The opinion of the court was delivered by: BYERS
This is an action upon a National Service Life Insurance policy, in which recovery is contested upon the ground of fraud practiced by the insured in procuring reinstatement, following lapse of prior insurance.
A jury trial was waived and the issues have been submitted pursuant to a stipulation from which the following are quoted:
'III. That John Joseph Ronayne, hereinafter referred to as the insured, while in the military service, applied for and was granted, effective November 1, 1942, a policy of National Service Life Insurance * * * in which policies he named Joseph Thomas Ronayne, described as brother, as principal beneficiary, and Raymond Ronayne, described as brother as contingent beneficiary, and on which policies premiums were paid by allotment from the insured's service pay through November 30, 1945, and that said insurance lapsed for failure to pay the premium due December 1, 1945.
'IV. That the insured entered into active service on April 22, 1942 and was honorably discharged on November 3, 1945.
'V. That while the insured was in the service, his medical records indicate that he was treated for a epigastric distress condition on June 25, 1945, June 26, 1945, July 20, 1945, and on September 12, 1945. He was admitted to the 25th General Hospital in Belgium for a G. I. Series, where he remained under observation from September 13, 1945 to September 22, 1945, with reports showing an intermittent history of the condition for the past eighteen months. After the period of observation and study in September 1945, the examining physician diagnosed that the veteran's principal difficulty was an anxiety state which he believed had been alleviated. At the time of his separation from the service, his army medical examination given in conjunction with his separation, reveals a history of peptic ulcer, with first attack in 1944.
'VI. That immediately following his discharge from the service, the insured applied to the Veterans Administration for disability compensation, based upon his gastrointestinal condition of a peptic ulcer. This claim was not allowed and insured reapplied for disability compensation on the same grounds, and his medical file contains following medical reports:
'a. Letter of Dr. Charles Radetsky, dated October 5, 1946, indicating that insured was treated by him for gastric distress and that X Rays revealed a pyloric ulcer with retention, and condition was chronic and subject to exacerbations.
'b. An affidavit of Dr. Charles Radetsky, dated December 1, 1947, showing that insured was treated for pyloric ulcer from December 17, 1945 to November 29, 1947. Pyloric ulcer was confirmed by X Ray.
'c. A report of a G. I. Series done by Dr. Henry M. Weiselberg, dated February 14, 1948, reveals that the insured had a chronic pyloric ulcer.
'd. A report of a G. I. Series done by the Veterans Administration, at their New York Regional Office, dated April 28, 1948, reveals a Juxta pyloric ulcer with secondary pyloric obstruction.
'VIII. That on July 6, 1948, the insured executed an application for the reinstatement and conversion of National Service Life Insurance in the sum of $ 5,000, at the New York City Office of the Veterans Administration, wherein the insured, among other things represented that he was then, on July 6, 1948 in as good health as he was on the due date of the first premium in default, December 1, 1945; that he had not been ill, suffered, or contracted any disease, injury, or infirmity, or been prevented by reason of ill health from attending to his usual occupation, or consulted a physician or other practitioner for medical care or treatment at home, hospital, or elsewhere, in regard to his health since the lapse of the insurance involved in this action; that he had applied for disability compensation and gave his claim number, to wit: 731128.
'IX. That said application for reinstatement was marked 'Acceptable' on August 6, 1948, signed A. K. Coughlin, and thereafter the within contract of insurance, Policy No. V 203 32 50 was issued, effective July 1, 1948, and was in force and effect on date of insured's death, except for defendant's contention of fraud in the application for reinstatement.
'X. That on September 20, 1948, the insured was admitted to Halloran Veterans Administration Hospital where a partial gastrectomy was performed on October 8, 1948. Insured was released and treated as an out patient until he died on March 13, 1949, cause of death: nephrosis, uremia following laparotomy and repair of perforation of duedenal stump.
'XI. That subsequent to the insured's death, the plaintiff filed claims with the Veterans Administration for the death benefits under the policy, and that said claim was finally denied by the Veterans Administration upon the basis of ...