Marshall v. Locomotive Eng'rs Mut. Life
| Decision Date | 31 October 1916 |
| Citation | 79 W.Va. 121 |
| Court | West Virginia Supreme Court |
| Parties | H. E. Marshall v. Locomotive Engineers Mutual Lifeand Accident Insurance Association. |
1. Insurance Fraternal Insurance Contract.
In a certificate of membership and policy of life insurance issued by a fraternal, beneficial association, where the basis of the contract of insurance between the association and the insured, is the application signed by the insured, the policy issued thereon, and the by-laws of the association, such application, policy, and by-laws will be considered in construing the contract. (p. 123)
2. Same Fraternal Insurance Fraud Policy.
Where it is provided in the by-laws of the association that '' if any fraudulent or untrue statements were made concerning the bodily health or condition of the insured at the time the application was written, or if any material facts which should have been stated or given were suppressed or withheld, by the applicant or examining physician, then and in every case the certificate issued thereon shall be null and void and all obligations of this Association to the insured, his beneficiary or beneficiaries shall cease," and the insured in his application consents and agrees that and the insured in his application, or in his statement to such medical examiner, makes a statement which constitutes a fraud either absolute or legal, he will forfeit the policy, (p. 123).
3. Same Fraternal Insurance Policies Construction.
If the answers of the insured to the questions propounded to him in the application, which are made part of the policy, are by the policy waranted to be true, and if any of the answers are false in fact, the policy is thereby forfeited, though the answers were made in perfect good faith. (p. 123).
4. Same Fraternal Insurance Policies.
Though the policy be construed as not warranting the truth of the answers of the insured, yet if these answers to specific questions are misrepresentations, the policy will be avoided, whether the court or jury regard the answers as material or not; for the parties by putting and answering such questions have declared that they regard them as material. (p. 130).
A false answer to a question, in order to be such a misrepresentation as will forfeit a policy, must be fraudulently false, that is, in making the answer, the insured must be guilty of actual fraud or legal fraud. By actual fraud is meant an intent to deceive; but legal fraud may exist where there is no intention to deceive, as where the insured in his answer makes a statement which from its nature the insurer must necessarily regard as made on the personal knowledge of the insured, which statement is false; in such case the insured is guilty of a legal fraud, which will forfeit the policy, though the false statement was made without any intent to deceive but was the result of carelessness or forgetfulness. (p. 130).
6. Same Fraternal Insurance Applications Misrepresentation.
But if the answer in the application for insurance is such as must have been made, not on the personal knowledge of the applicant but upon his best judgment and belief", and it be untrue, it will not forfeit the policy issued thereon, if the answer was made in perfect good faith, the applicant believing it to be true. (p. 130).
(PofFenbaRgeR, Judge, dissenting).
Error to Circuit Court, Mercer County.
Action by H. E. Marshall against the Locomotive Engineers' Mutual Life & Accident Insurance Association. There was a judgment for plaintiff, and defendant brings error.
Reversed and remanded.
French & Easley, for plaintiff in error.
John S. Draper and Russell S. Ritz, for defendant in error.
This is an action of assumpsit, instituted in the circuit court of Mercer County, for the recovery of benefits claimed by the plaintiff, on three membership certificates in the Locomotive Engineers Mutual Life & Accident Insurance Association, on account of the loss of his right eye. The defendant association is a fraternal, beneficial association, with its membership confined to the Brotherhood of Locomotive Engineers. On January 1, 1908, the plaintiff was admitted to membership in the association. The certificate of membership, under the constitution and by-laws of the association, insured the plaintiff in the sum of $1500.00, against the loss of "a hand, at or above the wrist joint, a foot, at or above the ankle joint, or sustaining the total and permanent loss of sight of one or both eyes.'' Under the by-laws of the association, a member of the Brotherhood of Locomotive Engineers, under certain age and passing the necessary examination is permitted to take out as many as three of these certificates, all certificates being issued for $1500.00 insurance, as above stated. Plaintiff's first certificate is effective January 1, 1908. In 1911 he made application to the defendant for two additional certificates of membership. Upon this application two additional certificates were issued to him, effective May 28, 1911. This gave plaintiff the full amount of insurance which he could take out in the association, amounting to $4500.00.
By a provision of the by-laws of the association, "any member of this Association losing, by amputation, a hand at or above the wrist joint, foot at or above the ankle joint, or sustaining the total and permanent loss of sight in one or both eyes, shall receive the full amount of his insurance."
The plaintiff alleges in his declaration that on the......day of
January, 1912, he became totally blind in one eye, and that he has performed, fulfilled, observed, and complied with all the conditions, provisions and stipulations of said policies, and claims that by reason thereof he is entitled to recover from defendant the full amount of said three policies, to-wit, $4500.00.
A person desiring to become a member of the association is required to file with the company an application pledging himself to be governed by and support all the rules and bylaws governing the same; the application forms the basis of the contract between the society and the insured. Section 22 of the constitution and by-laws provided that, "The regular application blank prepared and issued by this Association, furnished to, and signed by the applicant, "the policy issued thereon and the by-laws in force at the time, or as amended from time to time, shall form the basis of the contract between this Association and the insured." There is no formal policy. What is called the policy in these proceedings is the certificate of membership. There is in the application made by the insured this language. "I do hereby consent and agree that any untrue or fraudulent statements made herein, or to the Medical Examiner, or any concealment of facts by me in this application * * * or failure to comply with the laws of the Association now in force, or adopted in the future, shall forfeit the rights of myself and my Beneficiaries, to all benefits and privileges therein. '' Section 22 of the constitution and by-laws further provides: "And if any fraudulent or untrue statements were made concerning the bodily health or condition of the insured at the time the application was written, or if any material facts which should have been stated or given were suppressed or withheld, by the applicant or examining physician, then and in every such case the certificate issued thereon shall be null and void and all obligations of the Association to the insured, his beneficiary or beneficiaries shall cease.''
Section 19 of the constitution and by-laws of the association provides: "No applicant for membership in this association shall be admitted unless declared by a reputable physician, elected by the insured members of the division, after a full examination, as indicated by the application form, to be in good health and free from any disease or disability that
will be likely to shorten his life or prevent him from following his vocation of a locomotive engineer, and has two good eyes, both hands and both feet, unless applicant will sign a waiver releasing the Association from any liability for such injuries already sustained, and he must be under fifty (50) years of age." In each of the medical examinations which is a part of such application, the following question was asked and answered: Question. "Were your eyes ever affected by Cataract, Inflamation, or any other disease?" Answer.* "No." In the physician's certificate made in conformity with section 19, the physician in answer to the question, "Has the applicant two good eyes, both hands, and both feet?", answered, "Yes."
The defendant denies liability on the ground of fraudulent representations of the plaintiff, which will be referred to later. There was a plea of non-assumpsit, and statements of defense were filed, as above indicated. Trial was had by a jury, verdict for $4972.50, judgment on the verdict; and the defendant comes to this court on writ of error.
No substantial defense to the plaintiff's demand on the first policy was offered. Defendant denies liability on the two policies of May 28, 1911, on the grounds as alleged that when each of said policies was issued, the plaintiff represented that he had two good eyes, which representation it is alleged was false. Defendant alleges that the plaintiff did not have two good eyes at that time; that the defendant relied on the representation of plaintiff, and had it known that plaintiff did not have two good eyes at the time, it would not have issued the policies.
It is conceded that the plaintiff was blind in one eye a few...
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