On appeal from a judgment of the Supreme Court, whose opinion is printed in 13 N.J.Mis. R. 860.
For the appellant, H. David Zerman.
For the respondent, Michael N. Chanalis.
The opinion of the court was delivered by
HEHER, J. This is a workmen's compensation case. The essential question is whether the widow and dependent children of the deceased employe, whose death ensued from an accident arising out of and in the course of his employment, are concluded by what is conceded to have been a compromise of their claim for compensation under the statute (Pamph. L. 1911, pp. 134, 763, as amended), then disputed by the employer as to "both liability and coverage." Conceiving that the controversy as to liability has since, in another case, been judicially resolved against the employer, the award of additional compensation made in the bureau, and affirmed in the Court of Common Pleas, is not now questioned on that ground. The Supreme Court, in granting the employer's application for a certiorari, found a distinction between "a mere agreement between the parties without judicial sanction" and a settlement approved by the commissioner "after hearing," and ruled that the case in hand fell into the latter category and the commissioner's "approval of the settlement," as distinguished from "an agreement to compromise," constituted a "final determination of the claim so as to bar further proceedings." On the return of the writ, judgment was entered accordingly. It seems to be conceded that the instant petition, presented to the bureau on January 21st, 1933, was filed within the time limited by the statute, if what has been termed "the final close-out" is not conclusive of the dependents' rights under the statute.
Plainly, there was no examination nor adjudication of the merits by the deputy commissioner. The employer "disputed both the employment and the cause of death;" and it was stipulated that the payment so provided was not to be regarded as "an admission of the liability claimed, but made for the
purpose of terminating the dispute and all further litigation between the parties." The widow covenanted not to "move to reopen this proceeding or to set aside this agreement upon any ground whatsoever, or to institute any suit, action or proceeding based upon the accident and death mentioned herein, provided the respondent [employer] performs the terms hereof." The limited scope of the inquiry is exhibited by the following colloquy between the commissioner and the deceased employe's widow and her counsel: "The court: What is the basis of the settlement in this case? Mr. Meehan: $3,500 for the petitioner and $500 counsel fee to be paid by the respondent. The court: What is this in the nature of? Mr. Meehan: It is a death claim involving a widow and two children, one child is nine years old and the other child is seventeen. Two partners form the corporation, one is the president of the corporation and the other is the treasurer. The treasurer of the corporation went out on the building and fell off the roof and was killed and now they maintain that he is not covered by the policy. The court: Is this a lump sum settlement? Mr. Meehan: Yes. The court: Well, I don't know whether I will approve it in this case. You say it is a death case with a widow and a child nine years of age? * * * Now, Mrs. Hoffman, this case has been settledon the basis of $3,500. Ordinarily the case would be worth about $6,800, but the company has agreed upon a settlement on the basis of $3,500, the question at issue being that they claim your husband was not an employe of the company but he was an owner of the company, and there is a serious legal question as to their liability. There is also a serious legal question as to the coverage by the insurance company on their policy. Of course if they are not compelled to cover there would be no money to cover this case. I understand you have been over the matter with your attorney? A. Yes. Q. Are you satisfied to settle on this basis? A. Yes, I am satisfied to settle." And so, without more, the "settlement" and "discontinuance of the proceeding," as stipulated, were "approved" by the commissioner.
In so far as it purports to effect an irrevocable surrender of a right to compensation granted by the statute, the agreement,
notwithstanding the approval of the bureau, runs counter to the policy of the law and is voidable, if not void. This court has so construed the act. Its adjudications distinguish between a proceeding in which the asserted liability under its provisions has been litigated, and a final determination on the merits had, and a disposition that in essence is a mere agreement of compromise approved by the compensation bureau. In the first case, the judgment is final and conclusive; in the latter, the element of finality is lacking. Herbert v. Newark Hardware, &c., Co., 107 N.J.L. 24; affirmed, 109 Id. 266; Federated Metals Corp. v. Boyko, 11 N.J. Mis. R. 807; affirmed, 112 N.J.L. 87; Thomas v. Liondale Bleach Dye and Print Works, 10 N.J. Mis. R. 255; affirmed, 110 N.J.L. 27; George Palm Construction Co. v. Bahr, 10 N.J. Mis. R. 756; affirmed, 110 N.J.L. 455; Ecken v. O'Brien, 115 Id. 33; affirmed, 116 Id. 94.
And where the agreement was intended by the parties to be a final disposition of the claim for compensation, and full payment has been made in accordance with its terms, the sum so paid, if less than that prescribed by the statute, is considered merely a part payment of compensation within the intendment of paragraph 5 of chapter 149 of the laws of 1918 (Pamph. L., pp. 429, 431), as amended by chapter 280 of the laws of 1931 (Pamph. L., p. 708), and clause (h) of paragraph 23, section III, of the Compensation act, as amended by chapter 279 of the laws of 1931 (Pamph. L., pp. 704, 707), limiting the time for the filing of the petition for compensation. The test is whether the compensation so paid is but a part of that which "ought to be paid" under the statute, and not whether it is the entire sum agreed to be paid in full satisfaction of the claim arising under the statute. Lusczy v. Seaboard By-Products Co., 101 N.J.L. 170; Ecken v. O'Brien, supra. Such an agreement, upon approval, does not have the force of a judgment or arbitral award.
Moreover, there are other provisions of the statute pointing to this fundamental policy. Paragraph 23 (e) of the original act (Pamph. L. 1911, pp. 134, 144), as amended by chapter 174 of the laws ...