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.
Page 117 U. S. 392
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
Page 117 U. S. 593
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
Page 117 U. S. 594
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,
Page 117 U. S. 595
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.
Page 117 U. S. 597
MR. JUSTICE FIELD, after stating the case as above reported,
delivered the opinion of the Court.
From the charge of the court and its opinion on the motion for a
new trial, 11 F. 573, it appears that the refusal to admit
testimony of Hunter's fraudulent purpose in procuring the policy
and his feloniously causing, while the sole owner of it, the death
of the assured was founded upon the assumption that the insurance
money, payable in case the death occurred before the expiration of
the policy, went to the legal representatives of the assured, and
was not assignable, and that the assignment not taking effect,
Hunter had no interest in the policy, and therefore if he did
feloniously cause the death, the fact could have had no effect in
controlling the payment.
Assuming this to be the reason for excluding the evidence
offered, the ruling cannot be upheld. The position that the
assignment did not take effect because the assured died before the
expiration of the policy is untenable. The provision for payment in
such case to his legal representatives was intended to meet the
contingency of his dying without having disposed of his interest,
and not to limit his power over the contract during his life, and
pass the insurance to those who should represent him after his
death. The term "legal representatives" is not necessarily
restricted to the personal representatives of one deceased, but is
sufficiently broad to cover all persons who, with respect to his
property, stand in his place and represent his interest, whether
transferred to them by his act or by operation of law. It may in
this case include assigns as well as executors and administrators.
New York Life Insurance Co. v. Flack, 3 Md. 341.
A policy of life insurance, without restrictive words, is
assignable by the assured for a valuable consideration equally with
any other chose in action where the assignment is not made to cover
a mere speculative risk and thus evade the law against wager
policies, and payment thereof may be enforced for the benefit of
the assignee, and, under the system of procedure
Page 117 U. S. 598
in many states, in his name.
Warnock v. Davis,
104 U. S. 775,
104 U. S. 780;
Archibald v. Mutual Ins. Co. of Chicago, 38 Wis. 542, 545;
De Ronge v. Elliott, 23 N.J.Eq. 487, 495. The assignee
here, Hunter, represented that he was the special partner of
Armstrong and had placed $5,000 in the partnership, and was
apprehensive that he might be charged as a general partner. If he
was a special partner, the contract was not a wager policy, and as
it was not a contract for the benefit of the wife of the assured,
it does not fall within those cases where, for the protection of
the beneficiary, the power of the assured to divert the course of
payment is restricted.
The assignment conveying to Hunter the whole interest of the
assured, his representatives alone would have a valid claim under
it if the policy were not void in its inception. Proof, therefore,
that he caused the death of the assured by felonious means must
necessarily have defeated a recovery, and the court erred in
refusing to admit testimony tending to prove that such was the
fact.
The theory of the defense is that the purpose of Hunter in
obtaining the insurance was to cheat and defraud the company. In
support of that position, evidence that he effected insurances upon
the life of Armstrong in other companies at or about the same time
for a like fraudulent purpose was admissible. A repetition of acts
of the same character naturally indicates the same purpose in all
of them, and if, when considered together, they cannot be
reasonably explained without ascribing a particular motive to the
perpetrator, such motive will be considered as prompting each act.
A creditor has an insurable interest in the life of his debtor, and
may very properly procure an insurance upon it for an amount
sufficient to secure his debt; but if he takes out policies in
different companies at or nearly the same time, and thus increases
the insurance far beyond any reasonable security for the debt, an
inquiry at once arises as to his motive, and it may be considered
as governing him in each insurance. In
Castle
v. Bullard, 23 How. 173, where the defendants were
charged with having fraudulently sold the goods of the plaintiff,
evidence that they had committed similar
Page 117 U. S. 599
fraudulent acts at or about the same time was allowed with a
view to establish their alleged intent with respect to the matters
in issue. The Court said:
"Similar fraudulent acts are admissible in cases of this
description if committed at or about the same time, and when the
same motive may reasonably be supposed to exist, with a view to
establish the intent of the defendant in respect to the matters
charged against him in the declaration."
In
Lincoln v.
Claflin, 7 Wall. 132, an action was brought for
fraudulently obtaining property, and evidence of other frauds of a
like character committed by the defendants at or near the same time
was held to be admissible. "Its admissibility," said the Court,
"is placed on the ground that where transactions of a similar
character executed by the same parties are closely connected in
time, the inference is reasonable that they proceed from the same
motive. The principle is asserted in
Carry v. Hotailing, 1
Hill 311, and is sustained by numerous authorities. The case of
fraud, as there stated, is among the few exceptions to the general
rule that other offenses of the accused are not relevant to
establish the main charge. In
Butler v. Watkins, 13 Wall.
456,
80 U. S. 464, speaking on the
same subject, this Court said:"
"In actions for fraud, large latitude is always given to the
admission of evidence. If a motive exist prompting to a particular
line of conduct, and it be shown that in pursuing that line a
defendant has deceived and defrauded one person, it may justly be
inferred that similar conduct toward another at or about the same
time and in relation to a like subject was actuated by the same
spirit."
In
Bottomley v. United States, 1 Story 135, 144, Mr.
Justice Story held the same doctrine and cited several instances of
its application. Thus, in the case of a prosecution for uttering
counterfeit money, the fact that the prisoner has in his
possession, or has uttered, other counterfeit money is held to be
proper evidence to show his guilty knowledge, and upon an
indictment for receiving stolen goods, evidence that the prisoner
had received at various other times different parcels of goods
which had been stolen from the same persons is held admissible in
proof of his guilty knowledge. So, on an indictment for a
conspiracy to create public discontent and disaffection, proof is
admissible against
Page 117 U. S. 600
the prisoner that at another meeting, held for an object
professedly similar at which the prisoner was chairman, resolutions
were passed of a character to create such discontent and
disaffection. "In short," said the learned justice,
"wherever the intent or guilty knowledge of a party is a
material ingredient in the issue of a cause, these collateral
facts, tending to establish such intent or knowledge, are proper
evidence. In many cases of fraud it would be otherwise impossible
satisfactorily to establish the true nature and character of the
act."
Many other authorities might be cited to the same purport.
The evidence offered that Hunter obtained insurances in other
companies on the life of Armstrong at or near the same time was,
under these authorities, clearly admissible. It tended to establish
the theory of the defendant that the insurance in this case was
obtained by Hunter upon the premeditated purpose to cheat and
defraud the company. Especially would it have had that effect if
followed by proof of the manner of the death of Armstrong.
But, independently of any proof of the motives of Hunter in
obtaining the policy, and even assuming that they were just and
proper, he forfeited all rights under it when, to secure its
immediate payment, he murdered the assured. It would be a reproach
to the jurisprudence of the country if one could recover insurance
money payable on the death of the party whose life he had
feloniously taken. As well might he recover insurance money upon a
building that he had willfully fired.
This view renders it unnecessary to consider the effect upon the
policy of the statements made in the application of the assured as
to the amount of other insurances on his life.
Judgment reversed, and cause remanded for a new
trial.
MR. JUSTICE MATTHEW, did not sit in this case nor take part in
its decision.
