Clough & Molloy, Inc. v. Shilling

Digges, J., delivered the opinion of the Court. During the month of March, 1923, there was being constructed -a building in Baltimore City known as the Johns Hopkins University Dormitory,' the general contractor in charge of the work being Frainie Brothers & Haigley. There were a number of sub-contractors employed to do certain portions of the work going into the general construction, among whom were the Pen-Mar Company, the employer of ’ John Edgar Shilling, which sub-contracted for the slate roof ¹⁹¹ Ing; and Clough & Molloy, Inc., the defendant below and appellant here, which was the sub-contractor doing the stone work. On the 28th day of March, 1923, John Edgar Shilling, while in the course of his employment on and around the building, was struck upon the head and killed by a falling piece of scantling 4 by 4 and 10 or 12 feet long.

Shilling was the foreman in charge of the work being done by the Pen-Mar Company, and at the time of his death left surviving him a widow, Effie Shilling, and four minor children. The Pen-Mar Company, the employer of Shilling, was projected by a policy of liability insurance in the Indemnity Insurance Company of Worth America. Shortly after the -death of her husband, Effie Shilling made1 application to tho State Industrial Accident Commission for compensation for the death of her husband, on behalf of herself and minor • children, under and in accordance with the provisions of article 101 of Bagby’s Annotated Code of 1924, which article is commonly known as the Workmen’s Compensation Act. On or about May 4th, 1923, the State Industrial Accident -Commission awarded compensation against the Pen-Mar -Company, tho employer of the deceased, and the Indemnity Insurance Company of Worth America, the insurer, in the sum -of $5,000 and $125 for funeral expenses incurred by reason of the death of Shilling, and apportioned the award among the widow and Ruth E. Shilling, Dorothy M. Shilling, John Walter Shilling and Edith May Shilling, minor children of the deceased.

This compensation was being paid by the insurance company. After the lapse of two months, no action having been brought by the insurance company against Clough & Molloy, Inc., the appellant, the alleged tort-feasor, suit was instituted in the 'Superior Court of Baltimore City by Mrs. Effie Shilling, widow of John Edgar 'Shilling, deceased, individually and as next friend of Ruth E. Shilling, Dorothy M. Shilling, John Walter Shilling and Edith May Shilling, infants, in their behalf, and to- the use • of the Indemnity Insurance Company of Worth America, a ’.body corporate, against Clough & Molloy, Inc. This ease ¹⁹² was heard by the court and jury, and on February 16th, 1925, resulted in a verdict for the plaintiffs for the sum off $15,000, apportioned as follows: To the Indemnity Insurance Company of North America, $5,125; to Effie Shilling,, widow, $5,000; to Euth E. Shilling, infant, $500; to Dorothy M. Shilling^ infant, $875; to John Walter Shilling, infant, $1,500; and to Edith May Shilling, infant, $2,000; on-which day a judgment nisi on verdict was entered. On February 17th, 1925, defendant filed a motion for a new trial and also a motion in arrest of judgment, both of which motions were on February 21st overruled, and the judgment on verdict made absolute in favor of the plaintiffs for $15,000' apportioned as above stated. From this judgment the appellant has brought this appeal.

The record contains four exceptions, the first and second’ being to the ruling of the court in sustaining an objection' by the plaintiff to the offer by the defendant of the report' of the employer to the State Industrial Accident Commission ; the third being to the ruling of the court on the prayers y and the fourth to the overruling of the defendant’s motion-in arrest of judgment. The first two exceptions were not pressed at the argument or in the brief of the appellant, and’ are practically abandoned, which makes it unnecessary for us' to discuss them, further than to say that we have examined' them and find no reversible error. The record presents, therefore, for our consideration two questions, the one raised’ by the motion in arrest of judgment being whether the plaintiffs have any right to maintain the action in its present' form, and the second raised by the prayers of the defendant seeking to withdraw the case from the jury for want off sufficient evidence. Taking these up> in the order named, as to the first it is contended that section 58 of article 101 off the Code, entitled “Workmen’s Compensation,” does not create any new cause of action; that at common law, in cases: of negligence resulting in death no right of action survived' to the defendants of the deceased, but that such action for personal injury ceased with the death of the injured party;: ¹⁹³ that at the present time, under the laws now in force in this state, the only right of action given in such case is hy the provisions of Lord Oampbell’s Act, codified as article 67, and that this suit was improperly brought if attempted under the authority of Lord Oampbell’s Act, for the reason that that article specifically provides, by section 2, that the action must be brought in the name of the State of Maryland for ihe use of the persons designated in the article.

We do not think that this contention is sound. Article 101, “Workmen’s Compensation,” originally enacted by chapter 800 of the Acts of the General Assembly of Maryland, 1914, in its preamble states : “The State of Maryland, exercising herein its police and sovereign power, declares that all phases of extra-hazardous employments be and they are hereby withdrawn from, private controversy, and sure and certain relief for workmen injured in extra-hazardous employments and their families and dependents are hereby provided for, regardless of questions of fault and to the exclusion of every other remedy except as provided in this act.” .And hy section 60 of the said act, now codified as section 63 of article 101, it is provided: “The rule that statutes in derogation of the common law1 are to be strictly construed shall have no application to this article; but this article shall be so interpreted and construed as to effectuate its general purpose.” Bearing in mind the purpose of the Workmen’s Compensation Law and the rule of construction to be applied thereto, we will now examine the provisions of article 101 by virtue of which the case now before us was instituted, and which are contained in section 58 of article 101, Bagby’s Code of 1924. This section provides: “Where injury or death for which compensation is payable under this article, was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the employee, or in the ease of death, his personal representatives or dependents as hereinbefore defined, may proceed ¹⁹⁴ either by law against that other person to recover damages or against the employer for compensation under this article, or in case of joint tort-feasors against both; and if compensation is claimed and awarded or paid under this article, a'ny employer, if he is self-insured, insurance company, association or the State Accident Fund, may enforce for their benefit, as' the ca’se may, the liability of such other person; provided, however, if damages are recovered in excess of the compensation already paid or awarded to be paid under this article, and also any payments made for medical pr surgical services, funeral expenses or for any of the other purposes enumerated in section 37 of this article, then any such excess shall be paid to the injured employee, or in case of death to his dependents less the expenses and costs of action incurred by the employer, insurance company, association or State Accident Fund as the case may be. ■ If any such employer, insurance company, association or State Accident Fund shall not, within two months from the passage of the award of this commission, start proceedings to enforce the liability of such other person, the injured employee, or in case of death, his dependents, may enforce the liability of such other person, provided, however, that if damages 'are recovered the injured employee or in case of death his dependents may first retain therefrom the expenses and costs of action for which the employer, insurance company, association or the State Accident Fund, as the case may be, shall be reimbursed for the compensation already paid or awarded and any amount or amounts paid for medical or suxgical services, funeral expenses or for any of the other purposes enumerated in section 37 of this article, and the balance in excess of these items shall enure to the injured employee, or in case of death, to his dependents, and the amount thus x’eceived by the injured employee or in case of death by his dependents shall be in lieu of any award that might otherwise have been made thereafter in the same case uxxder the provisions of this article and said case shall thex’eupoxx be deemed to have been finally settled and closed.” ¹⁹⁵ It will be seen that where injury or death for which compensation is payable nnder this act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect therefor, the section gives to the parties specifically designated therein, under the conditions therein set forth, a right of action against a third party, the tort-feasor. The clear meaning of the language, “under circumstances creating' a legal liability in some person other than the employer,” is that the circumstances under which the injury was received created a liability resting upon the tort-feasor outside of the provisions of section 58, which means that if the injury did not result in death the injured party would have had a right of action at common law against the -wrongdoer for such injuries, or in case injury resulted in death, that the dependents would have had a right of action by reason of the liability then existing under Lord Campbell’s Act.

In other words, section 58 of article 101 does not create any new liability, but simply designates in what manner the liability theretofore existing, under the common law and Lord Campbell’s Act, should he enforced, and changes the parties who might he benefited by such enforcement. Section 58 provides, in eases where there was an existing liability on the part of a third person, other than the employer, that in case of death the dependents, as defined in article 101, may proceed either by law against the tort-feasor or against the employer for compensation nnder the act, and that if they elect to proceed nnder the act and compensation is awarded against an employer, where he is self-insured, or against the insurer, the employer in such case, or the insurer, may bring an action to enforce for their benefit the liability of the tort-feasor, and that if the employer who is self-insured, or the insurer, fails to start proceedings to enforce the liability of the tort-feasor within two months from the date of the award of the Industrial Accident Commission, the injured employee, or his dependents in case of death, may enforce the liability of such wrongdoer, with the proviso that if damages are recovered the party bringing suit shall ¹⁹⁶ first retain the expenses and costs of action, -after which the employer or insurer shall be reimbursed for the compensation awarded, and the balance in excess of said award, and the cost of medical services and funeral expenses, shall enure to the injured employee, or his dependents when the injury has caused death. The section further provides that such recovery “shall be in lieu of any award that might otherwise have been made thereafter in the same case under the provisions of this act, and said case shall thereupon be deemed to have been finally settled and closed.” The forms of -the titling’ in cases of this character which have heretofore been brought to this Court do not appear to bo uniform. In “State, to the use of the State Accident Fund v. New York, P. & N. R. R. Co.’’ 141 Md. 305 , the suit was brought in the name of the State for the use of the State Accident Fund, which was the insurer’, and the widow of the deceased, who was the sole dependent.

In that case we said, speaking through Judge Urner: “As the State Accident Fund consists of liability insurance premiums paid to the State treasury and administered by State officials, it is proper that a suit for the benefit of the fund under the act should be brought in the name of the State, and as the widow has a contingent interest in the recovery and could have proceeded in her own right against the defendant if the State Accident Fund had not sued, we see no reason to hold that it was improper to name her as one of the parties for whose use the action was instituted.” In Kaufman Beef Co. v. United Railways and Electric Co., 135 Md. 524 , the action was brought by the employer in his own name for the use of the insurer and not in the name of the State of Maryland. This case was instituted under section 57, chapter 800 of the Acts of 1914, as it read before the amendments made by the Acts of 1920 and 1922. The dependents, before these amendments, were given their election either to proceed against the wrong-doer or to accept compensation, -but they could not do both; if they elected to accept compensation, tlie employer, his insurer, or the State ¹⁹⁷ Accident Fund, could proceed against the wrong-doer. The suit having been brought by tbe employer, similar objections to those raised in this case were made on appeal, and the same arguments were contained in the briefs.

In that case it was contended that the suit should have been brought in the name of the State. This Court held: “Compensation having been awarded to the dependents of the deceased employee by the State Industrial Accident Commission, the pending subrogation suit, as permitted by statute (Code, art. 101, sec. 58), was brought by the appellant, as employer, against the United Railways and Electric Company and the Curtis Publishing Company, the latter corporation being the publisher of the papers which figured in the accident.” It will be seen from the above quotation that recovery was allowed by the employer in his own name for the use of the insurer, he being subrogated to the right of action given by the statute to the dependents. If, as was held in that case, the employer could, under the provisions of section 58, maintain an action in his name for the use of the insurance company without resor-ting to the State of Maryland as the legal plaintiff, we see no sound reason why the person to whose rights he was subrogated could not maintain a similar action without making the State of Maryland the legal plaintiff. In Bethlehem Steel Co. v. Raymond Concrete Pile Co., 141 Md. 67 , decided by this Court prior to the enactment of chapter 303 of the Acts of 1922, which act amended section 5S so as to permit the dependents to sue the wrong-doer in e^ont the employer or1 insurer did not proceed to enforce the liability within two months after the award of compensation, the suit was brought in the name of the employer for the use of the insurer and the dependents of the deceased, and while the judgment was reversed, this was done on grounds other than the titling.

It may be also noted that in the case last referred to, the verdict of the jury for $30,-000 was an apportioned verdict, disregarding the insurer against whom compensation had been awarded, and giving the full amount of the verdict in various portions to the ¹⁹⁸ dependents of the decedent; and in passing upon this phase of the case, which is also raised in the present case by the motion in arrest of judgment, we said, speaking through Judge Boyd, at page 88: “Then when we come to the second prayer, it is like one in a suit brought under Lord Campbell’s Act, and as a result the verdict of the jury was not for what the plaintiff or the insurer had a right to recover, and then any excess for the dependents, but wholly and only for the damages sustained by the dependents for the death of Graffius — the whole amount being apportioned between the widow and children and judgment entered accordingly. It may be said that the defendant cannot complain of that, but it certainly has a right to complain of a verdict for $30,000 in favor of a widow and children when, under no circumstances, were they entitled to more than the excess over the award and the employees expenses, and costs of action.” It will be seen that this, Court did not condemn the form of the verdict because it was an apportioned verdict, but because in the apportionment the whole amount of the verdict was apportioned to the dependents of the deceased, without regard to the insurer against whom compensation had been awarded; and it was held that a verdict making such an apportionment was invalid for the reason that the dependents, under the provisions of the statute as it then stood, in no' event were entitled to more than the balance remaining after the insurer was reimbursed for the amounts paid by it under the award, and costs and expenses. In the present case the apportioned verdict is not open to the objection presented in.that case, for the reason that under the granted instructions contained in the plaintiff’s second prayer the jury wrere directed that if they found for the plaintiffs they should allot to the equitable plaintiff the amount 'of the award against it by the State Industrial Accident Commission, and that the excess, if any, should be apportioned between the widow and infant children, the dependents of the deceased. While it is time that this verdict is in the form provided by Lord Campbell’s Act, it is also true ¹⁹⁹ that under the provisions of section 50 of article 101, the Commission may apportion the benefits among the dependents in such manner a.s it may deem just and equitable; and we can discover no legal impediment or impropriety, in a case such as tve are now considering, in the jury, under proper instructions, apportioning their verdict among the dependents.

While it may be contended that the proper method of instituting