Souder v. Home Friendly Society

Bryan, J., delivered the opinion of the Court. The appellant brought suit against the appellee to recover certain sums of money alleged to have become due and payable by reason of an insurance of the life of one Samuel Herman. The appellee demurred to three counts in the declaration and the demurrers Avere sustained. We Avill give our opinion on the questions in controversy Avithout at present making any particular examination of the pleadings. The facts, on which our opinion is desired, appear to be as folloAvs : Herman, the deceased, Avas indebted to one Sibbet, Avho was his son-in-law; Sibbet in eighteen hundred and seventy-seven insured Herman’s life for three thousand dollars in the Home Mutual Life Association of Pennsylvania, and assigned the policy of insurance to the plaintiff (now appellant) to secure a large sum of money, which he owed him; the plaintiff paid the dues and assessments on the policy, and continued to pay them until eighteen hundred and eighty-seven, when the defendant (now appellee) agreed to assume the risk taken by the Pennsylvania Company on the life of Herman, and in accordance with this agreement issued three certificates for the proceeds of an assessment to be levied at his death upon its surviving members, not to exceed a thousand dollars for each certificate; and they were declared by writing endorsed on them to be issued for the purpose of taking the place, in part, of Policy No. 388, in the Home Mutual Life [516] Association of Pennsylvania, which was thereupon surrendered; these certificates were made payable to “W. EL Souder, assignee and creditor, if then living,” within ninety days after satisfactory proof of the death of Herman. Herman is dead; and we understand that the sole question now in controversy is whether the plaintiff acquired a right of action on these certificates. It is not questioned that Sibbet as creditor of Herman had the right to insure his life. And we regard it as fully settled in this State that he could assign the policy to Souder. This question has been decided differently elsewhere, but the opinion of this Court in Rittler vs. Smith, Adm’x, 70 Md., 265, settles the law for us. In that case it was said: “In support of the view taken by the appellee’s counsel, cases have been cited in which it has been held that the assignee of a life policy, who has no insurable interest in the life, stands in the same position as if he had originally taken out the policy for his own benefit. In other words, the contention is that the assured himself can make no valid absolute assignment of his policy to one who has no insurable interest in his life. But our own decisions are opposed to this. It is settled law in this ¡State that a life insurance policy is but a chose in action for the payment of money, and may be assigned as such finder our Act of 1829, ch. 51. New York Life Ins. Co. vs. Flack, 3 Md., 341; Whitridge vs. Barry, 42 Md., 150. It is quite a common thing for the bond or promissory note of a private individual, to be sold through a broker to a bona fide purchaser, for less than its face value ; and when the latter takes an assignment of it, without recourse, he becomes its absolute owner, and is not bound to refund to the vendor anything he may recover upon it over and above what he paid for it. So a life policy being a similar chose in action may be disppsed of and assigned in the same way, provided the assent of the insurer is obtained where it is so stipu [517] lated in the instrument. In such case the assignee must of course keep the policy alive by the due payment of premiums, if he wishes to realize anything from it. Such an assignment is valid in this State, if it be a bona fide business transaction and not a mere device to cover a gaming contract.” There was, therefore, no infirmity about Souder’s title to the Pfennsylvania policy; no rule of law or public policy impeached his right to recover upon it. This defendant contracts to assume the responsibility of the Pennsylvania Company ; it binds itself to fulfil the engagement which that Company was legally bound to perform. It finds a legal and perfectly legitimate contract in existence, and for adequate consideration undertakes i to perform it. We regard this as the substance of the transaction. Undoubtedly Souder did not have an insurable interest in Herman's life ; and if these certificates should be considered separately and alone, without any connexion with the other portions of the contract between these parties, they would not confer a right of action on Souder. But such is not the real condition of the - case. Souder surrenders a valid cause of action against the Pennsylvania Company, and in consideration of such surrender, this defendant agrees to do what the Pennsylvania Company would have been obliged to do. It was simply the substitution of the liability of one defendant in the place of another. We have given our opinion on the facts as we have been able to gather them from the record, and have taken into view the life certificates appearing therein ; because our opinion seemed to be desired on these matters by the counsel on both sides. But we do not consider this certificate as forming a part of the declaration; it is not incorporated in it either» actually or by words of reference. We will now apply what we have said to the counts which’were demurred to ; confining ourselves en [518] tirely to what is stated on their face. We perceive no-error in the second and third counts. We think it proper to remark, however, that the second count does not in all respects correspond with the life-certificates, and that in case of a trial, there may be some difficulty, unless it is amended. It states that the certificates were made payable to the plaintiff on the death of the insured, and that the defendant was bound to pay the sum of a thousand dollars on each of them by means of an assessment, &c.; whereas they are payable to the plaintiff if living at the death of the insured, and the agreement is to pay within ninety days after satisfactory proof of death. These differences may appear to be minute, but they would support an objection on the ground of variance, when the certificates are offered in evidence under this count. We think that the first count is defective, because it does not state facts sufficient to show that Souder sustained any relation either to the deceased, or to the defendant, which authorized the issue to him of these life certificates. (Decided 19th June, 1890.) The Court rendered judgment on the demurrers against the plaintiff for costs. There were four counts in the declaration; to the fourth count there was a plea, and issue was joined. We are persuaded that the judgment in this case was rendered through inadvertence. When the Court sustained the demurrers, it ought to have proceeded to the trial of the issue under the fourth plea, and after verdict thereon, the judgment in the case ought to have been rendered. If the judgment and verdict had been in favor of the plaintiff, his appeal would still have lain ; because a party can always appeal from a judgment in his favor if there has been an error which diminishes the amount claimed to be due to him. In this case final judgment was rendered while an issue remained untried. Judgment reversed, and new trial awarded.