Sommer v. Guardian Life Ins. Co. of America

• Decision Date: 21 November 1939
• Citation: 281 N.Y. 508,24 N.E.2d 308
• Parties: SOMMER v. GUARDIAN LIFE INS. CO. OF AMERICA.
• Court: New York Court of Appeals Court of Appeals

281 N.Y. 508

24 N.E.2d 308

SOMMER

v.GUARDIAN LIFE INS. CO. OF AMERICA.

Court of Appeals of New York.

Nov. 21, 1939.

Appeal from Supreme Court, Appellate Division, Second Department.

Action on a life policy by Lucy Sommer against the Guardian Life Insurance Company of America, wherein defendant filed a counterclaim. From a judgment of the Appellate Division, 255 App.Div. 888, 7 N.Y.S.2d 972, which reversed on the law a judgment of Trial Term and dismissed the complaint, plaintiff appeals.

Judgment of the Appellate Division reversed, and that of the Trial Term affirmed. Clarence G. Bachrach, of Brooklyn, for appellant.

Victor E. Whitlock, of New York City, for respondent.

LEHMAN, Judge.

The defendant in 1930 issued a policy insuring the life of Morris Sommer in the sum of $7,000. The plaintiff was the wife of the insured and was named in the policy as the beneficiary. Failure to pay the semi-annual premium due on March 11, 1935, caused the policy to lapse; but it was reinstated upon the written application of the insured in which the insured stated: ‘For the purpose of inducing the company to reinstate said policy, I hereby declare that I am now in sound health and that within the past two years * * * I have had no disease, injury, or impairment of health; that I have not consulted nor been treated by any physician, surgeon, or practitioner.’ The insured died on November 28, 1935. The defendant company refused to pay the policy on the ground that the representations in the application were false.

A judgment in favor of the plaintiff was reversed by the Appellate Division and the complaint dismissed on the ground that as matter of law the representations contained in the application are false and furnish ground for avoidance by the company of the policy of insurance. The defendant at the trial had the burden of proof upon its affirmative defense of misrepresentation by the assured. All questions of fact were decided at the trial by the trial judge in favor of the plaintiff. The problem presented upon this appeal is whether the proof of misrepresentation, produced at the trial, was so conclusive that the trial justice was bound to direct a verdict in favor of the defendant.

We assume, for the purposes of this appeal, that the assured died of ‘coronary thrombosis' or ‘an acute coronary occlusion.’ We assume further, though only arguendo, that the ‘coronary thrombosis' was accompanied or induced by a ‘fibrosis of myocardium’ and that the evidence establishes without dispute that the heart and arteries of the insured were in a diseased condition long before the condition caused death; that, at the time the assured applied for a reinstatement of the policy, a careful examination of the assured by competent physicians would have disclosed that the health of the assured was impaired and that his impaired physical condition would be described by laymen as ‘heart disease.’ The record does not disclose that competent physicians did, in fact, make such an examination or discover the condition, or that the insured was conscious of any impairment of health or suffered any pain or inconvenience from it. On the contrary, the evidence shows that until about a week before his death the insured did not complain of any aches or pains; went to his place of business every morning and worked there till evening. The defendant company now contends that it appears, conclusively, that the representations of good health and freedom from disease were false, and that, because of such falsity, the company may avoid its policy even though the insured may have made these representations in good faith and in the honest and justified belief that they were true.

There can be no doubt that as a matter of law the representations made by the insured were material, for they induced the company to renew the lapsed policy. There can also be no doubt that a false representation, if material, ‘constituted a defense, although made innocently and without any feature of fraud.’ Eastern District Piece Dye Works, Inc., v. Travelers' Ins. Co., 234 N.Y. 441, 450, 138 N.E. 401, 403, 26 A.L.R. 1505. In form the representations are statements of fact made without qualification or reservation; but they are statements of fact upon a subject concerning which the applicant could not have absolute knowledge and which, indeed, is not susceptible of completely objective appraisal or definition. The defendant company undoubtedly knew that the applicant could state only his own opinion that he had no disease and that he was conscious of no malady or condition which impaired his health. If his representations mean only that and are understood to give no assurance beyond that, the proof of falsity is far from conclusive. If, in spite of their nature, these representations are strictly construed as absolute and unqualified representations that the applicant is free even from a latent and unknown disease which causes him no pain or inconvenience and does not interfere with his usual activities, then the representations are false.

Except where the Legislature has, by statute, regulated the form and content of policies of insurance, it is doubtless competent for a life insurance company to exact from an applicant for insurance a warranty that the applicant is free from disease or from impairment of health, however slight, regardless of whether such disease or impairment of health is known or unknown, latent or apparent. It may, when not restricted by the Legislature, condition...