Chisholm v. Nat. Capitol Life Ins. Co.

• Decision Date: 31 March 1873
• Citation: Chisholm v. Nat. Capitol Life Ins. Co., 52 Mo. 213 (Mo. 1873)
• Parties: HARRIET O. CHISHOLM, Respondrix, v. NAT. CAPITOL LIFE INS. Co., Appellant.
• Court: Missouri Supreme Court

52 Mo. 213

HARRIET O. CHISHOLM, Respondrix,

v.NAT. CAPITOL LIFE INS. Co., Appellant.

Supreme Court of Missouri.

March Term, 1873.

Appeal from St. Louis Circuit Court.

Henderschott and Chandler, for Appellant.

A life policy is not one of indemnity. (Dally vs. The India and Life Assurance Company, 15 Com. Bench., 364.)

The act of 4, Geo. III, Chap. 48 is declaratory of the Common Law. (Bunyon on Life Ins., 19; Ruse vs. Mutual Benefit, 1 Bigelow, 472.

The plaintiff had no insurable interest in the life of Clark. All of the American cases agree that there must be some interest.

The following cases show a direct pecuniary interest. Mutual Life Ins. Co. vs. Johnston, 1 Bigelow, 327; Hoyt vs. N. Y. Life Ins. Co., Id., 497; Am. Life Ins. Co. vs. Robert Shaw, Id., 665; Rawls vs. American Life Ins. Co., Id., 549; Bevin vs. Conn. Mut., Id., 19; Miller vs. Eagle Life Ins. Co., Id., 375; Mitchell vs. Mut. Life Ins. Co., Id., 137; McKee vs. Phœnix Ins. Co., 28 Mo., 385; Loomis vs. Eagle Life Ins. Co., Id., 175; Mitchell vs. Union Life Ins. Co., Id., 137; Patton vs. National Loan Fund Ins. Society, 1 Bigelow, 409; Mutual Life Ins. Co. of N. Y., vs. Wager, Bigelow, 483.

Isaac T. Wise, for Respondent.

I. There is no statute in this State touching this contract, and therefore this is a contract at common law and valid. (Bunyon on Life Insurance, 18, note b., Id. 21, § 6; Lord vs. Dall, (12 Mass., 115); Bigelow's Life and Accident Reports, 1 Vol. 154, 328, 374; Miller vs. E. G. and H. Co., 2 E. D. Smith, 290; Trenton Life, &c. vs. Johnson, 4 Zabriskie, 576; Shannon vs. Nugent, Hayes' Irish Rep., 537; Dalby vs. India and London Life Ins. Co. 28; English Law and Eq., 28 312; Campbell vs. N. E. Life, 98 Mass., 381.)

II. Even if an insurable interest was a necessary pre-requisite to the validity of the contract, the matrimonial contract between plaintiff and the person insured, was amply sufficient.

The certainty or probability, direct or incidental, of pecuniary benefit to the living, or pecuniary loss or damage to any one by the death of another, gives an insurable interest. (Phillips on Ins. C. 3, § XIV; Phila. Life Co. vs. Amer. Life Co., 23 Penn. St., 65; Loomis vs. Eagle Life, 1 Bigelow, 175; McKee vs. Phœnix Ins. Co., 28 Mo., 384; Miller vs. Eagle, Life Ins. Co., 1 Bigelow, 394.)

WAGNER, Judge, delivered the opinion of the court.

The main error assigned and relied upon for the reversal of this case, is the action of the court in refusing to declare that the plaintiff had no such insurable interest in the life of the person insured, as would entitle her to recover.

The record shows that there was a contract of marriage existing between plaintiff and Robert Peel Clark, and that on the 17th day of July, 1869, the defendant made and delivered to plaintiff its policy of insurance whereby it insured the life of the said Clark for the term of his natural life, for the sum of five thousand dollars. The policy was issued and delivered to plaintiff and made payable to her as the intended wife of Clark, she paying the annual premium of ninety dollars and twenty cents. The first premium was duly paid by her, and on the 12th day of January, 1870, whilst the policy was in full force, but before the contemplated marriage had been solemnized, Clark died.

What interest or whether any is necessary in the life of the person insured to support the contract of insurance is left in some confusion by the adjudged cases, as the authorities are contradictory. The leading case of Godsall vs. Bolden, (9 East, 72) was decided on the principle that a contract of life insurance was simply a contract of indemnity, not only requiring an interest in the assured, in order to give it a validity at its inception, but continuing good only so far as it was rendered so by the permanence of such interest. But that case was generally received with great dissatisfaction, and the insurance offices seldom availed themselves of the decision, as they found it very injurious to their interests to do so. They usually paid the amounts of their life insurances, and the decision was practically disregarded. But the same question was subsequently taken to the Exchequer Chamber on Error in the case of Dalby vs. The India and London Life Assurance Co., (15 Com. Bench, 364,) and Godsall vs. Bolden, was directly overruled.

There it was held, that the contract of life assurance was not one of indemnity, but a mere contract to pay a certain sum of money on the death of a person in consideration of the due payment of certain annual premiums during his life. An insurance on life has in fact very little resemblance to a fire or marine insurance. In a fire or marine insurance the particular object is to indemnify against a pecuniary loss, and the event upon which the money is made payable is the happening of the loss, the terms of the contract being to pay whatever is lost, not exceeding a specified amount. But a life insurance is a valued policy and a contract to pay a certain definite sum on the happening of a particular event, which may or may not occasion a pecuniary loss. In England there is a statute (4 Geo. III., ch. 48,) which enacts in express terms, that no insurance shall be made on the life of any person, wherein the person for whose use such policy shall be made shall have no interest, and that in all cases where the insured hath interest in the life, no greater sum shall be recovered or received from the insurers, than the amount or value of the interest of the insured during such life. But this statute does not extend to Ireland, and the courts of that country have held in a number of cases, that at the common law, policies of insurance are valid without any interest. (Bunyon on Life Ass., p. 11; Shannon vs. Nugent, 1 Hayes, 536; Fergusen vs. Lomax, 2 Dru. and War., 120; Scott vs. Roose, Long and...