Callies v. Modern Woodmen of America

• Decision Date: 02 March 1903
• Citation: 98 Mo. App. 521,72 S.W. 713
• Parties: CALLIES v. MODERN WOODMEN OF AMERICA.
• Court: Missouri Court of Appeals

72 S.W. 713

98 Mo. App. 521

CALLIES v. MODERN WOODMEN OF AMERICA.

Court of Appeals at Kansas City, Missouri.

March 2, 1903.

FRATERNAL INSURANCE — MISREPRESENTATIONS IN APPLICATION — DECLARATIONS OF INSURED AFTER ISSUANCE OF POLICY — WAIVER OF FORFEITURE — WARRANTIES.

1. Declarations by the holder of a benefit certificate, made after its issuance, and tending to prove misstatements by him in his application, are admissible as evidence against the beneficiaries.

2. The holder of a benefit certificate was cited for trial before the local lodge on the charge of violating the terms of the certificate by frequently becoming intoxicated. While the charge was shown to be true, no sentence of expulsion was passed, but all action was deferred until he should be released from an asylum in which he then was. Held to constitute a waiver of a forfeiture on account of the use by insured of intoxicants after the certificate was issued, but not a waiver as to his use of them before his application, there being no evidence that defendant had knowledge thereof before that time.

3. The holder of a benefit certificate stated in his application that he had never been intoxicated, and had never had a hemorrhage. There was no evidence that defendant knew, at the time it furnished blank proofs of death, that there had been a misrepresentation as to either of these things having occurred prior to the date of the application. Held, that the furnishing of the proofs of death did not constitute a waiver as to such misrepresentations.

4. A blank application for a benefit certificate contained a request that the applicant give full answers to questions as to family history; also warranties that the answers were full, complete, and literally true. Deceased made no direct answer as to whether any brother was dead, but did answer that he had two brothers, giving their ages and condition of health. Held, that the question whether any brother was dead not being asked in terms, and defendant having accepted the answers in the form as given, there was no warranty on this head, as the law would endeavor to avoid a forfeiture.

5. Where an applicant for a benefit certificate fraudulently conceals certain facts in order to induce the company to issue a certificate to him, which it would not have issued had the truth been told, it will avoid liability.

Appeal from circuit court, Pettis county; Geo. F. Longan, Judge.

Action by Catherine Callies against the Modern Woodmen of America. Judgment for plaintiff, and defendant appeals. Reversed.

James T. Montgomery and J. G. Johnson, for appellant. Barnett & Barnett, for respondent.

ELLISON, J.

The defendant is a fraternal benefit society, and Albert L. Callies became a member thereof and took out a benefit certificate insuring his life in the sum of $2,000, of which sum $1,000 was to be paid to his mother, and $500 to each of two sisters. Callies died about the 27th of May, 1901, at the asylum in Nevada, Mo. Each of the beneficiaries brought suit for the sums named payable to them. These suits were consolidated and tried as one. At the close of the trial the court gave a peremptory instruction for plaintiff.

The deceased at time of his application did not use intoxicating liquors, and he stated in his application that he had never been intoxicated. He also stated that he had never had a hemorrhage. The certificate provided that he should not become intemperate by the use of intoxicating drink, and that if he did it became void. There was evidence offered by defendant, and excluded by the court, that deceased had stated, after the certificate had been issued, that he had been intoxicated and that he had had hemorrhages before its issuance. The evidence tended to show that deceased died of consumption while in a protracted state of intoxication. The evidence further tended to show that a short time before his death deceased was complained of before the local lodge for violating the rules and laws of the order and the terms of his certificate by habitually using strong drink and frequently becoming intoxicated; that he was cited for trial of the charge, and, while it was shown to be true, no sentence of suspension or expulsion was passed. On the contrary, all action thereon was laid over and deferred until he should be released from the asylum.

The theory upon which the trial court sustained plaintiff's objections to the deceased's declarations as to his having been intoxicated and having had hemorrhages was that such declarations could not bind these plaintiffs as beneficiaries. We think the theory unsound, and that error was committed. The weight of authority, as regards ordinary life insurance, is that the declarations of the party insured are not evidence against the person for whom the insurance is taken, and the rule is so stated in a remark in the course of a decision by the Supreme Court of this state. Reid v. Ins. Co., 58 Mo. 425. But as to fraternal benefit insurance, where the beneficiary is named by the insured, and whom he may change at any time before death, a well-founded distinction exists, for there is no vested interest in the beneficiary in the certificate until it becomes fixed by death. Masonic Ben. Ass'n v. Bunch, 109 Mo. 560, 19 S. W. 25; Wells v. Mut. Ben. Ass'n, 126 Mo. 630, 29 S. W. 607; Hofman v. Grand Lodge, 73 Mo. App. 47; Niblack on Ben. Soc. § 212. It is true that neither has the insured member himself an interest in the fund (Masonic Ben. Ass'n v. Bunch, supra; Keener v. Grand Lodge, 38 Mo. App. 543), still he is the opposite party in the contract. He has made it from the motive of duty or affection, and he is interested in its being upheld. His declarations of things tending against the contract would likely not have been made if not true. They should be received in evidence. They should be regarded as in instances of contract, where the representative of the declarant is a party to the action. And so it has been decided. Thomas v. Grand Lodge, 12 Wash. 500, 41 S. W. 882; Steinhausen v. Mutual Ass'n (Sup.) 13 N. Y. Supp. 36; Niblack on Ben. Soc. §§ 212, 325.

Plaintiff seeks to avoid the effect of the deceased's misrepresentation and his subsequent conduct by a plea of waiver. This consists in the trial aforesaid by the local lodge, wherein deceased was charged with using intoxicants and becoming drunk just previous to his death, and wherein all action was deferred, as has been stated. We are satisfied that such action on the part of the company was a waiver of a forfeiture on account of the matter of use of intoxicants after he took out the policy. But it was no waiver of the fact (if it be a fact) that he had been drunk before his application. A waiver presupposes knowledge of the thing to be waived, and there is no evidence that defendant had any knowledge of his being drunk before the application. And so the trial aforesaid discloses that no consideration was given to anything except a violation of his duties after becoming a member and shortly prior to his death. We cannot discover any good reason for connecting the two violations in such way as to make a waiver of one affect the other. We discover nothing bearing on the question in the authorities cited by plaintiff.

But plaintiff further insists that, if what we have just stated was not a waiver, the subsequent furnishing blank proofs of loss to plaintiffs, and the fact that they went to trouble and expense in making them, constituted a waiver, not only on the question of intoxication, but also that of hemorrhage. We think not. There is nothing to show that defendant knew at the time the blank proofs were furnished that there had been a misrepresentation as to either of these things having occurred prior to the date of the application.

Deceased, at time of application, had two brothers alive and one dead. Defendant offered to prove this, and that the dead brother died of diabetes. The court rejected this offer. The following questions, in the following form, and answers thereto, are found in the application made by deceased:

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