as here, rather than warranties, the insurer in order to avoid the policy must show they were false and that the insured knew they were false or otherwise acted in bad faith in making them. Evans v. Penn Mutual L. Ins. Co., 322 Pa. 547, 186 A. 133; Bailey v. Pacific Mut. L. Ins. Co., 336 Pa. 62, 6 A.2d 770.
An answer known to be false is presumptively fraudulent. Lilly v. Metropolitan Life Ins. Co., 318 Pa. 248, 177 A. 779; Stein v. New York Life Ins. Co., 319 Pa. 225, 179 A. 589; Evans v. Penn Mutual L. Ins. Co., supra; Mutual Life Ins. Co. of New York v. Bamford, 132 Pa.Super. 255, 200 A. 907.
It is my factual conclusion that these statements were false. Furthermore, though I am not satisfied that the circumstances were such that an inference of intentional falsification was dictated as a matter of law, it is my factual conclusion that the insured knew the answers were false when he made them.
The defendant urges that a factual conclusion that the insured knew of the falsity is precluded, as a matter of law, by reason of the plaintiff's failure to adduce evidence directly pertinent to and probative of the insured's state of mind at the time of answering the questions. Knowledge or memory of particular matters, by its very nature, is not susceptible to direct proof, but must be determined by inference from indicative conduct or from the inherent quality of the occurrences or circumstances by which it was acquired.
Practically speaking, the record is replete with indications that insured knew the falsity of his answers. During the several years preceding the application he was plagued by physical disturbances which caused him frequent and considerable discomfort and concern, and prompted him to consult physicians who were specialists as well as physicians who were general practitioners. The nature and persistence of his diseases or disturbances and consequent discomfort was such as to support an inference that they were not forgotten. The examination and treatment by at least two of the physicians were of such a character that there arises an even stronger inference that the insured had not forgotten them at the time of application.
The defendant's contention that there are absent prerequisites to the equitable relief sought is insupportable. The insurer need not await the determination of the issue of fraud in the pending suit in the state court, but may proceed in equity for the cancellation of the disability and double indemnity provisions. American Life Ins. Co. v. Stewart, 300 U.S. 203, 57 S. Ct. 377, 81 L. Ed. 605, 111 A.L.R. 1268; Brown v. Pacific Mut. Life Ins. Co., 4 Cir., 62 F.2d 711; Ruhlin v. New York Life Ins. Co., 3 Cir., 93 F.2d 416; Metropolitan Life Ins. Co. v. Schneider, D.C., 34 F.Supp. 220.
There is danger that witnesses may disappear or that evidence may be lost. Further, all the parties interested in the policy are not before the court in the suit at law. Also, the adequacy of the remedy at law depends upon the will of the insured, and the ends of justice will not be satisfied by a mere judgment for the insurer in the action at law, but require some distinctly equitable relief such as cancellation or reformation of the instrument sued upon and injunction against prosecution of the action at law.
In an earlier opinion on defendants' motion to dismiss, D.C., 35 F.Supp. 62, I said that this court would not enjoin prosecution of the prior action in the state court, but that the plaintiff could proceed in this court until a judgment was obtained in one court which could be set up as res adjudicata in the other. It is my present conclusion, under the authority of Ruhlin v. New York Life Ins. Co., 3 Cir., 93 F.2d 416, reserved on another point, that the plaintiff, having established fraud on the part of the defendant, is entitled to have the defendant enjoined from prosecuting the action in the state court. See also Metropolitan Life Ins. Co., v. Schneider, supra.
Conclusions of Law.
1. The disability and double indemnity provisions of policy No. 7,725,845 issued by the Equitable Life Assurance Society of the United States, the plaintiff, to Joseph Saftlas are contestable.
2. The answers and statements made by Joseph Saftlas in his application for the policy were material, false and fraudulent representations as to his health and past medical history.
3. The plaintiff in entitled to equitable relief.
4. the plaintiff is entitled to have the double indemnity and disability provisions rescinded and declared void.
5. The plaintiff is entitled to be released from liability under the double indemnity and disability provisions.
6. The plaintiff is entitled to a surrender of the policy for reissuance without the voided provisions.
7. The defendant is entitled to be reimbursed for the premiums and interest thereon paid by him on the double indemnity and disability provisions.
8. Defendant Joseph Saftlas should be enjoined from prosecuting his action in the Court of Common Pleas No. 5 of Philadelphia County, No. 3932 of March Term, 1938, and should be directed to mark the said action discontinued.
9. The defendants are to bear the costs.
All requested findings of fact and conclusions of law not herein included are hereby denied.
A decree to conform with the above may be submitted.
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