277 N.W. 221 | Minn. | 1938
1. The first question is, by whom was the employe employed? The new corporation contends that he was employed by Peoples; that he had been so employed during most of the preceding 20 years and immediately prior to his working in the bakery of the new corporation; that he took orders from certain bosses at Peoples who told him when to report to work and what to do; that he knew nothing of the new corporation; that he reported to work at the bakery of the new corporation at 1801 Plymouth avenue pursuant to orders of the old bosses at Peoples, whom he was accustomed to obey, supposing and believing all the time that he was working for Peoples and not for the new corporation. It invokes the rule that the relation of employer and employe is contractual, specifically so declared for purposes of the workmen's compensation act, and that the contract of employment cannot be changed so as to substitute a new employer without the employe's knowledge and consent, citing Benson v. Lehigh Valley Coal Co.
2. The new corporation contends that, although no new contract of insurance was thereby effected, the insurance carried by the old corporations was "extended" through the Minnesota Rating Bureau so as to cover its compensation risks, by giving notice to the bureau that the new corporation had taken over the business of the two old corporations and requesting the bureau to put their insurance in one policy to cover the new corporation. Counsel frankly concede that this contention is inconsistent with that of employment of Yoselowitz by Peoples, involving as it does the assumption of his employment by the new corporation.
The policies issued by Travelers to Peoples and by Casualty Reciprocal Exchange to Lehmans, while risks assigned to said companies pursuant to L. 1929, c. 237, 3 Mason Minn. St. 1936 Supp. §§ 3634-1 to 3634-5 (amended by L. 1937, c. 175), contained the usual and customary provisions found in workmen's compensation insurance policies. They were not different from policies issued to *604
cover risks not so assigned pursuant to the statute. The insurer's liability under the statute is coextensive with that of the employer. Skuey v. Bjerkan,
The new corporation is a separate, distinct legal entity. Although the new corporation was organized on December 8, 1935, and commenced operation on March 14, 1936, Peoples continued to do business until April 7, 1936, although it quit baking operations on March 13, 1936. It does not appear when Lehmans quit operations, but it does appear that it continued to do business until at least March 13, 1936, and it did not cancel its policy with Reciprocal Casualty Exchange until April 7, 1936. There was no merger or consolidation as a matter of law. As a matter of fact the new corporation was not regarded as such. In fact, Lehmans took out a new policy of workmen's compensation insurance to cover its risks on Jauuary 8, 1936, and Peoples had a policy taken out on April 7, 1935, which expired on April 7, 1936. Certainly such conduct *605 is inconsistent with the idea that the corporations ceased to exist by being merged or consolidated with another corporation.
The workmen's compensation insurance of the old corporations could not be "extended" to the new corporation without effecting an entirely new contract of insurance, because there was necessarily involved the substitution of a new insured and a new risk. This could not be done so as to bind the insurer unless the bureau were its agent, authorized so to contract in its behalf. Therefore, notice and request to the bureau to extend the policies did not bind the insurers unless the bureau was their agent. Even if it be conceded that the bureau was agent of the insurers for certain purposes, it does not follow that it had the power to extend insurance policies in their behalf so as to include a new insured and a new risk. Insurance could be effected by the bureau only by the designation of a carrier pursuant to statute as hereinafter explained. The contention is that extending the insurance was a mere formal matter, such as the assignment of fire insurance to a purchaser of property; but even in such a case authority to consent to a change or to waive any term in an existing contract of insurance must be shown. Cobel v. Hartford F. Ins. Co.
It is claimed that the bureau was the agent of all insurers with power to represent them in writing compensation insurance, first, because it was authorized as such by statute and, secondly, because it was constituted such agent by acts of the insurers. The workmen's compensation law compels employers to insure all workmen's compensation risks either by self or carrier, and regulates the insurance of such risks as to form of policy, premium rates, coverage, and other particulars. Two agencies are created by L. 1921, c. 85 (amended by L. 1931, c. 353, 3 Mason Minn. St. 1936 Supp. § 3612) to accomplish these purposes. They are the compensation insurance board, an official body whose functions are to secure solvency of insurers and adequate and reasonable premium rates for compensation insurance, and the compensation insurance bureau, which is subject to the control and supervision of the board and which is an association composed of all insurers doing workmen's compensation insurance business in the state, membership being compulsory by *606
statute and the functions of which are rate making, administration, and placement of rejected workmen's compensation risks. The rate-making function consists principally of classification of industries and assisting the board and insurers in making and approving rates. The administration relates principally to inspection, surveys, analysis of risks, gathering information as to the experience of insurers in the application of rates, and the maintenance of records. Tile placement of rejected risks is the designation, pursuant to statute, L. 1929, c. 237 (since amended by L. 1937, c. 175) of member insurers as carriers of specified risks unable to obtain voluntary insurance. The objects sought to be achieved are the insurance of all compensation risks in solvent carriers for the protection of employer, employe, and the public, to insure fair, adequate, and reasonable premium rates, and to prevent rebates and discrimination. In these matters the public has an interest. Employer's L. A. Corp. v. Success-Uncle Sam C. Co.
We need consider only in this connection the bureau's power to designate carriers of rejected risks under the statute. It is not a general insurance agency with powers possessed by general insurance agents to represent insurance companies, write insurance, transfer policies, receive notices, and represent companies in connection with business handled through it by them. No such agency was ever contemplated, and the bureau is not such. L. 1929, c. 237, provides that insurers carrying compensation insurance who are members of the rating bureau are under a duty to insure and accept *607 any workmen's compensation risk if designated to do so by the bureau in the manner provided in the statute, which is that if a risk be tendered and rejected by three members of the bureau it may be assigned to a carrier if it appears that the applicant is in good faith entitled to coverage. Upon having its attention called to the matter, it is the duty of the bureau to fix the initial premium and designate the member whose duty it shall be to issue a policy of insurance to the applicant, containing the usual and customary provisions found in such policies. The bureau has adopted Tules pursuant to the statute, which then provided that the applicant shall submit a verified application on a form prescribed by the bureau, containing information pertaining to the particular employer, three letters of declination from compensation insurers stating that they have declined to insure the particular risk, and a certified check or money order payable to the bureau to cover the initial premium, following which the bureau then designates and notifies one of its members to insure the particular risk, effective at 12:01 a. m. the day following. All compensation insurers are members of the bureau and are required by the statute to file their consents authorizing the bureau to act in their behalf in accordance with the provisions of the statute. This procedure was followed by Peoples and Lehmans in obtaining the old policies referred to. On March 26 the new corporation complied with this procedure, by which the risk was assigned to the Liberty Mutual Insurance Company, which issued a policy on that day, effective at 12:01 a. m. March 27, 1936.
The authority of the bureau being wholly statutory, it must be exercised in conformity to the statute. 5 Dunnell, Minn. Dig. (2 ed. Supps. 1932, 1934) § 7998; Kipp v. Dawson,
3. It is claimed also that the bureau was the agent in fact, if not by statute, of the insurers. This is said to result not only from the provisions of law which we have already considered, but also because the bureau in fact acted as agent of the insurance companies. It is not necessary for us to consider whether the bureau *609
might have been authorized by its members to act as their general insurance agent. See Pennsylvania F. Ins. Co. v. Gold Issue Min. Co.
The finding of the commission that the new corporation did not have compensation insurance coverage is sustained.
4. The employe also seeks a review of the decision. He says that he is entitled to recover from one of the three corporations. The new corporation only is liable, and the employe will recover compensation from it.
The findings of the commission are sustained.
Affirmed and writs discharged.
The employe is allowed $50 attorney's fees in this court.
MR. JUSTICE STONE took no part in the consideration or decision of this case.