Charles L. McGuire, the defendant in error, while acting as a brakeman in the service of the Chicago, Burlington, & Quincy Railroad Company, in Iowa, in the year 1900, received injuries through negligence imputable to the company, and recovered judgment in the district court of that state for the sum of $2,000. By stipulation, the Chicago, Burlington, & Quincy Railway Company was joined in the judgment. It was affirmed by the supreme court of the state of Iowa, and the companies bring this writ of error.
The question presented is with respect to the validity of § 2071 of the Code of Iowa, as amended in the year 1898, which was held to preclude the railroad company from making the defense that recovery was barred by the acceptance of benefits under a contract of membership in its relief department.
The section in its original form was as follows:
'Every corporation operating a railway shall be liable for all damages sustained by any person, including employees of such corporation, in consequence of the neglect of the agents, or by any mismanagement of the engineers or other employees thereof, and in consequence of the wilful wrongs, whether of commission or omission, of such agents, engineers, or other employees, when such wrongs are in any manner connected with the use and operation of any railway on or about which they shall be employed, and no contract which restricts such liability shall be legal or binding.'
The amendment of 1898 added the following provision:
'Nor Shall any contract of insurance relief, benefit or indemnity in case of injury or death, entered into prior to the injury, between the person so injured and such corporation, or any other person or association acting for such corporation, nor shall the acceptance of any such insurance relief, benefit or indemnity by the person injured, his widow, heirs, or legal representatives, after the injury, from such corporation, person, or association, constitute any bar or defense to any cause of action brought under the provisions of this section; but nothing contained herein shall be construed to prevent or invalidate any settlement for damages between the parties subsequent to injuries received.'
The question arose upon demurrer to the defense in the answer of the railroad company, which asserted the bar denied by the statute. This defense, in substance, alleged that in November, 1900, and prior to his injury, the defendant in error had voluntarily become a member of the relief department of the railroad company, and thereupon had agreed that the acceptance of benefits payable to him in accordance with the regulations of the department should discharge the company from all liability for damages; that after he had sustained the injuries alleged in his petition, he had received benefits from the relief fund of the department, amounting to $822; and that the payment and acceptance of these benefits constituted, under the agreement, full satisfaction of the claim in suit.
The facts with regard to the organization, purpose, and management of the relief department, and the regulations governing it, were fully averred. The department was organized in 1889, as a part of the service of the railroad company, with the object of creating a fund out of which definite amounts of money should be paid to contributing employees in the event of disability from sickness or accident, or, in case of death, for their proper burial and the relief of their families. The various companies forming the Burlington, system organized similar departments, and by agreement these were associated in joint administration.
The regulations of the relief department provided that membership in the department should be voluntary, and defined the amount of contributions to be paid monthly, the members being classified for this purpose according to their monthly wages. The amount of benefits according to these classes was also specified. The relief fund consisted of the contributions of members, income from investments, interest paid by the railroad company on monthly balances, and appropriations made by the company when necessary to cover deficiencies. From the time of organization to December 31, 1900, there was paid in benefits out of the fund so constituted the sum of $2,671,510.54, of which $1,294,790.50 was paid by reason of sickness, and $1,376,720.04 for injuries and death.