Opposition Brief — FTC v. RF Keppel & Bro., Inc.

Supreme Court brief1934

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SEY INNES scars Nard ccandekesemesecenenana sed baseawecan 2

Statutes and regulations involved........ See he obec aSeneeaesanca 2

IE MOE OUND CIN ce cb ak 5 Gat 6 CONOR AICANA EEK ACK RRA RRR CAS 3

NE Gr NE A ck cca hea e RUS CAROLE UR cee eam 6

Argument, Point No. 1, “The Workmen’s Compensation Act of the

State of Washington is Compulsory in Nature”.............. 7

Argument Point No. 2, “The Appellant was Deprived of No Vested

ME IA CAREC A EAA KARE REARS ER ER KROES MwA Chace. 19

Argument, Point No. 3, “Rights Purely Statutory Fall With the

Repeal of the Statute Creating Them’”’...................... 33

Argument, Point No. 4, “The Workmen’s Compensation Act is

Remedial Legislation, and Creates No Vested Rights”....... 45

Argument, Point No. 5, “The Amendment is a Valid Exercise of

ee CN OE Cn ck ta iGe Lunictaakuees un « Makes ee CER RR AS 59

Argument, Point No. 6, “The Unitcd States Supreme Court is

Bound by the Interpretation of the State Law, as Decided by

Te Tse Cees GE Wie TN a anon ccccccccccccccccccsccs 65

Argument, Point No. 7, “The Right to Sue a Sovereign May Be

Withdrawn by the Sovereign at its Pleasure”............... 66

i a a aa 74

Appendix I, statutes and regulations involved.................. 76

CITATIONS | ;

Page

fe Se Fe ee re ones ae eee 30

Alabama G. S. R. Company v. Carroll, 97 Alabama 129, 11 So. 803 15

ree 49

ee ee Oe Oe i iekacdeveuneaeusnens 64

Bailey v. School Dist. No. 49, 108 Wash. 612 at 613.............. 37

ne a a ocle en kwaalge«ekcaan 67

Bennett v. Hargus, 1 Neb. 421.................... eee eee 41

ne ele ge pk he 64

Black’s -Law Dictionary, (2nd Edition) pp. 1203-1204............ 20

Ba RP NO ee ng a eee 20

CITATIONS—C ontinued

Page

Christenson v. Morse Dry Dock & Repair Co., 214 N. Y. S. 732, 740 47

Cohens v. Virginia, 19 U. S. 405.........- cece eee cece eee ee eens 68

Cooley on Constitutional Limitations, pp. 749-752..............- 31

Coombes v. Getz, 285 U. S. 434, 448.......... cece cece e eee ee eens 38-40

Continental Oil Co. v. Montana C. Co., SB Mont. BGO... .cencececs 41-42

Cooper Company v. Hammer, 250 U. S. 400........ 52sec ee eeeees 65

County of San Bernardino v. Industrial Accident Commission, 217

Cal. 618, 13 Pac. (2d) 829.......... cece cece cece ence eeeeeee 58

Crane v. Hahlo, 258 U. S. 146.......... cece eee e eee eee e eee ees 13

Crawford v. Halsted & Putnam, 20 Gratt. (61 Va.) 211.......... 51

Cudahy Company v. Parramore, 263 U. S. 418 at | eer Te 16

Davis v. Mills, 194 U. S. 451........ ccc cece eee eee eee eeneee 64

DeJoseph v. Standard Steel Co., 99 Pa. Super. Ct. 497........... 50

Denning v. Quist, 160 Wash. 681, 686...........2ee eee eee ee eeees 37

Dist. of Columbia v. Bslin, 183 U. S. 62.......... 0 cee cece eee eees 38

Dormidy v. Sharon Boiler Wks., 127 Fed. 485........----++ee005 15

Duquoin, et al. v. Industrial Commission, et al., 329 || i Se 58

Essex Public Road Board v. Skinkle, 140 U. S. 334, 340.......... 13

Ettor v. Tacoma, 228 U. S. 148........:e cece cece cece reece eeeees 39-40

Ex parte McCardle, 74 U. S. 506, 514.......... 2 eee ee eeeeeenees 33

Ferguson v. Department of Labor & Industries, 168 Wash. 677,

OTD, GBB ww ccc ccc ccccccensccccccccccccnncsccccccsccscceases 54-65

Ferry v. Spokane P. & S. Ry. Co., 258 U. S. 314, Beek sseeivcasses 29

Flanigan v. Sierra County, 196 U. S. 553 at 561......... 35-36-3 8-65-66

Freeland v. Williams, 131 U. S. 405, 414, 420............+--+0-- 13-47

Garrison v. City of New York, 21 Wall. 196, 203...........-..++- 13

Gossen v. Township of Borgholm, 174 Minn. 229.........--++-+++ 46

Graves v. State Industrial Accident Commission, 112 Ore.

Guay v. Brown Co., 83 N. H. 392, 142 Atl. rere re 46

Gwinn v. United States, 184 U. S. 669.......... cece eee eee eeenes 35

Holden v. Hardy, 169 U. S. 397..... 2... ee eee ee eee e eee e ee eeeees 12

Home Bldg. & Loan v. Blaisdell, 78 L. Ed. (Advance Opinions)

BEG, BTL nc ccccccccccccnccvcvccecccccsscccccccecessesveses 47-64

Industrial Commission of Ohio v. Kamrath, 118 Ohio 1, 160 N. E.

Re cia hesseh ben ShbGh00boseen sense oessensane 56

In re Duncan, 73 Ind. App. 270, 127 N. E. 289......---++seeeeees 46

In re Hogan, 129 N. E. 633, 75 Ind. App. 53........-+-eee eee eees 49

Insurance Company v. Ritchie, 72 U. S. Rep. 541 at 544...... (ae

Ireland v. Shipley, Supra, 165 Maryland Rep. 90...........+-+-- 56-62

Jacobson v. Mass., 197 U. S. 11...... eee cece cece eee eee eeeeees 64

Johnson v. Jeddo Highland Coal Co., 99 Pa. Super. Ct. | Sea 50

lil

CITATIONS—Continued

Page

Lane v. Industrial Commissioner of State of N. Y., 54 Fed. Rep.

SEUNG Re WARES ARERR DAKE RCOR ED SAG DA EOS Od Kaae ooo anur 17

Se My WO anc cn canveuttndacadasacevecvaccace 64

SE Ts COO, Oe Oy Be Mh Ona tac inc cdnansasctsercedccaccac 56

Louisiana v. Mayor of New Orleans, 109 U. S, 285............... 38

Louisville & Nashville Rd. Co. v. Mottley, 99 Ohio 128, 219 U. S.

OU sk WERRSA NAN WEENA 0645 SANNA News bubba DONA wad chEKRGe ce cdus 53

Lynch v, United States, 78 Advance Opinions, U. S. L. Ed. 997,

BE KA. VewsAnA cach ebescekus SiN SASRORRMSADEWES KEKE ARE EAS 71

Marchuk v. Pittsburgh Terminal Coal Corp., 106 Penn. Sup. Ct.

PE SN EDC CUCU uas cede cctyecnes cit ceelt cbcos unica 50-52

Mattson v. Department of Labor & Industries, 76 Wash. Dec. 255 654

Mickey et al. v. Barton, 62 N. EB. 802........... ccc ccc cccccewece 41

Morley v. Lakeshore & Michigan Southern Ry. Co., 146 U. S. 162,

aE ee One Vy Pr OI aes tanh are ge ae Se 13

Moss v. Smith, 171 Cal. 788.............. ce hid ebkedhwihssceee Kenn 41

Mountain Timber Company v. State of Washington, 243 U. S.

WUE SUNDER WAAREUGK ERs KOR EAT CIGAR ACO Ka eos NL aciaaus 11-16—45-63

Mullen v. Department of Labor & Industries, 157 Wash. 329, 382

vive ieststeniclrd ae LN eT EEE OEE TEETER RUT 22-25-53-5 4-65

cesar thse Ueecesnoe nec th cocBig Th EET OTT a tLe Bas 64

New London Northern Ry. Co. v. Boston & Albany Ry. Co., 102 ,

smucitnesl tion, Focasine Ce ECCT AE POET an Ct ee 41

Norris v. Crocker, 64 U. S. 429...............cccccccecd¥ecses., 33

North Alaska Salmon Company v. Pillsbury, 174 Cal. 1.......... 14

Northern Pac. Ry. Co. v. Meese, 239 U. S. 619... .. oo. cc ccc c ce 65

Obrecht-Lynch Corp. v. Clark, 130 Fed. (2d) 144...........2... 47

Ocean Accident & Guaranty Corp. Ltd. v. The Ind. Comm. of Ari-

zona et al., 32 Ariz. 275, at 282, 257 Pac. 645............... 15

Ohio v. Helverling, 54 Ws Ms PN 6 sw dnd ca caanccudcas 69-70

Pacific Gas & Electric Co. v. By We OR, GR icin kovcvcenk naan 41

Pacific Mail Steamship Co. v. oliffe, 2 Wall. 450, 507............ 38

Pearsall v. Great Northern R. R. Co., 161 U. S. es 21

Preveslin y. Derby_& Ansonia Dev. Co., 112 Conn. 129, 15 Atl. 518 73

Quong Ham Wet © ketene Commission, 255 U. S. 448........ 65

Raymond v. Industrial CPM, GOO TUR. BOB. os nn vcncccccscccccacs 47

Robinson yv. McHugh, 158 Wash. 157.......................0.... 37

Rohde v. State Ind. Acc. Commm., 108 Ore. 406... 0 ccc ccc cccccn 72

iv \

CITA TIONS—Continued

Page

Salt Co. v. East Saginaw, 80 U. S. Reports, 373, 377, 379......... 29

Schmeiling v. Dept. of Labor & Industries, 167 Wash. 692....... 54-65

South Carolina v. Gaillard, 101 U. S. 433................ Wkeka<s 47

Southern Pacific Company v. Jensen, 244 U. S. 205, 218......... 27-46

Smolen v. Industrial Commission et al., 324 Ill. 32, 154 N. E. 441.. 58

Standard Oil Company v. Industrial Accident Commission, 31 Pac.

PPE rrr TTeTy eT Tre rere eT Lie TEE lee OL 25

State ex rel. Boswell v. Industrial Commission of Ohio, 125 Ohio

Gs. Sec ka cRne du sbnceacevetbe00 06000 baer ecennb ERK 26-27-56

State ex rel. Crawford v. Industrial Commission, 110 Ohio St. 271,

Pee eee re TT eve UCIT TTT TET Lee 28

State ex rel. Davis-Smith Co. v. Clausen, 65 Wash. 156...........

re ae ey er ere res TET eT TER ECE TTC TE ELE 10—12—46—5 9-67-70

State ex rel. McKittrick v. Bair, 33 Mo. 1 at p. 14............... 30

State of Louisiana ex rel. Folson v. Mayor of New Orleans, 109

ae a cL ee Gha Sah Shek ban ee Shs REASAA HEUER ORS xd eARS 13

rena 200: ¥, JOU oe, COU. GB. BGO iis ccs iewece cece rises 33-35-36

Sturtz v. Industrial Insurance Commission, 91 Wash. 589........ 72

Taivott v. Industrial Ins. Comm., 108 Wash. 231................ 73

Tayter v. Strayer, TS NW. TE. BBS... .n ccc cccscccscsccccscccsccceves 41

po ps ee ee ee. eer Te Tee ee ee ee ee 47

The Collector v. Hubbard, 79 U. S. Rep. 1, at p. 14.............. 47

Thornton v. Duffy, 99 Ohio State Rep. 120, 124 N. E. 56......... 52

Thornton v. Duffy, 254 U. S. Rep. 368, 99 Ohio St. Rep. 120, 124

Re Ee A at RR ee Te ey Te ree ee ee eT ee eee ee 52

United States ¥. Chambers, 201 U. S: Bos... cc cecccccccvccccscces 41

United States v. Heinszen & Co., 206 U. S. 370........... 2 ee eeeee 38

Vincent v. Allerton House Co., 256 N. Y. 522...........eeeeeeees 54-56

Vinther v. Dept. of Labor & Industries, 76 Wash. Dec. 297..... 9-66-69

Virden v. Smith et al., 210 Pac. 129, 130........ccccccccccccecee 73

eee’. V. CARRION, 207 TU. Bi Be ons ce ieiccc ces se case eedees 64

White v. United States, 270 U. S. 180........... cece eee eee eeeee 16-30

Williams v. U. S., 77 Advance Opinions of the U. S. Law Ed.,

Ee, PE er mo rer Te Tree Tere TT Te eT Te Tee TE 68-72

Zajachuck v. Willard Strge. Battery Co., 106 Ohio State Rep. 538,

fk ae ig ee ee eee ere er ere yer re 28

IN THE

SUPREME COURT

OF THE

UNITED STATES

OCTOBER TERM, 1934.

ArtTHuR Martson, Appellant,

DeparTMENT oF Lapor anv Inpusrries or $+ No. 29

THE STATE OF WaAsHINGTON,

Appellee.

BRIEF ON APPEAL FROM THE SUPREME

COURT OF THE STATE OF

WASHINGTON ad

OPINIONS BELOW

The opinion of the Spreme Court of the State of

Washington is reported in 76 Washington Decisions,

page 2595.

QUESTIONS PRESENTED

Questions presented’are as follows:

_ (1) Does Subdivision (h) of Section IV, Chapter

310 of the Session Laws of the State of Washington,

1927, constitute an impairment of contract in violation

of Section X, Article I of the Constitution of the United

States?

(2) Does the said section violate the prévisions of

the Fourteenth Amendment?

STATUTES AND REGULATIONS INVOLVED

The statutes and regulations involved are set forth

in the Appendix herein.

STATEMENT OF THE CASE

The appellant was injured upon the 27th day of

February, 1927, while employed in extrahazardous in-

dustry as classified by the Workmen’s Compensation

Act, Section 7676 of Remington’s Compiled Statutes of

the State of Washington. A claim was filed with the

appellee, Department of Labor and Industries, as re-

quired by statute, and compensation was thereafter paid.

Final settlement of the claim was ordered by the De-

partment on the 17th day of January, 1928, at which time

compensation payment was closed with an award for

permanent partial disability. Thereafter, on the 10th

day of May, 1933, a formal petition for re-opening the

claim of appellant was presented to the Department of

Labor and Industries on the grounds that appellant’s

condition had become aggravated as a result of the in-

jury sustained February 27, 1927. Upon the 29th day

of May, 1933, an appeal having been taken from the

order of the Supervisor of Industrial ‘Insurance of the

Department of Labor and’Industries, refusing to re-open

said claim to the Joit oard of said Department, said.

Joint Board entered an order sustaining the Supervisor

and refusing to entertain the application for re-opening

upon the grounds that the appellant had not complied

with the provisions of the statute providing that the

claim for further compensation upon the grounds of

aggravation of disability must -be made within three

years from the date of the termination of compensation -

by the Department. From this order an appeal was

taken to the Superior Court by the State of Washington,

for Thurston County<—The court sustained the action

of the Department of Labor and Industries. Thereafter,

an appeal was taken to the Supreme Court of the State

of Washington, which affirmed the lower court. There-

after, the appeal to this court was prosecuted,

At the 1921 session of the Legislature of the State

of Washington, there was enacted a law rglating to com-

pensation of injured workmen, which is set forth in full

in the Session Laws of the State of Washington, 1911,

Chapter 74 thereof. The statute as then enacted pro-

vided for continuing jurisdiction over workmen’s claims

for injury with regard to aggravation, diminution,

termination of claim for disability without any limita-

tion as to time within which application for further con-

sideration on the part of the workman was to be made

in order for the Department to retain jurisdiction. That

provision of the statute is,found in Chapter 74 of the

Laws of 1911, Section 9, Subdivision (h) thereof. The

law continued without change with regard to this par-

ticular provision until June of 1927, at which time

Section 1 of Chapter 182 of the Laws of 1921, which

constituted a re-enactment of the Laws of 1911 with

amendments not here pertinent, was amended, Chapter

74, Section V, Subdivision (h) of the Laws of 1927 be-

eame Chapter 310, Section IV, Subdivision (h) thereof.

That section became effective after the appellant herein

had been injured, but before his compensation had been

terminated originally. The section then provided that

were there to be a change of condition, an application

for further compensation was to be made within three

years from the date of termination of compensation.

A saving clause was appended to Subdivision (h)

of Section V, as above provided, to the effect that in all

cases where compensation had been established or ter-

minated prior to the enaetment of said amendment,

claimant’s whose claims had been so adjusted were to

have three years from the taking of effect of the act

within which to apply for such readjustment. The amen-

datory provision is contained in Section 7679, Subdivi-

sion (h) thereof, of Remington’s Compiled Statutes of

the State of Washington.

a Senate aches

SUMMARY OF ARGUMENT

1. Tue WorkMEN’s COMPENSATION Act OF THE

Srate or WasHIncton Is CoMPULSORY IN NATURE AND

Rests Upon Stratus anp Is Not ConTRAcTUAL.

9. Tur AMENDMENT oF 1927 Dip Not ConstTITUTE A

Deprivation or Any Vestep Ricut PossSESSED BY THE

APPELLANT.

8. Riguts Purety Starurory Faun Wir THE Re-

PEAL OF THE STATUTE CREATING THEM.

4. Ture WorKMEN’s COMPENSATION Act Is REMEDIAL

LEGISLATION AND CONSEQUENTLY Creates No VESTED

RIGuHtTs.

5. Tur AMENDMENT IN QueEsTION CONSTITUTES A

Vauip ExercisE OF THE PoLice Power.

6. Tur Unitrep States SUPREME Court Is Bounp BY

THE INTERPRETATION OF THE STATE Law as DEcIDED BY

THe Hicuest Court or THat State.

7. Tue Rieut To Sur A SOVEREIGN May Be Wit8-

DRAWN BY THE SovEREIGN AT Its PLEASURE.

ARGUMENT

THe WorKMEN’s CompensatioN’ Act oF THE STATE OF

Wasutneton Is Compu.tsory 1x Nature anp Rests

Upon Status anv Is Nor ContTractTva.,

At the threshold of this argument it is indispensable

that there be a clear understanding of the nature of the

law known as the Workmen’s Compensation Act of the

State of Washington. The first assignment of error on

the part of the appellant is to the effect that the amend-

ment here in question constituted an impairment of the

obligation of contract and a violation of the Federal

Constitution.

Compensation acts either are elective or compulsory.

Under elective statutes, the choice remains with the em-

ployer and the workman as to whether or not their rela-

tionship, in so far as it relates to injuries shall be covered

by the Workmen’s Compensation Act. However, under

compulsory statutes there in no choice.

What is the nature of the Workmen’s Compensation

Act of the State of Washington? It needs but an ex-

amination of the first paragraph of the act as it now

stands and has stood ever since the enactment of the same

to determine this question. In order for there to be no

doubt as to the constitutionality of the law, the Legis-

lature declared that the enactment constituted an exer-

cise of the police power. (See Appendix, R. C. S. 7673,

page 1.)

Comment to the effect that no alternative was left

either to the workmen or to the employer with regard

to whether or not he would elect to come within the

provision of the act is certainly not needed to indicate

that there was no choice in those industries which the

Legislature thereafter proceeded to elassify as being

extrahazardous in nature. The Workmen’s Compensa-

tion Act herein under discussion did not limit itself by

way of penalty to the employer by depriving him of the

defense of contributory negligence in case suit: was

brought against him and he had not contributed to the

Workmen’s Compensation Fund, but further provided

that in the event said employer made no report of pay-

roll to the De artment of Labor and Industries, and was

in default for industrial insurance premiums, that said

employer was to be restrained from prosecution of any

extrahazardous occupation of whatever nature, until sal

industrial insurance premiums had been made, and bond

had been provided for further compliance in the future.

(See Remington’s Compiled Statutes, Section 7682, set

out in the Appendix herein.)

Any employee injured in the course of extrahazard-

ous employment not only was deprived of his right to

sue his employer (see Section 7673, Remington’s Com-

piled Statutes, set out in Appendix herein), but was also

denied the privilege of suit against any third party at

the time said third party tort feasor was a contributor

‘to the industrial insurance fund. (See Section 7679,

Remington’s Compiled Statutes, under definition of

‘“Workman,’’ set out in the Appendix herein.)

The nature of the Workmen’s Compensation Act of

the State of Washington differs from that of most com-

pensation acts of the various states of the Union. Out-

standing in its individual character, the state industrial

insurance fund is a fund administered by the State of

Washington, contributed to by the employers, said con-

tributions formerly being based upon the actual amount

of total pay roll, but recently amended so that premiums

assessed are based upon actual work hours. This fund

has two divisions,—an industrial insurance accident

fund, and an industrial insuranee medical aid fund. The

accident fund consists exclusively of premiums paid by

the employer. The medical aid fund, administered like-

wise by the Department of Labor and Industries, is

made up of contributions paid both by the employee and

the employer, and is devoted to the purpose of paying

for medical and hospital services.

Those occupations which the Legislature has classi-

fied as extrahazardous must contribute to the state fund

exclusively. There is no alternative. The Department

of Labor and Industries is the administerial agency

through which the act is made effective. Claims for in-

juries for compensation are filed directly with the De-

partment, and appeals from the decision of the Super-

visor of Industrial Insurance are taken to a_ board,

designated as the Joint Board, specifically created for

that purpose.

It has been held by the Supreme Court of the State

of Washington in a recent decision rendered in the case

of Vinther v. Department of Labor and Industries, re-

ported at 76 Wash. Decisions, page 297, that in the ad-

ministration of the Workmen’s Compensation Act the

Department of Labor and Industries is engaged in a

governmental function in carrying out the duties of the

sovereign, and that said Department constitutes an in-

tegral part of the sovereignty of the State of Wash-

ington.

The constitutionality of the Washington act was

challenged almost immediately following its enactment.

The Supreme Court of the State of Washington passed

upon the validity of the law in the case of State ex rel.

Davis-Smith Company v. Clausen, reported at 65 Wash.

page 156. The Supreme Court there, speaking through

Justice Fullerton, thoroughly analyzed the provisions of

the statute.’

It became increasingly obvious that the very nature

of instrumentalities used in production made it inevi-

table that injury would occur regardless of fault and

therefore since said injuries were incident to industry,

in its present form, therefore the proper provision for

compensation and medical attention to injured workmen

should be borne as the cost of production and should be

justly borne by that industry.

This doctrine, the Supreme Court of our state recog-

nized in the ease of State ex rel. Davis-Smith v. Clausen,

65 Wash. 178. It recognized further that the purpose

of the statute was to provide a remedy without considera-

tion of fault to those men who were injured. This legis-

lation must be considered a beneficent statute of a social

character designed to cure defects and evils which are

necessarily incident to industry in its present state.

Attention is called to the language of the court on

page 178 of the case under discussion.

It is significant to note that the Supreme Court of

the State of Washington held the Workmen’s Compen-

sation Act to be valid and constitutional solely upon the

ground that it was an exercise of the police power of

the state. The validity of the Washington Act with

relation to its violation of the Federal Constitution has

already been determined by this court in the case of

Mountain Timber Company v. State of Washington, 248

U.S. page 219. The attention of the court is directed

to the language of Mr. Justice Pitney, who delivered

the opinion for the court as it appears on page 228

thereof as follows:

“The act establishes a state fund for the compensa-

tion of workmen injured in hazardous employment,

abolishes, except in a few specified cases, the action at

law by employee against employer to recover damages

A ca ‘ , bed

on the ground of negligence, and deprives the courts of

jurisdiction over such controversies. Jt is obligatory

upon both employers and employees in the hazardous

employments, and the state fund is maintained by com-

pulsory contributions from employers in such industries,

and is made the sole source of compensation for injured

employees and for the depénttents of those whose injuries

result in death.’’ (italics ours.)

Of compelling significance in determination of the

character of the act herein under consideration is the

language used by the Supreme Court in characterizing

the contribution made by industries to the state fund.

Attention is directed to the language used by the court

on the bottom of page 243 and on top of page 244 in

the Mountain Timber case, supra, wherein the court

characterized the contributions and the fund as occupa-

tional taxes.

It is interesting to note that the Supreme Court of

the State of Washington construed the sections of the

statute relating to contribution from employers in the

following manner:

heaameniiemmmnaintiine 1 AO a

‘““As the charge laid on the persons engaged in the

industries named in the act is a pecuniary burden im-

posed by public authority if partakes of the nature of a

tax, and in the language of a distinguished judge discuss-

ing a similar question, ‘for many purposes might be so

spoken of without harm.’ But it is manifest that it is

not a tax in the sense the word is used in the sections of

the constitution to which reference is made.’? * * *

‘“‘Tt is the consideration which the owners of the

industries pay for the privilege of carrying them on. It

is, therefore, in the nature of a license tax, and can be

justified on the principle of law that justifies the imposi-

tion and collection of license taxes generally. In this

state, such taxes may be imposed, either as a regulation

or for the purposes of revenue, the only limitation upon

the power being that such taxes when imposed on useful

trades and industries shall not be unreasonable. * * *”’

State ex rel. Davis-Smith v. Clausen, 65 Wash. 156

at 203.

Upon the same day that the Mountain Timber case,

supra, was decided by this court, the constitutionality

of the New York statute was also determined. In the

ease of New York Central Railway Company v. White,

243 U. S., p. 190, the compulsory character of the law

upon which the Washington statute is largely based was

recognized.

In considering the argument propounded by counsel

that the statute strikes at the fundamentalities of the

constitutionality and freedom of contract, the court said:

‘And we recognize that the legislation under review

does measureably limit the freedom of employer and

emplovee to agree respecting the terms of employment,

and that it cannot be supported except on the ground

that it is a reasonable exercise of the police power of

the State. * * *”

See also Holden v. Hardy, 169 U. S. 397.

i re ee

The Workmen’s Compensation Act of the state is

an integral unit. It is difficult to understand, in the hght

of the express recognition, both by the Supreme Court

of the State of Washington, and the Supreme Court of

the United States, as well as the Court of Appeals of

the State of New York, that the act is in derogation of

the power of freedom of contract, and can be justified

only by virtue of public policy involved as a measure

dictated by the general public welfare, how it can reason-

ably be argued that since the act was imposed upon

employer and employee alike, regardless of consent

thereto, that this act can be conceived to be contractual

in character. If the act as an entity is non-contractual,

and constitutes an imposition of sovereign will upon its

citizens for the benefit of the state as a whole, then it

follows, a fortiori, that no part of the act can be consid-

ered as an independent unit, contractual.

This court has defined its concept of contracts in

relation to Section 10, Article I of the Constitution. In

the case of Crane v. Hahlo, reported at 258 U. S., p. 146,

Mr. Justice Clarke, speaking for the court, said as

follows:

‘‘It has long been settled by decisions of this court

that the word ‘contracts’ in See. 10 of Article I of the

Constitution is used in its usual or popular sense as

signifying an agreement of two or more minds, upon

sufficient consideration, to do or not to do certain acts.

‘Mutual assent’ (express or implied) ‘to its terms is

one of its very essence.’ State of Lowisiana ex rel. Fol-

son v. Mayor and Administrators of New Orleans, 109

U.S. 258, 288; Freeland v. Williams, 131 U. S. 405, 414;

Essex Public Road Board v. Skinkle, 140 U. S. 334, 340;

Morley v. Lake Shore & Michigan Southern Ry. Co., 146

U. S. 162, 169: Garrison v. City of New York, 21 Wall.

ee Ol sar sitent tsi jae

Salts het '

‘‘The origin of the right is thus wholly statutory,

an act of grace by the legislature, as if ‘consulting the

interests of morality,’ so that there is nothing in the

nature of a contract in it, and therefore there is nothing

in the case for the contract impairment clause of the

Constitution to operate upon.’ ’’

In the case of North Alaska Salmon Company v.

Pillsbury, reported at 174 Cal., page 1, the question as to

the character of the relationship between employer and

employee under the industrial insurance act of the State

of California was directly in issue, since in that case the

injured workman suffered an accident while working in

Alaska, the contention being that the act was contractual

and therefore the locus of the injury was not controlling,

but rather since the relationship was that of the contract

of the place where the contract is entered into and deter-

mined the rights of the parties. Upon rehearing of the

ease before the Supreme Court, a former decision of

the Supreme Court was reversed. In the first instance,

the court held that the relationship was one of contract.

Thereafter, the court said as follows:

‘‘The liability of employer to pay compensation

arises from the law itself, rather than from any agree-

ment of the parties. The law operates upon a status,

e., that of employer and employee, and fixes certain

rights and obligations to that status. True, the relation

of employer and employee has its inception in a contract,

but once the relation is created, its incidents depend not

upon the agreement of the parties, but upon the provi-

sions of the law. Our decisions upholding the validity

of this legislation have been emphasized, and found sup-

port in, the proposition that the statute is one regulating

the rights and obligations attaching to the status of

employer and employee. * * *”’

‘‘There is a manifest difference between a compul-

sory act, like ours, and elective acts,. like the Roseberry

Act of 1911 (Stats. 1911, p. 796) and various statutes in

other states, under which the compensation provisions

are dependent upon the election or consent of the em-

ployer and employee. It may well be said that the rights

declared by an elective statute have their origin and

sanction in the agreement of the parties to be bound by

relative rights and obligations are not founded upon con-

tract. Nor do they correspond with the egal conception

of a tort, since a liability is imposed without regard to

the element of wrongdoing on the part of the person

charged. The obligation is to be defined as a statutory

one, attached by law to a given status.’’

See, likewise,

Alabama G. 8S. R. Co. v. Carroll, 97 Ala. 129; 11

South 803;

also

Dormidy v. Sharon Boiler Works, 127 Fed. 485.

it is significant to note that the California court, in

considering New Jersey and Connecticut cases, said as

follows:

‘*The statutes of both New Jersey and Connecticut,

however, made the scheme of compensation dependent

upon the election or consent of the parties to the em-

ployment, and the decisions cited are put on the ground

that the rights of the parties are contractual—a position

which cannot be applied to a compulsory statute like

ours.’’

In those states where the Workmen’s Compensation

Act is compulsory, the rule is uniform and likewise the

interpretation. Attention is called to the ease of Ocean

Accident and Guarantee Corp. Ltd. v. The Industrial

Commission of Arizona et al., reported at 32 Arizona

275, 257 Pac. 645, wherein the court said in the follow-

ing language, on page 282 thereof, as follows:

‘“‘This act, so far at least as the employer is con-

cerned, is compulsory in its nature; he has no option as

to whether he shall accept or reject it, and the whole

hd abs, Oe

language, both of the constitutional amendment authoriz-

ing it and of the act itself, shows clearly that they were

based, not on the old theory of contract between the

parties, but upon the inherent right of the state, recog-

nized by the Supreme Court of the United States in the

case above cited, by virtue of its police power, to estab-

lish certain rules regulating the status of ‘employer and

employee. We therefore hold that the présent Arizona

Workmen’s Compensation Act is neither elective nor con-

tractual in its nature, but, on the contrary, that it rests

upon the police power to regulate the status of employer

and employee within the state of Arizona, and that no

contract, express or implied, made within or without the

state of Arizona, unless expressly so authorized by our

law, can of itself affect the rights and duties of such

status. It is governed so tar as this subject is con-

cerned, solely by the provisions of the Arizona statutes,

and nothing else.’’ (Italics ours.)

In passing, it is interesting to note that the Arizona

court considered the decisions of the Mountain Timber

case, supra, and the White case, both decided by this

court, and interpreted those decisions as establishing the

principle that the New York act and the Washington

act, both being of a compulsory nature, did not create

a contractual status between the employer and the em-

ployee. This court, however, has expressly passed upon

the question of what sort of relationship is created under

the Workmen’s Compensation <Act.

The case of Cudahy Co. v. Parramore, reported in

263 U.S. 418 at p. 423, came before this court upon re-

view of the holding of the Supreme Court of Utah. On

page 421 of this case, the following language is found:

‘“Workmen’s Compensation legislation rests upon

the idea of status, not upon that of implied contract;

that is. upon the coneeption that the injured workman

is entitled to compensation for an injury sustained in the

service of an industry to whose operations he contributes

his work as the owner contributes his capital—the one

for the sake of the wages and the other for the sake of

the profits. The liability is based, not upon any act or

omission of the employer, but upon the existence of the

relationship which the employee bears to the employment

because of and in the course of which he has been in-

jured.’’

To the same effect, see the case of Lane v. Industrial

Com’r of the State of New York, 54 Fed. Reporter, (2d),

page 341. To the same effect is the case of Obrecht-

Lynch Corp. v. Clark, reported at 130 Fed. (2d) at page

144.

The Workmen’s Compensation Act, Section 7713 of

Remington’s Compiled Statutes of the State of Washing-

ton, makes provision that the employer shall deduct from

the pay of each of his workmen engaged in extrahaz-

ardous work one-half of the amount the employer is re-

quired to pay into the medical aid fund. The employer

bears the entire cost of payment of compensation, as pro-

vided by the act, for disability, but for medical treatment

the employee is required to pay into the separate and

distinet medical aid fund an amount equal to that con-

tributed by the employer. It is significant to note that

there is no choice upon the part of the employee. He

must make such payment. The employer is authorized

and mandated to make such deduction. In view of the

holdings, as above set out, that the relationship created

is one of status rather than contract, it can not reason-

ably be argued that the relationship of the employee is

that of contractor. On the contrary, the Legislature has

imposed an obligation upon him to contribute in a small

measure towards the defraval of expenses of his medical

and hospital care, just as the state has enacted a tax in

5. NAMI ew

the nature of a license tax upon industry. This likewise

constitutes a tax assessed under the sovereign powers of

the state upon the workmen engaged in extrahazardous

occupations. This state exacts the tax to be adminis-

tered, in its judgment, calculated to best serve the inter-

ests of the great majority of its people, and it would seem

that the fundamental elements of contract, a meeting in

agreement, voluntarily of the minds of the parties as dis-

tinguished from any contemplation of coercion does not

exist so as to create contractual relationship between

the employee and the employer. In the exercise of its

police power, the state, through the Legislature, may im-

pose an assessment upon the employee towards the de-

frayal of such medical and hospital expenses as will be

incurred. To say that merely by virtue of the fact the

state compels the workman to make a contribution, in a

small measure, as well as the employer, that sole fact,

by reason thereof, creates a contract is to disregard the

fundamental nature as to both the Workmen’s Compen-

sation Act in this state and the fundamental elements

of a contract.

The Washington Workmen’s Compensation Act con-

stitutes the exercise of a governmental function. There

is no contractual relationship contemplated with indi-

viduals, either employer or employee, but the statute

makes regulations and rules governing industry at large

and governing the relationship of master and servant

caleulated to serve the best interests of society.

It is submitted that the Workmen’s Compensation

Act of the State of Washington, being of a compulsory

nature, created no contractual rights, and therefore the

amendment to the law enacted in 1927, which provided

that a claim for aggravation of disability was to be made

within three years from the termination of compensation

did not constitute a law impairing the obligation of con-

tract within the prohibition of Section 10, Article I of

the Federal Constitution.

THe AMENDMENT OF 1927 Dip Nor Constitute a Depriva-

TION OF Any Vestep Rigut Possessep By APPELLANT

It is of paramount importance, in considering the

question of vested right in this particular instanee, to dis-

tinguish between the right which might have accrued to

the appellant to have his claim re-opened in futuro had

the statute been construed to create a contractual obliga-

tion and the right to have said claim re-opened as a

vested right. It is freely conceded that if our statute

were to be construed to constitute a contract, and were

we to disregard the issue of police power and the effect

that it would have upon the right to modify or impair a

contract thereunder, that the appellant might have cause

for complaint. However, this would have been true only

were the statute to be construed to be contractual. It is

submitted that the issue has been conclusively adjudi-

cated against the theory that the rights created by statute

in our state are contractual. Therefore, the appellant

must of necessity rely upon the theory that in any event

the right which he has aequired by statute is a vested

right.

At this point it is timely to point out that from

a constitutional standpoint there is a vital difference be-

tween a right accruing by virtue of a contract and a

vested right. That which may be enforceable by virtue

——

of contract in futuro may be, not vested, but rather con-

tingent and inchoate, and yet be a right impairable as a

contractual right by the legislation such as the amend-

ment here in question. At*this point it becomes perti-

nent to remark that in any évent, as will be pointed out

in this brief, the power resides in the Legislature, under

the authority of the police power of the state to pass such

legislation as this, even were there to be an impairment

of contract, were such legislation not unjust and arbi-

trary.

What is a vested right? Black, in his Law Die-

tionary, Second Edition, page 1203-1204, defines vest

as follows:

‘‘Vest. To accrue to; to be fixed; to take effect;

to give a fixed and indefeasible right. An estate is vested

in possession when there exists a right of present enjoy-

ment; and an estate is vested in interest when there is a

present fixed right of future enjoyment.’’

‘“*“Vestep. Accrued; tixed; settled; absolute; having

the character of giving the rights of absolute ownership;

not contingent; not subject to be defeated by a condition

precedent.”’

In Bouvier’s Dictionary, the word ‘‘vest™ is de-

fined as follows:

‘“‘Vest: To give an immediate fixed right of pres-

ent or tuture enjoyment. An estate is vested in posses-

sion when there exists a right of present enjoyment; and

au estate is vested in interest when there is a present

fixed right of future enjoyment.’

A vested right must be one which is fixed and de-

termined; one which is capable of being exercised im-

mediately without the necessity of any further oecur-

rence of any event; or, if to be enjoyed in the future, the

right must be so vested that the lapse of time alone stands

between the right and its full and certain enjoyment and

exercise. If there be any uncertainty in determination as

to whether the right will ever be fully reduced to posses-

sion or enjoyed, if there be necessity for the occurrence

of a condition precedent before the right is capable of

enjoyment, if the right is inchoate at the time the amen-

datory legislation is passed, if at that time it is not fixed

and certain, then in those cases where the right is not a

contractual one, it cannot be said to be a vested right and

the legislation which effects it cannot be said to be such

as Within the mischief provided against the 14th Amend-

ment to the Federal Constitution.

This court had occasion to consider what constituted

a vested right in the case of Pearsall v. Great Northern

Radway Company, Vol. 161, United States Reports, p.

646. The question before the court at that time was

whether or not certain privileges by way of certain

authority granted to a railway company to connect its

railroad with other branches of railroad and to consoli-

date it with other roads having the same general direc-

tion or location, was such a right as to constitute a

vested right which could not be repealed by subsequent

legislation.

The court on page 672 of the opinion, said as follows:

‘fA vested right is defined by Fearne, in his work

upon contingent Remainders, as ‘an immediate fixed right

of pres@ut or future enjoyment ;’ and by Chancellor Kent

as ‘an immediate right of present enjoyment, or a present

fixed right of future enjoyment.’ 4 Keat Com. 202. It is

said by Mr. Justice Cooley that ‘rights are vested, in con-

tradistinction to being expectant or contingent. They

are vested when the right to enjoyment, present or pros-

pective, has become the property of some particular per-

son or persons as a present interest. They are expectant,

= ke ll

5 MPNBR Hw OF we

I Br tt 5 es Ce oe me

when they depend upon the continued existence of the

present condition of things until the happening of some

future event. They are contingent, when they are only

to come into existence on an event or condition which may

not happen or be performed until some other event may

prevent their vesting.’ Principles of Const. Law, 332.’’

(Italics ours.)

It is interesting to note that the court held in this

case that this bare power did not constitute a vested right.

It now becomes pertinent to analyze the character of the

right of the appellant herein. In 1927 the appellant was

injured. Thereafter, his claim was adjusted in 1928, and

he was paid whatever compensation was due him and his

claim terminated. He was entitled to no further consid-

eration unless other conditions subsequently occurring

or some would be change in his physical condition. See

Mullin v. Dept. of Labor and Industries, 157 Wash. 329,

at page 332, as follows:

‘‘There is no evidence to support the application for

a re-opening of the claim. There was no change in re-

spondent’s condition. In fact, the testimony of respond-

ent’s physician witnesses was to the effect that the condi-

tion of respondent at the time of the departmental re-

hearing in May, 1929, was substantially the same as when

he was examined in December, 1926, by three physicians

in Tacoma.

‘“‘The respondent’s failure to obtain work is not

proof of aggravation of injury. There is no statutory

authority upon such a state of facts as is here presented

for re-opening the claim.’’

The above citation is authority for the rule that in

order for a claimant to establish the right to have his

claim re-opened, he must show a definite change in phy-

sical condition, and only then, and at that time, would he

be entitled to further consideration. Before the time of

actual physical change in condition develops, he is

possessed merely of an inchoate right similar in character

to the inchoate right of dower, as in the case of dower

where the widow’s right becomes vested upon the death

of a husband, so in the case of a workman prosecuting a

claim for re-opening on aggravation, the right would vest

at the time an actual change in his physical condition

occurred. The necessity for further events to determine

subsequent compensation admits a contingency which

must occur before the right becomes vested, and clearly

demonstrates that the right is not vested within the

meaning of definitions commonly accepted to be acen-

rate.

The appellant contends most earnestly that the

amendment in question deprives the appellant of full

compensation which he is to receive as a result of the in-

jury by virtue of the law then in force. An analysis of

what is meant by full compensation as provided by the

statute, disclosed the following: When a man is injured,

under the Washington statute, he is placed upon time

loss until his physical condition becomes such as will

allow him to return to gainful occupation. During this

time, he is paid the amount provided by law. At the

time he is enabled to return to work, an adjudication is

made by the Department as to the permanent effects of

his injury, based upon the disability he will have for the

rest of his life, and the award is made for permanent

partial disability upon that finding. This disability not

only is compensation for his present condition, but it

constitutes an attempt on the part of the Department

of Labor and Industries to fix his permanent disability

wet a Ke

ARE bk on as eee i a ti Re

which he will have for the rest of his life as nearly as

possible. The section which provides for continued juris-

diction, the section here under discussion, exists not for

the purpose of determining future disability, but consti-

tutes added precaution taken by the Legislature, so that

should there have been an error in the calculation of

the Department of Labor and Industries as to how much

disability a man would permanently have, as disclosed

by future developments, that error might then be cor-

rected, so that the provision for the re-opening of a claim

was in its fundamental nature remedial rather than sub-

stantive, and existed for the purpose of correction.

When compensation has been terminated with a

permanent partial disability award, this constitutes an

end to the rights of the claimant, unless some new

factor should develop. This new factor, as has been

pointed out heretofore, constitutes the contingency. This

new factor alone constitutes the basis for the reopening

of a claim. It is clear to be seen that full compensation

as a result of the injury has been paid when the award

is made at the time the claim is closed, and the permanent

partial disability has been awarded, just as was done in

this ease. To be entitled to any further benefits, there

must be something new shown in the way of a change in

physical condition. Then, at that time, a right which

must be enforced by a new proceeding, that is, a claim

for re-opening, must be filed.

However, this arises only upon the changed condi-

tion, and is therefore governed exclusively by the law in

force and effect at the time this change occurs. Those

individuals whose conditions had changed so as to entitle

them to a re-opening of their claims at the time the

me aan

—_ . . . an ben - — i Anh ates th mn in lee ealay dna eet aaiemaniin lS

amendatory statute was passed had this right, saved to

them by the saving clause appended to the amendatory

section.

Counsel for the appellant has cited authority estab-

lishing the proposition that a statute may create vested

rights. However, even did counse!’s contention repre-

sent the prevailing law, yet counsel has made the fatal

error of assuming that the right herein contended for is

a vested right and has failed to offer any authority estab-

lishing this contention.

Numerous cases are discussed which define the rule

to be that vested rights which have already accrued, and

are created by statute, may not be impaired by subse-

quent legislation. The very necessity for a contingency

to develop in this class of cases, which may never develop

is conclusive evidence of the uncertain character of the

right sought herein to be exercised. That certainly is the

most potent argument against the appellant’s contention

that this is a vested right. It is not logical to argue, in

view of the accepted definitions, above set out, that an

inchoate and contingent claim which may never be re-

duced to possession, and which may never become such

a right capable of being enjoyed and fully possessed,

ean be classed as a vested right.

See, also, the case of Standard Oil Company v. Indus-

trial Accident Commission, described by the Circuit Court

of California, and reported only in 31 Pacific (2d) Series,

page 459. See, also, Mullin v. Department of Labor and

Industries, supra.

It will be noted that the Supreme Court of Oregon

has held that a claim for additional compensation on ac-

count of aggravation is a new and distinct proceeding.

We cite the case of Graves v. State Industrial Accident

Commission, 112 Oregon 1438, as follows:

‘*Nevertheless, it is a proceeding with a distinction

and individuality all of its own from a decision in which

an independent appeal may be taken to the Cireuit Court

of the county in which the claimant resides.”’

This, likewise, is the only construction which may be

placed upon the Washington act, since the section under

contemplation provides that an application may be filed

for re-opening on the grounds of aggravation. If this be

true, it must follow a fortiari, that the condition prece-

dent to exercising the right to aggravation is that an

aggravation or change of condition for the worse must

actually exist at the time such application is made.

It is interesting to note that the same contentions

raised by the appellant in the case herein were raised

and passed upon by the Supreme Court of Ohio in the

case of State ex rel. Boswell v. Industrial Commission of

Ohio, reported at 125 Ohio State Reports, 341. One Bos-

well had been injured December 9, 1916. His claim for

compensation had been terminated March 30, 1917.

Thereafter, and on or about May 14, 1930, he filed with

the Industrial Commission an application for modifica-

tion of award. The Industrial Commission refused to

consider the claim on the grounds that there was no juris-

diction in the commission. The fact that the Ohio Indus-

trial Insurance Act is compulsory in its nature, and that

the act is administered by an industrial insurance com-

mission similar to that of the Department of Labor and

Industries of the State of Washington in character, we

believe, makes this case so squarely in point as to admit

of no distinction of any consequence, either in fact, or in

principle between that case and the case now before this

court for decision. The action of the Industrial Insur-

ance Commission of Ohio was based upon the law as

amended in 1931 of that year. The statute as amended

limited the time within which a claim to re-open might be

filed (see index).

The court goes on to comment that the jurisdiction

of the commission is definitely limited. We refer to the

language of the court as to the contentions made by the

claimant, contained on pages 345-346 of the above case.

The very contention was made in the Boswell case as

is made by the appellant in the case herein. It is inter-

esting to note the reasoning applied by the court in pass-

ing upon this contention, contained on page 346, of the

above case, as follows:

‘The language of the amended statute is clear. The

only question presented is whether the amended statute

is valid in so far as it affects claims filed prior to its en-

actment. * * *

‘*The precise contention then of each of the several

relators is that by reason of the unlimited jurisdiction of

the Industrial Commission under the original provisions

of Section 1465-86, General Code, he could reassert his

claim for compensation throughout an indefinite period

of time upon the development of any disability or impair-

ment which could be connected with or traced to the in-

jury upon which the initial claim was based, and that

such provision creates in him a vested right which no

statute can divest or modify.

‘‘This contention loses sight entirely of the nature

of the right involved. It is not a common-law right, but

one solely of statutory creation under authority of Sec-

tion 35, of Article II of the state Constitution. The

award made pursuant to the statute had no relation to

common-law negligence. Southern Pacific Co. v. Jensen,

244 U.S. 205, 37 S. Ct., 524, 61 L. ed., 1086, L. R. A. 1918

setenienemmeenen

C, 451 Ann. Cas. 1917 E, 900; Zajachuck v. Willard Stor-

age Battery Co., 106 Ohio St. 538, 140 N. E. 405; State ex

rel. Crawford, Exr. v. Industrial Commission, 110 Ohio

St. 271, 143 N. E. 574.

‘*In the course of the opinion in the first case cited,

the court said: ‘The remedy which the compensation

Statute attempts to give is of a character wholly unknown

to the common law, incapable of enforcement by the ordi-

nary processes of any court * * *.?

‘*In the course of the opinion, by Marshall, C. J.,

language is used which is quite pertinent here: ‘Work-

men’s compensation administration is nut circumscribed

by the limitations which usually attach to the finality of

judgments rendered by courts, beeause its orders are

clearly recognized as purely administrative, and not ju-

dicial, and full power and authority is conferred to make

modifications and changes with respect to former find-

ings or orders as in the opinion of the commission may

be justified.’

‘**The jurisdiction of the Industrial Commission is

continuing only because the statute made it so. It could

have been originally provided otherwise. It could have

been made to continue for a stated period. The author-

ity, having been conferred by statute, may by it be modi-

fied or withdrawn.

‘*The award made by the Industrial Commission is

in each instance based upon the disability shown to have

resulted from the injury sustained. To take care of prob-

able future contingencies—a recurrence of disability or

subsequent impairment due to the injury—authority was

conferred upon the commission to take cognizance

thereof. The right of claimant could at best be but a

contingent right subject to change or modifications by

watute. ~ * *

‘“‘The fact that an application for modification of

award has been filed, and was pending at the time of the

passage of the amended section, does not affect the ques-

tion. Whatever rights existed were by virtue of the stat-

ute and were the same whether an application, for which

the statute makes no provision, was or was not filed.”’

Comment upon the above language would be merely

superfluous, since the words themselves as expressed by

Rt Mae artes 9

the Ohio Supreme Court, simply and clearly portray

what we conceive to be proper enunciation of the prin-

ciple applicable to the facts in this case.

The repeal of the law offering a bounty for salt

manufactured within the State of Michigan constituted

no interference with vested rights. See Salt Company

v. East Saginaw, 80 United States Reports, p. 373,

377-379.

ey the case of Ferry v. Spokane P. & 8. Ry. Co.,

208 U.S. Reports 314, at p. 320, the following language

is cited in discussing dower:

‘* Expressing the power of the legislature over it, the

court said ‘during the life of the husband the 1 ‘ight is a

mere expectancy or possibility. In that condition of

things, the law- making power may deal with it as may be

deemed proper. It is not a natural right. It is w holly

given by law, and the power that gave it may increase,

diminish, or otherwise alter it, or wholly take it away. It

is upon the same footing with the expectancy of heirs,

apparent or presumptive, before the death of the an-

eestor. Until that event occurs the law of descent and

distribution may be moulded according to the will of the

legislature.’ ”’

It is submitted that the above language can be ap-

plied with equal force and logic and most aptly to the

question now before the court that the right to further

compensation by way of aggravation of disability is not

a natural right—it is wholly given by law, and the power

that gave it may increase, diminish, or otherwise alter it,

or wholly take it away. It is upon the same footing as

the expectancy of heirs, apparent or presumptive, before

the death of the ancestor. The general law regulating the

relationship of employer and employee with reference

to the welfare of the workers and the employers may be

par aon

Mane Se eat Raed lt etel

molded according to the will of the Legislature; in its

wisdom it may decree as interest of the public generally

demands.

The very nature of the sovereign power of the people

of the State of Washington, expressed through the Legis-

lature, implies the reservation to change or alter, for the

interest of the public at large the terms and conditions

of general remedial legislation or a rule of common law.

See the case of White v. United States, 270 U. S. page

180

See also the case of State ex rel. McKittrick v. Bair,

reported in Vol. 33 Missouri, page 1, at page 14.

To the like effect, see also the case of Addiss v. Selig,

264 N. Y. S. 816.

An analysis of the statutory provisions demonstrates

that the appellant has no vested right to medical services.

In order for his right to be vested, it must have been cer-

tain, fixed and absolute. It would seem that a right can-

not be considered a vested right unless it is something

more than such a mere expectation as may be based upon

an anticipated continuance of the present general laws.

It becomes apparent upon perusal of the statutory

provision that at the time of the claimant’s injury com-

pensation was adjusted on January 17, 1928. All vested

rights at that time were fully satisfied by the payment of

compensation and the rendering of such medical service

as had been required. The appellant’s condition had been

determined at that time and had reached a fixed stage,

and compensation for any disability had been rendered.

The claimant’s right to further medical service, would,

of necessity, be contingent upon a change in condition

which would warrant creating the right at the time of

such change in the appellant to have his claim re-opened.

Any time prior to the time appellant’s claim would be

re-opened, he would not be entitled to medical service

for the reason that the condition precedent and neces-

sarily prerequisite to the right to further medical ser-

vice would be the change in physical condition.

See Cooley’s Constitutional Limitations, pages 749

and 752:

‘“‘But while this interest remains in expectancy

merely,—that is to say, until it becomes initiate,—the

legislature must have full right to modify or even to abol-

ish it.’’

Continuing along this line of thought, it is readily

apparent that the particular provision of the Workmen’s

Compensation Law which provided for a re-opening of a

claim upon the grounds of aggravation of disability eon-

stituted not a vested right, but merely an expectancy

which would become vested at the time of the happening

of the contingency, just as in the case of dower, the hus-

band’s death initiating and maturing a right from an in-

choate expectant state to an absolute fixed and vested

right. Until the aggravation actually occurs, the right

to re-open at any time in the future is no more than a

general declaration of public policy. The right to re-

open on the ground of change of condition before any

change of condition actually took place, it is submitted,

could be entirely withdrawn if the legislature deemed it

to be wise in the public interest. If it could be entirely

withdrawn, it follows that at the time within which such

re-opening could be claimed, it might also be modified as

the public weal dictated. For those rights which had al-

a a ee

CON Se OLRM A a Pi TOO cl te Suttny Bet eet Ntiy. Hb 8:

feady accrued, the Legislature enacted the saving clause

allowing three years from the date of the taking effect

of the amendment within which claim for further com-

pensation might be presented.

The unsoundness of the argument that a vested right

is created at the time of the injury to a re-opening in

futuro by the injured workman is readily apparent when

a hypothetical case is propounded.

Suppose that Jones, while engaged in an extrahazar-

dous employment, cuts his finger. The cut is of a minor

nature requiring one visit to a doctor. Jones returns to

work within a week, and the finger has completely healed.

From a medical standpoint, there is no possibility that

the workman’s finger will ever become worse as a result

of the injury. Yet, following the contention of the appel-

lant, Jones would have a vested right for the rest of his

life to come in and file an application for re-opening upon

the ground that his condition had become aggravated.

This, in spite of the fact that he had completely recovered

from whatever effects of the injury he had sustained.

This would be such a right as the Legislature would have

no power to interfere with, under the theory advanced by

the appellant, since such amendatory legislation would

interfere with that which the appellant urges to be a

vested right. It is submitted that the propounding of

this hypothetical state of facts clearly demonstrates that

there can be no vested, matured and accrued right until

the happening of the contingency, namely, the change of

condition.

This argument applies with equal force to the con-

tention that the vested right to compensation, as well as

the vested right to medical aid service, are both impaired

by the 1927 amendment to Section 0, Chapter 74, Subdi-

vision (h) of the Laws of 1911.

Ricuts Purerty Sratutory Faru Wirn tHe Repeat or

THE Statute Creating THEM

Universally, it is recognized that the rights which

are conterred by statute and which in their inception are

purely statutory, fall and are abolished by the repeal of

the statute, unless at that time the rights so conferred

have been reduced to final judgment. This principle was

early recognized in the case of Yeaton et al. v. United

States, reported at 9 U. S. Reports, page 281.

The doctrine from its inception evidently seemed to

have been directed to those cases involving penalties, but

in its development of the principle soon broadened to

cover all cases where the rights conferred were purely

statutory in origin. The above rule was recognized and

followed in the case of Norris v. Crocker, 54 United

States 429, and also in the case of Insurance Company v.

Ritchie, 72 United States Reports, page 541, at page 54H.

The decision in the above case was approved by this

court in the case of Ex parte McCardle, 74 U. S. 206, at

p. 914. The court there enunciated the broad general

principal of law as follows:

‘On the other hand, the general rule, supported by

the best elementary writers, is, that ‘when an act of the

legislature is repealed, it must be considered, except as

to transactions past and closed, as if it never existed.’ ”’

In the case of Steamship Company v. Joliffe, 69

United States Reports, page 450, this same principle of

WE REV i ew teceust

Mand minds Len

law-was involved. It is to be noted in this case that there

were but seven justices sitting, and there was a division

of the court of 4.3. There was involved the collection of

pilotage fees, as provided by an act of California in 1861.

The court construed that this act created a contractual

obligation, holding that when a vessel is spoken for by

a pilot and his services declined, he should be entitled to

one-half pilotage fees, and that these fees were in the

nature of a contract implied by law. These pilotage fees

had accrued under the statute. The law providing for

these fees subsequently was repealed, and its terms

thereinafter re-enacted. The contention was made that

since the law was repealed before the final disposition of

the cause, the rights accruing thereunder fell with the

repeal of the statute. The majority of the court, through

Mr. Justice Field, held that tender of services by the pilot

constituted as follows:

‘‘The transaction, in this latter case, between the

pilot and the master or owners, cannot be strictly termed

a contract, but it is a transaction to which the law at-

taches similar consequences; it is a quasi contract.

* @ *

‘‘When a right has arisen upon a contract, or a trans-

action in the nature of a contract authorized by statute,

and has been so far perfected that nothing remains to be

done by the party asserting it, the repeal of the statute

does not affect it, or an action for its enforcement. It

has become a vested right which stands independent of

the statute.”’

The court proceeds to justify its holding further on

the theory that the re-enactment of the statute operated

as a continuance of the statute.

Attention is called to the dissenting opinion recorded

on pages 463-464 of the above case, to which Miller,

Wayne and Clifford dissent. The general rule is stated

to be as follows:

‘‘The proposition is, that the statute of California,

under which plaintiff below recovered his judgment, has

been repealed since the writ of error was sued to this

court; and that the action being wholly dependent on the

statute, the repeal takes away the right, and the judg-

ment which he has obtained must be reversed, and the

case dismissed. * * *

‘“‘I take the law to be well settled that a right of

action not growing out of contract, but which is solely

dependent upon a statute, ceases and determines with the

statute on which it depends.’’

It is to be noted that the entire court was agreed

upon the fundamental principle of law involved, that is,

when a right is purely statutory, it falls with the repeal

of the statute, unless the rights thereunder have been

prosecuted to final judgment, and unless the right was

contractual in nature. The court divided upon the ques-

tion as to whether or not the right involved accrued by

virtue of a transaction contractual in nature, or whether

it was purely statutory in its inception. This general

principle of law, as above outlined, has been recognized

in later cases and has been continued in full force and

effect with no modifications. Only in cases where rights

have been construed to arise out of contracts has the

court been inclined to modify the rule that where rights

are created by statute, they fall with the repeal of the

statute unless prosecuted to final judgment.

See, also, Gwin v. United States, reported at 184

U.S., page 669.

However, in the case of Flanigan v. Sierra County,

reported at 196 U. S. 561, at page 553, this court not

only followed the rule laid down in the case of Steam-

MOS > Sh cca i etales SSR

ship Company v. Joliffe, supra, but also committed itself

to the doctrine that it would be bound by the decisions of

the highest court of the state as to the rule followed in

that state with relation to the effect of repealing statutes

upon rights which had aecrued prior to the statute. In

the Flanigan v. Sierra County case, an action was

brought to recover the amount of a license ordained

under an ordinance passed by the county May 31, 1900,

under and by virtue of a county government act. The

court, speaking through Mr. Justice McKenna, on page

560, in this case, used the following language in recog-

nizing the rule as we have hereinabove set out as follows:

‘‘The general rule is that powers derived wholly

from a statute are extinguished by its repeal. Suther-

land on Statutory Construction, See. 165, And it follows

that no proceedings can be pursued under the repealed

statute, though begun before the repeal, unless such pro-

ceedings be authorized under a special clause in the re-

pealing act. 9 Bacon’s Abridgement, 226.

‘*In speaking of the rule as to enforeements of rights

under repealed statutes, Endlich on the Interpretation of

Statutes (sec. 480), says: ‘The same rule applies to rights

and remedies founded solely upon statute, and to suits

pending to enforce such remedies. If at the time the

statute is repealed, the remedy has not been perfected or

the right has not become vested, but still remains execu-

tory, they are gone. * * *’’’ (Page 561) above citation.

‘‘Whether a statute of a State is or is not a revenue

measure certainly depends upon the construction of that

statute. Besides, if in any case we should lean to an

agreement with the state court, this is such a case.’

(Page 562) above citation.

This court follows the rule laid down by the highest

state court. We need but to point to the decision in the °

ease at bar, reported at 76 Wash. Advance Decisions

Number 5, 255, at page 257, for an enunciation of the

rule. The court in the case at bar on page 257 thereof,

said as follows:

‘‘In each of the first two cases cited will be’found a

considerable discussion leading to the holding that the

workmen’s rights under the law existing at the time of

the injury are purely statutory rights, and may be taken

away at any time by the legislature, and therefore the

limitation contained in the act of 1927, which is here com-

plained of, is purely remedial and destroys no vested

right.’’

At an early date the Supreme Court of the State of

Washington recognized the above quoted principle to be

the law in this state.

See Bailey v. School Dist. No. 49,108 Wash. Reports,

page 612, at 613.

The above case was cited with approval by the Su-

preme Court in the case of Robinson v. McHugh, 158

Wash., page 157.

‘‘Where a tort action ean be brought only by virtue

of a statute, there can be no vested right therein, and the

legislature may take away the right at any time.”’

This rule was again enunciated and followed in the

case of Denning v. Quist, 160 Wash. 681, 686:

‘This act, according to the declaration of legislative

policy therein contained, and its manifest purpose,

should be classed as remedial legislation. * * *

Rights of action vested by the act in favor of injured

workmen (Robinson v. McHugh, supra) became there-

after purely statutory rights, not common law rights.

* * * This right being purely statutory, it was com-

petent for the legislature to limit the same, and was ac-

complished by the 1929 amendment, supra, and we are

satisfied that the correct rule was laid down by this court

in the case of Robinson v. McHugh, supra.’

The Supreme Court of the State of Washington

has committed itself to the doctrine that rights which are

purely statutory in their inception may be taken away

Aythe Legislature, at its will, before said rights are re-

duced to final judgment. Under the doctrine of the

Flanigan case, above cited, it would seem that this court

a xX —

}

is hound by that rule of law. This court likewise has

unvaryingly held to that principle as so announced in the

Flanigan case. See

United States v. Heinszen & Co., 206 U.S. p. 370;

Loutsiana v. Mayor of New Orleans, 109 United

States, page 285.

* * * The obligation to make indemnity created

by the statute has no more element of contract in it

because merged in the judgments than it had previously.

* * * The right to reimbursement for damages caused

by a mob or riotous assemblage of people is not founded

upon any contract between the city and the sufferers.

Its hability for the damages is created by a law of the

legislature, and can be withdrawn or limited at its

pleasure.’’

Louisiana v. Mayor of New Orleans, supra;

Pacific Mail Steamship Co. v. Joliffe, 2 Wall 450-

507.

The rule contended for was likewise followed in the

ease of District of Columbia v. Eslin, reported in Vol.

183 U. S. page 62.

A very recent expression of opinion reiterating the

rule to which the Supreme Court has steadfastly adhered

was given in the case of Coombes v. Getz, 285 U.S. page

434, A California statute had provided that directors of

corporations should be liable to the creditors for all

monies embezzled or misappropriated by corporate offi-

cers. Thereafter, this section of the law was repealed.

The contention was made that this repeal constituted a

law impairing the obligation of contract. The Supreme

Court, speaking through Mr. Justice Sutherland, quoting

from page 442 of the above case, held as follows:

‘‘The right of this petitioner to enforce respondent’s

liability had become fully perfected and vested prior to

the repeal of the liability provision. His cause of action

was not purely statutory. It did not arise upon the con-

stitutional rule of law, but upon the contractual liability

created in pursuance of the rule.”’

Here, again, this court followed the rule. Signifi-

cantly Justice Sutherland draws the distinction that the

right sought to be enforced in the instant ease under

consideration was not a purely statutory right, and he

himself italicized ‘‘purely,’’ but had its basis in the con-

tractual liability created by the law. Justice Sutherland

cites the case of Ettor v. Tacoma, 228 U.S. 148, and em-

phasizes the fact that the right to recover against the city

by virtue of the provision of the statute was vested com-

pletely at the time of the repeal and was contractual in

nature. Mr. Justice Sutherland goes on to cite the lan-

guage used in the Joliffe case, supra, which is quoted on

page 29 of this brief, said language being directed to-

wards the emphasis of the proposition that when the

rights are contractual, if they have vested before the

statute is repealed, they remain in force, unabridged.

But onthe other hand, if they are purely statutory in

origin and creation, they fall with the repeal of the

statute. It is enlightening to consider Mr. Justice Suther-

land’s analysis of those California cases which estab-

lished the rule

‘‘That where a right is created solely by a statute,

and is dependent upon the statute alone, and such right

is still inchoate, and not reduced to possession or per-

fected by final judgment, the repeal of the statute de-

Int aey te tev een Eee

dis tee eras OE

stroys the remedy, unless the repealing statute contains

a saving clause.’’ Coombes v. Getz, 285 U.S. p. 448.

It is interesting to note further the language cited

by Mr. Justice Sutherland on page 448 of the above de-

cision as follows:

‘Tt is settled by decisions of this and other federal

courts (Ettor v. Tacoma, and cases cited in connection

therewith, supra) that, upon the facts here disclosed, a

contractual obligation arose; and the right to enforce it

having become vested, comes within the protection of

both the contract impairment clause in Art. 1, See. 10,

and the due process of law clause in the Fourteenth

Amendment, of the Federal Constitution.’’

Counsel relies upon the decision in the case of Ettor

v. Tacoma, reported at 228 U. 8S. 148, in support of his

contention that a vested right may be acquired under a

statute, irrespective of whether or not such right is

purely of a statutory nature, or whether its origin

springs from contract, and further that so long as this

right is vested, the legislature may not enact legislation

which in any way would interfere with the exercise of

said right. It is of salient significance to note that Mr.

Justice Sutherland reconciles the Ettor case to this gen-

eral principle, by classifying it with those cases where

the obligation is of a contractual nature.

This decision would seem to establish the law, be-

yond any question of doubt, that only in those cases

where rights are contractual in origin is there any pro-

hibition against subsequent legislative enactment which

would interfere with the enjoyment of said right. If the

right is purely statutory, and even though it be vested,

said right is subject to be divested unless reduced to final

judgment by action of the Legislature.

ene SRA Abb RS sSNA AOS SNS TR a ite AD Van Dal a Re Pre

See, also, the late case of United States v. Chambers,

291 U. S. 223, decided February 25, 1934.

The decisions of the state court recognizing the prin-

ciple above set out are legion. The rule seems to be uni-

formly adhered to by the highest courts of the several

states.

Continental Oil Co. v. Montana C. Co., 63 Montana

p. 230;

Moss v. Smith, 171 Calif. 788;

New London Northern Railroad Co. v. Boston &

Albany R. R. Co., 102 Mass. Rep. 386;

Taylor v. Strayer, 78 N. KF. 236;

Mickey et al. v. Barton, 62 NX. BE. Reporter 802.

Bennet v. Hargus, 1 Neb. 421;

Bueletin v. Palmer, 1 Hill N.Y. 332;

eee € Elec. Co. v. State, 6 P. (2d), 214 Cal.

431.

In 1927 the Legislature of the State of Washington

amended the Workmen’s Compensation Act. The word-

ing taken from Chapter 310 of the Session Laws of 1927,

page 854, entitled See. 4, reads as follows:

‘*That section 4 of chapter 131 of the Laws of 1919,

page 309, as amended by section 2 of chapter 136 of the

Laws of 1923, page 387 (section 7679 of Remington's

Compiled Statutes) be amended to read as follows:

‘“(h) If aggravation, diminution, or termination of

disability takes place or be discovered after the rate of

compensation shall have been established or compensa-

tion terminated, in any case the director of labor and

industries, through and by means of the division of in-

dustrial insurance, may, upon the application of the

beneficiary, made within three vears after the establish-

ment or termination of such compensation, or upon his

own motion, readjust for further application the rate of

compensation in accordance with the rules in this section

provided for the same, or in a proper case terminate the

payment: Provided, Any such applicant whose compen-

sation has heretofore been established or terminated

—

shall have three years from the taking effect of this act

within which to apply for such readjustment.’’ (Session

Laws, 1927, Subd. (h).)

This particular subdivision of the Workmen’s Com-

pensation Act has remained unchanged, since the original

enactment in 1911. However, from time to time, it has

been re-enacted in the Laws of 1923, and then thereafter

in the Laws of 1929, in the same language as originally

appeared in 1911. It is a well settled rule of statutory

construction that whenever the Legislature declares that

an existing statute is to be amended ‘‘to read as follows,”’

ete., it thereby evinces an intention to make the new Act

a substitute for the old one and that so much only of the

original Act as is repeated in the new one is continued in

foree, and all portions omitted from the new Act are

repealed. Continental Oil Co. v. Montana C. Co., 63

Mont. 223.

The Legislature, in the enactment of the 1927

Amendment, as above set out, repealed the provisions

of this particular subdivision as originally contained in

the Workmen’s Compensation Act in all respects wherein

the 1927 act differed, and was inconsistent with the lan-

guage contained in the section as it previously stood.

The law of 1927, Section IV, Subdivision (h), as it was

then enacted perforce must supersede and extinguish

the provision contained in the law which the legislature

enacted it to amend. The original language of this par-

ticular provision as it last stood upon the statute books

of the State of Washington appeared in the 1923 Session

Laws at Chapter 136, Section 2, Subdivision (h) thereof,

as follows:

AS — —

‘“‘(h) If aggravation, diminution, or termination of

disability takes place or be discovered after the rate of

compensation shall have been established or compensa-

tion terminated, in any case the Department may, upon

the application of the beneficiary or upon its own motion,

readjust for further application the rate of compensa-

tion in accordance with the rules in this section provided

for the same, or in a proper case terminate the payment.”’

(Session Laws, 1923, p. 397.)

It is manifest that since Subdivision (h) of Section

IV of Chapter 310 of the Laws of 1927, in so far as it is

inconsistent with Subdivision (h), Section (2) Chapter

136 of the Laws of 1923, supersedes and abolishes those

provisions of the 1923 statute in which it differs. The

section of the 1923 statute, above referred to, provided

no limitation within which a workman might apply for a

re-opening of his claim after the termination of compen-

sation or the establishment of compensation. The 1927

amendment provided that application for re-adjustment

upon the grounds of aggravation, diminution or termina-

tion of the disability was to be made within three years

from either the date of the establishment or the date of

termination of compensation. The wisdom of this legis-

lation is not a matter for judicial review. Suffice it to

say that in the efficient administration of the act in order

_ to impose the costs for accidents where they properly

should fall, the Legislature deemed it necessary that the

eosts which would accrue from any claim should be de-

eided within a definite period of vears.

It needs no quotation of authority to establish that

the common law knew nothing in the nature of a Work-

men’s Compensation Act. The right of a workman to

receive compensation and medical attention at the ex-

pense of the industrial insurance fund is purely a crea-

ture of the statute, having its inception, origin and crea-

tion in the statute, being dependent for its continued

existence upon the statute. Since such rights as the

workman enjoys are under the Workmen’s Compensation

Law in this state, and since it partakes not of the nature

of a contractual obligation inevitably it follows from the

the light of the foregoing authority that upon the repeal

of the statute all those rights which are dependent upon

the statute fall with the statute to which they owe their

creation, saved solely as they are kept alive by the saving

clause.

Applying this general rule to the facts in the instant

‘ase, it is obvious that the rights of the appellant, such

as they were, must be governed by the law as it was

amended in 1927. The right conferred by statute which

the appellant deemed himself entitled to, that is, to pre-

sent an application for re-opening in the event the con-

tingency of a changed physical condition developed at

any time during the remainder of his life was taken away

not only from him, but from all workmen, whether they

had ever been injured or not, since the statute did not

constitute a contract, but was to the contrary a matter

of general legislation, unless filed within time provided

by statute.

However, the amendment which provided that the

claimant must file an application for re-opening his

claim, as above set out, within three years from the date

of termination of his claim, preserved the continuing

power, without limitation of time to re-open the claim

upon his own motion at any time in the Director of the

ane SIS Sen AB Ne ae ABS Sa, PO So tl EY AY 2 ene caer eS ae eS

| al

Department of Labor and Industries, so that only as a

matter of absolute right to have his claim re-opened, has

the position of the appellant been affected by the 1927

Amendment.

THe WorkMen’s Compensation Act 1s Remepiau Lecis-

LATION AND CONSEQUENTLY Creatrs No Vestep Riguts

That the majority of aecidents which occur in in-

dustry under its present highly mechanized and complex

nature occur either entirely without fault on the part of

the employer or under such circumstances as would bar

the employee from recovery by reason of his contribu-

tory negligence is commonly known. It has been widely

accepted by the courts of various jurisdictions that the

Workmen’s Compensation Laws are highly remedial in

character.

Attention is called to the case of Wountain Timber

Co. v. State of Washington, reported at 248 U. S. 228,

wherein Mr. Justice Pitney, speaking for the court, cites

the provision of the Washington Act which sets forth

the declaration of the police power of the state in rela-

tion to withdrawing all matters under the act from pri-

vate controversy, and wherein the court notes that sure

and certain relief, regardless of fault, is to be accorded

to the workmen injured in extrahazardous work, and

their families and dependents.

This court, in the case of New York Central Rail-

road Company v. White, 248 U. S. 168, decided the same

day by Mr. Justice Pitney, speaking for the court in con-

sidering the character of the legislation, said as follows:

‘Tt is plain that, on grounds of natural justice, it is

not unreasonable for the State, while relieving the em-

plover from responsibility for damages measured by

common-law standards and payable in eases where he or

those for whose conduct he is answerable are found to

be at fault, to require him to contribute a reasonable

amount, and according to a reasonable and definite scale,

by way of compensation for the loss of earning power

incurred in the common enterprise, irrespective of the

question of negligence, instead of leaving the entire loss

to rest where it may chance to fall—that is, upon the in-

jured employee or his dependents.”’

For a complete consideration of the remedial char-

acter of the act, see the ease of State ex rel. Davis-Smith

Co. v. Clausen, 65 Wash. 165, and more particularly the

language contained on pages 175 and 210 thereof.

Attention is directed to the ease of In re Duncan, 73

Indiana Appeals, page 270, 127 N. EK. 289. The court in

that case said:

‘*The Workmen’s Compensation Act sought the cor-

rection of recognized errors and abuses by introducing

new regulations for the advancement of the publie wel-

fare. Being remedial in character, it should be construed

with regard to former laws and the defects or evils to be

corrected and the remedy provided.’’