Alden v. Supreme Tent of the Knights of the Maccabees of the World

• Decision Date: 03 June 1904
• Citation: 71 N.E. 104,178 N.Y. 535
• Parties: ALDEN v. SUPREME TENT OF THE KNIGHTS OF THE MACCABEES OF THE WORLD.
• Court: New York Court of Appeals Court of Appeals

178 N.Y. 535

71 N.E. 104

ALDEN

v.SUPREME TENT OF THE KNIGHTS OF THE MACCABEES OF THE WORLD.

Court of Appeals of New York.

June 3, 1904.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Bridget Alden against the Supreme Tent of the Knights of the Maccabees of the World. From an order of the Appellate Division (79 N. Y. Supp. 89) reversing a judgment in favor of defendant on a verdict directed by the court, defendant appeals. Reversed.James L. Quackenbush and Franklin Kennedy, for appellant.

Philip A. Laing, for respondent.

CULLEN, J.

The action was brought to recover the amount of a benefit certificate issued by the defendant to the plaintiff's husband, payable to the plaintiff on the death of said husband. The defendant admitted the issue of the certificate as alleged in the complaint, and set up as a defense to its liability that the certificate was issued on a written application of the deceased, whereby he agreed that any untruthful or fraudulent answers, any suppression of facts in regard to his health, age, habits, or circumstances, should vitiate the certificate, and forfeit all payments made thereon. It further alleged that in answer to the questions contained in his application the deceased made certain untrue and fraudulent answers, only one of which it is necessary now to note. In response to the question, ‘Have you ever been rejected by any life insurance company or association?’ the answer was ‘No.’ The defendant's order was divided into camps or tents. On the trial it was conceded that about eight months previous to the issue of the certificate the deceased had made application for admission to membership in a tent other than that which he finally joined, and had been rejected upon a medical examination, which rejection was known to him. The plaintiff sought to avoid the effect of this false answer by proof that the deceased made the application which resulted in his admission to membership on the advice and by the instruction of one of the general officers of the defendant designated as a special organizer of tents or camps, who instructed the deceased to answer the question as he did. Such proof was offered by the plaintiff, but rejected by the trial court, to which ruling no exception was taken. At the close of the evidence the court directed a verdict for the defendant, and from the judgment entered on that verdict the plaintiff appealed to the Appellate Division, which ordered a new trial.

That the verdict was properly directed on the evidence that was actually in the case is reasonably clear, and such seems to have been the opinion of the learned court below. It is contended, however, before us, that the defendant is not a life insurance company or association within the question quoted, and that hence the answer of the deceased that he had not been rejected by any life insurance company or association was not false. To this claim we cannot accede. The defendant is incorporated under the laws of the state of Michigan, and, technically, under that statute, it is called ‘a fraternal beneficiary society.’ Nevertheless, as appears by its constitution and by-laws, its business is essentially that of life insurance, though on the co-operative or assessment plan. The constitution and by-laws require persons seeking admission to membership to pass a medical examination, and admission depends on the result of that examination. I cannot see that it differs essentially in character from the corporations, associations, and societies which, by section 7 of chapter 175, p. 174, of the Laws of 1883 of this state, were declared to be ‘engaged in the business of life insurance upon the co-operative or assessment plan.’ This statute was repealed by the general insurance law (chapter 690, p. 1930, Laws 1892), and the declaration contained in the earliest statute is not re-enacted in terms in the later one. Neverthless, a review of article 7 of the insurance statute, which deals with fraternal beneficiary societies, orders, or associations, clearly shows that the law continues to regard such societies as engaged in life insurance. Thus, section 230 authorizes the incorporation of fraternal beneficiary societies ‘for relief by insurance.’ It also provides that no such society ‘shall transact the business of insurance’ in the state except on compliance with certain conditions. Reference can readily be made to other provisions of the insurance law to the same effect. The question is broad in its form. It asks whether the applicant has ever been rejected by any life insurance ‘company or association.’ The materiality of the inquiry is plain, for, if a risk on a member's life had been rejected, it would naturally put the defendant on its guard, and cause its examination to be more careful and thorough, and it might be unwilling to accept risks which other insurers had declined. There is no reason why information as to the rejection of an applicant by a fraternal society should not be as important to the defendant as rejection by any other form of insurance company or association. We think, therefore, that this defendant fairly fell within the terms of the question ‘insurance company or association.’ Of course, there may be societies to the objects of which any benefit that may be given to the family of sick or deceased members may be so purely incidental that this doctrine does not apply. I assume there are some trade guilds, some exchanges, and, from the terms of the statute, some secret orders, such...