will exist and thus the incontestability clause is inapplicable. Id. 178 A. at 30.
The Ludwinska decision was followed by the court in Petaccio v. N.Y. Life Ins. Co., 125 Pa. Super. 15, 189 A. 697 (1939). That case involved a situation in which a son substituted an imposter for his father to take a medical examination required by New York Life Insurance Co. The imposter signed the application and presented himself for a physical examination. The court held that since the contract was between the insurance company and a person other than the named insured, no contract was ever formed and the incontestability clause was not applicable. Id. at 28.
Plaintiff believes that the unique nature of this fraud is akin to the legal principals which voided ab initio the life insurance policies in Ludwinska and Petaccio. Dr. Moses not only committed fraud in his initial application for insurance, but he continued his fraudulent scheme by circumventing the reasonable investigatory measures the insurance company undertook to verify the truthfulness of his statements. His fraud was designed to thwart the inquiry necessary to uncover the truth, as such there was never any meeting of the minds. As with the factual situation in Petaccio and Ludwinska, the policy could not have been issued but for Dr. Moses' impersonation of Dr. Lewis. I agree with this characterization and wish to add these additional observations. Fraud is an abhorrent act. The judiciary should work to eradicate the unfavorable effects that frauds wreak on society at large. My research, which examined all the jurisdictions of the United States, has not uncovered even one reported case similar in nature to the facts as represented here. The normal business practice of a life insurance company is designed to uncover false statements made on an application. Simply by corresponding to the doctor of record and receiving a signed report verifying the truth of his patient's health can reliable information be obtained. It's a simple yet effective means, available without distinction to the financial resources that a company has, to ascertain the truth. Both the largest and the smallest companies employ this method with, undoubtedly, great success. Yet, normal business practices would not suffice to uncover the fraud committed here.
The legislative enactment of the incontestability clause did not eliminate the basic proposition that underlies it, namely, that insurance companies would not be injured by the clause since they possess the means, through normal business practices, to uncover fraud in an application. Nothing I can imagine is more basic and trustworthy than a signed statement from a treating physician as to the health of his or her patient. The signed statement, which included the proper medical terms, would not raise the suspicion of any underwriter who reviewed it. Even the most ardent skeptic would believe the truth of a signed statement from a doctor knowing that the letter was mailed to the doctor and not transmitted by the applicant as an intermediary; the letter was addressed to a community hospital; it was promptly returned and signed. I cannot in good conscience say that a company which goes to such a thorough extent to verify the truth only to find itself fooled by the grand illusion of the one person who possessed the knowledge, skills and opportunity to orchestrate this charade, should be the party penalized.
Dr. Moses committed more than simple fraud, he also undertook a criminal act of intercepting mail which was earmarked for another person. This fraudulent act was a cold calculation to circumvent a system that contained reasonable and workable safeguards to verify his health condition.
The insurer should not be put in the position where not only must they examine the truth of the application, but also the truth of the physicians' statements. There is no method short of hiring a private detective to delve into the entire history of the life insurance applicant that could be more effective in uncovering lies. The law does not require absurdity to displace common sense. Both the Ludwinska and Petaccio decisions share in common with these facts the important and practical concept that the type of fraud that was committed was simply not capable of detection absent extraordinary measures. Normal business practices would not uncover an artful substitution of a treating physician at a verification examination.
The eloquence of Justice Musmanno is worthwhile repeating, "fraud taints with illegality and invalidity anything its evil shadow darkens." Iacopani v. Pliska, supra. The insurance carrier's bright light in search of truth was not powerful enough to penetrate the dark shadows cast by this fraudulent and criminal act. This court will not uphold such an abhorrent scheme merely because the insurance industry practice failed to uncover the truth prior to Dr. Moses' death. The truth was not discovered in the Ludwinska and Petaccio cases until after the death, yet the policies were rescinded. The scheme Dr. Moses developed was devious and unique in that he, and he alone, possessed the ability to continue the fraud at each stage without further assistance of any party.
I find that the protection of the incontestability clause does not extend to a wrongdoer who thwarts the investigation into the truth of his statements by posing as the independent verifier of the accuracy of the applicant's health. I will grant plaintiff's summary judgment motion and enter final judgment in their favor. An appropriate order follows.
AND NOW, this 20th day of March, 1985, for the reasons set forth in the foregoing memorandum, it is ORDERED that:
1. Defendants' motion for summary judgment is DENIED.
2. Plaintiff's motion for summary judgment is GRANTED.
3. Unity Mutual Life Insurance Policy 020736712 is void ab initio, and judgment of rescission is entered in favor of the plaintiff and against the defendants Susan S. Moses and Continental Bank.
BY THE COURT:
JAMES McGIRR KELLY, J.