Mass. v. Cronin.

Decision Date03 February 1947
Docket NumberNo. 206.,206.
Citation51 A.2d 2
PartiesJOHN HANCOCK MUT. LIFE INS. CO. OF BOSTON, MASS., v. CRONIN.
CourtNew Jersey Supreme Court

OPINION TEXT STARTS HERE

Appeal from Court of Chancery.

Suit by the John Hancock Mutual Life Insurance Company of Boston, Massachusetts, against Noreen Cronin for rescission of a life policy in which defendant filed a counterclaim to reform insured's application for, and recover the amount of, the policy. From a decree for defendant, 137 N.J.Eq. 586, 46 A.2d 71, complainant appeals.

Reversed.

PARKER, Justice, and DILL, Judge, dissenting.

Nugent & Rollenhagen, of Jersey City (John P. Nugent, of Jersey City, of counsel), for complainant-appellant.

Milton, McNulty & Augelli, of Jersey City (Joseph Keane and Walter E. McInerney, both of Jersey City, of counsel), for defendant-respondent.

WACHENFELD, Justice.

A life insurance policy of $10,000 was issued by the appellant. The beneficiary widow, the respondent in this case, instituted an action at law after the death of her husband to recover the amount due on the policy in question. The Company filed an answer and counterclaim alleging misrepresentation. It then filed the present bill of complaint restraining the action at law and asking for a rescission of the contract, having tendered to the widow a return of the premiums paid.

Application for the insurance policy was made on December 5, 1941 and the policy was issued on January 22, 1942 although it was dated December 5, 1941. The first premium was paid on the same date, to wit, and the date of the application. The insured died on September 27, 1943, one year and ten months after the issuance of the policy. The opinion below found that he died of coronary thrombosis while the death certificate introduced in evidence recites:

‘Immediate cause of death:

Coronary Thrombosis? ?

Acute cardiac dilatation

Over exertion and

extreme nervousness'

The appellant contends the decedent in his application for insurance misrepresented material facts. They may briefly be set forth as follows: (1) decedent indulged in intoxicants while his application says that he did not; (2) he had been treated by a doctor within five years prior to the date of the application, which was denied in his application; (3) he had been in a hospital for treatment within the same period of time, while his application says that he had not been under treatment within this period of time.

The answer to the bill denies the misrepresentations and asserts the insurance company had knowledge of the actual facts, notwithstanding the application, and that no fraud existed because the appellant did not rely upon the misrepresentations but based its action upon an independent investigation. The full information the company obtained in this independent investigation is covered in a report dated December 17, 1941 known as the O'Hanlon report.

The issues arise as follows: the application shows (1) the decedent to have been a stock broker while the O'Hanlon report shows the decedent to have been unemployed; (2) that the decedent did not drink while the O'Hanlon report discloses he did drink, saying that he was a moderate indulger and took an ‘occasional high ball’; (3) that in answer to Question 17 ‘Have you consulted or been treated by a physician or other practitioner during the past five years?’ the insured answered ‘No’; and in answer to Question 18 ‘Have you ever received, or applied for treatment at, or attended, any hospital, dispensary, sanitarium, cure, or other institution?’ the insured replied ‘Yes.’ The application then provides if the answer to any of the above questions is ‘Yes' ‘specify every illness * * * operation, with dates, duration, severity, results, the names and addresses of any physicians or other practitioners, and hospitals, etc.,’ to which the applicant replied ‘Appendectomy 1924, Dr. McLoughlin St. Francis Hosp.’

The first two points are immaterial and of no consequence. As to the third, the O'Hanlon report discloses an investigation was made of the decedent's past medical history which showed the past health history included the appendectomy ‘over 15 years ago’ and the fact that a brother of the applicant had tuberculosis, which was also stated in the application made. The O'Hanlon report also has the following inquiry: ‘Do you regard applicant as a desirable life insurance risk?’ and the report answers ‘Yes-remarks.’

As contrasted with this situation, the proof shows the insured was attended by a Dr. Frank J. McLoughlin on April 2, 6 and 30, 1940, December 3, 4 and 5, 1940 and January 17, 1942. The insured suffered, according to this doctor's testimony, from a mild form of stomach trouble and extreme nervousness. On December 3, 1940 he was admitted to the St. Francis Hospital, Jersey City, because he had taken an overdose of sedative medication. At the hospital he was treated for a stomach condition and extreme nervousness. He was discharged on December 5, 1940.

On April 11, 1941 the insured was attended by Dr. Benjamin N. Schenker, who was called by the insured's father and mother. This doctor found the insured in ‘pretty bad shape,’ ‘seeing things,’ ‘carrying on,’ ‘stripped’; ‘* * * the sheets were torn, and everything else.’ A provisional diagnosis of delirium tremens was made and the doctor directed the insured be admitted to the Jersey City Medical Center. He was assigned to the psychopathic ward, where he remained under treatment for three weeks.

The court found material misrepresentations but concluded from the testimony that the appellant relied upon its own investigation as shown in the O'Hanlon report and not upon the decedent's application.

If it is factually established that the appellant did not rely upon the misrepresentations made even though they were material, the company is not entitled to relief. If, on the contrary, the policy of life insurance was issued on the written application and the company relied upon the statements made therein in respect to the physical condition and the attendance upon the applicant by physicians, it cannot successfully be contended that the insurance company was not thereby induced to issue its contract of insurance.

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26 cases
  • United Jersey Bank v. Wolosoff
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    • October 22, 1984
    ...on his own investigation." DSK Enterprises, Inc. v. United Jersey Bank, supra at 251, 459 A.2d 1201. See also John Hancock & Co. v. Cronin, 139 N.J.Eq. 392, 397, 398, 51 A.2d 2 (E & A 1947); Froehlich v. Walden, 66 N.J.Super. 390, 395, 169 A.2d 204 (Ch.Div.1961). On the other hand, our Supr......
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