Woodmen of the World Life Ins. Soc. v. Reese

• Decision Date: 20 December 1943
• Docket Number: No. 7170.,7170.
• Citation: 176 S.W.2d 708
• Parties: WOODMEN OF THE WORLD LIFE INS. SOC. v. REESE et al.
• Court: Arkansas Supreme Court

176 S.W.2d 708

WOODMEN OF THE WORLD LIFE INS. SOC. v. REESE et al.

No. 7170.

Supreme Court of Arkansas.

December 20, 1943.

Rehearing Denied January 24, 1944.

Appeal from Circuit Court, Howard County; Minor W. Millwee, Judge.

Action by Martha Lou Reese and another, by Ressie L. Reese, guardian, against Woodmen of the World Life Insurance Society to recover on a certificate of life insurance. Judgment for plaintiffs, and defendant appeals.

Affirmed.

Rainey T. Wells, of Omaha, Neb., and Jas. S. McConnell, of Nashville, for appellant.

Steel & Steel, of Nashville, and Boyd Tackett, of Murfreesboro, for appellees.

KNOX, Justice.

On August 1, 1940, appellant, a fraternal benefit insurance society, operating under the lodge system, issued its certificate of insurance on the life of Clyde M. Reese, for $2,000, designating his two minor children, Martha Lou Reese and Clyde Edwin Reese, as the beneficiaries thereunder. Insured died on May 29, 1942, in Howard County, Arkansas, where he had resided for many years. Proof of death was made to appellant, but payment was rejected, thereupon this action was instituted. Issuance of the certificate of insurance, the payment of premiums, the death of the insured and the proper presentment of the proof of death are all admitted. Appellant bases its defense upon certain answers made by insured to certain questions contained in the application which appellant contends constituted warranties, and alleges that the same were false. We quote such portion of appellant's answer as will fully disclose its defense:

"5. Defendant states that the said Clyde M. Reese in his application for membership in the defendant society executed and signed and agreed that the said application, the said certificate, the Articles of Incorporation, the Constitution, the Laws and By-Laws and Amendments legally adopted by said Society, and the Laws of the State of Arkansas governing such Fraternal Benefit Societies should constitute the contract between the said Clyde M. Reese, his beneficiaries and the defendant Society, and he, the said Clyde M. Reese warranted that all the answers made by him and set out in his said application for such membership certificate were true and not false. Said agreement and warranty in said application is in words and figures as follows:

"`For the purpose of securing the benefit certificate herein applied for, I hereby warrant that I have not been sick, except as stated herein; that I am now in sound bodily health; that I have no injury or disease that will tend to shorten my life; that I am not addicted to the use of intoxicating liquors, opium or other injurious drugs or substances. * * *

"`I hereby consent and agree that this application, including the foregoing answers made by me under the heading "Personal History" and "Family History" and all the provisions of the Constitution, Laws and By-Laws of the Society, now in force or that may hereafter be adopted, shall constitute the basis for and form a part of any benefit certificate that may be issued to me by the Woodmen of the World Life Insurance Society, whether printed or referred to therein or not.

"`I hereby waive the attaching of a copy of this application to said certificate; and I further waive the provisions of all statutory laws and court decisions in relations thereto; and I further waive for my self and beneficiaries the privileges and benefits of any and all laws which are now in force or may hereafter be enacted in regard thereto disqualifying any physician or nurse from testifying concerning any information obtained by him or her, either heretofore or hereafter, in a professional capacity; and I hereby expressly authorize such physician or nurse to make such disclosures.

"`* * * I hereby agree that the liability of the Society for the payment of benefits shall not begin until after the application shall have been accepted by the Medical Director, a benefit certificate issued thereon and personally delivered to me, as provided in the Constitution, Laws and By-Laws of said Society have been complied with.

"`I further agree that in as much as only the President, Medical Director and Secretary of the Society have authority to determine whether or not a benefit certificate shall be issued to me, and as they act on the written statements and answers in this application, no statement or information given by or to any person soliciting or taking this application, or by or to any other person, nor any knowledge possessed by any such person, shall be binding on said Society, or in any manner effect its liability unless such statements or information be presented in writing to the President, Medical Director and Secretary of said Society at its home office prior to the issuance of the benefit certificate.'

"6. That in the said application for said certificate under the heading of `Personal History' questions were asked and answered as follows: `5. Have you ever used alcoholic liquors or taken treatment for liquor habit? Have you ever habitually used any drug or medicine, opium, cocain or other narcotics. If so, state which, when, to what extent and length of time taken? Answer: "No"'.

"Defendant states that the answer made by the said Clyde M. Reese to said question No. `5' is untrue and constitutes a breach of his warranty and that all his answers to questions should be true, and if false any certificate issued thereon should be null and void, and the Society not be liable for any of the benefits of said certificate.

"That in truth and in fact the said Clyde M. Reese was at the time of signing the said application, and at the time of the delivery of said certificate sued on addicted to the use of alcoholic liquors and had taken treatment for such habit from Dr. E. V. Dildy, Dr. J. M. Proctor and Dr. H. King Wade.

"7. That also in said application for said certificate under the heading of `Personal History' question No. `6' was asked and answer given as follows:

"`6. Have you ever been under observation, care or treatment in any hospital, sanatorium, asylum or similar institution? If so, state which, when, for what length of time. Answer "Yes. Michael Meagher Hospital, Texarkana, Texas. Operation hernia, Dr. J. K. Smith."'

"Also question and answer No. `7': `7. Have you within the past ten years suffered any mental or bodily diseases or infirmity, or have within that period of time consulted, been attended by or examined by a physician? If so, state which, when and give full particulars. Answer, "No" except as stated in No. "6".'

"Defendant states that the answers to said questions made by the said Clyde M. Reese in said application to questions No. 6, and No. 7 are false and untrue. That in truth and in fact the said applicant had suffered of bodily disease of chronic alcoholism during said time and was so suffering at the time and had consulted and been treated by Dr. E. V. Dildy, Dr. J. M. Proctor for said disease and other diseases incident thereto.

"That such false answers constitute a breach of the warranty of the said application that such answers would be true and if not true there should be no liability of the Society for the benefits of said certificate, and that it should be null and void.

"8. That also in said application for the said certificate under the heading of `Personal History' the following questions were asked and answers given by the said Clyde M. Reese:

"`12. Have you ever had any disease or injury other than those above mentioned: If so, give date, disease or injury, duration, name and address of physician. Answer. "No".

"`13. Have you fully recovered from any and all diseases or conditions referred to above. If not, Why? Answer: "Yes".'

"The defendant states that the said answers to the said questions `12 and 13' are false and not true. That in truth and in fact the said applicant, Clyde M. Reese, was at the signing of said application then suffering from severe bodily disease and was then addicted to the use of alcoholic liquors, and was not in good health. That such false and untrue answers to the said questions constituted a breach of applicant's warranty contained in the said application and certificate, that said answers if untrue should void the certificate issued thereon."

Dr. E. V. Dildy, called as a witness for appellant, testified that during the past ten or twelve years of insured's life he had occasion from time to time to treat him—"at times for difficult breathing, some times for indigestion, some times for abdominal pains, and some times for complication of the liver". He admitted that he treated insured during his last illness, and filled out and signed the physician's statement in the proof of death, which showed cause of death as acute nephrites, but, in answer to a question therein propounded he also stated that at his office for the past several years, near ten years, he had from time to time treated insured for "Alcoholism and its usual sequences." In his testimony at the trial Dr. Dildy testified that he had treated insured for flu in 1939 or 1940, and was asked if he had treated him for alcoholism prior to that time, and answered: "Yes for little complications that come up, not directly for alcohol however. I never treated him purely for alcoholism."

The deposition of Dr. John Proctor of Hot Springs was taken on interrogations, and offered in evidence by appellant. He testified that the insured came to his office on August 5, 1939, for the purpose of procuring a prescription to take the Hot Springs' baths, that at such time insured was apparently under the influence of liquor and stated to the doctor that he took the same to relieve pain in his legs, insured did not state that he was addicted to the use of alcohol. That he, the doctor, made only such examination as was necessary in order to prescribe the baths, and therefore would not know whether he was suffering from chronic alcoholism, or any other disease acute or chronic.

Appellant...