Appeal from judgment of Court of Common Pleas of Allegheny County, July T., 1964, No. 1718, in case of Leah Quay Layman v. Continental Assurance Company.
William C. Walker, with him Dickie, McCamey & Chilcote, for appellant.
David M. Harrison, with him Harrison & Louik, for appellee.
Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell concurs in the result. Mr. Justice Jones dissents. Mr. Justice Musmanno took no part in the consideration or decision of this case.
On September 1, 1963, the Continental Assurance Company delivered to Fred W. Layman a certificate of life insurance reciting that he was insured under the group policy issued by the company to the members of the American Welding Society. The insured died on January 22, 1964, leaving as his beneficiary the appellee, Leah Quay Layman. On April 13, 1964, approximately three months after Mr. Layman's death, the company mailed to Mrs. Layman a copy of her deceased husband's insurance application. It was the company's position that, since Mr. Layman had falsified information on this application, his widow could not recover under the policy. Mrs. Layman accordingly commenced this action.
In its answer to appellee's complaint, appellant offered, as its sole defense, the fact that Mr. Layman had given the company false information in his application for insurance. Appellee then moved for judgment on the pleadings on the ground that, since a copy of her husband's application was not attached to the policy when issued, the company was precluded, by statute, from using this application as a defense. The statutes relied upon were the Act of May 17, 1921, P. L. 682, § 318, 40 P.S. § 441 and the Act of May 11, 1949, P. L. 1210, § 6, as amended, 40 P.S. § 532.6. After the lower court denied her motion, under authority of the Act of April 18, 1874, P. L. 64, § 1, 12 P.S. § 1097, Mrs. Layman appealed to this Court. We affirmed the denial. See Layman v. Continental Assurance Co., 416 Pa. 155, 205 A.2d 93 (1964).
Our first decision in Layman resulted from our construction of the statutes relied upon below. Although both the Act of 1921 and the Act of 1949 contain provisions that a copy of the insurance application must be attached to the policy when issued, we held that the Act of 1921 does not apply to group insurance policies, and that the policy referred to in the Act of 1949 (which does apply to group policies) is the policy furnished to the group employer, in this case the American Welding Society. Since Layman himself received only a certificate showing him to be insured, and since the Act does not require the application to be attached to the certificate when issued, Mrs. Layman could not prevail.
Following her initial defeat before our Court, Mrs. Layman went to trial. She was there successful in preventing the company from using the application in evidence by invoking another, previously untried, provision of the Act of 1949. The relevant provision recites: "[N]o statement made by any person insured shall be used in any contest unless a copy of the instrument
containing the statement is or has been furnished to such person or to his beneficiary." Act of May 11, 1949, P. L. 1210, § 6, as amended, 40 P.S. § 532.6(3). The lower court construed the language as requiring that the instrument (in this case Mr. Layman's application) be furnished to the insured or beneficiary before the death of the insured. It therefore concluded that appellant waited too long to furnish Mrs. Layman with a copy of her husband's application, and hence could not use it at trial. The jury accordingly was directed to find a verdict in favor of appellee in the amount of the insurance certificate, $10,000 plus interest. Following the denial of appellant's motion for judgment n.o.v. and the entry of judgment, this appeal was taken.
Construction of the statutory language here at issue presents a case of first impression for this Court. Moreover, we have found but two other jurisdictions, Illinois and New York, which have faced such a provision. Each came to a different result. In construing language identical to that found in our Act of 1949, the Seventh Circuit Court of Appeals (applying Illinois law) held that the requirement of furnishing a copy of the application was satisfied even though the company waited until it filed its answer in court before making the application available to the plaintiff beneficiary. Coleman v. Aetna Life Ins. Co., 261 F. 2d 296 (7th Cir. 1958). However, New York, again construing identical language, has required that the company furnish the application before the insured's death. Robins v. John Hancock Mut. Life Ins. Co., 49 Misc. 2d ...