24 Colo. App. 304 | Colo. Ct. App. | 1913
Lead Opinion
The appellant is a fraternal benefit society, created and existing by virtue of the laws of the state of Colorado; and its objects are the maintenance of a fraternal benefit society on the lodge plan, with a secret ritual, to provide and maintain, by means of assessments upon its members, a benefit fund from which shall be paid to designated relations or, dependents of each deceased member, who, at the time of death, is in good standing by having paid all lawful demands in due time, a sum not exceeding $2,000, $1,000 if- the insured dies in one year, $1,500 if the insured dies between one and two years, $2,000 if the insured dies after three years after being admitted as a member, and a small ■ sum to mark the grave.
The insured lived as a member fifteen months and seven days. Her expenses, under her certificate, were an initiation fee and an assessment of $1.40 during her life at fixed periods. We do not know the exact amount which she paid, but her investment, under the certificate, is probably very small. The amount of the judgment is $1,375.65.-
On the 22nd day of July, 1909, the parties hereto submitted the case to the court, on an agreed statement of facts, for its decree, which agreed statement of facts is as follows:
‘ ‘It is hereby agreed by and between the above named plaintiffs, by Frank J. Baker,' their attorney, and the above named defendant, by B. M. Carr, its attorney, that the following shall be, and they are "hereby declared to
“First. That Anna M. Workhausen is the duly appointed, qualified and acting guardian of Mary Rausch and Minnie Rausch, who are minors and the sole heirs of Conrad Rausch and Minnie Rausch, husband and wife, both deceased.
“That the defendant corporation is a fraternal benefit society, not for profit, organized under the laws of the state of Colorado.
“That the-said Minnie Rausch was a member of said society, holding certificate No. 63762 therein, for the principal sum-of two thousand dollars ($2,000) with benefits thereunder payable to Conrad Rausch, her husband.
“That the said Minnie Rausch signed her application for the membership in said society, and the certificate issued to her, as aforesaid, without having her attention called specifically to the conditions upon the back of said certificate, or' contained in the application and constitution and by-laws of said society. Said certificate issued to Minnie Rausch as aforesaid contained the following condition:
“ ‘This certificate is hereby made expressly subject to all conditions endorsed or printed hereon, all of which are hereby made a part hereof, whether printed upon the face or back, and also all conditions named and provided in the constitution of the Women of Woodcraft adopted by its Grand Circle and by the by-laws of said circle. It shall not be enforced at any time when the neighbor to whom it is issued stands suspended, or is not in good standing pursuant to the provisions of said constitution and by-laws, as the same are now in force or5as they may be hereafter regularly adopted or amended and in force at the time of the death of the neighbor named in this certificate. ’
“Second. That, on or about the 1st day of January,
“That the said Conrad Rausch inflicted said wounds upon the body of Minnie Rausch which caused her death, and then took his own life while of insane mind.
“Third. That the defendant society refuses payment under said certificate No. 63762 because of the condition thereon rendering the same null and void and the benefits thereunder forfeited in the event that the member is killed by the beneficiary.
“That the printed condition upon the back of said certificate No. 63762 issued to Minnie Rausch, as aforesaid, was as follows:
“ ‘If the member to whom «this certificate shall be issued shall be murdered by any beneficiary named herein, or who may claim benefits hereunder, or should any beneficiary named in this certificate, or who may claim benefits hereunder, cause the death of any such member directly or indirectly, intentionally or accidentally, then any benefits which such beneficiary might otherwise have received under the provisions of this certificate shall revert to the Grand Circle. ’
“In Witness• Whereof, We have hereunto set our hands this 30th day of June, A. D. 1909.
“FRANK J. BAKER,
“Attorney for Plaintiff.
“B. M. CARR,
“Attorney for Defendant.”
“If the member to whom this certificate shall be issued shall be murdered by any beneficiary named herein * * * or should any beneficiary named in this certificate * * * cause the death of sitch member directly or indirectly, intentionally or accidentally, then any benefits which such beneficiary might otherwise have received under the provisions of this certificate shall revert to the Grand Circle.”
Counsel for appellant does not contest the sufficiency of the insanity of the beneficiary, set up in the agreed statement of facts, to render him incapable of distinguishing between right and wrong relating to the killing of the insured, and, therefore, we shall assume that there was no intent to murder; hence, no murder committed. If the beneficiary was so insane as aforesaid, then he would likewise be not guilty of any intentional killing. The agreed statement of facts shows that no intermediate means were used to bring about the insured’s death; hence, there has been no indirect killing. The killing was not done accidentally, unless the killing by a person so insane as to be incapable of distinguishing between right and wrong relating thereto may legally be called an accidental killing.
From an early date in England, as well as in this country, the courts have often referred to self-destruction or suicide by insane persons as accidental killings, and it is quite probable that the framers of the certificate or policy of insurance in this case meant to use the word “accidentally” in the same sense. However, we have no judicial authority for so applying the term to a killing by an insane beneficiary. — Borradaile v. Hunter, 5 Man. & Gr., 646, 651, 654, 44 E. C. L., 339, 342, 343; Pierce v.
Counsel, under stipulation in agreed statement of facts, concede:
“That on or about the 1st day of January, A. D. 1907, the bodies of Minnie Rausch and Conrad Rausch, who was named as beneficiary under the said certificate of membership in the defendant association, were both found dead; that the skull of Minnie Rausch was crushed and brains protruding from the blows of a blunt instrument, and her body was covered with numerous stab wounds and blood, and lying upon the floor; and the body of Conrad Rausch was found lying upon the bed unwounded, but so contorted that the circumstances pointed strongly to murder and suicide, but as to which died first is not definitely decided.
‘ ‘ That the said Conrad Rausch inflicted said wounds upon the body of Minnie Rausch which caused her death, and then took his own life while of unsound mind.”
It seems hardly possible that the beneficiary could have so crushed the skull of the insured that her brains should have protruded, without causing instant death, or death before the beneficiary could have taken poison, and suffered the death that his condition would seem to indicate.
The application of the insured for the certificate, and the certificate or policy itself, clearly indicate that it was the mutual intention of the parties that if the beneficiary, directly or indirectly, intentionally or accidentally, or by murder, caused the death of the insured that all benefits which would otherwise go to the beneficiary or his successors in interest should revert to the grand circle.
These stipulations are clear and explicit and should be kept inviolate and enforced against the beneficiaries,
The ordinary life insurance policy is attended with certain well known canons of construction peculiar thereto, beyond which the ordinary rules of construction, pertaining to other contracts, apply.
This court, in speaking to this point, tritely said:
“It has been repeatedly decided in this state that the policy is the contract of insurance, and that it is to be considered and construed by the same rules of construction and interpretation as other contracts, so as to carry out the intention of the parties.”
Daly v. The Concordia Fire Ins. Co., 16 Colo. App., 350, 65 Pac., 416; Ins. Co. v. Taylor, 14 Colo., 499, 24 Pac., 333, 20 Am. St., 281; Ins. Co. v. Barker, 6 Colo. App., 535, 41 Pac., 513.
The supreme court of Indiana, speaking to the same question, said:
“ While forfeitures are never favored, yet if upon a reasonable construction it appears that the parties contracted for a forfeiture upon certain conditions it only remains for the courts to enforce the contract as the parties have made it. It is neither unlawful nor against the public policy for a contract of life insurance to stipulate that upon certain conditions or contingencies the policy should become void.”
Northwestern Life Ins. Co. v. Hazelett, 105 Ind., 212, 215, 4 N. E., 582, 55 Am. Rep., 192; Douglas v. Knickerbocker Life Ins. Co., 83 N. Y., 492.
There are no preponderating equities herein favoring the insured or her beneficiaries. There is no grasping corporation seeking to enrich itself at the expense of these appellees. It is charged by the beneficiaries, themselves, in their complaint that the appellant is a benevolent and fraternal benefit society and it is stipulated in the agreed statement of facts: “That the appellant corporation is a fraternal benefit society, not for profit.”
The removal, by foul means, of those standing between anxious beneficiaries and property interests is quite prevalent. With, the publicity of these dangers through many indictments and trials prevailing throughout the country, it is not strange that this society should seek to remove the temptation of anxious expectants to bring about premature deaths of the insured, and to press the counter suggestion that if beneficiaries in any manner whatever cause the death of insured persons the circle penalty shall be a loss of all claims to the benefits provided in the certificate.
Feeling that we must uphold the conditions in the certificate or policy or make a new contract for the parties, and believing that it does not contravene any principle of sound public policy, the judgment should be and is hereby reversed, with an instruction to the trial court to dismiss the same with costs.
Cunningham, C. J., not participating.
Morgan, J., dissenting.
Dissenting Opinion
dissenting:
I think the judgment of the lower court should be affirmed.
The agreed statement of facts, given in full in the majority opinion, upon which the case was tried, discloses that the insured received from the defendant a certificate of insurance on her life, designating’ her husband as beneficiary. That while he was of insane mind he inflicted
‘ ‘ MURDERED BY BENEFICIARY. If any memher shall be murdered by any beneficiary named in his or her certificate, or who may claim benefits thereunder, or should any beneficiary named in a member’s certificate, or who may claim benefits thereunder, directly or indireetly, intentionally or accidentally, cause the death of any such member, then the right of any such beneficiary to receive any benefits under the certificate held by such member shall revert to the Grand Circle. ’ ’
Now, in my opinion, it is not right, either from principle or authority, for the defendant to refuse to pay under this provision and under the agreed statement of facts. The defendant, in its answer, as a basis for its defense, after quoting the above provision from the by-laws, stated that the insured came to her death “as the result of wounds and injuries inflicted upon her by her husband with felonious and murderous intent, and that she was killed and murdered by her said husband.” The answer shows the interpretation put upon the provision by the defendant. The title of the provision and the answer of the defendant indicate clearly that it was inserted in the certificate to prevent any recovery thereupon by anyone who should take the life of the insured with felonious intent or with any intention of obtaining the money to be paid under it. The provision is apt in its terms and sufficiently clear to prevent anyone from reaping any benefit. by wrongfully taking the life, of the insured. The bene
The opinion in Head Camp, Woodmen of the World, v. Irish, 23 Colo. App., 85, 127 Pac., 918, 922, in regard to construction, generally, states:
“Mr. Niblack, in his work on Benefit Societies, on page 32, in regard to what construction should be given the by-laws of mutual benefit societies, says: ‘ The bylaws of mutual benefit societies should be construed liberally, and with a view to effectuate the benevolent pur*314 pose of their organization. Where there is any ambiguity or inconsistency in the terms of such by-laws, that construction should be given to them which is most favorable to the rights of the member.’ And, again, on page 625, he says: ‘ In actions on certificates of membership issued by mutual benefit societies designed to secure the payment of money to those dependent upon their members, after the death of such members, courts should construe the rules and regulations of such societies liberally to effect the benevolent objects of their organization.’ Mr. Bacon, in his work, in section 179, says: ‘It is also a rule of construction that where the language used is ambiguous or inaccurate, and susceptible of two interpretations, it shall be construed most favorably to the promisee in the obligation.’ And, again, in the same section, he says: ‘ It is also a familiar rule of law that if it be left in doubt, in view of the general tenor of the instrument and the relations of the contracting parties, whether given words -were used in an enlarged or restricted sense, other things being equal, that construction should be adopted which is most beneficial to the promisee.’ And, again, in the same section, he says: ‘Contracts of insurance, because they have indemnity for their object, are to be construed liberally, so as to give them effect, if possible. If the policy contains two provisions, one favorable to the assured and one unfavorable, they being inconsistent and contradictory, that provision most favorable to the assured will be accepted and the other disregarded. Only a stern legal necessity will induce such a construction as will nullify the contract. ’
“There are numerous decisions of this court and of our supreme court holding that, where an insurance policy is prepared by the party to be held liable under it, or where it contains doubtful provisions, or where a clause is susceptible of two constructions, that construction will be adopted which is most favorable to the insured. — At*315 lantic Ins. Co. v. Manning, 3 Colo., 224; State Ins. Co. v. Horner, 14 Colo., 391, 23 Pac., 788; German Ins. Co. v. Hayden, 21 Colo., 127, 40 Pac., 453, 52 Am. St. Rep., 206; Strauss v. Phenix Ins. Co., 9 Colo. App., 386, 48 Pac., 822; Lampkin v. Travelers’ Ins. Co., 11 Colo. App., 249, 52 Pac., 1040. And that certificates of insurance of benevolent associations should be interpreted the same as those of á mutual life insurance company. — Chartrand v. Brace, 16 Colo., 19, 26 Pac., 152, 12 L. R. A., 209, 25 Am. St. Rep., 235; Sup. Lodge, Knights of Honor, v. Davis, 26 Colo., 252, 58 Pac., 595. And that ‘it is also an inflexible rule that a policy of insurance must be liberally construed in favor of the insured, so as not to defeat, without a clear necessity, the claim to indemnity which, in mating the contract, it was his object to secure.’ — Northwestern Life Ins. Co. v. Tietze, 16 Colo. App., 205, 210, 64 Pac., 773, 775.”
Mr. Bacon, in his work on Benefit Societies, says, in sec. 329: “The question in all cases of this character is the proper interpretation of a contract, and the point of inquiry is, what obligations the parties must, from the language used, with relation to the subject-matter and the circumstances, be reasonably supposed to have intended to assume.”
And, in the same section, the learned author, discussing a clause in a benefit certificate relieving the order from liability in case the insured should commit suicide, while sane or insane, says: “The clause against suicide is clearly intended to protect the insurance company against the fraudulent act of the insured, whereby he may, even at the sacrifice of his own life, secure a benefit to those whom he may desire to favor, at the expense of the insurance company. But, as has already been said, it has been held from the earliest days that a suicide committed in consequence of insanity was not within the meaning of the condition, although within its literal terms.
It cannot be reasonably supposed that the parties to the contract intended that no recovery could be had by reason of anything done by the beneficiary while insane, as he could not be guilty of any fraudulent act, as Mr. Bacon says, “whereby he might, even at the sacrifice of his own life, secure a benefit to those whom he, might desire to favor.” If “suicide, committed in consequence of insanity, was not within the meaning of the condition” discussed by Mr. Bacon, then the killing of the insured, committed in consequence of insanity, was not within the meaning of the condition now under consideration. In the case of Mutual Life Ins. Co. v. Terry, 15 Wall., 580, 21 L. Ed., 236, the supreme court of the United States, distinguishing between suicide in the possession of ordinary reasoning faculties and suicide while insane, in reference to a clause in an insurance policy providing against liability in case the insured should ‘ ‘ die by his own hand, ’ ’ after a full review of all the cases, said: “If the death is caused by the voluntary act of the assured, he knowing and intending that his death shall be the result of his act, but when his reasoning faculties are so far impaired that he is not able to understand the moral character or general nature, consequences, and effect of the act he is about to commit, or when he is impelled thereto by an insane impulse, which he has not the power to resist, such death is not within the contemplation of the parties to the contract, and the insurer is liable.” — 2 Bacon on Benefit Societies, sec. 331; Clark v. Eq. L. A. Soc., 118 Fed., 374, 55 C. C. A., 200. Mr. Bacon further says, in the same sec
Now, if such construction is given in cases where it is provided that an insured cannot recover if he die by his own hand, and the same construction be applied to the facts of the pending case, then the clause now under consideration would not prevent a recovery, for the reason that whatever was done by the beneficiary was done while he was insane. And his acts while he was insane were not within the contemplation of the parties to the contract, and the insurer is liable. It seems that such construction would, for a much greater reason, apply to the facts of the pending case, as the contract here was made with regard to the acts of the beneficiary, and not in regard to the acts of the insured herself. In the absence of judicial construction of 'a clause like the one now under consideration, we are compelled to take the construction given by the courts concerning clauses in insurance contracts inserted to avoid liability in case of suicide by the insured. Mr. Bacon, in volume 2, sec. 336, in regard to clauses against suicide, says:
“To avoid the effect of these decisions it has become customary with life insurance companies to insert in their policies a stipulation that the contract shall be void if the insured shall ‘die by suicide, felonious or otherwise, sane or insane,’ or ‘by suicide, sane or insane,’ or ‘die by his own act or hand, sane or insane.’ These conditions have been generally Upheld and successfully eliminate the element of suicide, so that no kind or degree of insanity will prevent the avoidance if the insured had the intent to do*318 the act, or realized the physical consequences of his act. This condition does not attach where there is an absence of intent, as in ease of an accident. Culpable negligence, as in taking an overdose of laudanum to relieve pain, will not vitiate the contract. Where the condition was that the policy should be void if the insured should die by his own act or hand ‘voluntary or otherwise,’ the latter word was held too vague and uncertain to cover a case where the insured took his own life while insane. In a case in Ohio, where the policy was to. be void if the insured ‘shall under any circumstances die by his own hand, ’ the court held that the words ‘under any circumstances’ should be disregarded as too general and indefinite.”
See, also, Seitzinger v. Modern Woodmen of America, 204 Ill., 58, 68 N. E., 478; Schmidt v. Northern Life Assn., 112 Ia., 41, 83 N. W., 800, 51 L. R. A., 141, 84 Am. St., 323.
It is concluded; from the authorities and from principle, that the insurer in this case did not intend by the words used in the certificate that it could deny liability if the beneficiary, while he was insane, should cause the death of the insured. If such had been the intention, the words “sane or insane” would have been inserted after the word “accidentally.” Furthermore, if the insurer had not intended that the provision should only apply to instances where the beneficiary, through a wrongful intent or felonious purpose, caused the death of the insured, it would not have entitled the clause “murdered by beneficiary.” It would not have begun the clause with the provision as to murder, and it would not have associated the words “cause the death of the insured, directly or indirectly, intentionally or accidentally” with the title and the clause above referred to. The maxim Noscitur a sociis applies, and if the insurer did not intend that these words above quoted should imply a felonious intent, or at least a wrongful intent, they would not have been so associated. If the words referred to were intended to apply
Aside from the intention of the parties as the best rule for the construction of such contract, there are other rules of construction that would prevent the insurerfrom avoiding liability by reason of this clause in the contract. When applied to the acts of an insane beneficiary, these words become ambiguous and uncertain, and in such cases the courts have held that the benefit should not be forfeited, because forfeiture is an odious doctrine, as stated by'Cunningham, J., in the case of Knights of Maccabees v. Pelton, 21 Colo. App., 185, 189, 121 Pac., 949. Ambiguous, indefinite and uncertain language should always be construed against the insurer, according to authorities heretofore cited. Again, if the insurer intended that the clause should apply to the act of an insane beneficiary, the selection of the word “cause” in the provision, where it is provided that if the beneficiary “cause the death of the insured,” was unfortunate, for the reason that it readily occurs to the ordinary mind that an insane person could not, at least, directly, intentionally, indirectly or accidentally, cause anything. The parties to this contract must have intended that the provisions thereof, in reference to the acts of the beneficiary, referred to persons of sound mind, and if they did not so intend, it would have been stated in plain words that such was not the intention.- A benevolent order such as this would not have permitted a clause to be shrouded in such indefinite and uncertain words as those used, especially in benefit certificates issued to a woman, in an order that was organized for the purpose of insuring the lives of women. — Woodmen of the World v. Gilliland, 11 Okla., 384, 67 Pac., 487. It is a surprise that the defendant permitted the basis of its defense as alleged in its answer to be abandoned in the briefs of counsel, and that it would attempt to defeat
Furthermore, this clause is ambiguous and indefinite, in another particular: It is uncertain whether it was intended that the heirs could not recover if the beneficiary named in the certificate caused the death of the insured, or only in case they caused it themselves. The clause provides that — ‘ ‘ should any beneficiary named in a member’s certificate, or (any beneficiary) who may claim benefits thereunder, (though not named in the certificate) * * * cause the death of any such member, then the rights of any such beneficiary (who caused the death) * * * shall revert to the Grand Circle.” Now, aside from the question as to who died first, the husband or the wife, no beneficiary’s rights revert except the one who caused the death. Those who now claim the benefits never caused the death, and their rights do not revert. Furthermore, it is not stipulated nor agreed as to which died first, and if the husband died before the wounds produced the death of his wife, his rights as a beneficiary died with him, and the right of the heirs immediately took effect. As it was not stipulated nor proved that the wife died first, this defense must fail, because the burden of proof was upon the defendant to prove sufficient facts to establish the conditions of the forfeiture relied upon.— German Am. Ins. Co. v. Hyman, 42 Colo., 156, 172, 94 Pac., 27, 16 L. R. A. (N. S.), 77; Loyal Mut. Co. v. Brown Co., 47 Colo., 467, 475, 107 Pac., 1098.
As suggested in the majority opinion, it is a wise provision that prevents the intentional taking of the life of an insured, and “removes the temptation from anxious expectants to bring about premature deaths of the insured, ’ ’ but are those words in harmony with the conclusion reached? They are in perfect harmony with my conclusion, that the provision was inserted for this purpose only, “to remove the temptation from anxious expect-ants,” but not-to defeat a recovery, by innocent heirs, because of the irresponsible act of an insane beneficiary, who killed himself,'thus annihilating any suspicion that he was an anxious expectant. The construction of this provision adopted by the majority opinion is disastrous in its effect. Under such construction, no recovery could be had by the heirs if a husband should attempt to catch a runaway horse carrying his wife to certain death, in case the horse should stumble over and kill the husband, and, falling, kill the wife; because, forsooth, the proviso says, if he “accidentally or indirectly cause the death,” the fund reverts to the Grand Circle. Further illustrations are unnecessary. The provision destroys itself unless it is given a reasonable construction- in harmony with the beneficent purposes of the order.
