IV. RELEASE FROM LIABILITY

A tugboat boiler exploded, scalding the engineer to death. His widow, having applied for and received limited letters of adminis tration, executed a general release as administratrix to her hus band's employer for a consideration of $3,622. She then claimed death benefits for herself and her eight children. The Commission made an award to her. Upon appeal, the employer argued that the claim had been settled and discharged by the release; or, if not, that the $3,622 ought to be deducted from the compensation. The Appellate Division reversed the award and dismissed the claim upon authority of the maritime decision in Knickerbocker Ice Co. v. Stewart, U. S., May 17, 1920: Conroy v. Mott Haven Towing Line, Case No. 223282, June 23, 1919; App. Div. —, July 8, 1920.

Some earlier cases involving the question of release from liability have been presented in Bulletin 81, pages 335-339.

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of the leg from a vocational point of view." The examination further disclosed that this young man was not physically equipped for heavier work than he was doing and that $14 or $15 per week would be about the increased wages he would earn. The claimant being a minor the Commission exercised the power given it under section 14, subdivision 5, of the Compensation Law to find, as a matter of fact, he would be entitled to an increase of wages to $18 a week; based upon that weekly wage claimant's weekly award, $7.69, as provided by the agreement, was raised to $11.54 weekly award, lacking only a few cents of his full weekly wage when injured. The record discloses no evidence upon which such increase could be made. One of the Commissioners made such suggestion or estimate; but what took place on the examination falls short of evidence with probative force. It appears that the claimant is not inclined to do any thing to help himself or learn some useful trade that would enable him to earn a living, giving as a reason that if he did they would stop paying the compensation. Those so inclined should be made to feel that they can get on account of injury only what, by competent evidence, the law allows. (Cohen v. Rothstein & Pitofsky, 176 App. Div. 35.) The award should be reversed and the matter remitted to the Commission for further consideration. All concur, except H. T. KELLOGG, J., dissenting. Award reversed, and matter remitted to the Commission for further consideration.

The Commission took account of a boy of fourteen's expectation of increase in Gersonowitz v. American Pickle Co., 21 S. D. R. 304, 5 Bul. 26, Oct. 22, 1919.

G. RECEIPT OF WAGES BY INJURED EMPLOYEE DURING PERIOD OF DISABILITY

This topic is treated under "Disabilities" above, page 8.

IV. RELEASE FROM LIABILITY

A tugboat boiler exploded, scalding the engineer to death. His widow, having applied for and received limited letters of adminis tration, executed a general release as administratrix to her husband's employer for a consideration of $3,622. She then claimed death benefits for herself and her eight children. The Commission made an award to her. Upon appeal, the employer argued that the claim had been settled and discharged by the release; or, if not, that the $3,622 ought to be deducted from the compensation. The Appellate Division reversed the award and dismissed the claim upon authority of the maritime decision in Knickerbocker Ice Co. v. Stewart, — U. S. —, May 17, 1920: Conroy v. Mott Haven Towing Line, Case No. 225282, June 23, 1919: App. Div., July 8, 1920.

Some earlier cases involving the question of release from liability have been presented in Bulletin 81, pages 335–339.

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V. PAYMENT OF COMPENSATION-DEPOSIT OF PRESENT VALUE WITH STATE FUND, LUMP SUMS, ETC.

A. DEPOSIT OF PRESENT VALUE WITH STATE FUND

History of the question of deposit with the state fund by private insurance carriers of the present value of awards made against them has been set forth at length in Bulletin 95, pages 162–183. Following the court decisions in the Sperduto case, the Commission abandoned its plan for an aggregate trust fund consisting of the present value of awards paid in by employers and returned to the employers the very large sum that it had collected from them. In lieu of such method of safeguarding compensation by selfinsurers it worked out a plan of security deposits. This plan appears in the annual report of the Commission for 1919 at page, under the title "Rules for Self-Insurers." More than $5,000,000 of securities are now on deposit with the state fund.

In cases of award against uninsured employers the Commission's usual custom prior to the decision of the Court of Appeals in the Sperduto case was to require such uninsured employers to at once pay into the state fund the present value of the awards made against them. In reviewing a case of the kind after the Sperduto decision, Commissioner Lyon was of opinion that the "interest of justice" required immediate collection of the present value of awards against uninsured employers and that, if this could not be done, § 27 was virtually eliminated from the Workmen's Compensation Law altogether. Upon his recommendation, however, the Commission, in the case in hand, accepted the employer's offer of a security company's bond for bi-weekly payment of the compensation. His opinion was as follows:

MCDERMOTT V. INGERSOLL & BRO., 20 S. D. R. 463, 5 Bul. 13, Aug. 2, 1919. LYON. Commissioner: Even under the reasoning of the Appellate Division in Adams v. New York & Ontario Railroad Company, an award may be commuted and called in to the aggregate trust of the state fund when there are exceptional circumstances, making it in the interest of justice. Since that decision the statute has been amended authorizing the use of the tables which were condemned by that decision, though the use of these tables has been severely criticised by the court.

I think we are warranted in saying that compulsory insurance is the cornerstone of our Compensation Law. Section 50 provides that "an employer shall secure compensation to his employees in one of the following ways," naming four. The same section provides a penalty for failure so to do. Section 52 makes such a failure a misdemeanor, while section 11 deprives an employer failing so to secure compensation of his common law defenses when sued. In fact the compulsory feature of the law seems to be the only excuse for the establishment of the state fund as an insurance agency, the idea apparently being that insurance under compulsion ought to be made possible at bare cost. It is true that there is provision made for an employer's remaining uninsured (§ 50, subd. 3), but only after permission from this Commission and the giving of security before the loss arises.

In this elaborate scheme for safeguarding payments of compensation to injured workmen, it seemed to us that it was intended that the aggregate trust provided in section 27 should play some part. It seems that in some cases an employer should be compelled, after a compensation loss has arisen, to segregate from his other assets sufficient money and permanently remove it from the risk of his business to carry the loss to maturity.

If this cannot be done in a case where the employer has utterly failed to secure compensation as the law provides, then section 27 is virtually eliminated from the law altogether. It is true that this employer seems to have large assets, but everything which it owns within the jurisdiction of New York State may be removed over night. Again, many apparently prosperous concerns get into financial difficulties witness the experience of the traction companies in and around New York city in recent years.

Since the adoption of the new rule governing self-insurance it is doubtful whether the aggregate trust can be maintained as a solvent insurance unit. I, therefore, advise that on receipt of a surety company bond approved as to amount by our actuary and as to form by our counsel, the employer be allowed to continue payments bi-weekly. All the more so because the attor neys for both parties expressed at the hearings a preference for that method of securing payment.

Sayer, Perkins and Mitchell, Commissioners, concur.

B. LUMP SUM PAYMENTS

Reference to attacks of insurance carriers upon the constitutionality of lump sum awards as not being " in the interest of justice has been made in Bulletin 95, page 186. The award in one of the lump sum cases cited there, Dodd v. 461 Eighth Avenue Co., has since been affirmed by the Court of Appeals with a memorandum which states the constitutional points at issue (227 N. Y. Rep. 597, Oct 21, 1919). Quotation of the words of the Court of Appeals in Sweeting v. American Knife Co. approving lump sum awards for disfigurement also appears in the same connection. Since that time the United States Supreme Court has approved the award in the Sweeting case with a remark in the concluding sentence of its