Scribd Logo
Upload

Welcome to Scribd!

  • 111 views

    Hogan v. John Hancock Mut. Life Ins. Co, 195 F.2d 834, 3rd Cir. (1952)

    Uploaded by

    Scribd Government Docs
    The document is a court case regarding whether an insurer can require that an insured be in sound health on the date of approval of a life insurance reinstatement application and not have been treated by a physician between signing the application and its approval. The court found that the insurer was within its rights to impose such conditions, as reinstatement constitutes a new contract between the parties where the insurer must be satisfied the original risk remains insurable. The provisions in the reinstatement application at issue did not contradict the original policy reinstatement clause, but rather defined the evidence of insurability required by the insurer. As the insured was treated by physicians prior to final approval of his application, reinstatement was not effective.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd

    Hogan v. John Hancock Mut. Life Ins. Co, 195 F.2d 834, 3rd Cir. (1952)

    Uploaded by

    Scribd Government Docs
    111 views6 pages
    The document is a court case regarding whether an insurer can require that an insured be in sound health on the date of approval of a life insurance reinstatement application and not have been treated by a physician between signing the application and its approval. The court found that the insurer was within its rights to impose such conditions, as reinstatement constitutes a new contract between the parties where the insurer must be satisfied the original risk remains insurable. The provisions in the reinstatement application at issue did not contradict the original policy reinstatement clause, but rather defined the evidence of insurability required by the insurer. As the insured was treated by physicians prior to final approval of his application, reinstatement was not effective.

    Original Description:

    Filed: 1952-04-11 Precedential Status: Precedential Citations: 195 F.2d 834 Docket: 10468_1

    Copyright

    © Public Domain

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document is a court case regarding whether an insurer can require that an insured be in sound health on the date of approval of a life insurance reinstatement application and not have been treated by a physician between signing the application and its approval. The court found that the insurer was within its rights to impose such conditions, as reinstatement constitutes a new contract between the parties where the insurer must be satisfied the original risk remains insurable. The provisions in the reinstatement application at issue did not contradict the original policy reinstatement clause, but rather defined the evidence of insurability required by the insurer. As the insured was treated by physicians prior to final approval of his application, reinstatement was not effective.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    111 views6 pages

    Hogan v. John Hancock Mut. Life Ins. Co, 195 F.2d 834, 3rd Cir. (1952)

    Uploaded by

    Scribd Government Docs
    The document is a court case regarding whether an insurer can require that an insured be in sound health on the date of approval of a life insurance reinstatement application and not have been treated by a physician between signing the application and its approval. The court found that the insurer was within its rights to impose such conditions, as reinstatement constitutes a new contract between the parties where the insurer must be satisfied the original risk remains insurable. The provisions in the reinstatement application at issue did not contradict the original policy reinstatement clause, but rather defined the evidence of insurability required by the insurer. As the insured was treated by physicians prior to final approval of his application, reinstatement was not effective.

    Copyright:

    Public Domain
    Download as PDF or read online from Scribd
    Download as pdf
    of 6

    195 F.

    2d 834

    HOGAN,
    v.
    JOHN HANCOCK MUT. LIFE INS. CO.
    No. 10468.

    United States Court of Appeals Third Circuit.


    Argued Oct. 18, 1951.
    Decided April 11, 1952.

    Edwin J. McDermott, Philadelphia, Pa. (William Charles Brown,


    Philadelphia, Pa., on the brief), for appellant.
    William H. Peace, 2d, Philadelphia, Pa. (Ira Jewell Williams and White,
    Williams & Scott, Philadelphia, Pa., on the brief), for appellee.
    Before GOODRICH, KALODNER and HASTIE, Circuit Judges.
    KALODNER, Circuit Judge.

    Where a policy of life insurance provides that it may be reinstated after lapse
    'upon production of evidence of insurability satisfactory to the Company', may
    the insurer subsequently require that (1) the insured be in sound health on the
    date of approval of the reinstatement application and (2) that he had not been
    treated by a physician in the interval between the signing of the application and
    its approval?

    This question is presented by the instant appeal from the judgment of the court
    below granting appellee's motion to dismiss1 and its order denying the
    appellant's motion for a new trial. The facts giving rise to the appeal are as
    follows:

    On June 6, 1945, the John Hancock Mutual Life Insurance Company


    ('Company') issued a policy in the amount of ten thousand dollars insuring the
    life of one William J. Savage, and naming as beneficiary Charles J. Hogan,
    appellant herein, who was a business partner of the insured. This policy was
    countersigned by an official of the Company at its home office in Boston, and

    delivered to the insured in Philadelphia. At the same time an identical policy


    was issued on the life of the appellant naming Savage as beneficiary. The first
    quarterly premium on each policy was paid at the time of issuance. The second
    quarterly premium, due on September 6, 1945, was not paid, and both policies
    lapsed according to their terms on October 7, 1945. Subsequently, either during
    the last week in October or the first week in November, Herold and Lull, two of
    the Company's agents called upon the appellant at his office for the purpose of
    inducing the two partners to reinstate their respective policies. At the time,
    Savage was not in the office but was attending to some outside work pertaining
    to the partnership. Herold and Lull persuaded the appellant to sign a
    reinstatement application, and left with him a similar application which they
    instructed him to have Savage sign and return to the Company's Germantown
    (Philadelphia) office. Shortly thereafter, one Spearing, an employee of the
    partnership, secured Savage's signature on the second application and delivered
    it to the Germantown office.
    4

    The application signed by Savage contained a printed declaration that the


    insured

    'is now in sound health, and that during the time, including the grace period,
    since the first premium now in default became due, has had no injury, aliment,
    illness or disease, or symptoms of such, and has not consulted or been treated by
    a physician or any other practitioner, except as otherwise hereinafter stated.'

    Under this declaration, in the space provided, the written word 'none' appeared;
    and under that was the printed statement 'All exceptions have been stated.' The
    application also provided that:

    'A. No reinstatement of said policy shall be effective if any of the foregoing


    declarations are untrue or incomplete * * * nor until the application, duly
    executed * * * is approved by the Company at its Home Office in Boston, nor
    if the person named as insured in said policy has, since the date of this
    application, consulted or been treated by a physician or other practitioner, nor
    unless such person is alive and in sound health on the date of such approval * *
    * by the Company at its said Home Office, which shall be the effective date of
    reinstatement * * * '

    The application form was received by the Company at its home office on
    December 17, and was approved on December 21, 1945. On November 3,
    1945, Savage consulted his personal physician, and on his advice entered the
    Jefferson Hospital, Philadelphia, where he remained for ten days, and where it

    was determined that he was suffering from tuberculosis. The parties are in
    dispute as to whether this occurred before or after he signed the reinstatement
    application- the application was dated November 4, but appellant claims that it
    was actually signed on October 26.2 It is undisputed, however, that prior to
    December 21 (the date of final approval of the application) Savage was on
    several occasions treated by physicians, both at the Jefferson Hospital and at
    the Barton Memorial Hospital, Philadelphia. On January 7, 1946, the Barton
    Memorial Hospital reported to the Pennsylvania Department of Health that
    Savage had tuberculosis. Thereafter he spent a good part of the remainder of his
    life in sanatoriums, and he finally succumbed to the disease on March 5, 1947.
    9

    When payment of the principal amount of the policy was refused,3 appellant
    brought suit in the District Court for the Eastern District of Pennsylvania,
    which assumed jurisdiction because of the diverse citizenship of the parties.
    The Company's answer set up the form of the reinstatement application and
    denied liability, alleging in substance that reinstatement had never become
    effective because: (a) the insured's declaration in the application that he had not
    consulted a physician since the policy lapsed was false; (b) the insured had
    been treated by physicians between the signing of the application and its
    approval by the Company; and (c) the insured was not in sound health on the
    date of approval.

    10

    The cause was originally tried to a jury, but at the close of all the evidence the
    trial judge granted the Company's motion to dismiss, charging the jury that
    whether or not Savage had consulted a physician prior to signing the
    reinstatement application, the appellant could not recover 'if at any time
    (Savage) consulted a physician or was not in sound health before December 21,
    1945, when the policy was approved. * * * ' Appellant's motion for a new trial
    was denied, and this appeal followed.

    11

    It is the appellant's contention that the policy was irrevocably reinstated in that
    the insured had complied with the reinstatement provision in the original
    policy; that the provisions in the reinstatement application that reinstatement
    would not be effective if the insured should consult a physician prior to, or if he
    were not in sound health on, the date of final approval were void as repugnant
    to the policy; and hence that the trial judge erred in taking the case from the
    jury. We cannot subscribe to this contention.

    12

    The insured was a resident of Philadelphia and the policy, though countersigned at Boston, was delivered to him at Philadelphia. Therefore, the law of
    Pennsylvania applies. Both parties are in agreement as to this. Bush v.
    Prudential Ins. Co. of America, 3 Cir., 1945, 150 F.2d 631, Pierkowskie v. New

    York Life Ins. Co., 3 Cir., 1944, 147 F.2d 928. See also I Goldin, The Law of
    Insurance in Pennsylvania, 135 (2d ed. Phila. 1946).
    13

    It is true that under the Pennsylvania decisions, where a policy of life insurance
    provides, as here, that reinstatement is to be effective upon payment of all
    arrears and the production of evidence of insurability satisfactory to the insurer4
    'the company cannot impose any other or further conditions for reinstatement or
    modify or change any of the terms and provisions of the policy, all of which are
    continued in full force and effect precisely as before.' Rothschild v. New York
    Life Ins. Co., 1932,106 Pa.Super. 554, 565, 162 A. 463; Datesman v. Federal
    Life Ins. Co., 1939, 35 Pa.Dist.& Co.R. 251. However, the provisions of the
    reinstatement application of which the appellant complains do not in any way
    contravene the reinstatement provision in the policy itself; but rather, they
    represent a spelling-out by the insurer of what it will require as 'evidence of
    insurability satisfactory to the Company'.

    14

    A reinstatement provision in a policy of life insurance contemplates the making


    of a new contract between the parties, which the insurer is not obligated to do
    unless satisfied that the original risk is still insurable. Smith v. State Mutual
    Life Assurance Company of Worcester, 1936, 321 Pa. 17, 184 A. 45; Riebel v.
    Prudential Ins. Co. of America, 1935, 319 Pa. 24, 179 A. 447.5 Upon receipt of
    a reinstatement application, the insurer has the right to require further evidence
    of insurability, so long as it acts reasonably in so doing, or it may agree to
    reinstate upon the basis of the information in the application itself. Barag v.
    Metropolitan Life Ins. Co., 1938, 130 Pa.Super. 213, 196 A. 558; Rothschild v.
    New York Life Ins. Co., supra 106 Pa.Super.at page 565, 162 A. 463. In either
    event, reinstatement is never effectuated until the insurer acts on the
    application. Thus, where the insured dies after making the application, and the
    insurer approves in ignorance of this fact, such approval cannot 'operate to
    revive the policy on a life which (has) ceased to exist. No such thing could have
    been contemplated by either the company or the insured.' Meerbach v.
    Metropolitan Life Ins. Co., 1911, 46 Pa.Super. 133, 135, Likewise, where
    reinstatement is conditioned upon the truth of the statements in the application,
    approval by the insurer does not revive the policy unless the facts are exactly as
    alleged, regardless of the good faith of the insured, for such was not within the
    contemplation of the parties. McInerney v. Metropolitan Life Ins. Co., 1943,
    152 Pa.Super. 636, 33 A.2d 259; Mullen v. John Hancock Mutual Life Ins. Co.,
    1942, 150 Pa.Super. 323, 28 A.2d 456.

    15

    Applying these principles to the facts of the instant case, it is manifest that, in
    conditioning its approval upon the continued good health of the insured up until
    the date of approval, the Company was merely requiring the continued

    existence of the asserted facts upon which it was acting. The Company had a
    right to be 'satisfied' of Savage's insurability. It cannot conceivably have been
    contemplated that the application would be approved if it were known that on
    the date of approval Savage was suffering from tuberculosis, and hence was no
    longer insurable. Clearly, such was not the intent of the parties.6
    16

    Appellant also contends that the fact that the Company retained the application
    and back premium payments for a period of more than six weeks before acting
    on the application indicates an intent to reinstate the policy on the basis of the
    information submitted. It is true that retention of overdue premiums for an
    unreasonable period is evidence of the insurer's intent to revive. Smith v. State
    Mutual Life Assurance Co. of Worcester, 1938, 331 Pa. 1, 199 A. 358; Gross v.
    Home Life Insurance Co. of America, 1934, 112 Pa.Super. 96, 170 A. 432.
    However, the application in the instant case expressly provided that the
    Company was to have up to sixty days to act, and approval was in fact given
    within that period. Under the circumstances, retention of premiums by the
    insurer can have no probative value as evidence of intent to revive.

    17

    For the reasons stated, the judgment of the District Court will be affirmed.

    The motion to dismiss was made and granted at the close of all the evidence

    The records of the Company's Germantown office disclose the payment of two
    quarterly premiums on the Savage policy on November 29. Appellant asserts
    that he paid the premiums on both policies on October 25, when, he says, Lull
    and Herold visited him at his office. It is unnecessary to resolve this factual
    issue under our view of the case

    Pursuant to court order, the Company paid to the Prothonotary of the Court of
    Common Pleas of Philadelphia County the sum of $487.20, being the total
    amount of premiums paid on the policy between reinstatement and the death of
    the insured

    The reinstatement clause provided: 'Reinstatement.- At any time after default in


    payment of premium (unless the cash surrender value has been paid, or the term
    of any extended insurance has expired), this policy may be reinstated upon
    production of evidence of insurability satisfactory to the Company, and upon
    payment or reinstatement of any indebtedness to the Company hereon and
    payment of arrears of premiums, with interest at the rate of five per cent per
    annum.'

    This is the standard form of reinstatement provision required on all policies of


    life insurance written in Pennsylvania. See Pennsylvania Insurance Company
    Law of 1921, as amended, 40 P.S. 510(k).
    5

    In Smith v. State Mutual Life Assurance Company of Worcester, 1936, 321 Pa.
    17, at page 22, 184 A. 45, at page 47, the Court cited with approval, the
    following statement in Lantz v. Vermont Life Insurance Co., 1891, 139 Pa. 546,
    21 A. 80, 10 L.R.A. 577, with reference to lapsed policies and their
    reinstatement: 'It is true it (the lapsed policy) may be restored to life by the
    subsequent payment of the premium, and its acceptance by the company. This,
    however, is a new contract by which the company agrees in consideration of
    the premium to continue in force a policy which had previously expired; in
    other words, it is a new assurance, though under the former policy. * * * ' (321
    Pa. 17, 184 A. 47.)

    It is noteworthy that one Pennsylvania case contains language to the effect that
    where the insured was informed after making a reinstatement application that
    he would need an operation 'good faith * * * would require him to acquaint (the
    insurer) before accepting reinstatement of the policy, with the fact that he was
    going to the hospital for an operation.' Mutual Life Ins. Co. of New York v.
    Bamford, 1938, 132 Pa.Super. 255, 261, 200 A. 907, 909

    You might also like