Rasicot v. Royal Neighbors of America

• Decision Date: 16 April 1910
• Citation: 108 P. 1048,18 Idaho 85
• Parties: VICTOR R. RASICOT, Respondent, v. ROYAL NEIGHBORS OF AMERICA, a Corporation, Appellant
• Court: Idaho Supreme Court

108 P. 1048

18 Idaho 85

VICTOR R. RASICOT, Respondent, v. ROYAL NEIGHBORS OF AMERICA, a Corporation, Appellant

Supreme Court of Idaho

April 16, 1910

FRATERNAL BENEFIT INSURANCE-WARRANTIES AND REPRESENTATIONS-WAIVER OF BREACH OF WARRANTY-OPINIONS AS REPRESENTATIONS-PUBLIC POLICY-"SOUND HEALTH" DEFINED-"PERSONAL AILMENT" DEFINED-EVIDENCE-ADMISSION OF PROOFS OF DEATH-STATEMENTS TO THE JURY.

(Syllabus by the court.)

1. Where an applicant for fraternal benefit insurance specifically warrants the literal truth of the answers given to the questions submitted, the statements made in the application are treated in law as warranties and not as mere representations.

2. The warranty as to the truth of an answer which by its nature expresses only the opinion or judgment of the applicant should not extend further than to insure the honesty and good faith of the party answering the question, and that it was in truth and in fact his honest opinion or judgment.

3. Where a fraternal benefit society received an application from a woman for insurance which warranted the literal truth of the answers given by her, and she represented and at the time honestly believed that she was not pregnant, when in fact and in truth she was, and the contract provided that the society would not become liable in such a case and that it would not consider such an application until at least two months after confinement, and the society collected and received dues, assessments and premiums from the insured for a period of nearly five years thereafter, during which time the applicant was in good health, the insurance society will be held to have waived the right to insist on a breach of the contract for the falsity of the answer.

4. Where a local camp of a fraternal benefit society receives and collects the dues and assessments and insurance premiums from its members and transmits them to the officers of the superior or head organization, which issues the benefit certificates, and has supervision and right of expulsion of members, the local camp should be regarded and treated as the agent of the superior or head department of the society.

5. It is contrary to sound public policy and detrimental to the best interests of society at large to allow a fraternal benefit society to issue to an applicant a benefit certificate, and thereafter continuously collect and receive from the applicant his dues and assessments for a number of years, and induce him to continue his payments and keep up his membership and dues, under the belief that his savings are being devoted to the purchase of protection for his family and dependent ones, and then after his death to allow the society to repudiate the contract, on the ground that the policy never went into effect because of some temporary cause or disability which existed at the time of the delivery of the policy, and of which the applicant had no knowledge and which was wholly obviated and did not in any manner contribute to the cause of death, increase the risk or lessen the life expectancy of the applicant, and which cause or condition would not have avoided the policy or been a breach of the contract had it occurred after the contract went into force and operation.

6. An agreement or stipulation in a contract of insurance made with a married woman that the policy shall not go into effect unless it is delivered to her "while in sound health" is not violated by reason of the applicant being pregnant at the time of the delivery of the policy.

7. A statement made by a married woman who applies for insurance in a fraternal benefit society that she has not consulted with a physician "in regard to a personal ailment" within the last seven years does not cover a single attendance by a physician upon the applicant some three years prior thereto when she was confined and gave birth to a child. Confinement in childbirth is not a "personal ailment" within the meaning of such a provision in the contract.

8. In an action for recovery on a life insurance certificate, it is error for the trial court to exclude the proofs of death which have been furnished by the beneficiary, where the same are offered in evidence on the trial by the insurance society.

9. Where an amended answer has been filed in a case which omits and abandons certain affirmative defenses pleaded in the original answer, the trial court should not permit the counsel for the plaintiff in his opening statement to read and comment upon the defenses contained in the original answer, and which have been omitted and abandoned in the answer on which the case is to be tried.

APPEAL from the District Court of the First Judicial District (now the Eighth Judicial District), for the County of Bonner. Hon W. W. Woods, Judge.

Action by plaintiff to recover on an insurance of benefit certificate. Judgment for plaintiff and defendant appealed. Affirmed.

Judgment affirmed, with costs in favor of the respondent Petition for rehearing denied.

Edwin McBee, for Appellant.

The answers in the application for the benefit certificate herein sued on are warranties. (Beard v. Royal Neighbors, 53 Ore. 102, 99 P. 83, 19 L. R. A., N. S., 789; Hoover v Royal Neighbors, 65 Kan. 616, 70 P. 595; Sinon v. Royal Neighbors, 135 Ill.App. 599.)

As a warranty is in the nature of a condition precedent to the validity of a policy, and must be literally true, if the fact warranted is not true, there is a breach of warranty. It follows that a breach of warranty will avoid the policy. (3 Cooley's Briefs on the Laws of Insurance, 1950, and cases cited.)

In view of the general principle that the materiality of the fact is wholly unessential in the case of a warranty, it is readily deduced that where there is a breach of warranty the policy is avoided, though the statements on which the breach is predicated is in no way material to the risk. (3 Cooley's Briefs on the Law of Insurance, 1951; 3 Joyce on Insurance sec. 1962; Beard v. Royal Neighbors, supra, Hoover v. Royal Neighbors, supra; McDermott v. Modern Woodmen, 97 Mo.App. 636, 71 S.W. 833; Price v. Phoenix Mutual Life Ins. Co., 17 Minn. 497 (Gill. 473), 10 Am. Rep. 166; Peterson v. Des Moines Life Assn., 115 Ia. 668, 87 N.W. 397; National Union v. Arnhorst, 74 Ill.App 482; Cerys v. State Ins. Co., 71 Minn. 338, 73 N.W. 849; Schane v. Met. Life Ins. Co., 76 A.D. 271, 78 N.Y.S. 582; Aloe v. Mutual Reserve Fund Life Assn., 147 Mo. 561, 49 S.W. 553; Supreme Lodge v. McLaughlin, 108 Ill.App. 85.)

A breach of warranty is fatal to the policy, though the insured had no knowledge of the falsity constituting the breach, and did not intend to deceive the insurer. (3 Cooley's Briefs on the Law of Insurance, 1954; May on Insurance, sec. 156; 3 Joyce on Insurance, sec. 1964; 1 Bacon on Benefit Societies, sec. 197; Standard Life & Accident Ins. Co. v. Sale, 121 F. 664, 57 C. C. A. 418, 61 L. R. A. 337; Alabama Gold Life Ins. Co. v. Johnston, 80 Ala. 467, 59 Am. Rep. 816, 2 So. 125; Continental Life Ins. Co. v. Rogers, 119 Ill. 474, 59 Am. Rep. 810, 10 N.E. 242; O'Connell v. Supreme Conclave, 102 Ga. 143, 66 Am. St. 159, 28 S.E. 282; Conn. Life Ins. Co. v. Pyle, 44 Ohio St. 19, 58 Am. Rep. 781, 4 N.E. 465; McGowan v. Supreme Court I. O. F., 104 Wis. 173, 80 N.W. 603; Leonard v. State Mut. Life Assur. Co., 24 R. I. 7, 96 Am. St. 698, 51 A. 1049; Peterson v. Des Moines Life Assn., 115 Ia. 668, 87 N.W. 397.)

The statement by an applicant that she had not consulted a physician regarding any personal ailment within seven years preceding her application, and which was warranted to be true, and which said answer was untrue, constituted a breach of warranty relieving the defendant from liability, without regard to the character of the ailment for which the physician was consulted. (Beard v. Royal Neighbors, supra; Hoover v. Royal Neighbors, supra; Metropolitan Life Ins. Co. v. McTague, 49 N.J.L. 587, 9 A. 776; Cobb v. Assn., 153 Mass. 176, 25 Am. St. 619, 26 N.E. 230, 10 L. R. A. 666; McDermott v. Modern Woodmen, supra, and cases therein cited; Caruthers v. Kansas Mut. L. Ins. Co., 108 F. 487.)

Even if the answers in the application were, under a proper construction of the contract, misrepresentations, then they avoid the benefit certificate, if material to the risk. ( Aetna Life Ins. Co. v. France, 94 U.S. 561, 24 L.Ed. 287; Alabama Gold Life Ins. Co. v. Johnston, supra; Campbell v. New England Mut. Life Ins. Co., 98 Mass. 381; Price v. Phoenix Mut. Life Ins. Co., 17 Minn. 497, 10 Am. Rep. 166.)

Reading and commencing, over defendant's objection, on defendant's original answer, which had been withdrawn, was improper and prejudicial, and is, therefore, ground for reversal. (Giffen et ux. v. City of Lewiston, 6 Idaho 231, 55 P. 545; Burke v. McDonald, 3 Idaho 296, 29 P. 98; State v. Harness, 10 Idaho 18, 76 P. 788; Smith v. Smith, 106 N.C. 498, 11 S.E. 188; Riley v. Town of Iowa Falls, 83 Ia. 761, 50 N.W. 33; Taft v. Fiske, 140 Mass. 250, 54 Am. Rep. 459, 5 N.E. 621.)

The court erred in overruling defendant's objection to the question asked plaintiff as to whether defendant had tendered him the amount of dues and assessments paid by his wife. ( Thompson v. Travelers' Ins. Co., 11 N.D. 274, 91 N.W. 75.)

Proofs of death are admissible in evidence, and are prima facie proof of the facts stated therein and against the beneficiary and on behalf of the society, the same being admissions by the said beneficiary. (Ins. Co. v. Newton, 22 Wall 32, 22 L.Ed. 793; Home Benefit Assn. v. Sargent, 142 U.S. 691, 12 S.Ct. 332, 35 L.Ed. 1160; Grand Lodge v. Wieting, 168 Ill. 408, 61 Am. St. 123, 48 N.E. 59; Walther v. Mutual Ins. Co., 65 Cal. 417, 4 P. 413; Modern Woodmen of America v. Van Wald, 6 Kan. App. 231, 49 P. 782; Elliott on Evidence, sec. 2387; Bliss on Insurance,...