Case Name: Lena Thorner, Respondent, v. John Hancock Mutual Life Insurance Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-10-02
Citations: 164 A.D. 34
Docket Number: 
Parties: Lena Thorner, Respondent, v. John Hancock Mutual Life Insurance Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 164
Pages: 34–38

Head Matter:
Lena Thorner, Respondent, v. John Hancock Mutual Life Insurance Company, Appellant.
Second Department,
October 2, 1914.
Insurance—life insurance—reinstatement of policy procured by false representations — direction of verdict for defendant — appeal — direction of judgment by Appellate Division.
Where a policy of life insurance in substance provides that if the policy has lapsed for a failure to pay premiums, the insured may be reinstated at any time within five years upon producing evidence of insurability satisfactory to the company, the beneficiary cannot recover against the insurer, where it appears that the insured, knowing that he had been ill, and that he had been examined by several physicians, signed a certificate falsely stating that he had been in good health, had suffered no illness or symptoms thereof for the past year, and had not consulted a physician. Upon such evidence, a verdict for the defendant should have been directed.
Where the facts cannot be altered upon a new trial, the Appellate Division, upon reversing a judgment for the plaintiff, may direct a judgment for the defendant dismissing the complaint, with the costs of the action and of the appeal.
Appeal by the defendant, John Hancock Mutual Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 22d day of April, 1914, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 30th day of April, 1914, denying defendant’s motion for a new trial made upon the minutes.
Benjamin Reass [Hugo Hirsh and Emanuel Newman with him on the brief], for the appellant.
Henry M. Dater [Jay S. Jones and Bernard J. Becker with him on the brief], for the respondent.

Opinion:
Burr, J.:
There is substantially no dispute of fact in this case. The question is one of law. We think that defendant's motion to direct a verdict in its favor, made at the close of the entire case, should have been granted.
On October 18, 1910, Jacob Thorner procured from defendant a policy insuring his life in favor of plaintiff, who is his widow. By its terms a premium of eighty dollars and fifty-two cents, less insured's distributive amount of surplus, amounting to eight dollars and ten cents, became due October 18, 1911. This premium was not paid. On September 28, 1911, in compliance with the statute relative thereto, a notice was sent to him advising him when such premium would become due. By the terms of the policy, "A grace of thirty-one days, during which the policy shall remain in force, will be granted for the payment of premiums or regular installments thereof, after the first year." Defendant apparently conceded that this provision was applicable to the premium falling due on October 18, 1911, for on November eleventh it sent to him a notice reminding him that on November eighteenth of the same year the grace period would expire. Still the premium remained unpaid. Included in the contract of insurance was this further provision: "At any time within, five years from default in payment of premium this policy may be reinstated, upon production of evidence of insurability satisfactory to the Company and approved at its Home office and upon payment or reinstatement of any indebtedness to the Company hereon or secured hereby, and payment of arrears of premiums, with interest at the rate of five per centum per annum. " Within the specified period and on December 8,1911, the insured sought to have the policy reinstated. He furnished to defendant evidence, at that time satisfactory and approved, of his insurability and complied with the other conditions of the reinstatement contract. On June 20, 1912, he died. The immediate cause of death, as appeared from the proof thereof and the evidence in the case, was " carcinoma [cancer] of the stomach." The evidence furnished by insured to defendant, upon which the policy was reinstated, consisted of a certificate signed by him to this effect: " I certify that I am now in good health; that within one year prior to the date of this certificate I have had no injury, ailment, illness or disease, nor symptoms of such. Neither have I consulted a physician." The words here capitalized were printed upon said certificate in red ink and in capital letters. The remainder of the certificate was printed with ordinary type and in black ink. Concededly, at least so much of the statement as referred to his consulting a physician and to having had " symptoms " of " ailments " was false, and when made was known to him to be so. Among the proofs of death submitted by plaintiff was an affidavit made by Dr. Jacob Fuhs, a specialist in diseases of the digestive system. From this it appears that insured did consult him on September 16, 1911, October 12, 1911, November 2, 1911, December Y, 1911 (the day before the date of his certificate), and on January 11, 1912. It also appears that on June 6 and June 9, 1912, two weeks and eleven days respectively before his death, he saw insured in consultation with Dr. F. Ignatius Drobinski, his attending physician. In response to a question contained in said affidavit, "Did you ever prescribe for or attend deceased for any disease, ailment or injury ? " Dr. Fuhs replied, "Only for his last illness." In response to the question, ' ' When did health first begin to be impaired ? " he replied, "A year before his first call." It also appeal's that on September 19 and 20, 1911, Dr. Fuhs sent insured to Dr. Charles Eastmond, a specialist in "X-ray diagnosis;" that he took an X-ray photograph of insured and reported the result to Dr. Fuhs. It also appears that in January, 1912, (between January seventeenth and January twenty-fourth), insured submitted to an operation at the Post Graduate Hospital in the city of New York, and his disease was there diagnosed as cancer of the stomach. From that time until the date of his death he was constantly under the care of physicians for treatment for this disease of which he died.
The question for us is, was this certificate of December 8, 1911, upon which deceased obtained reinstatement of the contract of insurance with defendant, and which is concededly false, also fraudulent; that is, was it false to the knowledge of insured and made with intent to deceive? The evidence permits of but one answer. The inferences to be drawn therefrom allow but one conclusion. There is no other possible explanation thereof except that insured intentionally sought to mislead defendant, disarm suspicion and, if possible, procure a reinstatement of a policy when, if all of the facts known to him had been disclosed to defendant, it well might have declined to restore. A little more than a year before, after an examination by its own physicians, the life of insured had been accepted as a satisfactory risk. The subject upon which it sought information before reinstating this lapsed policy was what had occurred in the meantime. Under its contract, if it desired, it could require another medical examination by its own physicians before reinstating the same. Two of the facts which insured was asked to certify to were, first, whether within the past year he had any injury, ailment, illness or disease, or symptoms of such, and second, whether he had consulted any physician. The course of conduct of defendant with regard to further medical examination would undoubtedly be governed by the answers given thereto. Each of his statements respecting these vital facts was knowingly false. Con.ceding that he then did not know the nature of the disease from which he was suffering and from which he subsequently died, conceding even that at that time he did not know positively that he had any disease at all, he certainly did know that he had sufficient " symptoms " of an " ailment " to induce him to consult a specialist in diseases of the digestive organs, and that under his advice he had been subjected to the X-ray treatment. He did know that he had consulted a physician. Suppose it were the fact, although the indications are entirely to the contrary, that he had then been advised by Dr. Fuhs that he was suffering from no disease, illness or ailment whatever, defendant was entitled to know all of the facts respecting his conduct, that it might govern its conduct accordingly. The materiality of a representation is largely measured by the known consequences thereof. It is impossible to attribute to the insured but a single purpose in falsely stating to defendant that he had no " symptoms " of " ailment " and had not "consulted a physician." It was to avoid, if possible, further examinations by defendant's physicians, the consequences of which he might well dread. It is unfortunate that insured suffered his first annual premium to lapse, but defendant owes a duty to its other policyholders to see to it that its treasury is not depleted by the payment of fraudulent claims. In defend ing this action it is but discharging that duty. As the facts cannot be altered upon a new trial, within the power now conferred upon us we reverse the judgment and order appealed from, and direct judgment in favor of defendant dismissing the complaint, with costs of the action and of this appeal.
Jeeks, P. J., Thomas, Rich and Stapleton, JJ., concurred.
Judgment and order reversed, and judgment directed in favor of defendant dismissing the complaint, with costs of the action and of this appeal.
See Ins. Law (Consol. Laws, chap. 28; Laws of 1909, chap. 33), § 92.— [Rep.