Burt Burt v. Union Central Life Insurance Company

• Decision Date: 22 December 1902
• Docket Number: No. 70,70
• Citation: 47 L.Ed. 216,23 S.Ct. 139,187 U.S. 362
• Parties: S. M. BURT and H. R. BURT, Petitioners , v. UNION CENTRAL LIFE INSURANCE COMPANY
• Court: U.S. Supreme Court

187 U.S. 362

23 S.Ct. 139

47 L.Ed. 216

S. M. BURT and H. R. BURT, Petitioners,

v UNION CENTRAL LIFE INSURANCE COMPANY.

No. 70.

Argued and Submitted November 6, 1902.

Decided December 22, 1902.

This was an action to recover on a policy of life insurance, commenced in the district court of Travis county, Texas, and removed to the circuit court of the United States for the western district of Texas. The policy was issued August 1, 1894. William E. Burt was the insured. The policy, in case of death, was payable to Anna M. Burt, the wife of the insured, if living, otherwise to his executors, administrators, or assigns. On September 10, 1895, the beneficiary, Anna M. Burt, and her husband, the insured, assigned a one-half interest to plaintiffs to secure them as creditors of the assignors. On July 24, 1896, the beneficiary, Anna M. Burt, died intestate, as did also the only children of the beneficiary and the insured. On February 4, 1897, the insured, William E. Burt, conveyed to the plaintiffs the remaining interest in the policy, making them the sole owners of it. They are also his sole heirs, and as such are entitled, to the full benefit of the policy, there being no administration on his estate, nor any necessity for one.

On November 27, 1896, the insured, having been indicted for the murder of his wife, Anna M. Burt, the beneficiary, was tried and convicted in the district court of Travis county, Texas, a court of competent jurisdiction, was sentenced to be put to death, and on May 27, 1898, was hanged pursuant to such sentence. The petition in this case alleged that, notwithstanding such conviction, sentence, and execution, the insured, William E. Burt, did not in fact commit the crime of murder, nor participate therein, but that, if he did, the policy was not avoided thereby because he was at the time insane.

The policy, which in its general scope was an ordinary policy of life insurance, contained these provisions:

'Third. If the insured should, without the written consent of the company, at any time enter the military or naval service, the militia excepted, or become employed in a liquor saloon, or if the insured should die by self-destruction, whether sane or insane, within three years from date hereof, this policy shall be null and void.

* * * * *

'The contract of insurance between the parties hereto is completely set forth in this policy and the application for the same.'

A demurrer to the petition was sustained and judgment entered for the defendant, which was thereafter affirmed by the court of appeals of the fifth circuit (44 C. C. A. 548, 105 Fed. 419), and thereupon the case was brought here on certiorari. 181 U. S. 617, 45 L. ed. 1030, 22 Sup. Ct. Rep. 945.

Mr. Gardner Ruggles for petitioners.

Mr. Robert Ramsey for respondent.

Mr. Justice Brewer delivered the opinion of the court:

There is nothing in the policy which in terms covers the contingency here presented, the extracts therefrom given in the preceding statement being all that, even remotely, by suggestion or inference, can have any bearing. The question, therefore, is whether an ordinary life policy containing no applicable special provisions is a binding contract to insure against a legal execution for crime. The petitioners would distinguish between cases in which the insured is justly convicted and executed, and those in which he is unjustly convicted. The allegation here is that, notwithstanding his conviction and execution, he was not in fact gulity, that he did not participate in the killing of his wife, and that, if he did, he was insane at the time, and therefore not responsible for his actions.

Accepting the division made by counsel as one facilitating a just conclusion concerning the rights of the parties hereto, we inquire, first, whether a policy of life insurance is a contract, binding the insurer to pay to the beneficiary the amount of the policy in case the insured is legally and justly executed for crime. In other words, do insurance policies insure against crime? Is that a risk which enters into and becomes a part of the contract?

The researches of counsel have found but one case directly in point, Amicable Soc. v. Bolland, decided by the House of Lords in 1830, and reported in 4 Bligh N. R. 194, 211. The Lord Chancellor, delivering the opinion, after stating the question, answered it in the following brief but congent words:

'It appears to me that this resolves itself into a very plain and simple consideration. Suppose that in the policy itself this risk had been insured against; that is, that the party insuring had agreed to pay a sum of money year by year upon condition that, in the event of his commiting a capital felony, and being tried, convicted, and executed for that felony, his assignees shall receive a certain sum of money,—is it possible that such a contract could be sustained? Is it not void upon the plainest principles of public policy? Would not such a contract (if avaiable) take away one of those restraints operating on the minds of men against the commission of crimes,—namely, the interest we have in the welfare and prosperity of our connections? Now, if a policy of that description, with such a form of condition inserted in it in express terms, cannot, on grounds of public policy, be sustained, how is it to be contended that in a policy expressed in such terms as the present, and after the events which have happened, that we can sustain such a claim? Can we, in considering this policy, give to it the effect of that insertion, which, if expressed in terms, would have rendered the policy, as far as that condition went, at least, altogether void?'

There are some differences between that case and the present in the surrounding facts, but none that are material. There the policy was taken out for the benefit of the insured's estate. Here the beneficiary was the wife of the insured, or, if she should not be living at the time of his death, his estate. As her death preceded his, the conditions of the insurance became practically the same. In that case the insured had assigned all his interest in the policies upon certain trusts, though the plaintiffs were his assignees in bankruptcy. Here he and his wife, the original beneficiary, transferred a half interest to these plaintiffs, who were their creditors, but the amount of the indebtedness is not shown, and the policy provided 'should this policy be assigned or held as security, a duplicate of said assignment must be filed with the company, and due proofs of interest produced with proofs of death. This company does not guarantee the validity of any assignment;' a requirement which does not appear to have been complied with. So that the rights of the plaintiffs depend mainly, if not wholly, upon the fact of the assignment made by the insured after the killing of his wife and prior to his execution, and the further fact that they are his sole heirs. The plaintiffs, therefore, in each of the cases claimed directly under the insured, and sought to recover on a policy obtained by him, the maturity of which was accelerated by his execution for crime. In neither policy was there any express stipulation in respect to such a contingency, so that the reasoning of the Lord Chancellor is pertinent to this case, and it is reasoning the force of which it is impossible to avoid. It cannot be that one of the risks covered by a contract of insurance is the crime of the insured. There is an implied obligation on his part to do nothing to wrongfully accelerate the maturity of the policy. Public policy forbids the insertion in a contract of a condition which would tend to induce crime, and as it forbids the introduction of such a stipulation it also forbids the enforcement of a contract under circumstances which cannot be lawfully stipulated for.

That case was cited with approval in Ritter v. Mutual L. Ins. Co. 169 U. S. 139, 42 L. ed. 693, 18 Sup. Ct. Rep. 300, in which we held that a life insurance policy taken out by the insured for the benefit of his estate was avoided when he, in sound mind,...