Court Opinion

ID: 8811698
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:05:03.998528+00
Date Added: 2024-06-11T17:04:18.397385
License: Public Domain

WARD, Circuit Judge
(dissenting). The theory of the bill is that the assignees of the policies had no insurable interest to sustain absolute assignments, and that they should be construed only to secure any advances made to Finnie in his lifetime; the balance of the insurance collected by the defendant Morrow from the insurance company to be paid to Finnie’s estate.
The defendants in their demurrers denied that they had advanced any moneys to Finnie in his lifetime, or that they held the policies as collateral security. On the contrary, they claimed to be absolute owners as purchasers. It is true that the defendant Morrow testified on the trial that Finnie owed him some $400 to $500; but this was rightly rejected by the District Judge as having been a consideration for the assignments to him.. The bill cannot be sustained on this theory. Neither of the defendants had any insurable interest in Finnie’s life as relative, dependent, or creditor.
Policy 1,778,976, dated August 20, 1912 and executed by the company August 21st, was delivered to Finnie against his note for the first annual premium, which note he paid. Subsequently he revoked the designation of his wife as beneficiary, and assigned the policy to the defendant Morrow for an expressed consideration of $1. This being a valid policy on Finnie’s life, it was his property, which he could sell or give to any one, without reference to insurable interest, as held in Grigsby v. Russell, 222 U. S. 149, 32 Sup. Ct. 58, 56 L. Ed. 133, 36 L. R. A. (N. S.) 642, Ann. Cas. 1913B, 863.
*703The other four policies, though payable to his estate, were never delivered by the company to Finnic; he never paid any premiums upon them, and never owned them at all. They did not come into existence until delivery to his assignees against payment by them of the first annual premium. Finnie never had a valid policy to sell or give away, within the decision in the Grigsby Case. The situation was exactly as if the assignees had originally taken out wagering policies upon his life payable to them. Therefore I think, not merely the assignments, but the policies themselves, were void as wagering insurance. The fact that the insurance company has paid them to the defendant Mbrrow, assignee, as absolute owner, withbut raising any question of invalidity, does not change their character qua Finnie’s estate.
But the court, relying upon Warnock v. Davis, 104 U. S. 775, 26 L. Ed. 924, holds that the assignments are void, hut the policies valid. It must be admitted, as intimated by Mr. Justice Holmes in the Grigsby Case, that the language of Mr. Justice Field was too broad, although he finds the decisions themselves to be consistent with each other. I think they can he reconciled on the theory that in Warnock v. Davis the policy itself was held valid, perhaps because taken out by and delivered to the insured, he paying at least one-tenth of the first annual premium, and being liable for at least one-tenth of the subsequent premiums, and his widow, or, in case of her death, his estate, being entitled to at least one-tenth of the insurance.
This may have justified treating the assignment of the remaining nine-tenths as valid, but only as security for repayment of premiums advanced by the assignee. But the four policies in the instant case were in my opinion never valid at all, being pure wagers from their inception, and therefore neither P'innie in his lifetime nor his estate after his death had any standing to make claims against the insurance company or the person to whom it has paid the insurance. I think the decree should be affirmed as to the first policy, because it was valid, and as to the four policies, because Finnie’s estate has no interest in them, and not because they are valid.