Steele v. Aetna Casualty Surety Company

WRIGHT, Judge. A complaint of one count claiming money received by defendant to the use of plaintiff was filed by Aetna Casualty & Surety Company against Leon Holt Steele. Judgment was rendered against Steele in the amount of $2,112.80. The facts upon which suit was brought are not in dispute. The matter was submitted for consideration of the trial court upon stipulation of fact and certain exhibits thereto. — 707 — In 1965, appellant Steele was employed by Superior Trucking Company, a common carrier doing an interstate business. On July 16, 1965, while working within the course of his employment and while engaged in interstate commerce, Steele suffered an accident from which injury resulted. This injury occurred when a beam fell from a fork lift being operated by Charles Brown, an employee of Soderhamn Machine Manufacturing Company, located in Talladega County, Alabama. Aetna Casualty and Surety Company, appellee and hereinafter referred to as Aetna, insured Superior Trucking Company with Workmen’s Compensation insurance. Without claim being filed, Aetna paid Steele benefits according to the Workmen’s Compensation schedule, totaling $2,112.80, not including medical expenses. Upon final payment, Aetna, by letter, informed Steele that he had been paid full benefits for his injury in accordance with the Workmen’s Compensation law. They furnished him with a subrogation receipt which he did not sign. Steele filed suit against Brown and Soderhamn Machine Manufacturing Company in Talladega County for' damages for personal injury. Aetna petitioned to intervene as subrogee under provisions of Title 26, Section 312, Code of Alabama 1940, as amended. Before intervention was granted Aetna, Steele settled his claim against Brown and Soderhamn for the amount of $14,300.00, and the suit was dismissed. Aetna was not reimbursed the benefits paid Steele and this action resulted. Though the cause of action is stated in a common count, it was in the trial below the contention of Aetna that appellant was covered by Workmen’s Compensation at the time of his injury and since he had been paid, and accepted compensation payments, Aetna was entitled to reimbursement of such payments from the damages recovered by Steele from the third party according to the provisions of Title 26, Section 312, Code of. Alabama 1940, as amended. Aetna states in brief that it does not dispute that its right of reimbursement derives from Section 312. Thus, we wish to make clear at this point in our consideration, the theory upon which recovery was sought and upon which the case was tried and submitted for judgment. That theory has been reiterated in brief and our review is limited to the theory upon which the case was tried below. Union Springs Tel. Co. v. Green, 285 Ala. 114, 229 So.2d 503; Auto-Owners Ins. Co. v. Stokes, 284 Ala. 537, 226 So.2d 320. It is clear from assignments of error and argument in brief by both appellant and appellee that consideration must be given to the application of three sections of the Workmen’s Compensation Act of Alabama to the facts of the case. Those sections are 263, Section 270 and Section 312, of Title 26, Code of Alabama 1940, as amended. We now reproduce the pertinent portions of said sections. “§ 263. (7543) Articles 1 and 2 of chapter not applicable to certain employments. — Articles 1 and 2 of this chapter shall not be construed or held to apply to any common carrier doing an interstate business while engaged in interstate commerce, or to domestic servants, farm laborers, or persons whose employment at the time of the injury is casual, and not in the usual course of the trade, business, profession or occupation of the employer, or to any employer, who regularly employs less than eight employees in any one business or to any county, city, town, village or school district. Any employer who regularly employs less than eight employees in any one business or any county, city, town, village or school district may accept the provisions of articles 1 and 2 of this chapter by filing written notice thereof with the department of industrial relations and with the probate judge of each county in which said employer is located or does business, said notice to be recorded by the judge of probate for which he shall receive the usual fee for recording con — 708 — veyances, and copies thereof to be posted at the places of business of said employers and provided further, that said employers who have so elected to accept the provisions of articles 1 and 2 of this chapter may at any time withdraw the acceptance by giving like notice of withdrawal. In no event nor under any circumstances shall articles 1 and 2 of this chapter apply to farmers and their employees. (1939, p. 1036, § 2, appvd. July 10, 1940.)” “Section 270. If both employer and employee shall, by agreement, expressed or implied, or otherwise as herein provided become subject to this article, compensation, according to the schedules hereinafter contained, shall be paid * * “Section 312. Where the injury or death for which compensation is payable under article 2 of this chapter was caused under circumstances also creating a legal liability for damages on the part of any party other than the employer * * * the employee * * * may bring an action against such other party to recover damages for such injury * * *. If the injured employee * * * recover damages against such other party the amount of such damages so recovered and collected shall be credited upon the liability of the employer for compensation, and if such damages * * * should be in excess of the compensation payable * * * there shall be no further liability on the employer to pay compensation * * *, and the employer shall be entitled to reimbursement for the amount of compensation theretofore paid * * Our discussion of the statutes involved has been appreciably shortened by the concession of appellee in brief that the first sentence of Section 263 excepts from the provisions of the Workmen’s Compensation law employees of common carriers doing interstate business while engaged in interstate commerce. Thus, appellant, under the stipulation and by Section 263 was not eligible for Workmen’s Compensation. However, appellee contends that Section 270 provides conditions by which Steele and his employer may remove or nullify the exception of Section 263 and qualify for coverage by the Act. The conditions of Section 270 referred to for the removal of disqualification under Section 263, is “by agreement, expressed or implied.” It appears that the questions presented, after concession by appellee, are: (1) Though specifically disqualified from application of the Workmen’s Compensation Act by Section 263, does Section 270 allow an employee of a common carrier, while engaged in interstate commerce to remove such disqualification by agreement with his employer, either express or implied ? (2) Does acceptance and retention of payments from the employers compensation carrier constitute such agreement, express or implied? (3) If the answer to questions 1 and 2 are in the affirmative, do the reimbursement provisions of Section 312 apply? It appears that a negative answer to the first question would dispose of questions 2 and 3. Section 263 as above quoted begins by unqualifiedly stating that the Workmen’s Compensation Act “shall not he construed or held to apply” to certain specified categories of employees and employers. It follows with conditions for acceptance of the provisions of the Act by two categories of those employers disqualified in the beginning. It ends with a categoric denial of application of the Act to farmers and their employees. The last sentence applicable to farmers and their employees is used by appellee to contend that the disqualification of farmers and their employees is more specific than the disqualification of those named in the first sentence. It is argued that it is because those first disqualified are not so strongly disqualified as the lat — 709 — ter, that they are allowed to remove such disqualification by the agreement, express or implied, provided for in Section 270. It is conceded that Section 270 could not apply to farmers or their employees. Appellee submits the decision of the Supreme Court in the case of Ivey v. Dixon Investment Company, 283 Ala. 590, 219 So.2d 639, as support for this position. There is no doubt that the decision in Ivey v. Dixon Investment Company, supra, does hold that the language of the last sentence of Section 263 as to farmers and their employees so clearly expresses the intent and policy of the legislature that it prevents an agreement, express or implied, to become subject to the Act. It appears from the tenor of the opinion in Ivey that there is inferred the wording of the last sentence of Section 263 was given added emphasis over that of the first by the fact that it was added to the section by amendment. Such inference arises by the following statement in the opinion: “The last sentence of Section 263, ‘In no event nor under any circumstances shall articles 1 and 2 of this chapter apply to farmers and their employees,’ was added by Act No. 661, approved July 10, 1940, effective 1 January 1941. See 1939 Acts of Alabama, page 1036.” We must respectfully disagree with the accuracy of that statement. Our research discloses that the last sentence was not added by amendment of the legislature in 1939, but rather has been a part of Section 263 since the origin of the Workmen’s Compensation Act in 1919. General Acts of Alabama 1919, page 208. This inaccuracy does not affect the decision. The change to the section in 1939 was only to reduce the minimum number of employees from 16 to 8. Therefore, any added weight to be given to the last sentence over the first could not come from subsequent amendment. We can find nothing in the legislative journals of 1919 to indicate the reason for the insertion of the last sentence. From some experience with legislative process, we can speculate that it was added by a farm oriented legislature to insure that farmers were not to be affected by the Act and to remove any uncertainty that the category of farm laborer in the first sentence was sufficiently inclusive. The Alabama Workmen’s Compensation Act was largely borrowed from that of Minnesota. The last sentence of Section 263 did not come from the Minnesota Act. Neither was the exclusion of coverage of all common carriers while engaged in interstate commerce a part of the Minnesota law. The exclusion of common carriers in the Minnesota law was only as to common carrier by steam railroad. Section 4268, General Statutes of Minnesota, 1923. We must assume some legislative purpose in such departure from the model act. Another inference contended, raised by Ivey, is based upon the emphasized words in the following quotation: “(2) This language could not be clearer in setting forth the intent and policy of the legislature that farmers and their employees are disqualified from the operation of our Workmen’s Compensation laws, and would prevent an agreement, expressed or implied, between the employer and employee to become subject to the provisions of the Workmen’s Compensation law as may be done in appropriate cases under the provisions of Section 270 of Title 26.” Appellee contends that the meaning of this portion of Ivey is that any employer and employee, other than farmers and their employees, in spite of disqualification by Section 263, may by agreement under Section 270 accept coverage. We cannot agree such to be the result of the above statement from Ivey. We admit to difficulty of explanation arising from the following statement from Ivey: “Section 270, Title 26, provides a method by which those employments excepted in a general way by Section 263, — 710 — may come within the coverage of the Act.” We must consider this statement obiter dictum, as its declaration was not necessary to the issue decided and since Ivey does not refer at any point to the decision of the Supreme Court in the case of Ellison v. Butler, 271 Ala. 399, 124 So.2d 88. It appears to be a common impression that the Workmen’s Compensation law is mandatory as to all employers and employees not specifically excluded therefrom. It is not. It is an elective remedy merely substituted at the election of both employer and employee for other existing remedies under the Employer’s Liability Act and common law. Section 270 does not provide for qualification of those previously disqualified by Section 263, but is merely expressive of conditions precedent to becoming subject to the Act if not disqualified from acceptance. This meaning of Section 270 was clearly pointed out in the following statement in Ellison v. Butler, supra: “(2-5) Petitioner next contends that the Workmen’s Compensation Act is applicable in this case even if there had been no estoppel. This proposition is based upon certain language contained in Section 270, Tit. 26 of the Code, quoted from above, viz: ‘If both employer and employee shall, by agreement, expressed or implied, * * * become subject to this article, compensation, • according to the schedules * * * shall be paid’, etc., and it is argued that the bargaining agreement is just such an agreement as is contemplated in said § 270. This is not a correct interpretation of the quoted part of that statute. It must be borne in mind that the Compensation Act is elective, and to be constitutionally valid must be accepted by both employer and employee. Gentry v. Swann Chem. Co., 234 Ala. 313, 174 So. 530. The language quoted from § 270 is merely the statement of a condition precedent to the substitution of the remedy provided by the Compensation Act for other existing remedies, such as the Employer’s Liability Act or the common law, such condition being that both employer and employee have, as provided by the Act, become subject to it. Section 263 of the chapter expressly excludes employers of less than eight persons unless they affirmatively elect to accept in the manner prescribed by said section. Section 273 creates a presumption that all contracts of employment made after a stated date are made subj ect to the Act unless otherwise expressly stated in the contract or unless notice be given by either party to the other that he does not accept the provisions of the Act. The words ‘all contracts of employment’ are necessarily modified by the exclusionary provision in § 263, and provisions in both §§ 263 and 273 for withdrawal of acceptance by either party. Section 270, by the words ‘agreement, expressed or implied’, simply means an acceptance or election by affirmative action or one implied by law from failure to express nonacceptance as provided by the Act. * * *” If the exclusionary provisions could be eliminated in any manner, they would be removed by the presumption created by Section 273, which provides that all contracts of employment after January 1941 shall be presumed to have been made subject to the provisions of the Act, unless otherwise expressly stated in writing. Such is not the case, for as pointed out in Ivey, the sections of the Act are read in pari materia and as stated in Ellison Sections 273 and 270 are subject to the exclusionary provisions of Section 263. We think it clear that Section 270 does not modify the specific exclusions of Section 263, but is merely declaratory of the elective requirements of the Act. Those employers and employees, not disqualified from election, must by agreement, expressed or implied, or by the presumption of Section 273, elect to accept the provisions of the Workmen’s Compensation law. We have researched the cases since the inception of the Act, and we have found — 711 — no case in this state which has held the Act applicable to any of those excluded by Section 263. Appellee contends that National Cast Iron Pipe Co. v. Higginbottom, 216 Ala. 129, 132, 112 So. 734, holds that a “casual” employee, though excluded by Section 263, by accepting compensation impliedly agreed to come under the Act. He is incorrect. The court there specifically found from the evidence that Higginbottom was not a casual employee, and his employment was not without the usual course of the employer’s business. He was therefore not excluded from accepting the provisions of the Act. Though we hold that an employee of a common carrier doing an interstate business while engaged in interstate commerce cannot elect to be subject to the provisions of the Workmen’s Compensation Act, we do not intend to imply that he and his employer could not elect to be subject to the provisions of the Act for injury occurring in the course of his employment while not engaged in interstate commerce. Birson v. Decatur Transfer & Storage, 271 Ala. 240, 122 So.2d 917; Kasulka v. Louisville & N. R. Co., 213 Ala. 463, 105 So. 187. Since we have decided that appellant Steele could not elect to accept the provisions of the Workmen’s Compensation Act, his retention of payments made under the Act could not imply such election. Thus, question (2), posed hereinabove is answered in the negative. Ivey v. Dixon Investment Co., supra. The third proposition as to whether there is a right of reimbursement of payments made as compensation to Steele by Aetna under the provisions of Section 312, must also be answered in the negative. The right of subrogation granted by Section 312 can only be available to those subject to the provisions of the Act. It is clearly stated that the right extends only to instances where injury or death occurs under circumstances for which compensation is payable under article 2 of the Act. The rights and remedies granted by the Act are available only to those qualified thereunder and are exclusive as to those subject to it. Riley v. Perkins, 282 Ala. 629, 213 So.2d 796. We do not intend to infer that an employer is without a remedy to recover payments intended as compensation paid and accepted under the mistaken belief that there is coverage under the Workmen’s Compensation Act. We presume remedy available at common law. However, as we observed at the beginning of this opinion, appellee Aetna, though framing its action in the form of a common count tried the case in the trial court and conceded on appeal that the remedy pursued was that given under Section 312 of Title 26. Appellee has no remedy under Section 312, and the judgment granted thereon below cannot stand. Reversed and remanded. THAGARD, P. J., dissents.