129 Misc. 365 | N.Y. Sup. Ct. | 1927
The first cause of action alleges that on or about July 25, 1924, a policy of insurance on the life of Hunter S. Woodbery, husband of plaintiff, was issued by the defendant, whereby it was agreed that the plaintiff should receive $20,000 upon the death of her said husband. The insured died on September 16, 1925, and proof of death was duly received by the defendant and demand for the face amount of the policy made.
The second cause of action alleges the issuance of the same policy and the agreement to pay plaintiff the additional sum of $20,000 upon proof that the death of the plaintiff’s husband resulted from “ external, violent and accidental causes; ” that said Hunter S. Woodbery met his death on September 16, 1925, as the result of such causes. Judgment was demanded for $40,000.
The amended answer contains a general denial except as to the issuance of the policy and the death of the insured. The first separate and complete defense to each cause of action pleads that the policy contains a provision in words as follows: “ Self-destruction. In event of self-destruction during the first two insurance years, whether the insured be sane or insane, the insurance under this policy shall be a sum equal to the premiums thereon which have been paid to and received by the company, and no more.”
It is further alleged that the death of the insured resulted from self-destruction on September 16, 1925, and that the sums specified in the provision of the policy aforesaid were paid on September 29, 1925.
The second separate and complete defense to each cause of action asserts the payment of the aforementioned sum in full settlement and the surrender of the policy for cancellation.
The third separate and complete defense realleges payment of the sums mentioned heretofore and the acceptance thereof by plaintiff, which constituted an accord and satisfaction.
It is necessary to consider each defense separately. The policy of insurance is the usual “ ordinary life ” policy with disability and double, indemnity benefits. In addition to the provision relative to “ self-destruction ” it contains an incontestability -clause which forms the basis of plaintiff’s contention on this motion go far as the first separate and distinct defense to each cause of action is concerned. This clause reads as follows: “ Incontestability. This policy shall be incontestable after two years from its date of issue except for non-payment of premium and except as
For the purposes of this motion the allegations contained in the separate defenses are to be taken as true, so that it appears that tvithin a year and a half after the issuance of the policy the insured met his death by self-destruction. If this action had been instituted within six months thereafter there could be no question but that defendant could have successfully contested plaintiff’s claim, but the plaintiff now urges that inasmuch as two years have elapsed since the issuance of the policy prior to the institution of this suit, and the defendant having taken no affirmative action to cancel this policy and declare it null and void, the defendant is now barred from interposing the defense of self-destruction. In other words, the incontestability clause is a short statute of limitations, the provisions of which bar the insurance company from contesting the policy, except for the reasons therein stated, at any time after two years from the date of its issuance.
The question arises, whether this clause prevents the defendant from setting up “ self-destruction ” as a defense, where death occurred prior to the lapse of two years from the date of the policy and payment of the sums provided in the self-destruction clause have been made and accepted by plaintiff in full settlement of the benefits accruing under the policy.
Counsel for both parties, with commendable zeal and industry, have made an exhaustive research of the law in an endeavor to present to the court the insurance law applicable to the facts in this case. Apparently, this situation has never been adjudicated by the courts of the State of New York. The New York cases cited by plaintiff’s counsel are not applicable because they relate to defenses of fraud and misrepresentation which must be interposed before the contestable period expires. Nor do any of the decisions rendered in the foreign jurisdictions which plaintiff relies upon sustain her contention. It is obvious that defendant never intended to assume a risk for suicide at any time within the first two years’ existence of the policy. Can it be reasonably urged that if death occurs by self-destruction within that period and the insurer pays the limited benefits prescribed by the policy and receives the surrender thereof it must bring affirmative action for the cancellation of the policy? I think not. It must be remembered that no claim of fraud, misrepresentation or duress as to the payment made or the surrender of the policy is charged to the insurer or its agents. Defendant does not seek to void the policy. It does not contest the validity thereof. Contra, it urges that the policy is a valid and binding obligation. The defendant insurance com
In the case of Hearin v. Standard Life Insurance Co. (8 F. [2d] 202) the court, in passing upon provisions similar in the policy to the case at bar, said: “ There is only one construction of these two provisions possible. In the one case, the policy is incontestable after one year from its date for false representations or fraud in the application; in the other the risk for suicide, if committed within one year, is not assumed. If a risk is not assumed, how can there be a liability? If there is no liability, why must there be a denial thereof before the expiration of the year? * * * If the risk is not assumed, it certainly cannot be claimed by a bill in equity, to rescind the contract after the suicide, and of course none could be instituted before.”
Likewise, in Childress v. Fraternal Union (113 Tenn. 252; 82 S. W. 832) the justice writing for the court said: “ But the suicide clause is not one which enters into the original validity of the contract, but one which defeats the right of recovery after the full existence of the contract is established. The incontestable clause has no reference to the suicide clause, and the latter is in no wise affected by the former. If the insured commit suicide after the expiration of two years from the date of the policy, the effect is the same as if it occur within two years. [The suicide provision contained no limited period.] * * * We are of opinion that, while the policy in this case becomes incontestable after two years, except upon the grounds stated, still it was in force according to its terms, and these terms are plain and explicit, that the beneficiary, in case of suicide of the assured, shall be entitled to recover only one-third.”
In the more recent case of Howard v. Missouri State Life Insurance Co. ([Tex. Civ. App.] 289 S. W. 114) the insured met Ids death by self-destruction within the contestable period. The insurer tendered the return of premiums in accordance with the self-destruction clause of the policy, which were refused by the beneficiary. Action to recover the face amount of the policy was instituted after the con
The facts in the case at bar are analogous to the facts in the case of Howard v. Missouri State Life Insurance Co. (supra). There is the additional fact in the present case that plaintiff received and accepted the return premiums in accordance with the provisions of the policy and made a voluntary surrender of the instrument. Under the circumstances I am of the opinion that the defense is a proper one and should not be stricken from the answer.
The second separate and distinct defense to each cause of action in substance pleads payment and discharge of the obligation. The plaintiff urges that the policy was not voluntarily surrendered by her upon the receipt of the amount pleaded. This may or may not be the fact as the evidence adduced on the trial will probably determine, but for the purpose of this motion it is reasonable to assume that there was a voluntary surrender upon the receipt of the return premiums and the acceptance thereof.
The doctrine of law enunciated in the cases of Larkin v. Hardenbrook (90 N. Y. 333) and Simons v. American Legion of Honor (178 id. 263) is applicable to the facts in the case at bar. In these cases a defense such as interposed by the defendant herein was held to operate “ in law as a release and discharge of the maker’s liability in the absence of fraud or mistake.”
I conclude, therefore, that these defenses are sufficient and may be permitted to stand.
The third separate and complete defense to each cause of action attempts to plead accord and satisfaction. It is well settled that in order that payment by a debtor of a less amount than that demanded by a creditor should discharge the obligation, the debt must have been disputed and unliquidated. In the case at bar it may be that plaintiff claimed she was entitled to a greater amount than she received and accepted the return of the premiums in satisfaction of her claim. The defendant urges that it did not admit the amounts specified in the face of the policy to be due; that these amounts were disputed. There is, however, no allegation in the answer sustaining either of these contentions. Accord