1. Under the Longshoremen's and Harbor Workers' Compensation
Act, made applicable to the District of Columbia as a workmen's
compensation law, where an employee is killed in the course of his
employment by the negligence of a stranger, and the administratrix,
being also the sole beneficiary, accepts compensation, there is an
implied statutory assignment to the employer of her cause of action
for the negligence under the District death statute. P.
287 U. S.
537
2. In such case, the Compensation Act, by implication, gives the
employer the same control over the institution of the death action,
the compromise and settlement of the claim against the wrongdoer,
and the disposition of the proceeds as it gives where the injury
results only in disability. P.
287 U. S.
538.
3. Although the Compensation Act does not say that the action
for wrongful death may be brought in the name of the employer, this
is implied in its purpose to effect a complete transfer of the
cause of action, notwithstanding that the common law rule against
actions in the names of assignees of choses in action survives in
the forum. P.
287 U. S.
540.
Page 287 U. S. 531
4. An insurer under the Compensation Act, though required to pay
an award directly, is nevertheless an indemnitor and, to the extent
that it has paid, is entitled to be subrogated to the employer's
right of recovery against third persons. P.
287 U. S.
541.
5. The employer, being directed by the Act to distribute the
proceeds, is the party to bring the action for wrongful death, and
may show that it is for the use of the insurer and of the widow and
administratrix, according to their beneficial interests. P.
287 U. S.
542.
6. Whether, under Equity Rule 13 of the Supreme Court of the
District of Columbia, the insurer and the widow-administratrix may
join in the action for wrongful death as legal plaintiffs this
Court does not decide, it being a question of local practice. P.
287 U. S.
543.
61 App.D.C. 74, 57 F.2d 440, reversed.
Certiorari to review the affirmance of a judgment for the
defendant in an action for wrongful death. The trial court struck
the declaration for misjoinder of parties plaintiff, and entered
judgment for the defendants when the plaintiffs elected to stand on
the declaration.
Page 287 U. S. 536
MR. JUSTICE STONE delivered the opinion of the Court.
Roberts, an employee of petitioner Bralove, was killed in the
course of his employment by the alleged negligence of respondent.
His widow, who was also his administratrix, claimed and has
accepted an award of compensation under the Longshoremen's and
Harbor Workers' Compensation Act (March 4, 1927, c. 509, 44 Stat.
1924), made applicable as a workmen's compensation law in the
District of Columbia by Act of May 17, 1928, c. 612, 45 Stat. 600.
The award directed the employer and petitioner the Aetna Life
Insurance Company, his insurer, [
Footnote 1] to pay compensation to the widow in periodic
installments, and the expenses attendant upon the burial of the
deceased.
The present suit was brought in the Supreme Court of the
District of Columbia on the theory that the acceptance of
compensation awarded under the statute operated as an assignment of
the administratrix' right to pursue the respondent for damages for
the wrongful death, and that the insurer succeeded to that right by
subrogation. The declaration named as plaintiffs petitioner the
Aetna Life Insurance Company "in its own right and also to the
Page 287 U. S. 537
use of" the widow "in her own right and as administratrix" and
petitioner Bralove "to the use of" the insurance company.
Respondent moved to strike the declaration for misjoinder of
parties plaintiff and causes of action. The trial court sustained
the motion on the first ground, and, as petitioners elected to
stand on the declaration, gave judgment for the respondent, which
the Court of Appeals affirmed, 61 App.D.C. 74, 57 F.2d 440. This
Court granted certiorari.
Both courts below ruled that the administratrix is, by the terms
of the District Death Act (23 Stat. 307, D.C.Code (1924), §§ 1301,
1302, 1303), the only proper plaintiff in an action for wrongful
death, and that the Compensation Act, though it assigns the cause
of action for the death, to the employer, upon acceptance of the
award, does not under the common law practice prevailing in the
District, permit him to bring the suit in his own name. The trial
court further expressed the view that the insurer was without any
interest in the litigation, by way of subrogation, since the cause
of action for wrongful death is not assignable at common law, and
the Compensation Act confers on the insurer no rights analogous to
those given the employer. The question before us is whether the
Court of Appeals was right, and, if not, whether the proper parties
have been designated as plaintiffs.
Sections 7, 8, and 9 of the Compensation Act provide for
compensation to the employee if he is injured, or to certain of his
dependents if he is killed, in the course of his employment.
Section 33(a) provides that
"if, on account of a disability or death for which compensation
is payable . . . , the person entitled to such compensation
determines that some person other than the employer is liable in
damages, he may elect . . . to receive such compensation or to
recover damages against such third person."
By subsection (b),
"Acceptance of such compensation
Page 287 U. S. 538
shall operate as an assignment to the employer of all right of
the person entitled to compensation to recover damages against such
third person,"
and, by subsection (d), the
"employer, on account of such assignment, may either institute
proceedings for the recovery of such damages or may compromise with
such third person."
But the cause of action against a third party which is thus cast
upon the employer is not to be maintained exclusively for his own
benefit. From the proceeds of the litigation or compromise, the
employer is directed by § 33(e) to retain an amount equal to his
disbursements in securing them, the cost of benefits furnished by
him to the employee, amounts paid as compensation, and the present
value of all amounts which it is estimated are payable as such. The
latter sum is to be held by the employer
"as a trust fund to pay such compensation as it becomes due, and
to pay any sum in excess of such compensation to the person
entitled to compensation or to the representative."
Any amount recovered above that required for these purposes is
to be paid by the employer directly "to the person entitled to
compensation or to the representative."
In the case where the employee survives and accepts compensation
as the only person entitled, it is clear that the statutory
assignment vests in the employer the full right to recover damages
from the third person. Double recovery by the employee,
compare
Mercer v. Ott, 78 W.Va. 629, 89 S.E. 952;
Fox v. Dallas
Hotel Co., 111 Tex. 461, 240 S.W. 517, is thus avoided. Yet
the employer is permitted to share in the recovery only to the
extent of his own liability,
compare Travelers' Insurance Co.
v. Brass Goods Mfg. Co., 239 N.Y. 273, 146 N.E. 377, and any
excess goes to the injured employee.
In this case, the injury resulted in death of the employee, and
the election to take compensation was made by the widow. As she is
both the administratrix and the only
Page 287 U. S. 539
person entitled to compensation, the election was validly
exercised, and we need not resolve possible doubts as to the proper
person to make the election under other circumstances.
Compare §§ 33(a) and (b)
with (f). Her election
has called into operation the statutory assignment so far as it
applies to the action for wrongful death. We must decide its effect
on that cause of action.
The statute is not free from ambiguity. The right to recover for
a wrongful death is the creature not of the common law, but of a
statute which confers the right on the personal representative of
the deceased for the benefit of his next of kin under the local
statute of distribution, some of whom may not be entitled to
compensation under the Compensation Act. Nevertheless, § 33(b) of
the Act provides that it is the "right of the person entitled to
compensation to recover damages against such third person" which is
assigned to the employer by the election to take compensation.
Reading this provision literally and alone, the employer, in the
case of the wrongful death of his employee, would take nothing by
the assignment which it purports to effect, since the person
entitled to the compensation has no right to recover for the death.
But § 33(d) authorizes the employer to institute suit or to
compromise the claim, and § 33(e)(1)(C) and (e)(2) provide that any
recovery in excess of the sums required to reimburse the employer
and allow for compensation payable by him is to be paid to the
representative of the deceased. Having regard to those provisions
and to the general purpose which the Act discloses with respect to
rights of recovery when the injury does not result in death, we see
no escape from the conclusion that the statute contemplates that
the employer is to have the same control over the institution of an
action for wrongful death, the compromise and settlement of the
claim, and the distribution of the proceeds as he is given in
unambiguous language in the case where the injury results only
Page 287 U. S. 540
in disability. What is made explicit by the statute with respect
to the latter is implicit with respect to the former. For, if it
had been intended that the employer should assert only a part of
the action for wrongful death, proportionate to the interest of
those who are dependents under the Compensation Act,
compare
Matter of Zirpola v. Casselman, 237 N.Y. 367, 143 N.E. 222;
United States Fidelity & Guaranty Co. v. Graham &
Norton Co., 254 N.Y. 50, 171 N.E. 903, there would be no
meaning to the language of § 33(e)(2) directing him to pay to the
personal representative from the proceeds of the action any excess
over the compensation award.
Concluding that, where the employer is given anything to
recover, it is the full recovery provided by the Wrongful Death
Act, we do not think, as did the courts below, that the rights thus
conferred may be enforced only by an action brought in the name of
the personal representative. It is true that the statute does not
expressly say that the employer may bring the action in his own
name, and that, by the common law, the assignee must, in general,
sue in the name of the assignor.
Glenn v. Marbury,
145 U. S. 499.
This rule -- a vestige of the common law's reluctance to admit that
a chose in action may be assigned -- is today but a formality which
has been widely abolished by legislation. We see no reason for
thinking that a statute passed in 1928, and clearly intended to
effect a complete transfer of the cause of action, should be
interpreted to perpetuate that formality. There is nothing in its
language, history, or purpose to indicate that the word
"assignment" was used as anything other than a convenient
description of the transfer to the employer of the rights of the
employee or his representative, or that it is to be read in the
common law sense merely because the forum for the enforcement of
those rights has not departed from
Page 287 U. S. 541
the common law form in the case of voluntary assignments.
It is immaterial whether the statutory assignment is said to
create a new cause of action in the employer, or merely to permit
him to enforce that previously vested in the employee or his
personal representative. What is material is that the employer
acquires the legal rights of the employee or the personal
representative, subject to the qualifications imposed by the common
law or the death statute to the extent that they are not
inconsistent with the provisions of the Compensation Act. The
Compensation Act permits him to enforce them in his own name.
We do not doubt, although other courts have,
Henderson Tel.
& Tel. Co. v. Owensboro Home Tel. & Tel. Co., 192 Ky.
322, 233 S.W. 743;
Hartford Accident & Indemnity Co. v.
Englander, 93 N.J.Eq. 188, 118 A. 628, that the insurer is
subrogated to the rights of the employer to the extent that it has
discharged his duties, though whether its rights extend to
compensation which it is liable to pay, as well as to that which it
has paid, we need not decide. [
Footnote 2] Notwithstanding, the provision of the statute
and of the policy permitting an award for compensation to be made
against the insurer directly, the function of the insurer is
essentially that of indemnifying the employer. The statute
contemplates that the payment of compensation
Page 287 U. S. 542
should be secured by insurance, and nothing in it indicates that
the insurer is to be denied an indemnitor's rights. Subrogation is
a normal incident of indemnity insurance.
Hall &
Long v. The Railroad Companies, 13 Wall. 367;
Liverpool & Great Western Steam Co. v. Phenix Insurance
Co., 129 U. S. 397,
129 U. S. 462;
St. Louis Iron Mountain & Southern Ry. Co. v. Commercial
Union Insurance Co., 139 U. S. 223,
139 U. S. 235;
Travelers' Insurance Co. v. Great Lakes Engineering Co.,
184 F. 426;
Workmen's Compensation Exchange v. Chicago, M., St.
P. & P. R. Co., 45 F.2d 885.
The suggestion of the trial court that subrogation is precluded
here by the nonassignability, under the Death Act and the common
law, of the administratrix' cause of action for death, is without
force. Considerations of policy which may forbid the voluntary
assignment of the cause of action are obviously inapplicable to a
case where the statute does assign the action to the employer in
order to carry out the plan of the Compensation Act. That plan
would be destroyed if the insurance company were denied the right
of subrogation, for the consequence would be to permit that double
recovery by either the employer or the next of kin entitled to
compensation which the statute is careful to avoid, with a
resulting increase in the cost of the insurance which the statute
requires.
The insurer's right of subrogation does not alter the fact that
it is the employer who is directed by the statute to distribute the
proceeds of the recovery, in which the insurer has only a partial
interest. Accordingly, the employer is the party to bring the
action, and the only necessary party plaintiff in the case before
us. [
Footnote 3] But the
insurance
Page 287 U. S. 543
company and the widow, both in her own right and as
administratrix, are interested in the recovery. Under the common
law practice, the defendant may not complain if the employer
indicates their beneficial interests by bringing the action to
their use, as well as to his own.
See Southern Ry. v.
Carter, 139 Ga. 236, 238, 77 S.E. 21;
Pearce v.
Twichell, 41 Miss. 344, 346;
Atkins v. Moore, 82 Ill.
240, 241.
Compare Roof v. Chattanooga Wood Split Pulley
Co., 36 Fla. 284, 293, 18 So. 597. Whether, under Equity Rule
13 of the Supreme Court of the District of Columbia, made
applicable to actions at law by the first paragraph of the law
rules, they may join with him as legal plaintiffs, since they have
"an interest . . . in obtaining the relief demanded," we do not
decide. The decision does not depend upon the federal statute, but
upon the local rule, and may be conditioned by unwritten practices
which we should hesitate to disturb. Nor do we consider what would
be the rights of the person entitled to compensation or the
personal representative,
compare Hunt v. Bank Line, 35
F.2d 136; or the insurer,
see Norwich Insurance Co. v. Standard
Oil Co., 59 F. 984;
Continental Insurance Co. v. Loud
& Sons Lumber Co., 93 Mich. 139, 53 N.W. 394;
United
States Fidelity & Guaranty
Page 287 U. S. 544
Co. v. Graham & Norton Co., supra, 254 N.Y. 54, 55,
171 N.E. 903;
compare Ocean Accident & Guarantee Corp. v.
Hooker Electrochemical Co., 240 N.Y. 37, 147 N.E. 351;
Aetna Casualty & Surety Co. v. Phoenix Nat. Bank &
Trust Co., 285 U. S. 209,
285 U. S. 214,
in a case where the employer refused to cooperate in the
prosecution of the action.
Since the ruling below that the action could only be brought in
the name of the personal representative was erroneous, petitioners'
failure to amend in conformity to that ruling will not preclude
amendment now. Judgment will be reversed, and the cause remanded
for further proceedings in conformity with this opinion.
Reversed.
[
Footnote 1]
Under the terms of the policy, the insurer obligated itself to
pay all installments of compensation directly to the person
entitled to them "because of the obligation for compensation . . .
imposed upon . . . this Employer," as well as to indemnify the
employer against any loss by reason of his liability. The former
provision is required by §§ 35 and 36 of the statute
"in order that the liability for compensation imposed by this
chapter may be most effectively discharged by the employer, and in
order that the administration of this chapter in respect of such
liability may be facilitated. . . ."
[
Footnote 2]
The policy of insurance provides (Clause K) that
"the Company shall be subrogated in case of any payment under
this Policy, to the extent of such payment, to all rights of
recovery therefor vested by law either in this Employer or, in any
employee or his dependents claiming hereunder, against persons,
corporations, associations, or estates."
The insurer is subrogated to the employer's rights to no greater
extent under this express provision than it would be without it by
operation of law; whether its rights may be limited by it, we have
no occasion to consider.
[
Footnote 3]
Under the common law practice, rights acquired by subrogation
were asserted in an action at law in the name of the insured to the
insurer's use,
Hall & Long v. The
Railroad Companies, 13 Wall. 367;
United States
v. American Tobacco Co., 166 U. S. 468,
166 U. S. 474,
though, in equity,
Garrison et al. v. Memphis
Ins. Co., 19 How. 312, and admiralty,
Liverpool
& Great Western Steam Co. v. Phenix Insurance Co.,
129 U. S. 397,
129 U. S. 462,
the insurer might sue in its own name. We need not consider the
effect upon the common law rule of Equity Rule 13 of the Supreme
Court of the District of Columbia (made applicable to actions at
law by Law Rules, � 1) providing that all actions "shall be
prosecuted in the name of the real party in interest," in a case
where the insurer succeeds by subrogation to the entire cause of
action of the insured against the party primarily responsible for
the loss.
Cf. Travelers' Insurance Co. v. Great Lakes
Engineering Co., 184 F. 426. Such was not the case here.
Compare Norwich Insurance Co. v. Standard Oil Co., 59 F.
984;
Continental Insurance Co. v. Loud & Sons Lumber
Co., 93 Mich. 139, 53 N.W. 394;
United States Fidelity
& Guaranty Co. v. Graham & Norton Co., 254 N.Y. 50,
54, 55, 171 N.E. 903.