Howard Contr. Co. v. Yeager , 184 Md. 503 ( 1945 )

The question in this case is, whether under the Workmen's Compensation Act a childless widow who before remarriage has received all compensation payable up to her remarriage, and also a lump sum payment of future compensation for 102 weeks, is entitled to receive additional compensation for 52 weeks. This question depends upon construction of provisions of sections 55 and 63 of the Act (Code, 1939, Art. 101), viz.:

"55. * * * In case of the remarriage of a dependent widow of a deceased employee, without dependent children at the time of theremarriage, she shall receive compensation for one year after thedate of her remarriage, provided there is so much of thecompensation previously awarded her outstanding. * * *"

"63. In every case providing for compensation to an employee or his dependent, excepting temporary disability, the Commission may, if in its opinion the facts and circumstances of the case warrant it, convert the compensation to be paid in a partial or total lump sum."

Instead of the words above italicized in Section 55, the original Act (1914, Ch. 800, Sec. 42) provided: "all compensation under this Act shall cease." The change was made by the Act of 1920 (Ch. 456, Sec. 43 [Code, Vol. 3, 1914]). By the same Act (Sec. 51) the word "convert" in Section 63 was substituted for "allow" (Act of 1914, Sec. 50). The Act of 1920 (Sec. 36) also inserted in Section 36 (now 48) provision that the right to compensation payable to a dependent and unpaid at his death shall survive to surviving dependents, "and if there be none such, then the compensation shall cease." The Act of 1920 was an extensive revision of the original Act. By it amendments were made to fifteen sections (including the three above mentioned), "so as to make certain changes in the manner of administering and the extent of the application of workmen's compensation, and to increase the amount of such compensation." The object and purpose of the original Act remains unchanged, viz., to provide compensation for workmen and dependents — once — not to provide husbands for widows or duplicate compensation for anybody.

It may be assumed that the amendment of 1920 relating to remarriage of widows, and similar amendments in other states, were made "to induce freedom of marriage" and that the original provision that all compensation should cease upon remarriage had created "practices that required relief." See Garrity v. BitucoMfg. Chemical Co., 1923, 277 Pa. 88, 92, 120 A. 764, 766. The nature and extent of this amendment, however, depends upon the terms of the statute — Section 55.

The purpose and effect of the above quoted sentence in Section 55 is to reduce a childless widow's compensation in the event of remarriage. In the absence of any such provision, compensation is not terminated [a] by remarriage of a beneficiary, e.g., a sister (Adleman v. Ocean Accident Guarantee Corp., Ltd.,130 Md. 572, 101 A. 529, a childless widow (case of Bott,230 Mass. 152, 119 N.E. 755; Wangler, etc., Co. v. Industrial Comm.,287 Ill. 118, 120-123, 122 N.E. 366) or a widow with children (Walker v. Speeder Machinery Corp., 213 Iowa 1134,1141, 240 N.W. 725), or [b] even by death (State AccidentFund v. Jacobs' Adm'r, 140 Md. 622, 118 A. 159). The Act of 1920, by amendment in Section 48 (then 36), terminated compensation upon death of a dependent leaving no other dependents surviving, but provided that the right to compensation should survive to surviving dependents instead of the estate of the deceased dependent. The compensation of a widow with dependent children is not reduced at all upon remarriage. The original Act terminated compensation of a childless widow upon remarriage; the Act of 1920 terminated it one year after remarriage.

The amendment of 1920 did not change the nature of a childless widow's compensation, but increased by one year (or less) the amount of her compensation in the contingency of remarriage. It did not authorize a new award of compensation to a remarried widow, but continued part of "the compensation previously awarded her." It did not discriminate between lump sum compensation and unconverted compensation for a widow, or between lump sum compensation for a childless widow and for other dependents.

Under sections 48, 55 and 56 compensation of workmen or dependents is subject to termination or reduction in certain contingencies of recovery, death, remarriage or non-residence. Commutation of future compensation involves risk of loss in such contingencies. For obvious reasons the law does not require, and does not contemplate, repayment by workmen or dependents of compensation received before the happening of the contingency. It would seem equally obvious that the law does not require, and does not contemplate, any duplication of compensation by payments after the contingency. Of necessity, the employer bears a risk of overpayment before the contingency. This is no reason why he should be subject to certain loss by any overpayment after the contingency.

Under Section 63, power to convert compensation into a lump sum is power to convert future compensation into equivalent present compensation, not power to increase or duplicate compensation. If through death, marriage or other contingency the total amount received proves to be more than would otherwise have been received, this is an incidental result of the contingency, not a legitimate purpose of conversion into a lump sum.

In Victory Fireworks Specialty Co. v. Saxton, 1936,170 Md. 446, 450, 451, 185 A. 123, 125, the employer contended that an award for permanent total disability cannot be converted into a lump sum because of the possibilities of (a) recovery or (b) death of the claimant; that a conversion may result in payment to a claimant of the equivalent of a greater sum than he otherwise would have received; and that the commission's order did not indicate "that it considered the claimant's probable life expectancy, or possible partial or total recovery." Referring to these contentions, this court said that there was no testimony "tending to show either partial or total recovery," and that "it is but fair to assume, in the absence of proof to the contrary, that the commission considered his [claimant's] life expectancy in making its lump-sum award." It was held that an order converting compensation for total disability into a lump sum is within the commission's power under Section 63 (then 51), but is appealable on the law and the facts.

Neither Section 55 nor Section 63 authorizes duplication of compensation to a widow after remarriage. Section 55 provides for reduction of compensation, Section 63 for conversion, neither for duplication. The total amount of compensation to which a childless widow is entitled in the contingency of remarriage is usually less, never more, than in the opposite contingency. If at remarriage she already has received more than the total amount to which she is entitled in that contingency, payments to her must cease. An anticipated future naturally is a curtailed future.

The commission's orders of October, 1942, awarding [1] compensation to the widow and [2] a fee in a lump sum to her counsel, were necessarily subject to applicable provisions of law, including curtailment of the compensation period in the event of remarriage. The compensation period under the order was, therefore, 416 weeks, subject to curtailment in the event of remarriage. The lump sum payment of "the last 102 weeks of the compensation period" was to be deducted from "the end of the compensation period." Section 63 authorizes conversion of "compensation to be paid," not of contingent compensation which never is to be paid. Upon remarriage of the widow the compensation period was curtailed to "one year after the date of her remarriage." This one year became "the end of the compensation period" and part of "the last 102 weeks." Compensation for this last year had already been paid in full. To this effect, see Olson v. National Tea Company, 1942, 212 Minn. 215,217, 218, 3 N.W.2d 225.

Many states provide for lump sum commutation payments and for termination or reduction of a widow's compensation upon remarriage. The trial court in its opinion, and the appellee in this court, relied on early Pennsylvania Superior Court cases which held that lump-sum payments of future compensation could not be deducted from the reduced compensation of a beneficiary [a] upon becoming a non-resident alien, Lubanski v. Delaware, L. W.R.R. Co., 1923, 81 Pa. Super. 538, 541, 542, or [b] upon remarriage. DiLorenzo v. Carnegie Steel Co., 1927, 91 Pa. Super. 64,69; Hall v. Jones Laughlin Steel Co., 1922, 79 Pa. Super. 303,305-307. These cases were not based on statutory provision for remarriage of a widow and were not limited in application to remarriage or to widows. In Maryland they would be no less applicable to duplication of compensation for a non-resident alien under Section 48 or 56 than for a remarried widow under Section 55. They were based on reasoning, concerning lump-sum payments, not consistent with this Court's view of Section 63 (Victory Fireworks Specialty Co. v. Saxton, supra), or with reasoning of the Pennsylvania Supreme Court or the Superior Court in later cases. These early cases viewed broadly the right to receive lump-sum payments and narrowly the duty of the administrative board in the matter. The statute authorized the board to commute an award into a lump sum, "disregarding the probability of the beneficiary's death." These cases in effect required disregard of probability of remarriage or of becoming a non-resident alien. But the Pennsylvania Supreme Court later held that probability of remarriage should not be disregarded. Garrity v. Bituco Mfg. Chemical Co., supra. And the Superior Court, holding that lump sum payments to an injured employee must be deducted from the remaining compensation payable upon his death to his dependents, said that the opposite construction "would require the employer to pay double compensation — a result which we should not countenance, unless plainly compelled by the express language of the statute." Shaftic v. Commonwealth Coal Coke Co., 1932,106 Pa. Super. 406, 414, 161 A. 773, 775. Finally in 1939 the statute authorizing commutation into lump-sum payments was virtually repealed by amendments omitting the provision for "disregarding the probability of the beneficiary's death" and providing that unless the employer agrees to make commutation, the board shall require the employee or the dependents to furnish indemnity "safeguarding the employer's rights."

No authority is cited for this court's conclusion in the instant case. On the other hand, recent cases in Minnesota and Kentucky hold that lump-sum payments must be deducted from reduced compensation of a widow upon remarriage (Olson v.National Tea Co., supra), or from still unpaid compensation before remarriage. W.M. Ritter Lumber Co. v. Begley, 1941,288 Ky. 481, 484, 156 S.W.2d 501. In the Kentucky case, as in the instant case, the lump sum in question had been paid as a counsel fee. In Kentucky a widow's compensation ceases upon remarriage; in Minnesota it is reduced to a "lump-sum settlement" equal to one-half of the amount still unpaid (not to exceed two full years' compensation). In New York, in applying a statutory maximum of 66 2/3 per cent. for compensation for all dependents, after the death of a widow who had received a lump-sum commutation of future compensation her commuted compensation must be included in the total, as if she were still living and her compensation were being currently paid. Di Donato v. Rosenberg, 1934, 263 N.Y. 486,189 N.E. 560.

The reasoning and the results in the cases last cited are in harmony with the Maryland statute and decisions. In Olson v.National Tea Co., supra, the widow, before remarriage, had received two lump-sum payments, representing "the last 71 weeks" compensation. The Court, holding that these lump-sum payments must be deducted from her lump-sum settlement of 104 1/3 weeks compensation upon remarriage, said:

"The widow's remarriage did not change the rights of the parties. It merely eliminated the contingency as to what compensation she should receive, because thereby she became entitled only to the lump-sum settlement. Likewise, as a necessary incident, it definitely determined what particular payments the lump-sum payments represented. The lump-sumsettlement represented the `last' 104 1/3 weeks' compensation to which she was entitled. The lump-sum payments therefore were properly deductible therefrom. The commission has the power to adjust the accounts between employer and employe for compensation payments. Where a widow has been overpaid at the time of her remarriage, the amount due her may be adjusted by deducting the overpayment. Miller v. Tate Tile Silo Co., 168 Minn. 512,209 N.W. 630; see Stegner v. City of St. Paul, 189 Minn. 290,249 N.W. 189. Likewise, she may be charged with payments received in determining the amount actually due to her. Of course no such deduction could be made of an ordinary debt. Gregg v. NewCareyville Coal Co., 161 Tenn. 350, 31 S.W.2d 693." 212 Minn. 218,3 N.W.2d 226.

"Power to adjust" accounts between employer and employee or beneficiary is nothing more than power to make the arithmetical computations required in any determination as to compensation. See, e.g. Coca Cola Bottling Works v. Lilly, 154 Md. 239, 241,140 A. 215. Such general power is implied in the specific provisions in Section 55, [1] that in case of a second accident future compensation "shall be adjusted according to the other provisions of this Article," and [2] that in case of aggravation, diminution or termination of disability the commission may "readjust for future application the rate of compensation."

This court has recognized the tendency to give to workmen's compensation acts "an interpretation as broad and liberal in favor of the employee as their provisions will permit, in furtherance of the humane purpose which prompted their enactment." Reisinger-Siehler Co. v. Perry, 165 Md. 191, 199,167 A. 51, 54. But it has also observed that "the benevolent purpose of the act would not warrant a judicial extension of it beyond the limits it prescribes." Robertson v. North AmericanRefractories Co., 169 Md. 187, 189, 181 A. 223, 224.

The commission has broad power, "if in its opinion the facts and circumstances of the case warrant it," to convert compensation into a lump sum. The policy of such legislation is that periodic compensation should be the rule, lump-sum payments the exception. Frequent lump-sum payments, especially for substantial counsel fees, are recognized as an evil to be avoided. See Payment of Attorney's Fees by Lump-Sum Award under Workmen's Compensation Acts [1939], 25 Washington University Law Quarterly 107; Report to Governor O'Conor of Committee Appointed to Survey the State Industrial Accident Commission, July 8, 1940. The Supreme Court of Pennsylvania has said: "Commutation is the exception to the rule, for the reason that lump-sum payments are often quickly dissipated and do not afford the regular relief so necessary to the widow and orphans." Lovasz v. Carnegie SteelCo., 266 Pa. 84, 85, 109 A. 601; Garrity v. Bituco Mfg. Chemical Co., supra, 277 P. 92, 120 A. 765. Duplication of lump-sum payments is not within either the purpose or the provisions of the Act.

I think the judgment should be reversed.

Judges DELAPLAINE and GRASON authorize me to say that they concur in this opinion.