
    Jane Desmond, Respondent, v. The Supreme Council, Catholic Benevolent Legion, Appellant.
    
      Insurance—warranty as to prior examination and rejection — the knowledge of the medical examiner is not chargeable to the officers issuing the benefit certificate.
    
    Assuming that the medical examiner in chief of a fraternal benefit association, at the time of approving an application for membership containing a warranty that the applicant had never before applied for membership therein and been rejected, knew that the warranty was false, his knowledge is not chargeable to the association, where it appears that the benefit certificate was finally deliv•evered by the officers of the council which elected the member, and that the only duty of the medical examiner in chief was to scrutinize and to return to the secretary or medical examiner, of the council all medical examinations ■approved by him, with his decision indorsed thereon, and to file in his office :all examinations rejected by him, and to notify the council of the rejection.
    Appeal by the defendant, The Supreme Council, Catholic Benevolent Legion, from a judgment of the Supreme Court in favor •of the plaintiff, entered in the office of the cleric of the county of Albany on the 18th day of May, 1899, upon the verdict of a jury rendered by direction of the court.
    McGuire, Low & Burr, for the appellant.
    
      George Addington, for the respondent.
   Merwin, J.:

The defendant is a domestic .corporation and its principal office for the transaction of business is in the city of Brooklyn. • It is a fraternal benefit association and has subordinate branches or councils. On the 22d day of September, 1893, it issued to William H. Desmond, a member of a subordinate council at Albany called the John Tracey council, a benefit certificate, by which it agreed that, in case certain conditions were complied with, it would upon the death of William H. Desmond pay to his wife, Jane Desmond, out' of its benefit fund a sum not exceeding $2,000 according to the rules governing that fund. William H. Desmond' died on the 22d of October, 1898. The proper proofs of death were filed and the amount of recovery is correct provided the plaintiff can recover at all. The claim of the defendant is that the plaintiff cannot recover, by reason of a breach of the warranty of the truth of the statements in the application for the certificate and medical examination attached thereto.

In the certificate it is staled that it “is issued to William H. Desmond, a member of John Tracey Council, No. 377, Catholic-Benevolent Legion, located at Albany, N. Y., upon evidence received from said council that he is a third-grade contributor to the benefit fund of this legion, and upon condition that the statements are true' which are.contained in his application for membership, and medical examination filed in the office of the Supreme Secretary and made * a part of this contract, and that ..he "will strictly comply with the laws, rules and regulations of the legion.” ,

In the application, which is dated August 25, 1893, there was a ' clause as follows : “ I hereby make application for' third-grade .membership in your Council of the Catholic Benevolent Legion, and do declare and warrant as true every statement made by me upon this application, and every answer and statement I shall make to the Medical Examiner.”

Among the questions and answers in the medical examination attached to the application, there are the following.: “Have yon ever before applied for membership. in' the Catholic Benevolent Legion ? No. Or any other beneficial society or life insurance ' company? Yes. Were you ever rejected? No.”

At the close of the medical examination and just before the signature of the applicant there is the following: “ I hereby Certify that the answers given to the questions in this application are correct to - the best of my knowledge and belief.”

The application was. approved by the medical exaininer in chief, on September 21, Í893, in the following terms":

“ The foregoing having been referred to me for decision, I do hereby approve the same' for the third grade.
“ GEO, 'R. KUHN, M. D.
Medical Examiner-in-Chief,’ O. B. L.”

It was shown by the defendant that on the 25th of September, 1888, the applicant, William H. Desmond, applied for membership in' the defendant, such application being made to the Capital City Council, ■a subordinate branch or council located at Albany, and that liis medical examination upon such application was rejected by Dr. Kuhn, the medical examiner in chief, and notice thereof given by him to the Capital City Council. The papers in the case were retained on file in the office of the medical examiner in chief in accordance with the laws of the legion.

There is no dispute of the application and rejection in 1888. It consequently follows that there was a breach of the warranty. (Kemp v. Good Templars' Mut. Ben. Association, 46 N. Y. St. Repr. 429; affd., 135 N. Y. 658, upon opinion below), and it is available to the defendant unless, as claimed by the plaintiff, the defendant is estopped by reason of knowledge of the prior application and rejection at the time it issued the certificate in suit.

The argument of the plaintiff is in substance that Dr. Kuhn, the examiner in chief, at the time he approved the application for the certificate in suit knew, or was chargeable with knowledge, of the prior application and rejection; that his knowledge is to be deemed the knowledge of the defendant, and that, therefore, the defendant having, issued the certificate and received the assessments thereon with full knowledge of facts that would render it void, will not be permitted to defeat a recovery by proving such facts. (Robbins v. Springfield Fire Ins. Co., 149 N. Y. 477; Kelly v. Metropolitan Life Ins. Co., 15 App. Div. 220.)

There is no proof that Dr. Kuhn in fact knew in 1893 the circumstances of the transaction in 1888. He might have known by an examination of the papers in his office.

Assuming that Dr. Kuhn did know, was his knowledge charge-able to the.defendant? Tinder the by-laws of the defendant, it was the duty of the medical examiner in chief “ to receive and scrutinize all medical examinations and such accompanying statements or certificates as may be referred from any Subordinate Medical Examiner, and promptly return to the Secretary or Medical Examiner of such Council all examinations approved by him, with his decision endorsed thereon. All examinations rejected by him shall be filed in his office and the Council notified of the rejection immediately!”

It was not a part of the duty of the examiner in chief to issue or deliver the certificate. His action was only a preliminary step in the transaction. The application for membership was first passed upon by the medical examiner of the subordinate council. If approved by him, it was then referred to the medical examiner in chief. If he approved it, he returned it to the secretary of the subordinate council, and then, at the next stated meeting, the report of the committee of investigation and the medical certificates were presented together, and if all were favorable a ballot was taken. If only one black ball appeared, the applicant was declared elected. He then became, as it may be inferred, entitled to his certificate of membership and consequent benefits. The actors in the final delivery of the benefit certificate were the officers of the council which elected the member. There is no evidence that they knew anything about the prior application and rejection, and it is hardly claimed that they or the defendant is chargeable with the knowledge possessed by the subordinate council to whom the application was made in 1888.

In regard to a similar situation, it was said in Hackett v. Supreme Council (44 App. Div. 524) that, if a record of rejections was kept by the examiner in chief, it would not estop the defendant from taking advantage of false statements that were made by the.insured;. that the mere existence of the record would not be enough to make the misrepresentation immaterial unless the contents of the .record,, or the fact of the previous rejection and the consequent falsity of the applicant’s present answer, were actually known to those officers- or agents of the defendant from whom.the insurance was obtained.'

Under the circumstances presented in this case the defendant is, we think, not chargeable with the knowledge of the examiner in chief as to the prior application and rejection. It has the right to avail itself of the defense of breach ’of warranty. (Clemons v. Supreme Assembly, etc., 131 N. Y. 485.) There is no evidence in the case from which the court had a right to find a waiver. It follows that the court erred in directing a verdict for the plain tiff.

All concurred.

Judgment reversed upon the law and facts and a new trial granted, with costs óf appeal to- the appellant to abide the event.  