Muehlenbeck v. J. W. Ederer & Co.

Sharpe, J. Frank A. Muehlenbeck, while hauling stone for Ederer & Company, met his death in a collision between the truck he was driving and a Michigan Central railroad train on October 9, 1923. Carl A. Muehlenbeck, a brother of the deceased, was appointed administrator of his estate by the probate court of Saginaw county. On November 23, 1923, the administrator filed the following petition in the probate court: “Your petitioner respectfully represents that he is duly appointed and qualified administrator of the estate of Frank F. Muehlenbeck, who met death on October 9, 1923, at Swan Creek, Michigan, as the result of a collision between an automobile in which he was riding and a train of the Michigan Central Railroad Company. “That the said company, while denying all liability in the matter, has offered and is prepared to pay in settlement the sum of five hundred dollars ($500). “That your petitioner has investigated the facts of the accident, and believe said offer to be fair and for the best interests of the estate to accept the same. “Wherefore, your petitioner prays your honorable court to authorize him to accept and receive the said sum of five hundred dollars ($500) and to execute a release in full acquittance of all claims against said company for injuries suffered and death sustained by said deceased.” On the same day an order was entered by the court, reading as follows: *3 “Oh reading and filing the petition of Carl A. Muehlenbeck, administrator of' said estate, praying that he be authorized to compromise and settle a certain claim he holds against the Michigan Central Railroad Company for the sum of five hundred dollars ($500) and it appearing to the court that it would be for the best interests of said estate, it is ordered that said administrator be, and he is hereby authorized to accept and receive said sunt and to execute a release in full acquittance of all claims against said company for injuries suffered and death sustained by said deceased, upon payment to him as such administrator, of the sum of five hundred dollars ($500).” The $500 was paid to the administrator by the railroad company, and he executed a receipt and release pursuant to the terms of the order, and afterwards turned the money over to the duly appointed guardian of the minor son of the deceased. On December 10th following, the administrator filed a claim for compensation under the workmen’s compensation act, a report of the accident having theretofore been made by Ederer & Company. A petition, for the hearing of such claim was filed, signed by both the administrator and the guardian. Compensation was denied by the deputy commissioner. On review, the board awarded compensation for 300 weeks at $14 per week, together with funeral expenses. This award the defendants review by certiorari. The defendants claim that the petition filed in the probate court, the order made thereon, and the release executed pursuant thereto establish an election to proceed against the wrongdoer, and operate as a bar to this claim for compensation. The conclusion reached by the department is thus stated: “Respondents contend that applicant has elected to proceed against the Michigan Central Railroad Company, the third party responsible for the accident in this case. The administrator of the estate received a $500 settlement from the railroad company and the same was turned over to the applicant’s guardian. *4 The administrator testified that this $500 settlement was for the damage to the truck owned by deceased. The petition for permission to make the settlement and the order of the probate court indicates that it was made for the injuries suffered and death of deceased but the administrator stated he had no intention of settling for the death of deceased, but rather for the damage to the truck.” The finding as to the intention of the administrator is based on his testimony as follows: “Q. In reference to this paper, this typewritten paper Exhibit 1, signed by C. A. Muehlenbeck, administrator, how did you happen to sign that? * * * “A. Well, the railroad company man wanted to settle for the loss on the truck and it was settled in the judge of probate office. . “Q. You had nothing to do with the preparing of the paper? “A. Absolutely not. “Q. Was it prepared by the railroad people themselves ? “A. I imagine it was. “Q. What did they say to you, if anything, if you didn’t take five hundred dollars you would not get anything? “A. Well, we could either take five hundred dollars or nothing.” No mention was made of an injury to the truck in either the petition, order or release. The guardian, in answer to a question put to him by the deputy commissioner, “Was that five hundred dollars paid on account of the accident to your son?” answered “Yes.” In City of Grand Rapids v. Crocker, 219 Mich. 178, after a full consideration of the entire act and the purposes sought to be accomplished by it, we held that the word “employee” when used therein embraced also the dependents of the employee; “That in case of the death of the employee the dependents may elect to proceed against the wrongdoer *5 or to take compensation under the act; that an election to take under the act is a bar to an action brought by an administrator against the wrongdoer.” It necessarily follows that if the administrator elects to proceed against'the wrongdoer and makes settlement with him, after due authorization from the probate court, he may not proceed against the employer under the act. LaLonde v. Jennison Hardware Co., 219 Mich. 194. The proceedings in the probate court, followed by the execution of the release by the administrator, constituted an election to proceed against the railroad company, and barred the right of the defendant to recover compensation under the act. Had the settlement been procured by fraud, it might have been set aside in a suit in equity brought against the railroad for that purpose. But, founded as it was upon a court procedure, it may not be attacked in this collateral proceeding. A somewhat similar question was presented in Smith v. Port Huron Gas & Electric Co., 217 Mich. 519. The plaintiff, who had been injured while in the employ of the Mueller Metals Company, entered into an agreement for compensation under the act with the insurance company carrying the risk of his employer. This agreement was approved by the industrial accident board. Plaintiff, declining to accept any payments under it, brought an action against the Port Huron Gas & Electric Company, claiming liability on its part for negligence causing his injuries. The defendant in that suit insisted that plaintiff had elected to proceed under the compensation act. The plaintiff was permitted “to show that he did not intelligently sign the contract with the Mueller Company and that his signature was procured by the fraud of the agents of that company.” He recovered a judgment. On review in this court, it was held “that the *6 order of the board approving the contract * * * was a bar to plaintiff’s right to recovery,” and that “it may not be impeached for fraud in this collateral proceeding.” Under the holding in City of Grand Rapids v. Crocker, supra, the employer or company carrying its risk, if adjudged liable to pay compensation under the act, is subrogated to the rights of the administrator and may recover from the “wrongdoer to the extent of the liability imposed on him under the act.” Should the award in this case be affirmed and action brought against the wrongdoer, the release executed by the administrator would be a bar thereto, and the burden would be cast on the employer to have it set aside. It is clear that it cannot be attacked in this proceeding before the commission, in which the railroad company is not a party. The award is reversed and set aside. McDonald, C. J., and Clark, Steere, Fellows, and Wiest, JJ., concurred with Sharpe, J.