Connecticut Mut. Life Ins. Co. v. Luchs - 108 U.S. 498 (1883)
U.S. Supreme Court
Connecticut Mut. Life Ins. Co. v. Luchs, 108 U.S. 498 (1883)
Connecticut Mutual Life Insurance Company v. Luchs
Decided May 7, 1883
108 U.S. 498
A and B formed a partnership with a capital of $10,000, in which each was to contribute one-half the capital. A furnished B's moiety temporarily, and when after some time B failed to comply with his agreement, A, in May, 1869, applied for a policy on B's life for $5,000. One of the brothers of B had committed suicide. One of the questions asked A by the company was as to the number of brothers of B deceased, and causes of death; to this A made no answer. B, in the previous February, had applied to the same company for a policy, and in answer to the same question had replied: "Brothers dead, one; cause of death, accident." A policy was issued on A's application, by which the company agreed to insure the life of B for $5,000, and to pay the money "to the assured" within ninety days after notice of the death of B. B died in an insane asylum.
1. That although by the terms of the policy the life of B was insured, the person in whose favor it was assured was A, and that the action on the policy was rightfully brought in his name.
2. That A had an insurable interest in B's life to the extent of the moiety of the capital which B should have contributed to the firm, without respect to the condition of the partnership accounts, unless his estimate of the interest at the time of the application was made in bad faith.
3. That the failure of A to answer the question as to the suicide of B's brother could not necessarily be imputed as a fraud, and that the concealment of the cause of the brother's death in B's application could not be imported into this suit and applied to defeat A's application.
Suit to recover the sum of $5,000 alleged to be assured to the plaintiff below, and defendant in error, Luchs, on the life of one Dillenberg. Pleas: 1st., non debet; 2d., that the plaintiff had no insurable interest in Dillenberg's life; 3d., that the
policy was procured through fraudulent concealment of material facts, and by means of false representation. Luchs and Dillenberg entered into a co-partnership in which the capital was to be $10,000, of this, each to contribute one-half. Luchs actually contributed all, and when Dillenberg failed to contribute his half, he applied to the defendant's agent in Washington for a policy of $5,000 on Dillenberg's life. Dillenberg had three months previously applied to the same agent for a policy on his own life, and in reply to a question propounded respecting his family had made the following answer:
"Brothers living, one; ages, Brothers dead, one; ages, 48; health, good. 23; cause of death, accident."
Luchs to the same question replied
"Brothers living, one; ages, Brothers dead; age, 48; health, good. ; cause of death, ."
On this application a policy was issued of which the following is the material part:
"This policy of insurance witnesseth that the Connecticut Mutual Life Insurance Company, in consideration of the declarations and representations made to them in the application for this insurance and the sum of one hundred and twenty-five dollars and ___ cents, to them in hand paid by Leopold Luchs, of Washington, D.C., and of the annual premium of one hundred and twenty-five dollars and cents, to be paid on or before the second day of June in every year during the continuance of this policy, to assure the life of Levi Dillenberg, of Washington, in the County of Washington, District of Columbia, in the amount of five thousand dollars, for the term of the whole continuance of his life."
"And the said company do hereby promise and agree to and with the said assured, his executors, administrators, and assigns well and truly to pay or cause to be paid in the City of Hartford the said sum insured to the said assured, his executors, administrators, or assigns within ninety days after due notice and proof of the death of the said Levi Dillenberg, deducting therefrom all indebtedness of the party for loans made by the company on this policy. "
At the trial, the court instructed the jury as follows:
"1. If the jury find from the evidence that in May, 1869, the plaintiff and Levi Dillenberg were in partnership, and that to that partnership the plaintiff contributed all the capital and both contributed their services, and that they shared the profits equally, and that the policy in suit was applied for by the plaintiff under an agreement between him and Levi Dillenberg whereby the latter undertook to pay the premiums on the same, and that this agreement was made by said Dillenberg because of an obligation which he agreed he was under to the plaintiff growing out of the receipt, past or prospective, by Dillenberg of one-half of the partnership profits, and that said policy was taken out by the plaintiff in good faith and not for the purpose of speculating on said Dillenberg's life, then they will render a verdict for the plaintiff on defendant's second plea."
"4. Since [in] the application upon which the policy in suit was issued, there is no answer to the questions 'brothers dead; age; cause of death,' it follows that there is no warranty in respect of the information called for by said questions."
The defendants excepted. The jury rendered a verdict for the plaintiff for the full amount. The defendants brought the case here on error.