Before HASTINGS, Chief Judge, and SCHNACKENBERG and CASTLE, Circuit Judges.
The Aetna Casualty and Surety Company, intervening-plaintiff-appellant, filed an intervening petition in a diversity action commenced by Floyd Blanski, plaintiff-appellee, wherein Blanski sought to recover damages from three defendants for alleged personal injuries. Aetna, by its intervening petition, as subrogee insurance carrier of Davey Tree Expert Company, Blanski's employer, sought reimbursement and indemnification for compensation paid Blanski under the Illinois Workmen's Occupational Diseases Act from any recovery by Blanski from the defendants and to enforce a lien for such purpose. Blanski's action was settled and an agreed judgment for $10,500 entered in his favor. The judgment was satisfied and the amount deposited with the clerk of the court subject to adjudication of the intervening petition of Aetna. The matter was taken by the court on briefs of the parties. The District Court filed an opinion containing its findings of fact and conclusions of law and entered a judgment order disallowing the intervening petition. After denial of its motion to vacate the judgment Aetna appealed.
The main contested issues presented by this appeal are:
(1) Whether freedom from negligence causing or contributing to the employee's condition of ill-being and disability is a condition prerequisite to the employer (or its subrogee insurance carrier) obtaining indemnification for compensation paid under the Illinois Workmen's Occupational Diseases Act, and enforcing a lien therefor, from and against a settlement received by the employee from alleged third-party tort-feasors?
(2) And, if so, whether the District Court's finding that the record established such negligence on the part of the employer was clearly erroneous.
Blanski, a minor, was an employee of the Davey Tree Expert Company. On September 8, 1949 he allegedly sustained an occupational disease which he claimed arose out of and in the course of his employment. He filed a claim with the Industrial Commission of Illinois under the Workmen's Occupational Diseases Act against Davey Tree Expert Company and Aetna, its insurance carrier. He received an award which included compensation for permanent partial disability and covered accrued medical and hospitalization expense.
On attaining his majority in 1952, Blanski brought suit against the alleged third-party tort-feasors. Aetna's intervening petition filed therein alleged, inter alia, that Blanski's alleged injuries, disabilities and disablement for which Aetna became liable to pay compensation "are the same injuries, disabilities and disablement which are the basis" of Blanski's suit against the defendants. Aetna's original intervening petition, filed October 14, 1953, contained no allegation concerning freedom from negligence of Blanski's employer, Davey Tree Expert Company. An amendment to the intervening petition was filed in 1955 containing the following allegation:
"Petitioner says that the alleged injuries, disabilities and disablement which are the basis of the said Floyd Blanski's suit against the defendants in the above-entitled cause were not proximately caused by the negligence of Davey Tree Expert Company or by the negligence of any of such company's employees."
This allegation was subsequently deleted by an amendment made September 23, 1959. The answer to the intervening petition, filed by Blanski, expressly alleged that:
"[The] Davey Tree Expert Company, to whom intervener became subrogated, was guilty of acts of negligence and lack of care which contributed, along with the acts of the defendants, to cause plaintiff's condition of ill being, and is therefore barred from asserting any rights in any recovery had by plaintiff."
No reply was filed by Aetna. On this state of the pleadings the existence of negligence on the part of Blanski's employer which contributed to cause his condition was admitted. The District Court did not err in finding that the record established such negligence. We do not find it necessary to consider the contentions of the parties as to whether or not a stipulation which was entered into authorized the District Court to consider depositions on file in the cause on the question of the existence of negligence of Blanski's employer. Such negligence was admitted on the pleadings.
On September 8, 1949, the date on which Blanski's alleged claim under the Workmen's Occupational Diseases Act and his alleged cause of action against the defendant third-party tort-feasors accrued, the first paragraph of Section 29 of the Occupational Diseases Act (Ill.Rev.Stat.1949, Ch. 48, § 172.29) like the first paragraph of the companion section of the Illinois Workmen's Compensation Act (Ill.Rev.Stat.1949, Ch. 48, § 166) contained a provision to the effect that where the disablement for which compensation was payable was not proximately caused by negligence of the employer or his employees and was caused under circumstances creating a legal liability for damages in a third-party tort-feasor who was operating under and bound by the Act the right of the employee to recover from such third party was transferred to his employer.
The Illinois Workmen's Occupational Diseases Act and the Illinois Workmen's Compensation 29 of the Compensation Act are equally applicable to Section 29 of the Occupational Diseases Act. Dur-Ite Co. v. ...