An action was filed in the Court of Common Pleas by plaintiff in error against the defendants in error to recover for breach of contract. The case came to trial and upon conclusion of the *Page 382 opening statements of counsel a motion for a judgment for the defendants was granted. Error is prosecuted to this court to reverse said judgment.
The plaintiff was in the employ of the defendants on February 9, 1929, when he sustained a permanent injury, as claimed, while in the course of his employment.
The defendants employed three or more employees at the time of the injury but had failed and neglected to comply with the Industrial Commission Act of Ohio.
On February 25, 1929, defendants entered into a contract of settlement with plaintiff by the terms of which they agreed to pay him substantially the weekly sum usually allowed by the commission for a permanent injury under the circumstances in which plaintiff sustained his injury, to wit, $18.75 per week, plus certain medical and hospital bills, in consideration of the relinquishment by plaintiff of his right to bring suit in court or to file an application for compensation under the provisions of the Compensation Act.
Defendants performed under and in accordance with the terms of this contract by making the stipulated and other payments for a period of two years or more and then breached the contract by neglecting or refusing to make further payments. It was for the breach of this contract that the action was instituted.
The motion for judgment for defendants was granted by the trial court upon authority of Section 1465-94, General Code. It was decided that the agreement to waive his rights by plaintiff barred this action by reason of the inhibition of this statute. Section 1465-94 reads as follows:
"No agreement by an employe to waive his rights to compensation under this act shall be valid * * *. No agreement by an employe to pay any portion of the premium paid by his employer into the state insurance fund shall be valid, and any employer who *Page 383 deducts any portion of such premium from the wages or salary of any employe entitled to the benefits of this act shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not more than one hundred dollars for each such offense."
It was conceded in argument that this precise question has not been decided in this state; that no decision of any case involving these peculiar facts has been reported. Certain authorities have been cited by counsel representing the parties hereto. These authorities seem to present considerable conflict in respect to this question. Some of them may easily be distinguished from the case at bar by reason of the distinctive facts of the respective cases. Any attempt on my part to review or distinguish or reconcile these cases would not be helpful to anyone.
We prefer to base our conclusions upon the express provisions of the statutes herein referred to. For instance, it is contended on the one hand, and cases cited to support the contention, that the waiver referred to in the above quoted section applies only to a time prior to the date of injury. Several authorities were cited from other states applying a similar provision to both the time prior and the time subsequent to the date of injury.
It is our conclusion that the very language of the statute given a reasonable interpretation limits its application to the period prior to the date when a cause of action arose. Necessarily the second portion of the section which deals with the employee paying a portion of the premium relates to a time prior to the date of injury. We think the entire section does. This interpretation alone can be reconciled with, and is not in conflict with, the other sections of the act, and particularly the ones referred to herein.
A sound public policy would condemn the taking or coercing the execution of such a waiver before the cause of action arose as well as taking or requiring an *Page 384 employee to pay part of the premium. To deny a citizen of the state the right to contract in reference to an existing claim or cause of action against a non-complying employer rests on doubtful authority.
However, suppose that we are in error in this regard, it must be remembered that in this case we are dealing with a non-complying employer. What we said above in respect to an employee waiving his rights has regard to the particular facts of this case wherein the employer has failed to comply.
On February 9, 1929, when the plaintiff sustained his injuries he had the statutory right to adopt either one of two remedies.
Section 1465-74, General Code, provides that an injured employee of a non-complying employer may make application to the commission for an award, and provision is made for entertaining such application by the commission, and the machinery is created for making and enforcing the collection of any award made.
Or, under the provisions of Section 1465-73, General Code, he had a right to bring an action in a court to recover damages, in which action and in which event the defendants were deprived of their common law defenses.
The right to settle a cause of action is necessarily incidental to and is necessarily included in the right to prosecute a cause of action in court to recover damages from an employer who has not complied. In this case the employee did not file an application with the Industrial Commission. He did not file an action in court to recover damages. Instead, the employer and employee, without resorting to either of the foregoing methods of adjustment and compensation, proceeded to enter into a contract of settlement of an existing right of action.
Under these circumstances it is our opinion and conclusion that the non-complying employer cannot invoke *Page 385 the provisions of Section 1465-94, General Code, to defeat this action of the employee for breach of contract.
Again quoting the first several lines of Section 1465-94, General Code: "No agreement by an employe to waive his rights to compensation under this act shall be valid", his employer did not place him under this act by the payment of the required premium. The employer left the employee, so far as the employer was concerned, to his right to invoke the remedies provided by the act. The employee had a right to make an application for an award or to bring an action at law. In a sense the employee was under the act to the extent that remedies were provided for him as against a non-complying employer. Through the omission of the employer to comply with the requirements of the act under these circumstances the employee is afforded certain remedies for which the employer is not responsible and for which he made no contribution. The employer left the employee to his election. These conditions and circumstances created and imposed on the employee gives to the employer no rights which but for the act the employer would not possess.
Section 1465-73 expressly provides that an employer who does not comply shall not be entitled to the benefits of the act during the period of such non-compliance. This language surely should preclude an employer from invoking a section of the act, the provisions and requirements of which he ignored, to defeat an existing right of action of an employee, which arose from the breach of a contract to which he was a party, and which contract served as the instrument by which the employee was lulled into a feeling of security until the statutes of limitation had run to bar him forever from resorting to the two statutory remedies theretofore available to him.
For the foregoing reasons the judgment is reversed *Page 386 and cause remanded as contrary to law for further proceedings according to law.
Judgment reversed.
LEVINE and McGILL, JJ., concur in the judgment.