Appeal from order of Court of Common Pleas of Allegheny County, July T., 1964, No. 1718, in case of Leah Quay Layman v. Continental Assurance Company.
David M. Harrison, with him Harrison & Louik, for appellant.
William C. Walker, with him Dickie, McCamey, Chilcote & Robinson, for appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen and O'Brien, JJ. Opinion by Mr. Justice Jones. Mr. Justice Musmanno dissents.
On September 1, 1963, the Continental Assurance Company (insurance company) issued to Fred W. Layman a certificate of insurance, "issued under the terms of Group Life Insurance Policy No. G-10,578 insuring the Members of the American Welding Society", in the amount of $10,000, in which certificate Leah Q. Layman,
Layman's wife, was named beneficiary. On January 22, 1964, Layman died and the insurance company has refused payment on the certificate.
Leah Q. Layman instituted a suit on this certificate of insurance against the insurance company in the Court of Common Pleas of Allegheny County. After closure of the pleadings, a motion for judgment on the pleadings, under Pa. R. C. P. 1034, was made on behalf of Leah Q. Layman. From the order of the court below refusing to grant that motion this appeal was taken.*fn1
The determination of the propriety of the challenged order must begin with an examination of the pleadings and, in making such an examination, we bear in mind that well-pleaded allegations of fact in the insurance company's answer and new matter must be taken as true even though we are not bound by any inferences of fact or conclusions of law contained therein: Syme v. Bankers National Life Insurance Co., supra Note 1, at 604. The complaint recites the issuance of the certificates of insurance to Layman for $10,000, -- a copy being attached to the complaint --, the payment of the required premium, the date of death of Layman, that the death proofs were furnished, that the insurance was in effect at the time of Layman's death and that, although demand was made, the insurance company has refused payment. By way of answer, the insurance company, under new matter, avers that Layman on two occasions -- September 26, 1962 and August 1, 1963 -- had applied for group insurance and, on those occasions, had submitted applications, copies of which were attached to the answer and new matter; that, in these applications, Layman had stated that he had not
had any medical or surgical advice or been confined in a hospital during the period of the past ten years; that said statements were false and such falsity was well known to Layman; that upon the representations contained in these applications the insurance company was induced to issue the certificate of insurance; that Layman knew he had been confined in a certain named hospital from January 24, 1961 to January 31, 1961, and that his condition had been diagnosed as "arteriosclerotic heart disease and congestive heart failure". By way of reply, Leah Q. Layman averred solely that, since the applications referred to had not been attached to and made a part of the certificate of insurance referred to in the complaint, the insurance company could not defend on the basis of statements contained in the applications. In the motion for judgment on the pleadings it was averred that Layman's applications for insurance did not constitute a part of the contract of insurance since they were not attached to the certificate when issued. Relying on the Act of May 11, 1949, P. L. 1210, as amended, 40 P.S. § 532.6 and the Act of May 17, 1921, P. L. 682, 40 P.S. § 441, it was averred that, since the company failed to attach a copy of Layman's application to the insurance certificate it can not use anything contained in said application as a defense.
The 1921 statute, supra, in pertinent part, provides: "All insurance policies, issued by stock or mutual insurance companies or associations doing business in this State, in which the application of the insured . . . form part of the policy or contract between the parties thereto, or have any bearing on said contract, shall contain, or have attached to said policies, correct copies of the application as signed by the applicant . . .; and, unless so attached and accompanying ...