Court Opinion

ID: 9577611
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:36:29.625256+00
Date Added: 2024-06-11T13:20:56.364320
License: Public Domain

Stukes, Chief Justice.
The facts of this case are stated in the opinion of Mr. Justice Taylor, with the result of which I regret that I cannot agree. It is a hard case, hard on the claimant, but following the old adage, a hard case must not be permitted to make bad law.
Section 72-109 of the Code, which follows, prescribes the method by which an exempt employer, such as that here, may subject himself to the terms of the Workmen’s Compensation Law:
“72-109. Employers exempted may waive exemption. Any person employing employees in the State and exempted from the mandatory provisions of this Title may come in under the terms of this Title and receive the benefits and be subject to the liabilities of this Title by filing with the Commission a written notice of his desire to be subject to the terms and provisions of this Title. Any such person shall come under the provisions of this Title and be affected thereby thirty days after the date of such notice.”
It is seen that the employer is required to file with the Commission a written notice of his desire tó be subject to the terms and provisions of- the Act. When this has been done, the election does not become effective until after the expiration of thirty days from the date of such notice. The General Assembly evidently recognized the necessity of specifying in clear and unambiguous terms the manner in which an exempt employer may come under the Act so as to eliminate any uncertainty as to whether the rights of the parties would be governed by the common law or the Workmen’s Compensation Act.
In Eaves v. Contract Trucking Co., 55 N. M. 463, 235 P. (2d) 530, 531, the Court had under consideration a similar provision in the New Mexico statute which permitted an employer to elect to be subject to the Act by filing in the office of the District Court “a written statement to the *83effect that he accepts the provisions of this Act.” 1941 Comp. § 57-904. In construing this provision, the Court said:
“It provides for an election by the employer of his doing certain, definite and specific things in a certain way and in a certain place. The fact that an employer and his employees may come under the provisions of the Workmen’s Compensation Act very materially affects, changes and alters the rights and liabilities of the employer and his employees. It is of great importance to people in industry, both employees and employers to definitely know at all times whether in their relationship they are subject to the common law or the workmen’s compensation law. Their status, their rights and liabilities should not be left to conjecture or in doubt. The legislature did not leave room for doubt by merely saying an employer could elect to become subject to the act. It stated he could elect by doing certain, definite and prescribed things in a specific way and limited his election to be made by the doing of such specific acts in the prescribed manner.”
It was held in the Eaves case that the mere fact that the employer procured workmen’s compensation insurance did not constitute an implied election to come within the Act.
We held in Yeomans v. Anheuser-Busch, Inc., 198 S. C. 65, 15 S. E. (2d) 833, 136 A. L. R. 894, that substantial, -rather than complete, compliance with Section 72-109 might suffice but here there was not the slightest attempt at compliance with the statute; nothing was filed with the Commission and no notice of any kind given it. In the Yeomans case the employer filed with the Industrial Commission a notice that it had procured compensation insurance. The Commission acknowledged receipt of the proof of the insurance and that it had been filed, and assigned code numbers to the employer and carrier and instructed them with respect to the report of accidents, etc. But in the instant case not only was no policy ever filed with the Commission or other notice given to it but no policy was ever issued. Application was made but the insurance company declined to issue the *84policy. The inevitable result is that the Commission had no jurisdiction of respondent’s claim.
In Kindall v. McBirney, 52 Idaho 65, 11 P. (2d) 370, 371, the Court, in line with the general rule elsewhere, said:
“Jurisdiction cannot be acquired by the Industrial Accident Board by estoppel. Southern Surety Co. v. Inabnit, 119 Tex. 67, 24 S. W. (2d) 375; Employers’ Liability Assurance Corp. v. Industrial Accident Commission, 187 Cal. 615, 203 P. 95, 97; Zurich General Accident & Liability Ins. Co. v. Industrial Accident Commission, 191 Cal. 770, 218 P. 563. Nor can such jurisdiction be acquired by agreement, waiver, or conduct. Jester v. Thompson, 99 Conn. 236, 121 A. 470; Waldum v. Lake Superior Terminal & Transfer Ry. Co., 169 Wis. 137, 170 N. W. 729; Doey v. Clarence P. Howland Co., 224 N. Y. 30, 120 N. E. 53; Hassen v. Elm Coal Co., 184 App. Div. 715, 172 N. Y. S. 430; New Amsterdam Casualty Co. v. Industrial Accident Commission, 66 Cal. App. 86, 225 P. 459.”
Even if it be assumed that the act of the employer in applying for insurance and telling his employees that he had procured workmen’s compensation coverage constituted an election, under the clear terms of the statute such election would not be effective until the lapse of thirty days. Here the deceased was killed two days after the application was made for the policy. In Ham v. Mullins Lumber Co., 193 S. C. 66, 7 S. E. (2d) 712, 718, the Court said: “The employer’s election to come under the Act became effective thirty days after its giving of notice; the employee came under the Act upon his acquiescence in his employer’s election for thirty days after notice thereof.”
Both in the Ham and in the Yeomans cases the accident occurred more than thirty days after the alleged election on the part of the employer.
It is said that the circumstances show an oral contract of insurance to become effective immediately. Aside from the fact that no verbal agreement to operate under the Act would constitute a compliance with the *85terms of the statute, the thirty days provision would be regarded as a part of such agreement. The compensation act becomes a part of such contract of insurance just as if the terms of the Act were written into said contract. It may be true that both the insurance agent and the employer were unaware of the fact that an election to come under the Act did not become effective for thirty days but they are bound by the Act and had constructive knowledge of it.
I think it is very clear that the employee in this case was not bound. During the thirty-day period he undoubtedly could have brought an action at common law for damages on account of any injuries received. The mere fact that he remained silent when told by his employer that he had insurance coverage could not be held as a waiver of his common-law rights. If he were not under the Act, it is difficult to see how the employer would be bound.
If, as has been concluded, the parties were not under the Act, it necessarily follows that there is no liability on the part of the insurance carrier. Its liability only extended to those who had elected to operate under the provisions of the Act.
The instant case is strikingly similar to Cody v. Combs, 302 Ky. 596, 194 S. W. (2d) 525. In that case, a claim was filed by the widow for death benefits under Workmen’s Compensation against one Buck Combs, operator of a coal mine, and his insurance carrier, Bituminous Casualty Corporation. Combs had admittedly taken out a policy at the time he began the operation of his mine some three months before the claimant’s death, but not being familiar with the Compensation Act had not had his employee sign a register which was the election required under the Workmen’s Compensation Act, KRS 342.001 et seq. The employer had not supplied the register because in good faith he thought that taking out the policy and filing it with the Commission was sufficient. After the claimant’s death, the widow and the employer, Combs, agreed that the accident occurred in the course of employment, etc., and that the claimant’s widow *86was entitled to Workmen’s Compensation benefits at the stipulated rate. The insurance company intervened and asked that the agreement not be binding or be cancelled as to it, contending that the Workmen’s Compensation Commission did not have jurisdiction because there had been no election to come within the terms of the Act. The argument was advanced, as in the case at bar, that since the widow and employer had agreed to compensation the agreement was binding upon the insurance company. The claimant cited sections of the statute which provided that if the employer and employee agreed to compensation, a memorandum should be filed with the Board and approved and once done became as enforceable as any other order of the court. The court, disposing of this contention, stated at page 527 of 194 S. W. (2d):
“These statutes apply only where both the employer and employee have accepted the provisions of the Workmen’s Compensation Act in the manner prescribed by the Act. (Emphasis added.) Otherwise, the Workmen’s Compensation Board is without jurisdiction to entertain the case and enter an award. * * * In their contention that the insurance carrier was bound by the agreement entered into by Alta E. Cody and Buck Combs and had no right to intervene in the proceeding before the Workmen’s Compensation Board, the appellants overlook the fact that the insurance carrier is liable only to employees of its insured who have elected to-operate under the provisions of the Act. * * * Insurance companies and sureties on indemnity bonds or other bonds to secure the liability of the employer to pay compensation can be held bound only when the provisions of the act under which the bond is given have been complied with. The Compensation Act becomes a part of such contract of insurance and such contracts of indemnity or security just as if the terms of the act were written into said contract. So the matter of the evidence of the acceptance by the employee of the act is not simply a question between the employer and: employee.”
*87The facts of Miller v. Aetna Life Ins. Co., 101 Mont. 212, 53 P. (2d) 704, 706, which is cited, completely distinguish it from the case in hand as is shown by the following quotation from the opinion:
“We think that the board’s finding that its records do not show that Love-Sinclair Service, Inc., ever elected to be bound by the Workmen’s Compensation Act is erroneous. First, because it is shown in the record here that Love-Sinclair Service, Inc., succeeded Love & McTavish, Inc., and that the latter corporation was enrolled * * *; second, that the board’s records further show and defendant’s counsel admit that from May, 1931, to Nov. 7, 1931, there was on file with the board a policy issued by the defendant” to Love-Sinclair Service Station.
The only part of the text at 99 C. J. S., Workmen’s Compensation, § 122, p. 428 which may be said to support affirmance here is the following: “The failure of the employer to comply with an act specifying the method of enrollment does not inure to the benefit of his insurer.” As authority for this there is cited in the footnote only the case of Miller v. Aetna Life Ins. Co., supra, 53 P. (2d) 704, which is found upon examination to be distinguished by its facts from the case at bar and the following quotation from 99 C. J. S., Workmen’s Compensation, § 122, p. 426, is to the contrary:
“The employer’s election to come within a compensation act, or his election to bring employees within the act who would otherwise be excluded must be indicated in the manner prescribed by the act, and if the employer does not manifest his election in accordance with the statute he is not covered even though he intended to be, and believed he was, covered.”
Pertinent annotations are in 103 A. L. R. 1523 and 136 A. L. R. 899. From the latter, 136 A. L. R. 900, the following is quoted:
“Workmen’s compensation acts generally contain provisions governing the acceptance of them by employers as to *88whom the acts are not mandatory. No general rule can be laid down other than that a substantial compliance with these provisions is usually required. The question as to whether there has been a sufficient compliance depends upon the facts of the individual cases.”
The majority of the court having concurred in this opinion, the judgment under appeal is reversed and, as in it, the question of the liability of Associated Petroleum Carriers, Inc., and its carrier, Pennsylvania Threshermen’s & Farmers’ Mutual Casualty Company, reserved; as to that question no opinion is intimated.
Reversed.
Oxner and Legge, JJ., concur.
Taylor and Moss, JJ., dissent.