Lance v. Prudential Ins. Co.

• Decision Date: 31 July 1941
• Citation: 22 A.2d 3,19 N.J.Misc. 551
• Parties: LANCE v. PRUDENTIAL INS. CO. et al.
• Court: New Jersey Court of Common Pleas

22 A.2d 3

19 N.J.Misc. 551

LANCE

v. PRUDENTIAL INS. CO. et al.

Court of Common Pleas of New Jersey, Morris County.

July 31, 1941.

Action on industrial life policies by Bessie Lance, individually and as administratrix of the estate of George Lance, deceased, against the Prudential Insurance Company of America, a corporation, and the Metropolitan Life Insurance Company, a corporation. The action was discontinued as against the Prudential Insurance Company of America, and was tried as against the second named defendant alone.

Judgment for the defendant.

Frank C. Scerbo, of Morristown, for plaintiff.

Lindabury, Depue & Faulks, of Newark, for defendant Prudential Ins. Co. of America.

McCarter, English & Egner and Augustus C. Studer, Jr., all of Newark, for defendant Metropolitan Life Ins. Co.

HOLLAND, Judge.

Subsequent to the commencement of the suit as above entitled, a discontinuance was entered in behalf of one of the defendants, the Prudential Insurance Company of America. The action now concerns two industrial policies written by the remaining defendant, Metropolitan Life Insurance Company, on the life of the decedent, George Lance, the first issued November 15th, 1937, and the second issued April 18th, 1938. George Lance, the insured, died August 10th, 1938. This suit was instituted August 19th, 1939. By stipulation, the case was tried without a jury.

The plaintiff contended that the policies were incontestable by virtue of the "incontestability clause". This the defendant denied, and defended on the ground of breach of conditions of the policies; each policy provides, among other things, that, subject to the clause entitled incontestability, the policy was voidable by the Company if, within two years prior to the date of the issue the insured had been attended by a physician, unless it was not for a serious disease.

It was proved without contradiction that Dr. A. P. King had treated the decedent, George Lance, for cancer and jaundice, two concededly serious diseases, in April and May, 1937, within the two-year period prior to the date of each policy. In open Court it was admitted that the Company had declared the policies void, that it had made a tender of a return of the premiums and that this had been refused. Whereupon the plaintiff moved for a directed verdict and thereupon the defendant moved for a judgment in its favor.

Each policy provides as follows:

Incontestability

"This Policy shall be incontestable after it has been in force, during the lifetime of the Insured, for one year from its date of issue, except for nonpayment of premiums".

This is in conformity with the language of the Statute, formerly P.L.1925, Chapter 179, now entitled R.S. 17:34-15(c), N. J.S.A. 17:34-15(c).

The plaintiff asserted that the only effective meaning which could be ascribed to this incontestability clause was that if the policy remained in force for one year from its date of issue without being overthrown or declared void by the defendant in some court action, proceeding or suit within that time of one year, that the defendant was thereby debarred from offering any defense, and thus the right to recover was absolute; and also argued that this right was not adversely affected either by the death of the insured within the one year period or by the inclusion in the incontestability clause of the phrase "during the lifetime of the insured". This view was strongly resisted by the defendant.

The turning point at which the policies cease being contestable and become incontestable was never reached. This turning point would be one year from the date of issue during the lifetime of the insured. The insured did not live for one year after the date of the issue of either policy. He died August 10th, 1938, a little less than nine months after November 15th, 1937, the date of issue of the first policy; and a little less than four months after April 18th, 1938, the date of issue of the second policy. Thus the policies remained contestable, and the defendant is entitled to assert its defense of breach of conditions.

The incontestability clause in those policies fixes the limitation of contestability as one year from the date of issue during the lifetime of the insured. This language has a normal and purposeful meaning; under this wording, the insured must live for at least one year after the...