N.Y. Life Ins. Co. v. Steinman
| Decision Date | 07 November 1928 |
| Docket Number | No. 68—511.,68—511. |
| Citation | 143 A. 529 |
| Parties | NEW YORK LIFE INS. CO. v. STEINMAN. |
| Court | New Jersey Court of Chancery |
(Syllabus by the Court.)
Suit by the New York Life Insurance Company against Sarah Steinman. On motion to dismiss bill. Motion denied.
Philip Wendkos, of Camden, for the motion.
Starr, Summerill & Lloyd, of Camden, opposed.
The question for determination herein is whether a court of equity may properly entertain a bill filed by a life insurance company after the death of the insured for the cancellation and surrender of the policy of insurance and to enjoin the beneficiary from bringing an action at law thereon, when the bill is wholly based upon fraud of the insured in obtaining the policy. That question has been raised by a motion of defendant to dismiss the bill on the ground
of the existence of an adequate remedy at law.
My views touching the right of a court of equity to entertain a bill of this general nature are fully expressed in Smith-Austermuhl Co. v. Jersey Railways Advertising Co., 89 N. J. Eq. 12, 103 A. 388, and need not be here fully restated. They are to the general effect that the existence of a complete defense, based on fraud, in a court of law, falls short of and does not ordinarily constitute such an adequate remedy for the defendant as should impel a court of equity to refuse to entertain a bill filed by the defrauded party for cancellation and surrender of the contract, since the opportunity to make that defense may be lost, or the ability to make it may be weakened, by studied delay of the other party; and, further, that mere defense at law does not embrace the equitable relief of cancellation or surrender of a contract. The authorities in this state sustaining that view are there cited, to which should be added Gallagher v. Lembeck & Betz Eagle Brewing Co., 86 N. J. Eq. 188, 98 A. 461.
But in the present case an element exists which renders the relief now sought in this court peculiarly essential. The policy of insurance provides:
"This policy shall be incontestable after two years from its date of issue except for nonpayment of premium and except as to provisions and conditions relating to double indemnity."
The insured died prior to the expiration of the two-year period referred to in this incontestability clause, and no action at law has been brought by the beneficiary. The bill against which the present motion has been made was filed after the death of the insured and before the expiration of the two-year period. Should the view be entertained that this incontestability clause contemplates the expiration of two years during the lifetime of the insured, and is not operative...
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