American Indemnity Co. v. Zyloni , 1918 Tex. App. LEXIS 1428 ( 1918 )

GRAVES, J.

This concededly correct statement of the nature and result of the suit is taken from appellant’s brief:

“This suit was brought by John Zyloni and Hazmiers Zyloni, the brothers of Peter Zyloni. to recover for compensation alleged to be due them under the Workmen’s Compensation Act of Texas of 1913 (Acts 33d' Leg. c. 179 [Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 5248k-5246zzzz]). The appellees were residents of Erie county, Pa. Peter Zyloni met his death while in the employ of James Stewart & Co., which was a ‘subscriber’ under the Compensation Act of 1913, and appellant was the ‘association’ writing the insurance guaranteeing the payment of the compensation to the representatives of the deceased employés of James Stewart & Co. Peter Zyloni received the injuries which resulted in his death while in the course of his employment with James Stewart & Co. The court below rendered judgment in favor of appellees against appellant for $801.36, being the amount of compensation which he found ap-pellees were entitled to up to the date of the judgment, and provided by his judgment that it should be without prejudice to the right of ap-pellees to sue for installments of compensation which might become due after the date of the judgment. Prom this judgment appellant has duly perfected its appeal.”

By its first two assignments appellant attacks the trial court’s conclusion of both fact and law that, having voluntarily contested this claim before the Industrial Accident Board, without indicating any intention not to abide by the board’s final award, it was bound hy and had no appeal therefrom.

[1] In the view we take of the case, there was neither res adjudicata in that board’s action upon nor estoppel under its agreement preventing appellant from further contesting the question whether appellees were legal beneficiaries of their deceased brother, for two reasons: (1) The Industrial Accident Board did not direct payment of its award to the appellees, or find them in fact to be beneficiaries, but merely fixed the amount due, and ordered appellant to pay that sum to “the legal beneficiaries of Peter Zyloni, deceased,” without naming them; (2) as found by the trial court, “there was no express agreement that the parties would be bound by the action of said board. Nothing was said by either party prior to said hearing as to whether they,would or would not be bound by the decisión of such board. After the making of said award, defendant notified plaintiffs that it would not be bound by said award, whereupon plaintiffs filed suit.”

We therefore think the trial court was not without authority to determine in this suit whether or not appellees were legal beneficiaries of Peter Zyloni, as it did do notwithstanding the conclusion complained of in these assignments, but that it erred in holding them to be such.

In other words, we sustain the contention of appellant, presented under its third, fourth, and fifth assignments, that appellees, being the brothers of the deceased employé, came within none of the classes entitled to receive benefits under the Compensation Law.

This conclusion determines the case, and renders wholly academic any further question as to whether or not they gave the notice of injury and made the claim for compensation required by that statute (article 5246ppp). It accordingly becomes unnecessary to pass upon assignments 6 to 10, inclusive, relating to that issue.

Appellees, with much force and ability, insist that, under our Compensation Law of 1913, the beneficiaries to whom the right of action survives are the heirs of the deceased under the statutes of descent and distribution (article 2461 et seq.), and they, being the sole heirs under these statutes in this instance, are entitled to the compensation awarded by the act. As a part of their discussion they have filed here copies of an able argument presented by some of their attorneys and others to the Supreme Court in the ease of Vaughan et al. v. S. W. Ins. Co., now pending in that court upon.writ of error to the Court of Civil Appeals for the Ninth District. See 206 S. W. 920. We have read it with much interest, but are yet unable, as we have heretofore been, to yield to the view it so persuasively presents.

This court, in the case of Cole v. Mallory Steamship Co., 197 S. W. 326, followed the prior holding of the Court of Civil Appeals for the Ninth District at Beaumont that the Compensation Law did not enlarge the beneficiaries,named in the pre-existing death injury statute, and therefore, since the surviving husband, wife, children, and parents of the deceased were made sole beneficiaries under the latter, brothers could not be such under the former. The matter is fully discussed in the Cole case, and in the Vaughan Case (Vaughan et al. v. S. W. S. Ins. Co., 195 S. W. 261), which it follows, and in which the Supreme Court has granted a writ of error.

So far as we are advised, the two cases mentioned are the only ones in which the question has been directly decided by the appellate courts of Texas. In these circumstances while we refrain from extended further discussion if it here, recurrence is made to the case of Smith v. So. Surety Co., 193 S. W. 204, decided by this court prior to both the Vaughan and Cole Cases. In that case it was held that, by the terms of the Compensation Act, its benefits vest absolutely in the legal beneficiaries of the deceased immediately upon his death, and not in his estate; hence the administrator of his estate, having no interest in the fund, could not maintain an action to recover it. While the point now before us was not then involved, and although the term “heirs” was unintentionally used for “legal beneficiaries” which was later corrected in the Cole Case, the conclusion reached in the Smith Case that the fund created by the operation of the compensation statute vested at once upon the death of the insured, after the manner of other insurance, in his legal beneficiaries, is likewise our continuing conception of the general purpose and effect of that legislation; and if that was the Legislature’s purpose in so providing this new fund and terming it “compensation” to some particular class of persons then in mind for the loss of benefits they would otherwise have received from the deceased, there could not at the same time have been the intention to also make it a part of his estate and descendable as his other personal property. The one disposition excludes the other. Moreover, such an estate would not only be subject to administration, but would pass to the heirs of the deceased chargeable with his debts, whereas by the express terms of the Compensation Act creditors of the deceased employe cannot reach the money thereby provided, except in instances where there are no legal beneficiaries at all.

That this character of estate was created, however, seems to be the contention of ap-pellees, and upon such foundation largely is built their argument that the statutes of descent and distribution must be looked to in determining who are the beneficiaries.

It may be that in a theoretical or philosophical sense the fund intended to be created by this new system was in a certain way regarded as belonging to the deceased, by considering part of his currently earned wages as being withheld until after his death, and then paid in installments for a fixed period; in other words, by applying practically to economic affairs the spirtual principle that, “though dead, his works live after him,” and so indulging the fiction that he was still earning money.

We cannot think that either the purpose or effect of the Act. It seems to us, as to beneficiaries, the Compensation Law, subject only to the contingencies therein specified, was merely intended to take the place of our death injury statute, and that the benefits of the former were expressly created for the personal use and benefit of those named in the latter, just as, in the absence of the new system, would have passed the right under the death injury statute to damages resulting from negligence. Nor does the provision that the compensation “shall be distributed according to the law providing for the distribution of other property of the deceased” inveigh against this conclusion, we think, because that merely directs or explains what divided interest each of the beneficiaries shall have in the fund, thereby prescribing a method of apportioning it among members of a class otherwise designated.

But, if the view indicated be at all permissible, it is only theorizing as to the origin or economic basis of the compensation idea, as distinguished from liability resulting from negligence, and- cannot be so applied to the result and effect of what was actually enacted by our statute on the subject as to defeat the evident purpose of its direct and plain provisions; that is, to compensate those expressly designated for loss resulting to them from the employe’s death. It follows that, in our view, the judgment below was fundamentally erroneous in decreeing that brothers might recover the benefits in question, and must accordingly be reversed and here rendered for appellant, and that order has been entered.

Reversed and rendered.

=>For other cases see same tonic and KEY-NUMBKR in ail Key-Numbered Digests and Indexes