Modern Woodmen of America v. International Trust Co.

• Decision Date: 14 July 1913
• Parties: MODERN WOODMEN OF AMERICA v. INTERNATIONAL TRUST CO.
• Court: Colorado Court of Appeals

136 P. 806

25 Colo.App. 26

MODERN WOODMEN OF AMERICA v. INTERNATIONAL TRUST CO.

Court of Appeals of Colorado

July 14, 1913

Rehearing Denied Dec. 8, 1913

Appeal from District Court, Denver County; Hubert L. Shattuck Judge.

Action by the International Trust Company, as guardian of William Conter and Annie Conter, against the Modern Woodmen of America. From a judgment for plaintiff, defendant appeals. Reversed and remanded, with directions to dismiss.

Truman Plantz, of Rock Island, Ill., Tully Scott, of Denver, and George G. Perrin, of Rock Island, Ill for appellant.

S.D Crump and Henry C. Allen, both of Denver, for appellee.

BELL J.

This case was ably presented in the principal and supplemental briefs originally filed and oral arguments made previous to our opinion heretofore announced, but other points are raised and authorities cited in the petition presented for a rehearing, which is denied; and, for a more orderly disposition of all the questions now herein involved, our original opinion is hereby withdrawn and substituted by the following:

The action was brought by the International Trust Company, appellee herein, as guardian of the minor heirs of Henry Conter, against the Modern Woodmen of America, appellant, a fraternal benefit society organized under the laws of the state of Illinois, and doing business in the state of Colorado under section 74, c. 70, of the Revised Statutes of 1908 (section 3160). Said society has a lodge system with a ritualistic form of work, a representative form of government, and is self-governing in its administration, and in the early part of the year 1909 organized a local camp at Globeville, Colo. On the 2d day of February, 1909, Henry Conter, above named, made application to said society for membership in said Globeville camp and for a benefit certificate in the sum of $3,000, and in said application, which was in writing, warranted that all statements and answers by him made therein were full, complete, and literally true, and especially agreed therein that the literal truth of each answer should be a condition precedent to any binding contract issued upon the faith of such answers, and agreed that they should become a part of the benefit certificate. In the last paragraph of said application, immediately preceding the signature of the applicant, his attention was especially called to the following notice: "That inasmuch as only the head officers of the society have authority to determine whether or not a benefit certificate shall issue on any application, and as they act upon the written statements, answers, warranties and agreements herein made, no statements, promises, knowledge or information had, made or given by or to the person soliciting, taking or writing this application, or by or to any person shall be binding on the society or in any manner affect its rights, unless such statements, promises, knowledge or information be reduced to writing and presented to the head officers of the society at or before the time any benefit certificate shall be issued hereon; and I further agree that if any answer or statement in this application is not literally true, or if I shall fail to comply with or conform to any and all by-laws of the said Modern Woodmen of America, whether now in force or hereafter adopted, that my benefit certificate shall be void."

On the same day, February 2, 1909, the applicant appeared before Dr. Van Landingham, the examining physician for the society, and, in answer to the questions contained in his application, purported to state his family history, his health condition, and habits.

The answers thus made by him were written by the examining physician in the application, which was subsequently signed by the applicant, and represented, in substance, that he had not, in the last seven years previous to the date of his application, been treated by or consulted any person, physician, or physicians in regard to personal ailments; that he never had any local disease, personal injury, or serious illness; that at the time of the examination he was of sound body, mind, and health, free from disease or injury, and of good moral character and exemplary habits; that he did not use intoxicating liquors daily; that he had never been intoxicated; and that the kind and quantity of intoxicating liquors consumed by him was "an occasional beer." On the 19th day of March, 1909, the appellant issued a benefit certificate to the applicant on said application and the answers contained therein, and on April 11, 1909, 23 days after issuing the same, the assured died from fatty degeneration of the heart. The appellee, as guardian of the minor children of the assured, sought to collect from the appellant the sum of $3,000 as provided in the benefit certificate, and brought suit in the district court of the city and county of Denver for the amount. The appellant resists payment of this certificate because, it avers, the assured made false statements in his application in regard to his health and habits, and that at the time he made such statements he had a disease of the heart, and was intemperate in the use of intoxicating liquors, which was the indirect cause of his death, and that such false statements and intemperance on the part of the assured, under the terms of his application and the by-laws of the society, render his certificate null and void. The appellee denies the above charges, and alleges that, if they are true, the agents and of officers of the appellant society knew the actual condition of affairs at and before the time of issuing the certificate, and accepted from the assured his dues, premiums, and fees with full knowledge of these conditions, and has therefore waived the conditions in this respect in the application, its by-laws and the certificate, and is estopped from asserting a forfeiture. On the 12th day of April, 1909, Drs. Carlin and Bennett held an autopsy on the body of the assured, and were able to, and did, determine that the assured died from fatty degeneration of the heart, but were unable to determine, from their examination of the body, the primary cause of the disease.

Dr. Carlin testified that fatty degeneration of the heart is an affection which "causes the muscular fibers of the heart to change into fat surface and become friable and soft," so that the finger might be pushed through with very little effort, while the ordinary heart is tough, and that, in the case of the assured, the disease was in an advanced stage and the heart reduced in size. He further testified that the primary cause of the disease is any wasting disease of the body, such as cancer, tuberculosis, alcoholism, and long sieges of typhoid fever, diphtheria, arsenical and phosphorous poisoning, and Dr. Bennett adds to these: Torpidity of liver, poor circulation, bad digestion, and other things which tend to upset the heart.

The witness Miller, a druggist, testified that he thought the assured was suffering from heart trouble for some time before the date of his application, because of his bad complexion and complaints of dizziness, and had sold him strychnine tablets to relieve him of this trouble, but did not advise the assured that they were for this purpose.

Another witness, Jennie Sardakovski, who was well acquainted with the assured and had business transactions with him, testified that, about a year before his death, and again about two weeks previous thereto, she saw him taking tablets which he told her were for his heart.

Dr. Lee testified that he examined the assured for a policy in the Prudential Insurance Company about 30 days previous to his death, or 7 days before the certificate in question was issued, and found his heart action to be very rapid. Counsel for appellant endeavored to have the witness state the cause assigned to him by the assured for this abnormal condition; but, upon objection of the appellee, the court refused to hear the testimony.

It also developed at the trial that for the last 4 1/2 years of the assured's life he habitually indulged in the use of intoxicating liquors, using both beer and whisky.

Charles Newman testified that he knew the assured personally for a period of five years before his death; that they lived within three blocks of each other, and for weeks at a time he would see him daily, and at times he would not see him for a week or two; that whenever they met the assured took a drink of beer and sometimes two, three, or a whole lot more; that they both drank about the same, and would send for a can of beer and drink together; that it was a daily occurrence for the assured to drink beer when they were together, and, at times, but not frequently, the witness saw him under the influence of intoxicating liquors; that they both got drunk together, but not often; and that he, the witness, solicited applications for membership in the Globeville camp, but refused to take the assured's application because he was too much of a drinker, to his knowledge, for fraternalism.

Michael Pishko testified that he worked for the assured for more than four years immediately prior to his death, that he drove the wagon in the mornings and cut meat in the afternoons, and that during this time he drank whisky and beer with the assured. His examination in part is as follows: "Q. Did his habit of taking drinks extend over the whole period of four years that you knew him? A. Yes, sir. Q. Did he become intoxicated or under the influence of liquor? A. Under the influence? Yes, sir. Q. Did it (Conter's drinking) cover this period generally, every day, or every week? A. Yes, sir; I suppose he took his drink every day." Pishko also testified that he saw the assured drink beer the day he died.

Jennie Sardakovski testified that the assured...