Equitable Life Assur. Soc. v. Saftlas

• Decision Date: 05 May 1941
• Docket Number: No. 10089.,10089.
• Citation: 38 F. Supp. 708
• Parties: EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. SAFTLAS et al.
• Court: U.S. District Court — Western District of Pennsylvania

38 F. Supp. 708

EQUITABLE LIFE ASSUR. SOC. OF UNITED STATES v. SAFTLAS et al.

No. 10089.

District Court, E. D. Pennsylvania.

May 5, 1941.

Herman P. Abramson and Robert J. Sterrett, both of Philadelphia, Pa., for plaintiff.

Arthur S. Arnold, Samuel D. Goodis, and Sundheim, Folz, Kamsler & Goodis, all of Philadelphia, Pa., for defendants.

BARD, District Judge.

The Equitable Life Assurance Society filed its complaint in this court on August 17, 1938, seeking to rescind the disability and double indemnity provisions of the life insurance policy issued to Joseph Saftlas, to enjoin the insured from continuing an action in the state courts to recover disability benefits, and to enjoin both defendants from commencing any further action for either disability or double indemnity benefits. Fraud in the procurement of the policy was alleged as the basis for the relief sought. Regina Saftlas was joined as a defendant by reason of being trustee for Irving Saftlas, minor beneficiary.

Defendants' motions to dismiss the complaint on jurisdictional and substantive grounds were denied. D.C., 35 F.Supp. 62.

By its terms, the policy was to be incontestable after in force one year, except as to the provisions relating to disability and double indemnity. At the time the complaint was filed, the policy had been in effect several years.

The complaint alleges that the insured made false and fraudulent answers to questions contained in the application for the insurance. The answers were concerning his health as well as consultation and treatment by physicians within five years prior to the application for insurance. It is further alleged that these answers were material to the risk concerned and were made with the deliberate intent to deceive the plaintiff into issuing the policy.

I make the following special findings of fact:

1. The plaintiff, the Equitable Life Assurance Society of the United States, is a corporation organized and existing under the laws of the State of New York, and duly registered in Pennsylvania to issue policies of insurance.

2. The defendants Joseph Saftlas, the insured, and Regina Saftlas, trustee for Irving Saftlas, are residents of Philadelphia, Pennsylvania.

3. On June 19, 1929, Joseph Saftlas applied to the plaintiff for a policy to insure his life in the sum of $3,500; and to provide for the payment of a double indemnity of $7,000 upon his death from accident; and to provide a monthly disability income and a waiver of premiums in the event he became totally and permanently disabled.

4. The application, consisting of parts 1 and 2, was signed by Joseph Saftlas in Philadelphia and he agreed that the application was to be a part of the policy which was subsequently issued pursuant thereto.

5. On June 22, 1929, the plaintiff issued to Joseph Saftlas as the insured, a policy of life insurance No. 7,725,845, which was delivered to him in Philadelphia, containing provisions for benefits in the event of the insured's accidental death, and total and permanent disability. All premiums were paid by insured to a Philadelphia agent.

6. As appears from the Educational Fund Agreement, which is a part of the policy, the proceeds thereof in the event of the insured's death become payable to his son, Irving Saftlas, but provides that in the event the insured dies prior to the date that Irving Saftlas attains the age of seventeen, the proceeds of the policy shall be held by the plaintiff until Irving Saftlas reaches the said age, and in the event the insured dies during the minority of Irving Saftlas, then the payments due under the policy shall be paid to Regina Saftlas, the mother of Irving Saftlas, as trustee, or to the successor in trust for Irving Saftlas. Irving Saftlas was born on March 18, 1927.

7. The policy provides in part that:

The plaintiff "Hereby Insures the Life of Joseph Saftlas * * * and agrees to pay * * * Thirty Five Hundred Dollars * * * upon receipt of due proof of the death of the Insured * * *. And the Society agrees to increase the amount so payable to Seven Thousand Dollars, upon receipt of due proof of death from accident * * *. And further, if the Insured * * * becomes totally and presumably permanently disabled as defined in the Total and Permanent Disability provision on the third page hereof, the Society will, subject to the conditions of such provision, waive subsequent premiums and pay to the Insured a Disability Income of Thirty-five Dollars a month.

"This insurance is granted in consideration of the payment in advance of One Hundred seventy-three and 85/100 Dollars, and of the payment annually thereafter of a like sum * * *. These payments include an annual premium of $4.59 for the Double Indemnity and of $12.11 for the Total and Permanent Disability provision hereof. * * *

"This policy, except as to the provisions relating to Disability and Double Indemnity, shall be (a) incontestable after it has been in force during the lifetime of the Insured for a period of one year from its date of issue * * *."

8. The application contains a number of questions which the insured answered as set out therein as part of the said application.

9. Insured answered "No" to the question No. 6 of the application, as to whether he ever had, or had been treated for, any disease or disturbance of the tonsils, stomach, liver, intestines or eye.

10. Insured answered "No" to question No. 7 of the application, as to whether he ever had vertigo, dizzy spells, or ever had his blood examined. To the question whether he had any other illness or injury not mentioned above, he answered: "Yes — Influenza."

11. Question No. 9 of the application is: "State every physician or practitioner whom you have consulted or who has treated you during the past five years." Insured answered this question as follows:

Name and address of each Date and details Result Dr. Rattenberg Occasional cold Good 54th & Arlington Phila

12. The application contains the following declaration made by the insured above his signature: "I hereby agree that the policy issued hereon shall not take effect until the first premium has been paid during my good health * * *. All of the foregoing answers and all those * * contained in Part II hereof, are true, and are offered to the Society as an inducement to issue the policy for which application is hereby made."

13. Prior to application for the insurance in question, the insured had or had been treated for disturbances or diseases of stomach, intestines and kidney.

14. Prior to application for the insurance in question, the insured had frequent dizzy spells and vertigo, and had been advised to have a tonsilectomy performed.

15. In June 1924, the insured had a disease or disturbance of the stomach and intestines which was accompanied by pain in the lumbar region, vertigo, diarrhea, cramps and headaches.

16. On June 25, 1924, the insured consulted Dr. H. M. Eberhard, a specialist, on account of the disturbance mentioned in the foregoing paragraph.

17. On June 25, 1924, Dr. H. M. Eberhard made a gastric analysis of the insured's stomach which involved inserting a tube down the insured's throat to the stomach, extracting some of its contents and examining it. Dr. Eberhard, at that time, also made an examination of the insured's faeces, urine, blood, and blood pressure.

18. On June 25, 1924, Dr. H. M. Eberhard prescribed for the insured a bland diet, the use of an electric bag or pad for an hour or more upon the insured's stomach. For the insured's low blood pressure, Dr. Eberhard prescribed three baths a week with the temperature of the water between 95 and 100 degrees, and a saline enema whenever the attacks of diarrhea were severe, and subcarbonate of bismuth to be taken internally by the insured to reduce the inflammation.

19. On June 25, 1924, the insured gave Dr. H. M. Eberhard a history of having had jaundice in 1922.

20. The insured consulted Dr. Martin Rehfuss in September and October of 1926, and in February of 1927. At the time he complained of blurring of eyes, severe headaches, dizziness, severe pain in back when excited, nervousness, and inability to sleep well.

21. Dr. Rehfuss X-rayed the insured, fluoroscoped him, made a urine analysis, examined his stool which showed a positive reaction for blood, found evidence of liver, gall bladder and duodenal disturbances. The Doctor made a gastric examination of the stomach, and of the bile which involved the insertion of a tube down the insured's throat, and the extraction of part of the contents of the stomach and the bile.

22. The insured consulted Dr. H. H. Lott in October, 1925, and April and May of 1926.

23. The insured consulted Dr. A. Morgan twice a year in 1926, 1927 and 1928 for general checkups, with particular reference to cause of blurring eyes and frontal headaches. At one time Dr. Morgan prescribed a diet and requested the insured to note his reactions to particular foods.

24. The insured consulted Dr. A. E. Colcher in 1935 and gave him a history which...