Sovereign Camp of Woodmen of World v. Latham

• Decision Date: 18 February 1915
• Docket Number: 8,376
• Citation: 107 N.E. 749,59 Ind.App. 290
• Parties: SOVEREIGN CAMP OF THE WOODMEN OF THE WORLD v. LATHAM
• Court: Indiana Appellate Court

107 N.E. 749

59 Ind.App. 290

SOVEREIGN CAMP OF THE WOODMEN OF THE WORLD v. LATHAM

No. 8,376

Court of Appeals of Indiana

February 18, 1915

Rehearing denied May 14, 1915. Transfer denied June 22, 1915.

From Superior Court of Marion County (71,596); Vinson Carter Judge.

Action by Mattie R. Latham against the Sovereign Camp of the Woodmen of the World. From a judgment for plaintiff, the defendant appeals.

Affirmed.

Ralph Bamberger, Isidore Feibleman and A. H. Burnett, for appellant.

Newton J. McGuire, for appellee.

OPINION

CALDWELL, P. J.

This is an action brought by appellee, as the beneficiary of an insurance certificate issued by appellant, a fraternal insurance organization, on the life of Walter D. Latham, appellee's husband. The certificate was issued under date of November 9, 1903. The insured died April 24, 1905, and a controversy arising respecting the validity of the certificate, a settlement was effected by which appellant paid appellee the sum of $ 300, in consideration of the surrender and cancellation of the certificate. The suit was prosecuted to recover damages for alleged fraud and deceit in inducing and procuring such settlement. If the certificate was valid and in force, appellant's liability thereon was in the sum of $ 1,500. The verdict fixed appellee's damages at $ 1,668, for which sum judgment was entered. The questions presented arise under the motion for a new trial.

Appellee by her complaint alleges the issuing of the certificate; that the insured complied with all the requirements and performed all the conditions of the contract of insurance by him to be performed; admits that the insured made certain false answers in his application; avers that appellant with full knowledge of the facts, not only accepted and retained premiums and stated dues paid, but also induced the payment thereof by means of representations and assurances that notwithstanding such false answers, the certificate was valid and in force. The facts constituting the alleged fraud and deceit by which such settlement was procured are specifically averred.

Appellant answered in nine paragraphs. The first is a general denial; the second payment; the fourth that the maximum liability under said certificate was $ 1,500; the third, sixth, seventh and eighth plead in various forms the existence of a controversy respecting appellant's liability under said certificate, and a compromise, settlement and accord and satisfaction, in the absence of fraud, by the payment of $ 300, which appellee retained; the ninth paragraph pleads a section of appellant's constitution, by the terms of which the consul commander of the local camp was shown not to have authority to waive any of the conditions or requirements of the contract of insurance; the fifth paragraph, that by insured's written application, alleged to be a part of the contract, he warranted that he had never been afflicted with insanity, chronic catarrh, rheumatism, syphilis, dropsy, or scrofula, and that at the time of making such application and when the certificate was delivered to him, he was sound in body and mind, and that he then had no diseases that tended to shorten his life; that said answers and warranties were false in that the insured had had all said diseases, and that at the time of making said application and when said certificate was delivered to him, he was in poor physical health and then had diseases which tended to shorten his life, and that at said times, he was of unsound mind; that appellant accepted said application and delivered said certificate in ignorance of said facts; that by the terms and conditions of said certificate, the fact that said answers and warranties were false rendered the certificate void.

Appellee replied to all the paragraphs of answer except the first and fourth. The pleadings are not challenged. The first question presented is respecting the sufficiency of the evidence. In order that the judgment in appellee's favor may be sustained, it must appear, first, that there was a valid contract of insurance on which appellant was liable, and second, that said settlement was induced and procured by fraud, to the resulting damage of appellee as alleged. We proceed to consider these questions in the order stated.

By the terms of the application and the beneficiary certificate issued thereon, such application and the constitution and by-laws of the fraternity are made parts of the certificate, and consequently, they, with the certificate, constitute the contract of insurance. Supreme Lodge, etc. v. Graham (1912), 49 Ind.App. 535, 97 N.E. 806. The application provides that all statements, representations and answers contained therein are warranted to be true. The fourth specification of the certificate, as exhibited with the fifth paragraph of answer, and in so far as it is material here, is as follows: "If any of the statements or declarations in the application for membership, and upon the faith of which this certificate was issued, shall be found in any respect untrue, this certificate shall be null and void and of no effect, and all moneys which shall have been paid, and all rights and benefits which have accrued on account of this certificate shall be absolutely forfeited without notice or service." The insured's statements, representations and answers to questions, as contained in the application and certificate are by each of said instruments expressly made warranties. Such being the case, it is essential, in order that the contract of insurance may not thereby be rendered voidable, that such statements, etc., be true in every particular, and regardless of the apparent materiality or immateriality of the subject-matter thereof. Catholic Order, etc. v. Collins (1912), 51 Ind.App. 285, 99 N.E. 745.

Under the issues here, the only statements made by the insured that are important are the following: In the application, he stated, in answer to questions, that he had never been afflicted with dropsy, scrofula, rheumatism, chronic catarrh, syphilis, or insanity. The application contains also the following: "I hereby certify, agree and warrant that I am of sound bodily health and mind; * * * have no injury or disease that will tend to shorten my life." The certificate contains the following signed by the insured: "I have read the above certificate * * * and warrant that I am in good health at this time." The foregoing are the only statements that are material here, for the reason that the issues present no others for our consideration.

There was no evidence that the insured had been afflicted with dropsy or scrofula. By answers to interrogatories returned with the general verdict, the jury found that the insured, prior to said application, had not had chronic catarrh or rheumatism. The evidence does not show that he was at any time afflicted with chronic catarrh. There was direct testimony given by nonexpert witnesses that he had had rheumatism prior to said application. However, the testimony of certain expert witnesses on the subject of the causes, nature and symptoms of rheumatism, involves in doubt the question of whether such was in fact the nature of the ailment under investigation. It was, therefore, within the province of the jury to determine whether such affliction was rheumatism. As indicated, the jury found in the negative on that subject. By the answers to interrogatories, the jury also found that the insured had had syphilis prior to October 22, 1903, being the date of such application, and that on said date, he was of unsound mind; also that on said date, he was not in good mental and physical health, and that he was insane on November 9, 1903, being the date of said certificate, and that appellant knew prior to the time when it received proofs of the death of insured the facts aforesaid respecting such mental and physical infirmities. The interrogatory in response to which the jury answered that the insured was not in good mental and physical health on October 22, is so worded that if either his mental or physical health was impaired, the interrogatory is satisfied. The contract here, as well as the interrogatories, treats insanity as a mental disease. The evidence sustains the finding respecting the prior existence of syphilis and also the existence of said mental infirmity at the times indicated. There was evidence that ten or fifteen years prior to making said application, the insured contracted said physical disorder. There was no evidence that the insured was afflicted with said disease or with any other purely physical infirmity at the time of making such application or on the date of the certificate, but there was evidence that at each of said times he had a mental disorder in the form of paresis, and that such mental disorder was caused by such prior physical disease. On November 26, 1903, the insured, pursuant to an insanity inquest, was committed to the Central Hospital for the Insane, where he died April 24, 1905, as the result of a dislocated neck, caused by falling down a stairway. The fact of the prior existence of such physical disease and of such mental disorder at the time of making such application and when such certificate was delivered, constituted such a breach of the warranty contained in the application and beneficiary certificate, as to render the contract of insurance void, at the election of appellant, and we should be compelled so to hold, unless it may also be held that appellant waived such breach of warranty or is estopped from asserting it.

We proceed to consider the question of waiver, or what is practically its equivalent, the question of estoppel, as applied to the facts of this case. Appellant is a fraternal beneficiary association, incorporated under the laws of Nebraska. It is...