Mutual Life Assur. Soc. v. Harrington , 139 Miss. 826 ( 1925 )

^* Headnotes 1. Pleading, 31 Cyc., p. 564; 2. Insurance, 33 C.J., section 824; 3. Mutual Benefit Insurance, 29 Cyc., p. 244; 4. Insurance, 32 C.J., section 234; 5. Mutual Benefit Insurance, 29 Cyc., p. 14; 6. Mutual Benefit Insurance, 29 Cyc., p. 249; On representations as to health of insured when he has an undiscovered disease, see note in 53 L.R.A. 193, 15 L.R.A. (N.S.) 1277; 14 R.C.L., pp. 1070-1071; 3 R.C.L. Supp., p. 336; 4 R.C.L. Supp., 938. 7. Mutual Benefit Insurance, 29 Cyc., p. 242; 8. Mutual Benefit Insurance, 29 Cyc., p. 242; 9. Evidence, 22 C.J., section 344; Mutual Benefit Insurance, 29 Cyc., p. 242; Incorrect statement of age, in application for insurance as affected by provisions of constitution or by-laws fixing age limit, see notes in 1 A.L.R. 463, 14 A.L.R. 927; 14 R.C.L., p. 1068; 3 R.C.L. Supp., p. 335, 4 R.C.L. Supp., p. 938; 10. Affidavits, 2 C.J., section 140; Mutual Benefit Insurance, 29 Cyc., p. 242. Miss Maggie Harrington for herself and as next friend for her minor sisters, Mrs. Nina Newman and Miss Eva Harrington, filed her declaration in the circuit court of Simpson county against the defendant, based upon the "covenant of insurance" issued by the defendant upon the life of Mrs. Louisa W. Harrington, dated the 11th day of April, 1922, for one thousand dollars, the face of the covenant. Among other things the declaration charged that the "Columbian Mutual Life Society, a nonresident fraternal or benevolent society, but which has not been incorporated in the state of Mississippi, and is a foreign society," etc. And further charged that on the ____ day of ____ Mrs. Louisa W. Harrington, the insured, departed this life, having complied with the terms of this covenant in her lifetime, and that plaintiffs were entitled to receive by virtue of the contract the sum of one thousand dollars. Attached to the declaration, and as an exhibit thereto was what is denominated as covenant No. 106187, issued by the Columbian Mutual Life Assurance Society, their ordinary life beneficiary covenant, which is too long to copy in this opinion. We quote from said contract as follows:

"Proof of death satisfactory to the society shall be furnished within one year from the date of death of the assured, and written notice shall be given within ten days of any accident for which benefits are provided in this covenant, and no legal proceedings for recovery upon this covenant shall be brought until the assured has exhausted his rights of appeal under the constitution and laws of the society, nor in any event within ninety days after filing of proofs of death or disability, and no action at law or in equity shall be brought or maintained on this covenant unless such action is brought within one year from the time the right of action accrues."

The covenant further stipulated for the compliance on the part of the assured with the constitution and by-laws of this society now existing or as hereafter legally amended. Section 23 of the covenant partially quoted is as follows:

"The Columbian Mutual Life Assurance Society is incorporated as a fraternal beneficiary society under the laws of the state of Mississippi," etc.

Also as a part of the exhibited covenant we find the list of the founders on page 23 of the record setting out the names of Lloyd T. Binford and more than twenty associates, prominent citizens of Mississippi and other states.

The Columbian Mutual Life Assurance Society filed its plea of the general issue and notice under the general issue that, by virtue of chapter 206, Laws of 1916, in addition to the covenant sued on, the contract was further evidenced by the articles of association, constitution, and laws of the defendant society, application for membership, medical examination, under section 5180, Hemingway's Code. It further gave notice that Mrs. Harrington, the assured, under section 290 of the society's constitution, was obligated to state the condition of her health and her true age in her application. And they further gave notice that Mrs. Harrington stated in her application that she was of sound health, and stated specifically that she was not afflicted with cancer, and that she did not have lumps in her breast, and that the constitution of the order of the society provides that the answers in the application should be strict warranties, and would form the only basis of liability. That at the time the application was made the assured was afflicted with carcinoma of the breast. They further alleged that she represented in the application that she was fifty-five years of age, when at that time she was fifty-six years of age, and not insurable under the contract applied for and obtained. It further set out an acceptance by Mrs. Harrington upon the delivery of the covenant, with a statement that she had not been ill since the examination, and alleged further that on the 28th day of April, less than twenty days from the delivery of the covenant, she was operated upon at the Baptist Hospital of Jackson, Miss., and had her breast removed on account of cancer. That the representations and warranties in the application and written acceptance were false and were breached, and on that account the covenant sued on was breached and no liability attached on account of said breach. The plaintiffs gave notice of special matter to the effect that they would offer to show that the domicile of the society was at Memphis, Tenn., and that a copy of the application, constitution, and by-laws were not attached to the covenant or policy or furnished to Mrs. Harrington, and, further, that they would show that the defendant never qualified as a mutual fraternal beneficiary association in Mississippi.

The plaintiffs offered in evidence the covenant and rested. Mr. Lloyd T. Binford, the president of the association, testified that the defendant society was a fraternal benefit society under the laws regulating such societies in Mississippi and that it had qualified under chapter 206 of the Laws of 1916. The defendant further offered proof to the effect that carcinoma of the breast was a form of cancer, and by expert witnesses showed that the disease develops slowly, and that between the date of application and the date of operation for this malady this disease could not develop. One of the expert witnesses who performed the operation testified that it was his best recollection that Mrs. Harrington told him that she had been suffering with lumps in her breast and with the trouble for which she was seeking medical assistance in January prior to the date of the operation. The examination shows that Mrs. Harrington, in her application for membership in this society, stated that she had not suffered with lumps in the breast or with cancer, and was not so suffering at that time. The proof further showed that the members of this society formed a mutual society for the mutual benefit of its members in the matter of insurance in which each and all were alike interested. It was admitted that no copy of the constitution and by-laws with application of membership was furnished to the decedent, the assured. That Mrs. Harrington died on September 5, 1922, and the proofs of death and certificate showed that the cause of her death was cancer of the breast, and the proofs of death, consisting of affidavits of physicians, and denominated as Exhibit 6 of the record, with one from the adult beneficiary of the covenant and one from other relatives, were offered in evidence for the purpose of showing that Mrs. Harrington, the assured, died with cancer, and that the claimants showed by the affidavit or proofs that Mrs. Harrington was one year older than represented in the application. It was further shown by the rate book that this character of covenant was only issued to people above sixteen and not over fifty-five years of age. The rate book was offered to show that no rate of insurance was charged on this character of covenant above fifty-five years. The proofs of death in the form of affidavits as stated above were excluded from the jury, and exception noted.

The defendant showed by all of its expert testimony that this character of cancer or carcinoma of the breast would not develop in the length of time intervening between April 11th, the date of the delivery of the covenant, and April 28th, the date of the operation for cancer, and the further expert opinion that she had the malady for a much longer period of time.

Opposing this view, the plaintiff showed by the daughter of the deceased that about the 1st of April of that year Mrs. Harrington, the assured, had a fall through the back porch floor, and bruised her breast, and that she, the daughter, massaged the breast with liniment; that there were no lumps, but that later, about the 16th of April, that Mrs. Harrington complained that she had for the first time discovered lumps in her breast, and other testimony of this nature as to her complaining of the lumps after the fall and as to the time said complaint was offered.

The testimony of Dr. Giles was offered to show that in that community a Mrs. Patterson had suffered a bruise of the breast on the steering wheel of a car, and that within a shorter time lumps had developed, and carcinoma of the breast and death had ensued therefrom, and the disease developed and death ensued in a much shorter time than is shown in the case of the insured here. Also the husband of Mrs. Patterson was permitted to testify as to the injury and as to the development of the disease.

The record is too voluminous to undertake to copy it, but we think we have fairly stated the salient facts of the case. The case was submitted to a jury, and resulted in a verdict for the plaintiffs for the amount of the covenant, one thousand dollars.

It is earnestly insisted by counsel for appellee that the by-laws and constitution in this case did not bind the assured or the beneficiaries because the society here sued is a foreign corporation; that, under section 2675, Code of 1906 (section 5141, Hemingway's Code), the insurance society could not avail itself of any warranties or false representations as to age or disease or otherwise, unless, as a foreign corporation, a copy of the by-laws, constitution, and application was furnished to the insured with the covenant of insurance. Upon this objection of course hinges the decision of this case, and it is clear to us that, while it is true that the plaintiffs alleged that the defendant society was a nonresident corporation, yet they attached to their declaration a copy of the contract of insurance or covenant of insurance which states plainly that the corporation is organized under the laws of Mississippi. Also Mr. Binford testified, as shown by this reccord, that the corporation was duly organized under the mutual benefit association laws of this state. The exhibit therefore contradicts this statement in the declaration, and the plaintiff would be bound by the exhibit. But, if this were not the case, having alleged this defendant to have been a nonresident corporation, the burden of proof was upon the plaintiff, as a part of its substantive case, to show that the defendant was a foreign corporation and not organized under the laws of Mississippi. So that we say, first, the exhibit or contract executed by the parties overturns the averment in the declaration; second, we say that the burden of proof was upon the plaintiff to show that which he had affirmed, the general issue plea having been interposed; third, the testimony of Binford is uncontradicted in this record; fourth, and finally, said section applies and refers to life insurance companies, and does not include a mutual benefit association such as the Columbian Mutual Life Assurance Society. The appellee further insists that the constitution and by-laws are not complete because of certain extremely technical objections to the form of the certificate, and especially as to the number of founders or incorporators of this society. A reference to the exhibit shows that the names of the incorporators or founders, as a part of the exhibit attached to the declaration, and more than twenty names agreed in the contract to be founders or incorporators, are set forth in that exhibit, by which the plaintiff is bound. It is a fact that the copy introduced shows only nineteen names, only seven are required by section 5184, Hemingway's Code, but a count of the names in the exhibit beginning with the name of Lloyd T. Binford and ending with Hon. J.A. Teat, Jackson, Miss., shows twenty-five names of well-known citizens of the country and disposes of that objection, besides, section 5184, Hemingway's Code, applies to this character of organization, and by that section only seven incorporators are required. We think the certificate attached to the constitution and by-laws complies with the substance of the statute in all respects, and contains a copy of the charter and a copy of the certificate of Henry, the commissioner of insurance, together with the certificate of the national secretary of the society, and in all respects substantially complies with the requirement of the law and entitled to the exemption provided for in section 5176, Hemingway's Code, which is as follows:

"Except as herein provided, such societies shall be governed by this act, and shall be exempt from all provisions of the insurance laws of this state, not only in governmental relations with the state, but for every other purpose, and no law hereafter enacted shall apply to them, unless they be expressly designated therein."

So that we now approach this case upon the errors assigned by the appellant, treating the defendant as a mutual benefit life assurance society of this state, composed of members who have associated themselves together for the purpose, among others, of mutually affording to each other life insurance by mutual assessment, and, as was said by Mr. Justice HOLMES in the case ofModern Woodmen of America v. Jennie Vida Mixer, 45 S.Ct. 389, 69 L.Ed. ___, on April 13, 1925, this society is of that character referred to by him as being "the indivisible unity between the members of a corporation of this kind in respect of the fund from which their rights are to be enforced and the consequence that their rights must be determined by a single law, is elaborated inSupreme Council of the Royal Arcanum v. Green, 237 U.S. 531, 542, 35 S.Ct. 724, 59 L.Ed. 1089, L.R.A. 1916A, 771. The act of becoming a member is something more than a contract, it is entering into a complex and abiding relation, and, as marriage looks to domicile, membership looks to and must be governed by the law of the state granting the incorporation."

Counsel for appellant insists, first, that he was entitled to a peremptory instruction; insisting that the testimony of Dr. Giles as a nonexpert witness was not entitled to any consideration. Upon this point suffice it to say that, while the expert testified that the disease of cancer or carcinoma of the breast would not develop in such short time as seventeen days, still Dr. Giles testified for plaintiff that in his personal observation and experience he had seen this disease thus develop, and we know of no rule applicable to the disease of cancer which would render incompetent nonexpert testimony based upon observation and experience. In addition to that, the testimony of the daughter who massaged the breast of the insured is in the record, and cannot be ignored, whatever conclusion one might reach as to the weight of the testimony. There was this issue of fact in the case to be submitted to the jury, and we do not think, in view of Dr. Giles' and Mrs. Newman's testimony, that the defendant was entitled to a peremptory instruction.

Next it is insisted that the testimony of Dr. Giles as to the development of a case of carcinoma of the breast and of her husband as to the date of the bruise and cause thereof is incompetent. No reason is assigned nor rule invoked, and we must think that actual experience and actual observation is always competent in this character of case, especially where the testimony tends to show an exception to the rule announced by the experts. We know of no rule of evidence prohibiting this character of testimony in this character of case, so we do not think there is merit in this assignment of error.

It is next urged that the court erred in excluding the proofs of death submitted by the beneficiaries to the defendant, consisting of affidavits of physicians, relatives, and of Miss Harrington, one of the beneficiaries. If this testimony was competent it was vital to the defendant's theory of the case, because the affidavits show that she had within a short time been operated upon for cancer, and had within a few months from the date of the delivery of the covenant to her died with that disease; and, further, the proofs of death, executed by those who had interest in the proceeds of the covenant showed that Mrs. Harrington, the insured, had misrepresented her age and had obtained life insurance of a character and at an age not insurable under the by-laws and constitution of this society. The law of the land (section 5180, Hemingway's Code) makes the by-laws and constitution a part of the contract, as does the contract itself in this case, so that it was a pertinent question, if the insured in this case secured insurance, which the members of the society had agreed together should not be issued, by virtue of her statement that she was of insurable age for this class of covenant; then the statement in the proofs, if competent, was vital to the defendant's case. The proofs of death by the terms of the contract exhibited with the declaration are the basis upon which liability of the society rests, as we have quoted from the exhibit in the statement of facts herein. And by the very nature of the contract the statements procured by the beneficiaries in order to fix liability upon the society under the contract are admissible, though not conclusive, as against the assured.

We quote from Ency. of Evidence, vol. 7, p. 573, section 3:"Proofs of Loss as Evidence. A. In General. — The proofs of loss or death are admissible in evidence on behalf of the assured only for the purpose of showing that he has complied with the insurance contract in furnishing them; they are not competent to prove the fact of the loss or death, or its cause, or the extent of the loss, or any fact recited therein. The introduction of the proofs of loss by the insurer as a basis for showing fraud or false swearing by the assured does not make them evidence for the latter of facts recited in them.

"B. As Admissions. — The proofs of loss are competent evidence against the party furnishing them of the cause or extent of a loss, or the cause of death of an insured person, or of any other material fact therein recited [citing Bachmeyer v.Mutual Reserve Fund L. Ass'n, 82 Wis. 255, 52 N.W. 101]. Ordinarily, the rule extends to certificates and affidavits of physicians and others [citing Modern Woodmen of America v.Davis, 84 Ill. App. 439; Id., 184 Ill. 236, 56 N.E. 300;Nelson v. Nederland Life Ins. Co., 110 Iowa, 600, 81 N.W. 807; and many other cases]."

Quoting further from Ency. of Evidence: "And verdicts of coroner's juries and marine protests furnished as parts of the proofs of loss by the assured voluntarily, or under the terms of the insurance contract. It has been denied that certificates of attending physicians and proceedings of coroner's inquests are competent evidence against the beneficiary, where they are furnished solely at the request of the insurer, and not under the terms of the contract, and where the truthfulness of the facts found or recited therein is denied by the beneficiary at the time such certificates or proceedings are furnished. The admissions contained in proofs of loss are not conclusive against the assured" — citing cases where the proofs of loss were admitted and held not to be conclusive from United States, California, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Michigan, Nebraska, New York, Pennsylvania, West Virginia, and Wisconsin."

On this question, in the case of Supreme Lodge of Knights ofHonor v. Fletcher, 78 Miss. 377, 28 So. 872, 29 So. 523, our own court held: "In an action on a policy of life insurance, which by its terms was to be void in case the insured committed suicide, the finding of a coroner's inquest jury that the decedent committed suicide is admissible in evidence, and isprima facie, but not conclusive, of the fact found."

In this case Mr. Justice CALHOON delivered the opinion of the court, and said in part: "In this action on a life insurance policy the sole question before the jury was whether the death was by suicide. By the laws of the order sued, the beneficiary is required, as a condition precedent to recovery, to furnish it with satisfactory evidence of the death, and `in case of sudden death, the certificate of the coroner under seal, will invariably be required, and in all cases of death from unknown causes, the particulars and result of any investigation held in the case must be furnished.' The order offered the proofs of death, a part of which was the finding of the coroner's inquest, but the court excluded that part of these proofs. It was error to let in part without the whole. In fact the finding of the coroner's inquest jury was admissible as independent evidence and was prima facie, though not conclusive, of the cause of death. U.S. Life Ins. Co. v.Vocke, 129 Ill. 557; Fein v. Covenant Mut. Ben. Asso., 60 Ill. App.? 274; Walther v. Mutual Life Ins. Co., 65 Cal. 417;Ins. Co. v. Higginbotham, 95 U.S. 380-390."

So that we conclude that the affidavits furnished by the beneficiaries in compliance with the terms of the covenant of insurance as a part of the proofs of death of the insured were competent as against all the beneficiaries or plaintiffs in this case. Of course, ex parte affidavits secured by the insurer, appellant here, on its own initiative are not competent. We think it was manifest error in this case to reject the proofs voluntarily submitted to the insurer by the beneficiaries in order to secure the payment of the policy and in order to fix liability under the terms of the contract, and as a condition precedent to the enforcement of this covenant. And, in view of this error and the very uncertain state of the proof in this case, we feel that the defendant is entitled to another trial.

Reversed and remanded.

ETHRIDGE, J., and SMITH, C.J., took no part in the decision of this case.