Asposito v. Sec. Ben. Ass'n
| Decision Date | 06 June 1932 |
| Docket Number | April Term.,No. 96,96 |
| Citation | 258 Mich. 507,243 N.W. 37 |
| Parties | ASPOSITO v. SECURITY BEN. ASS'N. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court of Grand Rapids; Leonard D. Verdier, Judge.
Action by Grace Asposito against the Security Benefit Association. Judgment for plaintiff, and defendant appeals.
Reversed, and remanded, with directions.
Argued before the Entire Bench.Joslyn, Joslyn & Joslyn, of Detroit, for appellant.
Dunham, Taylor & Allaben, of Grand Rapids, for appellee.
On June 21, 1929, James Asposito applied for membership in the Security Benefit Association, a fraternal beneficiary society, defendant and appellant herein. It has several hundred thousand members and numerous lodges and subordinate councils throughout the United States. It has no capital stock, is not conducted for profit, has a representative form of government and ritualistic work. It is organized under the laws of Kansas, but has qualified in Michigan, where it maintains lodges and subordinate councils in many cities. On June 25, 1929, Asposito became a member of the Grand Rapids Council of the Association, and received a beneficiary certificate for $2,000, payable, in the event of his death, to his wife, Grace Asposito, plaintiff herein. He allowed the certificate to lapse, and at the end of July, 1930, was suspended for nonpayment of assessments and dues for the current month. He had taken out his original membership through one Charles Klein, a local agent of defendant. On December 31, 1930, Klein visited plaintiff's home at her request, and upon presentation of application for reinstatement, secured Asposito's signature. The application contains many pertinent representations and warranties of the applicant. It states that the application is based upon the original application and medical examination submitted for membership in the association in addition to the warranties thereinafter made. Among them is the unqualified statement that the applicant is in ‘sound physical and mental condition,’ and ‘a fit subject for life insurance.’ Paragraph 4 of the blank application for reinstatement reads as follows:
‘(a) Since the date of my application ..... on which my present benefit certificate ..... issued, I have not been under the care of, or examined by, or consulted any physician or surgeon, except as follows: (Give above details of any injury or ailment, and name and address of any physician or surgeon.)
‘(b) I have not undergone any surgical operation or been an inmate of any hospital, asylum or sanitarium since the date of my application ..... except as follows: ..... (Give details-when, where, what for, and results.)'
In paragraph 6, the applicant agrees that both the answers and the statements in the former application and in the present one are full, true, and correct, and shall be held to be strict warranties, and that any untrue statement or answer in either of them shall render the certificate null and void; that they shall be considered a part of any benefit certificate issued thereon; that they, together with the constitution and laws of the association, shall constitute applicant's contract for protection with the association.
The testimony shows that Klein wrote the answer ‘No’ after each section of paragraph 4 hereinbefore quoted, without asking any questions of applicant, who signed the document as prepared and presented by Klein; that applicant asked whether it would be necessary for him to be examined by a physician, and Klein told him that it would not. The record does not show that any facts whatsoever in regard to applicant's sickness were disclosed to Klein. The application was sent to the home office in Kansas, and a certificate of reinstatement was delivered to applicant on January 9, 1931. On the 5th day of the following month he was operated upon for chronic cholecystitis, an infection of the gall bladder, from which he had been suffering for three years. He died five days later. Notwithstanding that the proofs of death filed with defendant show that the immediate cause of death was pneumonia and the contributing cause was respiratory infection, the death certificate filed with the Michigan department of health shows that the principal cause of death and related causes of importance were as follows:
The proofs of death also showed that assured had his tonsils removed at the hospital on August 16, 1930.
It is also shown by the testimony that a physician attended him again in September and twice in November. In September, 1930, he went to an X-ray specialist, who examined the abdominal cavity and found ‘a moderate degree of cholecystitis and that the gastro-intestinal reactions are reflex to that condition.’ The record shows beyond any question that the assured was a sick man when he applied for reinstatement, and that material statements in the application for reinstatement were false. The sole question in the case is whether defendant is estopped from denying liability, or whether the fraud was waived because its agent filled in the answer ‘No’ to the questions in the aplication for reinstatement as hereinbefore indicated, without questioning assured and eliciting any information from him. We cannot overlook the fact that the application signed by assured contained the positive statement, and not in answer to any question, that he was in good physical condition, although during the previous month he had twice consulted a physician for a chronic disease three years old, and that shortly thereafter necessitated an operation, from which death ensued. The by-laws of the association, which are a part of the contract, provide that the association shall not be bound by the acceptance of assessments and dues from suspended members who are not entitled to reinstatement in accordance with the laws of the association; that members may only be reinstated after sixty days upon filing proof of sound bodily and mental condition; that the association is not bound by knowledge of or notice to officers or members of subordinate councils, none of whom are authorized or permitted to waive any provisions of the laws of the association; and that under no circumstances may a beneficiary certificate be delivered to or assessment collected from any applicant who is not in good health.
Plaintiff refused to accept the return of the assessment paid by applicant upon reinstatement. She brought suit against defendant and recovered a verdict of $3,200, the amount of the certificate.
The trial judge, in submitting the case to the jury, stated that there was only one issue in the case; that, if the jury found that the applicant truthfully answered the questions asked in the application for reinstatement, or that he was not asked them at all, but that Klein answered them without asking the insured, then the plaintiff would recover; that if, on the other hand applicant was asked the questions and he answered them untruthfully, and that as a result of such answers the defendant company issued the certificate, then plaintiff could not recover. Plaintiff makes no claim that the applicant told Klein about his condition. The only question asked by applicant was whether it would be necessary to have a medical examination, and Klein answered ‘No.'
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