119 P. 554 | Mont. | 1911
Lead Opinion
delivered the opinion of the court.
The Eleventh Legislative Assembly passed “an Act to create a State Accident Insurance and Total Permanent Disability Fund, for coal miners and employees at coal washers in the state of Montana, and providing for the maintenance and management of the same; extending and defining the duties of the state auditor, and fixing penalties for the violation of the provisions of this Act.” (See Chapter 67, p. 81, Laws of 1909.) In order to understand the Act in detail, it seems advisable to quote it in full. It reads as follows-:
“Section 1. All workmen, laborers and employees employed in and around any coal mines, or in and around any coal washers in which coal is treated, except office employees, superintendents and general managers, shall be insured in accordance with the provisions of this Act, against accidents occurring in the course of their occupations.
“Sec. 2. All corporations, partnerships, associations or persons engaged in the business of operating any coal mine or coal
“Sec. 3. The agent, manager, foreman or accountant of any corporation, partnership, association, person or persons engaged in mining coal in Montana, shall on or before the fifth day succeeding the payday at his respective mine, make report under oath to the state auditor as to the tonnage mined and subject to the payment of one per cent per ton thereon; and stating the gross earnings subject to the one per cent deduction as provided in this Act, accompanied by a certified check in full for the amount of the tax provided in section 2 of this Act. It shall be unlawful for any person, employer, employee, corporation, partnership, association or union to make any contract waiving, avoiding or affecting the full legal effect of this Act.
“See. 4. It is hereby made the duty of the state auditor to receive all moneys as provided for in this Act, and to send the proper acknowledgment to the person making such remittance. The auditor shall pay all moneys so received by him to the state treasurer, who shall keep such sums in safe custody in a distinct fund to be known as the Employers and Employees’ Cooperative Insurance and Total Permanent Disability Fund. The state treasurer must invest the surplus of this fund in safe and convertible state, county or city bonds, or bonds of the United States. All interest accruing from such investments shall be accredited to this insurance fund. The bond of the state treasurer shall be liable for such funds, and it shall be his duty to
“Sec. 5. The auditor of state shall keep full statistics of the operation of this function of his department in the event of death by accident of an employee insured under this Act, who shall have come to his death in the course of his employment and by causes arising therein. The auditor of state upon being satisfied by adequate evidence of such death shall issue a warrant upon the state treasurer to persons dependent upon the deceased, these warrants to issue in the following order: (1) To surviving wife and child, or children, in equal shares, and if neither wife or child, or children be alive, then (2) to surviving parents who are dependent, or partially so, upon the deceased; if none, then (3) to such other relative of the deceased as survive him and are dependent upon him, in the sum of three thousand ($3,000.00) dollars.
“A workman receiving injuries which permanently incapacitate him from the performance of work shall receive a compensation monthly, not to exceed one dollar ($1.00) a day for each working day. Compensation for permanent injury shall not be allowed until after the expiration of twelve weeks from the time such injuries were sustained, provided that the medical practitioner examines and pronounces the injury as being permanent, compensation may then be allowed from commencement of disability. The auditor of state, however, may, when in his judgment he deems it advisable, use so much of the funds as is necessary in the procuring of a medical practitioner, for the purpose of examination or treatment under this Act, for such injuries as herein mentioned compensation shall continué during disability, or until settlement if effected as provided for in section 9 of this Act. Total or permanent disability shall consist of the loss of both legs or both arms, the total loss of eyesight or paralysis, or other conditions incapacitating him from work, caused by accident, or' injuries received during employment as specified by this Act; provided, that if death, as a result of the injury, ensues at a period not longer than one year from date of accident the sum of three thousand dollars
“Sec. 6. Where a workman is entitled to monthly payments under this Act, he shall file with the auditor of state his application for such, together with a certificate from the county physician of the county wherein he resides, attested before a notary public.
“Sec. 7. If any person or persons, company or corporation who is then paying into this insurance fund shall believe that any person or persons are obtaining, or having made application to obtain benefits thereunder improperly or fraudulently, and shall file his written request that such person’s claim be investigated, the state auditor must, upon the receipt of such request request the secretary of the state board of health to make an examination for the purpose of this Act and his certificate as to the condition of the person or persons with reference to their rights to benefit under this Act shall be conclusive evidence as to his condition.
“Sec. 8. If the workman refuses to submit himself to such examination, or in any way obstructs the same, his right to
“Sec. 9. When any monthly payment has been made to a workman for any period whatever, the liability under this Act may, on the application by, or on behalf of the workman, be redeemed by the payment of a lump sum, which in no instance shall be in excess of the amount specified as death indemnity and all monthly payments made prior shall be deducted from such settlement.
“See. 10. The auditor of state shall report in January of each year to the governor of the experience and business of this function of his department, and shall have plenary power to determine all disputed cases which may arise in its administration not herein provided for, and to recommend in his report the rates or premium necessary in order to preserve such fund, and shall order paid such indemnification as herein provided. He shall have power to define the insurance provisions of this Act by regulations not inconsistent therewith and shall prescribe the character of the monthly or other reports required of the parties liable hereunder and the character of the proofs of deaths, or to total permanent disability, and shall have power to make all other orders and rules necessary to carry out the true intent of this Act.
‘ ‘ Sec. 11. No money paid or payable in respect of insurance or monthly compensation under this Act shall be capable of being assigned, charged, taken into execution, or attached, nor shall the same pass to any other person by operation of law; and the acceptance of pecuniary benefit under the provisions of this Act shall operate to release the person or persons, corporation, partnerships, or associations causing such injuries or death for which benefits are so claimed, who shall have paid the assessment provided in section 2 of this Act, and also the employer, officers and agents thereof from all liability and claim arising from such injuries or death. The commencement of a
“See. 12. A manager, agent, foreman, accountant, person or persons who represent any corporation, partnership, association, person or persons, engaged in the mining or management of any coal mines or coal washers in Montana, or person or persons liable for the payment herein provided for, who shall viólate the intent of this Act by inaccurate reports of tonnage of coal produced by them, or the earnings of employees in their employ, or who in any manner hinders or obstructs the auditor of state in ascertaining facts bearing upon any case provided for in this Act or who may refuse correctly to make out such reports as are required by this Act, or as requested by the auditor of state, or submit to its provisions, when liable therefor, or who shall fraudulently obtain benefits hereunder shall be fined for each offense the sum of not less than one hundred ($100.00) dollars nor more than five hundred ($500.00) dollars and imprisonment in the county jail for a period of not less than one month nor more than six months, or by both such fine and imprisonment.
“The proceeds of all fines shall be forwarded to the state treasurer and by him credited to the insurance fund.
“Sec. 13. This Act to be in full force and effect from and after the first day of October, nineteen hundred and ten, benefits to commence four months thereafter.”
On January 25, 1911, an agreed statement of fact was filed in the district court for Lewis and Clark county, as follows:
“Oome now the plaintiff and defendant in the above-entitled action, and present and submit to the above-entitled court the following agreed case, containing the facts upon which this controversy depends, as follows, to wit:
“1. That plaintiff is now, and at all times herein mentioned has been, the duly elected, qualified, and acting state auditor of the state of Montana.
“2. That defendant is, and was at all times herein mentioned,a corporation organized and existing under and by virtue of the laws of the state of New Jersey, and is, and was at all times
“3. That on the 20th day of November, 1910, the monthly wages for the month of October, 1910, of all workmen, laborers, and employees of defendant were paid by defendant.
“4. That during the month of October, 1910, defendant mined from its mines at or near Red Lodge, Montana, and either shipped or sold locally fifty-nine thousand six hundred and fifty-one (59,651) tons of coal.
“5. That the gross monthly earnings of all workmen, laborers and employees employed in and around the coal mines of the defendant, and in and around its coal washers in which coal is treated, except its office employees, superintendents, and general managers, for the month of October, 1910, was the sum of $79,000.47.
‘ ‘ 6. That under the provisions of Chapter 67 of the Eleventh Session Laws of the state of Montana entitled ‘An Act to create a State Accident Insurance and Total Permanent Disability Fund, for coal miners and employees at coal washers in the state of Montana, and providing for the maintenance and management of the same; extending and defining the duties of the state auditor; and fixing penalties for the violation of the provisions of this Act — plaintiff demanded of the defendant one cent per ton on the tonnage of coal mined and either shipped or sold locally by defendant during the month of October, 1910, to wit, the sum of $'596.51, and demanded of the defendant one (1%) per cent of the gross monthly earnings of all workmen, laborers, and employees employed in and around the coal mines of the defendant, and in and around its coal washers in which coal is treated, except its office employees, superintendent, and general managers, for the month of October, 1910, amounting to $790, making a total of $1,386.51; and that defendant has failed and refused to pay said amount, or any part thereof.
“7. That some of the employees of the defendant have protested against the deduction by said defendant of- one (1%)
“8. That if plaintiff is entitled to recover upon this case he will be entitled to interest on the amount of recovery from the 25th day of November, 1910.
“This controversy is submitted upon the foregoing agreed case, under the provisions of sections 7254, 7255, and 7256, Revised Codes of the state of Montana, for the purpose of determining the constitutionality of Chapter 67 of the Eleventh Session Laws of the state of Montana, under the agreed state of facts here presented.”
The district court adjudged that the 'plaintiff, as auditor, have and recover of the defendant the sum of $1,386.51, with interest thereon from the 25th day of November, 1910, together with costs. From that judgment the defendant has appealed.
On the part of the appellant it is contended:
(1) The Act does not amount to an exercise of the police power, so called, because not preventive in its nature, and because it does not serve any of the necessary ends of police legislation.
(2) If the subject were one which could be handled under the police power, so called, the Act is class legislation.
(3) The Act operates to deprive those subject to its terms of their right to trial by jury, guaranteed to them by the federal and state constitutions.
(4) The Act operates to take property without due process of law, and violates the provisions of the federal Constitution, as well as Article III, section 27, of the Constitution of the state of Montana.
(5) In reserving to the employee his right to an action at law, the Act denies to the mine operator the equal protection of the laws.
(6) The provision for payment to an injured employee of his compensation in a lump sum defeats the purpose of the Act itself, viewed as a police regulation.
(8) The Act lodges judicial power in the state auditor.
We shall not endeavor to consider the points raised in the foregoing order, because it will be noted that many of them comprehend, incidentally, questions of law involved in others.
At the outset, it may be stated that the Act, viewed as a whole, presents certain fundamental propositions, novel in this jurisdiction, which, although they have lately been the subject of serious consideration by courts and students of present-day conditions, involving, as they do, grave questions of constitutional law, as well as of economics, are yet so comparatively new in conception that their supposed basic principles have not been recognized as sound by some tribunals and law-writers, and may be said not to have been accepted in their entirety by any court. It will not suffice to say that because the theory or design of the law-making power, as evidenced by the Act, is one which is not only new in principle, but revolutionary of certain preconceived and deeply rooted notions of lawyers, therefore the Act is unconstitutional. Nevertheless, it is the duty of courts to jealously guard the constitutional rights of the citizen.
It is matter of common knowledge, among lawyers and laymen alike, that our present system of compensation for injury or death of an employee, caused by the actual or imputed negligence of his employer, has given rise to conditions which seem to demand an abrogation of that system. This demand is SO' widespread and insistent that we shall do well to inquire into the reasons therefor.
In this state the affirmative defenses of contributory negligence and assumption of risk, including in the latter the negligence of a fellow-servant, are still generally available to the employer. The result is that in many cases the maimed employee, and, in case of his death, his dependents, are obliged to bear the whole burden of misfortune. He or they may suffer the humiliation of becoming public charges, with the consequent additional expense to the taxpayer. The injury or death may have been the result of inevitable accident in the course of the
1. Can this statute be upheld as a proper exercise of the police
Let us first disabuse our minds of the notion that a claim for indemnity under this Act is either a suit, an action, or a cause of action. It is neither. The Act, as distinctly indicated by its title, provides for a state accident insurance and total permanent disability fund for coal miners. By its terms, a method of compensation is provided for injury or death of a coal miner, regardless of the manner in which the injury was inflicted or the death caused. It ignores, and was intended to ignore, any question of fault on the part of either employer or employee. It provides an insurance for persons who have no cause of action at law, and extends its benefits also to those who have a cause of action, if they so elect. But we may, for the moment, disregard the latter consideration, and treat the Act as simply providing indemnity for those who could not successfully prosecute an action in the courts. So regarded, it is essentially extrajudicial in character.
The police power of the state is not to be rigidly defined, or confined to set cases. Mr. Alfred Russell, in his work, Police
For the purposes of this ease, let us turn from its humanitarian features, and suppose for the moment that the sole object of the Act is to prevent persons injured in coal mines, and their dependents, from becoming public charges. Viewed in this light, the private benefits to be derived from the law may be disregarded, and its primary object held to be one of public concern solely. Moreover, it cannot be doubted, we think, that the general welfare of the state and its standing among its sister states, as well as among persons generally, necessarily including those who have money to invest, and those who seek new homes and new locations, depends in a great measure upon its .industries and the class and welfare of its wageworkers. Any measure which tends to minimize indigency, of necessity raises the general standard of the people; any statute which has a tendency to reduce the present enormous expense of operating our courts would seem to be, presumptively, a proper exercise >of the police power. The supreme court of Washington, in State ex rel. Davis-Smith Co. v. Clausen, State Auditor, 117 Pac. 1101, while construing and sustaining a compulsory workman’s ■compensation law (Laws of 1911, Chap. 74), said: “The inquiry ■should be: Is there no reasonable ground to believe that the public safety, health, and general welfare is promoted thereby? It is unnecessary to discuss the origin, nature, or extent of the police power. It is sufficient to say that, by means of it, the legislature exercises a supervision over matters affecting the common weal, and enforces the observance by each individual
Mr. Robert J. Cary, of Chicago, in his brief on the Power of Congress in Respect of Industrial Insurance, at page 51 says: “The body of law involved in the law of torts and employer’s liability statutes pertains entirely to the redress of private wrongs. In such instance, liability results in the payment of damages to the employee intended to be commensurate with, and to reimburse him for, the injury suffered. Such law has for its sole object and end the regulating of private rights. * * * The obligations, on the other hand, of industrial insurance and workmen’s compensation accrue from contingencies not dependent upon or within the control of the parties, and thus have no relation whatever to the conduct of the parties; hence, these obligations are not based upon wrongs. It follows, then, that they must pertain to the subject of government regulations, and are in the nature of economic provisions, taking the form of indirect taxation levied to regulate occupations, for on what other basis would the government be justified in writing into the labor contract, against the will of the parties, an insurance
The supreme court of the United States, in the ease of Lawton v. Steele, 152 U. S. 133, 14 Sup. Ct. 499, 38 L. Ed. 385, used this language: ‘ ‘ The extent and limits of what is known as the police power have been a fruitful source of discussion in the appellate courts- of nearly every state in the Union. It is universally conceded to include everything essential to the public safety, health, and morals, and to justify the destruction or abatement, by summary proceedings, of whatever may be regarded as a public nuisance. Under this power, it has been held that the state may order the destruction of a house falling to decay, or otherwise endangering the lives of passers-by; the demolition of such as are in the path of a conflagration; the slaughter of diseased cattle; the destruction of decayed or unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and other means of public conveyance, and of interments in burial grounds; the restriction of objectionable trades to certain localities; the compulsory vaccination of children; the confinement of the insane, or those affected with contagious diseases; the restraint of vagrants, beggars, and habitual drunkards; the suppression of obscene publications and houses of ill-fame; and the prohibition of gambling-houses and places where intoxicating liquors are sold. Beyond this, however, the state may interfere wherever the public interests demand it, and in this particular a large discretion is necessarily vested in the
In our judgment, the general scheme of this Act is well within the police power of the state. If the people, represented by their legislature, are of opinion that the public interests demand that industrial insurance ought to be substituted, in whole or in part, for actions for wrongs, this court certainly cannot say that they are in error.
2. But it is contended that the Act is an example of class legislation, and several reasons are urged in support of this contention.
The legislature has declared, in effect, that coal mining is a dangerous and extrahazardous business, and we think it is generally known to be so. The court of appeals of New York, in
In the case of Quong Wing v. Kirkendall, 39 Mont. 64, 101 Pac. 250, this court said: “The legislature is presumed to have exercised a reasonable discretion in making the classification, and the courts ought not to interfere with the action of this coordinate branch of the government, until the (party) upon whom rests the burden of proof clearly shows that he is denied the equal protection of the laws. Every intendment is in favor of. the validity of the legislative action. In other words, the classification is presumed to be reasonable.”
The fact that coal mining is alone selected from numerous other dangerous employments is not at all significant. Legislation of this character is in its infancy, and if it be found adequate to correct the evils growing ou,t of the present system, it may gradually be extended to apply to all extrahazardous em
3. Before proceeding to discuss the other questions involved, it may be well to fix the status of the parties to whom the Act applies, to-wit, operators of and employees in coal mines, as indicated by the Act itself. We hold to the following propositions :
(1) That the right to exercise police authority as such over the operator arises, in part at least, from the fact that he is
(2) The exercise of the police power is properly and neces- • sarily supplemented by the taxing power of the commonwealth, in order to carry the general plan into practical effect. Or,
Beyond doubt there can be no lawful tax which is not laid
The supreme court of Wisconsin, in Brodhead v. City of Milwaukee, 19 Wis. 658, 88 Am. Dec. 711, held that a tax imposed for the payment of bounties to volunteers who might enlist in the service of the United States during the Civil War was for. a public purpose. Mr. Chief Justice Dixon said: “The objects
The supreme court of Connecticut, speaking to the same subject, in Booth v. Town of Woodbury, 32 Conn. 118, said: “In the first place, if it be conceded that it is not competent for the legislative power to make a gift of the common property, or of a sum of money to be raised by taxation, where no possible public benefit, direct or indirect, can be derived therefrom, such exercise of the legislative power must be of an extraordinary character to justify the interference of the judiciary; and this is not the ease. Second, if there be the least possibility that making the gift will be promotive in any degree of the public welfare, it becomes a question of policy, and not of natural justice, and the determination of the legislature is conclusive. Such gifts to unfortunate classes of society, as the indigent blind, the deaf and dumb, or insane, or grants to particular colleges or schools, or grants of pensions, swords or other mementos for past services, involving the general good indirectly and in slight degree, are frequently made and never questioned. ’ ’
Judge Cooley, in his Constitutional Limitations (7th ed., p. 698), says this: “Not only are certain expenditures absolutely essential to the continued existence of the government and the
No one has ever thought to question the power of the legislature to erect memorials to certain distinguished citizens of Montana who have passed away. The erection of these memorials was actuated entirely by sentiment, but who shall deny that their contemplation has a tendency to raise, or at least to maintain, our general standard of citizenship?
The fact that the Act operates to the direct benefit of the injured employee or his dependents does not of itself characterize the measure as one for private purposes only. We think the considerations to which we have heretofore adverted demonstrate that the provisions of the Act disclose the fact that its enactment may have been so far a matter of public concern, involving the general good and welfare, that the legislature, in carrying forward the policy of the state, directed by a clearly defined, dominant public opinion, was warranted in declaring, by implication, that the purpose for which the tax is imposed is a public one. This being so, the courts have no power to declare otherwise.
4. Is the right to trial by jury denied? Article VII of the-amendments to the Constitution of the United States does not
The right of trial by jury, which is secured and protected by' the Constitution, refers to the trial of eases, actions, or suits at
5. This brings us to the question, Does the system and machinery provided in the Act constitute due process of law?
The phrase “due process of law” does not necessarily mean by
6. The contention that the provision for payment to an injured employee of his compensation in a lump sum defeats the purpose
7. Again, it is argued the Act does not differentiate between a careful and a careless employer. We think this argument is
8. But, it is said, the Act lodges judicial power in the state auditor. What has heretofore been said applies in large measure
It may be, considering the novel character of this legislation, that the auditor will encounter some slight obstacles in performing his duties. The difficulties which he may thus meet, however, will relate more to the details of administration than to any fundamental defect in the Act itself, and, we have no doubt, may be to a great extent minimized by the promulgation of reasonable rules and regulations for the conduct of his office, as well as for the guidance of contributors to and claimants against the fund. After all, such considerations are pre-eminently for the legislative branch of the government to deal with. Possibly time and experience will demonstrate that amendments to or changes in the Act will be advisable; but, as was well said by the supreme court of Washington, in the Clausen Case, supra: ‘ ‘ The courts cannot do otherwise than put it to the test of practice. ” If we are correct in our former conclusions that the Act affords due process of law, and the right of trial by jury has not been violated, then it seems clear that any controversy which may arise concerning the mere administrative duty of collecting and distributing the fund may be decided in such summary manner as the state shall prescribe. To again quote from Mr. Cary’s able brief (page 134): “The government may prescribe summary methods of adjudication through its administrative-officers whose decisions shall be conclusive; or it may provide, as was suggested in Den v. Hoboken Land & Improvement Co., that the controversy shall take a judicial form, and be determined by such remedial procedure as the government shall create for this purpose.” Regarded as an Act to provide a fund for the benefit of certain employees and their dependents, who would otherwise be remediless, we have no doubt that it is within the power of the legislative assembly to intrust the administration of the fund to such official as it may see fit.
The fact that one who has a cause of action at common law may elect to take under the Act, and the suggestion that as to him the auditor may be called upon to exercise judicial power, has no persuasive force when we consider that such election is
9. Contention No. 5, supra, has been reserved for final consideration, for the reason that, while the question raised thereby
The manner in which the equal protection of the laws shall be afforded to the operator is, of course, for the legislative body to determine; but some method must assuredly be provided to protect him from double payments. The Act in its present form is, in this regard, so repugnant to all ideas of equity and equality that it must, we think, appeal to every right-thinking person,, on the most cursory examination, as unjust. It was to guard against such legislation as this, as we apprehend, that the framers of all American constitutions guaranteed to the citizen the equal protection of the laws.
Reversed and remanded.
Concurrence Opinion
I concur in the result but prefer not to express an opinion at this time upon some of the questions discussed, as I do not deem a determination of them necessary to a decision of the case presented.