WASHINGTON SUPREME COURT.

(Department No. 2.)

HORACE E. PEET, Appt.,

V.

E. M. MILLS, Respt.

(76 Wash. 437, 136 Pac. 685.)

Master and servant workmen's compensation act — effect on employee's right of action against third person. 1. Any right of action which an injured employee might otherwise have had for negligence, either against his employer or against a third person, must be considered as having been abolished by a workmen's compensation act which imposes upon the industries within its purview the burden arising out of injuries to their employees, and to that end withdraws all phases of the premises from private controversy, regardless of questions of fault, and to the exclusion of every other remedy, proceeding, and compensation, except as provided

in the act.

The facts are stated in the opinion. Messrs. Charles P. Spooner and George R. Biddle, for appellant:

The right sought to be enforced here is one existing at common law, and without the aid of legislation, and a statute in derogation of such common-law rights should be strictly construed.

Hays v. Miller, 1 Wash. Terr. 143; Thurston County v. Sisters of Charity, 14 Wash. 264, 44 Pac. 252; Seattle v. Fidelity Trust Co. 22 Wash. 154, 60 Pac. 133; State ex rel. Atty. Gen. v. Superior Ct. 36 Wash.

381, 78 Pac. 1011.

The title of the act is not broad enough to permit the body of the act to contain Note. As to rights and remedies under compensation acts where injuries caused by negligence of third person, see annotation following this case, post, 360.

were

such a provision as would abolish plaintiff's right of action.

State v. Merchant, 48 Wash. 69, 92 Pac. 890; Blalock v. Condon, 51 Wash. 608, 99 Pac. 733; State ex rel. Arnold v. Mitchell, 55 Wash. 513, 104 Pac. 791; State v. Tieman, 32 Wash. 294, 98 Am. St. Rep. 854, 73 Pac. 375; State v. Poole, 42 Wash. 192, 84 Pac. 727; State ex rel. Matson v. Superior Ct. 42 Wash. 491, 85 Pac. 264.

Messrs. Kerr & McCord and J. N. Hamill, for respondent:

A statute should always be construed with reference to its object, so that the intention of the legislature would be given effect.

State ex rel. Oregon R. & Nav. Co. v. Clausen, 63 Wash. 535, 116 Pac. 7; State V. Stewart, 52 Wash. 61, 100 Pac. 153, 17 Ann. Cas. 411; 36 Cyc. 1173.

When a new right is created by a statute which provides a method in which the right may be enforced, the method thus provided is the only one which can be pursued.

Pollock v. Eastern R. Co. 124 Mass. 158. Where the parties are operating under the act, the injured employee, and his dependents in case of his death, are compelled to accept compensation from the insurance fund in the manner provided.

State ex rel. Yaple v. Creamer, 85 Ohio St. 349, 39 L.R.A. (N.S.) 694, 97 N. E. 602.

Messrs. H. V. Tanner, Attorney General and S. H. Kelleran, Assistant Attorney General, amici curiæ.

Morris, J., delivered the opinion of the court:

By this appeal we are again called upon to review the workmen's compensation act of 1911 (Laws 1911, chap. 74, p. 345; 3 Rem. & Bal. Code, §§ 6604-1 et seq.) under appellant's contention that the act is applicable only where recovery is sought upon the ground of negligence of the employer. The facts upon which appellant predicates his right of action are these: On January 22, 1912, while in the employ of the Seattle, Renton, & Southern Railway Company as motorman, he was injured in a collision between two of the railway company's trains. Respondent was then the sought to hold him personally responsible president of the railway company, and it is for the injuries because of the allegations that, when he assumed the control and management of the railway company, it was equipped with a block signal system for use in foggy weather, which respondent negligently failed to operate; and that, when complaint was made by the train operators of the great danger of operating the trains

without the aid of the block signals, a promise was made by respondent to have the block signals working during foggy weather, which promise respondent failed to keep, and as a consequence of his negligence in so failing appellant was injured. The court below sustained a demurrer to the complaint, and, appellant electing to stand upon his complaint, the action was dismissed, and this appeal taken.

It is the contention of appellant, conceding he was at the time of his injury a "workman" within the meaning of the act, and that as such he has no right of action against the railway company, his employer, that the act in no way infringes upon his right of action against respondent, because: (1) The act itself is in derogation of the common law, and, since it does not expressly abolish the doctrine of negligence as a ground of recovery except as against employers, it should be strictly construed; (2) even though it be admitted that the body of the act is in itself sufficient to abolish negligence as a ground of recovery of damages against all persons within the scope of the act, the title to the act is not broad enough to include such abolition as against anyone except employers. Our recent discussion of the workmen's compensation act of 1911, as found in State ex rel. Davis-Smith Co. v. Clausen, 65 Wash. 156, 37 L.R.A. (N.S.) 466, 117 Pac. 1101, 2 N. C. C. A. 823, 3 N. C. C. A. 599, and State v. Mountain Timber Co. 75 Wash. 581, L.R.A.—, —, 135 Pac. 645, renders unnecessary any further review of the act, except in so far as may be necessary to notice the contentions here raised. The act contains its own declaration of legislative policy, in reciting in § 1 that the common-law system in dealing with actions by employees against employers for injuries received in hazardous employments is inconsistent with the modern industrial conditions, uneconomic, unwise, and unfair, and that as the welfare of the state depends upon its industries, and even more upon the welfare of its workingmen, the state of Washington, in the exercise of its police and sovereign power, declares its policy to withdraw all phases of the premises from private controversy, regardless of questions of fault and to the exclusion of every other remedy, proceeding, or compensation, except as provided in the act, "and to that end all civil actions and civil causes of action for such personal injuries, and all jurisdiction of the courts of the state over such causes, are hereby abolished, except as in this act provided."

It is a well-accepted rule that remedial statutes, seeking the correction of recognized errors and abuses in introducing some

new regulation for the advancement of the public welfare, should be construed with regard to the former law and the defects or evils sought to be cured and the remedy provided; that in so construing such statutes they should be interpreted liberally, to the end that the purpose of the legislature in suppressing the mischief and advancing the remedy be promoted, even to the inclusion of cases within the reason, although outside the letter, of the statute (36 Cyc. 1173); and that in construing the statute courts will look to the old law, the mischief sought to be abolished, and the remedy proposed. State v. Stewart, 52 Wash. 61, 100 Pac. 153, 17 Ann. Cas. 411. Starting with these basic principles, the conclusion is evident that, in the enactment of this new law, the legislature declared it to be the policy of this state that every hazardous industry within the purview of the act should bear the burden arising out of injuries to its employees; and that it was the further policy of the state to do away with the recognized evils attaching to the remedies under existing forms of law, and to substitute a new remedy that should be ample, full, and complete, reaching every injury sustained by any workman while employed in any such industry, regardless of the cause of the injury or the negligence to which it might be attributed. We can conceive of no language the legislature might have employed that would make its purpose and intent more ascertainable than that made use of in the 1st section of the act. To say with appellant that the intent of the act is limited to the abolishment of negligence as a ground of action against an employer only is to overlook and read out of the act and its declaration of principles the economic thought sought to be crystalized into law, that the industry itself was the primal cause of the injury, and, as such, should be made to bear its burdens. The employer and employee as distinctive producing causes are lost sight of in the greater vision, that the industry itself, is the great producing cause, and that the cost of an injury suffered in any industry is just as much a part of the cost of production as the tools, machinery, or material that enter into that production, recognizing no distinction between the injury and destruction of machinery and the injury and destruction of men, in so far as each is a proper charge against the cost of production. The legislature in this act was dealing, not so much with causes of action and remedies, as with this great economic principle that has obtained recognition in these later years, and it sought in the use of language it deemed apt to embody this principle into law. That in so doing the legislative mind

But under the English act, while an injured workman may proceed either against his employer or against the third person whose negligence caused the injury, there cannot be a recovery both of compensation and of damages, and the recovery of one terminates the right to proceed for the other. Mahomed v. Maunsell (1907; C. C.) 124 L. T. Jo. (Eng.) 153, 1 B. W. C. C. 269; Tong v. Great Northern R. Co. (1902; Div. Ct.) 86 L. T. N. S. (Eng.) 802, 66 J. P. 677, 18 Times L. R. 566.

If a workman has received full compensation from his employers his dependents cannot thereafter bring an action based upon fault against the third person whose negligence was alleged to have caused the injury. Gray v. North British R. Co. (1914) 52 Scot. L. R. 144, 8 B. W. C. C. 373.

Where a workman in a colliery also carries on a small farm and while occupied as a collier was injured by the negligence of a third person and recovered compensation from his employer, he cannot thereafter, bring an action for damages against the third party and recover damages for the injury which he had suffered as a farmer although such damages were not included in the compensation. Woodcock v. London & N. W. R. Co. [1913] 3 K. B. (Eng.) 139, 82 L. J. K. B. N. S. 921, 109 L. T. N. S. 253, 29 Times L. R. 566, [1913] W. N. 179, [1913] W. C. & Ins. Rep. 563, 6 B. W. C. C. 471.

Acceptance of a settlement from a third person whose negligence caused the injury prevents the workman from securing compensation against his employer. Cripps's Case (1914) 216 Mass. 586, 104 N. E. 565, Ann. Cas. 1915B, 828.

But an injured workman cannot, by accepting a settlement from a third party whose negligence caused his injury, deprive his widow of her right to compensation, where the workman subsequently dies of his injury. (Mass.) Ibid.

The acceptance by an injured workman of weekly payments from a person other than the employer, who was alleged to be liable for the injury, bars

And the fact that the workman expressly reserved his right to compensation in no wise affects the result. Mulligan v. Dick (1904) 6 Sc. Sess. Cas. 5th Series, 126, 41 Scot. L. R. 77, 11 Scot. L. T. 433; Murray v. North British R. Co. (1904) 6 Sc. Sess. Cas. 5th Series, 540, 41 Scot. L. R. 383, 11 Scot. L. T. 746.

But an employee who, having received one payment under the act without qualifications, which payment was offered voluntarily by the employer, refused to sign any other receipt except subject to the reservation "without prejudice," subject to which other payments had been received, does not exercise the option referred to in the English statute, so as to preclude him from proceeding against other persons liable for the injury. Oliver v. Nautilus Steam Shipping Co. [1903] 2 K. B. (Eng.) 639, 72 L. J. K. B. N. S. 857, 89 L. T. N. S. 318, 19 Times L. R. 697, 52 Week. Rep. 200, 9 Asp. Mar. L. Cas. 436.

And a workman injured by the neglect of a third person, who received compensation from the employer, expressly reserving his right against the third person, and agreeing that if he recovers damages he will reimburse the employer for the amount of compensation received from him, has not "recovered compensation," so as to preclude him from proceeding against the third person in damages. Wright v. Lindsay (1911) 5 B. W. C. C. 31, 49 Scot. L. R. 210.

The findings by the arbitrator that the third person was guilty of negligence will not be disturbed by the court of appeals if there is some evidence to support them. Cutsforth v. Johnson [1913] W. C. & Ins. Rep. (Eng.) 131, 6 B. W. C. C. 28, 108 L. T. N. S. 138.

Under the New Jersey act the employer has no right of subrogation to the claim of the workman against the tort feasor. Newark Paving Co. v. Klotz (1913) 85 N. J. L. 432, 91 Atl. 91, affirmed in 86 N. J. L. 690, 92 Atl. 1068.

Nor can the employer recover from the tort feasor the compensation which he has paid the employee. Interstate Teleph. & Teleg. Co. v. Public Service Electric Co. (1914) 86 N. J. L. 26, 90 Atl. 1062, 5 N. C. C. A. 524.

But under the Massachusetts act the association in which the deceased is insured may enforce the right given to the employee of proceeding for damages against the negligent third person. Turnquist v. Hannon (1914) 219 Mass. 560, 107 N. E. 443. The court said, however, that this right does not amount to the right of equitable subrogation.

While under the English act the employer is entitled to indemnity against any third person whose negligence caused an injury to his workman, for which injury the employer is obliged to pay compensation. Dickson v. Scott [1914] W. C. & Ins. Rep. (Eng.) 67, 30 Times L. R. 256, 7 B. W. C. C. 1007; Daily News v. McNamara & Co. (1913) 7 B. W. C. C. 11.

Fellow servants of an injured workman, whose negligence caused the injury, are liable to indemnify the employer for any compensation which he is required to pay to the injured employee. Lees v. Dunkerley Bros. (1910) 103 L. T. N. S. (Eng.) 467, 55 Sol. Jo. 44; Bate v. Worsey [1912] W. C. Rep. (Eng.) 194, 5 B. W. C. C. 276.

But an employer, however, cannot maintain an action for indemnity against a third person, where the negligence of his own employees, together with that of the third person, caused the injury in question. Cory v. France, F. & Co. [1911] 1 K. B. (Eng.) 114, 80 L. J. K. B. N. S. 341, 103 L. T. N. S. 649, 27 Times L. R. 18, 55 Sol. Jo. 10, 11 Asp. Mar. L. Cas. 499.

In order that the employer may recover indemnity against a third person, the liability of such person to the injured workman must be proven. Kemp v. Darngavil Coal Co. [1909] S. C. 1314, 46 Scot. L. R. 939; Bradley v. Wallaces [1913] 3 K. B. (Eng.) 629, 82 L. J. K. B. N. S. 1074, 109 L. T. N. S. 281, 29 Times L. R. 705, [1913] W. N. 239, [1913] W. C. & Ins. Rep. 620, 6 B. W. C. C. 706; Lankester v. MillerHetherington (1910) 4 B. W. C. C. (Eng.) 80.

In one case, however, in which the workman had been killed, it was held that the negligent third person was liable to indemnify the employer for the compensation which he was obliged to pay to the workman's dependent, although such dependent, being an illegitimate daughter, could not of herself have had any cause of action against the negligent person. Smith's Dock Co. v. Readhead [1912] 2 K. B. (Eng.) 323, 81 L. J. K. B. N. S. 808, 106 L. T. N. S. 843, 28 Times L. R. 397, [1912] W. C. Rep. 217, 5 B. W. C. C. 449, [1912] W. N. 131.

In order to recover indemnity from a negligent third person, the liability of the employer to pay compensation need not be established by the award of an arbitrator. Thompson v. North Eastern Marine Engineering Co. [1903] 1 K. B. (Eng.) 428, 72 L. J. K. B. N. S. 222, 88 L. T. N. S. 239, 19 Times L. R. 206 (employer recovered compensation paid after receiving notice of the accident and of the claim for compensation, but before the other proceedings had been taken).

In an action in rem against a German vessel brought by the owners of an Irish vessel injured by a collision between the two, the owners of the latter vessel cannot include in the damages the amount paid in payment for compensation for injury from fright before the collision took place. See The Rigel (1912; Adm.) 106 L. T. N. S. (Eng.) 648, [1912] W. N. 56, 28 Times L. R. 251, L. R. [1912] P. 99, 81 L. J. Prob. N. S. 86.

Costs of the compensation proceedings, as well as the compensation awarded, may be recovered as an indemnity by the employer against the negligent third person. Great Northern R. Co. v. Whitehead (1902) 18 Times L. R. (Eng.) 816.

An employee under the Wisconsin act may assign the right of action which he has against the negligent third person, and the assignee may sue thereon in his own name. McGarvey v. Independent Oil & Grease Co. (1914) 156 Wis. 580, 146 N. W. 895, 5 N. C. C. A. 903.

The right of action which an employee has against the third person whose negligence caused his injury passes, in the case of the death of the employee, to his administrator. Turnquist v. Hannon (1914) 219 Mass. 560, 107 N. E. 443.

Under the English statute the notice required by rule 19 must be served in an action for indemnity, although the defendant was a party to the compensation proceedings. Howard v. Driver (1903) 5 W. C. C. (Eng.) 153; Appleby v. Horseley Co. [1899] 2 Q. B. (Eng.) 521, 80 L. T. N. S. 853, 68 L. J. Q. B. N. S. 892, 47 Week. Rep. 614, 15 Times L. R. 410.

But an employer may, if he chooses, bring an action for indemnity under § 6, subsection 2, independently of the general rule as to third party procedure. Nettleingham & Co. v. Powell [1913] 3 K. B. (Eng.) 209, 82 L. J. K. B. N. S. 911, 108 L. T. N. S. 912, 29 Times L. R. 578, 57 Sol. Jo. 593, 6 B. W. C. C. 479, [1913] W. C. & Ins. Rep. 424.

W. M. G.