Bible v. John Hancock Mut. Life Ins. Co. - 256 N.Y. 458, 176 N.E. 838 (1931)

Rule:

Estoppel remains what it has always been, and in the absence of notice to the contrary either in the application or otherwise, what is known to an agent with apparent authority to issue an effective policy is known also to the company.

Facts:

Decedent's husband filed suit against her insurer seeking to recover under two life insurance policies on which the insurer disclaimed liability on the ground that the policies had been avoided by the breach of conditions relating to the mental health of decedent, who had been institutionalized when the insurance policies were issued. The lower court granted recovery to the husband and the insurer appealed.

Issue:

Had the policies been avoided by the breach of conditions relating to the mental health of the decedent? 

Answer:

No.

Conclusion:

The court affirmed the judgment. According to the court, the breach of the policy conditions could be waived if the insurer had knowledge through its agent of the state of health or circumstances of decedent when the policies were issued and the premiums were accepted. In this case, limitations on the agent's authority to waive did not affect the fact that the insurer had actual knowledge through its agent of the condition of decedent at policy inception and had waived any breach by its conduct.