Howell v. American Nat. Ins. Co.
| Decision Date | 04 March 1925 |
| Docket Number | 62. |
| Citation | 126 S.E. 603,189 N.C. 212 |
| Parties | HOWELL v. AMERICAN NAT. INS. CO. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Washington County; N. A. Sinclair Judge.
Action by Eva Howell, by next friend, Van Howell, against the American National Insurance Company. Judgment for plaintiff and defendant appeals. No error.
Immaterial allegation of complaint on accident policy as to cause of injury properly omitted from special issue.
On September 29, 1920, defendant, in consideration of the statements made in a written application, signed by him issued to John Walker, a policy of insurance. In said application John Walker stated that his age, at nearest birthday, was 33 years and that, in case of his death, the beneficiary should be Eva Howell, related to him as daughter. The policy provided indemnity for loss of life, limb, limbs sight, or time, caused by accidental means, and for loss of time by sickness. Defendant agreed to pay to insured certain sums fixed by the terms of the policy for loss of limb, limbs, sight, or time. For loss of life, resulting directly and exclusively of all other causes, from bodily injuries sustained solely through external, violent, and accidental means, defendant agreed to pay to the beneficiary named the principal sum of $500 with an increase of 10 per cent. for each consecutive year's renewal of the policy. If beneficiary named did not survive insured, the indemnity for loss of life was payable to the executors or administrators of insured.
John Walker, the insured, died on October 18, 1922, leaving surviving plaintiff, Eva Howell, named in the application as beneficiary of indemnity provided in the policy for loss of life. Summons in this action was issued on April 27, 1923, and the action was tried at January term, 1925, of the superior court of Washington county, before Judge Sinclair and a jury. The verdict was as follows:
"(1) Was John Walker's death the direct and exclusive result of bodily injuries sustained solely through external violence and accidental means? Answer: Yes.
(2) Was Eva Howell the daughter of John Walker, as stated by him in the application for the policy? Answer: No.
(3) Did the beneficiary, Eva Howell, have an insurable interest in the life of John Walker at the time the policy was issued? Answer: No.
(4) Did John Walker procure the policy of insurance, and pay all premiums thereon as a gift to Eva Howell? Answer: Yes.
(5) In what amount, if any, is the defendant indebted to the plaintiff? Answer: $550 and interest from October 18, 1922."
From judgment in accordance with this verdict defendant, having excepted thereto, appealed, assigning errors based upon exceptions.
W. L. Whitley, of Plymouth, for appellant.
Horace V. Austin, of Plymouth, for appellee.
Defendant, in apt time, tendered issues as set out in statement of case on appeal, and excepted to the refusal of the court to submit the same as tendered. Defendant also excepted to issue No. 1 and to issue No. 4, as submitted by the court. The issues submitted arose upon the pleadings, liberally construed, and the answers thereto were determinative of the matters in controversy between the parties. The first issue tendered would have unduly limited the right of plaintiff to recover in this action, as it was predicated upon the assumption that defendant was liable, under the policy, only in the event that the death of insured was the result of injuries caused by the Norfolk Southern Railroad Company. It is true that plaintiff alleges in her complaint that John Walker "was accidentally struck near Mackey's, N. C., by the Norfolk Southern train." Defendant, however, had insured John Walker "against death or disability resulting directly and exclusively of all other causes from bodily injury sustained solely through external, violent, and accidental means, and had agreed that if loss of life should result solely from "such injury" it would pay to the beneficiary the amount provided in the policy as indemnity for such loss. If death was the result of such injury, it was wholly immaterial whether the injury was caused by the Norfolk Southern Railroad Company or not. The issue submitted was in the identical language of the policy and embodied the essential fact alleged in the complaint.
Nor was there error in submitting issue No. 4. The right of the plaintiff to recover as beneficiary named in the application for the policy was not to be determined solely by whether or not she had an insurable interest in the life of John Walker at the time the policy was issued. Assuming that the jury should answer issue No. 3 in the negative, as it did, it became material, under the law, to plaintiff's cause of action and to her right to recover, to determine whether or not insured procured the policy to be issued on his own life, and whether or not he paid the premium required to keep the policy in force. The issues submitted by his honor were proper issues. There was no error in refusing to submit the issues tendered by defendant.
Defendant relies, chiefly, on this appeal, upon its contention that plaintiff cannot recover in this action (1) because she had no insurable interest in the life of John Walker, at the date of the issuance of the policy under which she claims as beneficiary; and (2) because of the statement in the application by John Walker that she was his daughter, contending that this was a false statement of a fact material to the acceptance of the application and the issuance of the policy by defendant. These contentions are presented by defendant's motion for judgment as of nonsuit, to the refusal of which defendant excepted. There are other exceptions presenting these contentions. Assignments of error, based upon these exceptions, are discussed by counsel for defendant in his brief, with full citation of authorities relied upon to sustain the exceptions and with his accustomed clearness of statement and intelligent comprehension of the principles of law involved.
These contentions of defendant cannot, however, be sustained. It is true that a contract of life insurance, not supported by an insurable interest, is held to be contrary to public policy, and void. Vance on Insurance, p. 125. An insurable interest in the life of another has been defined to be "such an interest, arising from the relation of the party obtaining the insurance, either as creditor of or surety for the assured, or from ties of blood or marriage, to him as will justify a reasonable expectation of advantage or benefit from the continuance of his life." May on Insurance, § 102, cited and approved in Trinity College v. Insurance Co., 113 N.C. 245, 18 S.E. 175, 22 L. R. A. 291. See Albert v. Insurance Co., 122 N.C. 94, 30 S.E. 327, 65 Am. St. Rep. 693; Powell v. Dewey, 123 N.C. 105, 31 S.E. 381, 68 Am. St. Rep. 818; Hinton v. Insurance Co., 135 N.C. 321, 47 S.E. 474, 65 L. R. A. 161, 102 Am. St. Rep. 545; Victor v. Mills, 148 N.C. 116, 61 S.E. 648, 16 L. R. A. (N. S.) 1020, 16 Ann. Cas. 291; Hardy v. Insurance Co., 152 N.C. 291, 67 S.E. 767; Life Ins. Clearing Co. v. O'Neill, 106 F. 800, 45 C. C. A. 641, 54 L. R. A. 225, and note; Warnock v. Davis, 104 U.S. 779, 26 L.Ed. 926.
However, every person has an insurable interest in his own life, and may lawfully insure it for the benefit of his own estate, or in behalf of any other person. It is not necessary that such beneficiary shall possess an interest in the life insured. Vance on Insurance, p. 125; Albert v. Insurance Co., 122 N.C. 93, 30 S.E. 327, 65 Am. St. Rep. 693. In Hardy v. Insurance Co., 152 N.C. 286, 67 S.E. 767, Justice Hoke, writing for this court, says:
"We consider it, however, as established by the great weight of authority that where an insurant makes a contract with a company, taking out a policy on his own life for the benefit of himself or his estate generally, or for the benefit of another, the policy being in good faith and valid at its inception, the same may, with the assent of the company, be assigned to one not having an insurable interest in the life of the insured; provided this assignment is in good faith, and not a mere cloak or cover for a wagering transaction."
See Pollock v. Household of Ruth, 150 N.C. 211, 63 S.E. 940; Johnson v. Insurance Co., 157 N.C. 107, 72 S.E. 847; Wooten v. Order of Odd Fellows, 176 N.C. 52, 96 S.E. 654.
Where the insured procures a policy of insurance on his own life and pays the premiums himself, he may name as beneficiary, in the event of his death and of liability of the company for the loss thereby sustained, a person who has no insurable interest in his life, at the date of the issuance of the policy. The insurable interest covered by the policy is the interest which the insured has in his own life; the amount due by the terms of the policy is indemnity for the loss which the insured sustains by his death, and is payable to the beneficiary, not as an indemnity for his loss, by the death of the insured, but as a bounty in accordance with the direction of the insured. So, after the policy has been issued, payable to the estate of the insured, or to another, it may be assigned, subject to the provisions of the policy itself, to one who has no insurable interest in the life of the insured at the date of the assignment. It is only when a policy has been issued upon the life of another, upon application and for the benefit of one who has no insurable interest in the life insured, and who pays or undertakes to pay the premiums, that the policy is void as against public policy. Such a policy is a wagering transaction. So, although a policy of insurance be issued, payable to the estate of the insured, if, at the inception of the contract, there is an agreement that it shall...
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