Murphy v. Colonial Life Insurance Co. of America

Seabury, J. This action is brought upon an industrial life insurance policy for $360, the premium upon which was payable weekly. As a defense the defendant claims that the policy was procured by false and fraudulent representations contained in the application for the policy. The alleged fraud consists in the answer “No ” to the question in the application blank, “ Is the proposed now insured in any other company, association or society, and if so for what amount? ” The application was not indorsed on the policy or [476] attached thereto, and for that reason the learned court below excluded evidence as to the application and as to the alleged falsity of the answer said to be contained therein. . This ruling was made in deference to section 58 of the Insurance Law. The section provides as follows: “ Every policy of insurance issued * * * after January 1, 1907, * * * shall contain the entire contract between the parties, and nothing shall be incorporated therein by reference to any constitution, by-laws, rules, application or other writings unless the same are indorsed upon or attached to the policy when issued; and all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties. Any waiver of the provisions of this section shall be void. ’’ I think that the ruling of the court below is sustained by the case of Becker v. Colonial Life Insurance Co., 153 App. Div. 382. I had occasion to express the same view in Aaronson v. New York Life Insurance Co., 81 Misc. Rep. 228, although my learned colleagues held that the representations made to induce the issuance of the policy, whether oral or in a paper not attached to the policy, may, if material, be relied upon by the insurer to defeat a recovery. This interpretation seems to me to nullify the statute and prevent the accomplishment of its remedial purposes. The clause of section 58 of the Insurance Law, upon which the argument of the appellant is based, provides as follows: “And all statements purporting to be made by the insured shall in the absence of fraud be deemed representations and not warranties.” This clause is not an exception to the general rule declared in the body of section 58. The clause, as I understand it, means that if the insurer intends to claim that it was induced to enter into a policy by vir [477] tue of any statement of the insured it must express that statement in the policy or attach it thereto, and such statement so attached shall he deemed a representation and not a warranty, but any statement so attached, whether a representation or not, shall upon proof of fraud avoid the policy. Thus interpreted the clause is given a meaning which does not defeat the purpose of the statute. I regard this interpretation as in accord with that given to the statute in Becker v. Colonial Life Insurance Co., supra, where Mr. Justice Burr said: “Fraud vitiates any contract, and if proved, constitutes a good defense to an action based thereon. But to constitute fraud growing out of representations, such representations must not only have been knowingly false, but in addition they must have been material, and relied upon as an inducement to the making of the contract. (20 Cyc. 39; Brackett v. Griswold, 112 N. Y. 454; Powell v. Linde Co., 58 App. Div. 261; affd., 171 N. Y. 675.)” I advise that the judgment be affirmed, with costs. Guy, J., concurs.