Mutual Life Ins. Co. of New York v. Lane

• Decision Date: 04 February 1907
• Citation: 151 F. 276
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. LANE et al.
• Court: U.S. District Court — Southern District of Georgia

151 F. 276

MUTUAL LIFE INS. CO. OF NEW YORK v. LANE et al.

United States Circuit Court, S.D. Georgia.

February 4, 1907

A. R Lawton, for complainant.

Robert M. Hitch and Remer L. Denmark, for executors.

Garrard & Meldrim, for Max Alexander.

SPEER District Judge.

The Mutual Life Insurance Company of New York filed a bill of interpleader, with the averments following. On the 5th of August, 1899, it issued a policy of insurance on the life of the late John R. Young, then of Savannah, Ga. The policy was made payable to his executors, administrators, or assigns. The contract was what is known as a '20-payment, deferred dividend life policy, ' with the cash surrender, loan and extended insurance provisions usual in such policies. Its face value was $50,000, and the annual premium $2,242. On the 9th day of September, 1902, Young borrowed from the company the sum of $4,000, and pledged the policy as security therefor. Young died on November 19, 1905. Previously to his death, namely, on the 30th of April, 1903 there was filed with the complainant what purported to be an assignment of the policy from Young to one Max Alexander. Shortly after Young's death Max Alexander, claiming to be assignee, filed proofs of death, claiming the entire amount payable on the policy. This was $46,133.89.

The assignment is as follows:

'For one dollar, to me in hand paid, and for other valuable considerations (the receipt of which is hereby acknowledged) I hereby assign, transfer, and set over to Max Alexander, whose P.O. address is Savannah, Ga., all my right, title and interest in this policy No. 983258, issued by the Mutual Life Insurance Company of New York, and for the considerations above expressed, I do also for myself, my executors and administrators, guaranty the validity and sufficiency of the foregoing assignment to the above named assignee, his executors, administrators, and assigns, and their title to the said policy will forever warrant and defend.

'Dated in Savannah, Ga., this 30th day of April, 1903.

'(Signed)

John R. Young.

'In the presence of

'(Signed) M. Hyams, Jr.'

Young died testate. By his will Mills B. Lane, J. W. Mott, and D. C. Ashley were appointed executors. The bill recites that these executors have notified the complainant that the assignment by their testator to Max Alexander is invalid. They claim the entire proceeds of the policy. Alexander also notified complainant that, if it paid the proceeds of the policy to the executors, he will hold it liable therefor. The assignment of the policy does not disclose the consideration for the transfer. Protesting that it is not in collusion with either party, averring its willingness to pay the proceeds to the persons entitled, and being advised that it cannot with safety pay the same to either, the complainant brings its bill against the executors of Young and against Alexander, and insists that they ought to interplead, in order that the court may determine, and the complainant know, to whom the proceeds of the policy should be paid. There are the usual prayers for process, and the further prayer that the complainant may be permitted to deposit the fund in court, and that upon such deposit the defendants may be enjoined from further molesting it about the matter in question. The deposit has been made, and order passed directing the controverting defendants to interplead, and the complainant in the usual way has been discharged and acquitted of all responsibility and liability to either of the parties defendant to the bill. The answers of the defendants are voluminous, but it does not appear that a recital of the various clauses thereof is essential to an understanding of the controversy. It is proper, however, to state that the executors admit that Alexander may equitably recover such sums as he may have paid out for or on account of the policy, with interest for the same, but they deny his right to the surplus, on the ground that since he had no insurable interest in the life of the testator the assignment is therefore null and void, as a speculation upon human life, and contrary to public policy. The assignee was neither related by blood or marriage to the deceased, nor was he a partner, creditor, or otherwise financially interested with him in any pecuniary enterprise.

The questions presented are these: Did Alexander's lack of insurable interest in the life of Young ipso facto constitute such a wager upon that life, as to be void as against public policy, or, if not in legal contemplation inherently void, do the facts in evidence, attending the assignment, oblige the court to declare it a violation of the established rules regarding wagering contracts on human life? Max Alexander insists that no insurable interest in him was necessary. He contends that it was not required by the statutes of this state as construed by its highest tribunal. The assignee, in support of this contention, relies upon sections 2114 and 2116 of the Civil Code of Georgia of 1895. These provisions of the local statutory law are as follows:

'An insurance upon life is a contract, by which the insurer for a stipulated sum, engages to pay a certain amount of money if another dies within the time limited by the policy. The life may be that of the assured, or of another in whose continuance the assured has an interest.'

'The assured may direct the money to be paid to his personal representatives, or to his widow, or to his children, or to his assignee, and upon such direction, given and assented to by the insurer, no other person can defeat the same. But the assignment is good without such assent.'

It appears that these provisions of the state law were written by the first codifier, the late T. R. R. Cobb, whose profound and varied accomplishments have left an indelible impression upon the jurisprudence of the state. By a special statute, the state, in the codification of its laws adopted the first Code as an entirety. The same method has been followed with subsequent editions. The Code prepared by Mr. Cobb was adopted by act of the General Assembly, assented to December 19, 1860. It did not take effect until the 1st of January, 1862. The facts following may be of interest: On the 9th of December, 1858, provision was made by the General Assembly of the state for the election of three commissioners to prepare for the people of Georgia a Code, which should as near as possible express in a condensed form the laws of Georgia, whether derived 'from the common law, the Constitutions and statutes of the state, the decisions of the Supreme Court, or the statutes of England of force in this state. ' David Irwin, Herschel V. Johnson, and Iverson L. Harris were elected commissioners under the provisions of this act. The last two named, declining the position, his excellency, Gov. Brown, supplied the vacancies by the appointment of Thomas R. R. Cobb and Richard H. Clark. On the 18th of March, 1861, a convention of the people then in session resolved that in the publication of the Code it should be made to conform to the government of the Confederate States, instead of the government of the United States, and also that the Constitution of the Confederate States should be published as a part of the Code. We are also informed that:

'It is but an act of justice to the publisher to state that the typographical errors which appear in the book are mainly attributable to the frequent change of printers during the progress of its publication, resulting from the excited and unsettled state of our national affairs. No less than eleven printers, who were at one time or another engaged in the printing of the Code, are now in the service of the Confederate States.' These facts are gathered from the preface of perhaps the first volume of the first edition of this ancient Code, which was issued in 1861 from the press of the Crusader Book & Job Office, conducted by John H. Seales, of Atlanta, Ga. It is the volume once owned and annotated in his own handwriting by the illustrious Chief Justice Lumpkin, and was doubtless presented to him by his son-in-law, the famous codifier. It was purchased by the writer, when a very young man, at the sale after his death of the library of E. P. Lumpkin, one of the sons of Georgia's first chief justice. The report of the committee of the Legislature which recommended the act of adoption in this stormy epoch of legal evolution seems pertinent to the present inquiry. It is printed in the preface of this historic volume. 'If the Code now presented,' reads the report, 'were a new system of jurisprudence, or had the commissioners attempted to graft upon our system any new features extracted from others, and unharmonious with our own, or even if alterations in a well-defined public policy had been attempted, your committee would have paused, hesitated to recommend the mode of adoption suggested, without at least calling the special attention of the Legislature to each of the new and essential changes. But at an early date of our revision and examination, the codifiers announced the leading principle, by which they had attempted to guide their laborers, and your committee report the same prominent in all the amendments and changes made at their suggestion. This principle was, to admit no change or alteration in any well-defined rule of law, which had received legislative sanction, or judicial exposition, and to add no principle or policy which had received the condemnation of the former, or was antagonistic to the settled decisions of the latter. ' The provisions of the Code now of force differ in no respect from those of the first Code, except in this sentence:

'The life may be that of the assured, or of another (even if a slave) in whose continuance the assured has an

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