Fay v. Industrial Commission

I dissent. The case involves the construction of Section 42-1-52, R.S.U. 1933. That section reads:

"If a workman who has been hired in this state receives personal injury by accident arising out of or in the course of such employment, he shall be entitled to compensation according to the law of this state, even though such injury was received outside of this state. If a workman who has been hired outsideof this state is injured while engaged in his employer's business and is entitled to compensation for such injury under the law of the state where he was hired he shall be entitled to enforce his rights against his employer in the courts of this state." (Italics added.)

The case revolves about the interpretation of the phrases, "has been hired in this state," and "has been hired outside of this state." The Commission held that the phrases in question had to do with the place where the parties made and entered into the contract of employment. The prevailing opinion holds that the words refer not to the place where the contract of employment was made but to any place where the employer-employee relationship exists, that is, to any place the employee might be while under the contract of employment, — wherever he is in the status of an employee. Why did the legislature say has been hired if it meant is now employed? Why use the past tense, indicating a completed act, to describe a present, existing, and continuing situation? The expression "has been hired" is a terse and exact way of stating that the making of the contract, the hiring, is a past, a completed act, initiating an employment that is presently continuing. If "hired" means "in the status of an employee," the statute would in effect say "If a workman whohas been in the status of an employee in this state," thereby clearly implying that he is not in such status at the time of the injury. I cannot ascribe to the legislature the parenthood of such jargon.

No contract of employment was ever made by or with Fay in the State of Utah. The Commission so found, and the finding is amply supported by the evidence and the authorities. Benguet Consol.Min. Co. v. Industrial Comm., 36 Cal. App. 2d 158, 97 P.2d 267;Selser v. Bragmans Bluff Lumber Co., La. App., 146 So. 690;Pettiti v. T.J. Pardy Const. Co., 103 Conn. 101, 130 A. 70;Magnolia Compress Warehouse Co. v. Davidson, Tex. Civ. App., 38 S.W.2d 634; Texas Employers' Ins. Ass'n v. Volek, Tex. Com. App., 69 S.W.2d 33; Sims v. Truscon Steel Co.,343 Mo. 1216, 126 S.W.2d 204; Adams v. Continental Life Ins.Co., 340 Mo. 417, 101 S.W.2d 75.

Since Fay was injured and killed outside this state, and his contract of employment was entered into outside this state, the Commission found he was not hired in this state and denied compensation. The widow brings certiorari, contending that the words "hired in this state," should be construed to mean, "was in the status of an employee when in this state," and therefore the injury or death was compensable in this state regardless of where the injury or death occurred, and presents the one question: What is the meaning of the phrase "hired in this state" as used in the section of the statute quoted above?

Ordinarily state statutes have no force or effect beyond the state boundaries. Story, Conflict of Laws, 8th Ed., paragraphs 7, 22. And though the state may have the right to legislate concerning the rights and obligations of its citizens beyond its own boundaries, the presumption is that it did not intend to give its laws extraterritorial effect. So, state laws will not be given such effect unless such intention on the part of the legislature is clearly evident from the law itself, or from its purpose or history. Kennerson v.Thames Towboat Co., 89 Conn. 367, 94 A. 372, 373, L.R.A. 1918A, 436; Gould's Case, 215 Mass. 480, 102 N.E. 693; Ann. Cas. 1914D, 372. I find nothing in our Compensation Act which indicates any intent that it should have extraterritorial effect apart from the ection here under consideration. And the legislature evidently was aware of that fact, and wrote into the Act Section 42-1-52, R.S.U. 1933, as its declaration with respect to the circumstances and conditions under which such act should have extraterritorial effect. In Section 42-1-57, R.S.U. 1933, it is declared that "the right to recover compensation * * * for injuries sustained by an employee * * * shall be the exclusive remedy * * * except as * * * otherwise declared" in the act. Each state has the right to fix the conditions under which liability shall exist for injuries sustained within its boundaries, and that right cannot be affected by the laws of another state or the fact that either party may be a resident of another state. And when the legislature provided a liability for industrial accidents, which liability was exclusive and in lieu of all other remedies, it cannot be assumed that it intended to apply its laws to accidents occurring outside its own boundaries unless such is expressed or clearly to be inferred from the language used. Our legislature therefore clearly noted three instances which were exceptions to the statutory liability and remedy, to wit: injuries resulting from employer's wilful misconduct, Section 42-1-57; injuries to employee of non-complying employer, Section 42-1-54; and injuries occurring without the state, Section 42-1-52.

There are four possible situations which can arise with reference to employment and state boundaries. (a) Where a contract of employment is made in the state and the employee is injured in the state; (b) where the contract of employment is made in the state and the employee is injured outside of the state; (c) where the contract of employment is made outside the state and the employee is injured in the state; (d) where the contract of employment is made outside the state and the employee is injured outside of the state. I have used the words "contract of employment made" instead of the word "hired" to avoid quibbling over the words in dispute until the situation is clearly developed as a background for the determination of the meaning of the word "hired."

Subdivision (a) is concededly within the act. Subdivision (b) is definitely covered by the first sentence of the section under dispute (42-1-52). Subdivision (c) is within the compensation provisions of the act since the injury occurs while the injured party is in the status of an employee within the state. The only remaining situation, (d), is governed by the last sentence of the section under consideration. It has uniformly been held that cases within subdivision (d) above come within the last sentence of the section and are not compensable. We so held in BuckinghamTransportation Co. v. Industrial Comm., 93 Utah 342,72 P.2d 1077, 1084. We there said,

"We think, as did the Arizona Supreme Court in the case ofOcean Accident and Guaranty Corp. v. Industrial Comm. [32 Ariz. 275, 257 P. 644], in construing a statutory provision practically identical with section 42-1-52, that the last sentence of said section applies only to cases where both the status of employer and employee and the injury arose outside of the state of Utah."

We quoted with approval from the reasoning of the Arizona Court, and we think it equally applicable here, — as follows:

"There are three, and only three, cases in which the question of liability under a Compensation Act might be brought before our tribunals. In the first, the status of employer and employee would arise and the accident occur in this state; in the second, one of those events would occur in this state and one without; while in the third both events would occur out of the state. In the first case, obviously our tribunals recognize our act, and it alone, both as to procedure and benefits. In the second case, since our statute is one regulating the status, if the injury occur in the state our law governs, and under the first sentence of section 59, supra, if the status of employer and employee arises in Arizona, so far as our tribunals are concerned, it will also govern, even though the accident occur elsewhere. This leaves uncovered by the statute only the third case, viz., when the status arises and the accident occurs both outside the jurisdiction of our forums. Such a situation has been brought before the courts many times and the decisions are varied. Bradbury's Workmen's Compensation Laws (3 Ed.) pp. 95-101, and cases cited.

"Certainly this possibility is covered by the language, ``A workman who has been hired outside of this state is injured while engaged in his employer's business.' It will be urged that the language does not expressly state the place of injury must be outside of the state. This is true, but the construction we have given it will make the act provide one and one only certain and definite compensation for each possible class of cases, while any other view would make the basis of the compensation uncertain and unequal for like injuries arising from like causes contrary to the policy of this state. We therefore hold that the last sentence of section 59, supra, applies only to cases where the status and injury both arise outside of Arizona."

The Colorado Court also has recognized the rule that either the accident or the status of being an employee must arise within the state to enable the Industrial Commission to make an award. In United States Fidelity Guaranty Company v. IndustrialCommission, 99 Colo. 280, 61 P.2d 1033, at page 1035, that court said:

"It thus appears that to justify recovery under our law the one essential element is that a substantial portion of the work must be done in this state, but that with this must be combined either an accident in Colorado or a contract in Colorado."

Every state we have been able to find with a statute like the one here involved has held against compensability where neither the contract nor the injury arose within the state.

It is contended that Minnesota and Wisconsin have held contrary to the position here taken. But such is not the case. The compensation statutes of both Wisconsin and Minnesota are elective statutes and not compulsory, as is the Utah statute. The Minnesota court has repeatedly held that recovery is allowed for an injury sustained outside the state on contracts of employment made within the state because the act, being elective, the contract of employment, express or implied, has by force of law the statutory provision relating to compensation written into the contract where the employer has elected to be under the Act. If he has not, the Compensation Act does not apply. Since the compensation provisions are part of the contract, made in Minnesota, they may be enforced regardless of where the accident occurs. State ex rel. Chambers v. DistrictCourt, 139 Minn. 205, 166 N.W. 185, 3 A.L.R. 1347; Mathison v.Minneapolis St. R. Co., 126 Minn. 286, 148 N.W. 71, L.R.A. 1916D, 412, 5 N.C.C.A. 871; State ex rel Maryland Cas. Co. v.District Court, 140 Minn. 427, 168 N.W. 177; State ex rel.McCarthy Bros. Co. v. District Court, 141 Minn. 61,169 N.W. 74. Such too is the holding of the Iowa Court. Pierce v.Bekins Van Storage Co., 185 Iowa 1346, 172 N.W. 191; also New Jersey, — Deey v. Wright Cobb Lighterage Co. 36 N.J. Law J. 121; and West Virginia in Gooding v. Ott, 77 W. Va. 487,87 S.E. 862, L.R.A. 1916D, 637; Rhode Island likewise, Grinnell v.Wilkinson, 39 R.I. 447, 98 A. 103, L.R.A. 1917B, 767, Ann. Cas. 1918B, 618. Reliance is placed on Stansberry v. Monitor StoveCo., 150 Minn. 1, 183 N.W. 977, 20 A.L.R. 316. The stove company was an Ohio corporation, distributing stoves throughout the Northwest through branch offices at Minneapolis. The court says:

"Stansberry was employed by the Minneapolis branch and worked under its direction. For purposes of this case the situation is the same as though the head office instead of a branch were located in Minnesota." (Italics ours.)

Two Wisconsin cases are cited and relied upon. The Wisconsin Act, like that of Minnesota, is elective. Anderson v. MillerScrap Iron Co., 169 Wis. 106, 170 N.W. 275, 171 N.W. 935. But the court held that the elective feature was not the controlling thing in their line of reasoning because there must not only be a contract but work under it in the state. Val Blatz Brewing Co. v. Industrial Comm., 201 Wis. 474, 230 N.W. 622, 625, presented only the question as to whether one who in Wisconsin enters into a contract to perform services entirely outside of the state can recover under the Act for injuries outside the state. The answer was in the negative, the court saying:

"The Wisconsin act applies to all cases ``where, at the time of the accident, the employee is performing service growing out of and incidental to his employment.' Subdivision (2) of section 102.03 of the Statutes. This statute does not distinguishbetween injuries sustained in Wisconsin and those happeningoutside of its borders. The one essential requisite to liability under the Wisconsin Compensation Act is employment under such circumstances as to create the status of employer and employee under the Wisconsin act. That status arises out of the contract of employment, which may be either ``express or implied, oral or written.' Subdivision (4) of section 102.07 of the Statutes. It may be made by express agreement. It may be implied from the performances of service. [Italics added.]

"That status is created when service is performed within the state under a contract of hire, without regard to the question of where the contract was made. Such status may also exist where no service is performed in the state in those cases where both the employer and the employee are residents of the state when the contract is made. The state has such an interest in the welfare and protection of its citizens and of those dependent upon them that it may in the exercise of the police power extend the protection of its Compensation Act to citizens of the state who are injured while performing service outside its boundaries.

"Residents of Wisconsin who make contracts of employment in this state are bound by the terms of the Wisconsin act, because all residents of the state are subject to and bound by its laws. When the state exercises the police power, no principle of law and no constitutional right is violated by attaching to contracts of employment made in the state by residents of Wisconsin the same rights and duties incident to service outside of the state that are lawfully imposed as incident to the performance of service within the boundaries of the commonwealth.

* * * "Our Workmen's Compensation Act cannot be given extraterritorial effect such as will regulate the rights of citizens of other states who perform service wholly outside of this state, no matter where the contract of employment is made. Each state must be left free to determine how it will care for its employees and their dependents when injuries are sustained in industries conducted within its borders.

"This is the rule that has been adopted in the prior decisions of this court. In both Anderson v. Miller Scrap Iron Co.,169 Wis. 106, 170 N.W. 275, 171 N.W. 935, and in Zurich Ins. Co. v.Industrial Comm., 193 Wis. 32, 213 N.W. 630, the employees, who were residents of Wisconsin and who had made their contracts of employment in Wisconsin, were awarded compensation for injuries sustained outside the state. In Wandersee v. IndustrialComm., 198 Wis. 345, 223 N.W. 837, the employee was denied compensation because he was a resident of Minnesota, who was not subject to the laws of Wisconsin and whose service was to be performed outside of the state."

The prevailing opinion quotes from the case ofMcKesson-Fuller-Morrison Co. v. Industrial Comm.,212 Wis. 507, 250 N.W. 396, 398. That case does not help plaintiff here. Plaintiff in that case was regularly and fully employed in Wisconsin. All his territory and employment was in Wisconsin. His employer called him to Chicago on a special mission, in connection with the work he was doing in Wisconsin, and while on that trip he was injured in Illinois. The court says:

"The act overwhelmingly appears, and is not disputed, that deceased was stationed in this state carrying on his employersbusiness in this state, and that his ill-fated trip to Chicago was a mere incident to his employment in this state." (Italics added.)

The Utah Act is not elective but compulsory. It abolished the old relationship of master and servant and the rights founded thereon in matters involving industrial accidents, and substituted in lieu thereof new employer-employee relationship rights founded upon, fixed and controlled by the statute. Such rights are therefore in no sense contractual rights, that is, they do not grow out of the contract of employment under the law of contract, but are imposed on the parties in regard to industrial accidents within the state by virtue of an employer-employee relationship or status. Industrial accidents occurring outside the state are controlled by the provisions of the section here under discussion. Bear in mind that neither Wisconsin nor Minnesota has any provision in their act as we have in Section 42-1-52, R.S.U. 1933, dealing with accidents occurring outside the state. It is our function to apply the law as written by the legislature, barring constitutional questions, and not to legislate because we think the law should be otherwise.

With the foregoing background, does the phrase "hired in this state" refer to the inception of the employer-employee relationship or to the status or existence of that relationship? The words "hire" and "hired" are used in other sections of the act, and we may well look to them for light on the sense in which the legislature used the words in this section. In Section 42-1-40, employer is defined as,

"Every person * * * having in service three or more workmen * * * employed * * * under any contract of hire * * * oral or written, * * *."

Does it make sense to interpret the word hire here to mean "status" or "status or an employee-employer relationship"? In the next section, employee is defined as

"Every elective and appointive officer * * * of the state * * * or of any * * * board of education * * *, or under any contract of hire * * * written or oral."

And again,

"Every * * * person * * * in service of [an employer] * * * under any contract of hire, * * * written or oral."

Can one conceive of the legislature speaking of "relationship" or "status" being oral or written? The contract creating the relationship may be "oral or written, express or implied" but hardly the status or relationship.

Now turning to the section involved, (42-1-52, R.S.U. 1933), why speak of hired in this state when the injury is received outside of this state, if hired means the "status of employee"? The statute would then say where one who is in the status of an employee in this state, is injured in such employment [which must be employment having him in the status of an employee in this state], he shall be entitled to compensation for an injury received in employment outside of this state. It just doesn't make sense. But taking the view that hired refers to the contract of employment then the section is clear. It deals with the rights given in this state to workmen injured outside of this state. If his contract of employment was made in this state he may claim compensation for an injury incurred outside the state. When, however, his injury occurred outside the state and his contract had its inception outside the state there was nothing to which the law of this state could attach for compensation. And since our act provided, as quoted supra, that the compensation provisions were the sole remedy for industrial accidents, the legislature wanted to make it clear that such exclusive remedy was confined to its own borders and to accidents within its territorial limits. It therefore declared that the courts of the state were open to persons hired and injured outside the state for enforcement of the rights given them by the law of the state where they were hired. Such right to resort to the courts is a matter of established comity between sovereigns, as well as a constitutional guarantee.

The phrase here involved was construed by this court inPickering v. Industrial Comm., 59 Utah 35, 201 P. 1029, 1030, where we said that "not only was he hired in this state, but he was * * * employed in a business or enterprise being conducted in [the state]." If hired means status of an employee, it is meaningless to say that "not only was he in the status of anemployee, but he was employed," in a business conducted in this state.

It is evident the Commission correctly interpreted and construed the statute and its order denying an award should be affirmed.