Kline v. Nat'l Ben. Ass'n of Indianapolis

• Decision Date: 26 April 1887
• Citation: 11 N.E. 620,111 Ind. 462
• Parties: Kline v. National Ben. Ass'n of Indianapolis.
• Court: Indiana Supreme Court

111 Ind. 462

11 N.E. 620

Kline

v.National Ben. Ass'n of Indianapolis.¹

Supreme Court of Indiana.

April 26, 1887.

Appeal from superior court, Marion county.Morris & Newberger, for appellant. James Buchanan, for appellee.

ELLIOTT, C. J.

The policy of insurance on which this action is based contains, among others, this provision: “This certificate shall be incontestable for any cause except fraud or misrepresentation in the application or proofs of loss, or failure to report to the association any change of occupation that would make the risk a more hazardous one, or failure to comply with the conditions above specified.” The policy also recites that an admission fee of eight dollars has been paid, and that six advance assessments, amounting to nine dollars and sixty cents, had been paid to the association. In the application is written:

“I hereby agree to pay, on becoming a member, the following:

+---------------------------------+
                ¦Admission fee,            ¦$8 00 ¦
                +--------------------------+------¦
                ¦Dues,                     ¦      ¦
                +--------------------------+------¦
                ¦Assessments of $1.60 each,¦9 60  ¦
                +--------------------------+------¦
                ¦Total,                    ¦$17 60¦
                +---------------------------------+
                

I have received for the above, binding receipt No. 6,337.

N. B. If the number of a binding receipt is inserted, it becomes conclusive evidence that the above amount has been paid; if no number of a binding receipt is inserted, the payment is to be made upon the delivery of the certificate.”

The number of the binding receipt, as it is called, was inserted in the policy. The assured did not make full payment in money, but, as payment of part of the consideration of the contract, gave two orders, reading substantially as follows:

“$5.60. Indianapolis, July 24, 1882. No. ---.

Please pay the National Benefit Association, 66 East Market street, Indianapolis, Ind., five 60-100 dollars out of my wages for the month of August, 1882, to be applied as follows: Admission fee, $4; expense fee and assessments, $1.60. If this order is not paid, then all my rights in said association are thereby forfeited. I hereby authorize said association to deduct from moneys due on account of injuries any indebtedness there may be against my certificate. [Signed] Nick Kline.”

Payment of these orders was refused, because Kline notified the railroad company upon whom they were drawn not to pay them. The policy was taken out for the benefit of the appellant, the mother of the assured, and he was accidentally killed within 100 days after the policy was issued.

There was no error in admitting both of the orders in evidence, although only one was pleaded in the appellee's answer. This is so, because the general denial pleaded enabled the appellee to give evidence contradicting that of the appellant upon the question whether or not the assured had performed the conditions of the contract on his part. National Ben. Ass'n v. Bowman, ante, 316, (April 9, 1887.)

The language of the application and of the policy, declaring that the policy shall be incontestable except for fraud, is unusually strong and clear. It is declared that if a binding receipt is issued, and its number inserted in the policy, the policy “shall be incontestable.” It seems clear that, having made this express and strong statement, the association cannot be allowed to affirm as against the beneficiary, however it may be as to the assured, that the conditions precedent to the validity of the policy were not performed. The case of Wood v. Dwarris, 11 Exch. 493, is a much stronger one in favor of the insurer than the present. In that case the policy itself contained an express stipulation that, if any untrue statements were made, it should be void; but in a prospectus issued by the company it was provided that all policies should be indisputable except in case of fraud; and it was held that notwithstanding the provision in the policy, the insurer could only avoid the policy for fraud. In the course of the opinion delivered in that case, Baron Alderson said: “When the plaintiff went to their office, the defendants professed to grant him an assurance on those terms. Therefore they cannot now set up as a defense that the statement in the proposal was untrue, unless they add that it was fraudulently untrue, for they have in fact said that they will never make any other defense.” This case was approved in Wright v. Mutual Ben. etc., Co., 43 Hun, 61, 35 Alb. Law J. 323. In Wheelton v. Hardisty, 8 El. & Bl. 232, p. 276, it was said by Lord Campbell: “According to the case of Wood v. Dwarris, 11 Exch. 493, the equitable replication would be sufficient without the special fraud thus imputable to the fourth plea, and we ought to be bound by that decision, even if we doubted the propriety of it, but I must say that I heartily concur in it.” There are other cases which recognize the general principle which applies here. Wontner v. Shairp, 4 Man., G. & S. 408; Watson v. Earl of Charlemont, 12 Adol. & E. (N. S.) 863; Horwitz v. Equitable Ins. Co., 40 Mo. 557;Steele v. St. Louis, etc., Co., 3 Mo. App. 207.

Whether the assured could have availed himself of the benefit of that part of the policy which stipulates for the payment to him of weekly benefits in case of an accidental injury, we need not decide; for here the claim is made by the beneficiary to whom the association agreed to pay $1,000 in the event of the death of the assured. The beneficiary took an immediate interest in the policy, and her rights could not be...