Case Name: Loretta Smith, an Infant, by Mary Smith, Her Guardian ad Litem, Respondent, v. Chapter General of America, Knights of St. John and Malta, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-03-28
Citations: 143 A.D. 532
Docket Number: 
Parties: Loretta Smith, an Infant, by Mary Smith, Her Guardian ad Litem, Respondent, v. Chapter General of America, Knights of St. John and Malta, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 143
Pages: 532–534

Head Matter:
Loretta Smith, an Infant, by Mary Smith, Her Guardian ad Litem, Respondent, v. Chapter General of America, Knights of St. John and Malta, Appellant.
Second Department,
March 28, 1911.
Insurance—misrepresentation as to qualifications for membership — pleading —failure to deny allegations of complaint—admissions qualified by affirmative facts alleged.
There can be no recovery against a fraternal insurance corporation whose constitution provides that applications for membership shall not be received from barkeepers or other persons who sell or serve intoxicating liquors to be drunk on the premises, where the insured in an application providing that any false statement or evasion of facts should render the certificate of membership void, stated that he was a “ merchant,” while, as a matter of fact, he was at the time and until his death the owner of a saloon where he himself occasionally served intoxicating liquors to customers to be drunk upon the premises. Such corporation has power to impose said condition of membership.
Although the answer of the insurer did not deny that the insured was a duly elected member or that his certificate was in full force and effect, such admission is qualified by allegations showing his ineligibility to membership and that the certificate was obtained by an evasive statement of facts.
Appeal by the defendant, Chapter General of America, Knights of St. John and Malta, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the lTth day of March, 1910, upon the decision of the court rendered after a trial at the Kings County Trial Term before the court without a jury.
H. F. Lawrence, for the appellant.
Rufus 0. Catlin, for the respondent.

Opinion:
Burr, J.:
Defendant is a corporation of a fraternal and benevolent character. This action is brought to recover the. face value of an " endowment certificate " issued to one Michael Smith. Defendant's constitution provides, among other things, that " Applications shall not be received from barkeepers or other persons who at any time sell or serve intoxicating liquors to be drunk on the premises." At the time when Michael Smith applied for membership in such corporation he was the proprietor and owner of a saloon at 91 Myrtle avenue, Brooklyn, had obtained a liquor tax certificate which issued in his own name, bought merchandise in the way of liquors, cigars, soda waters, mineral waters and other articles, kept the same on the premises, and sold the same for profit. He continued so to do down to the date of his death. On occasions he himself served to his customers intoxicating liquors to be drunk upon the premises. This condition of membership was one which defendant had a right to make. (Graves v. Knights of Maccabees, 199 N. Y. 397.) At the time when Smith made application for membership he stated that he was a " merchant." His application'contained a provision that any false statement, concealment or evasion of facts contained in his application should render the certificate void. The answer to the question respecting his occupation, when read in connection with the provision of the constitution, was clearly an evasion of facts. But beyond that the situation was not precisely the same as though he had entered into the business after obtaining his certificate. Tlie business in which he was engaged made him ineligible for membership, and that fact he must have known. There is no question of waiver or estoppel in- this case. Whether a subordinate encampment could waive a constitutional provision so as to bind the general body, it is not necessary for us to determine, for there is no evidence that the fact of his ineligibility, or that the answer in his application for membership was evasive, was known to the members of the encampment, still less to the members or officers of the general body. We do not think defendant is precluded from this defense by the form of its answer. Although the answer by failing to deny one of the allegations of the complaint may seem to admit that Michael Smith was duly elected a member of the order, and that in 1905 the certificate was in full force and effect, this admission must be read in connection with and deemed qualified by the facts elsewhere set up in the answer, showing his ineligibility to membership, and that the certificate was obtained by an evasive statement of facts.
Without passing upon the other questions raised in the brief of appellant, we think the judgment appealed from should be reversed and a new trial granted, costs to abide the event.
Jehks, P. J., Thomas, Cabe and Woodwabd, JJ., concurred.
Judgment reversed and new trial granted, costs to abide the event.