Court Opinion

ID: 6157550
Source: CourtListenerOpinion
Date Created: 2022-02-05 16:25:26.106058+00
Date Added: 2024-06-11T08:55:18.965841
License: Public Domain

Genung, J.
Motion is made to vacate said judgment and for a new trial on the ground that the said decision and judgment entered thereon are contrary to law, and upon the further ground that the decision in this action as a submission of a controversy upon an agreed statement of facts under section 124 of the Municipal Court Code was improper and unauthorized as no affidavit “ by one or more of the parties showing that the controversy is real and that the submission was made in good faith for the purpose of determining the rights of the parties,” was filed. Such an affidavit has been filed by the parties and that objection has been cured. Attention has been called to Deem v. Equitable Life Assur. Soc. (302 U. S. 744), where a certiorari was denied, opinion in Circuit Court of Appeals (91 F. [2d] 569), and to Smith v. Equitable Life Assur. Soc. (169 Tenn. 478; 89 S. W. [2d] 165), and Greber v. Equitable Life Assur. Soc. (43 Ariz. 1; 28 P. [2d] 817), where identical incontestability clauses were presented.
The examination of the record in the Deem case discloses that it arose on a demurrer to a defense. From the statement of the defense it appears that when the policy was delivered Deem was afflicted with the very ailment upon which he based his claim in suit; that at the time when he made his application for a policy to the .Equitable he was then receiving disability payments from another insurance company; four days before he filed the application he made a further claim for disability payments to an insurance company; five days after he signed the application and while it was pending he received such a disability payment. The defense alleges he fraudulently withheld and denied all of this in his written application.
The petition for the writ states the only question to be presented is “ whether the disability feature of the policy in suit is contestable for fraud on the part of the assured in obtaining the policy.” Respondent’s brief in opposing the writ agrees that this was the sole question involved. The decision of the Circuit Court was considered and discussed in the opinion already filed. It was there pointed out that no State statute or attempted compliance therewith was involved. Hence, denial of the writ does not destroy the distinction stressed in the original opinion.
Next to be considered is Greber v. Equitable Life Assur. Soc. At page 12 of the opinion, section 1847 of the Arizona Revised Code is set forth at length. At page 13 it is pointed out that *51the Code creates incontestability only as to life insurance and has no application to disability insurance. The insured there urged that because the disability benefits were contained in a life insurance policy, such benefits came within the incontestability provision of section 1847. This contention was overruled. Apparently, the construction of the clause was not raised.
In Smith v. Equitable Life Assur. Soc. (169 Tenn. 478; 89 S. W. [2d] 165) it was also indicated that there was no statutory incontestability provision applicable to disability insurance. Section 6179 of the Tennessee1 Code is quoted, and it is held that this dealt with life insurance alone. The opinion then continues (at pp. 481, 482) as follows: “ It follows, therefore, that unless the right to contest the validity of the contracts of insurance evidenced by these policies, that is, the generally recognized right by bill in equity to rescind and annul the contract of insurance for misrepresentation and fraud in procurement, has been expressly limited by pertinent provisions in the policies, the chancellor was in error in sustaining the demurrer in this cause.”
The Tennessee case recognizes that a distinction exists where there is a statutory bar to contestability. It distinguishes Thompson v. New York Life Ins. Co. ([D. C. Okl.] 9 F. Supp. 248, 250) among other grounds because of the Oklahoma statute. Speaking of the Thompson case, the Tennessee opinion (at p. 485) says: “ And in addition to this phase of that case obviously influencing the mind of the court in deciding the conceded doubt in favor of the insured, the court calls attention to the State statute which includes double indemnity in life insurance and therefore precludes application of an exception to the noncontestability clause thereto; and double indemnity being coupled with disability in the excepting clause under consideration, the court found a probable want of intention to accept either.”
The New York statute does contain a time bar to contestability. (Insurance Law, § 101, T 2.) By amendment in 1923 (Laws of 1923, chap. 28) an option or privilege is given to the insurer to save from the bar total and permanent disability benefits.
In none of the cases cited by the defendant was a similar statutory provision involved. The distinction is one of substance. In one type of cases the insured seeks to bar a defense of fraud, recognizable in law and in equity, by invoking a provision of the policy which, so he contends, creates the bar. In cases such as the instant case the statute has created the bar and the insurer must demonstrate that by appropriate language it has exercised the option or privilege which destroys the bar.
The cases now cited do not warrant any change in the conclusion previously reached. Motion to reargue denied.