Binder v. National Masonic Accident Ass'n

Sherwin, C. J. 1. Permanent total disability: premature action. 'The by-laws of the defendant association provide that: “No benefits shall be due until ninety days after the receipt by the association of complete and satisfactory proofs. And no benefits shall be due until dis-, ability ceases, or the right to benefits has ter- * ° BmiatecL JNo suit shall be brought upon any claim against this association whether disputed or not before sixty days after the presentation to the association of completed satisfactory proofs.” Because of these provisions the appellant contends that this suit was prematurely brought, and should have been dis — 29 — missed, and it relies chiefly upon the provision that “ no benefits shall be due until disability ceases or the right to benefits has terminated.” It is said' that by the terms of this provision no claim for disability can be made until the disability ceases by death, or by recovery, or by the expiration of the time during which a right to benefits has existed. Whether such is the correct construction of the provision depends largely upon the question'whether the contract provides for the payment of a sum certain for “ permanent total disability.” If it does, as we shall hereinafter attempt to show, it is clear that the provision is not applicable to such condition, because, if the certificate holder is entitled to a stated sum for a permanent total disability, the other provisions of the contract set. out above, by implication at least, authorize the bringing of an action therefor at the end of either 60 or 90 days after presentation to the association of complete and satisfactory proofs, In other words, when the liability of the association and the amount thereof is fixed and certain under its contract, the amount becomes due at the end of the stated period, and the provision relied upon by the appellant applies only to disability for which weekly benefits only can be recovered. This conclusion is made clearly apparent when we consider the entire contract. It provides for the payment of a sum certain for the loss of different members of the body, and that such loss would constitute a disability' is beyond question; and still the appellant’s theory, carried to its logical conclusion, would prohibit a recovery therefore until after the death of the member. That such was not the intent of the provision is very manifest. 2. Premature action. It is also claimed that the suit was prematurely brought, 'because it was commenced before the expiration of the period limited within which the association was entitled to make settlement before the bringing of suit. There js nothing in this contention because of the appellant’s disavowal of liability six months before suit was — 30 — brought and. immediately after the proofs were presented to it. Moreover, the filing of the amended and supplemental petition after the death of Mr. Haverstoek and after every claim that could be made against the appellant had matured, was, in effect, the commencement of a new suit, and the substantial rights of the appellant have not in any way been prejudiced by a refusal to dismiss. Seevers v. Hamilton, 11 Iowa, 66; Sigler v. Gondon, 68 Iowa, 441. 3. Permanent total disability: proof. The appellant’s by-laws provide that no benefits shall be paid to the member or his beneficiary unless it shall be furnished with satisfactory proof that the disability or death was purely accidental and the direct result of an accident, and that the accident was the sole and only cause thereof. It is claimed that the proof furnished did not show accidental “ permanent total disability,” and that there should have been no recovery therefor. That they showed a total disability is beyond dispute; and while they did not, and could not at that time, state whether the disability was permanent, the facts stated therein tended to show that it was, and before it was known certainly that the disability was permanent the appellant denied any liability for the injury, and hence further proof was not necessary. Stephenson v. Bankers’ Life Ass’n, 108 Iowa, 637; Dyer v. Des Moines Ins. Co., 103 Iowa, 524. 4. Permanent total disability construction of certificate. Mr. Haverstoek was a member of Division B in class 1 of the defendant association. His application for member-was in 'writing on one of the appellant’s application blanks, which, so far as material to this inquiry, was as follows: — 31 — Class 1. division B. No. 27,819 APPLICATION FOR MEMBERSHIP IN THE NATIONAL MASONIC ACCIDENT ASSOCIATION, Des Moines, Iowa. This application is not binding upon the Association until approved by the Secretary. BENEFITS I hereby apply for membership in the National Masonic Accident Association of Des Moines, Iowa, my membership to be based upon the classification of my; occupation and'the following statement of facts, which I warrant to be true and complete, and I agree that' in no case shall my weekly benefits exceed the amount to be paid in case of accidental death, and that no weekly benefits shall be paid in addition to the sum named in the above table of benefits in case of death or for the loss of one or both -eyes, hands or feet. The certificate issued to him on this application stated that it was issued in consideration of the warranties and agreements in the application which was indorsed thereon and made a part thereof, and subject to all of the conditions and provisions of the articles of incorporation and by-laws of the association. It also contained the following provision: “ And subject to such conditions and provisions, which are hereby made conditions precedent to the accruing of payment of benefits, such member is entitled to the benefits appertaining to the division and class of which he is a member under article 10 of the articles of incorporation and the classification contained therein, which classification of benefits is a part of the said application, indorsed oh the back thereof.” A copy of the application was printed on the — 32 — back of tbe certificate, and there was also printed thereon what purported-to be a copy of the article and classification of benefits thereunder, referred to in the certificate. . It was as follows, so far, as material here: Article 10 of the Articles of Incorporation.— The members of this Association shall be so classified that the benefits shall be proportionate with the hazard of the occupation of the certificate holder, and all certificates must comply with said classification. The benefits in the several classes shall be as follows: As a matter of fact, the articles of incorporation did not provide for the payment of a permanent total disability benefit of $5,000, and the appellant contends that it is not liable therefor, notwithstanding the certificate, because of the general rule that a member of a mutual benefit association is charged with knowledge of the articles of incorporation and by-laws under which the association acts, and, further, because the certificate does not in fact provide for the payment of such sum for such disability. A fair and ordinary construction of article 10 and the classification thereunder, as printed on the certificate, can leave, no doubt as to the meaning sought to be conveyed thereby. To our minds, it very clearly conveys the impression that it provides for the payment of $5,000 for permanent total disability as distinguished from the payment of weekly benefits fox a total disability which is not permanent, and we think such would be the general understanding thereof. Admitting that its — 33 — meaning is doubtful, it should be construed most strongly against the appellant. 5. Estoppel. It is a familiar rule that the application for membership and the certificate thereof, together with the articles of incorporation and by-laws, constitute the contract between the members and the association, and it is the general holding that the member is charged with knowledge of the powers of the association as declared by its charter and by-laws. But in this case the association entered into a contract that expressly made article 10 of its charter a part thereof, and .undertook to set out in said contract the article and classification thereunder verbatim. Whether its officers made a mistake or whether they were guilty of a gross fraud in so doing, is of little moment now. The insured had the undoubted right to presume, and to act on such presumption, that' the association had embodied in its contract with him a correct copy of the article named, and that-the contract furnished him the precise indemnity named therein. It was made a part of the application and certificate by which he was bound, as well as the association. Had he made a false statement in his application, either through inadvertence, ignorance, or mistake, his beneficiary, suing on the certificate, would be estopped from proving that the statement was so made. The insured entered into the contract relying on its terms, and it is but just and equitable that the insurer shall not be permitted to take advantage of a mistake in its contract for which it is solely responsible, whether it be a mutual association or otherwise. If it was a mistake on its part, the insured or his beneficiary should not be compelled to pay therefor, and, if a deliberate fraud, the association has no standing in court-. In either event we think the appellant estopped on the question. Watts v. Ass’n, 111 Iowa, 96. Hirsch v. Grand Lodge, 56 Mo. App. 101, was a case where there was an erroneous, publication of the by-laws in a pamphlet which was read by one who was afterwards induced to join on account of the — 34 — representations therein made. Tbe false by-laws were not made a part of Ms contract by express incorporation therein, as in this case, and it was held that the member was bound by the true by-law. Section 10 of the appellant’s by-laws provides: 6. Instructions: accidental disability. No benefits shall accrue or be paid because of any disappearance of any member, nor for any bodily injury or death to which there shall be no external or visible marks upon the body (the body itself, in case death, not being deemed such mark); nor for any death or disability happening directly or indirectly, wholly or in part, accidentally or otherwise because of or resulting in or from any disease or bodily or mental infirmity, hernia, orchitis, fits, etc., nor shall any benefits whatever accrue or be paid to any member or his beneficiary, unless the said member or his beneficiary shall have furnished the association (within the time prescribed by these by-laws) with absolute and satisfactory proof that the death or disability of the said member was purely accidental and the direct result of an accident, and that the accident was the sole and only cause of the said member’s death or disability. As we have heretofore seen, there were external marks on the head and body of the deceased indicating a fall, and the evidence tended to show that a fall might have produced the rupture of the artery. But there was also evidence tending to show a diseased condition of Mr. Haverstock’s arteries at the time he received the injury, and that his disability may have been caused directly or indirectly, wholly or in part, by such diseased arteries. The appellant asked instructions directing the jury that there could be no recovery if it found that the disability was caused directly or indirectly, wholly or in part, by the disease or bodily infirmity afflicting Mr. Haverstock at the time of the alleged accident. These were refused, and the court on its own motion instructed that, if Mr. Haverstock sustained a fall, and if the bursting of the artery was caused thereby, the plaintiff would — 35 — be entitled to recover, even though, it was found that the artery was in a weakened condition by reason of disease. This instruction cannot, in our judgment, be sustained, because it entirely ignored the stipulation in the contract that there should be no liability for a disability happening directly or indirectly, wholly or in part, because of or resulting in or from any disease or bodily infirmity. As long as parties who are capable of so doing shall be permitted to make their own contracts, it is'the plain duty of the court to enforce them as they are written, unless fraud or public policy shall intervene; and if it be true, as the jury might have found under the evidence, that the diseased condition of the arteries aggravated the effect of the accident, if there was one, and contributed to the disability occasioned thereby, then, under the express terms of the contract, there was no liability on the part of the association. Commercial Travelers’ Mut. Acc. Ass’n v. Fulton et al., 24 C. C. A. 654 (79 Fed. 423); Natl. Masonic Acc. Ass’n v. Shryock, 20 C. C. A. 3 (73 Fed. 774); Fetter v. Fidelity & C. Co., 174 Mo. 256 (73 S. W. Rep. 592, 61 L. R. A. 459, 97 Am. St. Rep. 560); Sharpe v. Com. Trav. Mut. Acc. Ass’n, 139 Ind. Sup. 353 (37 N. E. Rep. 353); Lawrence v. Accidental Ins. Co., L. R. 7 Q. B. Div. 216; Western Com. Trav. Ass’n v. Smith, 29 C. C. A. 223 (85 Fed. 401, 40 L. R. A. 653); Trav. Ins. Co. v. Selden, 24 C. C. A. 92 (78 Fed. 285); U. S. Mut. Acc. Ass’n v. Barry, 131 U. S. 100 (9 Sup. Ct. 755, 33 L. Ed. 60); Freeman v. Mer. Mut. Acc. Ass’n, 156 Mass. 351 (30 N. E. Rep. 1013, 17 L. R. A. 753); 1 Cyc. 262. And see Delaney v. Modern Acc. Club, 121 Iowa, 528. 7. Expert evidence. As we understand the appellee’s argument, the correctness of the above rule is not seriously questioned, but it is 'contended that the court so instructed in the fourth paragraph of its charge, and, further, that there was n0 competent evidence as to the existence of the disease at the time of the injury. The instruction referred to was to the effect that, if the bursting of the — 36 — artery was caused solely by its weakened condition, there could be no recovery, and this was followed by the instruction directing that there could be a recovery even though the diseased condition of Mr. Haverstock did contribute to1 his •disability. The testimony clearly showed a diseased condition of the arteries at the time of Mr. Iiaverstock’s death, and physicians of skill and reputation testified that the condition probably existed at and prior to the time of the alleged accident; that this condition greatly weakened the arteries; and'that because thereof a blpw “or some other exciting'cause might produce apoplexy or paralysis, when in a healthy condition these results would not follow.” We know of no better evidence of the probable effect of disease than the testimony of skilled medical men, and think the testimony in this case competent, and its weight for the jury, alone. Dor the error pointed out,- the judgment is reversed.