Manhattan Life Ins. Co. v. Manger, Civ. A. No. 3791.

• Decision Date: 28 June 1946
• Docket Number: Civ. A. No. 3791.
• Citation: 66 F. Supp. 670
• Parties: MANHATTAN LIFE INS. CO. OF NEW YORK v. MANGER et al.
• Court: U.S. District Court — District of New Jersey

66 F. Supp. 670

MANHATTAN LIFE INS. CO. OF NEW YORK v. MANGER et al.

Civ. A. No. 3791.

District Court, D. New Jersey.

June 28, 1946.

McCarter, English & Egner, of Newark, N. J. (George W. C. McCarter, of Newark, N. J., of counsel), for plaintiff.

David Cohn, of Paterson, N. J., for defendants.

FAKE, District Judge.

Under date of July 27, 1942 the plaintiff life insurance company issued a policy of insurance covering the life of the defendant, Maurice L. Manger, naming his wife, Florence S. Manger, as beneficiary. The policy contains a clause providing that it "shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue, except for non-payment of premiums and except as to provisions, if any, relating to benefits in the event of total and permanent disability, or which grant additional insurance specifically against death by accidental means." The insured is still living.

On the 19th day of July 1944 and within the time above limited, the plaintiff filed a complaint herein directed against the insured without joining the beneficiary, as a party defendant. The relief sought is the return of the policy for cancellation on the ground of fraud arising out of false answers made in the application and such other relief as may be just.

The defendant insured, has directed a motion to the sufficiency of the complaint asserting that the beneficiary is an indispensable party defendant and not having been brought in within time, the cause of action set forth in the complaint must fall.

While the issue may be thus quickly and tersely stated it is by no means as easy of solution since no case directly in point is cited in the briefs nor have I been able to find one in an independent search of the authorities. There are cases however to the effect that the beneficiary has a vested right in the policy, Union Trust Co. of Pittsburgh v. McCaughn, D.C., 24 F.2d 459; Mutual Life Ins. Co. of N. Y. v. Hurni Packing Co., 263 U.S. 167, 44 S.Ct. 90, 68 L.Ed. 235, 31 A.L.R. 102; Metropolitan Ins. Co. v. Clanton, 76 N.J.Eq. 4, 73 A. 1052; and Sullivan v. Maroney, 76 N.J.Eq. 104, 73 A. 842, and there are cases to the effect that this right is in effect a secondary right, dependent on the validity of the policy, Smith v. Metropolitan Life Ins. Co. 222 Pa. 226, 71 A. 11, 20 L.R.A.,N.S., 928, 128 Am. St.Rep. 799; Wastun v. Lincoln National Life Ins. Co. of Ft. Wayne, Ind., 8 Cir., 12 F.2d 422; Knoche v. Mutual Life Ins. Co. of N. Y., 317 Pa. 370, 176 A. 230, but nowhere have I found a case flatly holding one way or the other that such a complaint as this is either good or bad for nonjoinder as here.

The nearest approach to it is found in a New Jersey case and the law of that state must be applied here if such can be found. In Metropolitan Life Insurance Co. v. Lodzinski, 122 N.J.Eq. 404, 194 A. 79, 81, it appears that a defective suit was instituted seeking the cancellation of a policy of insurance close to the deadline of time as provided in the incontestability clause. Technically, under the New Jersey equity practice, process or subpoena to answer cannot validly issue until after the filing of the complaint, but in this case the complainant fell into error by issuing process in advance of the filing of the bill. The bill however was filed within the time limited and of course the process had also issued within time. After the time limited had expired the defendant moved to dismiss the complaint for the defect above mentioned and the vice chancellor below granted the motion. When the issue reached the court of last resort in the state, Mr. Justice Bodine, speaking for the court, said: "* * * although the subpoena was issued before the precise filing date of the bill this was a technical irregularity, which was waived by the appearance." This has application here to the end that mere technical irregularities are not to be invoked, and certainly not to the extent of ignoring the substance involved. Moreover,...