Bible v. John Hancock Mut. Life Ins. Co. of Boston

• Decision Date: 02 June 1931
• Citation: 256 N.Y. 458,176 N.E. 838
• Court: New York Court of Appeals Court of Appeals
• Parties: BIBLE v. JOHN HANCOCK MUT. LIFE INS. CO. OF BOSTON, MASS.

256 N.Y. 458

176 N.E. 838

BIBLE

v.JOHN HANCOCK MUT. LIFE INS. CO. OF BOSTON, MASS.

Court of Appeals of New York.

June 2, 1931.

Action by Wacil Bible against the John Hancock Mutual Life Insurance Company of Boston, Mass. Judgment for plaintiff was affirmed by a divided court (232 App. Div. 695, 247 N. Y. S. 954), and defendant appeals by permission.

Affirmed.Appeal from Supreme Court, Appellate Division, Second Department.

Thomas McCall and Frederick C. Tanner, both of New York City, for appellant.

Charles E. Doyle, of Peekskill, and John J. Finn, of Yonkers, for respondent.

CARDOZO, C. J.

The defendant issued two policies of insurance, each in the sum of $400, upon the life of Anna Bible, payable at her death to her husband, the plaintiff.

Anna Bible was a patient in Hudson River State Hospital, a sufferer from a ‘manic depressive psychosis.’ An agent for the defendant visited her in the hospital and procured her signature to applications for insurance. Later he handed her the policies in the presence of her husband, received payment of the first premium, and at weekly intervals thereafter collected additional premiums at the hospital for a period of three months; the premiums thereafter being collected by another.

Upon the death of the insured, about a year and eight months after the delivery of the policies, there was filed with the insurer a proof of claim in due form exhibiting the condition of her health at the time of the delivery of the policies and earlier. The insurer disclaimed liability upon the ground that the policies had been avoided by the breach of two conditions. The two conditions are the following:

‘This policy shall not take effect unless upon its date the insured shall be alive and in sound health and the premium duly paid.’

‘This policy shall be void * * * if the insured * * * has attended any hospital, or institution of any kind engaged in the care or cure of human health or disease, or has been attended by any physician, within two years before the date hereof, for any serious disease, complaint or operation * * * unless each such * * * medical and hospital attendance and previous disease is specifically waived by an endorsement in the space for endorsements on page 4 hereof signed by the secretary.’

The policies contain also the following general provision as to alterations, erasures, and waivers:

‘No modification, change or alteration hereof or endorsement hereon will be valid unless signed by the President, a Vice President, the Secretary or an Assistant Secretary, and no other person is authorized on behalf of the company to make, alter or discharge this contract or to waive forfeiture. Agents are not authorized to waive any of the terms or conditions of this policy or to extend the time for payment of premiums or other moneys due to the company, or to bind the company by making any promise not contained in this policy.’

Upon the defendant's disclaimer of liability, this action was begun. The jury were instructed that the breach of the conditions might be found to have been waived if the defendant had knowledge through its agent of the state of health of the insured and of her confinement in the hospital when the policies were issued and the premiums accepted. The jury gave a verdict for the plaintiff, and the Appellate Division affirmed by a divided court.

Section 58 of the Insurance Law (Consol. Laws, c. 28) provides that ‘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 incorporatedtherein 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.’ Minsker v. John Hancock Mut. Life Ins. Co., 254 N. Y. 333, 173 N. E. 4. The defendant procured applications from the insured, but did not attach them to the policies. What was in them we do not know, and we must act as if they had never been. In such circumstances, Satz v. Massachusetts Bonding & Insurance Co., 243 N. Y. 385, 153 N. E. 844, 59 A. L. R. 606,Stanulevich v. St. Lawrence Life Ass'n, 228 N. Y. 586, 127 N. E. 315, and Drilling v. New York Life Ins. Co., 234 N. Y. 234, 137 N. E. 314, do not touch the case at hand except by pointing a distinction. There is here no warranty of health (Stanulevich v. St. Lawrence Life Ass'n, supra; Bollard v. New York Life Ins. Co., 228 N. Y. 521, 126 N. E. 900; Satz v. Massachusetts Bonding & Insurance Co., supra); nor warning, extrinsic to the policy, of a limitation on the apparent authority proper to an agent (Drilling v. New York Life Ins. Co., supra, 234 N. Y. at page 242, 137 N. E. 314). In the absence of warranty or warning, the delivery of the policies by the insurer, and the keeping of the premiums with knowledge of a then existing breach of the conditions as to the health of the insured and her treatment in a hospital, gave rise to a waiver or, more properly an estoppel. Whipple v. Prudential Ins. Co., of America, 222 N. Y. 39, 118 N. E. 211;Satz v. Massachusetts Bonding & Insurance Co., supra, 243 N. Y. at page 390, 153 N. E. 844, 59 A. L. R. 606;McClelland v. Mutual Life Ins. Co., of New York, 217 N. Y. 336, 111 N. E. 1062;Ames v. Manhattan Life Ins. Co., 40 App. Div. 465, 58 N. Y. S. 244;Id., 167 N. Y. 584, 60 N. E. 1106; Vance on Insurance (2d Ed.) 461, 496. If the insurer desired to overcome the effect of the...