Mutual Aid Union v. Blacknall

• Decision Date: 18 June 1917
• Docket Number: 48
• Citation: 196 S.W. 792,129 Ark. 450
• Parties: MUTUAL AID UNION v. BLACKNALL
• Court: Arkansas Supreme Court

196 S.W. 792

129 Ark. 450

MUTUAL AID UNION v. BLACKNALL

No. 48

Supreme Court of Arkansas

June 18, 1917

Appeal from Logan Circuit Court, Southern District; James Cochran Judge; affirmed.

Judgment affirmed.

J. V Walker and Ratterree & Cochran, for appellant.

1. The court erred in giving instruction No. 8 for the plaintiff and in refusing No. 13, asked by defendant. The knowledge of the agent must be actual and not implied. The burden was on appellee to show actual knowledge on the part of the agent. 135 Am. St. 160; 12 Id. 801; 14 R. C. L. pp. 1159, 1167, 1173; 65 Ark. 54; 65 Id. 62; 25 Cyc. 856; 60 S.W. 576; 111 F. 19; 102 Ark. 146.

Where the applicant informs the agent relative to his age and health, then the company is bound, but such knowledge must be based on information received by the agent in the performance of his duties at the time the application is made or during the negotiations for the policy. 65 Ark. 63; 102 Id. 146; 81 Id. 510; Ib. 207; 14 R. C. L. 1159; Ann. Cases, 1913 A. 850.

It was not shown that the insured made correct statements as to his age and health to the agent, and appellant was not chargeable with the notice or knowledge of the soliciting agent from observation. 25 Cyc. 860-865; 14 L. R. A. (N. S.) 279.

2. The agent was a mere soliciting agent, and had no authority to waive a breach of warranty, or one whose knowledge was the knowledge of the company, except under special circumstances. 25 Cyc. 860 to 865; 102 Ark. 146; 81 Id. 510, 207; 65 Id. 63. Appellee can not urge the knowledge of the company as a waiver unless it be shown that its knowledge was as full and complete as that of the insured. 14 R. C. L. 1167; 107 U.S. 485; 111 F. 31.

3. If the insured and agent both knew of the false statements, then collusion is presumed and the burden was on appellee to overcome the presumption. 77 Am. St. Rep. 34; 14 L. R. A. (N. S.) 279 and notes. The law presumes that the agent wrote the answers correctly as directed by the insured, and appellee by introducing the application in evidence has affirmed its genuineness. Jones on Ev. (2 ed.), §§ 48 and 50. See also 67 Ark. 584; 241 U.S. 613; 14 L. R. A. (N. S.) 279.

4. A policy procured by false and fraudulent statements and representations is not binding. 103 Ark. 201; 74 Id. 1; 72 Id. 620; 58 Id. 528; 25 Cyc. 798, 801.

5. The insured made the application; it was read to him; the questions were asked him and he had the opportunity to read it. 71 Ark. 185; 70 Id. 572; 9 Cyc. 389, 390. He accepted the policy without objection and thereby ratified his own application and is bound by its contents. 14 R. C. L. 1177, § 351; 74 Am. Dec. 459. If he did not sign the application, or authorize the agent to sign for him, and has not adopted or ratified it, there was no binding contract. 25 Cyc. 712, 715; 12 Am. St. Rep. 801. A false application is a fraud on the company. 32 L. R. A. 989; 47 Am. St. Rep. 336.

6. There was error in other instructions given and refused. 58 Ark. 528; Ib. 277; Ib. 565; 74 Id. 1; 72 Id. 621; 103 Id. 201; 25 Cyc. 789 to 810.

7. Incompetent testimony was admitted and the verdict is contrary to the evidence.

J. H. Evans, for appellee.

1. The burden of proof, on the whole case, was on the defendant. Kirby's Digest, § 3106.

2. All the writing in the application was done by the same person, and this was not Dr. Blacknall. It was done by Barnett, the agent of appellant. He filled out all the blanks and signed it. He inquired of the applicant his age and the condition of his health. True answers were given and the applicant can not be held responsible for false answers written by appellant's agent. There is a total failure of proof that the applicant made any false answers as to age or disease. If the truth was told the agent and it was incorrectly written by mistake, or fraud, by such agent, the company would be liable. The knowledge of the agent is regarded as the knowledge of the company. 102 Ark. 151.

3. If there was any fraud, it was on the part of the agent of the company. Where a policy is issued with knowledge of the facts which would render it void, there is a waiver of the grounds of forfeiture. 56 Ark. 62; Ib. 11; 1 Bacon Life & Acc. Ins., § 274. In the light of the law as thus laid down, instruction No. 8 was properly given and No. 13 refused properly. There is no error in the other instructions given and refused.

4. If there was any incompetent testimony admitted, it is not abstracted, nor was it prejudicial.

OPINION

WOOD, J.

Appellant is a mutual aid society (hereafter called society), doing an insurance business in Arkansas on the assessment plan. Appellee is the beneficiary in a certificate of insurance issued by the society insuring the life of Dr. Blacknall. After the death of Blacknall, the appellee instituted this suit against the society, and J. W. Walker and J. E. Felker, sureties on the society's bond, to recover the sum of $ 175 alleged to be due her on the certificate of insurance, and also 12 per cent. damages as penalty for the refusal to pay, and for a reasonable attorney's fee.

The society denied liability on the ground that the insured, Blacknall, perpetrated a fraud on the society by falsely stating in his written application for membership that he was only 60 years of age, and that he was not suffering from either kidney trouble or rheumatism, when in truth and in fact Blacknall was 66 years of age, and was at that time, and for a long time prior thereto, had been afflicted with both kidney trouble and rheumatism; that the written application was a part of the contract of insurance, and in the written application was a provision to the effect that all the statements contained therein were warranted to be true; that under the rules and by-laws of the society, persons over 60 years of age, or those afflicted with kidney trouble or rheumatism, or both, were not eligible to membership in the society.

The appellee introduced the written application of Blacknall and the certificate of membership issued to him in which it was stated that the application was a part of the contract and a warranty by the member. In the application, the age of Blacknall is stated as 60 years. And in the application the question is asked, "Has the applicant any of the following diseases?" naming, among others, "kidney" and "rheumatism," and the answer is "No." The application is signed as follows: "Dr. G. T. Blacknall, Applicant," and his name is endorsed on the back of the application in the same way. The application was dated the 22d of April, 1914.

The appellee testified that her husband, Dr. G. T. Blacknall, was suffering with kidney trouble when he made the application for membership; that he had Bright's disease; had been suffering with it for three or four years. He also suffered with rheumatism. He was so ill with these diseases that it had wrecked his mind. Dr. Blacknall died on the 12th of May, 1915. In April, 1914, on his nearest birthday, he was 66 years old. He lived about thirteen months after he became a member. The appellee usually attended to the matter of paying the assessments and keeping them paid as they were called for.

Appellant contends that since the appellee conceded that Dr. Blacknall was over sixty years of age and afflicted with rheumatism and kidney trouble, that the answers contained in his application were false, and that the contract of insurance was thus obtained through fraud and was therefore void.

Appellee, on the other hand, contends that Dr. Blacknall did not give false answers to the questions propounded in the application; that Dr. Blacknall gave the correct answer as to his age, and that the soliciting agent of the society who wrote down the answers and filled out the application, and who returned the same to the society, knew at the time that Dr. Blacknall, on account of his mental and physical condition, was not an insurable risk.

The undisputed evidence shows that the answers to the questions were written in the application by the society's soliciting agent, Barnett; and the daughter of Blacknall, who was present at the time, testified that Barnett asked her father how old he was, and that he replied that he was sixty-six. There was testimony also tending to prove that when the application was received by the appellee, she noted and commented upon the fact that the name was signed to the application as "Blackull," instead of Blacknall, and she testified that the name was not in her husband's handwriting. There was also other testimony tending to prove that the signature to the application was not written by G. T. Blacknall.

B. V. Sively testified that he was the soliciting agent for the society at Booneville in 1812, and solicited Dr. Blacknall to become a member of the society. He explained to him that no one could become a member who was over sixty years of age, and Dr. Blacknall told witness that he was too old. Witness discussed the plan of the society with Dr. Blacknall, who told witness that he could not become a member because he was too old.

Among others, the court gave the following instruction:

"(8) The fact, if it be a fact, that Dr. Blacknall had rheumatism and Bright's disease at the time of making application for insurance in this case, will not bar recovery by the plaintiff if his condition was such that Barnett the agent of defendant, knew that Blacknall was laboring under the disabilities of physical and mental diseases."

The court refused appellant's prayer for instruction No. 13 which is as follows: "I charge you that in order to bind the defendant, Mutual Aid Union, with the knowledge of its agent, Barnett, relating to the condition of health of the insured, Blacknall, it is not enough for the plaintiff to show that said agent...