VAN ZANDT v. SWEET. (Civ. 3569.)

(District Court of Appeal, Second District, Division 2, California. Jan. 13, 1922.)

204 Pacific Reporter 860.

1. MASTER AND SERVANT-RIGHT OF ACTION AGAINST WRONGDOER NOT DEFEATED BY COMPENSATION.

An injured employee has a right of action under Workmen's Compensation Law, § 26, as amended in 1919, against a third party causing injury, though he has received compensation from his employer's insurance carrier.

(For other cases, see Insurance, Dec. Dig. § 354.)

2. MASTER AND SERVANT-NOTICE TO COMPENSATION INSURER NOT CONDITION PRECEDENT TO EMPLOYEE'S ACTION AGAINST WRONGDOER.

The notice of action to the employer or to his insurance carrier required of the employee by Workmen's Compensation Law, § 26, is not an essential ingredient of the employee's cause of action against a negligent third person, nor a condition precedent to the employee's right to bring the action, and through failure to give notice to the employer or to his insurance carrier, subrogated to the employer's rights by section 30, subd. "f" may be ground for continuance, it is not ground for nonsuit or a verdict for defendant, if a nonsuit is the proper procedure.

(For other cases, see Master and Servant, Dec. Dig. § 398.)

Appeal from Superior Court, Los Angeles County; Louis W. Myers, Judge.

Action by John I. Van Zandt against E. W. Sweet. Judgment for plaintiff, and defendant appeals. Affirmed.

W. I. Gilbert, of Los Angeles, for appellant.

Chas. J. Kelly, of Los Angeles, D. A. Stuart, I. B. Benjamin, A. L. Abrahams, and P. B. D'Orr, all of Los Angeles, for respondent.

FINLAYSON, P. J. This is an action for damages for personal injuries sustained by plaintiff in a collision with an automobile driven by defendant. The jury returned a verdict in plaintiff's favor, and from a judgment entered thereon the defendant appeals.

At the time of the accident, August 28, 1919, plaintiff was in the the service of an employer who had been insured by the state compensation insurance fund against liability for compensation to an employee. During plaintiff's cross-examination the fact was brought out that he . had made application to the Industrial Accident Commission for compensation under the Workmen's Compensation Law (St. 1917, p. 831), and that he had been paid such compensation by his employer's insurance carrier, the state compensation insurance fund. Thereupon defendant moved the court for a nonsuit on the ground that plaintiff had received compensation under the Workmen's Compensation Law. The motion was denied. Later, and after both parties had introduced their evidence and rested, defendant requested the court to peremptorily instruct the jury to return a verdict for defendant. The requested instruction was denied. This request for a peremptory instruction was made for the same reeson that the motion for a nonsuit was made, namely, for the reason that, on his own showing plaintiff had received compensation under the Workmen's Compensation Law. The sole point made on this appeal is that the

trial court erred in denying defendant's motion for a nonsuit, and likewise in denying his request for such peremptory instruction.

[1] Without doubt, plaintiff, under the Workmen's Compensation Law in force at the time of the accident-the act of 1917, as amended by the act of 1919 (St. 1919, p. 910)—had a right of action against this defendant for damages arising out of his injuries, notwithstanding the receipt of compensation from his employer's insurance carrier. Such right of action is expressly recognized by section 26 of the act, which, so far as it is applicable to this particular point, reads:

"The claim of an employee for compensation [under the Workmen's Compensation Law] shall not affect his right of action for damages arising out of injury * against any person other than the employer."

* *

Such right of action against a third party causing the injury was possessed by the injured employee under the original Workmen's Compensation Law. The act of 1913 (St. 1913, p. 279). Stackpole v, Pacific Gas & Electric Co., 181 Cal. 700, 186 Pac. 354; Bassot v. United Railroads of San Francisco, 39 Cal. App. 60, 177 Pac. 884; Hall v. Southern Pacific Co., 40 Cal. App. 39, 180 Pac. 20. If such right existed under the act of 1913, there is much stronger reason for holding that it exists under the present act, the act in force when this accident occurred; for as we have shown, the right is expressly recognized by the latter act.

[2] The gravamen of appellant's argument in this court appears to be grounded upon the assumption that plaintiff did not comply with that provision of the act which requires the employee to give notice of the action to his employer or to the latter's insurance carrier. Section 26 of the present act, after stating that the claim of an employee for compensation under the act shall not affect his right of action for damages against a person other than his employer, and after providing that if the employer has paid or become obligated to pay compensation under the act he likewise may bring an action against such third person to recover the damages, proceeds as follows:

"If either such employee or such employer shall bring such action against such third person, he shall forthwith notify the other in writing. by personal service or registered mail, of such fact and of the name of the court in which such suit is brought, filing proof thereof in such action, and, if the action be brought by either, the other may, at any time before trial on the facts, join as party plaintiff or must consolidate his action, if brought independently."

The act also provides (section 30, subd. "f") that if an insurance carrier shall have paid any compensation for which the employer is liable, such insurance carrier shall be subrogated to all the rights of the employer, and may enforce any such rights in its own name.

In no part of the record to which our attention has been called by the briefs on file does it appear that plaintiff, the employee, failed to give to his employer, or to the latter's insurance carrier, the notice required of plaintiff by the above-quoted. provision of the act. We do not concede that a failure so to notify the employer or his insurance carrier would constitute a ground for a nonsuit or justify a peremptory instruction to the jury to return a verdict for the defendant. On the contrary, it would seem that, while a failure to give the prescribed notice would be ground for a continuance of the case until such time as the notice should be given, a nonsuit or a verdict for the defendant would not be warranted by such failure to notify the employer or his insurance carrier. The notice to the employer, or to his insurance carrier, is not an essential ingredient of the employee's cause of action against the negligent third party. It is not something to be done as a condition precedent to the employee's right to bring the action. However,..without deciding whether a nonsuit or a peremptory instruction to find for the defendant is the proper procedure where the plaintiff has failed to give the prescribed notice, suffice it to say that, since every intendment is in favor

of the regularity of the proceedings in the court below, we must assume, in the absence of some affirmative showing to the contrary, that plaintiff did notify his employer's insurance carrier, in writing, by personal service or by registered mail, of the fact that he had brought the action in the superior court for Los Angeles county.

[3] The appeal is so manifestly destitute of merit that we are unable to perceive any reason for it, other than a desire for vexation and delay. It is therefore a proper case for the imposition of a penalty.

The judgment is affirmed, and it is ordered that respondent recover of appellant the sum of $100 as damages on account of the appeal and his costs.

We concur: Works, J.; Craig, J.

STONG, STATE TREASURER, v. INDUSTRIAL COMMISSION OF STATE OF COLORADO. (No. 10236.)

(Supreme Court of Colorado. Feb. 20, 1922.)

204 Pacific Reporter, 892.

3. MASTER AND SERVANT-STATE. TREASURER MUST OBEY DIRECTIONS TO INVEST COMPENSATION FUND.

Under Workmen's Compensation Act, § 141, authorizing the Industrial Commission to direct the state treasurer to invest the state compensation insurance fund, the treasurer is required to obey the Commission's directions.

(For other cases, see Master and Servant, Dec. Dig. § 383.)

5. MASTER AND SERVANT COMPENSATION ACT PROVISION FOR INVESTMENT OF COMPENSATION FUND CONSTITUTIONAL.

Workmen's Compensation Act, § 141, authorizing the Industrial Commission to direct the state treasurer to invest the compensation insurance fund, is not in violation of Const. art. 10, § 12, and article 5, § 33, as taking away the treasurer's constitutional power over the state money, because the fund is not the general property of the state and its custody is no part of the constitutional duty of the treasurer, but he is made custodian of the fund which is not in the treasury of the state within Laws 1913, pp. 580, 582, §§ 1, 4.

(For other cases, see Master and Servant, Dec. Dig. § 347.)

En Banc.

Error to District Court, City and County of Denver; Charles C. Butler, Judge.

Mandamus by the Industrial Commission of the State of Colorado to require Arthur M. Stong, State Treasurer, to invest a portion of the state compensation insurance fund in United States bonds. From an order granting a peremptory writ, the treasurèr brings error. Affirmed.

Victor E. Keyes, Atty. Gen., Charles Roach, Deputy Atty. Gen., B. M. McMullen, Asst. Atty. Gen., A. M. Stevenson, and George A. Carlson, all of Denver, for plaintiff in error.

H. E. Curran, W. F. Mowry, and Charles H. Small, all of Denver, for defendant in error.

DENISON, J. The district court, upon the relation of the Industrial Commission, granted a peremptory mandamus, requiring Stong, state treasurer, to invest $200,000 of the state compensation insurance fund in United States bonds. He brings error.

The statute (S. L. 1919, c. 210), contains the following:

"Sec. 123. The Commission is hereby vested with full power, authority and jurisdiction over the state compensation insurance fund and may do and perform any and all things, whether herein specifically designated or in addition thereto, which are necessary or convenient in the exercise of any power, authority or jurisdiction over said fund in the administration thereof under the provisions of this act, as fully and completely as the governing body of a private insurance company might or could do, subject, however, to all the provisions of this act."

"Sec. 140. The state treasurer shall be the custodian of the state compensation insurance fund and all disbursements there from shall be paid by him upon warrants of the state auditor upon vouchers issued by the Commission and the state auditor is hereby authorized and directed to draw warrants upon the state compensation insurance fund for payment thereof, upon order of the Commission.

"Sec. 141. The Commission shall in writing authorize and direct the state treasurer to invest any portion of the state compensation insurance fund which in the judgment of the Commission is not needed for immediate use. Said fund, including its surplus and reserves or any portion thereof, may be invested in any warrants or bonds of the state of Colorado or of the United States of America at market price, as may be determined by the Commission. Upon the direction of the Commission, with the approval of the state auditing board, the state treasurer shall sell or dispose of such portion of the investments of said fund at market price, as may be directed."

* * *

The Commission directed the treasurer to invest in United States bonds, but he disobeyed and invested in state warrants.

In this court the plaintiff in error makes four points:

[1] 1. He says that the petition neither alleges nor shows that the relator had no remedy at law.

The brief suggests an action for damages could be brought on the bond of the treasurer as custodian of the fund, and so mandamus will not lie. The conclusion necessitates the premise that no public officer who has given a bond can be compelled to do his duty. Such is not the law. Bell v. Thomas, 49 Colo. 76, 111 Pac. 76, 31 L. R. A. (N. S.) 664. [2] 2. Plaintiff in error says:

"It affirmatively appears from the petition that the plaintiff in error is not directed by law to perform the act complained of."

[3] It is immaterial what the petition shows the law to be. We look to the statute for that. In support of this second proposition, however, it is urged that section 141 merely gives the Commission power to direct and does not require the treasurer to obey. We think such an argument requires no answer.

[4] 3. It is said that the act required involves the exercise of skill, judgment, and discretion and is not a ministerial act.. We cannot agree to this proposition.

The language is plain and incapable of two constructions. Full control of the fund is given to the Commission; the custodian is authorized to do nothing with it except upon their order, and his investment of it is restricted to "warrants or bonds of the state of Colorado, or of the United States of America at market price, as may be determined by the Commission.' The custodian is as much under the control of the words "as may be determined by the Commission" as by what precedes them. Nothing is required of the treasurer by the statute but to obey the Commission and invest as directed at the market price.. It is enough here to

cite Kendall v. U. S., 12 Pet. 524, 9 L. Ed. 1181, and People v. Higgins, 69 Colo. 79, 84, 85, 168 Pac. 740.

[5] 4. It is claimed that section 141, if construed as above, violates article 10, § 12, and article 5, § 33, of the Constitution.

The argument is that the power of the treasurer over the state money is constitutional and so cannot be taken from him by the General Assembly. This, without decision, may be conceded; and we also pass over the power given to the Legislature by said section 12 to regulate "the safe-keeping and management of the public funds in the hands of the treasurer"; yet the Constitution is not violated, because the fund in question is not the general property of the state, and its custody is no part of the treasurer's constitutional duty, but is conferred on him by statute only. The fund is not "creditable to the general revenue of the state" and is "designated for purposes other than such general revenue," and so is not in the treasury of the state. S. L. 1913, p. 580, § 1, and page 582, § 4. The treasurer, eo nomine, is made custodian of it, but gives a special bond, and anybody else, e. g., the Industrial Commission itself might have been and many hereafter be made such custodian and when the Legislature sees fit.

Judgment affirmed.

Scott C. J., not participating.

FRASCA v. CITY COAL CO. et al.

(Supreme Court of Errors of Connecticut. Feb. 21, 1922.)

116 Atlantic Reporter, 189.

1. MASTER AND SERVANT-ALIEN "EMPLOYEE" WITHIN COMPENSATION ACT.

An alien of any nationality is an "employee" within the Workmen's Compensation Act (Gen. St. 1918, § 5388).

(For other cases, see Master and Servant, Dec. Dig. § 361.)

(For other definitions, see Words and Phrases, First and Second Series, Employee.)

2. MASTER AND SERVANT-COMPENSATION ACT ELECTIVE.. No person is compelled to submit to the provisions of the Workmen's Compensation Act, and may indicate his refusal by written stipulation or by notice prescribed by Gen. St. 1918, § 5342.

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

3. MASTER AND SERVANT-COMPENSATION ACT PART OF CONTRACT OF EMPLOMENT.

Provisions of the Workmen's Compensation Act become a part of the contract of employment, and the parties are bound by them, under Gen. St. 1918, § 5342.

(For other cases, see Master and Servant, Dec. Dig. § 346.)

5. MASTER AND SERVANT-TREATIES-WORKMEN'S COMPENSATION ACT HELD NOT TO VIOLATE TREATY WITH ITALY.

The provision of the Workmen's Compensation Act (Gen. St. 1918, § 5350) which limits the compensation to be paid to alien dependents to