Post v. Grand Lodge A.O.U.W.

• Decision Date: 22 September 1930
• Docket Number: 40293
• Citation: 232 N.W. 140,211 Iowa 786
• Parties: LILLIAN I. POST et al., Appellees, v. GRAND LODGE ANCIENT ORDER OF UNITED WORKMEN OF IOWA, Appellant
• Court: Iowa Supreme Court

232 N.W. 140

211 Iowa 786

LILLIAN I. POST et al., Appellees, v. GRAND LODGE ANCIENT ORDER OF UNITED WORKMEN OF IOWA, Appellant

No. 40293

Supreme Court of Iowa, Des Moines

September 22, 1930

REHEARING DENIED JANUARY 15, 1931.

Appeal from Polk District Court.--O. S. FRANKLIN, Judge.

Action upon insurance certificate. Judgment on directed verdict for plaintiff. Defendant appeals.

Affirmed.

Utterback & Forrest, for appellant.

Nourse & Nourse, for appellees.

MORLING C. J. EVANS, FAVILLE, DE GRAFF, and WAGNER, JJ., concur. GRIMM, ALBERT, and KINDIG, JJ., dissent.

OPINION

MORLING, C. J.

Insured, in his application for the certificate sued upon, was asked and gave answer to certain questions, as follows:

"Have you had insanity, apoplexy, palsy, vertigo, convulsions, sunstroke, congestion, inflammation, or any other disorder of the brain or nervous system? No. B. Have you had asthma, consumption, spitting of blood, habitual cough, and expectoration, palpitation, or any disease of the throat, heart or lungs? No."

In the blank for the answer to a later request, namely, "Give name and address of your physician," a line was drawn with a pen, no name being given. At the end of the application, and immediately preceding his signature, was the following:

"I hereby certify that the answers to the foregoing questions are full, complete and true, and I hereby agree that the truth of each of said answers shall be a condition precedent to any binding contract or benefit certificate issued upon this application, and I hereby certify that there is nothing in my physical condition, family or personal history or habits of life that in any manner should prevent me from participating in the benefits of the Order."

Defendant's contention in this court is that the insured had been, prior to the application, suffering from vertigo, and that, by virtue of the answers and certificate quoted, there was a breach of warranty. On plaintiff's motion for directed verdict, the court said:

"There is some doubt in the court's mind whether, under the evidence in this case, the defendant has proven any false statement; but the court further finds that, if any false statements were made, they were not material * * *"

Defendant contends that the statements of the insured were warranties, and if false, that the policy was invalid, whether the false statements were material or not; and that, the court having given as its reason for directing verdict that the statements, if false, were not material, the judgment should be reversed.

If the verdict was rightly directed, the judgment must be affirmed though the trial court gave a wrong reason for its right conclusion.

The insured, Carl M. Post, was, at the date of his application, May 2, 1927, a physician, 46 years of age. The petition set out the contract, alleged in general terms that the insured had paid all premiums and performed all duties to be performed by him, and kept and carried the policy in full force, and that the policy was in full force at the time of his death. The petition was not assailed by motion or demurrer. The defense set up in the original answer was founded on fraudulent misrepresentation and concealment,--not on breach of warranty. On the date the trial was begun, defendant filed amended and substituted answer, in which it stated that "the certificate of membership sued upon was procured by misrepresentation, fraud, and concealment of the insured, as hereinafter set out * * * that the certificate of membership sued upon was procured by the making of certain warranties in the application, and that the insured was guilty of breach of warranties in procuring the said certificate, as hereinafter set out. * * * that the insured * * * represented and warranted in writing * * * that he had never had vertigo, inflammation, or any other disorder of the brain or nervous system, that he had never had palpitation or any disease of the heart or lungs; that he was not under the care of a physician;" that he filled out the blank application in answer to request for name and address of physician by placing a dash in the blank left for that purpose. "That the said Dr. Carl M. Post intentionally withheld and concealed the fact that he was then, and for a period of years from on or about January 20, 1924, had been, under the treatment of Dr. L. E. Verity, M.D., in the Battle Creek Sanitarium, Battle Creek, Michigan; that he was suffering at said sanitarium with vertigo and sensation of fullness in the head and with a disease of the heart known as high blood pressure; * * * that Dr. Post concealed from the defendant all of these facts, and also expressly warranted and represented that he had had no disease of the heart; that said ailments and disease above mentioned were the contributing cause of his death. That each and every one of said representations was material to his being admitted to membership in defendant's society, * * * that each of said representations was false * * * that defendant did not know such representations were untrue, and did not discover the falsity thereof until after the death of the insured. * * * That Dr. Carl M. Post, in his application for membership and for beneficiary certificate, warranted that he had never had vertigo, high blood pressure, or any disease of the heart, and that he was not under the care of a physician, as hereinbefore stated; that said warranty was untrue * * * that said warranty was material to and was relied upon by the defendant in the issuance of the certificate sued upon. That, because of the breach of warranties * * * and because of the fraud and concealment aforesaid * * * defendant avoided said policy. * * * offered to return [the assessments paid], and has continued to offer to return the same * * *" The reply was a denial. By a later amendment, defendant alleged substantially the same matters as false representations.

The allegations of the amended and substituted answer and amendment were not separated into divisions, but were presented as a single defense, consisting of alleged false representations, breach of warranty, and rescission. False representations and rescission, of course, constitute an affirmative defense, which must be pleaded and proved. Breach of warranty must be pleaded affirmatively by defendant. 33 Corpus Juris 88.

The defendant argues that the certificate contained in the application, that the truth of his answers "shall be a condition precedent to any binding contract, * * * makes the representations referred to a warranty." As conditions precedent, it would be necessary for plaintiff, in pleading, only to "state generally that he duly performed all the conditions on his part."

"It is not necessary to state the facts constituting such performance." Code, 1927, Section 11206.

"If either of the allegations contemplated in the three preceding sections is controverted, it shall not be sufficient to do so in terms contradictory of the allegation, but the facts relied on shall be specifically stated." Section 11208.

By Section 11209, "any defense showing that a contract * * * sued on, is void or voidable * * * must be specially pleaded."

We do not pause to determine the question whether there was a warranty, or whether, if plaintiff had pleaded as a distinct defense the facts alleged to constitute a warranty and breach thereof, the burden of proof would have been upon plaintiff to sustain his general allegations of performance. See Krause v. Modern W. O. A., 133 Iowa 199, 201, 110 N.W. 452; Wilkins v. Germania Fire Ins. Co., 57 Iowa 529, 531, 10 N.W. 916; Ballagh v. Interstate Bus. Men's Acc. Assn., 176 Iowa 110, 155 N.W. 241; Brock v. Des Moines Ins. Co., 96 Iowa 39, 64 N.W. 685; Ward v. Interstate Bus. Men's Acc. Assn., 185 Iowa 674; Hart v. National Masonic Acc. Assn., 105 Iowa 717, 75 N.W. 508; 37 Corpus Juris 616; 32 Corpus Juris 1291; 33 Corpus Juris 108.

The defendant here chose to intermingle allegations of fraud and breach of warranty, and as ground for its alleged action in rescinding the contract in pais. The petition alleged the issuance of the certificate. The answer alleged that the certificate was procured by fraud and false warranties. Execution of contract is not disputed. The nonexistence of the contract was not asserted, but the theory of the defense as alleged, and as defendant presented its case at the trial, was that the contract was induced by fraud and false warranty, and was because thereof rescinded. Defendant voluntarily assumed the burden of proving these allegations as its defense. It may not change its theory on appeal. White v. Melchert, 208 Iowa 1404, 227 N.W. 347.

Defendant introduced the deposition of Dr. L. E. Verity, a physician of the Battle Creek Sanitarium, who testified:

"Dr Post first came to the sanitarium January 20, 1924, * * * He complained of slight increased blood pressure and a slight vertigo,--more of a giddiness of the head than a true vertigo,--which condition was greatly aggravated by constipation. Slight dyspnea on exertion. His health at that time was excellent. The physical examination did not show any organic disease. There was no enlargement of the heart or valvular disease, no evidence of decompensation, and the various kidney tests were normal. * * * Dr. Post complained of giddiness of the head, amounting to a slight vertigo, in 1924, and to a less extent in 1925. He did not complain of this symptom at all in 1926. * * * The next time that Dr. Post consulted me professionally was March 23, 1925. At that time his general health was good. He had noticed in the past few months, while h...