Hurd v. Doty

Cassoday, J. The findings of the court are' fully sustained by the evidence. It is contended that the plaintiff had no^ insurable interest in the life of Fannie E. Nash. The learned counsel for the — 9 — defendant cites numerous cases to the effect that one procuring insurance upon the life of another cannot recover upon the policy without proving an interest in.the life assured. The theory upon which such decisions are based is that such a contract is nothing more than a wagering or gambling contract, and hence is against public policy, and is therefore void. It -is very questionable whether such a policy was void by the common law of England prior to 1774. Lucena v. Craufurd, 3 Bos. & P. 75; Cousins v. Nantes, 3 Taunt. 513; Dalby v. India & L. L. Ass. Co. (15 Com. B.) 80 Eng. C. L. 365. In the year named, the statute of 14 Geo. III. c. 48, was enacted, and is to the effect that thereafter “ no insurance shall be made by any person or persons, bodies politic or corporate, on the life or lives of any person or persons, or on any other event or events whatsoever, wherein the ■ person or persons for whose use, benefit, or on whose account such policy or policies shall be made shall have no interest, or by way of gambling or wagering; and that every assurance made contrary to the true intent and meaning hereof shall be null and void to all intents and purposes whatsoever.” 12 Eng. Stats, at Large, 90. The preamble to the act speaks of it as a remedy for an existing mischief. The act is general in its terms, and does not purport to extend to any English colony, and it was held as late as 1832 that it did not extend to Ireland. Shannon v. Nugent, Hayes, 536; British Ins. Co. v. Magee, Cooke & A. 182. In Spaulding v. C. & N. W. R. Co. 30 Wis. 117, 118, it was held, in an opinion by Dixon, C. J., that the statute of 14 Geo. III. c. 78, passed the same year and about the same time, was never in force in Wisconsin, for the reason that its passage was so near the Eevolution that it was never received and acted upon as a part of the common law in this country. But cases are cited by counsel from courts of high authority holding that tlm act of 14 Geo. III. c. 48, was merely confirmatory of the common law — 10 — as it previously existed in England, while others assume that the common law was and is as therein embodied, without making any reference to the act. So, some of the cases cited seem to have gone so far as to hold that if a creditor, having an insurable interest in the life of his -debtor, obtains an insurance thereon in his own favor, and the debt is subsequently paid or extinguished during the life of the assui'ed, or the policy is assigned to one having no insurable interest in the debtor’s life, such policy cannot be enforced against the company. But this court has held that a policy of life insurance obtained in good faith by a person having a,n insurable interest in the life assured may be- assigned to any person with the consent of the company; that an. assignment by a son of insurance policies on his own life, as security for a debt due from his father to the assignee, is valid. Bursinger v. Bank, 67 Wis. 75, and cases there cited by Mr. Justice Taylor. The same principle seems to be sanctioned in England, notwithstanding the statute quoted. It has there been held that, “ where a policy effected by a creditor on the life of his debtor is valid at the time it is entered into, the circumstance of the interest of the assured in such life ceasing before the death does not invalidate it by reason of the provisions of the 14 Geo. III. c. 48.” Dalby v. India & L. L. Ass. Co. (15 Com. B.) 80 Eng. C. L. 365. This is put upon the theory that a contract of life insurance is not a contract of indemnity, but is a mere contract to pay a certain sum of money upon the death of a person, in consideration of the due payment of certain annual premiums during his life. That case has ' been repeatedly cited with apparent approval by the English courts. Knox v. Turner, L. R. 9 Eq. 163; Rankin v. Potter, L. R. 6 H. L. 119; Bradburn v. G. W. R. Co. L. R. 10 Exch. 2; Burnand v. Rodocanachi, L. R. 7 App. Cas. 340. See, also, Morrell v. Trenton M. L. Ins. Co. 10 Cush. 282, 57 Am. Dec. 92. — 11 — But in the case at bar the plaintiff did not, as a creditor or otherwise, procure the insurance in question. On the contrary, the same was procured by Fannie E. Hash upon her own life, payable as indicated. The contention is that the company had no lawful authority to insure her life, directly or indirectly, for the benefit of the-plaintiff, and hence that, in so far as she attempted to do so' in the name of the defendant as trustee, the policy is pro tanto void. The statute authorized the formation of a corporation in the manner therein provided, to promote the several objects therein named, and, among others, “ for the mutual support of the members, their fa/milies or kindred in cases of sickness, misfortune, poverty, or death, or for any lawful business or purpose whatever, except,” as therein specifically named. Sec. 1771, R. S. The by-laws of the association provided that “ the object and business of the association shall be to furnish pecuniary relief to its members when disabled by sickness or accident, and- to provide a mortuary benefit for the burial of its members and relief of their families or kindred.” It is undisputed that Miss if ash was an invalid for six or seven years immediately prior to her death; that during that time she lived and made her home for most of the time with the plaintiff and as a member of his family; that while she was there one of her limbs was amputated, and she was much of the time under the care of a physician; that she was a blood relative of the plaintiff’s wife and their son, as mentioned in the foregoing statement; that from January 27, 1885, to December 17, 1891, her life was insured in this same company; that during the fore part of this time, and for about four years, one fourth of the amount of the insurance was expressly payable to the plaintiff; that during the most of the balance of the time about one half of the amount was expressly payable to the plaintiff; that the last change in the form of the policy, making $3,900 qf the amount payable to the defend — 12 — ant upon her agreement to receive and hold the same in trust, and from the amount so received pay over to the plaintiff $1,950, as found by the court, was merely to obviate a supposed legal objection to the form of the policy. In all these transactions the manifest purpose of Miss Nash was to secure for herself a home, maintenance, and support in the family of the plaintiff, and to remunerate him for the same by way of such insurance. It -was certainly a very appropriate way, if not the only way, in which she as a member of the order could, in the language of the statute, “ receive the mutual support of the (other) members,” or could be furnished with pecuniary relief by the other members. Neither the statute nor the by-laws limit the beneficiaries to blood relatives. In Barnes v. London, E. & L. L. Ins. Co. [1892] 1 Q. B. 864, an action was brought to recover the amount of a policy of insurance upon the life of a child ten years old, a step-sister of the plaintiff, and it appeared that the plaintiff had promised the mother of the child to take care of and help maintain it; and it was “held that the plaintiff had an insurable interest in the child’s life, and was entitled, in the absence of any objections as to the amount in fact expended by her, to recover the amount of the policy.” Lord Cole-eidge, C. J., in effect said that it appeared that the plaintiff had undertaken the burden of keeping and maintaining the child.' That “that was a duty not cast upon her by law, but was wholly self-imposed. ... In that state of circumstances it is said that the plaintiff had no insurable interest in the child’s life. Now, I agree that the insurable interest must be a pecuniary interest, and that the interest must be in existence at the time when the policy is effected. That is perfectly clear upon the authorities. Is there such a pecuniary insurable interest here? I think there is. . . . I cannot find that anything has been said in any case to a contrary effect.” And in one of th,e cases cited by counsel — 13 — for the defendant, Mr. Justice Field, speaking for the whole court, said: “It is not very easy to define with precision what will in all cases constitute an insurable interest, so as to take the contract out of the class of wager policies. It may be stated generally, however, to be such an interest, arising from the relations of the- party- obtaining the insurance, either as creditor of or surety for the assured, or from the ties of blood or marriage to him, as will justify a reasonable expectation of advantage or benefit from the continuance of his life. It is not necessary that the expectation of advantage or benefit should be always capable of pecuniary estimation. . . . Eut in all cases there must be a reasonable ground, founded upon the relations of the parties to each other, either pecuniary, or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured.” Warnock v. Davis, 104 U. S. 779. But, as indicated, the case at bar is more favorable to the validity of the insurance, since Miss Mash procured the insurance on her own life, in part to remunerate and compensate one to whom she was under great moral, if not legal, obligations. Upon her death the company promptly paid the money to the defendant, as agreed in the policy. It is, at least, very doubtful whether the company .could have successfully resisted such payment, had it made the attempt; but that question is not before us for determination. Even assuming that the company might have successfully resisted such payment, yet we are clearly of the opinion that in voluntarily making the payment the company violated no statute nor any principle of the common law or of good morals. The defendant, therefore, -came into the lawful possession of the money. As indicated in the foregoing statement, the plaintiff surrendered the previous outstanding certificate, and he and Miss Hash consented and agreed that a new certificate should be taken — 14 — ojut in the name of the defendant; but this was done only upon the express agreement of the defendant that she would receive $1,960 of the amount in trust for the plaintiff, and pay the same over to him. By virtue of the agreement so made by the defendant, Miss Nash, and the plaintiff, the defendant has since received the money. The precise question for determination, therefore, is whether the defendant can retain that money for her own use, in violation of that agreement. We are clearly of the opinion that she cannot. Kiewert v. Rindskopf, 46 Wis. 481; Heckman v. Swartz, 50 Wis. 267; Wells v. McGeoch, 71 Wis. 196; Remington v. Ward, 78 Wis. 539; Gilmore v. Roberts, 79 Wis. 450. These cases have repeatedly affirmed the proposition that if. A. receives money from B.'for the purpose of paying it to C; upon an agreement between them, he cannot retain the money so received on the ground that the agreement between B. and C. was illegal. See note to this case in 21 L. R A. 746. — Kep. By the Oourt.— The judgment of the circuit court is affirmed.