Bloomington Mut. Life Ben. Ass'n v. Blue

• Decision Date: 23 March 1887
• Citation: 120 Ill. 121,11 N.E. 331
• Parties: BLOOMINGTON MUT. LIFE BEN. ASS'N v. BLUE.
• Court: Illinois Supreme Court

120 Ill. 121

11 N.E. 331

BLOOMINGTON MUT. LIFE BEN. ASS'N

v.BLUE.

Supreme Court of Illinois.

March 23, 1887.

Error to appellate court, Third district.

Fifer & Phillips, for Bloomington Mut. Life Ban. Ass'n, plaintiff in error.

Kerrick, Lucas & Spencer, for Wm. Blue, defendant in error.

CRAIG, J.

This was an action brought by William Blue against the Bloomington Mutual Benefit Association to recover a certain amount of money claimed to be due on a life benefit certificate issued by the defendant in October, 1883, to William R. Bailey, by which the association agreed, on consideration of certain payments to be made by Bailey, to pay to William Blue, upon the death of Bailey, an amount therein named. To the declaration on the certificate the defendant filed four special pleas. In the first it is averred that defendant is a corporation organized and doing business under an act of the legislature approved June 18, 1883, in force July 1, 1883; that the plaintiff, Blue, is not a legatee or devisee of the said William R. Bailey, and is not related to the said Bailey either by affinity or consanguinity, etc.; that the defendant, by virtue of the act under which it was organized and doing business, was only authorized to furnish life indemnity and pecuniary benefits to the widows, orphans, etc., of deceased members, by means whereof said life benefit certificate was and now is null and void. The second plea is like the first, and contains the following additional averments: ‘The object for which it is formed is to provide and equitably distribute, at minimum cost, a fund devoted to the relief of widows, orphans, heirs, and devisees of deceased members.’ It is also averred in this plea that Blue was not a creditor of Bailey, and had no pecuniary interest in his life, and had no well-founded expectation of pecuniary advantage to be derived from the continuance of the life of Bailey. This plea also contains a copy of the constitution and by-laws of defendant. In the third plea the statute and defendant's articles of incorporation are set up as a defense, and in the fourth plea the articles of incorporation, and the fact that Blue had no pecuniary interest in the continuance of the life of Bailey, are interposed as a defense. To the pleas the court sustained a general demurrer, and, the defendant abiding by the pleas, judgment was rendered in favor of the plaintiff for the amount claimed.

It is contended- First, that Blue had no insurable interest in the life of Bailey, and hence the contract was void; second, that it is rendered void by virtue of the statute under which defendant is organized and doing business.

It may be regarded as a plain proposition of law that a wagering policy is void, and we think it also well settled that a policy taken out on the life of a third party by a beneficiary, in the continuance of whose life the beneficiary has no pecuniaryinterest, may be regarded as a wagering policy, and as such would be void. Had this policy been taken out by Blue on the life of Bailey, without his knowledge or consent, and had the premiums been paid by him, it would manifestly fall within what is known as a wagering policy, and would be void. Public policy forbids one person, who has no interest in the continuance of the life of another, from speculating on that life, by procuring a policy of insurance. But here it does not appear that Blue had any instrumentality whatever in procuring the policy on the life of Bailey, or that he ever paid any portion of the premiums to procure the policy, or to keep it in force, and hence the case of Insurance Co. v. Hogan, 80 Ill. 39, cited by the defendant, has no bearing on this case. In the case cited, the insurance was procured by the beneficiary, and all the premiums were paid by him; while here Bailey procured the policy, and paid all the premiums. Manifestly, the Hogan Case can have no bearing on the facts of this case. Bailey had an insurable interest in his own life, and had a clear right to procure a policy on his life; and, unless some principle of public policy is violated, he could make it payable, in case of death, to any person whom he might desire.

In Lemon v. Phoenix M. L. Ins. Co., 38 Conn. 294, where a similar question arose, it is said: ‘A question was made before us that Miss Lemon had not an insurable interest in Mr. Peterson's life. If she had undertaken to obtain, and had herself obtained, an insurance on his life, that question might have arisen; but, surely, Mr. Peterson had an insurable interest in his own life, and he obtained the insurance on it, and we know of no law to prevent him making it payable, in case of his death, to the person to whom he was affianced; and, if such a policy is delivered as a gift to the party to whom payable, we know of no law to prevent such a gift from being effectual. In Rawls v. Life Ins. Co., 27 N. Y. 282, Judge WRIGHT says: ‘If the contract is with the party whose life is insured, he may have the loss payable to his own representative, or to his assignee or appointee.’'

In Fairchild v....