Metro. Life Ins. Co. v. Coddington

• fullCitation: Metropolitan Life Insurance Company v. Coddington, 26 A.2d 41, 131 N.J.Eq. 430 (N.J. Ch. 1942)
• Decision Date: 28 April 1942
• Citation: 131 N.J.Eq. 430,26 A.2d 41
• Docket Number: 129/328.
• Parties: METROPOLITAN LIFE INS. CO. v. CODDINGTON.
• Court: New Jersey Court of Chancery

26 A.2d 41

131 N.J.Eq. 430

METROPOLITAN LIFE INS. CO.

v. CODDINGTON.

129/328.

Court of Chancery of New Jersey.

April 28, 1942.

Syllabus by the Court.

1. Where an application for a policy of life insurance contains a clear limitation upon the authority of the insurer's agents to waive or vary any answers, required by the application, any untrue answers so returned and signed by the insured, even though written in by the insurer's own medical agent, will, if material to the risk, constitute grounds for voiding the policy obtained upon the strength thereof.

2. An insurer has the right to limit the powers and authority of its own agents, and third parties dealing with such agents, with express notice of the limitation thus imposed, cannot bind the principal by any act done by said agents in excess of the bounds of their authority.

3. In the absence of proof that the affixation of the insured's signature to his application for a policy of insurance was procured through fraud, misrepresentation or imposition, he is conclusively presumed to have read said document and to be bound thereby.

4. Insurer may avoid policy of life insurance obtained on strength of insured's application containing untrue answers in response to the questions therein asked concerning his medical history; notwithstanding the fact that it had its own medical examiner examine the insured before issuing the policy.

5. Mere absence of a causal relationship between the insured's misrepresentation as to a material fact and the cause of his death will not defeat the insurer's right to a rescission or cancellation of its policy of life insurance obtained as a result of said misrepresentation.

Suit by the Metropolitan Life Insurance Company against Enez O. Coddington to cancel a life policy obtained by alleged misrepresentations.

Decree for complainant in accordance with opinion.

Drewen & Nugent, of Jersey City, for complainant.

Doughty & Dwyer, of Ridgcwood, for defendant.

LEWIS, Vice Chancellor.

Complainant's bill seeks the rescission and cancellation of a policy of insurance alleged to have been obtained from it as a result of false statements and misrepresentations on the part of the insured with respect to certain material facts.

The policy in question was issued on January 1, 1940, on the life of Jesse W. Coddington in faith of his written application therefor and designated as the beneficiary thereunder his wife, Enez O. Coddington, the defendant herein. The application bears date of December 13, 1939, and, in answer to certain questions therein asked of the insured, records, among other things, (a) that he was never sick; (b) that he never changed his residence or occupation or left his work for more than one month on account of his health; (c) that he was never an inmate of a hospital, sanatorium, asylum or cure, whether for observation, examination or treatment; (d) that he had lost no time from work through illness during the past five years; (e) that he had never had or suffered from any of a number of specified diseases or ailments, among which was insanity; (f) that he had never had any illness or occupational diseases; and (g) that he had not consulted any physicians, healers or other practitioners, nor had he been treated in any clinics or hospitals during the past five years.

The questions calling for this information obviously related to matters that were, or ought to have been, within the personal knowledge of the insured, and his answers thereto, as returned in said application, were complete, unqualified and unequivocal. That these answers were untrue clearly appears, however, from the uncontradicted and undisputed proofs which demonstrate beyond peradventure (a) that the insured was sick from October 22, 1934, up until around the middle of April, 1935; (b) that he, for at least that period of time, had left his work because of his then illness; (c) that he was an inmate of a hospital, or asylum, having been committed on October 22, 1934, by the Burlington County Court of Common Pleas, on the application of his father, to the New Jersey State Hospital at Trenton, where he was actually confined and treated from the date of his entry up until April 16, 1935, the date of his parole, for a serious form of insanity known as dementia praecox, hyperphrenic type, and from which institution he was not discharged until April 26, 1936; (d) that he had lost time from his work during the five years preceding the date of his said application; (e) that he had actually suffered from insanity; and (f) that he had in fact been treated in the New Jersey State Hospital at Trenton during the said period which, of course, was within five years preceding the date of his said application.

All of the hereinabove mentioned misstatements, misrepresentations and concealments made by the insured in reply to specific questions asked of him in his said application, were material, Duff v. Prudential Insurance Co., 90 N.J.L. 646, 101 A. 371, and unquestionably were relied on by complainant in issuing the policy in question. The defendant, however, seeks to evade responsibility for their making and to escape the consequences thereof by claiming in effect that the answers as given by the insured to complainant's medical examiner were true in fact, but that the latter recorded them otherwise in said application; and hence contends that the misstatements, misrepresentations and concealments thus recorded were, in truth and fact, not those of the insured but rather those of the medical examiner who was the agent of complainant.

This contention is, however, predicated upon nothing more than defendant's own uncorroborated testimony that she was present during the medical examination and interrogation of her husband by complainant's medical examiner; that she heard the latter ask her husband all of the questions contained in Part B of said application, dealing with his medical history, and heard her husband tell him of his confinement in the New Jersey State Hospital at Trenton for "a nervous breakdown"—. not because of insanity, as was the fact— and even gave him the date of his admission therein and discharge therefrom, but that the medical examiner told him that, since it happened so long ago, it would not be necessary to write that down in the application and that he, therefore, would write down the answer "No" to the question: "Have you ever been an inmate of a hospital, sanatorium, asylum or cure, whether for observation, examination or treatment? If yes, give date, duration, nature of ailment and name of institution." This,...