State Compensation Insurance Fund v. Thackery

CRAIG, J.

In an action in the superior court against the defendant, an automobile driver, by the State Compensation Insurance Fund as insurance carrier of Gates & Son, an employer, for damages and for medical expenses and compensation paid by the employer to John B. Brent, an injured employee, judgment was rendered in favor of the plaintiff notwithstanding a previous settlement and release from liability between the immediate parties. The entire judgment was for $1330.44, made up of three items—medical treatment, $77.50; money paid by the insurance carrier, $252.94, and $1000 damages for the injuries sustained by Brent. The defendant appealed.

The issues as to the negligence and the expenses and compensation as found in favor of the plaintiff by the trial court are conceded. The previous acceptance of a fair and reasonable amount in full settlement and compromise of all general damages was pleaded below, and is advanced by the appellant upon the contention that it should constitute a legal bar to recovery or neutralizing credit against any judgment rendered. By section 26 of the Workmen’s Compensation, Insurance and Safety Act (Stats. 1913, chap. 176, p. 279; 1917, chap. 586, p. 831, as amended), the legislature has ordained that no release or settlement of any claim for damages by reason of such injury shall be valid “-without the written consent of either both employer and employee, or one of them, together -with the consent of the commission”. The people of this state through amendment of article XX, section 21, of the Constitution, expressly vested in the legislature “plenary power, unlimited by any provision of this Constitution, to create and enforce a complete system of workmen’s compensation”, with authority to create and enforce “full provision for adequate insurance carriage against liability to pay or furnish compensation; full provision for regulating such insurance carriage in all its aspects, including the establishment of a state compensation fund; . . . and full provision for vesting power, au

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thority and jurisdiction in any administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, to the end that the administration of such legislation shall accomplish substantial justice in all cases, expeditiously, inexpensively, and without encumbrance of any character; all of which matters are expressly declared to be the social public policy of this state, binding upon all departments of the state government. The legislature is vested with plenary powers to provide for the settlement of any disputes arising under such legislation by arbitration, or by the industrial accident commission, by the courts, or by either or all of these agencies ...” Neither the employer nor the Industrial Accident Commission was consulted nor did either consent to the settlement or release here involved. By its judgment the trial court awarded to the respondent in the same transaction, for the same injury, the same amount of $1,000, for which theretofore “after full and fair negotiations between the parties it was agreed . . . that $1,000 would fully and fairly compensate the said Brent for all damages by reason of personal injuries which he had sustained”. This is construed as an invalid enactment, and as unjust, arbitrary and discriminatory and an invasion of constitutional guaranties of the liberty of contract, if construed as requiring the consent of an employee and a third party not affecting the amount which the employer may recover.