Opinion
March 15, 1926.
William J. Moran, for the plaintiff.
Marx, Harris Kahn [ Laurence S. Kahn of counsel], for the defendant.
The only ground of invalidity asserted is failure to show basis for equitable relief. Ordinarily such an action for rescission will not lie because the legal remedy by way of defense is adequate. ( Globe Mutual Life Ins. Co. v. Reals, 79 N.Y. 202; Cable v. U.S. Life Ins. Co., 191 U.S. 288; Charlton v. Metropolitan Life Ins. Co., 202 A.D. 757, 814; affd., 234 N.Y. 639.) An exceptional circumstance must be shown.
The policy here in suit contains the statutory incontestability clause. The position of the plaintiff is that unless it begins a suit to contest the policy within the time limited therein, it will lose its right to contest the validity of the policy. The contest contemplated by the incontestability clause is a suit. (37 C.J. 540, and cases there cited under notes 56 and 57.) The insurance company is, therefore, compelled to sue within the statutory period. This situation is not changed by the circumstance that the assured has died.
I have not overlooked the opinion in Markowitz v. Metropolitan Life Ins. Co. ( 122 Misc. 675). That opinion was written before the decision of the United States Supreme Court in Mutual Life Ins. Co. v. Hurni Packing Co. ( 263 U.S. 167), which holds squarely that the incontestability clause continues in effect after the death of the assured for the benefit of the beneficiary. The special circumstance which gives the ground of equitable relief here is, therefore, that unless the plaintiff moves in equity the defendant may delay suing at law on the policy until after the incontestability period has expired and thus defeat the plaintiff's right to seek rescission.
As stated by Mr. Justice McAVOY in Travelers Ins. Co. v. Gottlieb (N.Y.L.J. Dec. 29, 1920): "The clause of the policy * * * making the contract of insurance incontestable after one year from its date of issue is all-inclusive and it is quite within the law to exclude proof of fraud or misrepresentation amounting to a breach of warranty of the policy, unless the contest thereon is made within the year of limitation. Therefore, the remedy at law is not adequate."
Motion denied. Order signed.