Murphy v. Red

• Court: United States State Supreme Court of Mississippi
• Writing for the Court: ARNOLD, J.
• Citation: 64 Miss. 614,1 So. 761
• Parties: W. S. MURPHY, ADMINISTRATOR, v. E. O. RED
• Decision Date: 11 April 1887

1 So. 761

64 Miss. 614

W. S. MURPHY, ADMINISTRATOR,
v.
E. O. RED

Supreme Court of Mississippi

April 11, 1887

APPEAL from the Circuit Court of Holmes County, HON. C. H. CAMPBELL, Judge.

W. L. Red took out a policy of insurance on his own life in the New York Life Insurance Company, payable to him or his legal representatives. After paying the premiums thereon for several years he assigned the policy, in writing, in conformity with its provisions, for value, to R. M. Murphy, who had no insurable interest in the life insured. Murphy paid the premiums on the policy until Red's death, when he collected the money due on the same. After this R. M. Murphy died, and W. S. Murphy was appointed administrator of his estate. Mrs. E. O. Red, the widow and sole heir and distributee of W. L. Red, deceased, brought this action against W. S. Murphy, administrator, to recover the amount collected by R. M. Murphy on the policy of insurance, claiming that the assignment to him by her husband was not valid. The judgment in the court below was in favor of the plaintiff, Mrs. Red. The defendant, W. S. Murphy, administrator, appealed.

Judgment reversed.

Calhoon & Green, for the appellant.

It does not require an insurable interest in the assignee to support the assignment, even against the insurance company. St. John v. Am. L. Ins. Co., 2 Duer 419; s. c., 13 N.Y. 31; 22 Barb. 9; 20 N.Y. 32; Conn. Mut. L. Ins. Co. v. Schaeffer, 94 U.S. 461; Williams v. Carson, 2 Tenn. Ch. Rep. 269; Olmstead v. Keyes, 85 N.Y. 593.

A person has an insurable interest in his own life and may make the loss payable to his personal representative or a stranger who has no interest. Campbell v. New Eng. Mut. Life Ins. Co., 98 Mass. 381; Provident L. Ins. Co. v. Baum, 29 Ind. 236. Or assign to any one. Cunningham v. Smith, 7 Pa. St. 450.

"For myself, I can see no good reason why a man having an insurable interest may not insure it, and present the policy as a gift to a friend, and if such agreement be made to give at the very time of the contract, why may not the policy be made at once in the name of the donee, the whole transaction being bona fide--no fraud on the company being intended," Per Sharswood, J., in Am. Life and H. Ins. Co. v. Rabershaw, 26 Pa. St. 191, and the case and reasons were affirmed.

See for a clear exposition Clark v. Allen, 11 R. I. 441. See 52 Am. Rep. 142. In Trenton Life Ins. Co. v. Johnson, 4 Zab. N. J. 582, it was upon a full review of the authorities held that an insurable interest in the life was not necessary at common law, and that such interest was required by the statute of 14 George, which was not in force in New Jersey.

This case is cited with seeming approval in Maury v. Home Ins. Co., 9 R. I. 354. In Bussinger v. Bank, vol. 30 Northwestern Reporter (1886), p. 293, upon a review of the authorities, it is held that where the insurance is upon the life of the insured himself he may lawfully assign the same to any person, whether he has an insurable interest or not, citing a large number of cases, including those cited herein and others.

M. Green, for the appellant, argued the case orally.

Hooker & Wilson, for the appellee.

The vital question raised by the record is, what was the effect of the assignment by Red to Murphy of the policy?

It cannot be denied but that there is a great conflict of authorities upon the point raised in the record.

The cases seem to divide themselves in three classes.

One class (a small class) holding that an insurance can be effected in favor of a mere stranger to the insured, one who has no insurable interest in his life.

A second class holding that a policy issued in favor of one having no insurable interest in the life of the insured is void, but that if the policy is valid in its inception it is assignable to a stranger.

The third class holding that a policy issued to a stranger is not permissible, and that the same reasons and rules which forbid the issuance of a policy to a stranger forbid its assignment.

May on Insurance, § 398, approves the doctrine announced in the authorities cited below. He says that the same reasons which prevent a stranger acquiring a policy of insurance upon a life in which he has no interest by the direct issuance to him of such a policy also forbid him to acquire such policy by purchase.

We refer the court to the following authorities: 112 Pa. 251; 104 Pa. 77; 104 U.S. 775; 81 Ky. 368; 18 Kan. 93; 76 Ala. 183; 53 Ind. 380; May on Ins., §§ 74, 75; 41 Ind. 116; 101 Mass. 564; 15 Wall. 643; 46 Mich. 473; 10 La. An. 809.

If this contract of assignment was a wager contract then the attempt to convey it by Red was void, and it inured to the benefit of his wife (there being no children).

OPINION

[64 Miss. 617] ARNOLD, J.

It is shown that the husband of appellee before his death assigned the policy on his life for a valuable consideration to appellant's intestate. It is not suggested that there was any purpose in procuring the policy to evade or circumvent the laws against wagering policies, but it is affirmed on one side and...