Shapiro v. Metro. Life Ins. Co., 51.

• Decision Date: 27 September 1933
• Docket Number: No. 51.,51.
• Parties: SHAPIRO v. METROPOLITAN LIFE INS. CO.
• Court: New Jersey Supreme Court

168 A. 637

SHAPIRO

v. METROPOLITAN LIFE INS. CO.

No. 51.

Court of Errors and Appeals of New Jersey.

Sept. 27, 1933.

Appeal from Court of Chancery.

Suit by Betty Shapiro against the Metropolitan Life Insurance Company. From a decree in favor of the complainant (110 N. J. Eq. 287, 159 A. 680), the defendant appeals.

Decree affirmed.

Perkins, Drewen & Nugent, of Jersey City, for appellant.

Seclow & Nessanbaum, of Bayonne, for respondent.

HEHER, Justice.

On May 1, 1930, appellant issued a policy of insurance upon the life of respondent's father, Barney Laden. The insured died on April 20, 1931. Tumor of the media terminus was the cause of death. The policy provided that it should be incontestable after it had been in force for a period of two years from the date of issue. Respondent's bill alleged that insured, prior to his death, requested appellant, in the manner provided by the policy, to designate her as the beneficiary thereunder, and prayed that appellant be decreed to indorse the requested change of beneficiary on the policy, and pay the amount thereof to her. Appellant counterclaimed, alleging that the policy was "fraudulently obtained," in that false statements and representations relative to material matters were made by the insured "with intent to deceive" appellant, and praying a rescission of the contract and a surrender of the policy for cancellation.

The false statements specified were: (a) That he was in good health; (b) that he had never been sick; (c) that he was without any physical defect or infirmity; (d) that he had never had asthma, bronchitis, or tumor; and (e) that he had never been attended by any physician in the preceding period of five years.

The learned Vice Chancellor concluded that the insured, in making the statements and representations claimed to be false, did not have an intent to deceive, and that they were therefore not "fraudulent" within the meaning of the policy provision required by chapter 179 of the Laws of 1925 (Pamph. L. 1925, p. 436 [Comp. St. Supp. § 99—94]), stipulating, inter alia, that "all statements purporting to be made by the insured shall, in the absence of fraud, he deemed representations and not warranties."

Appellant insists that these representations were untrue in fact, and related to matters material to the risk assumed, and that even though made without conscious fraud, it was entitled to a rescission in equity. Passing the question as to the obligation resting upon appellant, under the issue framed, to prove moral or conscious fraud (Metropolitan Life Insurance Co. v. Sussman, 109 N. J. Eq. 582, 158 A. 406) we have reached the conclusion that false representations, in the particulars indicated, were not made by the insured. The proofs did not tend to establish the falsity of the representation that he had not been attended by a physician in the preceding period of five years. He had not been "attended" by a physician within the meaning of that term as employed in the policy. In the event of an affirmative answer, the insured was required to state "how long sick." By subsequent questions he was asked if he had had any treatment within that period at any dispensary, hospital, or sanatorium, and how much time he 'had lost from work through illness.

The insured's consultations with his physician related to a coughing affection. The first occurred on May 11, 1929, when the physician called at his home to visit a patient who resided there. Thereafter he called at the physician's office on three or four occasions. The physician testified that his diagnosis was asthmatic bronchitis. He did not, however, inform the insured that this was his conclusion; and it is clearly inferable from his testimony that he was unable to find a pathological basis for the condition in question. He agreed that the coughing was caused by the tumor which resulted in death, but obviously this was a subsequently formed opinion, based upon the discovery of this malignant growth during his last illness. He was concededly unaware until then of the existence of the tumor. He apparently regarded the condition as trivial, and merely advised the insured to cease smoking. The proofs do not show that he prescribed medicine or administered treatment in any form. Appellant's medical examiner observed the condition that moved the insured to consult his physician. He answered thus the query as to whether there was any disease or impairment of...