Hanford v. Massachusetts Benefit Association

• Decision Date: 14 May 1894
• Parties: Hanford, Appellant, v. Massachusetts Benefit Association
• Court: Missouri Supreme Court

26 S.W. 680

122 Mo. 50

Hanford, Appellant, v. Massachusetts Benefit Association

Supreme Court of Missouri, First Division

May 14, 1894

Appeal from St. Louis City Circuit Court.

Affirmed.

C. P. & J. D. Johnson for appellant.

(1) The defendant is simply an insurance company, and the contracts sued on are purely those of life insurance. They have none of the elements of insurance upon the assessment plan, as such contracts are defined by our laws. Session Acts, Mo. 1887, p 199; 2 R. S. Mo. 1889, sec. 5860; Bliss on Life Insurance sec. 3, pp. 4, 5; Cooke on Life Insurance, sec. 1, p. 2; Bacon on Benefit Societies, sec. 52, p. 62; Niblack on Mutual Benefit Societies, sec. 163, p. 193; 2 May on Insurance [3 Ed.], sec. 550; Commonwealth v. Weatherbee, 105 Mass. 149; Rensenhouse v. Seeley, 72 Mich. 603; Farmer v. State, 69 Tex. 561; Sherman v Commonwealth, 82 Ky. 102; Supt. v. Ainsworth, 71 Ala. 436; Bolton v. Bolton, 73 Me. 299; Chisholm v. Ins. Co. 52 Mo. 213. (2) The defendant is not an association formed for benevolent or fraternal beneficial purposes, and it is therefore subject to all the provisions of the insurance laws of Missouri. Secs. 1 to 13, chap. 115, Pub. Stat. Mass. 1882, pp. 655, 656, 657; secs. 1 to 14, chap. 183, Sup. Pub. Stat. Mass. 1888, pp. 291 to 295; sec. 2821 to 2835, 1 R. S. Mo. 1889; sec. 5860 to 5872, 2 R. S. Mo. 1889; State ex rel. v. Benevolent Society, 72 Mo. 146; Bliss on Life Insurance, pp. 6 and 7 and cases cited; Bacon on Benefit Societies, sec. 52 and cases cited; State ex rel. v. Benefit Ass'n, 6 Mo.App. 163; Niblack on Benefit Societies, sec. 163 and cases cited; State v. Brawner, 15 Mo.App. 597. (3) And, under the policies of insurance here sued on, the question as to whether any matter misrepresented by T. C. Hanford contributed to his death, and thus rendered said policies payable, was one of fact for the jury. Sections 5849 and 5850, 2 R. S. Mo. 1889; Boggs v. Ins. Co., 30 Mo. 63; Marion v. Ins. Co., 35 Mo. 148; Schulter v. Ins. Co., 62 Mo. 236; Conover v. Ins. Co., 3 Dillon, 217; White v. Ins. Co., 4 Dillon, 177; McConnell v. Mut. Aid Ass'n, 79 Iowa 757. (4) The proviso in section 5869, of article 3, chapter 89, Revised Statutes, is not intended to exempt "contracts of insurance upon the assessment plan" from the operation of sections 5849 and 5850, Revised Statutes. Such intent can not be gathered either from the letter or context of the statute. Laws of Mo., 1874, p. 89; arts. 2 and 3, chapter 89, R. S. 1889; Conner v. Railroad, 59 Mo. 289; State v. Diveling, 66 Mo. 375; Neenan v. Smith, 50 Mo. 525; Spitler v. Young, 63 Mo. 42; Tittmann v. Edwards, 27 Mo.App. 492.

H. D. Wood and Rowell & Ferriss for respondent.

(1) Where, as in the case at bar, the insured in his application warrants the statements therein to be true, and agrees that any untrue statement, or any concealment of facts, may forfeit all rights under the contract, and the assured, as part consideration of the contract agrees that the statements made in the application are the basis of the contract of insurance, and are war ranted to be true in all respects, all the representations are warranties, and any misrepresentation, whether material or immaterial, avoids the policy. Whitmore v. Supreme Lodge, 100 Mo. 47; Reichenbach v. Ellerbe, 115 Mo. 588; Linz v. Ins. Co., 10 Mo.App. 364; Ins. Co. v. France, 91 U.S. 510; Jeffries v. Ins. Co., 22 Wall. 47; Ins. Co. v. Pyle, 44 Ohio State, 19; State ex rel. v. Benefit Ass'n, 42 Mo.App. 485; Johnson v. Ins. Co., 83 Maine, 183; Mayer v. Ins. Co., 49 N.Y.S. 237; May on Ins., par. 158; Brennan v. Society, 4 Daly, 296; Sullivan v. Co., 12 N.Y.S. 923; Co. v. McTague, 49 N. J. L. 587; Cazenove v. Ass'n Co., 6 C. B. (N. S.) 437; Cobb v. Co., 20 Ins. L. J. 215; Phillips v. Ins. Co., 9 N.Y.S. 836. And the proof of loss was prima facie evidence of the facts stated therein, against the insured and in favor of the company. Ins. Co. v. Newton, 22 Wall. 32. (2) Companies doing business of life insurance on the assessment plan under article 3 of Revised Statutes, 1889, are not subject to the general laws of insurance of the state which include sections 5849 and 5850, and the defendant issued its certificates under that plan in this case. Whitmore v. Supreme Lodge, 100 Mo. 46; Laws of Mo. 1881, p. 87; Laws of Mo. 1887, p. 199 to p. 205, secs. 1 to 14; R. S. 1889, chap. 89, art. 3, especially secs. 5860, 5865, 5869; Laws of Mo. 1891, p. 166; Ellerbe v. Co., 106 Mo. 13; Ellerbe v. Co., 114 Mo. 501; Hastings v. Littledale, 150 Mass. 100; Laws of Mass. 1885, chap. 183; Laws of Mass. 1874, chap. 375; Laws of Mass. 1877, chap. 204; Bacon on Benefit Societies, par. 50; State v. Ins. Co., 26 Ohio St. 23; Supreme Order v. Fairnan, 62 How. 387; United States v. Babbitt, 66 U.S. 55; Beaumont v. Irwin, 2 Sneed, 301. (3) Nor should section 5849 be construed to extend to warranties which the parties make a part of the contract of insurance, and thus deprive insurance companies of the right to so make contracts as to secure protection from fraud, and to make such defense in court. State v. Loomis, 22 S.W. 350, and cases cited; Const. Mo., art. 2, sec. 10; Landis v. Campbell, 79 Mo. 439.

OPINION

Black, P. J.

The defendant is a corporation organized under the laws of the state of Massachusetts. It has and holds a certificate from the insurance department of this state, stating that it has complied with all the requirements of our laws and is authorized to do business here "on the assessment plan." This suit is based upon two policies issued by the defendant upon the life of Thomas C. Hanford, each in the sum of $ 5,000, payable to the plaintiff who is the wife of the insured.

The applications for the policies were in writing and were both signed by the insured on the fifth of December, 1889, at the city of St. Louis in this state; and the policies bear date the eleventh of the same month and year. In each application Thomas Hanford was asked a number of question, to each of which he made answer in writing. He was asked: "Do you usually have good health?" to which he answered, "yes." He was also asked: "How long since you were under the care of a physician, and for what cause?" to which he answered, "not for many years." In the concluding part of each application there is this stipulation: "I do hereby warrant each and all of the foregoing particulars and statements to be true." Each policy provides: "The statements and declarations made by and on behalf of said member in his application to become a benefit member of said association, which are hereby referred to as the basis of this contract, and are a part thereof, and on the faith of which this policy is issued, are warranted to be in all respects true, and that no fact has been suppressed," etc.

The defendant's answer sets up the matters before stated, according to their legal effect, and avers that the answers made by Hanford to the questions propounded in the applications were untrue.

The evidence produced by the plaintiff shows that the deceased was in a hospital in the city of St. Louis and under the care of the physician of that institution for two weeks in April or May of the year of 1889. He was in the same hospital and under the care of the same physician from thirty-first of August to the nineteenth of September of the same year. As before stated the applications were made on the eleventh of the following December. He was again in the hospital and under the care of a physician from the twenty-first of July, 1890, to the date of his death, which was the fifth of September, 1890.

By the terms of each policy Hanford is made a benefit member of the association, and the association thereby agrees to pay to the plaintiff $ 5,000 in ninety days after proof of the death of Hanford. Each policy is issued in consideration of $ 20 paid, and upon other conditions therein set out. The conditions material to the questions raised in this suit are as follows:

"Sixth. There shall be paid by the member under this contract, in forty days from the date thereof, and annually from said date thereafter, to the treasurer of the association, an assessment of $ 15 as a part of the expense fund, which fund is at the sole disposal of the officers of the association.

"Seventh. The member shall further pay under this contract, at the office of the association in Boston, Massachusetts, bi-monthly, on the first business day of January, March, May, July, September and November, respectively, of each and every year, the assessment specified in the table of rates printed on the back hereof, for his age at entry, unless the board of directors shall by special notice require a different amount, and in such case the assessment may be based upon the current age of the member. Such assessments, excepting the sum specified in section 6, for expense fund, can be used only for the payment of death and disability claims, protection of the death fund and the emergency fund. Twenty per cent. of all such assessments may be carried to the emergency fund. * * * The member may, if he so elect, make his payments semiannually or annually in advance, in accordance with the table of rates printed on the back of this policy. If the mortality experience of this association shall require any variation from said rates in any call, due notice will be given."

The plaintiff called the defendant's adjuster, who gave evidence to the following effect: The defendant has its principal office in Boston, Massachusetts. The principal officers are a president, treasurer, comptroller and adjuster, who receive salaries ranging from $ 2,000 to $ 10,000 per annum. The defendant transacts business in most of the states of the union. The business is conducted by a board of directors composed of the original...