Penn Mut. Life Ins. Co. v. Kelley

• Decision Date: 05 January 1937
• Parties: PENN MUT. LIFE INS. CO. v. KELLEY et al.
• Court: New Hampshire Supreme Court

189 A. 345

PENN MUT. LIFE INS. CO.

v. KELLEY et al.

Supreme Court of New Hampshire. Hillsborough.

Jan. 5, 1937.

Exceptions from Superior Court, Hillsborough County; Young, Judge.

Bill in equity by the Penn Mutual Life Insurance Company against James M. Kelley and another. Judgment for the plaintiff, and the defendants bring exceptions.

Exceptions sustained and bill dismissed.

Bill in equity for the reformation of a policy of life insurance issued by the plaintiff to the defendant, James M. Kelley, hereinafter called the defendant, and a supplemental agreement attached thereto providing for the payment of total disability benefits and waiver of premium; for an injunction restraining the defendants from bringing suit under said supplemental agreement; and for a judgment for the amount of benefits already paid thereunder. The plaintiff alleges that it was induced to enter into the supplemental agreement through the fraudulent representations of the defendant regarding his health. The defendants, while denying the allegation of fraud, claim that the policy and the supplemental agreement are, by their terms, incontestable. The defendants also sought to have the plaintiff's bill dismissed upon the ground that it has a complete and adequate remedy at law.

The court (Young, J.) ruled "that the rights of the parties should be determined in this action regardless of any remedy they or either of them might have at law" and the defendants excepted. Subject to the defendants' exception the court also ruled "that the supplemental agreement is contestable." The court also found that the defendant in his application for insurance falsely stated that he had never been treated or examined for diagnostic purposes by the X-ray and that he had never been treated for indigestion, biliousness, or appendicitis or other diseases of the stomach or intestines, whereas, in fact, he had received an X-ray examination prior to the date of application, followed by a diagnosis of ulcer of the stomach; that these statements were warranties; and that, because they were false, the plaintiff was entitled to cancel the supplemental agreement and to have the money paid under the total and permanent disability provision returned. It was accordingly ordered that the supplemental agreement be canceled and that the plaintiff have judgment for $1,477.40.

Other facts are stated in the opinion.

Wyman, Starr, Booth, Wadleigh & Langdell, of Manchester (L. E. Wyman, of Manchester, orally), for plaintiff.

Aloysius J. Connor, of Manchester, for defendants.

BRANCH, Justice.

Although the defendants still insist that the bill should be dismissed because the plaintiff has an adequate remedy at law, it was stated at the argument that both parties desired a decision upon the controlling question of substantive law here presented. We therefore proceed at once to a consideration of the question whether the supplemental agreement is now contestable.

The provisions of the policy and supplemental agreement here involved read as follows: From the policy: "Incontestability. This policy shall be incontestable after it has been in force duing the lifetime of the insured for a period of one year from its date of issue except for non-payment of premiums." From the supplemental agreement: "This supplemental agreement shall be deemed to include the provisions of the policy relating to change of beneficiary, assignment, payment of premiums, grace in payment of premiums, reinstatement, incontestability, policy and application entire contract, alterations, age and suicide, except, (1) that the provision of the policy entitled Incontestability is hereby changed to read as follows: 'This policy shall be incontestable after it has been in force during the lifetime of the insured for a period of one year from its date of issue except for non-payment of premiums and except as to any provision relating to disability benefits contained in any supplemental agreement attached to this policy.'" Both the policy and the supplemental agreement had been in force more than two years when defendant's claim for total disability was made under the latter and allowed...