54 N.J.L. 490 | N.J. | 1892
The opinion of the court was delivered by
This suit was brought by Mary Holland on a-Relief Fund certificate made by the Supreme Council of the Order of Chosen Friends- to James Holland, now deceased. So far as is material to this case the certificate is in these words-: “ This Certifies, That James Holland of Jersey City, a member of the Council named below, having duly applied therefor is entitled to a benefit of not exceeding two thousand dollars from the Relief Fund of the Order of Chosen Friends, which sum shall in case of death be paid to his wife Mary Holland in the manner and subject to the conditions set forth-in the laws governing said Relief Fund and in the application-for such benefit.” Sealed with the seal of the Supreme Council of the Order of Chosen Friends.
The Supreme Council of the Order of Chosen Friends is a corporation organized under the laws of Indiana. The objects of the organization as expressed in its constitution are : First. To unite in bonds of fraternity, aid and protection all acceptable white persons of good character, steady habits, sound bodily health, reputable calling, and who believe in a supreme-intelligent being, the creator and preserver of the universe^ Second. To improve the condition of its membership, morally, socially and materially, by timely counsel in the seven cardinal! virtues, and instructive lessons in the seven liberal arts and
To effectuate the objects of the association, members are ■divided into two classes — (1) social members and (2) beneficiary members. Social members are those who pay a certain •certificate fee and regular dues. These members are entitled to all the honors, rights and' privileges of any other members, •except that they are not entitled to the benefits of the relief fund, and they are also exempt from contributing to that fund. This fund is in the exclusive control of the. Supreme Council. .■Subordinate councils established by the Supreme Council, to which the social members belong, are, by section 2, article 10 •of the constitution of the order, excluded from all control over the relief fund.
Beneficiary membership is obtained by persons who are or become social members upon an application for such membership, to be made upon a form of petition furnished by the •Supreme Council. This application must be approved by the supreme medical examiner, and upon approval by the supreme medical examiner, based upon his examination of the appli■cant, and of the answers made by him to certain questions propounded, a certificate of membership is issued. The certifi
At the ages of On $1,000. On $2,000. On $3,000..
18 and 25 inclusive, $O 35 $0 $0 05
26 30 0 40 0 80 20
31 35 0 45 0 90 35
36 40 0 50 1 00 50
41 45 0 60 1 20 80'
46 50 0 75 1 50 25
51 54 1 00 2 00 00
By “ the Belief Fund laws ” any member of the association is entitled to make application for a beneficiary membership,, except that manufacturers of gunpowder and other explosives, retail liquor dealers and bartenders are entirely excluded from, beneficial membership.
Whatever may be the status of an association of this character in its social, charitable, and purely benevolent features, the-relation between the association and such of its members as-have become “ beneficiary members ” under its “ relief fund scheme is essentially a contractual relation. The right of a member to participate in that fund is a right arising from contract, and the disbursements from that fund are not voluntary gifts donated from a charitable or benevolent motive, but payments in fulfillment of contract obligations. - The contract of’ the association with its beneficiary members is made up of the-application for such membership, the certificate issued, which is an acceptance of the application, and the charter, constitution and by-laws of the society, and in its construction and-effect does not differ essentially from an ordinary policy of insurance. Bac. Ben. Soc., §§ 51, 52; Niblack Mut. Ben. Soc.,. §§ 163,164, 165, 166,166a; Commonwealth v. Wetherbee, 105 Mass. 149.
The defence at the trial was that the certificate of beneficial ■membership was obtained fraudulently by means of false and fraudulent representations. In his application the deceased represented that his occupation was that of a printer, and that his business was pressman ; that he was employed by P. Lorillard, in Jersey City, and had been so employed for nine years. In his statement to the medical examiner he answered in the negative the question : “ Are you engaged in the sale or manufacture of wine, beer, or distilled liquors ? ” The proof at the trial was that the deceased was employed in the printing ■department of the works of P. Lorillard for a period of time down to December, 1881; that in July, 1883, he was employed in another department of the same works, and left that employment in June, 1884, and that he had not been in Lorillard’s employ after that date. It was also proved that after December, 1884, down to his last illness, and within a few days of his death, his employment was that of a bartender. He was so employed in December, 1889, when he made applioation for his membership in the society. The statement made by the deceased in his application and in his answers to the questions in the statement to the medical examiner with
The deceased might have been stricken from the roll of beneficiary members and his Relief Fund certificate cancelled under the provisions of section 6, article 2, of the constitution for the false representation in his application and in the medical examination. He might also, after a trial, have been suspended by the subordinate council of which he was a member for the untrue representations by which he obtained his membership, and his suspension would have avoided his Relief Fund certificate unless he was reinstated as provided for in the general laws of the order and the Relief Fund laws. But these remedies were merely cumulative. The obligation sued on is a contract, on which a suit at law will lie, and the prosecution and defence of such a suit are alike regulated by the rules of practice and procedure and the same legal principles which prevail in actions upon other legal obligations.
To meet the defence made in this case, the plaintiff’s counsel contended that the benefit certificate was incontestible in the hands of the beneficiary named in it, unless the member had been suspended during his lifetime and his death occurred during his suspension. This contention was rested upon a stipulation in the deceased’s application for beneficial membership, which follows his agreement to pay dues and assessments, and is in these words, viz.: “ I further agree that any untrue or fraudulent statement made, or any concealment of facts by me in this application, or my suspension or expulsion from or voluntarily severing my connection with the order, shall forfeit my rights to all benefits and privileges therein; and it shall not be lawful, in ease of my death during such suspension, for
In the New York case the stipulation that no question as to-the validity of the policy should be raised after the death of the member was in the certificate which was the evidence of the-company’s contract, and was precise and explicit, and expressed in plain and unambiguous terms a contract to that effect binding upon the company. In this case the paragraph in question-is found only in the application, which was the act of the applicant, and in its language imports only an agreement on his-part, and no language or terms are found in it of like import
The relief fund is raised by assessments on beneficiary members for the benefit of members of that class, to provide means to pay the just claims of" those members whose certificates are a charge upon the fund. These certificates are not for the payment of a specified sum of money, but are simply vouchers that the holder is entitled to a benefit not exceeding a certain sum, to be paid in the manner and subject to the conditions set forth in the laws governing the relief fund. The amount realized upon such a certificate when matured depends upon the condition of that fund. A claim fraudulently foistered upon the relief fund by one member, in violation of the fundamental articles in the constitution of the order, is a fraud upon his associates.
The proof in this case was plenary that this certificate was obtained by positive fraud of such a character as ought, in morals as well as in law, to defeat the fraudulent purpose, and such must be the result on well-settled legal principles, unless the fraud be sheltered behind some barrier which the association itself has provided.
The stipulation upheld in Wood v. Dwarris, 11 Exch. 393, and approved in Wheelton v. Hardisty, 8 EL & B. 232, was that the policy should be indisputable except in cases of fraud. The stipulation in Kline v. National Beneficial Association, 9 West. Rep. 287, giving to the certificate the quality of incon
Courts incline strongly in favor of a liberal construction of stipulations which save contracts of insurance from forfeiture, but the judicial inclination is equally strong against contracts procured by fraudulent practices. Without considering the question whether an agreement having the effect to constrain a party to abide by a contract procured from him by fraud and deception will receive any legal countenance where such an agreement is part of the very contract which is tainted with fraud, I think it is clear that ¿n agreement which shall be conceded that effect must be expressed in terms that are clear and unambiguous. There is no agreement by the association to that effect in this case, and I fail to comprehend on what principle the agreement by the assured contained in his application can be made available to conclude the association from repudiating a membership from which the deceased was debarred by the Relief Fund laws of the order, and the certificate for benefits which was issuable only to a qualified member, when both the membership and the certificate were obtained by fraud and deception.
The charge of the learned judge that the plaintiff was entitled to recover was erroneous,' and the rule to show cause should be made absolute.