Court Opinion

ID: 3511136
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:21:53.403389+00
Date Added: 2024-06-11T14:16:47.659178
License: Public Domain

I.            EVIDENCE SUSTAINS FINDING OF 25 PERCENT PERMANENT PARTIAL DISABILITY OF LEFT ARM
1. I am of the opinion that the record amply sustains the commission's finding that employe suffered a 25 percent permanent partial disability of his left arm as a result of the accident.
At the outset it may be noted that the compensation act (§ 176.11, subd. 3[13]) provides that "for the loss of a hand,including the wrist movement," compensation is limited to a maximum of 66 2/3 percent of the daily wage at the time of the injury for a period of 175 weeks, while compensation for loss of an arm is limited to a maximum of 66 2/3 percent of the daily wage for 200 weeks (§ 176.11, subd. 3[14]). On the basis of the wages received by employe at the time of his injury, if his disability is now limited to 25 percent of the left hand and wrist, his unpaid compensation for this would amount to $875, while if it covers 25 percent disability of the left arm, as the commission determined, it would amount to $1,000, a difference of $125. It is also to be noted that § 176.11 makes no specific provision for loss of the use of the hand and lowerforearm, as determined in the medical report of Dr. Malmstrom.
2. At the opening of the hearing before the referee, counsel for employe stated:
"Mr. Gillette and I have agreed that we will submit the medical statements of Dr. Malmstrom, who examined the employe, and also of Dr. Bowen of Hibbing, and these will be used for the cause of deciding what medical disability, if any, the employe has."
Nothing therein manifested the intention of the parties that the medical reports alone were to form the basis of any disability finding here. Rather, it seems apparent that it was intended thereby to eliminate the need for the personal presence of these two medical witnesses. Notwithstanding this, it is urged in the majority opinion *Page 420 
that such language in effect (1) limited to such reports alone the evidence on the issue of disability; (2) bound the commission to determine such issue exclusively on such reports and the conclusions therein; and (3) compelled a finding of disability limited to 25 percent of loss of use of the left hand and wrist movement.
Neither counsel herein proceeded upon such a theory. Both recognized the right to present additional evidence on the question of disability. Both agreed to the submission thereof without objection. Neither urged upon the commission that the foregoing statement limited the trial herein or the commission as above described.
Thus, employe was permitted to testify without objection in substance that a chunk of ore had struck his left arm and knocked him off the bank on which he was working; that thereafter this arm was carried in a sling; that thereafter this arm pained and still pains him; that his left arm bothered him in 1935 and has been bothering him all the time.
He was requested to stand and demonstrate before the referee the limitation of movement in his hand and arm, and he did so without objection. In his demonstration he showed how much he could move his hand, how much he could twist his arm sideways, and, finally, he was requested to and attempted to put his left hand to his head. It is quite obvious that in making this demonstration he was obliged to bring into use his entire left arm, not merely his left forearm. Certainly it would be difficult for him to twist only the lower portion of his arm sideways or to raise his hand to his head by bending his forearm only. It is clear therefrom that the referee had ample opportunity to observe the extent of employe's disability and to determine whether it extended to his entire left arm or was limited to only the left hand and wrist.
Physical demonstrations in court are permissible and regarded as valid evidence for consideration by the triers of fact, even though the actual demonstration cannot be incorporated within the record any more than can a jury's authorized view of the locus of an accident or its view of other stationary physical objects in litigation. Hatfield v. St. Paul  Duluth R. Co.33 Minn. 130, 22 N.W. 176; *Page 421 
Adams v. City of Thief River Falls, 84 Minn. 30, 86 N.W. 767; Brown v. Douglas Lbr. Co. 113 Minn. 67, 129 N.W. 161.
3. Additional evidence on the question of disability in the form of an X ray of employe's left arm, taken on June 11, 1935, which formed part of the commission's file herein, was offered and received by agreement of counsel. It was viewed and considered by the referee, and with reference thereto he stated:
"It shows a pretty good healing at that time, but a fracture of that nature healing that rapidly in a man of his age would be a little unusual. It is possible, but it's pretty rapid."
Also, in the commission's file thus received in evidence, by agreement of counsel there were (1) a letter from the commission to the insured; (2) a medical report from Dr. O.E. Saarf, of Buhl, Minnesota, to the commission; and (3) a certificate signed by Dr. R.P. Pearsall on the reverse side of the "final receipt," all of which bore on the question ofemploye's disability.
4. It is clear from the foregoing that, regardless of the original statement of counsel, both parties herein waived any limitation therein and adopted a course of conduct at the trial manifesting a procedure under which the commission in arriving at its decision might well consider the additional evidence thus received.
Section 176.54 specifically provides:
"The commission, or a commissioner or a referee, in making an investigation or conducting a hearing under this chapter, shall not be bound by common law or statutory rules of evidenceor by technical or formal rules of pleading or procedure, except as provided by this chapter; and shall make such investigation or inquiry or conduct such hearing in such manneras to ascertain the substantial rights of the parties. All findings of fact shall be based only upon competent evidence." (Italics supplied.)
I feel that the construction in the majority opinion placed upon the opening statement of counsel is formal and highly technical and thus in direct conflict with the foregoing statutory provisions and the broad, liberal construction in favor of the employe contemplated *Page 422 
by the act in matters relating to pleading, procedure, and evidence.
5. But even accepting the construction placed by the majority opinion on counsel's statement, an examination of the medical reports in question indicates that therein there is ample evidence to sustain the commission's finding that employe had suffered a 25 percent loss of the use of his left arm. Certainly nothing therein would compel a determination limiting the disability to the left hand and wrist. Dr. Malmstrom, in his report of April 14, 1945, states that employe at the time of the examination described his inability to rotate his left hand in supination; that the pain in his neck, left shoulder,and left elbow region radiated down to his hand; that there was loss of strength in his left forearm and hand; and that there was a tendency to feel the effect of heat and cold therein. Thereafter, the report indicates a finding by Dr. Malmstrom of a slightly smaller musculature of the left upper extremity, with definite bowing of the left forearm "ventrically," causing a deformity of about one-half to three-fourths of an inch horizontally, occurring at the junction of the proximal middle third of the forearm; disability of the left hand, wrist, forearm, and elbow; and a grating of the middle portion of the left forearm. From such examination and by reason of the foregoing, he concluded that employe had sustained —
(1) 35 to 40 percent loss of use of the hand; (2) 10 to 15 percent loss of use of lower forearm; (3) 25 to 30 percent loss of use of both (hand and lower forearm).
There is no finding therein of 25 to 30 percent loss of the use of hand and wrist movement as related in the majority opinion, and there is no specific provision in the act which covers loss of the use of the hand and forearm, as found by Dr. Malmstrom.
These findings were for the most part confirmed by the medical report of Dr. Bowen, who found the left arm
measurements smaller than those of the right arm; moderate bowing of radius of the left arm; loss of one-third of grip of left hand as compared with right; *Page 423 
and arthritic lipping at the left elbow, which accounted for the pain. It was his conclusion that employe suffered a 25 percent loss of the use of the hand and wrist.
If I understand the majority opinion correctly, it is held therein that this latter finding must form the basis of the referee's determination herein. It is to be noted that under Dr. Malmstrom's estimates the statute provides payment as follows:
    40 percent loss of use of hand .................. $1,200 35 percent loss of use of hand .................. $1,050 30 percent loss of use of both hand and wrist (if the final finding may be thus construed) ..... $1,050
Each of said figures exceeds the amount allowed by the referee. Only the minimum figure arrived at by Dr. Malmstrom, together with Dr. Bowen's estimate, equals the maximum which can be found due under the majority opinion.
6. Further, I do not concur in the doctrine expressed in the majority opinion that before disability may be found as to employe's entire arm some evidence of actual trauma above the elbow must be shown. It is obvious that paralysis, arthritis, and like ailments which sometimes follow an injury may attack only the forearm. Can it be doubted that their effect may be felt on the entire arm, or that they may affect or limit the use thereof? The correct rule governing such a situation is expressed in Olson v. Griffin Wheel Co. 218 Minn. 48, 55,15 N.W.2d 511, 514, 156 A.L.R. 1338:
"* * * It has been repeatedly held by this court that it is the actual disability resulting from an industrial accident, and not the nature or location of the specific injuries, that determines the extent of compensation under our compensation act." (Italics supplied.)
See, also, State ex rel. Kennedy v. District Court, 129 Minn. 91,151 N.W. 530; State ex rel. The Broderick Co. v. District Court, 144 Minn. 198, 174 N.W. 826; State ex rel. Albert Lea Packing Co. Inc. v. District Court, 146 Minn. 283,178 N.W. 594. *Page 424 
In the Kennedy case, the evidence disclosed that the bones of the hand were crushed and the ligaments of the wrist and forearm torn. The only evidence of injury above the elbow was that muscles in the shoulder were strained. Nevertheless, the case was remanded to the trial court with directions to make findings on the question of disability of the entire arm. Therein we stated (129 Minn. 93, 151 N.W. 531):
"We think the trouble arises largely, if not wholly, with the attempt of the trial court to separate the injuries into two units, those to the hand, and those to the arm. The record doesnot leave it entirely clear whether the court intended to finda permanent partial disability in the arm above the elbow. The evidence shows that the bones of the arm that were crushed and the ligaments that were torn were wholly in the wrist and in the forearm, but there is some evidence that muscles in theshoulder were strained. * * * We think that injuries between the elbow and the wrist should be considered injuries to the hand. * * * If there were no injuries except to the hand and forearm, we think the court should have awarded compensation based upon a percentage of total disability to the hand. Ifthere were permanent injuries to the arm above the elbow, thecourt should not have attempted to separate these injuries fromthose to the hand, but should have found the percentage oftotal disability to the arm as a whole, and should have awarded compensation accordingly. * * *
"We are unable to say what percentage of total disability thetrial court would have found if it considered the disability ofthe arm as a whole, or if it had found a permanent partial disability to the hand alone, and the evidence does not warrant us in fixing the proper compensation. The case must go back to the trial court for new findings in line with the views we have expressed." (Italics supplied.)
In the instant case, where the evidence discloses disability and pain to the left shoulder, arthritic lipping at the leftelbow, a smaller musculature of the left upper arm, and other disabilities relating to *Page 425 
the entire arm, it was well within the province of the commission to make a finding of disability to the entire arm.
7. It cannot be questioned that under the act the ultimate determination of disability is a question of fact for the commission. This rule is expressed in Gurtin v. Overland-Knight Co. 179 Minn. 38, 39, 228 N.W. 169, as follows:
"Three physicians, all of whom were competent and straightforward, were the only witnesses. They fixed the impaired ability at 25 per cent. The injured man was before them, and they as witnesses described his injuries and gave their opinions. They could not conclude the commission by theirtestimony. Whether the physicians have a standard by which they determine the extent of permanent partial disability does not appear; but in any event the statute does not prescribe a ruleor method of determining the extent of disability. It is leftto the judgment of the trier of fact. The testimony of physicians is useful. * * * But the amount of disability is a question of ultimate fact for the commission." (Italics supplied.)
See, also, State ex rel. Globe Ind. Co. v. District Court,136 Minn. 147, 161 N.W. 391; Kruchowski v. Swift  Co. 201 Minn. 557,277 N.W. 15.
8. It is urged that the foregoing rule has no application here in view of the limitations placed upon the commission by virtue of the petition and opening statement of counsel. I have previously indicated that this action was not tried on the basis of any limitations expressed therein. I have likewise directed attention to § 176.54, which requires the conduct of hearings in such manner as to ascertain the substantial rights of the parties, not limited by any common-law or statutory rules of evidence or technical or formal rules of pleading or procedure. With such provisions in mind, it is my opinion that under the foregoing authorities the final determination of the question of disability in this case was a matter solely for the commission; that in its determination thereof it was not concluded by the medical reports above referred to; and that it had ample *Page 426 
evidence to sustain its finding that employe here suffered a 25 percent loss of the use of his left arm.
                                   II.                                INTEREST
It is the position of the majority that interest should be allowed only subsequent to the rehearing herein, because (1) there was no express contract to pay interest; (2) until such rehearing there was no ascertainment of the debt, and hence no default therein giving rise to interest; and (3) that delivery of the "final receipt" terminated employer's liability for principal and interest, at least until the rehearing.
1. The general principles governing interest, as expressed in the majority opinion and as embodied in the above summary, were entirely applicable when this court on three prior occasions considered the subject in relation to workmen's compensation. Reese v. National Surety Co. 162 Minn. 493, 203 N.W. 442; Brown v. City of Pipestone, 186 Minn. 540, 245 N.W. 145; Bourdeaux v. Gilbert Motor Co. 220 Minn. 538,20 N.W.2d 393. Therein, interest was allowed upon the theory ofdefault in a contractual obligation of the employer to make compensation payments at the times provided for by the compensation act. Interest was allowed from the datecompensation payments became due under the act, even though thecommission did not act on the controversy or ascertain theexact amount due until long subsequent to such statutory duedates.
In the Reese case, this court stated (162 Minn. 496,203 N.W. 443):
"The compensation act provides for the time at which payments of compensation shall commence. The award of the commission is somewhat akin to a judgment for damages for breach of contract. In such cases interest is recoverable where the amount does not depend upon any contingency. Dunnell, Minn. Dig. § 2524." (Italics supplied.)
In the Brown case, these doctrines were expressed as follows (186 Minn. 542, 245 N.W. 145): *Page 427 
"* * * Compensation in this state is a liability arising outof the contract of employment, and the compensation act becomes a part of every contract of employment. * * *
"Here was a contract debt due at the times when thecompensation instalments should have been paid under theprovisions of the act, and we see no reason why it should not,like any other debt, bear interest at the legal rate when it issubsequently decided that the debt existed. * * *
"* * * it seems more logical and more just that interest should be allowed at the legal rate on sums that the contract of employment by implied inclusion of the statute made due and payable of a date certain. That the commission or court doesnot act upon the controversy until a subsequent date should notalter the liability for interest." (Italics supplied.)
This rule was followed in the Bourdeaux case. There, the employer served notice of discontinuance of compensation, and the employe acquiesced therein. Ten and one-half years later, the commission awarded further compensation, but denied interest thereon, on the ground of laches. Subsequently this court reversed the commission and awarded interest on the additional compensation then found due, but from its original due date under the compensation act. Therein we stated (220 Minn. 541, 543, 20 N.W. [2d] 395):
"While it may be true that, where interest is given as damages, there may be cases where laches may bar recovery, * * * this is not such a case. * * * We are here concerned with aconsideration of employer's obligation under our workmen'scompensation act, which we have held should be construed liberally in employe's favor. Under that act, it is made theduty of employer to commence payment of compensation at thetime and in the manner prescribed by the act without thenecessity of any agreement or order. * * *
"Thus, even though it may be said that payment of interest here is by way of damages, the requirements of the act being infused into the contract, the duty to pay interest arises byreason of the statutory obligation to make the compensationpayments at the stipulated *Page 428 times. When the employer suspended payments, by reason of which it had the use of the money which should have been paid at intervals to the employe, it did so at the peril of being required to pay interest on these payments should it subsequently be decided that such payments were improperly suspended. The duty to pay such interest arises impliedly, as amatter of law, from the contractual obligation to makecompensation payments at the stipulated times required by thestatute.
* * * * *
"* * * No claim is made by respondents that laches should bar the recovery of the principal payments of compensation. Under a statute of this kind it seems inconsistent to us that laches should not bar the recovery of the principal payments of compensation and yet bar the interest." (Italics supplied.)
2. It is contended, however, that the "final receipt" in the instant case distinguishes it from the Bourdeaux case, and that here such receipt terminated liability for interest until the commission at the rehearing had determined that additional compensation was due.
When this "final receipt" was delivered, employe protested that his recovery was not complete. He was assured by his employer's foreman that, if so, the execution thereof would make no difference. The receipt acknowledged "settlement and satisfaction of all claims for compensation or damages,subject to review as provided by Law," thus indicating that it did not mark final termination of employer's liability. Thereafter, employe several times made written protests to the commission of his continuing disability. On one such occasion a medical examination was ordered, but thereafter no further allowance was authorized. The commission's order therein was never reduced to judgment, nor had certiorari ever issued from this court for its review prior to the rehearing.
3. Section 176.34 undertakes to prescribe the procedure for termination of an employer's liability for compensation payments. Thereunder, the majority opinion concedes that there are two methods by which such liability may be terminated, namely (1) by obtaining from the employe a "final reipt" and filing the same *Page 429 
with the commission; (2) by filing a "proposed discontinuance of payment," with medical reports attached, when the employe refuses to sign such a receipt.
Neither of such methods alone results in a final termination of such liability. The employer must be held cognizant of the provisions of § 176.34, to the effect that an order of the commission terminating liability based either upon a finalreceipt or upon notice of discontinuance is subject to review here, and subject to the right of the commission to set aside the same and grant a new hearing, under § 176.60, prior to such review.
Section 176.34 specifically provides that the notice ofdiscontinuance shall "operate as a suspension of payment ofcompensation until the right thereto can be investigated, heard, and determined as herein provided." (Italics supplied.) Thereafter, under the act, the commission, as distinguished from the employer, is required to investigate and determine whether such liability has actually terminated, and, if not, upon a hearing to order further payments. No furtherresponsibility is placed on the employer. We have held that the filing of a final receipt similar to the receipt filed herein under § 176.34 suspends but does not terminate liability for compensation. Tuomi v. General Logging Co. 196 Minn. 617,265 N.W. 837. Likewise, we have held that the filing of a notice ofdiscontinuance suspends but does not terminate liability for compensation. Hawkinson v. Mirau, 196 Minn. 120, 264 N.W. 438,265 N.W. 346. This is in strict compliance with the language of the act. In either case, the commission is empowered, upon application for rehearing, to set aside its prior order and determine whether additional compensation is due. Prior to the 1933 amendment to § 176.34 (L. 1933, c. 74), the rule was otherwise. See, Johnson v. Jefferson, 191 Minn. 631,255 N.W. 87; Rosenquist v. O'Neil  Preston, 187 Minn. 375,245 N.W. 621; Terres v. International Fuel Co. 208 Minn. 259,293 N.W. 301.
4. It is further suggested in the majority opinion that interest was allowed in the Bourdeaux case because the employerwrongfully discontinued making payments upon mere notice,without having *Page 430 first obtained an order under § 176.34 terminating itsliability. This would imply that the employer was guilty of some misconduct or statutory violation justifying the allowance of interest. The record in that case indicates the contrary. The employer there proceeded to terminate liability by filing the required notice of discontinuance, specified in § 176.34. Thereafter, no further responsibility rested upon it under said statute. The commission, as required thereby, notified the employe that such notice had been filed and advised him that if nothing was heard from him with reference thereto the commission would close its file. The employe made no reply to this notice, nor did he sign a final receipt. It did not hold the investigation or hearing or issue the order specified in § 176.34. Its omissions in this respect certainly did not constitute wrongful conduct on the part of the employer, which had fulfilled its obligations under the statute and whose obligation to make payments thereafter was suspended therewith.
5. As previously indicated, interest was allowed in the Bourdeaux case because of employer's improper discontinuance of or default in making compensation payments due by virtue of thecontract which the compensation act infuses into every employment agreement. The impropriety of the discontinuance wasthe default in the contractual obligation, and not the failureto obtain an order under § 176.34. The opinion makes this clear. There is nothing in the opinion that can be construed as a holding that interest was allowed as a penalty because the employer wrongfully discontinued payments without obtaining an order under § 176.34 terminating its liability. Such a holding would in effect constitute the imposition of a penalty upon the employer because it had not taken over and performed the duties imposed by the act upon the commission.
6. There is no logical basis for applying a rule in the instant case different from that applied in the Bourdeaux case. The facts are substantially the same, and the principles applicable should be identical. In each case, the employer sought to terminate liability by one of the statutory modes prescribed in § 176.34. Neither of such modes, i. e., giving the final receipt or filing notice of discontinuance, *Page 431 
nor any order based thereon, finally terminates such liability. In both cases, the commission at any time before judgment or certiorari had the right to order a rehearing and subsequently to order further compensation payments. In both cases, long periods of time had elapsed before such rehearing was sought by the employe. (In the Bourdeaux case the doctrine of laches was held inapplicable in compensation cases.) In neither case did the employer violate any provision of the act. In the instant case, at least, the employer was aware of claims of further disability after the attempt to terminate under § 176.34. In both cases, the liability for compensation arose out of the contract infused into the employment agreement by the compensation act. In both cases, such contract became in default by virtue of the suspension of compensation payments. In both cases, the commission subsequently ordered a rehearing. In both cases, the amounts in default were ascertained long subsequent to the due dates thereof. In both cases, the liability for principal compensation payments was held suspended only until such subsequent determination. In the Bourdeaux case, additional compensation was found due upon the rehearing and interest allowed thereon from the original due date thereof because of default in the implied contract. In the instant case, additional compensation was found due upon the rehearing, but back interest is now denied thereon because, as indicated in the majority opinion, there was no contract
calling for the payment of interest; there had been noascertainment of the debt due, and hence no default therein; and the final receipt method prescribed under § 176.34, as distinguished from the notice of discontinuance mode,terminated liability therefor.
In my opinion, there is no consistency in the principles applied in the two cases. If the Bourdeaux case is correct, it should be followed here. If it is not sound, it should be overruled. It cannot logically be distinguished.
7. The allowance of interest on past-due payments in compensation cases has been upheld in many jurisdictions. Brownfield v. Southern Amusement Co. (La.App.) 198 So. 670; Fryou v. T. Aucoin  Sons (La.App.) 5 So. 2d 193; Sunny Point Packing Co. v. *Page 432 
Faigh (9 Cir.) (Alaska) 63 F.2d 921; Texas Employers Ins. Assn. v. Suttles (Tex.Civ.App.) 57 S.W.2d 624; Hazard Blue Grass Coal Corp. v. Scott, 206 Ky. 759, 268 S.W. 548. See, Horovitz, Workmen's Compensation, p. 354. I do not feel that the allowance of interest would constitute an injustice in the instant case. By virtue of the commission's holding, it has been determined that a substantial sum in compensation benefits rightfully belongs to employe, and that because of mutual mistake of the parties the employer has retained the same for approximately 11 years, during which it has had the continued use thereof. It would seem only fair that employe, now found to be the true owner of this fund throughout this period, should be reimbursed for his loss thereof.
For the reasons expressed, I dissent from the majority opinion.
MR. CHIEF JUSTICE LORING, having been on the pardon board when this case was heard, took no part.