Court Opinion

ID: 7170860
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:26:16.245733+00
Date Added: 2024-06-11T16:15:43.345570
License: Public Domain

On Rehearing.
O’NIELL, J.
[3] The Supreme Court of the United States has announced, as a definite rule, that the amount of compensation to be allowed the beneficiaries of a deceased employe, if any be due them, under the federal Employers’ Liability Act, is only the cash value of what the employe might reasonably have contributed to the support of the beneficiaries during the term of his life expectancy. That is because the right of recovery is limited to the pecuniary loss suffered by the beneficiaries. And that loss is to be ascertained or computed by discounting the lost future benefits, at a fair or reasonable rate at which the money could be loaned or invested safely at interest, for each year of the life expectancy, according to the evidence. Chesapeake & Ohio Railway Co. v. Kelly, 241 U. S. 485, 36 Sup. Ct. 630, 60 L. Ed. 1117, L. R. A. 1917F, 367; Spokane & Inland Railroad Co. v. Campbell, 241 U. S. 497, 36 Sup. Ct. 683, 60 L. Ed. 1125.
[4] We have .concluded from the evidence taken on the second trial that Jones was 56 years of age at the time of his death. The evidence shows also that the life expectancy of a locomotive engineer, because of his hazardous occupation, is taken 8 years beyond his age. Accordingly a locomotive engineer 56 years of age is rated at 64. That rule has been adopted by the life insurance experts, and there is no reason why we should not avail ourselves of their knowledge and experience. In fact, we have this strong equitable reason for considering the danger of the occupation: That it is presumed that the employs was compensated for the risk, in the wages he received, and that the beneficiaries will therefore have the compensating advantage of a higher rate of future benefits, in our calculation, than they would have if the risk had been an ordinary one.
The life expectancy of a locomotive engi*313neer aged 56 years, or of an ordinary risk at 64, according to the expectation table constructed from the American Experience Table of Mortality, and therefore according to the reliable theory of chances, is 11.7 years. That is the presumed term of the future benefits of which the beneficiaries in this case were deprived by the death of Jones.
[5] The amount of the future benefits or contributions that the beneficiaries lost is the difference between the amount that Jones would have earned and the amount he would have spent upon himself if he had lived 11.7 years longer. I-Ie was earning $2,100 a year, and, from the evidence of his good habits, we have concluded that $600 a year is a fair allowance to be made for what he would hare spent for his own maintenance. Hence we fix the amount of the lost future benefits at $1,500 per annum for 11.7 years; that is, a total sum of $17,550 that would have been equally distributed or contributed in installments during a period of 11.7 years.
The rate of discount to be allowed on the anticipated payments, to reduce them to their present value, is a fair or reasonable rate at which the money could be loaned or invested safely at interest. There is evidence that ■ that rate locally is 6 per cent.; but we think the evidence refers to loans or investments requiring some financial knowledge or ability, and therefore producing returns that are earned, not altogether by the money invested, but in part by the financial ability of the investor. A person without business ability would have to deal with a savings bank, or invest in bonds or other securities of equal standing, paying something like 4 per cent., to make a safe investment at interest. On the other hand, as money does not invest itself, or produce any revenue without investment, its earning power or value is always due, in some measure, to some financial knowledge or ability on the part of its investor. It would therefore be putting the value of the money too low to adopt the rate of 4 per cent, in discounting the payments to be anticipated in this case. Our opinion is that 5 per cent, is a more appropriate rate, ahd is fully warranted by the evidence. That is the -legal rate of interest — the rate we are constrained to allow when none is stipulated and interest is due. It seems quite .equitable that the discount charged to the beneficiaries in computing the present value of deferred payments should be at the rate at which interest would bo allowed to the plaintiffs on a past-due claim of similar character.
We have concluded, therefore, to reduce the amount of the judgment in this case to the present value of 11.7 annual payments of $1,500 each, that is, the net proceeds, or what would be the present or cash value, of $17,550, payable in 11.7 yearly installments, discounted at 5 per cent. The result of our calculation is that the plaintiffs are entitled to a judgment for $13,547.64, viz.:
Years. Amount. Divisor. Discount. Casli Value
1. $ 71.43 $ 1,428.57 $ 1,500. 1.05
2. 1,500. 1.10 136.36 1,363.64
3. 1,500. 1.15 195.64 1,304.36
4. 1,500. 1.20 250.00 1,250.00
5. 1,500. 1.25 300.00 1,200.00
6. 1,500. 1.30 346.15 1,153.85
7. 1,500. 1.35 388.89 1,111.11
8. 1,500. 1.40 428.57 1,071.43
9. 1,500. 1.45 465.52 1,034.48
10. 1,500. 1.50 500.00 1,000.00
11. 1,500. 1.55 532.26 967.74
11.7 1,050. 1.585 387.54 662.46
Totals $17,550. $4,002.36 $13,547.64
[6] The jury was not required by the federal Employers’ Liability Act to apportion the award of damages among the beneficiaries of the deceased employé. Central Vermont Railway Co. v. White, 238 U. S. 507, 35 Sup. Ct. 865, 59 L. Ed. 1433, Ann. Cas. 1916B, 252; Chesapeake & Ohio Railway Co. v. Kelly, 241 U. S. 485, 36 Sup. Ct. 630, 60 L. Ed. 1117, L. R. A. 1917F, 367.
The judgment appealed from is amended by reducing the amount to $13,547.64, and, *315as amended, it is affirmed; the appellant to pay the .costs of the district court,; the appellees the costs of appeal.