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  "name": "DAN S. CLARK, SR., Employee v. GASTONIA ICE CREAM COMPANY, Employer, Non-Insurer, and LUMBERMENS MUTUAL CASUALTY COMPANY, Carrier",
  "name_abbreviation": "Clark v. Gastonia Ice Cream Co.",
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    "parties": [
      "DAN S. CLARK, SR., Employee v. GASTONIA ICE CREAM COMPANY, Employer, Non-Insurer, and LUMBERMENS MUTUAL CASUALTY COMPANY, Carrier."
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      {
        "text": "Bobbitt, J.\nPlaintiff (an appellee) contends he sustained a compen-sable injury on May 3, 1960, for which he is entitled to a compensation award against Ice Cream Company. Plaintiff did not and does not assert any claim against Casualty Company.\nIce Cream Company (the appellant) contends: (1) Plaintiff did not sustain a compensable injury on May 3, 1960. (2) If he did, Casualty Company under its Policy No. OCL 614 140 is obligated to pay the compensation award.\nCasualty Company (an appellee) contends its policy does not cover compensable injuries sustained prior to May 9, 1960, and that the Industrial Commission has no jurisdiction to reform the policy.\nFinding of Fact No. 8, the only finding of fact bearing upon whether plaintiff sustained a compensable injury to which appellant excepted, states: \u201c8. That the plaintiff suffered an injury by accident arising out of and in the course of his employment with the defendant employer on May 3, 1960.\u201d In assigning error, appellant asserts \u201c(t)he evidence introduced was not sufficient to warrant Finding of Fact No. 8 . . .\u201d Appellant also excepted to Conclusion of Law No. 1, essentially the same as Finding of Fact No. 8, and to Conclusion of Law No. 2. The subject of Conclusion of Law No. 2 is the extent of plaintiff\u2019s injury and the amount of compensation to which he is entitled.\nWhether plaintiff sustained an injury by accident arising out of and in the course of his employment is a mixed question of law and of fact. Sandy v. Stackhouse, Inc., 258 N.C. 194, 197, 128 S.E. 2d 218, and cases cited; Horn v. Furniture Co., 245 N.C. 173, 176, 95 S.E. 2d 521, and cases cited.\nThe Commission\u2019s ultimate finding that plaintiff was injured by accident arising out of and in the course of his employment is based on specific findings covering crucial questions of fact on which plaintiff\u2019s right to compensation depends. There being no exception to any of the Commission\u2019s specific findings of fact, \u201cwe consider such specific findings of fact, together with every reasonable inference that may be drawn therefrom, in plaintiff\u2019s favor in determining whether there is a factual basis for such ultimate finding.\u201d Guest v. Iron & Metal Co., 241 N.C. 448, 451, 85 S.E. 2d 596; Hardy v. Small, 246 N.C. 581, 584, 99 S.E. 2d 862. When so considered, we are of opinion and decide that the Commission\u2019s specific findings of fact support its Finding of Fact No. 8 and its Conclusions of Law Nos. 1 and 2. Hence, appellant\u2019s said assignments of error are overruled.\nAs indicated, plaintiff did not and does not assert any claim against Casualty Company. Ice Cream Company (appellant), not plaintiff, caused Casualty Company to be brought into the proceeding. The matters discussed below relate to the rights and liabilities of appellant and Casualty Company inter se.\nFinding of Fact No. 14, the only finding of fact bearing on this feature of the case to which appellant excepted, states: \u201c14. That the defendant employer was not covered by a policy of workmen\u2019s compensation insurance on May 3, 1960, the date of the plaintiff\u2019s injury by accident.\u201d In assigning error, appellant asserts \u201c(t)he evidence introduced was not sufficient to warrant Finding of Fact No. 14 . . .\u201d Appellant also excepted to Conclusion of Law No. 4, essentially the same as Finding of Fact No. 14.\nThe Commission, citing G.S. 97-91 and Greene v. Spivey, 236 N.C. 435, 73 S.E. 2d 488, concluded it was its duty to determine the rights and liabilities of Ice Cream Company and Casualty Company inter se.\nThe policy, according to its express provisions, was for the period from May 9, 1960, to June 1, 1961. It appears the Commission based its ultimate finding that Casualty Company was not on the risk on May 3, 1960, on the ground appellant, notwithstanding its officers had full opportunity to discover the contents of the policy, accepted and retained the policy without protest, citing Clements v. Insurance Co., 155 N.C. 57, 70 S.E. 1076, and Coppersmith v. Insurance Co., 222 N.C. 14, 21 S.E. 2d 838. Appellant contends this basis of decision is untenable in that there is no evidence or specific finding of fact to the effect the policy was received by appellant prior to plaintiff\u2019s injury on May 3, 1960. Be that as it may, in view of our conclusion that the Commission had no jurisdiction to determine the rights and liabilities of appellant and Casualty Company inter se, the Commission\u2019s findings of fact and conclusions of law with reference thereto are without significance and are set aside.\nAppellant offered evidence tending to show Casualty Company agreed to issue to it a workmen\u2019s compensation insurance policy for a period beginning April 20, 1960. Since the decision (s) below were in favor of the Casualty Company, no question is presented on this appeal as to the competency of such evidence. Obviously, the Commission would have no jurisdiction of a cause of action by appellant against Casualty Company to recover damages on account of Casualty Company\u2019s failure to comply with such agreement. See 44 C.J.S., Insurance \u00a7 229; 29 Am. Jur., Insurance \u00a7 185.\nUnder the policy as written and issued, Casualty Company has no liability in connection with the compensable injury sustained by plaintiff on May 3, 1960. Hence, appellant cannot recover from Casualty Company on the policy unless and until the policy is reformed on the ground of mutual mistake (or otherwise) so as to provide for a policy period inclusive of May 3, 1960. Peirson v. Insurance Co., 248 N.C. 215, 102 S.E. 2d 800, and cases cited. The question is whether the Commission had jurisdiction of what is essentially an action by appellant against Casualty Company to reform the policy and then recover the amount necessary to reimburse appellant as to all payments it is required to make to plaintiff under the award and judgment. The agreement asserted by appellant against Casualty Company is in the nature of an indemnity agreement and the controversy with reference thereto is not germane to the determination of plaintiff\u2019s claim against appellant. Compare Greene v. Laboratories, Inc., 254 N.C. 680, 688, 120 S.E. 2d 82; Steele v. Hauling Co., 260 N.C. 486, 489, 133 S.E. 2d 197.\n\u201cThe Industrial Commission is not a court of general jurisdiction. It is an administrative board with quasi-judicial functions and has a special or limited jurisdiction created by statute and confined to its terms.\u201d Letterlough v. Atkins, 258 N.C. 166, 168, 128 S.E. 2d 215, and cases cited; Biddix v. Rex Mills, 237 N.C. 660, 662, 75 S.E. 2d 777; Tindall v. Furniture Co., 216 N.C. 306, 312, 4 S.E. 2d 894. Whether the commission had jurisdiction of the subject matter, to wit, said controversy between appellant and Casualty Company, depends solely upon whether such jurisdiction was conferred by statute. Hart v. Motors, 244 N.C. 84, 92 S.E. 2d 673, and cases cited. \u201cAn absolute want of jurisdiction over the subject matter may be taken advantage of at any stage of the proceedings, even after judgment.\u201d Pulley v. Pulley, 255 N.C. 423, 429, 121 S.E. 2d 876, and cases cited. Casualty Company has contended throughout this proceeding that the Commission had no jurisdiction of said subject matter.\nThere is no contention that our Act expressly confers upon the Commission equitable jurisdiction to determine an asserted cause of action to reform a workmen\u2019s compensation insurance policy. The question is whether there is any statutory provision which, by necessary implication, confers such jurisdiction. In resolving this question, the nature of such cause of action and traditional requirements in respect of pleadings and burden of proof must be considered.\nWell established principles relating to the equitable remedy of reformation include the following: \u201cA proper case for the reformation of instruments must be made by the pleadings, and considerable strictness of pleadings as well as of proof is required.\u201d 76 C.J.S., Reformation of Instruments \u00a7 72; 45 Am. Jur., Reformation of Instruments \u00a7 98. \u201cThe power to reform an instrument is an extraordinary one whose exercise must be guarded with zealous care, and exercised with great caution. Thus, equity is slow and cautious in the exercise of this power, and will grant reformation only in a clear case of fraud or mistake.\u201d 76 C.J.S., Reformation of Instruments \u00a7 3; 45 Am. Jur., Reformation of Instruments \u00a7 5. To reform, i.e., to correct, a written instrument on the ground of mutual mistake of the parties, the evidence must be clear, strong and convincing. Johnson v. Johnson, 172 N.C. 530, 90 S.E. 516. \u201cWhether or not the evidence is clear, strong and convincing in a particular case is for the jury to determine.\u201d Stansbury, North Carolina Evidence, Second Edition, \u00a7 213, and cases cited.\nUnless the notice of accident required by G.S. 97-22 and G.S. 97-23 is so considered, our Act (G.S. 97-1 et seq..) makes no mention of pleadings. No statutory provision suggests it would have been appropriate for appellant to have alleged a cause of action against Casualty Company for reformation of the policy on the ground of mutual mistake. Indeed, appellant did not attempt to plead or assert such cause of action. Appellant\u2019s motion of January 31, 1962, that Casualty Company be made a party to the proceedings, is based on its assertion that its liability, if any, on account of plaintiff\u2019s injury on May 3, 1960, was covered by the policy Casualty Company had issued.\n\u201cWhether administrative tribunals have equity jurisdiction to reform a policy of insurance to conform to the true intent of the parties depends on the wording of the Constitution and the Statute enacted in pursuance thereto creating the tribunal. Administrative tribunals are of limited jurisdiction. In some states constitutional and statutory provisions confer equity jurisdiction upon them which permits the reformation of a policy. In other states such reformation may be accomplished only through courts of equity, while in still other states the courts, without specific reference to either statutory or constitutional authority have held that the particular administrative tribunal has such equity power.\u201d Schneider, Workmen\u2019s Compensation Text, Permanent Edition, Volume 12, \u00a7 2500; 58 Am. Jur., Workmen\u2019s Compensation \u00a7 572; 100 C.J.S., Workmen\u2019s Compensation \u00a7 377; Annotation: 127 A.L.R. 473.\nThis summary is pertinent: \u201cThe general rule appears to be that, when it is ancillary to the determination of the employee\u2019s rights, the compensation commission has authority to pass upon a question relating to the .insurance policy, including fraud in procurement, mistake of the parties, reformation of the policy, cancellation, and construction of extent of coverage. This is, of course, in harmony with the conception of compensation insurance as being something more than an independent contractual matter between insurer and insured. On the other hand, when the rights of the employee in a pending claim are not at stake, many commissions disavow jurisdiction and send the parties to the courts for relief. This may occur when the question is purely one between two insurers, one of whom alleges that he has been made to pay an undue share of an award to a claimant, the award itself not being under attack. Or it may occur when the insured and insurer have some dispute entirely between themselves about ,the validity or coverage of the policy or the sharing of the admitted liability.\u201d Larson, Workmen\u2019s Compensation Law, Volume 2, \u00a7 92.40.\nIn our opinion, and we so decide, our Act does not confer upon the Commission expressly or by implication jurisdiction to determine, in a proceeding in which plaintiff asserts no claim against Casualty Company, appellant\u2019s asserted right to reform the policy and to recover from Casualty Company the amount of plaintiff\u2019s award. It was not contemplated that payment of compensation to an injured employee should be delayed by or involved in a determination of such a controversy.\nIt is unnecessary to determine to what extent, if any, our Act confers equitable jurisdiction upon the Commission. It seems appropriate that such determination (s) be made when specific factual situations are under consideration. It is noted: Under Article IV (Section 3) of the Constitution of North Carolina as amended in 1962 the General Assembly may vest in administrative agencies \u201csuch judicial powers as may be reasonably necessary as an incident to the accomplishment of the purposes for which the agencies were created.\u201d\nUnquestionably, the Commission has jurisdiction to set aside on the ground of mutual mistake an agreement and an award theretofore entered in a proceeding for compensation. Neal v. Clary, 259 N.C. 163, 130 S.E. 2d 39. Here, the Commission\u2019s records disclose appellant\u2019s prior policy expired April 20, 1960, and that appellant\u2019s compensation liability was not insured between April 20, 1960, and May 9, 1960.\nAppellant contends equitable jurisdiction to determine the cause of action it asserts against Casualty Company is conferred by G.S. 97-91, which provides: \u201cAll questions arising under this article if not settled by agreements of the parties interested therein, with the approval of the Commission, shall be determined by the Commission, except as otherwise herein provided.\u201d (Our italics). Questions \u201carising under this article\u201d would seem to consist primarily, if not exclusively, of questions for decision in the determination of rights asserted by or on behalf of an injured employee or his dependents.\nAppellant quotes and stresses this excerpt from the opinion in Greene v. Spivey, supra, viz.: \u201cThe Commission is specifically vested by statute with jurisdiction to hear \u2018all questions arising under\u2019 the Compensation Act. G.S. 97-91. This jurisdiction under the statute ordinarily includes the right and duty to hear and determine questions of fact and law respecting the existence of insurance coverage and liability of the insurance carrier.\u201d While the quoted statement, considered apart from the factual situation under consideration, would seem to support appellant\u2019s contention with reference to the jurisdiction of the Commission, we are mindful of this apt expression of Barnhill, J. (later C. J.): \u201cThe law discussed in any opinion is set within the framework of the facts of that particular case . . .\u201d Light Co. v. Moss, 220 N.C. 200, 17 S.E. 2d 10.\nReference is made to the preliminary statement and opinion in Greene v. Spivey, supra, for a full explanation of the factual situation. Greene, an employee of Spivey, sustained a compensable injury on July 19, 1949, and as a result thereof died on July 26, 1949. The Commission\u2019s award in favor of Greene\u2019s dependents was against Spivey, Greene\u2019s employer, and against American Mutual Liability Insurance Company (American Mutual) as Spivey\u2019s compensation insurance carrier.\nSpivey was engaged in the business of \u201ctimbering and logging.\u201d He purchased and worked standing timber and sold logs in the open market. However, on January 14, 1949, and for some time prior thereto, he had been selling his entire output to Halsey Hardwood Company, Inc. (Halsey Hardwood). He continued to do so until March, 1949. On January 14,1949, American Mutual issued its compensation insurance policy to Halsey Hardwood on a \u201cquarterly audit basis.\u201d Spivey, Halsey Hardwood and American Mutual negotiated with reference to providing compensation coverage for Spivey. It was agreed that Spivey would be covered by the Halsey Hardwood policy upon payment of premiums based on 5.5% of his payroll, to be reported and paid weekly by Spivey to Halsey Hardwood and thereafter transmitted by Halsey Hardwood to American Mutual. Beginning the first week in February, 1949, and thereafter, Spivey reported and paid weekly to Halsey Hardwood. The Commission found as a fact that \u201cpremiums were paid by O. R. Spivey to Halsey Hardwood in accordance with the arrangement detailed until after the death of Henry Greene.\u201d American Mutual conceded the policy provided coverage for Spivey from \u201con or about 1 February, 1949.\u201d The opinion states: \u201cHowever, American Mutual takes the position that its contract with Spivey furnished coverage of his workers only while and so long as he was selling and delivering logs to Halsey Hardwood.\u201d (Our italics). American Mutual\u2019s primary contention was that Spivey was not covered on July 19, 1949, when Greene was fatally injured, because Spivey then was not engaged in selling and delivering logs to Halsey Hardwood but was engaged in selling and delivering logs to another purchaser.\nIn Greene v. Spivey, supra, the policy was in full force and effect on July 19, 1949. Subsequent to the issuance of the policy, the agreement was reached that, for the consideration stated, it would provide coverage for Spivey. No question was presented as to the necessity for reformation of the policy or of the Commission\u2019s jurisdiction to reform the policy. Whether the Commission had jurisdiction seems to have been raised and treated as an incidental question. Indeed, in view of American Mutual\u2019s admission that the policy provided coverage to Spivey \u201cfor a time,\u201d it does not appear that a serious question as to jurisdiction was presented. Be that as it may, the conclusion reached is that Greene v. Spivey, supra, may not be considered authority for the proposition that the Commission has equitable jurisdiction to determine whether a compensation insurance policy should be reformed. A fortiori, this is true when as here the controversy is solely between the employer and the insurance company.\nThe portion of the judgment of the court below which affirms the award of the Commission \u201callowing compensation to the plaintiff as against the defendant, employer, Gastonia Ice Cream Company, Inc.,\u201d is affirmed.\nThe portion of said judgment providing, \u201cand the opinion and award of the North Carolina Industrial Commission denying compensation to the employee as against the defendant, carrier, Lumbermens Mutual Casualty Company, is likewise, in all respect approved and confirmed,\u201d is stricken therefrom for two reasons, to wit: (1) The Commission\u2019s award contains no reference to the Casualty Company. (2) The Commission had no jurisdiction to determine the controversy between appellant and Casualty Company. Too, as stated above, all of the Commission\u2019s findings of fact and conclusions of law relating to the controversy between appellant and Casualty Company are set aside. Hence, in further litigation, if any, between appellant and Casualty Company neither party will be prejudiced on; account of any finding of fact or conclusion of law made herein.\nAs modified as provided in this opinion, the judgment of the court below is affirmed.\nModified and affirmed.",
        "type": "majority",
        "author": "Bobbitt, J."
      }
    ],
    "attorneys": [
      "Mullen, Holland A Cooke, 0. A. Warren and Robert E. Gaines for plaintiff appellee.",
      "Garland A Alala for defendant appellant Gastonia Ice Cream Company.",
      "Hollowell & Stott for defendant appellee Lumbermens Mutual Casualty Company."
    ],
    "corrections": "",
    "head_matter": "DAN S. CLARK, SR., Employee v. GASTONIA ICE CREAM COMPANY, Employer, Non-Insurer, and LUMBERMENS MUTUAL CASUALTY COMPANY, Carrier.\n(Filed 31 January 1964.)\n1. Master1 and Servant \u00a7 53\u2014\nWhether an employee\u2019s injury is sustained by accident arising out of and in the course of his employment is a mixed question of law and fact.\n2. Master and Servant \u00a7 93\u2014\nWhere there is no exception to the findings of the particular facts and the particular findings provide a factual basis for the ultimate finding that the employee\u2019s injury arose out of and in the course of his employment, exception to the ultimate finding will not be sustained.\n3. Master and Servant \u00a7 82\u2014\nThe Industrial Commission has only such jurisdiction as is conferred upon it by statute, expressly or by necessary implication.\n4. Courts \u00a7 2\u2014\nWant of jurisdiction may be raised at any time.\n5. Same; Master and Servant \u00a7 78\u2014\nWhere the injured employee does not assert any claim against insurer and the employer has the insurer brought in as a party and asserts liability of insurer under a policy which on its face was not in force until some six days after the injury in question, the Industrial Commission has no jurisdiction to determine the rights and liabilities of the employer and the insurer inter se, since insurer\u2019s liability must be based upon reformation of the policy and the Industrial Commission has no jurisdiction of the equitable remedy of reformation upon the facts of the case. G.S. 97-91.\n6. Appeal and Error \u00a7 59\u2014\nThe language in an opinion of the Supreme Court must be considered in relation to the facts of the particular case in which it was written.\nAppeal by defendant employer, Gastonia Ice Cream Company, from Riddle, S. J., July 1963 Civil Session of GastoN.\nProceeding under our Workmen\u2019s Compensation Act. G.S. 97-1 et seq.\nPlaintiff (Clark) filed claim against his employer, Gastonia Ice Cream Company (Ice Cream Company), alleging he sustained a compensable injury on May 3, 1960.\nOn January 31, 1962, Ice Cream Company, asserting \u201cit was not a non-insurer at the time of the accident in question, but instead was covered by Workmens Compensation Policy No. OCL 614 (sic) issued by the Lumbermens Mutual Casualty Company,\u201d moved that Lumbermens Mutual Casualty Company (Casualty Company) be made a party to the proceeding. No order making Casualty Company a party appears in the record. However, unchallenged recitals in the opinion of the hearing Commissioner disclose Casualty Company had \u201creceived all pleadings and other documents in connection with this case,\u201d and that counsel for Casualty Company acted in its behalf in \u201cthe trial of this claim\u201d and during the progress of the hearing \u201cadvised the Commission that his appearance was no longer special and accepted the jurisdiction of the Commission to make the defendant carrier a party to the action.\u201d\nIt was stipulated that plaintiff and Ice Cream Company were subject to the Workmen\u2019s Compensation Act; that Ice Cream Company regularly employed five or more employees; that the employer-employee relationship existed between Ice Cream Company and plaintiff at the time of the alleged accidental injury; and that plaintiff\u2019s average weekly wage at the time of the alleged accidental injury was $35.00.\nHearings were conducted by Deputy Commissioner Gene C. Smith on January 31, 1962, and on February 13, 1962. Plaintiff offered evidence bearing exclusively upon the circumstances and extent of his injuries. Ice Cream Company offered evidence bearing upon whether its liability, if any, to plaintiff was covered by Casualty Company\u2019s workmen\u2019s compensation Policy No. OCL 614 140. This policy states it is for the period \u201cfrom May 9, 1960, to June 1, 1961.\u201d The evidence offered by Ice Cream Company, admitted over objection by Casualty Company, tended to show Casualty Company had agreed to issue such a policy for a period beginning April 20, 1960. Casualty Company did not offer evidence.\nThe hearing Commissioner, based upon his findings of fact and conclusions of law, held (1) that plaintiff had suffered a compensable injury on May 3,1960, and (2) that Casualty Company was not on the risk on May 3, 1960. The hearing Commissioner entered an award that Ice Cream Company pay compensation and medical expenses in specified amounts. Ice Cream Company filed exceptions and appealed.\nThe full Commission adopted the findings of fact and conclusions of law of the hearing Commissioner and affirmed the award. Ice Cream Company filed exceptions and appealed to the superior court.\nJudge Riddle, being of opinion the Commission\u2019s findings of fact are supported by competent evidence and that its conclusions of law are correct, entered judgment as follows:\n\u201cTherefore, it is ordered, adjudged, and decreed that the award of the North Carolina Industrial Commission allowing compensation to the plaintiff as against the defendant, employer, Gastonia Ice Cream Company, Inc., be and the same is hereby in all respects approved and confirmed, and the opinion and award of the North Carolina Industrial Commission denying compensation to the employee as against the defendant, carrier, Lumbermens Mutual Casualty Company, is likewise, in all respect approved and confirmed.\u201d\nIce Cream Company excepted and appealed.\nMullen, Holland A Cooke, 0. A. Warren and Robert E. Gaines for plaintiff appellee.\nGarland A Alala for defendant appellant Gastonia Ice Cream Company.\nHollowell & Stott for defendant appellee Lumbermens Mutual Casualty Company."
  },
  "file_name": "0234-01",
  "first_page_order": 274,
  "last_page_order": 282
}
