Court Opinion

ID: 5744150
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:46:35.307063+00
Date Added: 2024-06-11T08:41:07.377089
License: Public Domain

Valente, J. (dissenting).
Subdivision 1 of section 142 of the Insurance Law, quoted verbatim in the majority opinion, provides that every policy of life insurance delivered in the State must contain the entire contract between the parties, and that no application for the issuance of any such policy should *72be admissible in evidence unless a true copy of such application was attached to the policy when issued. This is a mandate that all matters affecting the validity of the policy be incorporated in one single instrument so that the insured and beneficiaries have notice of everything upon which the insurer might rely at a subsequent time in resisting payment on the policy. (See Bible v. John Hancock Mut. Life Ins. Co., 256 N. Y. 458, 464, and Abbott v. Prudential Ins. Co., 281 N. Y. 375, 382, cited in the majority opinion of Stevens, J.)
I disagree with the majority of the court, and would hold that subdivision 1 of section 142 of the Insurance Law precluded the introduction in evidence of the application for an adjustment of rating indorsement, since the application was never attached to the policy. The indorsement itself was attached to the policy and the present action is to rescind the indorsement on the ground that the written application for an adjustment of rating contained' material representations.
The majority agrees that the policy and any supplemental rider or indorsement are to be read together and construed as a single instrument. In Matter of Massachusetts Mut. Life Ins. Co. v. Thacher (15 A D 2d 242, 246, affd. 11 N Y 2d 923) this court, in its majority opinion, said : “In the absence of statutory provisions, a rider attached to the face of the policy or referred to therein is a part of the insurance contract (Davern v. American Mut. Liab. Ins. Co., 241 N. Y. 318; Hukle v. Great Amer. Ins. Co., 230 App. Div. 477 [liability insurance policies] ; Berkshire Life Ins. Co. v. Weinig, 290 N. Y. 6 [life insurance]).”
In Couch, Insurance (2d ed., vol. 1, § 4:36, p. 193) it is said: “ The policy and its indorsements validly made a part thereof together form the contract of insurance, and are to be read together to determine the contract actually intended by the parties.”
But despite recognition of the unity of the original policy and a subsequent indorsement, the majority would limit the effect of subdivision 1 of section 142 of the Insurance Law solely to the policy issued at the inception of the coverage. The basis for that conclusion seems to be that the modification effected by the indorsement in the instant case should be regarded as merely an “internal modification” regarding only the amount of premium.
But, the premium is of the very essence of a contract of insurance. (1 Couch, Insurance [2d ed.], § 2:5, p. 107.) So far as the insurer is concerned, the premium represents the consideration paid for the assumption of the obligations under the contract of insurance. It is difficult then to agree with reasoning which *73minimizes and reduces the factor of the amount of premium to an inconsequential aspect of an insurance contract.
The modification of the policy effected by the indorsement concerned an essential and vital element of the contract. As such, when the indorsement was attached to the policy, there was. a reissue and redelivery of the policy so as to make subdivision 1 of section 142 of the Insurance Law applicable to the modified policy.
The plaintiff, in fact, recognized the necessity for attaching the application for the indorsement since the application contained the following statement:
"I understand and agree that:
"1. This application consisting of Parts 1 and 2 taken together shall form the basis of the contract applied for and shall become a part of said contract when issued.’’ (Emphasis mine.)
In Blatz v. Travelers Ins. Co. (272 App. Div. 9, 13) the court adverted to a similar situation where the company apparently recognized the requirement for attaching the application to the policy.
Cases like New York Life Ins. Co. v. Rosen (227 App. Div. 79, affd. 255 N. Y. 567) and Axelroad v. Metropolitan Life Ins. Co. (267 N. Y. 437) which held that applications for reinstatement of policies which had lapsed need not be attached to the policy under subdivision 1 of section 142 of the Insurance Law, are distinguishable. In Axelroad, Lehman, J., said (p. 448): “ but the reason the Legislature did not include applications for reinstatement within the express terms of that section is that the evils which the Legislature sought to remedy were not as apparent in such case, for all the terms and conditions of the contract of reinstatement were already embodied in a single document, i.e., the application itself.” Moreover, by chapter 882 of the Laws of 1939 subdivision 5 of section 142 was added which deals specifically with applications regarding reinstatements and renewals of policies of insurance, indicating clearly the legislative intent to treat such applications differently from other applications.
In Southland Life Ins. Co. v. Donati (201 Va. 855, 861) the court in discussing the Virginia statute corresponding to our subdivision 1 of section 142 of the Insurance Law, said: "The statute before us, remedial in nature, is couched in imperative and vigorous language. It should not be frittered aAvay by nice distinctions but should be construed so as to accord substance to its terms and make effective its purpose.”
If controversies are to be foreclosed by attaching applications (see Bible v. John Hancock Mut. Life Ins. Co., supra, p. 464) *74and if assureds are to be protected by providing that policies of insurance and their indorsements contain every provision of the contract and every representation claimed to have been made, there should then be no relaxation of the requirements of subdivision 1 of section 142 of the Insurance Law. The dispute presented by this appeal could have been avoided by the simple expedient of compliance with the statute by attaching the application. We should not by any loose interpretation of the statute permit the type of litigation sought to be eliminated by the statute.
I, therefore, dissent and would affirm the order sustaining the sufficiency of the defenses predicated on subdivision 1 of section 142 of the Insurance Law.
Babin and Noonan, JJ., concur with Stevens, J.; Tálente, J., dissents in opinion in which Breitel, J. P., concurs.
Order entered on December 4, 1961, so far as appealed from, reversed, on the law, with $20 costs and disbursements to the appellant, and the motion to strike granted, with $10 costs.