International Life Ins. Co. v. Carroll

• Decision Date: 12 January 1927
• Docket Number: No. 4648.,4648.
• Citation: 17 F.2d 42,50 ALR 362
• Parties: INTERNATIONAL LIFE INS. CO. v. CARROLL et al.
• Court: U.S. Court of Appeals — Sixth Circuit

50 ALR 362, 17 F.2d 42 (1927)

INTERNATIONAL LIFE INS. CO. v. CARROLL et al.

No. 4648.

Circuit Court of Appeals, Sixth Circuit.

January 12, 1927.

John M. Atkinson, of St. Louis, Mo. (W. Thomas Coleman, of Morristown, Tenn., on the brief), for appellant.

C. G. Bond and C. W. Hewgley, both of Jackson, Tenn. (Bond & Bond, Murray & Murray, S. J. Everett, Hu C. Anderson, L. L. Fonville, T. W. Pope, R. R. Sneed, and Pearson & Hewgley, all of Jackson, Tenn., on the brief), for appellees.

Before DENISON and MOORMAN, Circuit Judges, and GORE, District Judge.

MOORMAN, Circuit Judge.

On November 4, 1924, appellant issued a joint policy of insurance upon the lives of Thomas B. Carroll, James L. Lamping, and John W. Ross, payable to the survivor or survivors. Ten months later it filed this suit to cancel the policy, alleging fraudulent representation in procuring it, lack of insurable interest of any one of the policy holders in the life of either of the others, and the suicide of Ross, terminating the policy under its express terms and fixing the liability thereunder at a sum equal to the first year's premium.

The first two grounds relate to the insurable interest of the policy holders. If there was no such interest, the policy must be canceled, not only for that reason, but also because of the fraudulent representations that were made in procuring it. The facts as to these questions are not in dispute. They appear in the application for the policy and in a stipulation showing that the three were jointly and severally bound on sundry obligations which they had incurred in joint real estate ventures. Each was bound to pay the full amount of these obligations upon the default of his co-obligors. No one of them was financially able to pay his part, but presumably — nothing to the contrary appears in the record — each of them hoped to do so, and even to recoup his fortune, if he lived. They were therefore mutually and beneficially interested in the continuation of the lives of each other. This interest, we think, was insurable. Connecticut Mutual Life Insurance Co. v. Schaefer, 94 U. S. 457, 24 L. Ed. 251; United States v. Hardware Co., 265 U. S. 189, 44 S. Ct. 546, 68 L. Ed. 970. We also find, as did the court below, that there was no intent to defraud the company when the policy was taken out, and no misrepresentation by any of the policy holders of their joint or several interests.

The third contention depends on the cause of Ross' death. If he committed suicide, the liability under the policy was an amount equal to the first premium, which amount appellant offered to pay into the registry of the court. The facts are as follows: He started alone in an automobile about 7:30 on the morning of July 9th to his kennels, several miles from Jackson. Four or five miles from the city the road crossed a ditch, over which there was a steel bridge that had been used for more than a year. He was seen at least twice en route, was driving slowly when seen, and was apparently too preoccupied to notice those whom he passed. He was familiar with the road. The ditch was 6 feet deep, with 2 or 3 feet of water in it. Shortly after 8 o'clock his car was found in the ditch, turned upside down, and he was beneath it dead. The tracks of the car indicated that about 60 feet from the bridge it had turned off the road to the right, proceeding straight to the ditch. The ground over which it ran after leaving the road sloped to the right. The foot brakes on the car were poor. When it was taken from the ditch, one door was open and the engine was in intermediate speed.

Ross was the United States Judge for the Western District of Tennessee. He was 45 years of age, left a wife and five children, was hopelessly in debt, and had nothing except a few hundred dollars in bank and a modest home, for which he had not paid. He and Carroll, who was the cashier of the People's Savings Bank of Jackson, Tenn., and Lamping had engaged extensively in real estate speculations, and had lost heavily. Their obligations were pressing. The bank became involved, and a committee of its stockholders, learning of its condition, called on Ross and demanded payment of his overdue indebtedness. He was unable to pay, and told them that, while he was legally bound on all the paper they held against him, he had received nothing for a large part of it, and that Carroll had not only caused him to lose all that he had, but had irretrievably involved him...