Burt v. Union Cent. Life Ins. Co.

• Decision Date: 04 December 1900
• Docket Number: 864.
• Citation: 105 F. 419
• Parties: BURT et al. v. UNION CENT. LIFE INS. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

105 F. 419

BURT et al. v. UNION CENT. LIFE INS. CO.

No. 864.

United States Court of Appeals, Fifth Circuit.

December 4, 1900

Gardner Ruggles, for plaintiffs in error.

Geo. F Pendexter and Geo. E. Shelley, for defendant in error.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

SHELBY Circuit Judge.

This suit is on a life insurance policy, and is brought by S. M Burt and H. R. Burt, citizens of Texas, against the Union Central Life Insurance Company, a corporation chartered under the laws of Ohio. The policy was issued by the defendant on August 1, 1894, for $5,000, on the life of William E. Burt and was payable at his death to his wife, Anna M. Burt, if living, otherwise to the executors, administrators, or assigns of the insured, within 60 days after proof of death. The annual premiums for the policy were duly paid. The policy contained no provision for forfeiture in the event that the insured should be executed under sentence of the law. On September 10, 1895, Anna M. Burt and William E. Burt assigned in writing to the plaintiffs, to whom they were indebted, a one-half interest in the policy. Anna M. Burt died intestate on July 24, 1896. She left surviving her no descendants, and her husband, William E. Burt, became entitled to any interest she had in the policy. By assignment from William E. Burt and as his heirs and next of kin, the plaintiffs are the sole owners of the policy. William E. Burt was indicted for the murder of Anna M. Burt, in the district court of Travis county, Tex., and was tried on November 27, 1896. In addition to the plea of not guilty, he pleaded insanity. He was found guilty by the jury of murder in the first degree, and was by the court sentenced to be hanged; and on May 27, 1898, pursuant to the sentence, he was executed by the sheriff of Travis county, Tex. These facts are all alleged in the plaintiffs' petition. The petition then avers that the insured, William E. Burt, was in fact innocent of the crime of which he was convicted. To quote the petition as abridged by the plaintiffs' counsel, 'Notwithstanding said conviction and sentence, said William E. Burt did not in fact commit said murder, nor participate therein, but that, if he did, his policy was not avoided thereby, because he was insane. ' The defendant demurred to the petition because it appeared therefrom that the insured died at the hands of the law, under judgment of a court of competent jurisdiction. The circuit court, Judge Maxey presiding, sustained the demurrer. The plaintiffs declining to amend the petition, the case was dismissed. In this court it is assigned that the circuit court erred in sustaining the demurrer.

The industry of counsel has been able to find but one case in which a suit was brought on a life insurance policy when the insured had been tried and executed for the commission of crime. That case is Society v. Bolland, 4 Bligh (N.R.) 194, 211, and it is better known and oftener cited as the 'Fauntleroy Case.' It was an action by assignees in bankruptcy to collect a policy of insurance on the life of one Fauntleroy. The policy was made payable to his administrators or assigns. Fauntleroy was convicted of forgery, then a capital offense, and was executed. The lord chancellor (Lyndhurst) delivered the opinion. After stating the case, he said:

'The question, under these circumstances, is this: Whether the assignees can recover against the insurance company the amount of this insurance; that is to say, whether a party effecting with an insurance company an insurance upon his life, and afterwards committing a capital felony, being tried, convicted, and finally executed,-- whether, under such circumstances, the parties representing him and claiming under him can recover the sum insured in the policy so effected. I attended to the argument at the bar, in conjunction with the noble lord now present, and we have both come to the conclusion that the assignees cannot maintain this suit. It appears to me that this resolves itself into a very plain and simple consideration. Suppose that in the policy itself this risk has 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 committing 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 available) 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 the 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, we can sustain such a claim? Can we, considering the 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?' This case has been cited approvingly in many text-books on insurance, and by the supreme court of the United States. Ritter v. Insurance Co., 169 U.S. 139, 18 Sup.Ct. 300, 42 L.Ed. 693. That it correctly states the law has never been questioned so far as we know. it is quoted and relied on by the learned counsel for both parties to this suit. It is conceded, however, that there is a material difference between the facts of that case and this. Here the petitioners aver that the insured was guiltless, although convicted and executed. They aver in another count that, if he actually killed his wife, he was insane when he committed the act, and that the defense of insanity was presented unsuccessfully at the trial. If the insured did commit the homicide while insane, he was not guilty of murder. The meaning of the petition, therefore, is that at the trial of Burt, the insured, there was a miscarriage of justice,-- that he was unjustly convicted. It must be and is conceded as settled law that, if he had been rightfully convicted, his assignees could not recover on the policy, because, as was held in the Fauntleroy Case (stating the point most favorably for the plaintiffs in error), the policy would have been void if it had expressly provided for payment of the amount thereof on the just conviction and execution of the insured. Does a contract of insurance, having no special provision on the subject, cover the loss, when the insured is tried and condemned in, and executed by an order of, a court of competent jurisdiction, when he is in fact innocent of the crime with which he is charged? This precise question, we are advised by counsel, has never been decided. We will apply to the question the illustration used by the court in the Fauntleroy Case. Would the policy sued on have been valid if it had provided, in the event of the insured's being indicted, tried, convicted, and executed for murder, when in fact he was innocent, that the amount of the policy should be paid to his administrators or assigns? This condition would not be as encouraging to the insured, determined on crime, as that supposed by Lord Lyndhurst, but it would at least let him understand that the provision he had made by insurance for those connected with him would not be conclusively lost by his conviction and execution; that the beneficiaries would have a right of action on the policy, with chances of success, even if he was apprehended, convicted, and executed. It is well settled that no one can lawfully contract to do that which has a tendency to be injurious to the public or against the public good. Can there be a legal life insurance against the miscarriage of justice? Can contracts be based on the probability of judicial murder? If one policy so written be valid, the business of insuring against the fatal mistakes of juries and courts would be legitimate. The same principle could be applied, in a kind of accident insurance, to the miscarriage of justice in cases that led to convictions and punishments not capital. And in each suit to enforce such a policy the issue as to the fatal judicial mistake would be tried by another jury and court, not

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