Ulakovic v. Metropolitan Life Ins. Co.

• Decision Date: 28 October 1940
• Docket Number: 106
• Citation: 339 Pa. 571,16 A.2d 41
• Parties: Ulakovic, Appellant, v. Metropolitan Life Insurance Co
• Court: Pennsylvania Supreme Court

16 A.2d 41

339 Pa. 571

Ulakovic, Appellant, v. Metropolitan Life Insurance Co

No. 106

Supreme Court of Pennsylvania

October 28, 1940

Argued October 4, 1940.

Appeal, No. 106, March T., 1940, from judgment of C.P Allegheny Co., Jan. T., 1931, No. 16, in case of Anna C Ulakovic v. Metropolitan Life Insurance Company. Judgment affirmed.

Assumpsit on policy of life insurance.

The opinion of the Supreme Court states the facts.

Rule for judgment for want of a sufficient affidavit of defense discharged, before PATTERSON, KENNEDY and ELLENBOGEN, JJ opinion by PATTERSON, J., ELLENBOGEN, J., dissenting. Plaintiff appealed.

Error assigned was order discharging rule for judgment for want of a sufficient affidavit of defense.

The judgment is affirmed.

J. Thomas Hoffman, for appellant.

D. C. Jennings, for appellee.

Before SCHAFFER, C.J., MAXEY, DREW, LINN, STERN and PATTERSON, JJ.

OPINION

MR. MAXEY, JUSTICE:

This is an appeal from the order of the court below discharging plaintiff's rule for judgment for want of a sufficient affidavit of defense. On August 9, 1928, August Vulakovic, now deceased, applied to the defendant company for a policy of insurance. He was examined and on August 17, 1928, a policy was issued. His wife, the appellant, was named beneficiary. Since the insured's death his widow has married Maurice Ulakovic. A little later the insured requested a change of insurance payments from annual to semi-annual installments. This change was made on October 13, 1928. A semi-annual premium of $46.20 was then paid. This put the policy in force for six months from the date of its issue in August. On October 22, 1928, the insured died. Proofs of death were furnished to the defendant by plaintiff, but the company refused to pay anything on the policy. On June 20, 1930, the defendant made a legal tender to the plaintiff of $46.20, with interest. This the plaintiff refused.

The action on the policy was brought on October 6, 1930. As justification for its refusal to honor this policy, defendant averred certain acts of fraud and deception on the part of the insured. The application signed by him answered in the negative the usual questions as to whether he ever suffered certain diseases or had any surgical operations or whether or not he had been treated within five years for any illness or ailment. Defendant averred it expected to prove that on or about July 20, 1923, the insured suffered a gun shot wound for which he was hospitalized both in Philadelphia and in Pittsburgh, and that the wound caused a partial paralysis of the left arm and an axillary aneurism, which resulted in death. It also was averred that the insured was advised of his serious condition. For further defects, it is averred the insured had been treated for gastroenteritis, even while the application for the policy was pending.

After the affidavit of defense was filed on October 28, 1930, no praecipe for issue was ever filed or any other step taken until January 18, 1940, when this rule for judgment was entered by the plaintiff. The position taken by plaintiff is that the affidavit of defense setting up fraud was filed on October 28, 1930, more than two years after the original date of the policy, August 17, 1928, and also more than two years after the date of its issue, October 12, 1928. The plaintiff invokes the standard incontestability clause which makes the policy "incontestible after it has been in force for a period of two years from its date of issue, . . ."

The court below said in its opinion: "Upon the pleadings as we find them then, according the attribute of verity to the affidavit of defense and assuming defendant's ability to prove the averments thereof, to require the payment of the proceeds of this policy would be in furtherance of a patent fraudulent misrepresentation by the insured. This, however, can be of no avail to defendant, if it did not, within two years from the date of issue, take such action as would constitute a contest of the policy. The plaintiff contends that mere notice of repudiation is insufficient and that if the insurer seeks to escape its liability it must show actual inauguration of a contest by appropriate action in a court and since, in the case at bar, no such contest was initiated, the defense is insufficient to prevent judgment. On the other hand, the defendant's position is that a definitive and clear notice of rejection is sufficient to meet the requirement as to contestability and that having taken such action on June 20, 1930, its defense is sound."

The opinion of the court below cites on the question thus raised the cases of Prudential Life Ins. Co. v. Ptohides, 122 Pa.Super. 469, 186 A. 386; Feierman v. Ins. Co., 279 Pa. 507, 124 A. 171, and Killian et al. v. Metropolitan Life Ins. Co., 251 N.Y. 44, 166 N.E. 798, in which last named case Chief Judge CARDOZO, speaking for the New York Court of Appeals, held that notice of rejection of the insurance contract is unavailing unless followed within the prescribed time, two years, by contest with legal process. The court below held that under our own decisions disavowal of liability within the two year period, accompanied by a specification of the grounds of rejection, was sufficient to effect cancellation of the contract.

It is not necessary for us in this case to discuss or decide the question thus discussed and decided by the court below, to wit: Does notice to the beneficiary of denial of...