U.S. Supreme Court JOHN HANCOCK MUT. LIFE INS. CO. v. YATES, 299 U.S. 178 (1936)

[Page 299 U.S. 178, 181]

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 (299 U.S. 525, 57 S.Ct. 20, 81 L.Ed. --), 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 section 1 of article 4 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. [Footnote 2] The manner in which this question of materiality shall be determined, and the effect of the disclosure made orally by the applicant to the agent, are matters affecting the remedy only, and not the validity, form or effect of the contract. Hence, the full faith and credit clause of the Federal Constitution does not compel the application by

[Page 299 U.S. 178, 183]

to that effect had been embodied in writing in the policy. To refuse to give that defense effect would irremediably subject the Company to liability. Compare Bradford Electric Light Co., Inc. v. Clapper, 286 U.S. 145, 160, 52 S.Ct. 571, 576, 82 A.L.R. 696. Because the statute is a 'public act,' faith and credit must be given to its provisions as fully as if the materiality of this specific misrepresentation in the application, and the consequent nonexistence of liability, had been declared by a judgment of a New York court. Bradford Electric Light Co., Inc. v. Clapper, supra, , at page 155, 52 S.Ct. 571, 82 A.L.R. 696.

REVERSED.

Mr. Justice STONE took no part in the consideration or decision of this case. Footnotes

Footnote 1 Laws of New York 1906, c. 326, 16. Cahill's Consolidated Laws of New York (1930), c. 30, 58.

Footnote 2 Compare Johnson v. Aetna Insurance Co., 123 Ga. 404, 51 S.E. 339, 107 Am.St.Rep. 92; Supreme Lodge Knights of Pythias v. Few, 138 Ga. 778, 76 S.E. 91; Id., 142 Ga. 240, 82 S.E. 627; Metropolitan Life Insurance Co. v. Hale, 177 Ga. 632, 170 S.E. 875; National Accident & Health Insurance Co. v. Davis, 179 Ga. 595, 176 S.E. 387.

Footnote 3 Compare Aetna Life Insurance Co. v. Dunken, 266 U.S. 389, 393, 45 S. Ct. 129, 130; Modern Woodmen of America v. Mixer, , 45 S.Ct. 389, 41 A.L.R. 1384.