Nikolich v. Slovenska Nardona Podporna Jednota (slovenic Nat. Ben. Soc.).

• Decision Date: 23 August 1927
• Docket Number: No. 3044.,3044.
• Citation: 260 P. 849,33 N.M. 64
• Parties: NIKOLICHv.SLOVENSKA NARDONA PODPORNA JEDNOTA (SLOVENIC NAT. BEN. SOC.).
• Court: New Mexico Supreme Court

33 N.M. 64

260 P. 849

NIKOLICH

v.SLOVENSKA NARDONA PODPORNA JEDNOTA (SLOVENIC NAT. BEN. SOC.).

No. 3044.

Supreme Court of New Mexico.

Aug. 23, 1927.Rehearing Denied Nov. 7, 1927.

Syllabus by the Court.

Contracts of insurance to be liberally construed.

Considering that one section of the by-laws of a benefit society gives the member a right to sick benefits if unable to carry on his usual occupation, and that another section denies the right if the member is able to perform any labor, the latter must be disregarded.

By-laws of benefit society to be so construed as to give effect to all provisions.

A local organization through which a benefit society transacts all business with its members is to be considered generally as its agent.

Rejection by benefit society of member's claim on grounds other than those set up in defense constitutes waiver, though the society, due to the default of its local organization, misunderstood the nature of the claim.

A motion to strike evidence, received without objection, is addressed to discretion.

After an issue has been litigated, it is too late to object that it has been imperfectly raised by the pleadings. In case of such objection, both the trial court and this court will permit amendment.

An objection, made after the court has taken cause under advisement, that waiver of defects in proofs of claim is pleaded in the reply rather than in the complaint, will be met by permitting amendment of the complaint.

Failure of member of benefit society, claiming benefits, to exhaust remedies within society before bringing suit excused by unreasonableness of such remedies.

Requirement of by-laws of benefit society for appeal of member's rejected claim for benefits to convention meeting once in four years is unreasonable.

Requirement of by-laws of benefit society for submission of member's rejected claim for benefits to decision by vote of all members of society is unreasonable.

Appeal from District Court, Colfax County; Kiker, Judge.

Action by Aleska Nikolich against the Slovenska Nardona Podporna Jednota (Slovenic National Benefit Society). From a judgment for plaintiff, defendant appeals. Affirmed and remanded, with direction.

A motion to strike evidence, received without objection, is addressed to discretion.

Crampton & Darden, of Raton, for appellant.

Daniel K. Sadler, of Raton, for appellee.

WATSON, J.

The Slovenic National Benefit Society is incorporated in Illinois and has branches throughout the United States, Canada, and Mexico. Nikolich, a member, holding a benefit certificate, by occupation a coal miner, suffered an injury, consisting of a fractured pelvis resulting in a progressive atrophy of the left leg. He was paid sick benefits for something over three months. He sued the society, claiming the balance of one year's sick benefits, a so-called compromissary payment of $300 from the sick benefit fund, $375 as commutation of his $1,500 death benefit (see By-Laws, art. XXII, § 21, infra), and $500, the sum prescribed by By-Laws, art. XXVI, for loss of a leg. He recovered upon all claims except the last mentioned. The society has appealed.

The trial court found (finding 11):

“That by reason of said injuries the plaintiff is now, at all times since receiving said injuries has been, and will be hereafter, permanently, totally, and continuously disabled from performing any kind of work or labor for his support and maintenance.”

The evidence sufficiently shows that appellee's injury is permanent and incurable. It does not show, however, that he is disabled from performing any kind of work or labor for his support or maintenance. On the contrary, it clearly appears that while he cannot, and never can again carry on his occupation as a coal miner, he is well able to engage in occupations not requiring the use of his leg, and that his condition permits him to go from place to place, and up and down stairs. He is not therefore incapacitated for work which he could perform while sitting.

Appellee contends that the proof and finding showing that he is incapacitated for the performance of his usual occupation as a coal miner is sufficient to support the judgment. He cites many cases to the effect that, under a contract for indemnity on account of total and permanent disability, proof of total and permanent incapacity to perform the claimant's former and usual work entitles him to a recovery. Appellant does not question the authority of these cases, but contends that they are not here applicable. The contract consists of a benefit certificate, providing for the payment of $1,500 in case of death and for such other benefits as the by-laws prescribe. Not having suffered death, appellee's rights are dependent entirely upon the correct construction of the by-laws of the society. They are extensive and elaborate. The English version is not easy to read or comprehend, being a translation of the original in either the Slavic or the Croatian language. Article XXII covers the subject of “Sick benefits.” It contains 22 sections. To an understanding of appellee's rights, it seems necessary to reproduce sections 1, 8, 15, 18 (f), 19, and 21.

“Section 1. Members who on account of sickness or injury are declared by a certificate of the physician to be unable to attend their usual work, and who have strictly complied with the by-laws of this society and with instructions of the physician, and if the subordinate branch, upon recommendation of the local sick committee, approves and files with the main office the sick benefit order in proper time, shall be entitled to a sick benefit in the sum as provided for by the by-laws.”

“Sec. 8. Should the visiting officer suspect any member on the sick list of being able to do some kind of work in spite of the physician's statement to the contrary, he shall notify the president of his committee and said committee shall, without delay, cause a medical examination of such a suspected member by another physician, who shall give a written statement regarding the results of such an examination; such examinations shall be made regardless to the length of the period of the member's sickness. If found that the suspected member can perform some kind of work, he shall have no right to claim any further benefits from the date of said examination and the cost thereof shall be deducted from his benefits to which the member is entitled to the date of the special examination; if, on the contrary, the examining physician finds the member still unable to work, then the society shall pay the expenses of such an examination upon receipt of the physician's statement together with his bill by the secretary of the sick benefit department forwarded from the branch secretary. The same procedure shall be carried out when a notice of suspicion, as to the condition of a member's sickness, is given by a member other than an officer of the local sick committee.”

“Sec. 15. No member shall be entitled to receive sick benefits for a period longer than the period of his inability to perform any kind of work on account of one sickness and its effects. If the attending physician shall report that a member will not be able to perform the duties of his previous occupation, but that he may do some light work, his sick benefits shall cease with the date of such a report.”

“Sec. 18. The Slovenic National Benefit Society shall pay no sick benefits to members:

(f) Who, during their illness, are able to perform some kind of work.”

“Sec. 19. In case of any external disease, or injury resulting from accident, the local sick committee shall determine the real cause of such disability of member. The secretary of the sick benefit department shall have the power to ask for any proof or information from the subordinate branch and physician before payment of the sick benefits is made. The branch shall consider the conditions of a member's occupation, and upon facts in connection therewith shall base its judgment as to whether the sick benefits in such a case shall be approved or not. Should a member, while sick and claiming the sick benefits, leave the boundaries of the branch without the permission of his physician and knowledge of the branch without a reasonable excuse, the branch shall demand such a member to return to its boundaries in order to be under its proper control, and if the member refuses to comply with such a request, he shall have no further claim for sick benefits.”

“Sec. 21. In case a member, after having drawn sick benefit for one year, is considered incurable by the physician, he may expect the society to pay him in a lump sum his compromissary claim from the sick benefit fund. For every dollar of sick benefit, $100 compromissary claim shall be paid. Every such member may continue to be a member of the society, but must disclaim all sick benefit. Until then the member shall pay the full assessment. A member who demands full payment of his compromissary claim and thereby discontinues to be a member of the society shall also receive one-third of his death benefit insurance providing he has been a member of the society for at least 5 years. If he has been a member of the society for less than 5 years, he shall receive only one-fourth of his death benefit insurance. Before making any such payment, the member shall present to the supreme executive committee certificates from two physicians, selected either by the subordinate branch or supreme executive committee, certifying therein that he is absolutely incurable or permanently disabled. The examination of such member shall be conducted in the presence of either the local sick committee, a member of the supreme sick committee or his duly empowered representative, and the society shall bear the expenses of such examination.”

It appears from section 21 that the conditions entitling a member to the compromissary payment from the sick benefit fund, and to the prescribed proportion (in this case one-fourth) of the death...