Travelers' Protective Ass'n of America v. Smith

• Decision Date: 14 May 1913
• Docket Number: No. 22,093.,22,093.
• Parties: TRAVELERS' PROTECTIVE ASS'N OF AMERICA v. SMITH.
• Court: Indiana Supreme Court

101 N.E. 817

TRAVELERS' PROTECTIVE ASS'N OF AMERICA

v.SMITH.

No. 22,093.

Supreme Court of Indiana.

May 14, 1913.

Appeal from Circuit Court, Johnson County; Wm. E. Deupree, Judge.

Action by Ida M. Smith against the Travelers' Protective Association of America. Judgment for plaintiff, and defendant appeals. Affirmed.

Transferred under Acts 1901, c. 259.

John B. Elam, James W. Fesler, and Harvey J. Elam, all of Indianapolis, for appellant. Guilford A. Deitch, of Indianapolis, Charles A. Weathers, of Memphis, Tenn., L. Ert Slack, of Franklin, and Joseph F. Cowern, of Memphis, Tenn., for appellee.

ERWIN, J.

This was an action based on alleged fraud in making settlement on a certificate of membership in the Travelers' Protective Association, which carried certain benefits in the nature of accident insurance. The complaint, at the time of the trial, consisted of two paragraphs, to which the defendant demurred for want of facts. The demurrer was overruled, and the defendant filed an answer in three paragraphs, and the plaintiff filed a reply. The case was tried upon the issues so formed.

The errors relied upon for reversal are:

First. The complaint of appellee does not state facts sufficient to constitute a cause of action.

Second. The amended complaint of appellee does not state facts sufficient to constitute a cause of action.

Third. The court erred in overruling the demurrer of appellant to each paragraph of appellee's complaint.

Fourth. The court erred in overruling the demurrer of appellant to each of the second and third paragraphs of appellee's amended complaint.

Fifth. The court erred in its conclusion of law stated upon the special findings of facts.

Sixth. The court erred in overruling the appellant's motion for a new trial.

Seventh. The court erred in overruling the appellant's motion for a new trial, and thereby holding, among other things, that there was sufficient evidence to support the judgment, because the provisions of the United States Constitution and the statutes of the United States in force during all the time involved in this case are such that the trial court was obliged to give full faith and credit to the decisions of Missouri courts, to the effect that this defendant was correctly organized as a fraternal benefit association, and that such associations are not affected by the suicide statute, and the trial court, in entering judgment, did refuse to give full faith and credit to the public acts, records, and judicial proceedings of the state of Missouri, and ignored the plain provisions of the United States Constitution.

[1] The original complaint has been taken out by reason of the fact that it has been amended; no question is presented on a ruling on the demurrer to the original complaint. Kennedy v. Anderson, 98 Ind. 151;Wabash Ry. Co. v. Morgan, 132 Ind. 430, 31 N. E. 661, 32 N. E. 85;Hedrick v. Whitehorn, 145 Ind. 642, 43 N. E. 942;Weaver v. Apple, 147 Ind. 304, 46 N. E. 642.

The plaintiff, before the trial, dismissed her first paragraph of complaint, leaving the second and third amended paragraphs of complaint.

The second and third paragraphs of appellee's complaint being quite lengthy, we will not set them out in full, but content ourselves with giving the substance thereof.

The second paragraph of the complaint alleged that the defendant, the Traveler's Protective Association of America, is a mutual assessment accident insurance association, organized and existing under and by virtue of the laws of the state of Missouri; that on the 21st of April, 1904, a certificate was issued to Charles W. Smith, of Dillsboro, Ind., No. 52,316, wherein it is certified that Charles W. Smith is a member of the defendant association and entitled to all the benefits accruing from such membership under the constitution and by-laws of the association, and promised to pay such benefits in case of death to the plaintiff, who was the wife of Charles W. Smith; that the contract of insurance was fully executed in the state of Missouri and was to be carried out in said state; that $5,000 shall be paid to the beneficiary named in the certificate of any deceased member in case of death by accident; that notice of the death of Charles W. Smith was given to the defendant, and that thereafter, to wit, on the 14th day of October, 1905, formal proofs of death of the said Charles W. Smith were given the defendant upon the blanks furnished by the defendant; that the said defendant claimed that the death of said Charles W. Smith was due to suicide and paid to the plaintiff the sum of $100, claiming that the said sum was all that was due plaintiff under and by virtue of said certificate of membership, constitution, and by-laws of the defendant association; that at the time of the settlement with her by the said defendant company she was confined to her bed by reason of sickness, and, relying on the statement made by the defendant that said sum of $100 was all that was due her under the terms of said certificate of membership, the constitution, and by-laws of said defendant, she accepted the $100 and executed a release of all claims; that the statements by the defendant to her to induce her to execute said release and accept said $100 in full settlement of her claims against the defendant were made with a false and fraudulent intent of defrauding the plaintiff out of the sum of $5,000 to which she was entitled under the terms and conditions of the by-laws of the defendant in this, to wit, that the defendant is an assessment life and accident association under the laws of the state of Missouri as aforesaid, and that it has membership in many of the states of the United States, including the states of Indiana, Illinois, and Missouri; that according to the statutes of the state of Missouri it shall be no defense that the insured committed suicide, unless it shall be shown to the satisfaction of the court or jury trying the cause that the insured contemplated suicide at the time he made his application for the policy, and any stipulation in the policy to the contrary shall be void; that the Supreme Court of Missouri held that the provisions of said section applied to policies issued by accident insurance companies; that said statute is in full force, and was in full force and effect at the time the certificate of membership herein mentioned was issued and at the time of the death of said Charles W. Smith; that the provisions of said section and the decision above quoted construing the same were fraudulently concealed from her by the defendant, and that she had no knowledge of such provision and construction at the time she executed said release; that under the decision of the Court of Appeals it was held that any provision in an accident insurance policy reducing the death benefit on account of suicide is void; and plaintiff further says that under a decision of the Supreme Court of the United States, in the case of Whitfield ex rel. Hadley v. Ætna Life Insurance Co., 205 U. S. 489, 27 Sup. Ct. 578, 51 L. Ed. 895, construing said section of the statutes of Missouri, it is also held that any provision in an accident policy, reducing benefits in case of suicide not contemplated at the time of the taking out of the policy, is void; that the defendant had falsely and fraudulently concealed from the plaintiff the true facts of such decision, although the defendant well knew the construction the courts of Missouri had placed on said section, and the plaintiff, being ignorant in matters of law and not versed in the decision of the courts, had no knowledge of such facts and decision by the Missouri courts and the Supreme Court of the United States, but that, believing the assertions and statements of the defendant that the said provision of its by-laws was valid and that she was entitled only to the sum of $100, she executed said release as aforesaid; that the said Charles W. Smith, during his lifetime, performed all the provisions and conditions of the contract on his part to be performed, and violated none of the conditions thereof, and that this plaintiff has performed all the terms and conditions of said contract on her part to be performed; that she made demand in writing upon the defendant for the balance due her under said certificate of membership, and that the defendant refused said demand and denied all liability to plaintiff; that a copy of said certificate issued to said Charles W. Smith is filed therewith and made a part of that paragraph of complaint. Then follows the demand for relief.

In the third paragraph the plaintiff sets out facts similar to those set out in the first paragraph, and also avers that certain articles of incorporation of the defendant association make certain provisions as to the agreement of the policies, and sets out in full section 2 of the constitution of the defendant, showing the amount of liability of the company and the exception on account of suicide. Then follows the averment similar to those set out in the first paragraph set out above, closing with a demand for $7,000 and for all other proper relief.

The defendant filed a demurrer to each paragraph of the amended complaint for want of facts, which was overruled by the court.

The defendant filed an answer in three paragraphs; the first being a general denial. The second paragraph alleges that Charles W. Smith died a suicide, and that under the terms of the certificate of membership, as set out in the complaint in such case, this defendant was not to be liable for a greater sum than $100, and alleges that on the 25th day of October, 1905, it paid plaintiff in this case (the beneficiary under the...