Winer v. New York Life Ins. Co.

• Decision Date: 08 March 1938
• Parties: WINER v. NEW YORK LIFE INS. CO.
• Court: Florida Supreme Court

190 So. 894

140 Fla. 534

WINER v. NEW YORK LIFE INS. CO.

Florida Supreme Court

March 8, 1938

Rehearing Granted March 8, 1938.

On Rehearing Sept. 12, 1939.

On rehearing.

Prior judgment vacated, former opinion modified, judgment affirmed and cause remanded with directions.

For prior opinion, see 130 Fla. 115, 177 So. 224.

BUFORD J., dissenting on motion for rehearing; and CHAPMAN, J dissenting on rehearing.

On Rehearing. Appeal from Circuit Court, Dade County; Paul D Barns, Judge.

COUNSEL

Rosenhouse & Rosenhouse, of Miami, for appellant.

Shutts & Bowen and E. S. Quick, all of Miami, for appellee.

OPINION

PER CURIAM.

In this case, the Court, ex mero motu, recalled its mandate in order that it might reconsider its former opinion and decision, that it might, if it should see fit, grant a rehearing. A petition for rehearing had been filed, but it reached this Court after the fifteen day period had elapsed.

Upon reconsideration of the case, the Court has decided to allow a rehearing on briefs, without oral argument, upon the following questions:

1. Did the bill of complaint contain equity?

2. Was this Court correct in holding in its opinion that: 'The facts constituting false and untrue representations made to the plaintiff in the application for reinstatement of the policy in question are not affected by the incontestable clause contained or expressed in the policy.' (177 So. page 227.)

As the appellee asked for the rehearing, appellee is allowed fifteen days in which to file brief in support of its contentions in regard to the foregoing questions, copy of such brief to be promptly served on counsel for appellant, and counsel for appellant is allowed a like time in which to file a reply brief, copy of which is to be served upon counsel for appellee.

It is so ordered.

ELLIS, C.J., and WHITFIELD, TERRELL, BROWN, and CHAPMAN, JJ., concur.

BUFORD, J., dissents.

On Rehearing.

BROWN Justice.

In our original opinion and decision in this case, handed down on November 19, 1937, 130 Fla. 115, 177 So. 224, we held that the bill was without equity and that the chancellor should have granted the motion to dismiss the bill, and our order was that the order of the lower court be reversed with directions to dismiss the bill of complaint. Petition for rehearing was filed, and a rehearing granted on March 8, 1938. In the order granting the petition, the court, among other things, stated;

'Upon reconsideration of the case, the Court has decided to allow a rehearing on briefs, without oral argument, upon the following questions:

'1. Did the bill of complaint contain equity:

'2. Was this Court correct in holding in its opinion that: The facts constituting false and untrue representations made to the plaintiff in the application for reinstatement of the policy in question are not affected by the incontestable clause contained or expressed in the policy.'

After this order was entered, the file was returned to the clerk's office to await the coming in of the briefs, which were filed in due course by counsel for the respective parties, but by reason of fortuitous circumstances not material here, the file in the case was not again brought to the court's attention until a few weeks previous to the writing of this opinion, when the same was assigned by the Chief Justice to the writer to prepare an opinion on the questions presented for the consideration of the court upon this rehearing. Despite this long delay, which the court regrets, the questions presented are important, and the parties litigant are entitled to a careful reconsideration of the same, as heretofore ordered.

The appellee, New York Life Insurance Company, filed its bill against the appellant, praying the cancellation of a certain policy of life insurance, in which the appellant, Mrs. Sarah Winer, was made the beneficiary, upon the ground that the reinstatement of said policy had been procured by fraud. The policy contained a clause to the effect that it would be incontestable after two years from date of issue, except for nonpayment of premiums.

In this case it appears from the bill that the policy, which was issued November 4, 1931, lapsed for non-payment of premiums on July 26, 1933; that on October 2, 1933, the insured made written application for the reinstatement of said policy upon certain representations, which application was granted; that thereafter insured died June 24, 1935; that the plaintiff Life Insurance Company did not learn of the alleged fraud in the procurement of the reinstatement of the policy until July 3, 1935; that promptly thereafter plaintiff, on July 26, 1935, notified the defendant beneficiary of its election to rescind the reinstatement of the policy; that the contestable period (if construed as being two years from date of reinstatement) would have expired October 2, 1935; that the bill of complaint to rescind the reinstatement of the policy and to have same canceled and surrendered was filed September 19, 1935, some twenty days before the expiration of the alleged contestable period; that the insurer in its bill offered to return all premiums paid in connection with such reinstatement, and those paid thereafter; and the bill also alleged that the defendant, despite her knowledge that plaintiff would contest the policy, had failed to take any action, and that if the plaintiff had not filed its bill within the said contestable period, it would have been entirely deprived of its right to contest the validity of the reinstated policy. It thus appears that the issue of the validity of the reinstatement of the policy was raised in an equitable proceeding due to the failure of the defendant to sue at law on the policy within a reasonable time after she was advised of the insurer's intention to contest its validity and that defendant had had ample time within which to institute an action at law before the plaintiff filed its bill in equity.

Upon reconsideration of this case on this rehearing, we are now of the opinion that the complainant in the court below did not have any complete andadequate remedy at law at the time the bill was filed, and that there was, therefore, equity in the bill, for the reasons hereinafter set forth.

In the case of Prudential Ins. Co. of America v. Prescott, 130 Fla. 11, 176 So. 875, 880, handed down by this court on November 6, 1937, it was said:

'It is quite a problem to determine how in all cases the insured is to be given a jury trial after loss, and at the same time to hold that a contest must be begun in court within the contestable period of the insurer will lose his rights to contest the policy; because if the insured's beneficiary chooses to wait until the policy becomes incontestable, then the only thing that the insurer could do would be to come into equity, and this would be depriving insured of jury trial unless the suit was stayed by the chancellor to permit an action at law. The Minnesota and Arkansas courts have solved the problem by holding that the rights of the parties become fixed upon the death of the insured and that at any time thereafter the insurer can defend an action to enforce the policy. This gives the insured a right to a jury trial after loss and at the same time doesn't deny insurer his right to contest the policy. As hereinabove pointed out, however, this holding is against the weight of authority.'

In our original opinion and decision in the instant case, and also in the Prescott case just referred to, we overlooked a then recent and well considered opinion by the Supreme Court of the United States in the case of American Life Ins. Co. v. Stewart, 300 U.S. 203, 57 S.Ct. 377, 379, 81 L.Ed. 605, 111 A.L.R. 1268, which was handed down February 1, 1937. In that case the insurer filed two bills in equity for the cancellation of two policies of life insurance issued on February 23, 1932, each policy naming a different beneficiary, on the ground that the insured, in his applications, had made fraudulent misstatements as to his health and other matters material to the risk. Each policy contained a two-year incontestable clause. The insured died May 31, 1932. The suits were filed on September 3, 1932. Motions to dismiss for want of equity were filed. On October 11, 1932, the beneficiaries brought actions at law on the policies. There was a stipulation between the parties that the suits in equity should be tried before the law actions. Upon the trial of the equity suits, the District Court decreed the cancellation of the policies. This decree was reversed by the Court of Appeals on the ground that the insurer had an adequate remedy at law. On certiorari to the Supreme Court of the United States, the Court of Appeals was reversed. In the very logical and trenchant opinion of Mr. Justice Cardozo in that case, it was said:

'No doubt it is the rule, and one recently applied in decisions of this court, that fraud in the procurement of insurance is provable as a defense in an action at law upon the policy, resort to equity being unnecessary to render that defense available. Enelow v. New York Life Ins Co., 293 U.S. 379, 385, 55 S.Ct. 310, 312, 79 L.Ed. 440 [444]; Adamos v. New York Life Ins. Co., 293 U.S. 386, 55 S.Ct. 315, 79 L.Ed. 444; Phoenix Mut. L. Ins. Co. v. Bailey, 13 Wall. 616, 20 L.Ed. 501; Cable v. United States L. Ins. Co., 191 U.S. 288, 306, 24 S.Ct. 74, 48 L.Ed. 188 [193]. That being so, an insurer, though the victim of a fraud, may commonly stand aside and await the hour of attack. But this attitude of aloofness may at times be fraught with peril. If the policy is to become incontestable soon after the death of the insured, the insurer becomes helpless if he must wait for a move by some one else, who may prefer to remain motionless...