Connecticut Mut Life Ins Co v. Luchs

• Decision Date: 07 May 1883
• Parties: CONNECTICUT MUT. LIFE INS. CO. v. LUCHS
• Court: U.S. Supreme Court

108 U.S. 498

2 S.Ct. 949

27 L.Ed. 800

CONNECTICUT MUT. LIFE INS. CO. v. LUCHS.

May 7, 1883.

[Syllabus from page 498 intentionally omitted]

[Statement of Case from pages 498-500 intentionally omitted] Enoch Totten, for Connecticut Mut. Life Ins. Co.

A. S. Worthington, for Luchs.

[Argument of Counsel from pages 500-502 intentionally omitted]

FIELD, J.

This was an action by Leopold Luchs on a policy of insurance upon the life of Levi Dillenberg, issued by the Connecticut Life Insurance Company in June, 1869. Luchs and Dillenberg were partners at the time in the business of buying and selling tobacco in the city of Washington. Their partnership was formed in October, 1866, each agreeing to contribute his services and one-half of the capital. It was understood that the money of Dillenberg was then invested in mining stocks, and could not at once be obtained. Luchs accordingly furnished the entire capital, which was over $10,000. Dillenberg never contributed his portion, and, about two years after the partnership was formed, his failure in this respect caused dissatisfaction and complaint. It was thereupon suggested by one Myers, who was employed by an agent of the insurance company, and who had been called in as an accountant to examine the books of the concern, that, as a means of 'adjusting the dispute or misunderstanding between the partners,' a policy of insurance should be obtained upon the life of Dillenberg for the benefit of Luchs, and that Dillenberg should retire from the firm within a year afterwards. Nothing, however, was then done upon this suggestion, but in the following year the policy in suit was procured.

1. The first question presented is as to the right of Luchs to sue upon it. It is plain, from the parol evidence in the case, that it was the intention both of Luchs and Dillenberg that the policy should be procured for the benefit of Luchs. The declaration, which is the application for the policy, begins with an averment that he, Luchs, is desirous of affecting an insurance upon the life of Dillenberg, and proceeds to state the latter's age, the condition of his health, the character of his habits, and that he, Luchs, has an interest in the life of Dillenberg to the amount of $10,000. The declaration is signed both by Luchs and Dillenberg, though it purports in every line to be the separate application of Luchs. It is accompanied by questions and answers, and to the first question, as to the name and residence of the person for whose benefit the insurance is proposed, the answer is: 'Leopold Luchs, Washington, D. C.' The answers also are signed both by Luchs and Dillenberg.

The policy was issued and delivered to Dillenberg, and retained by him until after the dissolution of the partnership, when he handed it to Luchs, stating that he gave it to him to show that he intended to do what was right and fair with him, and requested him to pay the premiums on it, promising to refund the money. The first two premiums were paid by Dillenberg, the others by Luchs. The difficulty in the question presented arises from the language of the policy. Omitting words not essential on this point, it reads as follows:

'This policy witnesseth that the Connecticut Mutual Life Insurance Company, in consideration of the declarations and representations made to them in the application for this insurance, and the sum of $125 to them in hand paid by Leopold Luchs, * * * do assure the life of Levi Dillenberg. * * * And the said company do hereby promise * * * the said assured * * * to pay * * * said sum insured to the said assured, his executors, administrators, or assigns, within ninety days after due notice and proof of the death of the said Levi Dillenberg.

'It is hereby declared to be the true intent and meaning of this policy, and the same is accepted by the assured upon the express conditions that in case the said person whose life is hereby insured shall pass beyond the settled limits or the protection of the government of the United States, * * * this policy shall be null. It is also understood that if the proposal, answers, and declaration made by the said Leopold Luchs, which are hereby made part and parcel of this policy as fully as if herein recited, and upon the faith and warranty of which this agreement is made, shall be found in any respect untrue, this policy shall be null and void, or in case the said assured shall not pay the said annual premiums, * * * this policy shall cease.

'It is further agreed that this poliey shall not take effect * * * until the premium above named shall be actually paid * * * during the life of the insured.'

The contention of the plaintiff is that the words 'the assured' in the policy apply to the person for whose benefit the policy was effected, that is, Luchs, and not to the party whose life was insured. There are undoubtedly instances where this distinction between the terms 'assured' and 'insured' is observed, though we do not find any judicial consideration of it. The application of either term to the party for whose benefit the insurance is effected, or to the party whose life is insured, has generally depended upon its collocation and context in the policy. We are of opinion that, reading the policy here in connection with the declaration and the answers of Luchs, which form a part of it, and indicate the object of procuring it, the term 'assured' must be held as applicable to him, for whose benefit it was effected.

The policy considered in AEtna Life Ins. Co. v. France, 94 U. S. 562, gives some support to this view. There the policy was effected by a brother for a sister's benefit, and term assured was held to apply to the sister, for she recovered in a suit brought in connection with her husband on the policy. The attention of the court does not appear, however, to have been directed to that term. It may be said, also, that there could be little doubt as to its proper application in that case, as it was followed by the words 'and her executors, administrators, or assigns,' thus limiting it to the sister. In other respects the language is substantially identical with that of the policy under consideration.

2. The second question presented for our determination is whether Luchs had an insurable interest in the life of Dillenberg. Upon this we have no doubt. Dillenberg was his partner and had not paid his promised proportion of the capital of the concern. At the time the policy was applied for he was still in default, and although it might have turned out that the actual amount due, upon a settlement of accounts, was less than the promised proportion, it was not a matter definitely ascertained at the time. Besides what was thus due to him, Luchs was interested in having Dillenberg continue in the partnership. He had such an interest, therefore, as took from the policy anything of a wagering character.

As this court said in Warnock v. Davis, recently decided:

'It is not easy to define with precision what will, in all cases, constitute an insurable interest, so as to take the contract out of the class...