Van Woert v. Modern Woodmen of America

OhRistiaNsoN, J. This is an action upon a benefit certificate or policy of fraternal life insurance in the sum of $3,000,-issued to the plaintiff’s husband, Tiles J. Van Woert, for the plaintiff’s benefit. The application for such insurance was made on May 8, 1909, and the benefit certificate or policy issued on May 31, 1909, and delivered to the insured on June 12, 1909. The insurance contract consists of the beneficiary certificate together with the application therefor. The application for insurance contains thirty-five questions, together with the answers of the insured thereto. The insured, Jiles J. Van Woert, died on August 30, 1911. Thé cause of his death being what is commonly known as tumor of the brain. The application is expressly made a part of the beneficiary certificate, and a copy thereof attached to and made a part of such insurance contract. The application consists of thirty-five questions and answers, and at the top of each page of the application it is provided that the application must be completed in the presence of and with the aid of the camp physician. After all the questions and answers in the application and above the signature of the applicant, the following is found: “Applicant will please note this clause.” “I have verified, each.-of the foregoing answers and statements from 1 to 35, 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 ,1 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. I further agree that the foregoing answers and statements, together with the preceding declaration, shall form the basis of;the contract between me and Modern Woodmen of America, and are'offered by me as a consideration for the contract applied for, and are. hereby made a part of any benefit certificate that may be issued on.’ this application, and shall be deemed and taken as a part of — 448 — such certificate; that this application may be referred to in said benefit certificate as the basis thereof, and that they shall be construed together as one entire contract; that inasmuch as only the head officers of the society have authority to determine whether or not a benefit certificate shall issue on any application, and as they act upon the written, statements, answers, warranties, and agreements herein made, no statements, promises, knowledge, or information had, made, or given by or to the person soliciting, taking, or writing this application, or by or to any person, shall be binding on the society or in any manner affect its rights, unless such statements, promises, knowledge, or information be reduced to writing and presented to the head officers of the society at or before the time any benefit certificate shall be issued hereon; and I further agree that if any answer .or statement in this application is not literally true, that my benefit certificate shall be Amid. . . .” Among the questions propounded to applicant in the application are the following two questions (to both of which he answered, “No.”): (a) “Have you, within the last seven years, been treated by or consulted any person, physician, or physicans in regard to personal ailment?” (b) “If so, give' dates, ailments, duration of attacks, and name and address of each and ..all persons or physicians consulted or by whom treated.” “Have you ever had any of the following named diseases or symptoms, to wit, . \. . tumors ?” The application containing the answers and warranties of the applicant was signed by the applicant. In the body of the benefit certificate it is expressly agreed: “This benefit certificate is issiied and accepted only upon the following express warranties, conditions, and agreements: . . . (1) That the Modern Woodmen of -America is a fraternal beneficiary society. . . . That the application for beneficial membership in this society made by the said member, a copy of which is hereto attached, and made a part hereof, together with the report of the medical examiner, which is on file in the office of the head clerk, and is hereby referred to and made a part of this contract, is true in all respects, and that the literal truth of such application, and each and every part thereof, shall be held to be a si{nct warranty, and to form’ the only basis of the liability of this s’pciety to such member and to his beneficiary or beneficiaries, the same a¡? if fully set forth in this certificate.' (2) That if said application .shall! not be — 449 — literally true in each and every part thereof, then this benefit certificate shall, as to said member, his beneficiary or beneficiaries, be absolutely null and void. (5) . . . If his said application for membership or any part of it shall be found in any respect untrue, then this certificate shall be null and void and of no effect, . . . and all rights and benefits which may have accrued on account of this certificate shall be absolutely forfeited and this certificate shall become null and void.” On the first page of the benefit certificate, printed in large red type (in fact this is the only part of the certificate in red type), is found the following: “A copy of your application for membership is attached to this certificate — READ IT — if any answer or statement therein is not correct, notify the head clerk at once.” The principal defense is that the policy is void because the answers made by the insured in the application, to the effect that he never had a tumor and that he had not within the last seven years been treated by or consulted any person, physician, or physicians in regard to his personal ailments, were untrue, and that his untrue answer to such questions were breaches of the warranties contained in the application and beneficiary certificate. The case came on for trial before a jury, and the undisputed testimony showed that in the year 1907 Jiles J. Yan Woert’s left eye became inflamed, presumably from flax chaff. On bandaging his left eye, he discovered that he could not see well with his right eye. His condition growing no better, in the spring of 1908 he consulted Dr. A. Carr, of Minot, North Dakota, relative to his eyes. At that time he gave Dr. Carr a history of the trouble, and the doctor made an examination for the purpose of diagnosis and treatment, and found that there existed a partial atrophy of the optic nerve, slight as to the left eye, and more pronounced as to the right eye. The field of vision was contracted, and this contraction was more pronounced in the right eye than in the left. Dr. Carr then advised Mr. Van Woert that this affliction was not a primary one, and that he was unable to diagnose the primary trouble, but further advised Yan Woert to consult specialists in Minneapolis and St. Paul relative thereto. That thereafter, and in January, 1909, Yan Woert returned to Dr. Carr for further consultation and treatment, and at that time told Dr. Carr that he had visited specialists in St. Paul and that they had directed him to return to Dr. Carr for further treatment, and Dr. Carr did so — 450 — treat him for some time, and be did not recover. Aside from tbe condition of bis eyes and tbe apparent atrophy of tbe optic nerve, tbe deceased was a robust and apparently strong, bealtby man. During all tbe time subsequent to tbe deceased’s first treatment by Dr. Carr, there bad been a gradual loss of vision on tbe part of tbe deceased, and in tbe spring of 1910 be went, by tbe advice of bis physician at Mohall, N. D., to Dr. O. E. Eiggs of St. Paul, Minnesota, for diagnosis. Dr. Eiggs is a specialist in tbe line of neuro diagnosis. On consultation Mr. Van Woert disclosed tbe facts, heretofore recited, to Dr. Eiggs relative to bis physical condition, and further disclosed that in tbe fall of 1909 be was taken with projectile vomiting followed by vertigo. lie commenced to have severe headaches, began to take on flesh rapidly, was troubled with loss of memory, and was unable to distinguish certain well-defined odors, and could not tell sweet from bitter. After an examination of tbe case, Dr. Eiggs diagnosed the same as tumor of tbe brain, and advised Van Woert to go to Dr. Harvey Cushing, then of Johns-Hopkins Hospital, at Baltimore, Maryland, for operation. This be did and was operated upon in tbe early summer of 1910 for tumor of tbe brain, or more properly speaking tumor of tbe pituitary body, one of tbe ductless glands located at tbe base of the brain about 1-£ or 2 inches back of tbe eye. Tbe atrophy of tbe optic nerve heretofore referred to was caused by a pressure upon tbe optic nerve, — this pressure being induced by tbe enlargement or tumor of tbe pituitary body. At tbe time of tbe operation Van Woert bad become totally blind in bis right eye and vision in bis left eye was every greatly impaired. A portion of tbe pituitary body was removed, and Van Woert returned to Dakota hopeful of recovery. He disclosed to Dr. Cushing, aside from tbe facts heretofore recited, that long prior to any apparent illness upon bis part be bad been kicked in tbe bead by a horse. Van Woert died about August 3.1, 1911, and tbe direct cause of bis death was tbe tumor of tbe brain or pituitary body above referred to. Dr. Cushing is in charge of tbe department of neural surgery of Harvard Medical College, and formerly was in charge of tbe same department in Johns-Hopkins University. He has written a book upon disorders of tbe pituitary body, and is one of tbe recognized authorities in tbe United States upon the subject. He testified that in — 451 — bis opinion Van Woert bad been suffering from tbe disorder, to wit, tumor of tbe pituitary body for many years, and tbat tbe same was in existence as early as 1907. Dr. Biggs is a diagnostician of long years’ experience and is one of tbe recognized authorities on neuro diagnosis. lie testified tbat in bis opinion tbe tumor referred to was in existence as early as 1907. Dr. Carr testified tbat a tumor of tbe pituitary body was an extremely dangerous affliction, and tbe percentage of deaths resultant therefrom under tbe recorded cases was very high; tbat atrophy of tbe optic nerve was not a primary disorder, and danger to a patient’s life therefrom depended to some extent upon tbe nature of tbe primary disorder. All tbe medical experts agreed tbat tbe impaired vision of Van Woert, and bis eye trouble in 1908 and thereafter, doubtless was due to tbe tumor in question, and no other cause. Tbe above recited testimony was uncontradicted. At tbe close of tbe testimony, both sides moved for a directed verdict. Tbe court thereupon discharged tbe jury, and subsequently made findings of fact, and ordered judgment in favor of tbe defendant for a dismissal of tbe action. Tbe appeal is taken from tbe judgment so entered. Tbe first error complained of by appellant is tbe failure to submit tbe case to tbe jury. Tbe record in this case shows that at tbe close of tbe testimony and after both parties bad rested, both plaintiff and defendant made motions for a directed verdict, whereupon tbe court said: “Both of these motions, coming at tbe close of tbe testimony, leaves tbe matter for tbe court, and not for tbe jury.” So, so far as this action is concerned, gentlemen of tbe jury, you may be excused from any further attendance in this case.” No request was made by. either side to have any issue of fact submitted to tbe jury. It is tbe settled law in this state tbat under these circumstances, tbe jury was properly discharged and all questions of law and fact determined by tbe court. “By making these motions for tbe direction of a verdict, tbe attitude of each party was tbat there was no issue of fact to be submitted to tbe jury, and tbat tbe court should dispose of tbe case as a matter of law. By such motions they are deemed to have impliedly consented to a disposition of tbe case without tbe aid of a jury, by tbe submission of all questions to tbe court; and if, in disposing of tbe — 452 — case, it should become necessary for the court to determine issues of fact, such parties will not thereafter be permitted to urge that such issues should have been submitted to the jury.” American Case & Register Co. v. Boyd, 22 N. D. 166, 167, 133 N. W. 65. See also Erickson v. Citizens’ Nat. Bank, 9 N. D. 81, 81 N. W. 46; Bank of Park River v. Norton, 12 N. D. 497, 97 N. W. 860; Umsted v. Colgate Farmers’ Elevator Co. 18 N. D. 309, 122 N. W. 390. Appellant’s next contention is that applicant had no actual intent to deceive the defendant by the erroneous answers, and that under the provisions of § 6501 of the Comp. Laws of 1913, and the construction placed thereon by this court in the case of Soules v. Brotherhood of American Yeomen, 19 N. D. 23, 120 N. W. 760, the statements contained in the application must be treated as representations rather than warranties. Respondent, on the other hand, contends that under the provisions of § 5043, Comp. Laws 1913, the defendant is not subject to the general insurance laws of the state, and that for that reason § 6501 of the Comp. Laws has no application. The greater portion of appellant’s argument is devoted to an attack upon the defendant and its methods of doing business, and it is contended that the defendant is not in fact a fraternal beneficiary society, but is merely an insurance company, and for that reason is not entitled to be exempted from the general insurance laws even though such associations are exempted from the provisions of such laws. Appellant’s counsel also severely criticizes the wisdom and policy of such laws. The fact that the defendant in this case is a fraternal beneficiary association is not open to controversy, as this fact is expressly pleaded in plaintiff’s complaint and admitted in the answer. Whether it is a wise legislative policy to exempt fraternal beneficiary societies from the operation of general insurance laws, either in whole or in part, as provided by §§ 5043 and 5061A, Comp. Laws 1913, is not a question for this court to determine. This court is itself created by law, and is not superior to, but bound by'all valid enactments of, the legislature. Its function is to interpret, not to make, laws. Whether or not valid legislative enactments are wise or unwise, desirable or undesirable, is not for us to say, but is purely a question for the legislature, and the responsibility for the continuation or abolishing of such legislative policy rests solely upon the legislature, and not upon the courts. — 453 — It is unnecessary for us, in tbis case, to decide wbetber or not § 6501, Comp. Laws 1913, is applicable or inapplicable to tbe contract involved in tbis ease. And for tbe purpose of deciding tbis case we will assume, without deciding, that tbis section applies. Tbe section in question is as follows: “No oral or written misrepresentation made in tbe negotiation of a contract or policy of insurance by tbe insured, or in bis bebalf, shall be deemed material or defeat or avoid tbe policy or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increased the risk of loss.” Tbe statement by tbe applicant that be bad not been treated by or consulted any physician in regard to any personal ailment within tbe seven years last preceding tbe date of tbe application was contained in tbe application, signed by him and referred'to in tbe policy and is expressly declared to be a warranty by tbe parties to tbe contract and must be given such effect by tbis court. §§ 6519-6528, Comp. Laws 1913; Satterlee v. Modern Brotherhood, 15 N. D. 92, 98, 106 N. W. 561. In Soules v. Brotherhood of American Yeomen, 19 N. D. 23, 120 N. W. 760, tbis court held that § 6501 of tbe. Compiled Laws applied to statements contained in tbe application denominated warranties as well as to so-called representations, and that “there is no more reason why a warranty not material to tbe risk should vitiate a policy, than there is that misrepresentations as to a nonmaterial fact should do so.” We have no intention of disapproving tbe doctrine laid down in that case, but on tbe contrary entirely approve thereof. It will be observed, however, that under tbe express language of § 6501, Comp. Laws, as well as tbe decision of tbis court in Soules v. Brotherhood of American Yeomen, supra, it is held that if tbe matter so misrepresented or falsely warranted increased tbe risk that then it would avoid tbe policy. Tbe question is therefore, Bid tbe matters misrepresented and falsely warranted by tbe applicant in tbis case increase tbe risk? It cannot be said that- tbe question wbetber applicant bad consulted a physician within tbe last seven years asked for an expression of opinion. It asked for certain information which applicant could give more readily and accurately than any other person. Tbe latter part of tbe same question asks for particulars, including the names and addresses of tbe physicians consulted. Even though applicant believed — 454 — that the trouble with his eyes was only local, still the defendant had a right to a complete, truthful answer in order that it might make such further investigation as it- deemed necessary. By answering the question in the negative, the applicant withheld from the defendant the very information the question submitted was expected to furnish. The applicant warranted that he had not consulted a physician within the last seven years, and that he was not suffering with a tumor. The undisputed evidence in this case shows that both of these warranties were • untrue. They were both material facts which increased the risk. The truth of the conditions warranted is a condition precedent to recovery. Whether the applicant acted in good faith is immaterial. Satterlee v. Modern Brotherhood, supra, Bacon, Ben. Soc. § 197. McDermott v. Modern Woodmen, 97 Mo. App. 636, 71 S. W. 833. As was said by this court in the case of Satterlee v. Modern Brotherhood, supra: “If the matter misrepresented increased the risk of loss, it is still wholly immaterial whether the matter was intentionally or innocently misrepresented. The applicant in this case w.arranted that she was not pregnant. That this warranty was untrue cannot be seriously questioned. That a state of pregnancy materially increased the risk of loss is abvious. It was a material fact which increased the risk of loss; and the warranty with respect to it was untrue, however innocent the applicant may have been of any intentional misrepresentation. The warranty being false, the contract was viti•ated.” The decision of this court in the case of Soules v. Brotherhood of American Yoemen, supra, in no manner questioned the soundness of the doctrine laid down by this court in the case of Satterlee v. Modern Brotherhood, but merely held that a warranty not material to ■the risk would not vitiate the policy any.more than a misrepresentation as to a nonmaterial fact would do. We are clearly satisfied that the risk in this case was greatly increased by reason of the misstatements made by the applicant, as it is established by the undisputed evidence in this case that the very ailments for which he had been seeking medical treatment were the recognized symptoms of the disease from which he eventually died. In view of the false warranties the policy never attached, but was void ab initio. “A breach of rvarranty without fraud merely exonerates an insurer from the.time that it occurs, or 'when it is brolcen in its inception> prevents 'the policy from attaching — 455 — to the risk.” Comp. Laws, 1913, § 6528. McDermott v. Modern Woodmen, supra; Beard v. Royal Neighbors, 53 Or. 102, 19 L.R.A.(N. S.) 798, 99 Pac. 83, 17 Ann. Cas. 1199; Hoover v. Royal Neighbors, 65 Kan. 616, 70 Pac. 595; Cobb v. Covenant Mut. Ben. Asso. 153 Mass. 176, 10 L.R.A. 666, 25 Am. St. Rep. 619, 26 N. E. 230. Complaint is also made of the court’s ruling in sustaining an objection to an offer of proof made by the defendant, and the refusal to permit an amendment of the complaint at the close of plaintiff’s case. The evidence offered was so clearly inadmissible and the court’s rulings in excluding the same so entirely proper, under the most elementary and fundamental rules of evidence, that no good purpose would be served by entering into a lengthy discussion of this feature of the ease. The proposed amendment to the complaint was to the effect that the defendant had received the last assessment and proof of death of the insured, and that the board of directors had taken action thereon, and that for that reason defendant was estopped to deny liability. This constituted matter in avoidance of the affirmative defense set forth in the answer, and might have been proper by way of reply, but had no place in the complaint. And under the provisions of §§ 7467 — 7477, Comp. Laws 1913, plaintiff could have offered the evidence in question without a reply. Plaintiff, however, offered no evidence whatever in support of this proposition. But plaintiff would not be entitled to recover even though such evidence had been introduced. It is not contended that defendant or its officers had any knowledge of the false warranties at the time of the receipt of the assessment or the proofs of death. On the contrary, it is conceded that they had no such knowledge or notice until sometime subsequent thereto, and that when such knowledge and notice was received, payment under the benefit certificate was promptly refused. In the absence of such knowledge or notice there can be no estoppel or waiver on the part of the defendant. 25 Cyc. 859; Bacon, Ben. Soc. § 436; Finch v. Modern Woodmen, 113 Mich. 646, 71 N. W. 1104; Modern Woodmen v. Wieland, 109 Ill. App. 340; Marcoux v. St. John Baptist Beneficence Soc. 91 Me. 250, 39 Atl. 1027; Callies v. Modern Woodmen, 98 Mo. App. 521, 72 S. W. 713; Dunn v. Merrimack, County O. F. Mut. Relief Asso. 68 N. H. 365, 44 Atl. 44; Preuster v. Supreme Council O. C. F. — 456 — 135 N. Y. 417, 32 N. E. 135; Stuart v. Mut. Reserve Fund L. Ins. Co. 78 Hun, 191, 28 N. Y. Supp. 944. We find no error in tbe record which would justify a reversal of the judgment; the findings of the trial court are sustained by the undisputed evidence in the case, and the conclusions of law of the trial court are clearly correct. The judgment appealed from is therefore affirmed.