Summary
In St. John v. American Mutual Insurance Co., 11 N.Y. 519, the insurance was against fire, but the policy exempted the insurers from any loss occasioned by the explosion of a steam-boiler.
Summary of this case from Insurance Co. v. BoonOpinion
September Term, 1855
F. Kernan, for appellant.
A.L. Jordan, for the respondent.
An insurance upon the life of an individual, is a contract by which the insurer, for a certain sum of money or premium proportioned to the age, health, profession, and other circumstances of the person whose life is insured, engages that if such person shall die within the period limited in the policy, the insurer shall pay the sum specified in the policy, according to the terms thereof, to the person in whose favor such policy is granted. The risk of the insurer is the death of the person whose life is the object of the security.
Although the promise in this case is to pay to Mr. Noyes, his heirs, c., yet it is manifest, from the conditions of the contract and the nature of the transaction, that no payment could be made to him, because nothing would become due or payable until after his death, consequently the promise of the company must necessarily be fulfilled with the executors, administrators or assigns of the assured, and not with him. By the terms of each of the assignments, the assured, Noyes, absolutely sold, assigned and transferred each of said policies of insurance to the plaintiff.
It seems to me it cannot be doubted, but that the assured might legally assign the policies to the plaintiff. It has been said, that without the right to assign, insurances on lives lose half their usefulness. (1 Bell's Commentaries, 545.) The company, by the express terms of each of the policies, agreed to pay the sum of $2000 to Charles Noyes, his heirs, executors, administrators or assigns; another part of the policies provides for giving notice to the company, in case an assignment shall be made by the assured.
I am not aware of any principle of law that distinguishes contracts of insurance upon lives, from other ordinary contracts, or that takes them out of the operation of the same legal rules which are applied to and govern such contracts. Policies of insurance are choses in action; they are governed by the same principles applicable to other agreements involving pecuniary obligations. The testimony given on the trial proved a lawful and valid sale, transfer and assignment of the policies in question by Mr. Noyes, the assured, to the plaintiff.
So far as regards the question of the liability of the company, it is not material whether the plaintiff paid a full consideration upon such transfer or not. Such liability in no manner depends upon the amount of consideration of the assignments. The assignments on their face show a sufficient consideration to render them valid in the hands of the assignee as against the company. On the death of Mr. Noyes, if he died within the period limited by the policies, the company agreed to pay the amount of the insurance. It cannot be material, neither does it affect the extent of the liability of the company, whether the money is due and payable to the legal representatives of the assured or to his assignee.
It follows, from this view of the case, that the proof allowed on the trial of the trust agreements made by the plaintiff, by which he is liable to account and pay over to the widow of Mr. Noyes a large portion of the money, on receiving the same of the company on the policies, did not and could not legally affect the right of the plaintiff to recover in the action, or the amount of such recovery. If that proof is entirely stricken out of the case, the plaintiff, in my opinion, is still entitled to recover the whole amount of the insurance in this action.
I do not agree with the counsel of the defendant, that the assignee must have an insurable interest in the life of the assured, in order to entitle him to recover the amount of insurance. If the policies were valid in their inception, the assignment of them to the plaintiff did not change the liability of the company. The case of Ashley v. Ashley (3 Simons, 149,) is a direct authority to this point. It is referred to and approved in 3 Kent's Com., 369, note. The policy in the case of Ashley v. Ashley was issued for £ 1000. It was afterwards assigned by the person effecting it, for a small but valuable consideration, to one Heath, whose executors sold and assigned it to General Ashley for £ 320. After the death of General Ashley, in an action between his widow and his executors, a decree was made that the policy should be sold for the benefit of the estates; it was sold accordingly; the purchaser, after the sale, declined to accept the policy on account of a defect of title, on the ground that the assignment to the first assignee was made for a mere nominal consideration, which rendered the transfer invalid; or if not so, the purchaser could only recover the amount paid by the assignee. The court, however, held the objection not well taken, expressly deciding that an assignee, in good faith of an existing life policy which was valid when effected, is entitled in all cases to demand and require payment of the whole sum insured. It seems to me that this decision is supported by reason and sound judgment.
The point made by the defendant's counsel, that a creditor has only an insurable interest in the life of his debtor to the amount of his debt, has no application to this case.
It seems that the case of Godsall v. Boldero (9 East, 72), is not now regarded as law by the English courts. In that case it was held, that where a creditor insured the life of his debtor, the contract was in substance one of indemnity against the loss of the debt, and that its payment, even after the death of the debtor by his executors, was a bar to a recovery by the creditor upon the policy. But in the case of Dalby v. The India and London Life Assurance Company (15 Common Bench R., 365; found also in 80 Eng. Com. Law Reports, 364), recently decided in the Exchequer Chamber after much discussion, it was held that the case of Godsall v. Boldero was erroneously decided; that the contract of life insurance was not one of indemnity merely; and that where a party had an interest in the life insured at the time of effecting the policy, the circumstance of his interest ceasing in such life, before the death, did not invalidate the policy.
The whole proof shows that Mr. Noyes effected the insurance upon his own life; it was not done by the plaintiff; he had no agency in procuring the policies to be issued; neither does it appear that the assured was even indebted to the plaintiff at that time.
In conclusion, my opinion is that the judgment should be affirmed.
All the judges concurred in the foregoing opinion.
Judgment affirmed.