Court Opinion

ID: 3631311
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:10:45.94451+00
Date Added: 2024-06-11T14:07:40.984344
License: Public Domain

On December 13, 1939, Louis C. Katz made a written application to defendant for a policy of insurance which contained a provision that "The insurance hereby applied for shall not go into force unless * * * and then only if the applicant has not consulted or been treated by any physician or practitioner since his medical examination." His medical examination, made by defendant's physician, a report of which was made a part of the application, occurred on December 15, 1939. The medical board of defendant approved the application on December 19, 1939. On the strength of the application, the report of the medical examiner and the approval of the application by the medical board, Katz was found to be an insurable risk, the application was approved by defendant's underwriters on January 16, 1940, and the policy was issued and delivered to Katz on January 17, 1940, at which time the required premium was paid in full.
Katz, feeling indisposed, consulted physicians on January 15 and 16, 1940, and they advised him he had a duodenal ulcer. Undisputed evidence was presented from which the conclusion was permissible that such an ulcer would ordinarily disappear in short order, that he indicated no ill or disabling effects from that condition at any time and that the indisposition concerning which he consulted the physicians together with the discovered condition was trivial and not material to the insurability of the applicant. Katz died on June 8, 1940, and it is conceded that the cause of his death was coronary sclerosis, a disease entirely unrelated to and not affected or produced by the duodenal ulcer or any indisposition for which he had consulted the physicians or which they discovered on his examination.
The sole defense relied upon by defendant in this suit by the representatives of Katz to recover on the policy was the failure of Katz to advise it of his consultation with the physicians between the date of the application and the delivery of *Page 53 
the policy which, it is claimed, constituted a misrepresentation by the insured material to the risk. There was no claim made by defendant or evidence in the case of the fraudulent concealment of any material fact. There was no evidence that knowledge of defendant of the truth would have led to its refusal to make the contract. The trial court held, as matter of law, upon the authority of Geer v. Union Mutual Life Ins. Co. (273 N.Y. 261), that the misrepresentation or suppression of the truth was not material to the risk and directed a verdict for the plaintiff for the amount of the policy with accrued interest. The Appellate Division reversed and dismissed the complaint, holding, asmatter of law, also upon the authority of the Geer case, that "the breach of warranty was material as it deprived the insurer of an opportunity to determine whether to accept or reject the application" (265 App. Div. 822).
By the decision in the Geer case, handed down March 9, 1937, this court formulated and laid down the rule upon antecedent authority that any untrue representation, however innocent, either by affirmation of an untruth or suppression of the truth, where the insured had previous notice that specified information was required by the insurance company before it would issue its policy, was, as matter of law, either immaterial or material to the risk according to the facts. Notoriously, to overcome the legal effect of that and previous decisions, the Legislature enacted sections 149 and 150 of chapter 882 of the Laws of 1939. By subdivision 2 of section 149, it is provided that "No misrepresentation shall avoid any contract of insurance or defeat recovery thereunder unless such misrepresentation was material. No misrepresentation shall be deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract." Section 150, subdivisions 1 and 2, so far as material read: "1. The term `warranty' as used in this section, means any provision of an insurance contract which has the effect of requiring, as a condition precedent of the taking effect of such contract or as a condition precedent of the insurer's liability thereunder, the existence of a fact which tends to diminish, or the non-existence of a fact which tends to increase, the risk of the occurrence of any loss, damage, or injury within the coverage of the contract. * * * 2. No *Page 54 
breach of warranty shall avoid an insurance contract or defeat recovery thereunder unless such breach materially increased the risk of loss, damage or injury within the coverage of the contract. * * *."
The purpose of the Legislature is not open to debate. The language used is clear and unambiguous. There is no field open for construction on the question under consideration. Whether a false representation or suppression of a fact for which information is requested by the insurer as a condition antecedent to the completion of a contract of insurance tends to diminish or increase the risk of loss and is material to the risk or whether a breach of warranty, if one such exists, materially increases the risk of loss are no longer questions of law for the court but are now questions of fact which must be determined as such under rules applicable to other cases where questions of fact arise. Unless the misrepresentation or suppression of a fact or breach of warranty, if any such occurs, by the insured is found, as a fact, to be material to the risk, recovery on the contract may no longer be avoided. In no case may it now be held that recovery on a policy of life insurance may be avoided by a mere false representation or misrepresentation of a fact or by the suppression of a fact called for in an application for an insurance policy, without more, whether it becomes by statutory definition a part of the ultimate contract or a "warranty" or not. No court has the right nor will it be presumed to undertake by any process of reasoning to nullify a mandate of the Legislature so clear and unequivocal for the sake of salvaging some previous decision that may be on the books. It cannot be urged that the policy never came into being. Defendant seeks to have the contract which it made upon sufficient consideration declared void for the suppression of a material fact by the insured.
In this case the question of the materiality of the suppression of the fact that insured had visited physicians between the date of the application and the date of the delivery of the policy was sharply litigated. The evidence in the record was open for different inferences and conclusions by reasonable minds. Appellant is not foreclosed by practice in the lower courts from urging her exceptions here. The questions of fact raised on the record upon material and decisive questions should have been determined as such under applicable rules. *Page 55 
The judgment appealed from should be reversed and a new trial granted, with costs to appellant in all courts to abide the event.
LEHMAN, Ch. J., LOUGHRAN, CONWAY and THACHER, JJ., concur with DESMOND, J.; RIPPEY, J., dissents in opinion in which LEWIS, J., concurs.
Judgment affirmed.