Cochran v. ORDER OF UNITED COMMERCIAL TRAVELERS, ETC.

• Decision Date: 25 May 1944
• Docket Number: No. 2846.,2846.
• Citation: 143 F.2d 82
• Parties: COCHRAN v. ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA.
• Court: U.S. Court of Appeals — Tenth Circuit

143 F.2d 82 (1944)

COCHRAN v. ORDER OF UNITED COMMERCIAL TRAVELERS OF AMERICA.

No. 2846.

Circuit Court of Appeals, Tenth Circuit.

May 25, 1944.

William G. Davisson, of Ardmore, Okl., for appellant.

E. W. Dillon, of Columbus, Ohio (J. E. Williams and E. H. Williams, both of Ardmore, Okl., on the brief), for appellee.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

This appeal involves the liability of the Order of the United Commercial Travelers of America under a fraternal life insurance policy issued by it to Marvin L. Cochran, covering death by external, violent and accidental means independent of all other causes. The specific question is whether the insurer has, in the circumstances, waived or is estopped to assert a forfeiture of a claim for death benefits because an autopsy was performed on the insured without notice to the insurer, as required by a provision of the contract.

The question is presented here on stipulation of facts and the findings of the trial court, which are fairly supported by the evidence and may be narrated as follows: The appellee is a ritualistic fraternal association, organized and carried on solely for the mutual benefit of its members and their beneficiaries, and is engaged in the issuance of insurance certificates on the life and limb of its members, through the maintenance of a lodge system. The Order is comprised of a Supreme Council at Columbus, Ohio, with Local Councils, or Lodges throughout the United States, one of which is located at Ardmore, Oklahoma.

The Supreme Council is governed by an Executive Committee, the duty of which is to examine all claims of its members referred to it by the Manager of the Claim Department, and to determine who is entitled to benefits and the amount thereof. It is the duty of the Manager of the Claim Department at Columbus, Ohio, to examine all claims arising through or under any certificate of insurance issued by the Order; to decide upon their validity and, if possible, to settle and adjust the same, and if he deems necessary to refer the same to the Supreme Executive Committee for instructions. Each Local Council, composed of local lodge members, is governed by an Executive Committee with a secretary and treasurer, whose duty it is to call meetings of the Executive Committee "to discuss and investigate claims filed with him; to see that all information required of himself and claimants on blanks for proof of claims is properly given and to see that the same are properly completed, signed and sworn to and * * * forward same immediately to the Manager of the Claim Department without recommendation". The constitution, bylaws and articles of incorporation, as changed or amended from time to time, are expressly incorporated in and made a part of the certificate of insurance, which is the contract between the Order and the insured member. They measure the coverage under the certificate and the extent and manner of payment of benefits provided thereunder.

On December 4, 1916, the Order issued and delivered to Marvin L. Cochran of Ardmore, Oklahoma, its certificate of insurance which, according to the constitution and by-laws, provided for certain stipulated benefits in the event of disability resulting from accident, and certain benefits to the beneficiaries of the insured member in the event of death effected through external, violent and accidental means independent of all other causes. The contract further provided that notice in writing of an accident must be given to the Manager of the Claim Department within thirty days after the accident unless it was not reasonably possible to do so. If death resulted from an accident, notice of which had already been given, additional notice, in writing, of death must be given to the Manager of the Claim Department within thirty days after the death. The furnishing of the required notices, preliminary proofs, or final proofs was a condition precedent to recovery and failure to furnish the required notices, preliminary proofs or final proofs within the time limit therefor, forfeited any and all claims against the Order. It was also specifically provided that "any claim for death alleged to have been caused by accident shall be forfeited and rendered null and void should an autopsy not requested by the Supreme Executive Committee, or any representative authorized by it, be held without notice thereof being first given to the Manager of the Claim Department at least seventy-two hours in advance of intended autopsy". No grand or subordinate council, officer, member or agent thereof was authorized or permitted to waive any of the foregoing provisions of the constitution and by-laws as contained in the insurance contract.

The insured sustained a head injury in his place of business at Ardmore, Oklahoma on June 3, 1941. On the following July 10th, the wife and beneficiary made an oral report of the accident to W. H. Batis, who for twenty-five years had been the Secretary and Treasurer of the insurer's Local Lodge at Ardmore, and who had during this period accepted all notices of accidents and deaths, and claims for accident and death benefits. As was his custom, Batis communicated the information concerning the accident to the home office in Ohio, pursuant to which appropriate forms for notice of accident and claim of benefits were furnished to the insured, which were executed by the son of the insured, witnessed by Batis, and on July 15, 1941, mailed to Mr. Stratmann, Manager of the Claim Department, Columbus, Ohio.

Meanwhile, the condition of the insured became progressively worse, and he was removed to the Scott-White Hospital at Temple, Texas, where he died on July 18, 1941, at 10:05 P.M. The doctors were not certain of the exact cause of death, and asked permission of his wife to perform an autopsy, telling her that it might be of benefit "to someone else later on". Whereupon the wife immediately called her son in Ardmore, telling him of insured's death, and of the doctors' wish to perform an autopsy, and he told her to delay the autopsy until he had contacted the agents and representatives of insurance companies, who had a right to have a representative present if they desired; and that if any of the companies objected, he would so inform the Hospital by one o'clock in the morning. The son immediately contacted agents and representatives of interested companies, among whom was Mr. Batis. He advised Mr. Batis of his father's death, and the desire of the Hospital to perform an autopsy; that he had advised the Hospital it would "be all right" to perform the autopsy if there was no objection from the insurance companies. He requested Mr. Batis to call the proper official at the company's home office in Ohio and advise him of the intended autopsy, and ascertain whether or not it had any objections, and if so to get in touch with him or the Hospital at Temple, Texas, immediately. This Mr. Batis agreed to do, and about thirty minutes later called the son, telling him he had talked with Mr. Stratmann, Manager of the Claim Department of the insurer at Columbus, Ohio, and that if the company had any objections, Mr. Stratmann would communicate directly with the son or the Hospital. Batis did not call Stratmann in accordance with his representations to the son, and Stratmann did not know of the death of insured until the next day when he received a wire from Batis informing him of the death and requesting instructions.

After the death of the insured, the insurer made an investigation of the facts surrounding his death, and at that time learned that an autopsy had been performed. Thereafter, the insured filed a final claim for death benefits on forms prescribed and furnished by the insurer, and also submitted the autopsy report at the request of the insurer. On October 1, 1941, the insurer denied liability for the death of insured, and this suit was brought in the state court to collect the death benefits provided in the policy. The case was timely removed to Federal Court upon diversity of citizenship and requisite amount in controversy; issues were joined and the case was tried on two defenses interposed by the insurer: (1) that death did not result by accidental means, independent of all other causes, and (2) forfeiture of all rights by failure to notify insurer of the performance of the intended autopsy at least seventy-two hours before its performance.

The report of the autopsy was attached to and made a part of the stipulation of facts, and on the trial of the case, plaintiff made reference to the report as a part of a hypothetical question touching the cause of death. The defendant likewise referred to the report as a part of its case tending to show that death did not result from accidental means within the coverage of the policy. The deposition of the doctor who performed the autopsy was "taken at the instance of the defendant", and by it introduced in...