Knights of Maccabees of World v. Coleman
| Decision Date | 08 May 1922 |
| Docket Number | 22458 |
| Citation | 91 So. 561,128 Miss. 854 |
| Court | Mississippi Supreme Court |
| Parties | KNIGHTS OF MACCABEES OF THE WORLD v. COLEMAN |
1 INSURANCE. Statute held to repeal provision preventing insurer from contradicting statements in application, unless copy thereof was furnished insured.
Chapter 206, Laws of 1916, brought forward, revised and amended all statutes on the subject of the regulation and control of fraternal benefit societies, and by section 4 thereof necessarily repealed, so far as such societies are concerned section 2675, Code of 1906 (Hemingway's Code, section 5141), which latter statute provided that all life insurance companies doing business in this state should deliver to the insured with the contract of insurance a copy of his application, and in default thereof such life insurance company should not be permitted in any court of this state to contradict the truth of the statements contained in such application.
2 INSURANCE. Excluding evidence of fraudulent representation in application for reinstatement of insured held error.
A benefit certificate was issued in 1908 by a fraternal society to the deceased, the husband of plaintiff, who sued thereon when issued said section 2675, Code of 1906 (Hemingway's Code, section 5141), was in force. In 1920 deceased, having forfeited his rights under said benefit certificate by nonpayment of dues, was reinstated, as provided by the constitution and laws of the society, on the payment of such delinquent dues and a showing of good health in his application for reinstatement. When said reinstatement took place said section 2675, Code of 1906 (Hemingway's Code section 5141), had been repealed so far as fraternal orders were concerned by section 4, chapter 206, Laws of 1916. The defendant society defended on the ground that in such application for reinstatement the insured falsely and fraudulently represented that he was in good health, when In truth and fact he was suffering with Bright's disease and tuberculosis. The trial court ruled out such evidence on the theory that said statute (section 2675, Code of 1906; section 5141, (Hemingway' Code) governed. Held, the ruling of the trial court was erroneous; that the statute in force at the time of the reinstatement of the insured governed, and not that in force at the time the original certificate was issued.
APPEAL from circuit court of Lauderdale county, HON. J. D. FATHEREE, Judge.
Suit by Mrs. Mamie Coleman against the Knights of the Maccabeees of the World to recover on a fraternal benefit policy. Judgment for plaintiff, and the defendant appeals. Reversed and remanded.
A. J. Calhoun and Baskin & Wilbourn, for appellant.
The issue raised was as to whether or not the reinstatements were valid; that is, whether or not the applications for reinstatement were true or whether or not Arthur Coleman violated the warranties of his applications for reinstatements.
The proof offered showed that he did violate the warranties of his applications for reinstatements, and that he was reinstated on the faith of his applications for reinstatements, and that their falsity was not known or discovered until after his death.
All this proof was excluded by the lower court because of section 2657 of the Code of 1906, and we respectfully submit that counsel for appellee misconceives section 2675, Code 1906, and also our contentions with reference to said section. True, we insist that it never did apply to fraternal benefit societies, and of course do not care to repeat our argument on that point. But we also contend that if it did apply to fraternal benefit societies, it has not so applied since the Act of 1916, section 5176, Hemingway's Code.
There was no forfeiture of the policy until January 1, 1920, by reason of failure to pay December, 1919, assessment. When the forfeiture occurred, there were no further rights under the certificate.
If the said Arthur Coleman or his beneficiaries were to have any further rights, the said Arthur Coleman had to contract anew for those rights. Either he had to get an entirely new certificate or to make an entirely new contract to continue the forfeited certificate in effect. In either event he must make a new application based upon the existing facts. Having forfeited the original contract, he had nothing that either was or could be impaired by such legislation as had accrued since the original contract. Therefore, when Arthur Coleman applied to be reinstated in January, 1920, and again in August, 1920, he dealt anew with the appellant, at a time when the appellant was not required to give him a copy of his application, and he was not entitled to it.
The application for reinstatement was the basis of a new contract. The fact that in the application for reinstatement it was stipulated that the answers and statements were thereby made a part of the original application, does not result in making section 2675 a part of the new contract resulting from the reinstatement. The parties did not so expressly agree. The law did not then so require.
Since in 1920, the date of the applications for reinstatement, the law did not read into the contract then being made between the parties section 2675, and since they did not so expressly agree, this court has no jurisdiction to make that a part of their contract of reinstatement which the law did not require and they did not specify. By merely reaffirming the original application, and making it with the application for reinstatement incorporated therein, a part of the contract thereafter to exist between the parties, neither one stipulated for or agreed that section 2675 of Code of 1906, then no longer applicable, was to continue to apply and thereafter should affect their contractual relations. Nor does such result follow logically as a matter of law from the acts of the parties.
Since the policy was admittedly forfeited, and since whatever method or form was pursued in 1920, the resulting contract, whether a reinstatement or a new certificate, was the result of new negotiations, between the parties not then bound to each other by the old certificate unless they should so agree, and unless conditions then claimed to exist were warranted to be, and were actually true, and since section 2675 was not applicable in 1920, the court erred, we submit, beyond all controversy, regardless of whether or not section 2675 originally applied to fraternal beneficiary societies.
If the reinstatements be viewed simply as an agreement to cancel a forfeiture and restore the validity of the original certificate, the same reasoning applies, for when the application for reinstatement was made there was no law requiring a copy thereof to be given the holder of the certificate. The agreement to cancel the forfeiture and restore the policy, if such it is, is itself a new contract, based upon the application for reinstatement.
The authorities relied on by the appellee are decisions upon statutes worded differently from section 2675, and are inapplicable to the case at bar. Counsel rely on case of Metropolitan Life Insurance Company v. McTague, 49 N.J.L. 587, 60 Am. Rep. 661. But we submit that this case does not sustain appellee's position. The case does not deal with the question of the effect to be given our statutes, Act 1916, sections 4 and 20, Hemingway's Code, sections 5176 and 5192: In that case it was held that it was the intent of the parties to revive the forfeited policy with all its original terms by a new contract which incorporated into it additional terms--The case also involved an ordinary life insurance company--Appellee also cites Metropolitan Life Insurance Company v. Burch, 39 Appeal Cases, District of Columbia, p. 397, but, we submit that this case does not aid her. It was an instance of an ordinary life insurance policy.
No question of impairment of contract rights is involved, appellee's decisions are inapplicable and we submit appellant is entitled to a reversal.
C. B. Cameron, for appellee.
The appellant's main contention in the case at bar is that section 2675 of the Code of 1906, does not apply, because the legislature in 1916 passed the Fraternal Benefit Act and did not bring forward in said act, section 2675 of [128 Miss. 858] Code of 1916, and hence it is inapplicable to the present case and in addition thereto, they contend that by reason of the fact the applications for re-instatement were made by the insured subsequent to the passage of the Fraternal Benefit Act in 1916, and no question being raised as to the truthfulness of statements made by insured in his original application for insurance, that the appellant was not required to attach to nor deliver to the insured copies of his applications for re-instatement under the Fraternal Benefit Act in force at the time in this state.
In answer to this proposition the appellee contends: 1. That section 2675 of the Code of 1906, was a part and parcel of the contract of insurance between the appellant and the insured and that its requirements being substantive law, the same could not be impaired by the legislature under and by virtue of the constitutional provision which renders it impossible for the legislature to enact any law which would in any way, impair the obligation of an existing contract.
This court will keep in mind that this contract of insurance was made during the year 1908 and had been in force for practically eight years at the time of the enactment in 1916 by the legislature of the Fraternal Benefit Act and in addition thereto, each of the applications for re-instatement, expressly contain the following provisions among other things: "The said foregoing answers and statements are hereby made a part of my original application and with the same...
To continue reading
Request your trial