Red Men's Fraternal Accident Ass'n of America v. Rippey

Cox, J. Appellant issued to appellee’s husband a benefit certificate, June 12, 1908. He died December 28, 1908. Among other provisions for benefits and indemnity for sickness, accident and death, the certificate provided that, in case of the death of the certificate holder, while the certificate was in force, the association would pay to appellee, his wife, if living, under conditions contained in the • certificate, the sum of $100, if the certificate holder should die as the result of sickness. Appellee sued to recover this sum. Appellant answered the complaint by general denial. There was also a special answer which was based on a provision in the certificate which limited the agreement of the association to pay the sum named. This provision was as follows: “During the first twelve months from the date of this certificate, or any reinstatement thereunder, no indemnity or benefit shall be claimed or be payable if the disability or death is caused or contributed to by rheumatism, lumbago, sciatica, or tuberculosis which shall exist or commence within twelve months from the date of this certificate.” This answer alleged that the certificate holder died on December 30, 1908, within twelve months of the date of the certificate; that the cause of his death was pulmonary tuberculosis and that, therefore, no liability on the certificate had accrued. A general denial was replied to this answer and the issues thus formed were tried by jury which found for plaintiff. Prom a judgment thereon comes this appeal. The only errors assigned and not waived arise from the action of the conrt in overruling appellant’s motion for a new trial. Some of the causes for a new trial presented by appellant’s motion are based on the action of the trial [457] court in giving instructions on its own motion and at the request of appellee and its refusal to give instructions requested by appellant. One of these instructions, which was given by the court at the request of appellee over appellant’s objection and exception, was as follows: “The jury is instructed that the defendant to sustain its second paragraph of defense in this cause, must show by a fair preponderance of the evidence that James P. Rippey, the insured, came to his death by pulmonary tuberculosis or that said disease was the proximate cause of his death, and that said defendant returned or offered to return the premiums to plaintiff before the bringing of this suit.” The court also gave at the request of appellant the following instruction: “The defendant has alleged in its answer to the complaint that the deceased died of tuberculosis, and that his death occurred within the year from the date of the execution of the contract sued on, and I instruct you that if you find from a fair preponderance of the evidence in this case that the deceased did die of tuberculosis within a year from the execution of the contract or policy, then I instruct you that the plaintiff cannot recover, and your verdict should be for the defendant. ’ ’ 1. [458] 2. 3. [457] The benefit certificate issued to appellee’s husband contained the provision set out in appellant’s second paragraph of answer as above stated. It can scarcely be doubted that there may be a valid stipulation in a policy of life insurance wholly exempting the insurer from liability in case of death from some specified disease, or cause, and it follows that a. certificate or policy of insurance may provide that there shall be no liability on the 'part of the insurer if the insured die within a year, from some cause of disease excepted from the general provisions of the contract to insure against death. 25 Cyc. 874, and eases there cited; 2 Bacon, Ben. Soc. and Life Ins. (3d ed.) §320; 2 Beach, Insurance §912; Knights, etc., Ins. Order v. Schoaf (1906), 166 Ind. 367, 77 N. E. 738. In such case, the in [458] surance is of a limited nature until after the expiration of the time named and there is no insurance against death from the excepted disease or cause within the time specified. Death from the excepted cause within the time fixed by the certificate is a matter of defense and need not be negatived or anticipated by the complaint, the burden resting on the insurer to allege by answer and to prove by a preponderance of the evidence the fact of death from the excepted cause within the time named. When alleged and proved, the defense is complete. 4 Joyce, Insurance §3684; Coburn v. Travelers Ins. Co. (1887), 145 Mass. 226, 230, 13 N. E. 604; see cases collected in note to Starr v. Aetna Life Ins. Co. (1905), 4 L. R. A. (N. S.) 636. Such a provision is similar to a provision against liability in case of death from suicide and the rule just stated has been frequently applied to such cases. Modern Woodmen, etc. v. Craiger (1910), 175 Ind. 30, 92 N. E. 113, 93 N. E. 209; Modern Woodmen, etc. v. Kincheloe (1911), 175 Ind. 563, 94 N. E. 228, Ann. Cas. 1913 C 1259; Hodson v. Great Camp, etc. (1911), 47 Ind. App. 113, 93 N. E. 861. 4. [459] 5. [458] The instructions set out above are harmonious in correctly placing the burden on appellant of showing death from an excepted cause within the time named in the certificate. But the last clause of the first named instruction — that given by the court at the request of appellee, which required appellant also to show by a fair preponderance of the evidence that appellant had returned or offered to return the premiums before the suit was brought— is radically erroneous. Appellant was not required to return or offer to return any premiums before availing itself of this defense. As we have seen, by the terms of the contract, the insurance was in force from the beginning, as to all manner of death save from causes specifically excepted and it would become in force as to these after the lapse of a year from the date of the certificate. Upon these terms, [459] the insured paid his premiums. The insurance contracted for had been given by appellant and it was under no duty to return the premiums. Such cases as Commercial Life Ins. Co. v. Schroyer (1911), 176 Ind. 654, 95 N. E. 1004; and American Cent. Life Ins. Co. v. Rosenstein (1910), 46 Ind. App. 537, 92 N. E. 380, which hold that answers which seek to avoid liability on insurance contracts on the ground of fraud in making false answers to questions in the application for insurance which affect the risk, must, before they are sufficient to defeat a recovery, show a seasonable election to avoid and rescind the contract and to tender back the premiums recovered, have no application to an answer based on a provision limiting the risk such as that before us. The theory of such cases is, that by reason of the fraud there has been no contract from the first if the insurer elect to rescind and avoid it for the fraud, — that there has never been any insurance and no liability to pay on the part of the insurer, and, therefore, no premiums earned. In the case before us there has been some insurance from the inception of the contract but that insurance did not cover loss from death from tuberculosis during the first year of the contract. The premiums were earned in accordance with the unmistakable terms of the contract and appellant was not under obligation to return them. The answer was met by a general denial and there was no issue raised by any pleading in the case which placed any duty on appellant to return premiums. That part of the instruction under consideration was erroneous and not applicable to any evidence which would have been relevant and material under the issues. In the particular under discussion it was antagonistic to the instruction given at the request of appellant which was a correct and full statement of the burden resting on appellant in respect to the second paragraph of answer. Under the latter, appellant was not required to show a return or tender of premiums, while under the former he was bound to do so. [460] Which instruction the jury should follow, it could not know. For each of these reasons the court committed reversible error. Rapp v. Kester (1890), 125 Ind. 79, 25 N. E. 141; Winning v. Teeple (1896), 144 Ind. 189, 194, 41 N. E. 600; Chestnut v. Southern Ind. R. Co. (1901), 157 Ind. 509, 62 N. E. 32; Cleveland, etc., R. Co. v. Rudy (1909), 173 Ind. 181, 189, 89 N. E. 951. 6. The evidence is not in the record and counsel for appellee seek to avoid a reversal for error in giving instructions by invoking the well-settled rule that instructions will not be reviewed on appeal in the absence of the evidence. But the rule, as shown by the eases just cited, does not apply to instructions which must be held erroneous, if improper under any evidence admissible under the issues, and that, as has been shown, is the fact in this case. 7. Counsel for appellant makes complaint of other instructions, one given by the court of its own motion and others at appellee’s request. They were on the theory of a forfeiture of the policy and on the theory of a rescission of the insurance contract. The record shows that no such issues were presented. There was no pleading on behalf of appellant asserting any forfeiture of rights under the policy or for a rescission. The instructions were beyond the issues and should not have been given. Other questions are raised under the motion for a new trial but they are of such a nature that the conclusion reached makes them wholly immaterial. Judgment reversed with instructions to grant appellant’s motion for a new trial.