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Supreme Court of Oklahoma
CLOVER v. NEELY
1926 OK 83
243 P. 758
116 Okla. 155
Case Number: 16199 Decided: 02/02/1926
Supreme Court of Oklahoma
http://www.oscn.net/applications/oscn/deliverdocument.asp?citeid=50422
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Cite as: 1926 OK 83, 116 Okla. 155, 243 P. 758
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CLOVER, Adm'x,
v.
NEELY.
Syllabus
¶0 1. Evidence--Admissibility of Entries in Books of Account.
Entries in books of account are admissible in evidence upon proof that
they were made in the usual course of business of the person, firm, or
corporation whose accounts are in question.
2. Appeal and Error--Harmless Error--Admission of Evidence.
The admission of incompetent evidence by the trial court will not
warrant reversal of a judgment supported by competent evidence, unless
the Supreme Court can say, upon an examination of the entire record,
that a miscarriage of justice has probably resulted, or a statutory or
constitutional right of the complaining party has been violated.
3. Limitation of Actions--Effect of Concealment of Fraud.
Under paragraph 3 of section 185, Comp. Stats. 1921, providing that
where relief is sought on the ground of fraud, the cause shall not be
deemed to have accrued until the discovery of the fraud, an action
brought more than two years from the time the alleged fraud was
committed is not barred where the defrauded party has been tolled along
and prevented from discovering the fraud by the representations and
statements of the other party.
4. Same--Facts a Matter of Public Record--Constructive Discovery of
Fraud.
When a relation of trust or confidence exists, making it the duty of
defrauder in the trust capacity to disclose the true state of facts,
the defrauded party is not charged with constructive discovery of the
fraud on account of the facts being a matter of public record.
5. Executors and Administrators--Presentation of Claims as Prerequisite
to Suit-Claim Arising from Tort.
A claim arising on contract must be presented to the administrator for
allowance or rejection before suit can be maintained thereon, but not
so where the claim arises in tort or other wrongful act of the deceased.
C. R. Thurlwell and N.E. McNeill, for plaintiff in error.
Humphrey & Campbell, for defendant in error.
THOMPSON, C.
¶1 This action was commenced in the district court of Tulsa
county, by M. L. Neely, defendant in error, plaintiff below, against
Goldie R. Clover, administratrix of the estate of John M. Clover,
deceased, plaintiff in error, defendant below, to recover the sum of $
1,250 with interest from June 6, 1918. Parties will be referred to as
plaintiff and defendant as they appeared in the lower court.
¶2 It is claimed by plaintiff in his petition that he was the
owner of a one-fourth interest in the Iona Drilling Company, organized
under the laws of the state of Ohio, with a capital stock of $ 10,000,
and that John M. Clover, S. C. Clover, and F. M. Neely each owned a
one-fourth interest; that John M. Clover, in his lifetime, was the
president and business manager of said company; that on the 6th day of
June, 1918, the said John M. Clover was issued a check for $ 5,000 as a
200 per cent. dividend on his proportionate share of the stock, and
that the plaintiff, M. L. Neely, did not receive any dividend or any
money upon the dividend, and that one-fourth of said $ 5,000, drawn by
the said John M. Clover, belonged to him by virtue of his one-fourth
interest in said company; that the said corporation was dissolved under
the laws of the state of Ohio on the 17th day of May, 1920, and the
business of the corporation wound up, and that the said John M. Clover,
having charge of the books of the company and in full control of its
business, made no disclosure of the wrongful conversion of the said $
5.000, and that the first knowledge the plaintiff had that the said $
5,000 had been converted by the said John M. Clover was when the
government inspector disclosed to him that he was indebted to the
government upon his income tax on the amount of this dividend declared
by the company, which disclosure was made to him for the first time on
the 11th day of April, 1923; that sometime prior thereto, in November
or December, 1920, John M. Clover died, and his wife. Goldie R. Clover,
was appointed administratrix of the estate; that immediately after he
learned that John M. Clover had taken the $ 5,000 out of the treasury
of the company, he made demand on the administratrix to pay over to him
his one-fourth interest therein, which was refused, and this action was
thereafter filed.
¶3 The defendant answered by way of general denial that the
claim was barred by the statutes of limitation of three years, and that
no claim had ever been presented to the administratrix for the
allowance within the time provided by law for giving notice to
creditors. The case was tried to the court without the intervention of
a jury, the jury being specially waived, and resulted in a judgment for
the plaintiff in the sum of $ 1,721.25, amount of the principal sum and
interest, with interest thereon at six per cent. from the 19th day of
September, 1924, from which judgment the defendant appeals to this
court for review.
¶4 Attorneys for defendant assign five grounds of error in
their brief, but content themselves in presenting the same under three
heads: First, that the books were not properly identified, and it was
error in the trial court to permit the same to be introduced in
evidence; second, that the plaintiff's claim is barred by the statutes
of limitation; and, third, that the plaintiff's claim is barred for the
reason that no claim was ever filed with the administratrix, as
required by law.
¶5 Upon a review of the entire evidence in this case, we find
that the books of the Iona Drilling Company, referred to, were
identified by S. C. Clover, M. L. Neely, and A. J. Inderredien, and the
handwritings of the bookkeepers, who made the entries, were identified,
and the attorneys for both sides used said books in the examination and
cross-examination of the witnesses, and attorneys for the defendant had
an expert accountant to examine the books and introduced him and
examined him in regard thereto. The books, themselves, were never
introduced, but certain items of entry therein were examined, and
witnesses testified from the books as to these several items. While it
is true that it was never shown by the plaintiff that the bookkeepers,
who made the entries inquired about, were not in the reach of the
process of the court, yet, in our judgment, there was and there is no
dispute that they were the books of the company. Attorneys for
defendant, in their brief contend that it was error for the court to
allow the books to be introduced under such circumstances. Section 653,
Comp. Stats. 1921, is as follows:
"Entries in books of account may be admitted in evidence, when it is
made to appear by the oath of the person who made the entries, that
such entries are correct, and were made at or near the time of the
transaction to which they relate, or upon proof of the handwriting of
the person who made the entries, in case of his death or absence from
the county, or upon proof that the same were made in the usual course
of business."
¶6 And the contention of the attorneys might be, under some
circumstances, available for reversal of a cause, did not the last part
of the above-quoted section use this language:
"* * * Or upon proof that the same were made in the usual course of
business"
--which was added to the statute in the 1910 Revision of the Laws of
Oklahoma, and this court in the very recent case of Hemisphere Oil
& Gas Co. v. Oil Well Supply Co. et al., 104 Okla. 83, 230 P.
245, held:
"Entries in books of account are admissible in evidence upon proof that
they were made in the usual course of business of the person, firm, or
corporation whose accounts are in question."
¶7 And further on it is said:
"We think the phrase, 'in the usual course of business,' means in the
usual course of business of the person, firm, or corporation whose
accounts are in question. Whether the system of accounting adopted and
used by the person whose accounts are in question is perfect or
imperfect is not material"--and further holds that that is not the
question, but this only goes to the weight and value of the evidence
after being admitted; and cites the case of Navarre v. Honea, 41 Okla.
480, 139 P. 310. Under the authority of the above case, we are of the
opinion that it was admissible to use the books in the manner they were
used in this case, and they were sufficiently identified as the books
of the company sufficient for the purposes for which they were used.
¶8 There can be no question but that John M. Clover got the
benefit of the $ 5,000, which was used and invested by him and his
brother in the Knamona Zinc Company, in which the plaintiff had no
interest, and independent of the books, the record shows that the
check, itself, was introduced in evidence, which is as follows:
"The Iona Drilling Company, 407-15 Unity Building, Tulsa, Okla. Voucher
No. 6595. Treas. No. 8774. Date issued June 6, 1918. Pay to the order
of J. M. Clover, Tulsa, Okla., Dollars 5 000 Cents 00 $ 5,000 and 00
Cts. S. C. Clover, Vice President Approved for payment and
countersigned. H. F. Rethman, Cashier. Payable at the Commercial
National Bank, Independence, Kansas. 83-52. No good unless signed and
countersigned. Payable at par in Kansas City or New York Exchange.
Voucher check. The Iona Drilling Company 407-415 Unity Building, Tulsa.
Okla. To J. M. Clover, Dr. Address, Tulsa, Okla. If not correct return
to 407-415 Unity Building and explain difference, 1918 June 6--for 200%
dividend on 50 shares of stock $ 5,000. Ex'd and ent'd H. G. L. Correct
E. W. H. Approved H. F. R. Cashier.
¶9 Perforated on the face of said instrument appears:
"PAID 6x8x18."
¶10 Indorsed on said instrument appears:
"Make indorsements below. The indorsement of this check must be
technically correct and is a full receipt for the account as stated
herein. For deposit only to the credit of J. M. Clover, H."
¶11 There is evidence independent of the books, as testified
to by his brother, S. C. Clover, which showed that John M. Clover got
the benefit of this check, and that the plaintiff. M. L. Neely, did not
participate therein and was never given a like amount from the treasury
of the company to correspond to this amount wrongfully appropriated by
John M. Clover, and the check, itself, shows the following: "For
deposit only to the credit of J. M. Clover. " It was also shown by the
testimony of S. C. Clover, brother of John M. Clover, that he received
a like amount at the same time and that when demand was made on him by
the plaintiff in this case and his brother, he made restitution to them
in the sum of $ 2,500. The plaintiff, himself, testified that he
received no money on this account. So, independently of the books, we
are forced to conclude that there was sufficient evidence to justify
the judgment of the court that John M. Clover, in his lifetime,
wrongfully appropriated the $ 5,000 to his own use and benefit, and
that the plaintiff in this case was entitled to one-fourth of the
amount so appropriated with interest thereon from the date of the
appropriation.
¶12 This court has repeatedly held that the admission of
incompetent evidence by the trial court will not warrant a reversal of
a judgment, which is supported by other competent evidence, and
especially so where the case is heard by the court without the
intervention of a jury. Corder v. Purcell, 50 Okla. 771, 151 P. 482;
Hoodenpyl et al. v. Champion et al., 101 Okla. 239, 225 P. 160; M., K.
& T. Ry. Co. v. Elliott, 102 F. 96.
¶13 The question as to when the statute of limitation began to
run must be determined by the peculiar facts and circumstances of this
case. The record shows that the Iona Drilling Company was a close
corporation owned by the two Clover brothers and the two Neely
brothers, the Clover brothers being first cousins of the Neely
brothers; that the plaintiff, M. L. Neely, lived in California; that
John M. Clover was president and had full charge and control of the
business of the corporation, and had charge of the books of the
corporation, and that he wrongfully appropriated this $ 5,000,
belonging to the corporation, to his own use, under the guise of a 200
per cent. dividend, and occupying the fiduciary relation to the
plaintiff in this case, it was his duty to have disclosed this fact
when the corporation was dissolved and the business affairs settled up
among the stockholders. This he did not do. By virtue of his position,
he was charged with the duty of acting with the utmost good faith,
toward the plaintiff, and his appropriation of the $ 5,000 and
withholding the information of this act from the plaintiff in this case
constitutes a legal fraud. While it is true that this item appeared in
the books of the company, yet the books of the company were not
presented and this amount was not accounted for when the stockholders
met in Ohio for the purpose of dissolving the corporation, and the
first time the plaintiff knew of the state of affairs was when the
income tax inspector brought it to his attention, which was on the 11th
day of April, 1923, and this action was filed on the 28th day of
September, 1923, thereafter. The third paragraph of section 185, Comp.
Stats. 1921, among other things, provides:
"* * * An action for relief on the ground of fraud--the cause of action
in such case shall not be deemed to have accrued until the discovery of
the fraud."
¶14 It is seriously contended by attorneys for defendant that
the books of the Iona Drilling Company were in the keeping of the Iron
Mountain Oil Company after the death of John M. Clover, to which the
plaintiff had access, and that by the exercise of due diligence in
examining said books, he could have discovered the entry, showing the
appropriation of the $ 5.000 by John M. Clover; but the Iona Drilling
Corporation had already been dissolved several months before the death
of John M. Clover, and plaintiff had a right to rely and did rely upon
the belief that John M. Clover, as president of the company, had
accounted to the stockholders at the time of the dissolution for all
the property belonging to the corporation. As was said by this court in
the case of Billingslea et al. v. Whitelock, 112 Okla. 192, 240 P. 722:
"Under paragraph 3 of section 185 Comp. Stat. 1921, providing that
where relief is sought on the ground of fraud, the cause shall not be
deemed to have accrued until the discovery of the fraud, an action
brought more than two years from the time the alleged fraud was
committed is not barred where the defrauded party has been tolled along
and prevented from discovering the fraud by the representations and
statements of the other party."
¶15 In the case of Farmers' State Bank of Ada v. Keen et al.,
66 Okla. 62, 167 P. 207, this court said:
"When a relation of trust or confidence exists, making it the duty of
defrauder in the trust capacity to disclose the true state of facts,
the defrauded party is not charged with constructive discovery of the
fraud on account of the facts being a matter of public record."
¶16 The above case cites the case of Duffitt v. Tuhan, 28 Kan.
292, which is to the same effect. In the case of Cutshall et al. v.
Yates, 95 Okla. 277, 219 P. 343, it was held that the person
perpetrating the fraud must hold the personal property openly and
notoriously so that the owner may have reasonable opportunity of
knowing its whereabouts and of asserting his title. There are many
cases in this and other jurisdictions that hold that a party occupying
a trust relation is charged with the duty of disclosing a wrongful
appropriation of property in his hands by himself to the parties in
interest, and this was not done by John M. Clover in this case, and,
under such circumstances, we are forced to conclude that the statute of
limitation did not begin to run against the plaintiff's claim until the
11th day of April, 1923.
¶17 Upon the last proposition the plaintiff having dismissed
from his petition all allegations founded upon the trust theory of
recovery and based his right of recovery exclusively on one of
conversion, we are forced to conclude that his right of action is not
barred because he failed to present his claim to the administratrix
within the statutory time provided for presentation of claims against
an estate, as is required of claims founded upon contract. In the case
of Am. Trust Co. v. Chitty, 36 Okla. 479, 129 P. 51, this court laid
down the rule as follows:
"A claim arising on contract must be presented to the administrator for
allowance or rejection before suit can be maintained thereon, but not
so where the claim arises in tort or other wrongful act of the
deceased."
¶18 To the same effect are the cases of Donnell v. Dansby, 58
Okla. 165, 159 P. 317; Jones v. Woodward, 50 Okla. 704, 151 P. 586.
¶19 Under the facts and circumstances of this case and under
the statutes and decisions above cited and referred to, we are clearly
of the opinion that the judgment of the lower court was correct, and
that it should be and it is hereby affirmed.
¶20 By the Court: It is so ordered.
¶21 Note.--See under (1) 22 C. J. p. 862 § 1034;
anno. 53 L.R.A. 513; 10 R. C. L. p. 1171; 5 R. C. L. Supp. p. 590. (2)
4 C. J. p. 971 § 2952; 2 R. C. L. 250; 1 R. C. L. Supp. p.
476. (3) 37 C. J. p. 929 § 199; 17 R. C. L. p. 852; 3 R. C. L.
Supp. p. 741; 4 R. C. L. Supp. p. 1157. (4) 37 C. J. p. 945 §
310. (5) 24 C. J. p. 746 §
1837.
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Oklahoma Supreme Court Cases
WHITE v. KITTY CLOVER COMPANY
1965 OK 208
409 P.2d 637
Case Number: 41263
Decided: 12/28/1965
Supreme Court of Oklahoma
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Cite as: 1965 OK 208, 409 P.2d 637
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DOREEN WHITE, PETITIONER,
v.
KITTY CLOVER COMPANY, ST. PAUL FIRE & MARINE INSURANCE COMPANY
AND STATE INDUSTRIAL COURT, RESPONDENTS.
Syllabus
¶0 1. WORKMEN'S COMPENSATION -- Suicide to be compensable must
be shown to have resulted from accidental injury. In order for suicide
to be compensable under the Workmen's Compensation Law, it must be
shown that the suicide was the result of an accidental injury.
2. WORKMEN'S COMPENSATION -- Order of Industrial Court on question of
fact not disturbed on appeal. Where an order of the State Industrial
Court makes a material finding on a question of fact which is supported
by competent evidence, it will not be disturbed on appeal.
Petition for review from the State Industrial Court.
Original proceeding by Doreen White, claimant, against Kitty Clover
Company and its insurance carrier, St. Paul Fire & Marine
Insurance Company, to review an order of the State Industrial Court
denying an award. Order sustained.
Berry & Berry, by Howard K. Berry, Jr., Oklahoma City, for
petitioner.
Fenton, Fenton, Smith & McCaleb, Oklahoma City, Charles
Nesbitt, Atty. Gen., for respondents.
DAVISON, Justice.
¶1 On August 29, 1963, Doreen White, claimant, filed a claim
before the State Industrial Court for death benefits under the
provisions of the Workmen's Compensation Law against Kitty Clover
Company, and its insurance carrier, St. Paul Fire & Marine
Insurance Company. The claimant alleges that on January 4, 1963, Davis
Francis White, her husband, sustained an accidental injury while in the
employment of Kitty Clover Company, which resulted in his death by
suicide.
¶2 A trial judge of the State Industrial Court entered an
order awarding the claimant herein and her four children death benefits
in the amount of $13,500.00. Kitty Clover Company and its insurance
carrier appealed the order of the trial judge to the State Industrial
Court en banc where it was vacated and denied, stating there was no
causal connection between the suicide and the employment.
¶3 Because this case involves a suicide victim, we deem it
helpful to recite some background facts. Some of the pertinent facts in
this case are that the deceased was reared by foster parents until he
reached the age of about thirteen or fourteen; that he obtained an
eighth grade education; that he was discharged from the military
service, after serving seven months, as being incompatible; that in
1949 he married the claimant herein; that of said marriage four
children were born; that after his marriage he worked mostly as a route
salesman for dairy and potato chip companies; that several times he
spent the money of his employers that he would collect on his route;
that he attempted suicide twice by turning the gas on in the bathroom
without lighting it; that in September, 1962, the claimant commenced a
divorce action during which she was given custody of the children and
the court ordered the deceased to pay $40.00 per week as temporary
support and issued an order restraining the deceased from annoying the
claimant; that in December, 1962, the court entered an order citing the
deceased for contempt for failure to pay support and for failure to
comply with the restraining order; that the deceased was directed to
appear at the County Courthouse, Oklahoma County, Oklahoma, at 1:30
p.m. January 4, 1963, in connection with the contempt hearing; that at
approximately 1:00 p.m. on January 4th, the deceased was driving his
employer's truck and was involved in an accident with another vehicle
at the intersection of Northeast 12th Street and Central Street,
Oklahoma City, Oklahoma; that he was given a citation for failure to
yield the right-of-way and for failure to have a driver's license; that
after calling his attorney to tell him that he could not appear at the
contempt hearing, he returned to his employer's place of business; that
he went to his room around midnight of January 4, 1963, and the
following morning his land-lady became concerned when he did not leave
for work and upon entering his room found him dead; that the police
investigation revealed that the deceased had died from a self-inflicted
wound in the head from a pistol, and the police found a copy of the
citation for contempt in his room with writing on the bottom stating:
"This is what I get for thirteen years;" that on the morning following
the date of the accident, the deceased's supervisor, Carl Grier, found
a note which stated: "Carl, I am sorry that it happened this. But, you
will see when you check the inventory (inventory showed a shortage of
$231.00). I think you are the nicest man I have ever known. I wish you
all the luck in the world. I give you my car to help pay what I owe,
here is all my keys. Best of luck to all. You are a great bunch of
guys. (Signed) Dave. I can't go on, thanks to all.;" that another note
listed customers to be called on and then the words, "Goodbye and good
luck, Dave."
¶4 The claimant contends that she is entitled to the death
benefits of the Workmen's Compensation Law where the deceased sustains
an accidental injury within the scope and course of his employment,
where the accidental injury aggravates, contributes and accelerates a
pre-existing mental disorder which results in his death by suicide
twelve hours after the accidental injury.
¶5 The respondents first argue that the deceased was on a
mission of his own and was not acting within the course of his
employment at the time of the truck accident. We find it unnecessary to
decide this question due to the fact that the opinion is based on other
grounds.
¶6 We first consider the effect of the accident and the
contention of the claimant that the accident resulted in the suicidal
death of the deceased. We do not understand the claimant to say that
the accident was the sole cause resulting in the suicide but states
that the facts and circumstances in this case are like those in "heart
attack" cases such as found in Hefner Company v. Lantz, Okl., 393 P.2d
845, where an accidental injury arising out of and in the course of
employment which lights up and aggravates a prior condition, is
compensable. The claimant contends that the deceased had a pre-existing
personality disorder and the truck collision aggravated and
precipitated his death by suicide and that since there was no
substantial conflict in the medical evidence, the court must decide
this case as a matter of law.
¶7 The medical witnesses who testified in this case were
specialists in psychiatry. They both agree that the deceased was
suffering from a personality disorder which is referred to as a
sociopathic personality. The claimant's medical witness testified that
the collision served as the "last straw" and a "triggering mechanism"
for the subsequent events that eventuated in the deceased's suicide.
The respondents' medical witnesses testified that the collision was a
minor factor, rather than a major or causative factor, in a long chain
of events which resulted in the suicide; that the collision was a
contributing but not a precipitating cause. It was one of a group of
accelerating factors but not the accelerating factor.
¶8 The claimant contends that the instant case brings to issue
the question raised in Frye v. Secrest Pipe Company, Okl., 333 P.2d
559. In that case the claimant received an injury to his back and later
committed suicide because he could not work after the injury, and also
due to the fact that the employer resisted his claim for compensation,
and one of the foremen stated he could not be rehired due to the fact
he has filed a claim for the back injury. There was conflicting medical
evidence as to whether the suicide was the result of the accidental
injury. In sustaining the order denying the award, this court held that
a finding of the State Industrial Court would not be disturbed where
there was competent evidence to sustain such finding.
¶9 The facts in the Frye case, supra, was a stronger case for
the allowance of a recovery for the claimant than in the present case,
for in that case the deceased had sustained an accidental physical
injury prior to the suicidal act. In the instant case, though the
deceased was involved in the accident (collision), the claimant does
not contend that the deceased sustained any accidental physical injury,
but that the accident brought to light other distressing facts, when
coupled with a pre-existing mental disorder, caused him to commit
suicide. The basic question in this case is: Did the effect of the
collision on deceased's mind constitute an injury under the Workmen's
Compensation Law?
¶10 Claimant cites Wade Lehar Construction Company v. Howell,
Okl., 376 P.2d 221; O.M. Bilharz Mining Co. v. Arric, 155 Okl. 223, 8
P.2d 721; Rialto Lead & Zinc Co. v. State Industrial
Commission, 112 Okl. 101, 240 P. 96, 44 A.L.R. 494; and Northwestern
Refining Company v. State Industrial Commission, 145 Okl. 72, 291 P.
533. These cases are all distinguishable on the facts. In those cases,
the employee suffered a physical injury which aggravated a pre-existing
mental disorder, or a physical injury caused the mental disorder, or
the mental disorder caused the physical injury, which arose out of and
in the course of employment.
¶11 In order for the claimant to be entitled to compensation,
it must be shown that the deceased suffered an accidental personal
injury. The words accident and injury have particular and different
meanings. See Andrews Mining & Milling Company v. Atkinson, 192
Okl. 322, 135 P.2d 960. In the instant case there is ample evidence of
an accident (truck collision), but there is no evidence of any injury
which caused the suicide. Neither of the medical witnesses describe the
effect of the accident on the deceased's mind as being an injury. They
describe the accident variously as "a triggering mechanism,"
"contributing factor," "minor factor," "an event in a long chain of
events," "a strain on his personality," "sudden unexpected event," and
"one of a group of accelerating factors." There is a complete void in
the medical evidence of any injury the deceased received from the
collision. The claimant argues that since the deceased had a
pre-existing mental disorder, suicide was a natural consequence of the
accident, quoting from Keeling v. State Industrial Court, Okl., 389
P.2d 487, wherein we said:
"In this jurisdiction it seems settled that where a mental disorder is
the natural consequence of an accident which is compensable under the
Workmen's Compensation Act, the claimant should be compensated."
¶12 Clearly the Keeling case, supra, does not help the
claimant because in that case there was a physical injury involved.
There is no injury shown by medical testimony involved in the instant
case.
¶13 Where an order of the State Industrial Court makes a
material finding on a question of fact which is supported by competent
evidence, it will not be disturbed on appeal. Keeling v. State
Industrial Court, supra.
¶14 We are of the opinion that the finding and order of the
State Industrial Court en banc, that there was no causal connection
between the suicidal death and the employment, is supported by
competent evidence.
¶15 The order of the State Industrial Court denying the claim
is sustained.
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