Opinion
Opinion filed March 3, 1931.
1. — Insurance — Life Insurance — Beneficiary — Sister-in-law — Insurable Interest. A sister-in-law of the insured, procuring the issuance of an industrial policy of which she was the beneficiary, the premiums of which were paid by herself or husband, and she was in no way dependent upon the insured for support or maintenance, and there was no relation of creditor and debtor existing between them, held, that she had no insurable interest in the life of her brother-in-law and the trial court erred in refusing to direct a verdict for the insurer as requested.
2. — Same — Same — Same — Same — Same — Public Policy. Policies on the life of insured, procured by beneficiaries having no insurable interest in the life of the deceased, are void as against public policy.
3. — Same — Same — Same — Same — Same — Waiver — Estoppel. A beneficiary of a void insurance policy, being contrary to public policy, cannot recover from insurer on the theory of waiver or estoppel.
4. — Same — Same — Same — Same — Same — Industrial Policy. A beneficiary procuring an insurance policy must have an insurable interest in the life of insured, even in small industrial policies.
Appeal from the Circuit Court of the City of St. Louis. — Hon. Harry Sprague, Judge.
REVERSED.
Martin Farrow for appellant.
(1) Plaintiff had no insurable interest and the court erred in refusing defendant's instructions, peremptory, and Nos. 3 and 8, and in giving plaintiff's instruction A. Charter Oak Life Ins. v. Brant, 47 Mo. 419; Singleton v. St. L. Mut. Ins. Co., 66 Mo. 63; Reynolds v. Ins. Co., 88 Mo. App. 679; Whitmore v. Sup. L.K. L. of H., 100 Mo. 36, 13 S.W. 495; Masonic Ben. Ass'n v. Bunch, 109 Mo. 560, 19 S.W. 25; Sternberg v. Levy, 159 Mo. 617, 60 S.W. 1114; Ryan v. Metropolitan Life Ins. Co., 117 Mo. App. 688, 93 S.W. 347; Locher v. Kuechenmiester, 120 Mo. App. 701, 98 S.W. 92; Deal v. Hainley, 135 Mo. App. 507, 116 S.W. 1; Abernathy v. Springfield Mut. Ass'n (Mo. App.), (not officially published), 284 S.W. 198; 1 Couch on Insurance, 763-765, sec. 294; 1 Couch on Insurance, 770-771, sec. 295; 1 Couch on Insurance, 779, sec. 296; McRae v. Wormack, 98 Ark. 52, 135 S.W. 807, 33 L.R.A. (N.S.) 949; Mutual Aid Union v. White, 166 Ark. 467, 267 S.W. 137; Equitable Life Ins. Co. v. O'Connor, 162 Ky. 262, 172 S.W. 496; Keystone M. Ben. Ass'n v. Norris, 115 Pa. 446, 8 A. 638; 1 Cooley's Briefs on Insurance (2 Ed.), 387, 392; Taussig v. United Security Life Ins. Trust Co., 231 Pa. 16, 79 A. 810; Guardian Mut. Life Ins. Co. v. Hogan, 80 Ill. 35; Langdon v. Union Mutual L. Ins. Co., 14 F. 272; Home Mut. Ben. Ass'n v. Keller, 148 Ark. 361, 230 S.W. 10; Dresen v. Metr. Life Ins. Co., 195 Ill. App. 292; Baker v. Lyell, 210 Mo. App. 230, 242 S.W. 703. (2) As the application was signed by plaintiff, for insured, an infant, the policy based thereon is invalid; and the court erred in refusing defendant's instructions, peremptory and No. 6, and in giving plaintiff's instruction A. Turner v. Bondalier, 31 Mo. App. 582; Mechem on Agency (2 Ed.), secs. 140, 141 and 142; Curtis v. Alexander (Mo.), (not officially published), 257 S.W. 432, 436; 31 C.J. 1081, sec. 184, text to nn. 5-8; Poston v. Williams, 99 Mo. App. 513, 73 S.W. 1099. (3) As the application was signed by plaintiff, for insured, who was mentally incompetent, the policy based thereon is invalid; and the court erred in refusing defendant's instructions, peremptory and No. 4, and in giving plaintiff's instruction A. Cases cited under head 2, supra; See, also, 32 Corpus Juris 741, sec. 527, text to nn. 11-12. (4) The policy is void because it was obtained without insured's knowledge or consent. 1 Cooley's Briefs on Insurance (2 Ed.), 846, and cases cited; 1 Couch on Insurance, 779, sec. 296. (5) The application was fraudulently signed by a person other than insured, and the policy based thereon is invalid; and the court erred in refusing defendant's instructions, peremptory and No. 7, and in giving plaintiff's instruction A. Carter v. Metr. Life Ins. Co., 275 Mo. 84, 204 S.W. 399; Swinney v. Conn. Fire Ins. Co. (Mo. App.), 8 S.W.2d 1090; So. States Mutual Life Ins. Co. v. Herlihy, 138 Ky. 359, 128 S.W. 91. (6) As insured was afflicted with his fatal illness on the date of the policy, defendant was only liable, at the most, for the premiums; and the court erred in refusing defendant's instructions, peremptory and 3A, and in giving plaintiff's instruction A. Taylor v. Loyal Prot. Ins. Co. (Mo. App.), 194 S.W. 1055; State ex rel. Comm. Cas. Co. v. Cox (Mo.), 14 S.W.2d 600, and cases there cited; McAndiless v. Metr. Life Ins. Co., 45 Mo. App. 578; Renn v. Sup. Lodge K.P., 83 Mo. App. 442; Watkins v. Bro. of A.Y., 188 Mo. App. 626, 176 S.W. 516; 6 Cooley's Briefs on Ins. (2 Ed.), 5499, 5503; Geogoric v. Prudential Ins. Co., 165 Ill. App. 570. (7) There was no evidence of vexatious refusal, and the court erred in refusing defendant's instruction No. 5, and in giving plaintiff's instruction B. Non-Royalty Shoe Co. v. Ins. Co., 277 Mo. 399, 210 S.W. 37; Merkel v. Ry. Mail Ass'n, 205 Mo. App. 484, 226 S.W. 299; Liebing v. Mut. L. Ins. Co. (Mo.), 226 S.W. 897; Berryman v. Southern Sur. Co., 285 Mo. 379, 227 S.W. 96, 101; Bennett v. Standard Acc. Ins. Co., 209 Mo. App. 81, 237 S.W. 144; Zimmermann v. Southern Sur. Co. (Mo. App.), 241 S.W. 95, 97; Meisenbach v. Nat. Life Acc. Ins. Co. (Mo. App.), not officially published, 241 S.W. 450, 452; McAlister v. Nat. L.I. Co. (Mo. App.), 261 S.W. 733, 734; Kusnetzky v. Security Ins. Co. (Mo.), 281 S.W. 47; State ex rel., etc., v. Fid. Dep. Co. (Mo.), 298 S.W. 83; Landrigan v. Mo. State Life Ins. Co., 211 Mo. App. 89, 245 S.W. 382, 387; State, ex rel. Mo. State L.I. Co. v. Allen et al., JJ., 295 Mo. 307, 243 S.W. 839; Cooper v. Nat. Life Ins. Co., 212 Mo. App. 266, 253 S.W. 465.
John P. Griffin for respondent.
(1) The policy in suit is an industrial policy and insurable interest is not necessary, because the amount is so small ($198) there is no incentive to destroy the life on which it is issued. Metropolitan Life Ins. Co. v. Nelson, 170 Ky. 674, 186 S.W. 520. (2) The policy contains a provision that it is payable to the executors or administrators of the insured, unless payment be made under the provisions of the next succeeding paragraph, which is the "facility of payment" clause. This provides that the company may make payment to any relative by blood or connection by marriage of the insured or to any person appearing to the company to be equitably entitled to same by reason of having incurred expense in behalf of the insured for burial, or any other purpose. In view of all the above prospective beneficiaries there is certainly substantial insurable interest, and it has been held that the executor or administrator is the only one that can maintain the action. Manning v. Prudential Ins. Co., 202 Mo. App. 124. (a) Appellant raised the point at the trial, that the respondent was not a proper party plaintiff because the policy is payable to the executor or administrator (Abs., p. 2), but it has abandoned it in its brief. It would not be consistent with the attack on the insurable interest. (b) The insured was a dependent boy, and his father died March 1, 1927, and from that time on he was taken care of by the respondent, her husband (his brother) and his other brothers, which gave all of them an insurable interest. Reynolds v. Prudential Ins. Co., 88 Mo. App. 679; McGraw v. Metropolitan Life Ins. Co., 5 Pa. Sup. Ct. 488; 1 Cooley's Briefs on Ins., pp. 386-388; Carpenter v. United States Life Ins. Co., 161 P. 9, 28 A. 943; Cronin v. Vermont Life Ins. Co., 20 R.I. 570, 40 A. 497. (c) When appellant issued the policy in suit, on the 22nd day of August, 1927, it inserted in typewriting the following: "Beneficiary — Anna Bell Williams — sister-in-law." Therefore it knew the relationship and is charged with knowledge of it. It collected the premiums from her, until the insured died the later part of March, 1928, it accepted the policy from her after insured died and gave her form to make proof of death, and made her go to the trouble and expense of making it, and, therefore, with this information in front of it, its officers and agents, it is now estopped to set up want of insurable interest. Dolan v. Missouri Town Mutual Fire Ins. Co., 88 Mo. App. 666; Reid v. Brotherhood of Railroad Trainmen (Mo. App.), 232 S.W. 185; Van Cleave v. Union Casualty Surety Co., 82 Mo. App. 668; King v. Metropolitan Life Ins. Co. (Mo. App.), 211 S.W. 721. (3) A contract entered into between an adult and an infant is binding on the adult, and the infant only can attack it on the ground that it is not void, but voidable. Hill v. Taylor, 125 Mo. 331, 28 S.W. 599. (4) The respondent's evidence showed that the appellant's agent knew the insured, and the jury was required to find that it knew that it was insuring William I. Williams before finding for respondent, and the jury believed the respondent's evidence and found that appellant knew it was insuring William I. Williams, the insured, all of which were facts to be passed on by the jury, and the jury found against appellant. This finding forecloses the question. Van Cleave v. Union Casualty Surety Co., 82 Mo. App. 668; St. Louis Brewing Ass'n v. Schafer, 210 Mo. App. 213, 242 S.W. 642; Miles v. Connett (Mo. App.), 229 S.W. 1103. (5) The only evidence of bad health appellant offered was the copy of the death certificate which showed that the doctor only treated him ten days before his death. The certificate showed that death was caused by tuberculosis, but the doctor gave his opinion from the history he got of the case. This was controverted by respondent and appellant's witnesses. They testified he was only sick two weeks before he died; that he was in good health up to that time; had not had a doctor since he was a baby. The statement in the death certificate is not sufficient to submit the question to the jury, but it was submitted by appellant's instruction D and appellant is bound by the jury's finding. King v. Metropolitan Life Ins. Co. (Mo. App.), 211 S.W. 721; St. Louis Brewing Ass'n v. Schafer, 210 Mo. App. 213, 242 S.W. 692; Ryan v. Metropolitan Life Ins. Co., 30 S.W.2d 190. (6) Appellant's refusal to pay this claim is highly vexatious. First, it claimed respondent had no right to bring this suit, and then abandoned this defense for the purpose of strengthening the defense of lack of insurable interest, which it knew all about, since the policy was issued, but, nevertheless, collected the premiums. This left it without anything in the way of a defense, except the "history" hearsay statement in the death certificate. The defense was neither reasonable nor substantial, therefore the failure to pay was vexatious. State ex rel. Continental Life Ins. Co. v. Allen et al., 262 S.W. 43.
This is an action instituted before a Justice of the Peace, in the city of St. Louis, to recover on an industrial insurance policy for $198. Plaintiff recovered in the justice court, as well as in the circuit court, and defendant has appealed. There was a judgment for $342, which included interest, penalty, and attorney's fees.
The policy was issued on the life of William I. Williams on the 22nd day of August, 1927. Insured died on the 21st day of March, 1928. Plaintiff was the wife of one of insured's brothers, John Williams. The insured was twenty years old at the time the policy was taken out, and was twenty-one years old when he died.
The evidence discloses that he was feeble-minded, and never worked, except around the house, and never attended school very much. Plaintiff, her husband, and his other brothers and sisters took care of him after his father's death. Plaintiff's evidence discloses that defendant's agent, who visited her home frequently, wrote the policy of insurance; that he had seen this boy around the place at different times. The evidence also discloses that plaintiff signed the application for the insured, and the policy was issued while he was away from home, naming plaintiff, a sister-in-law, as the beneficiary. There is some evidence in the record tending to show that defendant's agent knew that the insured was not present at the time the application was signed, and, of course, knew that the plaintiff, who was named as beneficiary, was the wife of one of insured's brothers. The evidence also discloses that plaintiff's husband either paid the premiums or furnished her the money with which to pay them, and insured had nothing to do with paying the premiums. The policy also contained the usual facility-of-payment clause. Defendant paid into court the amount of premiums which had been paid on the policy.
It is unnecessary to discuss the further provisions of the policy, or to detail the evidence offered either by plaintiff or defendant further than what we have already stated. In our opinion, plaintiff cannot recover, as it seems to be thoroughly settled by the laws of this State that under such a state of facts as we have detailed plaintiff had no insurable interest in the life of the insured, and the court erred in refusing to direct a verdict for the defendant as requested.
In Reynolds v. Prudential Insurance Co., 88 Mo. App. 679, the court held that adult brothers, neither dependent upon the other, had not from the mere relationship an insurable interest in the life of each other.
In Ryan v. Metropolitan Life Insurance Co., 117 Mo. App. 688, 93 S.W. 347, the court held that the beneficiary in a life insurance policy, procured by himself, upon the life of his cousin, could not recover on the death of the insured, because the beneficiary had no insurable interest in the life of the deceased, and the contract was void as against public policy.
Such policies are treated as wagers on human life, and are void. [See Lee v. Assurance Society, 195 Mo. App. 40, 189 S.W. 1195; Singleton v. Insurance Co., 66 Mo. 63; Whitmore v. Supreme Lodge, 100 Mo. 36, 13 S.W. 495.]
If insured had taken out this policy and paid the premium thereon, we would, of course, have been confronted with a different situation, but the beneficiary secured the issuance of the policy, and she, or her husband, paid the premiums thereon. She was in no way dependent upon the assured for support or maintenance, and as to relationship was only a sister-in-law. There was no relation of dependence, or creditor and debtor, existing between insured and his sister-in-law.
We are not undertaking to define what may constitute an insurable interest in all cases, but it is clear that under all the authorities plaintiff had no insurable interest in the life of her deceased brother-in-law.
Plaintiff, however, insists that defendant is estopped from invoking the defense of want of insurable interest in this case. However, transactions like this one, being contrary to public policy, are absolutely void, and plaintiff cannot recover upon the theory of waiver or estoppel. [Mathes v. Westchester Fire Ins. Co. (Mo. App.), 6 S.W.2d 67.]
It is suggested that in small industrial policies of this character, it is not necessary for the beneficiary to have an insurable interest, because such policies are generally small and intended to take care of the insured in his last sickness and to pay his funeral expenses. There is authority for this contention. The Kentucky Court of Appeals so held in Smith v. National Life Accident Insurance Co., 287 S.W. 928. However, the courts of this State make no distinction, as the case of Ryan v. Metropolitan Life Insurance Co., supra, was based upon an industrial policy, very much like the one in question, for the sum of $201.
The judgment is accordingly reversed. Haid, P.J., and Becker, J., concur.