Stevens v. Woodmen of the World

The appellant society is not a corporation selling insurance for profit. It is a mutual society whose members agreed to contribute to each other through a corporation formed with peculiar statutory limitations as to its powers and the protection which it furnished its members. The statute under which it was organized — Colorado — and the laws of the state where the certificate was delivered — Montana — become important. These states, for reasons of their own and a public policy thus expressed in the statute, limited the persons who could be made beneficiaries. The statutes of the two states are identical. They provide: "The payments of death benefits shall be confined to wife, etc. (relatives enumerated); within the above designations each member shall have the right to designate his beneficiary and from time to time have the same changed in accordance with the laws," etc. (Sec. 2604, Comp. Laws, Colo.; sec. 6311, Rev. Codes.) Thus are definitely fixed by the statutes of the two states the limitations as to legal beneficiaries for death certificates. It would seem that a statutory limitation would be sufficient without further citation of authority; however, the following text, among others, states it clearly, "As a general rule, however, either a statute of a particular jurisdiction or the charter, articles of association, constitution or by-laws of the order provide that the benefits of the society shall be extended only to certain enumerated classes of individuals and where this is the case no one is eligible as a beneficiary who is not a member of one of the classes thus specified." (19 R.C.L. 1280; see, also, 45 Cyc. 171; 2 Couch on Insurance, 818-820.)

An innumerable list of cases could be cited supporting these text quotations. However, we shall content ourselves here with citations that are particularly applicable because the statutes under consideration were practically verbatim with those here involved. (Thomas v. Locomotive Eng. Mutual Life Assn.,191 Iowa, 1152, 183 N.W. 628, 15 A.L.R. 1240 at 1256, 1258;Ginsberg v. Butler, 217 Cal. 467, 19 P.2d 790, 92 A.L.R. 906 at 909; Grigsby v. Russell, 222 U.S. 149, 32 Sup. Ct. 58,56 L. Ed. 133; Travelers' Ins. Co. v. Lampkin, 5 Colo. App. 177,38 P. 335.) The contract between the members of the society, commonly called its constitution, was equally clear in its limitations as to who could be a beneficiary of a death benefit certificate.

From our studies, we venture the assertion that not a single case of concubine beneficiary permitted recovery can be found where the state statute specified the beneficiary or the statement of relationship is a warranty and the warranty was found to be false. In all insurance cases, life, accident, fire, surety, etc., where the warranty is a consideration for or part of the policy, recovery is denied if the warranty is false. Here we have a false warranty in a case where it is essential to the issuance of a certificate and part of it when issued. The question of insuring for a paramour or concubine or mistress is not new to the law. With the old line companies, where insurance is a commodity, sometimes purchased for creditors, friends, paramours or whatnot, paramours have been successful in collecting on the policies; however, the courts have tried every way to avoid even these, where it is plainly a concubine, common adulteress or paramour, upon the theory that in such an action, the courts are asked to become a party to compensating for such services. As one court says: what "was intended as a recompense for services odious in law and abhorrent to society." (See West v. Grand Lodge,14 Tex. Civ. App. 471, 37 S.W. 966; Di Messiah v. Gern, 10 Misc. 30,30 N.Y. Supp. 824, 825; Carter v. Employes' Ben. Assn.,212 Ill. App. 213, 214; Grand Lodge v. Hanses,81 Mo. App. 545; Grand Lodge v. Elsner, 26 Mo. App. 108-118; ElectricalWorkers' Benefit Assn. v. Brown, 26 F.2d 981 at 982, 983;Simpkins v. McDermott, 65 App. D.C. 123, 81 F.2d 257 at 258, 259; 2 Couch on Insurance, sec. 371.)

As to plaintiff's claim that her status was changed, because, on or about the 15th day of November, 1931, by some process of "mutual consent," she became Stevens' wife. As to her claim for a changed status, we find an apt quotation from 19 R.C.L. 1281: "It has also been laid down that the designation in a benefit certificate of a person not eligible as a beneficiary, under existing laws, is not validated by a subsequent status making such person eligible." Couch on Insurance, citing a great list of cases, says: "That an insured cannot change the beneficiary after the enactment of a statute defining those eligible, and name one not within the statutory class, although he could have named such person at any time prior to such enactment." (2 Couch on Insurance, 815.) In other words, by reason of this fraud, there never was and never could be a legal certificate issued, hence, there was no legal certificate in existence that could be the basis for a claim by her after becoming Stevens' wife, and this is without regard to the by-law provisions that specify the method of changing beneficiary.

Respondent claims that the certificate in question was incontestable. We submit that this question cannot properly be raised at this time for two reasons; first, because there never was a certificate, and, secondly, because the incontestability, if relied on, should have been set up in an appropriate pleading when the contest was asserted.

The first proposition is based upon the fact that no legal certificate was or could be issued; hence, if no certificate could be legally issued to Marie Cushing, the certificate is not being contested because it never was in existence. To say that a certificate is incontestable, presupposes a legal certificate, and in this case there was no legal certificate, nor could there be any such under the statutes involved. There was fraud abinitio. As to a benefit certificate that never became effective (just as we urge here), it has been expressly held that the incontestable clause has no effect. (Sovereign Camp, Woodmen ofthe World, v. Wernette, (Tex.Civ.App.) 216 S.W. 669;Bernier v. Pacific Mut. Life Ins. Co., 173 La. 1078,139 So. 629.) So, too, it has been held that the term "incontestable" means that the provisions of the policy would not be contested, not that the insurer agreed to waive the right to defend itself against a risk which it never assumed. (Scarborough v.American Nat. Ins. Co., 171 N.C. 353, 88 S.E. 482, Ann. Cas. 1917D, 1181, L.R.A. 1918A, 896; Collins v. Metropolitan LifeIns. Co., 27 Pa. Super. 353; Collins v. Metropolitan LifeIns. Co., 232 Ill. 37, 122 Am. St. Rep. 54, 13 Ann. Cas. 129, 14 L.R.A. (n.s.) 356.)

So, too, it has been repeatedly held that notwithstanding an incontestable clause, the insurer is entitled, even after the expiration of the incontestable period, to defend on the ground of want of insurable interest if the policy would otherwise have been void for lack of insurable interest, which is expressly the case here because the insurable interest is defined by statute and Marie Cushing does not come within the statutory designation. (Bromley v. Washington Life Ins. Co., 122 Ky. 402,92 S.W. 17, 121 Am. St. Rep. 467, 12 Ann. Cas. 685, 5 L.R.A. (n.s.) 747;Clement v. New York, etc., 101 Tenn. 22, 46 S.W. 561, 70 Am. St. Rep. 650, 42 L.R.A. 247; Welch v. Union Central Life Ins.Co., 108 Iowa, 224, 78 N.W. 853, 50 L.R.A. 774; New York,etc., v. Weaver, 114 Ky. 295, 70 S.W. 628.)

While it is true that there are a number of cases which hold that where the policy contains the incontestable clause, it forbids contest. But practically all of these are cases of standard insurance policies with old line companies. We have not found any of these cases where a mutual company, with a statutory limitation as to beneficiaries, has been in question, and it could not well be otherwise, the courts could not thus permit an avoidance or overruling of the statute. This is not a case of fraud as to age or disease or any of the conditions involved in ordinary life policies — this is a fraud that results in evasion of the statute and the issuance of a certificate which the statute does not authorize — it makes a certificate which is distinctly ultra vires.

Another element that should be considered here is that if this clause in this certificate is given the construction which is asked for by the respondent, it violates our statute against just such a situation. "All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or for wilful injury to the person or property of another, or violation of law, whether wilful or negligent, are against the policy of the law." (Sec. 7554, Rev. Codes; Lahood v. Continental Tel. Co., 52 Mont. 313, at 323, 157 P. 639;Dibble v. Reliance Life Ins. Co., 170 Cal. 199, 149 P. 171, Ann. Cas. 1917E, 34.)

The next point we urge is that to obtain the benefits of the incontestable clause, it must be specially pleaded. (See UnitedOrder G.C. v. Overton, 203 Ala. 335, 83 So. 59, 13 A.L.R. 672.) Plaintiff brought this action to recover on a policy of life insurance issued by the defendant, a fraternal insurance corporation operating under the lodge system. The cause was tried before the court sitting without a jury, and resulted in a judgment in favor of the plaintiff in accordance with the prayer of her complaint. The trial court found the issues generally in favor of the plaintiff. The appeal is from the judgment.

The defendant contends that the evidence was insufficient to support the judgment. A.W. Stevens, the insured, in the year 1922 secured a policy of insurance from the defendant. On November 1, 1928, a new policy was issued to Stevens in lieu of the former one under a different plan of insurance, but for a like amount; he died on December 16, 1932. In the application for the original policy, and also in his application for the conversion of it into the later policy, he designated Marie Cushing, the plaintiff, as beneficiary, stating in each instance that she was his cousin. She was not, at the time of making these applications and the issuance of policies, so related to the insured. She was designated as the beneficiary in the policies showing her relationship in each to be that of a cousin to the insured.

Plaintiff was married to Dr. Cordan, who died in Salt Lake City in 1901. She testified on the trial of this case that she was married to Albert J. Cushing in 1904. Later she and Cushing came to Helena, and she met the insured about 1917 or 1918. Thereafter she and these two men lived together until Cushing's death on October 31, 1931. Cushing had a policy of life insurance issued by the defendant in favor of the plaintiff as his wife, and this policy was paid to the plaintiff.

It was the theory of plaintiff's case that she and Stevens were husband and wife at the time of the latter's death as the result of a common-law marriage between them occurring at Salt Lake City some few days after Cushing's death and immediately following his burial there. The undisputed evidence is that following the return of plaintiff and the insured from Salt Lake in 1931, they lived together in Helena and Missoula as man and wife, held each other out as such, and were regarded as man and wife by their friends and acquaintances during this interval of time.

It appears from the record that the insured left a will in[1] plaintiff's favor, and she testified in a proceeding to have the will admitted to probate. She was confronted with this testimony on the trial of this case, which was contradictory of her testimony given in this case. She testified in the probate proceeding that she and Cushing were never married and that, after she met Stevens, she and Stevens lived together as man and wife, and Cushing became a boarder. Other contradictions appear between her testimony on these two different occasions as disclosed by the record before us, but these are sufficient to illustrate the point. Plaintiff's testimony on the former hearing was not substantive evidence concerning the subject-matter, and its presentation in the trial of this cause only raised a question of the credibility of the witness, which was for the trial court. In the case of Wise v. Stagg, 94 Mont. 321,22 P.2d 308, we said: "After contradiction of a witness by showing his inconsistent statements at other times, not only is such contradictory evidence not substantive evidence concerning its subject-matter, but, as before, the credibility of the witness remains a question for the jury. (6 Jones' Commentaries on Evidence, 2d ed., 4769; Thompson v. Los Angeles etc. R.Co., 165 Cal. 748, 134 P. 709; Steele v. Kansas City So. R.Co., 302 Mo. 207, 257 S.W. 756." This statement was approved by this court in the case of Osnes Live Stock Co. v. Warren,103 Mont. 284, 62 P.2d 206.

Under the constitution and by-laws of the defendant as well as section 6311 of our Codes (the Colorado statute is the same as ours), a first cousin could become the beneficiary of a fraternal[2] life insurance policy. One who does not occupy some one of the degrees of relationship with the insured enumerated in section 6311, supra, may not be beneficiary of such a policy. (Nitsche v. Security Benefit Assn., 78 Mont. 532,255 P. 1052.) Clearly, the plaintiff was not at the time of the issuance of this policy a legal beneficiary. The defendant contends that because of this fact, the representations made in the application amounted to a fraud upon the defendant, and that therefore, under the terms of certain provisions of the constitution and by-laws, the policy was vitiated because of this fraud. The policy, however, contained the following provision: "This certificate shall be incontestable for any cause except non-payment of benefit payments and dues, when it has been maintained continuously in force for a period of one year during the lifetime of the member, provided that if the certificate has been reinstated at any time, then said period of one year shall run from the date of last reinstatement and subject to any statements made to secure such reinstatement."

The effect of such incontestable clause in insured's policy is[3] well stated by the Supreme Court of the United States in the opinion of the case of Mutual Ins. Co. v. Hurni Co.,263 U.S. 167, 177, 44 Sup. Ct. 90, 68 L. Ed. 235, 31 A.L.R. 102, in the following language: "It is true, as counsel for petitioner contends, that the contract is with the insured and not with the beneficiary, but, nevertheless, it is for the use of the beneficiary and there is no reason to say that the incontestability clause is not meant for his benefit as well as for the benefit of the insured. It is for the benefit of the insured during his lifetime and upon his death immediately inures to the benefit of the beneficiary. As said by the supreme court of Illinois in Monahan v. Metropolitan Life Ins. Co.,283 Ill. 136, 141, 119 N.E. 68, L.R.A. 1918D, 1196: ``Some of the rights and obligations of the parties to a contract of insurance necessarily become fixed upon the death of the insured. The beneficiary has an interest in the contract, and as between the insurer and the beneficiary all the rights and obligations of the parties are not determined as of the date of the death of the insured. The incontestable clause in a policy of insurance inures to the benefit of the beneficiary after the death of the insured as much as it inures to the benefit of the insured himself during his lifetime.'"

It is almost universally held that an incontestable clause allowing a reasonable time such as a year cuts off all defenses including fraud, except those specifically and expressly enumerated in the clause. The decided cases sustaining this view are numerous, and include cases where the insured has made false statements as to health, age, occupation, etc. The following texts and cases support the foreging statement: 8 Couch on Insurance, 6957, sec. 2155; notes, 6 A.L.R. 452; 35 A.L.R. 1492;Apter v. Home Life Ins. Co., 266 N.Y. 333, 194 N.E. 846, 98 A.L.R. 1281; 2 Bacon on Benefit Societies Life Insurance, 3d ed., 875; 37 C.J. 544; 5 Cooley's Briefs on Insurance, 4483;Great Southern Life Ins. Co. v. Russ, 14 F.2d 27;Mutual Reserve Fund Life Ins. Assn. v. Austin, 142 Fed. 398, 6 L.R.A. (n.s.) 1064; Great Western Life Ins. Co. v. Snavely, 206 Fed. 20, 40 L.R.A. (n.s.) 1056 [9th Circuit]; Arnold v.Equitable Life Assur. Soc., 228 Fed. 157; Russ v. GreatSouthern Life Ins. Co., 6 F.2d 940; Pacific Mut. Life Ins.Co. v. Strange, 223 Ala. 226, 135 So. 477; Dibble v.Reliance Ins. Co., 170 Cal. 199, 149 P. 171, Ann. Cas. 1917E, 34; Flanigan v. Federal Life Ins. Co., 231 Ill. 399,83 N.E. 178; Weil v. Federal Life Ins. Co., 264 Ill. 425,106 N.E. 246, Ann. Cas. 1915D, 974; Ramsey v. Old Colonial Life Ins.Co., 297 Ill. 592, 131 N.E. 108; Kanter v. Continental Assur.Co., 251 Ill. App. 272; Indiana Life Ins. Co. v. McGinnis,180 Ind. 9, 101 N.E. 289, 45 L.R.A. (n.s.) 192; New York LifeIns. Co. v. Adams, 202 Ind. 493, 176 N.E. 146; CommercialIns. Co. v. McGinnis, 50 Ind. App. 630, 97 N.E. 1018; KansasMut. Life Ins. Co. v. Whitehead, 123 Ky. 21, 93 S.W. 609, 13 Ann. Cas. 301; Mutual Life Ins. Co. v. New, 125 La. 41,51 So. 61, 126 Am. St. Rep. 326, 27 L.R.A. (n.s.) 431; Becker v.Illinois Life Ins. Co., 227 Mich. 388, 198 N.W. 884; Williams v. St. Louis Ins. Co., 189 Mo. 70, 87 S.W. 499; Harris v.Security Life Ins. Co., 248 Mo. 304, 154 S.W. 68, Ann. Cas. 1914C, 648; Drews v. Metropolitan Life Ins. Co., 79 N.J.L. 398,75 A. 167; Teeter v. United Life Ins. Assn., 159 N.Y. 411,54 N.E. 72; Wolpin v. Prudential Ins. Co., 223 A.D. 339,228 N.Y. Supp. 78; Strzelicka v. Chicago Fraternal LifeIns. Assn., 140 Misc. 517, 250 N.Y. Supp. 601; Chinery v.Metropolitan Life Ins. Co., 112 Misc. 107, 182 N.Y. Supp. 555,556; American Trust Co. v. Life Insurance Co. of Virginia,173 N.C. 558, 92 S.E. 706; Hardy v. Phoenix Mutual Life Ins.Co., 180 N.C. 180, 104 S.E. 166; Metropolitan Life Ins. Co. v.Peeler, 122 Okla. 135, 176 P. 939, 6 A.L.R. 441; Murray v.State Mutual Life, 22 R.I. 524, 48 A. 600, 53 L.R.A. 742;Philadelphia Life Ins. Co. v. Arnold, 97 S.C. 418,81 S.E. 964, Ann. Cas. 1916C, 706; Union Cent. Insurance Co. v. Fox,106 Tenn. 347, 61 S.W. 62, 82 Am. St. Rep. 885; Harrison v.Provident Relief Assn., 141 Va. 659, 126 S.E. 696, 40 A.L.R. 616;Patterson v. Natural Premium Mut. Life Ins. Co.,100 Wis. 118, 75 N.W. 980, 69 Am. St. Rep. 899, 42 L.R.A. 253.

The reasons for the insertion of an incontestable provision in a policy of life insurance are set forth in Massachusetts LifeAssn. v. Robinson, 104 Ga. 256, 30 S.E. 918, 42 L.R.A. 261, as follows: "In many cases, no doubt, the misrepresentation would be innocent, with no intention to defraud the insurer; while in others possibly a deliberate intention to defraud might be developed. In all cases, however, the question as to whether there had been any intention on the part of the insured to perpetrate a fraud upon the insurer, and whether such scheme should be successful, was to be determined after the death of insured, when he could no longer be heard on the questions involving not only the validity of the contract, but sometimes his character as well. The insurer, having in his hands the premiums paid by the insured during his lifetime, as well as the accumulations which had been made thereon, was permitted to raise questions of this nature in a controversy between himself and the beneficiary of the policy, and was, as has been said, in many cases allowed to defeat entirely the contract entered into with the insured, when he could no longer be heard in explanation of his conduct or vindication of his character."

An excellent statement of the effect of such provisions is found in the same opinion, wherein it was said: "Where parties enter into a contract which from its nature affords an opportunity of one party to perpetrate a fraud upon another, and it is stipulated therein that the party who is liable to be defrauded shall have a specified time in which to make inquiry as to the acts and conduct of the other party, he is on notice by the very terms of the contract itself that fraud may be involved in it, and the duty is upon him to commence at once an investigation into the acts, conduct and representations of the other party; and if the time fixed is such that the information which would show that the fraud had been perpetrated could have been, by the exercise of ordinary diligence, obtained, then the parties are bound by their contract as to time, and after the lapse of that time, fraud is no longer a defense. This does not violate in any way the well-settled principle that fraud is to be abhorred, vitiates everything it touches, and the person guilty of it is not to be countenanced in any way by the courts. While all this is true, it is equally well settled that a contract which has for its foundation a wilful fraud may become vitalized and enforceable by the negligence of the party who was the victim of the fraud."

In Wright v. Mutual Ben. Life Assn., 119 N.Y. 237,23 N.E. 186, 16 Am. St. Rep. 746, 6 L.R.A. 731, referring to an incontestable provision, it was said: "It recognizes fraud and all other defenses but it provides ample time and opportunity within which they may be, but beyond which they may not be, established. It is in the nature of and serves a similar purpose as statutes of limitations and repose, the wisdom of which is apparent to all reasonable minds. It is exemplified in the statute giving a certain period after the discovery of a fraud in which to apply for redress on account of it and in the law requiring prompt application after its discovery, if one would be relieved from a contract infected with fraud. * * * No doubt the defendant held it out as an inducement by removing the hesitation in the minds of many prudent men against paying ill-afforded premiums for a series of years when in the end and after the payment of premiums, the death of the insured and the loss of his and the testimony of others, the claimant instead of receiving the promised insurance may be met by an expensive lawsuit to determine that the insurance which the deceased has been paying for through many years, has not and never had an existence except in name. While fraud is obnoxious and should justly vitiate all contracts, the courts should exercise care that fraud and imposition should not be successful in annulling an agreement, to the effect that if cause be not found and charged within a reasonable and specific time, establishing the invalidity of the contract of insurance, it should thereafter be treated asvalid."

Answering the contention that fraud vitiates everything and that, therefore, an incontestable clause does not cut off the defense of fraud, the supreme court of Kentucky, in the case of KansasMutual Life Ins. Co. v. Whitehead, 123 Ky. 21, 93 S.W. 609, 13 Ann. Cas. 301, said: "It is said that, as a rule, fraud vitiates every contract, and that a sound morality requires that the courts should forbid one's contracting for immunity from the consequences of his own fraud. All this may be admitted to be sound as an abstract proposition; but it does not hold good in the actual affairs of life, when rules must be adjusted to meet conditions, rather than theories. In the case at bar, full force and effect is given to the theory for a specified time — two years — and after that another public policy comes into play, which recognizes the right of the insured, under certain circumstances, to contract for peace, and for a knowledge that after the stipulated time has expired, neither he, nor, if he be dead, those for whom he has undertaken to provide, shall be put to the expense and trouble of a trial of the question as to whether or not fraud was perpetrated in the procurement of the policy. This view does not exclude the consideration of fraud, but allows the parties to fix by stipulation the length of time which the fraud of the insured can operate to deceive the insurer. It recognizes the right of the insurer, predicated upon a vast experience and profound knowledge in such matters, to agree that in a stipulated time, fixed by himself, he can unearth and drag to light any fraud committed by the insured, and protect himself from the consequences. This clause is of vast importance and benefit, both to the insured and to the insurer. It enables the latter to increase his business by giving an assurance to persons doubtful of the utility of insurance, that neither they nor their families, after the lapse of a given time, shall be harassed with lawsuits when the evidence of the original transaction shall have become dim, or difficult of obtention, or when, perhaps, the lips of him who best knew the facts are sealed by death. That this consideration is a powerful inducement, especially to the poor and obscure, to take out insurance, cannot be doubted; and after the lapse of this reasonable time, it must, of necessity, be of great consolation to the insured to feel that the insurance money, to secure which he has, perhaps, so often endured privation, will be paid over to his family undiminished by court costs or lawyers' fees. To permit an insurance company to induce persons to insure their lives under the pleasing expectation of an incontestable clause, and then, when the insured is dead, to undertake, as against his family, to contest the policy on the ground of fraud, would be to permit the perpetration of as great fraud as the insured could possibly have committed in the obtention of the policy. There is no more public policy against the fraud of the insured than against the fraud of the insurer. The incontestable clause is upheld in law, not for the purpose of upholding fraud, but for the purpose of shutting off harassing defenses based upon alleged fraud; and, in so doing, the law merely adopts the certificate of the insurer that within a given time he can expose and render innocuous any fraud in the preliminary statement of the insured."

Again, it is said that it is against good morals to permit plaintiff to recover on a contract which was the child of fraud. The supreme court of Missouri, in the case of Harris v.Security Life Insurance Co., supra, stated a similar contention, and answered it as follows: "But we gather from their brief that they are content to assail the proposition by characterizing the reasoning of the courts as being ``more specious than sound,' ``at variance with good morals,' ``sophistry,' and inconsistent with the ``Decalogue.' This method of assailing the logic of the decisions of the courts, if it be lacking in demonstrative force or constructive reasoning, may have the merit, at least, of reflecting the temper and taste of the writers. Possibly the great judgments of the great judges cited above will not be wholly dissolved by an irruption so slight and so entirely free from every element of dialectical reasoning or any form of logical disproof. We are inclined to indulge this hope when we bear in mind that the demolition of this great consensus of judicial conclusion is attempted, only, by the use of the particular aerial force which is said to have overthrown the walls of Jericho."

Other courts have met the contention that a policy of[4] insurance obtained through fraud is void ab initio and will not therefore permit recovery even in the face of an incontestable clause, such as here, and have declined to accede to the force of such a contention. (Stiegler v. Eureka Life Ins. Co.,146 Md. 629, 127 A. 397; Drews v. Metropolitan Life Ins. Co., supra.)

When we say that a contract is void as a result of fraud — and many such expressions appear in the books — all that is meant by such term, according to any legal usage, is that a court of law will not lend its aid to enforce the performance of a contract. In the case of Ewell v. Daggs, 108 U.S. 143, 2 Sup. Ct. 408,27 L. Ed. 682, it was said: "It is quite true that the usury statute referred to declares the contract of loan, so far as the whole interest is concerned, to be ``void and of no effect.' But these words are often used in statutes and legal documents, such as deeds, leases, bonds, mortgages, and others, in the sense of voidable merely, that is, capable of being avoided, and not as meaning that the act or transaction is absolutely a nullity, as if it had never existed, incapable of giving rise to any rights or obligations under any circumstances. Thus we speak of conveyances void as to creditors, meaning that creditors may avoid them, but not others. Leases which contain a forfeiture of lessee's estate for nonpayment of rent, or breach of other condition, declare that on the happening of the contingency the demise shall thereupon become null and void, meaning that the forfeiture may be enforced by re-entry, at the option of the lessor. It is sometimes said that a deed obtained by fraud is void, meaning that the party defrauded may, at his election, treat it as void. All that can be meant by the term, according to any legal usage, is that a court of law will not lend its aid to enforce the performance of a contract which appears to have been entered into by both the contracting parties for the express purpose of carrying into effect that which is prohibited by the law of the land."

Our own court, in the case of Mutual Benefit Ins. Co. v.Winne, 20 Mont. 20, 49 P. 446, in considering a statute which provided that the failure of a foreign corporation to file a certain statement should, by way of punishment, render all of its acts and contracts while in default, void and invalid, said: "We must not be misled into giving to the words ``void' and ``invalid' too broad a meaning, for, as has been well observed by a learned court, deductions founded on the broadest meaning of the word ``void' would lead to greater errors than are found in the most erroneous cases, while those founded on its narrower and more usual meaning seldom err. (Pearsoll v. Chapin, 44 Pa. St. 9.) Therefore, before the court can say that a mortgage made by a citizen of this state to a foreign corporation which has failed to file its certificate and statements required to be filed before it can undertake to do any business within the state is void in the sense that it is an absolute nullity, it should be assured of the correct meaning of the word; it should observe the use of the word in the context of the statute. A void contract is the same as none, although a voidable one may be so treated. (Gist v. Smith, 78 Ky. 367.) The two words ``void' and ``voidable,' as often used in the statutes, have been pronounced by Bishop (sec. 610 of his work on Contracts) to be variable, and most inexact. But a correct discrimination will lead us to a right conclusion. It cannot be held that the contract of Winne with the plaintiff corporation is without any legal effect, for it has some effect, but it is liable to be made void by him or a third person."

We are mindful that some courts hold that an incontestable clause which becomes operative upon the issuance of the policy is invalid, as is illustrated by the decision in Reagan v. UnionMut. Life Ins. Co., 189 Mass. 555, 76 N.E. 217, 109 Am. St. Rep. 659, 4 Ann. Cas. 362, 2 L.R.A. (n.s.) 821. That decision, however, recognizes the rule which we have stated supra as sound.

It is contended that plaintiff may not rely upon the[5] incontestable clause for the reason that it was not pleaded. No pleadings on behalf of the plaintiff mentioned the clause and the policy of insurance was not attached to the complaint as an exhibit. The defendant, however, without objection offered in evidence the policy containing the incontestable clause, and it was before the court. Under these circumstances, even though the allegations of plaintiff's pleadings may not have been broad enough to admit the proof, they will be deemed as amended at the trial in that respect if this be necessary to sustain the judgment under the provisions of section 9191, Revised Codes. (Baker v.Union Assur. Soc. of Londan, Ltd., 81 Mont. 281, 264 P. 132, and cases there cited.) The incontestable clause appearing in the policy in question bars the defense of fraud.

We have certified to us among the exhibits a printed volume of the constitution and by-laws of the defendant. Also we find this statement of counsel in the record: "I really believe we would save time by offering the three sets of the constitution and by-laws, and then they can go up as exhibits." To this statement the trial judge gave his consent. Section 104 of this document provides the manner of changing beneficiaries. After an examination of its contents it appears that the insured may change beneficiaries as often as desired, observing certain formalities, but nowhere is it indicated that the approval of the insurer is necessary to any proposed change.

It is generally held by the weight of authority, with[6] reference to old line company policies, that a statement in an application for insurance as to the relationship of a proposed beneficiary, is to be regarded as intended merely for identification, as a mere description of the person. (Metropolitan Life Ins. Co. v. Olsen, 81 N.H. 143,123 A. 576, 32 A.L.R. 1472; Vivar v. Supreme Lodge K. of P.,52 N.J.L. 455, 20 A. 36; Standard Life Acc. Ins. Co. v.Martin, 133 Ind. 376, 33 N.E. 105; Lampkin v. Travelers Ins.Co., 11 Colo. App. 249, 52 P. 1040; Equitable Life Assur.Soc. v. Paterson, 41 Ga. 338, 5 Am. Rep. 535; Slaughter v.Slaughter, 186 Ala. 302, 65 So. 348; Story v. WilliamsburghMasonic Mut. Benefit Assn., 95 N.Y. 474; Baltimore Life Ins.Co. v. Floyd, 5 Boyce (Del.), 431, 94 A. 515; Brogi v.Brogi, 211 Mass. 512, 98 N.E. 573.) It is also held with reference to fraternal insurance companies that a false statement as to the relationship of the beneficiary named is not a breach of a warranty, nor does it vitiate the policy on the ground of fraud. (Britton v. Supreme Council of the Royal Arcanum,46 N.J. Eq. 102, 18 A. 675, 19 Am. St. Rep. 376; Cunat v.Supreme Tribe of Ben Hur, 249 Ill. 448, 94 N.E. 925, Ann. Cas. 1912A, 213, 34 L.R.A. (n.s.) 1192; Supreme Lodge, A.O.U.W., v. Hutchinson, 6 Ind. App. 399,33 N.E. 816.)

In the case of Cunat v. Supreme Tribe of Ben Hur, supra, the court said: "It is further contended that the insured warranted or falsely represented the statement ``bearing to me the relationship of cousins' to be true, and that unless the statement was literally true, the benefit certificate was void. The benefit certificate contained the usual covenants that the insured warranted the truth of her representations. The language above quoted amounted only to a direction by the insured to the association as to whom the insurance, upon her death, should be paid, and did not amount to a warranty or false representation and did not have the effect to avoid the benefit certificate."

In the case of Britton v. Supreme Council of the RoyalArcanum, supra, the court said: "Whether the person designated by a member on his admission as his beneficiary is qualified or not is a question which is wholly unimportant and immaterial to the defendant. The designation then made will only continue in force so long as the member chooses to let it stand. He has a right to change his beneficiary as often as his will changes. The only limit upon his power in that regard is that he cannot make a designation which will divert that part of the fund payable on his death from its appointed channel; and whether he designates a qualified or incompetent person can have no effect whatever in either increasing or diminishing the defendant's liability. The sum which it must pay on the death of a member is fixed by its contract, as well as the person or persons to whom it must be[7] paid. * * * A falsehood or fraud that does not result in legal injury can neither be made the foundation of an action nor the ground of a defense."

The foregoing authorities demonstrate that a lack of insurable[8] interest at the time of the issuance of the policy does not render the policy void ab initio. To attempt to name a person who was not qualified by law to be a beneficiary does not ipso facto invalidate the entire policy.

It is, however, generally held that notwithstanding an[9] incontestable clause, the insurer is entitled, after the expiration of the contestable period, to defend on the ground of want of insurable interest if the policy otherwise would have been void for lack of insurable interest. (Bromley v. Washington Life Ins.Co., 122 Ky. 402, 92 S.W. 17, 121 Am. St. Rep. 467, 12 Ann. Cas. 685, 5 L.R.A. (n.s.) 747; Clement v. New York Life Ins. Co.,101 Tenn. 22, 46 S.W. 561, 70 Am. St. Rep. 650, 42 L.R.A. 247;Anctil v. Manufacturers Life Ins. Co., 28 Can. S.C. 103.) And we have said that a fraternal insurance company may not waive existing statutory requirements governing its own conduct. (Styles v. Byrne, 89 Mont. 243, 296 P. 577.) Therefore, the incontestable clause does not prevent the company from raising the qualifications of the beneficiary at the time of the death of the insured to take under the policy. Admittedly, plaintiff was[10] not qualified as a beneficiary at the time of the issuance and delivery of the policy; but if her common-law marriage with the insured is valid, then she was his wife at the time of his death, and occupied a degree of relationship with the insured which placed her within the class of persons who may be beneficiaries under section 6311, supra.

In the case of Nitsche v. Security Benefit Assn., supra, a husband was named as beneficiary in a fraternal insurance policy on the life of his wife. Prior to her death they were divorced. There we held that he was not qualified as a beneficiary and could not receive the proceeds of the policy. In other words, the policy of insurance in that case at the death of the insured for the first time called for the husband of the deceased, and there was none to answer.

In the case of Columbian Circle v. Auslander, 302 Ill. 603,135 N.E. 53, the insured had deserted a wife and family in New York state and removed to Chicago, where he resided illicitly with another woman whom he named as beneficiary in a fraternal insurance policy. Subsequent to the death of his wife he and his beneficiary in his insurance policy were married; thereafter he died. The court held that notwithstanding the beneficiary was not within the eligible list at the time of the issuance of the certificate, the policy did not fail for illegality. To the same effect is the case of De Benio v. Catholic Order of Foresters, 194 Ill. App. 616. On another phase of this case the supreme court of Illinois in the Auslander Case, supra, expresses our views, as follows: "Appellees urge that to permit the appellant to take the fund in this case would be to sanction a fraud and immorality. This court, in passing upon the effect of this certificate of insurance, does not in any way approve the illicit relations existing between the insured and the appellant prior to their marriage. The rule which we believe should be adopted is not based upon any such conduct of the parties but upon the legal principles arising out of the facts."

Proceeding now to the consideration of the alleged common-law[11-14] marriage: The plaintiff testified that after the death of Cushing she and Stevens were married by agreement. She said: "We were pledged to one another as man and wife. After that was done we continued living as man and wife. That was after I came back from Salt Lake in November." The evidence of many witnesses was introduced showing that plaintiff and the insured lived together as man and wife, were introduced as such, and referred to each other as man and wife; that accounts were charged at mercantile establishments to Mrs. Stevens; and that all of these various acquaintances, friends and mercantile establishments considered them as man and wife.

One of the disputable presumptions in this state is that a man and woman holding themselves out as husband and wife have entered into a contract of lawful marriage. (Sec. 10606, subd. 30, Rev. Codes; Elliott v. Industrial Acc. Board, 101 Mont. 246,53 P.2d 451.) In the case last cited we said: "The so-called ``common-law marriage' is recognized as valid in this state, but, to be effective, there must be the mutual consent of parties able to consent and competent to enter into a ceremonial marriage, and the assumption of such relationship, by consent and agreement, as of a time certain, followed by cohabitation and repute." After the death of Cushing unquestionably the plaintiff was a person capable of marrying, and the evidence clearly supports the implied finding of the court within the rule supra. We are mindful, however, that the rule is that where the relations between a man and woman are illicit in their inception and such a condition is shown to exist, it is presumed that their relations continue illicitly until the contrary is shown, and the burden rests upon the party asserting the validity of the marriage to show that the illicit relations changed to a lawful one by marriage. (Shepherd Pierson Co. v. Baker, 81 Mont. 185,262 P. 887; Welch v. All Persons, 78 Mont. 370,254 P. 179.) The evidence, aside from this disputable presumption, is all to the effect that there was a common-law marriage between the plaintiff and the insured after the death of Cushing, and the trial court impliedly found that there was a common-law marriage. Ample evidence is found in the record to support such finding.

We, therefore, conclude that plaintiff was a qualified beneficiary at the time of the death of the insured and entitled to receive the proceeds of this insurance policy. Judgment affirmed.

ASSOCATE JUSTICES MORRIS and ANGSTMAN concur.