Erickson v. Ladies of the Maccabees of the World

SMITH, J. On the 13th day of January, 1906, one Blanche Erickson took out a membership or policy of life insurance for $1,000 in the defendant corporation, a mutual benefit association organized under the laws of the state of Michigan, and thereafter paid all premiums and assessments to March 3, 1907, at which date she died. Isabelle P. Erickson, a minor daughter, was named as beneficiary, and brings the action by her guardian, John P. Erickson, to recover the amount claimed to be due upon said policy. The statements and answers contained in the application and the medical examination are expressly made a part of the contract of insurance. The following warranty is a party of the contract: “I hereby warrant * * * that my age as written herein is correct, and that all the statements herein and the statements and answers in my medical examination which is attached hereto and made a part hereof, are full, complete, and literally true in every respect, and that they and each of them are material and absolute and unconditional warranties, and I agree that any untrue statement or answer.as hereinbefore contained or written, or any omission or failure to state and answer fully and truthfully in writing, any matter in my medical examination * * -* shall ■be a breach of this warranty, and of itself forfeit and terminate all of my rights as a member of the order, and of my beneficiary or beneficiaries. * * *” In the application for insurance, the insured stated: “I was born on the 17th day of June, 1878, and am 28 years old on my nearest birthday.” * In the medical examination are the following statements: “Family History. Note. — In giving the cause of death, avoid all indefinite terms, such as ‘exposure/ ‘general debility/ ‘effects of cold/ ‘fever/ ‘complication of diseases/ etc. If the word ‘childbirth’ be used, state how long after delivery death occurred, and whether there were any evidences of disease of the lungs, if the health of any of the living members is rated as ‘fair’ or ‘poor’ state the nature of the ill health. — 188 — “Father. Age at death — 56. Cause of death — Accident. Year of death — About 1896. Place of death — Eau Claire, Wis. How long sick — 3 day.s. Previous health — Good. “Mother. Age at death — 44 Cause of death — Childbirth. Year of death — About 1890. Place of -death — Eau Claire, Wis. How long sick — 3 days. Previous health — Good. “Give history of your children, both living and dead. One stillborn and one eighteen months. * * * Have you ever miscarried ? No.” The contract or policy of insurance also contained the following clause: “That this application, my benefit certificate and the laws of ■the order, as now in force, or as may hereafter be enacted or amended, constitute my-entire contract with the order, and determine my rights and those of my beneficiary; that the laws of the order may be revised, repealed or amended, and that -my lights as a member and those of my beneficiary may be thereby modified, enlarged or reduced, from time to- time, and shall be determined by the agreements herein, and by the laws in force at the time of my death.” • Notice and proofs of death were submitted to the defendant association. On the trial of the action, along with the general issues raised by the pleadings, eight special questions were submitted to the jury for answer. The trial resulted in a verdict for the -plaintiff for the full amount of the insurance, and this appeal is from an order overruling a motion for a new trial and from the judgment. There are 54 assignments of. error, a large number of which relate to rulings of the court on matters of evidence a't the trial, and it is apparent that a separate discussion of each would extend this opinion beyond reasonable limits. But we have examined ■the rulings complained of, and are satisfied that none of them are seriously prejudical to defendant’s rights, or demand discussion, save those herein expressely referred to. Upon the trial of the action two of -the by-laws of the defendant association were offered in evidence by plaintiff which read as follows: — 189 — “Section 431. Effect of Untrue Answers in Application.— No benefit shall be paid on account of the death or disability of a member who has given untrue answers in her application for membership; 'provided however, that a member, who, in her application for membership, understated -her age, in good faith and without any intention to deceive shall not thereby forfeit her certificate, if she was under the age limit of the order at the time of her original application. If she was beyond the age limit of the order at the time of making application, her membership shall be void from the beginning whether she knew her correct age or not. “Section 432. Understatement of Age. — In each case where satisfactory evidence has been submitted to the board of trustees showing an understatement of age, made in good faith and without any intention to deceive, the beneficiary of such member shall be entitled -to receive only an amount which bears the same ratio to the amount named in the benefit certificate, as the rate the mem: her paid to the rate the member should have paid based on the actual age the mtmber had attained at the date of her application.” The defendant objected to^ the offer in evidence of these bylaws because it appeared 011 the face thereof that such by-laws were amended by-laws, and became operative in September, 1907, subsequent to the death of Blanche Erickson. The court ruled that, in the absence of any showing that the amended by-laws were ¡substantially different from those in force at the time of her death, the sections might be received in evidence. The record does not disclose any prejudical error in this ruling. The reasons assigned by the trial court as the grounds of its ruling are immaterial, if the evidence offered and received was competent. The contract of insurance provides for an absolute forfeiture of all rights when the applicant has made any false statement ais to her age. Such forfeiture could be waived or modified by the defendant company in ’any class of cases in which it might be deemed equitable and proper, and the company might make such waiver alike applicable to> all policies, and to all claims arising after the death of the insured. The very language of this bylaw seems to us to imply such intent on the part of the defendant: — 190 — “No benefit shall be paid on account of the death or disability of a member who has given untrue answers * * *provided however, that a member who * * * understated her age in good faith and without any intention to deceive, shall not thereby forfeit here certificate if she was under the age limit of the order at the time of her original application.” This by-law by its language relates back to the date of the original application in all cases alike, whether the insured be living or deceased at the time of its adoption, and section 432 prescribes that the rule of waiver shall govern the board of trustees in their action upon all claims for deáth losses. It appears in the record that the insured was within the age limit at the time of her application. We are of the opinion, therefore, that 'said by-laws were properly received in evidence, and therefore the court was not in error in receiving over defendant’s objection certain evidence tending to show good faith of the deceased as to the statements concerning her age. In. the application, under the head of Family History, the deceased, Blanche Erickson, stated 'in 'substance that her father died from accident about 1896, that he was sick three days, and that his previous health' was good. The evidence introduced at the trial by respondent shows, quite conclusively, that the father had suffered some years from diabetes or Bright’s disease, and that his death resulted from such disease. In rebuttal of this evidence, or by way of estoppel, the plaintiff called as a witness one Edith Kile, who testified over appellant’s objection that she was secretary of the local lodge of the Maccabees of Watertown in the'year 1905, and knew the deceased in her lifetime; that she solicited the application for insurance, and personally filled out the application.; that at the time the witness fiiled out this application Blanche Erickson stated to her “that her father had not been well; that he had got up out of bed to use a vessel and fell over dead, and that she did not want to give that in; that thereupon the witness, the soliciting agent, suggested to the applicant “■that the word ‘Accident’ would do.” Upon this showing it is contended by respondent that Mrs. Kile, acting. as agent for the company, took the -responsibility of stating the answer in the form appearing in the application, and advised her in effect that — 191 — the answer given would be a proper answer, that Mrs. Kile was the agent of the defendant company as to filling out the blank application, and that the answer inserted by such agent as a sufficient answer to the question is binding upon the defendant company, noth withstanding the application states that the agent should be considered as acting for -the applicant. In support of this contention respondent cites Kausal v. Minnesota Farmers’ Mut. Fire Ins. Co., 31 Minn, 17, 16 N. W. 430, in which Justice Mitchell uses the following language: “1. On principle, as well as for considerations of public policy, agents of insurance companies, authorized to' procure applications for insurance and to forward them to the companies for acceptance, must be deemed the agents of the insurers, and not of the insured, in all that they do in preparing the application, or in any representations they may make to the. insured as to the character or effect of the statements therein contained. This rule is rendered necessary by the manner in which business is now usually done by the insurers. They supply these agents with printed blanks, stimulate them by the promise of liberal commissions, and then send them abroad in the community to solicit insurance. The companies employ them for that purpose, and the public regard them as the agents of the companies in the matter of preparing and filling up the applications— a fact which the companies perfectly understand. The parties who are induced by these agents to-make applications for insurance rarely know anything about the general officers of the company, or its constitution and by-laws, but look to the agent as ’itis full and complete representative in all that is said or done in regard to the application. And, in view of the apparent authority with which the companies clothe these solicitors, they have a perfect right to consider them such. Hence, where an agent to procure and forward applications for insurance, either by his direction or direct act, makes out an application incorrectly, notwithstanding all the facts are correctly stated to him by the applicant, the error is chargeable to the insurer, and not to the insured” (citing Insurance Co. v. Mahone, 21 Wall. 152, 22 L. Ed. 593; Insurance Co. v. Wilkinson, 13 Wall. 222, 20 L. Ed. 617; Malleable Ironworks v. Phoenix Ins. Co., 25 Conn. 465; — 192 — Hough v. City Fire Ins. Co., 29 Conn. 10; Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Miner v. Phoenix Ins. Co., 27 Wis. 693; Winans v. Allemania F. Ins. Co., 38 Wis. 342; Rowley v. Empire Ins. Co., 36 N. Y. 550; Brandup v. St. Paul F. & M. Ins. Co., 27 Minn. 393, 7 N. W. 735; 2 Am. Lead. Cas. [5th Ed.] 917 et seq.; Wood on Insurance, c. 12; May on Insurance, p. 120). And the decision holds the rule applicable tc fraternal companies as to others. The doctrine announced by that learned court -is sound in principle, and has been expressly approved by this court in Smith v. Cash G. F. Ins. Co., 21 S. D. 433, 113 N. W. 94. But 'the doctrine has necessary limitations in its application. The court holds that the soliciting agent is clothed with apparent or ostensible authority as to all matters connected with the making and filling in answers to questions in the application, and that such ostensible authority may not he limited by a provision or notice contained in the policy subsequently issued upon the application. The court remarks, however: “To be efficacious such notice should be given before the negotiations are completed.” The court does not hold that the rule as to limitations upon the authority of insurance agents is different from that governing agencies generally, but only that the ostensible authority of an insurance agent cannot be curtailed by limitations of which the applicant has no notice. The same doctrine is announced by the Supreme Court of North Dakota in the case of Johnson v. Dakota F. & M. Ins. Co., 1 N. D. 167, 43 N. W. 803. That court says: “But’there is nothing in this case tending to show that there was any restriction whatever upon the agent’s authority in the matters intrusted to his charge, viz., the matter of soliciting and -procuring the application for the insurance in question. As to such duties the agent had prima facie plenary powers coextensive with the matter intrusted to him, and such powers cannot be narrowed by limitations not communicated to the insured. See May, Ins. 144, note 1; Miller v. Insurance Co., 31 Iowa, 232. But “where the solicitor of insurance is expressly limited in his authority in the manner of taking the application, and where such limitation is brought — 193 — home to the knowledge of the insured at the time the application is (signed, the insured is hound by the limitation.”» Sutherland v. Eureka F. & M. Ins. Co., 110 Mich. 668, 68 N. W. 985; Carpenter v. Prov. Wash. Ins. Co., 16 Pet. 495, 10 L. Ed. 1044. In the case before us the assured in her application says: “I hereby expressly warrant and agree that no verbal statement to whomever made shall modify this contract or application or the answers herein written to the above question’s. * * * I have read the foregoing application for my membership and fully understand the same. * * *” This written declaration over her own signature, which is in evidence and is not controverted, is sufficient to show, and is an admission of, her knowledge of an express limitation of the authority of the agent taking the application to modify her answers to the questions therein written by any verbal statements made by such agent. And in the application itself 'she expressly declares that such answers are literally true in every respect. We are of the opinion, therefore, that the contention of respondent that the act of the soliciting agent in advising the assured that the “word ‘Accident’ would .do as an answer” 'to the question — which was in effect “State the cause of your father's death” — cannot be sustained as binding upon the defendant. It is, however, earnestly contended by respondent’s counsel that the court may properly construe the question as merely calling for an opinion of the applicant as to the cause of her father’s death, and that an honest answer of the witness giving her opinion cannot be construed or considered to be a false answer, thus bringing this case within the rule laid down in M. W. A. v. Wilson, 76 Neb. 344, 107 N. W. 568, Rupert v. Supreme Court U. O. F., 94 Minn. 293, 102 N. W. 715, and other decisions there cited. The evidence conclusively shows that the father’s death was the culmination of disease, which was known to the members of the family as Bright’s disease or kidney complaint, or some similar disease. And had the applicant chosen to express an opinion as to the particular form of disease which caused her father’s, death, the doctrine of these cases might be readily applicable. In — 194 — such case the answer, though incomplete, might be held truthful and responsive and 'sufficient. O’Connor v. M. W. A., 124 N. W. 454. In the case of M. W. A. v. Wilson, supra, the application fo<r insurance contained the following statement: “I have verified each of the foregoing answers and statements from 1 to 28 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 the foregoing answers.” The defense relied upon was that the answers of the assured to questions in the application were made by the applicant in regard to matters within his knowledge and material to the risk, and that tsuch answers were incomplete and untrue. The trial court submitted the case to the jury on the theory that “incomplete or untrue answers to questions in the application would not-defeat a recovery on the certificate unless such answers or some of them were intentionally incomplete or false, and made with intent to deceive,” and says: “Whether that theory is sound is the question now presented- by t-he record; * * * the defendant contending that the honesty and good faith of the assured in making -the answers in question are eliminated from the case because -such answers are in regard to matters which were within the personal knowledge of the assured and untrue.” The court in discussing its former ruling in Royal Neighbors v. Wallace, 73 Neb. 409, 102 N. W. 1020, says: “* * * But while the doctrine announced would necessarily eliminate the question of the good faith and honesty of the assured as to untrue answers in -regard to matters within -his knowledge, it would not eliminate the question of his honesty and good faith as to the construction to be -placed upon the -questions propounded in the application. Every practitioner knows that it frequently happens that an apparently false answer is given to a question simply because the wi-tness gathers a different meaning- from the question than that his interrogator intended to convey. Hence ordinarily the first question that arises when the truthfulness of an amswer is challenged is whether the party giving the answer understood — 195 — the question. The assured is dead, and is not here to 'explain why he answered as he did; the questions are not of his framing, but of the defendant, thought out and elaborated in the quiet of an office where every word was examined and carefully weighed. The assured was a farmer and -many of the wordis and the combinations in which they were used were undoubtedly new to him. Under such circumstances it is .highly probable that the assured failed to grasp the true import of some of the questions. As the questions are made a part of the contract, and were prepared by the defendant, they should be construed most strongly against it (Conn. F. Ins. Co. v. Jeary, 60 Neb. 338, 83 N. W. 78, 51 L. R. A. 698), and where any of such questions are so framed o.r placed that the assured may have honestly mistaken stheir true import, and gave answers thereto which are in fact untrue, but true as he may have reasonably understood the questions, it iis for the jury to say, we think, in the light of the entire transaction, whether in making his answers he acted honestly and in good faith, and without intention to misrepresent or conceal material facts.” The defendant in the case before us framed its own questions. The one under consideration’ required the applicant to state the ‘‘cause” of her father’s death, and required her to give an answer ‘‘literally true.” Such a question upon such conditions is little short of a trap for the feet of the uninformed and unwary. A dozen doctors might have disagreed ais to the “cause” of her father’s death, and yet the applicant was required to give the literally true and correct answer or forfeit her rights. The question, the answer, and the conditions in the contract dependent thereon, constitute the entire warranty, and the proper construction to be placed upon such warranty is and -must always be a matter for the court tq, determine. We do not question the right under the statute of parties to agree' that immaterial representations shall be deemed warranties, but we maintain the right of the courts to give every warranty its reasonable construction, where the language of the question and answer may be open to construction or interpretation. When the question is so framed that it calls for specific facts within the actual knowledge of the applicant, and plainly excludes matters of opinion or judgment, no — 196 — interpretation is possible or required. But when the questions, whether they relate to matters ordinarily deemed material or immaterial, are open to construction or interpretation, they may and should be interpreted to the jury by the court as a part of the contract of the parties. And where the answer upon any fair interpretation of the meaning of the question itself, as it might have been understood by the applicant, may be deemed a true answer, no forfeiture of rights should be permitted. The ascertainment of the exact and the true intent and meaning and purpose of the parties as expressed by the language of the contract is the purpose of interpretation. Applying the, rule of interpretation, what did the insurer seek to ascertain when he asked the question “State 'cause’ of father’s death.” Did the insurer intend to require the applicant to answer a question which its own medical expert, with every fact known to the applicant before him, might be unable to answer? Why did the insurer seek information in regard to the father’s death ? The insurer most' certainly knows exactly what specific facts it seeks to ascertain, and why, but the applicant, not an expert in insurance, may know neither. The death of the father from some form of external violence would be wholly immaterial to the purpose of the insurer. Death from disease in some of its multitudinous forms is the fact which may be assumed to be in the mind of the insurer when he framed the question Does the question under consideration in this case place clearly before- the mind of the applicant the distinction between death resulting from disease and death from some, form of external violence? If not, how may the applicant construe the question? While her statement to the soliciting agent as to her father’s death may not be received to relieve her from the effect of a concededl'y. false answer, it might tend to show how she understood the question asked. The evidence shows that her father had been in ill health, and had some disease which the doctors called diabetes or Bright’-s disease, but it nowhere appears that she understood he was ill o'f a disease necessarily fatal. His death was sudden, unexpected, shocking, and may it not be said it was “accident” within the well-defined meaning of that word, and that — 197 — she intended merely to express that idea? Webster defines “accident” as: “Literally a befalling; an event that takes place without one’s foresight or expectation; an undesigned, sudden and unexpected occurance of an afflictive or unfortunate character; a mishap, as to die by an accident.” B.ut appellant seeks to give the word a restricted construction in its favor,- and against the assured, by attaching to it in effect the meaning specifically defined in accident insurance policies. Such contention cannot be sustained under the authorities. The applicant might have considered her father’s death, with all its attendant circumstances of his falling, and isuddenness, and -unexpectedness and shock, as an accident, and the answer could be held to be false and untrue only by giving the question itself a restricted meaning. This the courts will not do unless -the questions are so specific and so framed as to require it. It seems to us that the rule announced in the case of M. W. A. v. Wilson, supra, is peculiarly applicable to the cas,e before us. The court says: “And where any of such questions are :so framed or placed that the assured may have honestly mistaken their true import, and gave answers thereto which are untrue, but true as he may have reasonably understood the questions, it is for the jury to sa)', we think, in the light of the entire transaction, whether in making his answers he acted honestly and in good faith, and without intention to misrepresent or conceal any material facts.” The substance of this ruling is that an answer which may even be untrue shall not be deemed a false answer within the meaning of the warranty contained in the conaact, and therefore should not be held to avoid the policy, when tne answer of the applicant -may be found to be a true response to her honest conception of the meaning of a general question. In the absence of exceptions to the charge of the court or the refusal of the court to give instructions covering specific propositions, the presumption is that such instructions were given by the court as to present fully and fairly to the jury the exact issues involved in determining the rights of the parties. In this case we have but one exception to the charge of the court, and the portion of the charge excepted to does not relate to the matters here under dis — 198 — cuissiou. The instructions are therefore presumed to have been of such character as to cover fully and specifically every proper and necessary issue before the jury. Under instructions presumed to be correct the jury in this case have found upon a special interrogatory that the cause of death of applicant’s father was acci'dent, and we cannot say upon the record before us that such verdict is not sustained by the evidence. Appellant assigns the insufficiency of the evidence to sustain other special findings of the jury as to alleged false answers in the application. But each of these falls easily within the rule announced in the foregoing discussion and we need not refer to them further at this time. Defendant alleged that assured gave a false answer as to a miscarriage, and on the trial offered evidence of a physician and nurse tending to show such miscarriage. In rebuttal plaintiff offered John Erickson, husband of assured, as a witness, who testified that he and his wife had lived together constantly since their marriage; that -lie had not been away from home any length of time, and stayed right at home with her. He was then asked whether his wife had ever had a miscarriage as alleged by the physician, which was objected to on the ground that the husband cannot be examined as to “communication made by one to the other during marriage.” The question called for a fact and not a communication, and the objection was properly overruled. The evidence as to miscarriage was conflicting, and the finding of the jury will not be disturbed. The issues as submitted to the jury on the trial seem to have presented a breach of warranty arising from the alleged falsity of the answers in the application. No question of fraudulent suppression of facts is involved in -the special questions submitted to the jury, the answers to which by the jury are alleged by appellant to be not sustained -by the evidence. Breach of warranty, and not fraudulent suppression of facts, was the issue tried by the jury, and their finding cannot be attacked now upon the ground that the applicant fraudulently suppressed facts. No request for an instruction on this proposition was made by appellant,' and none given by the court in its general charge. The rule is well stated in Dilleber v. Home Life Ins. Co., 69 — 199 — N. Y. 256, 25 Am. Rep. 182: "Although fraud may be predicated upon a suppression of the truth, warranty is only based on an affirmation of something not true.” In the case of a partial answer a warranty will not extend beyond the answer. The assured in her application stated she was born June 17, 1878, and the jury so found by a special verdict. On the trial respondent offered no direct evidence as to the age of the assured, but appellant introduced evidence showing quite clearly we think that she was born June' 17, 1876, and that her answer was incorrect. Upon this issue we think the evidence does not sustain the finding of the jury. It is, however, contended by respondent that the question of the good faith of the assured in answering this question in the application might be considered by the jury to show that the assured might recover a sum less than the full amount of the policy, under the provisions of sections 431 and 432 of the by-laws above quoted, and the rate card of the appellant was introduced in evidence to determine the amount of recovery under the by-laws. We think respondent is right in this contention. The court instructed the jury. “If you answer the first of the said questions in favor of the contention of the defendant that said Blanche was bom on June 17, 1876, and not on June 17, 1878, as claimed by the plaintiff, you will, if your general verdict be in favor of the plaintiff, reduce the amount of her recovery one-twelfth, so that it will be $916.66 and interest, instead of $1,000 and interest.” This instruction was not excepted to by appellant, and is therefore the law of the case, and is binding upon the appellant. We regard the evidence as insufficient to sustain the general or special verdict for the full amount of the policy because of error .in the answer as to assured’s age. For this reason the case will be reversed and a new trial granted, unless respondent shall within 30 days file with the clerk of the circuit court a remittitur of the amount of said judgment in excess of $9x6.66, and interest thereon from the date of said verdict.