S. Travelers' Ass'n v. Shattuck , 2 S.W.2d 568 ( 1928 )

The appellee offered in evidence, as constituting the contract of insurance, the benefit certificate and the by-laws of the association. Section 5, art. 3, of the by-laws, reads:

"This association shall not be liable when death or disability is caused wholly or in part by * * * gunshot wounds or the alleged accidental discharge of firearms when there is no eyewitness except the member himself."

It was conclusively shown that the death of the insured resulted from the discharge of firearms in the absence of eyewitnesses. Whether or not the discharge of the gun was of accidental nature rests upon inferences from the circumstances proven. Therefore, was the appellant entitled to have the requested peremptory instruction given to the jury to return a verdict in its favor? The appellee insists that the instruction was properly denied because of two things: (1) The provision of the by-law was invalid because simply a rule of evidence to regulate the procedure of the courts; (2) the statute requires the benefit certificate to specify the contingency insured against, and the certificate insuring against accidental death may not be avoided by the repugnant by-law provision. It is apparent that the quoted provision has the object in view, not of providing simply a rule of evidence to modify or control the procedure of the courts, but of fixing a condition or excepted risk under which the association would not become liable to pay any amount of insurance to the insured or his beneficiary. Death by discharge of firearms where there are eyewitnesses, and death by discharge of firearms where there are no eyewitnesses, are thus placed into two separate classes, the one class insured against and the other class excluded from indemnity. The exception, or exclusion, is evidently for the protection against probable fraud upon the association through suicide by means of firearms. A provision of the same kind and form has been held valid, as being simply in the nature of a specially excepted risk or contingency. 14 R.C.L. p. 1265, § 441; Roch v. Ass'n, 164 Iowa 199, 145 N.W. 479,51 L.R.A. (N.S.) 221, Ann.Cas. 1915C, 813; Lundberg v. Ass'n,162 Wis. 474, 156 N.W. 482; Becker v. Ass'n (C.C.A.) 265 F. 508; Connell v. Ass'n, 139 Iowa 444, 116 N.W. 820; Schumacher v. Ass'n,118 Kan. 523, 235 P. 844. Quoting from the Becker Case, supra, as showing that it was not merely intended to change or alter rules of evidence:

"Only a particular kind of death is insured against, and hence that it is only the fact of that particular sort of accidental death that is relevant" to prove.

There are cases holding invalid provisions in different form and wording from the present one. Rollins v. Ass'n, 204 Mo. App. 679,220 S.W. 1022; Ellis v. Ass'n, 183 Iowa 1279, 168 N.W. 212, L.R.A. 1918F, 414. In the Rollins Case the provision was:

"The claimant shall establish the accidental character of the injury by the testimony of at least one eyewitness to the accident other than the insured himself, and in the event of failure so to do * * * the liability of the association shall be limited to one-tenth of the amount otherwise payable."

The court, after making distinguishment between that provision and one like the one in the present case, determined that —

"The provision which we have heretofore quoted in the policy we are considering does not state a condition that existing will necessarily avoid or limit the liability of the insurer, but attempts to describe and require the character of evidence that the beneficiary must produce in order to show or prove the accidental character of the injury."

The provision considered in the Ellis Case, supra, was likewise construed, in view of the proviso of the provision, as undertaking, in purpose and intention, simply to regulate rules of evidence. Likewise the stipulations considered in the following cases were held as not in the form and purpose of excepted risks, but simply as providing a rule of evidence in direct opposition of statutory provision. Mystic Circle v. Hoskins (Tex.Civ. App) 171 S.W. 812; Woodmen of the World v. Robinson (Tex.Civ.App.) 187 S.W. 215. The case of Ass'n v. Wilkes (Tex.Civ.App.)209 S.W. 230, involving a stipulation like the present one, expressly states that —

"It is not, however, necessary for us to determine the validity of this stipulation, since we think * * * appellee was an eyewitness within its terms."

Provisions of like tenor and effect as the present one have been held valid as an excepted risk, such as, for instance, "the insurance shall not extend to any bodily injury of which there is no visible mark upon the body." See 4 Joyce on Insurance, § 2617; 14 R.C.L. p. 1250, § 428; 4 Cooley on Ins. p. 3184. The purpose of such a provision, as declared, "is to protect the insurer against sham claims by barring the insured from recovering for alleged injuries of which there is no proof except his own assertion." The same certainty of the direct evidence of the accidental discharge of firearms is the import of the present by-law, in the purpose of protection against death through suicide by firearms. We are of the opinion that the provision is valid and enforceable as in the nature of an excluded risk.

Second point. The certificate of membership issued to the insured does not purport to contain in itself and without reference to any other formal instrument any of the substantive terms of the contract of insurance. It merely states that, as a member in "classes E and B" "the insured is entitled to benefits" indicated to be payable "in such amounts and under conditions and limitations as may be provided for in the articles of incorporation and by-laws of said association in force on the date of the happening of the event on account of which any claim, under this certificate, is made." Merely proving the certificate of membership and death of insured did not give the appellee any cause of action whatever. In order to establish a cause of action of any sort, she was compelled to prove a portion of the by-laws. Therefore, unless the application and bylaws are included with the certificate of membership as constituting "the policy or certificate issued by the association," within the meaning of the statute, in this case there is no formal policy or certificate whatever. Those documents constitute the only contract and only "policy or certificate" contemplated by the parties, and because thereof such "certificate" may not legally be regarded as invalid and unenforceable as a contract of insurance. It is not so entirely lacking in conformity to the form prescribed by statute (article 4797, R.S. 1925) as to make it void, in that it does not "specify" or particularize the entire subject-matter of insurance by express reference to the by-laws of said association. The by-laws definitely state, plainly and without ambiguity, the substantial elements of the insurance in "class E," of the time and amount of the payment by the insurer, the "event" or peril or risk insured against, and the "conditions and limitations" or excepted risks not insured against. By-laws are valid when enacted within the limits and by virtue of the power conferred by the charter of the association. So in this view the legal effect may be given, as the appellee did in her pleadings, that the by-laws are included with the certificate of membership as constituting the certificate of insurance issued by the appellant to the insured. A fair construction of the plain provisions of the contract of insurance, as derived from the by-laws and the membership certificate, leads to the one conclusion that there are no conflicting or repugnant provisions relative to the risks insured or risks insured against or the time and amount of payment of insurance. The by-laws and the certificate, read together, express the same contingency and the same exception. There is a risk insured against and a risk excepted. This ruling is not opposed to the holdings in the cases of Pledger v. Acc. Ass'n (Tex.Com.App.)228 S.W. 110; Francis v. Association (Tex.Civ.App.) 260 S.W. 938. The precise question here considered is quite different from that involved in those cases.

The death conclusively fell within the by-law exception, as shown under appellee's pleading and proof (Harris v. Ins. Co. [Tex.Com.App.]212 S.W. 933), and it is believed that the instruction requested should have been given.

Accordingly the judgment is reversed, and judgment is here rendered for appellant, with costs of the trial court and of the appeal.