Case Name: OWENS v. ATLANTIC COAST LUMBER CORP.
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1917-10-29
Citations: 108 S.C. 258
Docket Number: 9821
Parties: OWENS v. ATLANTIC COAST LUMBER CORP.
Judges: Messrs. Justices Watts, Fraser and Gage concur in the opinion, of the Court.
Reporter: South Carolina Reports
Volume: 108
Pages: 258–271

Head Matter:
9821
OWENS v. ATLANTIC COAST LUMBER CORP.
(94 S. E. 15.)
1. Judgment — Pleadings—Demurrer to Complaint — Dismissal.—When a demurrer to a complaint is sustained, the complaint should not ordinarily be dismissed if the omission can be supplied by amendment, but where it appears affirmatively that plaintiff is not entitled to relief, dismissal on such ground is proper, and is a bar to another action.
2. Master and Servant — Agreement for Medical Attention. — Where an employer deducted $1 each month, for which he was to furnish a staff of doctors to render medical attention to the employees’ families when requested, there was a contract based upon a valuable consideration.
3. Master and Servant — Agreement for Medical Care — Breach—• Pleading. — Allegations that plaintiff was an employee, and went several times to a doctor engaged chiefly to attend to defendant’s employees and families, and requested him to attend to his sick wife, and the doctor gave no excuse for not coming, except that he was too busy, were sufficient to show that the doctor knew plaintiff was an employee. «
4. Master and Servant — Agreement for Medical Care — -Application to Physician — 'Notice to Master. — Where an employer agrees, for consideration, to furnish medical attention to employees’ families when requested, a request to a designated doctor by an employee to care for his sick wife was notice to the master of such sickness and need.
5. Master and Servant — Agreement for Medical Attention — Negligence of Physician — Liability of Master. — A master who deducts a specified amount each month in return for medical attention is liable for negligence and malpractice of a physician furnished by him, as a contractual duty, unless it is shown that he obtained no pecuniary profit.
6. Pleading — Demurrer to Complaint — Construction op Pleading.— On demurrer to a complaint, the allegations should be most liberally construed for the plaintiff.
Before Shipp, J., Georgetown, June, 1916.
Reversed.
Action by Julius Owens against the Atlantic Coast Lumber Corporation. From an order sustaining a demurrer to the complaint, plaintiff appeals.
Mr. Capers G. Barr, for appellant,
cites: As to construction of pleadings: 8 S. C. 103; 12 S. C. 1; 29 S. C. 258; 70 S. C. 274; 31 Cyc. 290. Contractual duty to afford medical treatment: 98 S. C. 25; 211 Mo. 419; 17 L. R. A. (N. S.) 1167; 124 S. W. 202; 30 L. R. A. (N. S.) 1207; 153 Ind. 119; 58 N. E. 738; 6 Cyc. 900; 9 Cyc. 240; 4 Wheaton 518. Doctrine of respondeat superior: 104 S. C. 197.
Messrs. LeGrand Walker and M. W. Pyatt, for respondent,
cite: The funds collected by employer for medical treatment created a mere trust: 60 Fed. 365. Admissions as to legal conclusions: 104 S. C. 311. Duty under the trust agreement: 18 Fed. 224-226; 60 Fed. 367-370; 84 Ohio St. 74; 95 N. E. 509; Ann. Cas. 1912b, 933; 211 N. Y. 125; 52 L. R. A. (N. S.) 506; 36 L. R. A. (N. S.) 51; 49 L. R. A. (N. S.) 801; 45 S. E. 741; 77 S. E. 324; 79 S. E. 941. Care in selection of physician: 3 Labatt M. & S. (2d ed.l 1098; 4 Thompson Neg., secs. 4895, 4896.
October 29, 1917.

Opinion:
The opinion of the Court was delivered by
Mr. Justice Hydrick.
Plaintiff appeals from an order sustaining a demurrer to his complaint for damages for breach of defendant's contract to provide medical attention to his sick wife, for the lack of which she died.
The complaint alleges that defendant employs a great number of men, and deducts $1 from the monthly wages of each to maintain a staff of two physicians to render medical attention to its employees and their families, when needed and requested; that while he was employed by defendant his wife became ill, and needed medical attention, and he called upon Dr. Brown, one of the physicians regularly employed by defendant, and requested him to give her proper medical attention, which he refused to do, on the pretext of being too busy; that he then tried to get Dr. Sawyer, the other physician so employed, but could not find him; that three or four days later his wife became desperately ill, and, still being unable to find Dr. Sawyer, and being without means to employ another physician, he again applied to Dr. Brown, and begged him to go immediately to see her and give her the attention she needed; that, again, in utter disregard of his rights under the contract, the doctor refused his request, saying he could not risk his automobile on the ferry across Sampit River, which ferry was regularly operated by the county authorities in the transportation of automobiles and other vehicles over the river; that, on account of the failure and refusal of Dr. Brown, the agent appointed by defendant to perform its contract, his wife died from the lack of proper medical attention, and he was damaged in the sum of $10,000.
Defendant demurred to the complaint on numerous grounds. Those of merit may be summarized thus : (1) The default alleged is thát of one of the physicians employed by defendant, for whose neglect defendant is not liable, in the absence of allegation of negligence in his selection; (2) it is not alleged that Dr. Brown knew or was informed that plaintiff was an employee of defendant, and, therefore, entitled to the services requested of him; (.3) nor, that defendant was notified of Dr. Brown's refusal to respond to plaintiff's request, or his inability to find Dr. Sawyer.
The trial Court held that "the complaint not only failed to state facts sufficient to constitute a cause of action, but contained affirmative allegations, showing that plaintiff had no cause of action." Therefore the complaint was dismissed.
Ordinarily, when a demurrer is sustained for mere insufficiency, the complaint should not be absolutely dismissed, if the omission can be supplied by amendment, for the latter course saves the delay, trouble and expense of bringing a new action. ' But, when the complaint shows affirmatively that plaintiff is not entitled to relief in any view of the case, dismissal of the action is proper; and, in such cases, the judgment of dismissal will bar another action for the same cause. Hodge v. Lumber Corp., 90 S. C. 229, 71 S. E. 1009. No doubt the Court would have ordered an amendment, but for the latter part of its conclusion above quoted, and, if that conclusion be sustained, plaintiff is remediless.
Let us inquire, then, whether the complaint does show affirmatively that plaintiff is entitled to no relief. The Court did not point out the allegations leading to that conclusion, but it was rested, no doubt, upon the ground that the delict alleged was that of one of the physicians for whose negligence defendant is not liable, in the absence of allegation of its negligence in his selection.
That was a misconception of plaintiff's case. He does not seek to recover damages for the malpractice, or negligence, or unskillfulness of the physician, in the management of the case after he took charge of it, but for the breach' of defendant's contractual duty, in his refusal to render any service at all. The gravamen of the complaint is nonfeasance, not malfeasance. Therefore the interesting question made by the first ground of demurrer, whether defendant would be liable for the malpractice of physicians selected by it with due care, was not at issue.
It is too plain for argument that, under the facts alleged, there was a contract, and that it was based upon valuable consideration. The only real question is: Did plaintiff allege enough to show a breach of that contract by defendant ?
From the nature of the case, plaintiff was bound to notify one of the physicians of his wife's need of attention, and, also, of her right to it, by reason of hfc being-an employee, if that fact was unknown to the physician. While there is no direct allegation that Dr. Brown knew that plaintiff was an employee, it is fairly inferable from all the facts alleged tha,t he did, for he did not refuse plaintiff's request on that ground, as he probably would, if he had conceived that plaintiff's wife was not entitled to his services for that reason. The giving of other excuses impliedly excludes that one. A't any rate he should not have based his refusal on that ground, keeping it concealed, without inquiring of plaintiff as to the truth of the matter. Besides, it is inferable from all the circumstances that these physicians were engaged chiefly, if not exclusively, to attend to defendant's employees, which was enough to put the doctor upon inquiry which would have disclosed the fact.
Was notice to Dr. Brown, who is admitted by the demurrer to have been the agent appointed by defendant to perform the contract on its part, sufficient notice to defendant? The general rule is that notice to one who has been appointed by the master to perform his duty is notice to the master. It would result in great injustice to allow the master to put forward another to perform a duty imposed upon him by law or contract, and escape the consequences of knowledge of the rights and interests of his servants which he would have gained, if he had performed the duty himself.
So, too, as a general rule, a breach of contract which is due to the failure or inability of a third person with whom the party in default has made contracts to enable him to perform his contract does not excuse such breach. 3 Page on Contracts, 2241. Defendant contracted to provide medical attention to plaintiff's wife. The doctor was the third person contracted with by defendant tO' perform its part of the contract. In effect, defendant said to its employees: I will retain $1 from the monthly wages of each of you, for which I agree to provide for you and your families the services of competent medical men, when needed and requested; and when you, or any member of your family, needs a physician, call one of those regularly employed by me for that purpose, and he will render the needed services. Clearly, then, the doctor was defendant's agent for the performance of its contractual obligation to plaintiff, and notice to him was notice to defendant, and his failure to render any service at all was defendant's failure to perform its contract.
While, in the view taken, the question whether defendant would be liable for the malpractice of physicians carefully chosen is not strictly within the issues tendered by the complaint, there is one view of the case in which that question may become important. If the deductions made resulted in direct pecuniary profit to defendant, then, clearly, it would be responsible for the negligence or malpractice of the physicians employed even with due care, on the same principle that a private hospital conducted for gain, or the physican himself, is made liable.
Nothing appearing to the contrary, the allegation that defendant exacted and received pay for promised services warrants an inference, at least prima facie, that defendant received pecuniary profit from the scheme. Certainly it is not inferable that it was conducted as a charity, even in part, for there is no suggestion that defendant contributed or agreed to contribute anything towards its maintenance, nor that the whole fund so raised was used in paying for the services of the physicians, or otherwise for the sole benefit of the employees. It was retained in defendant's treasury, and, if there was any surplus, it inured to the benefit of defendant. This put upon defendant the burden of showing that it derived no pecuniary gain in the conduct of the undertaking and administration of the fund to escape the liability arising from that situation.
Discussing this question, Dabatt, in his work on Master and Servant (volume V, sec. 2005), says that it may present itself in one or the other of three situations:
"(1) The master may deduct a certain amount from the wages of his servants, for the purpose of forming a relief fund, and so administer that fund as to derive a direct pecuniary profit from it. The effect of such an arrangement, it has been held, is to subject the master to the responsibility of a person who agrees to' perform a specific duty for a valuable consideration. The conclusion arrived at in this point of view is that he is absolutely bound to see that the sick or injured servants whose money he is expending are treated with proper care, arid that this obligation is not discharged, by merely engaging doctors and surgeons whom he is warranted in believing to be competent.
"(2) The whole cost of medical attendance upon the servants may be defrayed by the master himself. All the authorities are agreed that, if he pursues this course, he cannot be held liable for the negligence of the practitioners whom he employs, unless he has failed to exercise due care in selecting them.
"(3) The master may make deductions from the wages of his servants, and, without deriving any direct pecuniary profit from the fund thus created, administer it for the benefit of those who fall sick or sustain injur)' while in his employment. The decided preponderance of authority is in favor of the doctrine that, under an arrangement of this character, he is not accountable for the negligence or unskillfulness of physicians or surgeons employed by him, unless he has failed to exercise due care in selecting them."
Construing the allegations of the_ complaint most liberally for plaintiff, as we must on demurrer, they bring his case, at least prima facie, within the first situation described, in which the decided weight of authority and reason holds the master liable for the malpractice ór negligence of physicians chosen by him, even with due care; for, in that situation, the master assumes an absolute duty and responsibility to the servant. American Tin Plate Co. v. Guy, 25 Ind. App. 588, 58 N. E. 738; Richardson v. Carbon Hill Coal Co., 6 Wash. 52, 32 Pac. 1012, 20 L. R. A. 338; Sawdey v. Spokane Falls etc. Ry., 30 Wash. 349, 70 Pac. 972, 94 Am. St. Rep. 880; Texas & P. Coal Co. v. Connaughten, 20 Tex. Civ. App. 642, 50 S. W. 173; Zumwalt v. Texas C. R. Co., 56 Tex. Civ. App. 567, 121 S. W. 1133, 132 S. W. 112; Nations v. Ludington etc. Lumber Co., 133 La. 657, 63 South. 257, 48 L. R. A. (N. S.) 531, Ann. Cas. 1916b, 471; Phillips v. St. Louis & S. F. R. Co., 211 Mo. 419, 111 S. W. 109, 17 L. R. A. (N. S.) 1167, 124 Am. St. Rep. 786, 14 Ann. Cas. 742. In the note to the case last cited, the editor thus states the rule:
"Where such arrangement is substantially a contract, whereby, in consideration of the sums held back from the employee's wages, the employer undertakes to provide him with medical attendance, etc., the employer seems to be regarded as liable for any injury resulting from want of care or improper treatment."
The facts of the case quoted from by the Chief Justice bring them under the second or third situation stated by Eabatt, and distinguished them from this case. Besides, as Labatt points out, on page 6220, the principle of the Artist, case, 60 Fed. 367, 9 C. C. A. 14, 23 L. R. A. 581, is contrary to the view adopted by the Courts of Massachusetts, Missouri and Texas, which is more consonant with reason and justice.
The order appealed from is reversed.
Messrs. Justices Watts, Fraser and Gage concur in the opinion, of the Court.