imposed.
4. Damages — Breach op Contract.
One for whose financial advantage an obligation was assumed or imposed, and who has suffered aetual money damages by an other’s breaeh of that obligation, should be fairly compensated for the loss thereby sustained.
References for Points in Headnotes
14 Am Jur, Courts § 78.
30 Am Jur, Interest § 46.
Interest prior to judgment. 1 ALR2d 492.
12 Am Jur, Contracts § 273 et seq.
Right of third person to enforce contract between others for his benefit. 81 ALR 1271.
Constitutionality, construction, application, and effect of provisions of workmen’s compensation acts in relation to costs or expenses on appeal or review. 79 ALR 678.
58 Am Jur, Workmen’s Compensation § 2.
14 Am Jur, Courts § 130.
Judicial change of rule regarding measure of damages as applicable retrospectively. 171 ALR 1008.
Right of court in overruling earlier precedent to apply new rule prospectively and adhere to old one as regards past transactions. 83 ALR 262.
20 Am Jur, Evidence § 122.
58 Am Jur, Workmen’s Compensation § 543.
5. Workmen’s Compensation — Interest.
The failure of the legislature to mention interest in the workmen’s compensation act does not necessarily mean that it intended that the obligation created by that act should not bear interest (CL 1948, §§ 413.13, 438.7).
6. Same — Purpose of Act.
The primary purpose of the workmen’s compensation act is to provide compensation for disability or death resulting from occupational injuries or diseases or accidental injury to or death of employees, the statute being enacted primarily for the benefit of the man who works in the pursuits subject to its provisions, the injured employee, not the injured employer (CL 1948, § 411.1 et seq., as amended).
7. Same — Interest — Circuit Court — Jurisdiction — Overruled Case.
The circuit court had jurisdiction to allow interest on an award of workmen’s compensation, overruling Fowler v. Muskegon County, 340 Mich 522 (CL 1948, §§ 413.13, 438.7).
8. Courts — Overruled Case — Retroactive Effect.
Rule announced in current ease allowing interest on award of workmen’s compensation before judgment became final, thereby overruling an earlier case, is not to be regarded as retroactive.
9. Evidence — Common Knowledge — Master and Servant — Dependency on Wages.
It is common knowledge that those who work for small wages are dependent upon such wages for their immediate livelihood.
10. Workmen’s Compensation — Interest on Award.
Interest is allowed on award of workmen’s compensation from date compensation would have been due had it been paid voluntarily (CL 1948, §§ 413.13, 438.7).
11. Costs — Construction of Statutes.
No costs are allowed in action to recover interest on award of workmen’s compensation, where a question of statutory interpretation is involved.
Dethmers, C. J., and Carr and Kelly, JJ., dissenting.
Appeal from Kent; Sear! (Fred N.), J.
Submitted June 4, 1959.
(Docket No. 27, Calendar No. 48,104.)
Decided January 4, 1960.
Motion by Edna Wilson, guardian of Sharon Louise Bentley and Ronald Bentley, minor children of James A. Bentley, deceased, for judgment against Doehler-Jarvis Division of National Lead Company on unpaid workmen’s compensation award. Judgment for plaintiff with interest from date of award. Defendant appeals. Plaintiff cross-appeals.
Modified and remanded for computation of interest from date compensation would have been due if paid voluntarily.
Marcus, Kelman, Loria, McCroshey <& Finucan (.Benjamin Marcus, of counsel), for plaintiff.
Warner, Norcross & Judd (Conrad A. Bradshaw, of counsel), for defendant.

Opinion:
Voelker, J.
This appeal and cross-appeal involves a claim of interest on a workmen's compensation award. On May 11, 1954, the initial application for hearing and adjustment of claim before the workmen's compensation commission was filed by the injured employee, James A. Bentley. Thereafter Mr. Bentley died of cancer. On March 25,1955, the plaintiff herein, Mrs. Edna Wilson, guardian for Mr. Bentley's 2 minor children, filed her application for hearing and adjustment of claim. An award was allowed by the hearing referee, which was ultimately appealed to and affirmed by this Court. See Wilson v. Doehler-Jarvis Division of National Lead Company, 353 Mich 363. So much for background.
Thereafter a motion was filed in the circuit court praying judgment on the award in accordance with the opinion of this Court and also seeking interest on the award at the rate of 5% per annum from February 19, 1955, the date of death. Judgment and interest were granted at the rate requested, but not the date, but instead from the date of the appeal board's order of October 23, 1956, and from the due date of each payment coming due thereafter. From that judgment the parties have appealed and cross-appealed. Defendant-appellant, Doehler-Jarvis Division of National Lead Company, claims that the circuit court had no jurisdiction whatever to allo.w any interest, and that, even if it possessed such jurisdiction, interest should not have been allowed until the award was final, which appellant urges is not until it had been finally affirmed by this Court. On her side plaintiff and cross-appellant understandably argues that the court had jurisdiction not only to allow interest, but that it should have been allowed from the date compensation first became due and payable.
The controversy boils down to 2 questions. Can interest ever be allowed by the circuit court on a workmen's compensation award when neither the award nor the statute makes specific reference thereto? Assuming jurisdiction in the circuit court ever to allow interest, at what point should such interest commence?
To support its claim that the circuit court was without jurisdiction to allow interest on the award, appellant cites us to Fowler v. Muskegon County, 340 Mich 522, a similar case dealing with the allowance of interest on a workmen's compensation award. That case held flatly that interest is statutory, and that because the workmen's compensation act did not specifically provide for interest, the circuit court was without authority to allow it. Appellant then says in its brief:
"It is obvious that what is sought in this case is a reversal of the Fowler decision, and that Judge Searl's opinion awarding interest is based not upon the settled law of the State of Michigan but upon his guess as to how a majority of the present Supreme Court might view the law.
"It is likewise obvious that adherence to the doctrine of stare decisis will result in a reversal of Judge Searl's decision, and a vacation of the judgment entered by him.
"Only if a majority of the present court is convinced (a) that the Fowler decision is wrong, (b) that the universally followed procedure under the Michigan workmen's compensation law that interest is not paid on awards should be set aside, and (c) that the rules of stare decisis should, in this case, be set aside, can the judgment appealed from be sustained."
Notwithstanding appellant's quoted understanding of the oft-discussed doctrine of stare decisis, this Court will not close its eyes to a possible error it may have committed in the past. We do not believe that the doctrine of stare decisis means that this Court and the evolution of the law should be controlled by the "dead hand from the past." Nor do we believe that this Court must perpetuate error simply because it may have reached a wrong result in one of its earlier decisions. Such is not our understanding of the doctrine of stare decisis. See Van Dorpel v. Haven-Busch Co., 350 Mich 135, 148-155, for an extended discussion. With these thoughts in mind we will proceed to our discussion of the questions before us, and re-examine the principles set out in the cited Fowler Case.
The workmen's compensation act neither provides for, nor forbids, the allowance of interest by the circuit court; the subject is simply not mentioned. The question is, does the circuit court have authority to allow the legal rate of interest when it enters a judgment on a compensation award? In the Fowler Case we said that interest is purely statutory, yet the fact is that we have consistently allowed interest in many cases in which no express statute could be invoked. See Hammond v. Hannin, 21 Mich 374 (damages for breach of contract to convey land); McCreery v. Green, 38 Mich 172 (fraudulent conveyance, breach of contract); Snow v. Nowlin, 43 Mich 383 (fraudulent conveyance); Taylor v. Bay City Street R. Co., 101 Mich 140 (damages for negligence) ; Kaminski v. Wayne County Board of Auditors, 287 Mich 62 (suit for back salary of a circuit court commissioner). ;
On this same subject the United States supreme court in Rodgers v. United States, 332 US 371, 373 (68 S Ct 5, 92 L ed 3) speaking through Mr. Justice Black said:
"There is no language in the agricultural adjustment act or in any other act of congress which specifically allows or forbids interest on penalties such as these prior to judgment. But the failure to mention interest in statutes which create obligations has not been interpreted by this court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest. Billings v. United States, 232 US 261, 284-288 (34 S Ct 421, 58 L ed 596). For in the absence of an unequivocal prohibition of interest on such obligations, this court has fashioned rules which granted or denied interest on particular statutory obligations by an appraisal of the congressional purpose in imposing them and in the light of general principles deemed relevant by the court. See, e. q., Royal Indemnity Co. v. United States, 313 US 289 (61 S Ct 995, 85 L ed 1361); Board of Commissioners of Jackson County v. United States, 308 US 343 (60 S Ct 285, 84 L ed 313).
# "As our prior cases show, a persuasive consideration in determining whether such obligations shall bear interest is the relative equities between the beneficiaries of the obligation and those upon whom it has been imposed. And this court has generally weighed these relative equities in accordance with the "historic judicial principle that one for whose financial advantage an obligation was assumed or imposed, and who has suffered actual money damages by another's breach of that obligation, should be fairly compensated for the loss thereby sustained (citing authority)."
We also feel that the failure of the legislature to mention interest does not necessarily mean that it intended that the obligation created by it should not bear interest. Rather we must look to the purpose of the legislation:
"The primary purpose of the workmen's compensation act is to provide compensation for disability or death resulting from occupational injuries or diseases or accidental injury to or death of employees. The statute is a remedial one enacted primarily for the benefit of the man who works in the pursuits subject to its provisions; it is for the benefit of injured employees and not injured employers." (24 MLP, Workmen's Compensation, § 2, p 229).
Who benefited from the delay in payment here? Who, if anyone, suffered any loss? In the instant case the disputed claim for compensation has been in the throes of litigation for over 5 years. In the meantime the defendant-appellant has had the possession and use of funds that it now appears rightfully belonged all along to the plaintiff, while the plaintiff (theoretically if not actually) had to raise money elsewhere (and presumably pay interest on it) to meet the daily necessities of life. In a real sense, then, the employee and his dependents have been obliged to help subsidize the employer in the long, expensive fight for possession of the money thus wrongfully withheld.
Considering the broad purposes of the workmen's compensation act and the various equities involved we think and hold that the circuit court properly had jurisdiction to allow interest on the award. In so holding we expressly overrule the contrary principles expressed in the Fowler Case. This decision shall not, however, be regarded as retroactive.
We are now left with the question of when the* interest should begin to run. In that regard we quote with approval the comments of Dean Roscoe Pound on the case of Parker v. Brinson Construction Co. (Fla), 78 So2d 873. This commentary may be found in 16 NACCA Law Journal, pp 135, 136. j
"There was 'no controlling statute on the subject,' and the question was 'one of first impression' in Florida. The opinion of the court [p 875] puts the matter very well as follows: 'The basic philosophy of the act is to insure and secure prompt payment of compensation or other awards to the man who works for wages or his beneficiaries. This court' knows that the smaller the award of compensation, the greater is the need for the prompt payment thereof. It is common knowledge that those who work for small wages are dependent upon such wages for their immediate livelihood. Inherent in the act itself is the intention that if such an award is wrongfully withheld (and under the law it is wrongfully withheld if it be eventually determined that it should have been paid), the person or the party which should have paid it should be compelled to pay, as damages for its detention, lawful interest thereon from the date it should- have been paid.' There has been no clear weight of authority and difficulty seems to have arisen from a distinction between actions upon contract and actions for personal injuries. Generally in personal injury cases the courts have declined to allow interest before the date of the judgment, whereas in actions ex contractu interest is allowed from the time of accrual of the cause of action. The Court rightly considers that the rule to be applied to awards in workmen's compensation cases is that applicable to actions ex contractu. Accordingly it holds that interest is to be awarded at the statutory rate from the date when the claimant should have been receiving compensation. 'Any other rule affords the carrier or employer an advantage wholly disproportionate to the harm that befalls the beneficiary. Moreover such would result in a situation never contemplated nor intended by the workmen's compensation law and which would be repugnant to its basic purposes.' "
: We have already cited the Michigan statute which provides for interest "in all actions founded on contracts express or implied." (CL 1948, § 438.7 [Stat Ann 1959 Rev § 19.4].)
Under a general statute' of this nature, Minnesota, in an early case, Brown v. City of Pipestone, 186 Minn 540 (245 NW 145), allowed interest on workmen's compensation awards from the date they should have been paid.
In discussing the principle involved in the leading-case of Bourdeaux v. Gilbert Motor Co., 220 Minn 538, 541 (20 NW2d 393, 394), the court said:
"The sole question raised in that case (Brown v. City of Pipestone) was 'whether or not unpaid instalments of compensation bear interest at the legal rate from the date when under the provisions of the compensation act they should have been paid.' We there held: ' Compensation in this State is a liability arising- out of the contract of employment, and the compensation act becomes a part of every contract of employment.' We there further stated: 'Here was a contract debt due at the times when the compensation instalments should have been paid under the provisions of the act, and we see no reason why it should not, like any other debt, bear interest at the legal rate when it is subsequently decided that the debt existed.' "
It appears that the majority of the courts in this nation, under either general or specific interest statutes, hold that interest should be paid on workmen's compensation claims. See Sunny Point Packing Co. v. Faigh (CCA 9), 63 F2d 921; Bourdeaux v. Gilbert Motor Co., supra; Parker v. Brinson Construction Co., supra. The best reasoned of these cases, including the 3 cited above, appear to us to hold that interest should run from the date when the workmen's compensation claim should have been paid.
The judgment of the trial court is therefore modified and the case remanded with instructions to compute and allow interest on the award from the date compensation would have been due had it been paid voluntarily. No costs, a question of statutory interpretation being involved.
Smith, Black, Edwards, and Kavanagh, JJ., concurred with Voelker, J.
CL 1948, § 413.13 (Stat Ann 1950 Rev § 17.187). But see CL 1948, § 438.7 (Stat Ann 1959 Rev § 19.4).
See CL 1948, § 411.1 et seq., as amended (Stat Ann 1950 Rev § 17.141 et seq., as amended).—Reporter.