Royal Circle v. Achterrath
204 Ill. 549
Ill.
1903
Check Treatment
Mr. Justice Magruder

delivered the opinion of the court:

In the case at bar, the proof shows that William Achterrath, to whom the benefit certificate sued upon was issued, died by his own hand. While the affirmative proof in the case does not show whether the deceased was sane or not at the time of his death, yet there is no proof that he was in such a state of mind as to be unconscious of the physical nature of the act of self -destruction, and, therefore, in the absence of any proof as to his insanity, all the presumptions are in favor of his sanity. (Grand Lodge I. O. M. A. v. Wieting, 168 Ill. 408; Dickerson v. Northwestern Mutual Life Ins. Co. 200 id. 270). It follows that, under the terms and provisions of the benefit certificate, and of the application for membership, and of the constitution and by-laws of the appellant association, except those contained in section 1 of article 16 of the constitution of the order, the appellant would not be liable to the appellee in this suit. Consequently, the real and substantial, and only material, question in the case is, whether the- remaining $1500.00, due upon the face of the benefit certificate, is indisputable and incontestable by the appellant on account of the provision, contained in section 1 of article 16 of the constitution, that section being indisputably a part of the contract between the society and the insured. In other words, is the appellant estopped from refusing payment on account of Achterrath’s death by suicide, by reason of the “incontestable clause,” quoted in the statement preceding this opinion as section 1 of article 16 of appellant’s constitution?

Section 1 of article 16 provides that, “after two years from the date of a certificate, the member continuing in good standing, the only conditions binding upon the member are the agreements as to his full compliance with the laws and rules of the association, and that all dues and assessments shall be paid as required. In all other respects the payment of any sum, due under any certificate issued to a member, shall be indisputable and incontestable-.” ■

Before proceeding to consider the proper meaning and interpretation of this incontestable clause, it may be well to refer to some of the authorities, which have considered the force and effect to be given to such clauses. Courts have frequently recognized the validity of clauses, making policies of life insurance, and benefit certificates in benevolent associations, incontestable by the company or association under certain conditions. Stipulations, to the effect that a policy, or certificate, shall become incontestable for fraud in procuring the same after the lapse of a specified period from the date of its issue, have been held valid as creating a short statute of limitations in favor of the insured, and as giving the insurer a limited period for the purpose of testing the validity of the policy. In such cases, the company or association cannot set up fraud as a defense, if the period so fixed is sufficient to enable .the company, or association, by the exercise of proper diligence to ascertain whether fraud has been practiced or not. Such clauses, making a policy or certificate incontestable for fraud, have fixed such period at from one to three years from the date of the issuance of the policy, or certificate. (Massachusetts Life Ass. v. Robinson, 104 Ga. 256; Patterson v. National Premium Mutual Life Ins. Co. 100 Wis. 118; Wright v. Mutual Benefit Life Ass. 118 N. Y. 237; Clement v. New York Life Ins. Co. 101 Tenn. 22). “It has been held that, where a policy provides, that it shall be incontestable after a certain period, except for certain causes, death by suicide not being one of the excepted causes, such clause will apply in case of the death of the insured by suicide, notwithstanding the policy contains another clause, providing that death by suicide is not a risk which the company assumes.” (19 Am. & Eng. Ency. of Law,—2d ed.— p. 80; Mareck v. Mutual Reserve Fund Life Ass. 62 Minn. 39; Goodwin v. Provident Savings Life Assurance Ass. 97 Iowa, 226; Simpson v. Life Ins. Co. 115 N. C. 393; Mutual Reserve Fund Life Ass. v. Payne, 32 S. W. Rep. 1063; Murray v. State Mutual Life Ins. Co. 22 R. I. 524; Kline v. National Benefit Ass. 111 Ind. 462). In interpreting incontestable clauses, several well known rules of construction are adopted as being peculiarly applicable to contracts of this class. One of these rules of construction is, that such contracts are to be liberally construed in favor of the insured. In National Bank v. Insurance Co. 95 U. S. 673, it was said that “the policy having been prepared by the insurers, it should be construed most strongly against them.” In Thompson v. Insurance Co. 136 U. S. 297, it was said: “If a policy is so drawn, as to require interpretation, and to be fairly susceptible of two different constructions, the one will be adopted that is most favorable to the insured.” (See also Massachusetts Life Ass. v. Robinson, 104 Ga. 277). In the American and English Encyclopedia of Law (vol. 19,—2d ed.—p. 80,) it is said: “In regard to matters, which would have the effect of defeating or destroying the contract, if there is a reasonable doubt as to the extent of the application of the incontestable clause, it must be solved in favor of the beneficiary, and stipulations in the policy to the contrary must yield. Thus it has been held that a clause in the policy, providing that ‘if the terms of this contract be complied with, it shall be incontestable after one year from its date, ’ though the meaning is somewhat doubtful, will relieve the insured from the effect of a false warranty after the expiration of one year. * * * So, it has been held that, where a policy omits the ‘suicide clause,’, but contains a clause malting it absolutely incontestable from the date of its delivery and acceptance, except for nonpayment of premiums or mis-statement of age, intentional suicide while sane, although technically a crime, cannot be set up as a defense under another clause of the policy, in effect providing that death ‘in consequence of or in violation of law’ is not a risk covered by the policy.”

So, in Mareck v. Mutual Reserve Fund Life Ass. supra, it was said: “If there is a reasonable doubt as to the extent of the application of the ‘incontestable clause, ’ it must be solved in favor of the' beneficiary. This clause was inserted in the contract by the company itself. * * * Another reason why the insured might well understand the clause as meaning this, [that is, that the company agreed to waive the condition as to suicide after five years], and why the company itself may have intended it to have that meaning, is the fact that’it is the custom of many life insurance companies to limit the operation of conditions as to suicide to a fixed period, and to make their policies thereafter incontestable on that ground.” In the case last referred to of Mareck v. Mutual Reserve Fund Life Ass. there was written in ink across the face of the policy, and forming a part of it, the following: “After five years from the date of this certificate, it is incontestable for any cause, except non-payment of dues or mortuary assessments at the times and places, and in the manner herein provided, the age of the member being correctly stated in the application for this certificate;” the age of the insured was correctly stated in his application, and all dues and mortuary assessments were duly paid up to the time of his death; and, more than five years after the date of the certificate, the insured came to his death by his own hand; and it was there held that the incontestable clause applied, and that the company was liable for the full amount named in the life insurance policy. In Goodwin v. Provident Savings Life Assurance Ass. 97 Iowa, 234, it appeared that, by the terms of the policy, it was incontestable after two years from its date, except for fraud in procuring it, subject, however, to stipulations regarding payments .of premiums and extra-hazardous occupations, and it was there said by the court: “The tenets established for the guidance of courts in such matters are well understood, and no one is better established than that in all cases the policy must be liberally construed in favor of the assured, so as not to defeat without a plain necessity, his claim for indemnity. And when the words used may, without violence, be given two interpretations,- that which will sustain the claim and cover the loss should be adopted. * * * The proper construction of this policy, taken in connection with the application, we think, is that the policy does not cover death by suicide, occurring within two years from the date of its delivery, but that after two years it is incontestable, except upon the grounds stated therein. This construction will give effect to all the provisions of the policy, and as such a result is always sought for by courts in interpreting all classes of contracts, we are quite content with it. We are the better satisfied with this conclusion, because it seems that, in life insurance, certain companies limit the operation of the conditions as to suicide to a- fixed period, and make their policies incontestable on that ground thereafter.”

An application of the rules, thus announced in relation to these incontestable clauses in policies of insurance and benefit certificates, leads to the conclusion that the appellant is estopped from denying its liability to the appellee upon the benefit certificate, here sued upon, by reason of the provision contained in section 1 of article 16 of the constitution. It is claimed by the appellant, that William Achterrath did not continue in good standing by reason of the fact that he committed suicide. When the constitution provides that, “after two years from the date of a certificate, the member continuing in good standing, the only conditiohs binding upon the member are the agreements,” etc., it is not meant that, by the act of taking his life, the member does not continue in good standing. The meaning is, that he must continue to be in g'ood standing during the period of two years after the issuance or date of the certificate, and up to the time of his death. The loss of good standing, as here contemplated, is not such loss as that occurring by the act of death, but the reference is to such good standing as exists up to the time of the death. The life of the insured is ended the moment the act of suicide is performed, and there is no interval for loss of good standing- in the order. In the next place, section 1 of article 14 of appellant’s constitution, as quoted in the statement preceding this opinion, provides for affirmative action to be taken by the order in case of any offense against the order being committed by the member. The accused must be given an opportunity to be heard, and evidence must be taken by a committee, and a report made to the lodge, and a vote had upon the report or recommendations of the committee. As the loss of good standing of the member must be established by a trial and conviction of the offense charged against him, it cannot be said that suicide is such a loss of good standing as is contemplated by section 1 of article 16, as no investigation or trial could occur to establish the loss of good standing after a member’s death.

When a certificate of membership is issued to a member, that certificate is evidence of his good standing at the time of its issue, and such good standing will be presumed to continue until there is proof that it no longer ✓exists. A member is said to be in good standing when he complies with the laws, rules, usages and regulations of the order. Such compliance necessarily includes punctual payment of all dues and assessments, for which the member may become liable. Good standing also means good conduct, that is, freedom from the violation of those requirements, which indicate the benevolent purposes of the society, or express its intention to insist upon a high standard of character among its members. (Independent Order of Foresters v. Zak, 136 Ill. 185; Royal Templars of Temperance v. Curd, 111 id. 284). The words of the certificate here sued upon are as fdllows: “Provided always that said member is in good standing in this order at the time of said death.” In relation to words of a similar kind, we said, in Independent Order of Foresters v. Zak, supra: “Under such a constitution as that of appellant, the loss of good standing must be shown by some official action on the part of the organization. * * * The order is a corporate body. The attitude of a corporate body .towards one of its members can only be known through its action as such corporate body. The only proper evidence of such action will be the records or proceedings of the organization itself.” It is clear that, inasmuch as loss of good standing on the part of a member must be thus established by corporate action, such loss of good standing does not include the act of the member in committing suicide. (See, also, Niblack on Accident Insurance and Benefit Societies,'—2d ed.—secs, 155-157, inclusive; also sec'. 323). At section 323 of the second edition of Niblack's work on Accident Insurance and Benefit Societies, the author says: “Proof, that the society recognized the decedent as a member up to a short time before his death, in connection with the presumption that all persons follow such laws, rules and regulations as they' are subject to, is sufficient evidence of the good standing of decedent to maintain the action.” It is not denied, in this case, that the deceased, William Achterrath, paid all his dues, and conformed in every respect to such requirements of the society as entitled him to a good standing up to the time of his death, independently and outside of the fact that he died by his own hand. (2 Bacon on Benefit Societies and Life Insurance,—2d ed. —sec. 414).

Again, the constitution and by-laws of the appellant society, which are a part of the contract made by it with the deceased, recognize a distinction between loss of good standing in the society, and self-destruction. A member’s certificate may become void by his loss of good standing in the order, but such loss of good standing is determined, as a general thing, by a trial and conviction in the order. When, however, a member takes his own life, no trial can be had, and none is required by the constitution of the order. The act of suicide works a forfeiture of the certificate, not because the member is thereby deprived of his good standing in the order at the time of his death, but because, aside from all question of good standing, it is especially provided that suicide in and of itself shall defeat a recovery. If the intention was, that loss of good standing in the order always occurred when death was from self-destruction, then there would be no occasion for providing- especially against suicide. In such case, it would only be necessary to provide generally that loss of good standing should work a forfeiture of the policy; and if the commission of suicide is included in the loss of good standing, the special provisions against suicide would be unnecessary.

Counsel for appellant, however, claim that suicide is a crime, and that,.therefore, the appellant is not liable under the provisions of its constitution, which make the certificate null and void, if a member dies on account of the violation of any criminal law of any State, province or municipality. But suicide is not a crime under the statutes of this State. In Hew York, although suicide is not a crime, an attempt to commit suicide is a crime, but it has been held in that State, that the fact, that a member killed himself, is not a defense to an action under a provision of the contract that it should be void if he should die “in violation of, or attempt to violate, any criminal law.” (Darrow v. Family Fund Society, 116 N. Y. 537). In Kerr v. Minnesota Mutual Benefit Ass. 39 Minn. 174, where a policy of insurance provided that, “if the assured shall die in, or in consequence of,. the violation of any criminal law of any country, State or Territory in which the assured may be, this certificate shall be null and void,” it was held that death by suicide is not within the proper meaning of the policy, to be considered as the violation of law therein referred to; and in that case it was said by the Supreme Court of Minnesota: “And under the general language here used, which must be construed favorably to the assured and strictly as against the company, the violation of law referred to in the policy ought not, we think, to be construed to mean or include suicide. Suicide, though strictly a crime, is not reckoned among offenses or violations of law, such as the language of the policy would be commonly understood to refer to.”

Counsel for appellant also say that, while suicide itself may not be a crime, yet the attempt to commit suicide is a crime. But “an attempt to commit crime imports a purpose not fully accomplished to commit it. It is the attempt to commit suicide that is the crime, while the taking of one’s own life is no violation of the criminal law. * * * While the attempt to commit suicide is a crime, the accomplishment of the purpose to do so is not.” (Darrow v. Family Fund Society, supra). In the case at bar, suicide was actually accomplished, and, therefore, it cannot be said tfiat the deceased was guilty of the attempt to commit suicide. “If the act fails to accomplish its purpose, it constitutes an attempt, but if the result of it is the consummation of the purpose, the act is not commonly designated as an attempt.” (Darrow v. Family Fund Society, supra).

The benefit certificate, issued to the deceased, was issued January 19, 1899, and his death took place May 8, 1901, more than two years after the issuance of the certificate. Inasmuch as he continued to be in good standing up to the time of his death, the question arises as to the meaning of that part of section 1 of article 16, which reads as follows: “The only conditions binding upon the member are the agreements as to his full * compliance with the laws and rules of the association, and that all dues and assessments shall be paid as required. In all other respects the payment of any sum due under any certificate issued to a member, shall be indisputable and incontestable.” After the expiration of the two years from the date of the certificate, the only conditions, binding upon William Achterrath, were the agreements as to his full compliance with the laws and rules of the association, and that all dues and assessments should have been paid as required. It is not denied that he paid all dues and assessments as required; and the only question remaining is, whether the agreements as to his full compliance with the laws and rules of the association include or exclude the provisions in regard to suicide and self-destruction.

The certificate in this case provides that the statements and representations, made by Achterrath in the petition or application for his membership in the circle, shall be made a part of the contract embodied in the certificate. When we look at the application for membership, we find two agreements embodied in the eighth and ninth clauses of the application, and following the one upon the other. By the first of these agreements, Achterrath" says, “I further agree that the order shall not be responsible under this contract, if * * * I shall die * * * by suicide, whether sane or insane,” etc. By the terms of the second agreement, embodied in clause 9, he says: “I agree to make punctual payment of all dues and assessments for which I may become liable, and to conform in all respects to the constitution, laws, rules, and usages of this order now in force, or which may hereafter be adopted by the supreme circle thereof.” By agreeing that the order shall not be responsible under the contract if he should die by suicide, whether sane or insane, he made an agreement which stood by itself, and was not dependent upon anything in the constitution, laws, rules or usages of the order. It is not to be presumed that, when he made the agreement embodied in the ninth clause of the application, it was intended to repeat what was agreed to in the eighth clause. Therefore, when by the ninth clause he agreed to conform in all respects to the constitution, laws, rules and usages of the order; the intention evidently was to refer to such parts of the constitution, laws, rules and usages of the order, as were not embraced in what was agreed to by the terms of clause 8. If the language in clause 9 was broad enough to cover the agreement, that the order should not be responsible in case of his death by suicide, then it was unnecessary to make the separate agreement in regard to dying by suicide, which is embodied in clause 8. In construing two clauses of a contract following one upon the other, a construction will not be adopted, which makes one a repetition of the other. It is true that, by section 5 of article 10 of the constitution, it is provided that “if a member dies * * * by self-destruction * * * the certificate of membership shall be null and void.” But, all upon this subject that is embodied in section 5 of article 10 of the constitution, is contained in the agreement made by the insured in clause 8 of the application. It is, therefore, to be presumed that the agreement in clause 9 of the application did not refer to that part of section 5 of article 10 of the constitution, which refers to self-destruction.

When, now, we come to section 1 of article 16 of the constitution of the order, we find substantially the same language, which is embodied in clause 9 of the application. This application is made out upon a blank furnished by the order itself. Sections 1 and 3 of article 6 of the constitution refer to the subject of filling out the blank application by the applicant, and the signing of it by him, and to the report of the committee upon the application, and to the endorsement to be made upon the application, and to the approval of the application by the supreme medical director, and the return of the same to the office of the supreme secretary; and it is specifically stated, that “each application for membership and indemnity must be in writing on blanks furniShedby the order.” The agreements, embodied in clauses 8 and 9 of the application in the present case, are parts of a printed blank furnished by the order. Unquestionably, the language of this printed blank was in the mind of the order when it framed section 1 of article 16. The following words in that section, to-wit, “the agreements as to his full compliance with the laws and rules of the association,” are substantially the same as the language used in clause 9 of the application. It is to be presumed, therefore, that the reference in section 1 of article 16 of the constitution is to the agreement, embodied in clause 9 of the application, and not to the agreement embodied in clause 8 of the application. This conclusion receives endorsement from the fact, that, in clause 9, the agreement is “to conform in all respects to the constitution, laws, rhles and usages of this order,” etc. The language in section 1 of.article 16 is, “the agreements as to his full compliance with the laws and rules of the association.” It will be observed that, in section 1 of article 16, the word “constitution” is left out, and the words “laws and rules” are used. The provision, that, “if a member dies * * * by self-destruction * * * the certificate of membership shall be null and void,” is a part of the constitution of the order, that is to say, it is section 5 of article 10 of the constitution. But the agreements, mentioned in section 1 of article 16, do not refer to the constitution, but only to the laws and rules of the association. It cannot be supposed, therefore, that section 1 of article 16 referred to that provision of the constitution, embodied in section 5 of article 10. It is true that the word, “rules,” is sometimes used in a sense sufficiently broad to embrace such rules, as are embodied in the constitution, as well as in the by-laws. But, the omission of the word “constitution” from section 1 of article 16, when the same was used in clause 9 of the" application, possesses a peculiar significance with reference. to the interpretation of the language now under consideration.

It is thus apparent that, if, after two years from the date of the certificate, the member continued in good standing—and such was the fact in regard to William Achterrath—the only conditions after that date binding upon him were the agreements as to his full compliance with the laws and rules of the association, and not such other agreements, as were made independently and outside of the laws and rules of the association. It follows that the words, “in all other respects the payment of any sum due under any certificate, issued to a member, shall be indisputable and incontestable,” were intended to mean that the benefit certificate should be incontestable after two years, except for certain conditions, among which suicide was not embraced. Our opinion is, that, here, the incontestable clause applies even though the insured came to his death by suicide. The only conditions, binding upon the member remaining in good standing after the lapse of the two 'years, did not embrace any agreements in regard to suicide or death by his own hand. At any rate, the language of section 1 of article 16 leaves it doubtful, whether such was the case or not. This being so, the rule applies that, where there is a reasonable doubt as to the extent of the application of the incontestable clause, it must be solved in favor of the beneficiary.

The action of the trial court in ruling upon the evidence, and in the giving and refusal of instructions, was in accordance substantially with the views here announced. The judgments of the Appellate and trial courts were based upon the theory that, under section 1 of article 16, the appellant was estopped from refusing payment on account of Achterrath’s death by self-destruction. We think that they adopted the correct theory, and gave the correct interpretation to section 1 of article 16.

Accordingly, the judgment of the Appellate Court is affirmed.

Judgment affirmed.