Numrich v. Supreme Lodge Knights & Ladies of Honor

McAdah, C. J., (after stating the facts.) The distinction between a warranty and a representation is that the former is contained in and forms part •of the contract, and must be complied with, whether material to the risk or not, while the latter is outside of the contract, and is immaterial, whether it is true or false, unless material to the risk. Chase v. Insurance Co., 20 N. Y. 57; Campbell v. Insurance Co., 98 Mass. 389. The difference between a •certificate of membership in a beneficial association and a life policy is that, in the latter, the rights of the beneficiary are fixed by the policy, while in the former they depend upon the constitution and by-laws of the society. Benefit Ass'n v. Burkart, 10 N. E. Rep. 79, cited with approval in Grossman v. Supreme Lodge, 13 N. Y. St. Rep. 596. In this view of the law, the fact that the certificate or policy sued upon does not refer to the application, and make it part and parcel of the contract, is not of paramount importance; for the policy in terms requires that the insured, while a member of the Order, :shall comply with all the rules and requirements thereof. The constitution .governing subordinate lodges requires each member of the order to procure a -certificate of his physical condition from the subordinate medical examiner, after undergoing an examination by him, and provides that, “if said medical •examination is approved by the supreme medical examiner, the applicant .shall be entitled to the relief fund; otherwise the applicant is declared ineligible, except as a social member.” Article 6, § 1. The examination, reduced to writing by the subordinate medical examiner, is sent by him to the supreme medical examiner, and, if approved of by him, it is sent to the supreme secretary, who transmits the report to the secretary of the subordinate lodge, and the certificate or policy is thereupon issued to the successful can■didate. Const. Supreme Lodge, art. 9, § 7. The entire scheme shows that the answers of the applicant are made the basis of the contract, and are regarded by the supreme medical examiner and by the lodge as conditions precedent to the contract, and that any untrue declaration by the applicant in regard to his physical condition operates as a fraud upon it. The representa 554 tion made by the insured, that she had not been attended to by a physician* for nine years, was material. It was calculated to induce the belief that her-general health had been good for a considerable period of time, and, appearances favoring that conclusion, the risk seemed to be a fair one for the defendant to assume. The representation was the basis of the contract, (Bliss, Ins. § 293,) and, if in the nature of a warranty, it is practically conceded that the-policy was in consequence avoided. Valton v. Insurance Co,, 20 N. Y. 32; Horn v. Insurance Co., 64 Barb. 81; Smith v. Insurance Co., 49 N. Y. 211; Cushman y. Insurance Co., 63 N. Y. 405; Barteau v. Insurance Co., 67 N. Y. 595; Armour v. Insurance Co., 90 N. Y. 450; Edington v. Insurance Co., 100 N. Y. 536, 3 N. E. Rep. 315; Dwight v. Insurance Co., 103 N. Y. 341, 8 N. E. Rep. 654; Insurance Co. v. France, 91 U. S. 510; Jeffries v. Insurance Co., 22 Wall. 47; Harris v. Society, 3 Hun, 724; Mayer v. Association, 49 Hun, 336, 2 N. Y. Supp. 79. In this case it is not important whether the statement made by the insured is regarded as a warranty or a representation; for being the basis of the contract, and false in a material respect, it defeats the action, whether more properly called by the one name or the other. It is therefore unnecessary to decide under which head it falls. The statement was material to the risk, and. one about which the insured could not have been mistaken. The evidence shows that the plaintiff called five times for medical treatment at the German Polyclinic, to-wit, on October 12, 21, November 4, 9, and 15,1886. She was also-attended by Dr. Guden in July, 1886, and by Dr. Schmidt in the early part of October, 1886. If she had answered that she had been professionally attended at these several times, the medical examiner of the defendant might, and probably would, have made a more searching medical examination, or" consulted these gentlemen, or, without going to further trouble, might have-declined the risk entirely. Her answers are supposed to have influenced his-judgment more or less; as they were favorable, so was the impression they naturally created. The evidence proves that the answers were untrue, and their falsity furnished the defendant with a complete defense. As the amount insured is small, the defendant, as a benevolent organization, might (if it had. chosen to do so) have thrown the broad mantle of charity over its deceased, member by adjusting the loss without litigation, but, as truth and charity seem to be concomitant requirements of the order, the defendant had the legal, right to resist the demand made, and interpose the breach of the one obligation-, as a bar to the enforcement of the other. The liability to pay is founded solely on the contract obligation, which must be enforced ("if at all) by the general, principles applicable to life insurance. The defendant agreed to pay a speei— fled sum on certain contingencies, and cannot be forced to pay it unless they occur in the manner agreed; and, while it may voluntarily bestow charity, it, cannot be compelled to do so against its will. In contracts for life insurance,. the prevailing maxim is uberrima fldes, and the best of faith must be observed by each of the contracting parties, for the foundation stone of the obligations is truth. ■ The defendant was permitted at the trial to prove by the physicians that; they attended the insured professionally. This was proper to establish that, the confidential relation of physician and patient existed between the parties, (Grattan v. Insurance Co., 80 N. Y. 295,) but as soon as the relation was; established the seal of secrecy imposed by the statute was kept sacred, (Code,. § 834,) and thus all evidence of her physicians, tending to show the nature-of the ailment of the patient, or the cause of her death, was kept out of the case. The fact of the medical attendance, however, sufliciently proved the untruthfulness of the representation that she had not been so attended, and established the defense pleaded. The additional fact that the insured lived but two months and twelve days after joining the order gives color, at least, to the claim that the medical attendance was required, not for any imaginary. 555 or temporary ailment, but oné which the after-event (death) demonstrated to be permanently located in the system at the time professional aid was called, and that it was of a nature not calculated to prolong, but shorten, life,—a-circumstance making the risk a precarious one for the defendant to accept. Under all the circumstances, there must be judgment for the defendant.