(dissenting) — I respectfully dissent from the opinion of the majority.
It is almost an understatement to say the construction placed by the majority on subsection 5 of section 85.22, Code, 1954, results in a “drastic statute.” It means the employer’s insurer can recover full damages in a negligence action without allegation or proof of negligence. One could expect the legislature to spell out such legislative intent in rather clear language. I feel the plain simple construction of subsection 5 gives no such right to the plaintiff here.
Prior to the enactment of subsection 5 this court held in a number of cases that where the injured employee settled with a third party, under circumstances where there was no admission of liability, the subrogation rights of the employer or his insurer did not extend to the fruits of the settlement, without allegation and proof that the third party was legally liable for the employee’s injury and damage. Renner v. Model Laundry, Cleaning & Dyeing Co., 191 Iowa 1288, 184 N.W. 611; Southern Surety Co. of New York v. Chicago, Rock Island & Pacific Ry. Co., 215 Iowa 525, 254 N.W. 864; Disbrow v. Deering Implement Co., 233 Iowa 380, 9 NW.2d 378. In the cited cases the employer or his compensation insurer sought to have credited on the amount it was to pay the injured employee the amount the latter received from a third person involved in the injury to the employee. In all of them we held there could be no credit allowed until the employer or his insurer established the legal liability of the third party.
All that subsection 5 was designed to do, and, in my opinion all that it does, is give the employer or his insurer that which was denied in our decisions in the cited eases. In other words the earlier paragraphs of section 85.22, Code, 1954, gave the employer and his insurer the right to a credit in the amount of the sum recovered by the employee from a third party by litigation. The new section (subsection 5) gives the employer or his insurer the same credit in the event of settlement of the litigation however accomplished. The employer or his insurer is entitled to the credit of the settlement sum without necessity *1305of proving legal liability. This seems to me perfectly clear for subsection 5 states it is “any payment made” by way of settlement that is to be considered as damages resulting under circumstances creating a legal liability. In effect subsection 5 merely makes the settlement sum the same as a judgment recovery by the employee.
Of course the employer or his insurer is not limited to the settlement sum. That is all he can secure as a credit on the compensation liability without pleading and proof of legal liability. No agreement between the injured employee and third party will deprive the employer or his insurer of the right to recover in a subrogation action where legal liability is alleged and established. Renner v. Model Laundry, Cleaning & Dyeing Co., supra. I would affirm.
Oliver, C. J., joins in this dissent.