Gilbert v. Moose's Administrators

Mr. Justice Gordon

delivered the opinion of the court, October 1st 1888.

Jacob Moose, in his lifetime (August 17th 1880), made application to the Southern Pennsylvania Relief Association, of Hanover, York county, for an insurance on his life, and upon this application a policy, or certificate of membership, as it is called, in the sum of $2,000, was issued for the benefit of one Peter Jacobs, an alleged grand-son of the assured. It turns out, however, that Jacobs was in no way related to Moose, being. but the son of a son’s wife; hence, having no assurable interest in the life on which the policy was issued. On the 31st of August following the date of the certificate, Jacobs, for the consideration of $28, assigned to John G. Gilbert, the defendant, by whom all subsequent assessments, made by the company, were paid. On the 3d of April 1881, Jacob Moose died, and the defendant received from the company on the policy some $356. It was for this sum of money, or the balance of it, after deducting the assessments and other expenses paid by Gilbert, that this suit was brought. The court helow, after hearing the evidence, directed the jury to return a verdict for the plaintiffs, and reserved the following point: “ Whether or not, the assignment being made upon the consideration of the payment of $28, the assignee having no interest in the life of the assured, and having taken the assignment for the purpose of speculation only, is entitled to retain the money received on the policy as against the personal representatives of the deceased, beyond the amount of the consideration, fees and assessments paid to the association.” Afterwards, on argument, the court entered judgment on the verdict for the plaintiffs. are thus at once brought face to face with the question, really the only one in the case, can one having no interest in the life assured, and for the purpose of speculation only, acquire, by assignment or otherwise, such title to the policy as the law will enforce ? *

It was held by this court as early as 1803, in the case of Pritchet v. The Insurance Co., 3 Yeates 458, that every species of gaming contracts of insurance, wherein the insured has no interest in the subject matter of the policy, or one only color-able, is, in this Commonwealth, without the sanction of either law or usage; that such contracts are mischievous and dangerous to the interests of trade, commerce and society, and are to be reprobated rather than encouraged by our courts. The very same view of this subject is adopted in Edgell v. McLaughlin, 6 Wharton 176, and it was there said that no kind of wager had ever been recoverable in the courts of Pennsylvania. So also, in the case of Adams v. The Insurance Co., 1 Rawle 97, it was asserted that, in this state, a gaming policy cannot be enforced. We need not stop to consider at length the principles on which these decisions rest, for they must be obvious to every sound moralist. The gambler is, as a rule, reckless and dangerous, and seldom hesitates at the means necessary to secure his bet. We have within our own knowledge a case in which a wagering policy on a life resulted in murder.

So far, however, as the policy itself is, in this case, concerned, we must take it as valid; nothing to the contrary appears from the evidence, and its validity seems not to have been questioned in the court below. The sole inquiry then is, to whom do the proceeds belong? Was the court right in holding that they could not goto Jacobs, the beneficiary named in the certificate, or to the defendant, his assignee, because of their want of interest in the assured life? If so, judgment was properly entered for the plaintiffs, for, in that case, the beneficial interest in the risk remained in Jacob Moose and the representatives of his estate. "We do not overlook the fact that the status of Jacobs is the point of this case, for if he was the proper and lawful beneficiary, then, even were Gilbert without right, the plaintiffs could not recover, for the proceeds of the policy would belong to Jacobs, and, on the other hand, if his claim was not good ho had nothing to assign to the defendant. But as a beneficiary merely, having no interest in the life, it seems to us very clear that he could lawfully have no interest in the policy. For if we admit the contrary; if wo admit that one man may insure his life for the benefit of another, who is neither a relative nor a creditor, our whole doctrine concerning wagering policies goes by the board. The very foundation of that doctrine is, that no one shall have a beneficial interest of any kind in a life policy who is not presumed to be interested in the preservation of the life insured. But in the case supposed the presumption is inverted; the beneficiary is directly interested in the death of the assured. Moreover, if such a "transaction were permitted, the wager could always be concealed under the mere form of the policy. Nor can we see, that did the defendant’s case depend on an assignment directly from Moose to himself, how it would be bettered in the least. The reserved point alleges that Gilbert took the assignment for the purpose of speculation, and of this there can be no doubt,-for, for what other purpose could it have been taken? But speculation on what? The life of Moose, and the sooner that was determined the better the speculation. If there is any difference between this and an original wager policy, I confess I cannot see it. Under the case put, Gilbert as assignee undertakes to pay the assessments ; he pays one, say for example, of ten dollars, and the sole and only consideration for .that payment is the chance that the life may fall in before the next assessment, and that for his ten dollars he may get one hundred or, perchance, one thousand dollars. Between this and the bet in the case of Phillips v. Ives, 1 Rawle 36, on the life of Napoleon Bonaparte, we can see no material difference. Both are wagers, and both dependent on the contingency of a life. No semblance of authority from cither Pennsylvania or Federal courts, has been adduced in support of the position assumed for the plaintiff in error, except a dictum of Judge Siiakswood, then president of the district court of Philadelphia, in the case of the Insurance Co. v. Robertshaw, 2 Ca. 189. Not only is the case itself very far from being in point, but even the language cited was intended to have no application to a case like that in controversy.

The position assumed by the learned judge is, that where a policy is bona tide and founded upon an insurable interest, the- assignment, or gift of it, to a friend or other person, is no fraud upon the insurance company by which it was issued. This, however is a position not controverted in the suit now under consideration. Therefore, admitting this dictum to be authority in a case proper for its application, it is certainly not so in the case in hand.

When we pass from our own courts to those of neighboring states, we find such difference in the decisions upon this subject that, as authority, they afford us little or no help in the way of a definite conclusion. In Rhode Island, Clark v. Allen, 11 R. I. 439, it has beeu held, that the assignment of a life policy to one baviug no interest in the life insured, is good. On the other hand, in New York, in the case of Ruse v. The Life Insurance Co., 23 N. Y. 516, the doctrine appears to be, and this independently of the statute of that state avoiding wagering contracts of every sort, that a policy obtained by a party having no interest in the subject matter of the insurance, is a mere wager and void. Opposed to this we have the case of the Trenton Mutual Life and Fire Insurance Co. v. Johnson, 4 Zab. 576 (New Jersey), where it was determined that it was not necessary for the plaintiff, in an action on a policy on the life of another, to show that he had an interest in such life, and this, as it appears, on the ground that wagers on indifferent questions are not prohibited by the laws of New Jersey. Rut we abstain from further citation of these conflicting opinions, since it involves but useless labor, and turn to the federal decisions, which, next to our own, are of the most value in our discussion. Of these we have two directly in point: Cammack v. Lewis, 15 Wal. 643, and Warnock v. Davis, 14 Otto 775. In the first of these the facts are briefly as follows : Lewis insured his life for $3,000, and assigned the policy to Cammack to whom he owed $70. Cammack paid the first ye'ars premium, and upon the death of the assured, some seven months after-wards, received from the company the amount due on the risk. Of this he paid $1,000 to Mrs-Lewis and kept the balance. To recover this money, suit was brought against Cammack by the administrators of Lewis, and it was held that they could recover the whole amount received by the defendant, less premiums by him paid, and other just offsets. In the opinion, which was delivered by Mr Justice Miller, it was said that the transaction with Cammack ivas a wager; that the disproportion between the debt and the amount received by him, deprived the matter of all pretence of being a bona fide effort to secure a debt; that the strength of this proposition was not diminished by the fact that Cammack was to get but $2,000 out of the $3,000, nor was it weakened by the further fact that the policy was taken out by Lewis and assigned to Cammack. In the second case, the facts Avere, that the decedent liad, in his life time agreed with the defendants to procure a policy on his life, they to pay the fees and assessments, and on his death to be entitled to nine-tenths of the insurance. In pursuance Avith this arrangement, a policy Avas procured and assigned to the defendants, Avho, after the death of the assured, receiA’ed from the insurers nine-tenths of the amount due on the policy. Here again it Avas held, on suit by the administrators of the estate of the assured, that they were entitled to recover the money received by the defendants on the said policy.

In the opinion delivered by Mr. Justice Field, the case of Cammack v. Lewis is approved; and cited as sustaining the doctrine that the assigning of a policy to a party not having an insurable interest in the life, is as objectionable as though the policy were taken in the assignee’s own name.

These authorities, in connection with our own, remove all hesitation concerning the rectitude of the judgment of the court below. If, however, the question were one of first impression, and to be settled on the ground of public morality and judicial policy, Ave could hardly fail to reach the same conclusion. So fraught with dishonesty and disaster, and so dangerous even to human life, has this life insurance gambling become, that its toleration in a court of justice ought not for one moment to be thought of.

The judgment is affirmed.