McLemore v. Western Union Tel. Co.

171 P. 390 | Or. | 1918

Lead Opinion

McCAMANT, J.

1. It is contended that the plan promulgated by the defendant should be treated like a policy of life insurance and construed strictly against defendant. This contention is supported by Western Union Tel. Co. v. Hughes, 228 Fed. 885 (143 C. C. A. 283). We are committed to such strict construction in the case of a life insurance policy: Stringham v. Mutual Ins. Co., 44 Or. 447, 448 (75 Pac. 822). This is not an action on a life insurance policy. The defendant is not a life underwriter, but a telegraph company. Its promulgation of the plan under which this action is brought is differentiated from an ordinary transaction in the commercial world. The protection and benefits assured by the defendant to its employees impose upon the defendant a burden greater than any exacted from employers by the law in its present state of development. The fund from which these benefits are paid is created and maintained by the defendant; there is no provision for deductions from the wages of the employees for the benefit of the fund. A plan of this character voluntarily promulgated by a large employer of labor should not be extended by the courts so as to embrace cases falling without the intent of the author of the plan as manifested by a fair and just construction of the language used. These principles of construction seem to be applied by the appellate division of the Supreme Court of New York in McNevin v. Solvay Process Co., 32 App. Div. 610 (53 N. Y. Supp. 98), a case affirmed by the Court of Appeals: 167 N. Y. 530.

2. It is contended that the plan is a mere benefaction and that the evidence fails to sustain the charge in the complaint that it constitutes a contract made by the defendant with its employees. It is provided in Article 8, Section 1:

“All employees of the Company on January 1, 1913, or thereafter shall be entitled to insurance against death by accident occurring in and due to the performance of work for the Company.”

The plan, containing this offer, was brought to the attention of all employees. The language used imports a right in the employee to the protection specified. The statement in Section 20 of Article 9 that claims for death benefits will be payable at a time .stated implies an obligation of the defendant to make such payments. Section 28 of Article 9 quoted above clearly implies the creation of a right under the plan which may be asserted or waived at the election of the employees. In effect, the defendant said to its employees :

“If you remain in the discharge of your duties, those dependent upon you shall be entitled to benefits in the event of your death, to the extent of the sums specified in this plan.”

Plaintiff’s husband did remain in defendant’s employ and lost his life while in the performance of his duties. We find here all the elements of a contract.

“Where the offer is to do something if the offeree will not merely promise to do, but do, something, compliance with the condition of the offer by doing the act in the way prescribed is ordinarily sufficient evidence of the acceptor’s'assent”: 13 C. J. 284.

We are committed to the foregoing principle by Fisk v. Henarie, 13 Or. 156, 168 (9 Pac. 322). Plaintiff’s husband must be deemed to have accepted the plan offered and his services rendered subsequent to the • promulgation of the plan are a sufficient consideration to support the defendant’s promise to pay. While this question is not discussed in Western Union Tel. Co. v. Hughes, 228 Fed. 885 (143 C. C. A. 283), the effect of the opinion is to decide that the plan offered by the defendant constitutes a contract with its employees on which an action may be maintained. In McNevin v. Solvay Process Co., 32 App. Div. 610, 617, the defendant admitted that a similar scheme to that with which we are concerned constituted a contract between employer and employees.

3-5.. Under Article 11 of the plan,

“the obligation of the Company is limited: * * Third: To the appointment of a Committee to administer the Fund according to these Regulations. Fourth: To making payments out of the Fund upon the order of the Committee.”

It is neither alleged nor proved that' the committee has acted on plaintiff’s claim and defendant contends that for this reason plaintiff’s suit cannot be maintained. Defendant relies on Legg v. Swift & Co., 167 Mo. App. 427 (151 S. W. 230), and McNevin v. Solvay Process Co., 32 App. Div. 610 (53 N. Y. Supp. 98). In the first of these cases plaintiff’s claim was not against the defendant, but against an association organized at the instance of the defendant for the protection of defendant’s employees. The fund was created wholly by deductions from the wages of the employees and the defendant was merely the treasurer of the fund. A demurrer to the petition was sustained in the lower court and this action was affirmed. In the case at bar the contract of the deceased was with the defendant and plaintiff’s claim if valid at all is against defendant. In McNevin v. Solvay Process Co. the plan provided that the funds available should be and remain the sole property of defendant until paid over to the employee and that in no case could an employee demand payment except when the defendant through its trustees should adjudge him entitled thereto. The defendant’s trustees were entitled under the plan to decide without appeal all questions both of law and of fact. It was held that the employee had no vested right in the fund until payment was made to him.

The functions of the defendant’s committee are by no means so extensive as those of the trustees in the New York ease. It is provided in Section 33 of Article 9 of the plan that ‘ ‘ Questions of fact arising in the administration of these Regulations shall be determined conclusively for all parties by the Committee.” Under this provision it was competent for the defendant to refuse payment of plaintiff’s claim until the facts on which it is based had been determined in her favor by the committee. It has waived this right by admitting in the answer that the facts with reference to the employment of plaintiff’s husband and his accidental death while in defendant’s service are as stated in the complaint. Expressio unius exclusio alterius. The inference is that the committee has no authority to bind either the defendant or one of its employees by any decision on a question of law. It is provided by Section 1 of Article 8, quoted above, that plaintiff’s husband was entitled to life insurance. A right was created subject to the determination of the facts on which the right is dependent in the manner set out in the plan. A fair construction of the plan leads us to the conclusion that when the facts are once determined, either by the action of the committee or by agreement of the parties, a right arises by operation of law which the courts are competent to enforce. The failure of the committee to act on plaintiff’s claim does not bar the maintenance of this action.

6, 7. It is provided in Section 31 of Article 9:

“In the event of the death of an employee no part of the death benefit or unpaid disability shall be due or payable unless and until good and sufficient release shall be delivered to the Committee, of all claims against the Employees’ Benefit Fund as well as against the Company, arising or growing out of the death of the employee, said release having been duly executed by all who might legally assert such claims. ’ ’

"We think that plaintiff should have tendered the release specified above and demanded the sum she claims from the defendant. Such tender should have been alleged in the complaint. In this respect, however, the complaint is aided by the answer. It appears from the defendant’s pleading that such a tender would have been unavailing as the defendant denies all liability to plaintiff. The law does not exact a vain thing. The allegations of the answer excuse the failure of plaintiff to make tender of the release called for by the provision above quoted: Merrill v. Hexter, 52 Or. 138, 144 (94 Pac. 972, 96 Pac. 865); Livesley v. Krebs Hop Co., 57 Or. 352, 367 (97 Pac. 718, 107 Pac. 460, 112 Pac. 1); Woods v. Wikstrom, 67 Or. 581, 601 (135 Pac. 192); Wallowa Lake Amusement Co. v. Hamilton, 70 Or. 433, 447 (142 Pac. 321). It should be noted in this connection that the acceptance by plaintiff of any money from the fund created by defendant operates to discharge defendant from any claim which might otherwise be asserted by plaintiff because of the death of her husband. Such is the express provision of Section 31 of Article 9 of the plan.

8, 9. This brings us to the point on which the case turned in the lower court. Section 32 of Article 9 of the plan provides:

“In case any employee or his beneficiaries shall be entitled under the laws of any State to any compensation, pension or other benefit greater than that herein provided, the amount paid to the employee shall be that prescribed by the statute.”

Plaintiff contends that the entire section of the plan from which the above words are quoted should be disregarded because the author of the plan had in mind compensation laws under which the benefits are paid by the employer and that the Oregon statute, under which the payments are made by the state, is wholly without the scope and purview of this section. We are not favorably impressed with this contention. The fund from which the state makes payments under the act of 1913 is supplied chiefly by contributions made by employers of labor. Most of the payments made to the employees and their beneficiaries are made indirectly by the employers. Giving to the plan the fair construction to which it is entitled, an intention is manifested that it shall be read in the light of the laws of the state in which the employee resides and in which he is injured. If the benefit to which he or his beneficiaries are entitled under the law is greater than the benefit provided by the plan, the larger benefit shall be paid and shall exclude any right to the smaller benefit for which defendant has made provision. If the amount provided by statute is less than that provided by the plan, the company shall pay to the employee or his beneficiaries such sum as, added to the statutory payment, shall equal the sum provided by the plan. At the time when the defendant promulgated its scheme the Oregon statute had not been enacted. The author of the plan was evidently familiar only with compensation laws which provided for payments by the employer directly to the employee. The intention is nevertheless apparent from the language used in Section 32 of Article 9 and it should be given effect as above stated.

10-12. It remains to apply these facts to the instant case. Under the plan plaintiff is entitled to $2,700. Under the statute she is entitled to $30 a month so long as she lives and remains unmarried. If she lives and remains unmarried for as much as eight years,- she will receive under the statute a larger sum than that provided by the plan. If she dies or marries within seven years, the benefit prescribed by the plan is greater than that provided by the statute. She was nineteen years of age at the time of her husband’s death and the record justifies the presumption that she will live 42.87 years. There is no presumption that she will remain unmarried for that period or for eight years.

We have seen that plaintiff is entitled to recover unless her right is barred by the provisions of Section 32 of Article 9 of the plan. Under this section the burden devolves on defendant to show that the benefit provided for plaintiff under the act of 1913 is greater than that provided by the plan. Defendant’s showing is defective for the reason that plaintiff may marry within seven years from the death of her husband. It does not appear from this record that her benefit under the law is greater than that under the plan. Defendant, having failed to show this fact, has failed to make out its defense.. Plaintiff is entitled to judgment for $2,700, less the sum she shall have received from the Industrial Accident Commission at the time when the judgment is entered. In figuring this amount she should not be charged with the sum of $6 a month paid for the care of her child. If the parties are unable to agree as to the credit to which the defendant is entitled, the amount can be determined at a hearing in the Circuit Court.

The judgment is reversed and the cause remanded for further proceedings in accordance with this opinion. Reversed and Remanded.

Modified on Petition for Rehearing.

Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Bean concur.

Former opinion modified April 9, 1918.

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Rehearing

Petitions for Rehearing.

(171 Pae. 1049.)

Messrs. Dolph, Mallory, Simon S Gearin and Mr. Hall S. Lush, for respondent’s petition.

Mr. Virgil A. Grum, for appellant’s petition.

Department 2.

McCAMANT, J.

13. Both parties have petitioned for a rehearing. Their petitions challenge practically every proposition announced in the former opinion. Plaintiff contends that we have given defendant the benefit of a defense not pleaded. The answer sets up the election of defendant to accept the benefits of Chapter 112 of the Laws of 1913; it is charged that' plaintiff filed her claim to compensation under this act March 3, 1915; that the State Treasurer on March 5, 1915, set aside for plaintiff’s benefit a sum of money and

‘ ‘ that ever since the 15th day of March, 1915, the plaintiff has been receiving payments of $30 per month from the moneys set aside for her, and since the 31st day of May, 1915, has been receiving the additional snm of $6 per month on behalf of said child.”

The answer also pleads the stipulations of the plan on which defendant relies. We think that the allegations are sufficient to entitle defendant to the credits allowed it in the former opinion.

14. Plaintiff quarrels with the rule announced for the construction of the plan. Authorities are cited to the effect that a contract is to be most strongly construed against the party drawing it. This principle, as applied to ordinary commercial contracts, is well established, but it is inapplicable to the instrument which is the basis of this litigation. Defendant was under no legal obligation to provide this protection for its employees. It is not suggested that the compensation paid the deceased was diminished by a dollar when the plan was promulgated. The entire fund was created by defendant. We agree with plaintiff’s counsel in his claim that the promulgation of the plan inured to the advantage of defendant. Broad-gauge, generous conduct is usually well advised, even from a selfish standpoint. It is contrary to fair dealing to enlarge by construction the burdens assumed by an employer of labor who voluntarily provides for such a system of pensions and benefits. The duty of the court is to ascertain the intent of the parties; that of the defendant in announcing the plan and that of the deceased in remaining in defendant’s employ after the plan.was put in effect. This intent is to be gathered from a fair and impartial interpretation of the language used.

It is true that prior to the promulgation of defendant’s plan the states of Ohio and Washington had adopted statutes similar to Chapter 112 of the Laws of Oregon for the year 1913. It is nevertheless apparent that the author of the plan was familiar only with industrial accident legislation providing for payments hy the employer directly to the employee.

The other contentions of plaintiff have been duly considered, but it would unnecessarily prolong this opinion to discuss them.

Defendant contends that we are in error in holding that the burden of proof devolved on defendant to show that plaintiff’s benefit under the Act of 1913 was greater than the benefit provided by the plan. Defendant cites Mercer v. Germania Ins. Co., post, p. 410,171 Pac. 412. In that case plaintiff sued on a policy of fire insurance written in favor of her husband. The policy provided that it should be void if the interest of the insured were anything other than sole and unconditional ownership. Plaintiff contended that defendant was estopped to rely on the above provision in the policy, but her estoppel was pleaded only in the reply. It, was held that she could not recover. The contract on which she relied was inconsistent on its face with her right of recovery.

In the case at bar there is nothing in the contract which on its face precludes a recovery by plaintiff. There is no presumption that defendant had accepted the provisions of Chapter 112 of the Laws of 1913, nor is such acceptance alleged in the complaint. Notwithstanding Section 32 of Article IX of the plan, plaintiff was entitled prima facie to recover. Her rights under the act of 1913 were a defense which it devolved on defendant to allege and prove. These conclusions are supported by the opinion of Mr. Justice Moore in Olds v. Olds, ante, p. 209 (171 Pac. 1046), decided April 2, 1918. Plaintiff’s complaint is sufficient and her proof corresponds with her allegations.

Defendant relies on Clark v. New England Tel. & Tel. Co. (Mass.), 118 N. E. 348. This case is based on a plan similar to that with which we are concerned. The Massachusetts court holds that where the facts are in dispute the finding of the committee thereon is conclusive. In the instant case the facts are not in dispute. The answer admits the facts on which plaintiff’s right to recover is based. The reasoning of the Massachusetts court is in entire harmony with our former opinion and the rule of' construction applied conforms to the views above expressed.

15. Defendant calls our attention to the fact that under our industrial accident statute, Laws of 1913, page 199, in case plaintiff marries she is entitled to receive the equivalent of ten monthly allowances, or $300. We think that this sum as well as the moneys which plaintiff has already received should be deducted from the sum of $2,700 provided by the plan. Plaintiff admits in her petition that the sum of $30 a month has been paid her since March 15,1915. Plaintiff asks that the case be remanded with directions to enter the judgment to which she is entitled.

The former opinion will therefore be modified. The judgment will be reversed and the Circuit Court will be directed to enter a judgment in favor of plaintiff for $1,320. Former Opinion Modified.

McBride, C. J., and Moore and Bean, JJ., concur.

Case Details

Case Name: McLemore v. Western Union Tel. Co.

Court Name: Oregon Supreme Court

Date Published: Mar 5, 1918

Citation: 171 P. 390

Court Abbreviation: Or.