Court Opinion

ID: 6698303
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:01:14.423187+00
Date Added: 2024-06-11T16:01:19.209423
License: Public Domain

ClabicsoN, J.,
dissenting: I think the judgment of the court below should be sustained. It may seem trite to refer to the major purpose involved in the adoption of workmen’s compensation acts. The facts in this case are such, however, that we deem it proper to discuss this purpose. At common law an injured employee was so often defeated in his efforts to recover damages growing out of injuries arising out of and in the course of his employment by the interposition of various defenses, such as contributory negligence, negligence of fellow servants, lack of negligence on the part of the employer, etc., that it was deemed to be-in the interest of justice and the public welfare to give the employee *23compensation for injuries sustained' in tbe course of bis employment irrespective of tbe various and sundry defenses wbicb bad previously been recognized. Negligence was eliminated as a defense. "Workmen’s compensation acts were, therefore, adopted to afford employee a certain, specific and swift mode of relief for occupational injuries. Tbus we believe that tbe welfare of employees was tbe primary concern of legislative bodies enacting legislation of tbis type, but there has crept up in this beneficent act technicalities and refinements that are tending to nullify it. Tbe present case is an example.
In order to best effectuate tbe purpose of tbe Workmen’s Compensation -Act in tbe State of North Carolina, means were provided for tbe creation of a body known as tbe North Carolina Industrial Commission, it being made tbe duty and responsibility of tbe said Industrial Commission to enforce tbe terms and provisions of tbe said Workmen’s Compensation Act. Tbe Industrial Commission was given broad power to formulate rules and regulations for tbe protection of all employees coming within tbe purview of tbis act. N. C. Code, 1939 (Micbie), sec. 8081 (jjj), subsection (a), in part, is as follows: “Tbe Commission may make rules, not inconsistent with tbis article, for carrying out tbe provisions of tbis article. Processes and procedure under tbis article shall be summary and simple as reasonably may be.”
It has, been held that tbe rules of Industrial Commissions have tbe force and effect of law. Bethlehem, etc., Corp. v. Mullen (Del.), 119 A., 314.
Tbe North Carolina Industrial Commission under tbe authority vested in it by tbe Workmen’s Compensation Act passed a rule wbicb is known .as Eule 4, said rule being as follows: “Any insurance carrier having-issued a policy to an employer and desiring to cancel same shall be required to give ten days prior notice thereof to tbe Industrial Commission at its office in tbe city of Ealeigb. Cancellation of policies shall .give cause and be reported promptly to tbe Commission.”
Tbe reason for tbe adoption of rules such as Eule 4 hereinbefore •quoted is well stated in Corpus Juris, as follows: “A provision that any termination of tbe insurance, policy shall not be effective as far as the employees of insured are concerned until a specified number of days after notice thereof is received by tbe board or commission has for its purpose to provide a period of time within wbicb tbe board or commis•sion and tbe employer may see that new insurance is provided in place •of tbe canceled insurance, and an insurer who fails to file notice of the ^cancellation of tbe policy, as required by statute, is bound to pay tbe compensation due an injured employee, where no other insurer has become liable therefor, . . .” Workmen’s Compensation Act, 11 ■O. J., at p. 914.
*24There is a provision in tbe policy of insurance involved in this case which reads as follows: “The law of any stale, in which this policy applies, which requires that notice of cancellation shall be given to any board, commission or other state agency is hereby made a part of this policy and cancellation in such state shall not be effective except in compliance with such law.”
Rule 4 of the Industrial Commission was in existence at the time this policy was issued, and therefore became, in effect, a part of the policy. It has been the policy of this State and every other state, so far as we know, to vest in boards and commissions certain powers and duties with regard to insurance business, and insurance companies have been required to comply with reasonable requirements made by said boards and commissions. As a matter of fact, the insurer in this case had actual knowledge of Rule 4 of the Industrial Commission, but thought that its agent would give notice to the Commission. The agent thought that the insurance company would give notice to the Commission. Since they were relying on each other, neither of them gave notice.
This ease has been before three tribunals, namely, the trial Commissioner, the Full Commission and the Superior Court. The examination of Mrs. S. B. Clark and the statements made by the court and by Mr. Bane as shown in the record indicate that Rule 4 was under discussion.
We are of the opinion that the Industrial Commission, as well as other trial bodies, have a right to take cognizance of its own rules in hearings before it. Whether this is true or not we believe that the Supreme Court has the right to take judicial notice of the rules of the Industrial Commission. Comrs. v. Steamship Co., 128 N. C., 558; Staton v. R. R., 144 N. C., 135.
In the case of Pettit v. Trailer Co., 214 N. C., 335, the insurer gave notice to the insured, the Industrial Commission and the Rating Bureau. The Rating Bureau received the notice of a sufficient length of time prior to the accident, but neither the insured nor the Industrial Commission received the notice in time to effect a cancellation of the policy prior to the accident. The Supreme Court held that since sufficient notice was given the insured, it was not “necessary to determine whether notice to the North Carolina Rating Bureau by compensation carrier that it is canceling a compensation policy is notice to the Industrial Commission.” We infer from this decision that the Supreme Court regards notice to the Industrial Commission as being necessary. It should be noted that Rule 4 was in effect on 23 November, 1936, when the insurer attempted to give notice of cancellation to the insured in the Pettit case, supra, and this was done more than six months prior to the attempted cancellation of the policy involved in the case at bar.
*25The case of Zurich, etc., Co. v. Industrial Commission (Ill.), 156 N. E., 307, involves a different state of facts from tbe case now under consideration. In the Zurich case, supra, the insurer sent a notice to the Industrial Commission stating that the insurer was issuing a policy of insurance, but as a matter of fact no such policy was ever issued or delivered. In other words, there’ was no contract of insurance involved. The Court held that the Industrial Commission could not create a contract where none existed. On the other hand, in the case under consideration, the policy of insurance was issued and the premium paid for a period of six months. The Industrial Commission did not attempt to create a contract; the parties had made the contract, and the rule of the Industrial Commission became a part of the contract in accordance with its terms.
Rule 4 is really procedural in nature when applied to the facts of this case. The parties had entered into a contract, and in the contract provided that notice required by law to be given to any board or commission would have to be given before the policy could be canceled. At that time Rule 4 was in existence which required that notice be given to the Industrial Commission prior to cancellation. The Industrial Commission was saying to the insurer that if it desired to cancel the policy after it went into effect, it must proceed in a certain manner to do so.
The plaintiff, appellee, is entitled to protection. He paid the premium. He doubtless thought that he was fully protected by insurance issued under and in accordance with the terms of the Workmen's Compensation Act. If the appellant had notified the Industrial Commission of its intention to cancel the policy, the Commission would have immediately demanded that the employer furnish a new policy or give adequate security for the protection of his employees. The failure of the appellant to give the Industrial Commission such notice, therefore, resulted in the loss of plaintiff’s protection, unless appellant is held liable. The appellee was entirely innocent, but the appellant was negligent in failing to give proper notice to the Industrial Commission.
The N. 0. Rating Bureau has nothing to do with the facts in this case. The contention by plaintiff is that under legislative authority as before set forth, the Commission may make rules. It has done so, as follows: “Any insurance carrier having -issued a policy to an employer shall be required to give ten days prior notice thereof to the Industrial Commission,” etc. The language in the carrier’s policy in this case says: “The law of any state, in which this policy applies, which requires that notice of cancellation shall be given to any board, commission or other state agency is hereby made a part of this policy and cancellation in such state shall not be effective except in compliance with such law.”
*26. Tbe carrier bad actual notice of tbis rule in existence wben tbe policy was issued. It is well settled tbat tbis entered into and became a part of tbe carrier’s contract. Tbe'premium was paid to tbe carrier. It is further well settled tbat tbe insurance carrier usually draws tbe policy contracts and a liberal construction is put on same in favor of tbe insured.
If tbe appellant bad not been negligent and careless as hereinabove mentioned, tbe insured would doubtless have procured an insurance policy elsewhere and tbe employee would have been amply protected by other insurance. Tbe appellee is entirely innocent.
Tbe Legislature has spoken, tbe Industrial Commission has acted, and tbe defendant Indemnity Company bad notice of tbe ten-day provision. Tbe carrier’s policy contract should be held valid.
ScheNok, J., concurs in dissent.