STATE COMPENSATION INSURANCE FUND v. INDUSTRIAL ACCIDENT COMMISSION ET AL

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District Court of Appeal, First District, Division 2, California.

STATE COMPENSATION INSURANCE FUND v. INDUSTRIAL ACCIDENT COMMISSION ET AL.*

Civ. 12709.

Decided: October 17, 1944

Donald Gallagher and Edmund J. Thomas, Jr., both of San Francisco, for petitioner. Everett A. Corten and Dan Murphy, Jr., both of San Francisco, for respondent Industrial Accident Commission. Floyd S. Sisk, of San Francisco, for respondent Colonial Ins. Co.

The petitioner seeks the annulment of an award as the insurance carrier of one who was found to be the general employer of the applicant for compensation.

The facts are fairly stated by the petitioner in its opening brief and this statement is conceded to be correct by the respondent commission with certain reservations of matters which are listed as conclusions of counsel. Omitting the portions objected to the statement reads:

“Carrico & Gautier had a general contract to erect a warehouse at Marinship Corporation, Sausalito, California. There were several subcontractors, among them being Arch Rib Truss Co. The Arch Rib Truss Co. furnished certain trusses required in the construction of the warehouse, together with the necessary labor * * * in the placing of the trusses. Carrico & Gautier erected uprights, put in rafters, and installed the roofing. Carrico & Gautier and Arch Rib Truss Co. shared the same office at Marinship and all employees of Carrico & Gautier as well as those of the subcontractors wore a badge carrying the name of Carrico & Gautier. Such badges were issued by the shipyard and were necessary for the men to enter and leave the yard.

“In performing their work, Carrico & Gautier rented a crane. The Arch Rib Truss Co. also had need for a crane, so made arrangement to share the use of the crane and its crew with Carrico & Gautier.

“* * * Accurate records were kept of the time the crane and crew were used by each company, and the crew was paid separately by each company. * * *

“Arch Rib Truss Co. was insured under the Workmen's Compensation Laws of California by Colonial Insurance Company, and Carrico & Gautier was insured by petitioner, State Compensation Insurance Fund.

“Respondent R. E. Rodgers obtained a job through his union and was told to report to the office of Carrico & Gautier at the shipyard. He reported there about eight days prior to his injury, and was taken to the foreman of Arch Rib Truss Co. for an interview. The foreman instructed him to report for work the next day. He was placed in the crew working on the crane. * * * He was paid separately by each company. On the day he was injured he worked only for the Arch Rib Truss Co.

“Following the injury respondent R. E. Rodgers was given first aid treatment by the shipyard hospital and was then transferred to a hospital in San Francisco. He was first examined by a doctor sent to the hospital by State Compensation Insurance Fund; but upon being advised that respondent Rodgers was not in the employ of its assured at the time of injury, the Fund did not furnish or agree to furnish medical treatment or compensation. After he had been in the hospital a few days, respondent Rodgers was interviewed by Mr. Sisk, a representative of the Colonial Insurance Company. To this representative respondent Rodgers related the circumstances of his employment as set forth above. Thereupon the Colonial Insurance Co. proceeded to furnish medical treatment and paid compensation.

“On January 12, 1943, respondent Rodgers filed an application for adjustment of claim with the respondent Industrial Accident Commission. The application named only Arch Rib Truss Co. and Colonial Insurance Company as defendants. The issue raised in the application was: ‘Whether or not disability continues and rating.’ The respondent Commission set the case for hearing on February 24, 1943. At the hearing on February 24, 1943, Mr. Sisk, acting as attorney for Colonial Insurance Company, requested the respondent Commission to join Carrico & Gautier and State Compensation Insurance Fund as parties defendant. On February 26, 1943, the respondent Commission issued such an order.

“When the case came on for formal hearing on August 2, 1943, petitioner placed all material facts in issue, except insurance coverage, and raised the defense of the statute of limitations. Subsequently, after finding general and special employment, the Commission ruled that the statute was not a valid defense even though the State Compensation Insurance Fund and its assured, Carrico & Gautier, were not joined as parties defendant until more than three months after the prescriptive period had otherwise run, because the State Compensation Insurance Fund was ‘one of the joint employer.’ ”

The petitioner attacks the award upon four grounds, but we will confine our discussion to the question of the statute of limitations as upon that issue the award must be annulled as to the petitioner.

It is the general rule that when a party has a cause of action against another the statute of limitations is not tolled as to the latter by the filing of suit against some other party. 16 Cal.Jur. p. 545; 34 Am.Jur. p. 223. A similar situation arose in Ingram v. Department of Indus. Relations, 208 Cal. 633, 284 P. 212, 216. The injured employee filed a claim against one employer and after an award was made it was set aside and another was added as a party defendant on the theory that she held title to the property upon which the employee was injured. In annulling the subsequent award against her the Supreme Court said: “The petitioner Minnie H. Ingram was guilty of no act of commission or omission prior to the running of the statute in her favor by which the status or rights of the employee or the authority of the commission were in anywise prejudiced, and at no time has she waived her rights under the statute. When she was ordered into the proceeding as a party, she interposed the bar of the statute, and has at all times relied upon the same. ‘The general rule is well settled that, when new parties are brought in by amendment, the statute of limitations continues to run in their favor until thus made parties. The suit cannot be considered as having been commenced against them until they are made parties.’ 37 Cor.Jur. 1066, and cases therein cited.”

A recognized exception to the rule is where the party against whom the action lies fraudulently conceals from the plaintiff his liability or fraudulently induces the plaintiff to believe that the one sued is the one and only party liable. 34 Am.Jur. p. 188. This exception is based upon the accepted theory that the party who has concealed his liability is estopped by his fraud to raise the plea of the statute. That was the situation in Pac. Employers Ins. Co. v. I. A. C., Cal.App., 152 P.2d 501. But here we find no evidence of concealment or fraud and hence no ground upon which the statute may be held to have been tolled. From all the evidence it appears that all the parties dealt at arms length and that, though there may have been some confusion as to the status of the general and the special employer, there was no act of the petitioner herein which could lay the foundation for an estoppel.

Another exception to this general rule is where one of two joint obligors directs or requests the other to make payments under the obligation or knows of and consents to the making of such payments. In such cases the payments may be treated as having been made by the one debtor for the benefit of both and thus to toll the running of the statute of limitations against both. The authorities on this subject are treated in the note found in 71 A.L.R. p. 399, and 121 A.L.R. p. 553. In 1 Campbell on Workmen's Compensation, p. 844, it is stated: “Any act or agreement which may serve to toll the statute of limitations operates only as respects the liability of the party so acting or agreeing. If there be both a general and special employer involved, any act constituting a recognition of liability sufficient to toll the statute by the general employer alone does not, in the absence of a showing of agency, serve to toll the claim against the special employer. The same rule applies where by error a third party pays compensation. The period of liability of the real employer is not thereby extended.”

No authority is cited in support of the statement other than rulings of the respondent commission in prior cases. We may assume that the theory of agency is akin to that of acquiescence and consent referred to in the authorities heretofore cited. The doctrine that the act of the agent is the act of the principal presupposes knowledge of the agency and the implied consent that he may act for and in behalf of the principal. The whole doctrine falls with the denial of the agency. Hence when a party having no authority to act as the agent of another assumes to act for another who denies the agency and repudiates the act as done in his behalf the rule stated in Campbell does not apply.

Such is the situation here. The two employers were notified of the injury, the employee was removed to a hospital for treatment, the petitioner denied liability and insisted that the special employer alone was liable. All payments thereafter made by the special employer were made with the knowledge of all parties––the employee, the general employer, and the special employer––that the latter assumed liability on its own account and that this petitioner denied all liability. Under such circumstances there is no question of agency involved.

The only defense of the finding made by respondent is that the employment was joint and that since the employee was furnished treatment by one of the employers he had no reason to sue the other and hence his cause of action did not arise until all payments ceased. The argument overlooks the important elements referred to in the authorities above noted. When one of the joint obligors denies all liability there is no basis for the doctrine of acquiescence and consent. The employee was not deceived by any act of the petitioner, hence there is no estoppel. The insurance carrier of the special employer (and this controversy is between the two carriers alone) does not contend in its brief that the award was sound as to the petitioner, or that any act of the petitioner or of its insured tended to deceive the employee, the special employer, or the carrier. Under these circumstances there is no case of agency, estoppel, fraud, or misrepresentation.

The award as to petitioner alone is annulled and in all other respects affirmed.

NOURSE, Presiding Justice.

SPENCE, J., and DOOLING, Justice pro tem., concur.