Haase v. First Nat. Bank

• Decision Date: 13 November 1919
• Docket Number: 7 Div. 23
• Parties: HAASE et al. v. FIRST NAT. BANK OF ANNISTON.
• Court: Alabama Supreme Court

84 So. 761

203 Ala. 624

HAASE et al. v. FIRST NAT. BANK OF ANNISTON.

7 Div. 23

Supreme Court of Alabama

November 13, 1919

Rehearing Denied Jan. 29, 1920

Appeal from Circuit Court, Calhoun County; Hugh D. Merrill, Judge.

Bill by the Mutual Life Insurance Company of New York against the First National Bank of Anniston, Charles J. Haase, executor of the estate of Julius Saarbach, and Charles Wurtzburger and wife. From the decree rendered, defendant First National Bank of Anniston and defendant Charles J. Haase appeal. Affirmed.

Each of the respondents answered. The bank claimed under its assignment from Wurtzburger and the proceedings it had taken to enforce its lien under the assignment on the policy. Wurtzburger having died pending the suit, an administrator ad litem answered that Wurtzburger claimed no interest in the policy, having no interest in the life of the insured, and that the proceeds of the policy properly belonged to the estate of Julius Saarbach. Saarbach's executor answered claiming the proceeds of the policy and setting up that both transfers were void. The chancellor decreed that the funds arising from the policy were the property of the First National Bank.

Weakly & Rice, of Birmingham, for appellants.

Knox Acker, Dixon & Sterne, of Anniston, for appellee.

SAYRE J.

In 1871 Julius Saarbach procured a policy of insurance on his own life in the sum of $1,000, payable at his death to his executors, administrators, or assigns, for which he paid and was to pay a single premium of $403.75. In August, 1887, on a recited consideration of $1 and other valuable considerations, the insured assigned this policy to his son-in-law, Charles H. Wurtzburger. In 1890 Wurtzburger assigned the policy to appellee bank, in fact to secure a note of $1,000, but this, as well as the assignment to Wurtzburger, was absolute in form. In 1894, Wurtzburger having failed to pay, appellee, proceeding under the statute in such cases made and provided, foreclosed its lien on the policy and became the purchaser thereof. In 1911 Saarbach died, appellee brought its action at law, and, the personal representatives of both Saarbach and Wurtzburger laying claim to the policy, the insurance company filed this its bill of interpleader to have determined the ownership of the policy worth at that time $2,044.53.

We have a line of cases which hold--and in this state there is nothing to the contrary--that an assignment like that to Wurtzburger, who had no insurable interest in the life of Saarbach (27 Cyc. 704), is obnoxious to public policy as constituting a wager contract. Helmetag v. Miller, 76 Ala. 183, 52 Am.Rep. 316; Ala. Gold Life Ins. Co. v. Mobile Mutual Ins. Co., 81 Ala. 329, 1 So. 561; Stoelker v. Thornton, 88 Ala. 241, 6 So. 680, 6 L.R.A. 140; Sands v. Hammell, 108 Ala. 624, 18 So. 489; Spies v. Stikes, 112 Ala. 584, 20 So. 959; Culver v. Guyer, 129 Ala. 602, 29 So. 779; Troy v. London, 145 Ala. 280, 39 So. 713. For a summary of the conflicting decisions on this subject in other jurisdictions, see 2 Joyce on Insurance (2d Ed.) § 919. These cases at their source in this state (Helmetag v. Miller) were based in part on Stevens v. Warren, 101 Mass. 564. But in Mutual Life Insurance Co. v. Allen, 138 Mass. 24, 52 Am.Rep. 245, decided in the same year with Helmetag v. Miller, and evidently not before this court in Helmetag v. Miller, it was said that the case of Stevens v. Warren, in so far as it had been supposed to hold that an assignment of the right of the insured in a life policy to one who has no interest in the life was void, without regard to the circumstances and character of the particular transaction, had been misunderstood, and that court, after reviewing the cases cited by this court in support of its decision, came to the conclusion that there was nothinging in a contract of life insurance which would prevent the insured from selling his right under the contract for his own advantage, and that an assignment made by the insured in good faith for the purpose of obtaining the present value of his policy, and not as a gaming risk between him and the assignee, passed the equitable interest of the assignor. We are now asked to review our cases, but do not find that to be necessary, and will not consider whether they should be further followed.

The assignment to Wurtzburger was executed and delivered in the state of New York, where Saarbach lived at the time, or possibly in the state of Tennessee, of which state Wurtzburger was then a citizen and resident, and by the law of those states alike, competently proved at the hearing ( Cubbedge v. Napier, 62 Ala. 518), such assignment was valid, and, for aught appearing, conferred a perfect title upon the assignee (Steinbach v. Diepenbrock, 158 N.Y. 24, 52 N.E. 662, 44 L.R.A. 417, 70 Am.St.Rep. 424; Clement v. Insurance Co., 101 Tenn. 22, 46 S.W. 561 42 L.R.A. 247, 70 Am.St.Rep. 650). In Afro-American Life Ins. Co. v. Adams, 195 Ala. 147, 70 So. 119, in Barnett v. United Brothers, etc., 10 Ala.App. 382, 64 So. 518, and in American National Ins. Co. v. Moore, 14 Ala.App. 413, 70 So. 190--the last two being referred to in the briefs--it was held that the public policy which forbids a mere stranger, having no insurable interest in the life of the insured, to take out or otherwise acquire insurance on the life of another, does not prevent one who procures and retains insurance on his own life from making the benefit payable to another, without regard to whether the latter has an insurable interest; but those cases did not involve the precise point now at issue, and need not be further considered. The cases generally hold that the assignment of a life policy is governed by the law of the place where the assignment is made (25 Cyc. 780, 781), and our predecessors seem to have held that contracts which may in a general way be classed with the contract in question as interpreted in the line of cases to which we have referred--that is, contracts for the sale of "futures"--if legal where made, would be enforced in this state (Hawley v. Bibb, 69 Ala. 52; Peet v. Hatcher, 112 Ala. 514, 21 So. 711, 57 Am.St.Rep. 45). These cases were decided prior to the enactment of section 3345 of the Code of...