Minsker v. John Hancock Mut. Life Ins. Co.

• Decision Date: 30 September 1930
• Citation: 254 N.Y. 333,173 N.E. 4
• Parties: MINSKER, v. JOHN HANCOCK MUT. LIFE INS. CO.
• Court: New York Court of Appeals Court of Appeals

254 N.Y. 333

173 N.E. 4

MINSKER,

v.JOHN HANCOCK MUT. LIFE INS. CO.

Court of Appeals of New York.

Sept. 30, 1930.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Anna Minsker against the John Hancock Mutual Life Insurance Company. Judgment for defendant was affirmed by the Appellate Division (227 App.Div. 846, 237 N.Y.S. 839), and plaintiff appeals.

Affirmed.

Ernest D. Leet, Robert H. Jackson, and John E. Durkin, all of Jamestown, for appellant.

Clarence G. Pickard, of Jamestown, for respondent.

HUBBS, J.

On October 2, 1926, the defendant issued a life insurance policy for $10,000 upon the life of Eli Minsker, plaintiff's husband, in which she was named as beneficiary. Within one year thereafter and upon July 15, 1927, the insured died of nephritis and endocarditis. Proof of death was duly served. The defendant denied liability upon the policy, but tendered a return of the premium paid thereon. The complaint herein is in the usual form, except that in the sixth paragraph it alleges, in anticipation of the defense that the insured had made false answers to questions in regard to previous consultations with and treatment by physicians and at a medical institution, that the answers to such questions were truthfully made to the defendant's local agent and medical examiner and that they had full knowledge of the facts.

The answer alleges breach of warranty and material false representations. The written applications for the policy, in part B, statement to medical examiner, contains the two following questions:

“14. Have you had any medical advice during the past five years? State every instance with illness, dates, duration, severity and results and the names and addresses of the physicians who treated you.

“15. Have you ever received or applied for treatment at any hospital, dispensary, sanitarium, cure or other institution?”

The insured answered each of those questions “No.” It is undisputed that both answers were false. It clearly appears that on several occasions within a few months before the application was signed the insured received medical advice from at least three different physicians, who each treated him professionally and prescribed for him, and that on such occasion he was ill. On one occasion when ill he attended the Cleveland Clinic located at Cleveland, Ohio, was under observation by a physician in that medical institution, and was prescribed for by said physician. The nature of his illness and the remedies prescribed by the physicians were not disclosed. Testimony in regard to those matters was excluded upon the objection of plaintiff's counsel, upon the ground that it was incompetent under section 352 of the Civil Practice Act.

The position of the appellant is that the false answers as written to the two questions quoted do not affect the validity of the policy, as the insured orally imparted the correct and truthful answers to the defendant's local agent and medical examiner, and that the evidence does not disclose a fraudulent breach of warranty or material false representation, as it does not appear that the insured was treated by a physician for any serious physical ailment, and that it must be presumed that he was not, as his son testified that he had been continuously in good health for five years before the policy was issued.

Prior to January 1, 1907, when section 58 of the Insurance Law (Consol.Laws, c. 28) became effective, the courts of this state had decided in numerous cases that, if the medical examiner of a life insurance company was truthfully told, by the applicant for a policy, of facts which under the terms of a policy would make it void if not noted upon it, the company could not avail itself of the defense that such facts were not stated in the policy, the underlying principle being that it would be a fraud upon the insured to accept pay for a policy which the company through its agent knew was void when delivered. Such was the case of Sternaman v. Metropolitan Life Ins. Co., 170 N.Y. 13, 62 N.E. 763, 57 L.R.A. 318, 88 Am.St.Rep. 625. The Federal Supreme Court adopted a different view, and held that a void policy could not be made valid by parol testimony to the effect that the company's agent had knowledge of the true facts and that the answers as written in the application were incorrectly written by the company's agent. Northern Assurance Co. v. Grand View Building Ass'n, 183 U.S. 308, 22 S.Ct. 133, 46 L.Ed. 213. Section 58 of the Insurance Law (Laws of 1906, c. 326), reads in part: “Every policy of insurance issued or delivered within the state on or after the first day of January, nineteen hundred and seven, by any life insurance corporation doing business within the state shall contain the entire contract between the parties and nothing shall be incorporated therein by reference to any constitution, by-laws, rules, application or other writings unless the same are indorsed upon or attached to the policy when issued; and all statements purporting to be made by the insured shall in the absence of fraud be deemed...