Gilroy v. Supreme Court, I. O. F

• Decision Date: 18 November 1907
• Parties: GILROY v. SUPREME COURT, I. O. F.
• Court: New Jersey Supreme Court

67 A. 1037

75 N.J.L. 584

GILROY

v. SUPREME COURT, I. O. F.

Court of Errors and Appeals of New Jersey.

Nov. 18, 1907.

(Syllabus by the Court.)

Magie, Ch., and Garrison, Pitney, and Reed, JJ., dissenting.

Error to Supreme Court.

Action on a benefit certificate by Ellen Gilroy against the Supreme Court of Independent Order of Foresters. Judgment for plaintiff, and defendant brings error. Affirmed.

Craig A. Marsh, for plaintiff in error. Cecil H. MacMahon (Riker & Riker, on the brief), for defendant in error.

SWAYZE, J. This is an action upon a benefit certificate on the life of Thomas F. Killoran for the benefit of his mother, Ellen Gilroy. The defenses relied upon are (1) that within six months after the medical examination of Killoran had been passed the secretary of the medical board reconsidered it and rejected it; (2) that Killoran in his application for membership in the order falsely represented that his father died of pneumonia, when, in fact, be died of phthisis; (3) that the courts of the order decided adversely to the plaintiff's claim, and that their decision was final and conclusive.

In order to understand the first ground of defense, it is necessary to consider with care the exact language of the contract. It provides that the secretary of the medical board of the defendant shall have power to reconsider any medical examination within six months after passing the same, and, if there be sufficient cause which existed at the time of the examination to have rejected it, he may reject, whereupon such member shall cease to be a beneficiary member of the order. The plea significantly omits to aver that there was a rejection for sufficient cause, and the stipulation as to facts merely sets forth that the secretary reconsidered and rejected the medical examination, but does not set forth the cause. A letter is printed in the book from one Williams to one Wright, notifying the court to which Killoran belonged that the examination had been reconsidered and rejected by the medical board because he did not give a correct report in reference to family history. The communication adds that, had the same been given, he would have been rejected in the first place. This notice is not evidence of the cause of rejection or its sufficiency. It seems to be no more than notice to the, subordinate court of the fact of rejection; but aside from that it shows a rejection by the medical board, a body which by the contract consisted of three physicians and the Supreme Chief Ranger, and perhaps a president and secretary in addition. A rejection by such a board may well have been in spite of the vote of the secretary, to whom alone the contract committed the right of review. In this respect, however, we must be guided by the stipulation which admits that it was the secretary who reconsidered and rejected the examination. The failure to prove a rejection for a sufficient cause is an answer to this defense. The subsequent action of the Supreme Chief Ranger, which was affirmed by all the courts of the order, placed the rejection not on the defect in family history, but on the fact that the assured had made a false statement in his medical examination paper. What the false statement was is not specified. There is no proof of any other cause, and the Chief Justice was therefore quite right in charging the jury that the cause of the rejection was Killoran's failure to give a correct report in reference to his family history. Counsel for the defendant urges that it was unnecessary to prove the cause which led to the rejection, and this would he so if the right to reject had been absolute. Such was not the case. The examination could only be reconsidered and rejected for a sufficient cause which existed at the time of the examination.

The defendant is not helped if we assume the cause of rejection to have been the fact that the death of the assured's father was caused by phthisis. It would still be incumbent upon the defendant to prove that this would have been a sufficient cause within the contract. No doubt such a family history may be a sufficient reason for rejection, and we might perhaps so assume without proof, but, in interpreting a clause which works a forfeiture, we ought to adopt such a construction as may save the contract. We think the parties by the use of the words "sufficient cause" meant more than a sufficient reason. They meant such a state of things as would in fact, as distinguished from such as might in reason, but would not in fact, lead to a rejection. There is no evidence to show what the rule or custom of the defendant or of other insurers is as to the acceptance or rejection of a risk where the father of the assured has died of phthisis. If the rules of another order, as reported in Hoagland v. Supreme Court, Royal Arcanum, 70 N. J. Eq. 607, 61 Atl. 982, were followed by the Independent Order of Foresters, the question of acceptance would depend on the age of the applicant. It probably depends in each case upon the age of the applicant, his occupation and environment, his general prospect of life, the facts of the family history taken as a whole, and the view taken by the insurers of the transmissible quality of the disease or of parental tendencies and weaknesses. The Royal Arcanum Case above cited shows that the father's death from phthisis would not necessarily cause a rejection, and the failure of the defendant in this case to plead or prove that the fact would have been sufficient to cause Killoran's rejection is fatal to this defense. So likewise a false statement may or may not cause a rejection, depending upon the importance of the statement and the likelihood of its having been honestly made.

The defense of false representation rests upon the same false statement that the father died of pneumonia, when he, in fact, died of phthisis. The question as to the admissibility of the physician's book, and the parish record to prove the cause of death becomes of no importance, since the Chief Justice did not reject the physician's certificate, but said he would admit it upon proof that the person named was the father of Killoran, and that the assured knew the cause of his father's death; and in the charge he assumed that the fact sought to be proved was true. He left...