United States Life Insurance v. Ludwig

Mr. Justice Scholfield delivered the opinion of the Court: A single question arising on this record is presented for our consideration by the arguments of counsel: Are the plaintiffs entitled to prosecute an action at law, in their own names, on these policies ? Policies of insurance are but choses in action, and governed by the same principles applicable to choses in action in general. They are assignable in equity only, and in this State, and in others where the strict rules of the common law prevail, courts of law will not recognize the assignment so as to allow the assignee to sue on the policy in his own name. New England Fire and Marine Ins. Co. v. Wetmore, 32 Ill. 221; Peoria Marine and Fire Ins. Co. v. Hervey et ux. 34 id. 62; Massachusetts Mutual Life Ins. Co. v. Robinson, 98 id. 324; Bliss on Life Insurance, sec. 325; May on Insurance, sec. 377; Jessel v. Insurance Co. 3 Hill, 88; 2 Am. L. Cases, (5th ed.) 886, 887. But counsel contend that “payment of the premiums by the assignees, or for their benefit, after notice of the assignment to the company, creates a new contract between the assignee and the company, and on that contract suit will be sustained, ” and they cite Peoria Marine and Fire Ins. Co. v. Hervey et ux. supra, New England Fire and Marine Ins. Co. v. Wetmore, supra, and Westchester Fire Ins. Co. v. Foster, 90 id. 122. Neither of these cases sustains the proposition so broadly and unqualifiedly as thus contended for by counsel. In the first named case, the case stated shows this: The property had been insured by Bishop. He sold and delivered it to the plaintiff, and on the same day, and with the consent of the defendants manifested by their indorsement on the policy, assigned the same to the plaintiff. On the same day the defendants executed a renewal certificate in writing, and delivered it to the plaintiff, and in consideration of the sum of $45, paid by the plaintiff as premium to the defendants at their request, and of the undertaking and promises by the plaintiff to perform and fulfill "all things contained in the policy to Bishop, on her part to be performed, etc., the defendants undertook and promised the plaintiff to consent to a continuance of the risk originally insured, from October 22, 1859, to October, 1860, and to become and be insurers to the plaintiff, of the sum mentioned in said policy, upon the property, and to fulfill all things mentioned in the policy, etc., and the court said: “The question before us is correctly put by the counsel for appellee: Can the plaintiff recover of this insurance company, in her own name, the amount of damages which they, as an insurance company, undertook and promised to pay her in case the property insured was destroyed by fire ? Did the company enter into such a contract, on a valuable consideration, with the plaintiff ? The fact that they had the year previous insured the property for Bishop, and that he assigned the policy to the plaintiff, does not, we think, affect one way or the other the real question stated above and presented by the record. * * * It amounts simply to this: that on the plaintiff going to the insurance company with the policy issued to Bishop in her possession, of which she was then the holder, on seeing it, the defendants, by their agent, say to her that she need not make a new application for insurance—that they would continue the risk for her benefit one year, on the payment by her of $45. That had no effect upon the written policy of Bishop to continue it alive, or to revive it, being dead, but it was a new contract with the plaintiff, for a valuable consideration paid, and on the terms of the original policy. ” And so it was held the action was properly brought in' the name of the plaintiff—on the new contract, however, and not on the original policy. In the next case, it was expressly held that the assignee of an insurance policy could not, at common law, maintain a suit upon it in his own name, and it.was also further held that' a renewal receipt, executed upon the payment of the premium by the assignees of a policy, whereby the policy was continued in force for another year, merely revived an expiring contract, and that suit must be brought- on the original policy in the name of the assured therein. In the other case the policy was expressly payable to the beneficiary, and not, as here, to the assured, etc., and the question there was simply whether, under the language of the policy, the beneficiary could sue in his own name. That case is not at all analogous. There was not here, as in Peoria Marine and Fire Ins. Co. v. Hervey et ux. supra, any new and independent contract. The suit here is not, as there, upon the agreement made when the premium was paid after the assignment. There was here no new insurance. The premiums paid after assignment are paid by the assured, not by the beneficiaries. It is true, as contended, this was done-for them; but so were the premiums paid before assignment. The policies were, in the first instance, obtained by the assured for their benefit. The contracts, pursuant to which they were issued, and of which they are evidence, were, however, his contracts, made by him, and complied with by him both before and after the assignment. The contracts upon which suit is broúght are his contracts,—his acts are in evidence,—and there is no suit upon contracts, and no evidence of the acts, of the beneficiaries. Even if the money here paid after the assignment, had been paid by the assignees out of their own funds, the ease would be totally unlike that of Peoria Marine and Fire Ins. Co. v. Hervey et ux. supra. The old policy had not expired, and the case would then be strictly analogous to New England Fire and Marine Ins. Co. v. Wetmore, supra,— the revival of an expiring contract,—and on the authority of that case the assignees could not sue in their own names. Indeed, the receipts here are, as there, expressly renewal receipts, on their faces. Mutual Life Ins. Co. v. Robinson, 98 Ill. 324, is in point, and conclusive against the plaintiffs. The position that the present plaintiffs are entitled to recover under the common counts, in their own names, is untenable. The recovery must be on the" policy, even if it be under the common counts. The suit must be brought by the party having the legal interest, although it may be for the use of one having an equitable interest. Dicey on Parties, 51, and notes. The judgment is reversed, and the cause remanded for further proceedings consistent with this opinion. Judgment reversed.