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(116 Kan. 280, 226 Pao. 764.)

127 S. W. 457, 21 Ann. Cas. 1029; Brotherhood of Locomotive F. E. v. Aday, 97 Ark. 425, 34 L.R.A. (N.S.) 126, 134 S. W. 928; Turner v. Fidelity & C. Co. 112 Mich. 425, 38 L.R.A. 529, 67 Am. St. Rep. 428, 70 N. W. 898; Lobdill v. Laboring Men's Mut. Aid Asso. 38 L.R.A. 537 and note, 69 Minn. 14, 65 Am. St. Rep. 542, 71 N. W. 696; Starling v. Supreme Council, R. T. T. 108 Mich. 440, 62 Am. St. Rep. 709, 66 N. W. 340; 14 R. C. L. § 491, p. 1317; United Commercial Travelers v. Barnes, 7 Ann. Cas. 809 and note, 72 Kan. 293, 80 Pac. 1020, 82 Pac. 1099; Erickson v. United Commercial Travelers, 103 Kan. 833, 176 Pac. 989.

Harvey, J., delivered the opinion of the court:

This is an action upon an accident insurance policy. There was a verdict and judgment for plaintiff, and defendant has appealed.

The petition contained the usual allegations for such an action, and had attached to it a copy of the policy sued upon, including a rider indemnifying for injuries from pyogenic infection. The answer, after admitting the execution of the policy, contained a general denial, and averred that plaintiff had made false answers to material questions in his application for the policy which he had warranted as true, and which had been relied upon by defendant in issuing the policy. The reply was a general denial.

Among the answers given by plaintiff in his application for the policy, and which he warranted as being true, were the following:

Has any application ever made by you for life, accident, or health insurance been declined?

Answer as to each: No.
Has any life, health, or accident
policy issued to you been canceled?
Answer as to each: No.

Has any renewal of a life, accident, or health policy been refused by any company or association?

Answer as to each: No.

Defendants contend that the second portion of this question was falsely answered, for the reason that in 1915 plaintiff had poli

cies in three accident insurance companies which were canceled, and offered evidence tending to show that fact. Plaintiff in his testimony admitted that he had three accident insurance policies; said he had received an injury which resulted in a fractured arm; that he presented a claim under each policy; that he was not satisfied with the settlement made, and that he had surrendered the policies by going personally to the general office of the respective companies at Kansas City, Missouri, and turning his policies in and receiving the unearned premiums thereon.. On this question the court instructed the jury as follows: "In regard to this, I instruct you that the cancelation contemplated by the question rerelated to cancelation by other insurance companies when exercising their option under the policy to cancel same, and does not refer to a cancelation by the plaintiff himself or the assured because of being dissatisfied with the manner in which his claims were handled or other conduct on the part of the insurance company objectionable to him."

Appellant complains of this instruction, and says that by it the court has changed the question asked in the application so as to read, "Has any life, health, or accident policy issued to you been canceled by the company issuing the

same?" and contends that was not within the province of the trial court. Considering question 8 as a whole, it is clear the company

wanted such information as would indicate whether or not any company had ever declined to insure the applicant, or canceled the policy issued to him, or refused to renew a policy previously issued, and, so construed, the question is material. It was of no importance to the company to know whether or not the applicant had voluntarily surrendered a policy, even though technically it might have been marked "Canceled," or whether he had let one lapse by reason of nonpayment; for under such circumstances the

act would not indicate anything detrimental to the applicant as a risk. In 1 C. J. 423, speaking of false warranties in an application for accident insurance and the interpretation which should be given to them, it is said: "So, also, the voluntary surrender of a policy is not a breach of a warranty that no other insurance has been canceled."

In Smith v. Dominion of Canada Acci. Ins. Co. 36 N. B. 300, Smith had two accident policies with one insurance company, and sustained an injury, for which he made claim. After some controversy, the amount. payable was agreed to. The company, in remitting to its local agent, sent a check for the amount agreed to be due upon the claim, and stated, "As we are desirous of retiring from the risk, we inclose a further check" for the unearned premium, and asked its local agent to take up the policies in making settlement of the claim. The agent did not read the letter to the insured, but handed him the check for the amount of the settlement, and asked him if he was willing to surrender the policies on the unearned premiums being returned. To this the insured assented. The agent then gave him the check for the unearned premiums, and the insured delivered the policies. Thereafter he made application to another insurance company for accident insurance and stated in his application: "No accident policy ever issued to him had been canceled by this or any other company, corporation or association, except as herein stated."

No exceptions were stated. In an action upon this last policy the defense was that this answer was false and that it avoided the policy. The court held "that the putting an end to the policy with the consent of the plaintiff was a surrender and not a cancelation, and was not a breach of the warranty that no policy issued to him had ever been canceled."

In Wells v. Great Eastern Casualty Co. 40 R. I. 222, 100 Atl. 395, the application contained this state

ment: "No accident, sickness, or life insurance policy issued to me has ever been canceled or renewal refused except as follows-no exceptions."

In an action upon the policy it was contended that this statement warranted to be true in the application was false. It is contended by plaintiff that the policy was surrendered instead of canceled. The court, in discussing the matter, said: "In requiring that an applicant state whether an accident, sickness, or life insurance policy issued to him had ever been canceled, the defendant must be held to have referred to cancelation by the insurer, and not to a policy voluntarily surrendered by the insured, even though the policy so surrendered had been marked 'Canceled' by the insurer. An insurance company might well regard it as a fact material to be known by it in passing upon the acceptance of a risk, that insurance previously secured by the applicant had been regarded by the insurer as

an undesirable risk and had been canceled. The fact that there had been a previous voluntary surrender of an insurance policy by the insured would be of slight, if of any, imIf the defendant reportance. garded the previous surrender of a policy by the applicant as a fact material to be known by it, it should have specifically required information as to that, as well as concerning the prior cancelation of any policy." (Page 228.)

The instruction given correctly interprets the purpose of the question. The court properly submitted to the jury whether the policies had been canceled at the instance of the companies which had issued them, or whether they had been surrendered by the assured. dered by the assured. The evidence in this case was suf

Insurance

insurance.

ficient to support a breach of warjudgment that they ranty as to other had been surrendered by the assured, rather than canceled by the companies.

(116 Kan. 280, 226 Pac. 764.)

Defendant, as one of its defenses, averred that plaintiff had made a false warranty in his answer to question 9 in the application, as follows:

Q. Have you ever made claim for or received indemnity on account of any injury or illness? If so, give companies or associations, dates, amounts, and causes.

A. Yes; about eight years ago; have forgotten name of company.

The contention was that this answer was false and fraudulent, in that plaintiff in 1915 had made claim for and received indemnity on account of injury from three different companies, and evidence was offered tending to support that fact. In his instructions the court, in effect, took this defense away from the jury. Appellant complains of that ruling. The question included five elements, viz.: (1) Have you made a claim? (2) name of companies; (3) dates; (4) amounts; and (5) causes. He answered: (1) Yes; which is conceded to be true. (2) That he had forgotten name of companies, and there is no evidence to contradict that. Complaint is made that the word "company" is used in the singular, when in fact there were three companies. About eight years ago, when the correct date was in July, 1915, less than six years. No attempt was made in the answer to give (4) amounts and (5) causes. The answer was obviously answer-waiver. imperfect and incomplete, but defendant issued the policy thereon without any request that it be completed or perfected.

-incomplete

(3)

The rule seems to be well recognized that when, upon the face of an application, a question appears not to be answered at all, or to be incompletely answered, and the insurer issues a policy without further inquiry, it waives the incompleteness of or failure to answer, as the case may be, and renders the failure to answer immaterial. 3 Joyce, Ins. 2d ed. § 1870; Phoenix Mut. L. Ins.

Co. v. Raddin, 120 U. S. 183, 30 L. ed. 644, 7 Sup. Ct. Rep. 500; Smith v. North America Acci. Ins. Co. 46 Nev. 30, 205 Pac. 801. The court did not err in taking this defense from the jury.

The policy sued on insured plaintiff against loss resulting from bodily injuries effected directly and independently of all other causes, "if such injuries, independently and exclusively of all other causes, shall wholly and continuously disable the insured from the date of accident from performing any and every kind of duty pertaining to his occupation." The evidence tended to show that about July 1st plaintiff, in going to a telephone in the night, injured his great toe by striking it against the furniture with such force as to drive the nail into the flesh, causing an injury which required the nail to be removed, and for about ten days plaintiff was unable to conduct his business; that from about July 13th for about ten days he was able to be about the office and perform his work, when what proved to be a pyogenic infection developed, requiring him to go to the hospital, where he remained for some time and was operated on several times. Upon this phase of the case the court instructed the jury as follows: "If you find and believe from the evidence that plaintiff's great toe was injured by being struck against a chair or some object on or about the 1st day of July, 1921, and that such injury resulted in the cutting and bruising or abrading of the toe to such an extent that it was infected by pyogenic germs from external inoculation through these cuts or bruises, then and thereafter until the 13th day of July following, plaintiff was totally disabled from performing any and every duty pertaining to his occupation, that on said 13th day of July, 1921, said infection subsided for a period until the 23d day of July, 1921, to such an extent he was able to perform his said duties, and that on said 23d day of July, 1923, said original infection so produced from

the injury to said great toe recurred, and that after said 23d day of July, 1921, plaintiff became totally disabled thereby, and he was continuously disabled from performing any and every kind of duty pertaining to his occupation following such recurrence of said infection, then I instruct you he is entitled to recover, if you find for him on the other points, notwithstanding the fact of the temporary subsidence of such infection."

Appellant complains of this, and contends that plaintiff was not continuously disabled longer than the first ten days after the accident; that any loss of time after that was not covered by the policy. The policy had a rider attached to it indemnifying for injury by pyogenic infection resulting from an accident. The evidence was that the pyogenic germs, or pus-creating germs, do not develop at once from the injury, but require time in the natural course of events for their development. An injury develops at once,

-immediate

injury.

within the meaning

and continuous of a policy of this character, when it follows directly from the accidental hurt within such time as the proc

esses of nature consume in bringing the person affected to a state of total incapacity to prosecute every kind of business pertaining to his occupation. Erickson v. United Commercial Travelers, 103 Kan. 833, 176 Pac. 989, and cases there cited. Hence the fact that it took ten days or more for the injury to develop in its ordinary course to such an extent that plaintiff was wholly incapacitated from performing any of his duties does not prevent the injury from being immediate and continuous within the meaning of the policy.

Appellant complains that the court did not, in his instructions, define the term "pyogenic infection." It had been repeatedly defined by the witnesses as pus infection. There was no question as to what the term meant, and it had been so frequently used and defined in the trial of the case that there was no necessity for special definition of it in the instruction. Several alleged errors in the conduct of the trial are complained of. We have examined each of them and find nothing in any of them to require a reversal.

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The judgment of the court below is affirmed.

ANNOTATION.

Prior surrender of policy as breach of warranty or representation that there had been no cancelation of insuance.

The holding of the reported case (RABIN V. CENTRAL BUSINESS MEN'S Asso. ante, 26) that in an application for insurance a warranty that no other insurance had been canceled is not breached by the prior voluntary surrender of a policy by the assured is supported by the other cases.

Thus, in Ætna L. Ins. Co. v. McCullagh (1919) 185 Ky. 664, 215 S. W. 821, the court held that a statement of the insured in his application, that no policy issued to him had ever been canceled, was substantially true, where, after a policy had been issued to him, and before its delivery, he refused to accept it of the agents, and ordered its cancelation, because of a

"rider" sent to its agents by the company with direction to attach thereto, which would have excluded a claim by the insured for a slight injury previously suffered.

And in Wells v. Great Eastern Casualty Co. (1917) 40 R. I. 222, 100 Atl. 395 (motion for reargument denied in (1917) 40 R.. I. 320, 101 Atl. 6), the court recognized the distinction between cancelation and surrender of a policy, and expressed the opinion that under a requirement in the application that the applicant state whether a policy issued to him had ever been canceled, the insurer must be held to have referred to cancelation by the insurer, and not to a

policy voluntarily surrendered by the insured, even though the policy so surrendered had been marked "Canceled" by the insurer. However, in the instant case it seems that the insured had been notified that the company had canceled the policy and had been directed to bring it to them to be canceled, which he did, and the policy was canceled; thus under the circumstances there was not a voluntary surrender of the policy by the insured.

And in Smith v. Dominion of Canada Acci. Ins. Co. (1903) 36 N. B. 300, where a policy of accident insurance contained a warranty that no accident policy ever issued to the applicant had ever been canceled, and it was shown that, in remitting to its agent for a claim filed by the applicant on accident policies secured by him prior to the policy in suit, the insurer had notified the agent by letter that it was "desirous of retiring from the risk" and instructed him to return claimant's policies, but the agent failed to read this letter to the claimant, asking him, however, if he was willing to surrender the policies, to which the claimant assented, and the policies were returned to the insurer,-the court held that, under the circumstances detailed, the policies were surrendered, and not "canceled," in the ordinary acceptation of that word when applied to policies, and there was no breach of warranty. Barker, J.,

said: "And when they speak of canceled policies, I can see no reason why they should be held as including surrendered policies. There is a reason for asking as to the one which does not apply to the other. If a policy is surrendered by mutual agreement, there is nothing in the transaction which necessarily points to any suspicious circumstances as to the assured, which it might be material for a company to know in case of a subsequent application being made by him. But if a company cancel a policy, as it has a right to do, it is not an unreasonable inference to draw that there is a reason for it which would naturally influence the minds of others in case the same person applied to them for insurance, as to whether they would accept the risk or not. If the defendants in this case attached any importance whatever to the fact that previous insurance effected by the plaintiff had been surrendered, they would have asked for it specifically. In my view, therefore, if these other policies were surrendered, as the jury found they were, and not 'canceled' in the ordinary acceptation of that word when applied to policies, then, I think, there was no breach of warranty. 1 am also of opinion, assuming the evidence which has been given as to the transaction be true, and as to that there is no dispute,-that the transaction was one of surrender, and not of cancelation." R. P. D.

STATE OF WEST VIRGINIA, Plff. in Err.,

V.

MCDOWELL LODGE, NO. 112, A. F. & A. M.

West Virginia Supreme Court of Appeals — June 6, 1924.

(96 W. Va. 611, 123 S. E. 561.)

Taxes, § 140-property of Masonic lodge.

Property of a lodge of Ancient Free and Accepted Masons, a charitable and benevolent organization, leased for profit, is not exempt from taxation under § 1, art. 10, of the Constitution, and § 57, chap. 29, of the Code, although the rents are used for charitable and benevolent purposes and for the upkeep of the property rented and the discharge of a debt thereon.

[See note on this question beginning on page 36.]

Headnote by LIVELY, J.

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