The opinion of the court was delivered by: BARD
The Equitable Life Assurance Society filed its complaint in this court on August 17, 1938, seeking to rescind the disability and double indemnity provisions of the life insurance policy issued to Joseph Saftlas, to enjoin the insured from continuing an action in the state courts to recover disability benefits, and to enjoin both defendants from commencing any further action for either disability or double indemnity benefits. Fraud in the procurement of the policy was alleged as the basis for the relief sought. Regina Saftlas was joined as a defendant by reason of being trustee for Irving Saftlas, minor beneficiary.
Defendants' motions to dismiss the complaint on jurisdictional and substantive grounds were denied. D.C., 35 F.Supp. 62.
By its terms, the policy was to be incontestable after in force one year, except as to the provisions relating to disability and double indemnity. At the time the complaint was filed, the policy had been in effect several years.
The complaint alleges that the insured made false and fraudulent answers to questions contained in the application for the insurance. The answers were concerning his health as well as consultation and treatment by physicians within five years prior to the application for insurance. It is further alleged that these answers were material to the risk concerned and were made with the deliberate intent to deceive the plaintiff into issuing the policy.
I make the following special findings of fact:
1. The plaintiff, the Equitable Life Assurance Society of the United States, is a corporation organized and existing under the laws of the State of New York, and duly registered in Pennsylvania to issue policies of insurance.
2. The defendants Joseph Saftlas, the insured, and Regina Saftlas, trustee for Irving Saftlas, are residents of Philadelphia, Pennsylvania.
3. On June 19, 1929, Joseph Saftlas applied to the plaintiff for a policy to insure his life in the sum of $3,500; and to provide for the payment of a double indemnity of $7,000 upon his death from accident; and to provide a monthly disability income and a waiver of premiums in the event he became totally and permanently disabled.
5. On June 22, 1929, the plaintiff issued to Joseph Saftlas as the insured, a policy of life insurance No. 7,725,845, which was delivered to him in Philadelphia, containing provisions for benefits in the event of the insured's accidental death, and total and permanent disability. All premiums were paid by insured to a Philadelphia agent.
6. As appears from the Educational Fund Agreement, which is a part of the policy, the proceeds thereof in the event of the insured's death become payable to his son, Irving Saftlas, but provides that in the event the insured dies prior to the date that Irving Saftlas attains the age of seventeen, the proceeds of the policy shall be held by the plaintiff until Irving Saftlas reaches the said age, and in the event the insured dies during the minority of Irving Saftlas, then the payments due under the policy shall be paid to Regina Saftlas, the mother of Irving Saftlas, as trustee, or to the successor in trust for Irving Saftlas. Irving Saftlas was born on March 18, 1927.
7. The policy provides in part that:
The plaintiff "Hereby Insures the Life of Joseph Saftlas * * * and agrees to pay * * * Thirty Five Hundred Dollars * * * upon receipt of due proof of the death of the Insured * * *. And the Society agrees to increase the amount so payable to Seven Thousand Dollars, upon receipt of due proof of death from accident * * *. And further, if the Insured * * * becomes totally and presumably permanently disabled as defined in the Total and Permanent Disability provision on the third page hereof, the Society will, subject to the conditions of such provision, waive subsequent premiums and pay to the Insured a Disability Income of Thirty-five Dollars a month.
"This insurance is granted in consideration of the payment in advance of One Hundred seventy-three and 85/100 Dollars, and of the payment annually thereafter of a like sum * * *. These payments include an annual premium of $4.59 for the Double Indemnity and of $12.11 for the Total and Permanent Disability provision hereof. * * *
"This policy, except as to the provisions relating to Disability and Double Indemnity, shall be (a) incontestable after it has been in force during the lifetime of the Insured for a period of one year from its date of issue * * *."
8.The application contains a number of questions which the insured answered as set out therein as part of the said application.
9. Insured answered "No" to the question No. 6 of the application, as to whether he ever had, or had been treated for, any disease or disturbance of the tonsils, stomach, liver, intestines or eye.
10. Insured answered "No" to question No. 7 of the application, as to whether he ever had vertigo, dizzy spells, or ever had his blood examined. To the question whether he had any other illness or injury ...