CERTIORARI TO THE SUPREME COURT OF GEORGIA.
Hughes, Van Devanter, McReynolds, Brandeis, Sutherland, Butler, Roberts, Cardozo; Stone took no part in the consideration or decision of this case.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
In May, 1932, the John Hancock Mutual Life Insurance Company, a Massachusetts corporation, insured the life of Harmon H. Yates, agreeing to pay upon his death $2,000 to his wife. The policy was applied for, issued and delivered, in New York, where he and his wife resided; and they remained there until his death of cancer in the following month. Then his widow removed to Georgia, and brought, in a court of that State, this suit on the policy. The case was tried before a jury.
The Company contended that since the contract was made in New York, the existence of liability thereon is governed by the statutes of that State. It denied liability, upon the ground that answers in the application to the questions whether the applicant was then in good health, so far as he knew, whether he had ever been treated for cancer or indigestion, and whether he had had medical advice for any other disease or disorder during the period of five years prior to making the application, were false; and that these were material misrepresentations.
The Company proved, and it was undisputed, that the applicant had received medical treatment five times within the month preceding the application. It proved, also, that under the law of New York the misstatement made is a material misrepresentation which avoids the
policy, introducing § 58 of the New York Insurance Law,*fn1 which, as construed and applied in Travelers Insurance Co. v. Pomerantz, 246 N. Y. 63; 158 N. E. 21 and Minsker v. John Hancock Mutual Life Insurance Co., 254 N. Y. 333; 173 N. E. 4, provides that the entire contract between the parties must be embodied in the policy, to which a copy of the application must be physically attached; that when the insured receives a policy, it is his duty to read it or have it read; that if an application incorporated therein does not contain correct answers to questions asked, it is his duty to have the answers corrected; that in case a false answer to a material question is not so corrected, there can be no recovery even on proof that he gave to the examiner the true answer; that the agent of the Company is without power to waive this requirement of the policy; and that the false statement in the application that the applicant had not received medical advice constitutes a material misrepresentation which avoids the policy. It was not denied that such is the law of New York.
The trial court overruled the Company's contention; permitted the plaintiff to testify, in effect, that true answers had been given orally by the applicant to the Company's agent, and that the agent had said that the answers as recorded in the application were correct; submitted to the jury the determination of the question whether the false statement in the application was a material misrepresentation; and, among other things charged that "if a policy is issued with knowledge by the agent of a fact or condition which, by the terms of the contract, would render it void, the insurer will be held to have waived the existence of such fact or condition, and the policy will not be voided thereby." The jury rendered a verdict for the plaintiff; judgment was entered
thereon in the sum of $2,000; that judgment was affirmed by the Court of Appeals of Georgia (50 Ga. App. 713; 179 S. E. 239); and again by the Supreme Court of that State, two judges dissenting (182 Ga. 213; 185 S. E. 268). We granted certiorari because of the claim that the state courts had refused to give to the public acts of New York full faith and credit as required by § 1 of Article IV of the Federal Constitution.
The reason assigned by the Supreme Court of Georgia for its decision appears to be this: Under the law of that State, as elsewhere, the validity, form and effect of contracts are to be determined generally by the law of the place where made, but the character and extent of the remedies and the mode of procedure by the law of the forum. Under its law, false answers to questions in an application furnish ground for avoiding a policy, if the matters involved are material to the risk; but whether the statements are material is a matter of fact to be decided by the jury. And, if the agent of the insurance company incorrectly records answers after the applicant has truthfully replied to the questions, the agent's actual knowledge of the facts will be imputed to the insurer, and the question for the jury then is as to the materiality of the misstatements on the face of the application, viewed in the light of the knowledge imputed to the insurer.*fn2 The manner in which this question of materiality shall be determined, and the ...