Prudential Ins. Co. of America v. Stone

• Court: New York Court of Appeals
• Writing for the Court: FINCH
• Citation: 270 N.Y. 154,200 N.E. 679
• Decision Date: 03 March 1936
• Parties: PRUDENTIAL INS. CO. OF AMERICA v. STONE et al.

270 N.Y. 154
200 N.E. 679

PRUDENTIAL INS. CO. OF AMERICA
v.
STONE et al.

Court of Appeals of New York.

March 3, 1936.

Action by the Prudential Insurance Company of America against Dorothy Stone and Dorothy Stone as administratrix of the goods, chattels, and credits which were of William Stone, deceased. From a judgment of the Appellate Division (244 App.Div. 789, 280 N.Y.S. 967), affirming the judgment of the Special Term in favor of the plaintiff, the defendants appeal.

Affirmed.

[270 N.Y. 155]Appeal from Supreme Court, Appellate Division, First Department.
Irwin N. Wilpon and Burton B. Turkus, both of Brooklyn, for appellants.

270 N.Y. 156]Merwin F. Le Vine, Solon Weit, and Howard S. Levie, all of New York City, for respondent.
[270 N.Y. 157]FINCH, Judge.

This is an action to rescind a contract of life insurance on the ground of misrepresentation by the insured in the application for the policy.

[270 N.Y. 158]On May 25, 1930, William Stone applied to the plaintiff for a policy of life insurance, naming his wife, Dorothy Stone, as beneficiary. The application was accepted and on June 13, 1930, a policy was issued. By the terms of the policy the insured reserved the right to change the beneficiary. The premiums on the policy were paid by William Stone.

The policy contained the following clause: ‘Incontestability. This Policy shall be incontestable after one year from its date of issue, except for non-payment of premium, but if the age of the insured be misstated the amount or amounts payable under this Policy shall be such as the premium

[200 N.E. 680

would have purchased at the correct age.’

On April 24, 1931, the plaintiff brought this action to rescind the policy, naming as defendants Dorothy Stone and William Stone. On that date service of the summons and complaint was made on Dorothy Stone. The plaintiff was unable to effect service upon the insured, William Stone, before his death which occurred July 14, 1931. Thereafter letters of administration were issued on the estate of William Stone to Dorothy Stone. The action was predicated upon certain misrepresentations contained in the application for the policy concerning the health of William Stone, his prior medical treatment, his hospitalization, and the rejection of his application by another insurance company. The trial court found and the appellants do not question that said misrepresentations were overwhelmingly established. The trial court further found that the action was commenced within the period of contestability. The Appellate Division unanimously affirmed the judgment of the trial court.

The chief problem is whether the statute of limitations bars the action. This depends on whether the plaintiff commenced the action within the year fixed by the aforesaid incontestability clause. This in turn depends upon the interpretation of the language of section 16 of the [270 N.Y. 159]Civil Practice Act, which governs the commencement of an action both as to contractual and statutory limitations.

Section 16 of the Civil Practice Act reads as follows: Ԥ 16. When action deemed to be commenced. An action is commenced against a defendant, within the meaning of any provision of this act which limits the...