Archer v. Equitable Life Assur. Soc. of United States

• Decision Date: 18 April 1916
• Citation: 218 N.Y. 18,112 N.E. 433
• Parties: ARCHER v. EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.
• Court: New York Court of Appeals Court of Appeals

218 N.Y. 18

112 N.E. 433

ARCHER

v.EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES.

Court of Appeals of New York.

April 18, 1916.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Georgia C. Archer against the Equitable Life Assurance Society of the United States. From an order of the Appellate Division (169 App. Div. 43,154 N. Y. Supp. 519), affirming an order of the Special Term for judgment on the pleadings for plaintiff, defendant appeals by permission. Affirmed.

The following questions were certified:

‘(1) Is the defense designated ‘Second,’ contained in the answer to the amended complaint herein, sufficient in law upon the face thereof?

‘(2) Is the defense designated ‘Third,’ contained in the answer to the amended complaint herein, sufficient in law upon the face thereof?

‘(3) Is the defense designated ‘Fourth,’ contained in the answer to the amended complaint herein, sufficient in law upon the face thereof?'

The nature of the action and the facts, so far as material, are stated in the opinion.Allan McCulloh, of New York City, for appellant.

John B. Stanchfield, of New York City, for respondent.

COLLIN, J.

[1] The action is to recover the sum payable to the plaintiff under the terms of a policy of the defendant insuring the life of Joseph D. Carroll. The policy forms a part of the amended complaint, which in the ordinary form avers the issuance of the policy, the death of the insured, the making of due proof of the death, the refusal of the defendant to pay, and the other requisite formal facts. The policy was issued July 1, 1912, and therefore subsequent to the adoption of the statute hereinafter considered. The defense designated ‘Second,’ which we will first consider, averred that the insured, when applying for and as an inducement to the issuance of the policy, deceived intentionally the defendant by stated representations which he knew to be false, and the defendant relied and acted upon in accepting the application and making the contract. The false representations related to facts which would enter into the estimation by the defendant of the risk to be assumed by it in effecting the insurance; that is, to the prior physical condition, in various respects, of the insured, the last time he had consulted with a physician, the causes of the deaths of his parents, and the time of the death and age at death of his father. They were not contained in the policy, either directly or by reference. The sufficiency of the defense, in law, depends upon an interpretation, in connection with the facts, of section 58 of the Insurance Law as enacted in 1906 (Cons. Laws, c. 28, § 58; Laws of 1906, c. 326, § 16). The section is:

‘Policy to contain the entire contract; statements of insured to be representations and not warranties. Every policy of insurance issued or delivered within the state on or after the first day of January, nineteen hundred and seven, by any life insurance corporation doing business within the state shall contain the entire contract between the parties and nothing shall be incorporated therein by reference to any constitution, by-laws, rules, application or other writings unless the same are indorsed upon or attached to the policy when issued; and all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties. Any waiver of the provisions of this section shall be void.’

The section and the policy must be read together. Strauss v. Union Central Life Ins. Co., 170 N. Y. 349, 63 N. E. 347;Taylor v. N. Y. Life Ins. Co., 209 N. Y. 29, 102 N. E. 524.

[2] The false and inducing statements set forth in the second defense were not incorporated in the policy when issued. The appellant asserts and argues that the section does not relate to or affect its right to declare and have adjudged void the policy, because the fraud of the insured, as alleged, entered into it, and fraud is a defense to any contract. The respondent asserts and argues that the section prohibits the defendant from invoking, as a defense fraudulent representations of the insured, entering into the extent or estimate of the risk, which are not incorporated in the policy when issued. We are to determine which assertion is valid.

The meaning and intent of the section is, manifestly, not clear and certain through its language. We are therefore bound to search for the legislative intent in such facts and through such rules as may, in connection with the language, legitimately reveal it. We may consider, in addition to the language, the relevant conditions existing when it was adopted, the evils it was designed to remedy, and the reasons for and the spirit of the enactment.

[3][4] If the intent, as determined, is within the scope or capability of the language, it must be taken to be a part of the statute the same as if it were plainly expressed. To effect the intent, the language may be freely dealt with. The position of the words may be shifted or the words enlarged or restrained in their meaning and operation. The courts are bound to enforce an enacted intent no matter how inartistically or inaccurately it has been expressed. Matter of Meyer, 209 N. Y. 386, 103 N. E. 713, L. R. A. 1915C, 615, Ann. Cas. 1915A, 263;Woollcott v. Shubert, 217 N. Y. 212, 111 N. E. 829;Flynn v. Prudential Ins. Co., 207 N. Y. 315, 100 N. E. 794;Matter of Jannicky, 209 N. Y. 413, 103 N. E. 715. They may not, however, through construction, enact an intent which the Legislature has not expressed at all. Furey v. Town of Gravesend, 104 N. Y. 405, 10 N. E. 698.

Two conditions existing at its adoption the statute was plainly intended to remove. The one, the contract might, by a stipulation or reference within it, make a part of itself instruments, stipulations, statements, and agreements of the insured which the policy did not contain. Cushman v. U. S. Life Ins. Co., 63 N. Y. 404;Clemans v. Supreme Assembly R. S. of G. F., 131 N. Y. 485, 30 N. E. 496, 16 L. R. A. 33; Fitch v. American Popular L. Ins. Co., 59 N. Y. 557, 17 Am. Rep. 372. The other, the statements of the insured which were made a part of the contract by reference, indorsement or otherwise, or declared or agreed by the insured to be true, were warranties. Foot v. AEtna Life Ins. Co., 61 N. Y. 571;Dilleber v. Home Life Ins. Co., 69 N. Y. 256, 25 Am. Rep. 182;Dwight v. Germania Life Ins. Co., 103 N. Y. 341, 8 N. E. 654,57 Am. Rep. 729;Gaines v. Fidelity & Casualty Co. of N. Y. 188 N. Y. 411, 81 N. E. 169,11 Ann. Cas. 71;Campbell v. New England Mut. Life Ins. Co., 98 Mass. 381.

A third condition existed, intimately related to those two, indeed quite the parallel of the first, namely, the warranties and representations made by persons insured, in the process of issuing the policy, might be, and frequently were, as we may judicially know, retained continuously and exclusively by the insurers. The insured persons neither had nor received duplicates or copies. They had not incentive or opportunity, from having their statements before them, through incorporation in the policy, to examine and correct any errors in them arising through mistake, carelessness, ignorance, or fraud, or to terminate the policy. Frequently they or their beneficiaries became first conscious of the errors, after payment of the premiums or dues through a period...