L. 1916, ch. 622.

Security for payment.

§§ 34,50.

provides insurance for the servant for he pays no premiums. Miller v. New York Railways Co. (1916), 171 App. Div. 316, 157 N. Y. Supp. 200.

Compliance with statute not a defense to action under section 1902 of the Code of Civil Procedure.-See Shanahan v. Monarch Engineering Co. (1915), 92 Misc. 466, 156 N. Y. Supp. 143.

Execution of release and receipt of payment of damages by employee held not to effect a claim for compensation. Buell v. N. Y. C. & H. R. R. R. Co. (1915)

6 State Dep. Rep. 377.

Election of minor.-The legislature may remove the disability of infancy so as to permit a minor, old enough under the Labor Law to go to work, to make an election as to whether he will work under the "Workmen's Compensation Act" or the common law. Herkey v. Cigar Manufacturing Co. (1915), 90 Misc. 457, 153

N. Y. Supp. 369.

Where in a common law action brought in behalf of an infant employee to recover damages for personal injuries received while working for defendant in his factory the answer pleads as a separate and complete defense that defendant has complied with the provisions of the Workmen's Compensation Act and is relieved from all liability to plaintiff, except as provided in said statute, a demurrer to such defense that said statute cannot deprive plaintiff of her right to resort to the court for damages if she so desire must be overruled, as under said statute the employee is given no choice or election, and if the employer chooses to come thereunder the employee is bound to and is barred from all other remedy. Herkey v. Cigar Manufacturing Co. (1915), 90 Misc. 457, 153 N. Y. Supp. 369.

An employee may maintain a common-law action for negligence against a third party without alleging and proving his election to do so pursuant to this section. It seems, that where an employee brings such an action without having duly evidenced his election to do so he will not be entitled to any compensation under the statute, even though he fails to recover the full amount to which he would have been entitled. Lester v. Otis Elevator Co. (1915), 169 App. Div. 613, 155 N. Y.. Supp. 524, affg. 90 Misc. 649, 153 N. Y. Supp. 1058.

§ 34. Preferences.-The right of compensation granted by this chapter and any awards made thereunder shall have the same preference or lien without limit of amount against the assets of the employer as is now or hereafter may be allowed by law for a claim for unpaid wages for labor. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

§ 50. Security for payment of compensation.-An employer shall secure compensation to his employees in one of the following ways:

1. By insuring and keeping insured the payment of such compensation in the state fund, or

2. By insuring and keeping insured the payment of such compensation with any stock corporation or mutual association authorized to transact the business of workmen's compensation insurance in this state. If insurance be so effected in such a corporation or mutual association the employer shall forthwith file with the commission, in form prescribed by it, a notice specifying the name of such insurance corporation or mutual association and such information regarding the policies as the commission may require. 3. By furnishing satisfactory proof to the commission of his financial ability to pay such compensation for himself, in which case the commission

§ 52, 54.

The insurance contract.

L. 1916, ch. 622.

may, in its discretion, require the deposit with the commission of securities of the kind prescribed in section thirteen of the insurance law, in an amount to be determined by the commission, to secure his liability to pay the compensation provided in this chapter. The commission shall have the authority to revoke its consent furnished under this section at any time for good cause shown.

If an employer fail to comply with this section, he shall be liable to a penalty during which such failure continues of an amount equal to the pro rata premium which would have been payable for insurance in the state fund for such period of noncompliance to be recovered in an action brought by the commission.

The commission may, in its discretion, for good cause shown, remit any such penalty, provided the employer in default secure compensation as provided in this section. (Re-enacted by L. 1914, ch. 41, and amended by L. 1914, ch. 316, and L. 1916, ch. 622, in effect June 1, 1916.)

Methods of providing for security of employees. As the State, through its Commission, undertakes to make compensation for injuries received in hazardous employments from moneys which the employer has paid in advance for that purpose, or the payment of which he has secured by proper insurance, the State must be held strictly to its obligation to disburse the moneys received under the act. McQueeney v. Sutphen & Myer (1915), 167 App. Div. 528, 153 N. Y. Supp. 554.

The rights of an employee do not depend at all upon the manner in which his employer has elected to carry his insurance. An employee is not prejudiced by the fact that his employer qualifies as a self-insurer or insures otherwise than in the State fund. Winfield v. New York Central & Hudson River R. R. Co. (1915), 168 App. Div. 351, 153 N. Y. Supp. 499.

$ 52. Effect of failure to secure compensation-Failure to secure the payment of compensation shall constitute a misdemeanor and have the effect of enabling the injured employee, or in case of death, his dependents or legal representatives, to maintain an action for damages in the courts, as prescribed by section eleven of this chapter. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

§ 54. The insurance contract.-1. Right of recourse to the insurance carrier. Every policy of insurance covering the liability of the employer for compensation issued by a stock company or by a mutual association authorized to transact workmen's compensation insurance in this state shall contain a provision setting forth the right of the commission to enforce in the name of the people of the state of New York for the benefit of the person entitled to the compensation insured by the policy either by filing a separate application or by making the insurance carrier a party to the original application, the liability of the insurance carrier in whole or in part for the payment of such compensation; provided, however, that payment in whole or in part of such compensation by either the employer or the insurance carrier shall to the extent thereof be a bar to the recovery against the other of the amount so paid.

2. Knowledge and jurisdiction of the employer extended to cover the

L. 1916, ch. 622.

The insurance contract.

$ 54.

insurance carrier. Every such policy shall contain a provision that, as between the employee and the insurance carrier, the notice to or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge, as the case may be, on the part of the insurance carrier; that jurisdiction of the employer shall, for the purpose of this chapter, be jurisdiction of the insurance carrier and that the insurance carrier shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the employer for the payment of compensation under the provisions of this chapter.

3. Insolvency of employer does not release the insurance carrier. Every such policy shall contain a provision to the effect that the insolvency or bankruptcy of the employer shall not relieve the insurance carrier from the payment of compensation for injuries or death sustained by an employee during the life of such policy.

4. Limitation of indemnity agreements. Every contract or agreement of an employer the purpose of which is to indemnify him from loss or damage on account of the injury of an employee by accidental means, or on account of the negligence of such employer or his officer, agent or servant, shall be absolutely void unless it shall also cover liability for the payment of the compensation provided for by this chapter.

5.

Cancellation of insurance contracts. No contract of insurance issued by an insurance carrier against liability arising under this chapter shall be cancelled within the time limited in such contract for its expiration until at least ten days after a notice of cancellation of such contract, on a date specified in such notice, shall be filed in the office of the commission and also served on the employer. Such notice shall be served on the employer by delivering it to him or by sending it by mail, by registered letter, addressed to the employer at his or its last known place of residence; provided that, if the employer be a partnership, then such notice may be so given to any one of the partners, and if the employer be a corporation then the notice may be given to any agent or officer of the corporation upon whom legal process may be served. Provided, however, the right to cancellation of a policy of insurance in the state fund shall be exercised only for nonpayment of premiums.

6. Any insurance carrier may issue policies, including with employees, employers who perform labor incidental to their occupations, such policies insuring to such employers the same compensations provided for their employees, and at the same rates; provided, however, that the estimation of their wage values, respectively, shall be reasonable and separately stated in and added to the valuation of their pay rolls upon which their premium is computed. The employer so insured shall have the same rights and remedies given an employee by this chapter. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

Notice of cancellation of a policy of insurance, made on the first of the month, to be effective on the 10th, is insufficient. McCaffrey v. Tager Contracting Co. (1915)

§ 67.

Rules; rule of evidence.

L. 1916, ch. 622.

5 State Dep. Rep. 434. A notice of cancellation by registered mail to the assured, at the address given in the policy, which address was given by the agent of the assured, is sufficient to effect a cancellation of the policy. Bloom v. Tilin (1915) 5 State Dep. Rep. 441.

An insurance company which has issued a policy of insurance can escape liability under it on the ground of cancellation, only by proof that they followed the statutory method literally, or if this is not done, that the statutory notice was in fact received by the insured. Miner v. Turnbull (1916) State Dep. Rep., Adv. Sheet No. 42, p. 102.

§ 67. Rules.-The commission shall adopt reasonable rules, not inconsistent with this chapter, regulating and providing for

1. The kind and character of notices, and the service thereof, in case of accident and injury to employees;

2. The nature and extent of the proofs and evidence, and the method of taking and furnishing the same, to establish the right to compensation; 3. The forms of application for those claiming to be entitled to compensation;

4. The method of making investigations, physical examinations and inspections;

5. The time within which adjudications and awards shall be made; 6. The conduct of hearings, investigations and inquiries;

7. The giving of undertakings by all subordinates who are empowered to receive and disburse moneys, to be approved by the attorney-general as to form and by the comptroller as to sufficiency;

8. Carrying into effect the provisions of this chapter.

9. The collection, maintenance and disbursement of the state insurance. fund. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

§ 68. Technical rule of evidence or procedure not required. Commission not bound by rules of evidence and procedure; heresay evidence competent. This section, and subdivision 2 of section 67 providing that the Commission shall adopt rules providing for the "nature" of the evidence to be accepted by it, wholly abrogate the substantive law of evidence, the common law, the statute law, the rules of procedure formulated by the courts, and all the technicalities respected by the legal profession. The Commission is authorized by the statute to make its investigation in any manner that it chooses, wholly unfettered by any previous law, and may, under section 68 of the statute, receive hearsay evidence and base their findings thereon. Carroll v. Knickerbocker Ice Co. (1915),

169 App. Div. 450, 155 N. Y. Supp. 1.

Evidence insufficient to sustain claim.-The Workmen's Compensation Commission has no authority to make an award in the absence of at least some evidence that the employee met with the injury while he was at work for the specified employer, and as a consequence of something that had a relation to the work of the employer, something done by him or by others while he was so employed. Hence, where a claim is made for the death of an assistant foreman in the employ of the street department of a gas company, who, while sweeping the paving where work was being done, suddenly fell to the street and died some days later, and the autopsy reveals that he received a fracture of the skull from the fall, and that the fall was in all probability due to an attack of cardiac syncope, to which he was

L. 1916, ch. 622.

Surplus and reserves.

§§ 75, 77, 92, 93.

predisposed, and there is no evidence to indicate that the deceased's fall was due to anything except that while standing in the street he happened to have a sudden attack of cardiac syncope, and there is nothing to sustain a finding that his injury was "accidental" or that it arose "out of" the employment, except that the sudden fainting spell came during working hours, the claim should be dismissed. Collins v. Brooklyn Union Gas Co. (1916), 171 App. Div. 381, 156 N. Y. Supp. 957.

§ 75. Report of commission.-Annually on or before the first day of February, the commission shall make a report to the legislature, which shall include a statement of the number of awards made by it and the causes of the accidents leading to the injuries for which the awards were made, a detailed statement of the expenses of the commission, the condition of the state insurance fund, together with any other matter which the commission deems proper to report to the legislature, including any recommendations it may desire to make. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

§ 77. Expenses of administering commission.-As soon as practicable after July first, nineteen hundred and seventeen, and annually thereafter, the commission shall ascertain the total amount of its expenses incurred during the preceding fiscal year, in connection with the administration of the workmen's compensation law, and shall thereupon assess upon and collect from each insurance carrier, including the state insurance fund, the proportion of such expense that the total compensation or payments made by such carrier in such year bore to the total compensation or payments made by all insurance carriers. The amounts so secured shall be transferred to the state treasury to reimburse it for this portion of the expense of administering this chapter. (Added by L. 1916, ch. 622, in effect June 1, 1916.)

§ 92. Surplus and reserves.-Ten per centum of the premiums collected from employers insured in the fund shall be set aside by the commission for the creation of a surplus until such surplus shall amount to the sum of one hundred thousand dollars, and thereafter five per centum of such premiums, until such time as in the judgment of the commission such surplus shall be sufficiently large to cover the catastrophe hazard. The commission shall also set up and maintain reserves adequate to meet anticipated losses and carry all claims and policies to maturity, which reserves shall be computed in accordance with such rules as shall be approved by the superintendent of insurance. (Re-enacted by L. 1914, ch. 41, and amended by L. 1916, ch. 622, in effect June 1, 1916.)

§ 93. Investment of surplus or reserve.-Any of the surplus or reserve funds belonging to the state insurance fund may, pursuant to a resolution of the commission approved by the superintendent of insurance, be invested in or loaned on the pledge of any of the securities in which deposits of insurance corporations are required to be invested pursuant to section thirteen of the insurance law, or in the public stocks or bonds of any one