New York Mut. Life Ins. Co. v. Armstrong - 117 U.S. 591 (1886)
U.S. Supreme Court
New York Mut. Life Ins. Co. v. Armstrong, 117 U.S. 591 (1886)
New York Mutual Life Insurance Company v. Armstrong
Argued March 16-17, 1886
Decided April 5, 1886
117 U.S. 591
A policy of life insurance payable to the assured or his assigns at a future day named, or if he should die before that day to his legal representatives within sixty days after notice and proof of his death, is assignable if the assignment is not made to cover a speculative risk, and an assignment of it passes to the assignee the right to receive the sum insured in case of the death of the assured before the day named.
Proof that the assignee of a policy of life insurance caused the death of the assured by felonious means is sufficient to defeat a recovery on the policy.
In a suit brought by an assignee of a policy of life insurance, obtained on the application of the assured at the instigation of the assignee, to recover of the insurers after the death of the assured, the defendants set up that it was plaintiff's purpose, in procuring the insurance to be obtained, to cheat and defraud defendants, and offered to show that he effected insurances upon the life of the assured in other companies at or about the same time for the like fraudulent purpose. Held that the evidence was admissible.
On the 8th of December, 1877, the Mutual Life Insurance Company of New York issued a policy of insurance on the life of John M. Armstrong, of Philadelphia, for $10,000. It was what is known as an endowment policy -- that is, a policy payable to the assured if he live a designated time, but to some other person named if he die before the expiration of that time. It was payable, subject to certain conditions, to the assured or his assigns on the 8th of December, 1897 at the office of the company in New York, or, if he should die before that time, to his legal representatives, within sixty days after notice and proof of his death. It recited that it was issued in consideration of his application and of the statements contained therein, which, whether written by his own hand or not, every person accepting or acquiring any interest in the contract adopted and warranted to be true, and the only statements upon which the contract was made, and in further consideration of the payment of $138.60 quarterly each year during the continuance of the policy.
On the 25th of January, 1878, Armstrong died, and his widow was appointed administratrix of his estate. The required notice and proof of his death were furnished, and the insurance money not being paid, she brought this action for its recovery in a court of the State of New York, and, on motion of the company, it was removed to the circuit court of the United States.
The company set up several special defenses to the action. One of them was that the policy was obtained by one Benjamin Hunter with the intent to cheat and defraud the company by compassing the death of the assured by felonious means and collecting the amount of the insurance, and which he attempted to carry out by causing his death. Another was that the statements made in the application of the assured as to previous insurances upon his life were false, the amounts being much larger than those stated.
On the trial, it appeared in evidence that on the 3d or 4th of December, 1877, Hunter made some inquiries at the office of the company in Philadelphia as to the rates of insurance on the life of a person aged forty or forty-one years upon an
endowment policy of twenty years, stating that he thought of insuring for his own benefit the life of a person in the sum of $10,000. After some conversation on the subject of insurance generally, he left, stating that the person to be insured would probably call in a day or two. On the 5th of the month, Armstrong called and informed the agent that he came at the request of Hunter to make application for a life insurance. He was thereupon examined, and after answering the questions usually propounded to applicants, and among others those in relation to existing insurances on his life, he signed a formal application, leaving, however, blank the place for the amount of the insurance which he desired, and for the answer to the question touching the payments of the premium. He also executed an assignment of the policy, leaving blanks for its date and for that of the policy, and for the name and residence of the assignee. This was his entire connection with the transaction. In the afternoon of the same day or on the following morning, Hunter informed the office that the amount of the insurance desired was $10,000, and that it would be more convenient for him to pay the premiums quarterly. The term "quarterly" and the sum "$10,000" were therefore, upon his instructions, inserted in the application, which was then sent to New York, and a policy was there executed by the company. Before the receipt of the policy in Philadelphia, he visited the office and stated that as he intended to leave the city and be absent for some time, he would pay the premium, and that his lawyer would call for the policy. He accordingly paid the stipulated premium and the fee for the policy. Some days afterwards, his lawyer received the policy and also the assignment, which was attached, the blanks having been filled. They were subsequently delivered to Hunter, and were found in his possession at his death.
Within six weeks after the policy was issued, Armstrong was attacked at night in a street in Camden, New Jersey, and received blows on his head which fractured his skull, from the effects of which he died two days afterwards. Suspicion fell upon Hunter as the perpetrator or instigator of the attack. He was accordingly arrested, and was indicted and tried for the
murder of Armstrong in one of the courts of that state, and was convicted. He was sentenced to death, and was hanged. By stipulation, the testimony of any living witness might be read from the record of his testimony in that case with like effect as if he were present and testified in this action, subject to all legal objections to its relevancy, competency, and materiality. As the first step in proof of the defense that the policy was obtained to cheat and defraud the company, the defendant offered to read from that record the testimony of a witness to show that Hunter, being at the time the sole owner of the policy, intentionally caused the death of Armstrong; but the court, upon objection of the plaintiff, excluded the testimony, and an exception was taken. The defendant offered in different forms to make this proof, but the court refused to receive it, accompanying its ruling in one instance with this statement to counsel:
"I will take your offer as broad as you choose to make it -- that you offer the testimony to prove that Hunter procured the application for the policy on Armstrong to be made, and that he did so for the purpose of having the insurance effected, and then disposing of Armstrong, and then getting the money; make it as broad as that, and I will exclude it."
The defendant also offered to prove that about the time the policy in suit was issued, Hunter, with like fraudulent intent, obtained policies of insurance in two other companies upon the life of Armstrong, one made directly to himself and the other to Armstrong, with an assignment executed simultaneously to himself, and that he paid the premiums thereon, one of the policies being for $10,000 and the other for $6,000, but, upon the objection of the plaintiff, the testimony was excluded, and an exception taken.
The court, among other things, instructed the jury in substance that the contract of insurance was divisible; that the last part, providing for the payment of the insurance money to the legal representatives of Armstrong in case he should die before the expiration of the policy, was not assignable; that his assignment only transferred the interest payable at the expiration of the policy, and that the plaintiff was his legal representative,
entitled to the policy, and to whatever was due upon it. The defendant excepted. A verdict for the full amount of the policy, with interest, was rendered, and judgment entered thereon. 11 F. 573.