Court Opinion

ID: 9669753
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:08:59.225407+00
Date Added: 2024-06-11T18:16:00.122752
License: Public Domain

On Rehearing
HAMITER, Justice.
On the original hearing of this cause plaintiff was awarded a workmen’s *989compensation judgment against the defendants Elmo Tullos and Consolidated Underwriters (insurer of Tullos), pursuant to' the principal and contractor provisions of. LRS 23 :1061, for the death of her husband which occurred during the course and scope of his employment with defendant J. E.' Mitchell. But there we failed to specifically rule on the alternative demands of Tullos and Consolidated Underwriters that they, in the event of being condemned to pay the compensation to plaintiff, have judgment against the contractor J. E. Mitchell for the same amount for which they are cast. And because of the oversight we granted this rehearing, it being restricted to a consideration of the mentioned alternative demands. In all other respects our original judgment is final.
Unquestionably, the alternative demand of Tullos is well grounded in law, for the second paragraph of LRS 23:1061 provides : “Where the principal is liable to pay compensation under this Section, he shall be entitled to indemnity from any person who independently of this Section would have been liable to pay compensation to the employee or his dependent, and shall have a cause of action therefor.” However, in view of the circumstances disclosed by the evidence adduced, which was clearly admissible under the pleadings of Mitchell, we are of the opinion that such alternative demand cannot be sustained.
According to the testimony of Mitchell ,he was assured by Tullos that his employees would be covered by compensation insurance (to be obtained by Tullos) and he thought all the while that he had such coverage. In this connection he stated that his practice was to give to Tullos “a little list of the men and the time they had each week”; that occasionally he paid an insurance premium to Tullos, this occurring after the latter had informed him of the amount then due; and that it was not until after the death of plaintiff’s husband (Mitchell’s employee) on June 16, 19SS that his money was returned by Tullos and he was told that no insurance had been obtained for him.
Tullos admitted his having informed Mitchell that he would try to obtain the compensation insurance and having collected from Mitchell from time to time insurance premiums based on the lists of employees - furnished. However, he testified that he made no effort to obtain the coverage and that he failed to send to the insurance company any of the premiums paid to him by Mitchell. As to this failure Tullos did not say that the insurance was unobtainable; he merely said: “I had overlooked it (premium money) in my bookkeeping, my bookkeeper had, and failed to send it in.” In*991cidentally, Tullos admitted that in a former transaction with Mitchell, involving a different tract of timber, he had collected similar premiums and sent them to the insurance company, they having been computed on lists of employees furnished by Mitchell.
Tullos admitted that he did not inform Mitchell of his failure to obtain the insurance until after the death of plaintiff’s husband and that he then returned the premiums to Mitchell on the advice of his insurer. Further evidencing this return is a letter from Tullos to Mitchell, dated September 1, 1955 (approximately two and one-half months after the employee’s death), wherein the writer stated that he was enclosing a check “as refund on money paid to me for insurance.” This check, which was never cashed by Mitchell, was likewise introduced into evidence.
Clearly the above described acts of Tullos, particularly the promise to try to obtain the insurance and the assessing and collecting of premiums from time to time, warranted the thought and an assumption on the part of Mitchell that his logging operations were covered by suitable insurance and that he was fully protected from compensation claims. Further, there is no doubt that such protection could and would have been provided had Tullos used Mitchell’s premium payments for the purpose intended. And it follows that Tullos should not now be permitted to recover judgment against Mitchell on a claim that exists solely because of his neglect.
A factual situation somewhat similar to the one here was involved in Carpenter v. Madden, 90 So.2d 508, 514, a case decided by the Court of Appeal of the Second Circuit and in which we denied certiorari. There the defendant Godfrey had failed to fulfill his promise to obtain compensation insurance for the defendant partnership of Madden and Dewitt, the immediate employer of the injured employee, notwithstanding that he collected the necessary premiums from the employer. In ruling that Godfrey must hold the employer harmless from the compensation claim the court correctly observed: “ * * * That Godfrey did not obtain the insurance that he represented he obtained is evident from the policy introduced in evidence insuring him and him alone. Relying upon these representations and agreement that Godfrey either had or would obtain insurance insuring defendants Madden and Dewitt, they have been prejudiced by his failure in that respect. They were led to believe they were secure so far as any compensation claims might arise. It was not until after the accident occurred for which they became liable for workmen’s compensation they were informed that the insurance did not cover them. While it is recognized that estoppels *993are not favored in law, in clear cases estoppels should be applied. The situation here presents a clear case where the plea should be sustained.”
Neither can the defendant Consolidated Underwriters recover herein from Mitchell. Its claim against the latter is only that of a subrogee of the insured, Tullos, inasmuch as there was no contractual relationship between the two and the compensation statute does not grant to it an independent right against such employer. And as such subrogee it stands in the shoes of Tullos — all defenses that can be urged against its insured are likewise available against it. See Aetna Casualty & Surety Company v. Cazebon, La.App., 11 So.2d 118; Taylor v. Willett, La.App., 14 So.2d 298; 83 C.J.S. verbo Subrogation §§ 14, 52 and 57; and 50 American Jurisprudence, verbo Subrogation, Section 110. Therefore,- since the above outlined circumstances bar recovery by Tullos, Consolidated Underwriters similarly is not entitled to a judgment against Mitchell.
For the reasons assigned it is ordered, adjudged and decreed that the alternative demands of defendants Elmo Tullos, d/b/a Tullos Lumber Company, and Consolidated Underwriters, as against the defendant J. E. Mitchell, be and they are hereby denied. All costs of this proceeding are to be paid by the first named two defendants.