The sole question which concerns us here is whether, under the New Mexico Workmen’s Compensation Act, the trial court, in a suit by an injured workman, can award an attorney’s fee to the claimant where only medical and hospital expenses are recovered. In Schiller v. Southwest Air Rangers, Inc., Ct.App., 87 N.M. 476, 535 P.2d 1327 (decided January 15, 1975), the Court of Appeals in a memorandum opinion answered that query in the negative. It held, inter alia, that in a workman’s compensation case where only medical and hospital expenses are recovered, attorney fees cannot be awarded under § 59-10-23(D), N.M.S.A.1953 because medical expenses are not “compensation”, citing Wuenschel v. New Mexico Broadcasting Corp., 84 N.M. 109, 500 P.2d 194 (Ct.App.1972) and Lasater v. Home Oil Company, 83 N.M. 567, 494 P.2d 980 (Ct.App.1972).
We granted certiorari and reverse the Court of Appeals.
The first paragraph of § 59-10-23 states:
“It shall be unlawful for any attorney to receive or agree to receive any fees or payment directly or indirectly in connection with any claim for compensation under the Workmen’s Compensation Act * * * except as hereinafter provided
Subdivision D. of that statute provides that where “compensation” has been refused and the claimant thereafter collects “compensation” through court proceedings in excess of the amount offered by the employer, then reasonable attorney fees shall be allowed by the trial court or by the Supreme Court on appeal.
Wuenschel, supra, Lasater, supra, and Cromer v. J. W. Jones Construction Company, 79 N.M. 179, 441 P.2d 219 (Ct.App.1968) all support the Court of Appeals’ holding. However, the rule in those cases is erroneously based on two decisions of this Court which do not support the Court of Appeals interpretation of § 59—10—23(D). See Rayburn v. Boys Super Market, Inc., 74 N.M. 712, 716, 397 P.2d 953, 955 (1964); Nasci v. Frank Paxton Lumber Co., 69 N.M. 412, 367 P.2d 913 (1961). If anything, they support the converse.
Nasci construed § 59-10-13, N.M.S.A. 1953, which requires a workman to file a claim within one year after the failure or refusal of the employer to pay “any installment of compensation” as not applying to medical expenses because medical expenses are not payable in installments, and are not, therefore, “installments of compensa*478tion.” We said that this interpretation left “unanswered the question of whether [medical expenses] are ‘compensation.’ ” 69 N.M. at 415, 367 P.2d at 915. Though the Nasci court avoided deciding whether medical payments are compensation, it stated at one point that:
“ * * * [t]he compensation to which he is entitled may be nothing more than medical and surgical payments, but the right must have arisen out of an accidental injury in the course of employment.” 69 N.M. at 416, 367 P.2d at 916.
The reference to medical and surgical expenses as compensation is unmistakable.
The Rayburn decision was based on § 59-10-23(D). The court held that attorney fees were not allowable under the statute because “the total amount of the employer’s liability, including the medical and hospital expenses, was less than the $3,200.00 offered in settlement.” 74 N.M. at 716, 397 P.2d at 955. Medical and surgical expenses were thus considered in determining whether the claimant collected “compensation” in excess of the amount offered in settlement.
When we consider the long recognized principle that the workman’s compensation act is to be liberally construed in favor of the employee (Kosmicki v. Aspen Drilling Company, 76 N.M. 234, 414 P.2d 214 (1966)), together with the implicit recognition in Rayburn and Nasci that medical expenses are “compensation”, we conclude that medical expenses are compensation for the purpose of allowing attorney fees under § 59-10-23(D). Wuenschel, supra, Lasater, supra, and Cromer, supra are overruled to that extent.
The Court of Appeals and the District Court of the Second Judicial District are reversed insofar as they held and determined that medical and hospital expenses are not “compensation” within the meaning of § 59-10-23(D). The case is remanded to the district court with directions to set aside the portion of its Amended Judgment denying attorney’s fees, and to proceed in the manner prescribed by law to fix and allow attorney’s fees for services in the trial court.
Attorney’s fees of $750.00 are allowed for services on appeal.
It is so ordered.
McMANUS, C. J., and MONTOYA and MARTINEZ, JJ., concur.
OMAN, J., dissents.