King v. Atlantic Coast Line R. Co.

• Court: North Carolina Supreme Court
• Writing for the Court: ALLEN, J. (after stating the facts as above).
• Citation: King v. Atlantic Coast Line R. Co., 157 N.C. 44, 72 S.E. 801 (N.C. 1911)
• Decision Date: 15 November 1911
• Parties: KING v. ATLANTIC COAST LINE R. CO.

72 S.E. 801

157 N.C. 44

KING v. ATLANTIC COAST LINE R. CO.

Supreme Court of North Carolina

November 15, 1911

Appeal from Superior Court, New Hanover County; Whedbee, Judge.

Action by La Fayette King against the Atlantic Coast Line Railroad Company. From a judgment of nonsuit, plaintiff appeals. Reversed, and new trial granted.

An acceptance by an injured employee of benefits from a relief fund maintained by the employer, who has not contributed anything to the fund, but who merely guarantees to fulfill the obligations incurred in consequence of the maintenance of a relief department under his absolute control with power to determine the amount of the contributions of the members of the department, does not constitute a consideration moving from the employer for a release of a claim for injuries, and the employee may sue therefor under the rule that a release must be founded on a valuable consideration.

A railroad company maintaining a relief department for the payment of benefits to injured employees who become members is not thereby engaging in the insurance business, and an agreement by an employee that he will accept benefits from the fund in discharge of any claim for personal injuries is not invalid on that ground.

The plaintiff brings this action to recover damages for personal injuries caused, as he alleges, by the negligence of the defendant. The defendant denies negligence, and alleges, as a defense, that the defendant maintains a relief department that the plaintiff was a member thereof, and that, after he was injured, he accepted benefits from said department which under its rules and regulations bars a recovery. Evidence was offered by the plaintiff in support of his contention. The defendant introduced evidence in rebuttal, and also introduced the rules and regulations of said department which are very fully stated in the report of Barden v Railroad, 152 N.C. 318, 67 S.E. 971. Section 4 of the rules and regulations provides: "The company shall have general charge of the department, guarantee the fulfillment of its obligations as determined by these regulations, take charge of all moneys belonging to the relief fund, and be responsible for their safe-keeping, pay into the fund interest at the rate of 4 per cent. per annum on monthly balances in its hands, supply the necessary facilities for conducting the business of the department, and pay all the operating expenses thereof." No evidence, however, was introduced that the defendant had contributed any money to the funds of the department or for its maintenance. There was evidence that the plaintiff was entitled to be paid benefits for a period of eight months, and that he was paid for about four months.

It appears from the rules and regulations:

(1) That the relief department is a department of the defendant.

(2) That the rules and regulations thereof are prescribed by the defendant.

(3) That under these rules and regulations the defendant has control of the department and of its money.

(4) That the rules and regulations can be changed by the defendant without the consent of the members of the department, and that they cannot be changed except with the consent of the defendant.

(5) That the object of the department is the establishment and management of a fund, to be known as the "Relief Fund," for the payment of definite amounts to employés contributing thereto, who are to be known as "members of the relief fund," when under the regulations they are entitled to such payment by reason of accident or sickness or, in the event of their death, to the relatives or other beneficiaries designated by them, with the approval of the superintendent. The relief fund will consist of contributions from members thereof, income derived from investments and from interest paid by the company, and advances by the company, when necessary, to pay benefits as they become due.

(6) That the defendant is not a member of the department, but it is provided the company shall have general charge of the department, guarantee the fulfillment of its obligations as determined by these regulations, take charge of all moneys belonging to the relief fund, and be responsible for their safekeeping, pay into the fund interest at the rate of 4 per cent. per annum on monthly balances in its hands, supply the necessary facilities for conducting the business of the department, and pay all the operating expenses thereof.

(7) That all employés of the company who under the regulations are contributors to the relief fund shall be designated as "members of the relief fund." There shall be five classes of members. The highest class in which an employé may be a member shall be determined by his regular or usual monthly pay, as follows:

Monthly Pay. Highest Class.

Less than $35.00 ..................... 1st.

35.00 or more, but less than $55.00 .. 2d.

55.00 or more, but less than $75.00 .. 3d.

75.00 or more, but less than $95.00 .. 4th.

95.00 or more ........................ 5th.

For employés paid by the hour, trip, piece, or in any other way than by the month the highest class shall be determined by the usual amount of earnings in a month.

(8) That the word "contribution," wherever used in these regulations, shall be held and construed to refer to such designated portion of the wages payable by the company to an employé, as he shall have agreed, in his application, that the company shall apply for the purpose of securing the benefits of the relief fund, or to such cash payment as it may be necessary for a member to make for said purpose. Contribution for full membership shall be made monthly in advance at the following rates: First class, 75 cents per month; second class, $1.50; third class, $2.25; fourth class, $3; fifth class, $3.75.

(9) Wherever used in these regulations, the word "disability" shall be held to mean physical inability to work by reason of sickness or accidental injury, and the word "disabled" shall apply to members thus physically unable to work. The decision as to when members are disabled and when they are able to work shall rest with the medical officers of the department. The decision as to whether disability at any time shall be classed as due to sickness or due to accident, and as to whether any disability shall be considered a relapse or an original disability, shall rest with the medical officers of the department.

(10) That the following benefits will be paid to members or beneficiaries entitled thereto in accordance with the provisions of these regulations: Payment for each day of disability classed as due to accident for a period not longer than 52 weeks, as follows: To a member of the first class, 50 cents; second class, $1; third class, $1.50; fourth class, $2; fifth class, $2.50; and at half these rates thereafter during the continuance of disability. Also payment to or in behalf of the members of such amounts for necessary surgical treatment as may be approved by the chief surgeon, and provision by the department for free surgical treatment of the member in one of the hospitals under its control when requested by a medical examiner of the department and authorized by the superintendent or chief surgeon. No member shall have authority to contract any bills against the department, and nothing herein shall be held to mean or imply that the department shall be responsible for the payment of such bills as a member shall contract or his surgeon may charge. Bills for surgical attendance, to be considered by the department, must be made out against the member, and must be itemized. Payment, in accordance with the conditions prescribed in the regulations, upon the death of a member, as follows: To the beneficiary of a member of the first class, $250; second class, $500; third class, $750; fourth class, $1,000; fifth class, $1,250; also payment of $250 for each additional death benefit of the first class to which the beneficiary is entitled.

(11) That employés are required to sign a written application before joining the relief department in which it is provided: "I also agree that, in consideration of the amounts paid and to be paid by the said company for the maintenance of said relief department, and of the guaranty by said company of the payment of said benefits, the acceptance by me of benefits for injury shall operate as a release and satisfaction of all claims against said company, and all other companies associated therewith in the administration of their relief departments, for damages arising from or growing out of said injury; and, further, in the event of my death, no part of said death benefit or unpaid disability benefit shall be due or payable unless and until good and sufficient releases shall be delivered to the superintendent of said relief department of all claims against said relief department, as well as against said company, and all other companies associated therewith, as aforesaid, arising from or growing out of my death, said releases having been duly executed by all who might legally assert such claims; and, further, if any suit shall be brought against said company, or any other company associated therewith as aforesaid, for damages arising from or growing out of injury or death occurring to me, the benefits otherwise payable, and all obligations of said relief department and of said company created by my membership in said relief fund shall thereupon be forfeited without any declaration or other act by said relief department or said company."

(12) That section 62 of the rules and regulations is as follows "62. In case of injury to a member he may elect to accept the benefits in pursuance of these regulations, or to prosecute such claims as he may have at law against the company or any companies associated therewith...