Concrete Co. v. Insurance Co. , 70 S.D. 535 ( 1945 )

The policy of insurance involved in this action covers both workmen's compensation and employers' liability insurance. It contains a provision exempting occupational disease from that part of the policy relating to employer's liability. The question is whether this exemption is valid. If it is valid, the insurance company is not liable to the employer; if it is not valid, the insurance company must indemnify the employer for any liability of the employer to Johnson, the employee, for occupational disease acquired by Johnson as the result of employer's negligence, and in such case the insurance company must defend the action brought by Johnson against the employer.

The validity of the exemption provision of the policy depends upon whether such an exemption is prohibited by statute. The title to Ch. 278, S.L. of 1917 was "An Act Regulating Policies of Insurance Issued in This State for Workmen's Compensation or Employers' Liability and Prescribing Conditions and Provisions to be Contained or Prohibited in Such Policies." That Act is now sections 31.3305 to 31.3313, inclusive, of the Code of 1939. Section 1 of the original Act is now section 31.3305 and section 3 of the original Act is now section 31.3307. The former section provides that every policy of workmen's compensation shall cover "all the liabilities which are imposed upon an insurer by the provisions of the title `Workmen's Compensation.'" Section 31.3307 provides that "Every policy of insurance issued by a stock company, or by a mutual association authorized to transact workmen's compensation or employers' liability insurance in this state, shall cover the entire liability of the employer to his employees covered by the policy or contract" (except as limited by the amount of the face of the policy. SDC 31.3312).

The part of section 31.3305, quoted above, is a special provision, covering policies of workmen's compensation only, and the part of section 31.3307, quoted above, is a general provision, covering "every policy of insurance" and therefore it is applicable to both workmen's compensation and employers' liability insurance, whether issued by a stock company or a mutual insurance association. The two sections duplicate each other as to workmen's compensation insurance but they are not inconsistent. There is no provision in section 31.3305 which is contradictory or repugnant to the general application of section 31.3307 to both kinds of insurance.

The applicable rule of statutory construction is:

"When there is no repugnancy between two distinct and co-ordinate sections of the same statute, the language of the special provisions of one should not be allowed to limit or control the general provisions of the other, especially when such general provisions are in harmony with the purpose and scope of the statute as expressed in the title." State v. Shanks,178 Ind. 330, 99 N.E. 481, 483.

See also 59 C.J., Statutes, § 596.

For these reasons it is my opinion that the clause exempting occupational disease from the employer's liability provisions of the policy is void, and that the judgment should be reversed.