158 N.Y. 24 | NY | 1899
The counsel for the appellant in his argument insisted with great earnestness and force that the position several times asserted by this court in support of the legality of the assignment of a policy of insurance to a person having no insurable interest in the life of the insured, is a mistaken one and in conflict with the decisions of the United States Supreme Court and the court of last resort in many of the states.
Warnock v. Davis (
In St. John v. Am. M.L.Ins. Co. (
The next case was Valton v. N.F.L. Assur. Co. (
It will be observed that in the cases cited the contest was between the assignee and the company issuing the policy, and the question was not squarely presented whether, as between the assignor and the assignee, the assignee would be entitled to retain more than the sum actually invested by him, which is the rule in some jurisdictions. But it necessarily was decided that the policy was not rendered invalid by the assignment, and further that the assignee acquired thereby the right to enforce collection of the full amount of the policy from the company.
In Olmsted v. Keyes (
The result of our further examination persuades us that what has been understood to be the rule in this state is not only in line with the authorities in most jurisdictions upon that subject, but is sound as a matter of public policy. It was formerly the rule in England that while a policy of insurance could not be assigned at law it could in equity. By the act of 1867 (30, 31 Vict. c. 144) a policy of life insurance was made assignable at law, and in some of the decisions it was said by the court that the object of the statute was to enable the assignee to sue in his own name; but it did not in any other way improve the position of the assignee, who could before that secure the money in equity. (B.E. Ins. Co. v. G.W.R. Co., 38 L.J. Ch. 132; In re Turcan, L.R. [40 Ch.D.] 5.)
The rule asserted by this court has also been held to be the law in many of our sister states in a number of cases where the question has been raised either in actions brought by personal representatives of the assignor to recover the money received by the assignee on a policy, or in suits brought by the company issuing the policy for the purpose of determining whether the personal representatives or the assignee were *30
entitled to the proceeds, all claimants being made parties defendant. (Mut. L. Ins. Co. v. Allen,
On the other hand, it is said that if the payee of a policy be allowed to assign it, a safe and convenient method is provided by which a wagering contract can be safely made. The insured, instead of taking out a policy payable to a person having no insurable interest in his life, can take it out to himself and at once assign it to such person. But such an attempt would not prove successful, for a policy issued and assigned, under such circumstances, would be none the less a wagering policy because of the form of it. The intention of the parties procuring the policy would determine its character, which the courts would unhesitatingly declare in accordance with the facts, reading the policy and the assignment together, as forming part of one transaction.
Cammack v. Lewis (15 Wall. 643) and Warnock v. Davis
(
In Warnock's case the agreement touching the procurement of the policy and the use to be made of it, including the promise to assign it, was in writing, and executed the very day the policy was applied for, and the day following the assured executed an assignment of the policy, which had in the meantime been issued in pursuance of such an agreement. The insurance company paid over the money to the assignee, and the court held that the personal representatives of the assured *32 were entitled to receive from the assignees all the money except the sums advanced by them under the agreement, plus the sum paid by them to the widow. In the opinion it is said that the assignment of the policy to a party not having an insurable interest is as objectionable as the taking out of a policy in his name. That remark was clearly true as applied to the facts of that case, for the policy was taken out in pursuance of an agreement to assign it. It was, therefore, in fact a policy taken out for the benefit of parties having no insurable interest, although in form issued to the assured and by him assigned to such parties. In such case the court will always declare the fact to be as it is, without regard to the effort of the parties to hide the truth and cheat the law. But the language employed by the court, and evidently advisedly, is broad enough to cover all assignments of policies to parties not having an insurable interest, including as well those taken out in good faith and kept up as long as the financial condition of the insured permits, as those deliberately taken out for the purpose of speculation upon a life that the intended beneficiary, whether as payee in the policy or by assignment, has no interest in prolonging. The point of actual separation between the cases asserting the assignability and those asserting the non-assignability of policies of insurance to persons not interested in the continuance of the life of the assured, seems to be that those asserting non-assignability proceed on the assumption that the question is one of law, and that if a policy is not assignable in one case, it cannot be in any case; while in the other line of cases the underlying principle is that all valid contracts are assignable, but that contracts are not necessarily valid and free from the taint of gambling because upon their face they appear to be regularly and properly issued. In order to ascertain the truth all the facts and circumstances may be proved, and if it then appear that the parties intended by the contract to enable a third and uninterested party to speculate upon the life of another, the court will declare such contract invalid, not because of the assignment, but in spite of it. *33 Warnock's case and this one are very wide apart in their facts and serve very well to illustrate the necessity for the position taken by the courts of this state upon this general subject.
In December, 1887, Alois Diepenbrock took out a policy of insurance on his life in the Equitable Life Assurance Society. He paid the premiums regularly down to December, 1892, a period of about five years, at which time the surrender value of the policy was about $485. He was pressed for money and finally sold the policy to the defendant Erdtmann for $600, or something like $115 more than he would have received by the surrender of the policy to the company. He had paid a much larger sum in premiums, something over $2,000, and there seems to be no good reason why a person owning such a policy and obliged to sell it, should not be permitted to get back as much as possible of the money that he has paid out for insurance. His condition of health may have changed very materially, of which fact the company can take no advantage; for in its contract it made allowance for that possibility. There is no good reason for saying that an insured person should not have the right, whenever his necessities press him because of a failing condition of health that assures a speedy death, to realize on his policy and obtain for it something like a fair price, which may, perhaps, be almost equal to its face value.
The personal representatives of the assured contested the assignment also on the ground that it was intended as collateral, although in form a valid assignment, but the Special Term found otherwise, and the Appellate Division approved that finding, so that question is no longer open for consideration.
Other questions are presented by the appellant, but after a careful examination of them we conclude that no error was committed below that will support a reversal of the judgment.
The judgment should be affirmed, with costs.
All concur, except MARTIN, J., absent.
Judgment affirmed. *34