Court Opinion

ID: 6310679
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:12:03.057528+00
Date Added: 2024-06-11T08:59:04.047599
License: Public Domain

Opinion by
Mr. Justice Sterrett:
It is conceded that the policy of $3,000 on the life of Weaver was taken out and immediately assigned to Blouch, for the purpose of securing a debt of $100 due by the former to the latter. Subsequently one half interest in the policy was assigned by Blouch to plaintiff in error, but Weaver was not in any manner a party to that transaction. On the death of Weaver the insurance company, recognizing its liability for the amount insured, paid $1,800 thereof to Cooper, and the residue to Blouch.
In view of the undisputed facts, the learned judge of the common pleas held that the disproportion between the insurance, $3,000, and the debt, $100, was so great as to require him to say, as matter of law, that the transaction was a wager, and that the assignees of the policy had no right to retain more of the insurance money received by them than the amount of the debt, plus the premiums paid and interest thereon. In this he was clearly right. The disproportion is so great as to make the insurance a palpable wager, and no court should hesitate to declare it so as matter of law.
It has heretofore been correctly said that the sum insured, must not be disproportionate to the interest the holder of the policy has in the life of the insured; but we have never found it necessary to adopt any rule by which such disproportionate interest may be determined.
Speaking for himself, our brother Paxson, in Grant v. Kline, *409115 Pa. 618, 9 Atl. 150, suggests that a policy taken, out by a creditor on the life of his debtor ought to be limited to the amount of the debt with interest and the amount of premiums with interest thereon, during the expectancy of the life insured according to the Carlisle tables. This appears to be a just and practicable rule.
It is not easy to define with precision what will in all cases constitute an insurable interest, so as to take the contract out of the class of wagering policies; but, as is said in Corson’s Appeal, 113 Pa. 438, 445, 57 Am. Pep. 479, 6 Atl. 213: “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 assured. Otherwise the contract is a mere wager, by which the party taking the policy is directly interested in the early death of the assured. Such policies have a tendency to create a desire for the event. They are, therefore, independently of any statute on the subject, condemned as against public policy.”
But in such a case as the one before us, where the disproportion is so great, there can be no doubt as to the character of the transaction. There is no merit in either of the specifications of error.
Judgment affirmed.