Opal B. McGILL, Widow & Adm'x, Estate of Duncan H. McGili, Jr., Dec'd, and Deborah Jane McGili, Minor Daughter,
v.
BISON FAST FREIGHT, Inc., and Bituminous Casualty Corporation.
No. 532.
Supreme Court of North Carolina.
February 1, 1957.*441 John D. McConnell, Pinehurst, Teague & Johnson, and Grady S. Patterson, Jr., Raleigh, for appellees.
Uzzell & Dumont, Asheville, for appellants.
*442 BOBBITT, Justice.
It is now established in this jurisdiction that an interstate carrier, which exercises its franchise rights by transporting its freight in leased equipment under leases such as that here involved, is liable in damages for injuries to third parties caused by the negligent operation of such equipment in the prosecution of such carrier's business. Wood v. Miller, 226 N.C. 567, 39 S.E.2d 608; Jocie Motor Lines v. Johnson, 231 N.C. 367, 57 S.E.2d 388; Eckard v. Johnson, 235 N.C. 538, 70 S.E.2d 488; Hill v. Carolina Freight Carriers Corp., 235 N.C. 705, 71 S.E.2d 133; Newsome v. Surratt, 237 N.C. 297, 74 S.E.2d 732.
And, with specific reference to the Workmen's Compensation Act, this Court has held: 1. The dependents of a lessoroperator, who was transporting freight for the lessee, an interstate carrier, under authority of the lessee's I.C.C. franchise and license plates, were entitled to recover death benefit compensation from the lessee. Brown v. Bottoms Truck Lines, 227 N.C. 299, 42 S.E.2d 71.
2. The dependents of the lessor's driver, whose death occurred while operating the leased equipment under like circumstances, were entitled to death benefit compensation from the lessee. Roth v. McCord & Dellinger, 232 N.C. 678, 62 S.E.2d 64.
In the Brown and Roth cases, for the reasons stated, the death was regarded as arising out of and in the course of decedent's employment by the lessee. Here the decedent was an assistant driver, aboard the tractor-trailer but not operating it on the occasion of the mishap causing his fatal injuries. His status, with reference to the Act, was that of an employee of the lessee, whose death resulted from an accident arising out of and in the course of such employment. Hence, on this aspect of the case, the conclusion reached is that the dependents of McGill had the right to recover compensation under the Act from Bison and its compensation carrier.
No question is involved here as to the rights and liabilities of Bison and Matthews inter se, by reason of the terms of the lease agreement or otherwise. Compare: Hill v. Carolina Freight Carriers Corp., 235 N.C. 705, 71 S.E.2d 133; Newsome v. Surratt, supra.
It appears here that Matthews had no compensation insurance coverage; and, unless decedent is so considered, Matthews had no employees. Hence, if Matthews were considered an independent contractor, as defendants contend, it would seem that Bison would be liable for the payment of compensation under the Act. G.S. § 97-19.
Even so, defendants contend that the settlement made by Opal B. McGill, individually and as administratrix, constitutes a complete bar to claimants' right to compensation under the Act. In considering this contention, the following must be kept in mind.
Since Matthews had less than five employees, the Act did not apply to him. G.S. § 97-2(a). If McGill's death was caused by the negligence of Matthews in respect of the manner in which he operated the tractor-trailer, unquestionably his administratrix had a good cause of action against Matthews. G.S. § 28-173. As to Bison, the only remedy was a proceeding by his dependents for compensation under the Act. G.S. § 97-10; Bright v. N. B. & C. Motor Lines, 212 N.C. 384, 193 S.E. 391; Hunsucker v. High Point Bending & Chair Co., 237 N.C. 559, 570-571, 75 S.E.2d 768, and cases cited. As stated by Barnhill, J. (later C. J.): "While the rights of the employee, as against a third party after claim for compensation is filed, are limited, G.S. § 97-10, there is nothing in the Act which denies him the right to waive his claim against his employer and pursue his remedy against the alleged tort-feasor by common law action for negligence." Ward *443 v. Bowles, 228 N.C. 273, 275, 45 S.E.2d 354, 355.
Ordinarily, an executor or administrator has the right to compromise any disputed or doubtful claim of his decedent provided he acts honestly and exercises the care of an ordinarily prudent person. 33 C.J.S., Executors and Administrators, § 181. "In the ordinary course of the administration all that is required of him is that he act in good faith and with such care, foresight and diligence as an ordinarily sensible and prudent man would act with his own property under like circumstances." Higgins, J., in Poindexter v. First Nat. Bank, 244 N.C. 191, 92 S.E.2d 773, 775. And this rule is applicable to a purely statutory cause of action for wrongful death. 16 Am.Jur., Death, Sections 53 and 159. Acceptance of this rule in this jurisdiction is implied in Jenkins v. Fields, 240 N.C. 776, 83 S.E.2d 908.
There is force in the contention that when the widow, individually and as administratrix, effected said settlement, irrespective of her misapprehension as to the law applicable to her rights as against Bison, she elected to extinguish the liability of Matthews by acceptance of the $3,500; that thereafter she had no further remedy against Matthews; and that Bison, if subrogated to the rights of the administratrix, would have no standing to prosecute a wrongful death action against Matthews, Bison having been a party to the settlement. The doctrine of election of remedies is discussed in Surratt v. Chas. E. Lambeth Insurance Agency, 244 N.C. 121, 93 S.E.2d 72, and in Davis v. Hargett, 244 N.C. 157, 92 S.E.2d 782.
If we exclude Matthews from consideration, the situation as to Bison alone would be as follows: rather than two available inconsistent remedies, only one remedy was available; and the settlement was made in the belief that this one available remedy was an action for wrongful death. This belief, of course, was grounded on the idea that McGili was not an employee of Bison. Therefore, appellants contend, the widow cannot now assert that McGili was an employee of Bison. Compare Deaton v. Board of Trustees of Elon College, 226 N.C. 433, 38 S.E.2d 561.
We are constrained to hold that Mrs. Opal B. McGili, in respect of her right to recover compensation under the Act, is barred by said settlement and release.
It appears that the $3,500 settlement was negotiated and effected in good faith. Mrs. McGili was represented by counsel. The grounds upon which the defendants now base their contentions that McGill's dependents have no claim for compensation against Bison under the Act, and perhaps other factors not disclosed by the record, apparently lead the administratrix and her counsel to the considered opinion that the sole remedy available against Bison was an action to recover damages for alleged wrongful death. Unfortunately, the decision now reached by this Court was not available for their guidance. While it appears now that they were mistaken as to the applicable law, the fact remains that the $3,500 was paid and accepted in full settlement of all claims against both Bison and Matthews. No attack is made upon the settlement. Only the legal effect thereof as made is under consideration.
It is noted that the recovery by the administratrix for alleged wrongful death, except as to burial expenses, is for distribution equally between the widow and child. G.S. §§ 28-173, 28-149, subd. 1. It is further noted that, under the Act, the compensation payable would be to the widow and child, share and share alike, the award to provide for burial expenses not exceeding $400. G.S. §§ 97-38, 97-39; Wilson v. Utah Construction Co., 243 N.C. 96, 89 S.E.2d 864.
A compromise and settlement negotiated in good faith by persons sui juris *444 and represented by counsel will not be disturbed by a mere mistake of law or mistake as to its legal effect. 15 C.J.S., Compromise and Settlement, Section 36(c); 11 Am.Jur., Compromise and Settlement, Section 31; Penn Dixie Lines v. Grannick, 238 N.C. 552, 555, 556, 78 S.E.2d 410. It is noted that in Allgood v. Wilmington Savings & Trust Co., 242 N.C. 506, 88 S.E.2d 825, the basis of decision was that the evidence did not establish as a matter of law the defense of accord and satisfaction. Here the proceedings before the clerk and the release leave no room for doubt that a full and complete settlement was intended.
In accordance with claimants' contention, the court upheld the conclusion of law that the $3,500.00 payment was not a bar to the award of compensation herein because it "has never been submitted to or approved by the North Carolina Industrial Commission as provided by G.S. § 97-17." We are constrained to hold that the only "settlement" contemplated by G.S. §§ 97-17 and 97-82 is a settlement in respect of the amount of compensation to which claimants are entitled under the Act. Such a settlement is not involved here.
Since the widow is barred, defendants' contentions in respect of the failure to give notice as required by G.S. §§ 97-22, 97-23, and 97-24, become immaterial. The minor child, for whom no general guardian has been appointed, is certainly not barred. G.S. § 97-50 provides: "No limitation of time provided in this article for the giving of notice or making claim under this article shall run against any person who is mentally incompetent, or a minor dependent, as long as he has no guardian, trustee, or committee." While for the purposes of the Act, a minor becomes sui juris upon attaining the age of 18 years, until then he may prosecute his proceeding for compensation only when represented by general guardian or other legal representative. Lineberry v. Town of Mebane, 219 N.C. 257, 13 S.E.2d 429, 142 A.L.R. 1033. As to the dependent minor claimant, she is the real party in interest and the proceeding must be prosecuted in her name by general guardian. The administratrix of the decedent is the proper claimant in a proceeding for compensation only when there are no dependents, whole or partial. Hunt v. State, 201 N.C. 37, 158 S.E. 703; G.S. §§ 97-40, 1-57. Apparently, whether the proceeding was properly constituted as indicated was not raised in several of the cases heretofore presented to this Court. In view of the foregoing, the presence of the administratrix as a claimant is surplusage; and in further proceedings herein the dependent minor claimant should appear by general guardian.
This leaves for consideration the effect, if any, of said settlement upon the award to be made in favor of the dependent minor claimant.
The settlement by the administratrix does not bar the dependent minor claimant for the simple reason that the administratrix had no authority to act for her except in respect of claims or causes of action vested in the administratrix as such. The widow, neither as administratrix nor as natural guardian, could conclude a settlement or execute a release that would bar the minor dependent's claim for compensation. Hence, the minor dependent is entitled to recover her one-half of the compensation payable under the Act.
Even so, as stated by Schenck, J., in Holland v. Southern Public Utilities Co., 208 N.C. 289, 292, 180 S.E. 592, 593; "* * * think the weight of both authority and reason is to the effect that any amount paid by anybody, whether they be joint tort-feasors or otherwise, for and on account of any injury or damage, should be held for a credit on the total recovery in any action for the same injury or damage." Preddy v. Britt, 212 N.C. 719, 194 S.E. 494; Smith v. Thompson, 210 N.C. 672, 188 S.E. 395; Hester v. Horton Motor Lines, 219 N.C. 743, 14 S.E.2d 794.
*445 The result is that the award in favor of the dependent minor should be diminished to the extent of the amount of the release consideration now held by the administratrix for distribution to said dependent minor and actually available for payment to a guardian for her.
We have considered each of defendants' other contentions, whereby they seek to defeat the present claim in its entirety. Brief reference will be made to the following:
We reject as untenable defendants' contention that decedent's death was not compensable under the Act because the fatal accident occurred in Virginia. The Commission had jurisdiction under G.S. § 97-36. It appears affirmatively that the contract of employment was made in this State that Bison's place of business was in this State, and that decedent resided in this State; and further, that decedent's employment "was not expressly for service exclusively outside of the State." Aylor v. Barnes, 242 N.C. 223, 87 S.E.2d 269, 270.
Incidental mention is made in defendants' brief to their contention "that the Commission's findings of fact and conclusions of law in reference to the deceased's average weekly wage is determined contrary to the provisions of G.S. § 97-2(e)." Suffice to say, the evidence, in our opinion, supports the Commission in this respect.
Moreover, the Commission's denial of defendants' motion that Prunty Motor Express be joined as a defendant herein was fully justified by the evidence.
By reason of the foregoing, the judgment of the court below is vacated and the cause is remanded, to the end that further proceedings may be had and an award made for the benefit of said minor claimant in accordance with the law as stated herein.
Judgment vacated and cause remanded.
JOHNSON, J., not sitting.