Gaunt v. John Hancock Mut. Life Ins.

1. Judge Hand writes:

for the ordinary applicant who has paid his first premium and has successfully passed his physical examination, would not by the remotest chance understand the clause as leaving him uncovered until the insurer at its leisure approved the risk; he would assume that he was getting immediate coverage for his money. 

Do you agree?  This passage has greater force, I would contend, because of Hand's inclusion of the phrase "at its leisure." It does seem problematic to let the insurer twiddle its thumbs and then be able to deny coverage when the insured dies in the interim. But (a) is there evidence that the insurer here was leisurely or that it was resolving bona fide questions about insurability; (b) do insurers have a stronger business motivation to twiddle or to lock up business? Wouldn't the law imply a duty of good faith and fair dealing by the insurer so that if it did unduly delay it could not take advantage of the condition?

2. Why does Justice Clark concur? Whom do you think has the better argument, the majority, the concurrence or an imaginary dissenter who writes that contracts should generally be enforced as written and that this provision was sufficiently clear.

3. Is this a strong form reasonable expectations case -- with all the strengths and weaknesses of that doctrine -- masquerading as a contra proferentem case? If so, it might not be the first time such a disguise had been used.