Farm v. Royal Neighbors of Am.
| Decision Date | 27 February 1920 |
| Docket Number | No. 21482.,21482. |
| Citation | 145 Minn. 193,176 N.W. 489 |
| Parties | FARM et al. v. ROYAL NEIGHBORS OF AMERICA. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, St. Louis County; Bert Fesler, Judge.
Action by John Farm and John J. Farm, as guardian of Vernon R. Farm a minor, against the Royal Neighbors of America. Verdict for plaintiffs, and from an order denying its alternative motion for judgment notwithstanding the verdict or for a new trial defendant appeals. Order reversed.
The evidence made the question of whether the assured had made the misrepresentations alleged a question for the jury.
Chapter 345 of the Laws of 1907 (Gen. St. 1913, §§ 3537-3567), established a complete code for the government and regulation of fraternal beneficiary associations, and superseded all prior statutes relating to such associations, and section 3300, Gen. St. 1913, being section 1623, Rev. Laws 1905, does not apply to them.
The contract warranted the answers to the questions in the medical examination to be literally true. The answers in controversy related to matters material to the risk, and if they were made and were not true their falsity avoided the contract.
An instruction to the effect that, although false answers were knowingly made, the plaintiffs were entitled to recover unless the matters misrepresented increased the risk, was error. Benj. D. Smith, of Mankato, and John H. Norton, of Duluth, for appellant.
Lathers & Hoag, of Duluth, for respondents.
Action to recover the amount of a benefit certificate issued by defendant, a fraternal beneficiary society, on November 21, 1914, to Frances Farm who died June 26, 1917. Defense that the contract was void because the assured had falsely stated, in the medical examination made a part of her application for the insurance, that she had not consulted a physician in regard to a personal ailment within the preceding seven years, that she had never been an inmate of a hospital, and that she had never had appendicitis nor any disease of the genital organs. The jury returned a verdict for the plaintiffs, and defendant appealed from an order denying its alternative motion for judgment notwithstanding the verdict or for a new trial.
[1] 1. Defendant contends that the evidence conclusively established that Mrs. Farm had made the misrepresentations alleged.
Among more than a hundred and fifty printed questions to be answered by the applicant in the medical examination, were questions asking whether she had consulted a physician within the last seven years in regard to a personal ailment; whether she had ever been an inmate of a hospital; whether she had ever had appendicitis; and whether she had ever had any disease of the genital organs. The medical examination shows that each of these four questions was answered, ‘No.’
It appeared without dispute that about a year before making this application Mrs. Farm had undergone an operation, at St. Mary's Hospital in the city of Duluth, for double salpingitis in which both fallopian tubes and one of her ovaries had been removed. It also appeared that about three years earlier she had undergone an operation for appendicities at St. Luke's Hospital in the same city. The plaintiffs do not claim that the above answers were true, but claim that the evidence made the question of whether the assured gave those answers a question for the jury. The examination was made by defendant's physician who asked the questions and wrote the answers. The assured is dead and her testimony as to the questions she was asked and the answers she gave could not be had. From the testimony of the examining physician, it is reasonably clear that the answers were neither read to her nor by her after they were written. This physician, Dr. Graham, gave his testimony with commendable frankness without attempting to color the facts in favor of either party. He had no recollection of this examination and only knew that he had made it from the fact that he recognized his own handwriting on the paper produced by defendant. He had made many such examinations. He stated on cross-examination that he never read the answers to an applicant after they were written and had never seen an applicant read them himself. He also stated that where the applicant was known to him and appeared to be healthy, he quite often trusted to his own knowledge and observation and wrote the answers to more or less of the questions without asking the applicant to answer them. He had known Mrs. Farm prior to the examination but remembered nothing concerning the examination. Question No. 19 was as follows:
It was admitted that the supreme recorder, if present, would testify that these questions were not answered when the application was first received by the supreme officers and that they returned the application to the local lodge to have them answered. The answer, ‘Yes,’ now appears after ‘A,’ and the answer ‘See letter,’ after ‘B..’ It was admitted that the supreme recorder would further testify that these answers were written by a clerk in the supreme office after the application had been returned by the local lodge with the following slip attached to the inside thereof:
‘Slight operation on cervix after childbirth-all successful.’
There is no testimony whatever as to whether the application, when returned, was or was not accompanied by a letter. It was sent back to the local lodge to have the questions under No. 19 answered. It was returned with no answers inserted after these questions, but the notations made in the supreme office and the issuance of the certificate indicate that a letter had been received which satisfied the supreme officers. Defendant insists that the slip above mentioned is that letter. Plaintifs insist that the slip is not a letter, and that the expression, ‘See letter,’ would not be used by the supreme officers if the reference was merely to the slip attached to the application. This slip gave the names of the beneficiaries and the amounts which each should receive. At the bottom a minor operation was mentioned followed by the words, ‘All successful.’ This statement at least does not exclude the supposition that other operations had been made known. The inference that the notation, ‘See letter,’ under question No. 19, referred to some letter and not to the slip is at least as probable as the inference that it referred to the slip. The testimony of the examining physician and the uncertainty as to what information had been given defendant concerning the operations which Mrs. Farm had undergone clearly made the question of whether she had made the alleged misrepresentations a question for the jury. Mattson v. Modern Samaritans, 91 Minn. 434, 98 N. W. 330;Olsson v. Midland Ins. Co., 138 Minn. 424, 165 N. W. 474;Zimmerman v. Bankers' Casualty Co., 138 Minn. 442, 165 N. W. 271;Clark v. North American Union, 179 Mich. 131, 146 N. W. 336.
[2] 2. The contract expressly stipulated that each of the statements and answers in the application were warranted to be literally true; that the literal truth of each was a condition precedent to any binding contract; and that if any of them were untrue the benefit certificate should be void.
Section 1623 of the Revised Laws of 1905, being section 3300 of the General Statutes of 1913, provides:
‘No oral or written misrepresentation made by the assured, or in his behalf, in the...
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