Citations
- 276 F.2d 861
Full opinion text
CLARK, Circuit Judge.
This is an appeal from a plaintiff’s judgment in an action by the beneficiary to recover the face amount of a policy of life insurance issued by defendant. The insured, a resident of New York, applied for the policy and paid the first premium thereon in Massachusetts. But there was conflicting evidence as to whether the policy had been delivered to the insured in Massachusetts or had been mailed to his residence in New York. A provision of the policy limited death benefits to a return of premiums in the event of the insured’s suicide, while sane or insane, within two years of the date of issue. Since the insured did so commit suicide, the only question involves the effectiveness of the limitation. The court below applied § 155 of the N.Y. Insurance Law, which has been interpreted as rendering the restriction void where the insured commits suicide while insane. Franklin v. John Hancock Mut. Life Ins. Co., 298 N.Y. 81, 80 N.E.2d 746. The case was submitted to the jury for a verdict upon special interrogatories, and it was found that the policy had been mailed to the insured in New York and that the insured had been insane at the time he committed suicide. Judgment for plaintiff was directed to be entered upon this verdict.
As jurisdiction is grounded upon diversity of citizenship of the parties, familiar principles require that we decide the issue here in accordance with the substantive law, including the conflict-of-laws rules, which would be applied by a court of the State of New York. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481, 134 A.L.R. 1462; Guaranty Trust Co. of N. Y. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231; Sampson v. Channell, 1 Cir., 110 F.2d 754, 128 A.L.R. 394, certiorari denied Channell v. Sampson, 310 U.S. 650, 60 S.Ct. 1099, 84 L.Ed. 1415.
Defendant’s contention is that the New York statute should not have been applied to the transaction here involved. Its position is that the applicable substantive law is that of Massachusetts, under which the suicide provision is enforceable in accordance with its terms. Moore v. Northwestern Mut. Life Ins. Co., 192 Mass. 468, 78 N.E. 488. This assertion is based upon the fact that a so-called “binding receipt” was delivered to the insured in Massachusetts at the time he executed Part I of the application and paid the first premium. It is urged that as the locus contractus its law should be applied. Although there is considerable conflict in New York, as elsewhere, as to the effect of various types of binding receipts, these decisions involve the situation where death or a change in the applicant’s condition occurs between the date of the receipt and the date when the policy, if any, is delivered. See Comment, 63 Yale L.J. 523, 525-528 (1954); see also Comment, 44 Yale L.J. 1223 (1935). The issue has thus involved the enforecability of the “binder” as against the insurer, rather than the enforceability as against the insured of terms of the policy of which he may not have been aware until its actual receipt. But without pursuing this distinction, we assume, arguendo, that a complete and binding insurance agreement was formed in Massachusetts. See Gaunt v. John Hancock Mut. Life Ins. Co., 2 Cir., 160 F.2d 599, certiorari denied 331 U.S. 849, 67 S.Ct. 1736, 91 L.Ed. 1858; Ransom v. Penn Mut. Life Ins. Co., 43 Cal.2d 420, 274 P.2d 633, noted in 7 Stan.L.Rev. 292 (1955) (construing identical language with that here present).
The question remains, however, whether N.Y. Insurance Law § 155 is nevertheless applicable. Defendant’s position is that formation of the contract in Massachusetts requires a reference to the law of that state as the locus contractus. We need not consider the extent to which this choice-of-law rule may today be considered as generally applicable in the contract field. It need only be noted that in the area of adhesion contracts, particularly in the insurance field, any generalization as to a majority, or even preferable, view is apt to constitute a misleading oversimplification. 6Cf. Ehrenzweig, Contracts in the Conflict of Laws, 59 Col.L.Rev. 973, 986, 1014 (1959). Decisions involving the applicability of the insurance laws of the several states to transactions including foreign elements appear irreconcilable in terms of any uniform conflict-of-laws theory. If any trend is discernible in these cases, it is that of a forum to apply its own law to adhesion contracts of insurance entered into by its residents. See Lenhoff, Conflict Avoidance in Insurance, 21 Law