Righter v. Loyal Protective Ass'n

GOODE, J. This action is one on either a policy of insurance or a benefit certificate to recover indemnity for twenty weeks’ total disability due to illness. Plaintiff insists defendant is an assessment company doing business under the laws of this State; whereas defendant insists it is a fraternal beneficiary association and exempt from the general insurance laws of the State. The importance of this question lies in the fact that plaintiff made certain untrue statements in his application for insurance, and if defendant is an assessment company, the statements are not a defense unless the matter represented contributed to the loss; whereas if defendant is a beneficiary association, the representation was a warranty and avoided the insurance. It should be stated in fairness to plaintiff, he contends the application was made out by the local agent of the defendant company who knew all the facts and advised plaintiff the information asked for was unimportant and need not be stated. These matters are irrelevant to the case on appeal as we understand it. The disability occurred May 14, 1905, and continued until October 8th. On or about October 15th proofs of disability were furnished the company and thereafter on October 25th, defendant made an examination of the proofs and of plaintiff’s physical condition prior to the application, and its adjuster said the claim would be allowed and paid. On December 1, 1905, in a written communication transmitted from the home office of the company in Boston, and signed by the secretary of the company, plaintiff was notified his claim would not be allowed because statements in his application were [498] false, and he had gained membership in the association by misrepresentations of fact which rendered his policy null and ‘void. After thus repudiating the policy, defendant continued to call on plaintiff ■ for the payment of dues up to the trial, which occurred in September, 1906. These calls were signed by the same secretary who had notified plaintiff the company regarded his insurance as void, and he was directed to pay dues to the local collector at Vandalia, Missouri. It is out of the question to permit defendant to treat the policy of insurance as valid for the purpose of collecting dues and as invalid for indemnity. For nearly a year after plaintiff’s demand had been rejected and long after the present action was instituted, the defendant company collected dues from plaintiff as an insured member. But it is said the insurance covered other, matters besides indemnity for total disability, and therefore defendant was entitled to dues even though it rejected the present claim; that the indemnity covered accidents, etc. We do not understand this argument. If the policy was valid, plaintiff, on proof of disability, was entitled to indemnity for the period he was disabled. Now the evidence made out a case of disability from sickness and he was as much entitled to be indemnified for that loss as for an accidental injury. If the policy was a nullity from the start because of false representations in the application, it was a nullity as to all indemnities for which it provided. In view of the continued collection of dues which defendant has not even offered to return, we hold it waived the defense of broken Avarranties. [Smith v. Insurance Co., 2 Mo. App. 339; Insurance Co. v. Phillips, 70 S. W. (Tex. Civ. App.) 603.] The judgment is affirmed. All concur.