Edelson v. Metropolitan Life Insurance

Lehman, J. The plaintiff has recovered a judgment upon a policy of insurance in the sum of $500 issued by the defendant upon the life of Isaac Levitt. The policy contains a clause that “ if the age of the Insured has been misstated the amount payable hereunder shall be such as the premium paid would have purchased at the correct age.” The policy also contains on its face the words “ Ordinary Life Intermediate Class. Age 60. Amount $500. 1/12 Annual Premium $3.13.” It appeared at the trial practically without dispute that the insured was sixty-six years old at the time the policy was issued; that in his application his age was stated as sixty; that the premium paid would have purchased a policy for only $370.85 if the age had been correctly stated. The defendant admits liability for, and has paid into court, this amount less the unpaid premium for the last year, The trial justice has given [220] judgment for the face amount of the policy less the unpaid premium, apparently on the ground that the application was not attached to the policy and that under section 58 of the Insurance Law the application did not become part of the policy of insurance unless attached thereto. The policy recites that it is issued “ In consideration of the application for this policy, copy of which application is attached hereto and made part hereof.” It also provides that “ this policy and the application therefor constitutes the entire contract between the parties. * * * All statements made by the insured shall, in the absence of fraud be deemed representations and not warranties and no such statement shall avoid this policy or be used in defense of a claim hereunder unless it is contained in the written application therefor and a copy of such application is securely attached to this Policy when issued.” These clauses of the contract must be read in connection with section 58 of the Insurance Law and are, I think, practically a stipulation by the parties fixing their rights in the same manner as in any event and without express stipulation they would be fixed'by law. I do not think, however, that they can be given the effect contended for by the plaintiff and that they prevent the court from considering the statement of the insured as to his age though the application was not physically attached to their policy. There can be no doubt that the insured did make a misstatement as to his age and there can be no doubt that the amount of the policy was determined upon that statement. The parties have expressly stipulated however, that in spite of the fact that the policy states on its face that it is for $500, yet if the age of the insured has been misstated, the amount payable shall be such as the premium would have purchased at the [221] correct age. Unless this clause can be enforced the insured will receive more insurance for the premium than the parties agreed upon and more than the parties could have agreed upon without contravention of section 89 of the Insurance Law. I cannot see any valid reason why the contract should not be enforced in accordance with the intent of the parties. To do so would not, as the plaintiff claims, make the application a part of the contract nor permit a statement therein to be used as a defense of a claim thereunder though not attached to the contract. The contract on its face shows that the amount payable thereunder is based upon the assumption that the insured was sixty years of age when it was issued and it further provides that if the age has been misstated the amount payable shall be such as the premium paid would have purchased at the correct age. The defendant does not now seek to interpose any representation in the application as a defense to the claim under the contract nor does it seek to incorporate the application into the contract. It stands upon the actual contract itself and the application is material and competent evidence to show that the contingency has occurred which makes effective the clause that the amount payable shall be such as the premium would have purchased at the correct age. In other words, as I read the contract, it expressly provides for a payment of $500 upon the death of the insured based upon the assumption that the age of the insured is sixty, or a payment of the amount which the premium would purchase if the age has been misstated. That contract represents the whole agreement of the parties and there is nothing either in the express contract or in the statute which precludes the defendant from showing by proof outside of the contract that-the contingency agreed upon has occurred. It follows that the judgment should be reduced to the sum of [222] $344.87 with appropriate costs in the court below, and as modified, affirmed, with twenty-five dollars costs to the appellant. Pendleton and Whitaker, JJ., concur. Judgment modified, and, as so modified, affirmed, with twenty-five dollars costs to appellant.