7 S.D. 214 | S.D. | 1895
This was an action by the heirs of Knud C. Kundson,. deceased, to recover of defendants the sum of $2,000 insurance on the life of deceased. Judgment for plaintiffs, and defendants appeal. The defense to the action is based upon the alleged fact that in the application of said deceased and in his medical examination he made certain statements that constituted warranties, and that, these statements being untrue, the plaintiffs-cannot recover. The defendant is a mutual benefit association having a number of subordinate councils, one of which, No. 94, is located at Sioux Falls, where the deceased resided at the time of his death. To entitle a person to the benefits of the association, he was required to become a member of a subordinate council. This membership was obtained by making an application to a subordinate council, which application, together with his medical examination and the certificate of the local medical examiner, was forwarded to the grand council, located at Marengo, Iowa, where, if the application was satisfactory, a certificate in the nature of a policy of insurance was issued. In April, 1892, the decased made application for membership in the Sioux Falls council, the material parts of which application are as follows: <:To the officers and-
The appellant has assigned a large number of errors, but, in the view we take of this case, it will be only necessary to consider those relating to application, medical examination, and certificate issued, and the alleged breach of statements made in the application and medical examination. Three questions naturally present themselves for our consideration. First. Did the statements made by the deceased in his application and medical examination constitute warranties? Second. If they did constitute warranties do the special findings and uncontradicted evidence show that there was a breach of these warranties? Third. If the statements constituted warranties, and they were untrue, has the company in any manner waived such breach of warranty, or is it estopped from insisting upon such breach or breaches as a defense to this action?
There can be no reasonable doubt, from the special findings of the jury and the undisputed evidence, that these statements were untrue. The jury find that he did use alcoholic liquors “moderately”; that he had taken the “Dittmer Cure” for the drink habit; and the evidence of Hr. Stevenson is uncondradicted that early in the summer of 1892 the deceased admitted to him, while treating him for delirum tremens, that he had had the disease two or three times before, and that he had been addicted to the excessive use of alcoholic liquors. The warranties and breach being established, the law applicable to the case is too well settled to require discussion at this time. A breach of the warranty avoids the contract, and it makes no difference whether the statement warranted to be true was material or not, or whether the death of the deseased resulted by reason of a breach of the warranty. Mr. Bacon, in Benefit Associations & Life Insurance, lays down the rule as follows: “If the contract of life insurance therefore declares that the statements made in the application touching the subject of insurance are warranted to be true, and that the policy shall be void if they are untrue, the falsity of such statements will defeat the insurance. The parties having in their contract so agreed, and having been free to agree upon whatever terms and conditions they chose, the contract being a voluntary one, the courts have no other alternative than to give effect to the contract of the parties. The truth of the fact warranted is a condition precedent to recovery. It is immaterial that the applicant believed the statements to be true.” Bac. Ben. Soc. section 197; Dwight v. Insurance Co., 108 N. Y. 341, 8 N. E. 654; Glendale Woolen Co. v. Protection Ins. Co., 21 Conn. 19; Gluting v. Insurance Co., (N. J. Sup.) 13 Atl. 4; Hunt v. Supreme Council (Mich.) 31 N. W. 576; Society v. White, 100 Pa. St. 12; Sweet v. Society, 78 Me. 541, 7 Atl. 394.
In Insurance Co. v. Mowry, 96 U. S. 544, the supreme court of the United States uses the following language: “All previous yerbal arrangements were paerged fn tlje written agreement. The
The second question presents more difficulty. The effect of the section above quoted has never been passed upon by this court. The plaintiffs, to bring the case within the provisions of this section, gave evidence tending, to prove that the habits of deceased as to indulging in the use of intoxicating liquors were known to people generally of Sioux Falls, and that, while his habits were thus generally known, the defendant accepted from him several assessments. Counsel for the appellant contend that this section does not apply to this case, for two reasons: First, because by section 51 of the same act it is provided as follows: “Any corporation or association doing business in this state which provides in the main for the payment of death losses or accident indemnity by any assessment upon its members or upon the mutual premium plan, shall for the purpose of this act be deemed a mutual benefit association, and shall not be subject to the general insurance laws of this state regulating life insurance.” Second, because, by the terms of the section itself, it only applies to regular life insurance companies, as indicated by the term “policy”; and only applies to the usual clause in a policy that if the assured acquires the habit of the excessive use of intoxicating liquors after the policy is issued it shall become void, but cannot affect the question of warranties. We are inclined to agree with the contention of counsel. An examination of the chapter discloses the fact that it consist of two parts. The first 31 sections treat of life insurance companies proper, — the manner of their organization, powers, and liabilities, etc., and the last 23 sections treat of the manner of organizing, etc., assessment companies. The methods of organization, powers, duties, and liabilities are quite different in the two classes of companies. In the first class of companies,' only “policies” are spoken of. In the second, the term “policies or certificates” is generally used. It would seem, therefore, that not only by the terms of section 24, in which the term “policy” only is used, but by the express provisions qf section 51, the pro.