Sargent v. Modern Bhd. of Am.

• Decision Date: 09 July 1910
• Citation: Sargent v. Modern Bhd. of Am., 148 Iowa 600, 127 N.W. 52 (Iowa 1910)
• Parties: SARGENT v. MODERN BROTHERHOOD OF AMERICA.
• Court: Iowa Supreme Court

148 Iowa 600

127 N.W. 52

SARGENT

v.MODERN BROTHERHOOD OF AMERICA.^d1

Supreme Court of Iowa.

July 9, 1910.

Appeal from District Court, Hardin County; C. G. Lee, Judge.

Action to recover a death benefit under a certificate of membership of Lulu N. Sargent in the defendant association, which benefit was made payable to this plaintiff, the mother of said member. The proceeding was in equity, and the court decreed that plaintiff was entitled to participate in the mortuary fund of the association to the amount of one full assessment on all members in good standing, not to exceed $1,000. The defendant appeals. Affirmed.Blythe, Markley, Rule & Smith and Ward & Williams, for appellant.

Lundy & Wood, for appellee.

McCLAIN, J.

The defense to this action is predicated on alleged false statements contained in the application for membership, and the questions argued are: First, whether, in the absence of proof of fraud, false statements constituted a defense; and, second, whether the alleged misstatements were in fact false.

1. It appears that the application on which the certificate of membership was issued consisted to a considerable extent of answers of the applicant to questions propounded by defendant's regular examining physician, Doctor Guthman, who wrote down the answers and certified at the end of the examination that he considered the applicant a good physical risk. It is one of the contentions of appellee that this report of the examining physician that the applicant was a fit subject for insurance estopped the defendant from setting up in defense of this action on the certificate that the assured was not in the condition of health required by the policy at the time of the issuance of the certificate, in the absence of any evidence that the certificate was procured by or through the fraud or deceit of the assured. See Code, § 1812. Brown v. Modern Woodmen, 115 Iowa, 450, 88 N. W. 965;Ley v. Metropolitan L. Ins. Co., 120 Iowa, 203, 94 N. W. 568.

The contention for appellant is, in this respect, that the statutory provision just referred to, found in the chapter of the Code relating to life insurance companies and associations, has no relation to fraternal beneficiary societies, orders, or associations which are specifically governed by another chapter of the Code and exempted from the provisions of statutes relating to life insurance companies, except as specified in the latter chapter. If the defendant is a beneficiary society or association, and not a life insurance company or association, then the provisions of Code, § 1812, have no application to this case. Smith v. Supreme Lodge, 123 Iowa, 676, 99 N. W. 553.

The allegations of the petition are that “defendant is an association organized under the laws of the state of Iowa as an insurance company and fraternity for the purpose of insuring the lives of its members, as indicated by Exhibit A hereto attached.” And it is admitted in the answer “that the defendant is a corporation organized under the laws of the state of Iowa relating to fraternal and beneficiary associations.” This is the only admission as to the character of the defendant association, and by general denial of all allegations of the petition not admitted, any allegation of the petition inconsistent with this admission is denied. There is also a specific allegation that the defendant is a fraternal beneficiary association organized under the chapter of the Code relating to such associations.

By way of stipulation it was agreed on the trial that the certificate set out as an exhibit to the petition was executed by the defendant on the application, which was introduced in evidence and made part of the record, and that another exhibit incorporated in the record was a copy of the articles of incorporation of the defendant society, under which it was organized and transacted business. The certificate recites that it entitles the applicant to membership in said fraternity, and that such certificate, together with the articles of incorporation, by-laws, and regulations of the society, constitute express warranties, conditions, and agreements as between the defendant and said member. The application refers to the applicant as proposed for membership in the defendant, and the articles of incorporation expressly recite that the incorporators associate themselves together as a body corporate for the purpose of organizing a fraternal beneficiary society under the statutes providing for the organization of such societies.

Under the allegations of the pleadings and the stipulations on the trial, it is clear that the defendant is a fraternal beneficiary society, order or association, and not a life insurance company or association, and, therefore, that the provisions of Code, § 1812, above referred to, do not apply to it. The allegations and the proof clearly distinguish this case from the cases relied upon by the appellant. See Stork v. Supreme Lodge, 113 Iowa, 724, 84 N. W. 721;Brown v. Modern Woodmen, 115 Iowa, 450, 88 N. W. 965;Krause v. Modern Woodmen, 133 Iowa, 199, 110 N. W. 452.

In the case last cited it appears that the character of the defendant corporation as a life insurance society under the averment in the petition that it was a life insurance and beneficiary society was not put in issue, and there was no specific proof as to its character. We have no occasion therefore to determine the effect of Code, § 1812, as applied to this case; and if the application contains specific representations which are shown to have been untrue, then the defendant may rely upon them as breaches of warranty, rendering the certificate void under the provision found in the certificate, that if said application or any part thereof shall be found untrue, then the certificate shall be null and void and of no effect.

2. The misstatements relied upon by appellant, as constituting breaches of warranty rendering the certificate void, are found in the answers of the applicant to questions by the physician; the answers being written by the regular examining physician for the defendant, and the application as thus filled out being signed by the applicant and warranted to be true. So far as relied upon for the appellant these questions and answers were as follows:

“Question 4. Have you ever had any of the following diseases: (a) Habitual headache? Answer. No.

Question 5. Have you ever had any other disease or surgical operation? Answer. No.”

“Question 9. When and by what physician were you last attended and for what complaint? Answer. Never have been sick.”

“Question 14. Have you had during the last seven years any disease or severe sickness? Answer. No.”

“Question 22H. Is your menstruation regular and normal? Answer. Yes.”

We cannot set out all the evidence relating to the truth or falsity of these answers. But bearing in mind that the burden of proof was on the defendant to show the answers to be false, we find that the most that can be claimed for the evidence is that it shows: (1) That the applicant had been afflicted with headaches, sometimes as often as once in two weeks, but not so often in the last few years of her life; (2) that in January, 1907 (the certificate was issued in August, 1907, and her death occurred in October following), the applicant had had an attack of sore throat, tonsilitis or quinsy which had been of a temporary character, from which she recovered in two or three days, having had one call from a physician on that account, and that in the latter part of June and the first part of July in the same year she had had a rather severe attack of gastritis which was brought on by the eating of strawberries and cream, and during which she was twice called on by a physician for purposes of treatment, and further that a slight attack of stomach trouble had occurred in August for which she once called upon a physician, this attack having no apparent reference to or connection with the attack in June and July; (3) that when sh...