Case Name: The Union Central Life Insurance Company v. Hilliard, Admr., et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1900-12-18
Citations: 63 Ohio St. 478
Docket Number: 
Parties: The Union Central Life Insurance Company v. Hilliard, Admr., et al.
Judges: Minshall, J., dissents.
Reporter: Ohio State Reports, New Service
Volume: 63
Pages: 478–495

Head Matter:
The Union Central Life Insurance Company v. Hilliard, Admr., et al.
Policy of insurance on life of minor — Payable at maturity if living and to his executors, etc., in case of death before maturity — Is not absolutely void — Nor are notes given by him for premium — Insurance contract not invalid as wagering contract — Though induced by one having no insurable interest in insured — Giving mortgage and assigning policy on life of another as security not regarded as usury, when.
1. A policy of life insurance issued on the life of a minor, payable to him if living at maturity, and to his executors, administrators, or assigns in case of death before maturity, is not absolutely void, nor are notes given by him for premiums void, although the insured has power to elect to avoid both on arriving at majority. Nor is his written assignment of such policy during minority necessarily void.
2. The obligation on the part of the company to pay the amount of the policy on the happening of the event contemplated, furnishes a sufficient consideration to support the promise to pay premiums, whether such promise is made by the insured alone, or by another jointly with him. And such insurance contract is not invalid as a wagering contract, though it is induced by one who has no insurable interest in the life of the insured, and who joins in a promise, evidenced by promissory notes, to pay premiums.
3. Where an applicant for a loan of money from a life insurance. company obtains the same upon a lawful rate of interest, giving a real estate mortgage as security, and also procures the issue by the company of an insurance policy to one in whose life he has no insurable interest, and its assignment to the company as collateral security upon the loan, and signs premium notes with the insured in order to give value to the policy as collateral, 'such policy being upon the usual terms and conditions, the premiums paid and agreed to be paid thereon will not be regarded as additional interest for-the loan, and usurious.
(Decided December 18, 1900.)
Error to the Circuit Court of Licking county.
The plaintiff in error, The Union Central Life Insurance Company, is a corporation organized under- the laws of Ohio, having its principal place of business at Cincinnati. The defendant in error, J. Y. Hilliard, is the administrator of the estate of John Strawn, deceased, and the other defendants in error are the heirs at law of said Strawn.
The action below was a proceeding in the probate court of Licking by the administrator to sell the lands of John Strawn, deceased, in that county, to pay debts, the petition also declaring upon a certain mortgage given by the deceased in- his lifetime to Hilliard, individually, and making the Life Insurance Company, mortgagee, and the heirs at law of the deceased, parties defendant. In its answer and cross-petition the Company set up and asked to recover upon a note for $10,500, and others not in controversy here, signed by said John Strawn, less certain payments credited, and to foreclose a mortgage on the premises described in the petition given by Strawn to secure the same; also upon two notes for $532 each, signed by one Edward L. Roberts and John Strawn, being two of a series of four notes for like amount, and to foreclose a mortgage on the same premises given by Strawn to secure the last mentioned notes. Issue was taken by the administrator and by the heirs, contesting wholly the last mentioned claim of the Company, and insisting that its recovery should be confined to the sum of $12,500, and some interest, less divers payments alleged to have been received by the Company, particularly stated in their answer. Trial in the probate court resulted in a judgment and decree substantially as claimed by the administrator and heirs, from which the Company appealed to. the common pleas. In the latter court a separate finding of facts and law was had, and a judgment and decree of similar legal effect to that of the probate court was rendered, from which error, was prosecuted by the Company to the eircuitt court where the judgment was affirmed; and the Company brings error here. Additional facts will be stated in the opinion.
Charles Follett and Maxwell & Ramsey, for plaintiff in error.
1. The minority of the insured does not render the insurance void, but voidable at his election. There can be no failure of consideration for the premium notes unless that election is made. The record shows that before the commencement of this action, the insured had attained majority. It does not show that he has elected to avoid the contract. The law does not permit third parties to make election for him, as they seek to do in this case.
2. As anticipated, the question of insurable interest is sought to be made the paramount issue, and the burden of the argument is upon the proposition that a grandfather can not procure insurance upon the life of his grandson.
The question is foreign to the case.’ The grandson applied for insurance on his own life, payable at death to his owm estate. It Avas not even assigned to his grandfather. It is not unlawful to insure minors. The grandfather advanced the first five premiums, and in return the grandson pledged the policy for the grandfather’s debt to the pledgee. Five premiums paid for the benefit of the grandson Avere a full consideration moving to him in return for the temporary pledge of the policy, at least until he should elect to avoid the transaction.
If the insured had died, the insurer would have deducted the amount of the advanced premiums and whatever deficit there might have been after foreclos ure of the mortgage, and paid the balance of the $12,500 policy to his estate. He would have netted $5,000 or more out of the insurance; his grandfather would have received none of it. How can the question of insurable interest in the grandfather possibly arise?
3. The third point falls with the other two; for if the insurance contract was valid, supporting a consideration for the premium notes, .those notes can not be treated as representing usurious interest upon the mortgage loan. Since the filing of our original brief, this court has affirmed Morrow v. Union Central Life Insurance Company, to which attention was there called (see 61 Ohio St., 661; 16 C. C. R., 351, 8 Circ. Dec., 419; Insurance Co. v. Manufacturing Co., 25 N. J. Eq., 160.
1. There is a fatal defect of parties defendant.
In order to establish usury, it is necessary to adjudicate the contract of insurance, and the holder of the policy is not brought in. This is not such defect as is waived by failure to make the objection by demurrer or answer. Section 5064, Revised Statutes, does not intrench upon section 5013. Church v. Nelson, 35 Ohio St., 638.
But this point is upon the theory, more favorable to the other side than the record warrants, that the avoidance of the contract of insurance was a part of the relief sought. It was not; which gives rise to the next proposition.
2. The plaintiff is seeking equitable relief against an alleged usurious contract. Tyler on Usury, 439.
It is asserted that non payment of the premium notes forfeited the .policy. They did not. By their terms they gave the insurer the option of declaring a forfeiture. This requires an overt act, brought home to the insured. French v. Insurance Co., 30 Ohio St., 240.
There is no evidence or allegation of such forfeiture; and if there were, it would not be conclusive upon the insured, or bar his action on the policy, since he is not a party to the suit. Plaintiff can only do equity by placing this insurance company where it was before the transaction was entered into. He has restored his own status very nicely, by getting his notes canceled. That is not according to the doctrines of equity.
3. He does not come here with clean hands. The petition is nominally that of Hilliard “as administrator of the estate of John Strawn, deceased, and individually.”
In reality it is that of Hilliard individually, brought for the purpose of creating value for a mortgage of his own on this property.
The sale did not realize enough to pay incumbrances. The estate gets nothing. Plaintiff sought to accomplish this end, first by asserting the priority of his mortgage over those of the defendant, and when that failed, by cutting down those other mortgages on the charge of usury.
The petition alleged that plaintiff’s mortgage was dated and recorded on Máy 30, 1889. Defendant’s mortgages were dated May 29, 1889, but not recorded until June 1. Hilliard was the agent of the defendant. He made the application for the loan and for the insurance. He represented the company in the whole transaction. He represented the property as unincumbered. The statutes do not permit insurance companies to lend on second mortgage (section 3598, Revised Statutes). These mortgages were delivered to him on May 30th. Mr. Hilliard was also the county recorder at the time. He filed and recorded his mortgage first, and those of his company second. That is the nature of his claim upon which his standing in a court of equity is to be determined. The court below decreed his mortgage junior to those of his company, but did not think there was any reason why it should not go on and give him equitable relief in the interest of that mortgage, by allowing him to stultify himself on the issue of usury. So in the interest of this man’s mortgage, one of the two mortgages which he negotiated for his principal was pronounced usurious and taken out of his way.
We submit that he has no standing in equity.
J. Y. Hilliard; John M. Bwarts and Kibler & Kibler, for defendant in error.
We claim that this transaction was void and not enforcible against the administrator of John Strawn for three reasons:
1. Because of the minority of Edward L. Roberts and his inability to make a valid contract for insure anee, or to assign the same.
2. That the insurance was void because John Strawn had no insurable interest in the life of Edward L. Roberts and the same was therefore a wagering policy.
3. Because the whole transaction connecting the life insurance feature with the loan was a mere shift and device to compass usury and was therefore illegal.
The case at bar is to be distinguished from a case in which an insured insures his own life for the benefit of another, because the law is that any person may insure his own life for the benefit of another. Gilbert v. Moore, 104 Pa. St., 74, s. c. 49 A. M. Rep., 570; Amer., etc., Ins. Co. v. Robert Shaw, 26 Pa. St., 189; Campbell v. Insurance Co., 98 Mass., 381; Aetna Life Ins. Co. v. France, 94 U. S., 561; Conn. Mut. L. Ins. Co. v. Schaeffer, 94 U. S., 457; Tucker v. Life Ins. Co. (Wis.), 41 N. W. Rep., 968; Franklin L. Ins. Co. v. Sefton, 53 Ind., 380.
And even a stranger: Johnson v. Van Epps, 110, 111, 551; 26 La. Ann, 326; Langdon v. Insurance Co., 14 Fed. Rep., 272; Valton v. Life Assoc’n, 20 N. Y., 32.
In the case at bar, however, although the application for the loan states that the insurance is to be upon the life of John H. Strawn, that having abandoned this, insurance was taken upon the life of Edward L. Roberts, who was a minor, who had not the power to insure his own life for the benefit of another and who could not make any valid assignment of the policy. The fact that John Strawn agreed to pay the premiums doesn’t add anything to the validity of the transaction. Aetna Life Ins. Co. v. France, 94 U. S., 561; St. John v. Insurance Co., 13 N. Y., 31.
It is undoubtedly the rule that the insured must have an interest in the subject matter in the insurance. A policy of insurance obtained upon a subject-in which the insured has no interest is void, whether or not it be so stipulated therein. No action can be maintained upon it; the notes given for the premiums upon such insurance are void for want of consideration. Bersch v. Insurance Co., 28 Ind., 64; Fowler v. Insurance Co., 26 N. Y., 422; Peabody v. Insurance Co., 20 Barb. (N. Y.), 339; Freeman v. Insurance Co., 38 Barb. (N. Y.), 247; Talman v. Insurance Co., 29 How. Pr., (N. Y.), 71; Sawyer v. Mahew, 51 Me., 398; Sweeney v. Insurance Co., 20 Pa. St., 337; Tren ton Ins. Co. v. Johnson, 24 N. J. L., 576; Mawry v. Insurance Co., 9 R. I., 346.
In life insurance as in other kind of insurance the assured must have an interest in the life insured; and where insurance be effected by one person on the life of another the assured must show himself to have possessed an interest in the life of that other at the time the insurance was effected. Revin v. Insurance Co., 23 Conn., 244; Ruse v. Insurance Co., 23 N. Y., 516; Guardian Ins. Co. v. Hogan, 80 Ill., 36; Franklin Ins. Co. v. Sefton, 53 Ind., 380; Trenton Ins. Co. v. Johnson, 24 N. J. L., 576.
A substantial pecuniary interest is sufficient. Hoyt v. N. Y. Ins. Co., 3 Bosw. (N. Y.), 440.
The insurable interest of a father in the life of his child is sustained only on the ground that the father is entitled to the services of the child. Mitchell v. Insurance Co., 45 Me., 104.
But this principle has been denied in the case of Guardian Mut. Life Ins. Co. v. Hogan, 80 Ill., 35.
It has been held that the relation of nephew and uncle does not constitute an insurable interest to enable either to insure the life of the other. Singleton v. Insurance Co., 66 Mo., 63.
So a son-in-law has no insurable interest in his mother-in-law, and vice versa, even though she lives with him and is dependent upon him for support. Rombach v. Insurance Co., 35 La. Ann, 233, s. c. 48 Am. Rep., 239; Stambaugh v. Blake (Pa.)/15 Atl. Rep., 705.
The mere relation of step-son does not create an insurable interest in the life of the step-father. United Brethren v. McDonald, 122 Pa., 324; 1 L. R. A., 238; Keystone Mut. Benefit Assn. v. Norris, 115 Pa., 446; Price v. Supreme Lodge K. of H., 68 Texas, 361.
That a party having no insurable interest in the life of another cannot receive an assignment of the policy of insurance upon the life of the latter on an agreement merely to pay the premiums or assessments. An insurable interest must be of a substantial character and such as under all the circumstances to take from the transaction all the suspicion of wagering. Amic v. Butler, 111 Ind., 578; Conn. Mut. L. Ins. Co. v. Luchs, 108 U. S., 498; Corsons App., 113 Pa., 438.
Where a third party, without any insurable interest in the life of another, procures a policy of insurance on the life of such person, either by having a policy issued directly to himself, or by having the person whose life is insured take out a policy to himself and then assign it, the transaction is a mere speculation on the life of another, and, as such, contrary to public policy and void. Lamont v. Grand Lodge, 31 Fed. Rep., 180; Warnock v. Davis, 104 U. 8., 775, 26 L. ed., 924; Seigrist v. Schmaltz, 5 Cent. Rep., 230, 113 Pa., 326; Downey v. Hoffer, 16 W. N. C., 185; 1 Bacon on Ben. Soc. & Life Ins., Sec. 251.
If Roberts had died the Central Union Life Insurance Company could have defended against payment on the ground that it was a wagering policy — for insurance companies. 1 Bacon, etc., Sec. 248; Ruse v. Insurance Co., 23 N. Y., 516; Loomis v. Insurance Co., 6 Gray, 398; Warnock v. Davis, 104 U. S., 775; Tate v. Commercial B. A., 45 L. R. A., 243.
This insurance company, being an Ohio corporation and subject to the statutes of Ohio, had no statutory authority whatever to issue his policy of insurance. It is upon the life of a minor who had no authority to assign it, and is payable to the executors, administrators or assigns of the insured.
Sections 3595, 3628, 3629, 3183, Revised Statutes.
Where as a condition of making a loan, the borrower is required to take policies of life insurance from the lender, and pay premiums thereon, in addition to the highest legal rate of interest on the amount loaned, it is generally held that the profit thus derived by the lender is equivalent to additional interest, and therefore usurious. Missouri Valley L. Ins. Co. v. Kittle, 1 McCrary (U. S.), 234; National L. Ins. Co. v. Harvey, 2 McCrary (U. S.), 576; Clague v. Creditors, 2 La., 114; 20 Am. Dec., 300.
It matters not what the name of the transaction is, whether it is called an insurance policy or some other transaction. Union Bank v. Bell, 14 Ohio St., 200; Burt v. Rattle, 31 Ohio St., 116; 13 Wheaton 385. Smith v. Cross, 90 N. Y., 549.
That the question as to whether the contract is usurious or not may be determined outside of the instruments themselves. Tyson v. Rickard, 5 D., 424; Sylvester v. Swan, 5 Allen (Mass.), 134; Maine Bank v. Butts, 9 Mass., 49; Kilgore v. Dempsey, 25 Ohio St., 413.
A condition to the loan of money that the borrower shall buy a piece of land from the lender, at an exorbitant price, is evidence of usury. Ernest v. Hoskins, 100 Pa. St., 551.
A note executed to secure a loan of gold at a higher rate than the market value of gold, in addition to legal interest, is usurious. Austin v. Walker, 45 Iowa, 527.
An agreement to take an insurance policy and pay the premiums thereon, and in addition to pay the highest legal rate of interest on the money lent on such policy is usurious. Missouri Valley Ins. Co. v. Kittle, 1 McCrary (U. S.), 234; National Life Ins. Co. v. Harvey. 2 McCrary (U. S.), 576.

Opinion:
Speak, J.
The contention here relates wholly to the legal effect of the transaction involving the giving of the notes last referred to in the foregoing statement. The first claim of the Company was upon notes and mortgage given for a loan of money to John Strawn, and the other upon notes and mortgage given to sesüre a sum advanced by the Company to enable the deceased to pay premiums upon a policy of life insurance issued by the Company on the life of one Edward L. Roberts, and by him assigned to the Company as collateral security for the loan made to Strawn. it was claimed by the administrator, and heirs, and found by the common pleas and circuit courts, that the loan of money and the issuing of the policy were parts of one and the same transaction, and were a mere device on the part of the Company for securing upon the loan a larger rate of interest than the legal rate; that the transaction was usurious, and that the Company was entitled only to the face of the loan with interest at six per cent., less certain payments which they claimed had been made. Pertinent facts, necessary to an understanding of the questions presented follow:
April 30, 1889, John Strawn applied to the Union Central Life Insurance Company for a loan of twelve-thousand, five hundred dollars for five years with interest at seven per cent., payable annually, tendering as security a mortgage upon two hundred and forty-four acres of land, being part of the land involved in this suit. The Company declined to loan the amount on the security alone of the land, but would do so if added thereto there were given the additional security of a life insurance policy. Thereupon, May 30, 1889, Strawn executed and delivered to the Company five principal notes for the loan, one for $10,500, due in five years, and four for $500 each, due in one, two, three and four years, with interest coupons attached to each for annual interest, and a mortgage to secure the same on the land referred to. Also another mortgage on the same land to secure the payment of four premium notes of $532 each, due in one, two, three and four years, and to bear interest at eight per cent.after maturity,the notes being executed by Edward L. Roberts and John Strawn,and given for the payment of annual premiums on the policy of insurance issued by the Company on the life of Roberts. The policy was a ten-year annual life rate endowment policy which required all payments to be paid up in ten years. In order to give the policy value as collateral the premium for five years was paid in advance; that is, five annual premiums at the regular rate were properly discounted and thus paid at the inception of the policy. This payment was made by the advance of the amount by the Company and evidenced by the notes of the insured (Roberts) and John Strawn, secured by mortgage by Strawn as stated above, the notes being treated by the Company, as between it and the insured, as cash. The policy was then assigned by Roberts to the Company as collateral to the mortgage given to secure the larger loan. Roberts was a minor, eighteen years of age, a grandson of Strawn, and the trial court found Strawn had an insurable interest in the life of Roberts solely from the fact that Roberts was his grandson, no other relation existing between them giving such interest. It further found that the policy is not a wagering policy, and for that reason not illegal, void, or without consideration. Strawn himself was not an insurable subject on account of his advanced age, and hence the requirement that the policy be upon the life of another and that Strawn should secure the payment of the premiums. The grandson was without means and unable to pay them. The policy was made payable to the insured, if living at maturity, and in case of death prior to maturity, to his executors, administrators or assigns. It acknowledged receipt of $532, the first premium, and the four notes of like amount payable in one, two, three and four years, secured by mortgage, and containing a provision that failure to pay any one of the notes at maturity would give the Company the right, at its election, to avoid the policy, but it does not appear that the Company had exercised that right. It was the habit of the Company to require the assignment as collateral security of policies in the manner above mentioned, although there was no written rule to that effect. The court found that the mortgage was ample security at the time the loan was taken independent of the assignment of the policy. Many facts are found by the trial court, but the foregoing statement is believed to embrace all that are necessary to an understanding of the points decided.
No substantial claim of fraud, or deceit, or circumvention practiced by either party, is made; nor is it seriously claimed that the transaction was misunderstood by the parties,, either as to its terms or legal effect. The issues are issues of cold law.
Three grounds are stated and argued by counsel for defendants in error as supporting the conclusion of the courts below that the transaction is void and not enforceable against the administrator of John Strawn, viz.:
1. Because of the minority of Edward L. Roberts and his inability to make a valid contract for insurance, or to assign the same.
2. That the insurance was void because -John Strawn had no insurable interest in the life of Edward L. Roberts, and the same was, therefore, a wagering policy.
3. Because the whole transaction connecting the life insurance feature wdth the loan was a mere shift and device to compass usury and was, therefore, illegal.
As to the first proposition it is sufficient to say that a contract by a minor is voidable only, and that at his election. The other contracting party cannot avail himself of the lack of power on the part of the minor to conclusively bind himself as a reason for refusing performance on his part. Hence the contract cannot be said to be absolutely void. In the present case the record does not show that the insured has elected to avoid the contract, although it does show that he has long since reached his majority. Nor is he a party in the case, and his rights in the matter, ^whatever they may be, cannot be adjudicated here.
Respecting the second proposition, it is apparent that the question of insurable interest on the part of John Strawn in the life of Roberts is not involved in the inquiry. It is true that the grandfather procured the making of the contract of insurance, but the policy was made payable to the grandson (the insured), and, in case of his decease before maturity, to his executors, administrators or assigns. So that, in legal intendment, it wms a contract wholly between the Company and the insured. The courts below held that the contract was not a wagering contract,, and in this we agree with them.
The third proposition is of more gravity. It raises the question whether an insurance company, in the making of a loan of its surplus funds can lawfully require of the borrower that a life policy be taken from that company and assigned to it as collateral security for the proposed loan. It would seem that the matter' of the amount of the security otherwise tendered cannot have weight, for the parties are at full liberty to agree upon the amount of security to be.taken, as they are to make any other contract not inhibited by law,, and a contract, otherwise legal, is not to be invalidated because a court may be of opinion that more security has been exacted than was necessary. Had the policy been taken out in some other company, and assigned as collateral, no one would have thought of interposing the claim of usury. The objection must rest, if well founded, upon some fact other than the quantum of security. Put in other words, the question is: May a loaner of money at the time of agreeing upon the loan,also agree with the borrower,for the execution between them of another contract, by which a part of the money loaned is to be paid to the lender as consideration for the lender's promise to pay a larger sum on a future contingency (a contract fair in itself and lawful), without tainting the loan transaction with usury? Authorities which seem to hold the negative of this proposition are adduced, and, regarded in the light of principle, the writer might have difaculty in reaching a satisfactory conclusion. But the question seems not to be an open one in this court. In the case of the same plaintiff in error against MorroAv et al.', reported in 16 O. C. C., 351, it is held by the circuit court that: "Where a life insurance company requires of an applicant for a loan at the same time to take out an insurance policy on his life on the usual terms and conditions, such insurance and the premiums paid thereon will not be considered as compensation in addition to legal interest for the loan, and usurious." And a recovery was had. On error' by Morrow to this court the judgment was affirmed, 61 Ohio St., 661. It is suggested that in that case usury was not distinctly pleaded. Whether so or not, the facts were pleaded, and the record sufficiently disclosed facts warranting a holding against the Company had the court been of opinion that an insurance contract of the character indicated could not be made by the parties without tainting the loan with usury.
But it is insisted that the Morrow case is not authority in this case because the insurance contract was different in that in the Morrow case the insurance was effected on the life of the borrower himself, wliile here it was issued upon the life of another in whose life the borrower had no insurable interest. Assuming without holding that the borrower was without insurable interest in the life of the insured, does it follow that the contract of Strawn with respect to the payment of the premium notes was invalid? We confess our inability to see that it does. If the policy had been made payable to Strawn, the point wrould be well taken; but being payable to the insured, and not to Strawn,the rule as to insurable interest is not pertinent. If, then, the insurance contract, and Strawn's notes for premiums, are not invalid on that score, and if, as we have found, the requiring of a life policy by the Company is not to be regarded as compensation in addition to legal interest for the loan, and so usurious, what is left here but an inquiry as to consideration? Applying the familiar rule that one may lawfully contract with another for the benefit, of a third, it would hardly be doubted that the grandfather might pay premiums on a life policy for the-grandson and present him with the policy. Why not? If the purchase were a horse, oa? a farm, would anyone doubt the legality of it? And if he might buy outright and pay, why might he not buy on credit? Could he, in a suit by the vendor of a horse so purchased, or of a farm, be heard to say that he had no interest in the beneficiary and hence his obligation had no validity? The consideration moving from the Company was its agreement to pay the. policy at maturity, or at death if sooner; and the payment of the first five premiums by the grandfather for the-benefit of the grandson constituted a sufficient consideration to. support his pledge of the policy fo.r the benefit of the grandfather, at least to the extent of premiums paid, and entirely good until he should elect to avoid the transaction.
Decisions are not lacking, and many are cited, to the effect that where the borrower is induced to make with the lender some unusual and unfair additional contract, as to buy a piece of land from the lender at an exorbitant price, or give a note to secure a loan of gold at a higher rate than the market value in addition to legal interest, the contract will be held usurious. But it does not appear that the insurance contract in this case was unusual, or that the rate charged or the terms imposed were other than those which were customary.
It is further urged that the whole contract is unconscionable and its execution would result in great, hardship. The former claim, we suppose, must stand on the question whether or not it is illegal. As to the latter claim, it does appear to work a hardship as it has turned out. But had the young man died soon after the issuing of the policy, or during the time for which the premiums had been paid, the apparent hardship would have been on the other party. It was held by a fast bargain, and would have been compelled to pay, for no court would have listened to a defense by the Company, had such been interposed, based on the ground here urged by defendants in error, viz.: the inability of the minor to make a binding contract. In case of default by Strawn in the payment of his loan the Company would have been required to first exhaust tbe mortgage security, and, only in the event that that proved insufficient, could it have resorted to the proceeds of the policy. The balance would have belonged to the insured's legal representatives, subject possibly to advances on account of premiums. In this view the question of insurable interest on the part of the grandfather becomes immaterial, and the complaint of wagering contract untenable.
Viewing the case as presenting a legal claim on the part of the Company, and following the former decision with respect to the main point of contention, we are led to the conclusion that the judgments below should be reversed, and the cause remanded to the court of common pleas with direction to enter judgment upon its previous finding of facts and in conformity with this opinion.
Reversed.
Minshall, J., dissents.