Opinion
Decided February 23, 1928.
Insurance — Beneficiary falsely designated as wife — Insured's lawful wife not entitled to recover as administratrix — Policy provision for payment where insured died without beneficiary living, inapplicable.
The naming of a woman as beneficiary in a life insurance policy, procured and paid for by the insured, and falsely designating her as his wife, does not give the administrator of the estate of the insured a right of action against the insurance company under a provision in the policy that the amount of insurance payable shall be paid to the administrator, if there is no beneficiary living at the death of the insured.
ERROR: Court of Appeals for Summit county.
Messrs. Parlett Veitch, for plaintiff in error.
Messrs. Musser, Kimber Huffman, for defendant in error.
In the year 1912 Joseph Schmidt married a woman whose first name is Mary, and with whom he lived until about 1922, when he left her, and went to live in a state of adultery with a woman whose first name is Anna. He lived with Anna in different cities in Ohio, and finally located in Morgantown, West Virginia, where they lived together and held themselves out as husband and wife.
On February 1, 1924, while said Schmidt and said Anna were so living in West Virginia, he took out an insurance policy on his life for $2,500, with the defendant in error, the Prudential Insurance Company, through its local agent at Morgantown, West Virginia, paid the premium thereon, and made the policy "payable to Anna Schmidt, beneficiary, wife of the insured," she being the same one with whom he was living in a state of adultery.
Joseph Schmidt died in a tuberculosis hospital at Asheville, North Carolina, within four months after he purchased said life insurance, and was buried in said city. Schmidt in his application for insurance falsely and fraudulently represented that he never had had tuberculosis, and had never been treated for such disease, when in truth he had been so treated in the same hospital to which he returned after the policy had been issued, and in which he died.
Said Anna filed proof of death and made claim for the amount of said insurance, which claim the company rejected on the ground that the policy was obtained by false and fraudulent representations as to decedent's physical condition, but it afterwards settled with her as the beneficiary and took up the policy, with knowledge that Mary was decedent's lawful widow and that said Anna was not, and that decedent was living with her in a state of adultery at the time he procured the insurance.
Said Mary was thereafter appointed administratrix of his estate in this county, and commenced action on the policy to recover the amount stipulated therein.
The common pleas court found, upon the issues joined, in favor of defendant, and the case is here on error to reverse that judgment.
Counsel for plaintiff contend that the rights of the parties should be determined according to the laws of West Virginia, and that under the laws of that state a contract of insurance, obtained by a person on his own life for the benefit of another having no interest in his life, is void as against public policy; in other words, that said Anna did not have an insurable interest in decedent, and that the legal effect of naming a beneficiary without an insurable interest is the same as though no beneficiary had been named able to take under the laws of West Virginia, and, therefore, that the plaintiff, as administratrix of his estate, is entitled to the proceeds of said policy under the following provision thereof:
"If there is no beneficiary living at the death of the insured, the amount of insurance payable shall be paid to the executors, administrators or assigns of the insured, unless otherwise provided in the policy. The right to change the beneficiary has been reserved by the insured."
It seems to be conceded by counsel on both sides that under the laws of Ohio a person may, in good faith, insure his own life for the benefit of any one whom he may choose, though not related to him by blood or marriage, and that such insurance so procured is not invalid as being against public policy.
Counsel for plaintiff rely entirely upon the case of Tate v. Commercial Bldg. Assn., 97 Va. 74, 33 S.E. 382, 45 L.R.A., 243, 75 Am. St. Rep., 770, decided in 1899, contending that it supports their position, and that the decisions of the Supreme Court of Virginia are controlling in West Virginia.
Assuming that this may be true in the absence of a law or decision in West Virginia to the contrary, it cannot be true when there are decisions of the Supreme Court of that state on the same question to the contrary. Counsel for plaintiff seem to have overlooked the case of Burdette v. Columbus Mutual Life Ins. Co., decided May 1, 1917, and reported in 80 W. Va. 384, 93 S.E. 366. The first paragraph of the syllabus of that case reads:
"1. Any person competent to contract may in good faith lawfully procure insurance upon his life, and in the policy designate as beneficiary any one whom he may choose, though not related to him by blood or marriage. Insurance so procured is not invalid, or subject to condemnation as being obnoxious to public policy."
It therefore clearly appears that it was lawful for decedent to make said Anna the beneficiary in said policy under the law of either Ohio or West Virginia. This principle is supported by the great weight of authority, and is the rule in most of the states.
It must be borne in mind that there is a clear distinction between a person insuring his life for the benefit of another, and paying for it himself, and a person procuring and paying for insurance on the life of another.
The conclusion reached renders it unnecessary to consider the other questions urged by counsel for plaintiff in error.
Some claim is made by counsel for plaintiff concerning the provision in the policy that it was "incontestable after one year," but this provision has no application in this case, as it is effective only when the assured lives longer than one year after the date on which the policy is issued.
The judgment of the common pleas court is therefore affirmed.
Judgment affirmed.
WASHBURN, P.J., and PARDEE, J., concur.