Shamblen v. Modern Woodmen of America

• Decision Date: 28 February 1928
• Docket Number: 6107.
• Citation: 142 S.E. 447,105 W.Va. 252
• Parties: SHAMBLEN v. MODERN WOODMEN OF AMERICA.
• Court: West Virginia Supreme Court

142 S.E. 447

105 W.Va. 252

SHAMBLEN v. MODERN WOODMEN OF AMERICA.

No. 6107.

Supreme Court of Appeals of West Virginia.

February 28, 1928

Submitted February 21, 1928.

Rehearing Denied April 9, 1928.

Syllabus by the Court.

An application for insurance states that, inasmuch as the "head officers" of the insurer act upon the written statements and answers in the application in determining whether a policy shall issue, no information had or given to any one other than its head officers shall be binding on it or in any way affect its rights. Held, the insurer is not estopped to contest the policy on the ground of misrepresentation in the application merely because a subordinate agent had knowledge of actual conditions.

Point 7 in the syllabus of Schwarzbach v. Protective Union, 25 W.Va. 623, 52 Am. Rep. 227, relative to the effect of false warranties in an application for insurance, applied.

Error to Circuit Court, Jackson County.

Action by Cloh Shamblen against the Modern Woodmen of America. Judgment for plaintiff, and defendant brings error. Reversed and remanded.

Geo. G Perrin, of Rock Island, Ill., and Price, Smith & Spilman and J. M. Woods, all of Charleston, for plaintiff in error.

Lewis H. Miller and Walter F. Boggess, both of Ripley, for defendant in error.

HATCHER J.

In this action plaintiff seeks to recover $3,000 as the beneficiary named in a benefit certificate issued by defendant to her husband, Roy Shamblen.

The defendant is a fraternal beneficiary society. The certificate in question is dated January 30, 1926, and was issued to Shamblen as a member of a local camp of defendant at Hurricane, W.Va. In answer to questions in the application upon which the certificate was issued, it is stated that both Shamblen and his wife resided in Hurricane; that his business was that of a traveling salesman, and that he performed no work or duties incident to any other occupation; that the application was for original membership; and that he had not within five years prior thereto been treated by a physician for influenza, or consulted with and been treated by a physician in regard to "personal ailments." Shamblen died May 7, 1926, from miliary tuberculosis.

The proof shows that both Shamblen and his wife resided at Ripley; that he was town sergeant of Ripley; that he had been a member of defendant's camp at Ripley from April, 1920 to November, 1924, when he was suspended for nonpayment of dues; and that within two years prior to the application in question he had suffered a severe attack of influenza, during which he had been treated by a physician.

The answers were written by Roy Hylbert after discussing them with Shamblen. Hylbert was a "deputy head consul" of the defendant, with authority to organize new camps in seven counties of this state, for which he received compensation. At the time the application was prepared Hylbert was attempting to organize a camp at Hurricane. He solicited Shamblen to become one of the charter members there in order to make up the necessary quota. He knew that some of the answers in the application were not true, and, in fact, suggested their falsity himself. He read the answers to Shamblen after they were written, however, and Shamblen "acquiesced in them." Hylbert attempted an explanation of each misleading statement, except the answer relative to influenza, to which he did not refer.

The application contains the following covenant:

"I have verified each of the foregoing answers and statements, from 1 to 30, both inclusive, adopt them as my own, whether written by me or not, and declare and warrant that they are full, complete, and literally true, and I agree that the exact literal truth of each shall be a condition precedent to any binding contract issued upon the faith of said answers and statements. I further agree that said answers and statements, together with this declaration and warranty, shall form the basis of the contract between me and Modern Woodmen of America, and are offered by me as a consideration for the contract applied for, and are hereby made and shall be deemed a part of any benefit certificate that may be issued on this application; that this application may be referred to in said benefit certificate as the basis thereof, and that they shall be construed together as one instrument; that inasmuch as only the head officers of the society have authority to determine whether or not a benefit certificate shall issue on this application, and as they act upon the written statements, answers, warranties, and agreements herein made, no statements, promises, knowledge, or information had, made, or given by or to the person soliciting, taking, or writing this application, or by or to any person, shall be binding on the Society or in any manner affect its rights, unless such statements, promises, knowledge, or information be reduced to writing and presented to the head officers of the society at or before the time a benefit certificate shall be issued hereon; and I further agree that if any answer or statement in this application is not literally true, or if I shall fail to comply with and conform to any and all of the by-laws of the said Modern Woodmen of America, whether now in force or hereafter adopted, that my benefit certificate shall be void."

The following conditions were made part of the benefit certificate:

"2. That the application for beneficial membership in this society made by the said member, a copy of which is printed and written hereon or is hereto attached, and in either case made a part hereof, is true in all respects, and that the literal truth of such application, and each and every part thereof, shall be held to be a strict warranty and to form the only basis of the liability of this society to such member and to his beneficiary or beneficiaries, the same as if fully set forth in said benefit certificate, and that if said application be not literally true in each and every part thereof, then said within benefit certificate is, and shall be, as to said member, his beneficiary or beneficiaries, absolutely null and void."

"4. It is agreed by the member holding said benefit certificate that the said certificate, the charter or articles of association, the by-laws of the society, and the application for membership signed by the applicant, with all present and subsequent amendments to each thereof, shall constitute the agreement between the society and the member. ***"

"8. No officer of this society, nor any local camp, or officer, or member thereof, is authorized or permitted to waive any of the provisions of the by-laws of this society which relate to the contract between the member and the society, whether the same are now in force or hereafter enacted. Neither shall any knowledge or information obtained by, nor notice to any local camp, or officer or member thereof, or by or to any other person, be held or construed to be knowledge of, or notice to the society, or the officers thereof, until after said information or notice be presented in writing to the head clerk of the society."

One of the by-laws of the...