Solvuca v. Ryan & Reilly Co.

Thomas, J., delivered the opinion of the Court. This suit was brought by the appellant to- recover for ipjuries received while in the employ of the appellee, and charged in the declaration to have-been caused by its negligence. As we said in the first appeal (T29 Md. 235), the narr., on its face, presents a good cause of action, but the ²⁶⁷ defendant interposed the following plea: “that in conformity with the provisions of Chapter 800 of the Acts of 1914, generally known as the Employer’s Compensation Act, this defendant, the Kyan & Reilly Company, exercised the option of securing compensation for its employees engaged in hazardous employments, as provided in section 15, and sub-section 3, of said Act. That by an order of the State Industrial Accident Commission passed the 28th day of January, 1915, and which continued in effect until the 15th day of January, 1916, this defendant was permitted to carry its compensation risk as a self-insnrer, having established its financial ability to assume the payment of the compensation required.

That on the 26th day of February, 1915, the date of the alleged injury to the plaintiff in this cause, said order was in effect, and the defendant—had thereby secured compensation to this employee who* was injured while in a hazardous employment, and the defendant fully complied with the provisions of the Compensation Act as provided by section 15, sub-section 3 of said Act.” The plaintiff demurred to this plea. It is not suggested that the plea is defective in form, but the purpose of the demurrer was to challónge the constitutionality of the Act, which, it is claimed, contravenes the Fourteenth Amendment and Article 7 of the Constitution of the United States and the Declaration of Rights and Constitution of this State. This Act, commonly called the Workmen’s Compensation Act, declares in its preamble that the State “recognizes that the prosecution of various industrial enterprises which must be relied'upon to create and preserve the wealth and prosperity of the State involves injury to large numbers of workmen, resulting in their partial or total incapacity or death, and that under the rules of the common law and the provisions of the statutes now in force an unequal burden is cast upon its citizens, and that in determining the responsibility of the employer on account of injuries sustained by his workmen, great and unnecessary cost is now incurred in litigation, which cost is born by the workmen, the employers and taxpayers, in part, in the- maintenance of courts and juries to ²⁶⁸ determine the question of responsibility under the law as it now exists;—and, in addition thereto, the 'State and its taxpayers are subjected to a heavy burden in providing care and support for such injured workmen and their dependents, which burden should, in so far as may be consistent with the rights and obligations of the'people of the State, be more fairly distributed as in this Act provided;” and that “whereas, the common law system governing the remedy of workmen against employers for injuries received in extra-hazardous work is inconsistent with modern industrial conditions; and injuries in such work, formerly occasional, have now become frequent and inevitable,” therefore “the State of Maryland, exercising herein its police and soverign powers, declares that all phases of extra-hazardous employments be, and they are hereby withdrawn for private controversy, and sure and certain relief for workmen injured in extra-hazardous employments and their families and dependants are hereby provided for, regardless of questions of fault, and to the exclusion of every other remedy, except as provided in this Act.” The Act creates a Commission to administer the law; authorizes it, for the purpose contemplated by the Act, to require the attendance of witnesses and the production of books, payrolls, documents and testimony, and to apply to any judge of the Supreme Bench of Baltimore City, or of the Circuit Court of any county for a rule on any witness refusing to testify or to produce a book or paper, to show cause why he should not be committed to jail; to adopt reasonable and proper rules to govern its procedure, .and provides that the Commission shall not be bound by the usual common law or statutory rules of evidence, or by any technical or formal rule of procedure, but may make the investigation in such manner as in its judgment is best calculated to ascertain the substantial rights of the parties and to carry out justly the spirit of the Act.- The Commission is required to make annually a report to the Governor, of the number of awards made by it, the causes of the accidents, and a ²⁶⁹ detail statement of its expenses and of the condition of the State Accident Fund (therein provided for), together with any other matter it may deem proper to report. Every employer is required to pay or provide, as required by the Act, compensation, according’ to1 the schedule contained therein, “for the disability or death of his employee resulting from an accidental personal injury sustained by the employee arising out of and in the course of his employment, without regard to fault as a cause of such injury, except where the injury is occasioned by the willful intention” of the employee to bring about the injury or death of himself or of others, or where the injury results solely from the intoxication of the employee while on duty.

The liability prescribed above is exclusive1, provided that if the employer shall fail to secure the payment of compensation as provided in the Act, an injured employee, or his legal representatives in case death results from, the injury, “may, at his option, elect to claim compensation” under the Act, or to maintain an action in the courts for damages, in which action the defendant shall not plead as a defence that the injury was caused by the negligence of a fellow servant, or the negligence of the employee, or that the employee assumed the risk of the employment. The employer is required to secure the compensation provided by the Act, (1) by insuring the payment of the same in the State Accident Fund; (2) by insuring the payments in any stock corporation or mutual association authorized to transact the business of workmen’s compensation insurance in the State; or (3), if he does not voluntarily adopt one of the above methods, by furnishing the Commission with satisfactory proof of his ability to pay such compensation, and depositing, when required to do so, with the Commission securities in an amount to be determined by the Commission, to secure his liability. Provision is made for the establishment of a fund called' the State Accident Fund, to insure employers against liability, and payment to employees and their dependents of the compensation specified. ‘ A great number of employments are specified as extra-hazardous, and ²⁷⁰ the Act is made to apply to all other extra-hazardous employments. Compensation is allowed for temporary and permanent, and for partial and total disability according to the schedule contained in the Act, and provision is made for compensation to dependents where the injury results in the death of the employee.

An appeal is allowed from the decision of the Commission to the circuit courts or the common law courts of Baltimore City by an employer, employee, beneficiary, or person feeling aggrieved by such decision, and provision is made for trial by jury in the courts of issues of fact, and for the reversal or modification by the Court of the decision of the Commission, in accordance with the law and. facts, and for a further appeal from the judgment of the Circuit Court or common law Court of Baltimore City to this Court. All of the questions raised by the demurrer, except the two to which we shall hereafter refer, are so fully covered by recent decisions of the Supreme Court of the United States, and by a recent decision of this Court, that it would be useless to undertake a further discussion of them here. We have frequently said that “the law of the land,” in the Constitution of this State, and “due process of law,” in the Constitution of the United States, mean the saape thing. Balimore Belt R. R. Co. v. Baltzell, 75 Md. 94 ; Public S. Com. v. N. C. Rwy.

Co., 122 Md. 355 . In the case of New York Central R. R. Co. v. White, 243 U. S. 188 , decided March 6th, 1917, Me. Justice Pitney, in delivering the opinion of the Supreme Court, after reviewing the provisions of the Workmen’s Compensation Law of ISTew York, which are like those of our statute, said: “The scheme of the Act is so wide a departure from common law standards re^ speeting the responsibility of employer to employee that doubts naturally have been raised respecting its constitutional validity. The adverse considerations urged or suggested in this case and in kindred cases submitted at the saíne time are: (a) that the employer’s property is taken without due process of law, because he is subjected to a liability for compensation without regard to any neglect or default on his ²⁷¹ part or on the part of any other person for whom he is responsible, and in spite of the fact that the injury may be solely attributable to the fault of the employee; (&) that the employee’s rights are interfered with, in that he is prevented from having compensation for injuries arising from the employer’s fault commensurate with the damages actually sustained, and is limited to the measure of compensation prescribed by the Act; and (c) that both employer and employee are deprived of their liberty to acquire property by being prevented from making such agreement as they choose respecting the terms of the employment. “In considering the constitutional question, it is necessary to view the matter from the standpoint of the employee as well as from that of the employer.

E'or, while plaintiff in error is an employer, and can not succeed without showing that its rights as such are infringed;—yet, as pointed out by the Court of Appeals in the Jensen v. So. Pac. Co., 215 N. Y. 526 , the exemption from further liability is an essential part of the scheme, so that the statute if invalid as against the employee is invalid as against the employer. “The close relation of the rules govering responsibility as between employer and employee to the fundamental rights of liberty and property is of course recognized. But those rules, as guides of conduct, are not beyond alteration by legislation in the public interest.

Yo person has a vested interest in any rule of law entitling him to insist that it shall remain unchanged for his benefit. * * * The common law bases the employer’s liability for injuries to the employee upon the ground of negligence; but negligence is merely the disregard of some duty imposed by law; and the nature and extent of the duty may be modified by legislation, with corresponding change in the test of negligence. Indeed, liability may be imposed for the consequences of a failure to comply with a statutory duty, irrespective of negligence in the ordinary sense; safety appliance acts being a familiar instance. * * * “The fault may be that of the employer himself, or—most frequently—that of another for whose conduct he is made ²⁷² responsible according to the maxim respondeat superior. In-the latter ease the employer may be entirely blameless, may have exercised the utmost human foresight to safeguard the employee; yet, if the alter ego while acting within the scope of his duties he negligent-—in disobedience, it may be, of the employers positive and specific command—the employer is answerable for the consequences. It can not be that the rule embodied in the maxim is unalterable by legislation. “The immunity of the employer from responsibility to an employee for the negligence of a fellow employee is of comparatively recent origin, it being the product of the judicial conception that the probability of a fellow workman’s negligence is one of the natural and ordinary risks of the occupation, assumed by the employee and presumably taken into account in the fixing of his wages. * * * The doctrine has prevailed generally throughout the United States, but with material differences in different jurisdictions respecting who should be deemed a fellow servant and who a vice-piúncipal or alter ego o-f the master, turning sometimes- upon refined distinctions as to grades and departments in the employment. * * * It needs no argument to show that such a rule is subject to modification or abrogation by a State upon proper occasion. “The same may be said with respect to the general doctrine of assumption of risk.

By the common law the employee assumes the risks normally incident to the occupation in which he voluntarily engages; other and extraordinary risks and those due to the employer’s negligence he does not assume until made aware of them, or until they become so obvious that an ordinarily prudent man would observe and appreciate them, in either of which cases he does assume them, if he continue in the employment without obtaining from the employer an assurance that the matter will be remedied; but if he receive such an assurance, then, pending performance of the promise, the employee does not in ordinary eases assume the special risk. * * * Plainly, these rules, as guides of conduct and tests of liability, are subject to change in the exercise of the sovereign authority of the State. ²⁷³ “So, also, with respect to contributory negligence. Aside from injuries intentionally self-inflicted, for which the statute under consideration affords no compensation, it is plain, that the rules of law upon the subject, in their bearing’ upon the employer’s responsibility, are subject to legislative change; for contributory negligence; again, involves a default in some duty resting' in the employee, and his duties are subject, to modification. “It may be added, by way of reminder, that the entire matter of liability for death caused by wrongful act, both within and without the relation of employer and employee, is a modem statutory innovation, in which the States differ as to who may sue, for whose benefit, and the measure of damages. “Hut it is not necessary to extend the discussion. This Court repeatedly has upheld the authority of the States to establish by legislation departures from the fellow-servant rule and other common-law rules affecting the employer’s liability for personal injuries to the employee. * * The statute under consideration sets aside one body of rules only to establish another system, in its place. If the employee is no longer able to recover as much as before in case of being' injured through the employer’s negligence, he is entitled to moderate compensation in all oases of injury, and has a certain and speedy remedy without the difficulty and expense of establishing negligence or proving the amount of the damages.

Instead of assuming the entire consequences of all ordinary risks of the occupation, he assumes the consequences, in excess of the scheduled compensation, of risks ordinary and extraordinary. On the other hand, if the employer is left without defense respecting the question of fault, he at the same time is assured that the recovery is limited, and that it goes directly to the relief of the designated beneficiary. And just as the employee’s assumption of ordinary risks at common law presumably was taken into account in fixing the rate of wages, so the fixed responsibility of the employer, and ihe modified assumption of risk by the employee under the ²⁷⁴ new system, presumably will be reflected in the wage scale. The act evidently is intended as a just settlement of a difficult problem affecting one of the most important of social relations, and it is to be judged in,its entirety.

We have said enough to demonstrate that, in' such an adjustment, the j'articular rules of the common law affecting the subject matter are not placed by the Fourteenth Amendment beyond the reach of the law making power of the State; and thus we are brought to the question whether the method of compensation that is established as a substitute transcends the limits of permissible state action. “We will consider, first, the scheme of compensation, deferring for the present the question of the manner in which the employer is required h> secure payment. “Briefly, the statute imposes liability upon the employer to make compensation for disability or death of the employee resulting from accidental personal injury arising out of and in the course of the employment, without regard to fault as a cause except where the injury or death is occasioned by the employee’s willful intention to produce it, or where the injury results solely from his intoxication while on duty; it graduates the compensation for disability according, to a prescribed scale based upon the loss of earning power, having regard to the previous wage and the character and duration of the disability; and measures the death benefit according to the dependency of the surviving wife, husband, or infant children. Perhaps we should add that it has no retrospective effect, 'and applies only to cases arising some months after its passage. “Of course, we can not ignore the question whether the new arrangement is arbitrary and unreasonable, from the standpoint of natural justice. Respecting this, it is important to be observed that the act applies only to disabling or fatal personal injuries received in the course of hazardous employment in gainful occupation. Reduced to its elements, the'.situation to be dealt with is this: Employer and employee, by mutual consent, engage in a common operation in ²⁷⁵ tended to be advantageous to both; the employee is to contribute his personal services, and for these, is to receive wages, and ordinarily nothing more; the employer is to furnish plant, facilities, organization, capital, credit, is to control and manage the operation, paying the wages and other expenses, disposing of the product at such prices as he cau obtain, taking all the profits, if any there be, and of necessity hearing the entire losses.

In the nature of things, there is more or less of a probability that the employee may lose his life through some accidental injury arising out of the employment, leaving his widow or children deprived of their natural support; or that he may sustain an injury not mortal but resulting in his. total or partial disablement, temporary or permanent, with corresponding impairment of earning capacity. The physical suffering must he home by the employee alone; the laws of nature prevent this from, being evaded or shifted to another, and the statute makes no attempt to afford an equivalent in compensation. But, besides, there is the loss of earning power; a loss of that which stands to the employee as his capital in trade. This is a loss arising out. of the business, and, however it may be charged up; is an expense of the operation, as truly as the cost of repairing broken machinery or any other expense that ordinarily is paid by the employer.

Who is to bear the charge? It is plain that, on grounds of natural justice, it is not unreasonable for the State, while relieving the employer from responsibility for damages measured by common-law standards and payable in case where he or those for whose conduct he is answerable are found to be at fault, to require him to contribute a reasonable amount, and according to a reasonable and definite