McGowan v. Supreme Court of the Independent Order of Foresters

"Winslow,- J. The-appellant’s general contentions are: first, that the evidence shows that the beneficiary was never •changed; second, that the evidence shows fraudulent and material misstatements in the application for insurance; and, third, that there were erroneous rulings upon evidence. These contentions will be considered in the order indicated. 1. It is now well settled that one who is insured in a mutual benefit association, and who wishes to change the beneficiary, must make the change in the manner required by his policy and the rules of the association, and that any material deviation from this course will render the attempted •change ineffective. It is equally well settled that there are •cases where literal and exact conformity with the requirements of the policy may be excused. In the case of Supreme Conclave v. Cappella, 41 Fed. Rep. 1, the subject is exhaustively reviewed, and the conclusion reached that there were three exceptions to the rule of exact compliance: First, where the society has waived strict compliance by issuing a new certificate without insisting- on the performance of all the intermediate steps; second, where, by loss of the first — 181 — certificate without fault, its surrender becomes impossible, a court of equity will not require an impossibility, but will treat the change as made if the insured has taken all the other necessary steps and done all in his power to make the change; third, where the insured .has pursued the course required by the policy and the rules of the association, and done all in his power to make the change, but before the new certificate is actually issued he dies, a court of equity will decree that to be done which ought to be done, and will act as though a new certificate had been issued. National Asso. v. Kirgin, 28 Mo. App. 80; Isgrigg v. Schooley, 125 Ind. 94; Grand Lodge v. Noll (Mich.), 15 L. R. A. 350, note; Marsh v. Supreme Council, 149 Mass. 512; Luhrs v. Luhrs, 123 N. Y. 367; Bacon, Ben. Soc. (New ed.), §§ 310, 310a. The case at bar clearly comes within the last of the above classes. The insured had done every substantial act required of him by the terms of the policy and the rules of the society in order to make a complete change of beneficiaries. The last act was the surrender to the deputy chief ranger of the original certificate, at least one day before his-death. He could do nothing further. On the part of the society there were simply formal acts to be performed. There was no discretion as to whether the society would allow the change. It is true the rules say that the change shall be made and a new certificate issued if the application be approved by the supreme chief ranger, but this approval plainly relates to matters of form only. It was the right of the insured to make the change before his death if he took the required steps, and if the new beneficiary was competent to be such under the rules of the order. We hold, therefore, that under the rules laid down in Supreme Conclave v. Cappella, supra, the insured in the present case had made an effective and complete change of beneficiaries. But it is urged that the cases in which this doctrine has been applied are all cases where the money has been brought — 182 — into court, and tbe other claimant has been interpleaded, •and thus the action has become an equitable one, in which ■equitable principles may be and are applied, while the present action is an action at law, where strictly legal principles must prevail. The objection does not seem forcible. Either there was a change of beneficiaries or there was not. There is no middle course. Nor do we see how there could well be a change in equity and no change' at law, or a change which should operate as to some parties and not as to other parties to the transaction. Therefore we hold that the facts here shown prove a change of beneficiaries, even though the action be one at law. 2. In the application for insurance the insured was asked this question-, “ (66) For what diseases have you been attended by a physician during the last five years ? ” to which he replied, “ Did not need any.” He also answered, in response to other questions, that his father’s health previous to his death was good; that none of his near relatives had been afflicted with inflammatory rheumatism; that his mother died of inflammation of the bowels; that he had no sisters dead; that both his grandfathers were killed in the army; and that he himself had never had pleurisy, inflammation of the lungs, acute bronchitis, chronic catarrh, diseases of the throat and air passages, shortness of breath, chronic cough, or consumption. These answers were all attacked as false by the defendant, and much evidence was adduced in support of such claim of falsity. It will be noticed that a part of these claims are disposed of by the verdict, and some do not seem to have been disposed of at all. Thus, it is found that the cause of the mother’s death was not material, and that the statement was substantially true; that the statement of the number of sisters dead was immaterial; that the answer to question No. 66 was imperfect; that the health of the father was good prior to his death, and that he'had not been afflicted with inflammatory rheumatism; and that — 183 — the deceased was in good bealtb when be made tbe application ; but the verdict does not state whether the statement as to the death of the grandfathers or the statement that he had no brothers dead were material to the contract. It appeared by the evidence, without contradiction, that the insured had one sister dead, whose funeral he attended a few years before his own death; that he had one brother who died in infancy; and that both his grandfathers died natural deaths. As will appear from the statement of facts, the representations and statements of the insured in his application are only made the basis of the contract and declared to be warranties so far as material, and hence, we suppose, resulted the submission to the jury of the various questions ■as to the materiality of the statements as to the deaths of brothers and sisters and the cause of the death of the mother. It would seem strange, indeed, if these were questions for a jury to pass upon. If a jury may say that the condition of health of near relatives, such as parents and brothers and .sisters of the insured, is not material when inquired about as preliminary to the making of a contract of insurance, why may they not advance a step further and declare that the ■condition of health of the insured himself is immaterial ? It is matter of common knowledge that family tendencies to disease, as developed in the immediate blood relatives,-are ■of the utmost importance in judging, of the probabilities of life. No expert knowledge is required to know that such matters are most material to be known by a proposed insurer, and are always carefully asked about, and that applicants are frequently rejected because of such family tendencies, although they- may not have appeared in the insured themselves. Bacon, Ben. Soc. (New ed.), § 230. All of the questions as to the health or death, or age at death, of the ancestors or brothers and sisters of the deceased, were material to the risk as matter of law, and the court should have so declared. "Whether inquiries concerning very remote — 184 — relatives should be held material as matter of law is a question not before us now for decision. It was error, therefore, to submit the question as to materiality of the questions above referred to to the jury. But there is another question which is of greater importance. The insured was asked, by question No. 66, for what diseases he had been attended by a physician during the last five years, and he answered that he did not need any physician. This fairly means that he had had no diseases during that time for which he needed the attendance of a physician. This answer was disposed of by the finding that it was imperfect, and the argument is made that because it was an imperfect answer, and because the company accepted the application without requiring it to be made more certain and responsive to the question, all objections are now waived. It needs no finding of the jury to show that it is an imperfect answer to the question, but, imperfect as it is, it states a material fact, and that is that the insured had not needed a physician for disease during the last five years. It states this fact plainly and unmistakably, and the insured affirmed and declared, at the close of his application, that this answer was “ true and correct,” and that he had made no “ intentional omission, concealment, or mental reservation of any material fact or circumstance relating to my past or present health, habits, or condition, or family history.” Now, as has been before said, there was much testimony in this case, aside from the physicians’ testimony, to the effect that the insured had a chronic cough and weakness of the lungs for two or three years before the application, and both the question whether he had a disease for which he needed the services of a physician, as well as the question whether the answer ta the sixty-sixth question was not an intentional omission or-concealment of a material fact as to his health, should clearly have been submitted to the jury. 3. The evidence of certain fellow-workmen as to state — 185 — ments made by Pion concerning bis health, in the summer of 1895, was offered by the defendant and ruled out, and this ruling is alleged as error. The rule is that declarations and admissions of the assured, made prior to the application, and so remote as to be disconnected with any act or fact showing his then condition of health, are incompetent as substantive proof to contradict the statements made in the application, as against a third party who is the beneficiary; but where, as here, there is independent proof tending to show falsity of the statements in the application, the evidence of the prior declarations of the assured is admissible to show his knowledge of the falsity of his answers. Bacon, Ben. Soc. (New ed.), § 460. The questions should have been allowed. The examining physician, who was an officer of the local court of Galena, made a personal examination of Pion at the time of his application, and made a long written report, in answer to questions, as to Pion’s physical condition, in which he gave a very favorable account of his health. This report was offered in evidence by the defendant on the trial, in connection with, and as part of, the application. Thereafter the plaintiff asked one of the medical experts a hypothetical question based on the facts stated in the physician’s report, and the defendant objected, on the ground that the paper was not evidence of the facts stated in it, but only of the fact that such a report was made. The court overruled the objection, and held that the statements in the report were in the nature of admissions by the company of the facts therein stated, not conclusive, but competent to go to the jury on the subject. We think the ruling was correct. The statements were made by one of the defendant’s officers, as a part of his official duties, and within the scope of such duties. Such statements are plainly statements of the company itself, and must be regarded as upon the same plane as the admissions of agents generally, made during the transaction — 186 — of the agency business, and within its scope, which are deemed parts of the res gestas. 1 Jones, Ev. § 256. The case bears no analogy to that of Hiles v. Hanover F. Ins. Co. 65 Wis. 585, where the statement of the insured in his proof of loss was sought to be used as evidence in his own favor. Two physicians were allowed to testify that during the year 1895 they were consulted as physicians by the insured, .ancbthat they attended him for a disease. These questions were objected to, on the ground that they called for privileged communications, but the objections were overruled. While these rulings were favorable to the appellant, and therefore are not here for review, it is not improper to call attention to the fact that a physician who answers that he treated a man for a disease must obtain his knowledge either from information received from the patient or by observation of his symptoms, all of which are privileged (Boyle v. N. W. Mut. R. Asso. 95 Wis. 314), or from statements made by others, which are hearsay (Edington v. Mut. L. Ins. Co. 67 N. Y. 185). We do not deem it necessary to consider any other points made. Enough has been already said to indicate the proper •course to be pursued upon a new trial. By the Court.— Judgment reversed, and action remanded for a new trial.