Rasicot v. Royal Neighbors of America

AILSHIE, J.

(After Stating the Facts.) — At the outset it must be conceded that under the terms of this contract the answers given by the applicant for insurance are viewed by the law in the nature of warranties rather than as mere representations. (3 Joyce on Insurance, sec. 1944; Bacon on Benefit Societies, see. 194; Hoover v. Royal Neighbors of America, 65 Kan. 616 , 70 Pac. 595 ; Beard v. Royal Neighbors of America, 53 Or. 102 , 99 Pac. 83 , 19 L. R. A., N. S., 798; Supreme Lodge Knights and Ladies of Honor v. Payne, 101 Tex. 449 , 108 S. W. 1160 , 15 L. R. A., N. S., 127.) It has been found as a fact that the insured was pregnant at the time she made application for insurance and at the time the benefit certificate was issued to her. It is also established that she did not know of her pregnancy at the time and that her answer was in good faith and honestly made. Viewing these facts alone, if we should follow the inflexible technical rule of warranties which has been adopted by many courts, the inquiry would end here and we would hold that the breach itself avoided the contract and that the subsequent- conduct of the society could not be considered. (Joyce on Insurance, sec. 1970; McDermott v. Modern Woodmen of America, 97 Mo. App. 636 , 71 S. W. 833 ; Hoover v. Royal Neighbors of Amer *95 ica, supra; Beard v. Royal Neighbors of America, supra; and authorities above cited.)

We are of the opinion, however, that there are rules of law and principles of equity that must be applied to the insurer as well as to the insured, and that its treatment of the contract for a number of years after the effects and consequences of the breach had disappeared is a subject requiring our consideration. The benefit certificate was issued to the insured on the 28th day of June, and thereafter and on the 25th day of November of the same year she gave birth to twins, both of whom were healthy and normal. No unusual or unfavorable condition of health resulted from her confinement. She continued to be a member of Lakeside Camp No. 2373 located at Sandpoint, and continued the regular payment of dues and assessments from time to time and was in fairly good health until shortly before the date of her death in February, 1907. In the meanwhile, she bore at least one child after the birth of the twins. It should at this point be observed that there is no provision of the contract or policy of insurance which attempts to suspend or avoid the contract after it is once entered into on account of subsequent pregnancy. The provision of the contract confronting us is a stipulation against pregnancy existing at the time of the application for the insurance. It is conceded in this ease that the death of the insured did not result from any condition of the insured which existed at the time of making the application or of the issuance of the policy; nor, indeed, is it contended that the pregnancy of the insured at the time of the issuance of the policy in any way contributed to the ultimate cause of death or in any way augmented the subsequent risk or diminished her life expectancy. In the application question 33-1 is followed by a star, and at the foot of the application blank is the following note: “If applicant is pregnant, application will not be accepted by Supreme physician. Examination should be postponed until at least two months after confinement.’5. It appears that,under the by-laws, rules and regulations of the society in a case of this kind, the application is withheld *96 ¡until a period of two months after the confinement of the applicant, and thereupon the physician makes the examination and tabes the applicant’s answers to the questions,,and if they prove satisfactory in other respects, the application 'is accepted and the certificate is issued.

In this case no fraud was practiced whatever. Although the society contends that the policy never went into effect .and that the contract never became binding, still it received and accepted dues and assessments from the insured for a period of more than four years continuously succeeding her confinement and also covering a subsequent period of gestation and confinement, and the society is presumed to have had notice through the local Camp of the existence of the facts and the happening of the contingency which would have avoided the contract. The local camp of which the insured was a member collected and received the dues and assessments from its members, and was charged with the duty of looking •after the health and conduct of its members and of expelling -or suspending its members for any violation of the laws of the order or breach of their duties as members of the society. The local lodge was, therefore, the agent of the society which issued the benefit certificate, and the appellant after the lapse of more than four years is chargeable with notice of the existence of the condition on the part of the insured which would have avoided the risk and prevented the contract becoming effective and operative. (Modern Woodmen v. Breckenridge, 75 Kan. 372 , 89 Pac. 661 , 12 Ann. Cas. 636; Order of Foresters v. Schweitzer, 171 Ill. 325 , 49 N. E. 506 , 7 L. R. A. 262, 12 Ann. Cas. 638; Supreme Lodge K. of H. v. Davis, 26 Colo. 252 , 58 Pac. 595 ; Modern Woodmen of America v. Lane, 63 Neb. 89 , 86 N. W. 943 ; Modern Woodmen of America v. Coleman, 68 Neb. 660 , 94 N. W. 814 , 96 N. W. 154 ; Supreme Lodge v. Wellenvoss, 119 Fed. 671 , 55 C. C. A. 287 ; Pringle v. Modern Woodmen of America, 76 Neb. 384 , 107 N. W. 756 , 113 N. W. 231 .) Under these facts and circumstances the doctrine of waiver should be applied to the society.

In Supreme Lodge K. of H. v. Davis, supra, the court said: “Ina mutual benevolent order composed of a supreme lodge *97 and subordinate lodges, an officer of a subordinate lodge charged with the duty of notifying the members of assessi-ments made by the supreme lodge for the purpose of paying insurance certificates of deceased members, and of collecting and forwarding to the supreme lodge such assessments, is an agent of the supreme lodge, notwithstanding a rule or by-law of the order recites that such officer in collecting and forwarding assessments shall be the agent of the members of the subordinate lodge, and the supreme lodge is charged- with all knowledge possessed by the agent in making the collection.”

In Trotter v. Grand Lodge Legion of Honor, 132 Iowa, 513 , 109 N. W. 1099 , 7 L. R. A., N. S., 561, 11 Ann. Cas. 533, the court said: “The(rule that courts will give effect to any act or circumstance from which it may fairly be argued that the insurer has waived the right to strict and literal performance by the insured, or upon which an estoppel against forfeiture may be founded, applies to fraternal or lodge insurance. And whether a waiver of forfeiture of a certificate of insurance will be found in any particular ease depends, not on the intention of the insurer, against whom it is asserted, but on the effect which its conduct or course of business 'has had upon the insured, and this rule is applicable where the insurer acts under a mistake.”

In Pringle v. Modern Woodmen of America, 76 Neb. 384 , 113 N. W. 231 , Pringle held a benefit certificate which contained a clause to the effect that it should become null and void if the insured should at any time be convicted of a felony. While holding the certificate, the insured was convicted of felony and sentenced to the state penitentiary, where he was confined for about six months and died. The beneficiary sued on the contract to recover the amount of the policy. It appeared that the insured had continuously kept up the payment of his dues and assessments. The supreme court of Nebraska, in speaking through Mr. Justice Barnes, said: “The local camp and its clerk being the agents of the association, the conclusive presumption, in the absence of fraud, is that they seasonably communicated the fact of Pringle’s conviction to -the head *98 camp. Indeed, tbe clerk testified that the governing body knew of the fact, and his statement stands unchallenged, except by the evidence of one C. W. Hawes, the head clerk of the association. A like state of facts has often been held to amount to waiver of a similar forfeiture clause. ’ ’

The state is vitally interested in the thrift and frugality of its citizens, and in encouraging the citizen in providing for his family and looking to their protection and comfort in the event of his demise. To allow him, when acting honestly and from the most laudable motive, to be led on under the belief that he is devoting his savings to the purchase of a legacy for his dependent ones, and then when the beneficiary comes to make demand for that paltry recompense to tell him that the courts, the final arbiters of his rights, will not listen to the equity of the case, would be doing violence to the principles of fair dealing, and would be likewise contrary to the best interests of the public at large which we term public policy. ITad the insured been in any manner advised that her policy was not in force, she would perhaps have procured one that would have been valid, and this would have been to the benefit of her family and in the interest of society as well, and the state itself must feel an interest in having her take such precautions, and in that sense the construction of such contracts becomes a matter of public policy. The insurer cannot suffer half so much from such a policy, and such a construction as the individuals interested, and society at large must in the end of necessity suffer from the cold-blooded, technical rule that seems to prevail in so many jurisdictions. This ought to be the rule in order to prevent organizations soliciting membership, receiving insurance applications and accepting dues and assessments for years, and then, after the applicant is perhaps too old to procure insurance elsewhere, tell the insured that he made a false answer in some one of the numerous questions propounded by the society, and that consequently his policy has never been in force. Such a contract is clearly violative of the interests of society at large and of the welfare of its citizens and ought to be discouraged.

*99 The more than two hundred questions contained in one application blank run the gamut of the applicant’s ancestry from his grand ancestors down to date, and ask him about every disease and pathological condition for which the medical world has been able to invent a name, and then if forsooth he misses a guess on any one of them, he is chargeable with expert knowledge and warranting the correctness of his answers and must lose his protection on the venture of a guess. In such a game the insured has only a chance in hundreds, and the result must follow that he only thinks he is insured, — it amounts to mental insurance and nothing more. The insurance society in such ease could exist for the sole and only purpose of collecting dues and assessments with no insurance liability.

Some courts have held, and we think the rule sound, that notwithstanding the stipulation of warranty in such contracts, answers which merely express the opinion or judgment of the applicant cannot be classed among the facts, the truth of which is insured by the applicant, — that he only warrants his honesty and good faith as to such answers. (Rupert v. Supreme Court U. O. F., 94 Minn. 293 , 102 N. W. 715 ; Ranta v. Supreme Tent of Maccabees, 97 Minn. 454 , 107 N. W. 156 ; Royal Neighbors of America v. Wallace, 73 Neb. 409 , 102 N. W. 1020 ; Royal Neighbors of America v. Wallace, 5 Neb., (Unof.) 519, 99 N. W. 256 .) “It would be solemn nonsense,” says the supreme court of Minnesota in Ranta v. Supreme Tent of Maccabees, “to hold that an ordinary applicant insures the exact reality of physical conditions and causes at a time when the greatest pathologists might differ or even when they might be impossible of definite determination.” This rule seems to us more in consonance with reason and justice than the rule of strict literal warranty contended for by appellant.

The application contained the stipulation that any certificate which might be issued to the applicant “shall be delivered to me while in sound health and in pursuance of the by-laws of the order.” It is also contended that the insured was not in “sound health” at the time of delivery because *100 of pregnancy. Pregnancy is not per se a condition of “unsound” health, nor is it a “disease” or “ailment” within •the meaning of those terms used in this application and policy. The term “sound health” has been frequently defined by the courts, and so far as we are advised it has never been held that this term used in an insurance policy or certificate covered every slight ailment or indisposition of health of a temporary character which does not tend directly to shorten the life or undermine the constitution of the insured. (Packard v. Metropolitan Life Ins. Co., 27 N. H. 1, 54 Atl. 287 ; Morrison v. Wis. Odd Fellows’ Mutual Life Ins. Co., 59 Wis. 162 , 18 N. W. 13 ; Brown v. Metropolitan Life Ins. Co., 65 Mich. 306 , 8 Am. St. 894, 32 N. W. 610 ; Manhattan Life Ins. Co. v. Carder, 82 Fed. 986 , 27 C. C. A. 344 ; 7 Words and Phrases, 6554.) So far as we are informed, this term of itself and standing alone has never been held to cover or include a ease of pregnancy. Appellant must, therefore, rest its case on the falsity of the representation that the insured was not pregnant.

Appellant attempted to show that the answer to question 18 was false for the reason that the insured had consulted a physician within the period of seven years immediately preceding her application. On this point there was a sharp conflict in the evidence except with reference to one visit by a physician, who it is admitted attended her on April 5, 1899, the date of her last previous confinement. The appellant had notice that the applicant was a married woman, and that she had already borne five children and that she had been confined on April 5, 1899, which was only about three years prior to this application. It might have assumed that either a physician or a midwife attended her on this confinement. The attendance, however, of a physician at the time of a normal case of confinement is clearly not a “consultation” or treatment of a “personal ailment” of the female confined. Childbirth is a physiological fact which occurs in the regular course of nature, and neither signifies nor entails disease or ailment in the usual and ordinary use of those terms.

*101 On tbe trial of tbe ease tbe plaintiff introduced tbe physician who attended tbe insured during her last sickness, and examined him as to the nature of her illness and the cause of death. He testified that she died following an operation performed by him, and testified to the g’eneral nature and character of her condition and the cause for which the operation was performed. He said: “The object of it was to remove the right tube and the right ovary and drain for an abscess in the pelvis.” He also testified to signing the death proofs, and identified the paper containing the proofs made by him. The defendant thereafter offered to introduce in evidence the death proofs made by this physician. The plaintiff objected and the objection was sustained by the court. This ruling is assigned as error. The court should have admitted this exhibit in evidence. It is a uniform rule almost without exception that such proofs are admissible when offered by the insurer. (3 Elliott on Evidence, sees. 2386-2389; Insurance Co. v. Newton, 22 Wall. 32 , 22 L. ed. 793; Beard v. Royal Neighbors of America, 53 Or. 102 , 99 Pac. 83 , 19 L. R. A., N. S., 798.) The defendant was not prejudiced by the exclusion of this exhibit. The exhibit has been preserved in the record and is before us. Answer No. 11 is the particular portion of the exhibit that defendant offered in evidence, and to the rejection of which counsel took their exception. It is an answer to the question: “State the remote cause of death.” The answer given by the physician is as follows: “Exposure and cold. Patient had a recto vaginal fistula which may predisposed to the pelvic inflammation 1st symptoms, severe abdominal pains, tenderness of whole abdomen, vomiting and constipation, Tympanitis then located pelvic cellulitis uterus became filled was forming in right side filling up Douglas pouch.” This answer was substantially the same as that given by the doctor when on the witness-stand. His explanation at length as given on the witness-stand was clearer and more complete than the answer given in the death proofs. This is evidently due, however, to the fact that he was asked more questions. The purpose of this proof should not be lost sight of. The defendant was not seeking to prove that *102 the answers given in the death proof showed that the insured had died from a disease or malady or cause not covered by the policy of insurance. The purpose must have been either to impeach or discredit the physician who was then testifying, or, what is more probable, to show by inference that the insured had fistula at the time she made application for insurance. Death took'place, however, nearly five years after the application was made, and while she was afflicted with fistula at the time of her death, the inference that she had this trouble at the time she made application for insurance would be very remote and at most only prima facie. These facts were substantially all before the jury, and we are satisfied that the appellant was not prejudiced by the erroneous ruling of the court.

Appellant assigns as error the action of the court in permitting the plaintiff to introduce evidence showing that defendant had never paid back or tendered the dues and assessments that had been paid on this benefit certificate. ¥e do not think the admission of this evidence was prejudicial or reversible error. Of course, it was immaterial in view of the fact that the defendant had not tendered it into court or pleaded a return or tender of the premiums paid.

"When the case was called for trial and prior to the introduction of any evidence, the attorney for the plaintiff read the pleadings to the jury and thereupon proceeded to make a statement to the jury, and in doing so commented upon the allegations contained in the first answer of defendant, whereupon counsel for defendant made objection to any comment being made on the original answer. This objection was overruled. Further along in counsel’s statement, he again made reference to that part of the defendant’s original answer in which it had alleged that the insured came to her death by a self-inflicted criminal operation. Counsel for defendant again objected and the objection was overruled by the court. This action of counsel for the plaintiff and the ruling of the court is assigned as error. Without going into any discussion of the evils and dangers of such a practice, it is sufficient to say that we do not approve of the same, and that the court should *103 have sustained the objection and admonished counsel to refrain from commenting on any allegations contained in the pleadings that were not then at issue and on which the case was to be tried. (Owens, Lane & Dyer Co. v. Pierce, 5 Mo. App. 576 ; Stratton v. Nye, 45 Neb. 619 , 63 N. W. 928 ; Giffien v. City of Lewiston, 6 Ida. 231 , 55 Pac. 545 .) We cannot reverse the judgment in this case, however, on account of this error for the following reason: Counsel for appellant have not preserved in their statement and bill of exceptions any statement that was made by the counsel for the plaintiff, which it claims was prejudicial, and nowhere in the record does it appear what language counsel used. The comment made by counsel may have in no respect been prejudicial, and in the absence of any positive showing in the record as to what it was, we must assume that nothing prejudicial to the appellant’s rights was said in this connection.

Many other errors are assigned on the admission and rejection of evidence and the giving and refusing to give instructions to the jury. It is unnecessary to give all these assignments of error specific and detailed consideration here, for the reason that what we have already said covers and disposes of the entire case. We find no error that will either require or justify a reversal of the judgment in this case. The judgment is eminently just, and the defense was highly technical and wholly unconscionable.

The judgment is affirmed, with costs in favor of the respondent.

Sullivan, C. J., and Stewart, J., concur.

Petition for rehearing denied.