Reid v. Brotherhood of Railroad Trainmen

• Decision Date: 13 June 1921
• Docket Number: No. 14018.,14018.
• Citation: 232 S.W. 185
• Parties: REID v. BROTHERHOOD OF RAILROAD TRAINMEN
• Court: Missouri Court of Appeals

232 S.W. 185

REID v. BROTHERHOOD OF RAILROAD TRAINMEN

No. 14018.

Kansas City Court of Appeals. Missouri.

June 13, 1921.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

"Not to be officially published."

Action by Leora E. Reid against the Brotherhood of Railroad Trainmen. From judgment for plaintiff, defendant appeals. Affirmed.

H. H. Blanton and Boyle & Watson, all of Kansas City, for appellant.

Davis & Woodruff, of Kansas City, and J. W. Miller, of Appleton City, for respondent.

TRIMBLE, P. J.

This is an action on a policy of insurance issued on the life of Arthur J. Reid, who, on February 4, 1913, at Kansas City, Mo., applied for the policy which was issued on March 4, 1913, and delivered in Missouri to insured on April 11, 1913. The policy agreed to pay the amount specified in the constitution of defendant, (which was $1,600), which amount was to be paid to insured himself "in the event of his total and permanent disability," or at his death said amount, according to the face of the policy, was to be "paid to Mary J. Reid, his wife, if living, if not to the executor or administrator of said member's estate, in trust, however, for and to be forthwith paid over to his heirs at law." Mary Z. Reid, the beneficiary thus named, died in 1916, and shortly thereafter the insured had his mother substituted as primary beneficiary in the policy in the place of the wife.

Insured died on July 12, 1918, and shortly thereafter proofs of death were furnished, and finally on March 13, 1919, defendant refused to pay the policy, and thereupon this suit was brought August 13, 1919.

On June 19, 1920, plaintiff obtained judgment for the $1,600 sued for together with interest thereon at 6 per cent. from March 13, 1919, making an aggregate of 81,721.80. Thereupon defendant appealed.

The constitution and by-laws of the defendant provided that the insurance contracts issued by it should be "in all respects deemed to be made under, and to be interpreted and construed in accordance with, the laws of the state in which the Grand Lodge has its headquarters." (They were in Cleveland, Ohio.)

Under the constitution and by-laws, insured's application was made the basis of the insurance contract, and in case any untrue or incomplete answers were made by insured in the application, then the contract of insurance issued thereunder was to be thereby rendered absolutely null and void.

The defense was that the insurance contract was rendered null and void because insured made untruthful answers to questions in his application, as follows:

"1. Are you in good health? A. Yes.

"2. Have you consulted a physician during the last five years? A. No.

"State present condition (of health). A. Excellent. ***

"5. Have you ever been afflicted with any of the following complaints or diseases: Asthma, bronchitis, pneumonia, pleurisy, consumption, spitting of blood, habitual cough or expectoration, shortness of breath, palpitation, or any disease of the throat, lungs or heart? *** A. No."

The answer set up the foregoing matters as to the contents of the application and the alleged untruthful answers, and asserted that by reason thereof the contract sued on is not and never was a valid obligation and should be canceled; that the aforesaid statements were false and untrue and were material, and rendered said contract void under the laws of Missouri as well as under the laws and decisions of Ohio; that "in the case of Hess v. Ladies of Maccabee, 4 Ohio Law Rep. 30, it was held, `False answers in application constitute breach of warranty and voids the certificate and it is not necessary that death result from any affliction of any kind had at any time.'"

The answer further alleged that Arthur J. Reid was afflicted with consumption at the time of making said application and the answers therein, and that said disease resulted in his death. There was no attempted pleading of the laws and decisions of Ohio other than as hereinabove quoted and the answer closed with a prayer that the insurance "be canceled and for naught held" and for costs and such further relief as might seem proper.

The reply, after a general denial, admitted that insured made the answers charged, but denied that they were untrue, and denied that at the time of making said answers said Reid was afflicted with tuberculosis or consumption, or that he had been afflicted with any of the diseases aforesaid, and asserted that his answers were true and correct.

The reply then set up certain acts done and letters written by defendant (which will be hereinafter more fully referred to and set forth), whereby, if said Reid made untrue statements as claimed by defendant, then the latter "has by its aforesaid conduct, subsequent to the filing of said claim for disability benefits, waived the right to refuse to make payment under said benefit certificate *** and defendant has by said conduct estopped itself from relying upon said misstatements, if any, and from refusing to make payment *** on account of said misstatements, if any."

Over plaintiff's objections the case was tried as one in equity on the theory, maintained by defendant, that as it in its answer asked to have the policy canceled, this converted the action from one at law to one in equity. We have heretofore entertained the view that a case at law will not be converted into equity by answer "unless affirmative relief is asked and is necessary to ascertain or sustain the defendant's rights." (Italics ours.) Withers v. Kansas City, etc., R. Co., 226 Mo. 373, 398, 126 S. W. 432; Berryman v. Maryland Motorcar Ins. Co., 199 Mo. App. 503, 204 S. W. 738. In the former case cited, affirmative relief was asked in that, aside from denying plaintiff's claim to the land in controversy in that case, the defendant sought to have the title thereto vested in it and to have the plaintiffs enjoined from bringing any other action for the possession or value of said property. If defendant has no right involved other than the claimed right to defeat plaintiff's cause of action on the policy herein sued on, it would seem that the mere prayer to have the policy canceled would not be sufficient to transform the case from one at law into one in equity, because that would not be necessary to ascertain or sustain such right. There would seem to be no right of defendant involved herein other than the right to defeat plaintiff's cause of action on the policy, and hence we are unable to see wherein it was entitled to have the case tried in equity. However, it may have been so tried on the theory that, owing to the provision of the policy that in case of the death of the primary beneficiary therein the policy would be payable to the executor or administrator of insured, in trust, for and to be forthwith paid over to his heirs at law, and the defendant, in order to shut out the possibility of some other action being brought on the policy by insured's administrator in case plaintiff lost in this case, desired to obtain the affirmative relief of having the policy canceled. But no claim is made that plaintiff is not the proper person to sue on the policy, or that she could not be substituted in the place of insured's wife as the primary beneficiary in the policy; and if she is the proper beneficiary, then, since she was living at the death of insured, her rights under the policy became vested, and even if she should subsequently die, no cause of action would seem to revert and arise in insured's administrator under the policy.

However, we are relieved from the necessity of deciding whether the case should have been tried at law or in equity for two reasons: (1) Because defendant insists it was properly so tried, and plaintiff is the only one objecting thereto, but as the judgment was in her favor, she very naturally did not appeal and, of course, cannot be heard in complaint. (2) Because, in the case of Carter v. Metropolitan Life Ins. Co., 275 Mo. 84, 94, 204 S. W. 399, L. R. A. 1918F, 325, the Supreme Court has held that the prayer for cancellation of the policy in defendant's answer changed the action at law into one in equity. We will therefore consider the case on the same theory that it was tried, namely, that it is one in equity; and agree with appellant in its contention that in an equity case the appellate court is not bound or concluded by the findings or decision of the trial court, but the same on appeal may be considered de novo. Scott v. Page, 224 S. W. 1001, 1003; Schulz v. Bowers, 223 S. W. 725, 726. There is, however, a well-established qualification to that rule mentioned in both of the above-cited cases, and it is somewhat more fully stated in the latter, to wit, that—

"Whilst we look upon the finding of the lower court as persuasive, we do not allow it to be binding, unless our minds run with the chancellor below on the facts, or unless the facts are conflicting and close, and we yield to his judgment because of his better position to judge of the credibility of the respective witnesses."

The defense of alleged untruthful answers on the part of insured, and plaintiff's claim that defendant has waived, or is estopped to make, such a defense, arise out of the following facts:

In insured's application made February 4, 1913, he made the answers to the questions hereinbefore set out in which he said that he was then in good health and had not consulted a physician in the last five years; that the condition of his health was then excellent; and that he had never been afflicted with the diseases therein named, among them pleurisy or any disease of the throat, lungs, or heart. On February 10, 1918, insured made application to defendant for the payment of the policy to him on account of his "total and permanent disability." The physician's certificate, dated February 10, 1918, and attached to said application, was made by Dr. Barr, and he certified that insured was completely disabled and had been since January 1, 1917; that he ...