Court Opinion

ID: 9659012
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:26:33.563294+00
Date Added: 2024-06-11T18:14:02.981773
License: Public Domain

JONES, Justice
(dissenting).
I must disagree with the majority holding that one has an insurable interest in the life of his brother (or sister) on the basis of their relationship alone. The public policy which provides the “insurable interest” requirement has its roots in two related, yet independent, principles. Absent insurable interest such contracts have been discredited for two reasons. One is that they are wagering contracts and the other is that they may be an inducement to homicide. It is not necessary that both reasons exist at the same time or to any given policy. While each might considerably influence the other, these two public policy principles are mutually exclusive and not interdependent.
The rule relating to the necessity of an existence of an insurable interest is well stated in Commonwealth Life Insurance Co. v. George, 248 Ala. 649, 28 So.2d 910:
“It is, of course, well established that one cannot take out a valid and enforcible policy of insurance for his own benefit on the life of a person in which he has no insurable interest. Such a policy or contract of insurance is void and unenforcible on ground of public policy, it being merely a wagering contract. The reasoning found in the cases is based upon the presumption that a temptation would be held out to the one taking out the policy to hasten by improper means the time when he should receive the amount of insurance named in the policy. Good faith alone will not suffice to sustain a policy taken out on the life of another by one who has no interest in the continuance of such life
“The observation of the court in Warnock v. Davis, 104 U.S. 775, 26 L.Ed. 924, in regard to what is an insurable interest has been often cited by text books and by decisions generally. There it was recognized that it was not easy to define with precision what in all cases would constitute an insurable interest so as to take the contract out of the class of wager policies. In a helpful note to the case of Young v. Hippie, 25 A.L.R. 1541, the author has succinctly stated the rule as observed in the Warnock case, which is here worthy of repetition. ‘As there is much conflict among the authorities on the general question as to what con*454stitutes an insurable interest, it may be helpful at the outset to bear in mind the statement of the Federal Supreme Court on this question, to the effect that it is not necessary that the expectation of advantage or benefit should be always capable of pecuniary estimation, for a parent has an insurable interest in the life of his child, and a child in the life of his parent, as does also a husband in the life of his wife, and a wife in the life of her husband; that the natural affection in cases of this kind is considered as more powerful, as operating more efficaciously, to protect the life of the insured than any other consideration; but that in all cases there must be a reasonable ground, founded upon the relations of the parties to each other, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the insured, or otherwise the contract is a mere wager by which the party taking the policy is directly interested in the early death of the insured.’ ” [Emphasis added.]
This Court has emphasized that absent insurable interest such a contract of insurance is a wagering contract, and stated further that the essential test for validity is that there must be a reasonable ground, founded upon the relation of the parties to each other, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the insured, not merely an advantage to be gained by his death.
One of the earliest cases on the subject of insurable interest, Helmetag’s Adm’x v. Miller, 76 Ala. 183, stated in clear and explicit language-:
“No principle of the law of life-insurance is at this day better settled, than the doctrine, that a policy taken out by one person upon the life of another, in which he has no insurable interest, is illegal and void, as repugnant to public policy. — 3 Kent’s Com. (11th Ed.) 462-63. Such contracts are aptly termed ‘wager policies,’ and are entitled to no higher dignity, in the eye of the law, than gambling speculations, or idle bets as to the probable duration of human life. There is no limit to the insurable interest which a man may have in his own life; but there are forcible reasons why a mere stranger should not be permitted to speculate upon the life of one whose continued existence would bring to him no expectation of possible benefit or advantage. All wagers, at common law, were not illegal, but only such as were contrary to good morals or sound policy. — Chitty. Contr. 468. The statutes of this State make all contracts by way of gaming or wagering void. — Code, 1876, § 2131; Hawley v. Bibb, 69 Ala. 52. However this may be, wager policies, or such as are procured by a person who has no interest in the subject of insurance, are undoubtedly most pernicious in their tendencies, because in the nature of premiums upon the clandestine taking of human life. As observed in Ruse v. The Mutual Benefit Ins. Co., 23 N.Y. 516, ‘such policies, if valid, not only afford facilities for a demoralizing system of gaming, but furnish strong temptations to the party interested to bring about, if possible, the event insured against.’ It has been said by another court, in a comparatively recent case, that of ‘all wagering contracts, those concerning the lives of human beings should receive the strongest, the most emphatic, and the most persistent condemnation.’ — Missouri Valley Life Ins. Co. v. Sturges, 18 Kan. 93, 26 Am.Rep. 761.”
This brings us to the question whether the relationship of brother and brother (and, incidentally, brother and sister or sister and sister) is such a relationship that it in itself creates an insurable interest. We know that the relationship of husband and wife constitutes such a relationship per se, Jennings v. Jennings, 250 Ala. 130, 33 So.2d 251; and while I do not find that this Court has been specifically called upon to *455decide whether in every case the relationship of parent and child, or child and parent, in and of itself, with a presumption that is not even rebuttable, gives rise to an insurable interest in either, the overwhelming weight of authority is that this relationship is sufficient to constitute an insurable interest by one in the life of the other (44 C.J.S. Insurance § 204, at 907). But is the relationship of brothers in the same category, or does it depend upon the circumstances of the particular case ?
I should here refer to previous decisions of this Court which involve or mention other blood relationships in connection with the question of insurable interest. The following relationships have been held not to create an insurable interest on the basis of such relationship alone. Cousin and cousin, National Life & Accident Ins. Co. v. Alexander, supra; no interest in life of the wife of beneficiary’s wife’s brother, National Life & Accident Ins. Co. v. Middlebrooks, 27 Ala.App. 247, 170 So. 84; aunt and niece, Commonwealth Life Insurance Co. v. George, supra; aunt-in-law and niece, Liberty National Life Ins. Co. v. Weldon, 267 Ala. 171, 100 So.2d 696; niece and uncle, Bell v. National Life & Accident Ins. Co., 41 Ala.App. 94, 123 So.2d 598.
The opinions in Middlebrooks and Alexander contain the following identical quotation :
“The general blood relations, recognized by the courts as constituting an insurable interest in human life and health, are discussed in 1 Cooley’s Briefs on Insurance (2d Ed.) p. 370 et seq., viz.: (f) Husband and Wife, page 377, 37 C.J. p. 394, § 59; (h) parent and child, page 380, 37 C.J. p. 393, § 55; (i) grandparent and grandchild, page 383, 37 C.J. p. 393, § 56; (j) brothers and sisters, page 383, 37 C.J. p. 393, § 57. The other relations of uncles and aunts, nieces and nephews, and that of cousins, have not been recognized by the courts as within the degree of blood of an insurable interest. 1 Cooley’s Briefs on Insurance, p. 385. (k) Other relationships; 37 C.J p. 394, § 58.”
The statement in both cases that the relationship of brothers and sisters is recognized as constituting an insurable interest is followed by a reference to 37 C.J. Life Insurance, § 57, at page 393. I quote this section:
“Brother and Sister. A brother or sister of insured has an insurable interest in the life of the latter, at least where there is a reasonable or well grounded expectation of support of pecuniary aid in time of need, or some other pecuniary interest. It has been both affirmed and denied that a brother or sister has an insurable interest on the ground of relationship alone without regard to pecuniary interest.
“A stepbrother or stepsister has an insurable interest where a moral obligation to support and maintain has been assumed.”
We also quote from 44 C.J.S. Insurance § 204, page 906:
“Brother and sister. It has been broadly declared that a brother or sister of insured has an insurable interest in his life, at least where there is a reasonable or well grounded expectation of support or pecuniary aid in time of need, or some other pecuniary interest. It has been both affirmed and denied that a brother or sister has an insurable interest on the ground of relationship alone without regard to pecuniary interest.” [Emphasis added.].
It is stated in 43 Am.Jur.2d, Insurance, § 511, page 540, that the decisions are not in accord on the question whether one has by reason of relationship alone an insurable interest in the life of a brother or sister. This section contains notes showing decisions pro and con. While these two cases, Middlebrooks and Alexander, contain state*456ments that the relationship of brother and sister gives rise to an insurable interest without more, these statements are pure dicta and are merely quoting the first note in 37 C.J., which I have quoted above.
As already noted, there is a conflict of authority on the effect of the mere relationship of brother or sister. Cases on the subject are also found in the annotation in 45 A.L.R. commencing at page 1181 following the case of Rogers, Admr. v. Atlantic Life Ins. Co., 135 S.C. 89, 133 S.E. 215. In that annotation cases are cited, including the Rogers case, as holding that the mere relationship alone is sufficient. There are cases to the contrary, such as Abernathy v. Springfield Mutual Assn., 284 S.W. 198 (Mo.Ct.App.). This is cited in the annotation at page 1184 of 45 A.L.R. along with other Missouri cases, an Indiana case, English decisions, a Connecticut Supreme Court case, a Georgia case, and a Louisiana case. The Rogers case, and others, place reliance upon Aetna Life Ins. Co. v. France, 94 U.S. 561, 24 L.Ed. 287.
In France the life insurer insured the life of Andrew J. Chew, for the benefit of his married sister. The policy itself acknowledged the receipt of the first premium of $243.50 “in hand paid by Andrew J. Chew” for the benefit of his said sister and provided for an annual premium in a like amount to be paid to the insurer annually thereafter. Nothing was said therein about the sister taking out the policy, it containing only a promise to pay her or her personal representatives upon the death of her brother. There was no evidence that Mrs. France, who was in no way dependent on her brother for support, loaned him money at different times and that she paid premiums on the policy. In reaching its conclusion on the question of insurable interest, the U. S. Supreme Court said:
“. . . we hold that where, as in this case, a brother takes out a policy on his own life for the benefit of his sister, it is totally immaterial what arrangement they choose to make between them about the payment of the premiums. The policy is not a wager policy. It is devested of those dangerous tendencies which render such policies contrary to good morals.”
The Court, therefore, laid stress upon the fact that the policy was procured or taken out by the brother himself and each time the insurer acknowledged that the premiums were paid by him. It is not entirely clear to us whether the Court intended to say that the decision might have been otherwise had the contract between the insurer and Mrs. France expressly shown that it was procured by her and that she was insuring the life of her brother for her benefit. It may be that the cases are not distinguishable, but the language in the opinion to the effect that according to the policy the contract was made solely by the insured might be construed as constituting a significant factor in the Court’s decision.
In any case, I think that the relationship alone is not sufficient, that the rule requiring something other than the relation is the sound one and I would so hold. This is based on the rationale that there is but one test for insurable interest — that of a pecuniary interest or some reasonable expectation of monetary benefit from the continuance of the insured’s life; and within certain blood or affinity relationships this pecuniary interest or benefit is conclusively presumed. Such relationships are that of husband and wife, parent and child, grandparent and grandchild, and under certain conditions loco parentis relationships. This “conclusive presumption” rule with respect to these relationships does not violate the public policy necessitating insurable interest aimed at preventing homicide and wager contracts. While an extension of this rule to the brother relationship might be permissible as to the homicide aspect, to so extend this rule would facilitate the violation of the second evil which the aforementioned public policy seeks to prevent; vis., wager contracts.
*457Having adopted the above view, I would hold that the line must be drawn short of the brother relationship, and that insurable interest in such cases should depend upon a pecuniary benefit, or advantage to be gained from the continued life of the insured, which cannot be conclusively presumed, but is subject to proof.
My dissent is limited to the holding of the majority with respect to the insurable interest feature of the life insurance policies, and in all other respects, I concur.