Metro. Life Ins. Co. v. Nicola

• Decision Date: 29 December 1944
• Citation: 317 Mass. 416,58 N.E.2d 841
• Parties: METROPOLITAN LIFE INS. CO. v. DE NICOLA.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

317 Mass. 416

58 N.E.2d 841

METROPOLITAN LIFE INS. CO.

v.DE NICOLA.

Supreme Judicial Court of Massachusetts, Worcester.

Dec. 29, 1944.

Bill in equity by Metropolitan Life Insurance Company against Carmela De Nicola to set aside and avoid a life policy on ground that it was obtained by false representations of insured. Decree for plaintiff, and defendant appeals.

Affirmed.Appeal from Superior Court, Worcester County; Donnelly, Judge.

Before FIELD, C. J., and LUMMUS, QUA, WILKINS, and SPALDING, JJ.

L. E. Stockwell, G. R. Stobbs, and S. B. Tilton, all of Worcester, for plaintiff.

Fusaro & Fusaro, of Worcester, for defendant.

LUMMUS, Justice.

This bill in equity to set aside and avoid a policy of life insurance containing the incontestability clause hereinafter quoted, issued by the plaintiff on October 1, 1939, on the ground that the insured, Giuseppe DeNicola, obtained the policy by false representations, was filed on July 28, 1941, in his lifetime. Metropolitan Life Ins. Co. v. Burno, 309 Mass. 7, 33 N.E.2d 519;Jefferson Standard Life Ins. Co. v. Keeton, 4 Cir., 292 F. 53;New York Life Ins. Co. v. Seymour, 6 Cir., 45 F.2d 47, 73 A.L.R. 1523;American Life Ins. Co. v. Stewart, 300 U.S. 203, 57 S.Ct. 377, 81 L.Ed. 605, 111 A.L.R. 1268;New York Life Ins. Co. v. Truesdale, 4 Cir., 79 F.2d 481;New York Life Ins. Co. v. Rigas, 117 Conn. 437, 168 A. 22, 91 A.L.R. 1122;Equitable Life Ins. Co. v. Mann, 229 Iowa 945, 295 N.W. 461.

After his death, which occurred on October 2, 1941, one day after the policy became incontestable, this bill in equity was prosecuted against Carmela DeNicola, the beneficiary named in the policy, who was substituted as defendant by amendment allowed on November 12, 1941. She appeared, answered, and defended the case before a jury on issues. The answers of the jury upon the issues submitted to them were in substance that the insured obtained the policy by misrepresentations contained in his application with respect to a matter that increased the risk of loss, G.L.(Ter.Ed.) c. 175, § 186; Metropolitan Life Ins. Co. v. Burno, 309 Mass. 7, 33 N.E.2d 519, but had no actual intent to deceive the plaintiff. By the final decree the plaintiff was awarded costs, the policy was annulled, and the defendant beneficiary was permanently enjoined against suing on the policy. She appealed.

There are two defenses, (1) that the provision in the policy making it ‘incontestable after it has been in force during the lifetime of the Insured for a period of two years from its date of issue’ (Mutual Life Ins. Co. v. Hurni Packing Co., 263 U.S. 167, 44 S.Ct. 90, 68 L.Ed. 235, 31 A.L.R. 102;State Mutual Life Assurance Co. v. Stapp, 7 Cir., 72 F.2d 142;Amoskeag Trust Co. v. Prudential Ins. Co., 88 N.H. 154, 185 A. 2;Prudential Ins. Co. v. Prescott, 115 Fla. 365, 156 So. 109), with immaterial exceptions, bars relief against the beneficiary, who was not made a party until after that period had ended, and (2) that the right to maintain the suit did not survive the death of the insured.

1. The provision for incontestability in the policy conforms to G.L. (Ter.Ed.) c. 175, § 132. It is designed to require the insurer to investigate and act with reasonable promptness if it wishes to deny liability on the ground of false representation or warranty by the insured. It prevents an insurer from lulling the insured, by inaction, into fancied security during the time when the facts could best be ascertained and proved, only to litigate them belatedly, possibly after the death of the insured. The insurer, within the period prescribed by the policy, must contest the policy, that is, must set up its invalidity in some judicial proceeding, by way either of attack or of defence. American Life Ins. Co. v. Stewart, 300 U.S. 203, 57 S.Ct. 377, 81 L.Ed. 605, 111 A.L.R. 1268;Great Southern Life Ins. Co. v. Russ, 8 Cir., 14 F.2d 27;Peake v. Lincoln National Life Ins. Co., 8 Cir., 15 F.2d 303;Densby v. Acacia Mutual Life Association, 64 App.D.C. 319, 78 F.2d 203, 101 A.L.R. 863;Lanier v. New York Life Ins. Co., 5 Cir., 88 F.2d 196;New York Life Ins. Co. v. Rigas, 117 Conn. 437, 168 A. 22, 91 A.L.R. 1122;Powell v. Mutual Life Ins. Co., 313 Ill. 161, 144 N.E. 825, 36 A.L.R. 1239;Amoskeag Trust Co. v. Prudential Ins. Co., 88 N.H. 154, 185 A. 2;Killian v. Metropolitan Life Ins. Co., 251 N.Y. 44, 166 N.E. 798, 64 A.L.R. 956; 29 Am.Jur., Insurance, §§ 898, 899.

But the provision for incontestability is not, as has sometimes been thought, a limitation of actions. That provision speaks of contests, not of actions. If within the prescribed period the insurer acts, by way either of bringing suit or of making defence in a judicial proceeding brought against it, to relieve itself from liability under the policy, it has made a contest, and the provision in question is satisfied. It is immaterial that some procedural difficulty prevents the final determination of that contest in the suit or action in which it is begun. The contest remains, although the particular proceeding for its determination fails. In the present case the insurer began its contest within the prescribed time, and that contest still continues, no matter whether the suit against the beneficiary be deemed a continuation of the suit against the insured or a new proceeding. Nothing in the statute or the policy provides that a decree annulling a policy should not be entered in a suit begun after the end of the prescribed period of contestability if before the end of that period the insurer had begun its contest.

2. The defendant beneficiary appeared and answered and tried the merits of the suit, apparently without making any contention that the suit abated because of the death of the insured and could not be revived against the defendant beneficiary by amendment. So far as appears, it was only after being defeated on the merits that the defendant beneficiary made such a contention in her brief. In our view, the defendant beneficiary may not now contend that she was not properly before the court after joining issue on the merits and seeking a favorable decision on them. This is true even though the case against the defendant beneficiary be deemed a new case. Faulkner v. Lowell Trust Co., 285 Mass....