Volume X

July, 1922

No.1

Reports of All Decisions Rendered in Workmen's Compensation Cases in the Federal and Appellate Courts, and in Addition All Admiralty and Federal Employers' Decisions wherein the Jurisdiction, in such Cases, is determined.

DAHN v. DAVIS, AGENT, ETC. (No. 166.)

(United States Supreme Court. Argued March 10, 13, 1922. Decided April 10, 1922.)

42 Supreme Court Reporter, 320.

2. MASTER AND SERVANT-MAIL CLERK ENTITLED TO COMPENSATION FOR INJURIES, UNDER COMPENSATION

ACT.

Under Federal Employees' Compensation Act (Comp. St. §§ 8932a8932uu), a railway mail clerk, injured in a wreck while in the performance of his duty, was entitled to compensation on making claim therefor.

(For other cases, see Master and Servant, Dec. Dig. § 364.)

3. MASTER AND SERVANT MAIL CLERK, COMPENSATED FOR INJURIES CANNOT SUE DIRECTOR GENERAL FOR NEGLIGENCE.

Under Federal Employees' Compensation Act, § 7 (Comp. St. § 8932d), prohibiting remuneration other than the specified compensation, sections 26 and 27 (Comp. St. §§ 8932mm, 8932n), relative to injuries creating liability on some person other than the United States, and section 41 (Comp. St. § 8932u) relative to injuries creating liability on the part of the Panama Railroad Company, a mail clerk, injured in a wreck on a road operated by the Director General, and applying for and accepting_compensation, could not sue the Director General for negligence, under Federal Control Act, § 10 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 311534j)

(For other cases, see Master and Servant, Dec. Dig. § 351.)

On Writ of Certiorari to the United States Circuit Court of Appeals for the Eighth Circuit.

Action by Arthur J. Dahn against the Director General of Railroads, in which James C. Davis, Agent designated by the President under section 206 of the Transportation Act of 1920, was substituted as defendant. A judgment for plaintiff was reversed by the Circuit Court of Appeals (267 Fed. 105), and plaintiff brings certiorari. Affirmed.

Messrs. Walter C. Clephane and J. Wilmer Latimer, both of Washington, D. C., for petitioner.

Mr. A. A. McLauglin, of Washington, D. C., for respondent.

Mr. Justice CLARKE delivered the opinion of the Court. The petitioner, a railway mail clerk in the employ of the United States, was injured on May 29, 1918, when the car in which he was

working was wrecked on the line of the Illinois Central Railroad, then being operated by the Director General of Railroads under the Federal Control Act of March 21, 1918 (40 Stat. 451, c. 25, Comp. St. 1918. Comp. St. Ann. Supp. 1919, §§ 311534a-311534p). He brought this suit to recover for his injuries against the Illinois Central Railroad Company and the Director General of Railroads, but the former was dismissed from the case on demurrer. Among other defenses, the Director General of Railroads alleged in his answer that the petitioner, as an employee of the United States, had made application for, and pursuant to its provisions had been paid, compensation under the provisions of the Federal Employees' Compensation Act (39 Stat. 742, Comp. St. §§ 8932a8932uu), and that thereby this further action, which is in effect, against the United States, was barred. A demurrer to this last defence was sustained and the petitioner obtained a verdict on which the District Court entered judgment. On error this judgment was reversed by the Circuit Court of Appeals, that Court holding that the petitioner had his option under the law to apply for compensation under the Employees' Compensation Act as he did, or to sue for damages under the Federal Control Act (40 Stat. 451, c. 25), and that, by electing to accept the benefits of the former, he was barred from prosecuting this action for negligence against the United States under the latter.

Thus, the writ of certiorari brings up for review the question whether, when a goverment employee, injured on a railroad, operated at the time by the Director General of Railroads, had elected to accept payment under the Federal Employees' Compensation Act, he was thereby barred from prosecuting a suit against the Director General of Railroads for negligence causing the injury for which he had been compensated.

James C. Davis, the Agent designated by the President under section 206 of the Transportation Act of 1920 (41 Stat. 456), has been substituted for the Director General of Railroads as respondent.

[1] It was definitely held in Missouri Pacific Railroad Co. v. Ault, 255 U. S. —, 41 Sup. Ct. 593, 65 L. Ed. —,that, at all of the times here involved, section 10 of the Federal Control Act permitted the government, through its Director General of Railroads, to be sued for any injury negligently caused on any line of railway in his custody, precisely as a common carrier corporation operating such road might have been sued, and that recovery, if any, would be from the United States.

Thus plainly the petitioner had the right to sue the Director General of Railroads for negligently injuring him, and if successful his recovery must have been from the United States.

[2] The Federal Employees' Compensation Act, approved September 7, 1916 (39 Stat. p. 742, c. 458), provides that the United States shall thereafter pay, as therein specified, for the disability or death of any government employee resulting from personal injury sustained while in the performance of his duty. The act provides for a commission to investigate claims and to make awards, but no compensation may be allowed to any person unless he, or some one in his behalf, shall make written claim therefor. Thus, the petitioner, injured, as he was while in the performance of his duty, was entitled to compensation under the act upon making claim for it.

[3] This reference to the two acts shows that the petitioner had two remedies, each for the same wrong, and both against the United States and therefore the question for decision takes the form, May the petitioner after having pursued one of his remedies to a conclusion and payment, pursue the other for a second satisfaction of the same wrong against the government.

That this question must be answered in the negative we think clear from various provisions in the Compensation Act, showing that Congress intended that payments made under it should be regarded as full and

final and that no payment in addition thereto would be made by the government to an injured employee.

Section 7 of the act specifically declares that so long as any employee is receiving installment payments under the act, or if he has been paid a lump sum in commutation of stallment payments then until the expiration of the period during which installment payments would have continued, "he shall not receive from the United States any salary pay or remuneration whatsoever except in return for services actually performed," and except pension for service in the Army or Navy.

It would be difficult to frame a clearer declaration than this that no payment would be made by the government for injuries received other than as provided for in the act.

Section 26 provides "that if any injury or death for which compensation is payable under this act is caused under circumstances creating a legal liability upon some person other than the United States to pay damages therefor" the Commission may require an assignment to it of the right to enforce such liability or to share in any money received in satisfaction thereof, or it may require the beneficiary to prosecute an action for damages in his own name. Refusal to make such assignment or to prosecute such action, when requested by the Commission, shall forfeit all right to compensation. This section also provides that if the commission shall realize on such claim against third persons, either by suit or settlement, it shall apply the net proceeds to reimbursing the "Employees' Compensation Fund" for payments therefor made, and any surplus remaining shall be paid to the beneficiary and credited on future compensation payable for the same injury. If the amount of recovery exceeded the payments made and to be made, obviously the beneficiary would be entitled to the excess.

Section 27 also provides for cases in which death or injury, for which compensation is payable under the act, is caused under circumstances "creating a legal liability in some person other than the United States to pay damages," but in which the beneficiary, instead of the Commission, receives the proceeds of suit or settlement. Here it is required that such beneficiary shall refund to the United States from such proceeds the amount of any compensation that has been paid to him by the government or shall credit the money so received upon any compensation payable to him for the same injury.

Plainly by these two sections Congress deals with the liability of persons "other than the United States" to employees entitled to compensation under the act, not for the purpose of increasing that compensation, but for the purpose of reimbursing the government for payments made and of indemnifying it against other amounts payable in the future. The sections emphasize the disposition to treat the compensation, provided for, as adequate for the injuries received, and they nerative any intension on the part of the government to make further payments.

But section 41 is even more convincing to the point we are considering.. A special proviso in this section declares that if the injury or death for which compensation is payable under the act is caused under circumstances creating a legal liability in the Panama Railroad Company to Day damage there for "no compensation shall be payable until the person" shall release to the Railroad Company any right of action he may have against it or until he assigns to the United States any rights which he may have to share in any money or other property received in satisfaction of such liability.

When the Compensation Act was passed the United States was the owner of all the capital stock of the Panama Railroad Company and as such was ultimately liable for the torts of that company just as it became liable for the torts of the Director General of Railroads under the Federal Control Act and, therefore, this manner cf

dealing with the liability of that company to employees negligently injured is highly persuasive as to the congressional intent.

This Compensation Act is the expression of a slowly developed purpose on the part of the United States (1908-35 Stat. 556; 1912-37 Stat. 74; 1916-39 Stat. 742) to give compensation to its employees, who otherwise would be without remedy when injured by fault of the government, and the provisions of it which we have discussed convince us that the congressional purpose was that when the compensation was accepted no further payment should be made by the government. The act does not contemplate or provide for suits against the government. On the contrary, it is essentially an act of justice or of grace on the part of the United States, elaborately and carefully worked out, and designed to compensate, promptly without ligation or expense, all employees injured while in discharge of duty, in an amount, which, on the average, was thought adequate and just: The amount of the award in each case is determined by a specially constituted commission, without cost to the claimant, and it is allowed wholly without regard to the negligence of the government or its employees.

On the other hand, the right to sue the United States under the Federal Control Act, applicable to all persons alike, is on the basis of negligence, precisely as if the government were an operating common carrier corporation, and it is subject to all of the expense, delay and hazard usual in cases of that character. The Compensation Act deals only with, and confers right only upon, employees of the government, who must necessarily be but a small percentage of those authorized to sue under the Federal Control Act, and it is impossible for us to conclude that Congress intended by the enactment of the latter law to allow an employee to claim and receive the compensation specially provided for him under the former and then, while enjoying that benefit, to institute suit against the government under the Federal Control Act, which might require it to make further payment for the same injury and which must, in all cases, subject it to expensive, harassing and often long protracted litigation.

We find no language in the Federal Control Act inconsistent with the distinct expression of purpose on the part of Congress which we have found in the Compensation Act, to treat the payments under it as sufficient and final, and for the reasons stated in the discussion herein of the latter act, and because the petitioner elected to pursue to payment the remedy given him thereunder, we agree with the Circuit Court of Appeals that his right of action asserted in this case was barred and the judgment of that court is therefore

Affirmed.

BLUE DIAMOND PLASTER CO. v. INDUSTRIAL ACCIDENT COMMISSION OF CALIFORNIA ET AL. (L. A. 7065.) (Supreme Court of California. March 14, 1922.) 205 Pacific Reporter 678.

1. MASTER AND SERVANT - EVIDENCE IN COMPENSATION CASE HELD TO SHOW WILLFUL MISCONDUCT OF EMPLOYER'S PREDECESSOR.

Evidence that the employer's predecessor in the operation of the plant in which decedent was killed, had been repeatedly notified of the dangerous condition of its unguarded belts and pulleys, held ample to show willful

misconduct by the predecessor which would have rendered it liable for excess compensation under the Workmen's Compensation Act, 1917, § 6b, if it had retained the plant until the accident.

(For other cases, see Master and Servant, Dec. Dig. § 405[6].)

2. MASTER AND SERVANT - EVIDENCE IN COMPENSATION CASE HELD TO SHOW MISCONDUCT OF EMPLOYER ACQUIRING PLANT.

Where an employer acquired the plant almost four months before the accident in which an employee was killed, and retained the manager and superintendent who knew of the unsafe condition of its unguarded belts and pulleys, and the general manager of the purchaser had visited the plant and inspected the hoist where an unguarded belt was installed, a finding that the employer as well as its predecessor was guilty of willful misconduct, resulting in the death of the employee, will not be set aside. (For other cases, see Master and Servant, Dec. Dig. § 405[6].)

In Bank.

Proceedings under the Workmen's Compensation Act by Marilyn Wallace to recover compensation for the death of her husband, Donald M. Wallace, opposed by the Blue Diamond Plaster Company, employer, and the General Accident, Fire & Life Assurance Corporation, Limited, insurer. The Industrial Accident Board awarded compensation in an amount exceeding by one-half the normal compensation, and required the employer and not the insurer to pay the excess, and the employer brings certiorari. Award affirmed,

Black, Hammack & Black, of Los Angeles, for petitioner.

A. E. Graupner, of San Francisco, for respondent Industrial Accident Commission.

Joe Grider, Jr., and Clarence B. Runkle, for respondent General Accident, Fire & Life Assur. Corporation, Limited.

Walter S. Clayson, of Corona, for respondent Wallace.

PER CURIAM. The petitioner in this proceeding seeks to have an award of the Industrial Accident Commission reviewed and annulled. The proceeding before the commission, in which said award was made, arose out of the following facts: Donald M. Wallace, who was an employee of the Blue Diamond Plaster Company, was killed on or about December 20, 1920, at the plant of said corporation at or near Corona, Cal., by coming into contact with an unguarded belt and pulley which were being operated at the time in the hoisthouse at said plant, in connection with machinery for the hoisting of supplies and materials from the railroad tracks to the quarry levels and various floor levels of the plant and also for the operation of a compressor therein. The machinery in this hoisthouse was in use regularly, though not constantly, in connection with the operation of the plant, and was set in motion and stopped by means of a clutch or controller which was located on one side of, and about 12 inches from, the belt, and which mamnipulators of the hoist could make use of either by going around the belt to the side on which the controller was placed or, as was more conveniently and frequently, if not customarily dere, by reaching over the belt a distance of some 22 inches to the handle of the controller.

The deceased employee, Donald M. Wallace, while not regularly in charge of the hoist, did from time to time operate its machinery in connection with his other duties as occasion required, with the knowledge of the employer, and was engaged in so doing at the time of his death, which was occasioned by his being caught and crushed between the belt and the pulley. There was no witness to the casualty, and hence the exact manner in which he was thus caught and crushed was not known.