Burdette v. Columbus Mut. Life Ins. Co.

• Decision Date: 01 May 1917
• Docket Number: 3163.
• Citation: Burdette v. Columbus Mut. Life Ins. Co., 80 W.Va. 384, 93 S. E. 366 (W. Va. 1917)
• Parties: BURDETTE v. COLUMBUS MUT. LIFE INS. CO.
• Court: West Virginia Supreme Court

93 S.E. 366

80 W.Va. 384

BURDETTE v. COLUMBUS MUT. LIFE INS. CO.

No. 3163.

Supreme Court of Appeals of West Virginia.

May 1, 1917

Submitted April 17, 1917.

Rehearing Denied Sept. 18, 1917.

Syllabus by the Court.

Any person competent to contract may in good faith lawfully procure insurance upon his life, and in the policy designate as beneficiary any one whom he may choose, though not related to him by blood or marriage. Insurance so procured is not invalid, or subject to condemnation as being obnoxious to public policy.

A foster daughter, when acting in good faith, lawfully may procure insurance upon her life, payable to her if living at the expiration of the term fixed by the contract, and in the policy designate as beneficiary in the event the insured should die within the term the foster mother, who has assumed toward the insured a moral obligation to maintain and support her as a member of the family composed solely of the beneficiary and her husband, they being childless.

Through valid on its face, such a contract of insurance ceases to be enforceable, because obnoxious to public policy, whenever in an action thereon by the beneficiary it appears from the proof introduced upon the trial, competent and sufficient to satisfy the minds of reasonable men, that the policy partakes of the nature of a wagering contract upon the continuance of the life insured, and as such tends to induce a temptation on the part of the beneficiary, by unfair means to terminate such life rather than to prolong it.

Whether the insurance was obtained in good faith or for speculative purposes merely, either by the insured or beneficiary depends upon the facts and circumstances surrounding the parties at the time of its procurement; of the sufficiency of which, and of the inferences to be drawn from them, to show the true character of the transaction, the jury, not the court, must determine.

Error to Circuit Court, Cabell County.

Action by Susan Burdette against the Columbus Mutual Life Insurance Company. Judgment for defendant, and plaintiff brings error. Reversed, verdict set aside, and new trial granted.

J. W Perry and Marcum & Shepherd, all of Huntington, for plaintiff in error.

J. M Sheets, of Columbus, Ohio, and Enslow, Fitzpatrick & Baker of Huntington, for defendant in error.

LYNCH, P.

Of the two questions discussed, one only need be determined upon this review; that one being whether plaintiff on June 30, 1913, had an interest in the life insured sufficient to permit her as beneficiary to maintain this action on the policy issued by the Columbus Life Insurance Company. Upon the trial the court, apparently adopting the view that she had no such interest, on defendant's motion excluded the testimony introduced by her and entered the nil capiat judgment of which she complains.

No relationship by consanguinity or affinity existed between Susan Burdette, the beneficiary, and Sadie Sarah Thompson, the insured. Until the early spring of 1913 they were strangers, unrelated in any manner, and personally unacquainted with each other. The plaintiff, a childless married woman, living with her husband, accepted and introduced the insured, who then was 17 years of age, into her household as a member of the family, theretofore composed of herself and husband. Until the date of her death, which occurred January 1, 1915, the insured remained a member of that household. Between her and the foster mother there arose an intimacy, sympathy, and friendship, which continued without interruption, except for a brief period of a few days, until terminated by the death of the girl; and the uncontradicted and unimpeached testimony shows beyond question not only that the two voluntarily assumed towards each other the performance of the reciprocal duties incident to the relation of foster mother and foster daughter, a relation which, though materially different from that maternal and filial reciprocity due to actual motherhood, is akin to it, but also that Mrs. Burdette had signified an intention to adopt the child as her daughter, under the authority of chapter 122, Code, and employed an attorney to prepare the papers necessary to institute the proceedings thereby required to effectuate that purpose, and, as one of the incidents of such adoption, to confer upon the girl the right of prospective inheritance from the foster parents. Plainly, this purpose, if it existed, and we must assume it did in the absence of proof to the contrary, was defeated by the illness and death of the insured. Moreover, as supplementary thereof, Mrs. Burdette, while the child was living, actually had in contemplation the making of a will devising and bequeathing to the insured jointly with the husband of the plaintiff, in the event they survived the testator, the property of which she should die seised and possessed.

The death of the insured was caused by pneumonia fever, induced by her voluntary and indiscreet exposure in going and returning from her bedroom and the toilet in the nighttime when insufficiently protected by clothing, while in the process of recovery from an operation by her medical adviser deemed necessary in order to remove the appendix, which he seemed to think was the provoking cause of the feverish condition that tended to retard her recovery from a chill suffered as the result of bathing in the waters of the river during the period of menstruation. The operation did disclose an abnormal enlargement of the appendix, and at the same time an unhealthy condition of the ovaries, the bath being assigned as the proximate cause of the infection. From these afflictions and from the operation itself she had not fully recovered when the fever set in, but for which she may have regained her former apparent healthfulness, as seems to have been the belief of her medical adviser.

An examination of the proof introduced upon the trial fails to disclose any substantial reason for assuming that underlying the act or purpose of the parties there were any improper motives or mala fides on the part of the insured or the beneficiary in procuring the contract. Nor is there anything pointed out as the basis of a suspicion of the want of good faith in the transaction, further than that the plaintiff through Dr. Schultz first directed the attention of the defendant's agent Payne to the fact that the insured desired to procure the policy. It is apparent, indeed obvious because not controverted, that the child herself first expressed a desire for the insurance, and that plaintiff's participation in effectuating that desire for the endowment policy issued was prompted by the protection it would afford to the child, the care of whom she had assumed, and who of her own accord caused the agent to name the plaintiff as the beneficiary in the event the former should die within the 20-year period fixed by the contract as the time of its maturity. If she survived that period, as her life expectancy seemed to indicate she would, the money then due on the policy would be payable to the insured herself. The only other fact relied on as indicative of a sinister motive in applying for the insurance is that Mrs. Burdette paid the first premium on the policy.

Evidently, the action of the trial court was based upon the proposition, sustained and supported by much authority, that, except where there is some relation by blood or affinity between the insured and the beneficiary, as in the case of husband and wife or parent and child, or some pecuniary interest to be conserved, as debtor or creditor, or in case of dependency, a beneficiary not so interested cannot maintain an action on a life insurance policy, because forbidden by public policy. Such a contract, it is said, partakes of the nature of a wager upon the existence of the life insured, and as such tends to induce the temptation on the part of the beneficiary to terminate rather than to prolong it. This, indeed, seems to have been the view taken and rigidly adhered to in the earlier cases. But the modern tendency is to relax that doctrine, and to enforce the contract by permitting recovery, provided always fraud or other improper motive does not enter into its procurement. If free from the suspicion that it was obtained for speculative purposes, the policy does not violate the rule against wagering contracts. Nor does it necessarily presuppose a desire by foul means to terminate the life insured in order to facilitate the enjoyment of the amount of the insurance.

It must be observed that the plaintiff made no effort to procure, and did not procure, a contract of insurance in her own name upon the life of the decedent, as was done in many of the decided cases which have held such contracts unenforceable because of the tendency to speculate upon the prolongation of the life of a particular person. The insured did what the court in Langdon v. Insurance Co. (C. C.) 14 F. 272, upheld as not violative of any rule of law. It was there said, what is peculiarly pertinent here:

"It is now well settled in the federal courts that a party cannot take out an insurance [policy]- ] upon his own life and assign the policy, either contemporaneously * * *

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