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Geneva Constr. Co. v. Martin Tr. & Stor. Co.

OPINION FILED OCTOBER 14, 1953

GENEVA CONSTRUCTION COMPANY, AND FRANK J. POWERS, PLAINTIFFS-APPELLEES,

v.

MARTIN TRANSFER AND STORAGE COMPANY, DEFENDANT-APPELLANT.



Appeal by defendant from the Circuit Court of Kane county; the Hon. HARRY C. DANIELS, Judge, presiding. Heard in this court at the May term, 1953. Judgment affirmed. Opinion filed October 14, 1953. Released for publication November 2, 1953.

MR. JUSTICE ANDERSON DELIVERED THE OPINION OF THE COURT.

The Geneva Construction Company, plaintiff herein, filed suit to recover compensation paid to its employee, Frank J. Powers, in the circuit court of Kane county, Illinois, against Martin Transfer and Storage Company, defendant. The suit was based upon paragraph 1 of section 29 of the Illinois Workmen's Compensation Act. (Ill. Rev. Stat. 1949, chap. 48, par. 166 [Jones Ill. Stats. Ann. 143.44].) Geneva alleged in its complaint that its employee, Frank J. Powers, was injured in 1948 as a result of the negligence of one of the employees of the defendant. The usual allegations of negligence, due care, and proximate cause of injuries were contained in the complaint. All of the parties were under the Compensation Act at the time of the occurrence.

Subsequent to the filing of this complaint, the Supreme Court in 1952 handed down its decision in Grasse v. Dealer's Transport Co., 412 Ill. 179. In that case the Supreme Court held that paragraph 1 of section 29 of the Workmen's Compensation Act was unconstitutional. More than two years after the suit was filed, leave was asked and obtained by Frank J. Powers to intervene as a party plaintiff. The plaintiffs then obtained leave to file an amended complaint consisting of four counts. Defendant vigorously opposed the joinder of Frank J. Powers as a party plaintiff and also the motion by plaintiffs to file an amended complaint. The cause proceeded to trial with a complaint containing four counts in substance as follows:

In the first count in the amended complaint, virtually identical to the original complaint, the Geneva Construction Company asked judgment against the defendant for $3,706.83, the amount of compensation paid by it to Powers.

In the second count of the amended complaint the Geneva Construction Company alleged that a cause of action had accrued to it for damages resulting from the injuries to Powers and requested judgment in the amount of $30,000.

Count III, filed on behalf of both the Geneva Construction Company and Frank J. Powers, asked judgment against the defendant for $30,000, both for money paid out to Powers by the Geneva Construction Company and for damages for personal injuries to Powers.

Count IV of the amended complaint, on behalf of Frank J. Powers alone, was a common-law action against the defendant for $30,000, for personal injuries arising out of the accident.

Issue was joined and the cause proceeded to trial. The jury returned a general verdict for both plaintiffs against the defendant in the amount of $15,000, and judgment was entered thereon by the court. Motions for a new trial and for judgment notwithstanding the verdict were denied, from which defendant prosecutes this appeal.

The parties have agreed and stipulated in this court that the sole questions involved herein are ones of law.

Defendant contends that an employer who has paid compensation to his employee under the terms of a Workmen's Compensation Act, which contains no provision for subrogation, is left without remedy against a third-party tort-feasor, who is under the Act, who has injured the said employee. Defendant further contends that at the time the Geneva Construction Company filed its suit, it had no cause of action by virtue of the decision of the Supreme Court in the Grasse case; that at the time Geneva filed its suit, it had no cause of action under the common law by way of subrogation or otherwise; and that the alleged cause of action of Powers is barred by the Ill. Rev. Stat. 1951, chap. 83, par. 15 [Jones Ill. Stats. Ann. 107.274], which provides that all actions for personal injuries shall be commenced within two years after the cause of action accrues.

The patent effect of the Grasse decision was to leave the Illinois Workmen's Compensation Act without a provision for subrogation to an employer in the position of Geneva.

Paragraph 1 of section 29 of the Workmen's Compensation Act provided that where both employers are under the Act and the plaintiff's employee is injured while he and his employer are in the exercise of ordinary care as a result of the negligence of the defendant employer or his employee and compensation has been paid under the Act by the plaintiff's employer, the employee's cause of action is transferred to his employer and he may collect the compensation paid and no more and his employee can maintain no action to recover damages for his injuries.

Paragraph 2 of section 29 specifically applies only to cases where the third-party tort-feasor is not bound by the Act. It is clear, therefore, that at the time Geneva filed its suit, it had no cause of action under the Compensation Act and was, therefore, without remedy unless some remedy existed at common law. The fact that at the time the original complaint was filed the cause of action was based upon paragraph 1 of section 29, subsequently held unconstitutional, is wholly immaterial. The true test of the sufficiency of the original complaint was whether or not all the essential elements of a cause of action were alleged therein. In order to determine whether or not Geneva had any cause of action at the time of the filing of the original complaint under common-law subrogation principles, an analysis of the Grasse decision is imperative.

In that case a complaint containing two counts was filed. Count I was filed in the name of the employer to recover compensation paid to its employee for injuries sustained as a result of the negligence of one of the employees of the defendant and was based upon paragraph 1 of section 29 of the Compensation Act. Count II was filed in the name of the injured employee and was a common-law action for personal injuries. On motion in the trial court, Count II was dismissed and the trial court held that by virtue of paragraph 1 of section 29 the cause of action of the employee was transferred to the employer. The Supreme Court held paragraph 1 of section 29 of the Illinois Workmen's Compensation Act to be unconstitutional and reversed the trial court in its action in allowing the motion to dismiss Count II of the complaint. The Supreme Court held that the legislative action limiting recovery to the injured employee where all parties were under the Act to the compensation paid, and permitting recovery where the defendant tort-feasor was not under the Act is an arbitrary classification without reasonable basis and does not constitute a reasonable exercise of the police power. The court further held that such legislative action violated the guarantee of due process of law and equal protection of the law under the Federal and State Constitutions as well as under section 22 of article 4 of ...


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