Forbes v. American Mutual Life Insurance
81 Mass. 249
Mass.
1860
Check Treatment
Hoar, J.

The question, what is such an interest in the life of another as will support a contract of insurance upon the life, is one to which a complete and satisfactory answer, resting upon sound principles, can hardly yet be said to have been given. It was fully discussed and considered in the recent case of Loomis v. Eagle Life & Health Ins. Co. 6 Gray, 396, and it is there said by the chief justice of this court, that “perhaps it would be difficult to lay down any general rule as to the nature and amount of interest which the assured must have.” As the premium is intended to be a precise equivalent for the risk taken, it would seem that the contract is a just and equitable one, whether any interest in the life exists or not; and that the only essential inquiry is, whether the object of the contract is such as to obviate the objections to a mere wager upon the chances of human life.

*255In this case, the policy was procured by Thomas T. Smith upon his own life, and the first payment of the premium upon it was made by him. It was made payable to the plaintiff, the husband of his sister, and the subsequent payments were made by the plaintiff as his agent; but the promise of the company is to and with Smith. The policy appears to have been really, if not nominally, for the benefit of Smith, and the interest of the plaintiff to be simply that of a trustee. Under such circumstances, we think no question could have arisen as to the sufficiency of the interest, unless on account of the conditions of insurance annexed to the policy, by one of which it is stipulated that “ policies made payable to creditors, or persons not belonging to the family of the person whose life is insured, are subject to proof of interest, and the company will pay upon such policies no greater sum than the amount or value of such interest,” unless a waiver of such proof is indorsed upon the policy. But while we are inclined to the opinion that, even under this condition, the plaintiff would be entitled to recover we are relieved from the necessity of considering the point, b-' the decisive fact that no such issue is raised by the pleadings. The defendants, by their answer, expressly admit their liability upon the policy, which they set forth, “ in case the said Smith should die during the year 1854, without having violated the terms and conditions of said policy.” They indeed add that they do not owe and are not bound to pay the sum claimed by the plaintiff; but proceed to say that they are not thus bound for certain specific reasons, which they set forth in detail; and among these is not any allegation of a want of insurable interest in the plaintiff. We think it clear therefore that the objection of the want of such an interest is not open to them, and that the plaintiff was not required to come to the trial prepared to prove it.

But the ground of objection to the plaintiff’s recovery, chiefly relied on by the defendants, is this; that Smith had no right under the contract to reside at Valparaiso without the payment of an additional premium, which was not paid for the year 1854, and that the policy thereby became void, and the liability of the company ceased.

*256By the policy, the life of Smith is insured as an inhabitant of Valparaiso, and in the application for insurance, which is referred to by a proviso upon the policy, stating that “ this policy is made and accepted in reference to the application and declarations made to this company, which are to be used and resorted to, to explain and protect the rights of all the parties,” his residence is declared to be at Valparaiso. It is also noticeable that there is in the policy and conditions of insurance no prohibition of travelling to or residing in South America; that no statement or declaration in the application shows that such a prohibition was in the contemplation of the parties ; and that if any restriction upon the liberty of the person whose life was insured to reside or travel anywhere at his pleasure, excepting in and to the places specifically enumerated in the printed proviso, was created under the contract, it must be derived by implication from the permission to travel to certain places named, or from the indorsement upon the policy. Such an implication would indeed be a reasonable one, because it is obvious that a permission to go to certain places named would be without reason or effect if the contract already allowed the person insured to go, not only to those places, but to any others. But we cannot think that such an implied restriction, derived from a printed clause, should be allowed to control the direct meaning and purpose of the policy, to be gathered from the written parts of that instrument. An insurance upon the life of Smith, as a resident of Valparaiso, for a premium agreed on, gave him a right to reside there, without further permission or payment. The indorsement upon the policy of a permission to reside there upon the payment of a sum not named, leaving a blank for the amount not filled up, and delivered intentionally in that condition, cannot operate to deprive the party insured of a privilege for which he had already, in the completed parts of the instrument, contracted and paid.

Treating the indorsement therefore as a part of the contract at the time the policy was delivered, we are of opinion that the plaintiff was under no obligation to pay any sum for the privilege of residence at Valparaiso ; and this decision renders it un*257important to consider the effect of the letters which were offered in evidence, or to consider whether they would be admissible for any other purpose than to rebut any claim or proof by the defendants that the contract, as it was delivered, was not complete, or was intended to have its blanks filled according to some further arrangement.

The further objection that the declaration should have set out the conditions of the insurance, and that these conditions constitute a variance between the contract offered in evidence and that declared on, cannot prevail, because they are conditions subsequent. While a breach of them would therefore operate as a bar to the plaintiff’s recovery, their performance does not constitute a part of his cause of action.

The permit which was issued in January 1853 was not granted by the defendants in pursuance of any contract made by the parties, and is shown to have been accepted by the agent of the plaintiff without authority from his principal to do any act to modify or change the contract already made, and under a mistake of fact. It cannot therefore be resorted to, to diminish the privilege of foreign residence before granted, or to subject it to any new condition; and the money, having been paid by mistake, may be recovered back in this action.

Judgment upon the verdict for the plaintiff.