Pulcifer v. Henry Carlson Builders

SMITH, J. An employer and its carrier of workmen’s compensation insurance appeal from a judgment which sets aside an instrument by which the employee releases the employer from all claims in consequence of a described injury. On October 23, 1945, the employee suffered an injury to his left arm arising out of and in the course of his employment. He remained away from work under treatment by his physician until Monday, the 5th day of November 1945. Upon return to work he executed an agreement with the insurance carrier that names the employer and employee, describes the-date, place, nature and cause of his injury, and reads in part as follows: “The terms of this agreement under the above facts are as follows: That the said Donald L. Pulcifer shall receive compensation at the rate of $15.00 *132 per week based upon the average weekly wage of $40.25 and that said compensation shall be payable from and including the 10 — 30—45 day of - 194 — , until terminated in accordance with the provisions of the Workmen’s Compensation Law of the State of South Dakota.” At the 'same time a check for $12.50 was delivered to the employee and he executed an instrument entitled “Final Receipt and Release for Compensation Paid únder South Dakota Workmen’s Compensation Law.” The above described agreements were filed with the Industrial Commissioner on November 15, 1945, and he noted his approval of the agreement first described by endorsement dated December 3, 1945. The employee worked from November 5 to and including December 22, 1945. Upon the advice of his physician, and because of pain, he remained away from work until the first days of February 1946. During the last days of January 1946 the insurance carrier paid the employee $62.50 by check which recited “Compensation from 11-3 thru 1-21-46.” Some ten days after the employee had again returned to work the carrier.paid him $35 and he executed another like “Final Receipt and Release for Compensation Paid under South Dakota Workmen’s Compensation Law.” This instrument, as well as those we have previously described, was prepared upon a form supplied by the Industrial Commissioner and reads as follows: “Received of E’mpl. Mutual Liab. Ins Co. the sum of Thirty-five and Dollars no/100 Cents ($35.00) Making in all, the weekly payments received by me, the total sum of One hundred ten and no/100 Dollars * * * Cents ($110.00), such payment being the final payment of compensation under the South Dakota Workmen’s Compensation Law and in consideration of which I hereby release and forever discharge the said Henry Carlson Builders heirs, successors and assigns, from any and all actions, causes of action, claims and demands, for, upon, or by means of any damage, loss, injury or suffering which heretofore has been or which hereafter may be sustained by me in consequence of an injury suffered by me on or about the 23 day of October 1945, while in the employment of Henry Carlson Builders and returned to work 1-31-46.” *133 This instrument was filed with the Industrial Commissioner on February 21, 1946, and was not dissapproved by him. Thereafter the employee continued to work for the employer until laid off for lack of work, and he has since worked at common labor for other employers. On the 30th day of August 1946 the employee commenced this action. He alleged that his left arm has become permanently partially disabled as a consequence of the injury of October 23, 1945, that he has not been paid workmen’s compensation for such permanent partial disability, that his signature to the above described releases was procured by “fraud, misrepresentation and deceit” and that said-releases are void because unsupported by a consideration, and prayed judgment setting aside said releases and declaring plaintiff “is not barred by any purported release or settlement from prosecuting his claim for prosecuting his claim for permanent disability to his left arm before the Industrial Commissioner of South Dakota.” The answer denied the disability, set up the described agreements of release and alleged that said Releases were duly filed and approved by the Industrial Commissioner of the State of South Dakota. The employee was unable to sustain his allegation of fraud and misrepresentation. The disability about which he now complains had become apparent to him in February 1946. He had had the advice of his physician. That advice offered a hope of improvement but did not promise a normal arm. When the final ■ release was signed the employer’s superintendent explained its character and legal effect and advised him not to sign it if his arm was not right. Therefore, the court found against him on the issue of fraud. However, the court was of the opinion that the employee had adduced evidence from which the Industrial Commissioner might find the employee- had suffered some permanent disability as a result of the injury in question for which he has not been compensated. It found the amounts received by the employee as consideration for the releases was the exact amount due for the temporary total disability resulting from the injury. Upon these facts, the *134 court concluded as a matter of law “That the said release above described should be set aside, vacated and cancelled to the end that the plaintiff may make proof before the Industrial Commissioner as to the nature and extent of the disability and loss of use to his arm in order that the Industrial Commissioner may make an award in accord with the law and facts,” and such were the terms of its decree. It is this legal conclusion which the employer and the insurance carrier question. They accept the factual premise found by the court. Support for the judgment below obviously must be sought in some special public policy or statute abridging the freedom of contract of these parties. General principles support the release. Its all inclusive, clear and unambiguous phrases embrace the claim now made. The disability now said to be permanent was apparent at the moment the release was executed. The employee’s physician testified for him and said that while he honestly hoped it would get better, he warned him he was never going to have a normal arm. Under such a state of undisputed facts it cannot be claimed that the release was not intended to extinguish the present claim. Cf. SDC 47.0241 and Petersen v. Kemper, 70 S. D. 427, 18 N. W.2d 294. According to the general principles we are now considering, it was effective. It was in writing and in this jurisdiction an obligation is extingushed by a release therefrom given to the debtor by the creditor, upon a new consideration, or in writing, with or without new consideration. SDC 47.0240. Cf. Ellens, v. Lind, 65 S. D. 620, 277 N. W. 40. Thus we are brought to the contention so earnestly urged by counsel for the employee. According to this contention the right of the parties and the Industrial Commissioner-to relieve the employer of any of his liabilities under the Workmen’s Compensation Act is denied by the public policy evidenced by the act as a whole and by the express language of SDC 64.0302, reading as follows: “No contract or agreement, express or implied, no rule, regulation, or other device, shall in any manner operate to *135 relieve any employer in whole or in part of any obligation created by this title except as herein provided.” It should be observed that this is not a contention that such a release is voidable and may he set aside on equitable grounds. The contention is that such an instrument is legally ineffective as a release; that the parties and the Industrial Commissioner are without power to extinguish a just obligation for workmen’s compensation. The contention is ruled adversely to the employee by the pronouncement of this court in Hines v. Ree Heights Implement Co., 65 S. D. 169, 272 N. W. 681. That decision reversed a judgment of the circuit court which had affirmed a further award by the Industrial Commissioner because the award was made after a like “Final Receipt and Release” had been executed and approved. The issue on appeal in that case was stated as follows: “Appellants contend that the basic question involved upon this appeal is the authority of the Industrial Commissioner to reopen the proceedings and make further award; that the failure to proceed to reopen the case for a period of two years and five months after the final release was executed and approved barred the claimant from further proceeding for added compensation. They also challenge the sufficiency of the evidence to support the findings and the sufficiency of the findings to support the conclusions, and have argued all said assignments relating thereto together.” Our decision further reads as follows: “We are inclined to agree with this argument of appellant. The evidence discloses that the respondent had been informed by Dr. Riggs, a short time prior to the execution of the second memorandum of settlement on August 28, 1931, that he had a 33% per cent, disability. Respondent testified that Dr. Riggs has so informed him of the extent of his disability, and in view of the fact that the commissioner found the respondent’s disability to be 33% per cent, we fail to see upon what grounds the commissioner based his finding that the respondent was ‘in ignorance as to extent of his injuries and the full measure of his disability. * * *’ *136 In considering the second part of finding No. 9, * * and in reliance on the belief that such settlements were partial only and not in complete satisfaction of his claim for said injury,’ we must againd agree with the contention of appellant, that the evidence does not support such a finding. On August 28, 1931, the respondent signed an instrument which was headed by the words ‘* * * Final Receipt and Release, * * *’ and which contained in the body of the instrument the words, * * I hereby release and forever discharge the said S. D. Employers Protective Ass’n., heirs, successors and assigns, from any and all actions, causes of actions, claims and demands, for, upon, or by means of any damage, loss, injury or suffering which heretofore has been or which hereafter may be sustained by me in consequence of an injury suffered by me on or about the 12th day of August, 1930, while in the employment of Ree Pleights Impl. Co. * * *’ There is no showing in the record that the respondent was other than an average intelligent person who could read and write, and who could understand the nature of an instrument such as the one referred to above. The only evidence offered by respondent to offset the fact that he signed this instrument, which was in the nature of a final receipt and release, is that at the time of the execution of said instrument, the respondent asked the representative of the appellant, Ts this all?’ and the representative said, ‘Not necessarily.’ We are of the opinion that such evidence is not sufficient to support the commissioner’s finding, <::: * * and in reliance on the belief that such settlements were partial only and not in complete satisfaction of his claim for said injury.’ ” The foregoing decision was handed down in April of 1937. In 1939 the legislature re-enacted the Workmen’s Compensation Act, SDC 64.0101 et seq., without any change in the sections pertinent to the present contention. It is presumed that the legislature was familiar with this construction and intended the the act should be so construed subsequent to re-enactment. Brink v. Dann, 33 S. D. 81, 144 N. W. 734; Stewart v. Rapid City, 48 S. D. 554, 205 N. W. 654; and F. M. Slagel & Co. v. Bushnell, 70 S. D. 250, 16 N. W.2d 914, 156 A. L. R. 1070. *137 Our subsequent decisions have assumed the validity of such a “Final Receipt and Release.” Chittenden v. Jarvis, 68 S. D. 5, 297 N. W. 787; Nilsson v. Krueger, 68 S. D. 11, 297 N. W. 790 and Nilsson v. Krueger, 69 S. D. 312, 9 N. W.2d 783. We think the assumption upon which these cases rest is sound. A legislative intention to prohibit agreements between the employer and employee with reference to compensation due the employee is not reflected by the provisions of the Workmen’s Compensation Act. On the contrary, as is so clearly pointed out in Chittenden v. Jarvis, supra, and in Bailey v. Hess, 55 S. D. 602, 227 N. W. 69, the act contemplates such agreements but seeks to protect the public interest and the interest of the employee by investing the Industrial Commissioner with supervisory powers. SDC 64.0302, quoted supra, proscribes such agreements “except as herein provided.” SDC 64.0509 provides as follows: “If the employer and employee reach an agreement in regard to the compensation under this title, a memorandum thereof shall be filed with the Commissioner by the employer or employee, and unless the Commissioner shall, within twenty days, notify the employer and employee of his disapproval of the agreement by registered letter sent to their addresses as given in the memorandum filed, the agreement shall stand as approved and be enforcible for all purposes under the provisions of this title.” The power to disapprove the agreements of the parties, and thus to render them ineffective, with which the Industrial Commissioner is clothed, is the device adopted by the legislature to afford the desired protection. If that device is deemed inadequate, relief must be sought at the hands of the legislature. It follows we are of the opinion that the facts found by the court do not support its conclusion of law. The judgment of the trial courts is reversed. ROBERTS, P.J., and RUDOLPH, J, concur. SICKEL and HAYES, JJ., dissent.