Opinion
No. 28556.
March 31, 1930.
1. INSURANCE. Life insurance. Insurable interest.
To have "insurable interest" in another's life, there must be reasonable ground, founded upon relations of parties, to expect advantage from continuance of assured's life.
2. INSURANCE. Life insurance. Insurable interest. Son-in-law.
Relationship by affinity is not alone sufficient to confer insurable interest on son-in-law.
3. INSURANCE. Life insurance. Insurable interest. Insured's consent.
Where son-in-law had no insurable interest in insured's life, it was immaterial that insured consented to transaction.
4. INSURANCE. Insurable interest. Estoppel. Collecting premiums. Son-in-law having no insurable interest in insured's life could not recover on policy, notwithstanding insurer collected premiums from son-in-law though knowing want of insurable interest.
The contract being in contravention of public policy, the individual interests of the immediate parties are subordinated to the superior concern of the public in general.
APPEAL from circuit court of Jones county, Second district. HON. GEO. W. CURRIE, Special Judge.
W.J. Pack and W.L. Pack, Jr., both of Laurel, for appellant.
It is against public policy to allow one person to have insurance on the life of another without the consent of the latter.
37 C.J., p. 381, section 45; 56 L.R.A., p. 585; L.R.A. 1918F, 574; Chicago Guaranty Fund Life Society v. Dyon, 79 Ill. App. 100; 56 L.R.A. 590.
Conceding that the policy was procured, and the beneficiary named, with the consent of the insured, still the policy was void because appellee had no insurable interest in her life.
Murphy v. Red, 64 Miss. 614, 1 So. 761; 37 C.J., p. 385, section 51; 14 R.C.L., p. 905, et seq.; Warnock v. Davis, 104 U.S. 775, 21 L.Ed. 924.
It is not 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. But in all cases there must be a reasonable ground, founded upon the relation 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. Otherwise the contract is a mere wager, by which the party taking the policy is directly interested in the early death of the assured. Such policies have a tendency to create a desire for the event. They are, therefore, independently of any statute on the subject, condemned as being against public policy.
14 R.C.L., pp. 919-920; Warnock v. Davis, 104 U.S. 775, 26 L.Ed. 924.
But even conceding that appellee was the son-in-law of the insured at the time the policy was issued, that fact would give him no insurable interest in her life.
14 R.C.L., pp. 921-922; 37 C.J., p. 395, section 60; Rombach v. Piedmont A.L. Insurance Company, 35 La. Ann. 233, 48 Am. Rep. 239, Cited in 56 L.R.A. 590; American Insurance Union v. Manes (Ark.), 234 S.W. 496, 18 A.L.R. 1161.
It was only by her death that he could profit. The policy is clearly a mere wagering contract and is void.
Collins Collins, of Laurel, for appellee.
The company by issuing a policy to a son-in-law on the life of his father-in-law with knowledge of the relationship, may be estopped to deny the validity of the policy.
37 C.J. 398; Smith v. Peoples' Mut. Ben., 19 N.Y.S. 432, 534; Sec. 64, Hemingway's Code.
There is no question of insurable interest in this case because insured could have any one named she wanted to name. Even if there was a question of insurable interest, the son-in-law's relation to his mother-in-law and his care and support of her gave him an insurable interest. And even if he had no other than she being his mother-in-law, the company is estopped under the facts of this case to deny the validity of the policy.
In order that there may be an insurable interest in the life of another, "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. Otherwise the contract is a mere wager, by which the party taking the policy is directly interested in the early death of the assured. Such policies have a tendency to create a desire for the event. They are, therefore, independently of any statute on the subject, condemned, as being against public policy." Warnock v. Davis, 104 U.S. 775, 779, 26 L.Ed. 924; 14 R.C.L., p. 919; 37 C.J., p. 391.
In this case the policy was taken out and the premiums paid by appellee who claims to have been the son-in-law of the insured, but who shows no reasonable expectation of any such benefit in the continuance of the life of the insured as the law regards as necessary to form the basis of an insurable interest. The insured was without substantial property so far as the record shows, was to a large extent dependent on others, and was not even a member of the household of appellee. Relationship by affinity is not alone sufficient to confer an insurable interest on a son-in-law. 37 C.J., p. 395, and cases cited under note 15; and see the annotations to Crismond v. Jones, 117 Va. 34, 83 S.E. 1045, in Ann. Cas. 1917C, at page 158. And it is immaterial that the insured consented, for "where one has no insurable interest in the life of another, the law will not permit him to take out insurance on such life, and, if he does so, will not lend its aid to the enforcement of such contract because against public policy, and the fact that the insured lends his consent to the transaction adds nothing whatever to its validity." Western So. Life Ins. Co. v. Grimes, 138 Ky. 338, 128 S.W. 65, 67.
Appellee contends however that the insurer knew of the particular relation and of the want of insurable interest; and that the insurer, having nevertheless continued to collect the premiums from appellee, is now estopped to raise the point. If it were a matter wherein only the parties to the litigation were concerned, the argument of appellee would be unanswerable; but when a contract is in contravention of public policy, is contrary to the public good, the individual interests of the immediate parties are subordinated to the superior concern of the public in general, so that, so long as the condemnatory vice remains in it, there is nothing that the particular parties to the contract may do which will make it otherwise than it was ab initio — void as against public policy, and therefore nonenforceable by the courts. Greenhood on Public Policy, pp. 1, 8; 10 R.C.L., p. 801, and the numerous cases cited under note 3; see, also, Cotton v. Mutual Aid Union, 132 Ark. 458, 201 S.W. 124.
Reversed, and judgment here for appellant.