Page v. Metropolitan Life Insurance Co.

• Decision Date: 20 March 1911
• Parties: PAGE v. METROPOLITAN LIFE INSURANCE COMPANY
• Court: Arkansas Supreme Court

135 S.W. 911

98 Ark. 340

PAGE v. METROPOLITAN LIFE INSURANCE COMPANY

Supreme Court of Arkansas

March 20, 1911

Appeal from St. Francis Circuit Court; Hance N. Hutton, Judge affirmed.

STATEMENT BY THE COURT.

This is an action by Thomas Page, William Page and Charles Page against the Metropolitan Life Insurance Company to recover on a policy of life insurance. The policy was issued on June 30 1905, and was payable to Ben Page, the insured, providing he was living at the end of 15 years, or, if he died before that time, it was made payable to his "legal representatives." The policy was for $ 2,000, and on June 29, 1906, Ben Page, by a written assignment, transferred the policy to Pettus & Buford. The insured died at his home in St. Francis County, Arkansas, on July 31, 1909. Upon proof of death being made, the insurance company paid the full amount of the policy to Pettus & Buford.

Plaintiffs are the surviving children and sole heirs at law of Ben Page deceased. They demanded payment of the amount of the policy and, upon the refusal of the company to pay them, brought this suit as above stated. The policy of insurance and the assignment to Pettus & Buford were introduced in evidence.

The court, after the evidence was introduced, withdrew the case from the consideration of the jury, and gave a peremptory instruction for the defendant.

The plaintiffs have duly prosecuted an appeal to this court.

Judgment affirmed.

J. M. Prewett, for appellants.

1. Language designating a beneficiary in a life insurance policy must be construed as testamentary in character and must receive the same interpretation as if used in a will. 79 F 461; 44 L. R. A. 689. The words "legal representatives" in a life insurance policy are construed to mean "heirs" or "next of kin," or "descendants," and not executors or administrators. 61 N.W. 331; 71 Ill. 91; 26 N.E. 464; 63 S.W. 863-6; 32 S.W. 458-9.

2. The word "assigns," usually found in policies which are assignable by the insured, is not found in this policy. The only interest the insured had in the policy was contingent upon his living fifteen years, and, as written, he had no interest in it that he could assign. 71 Ark. 60; 26 N.E. 464. A policy cannot be assigned without the consent of the beneficiary, nor the beneficiary changed by the insured unless the policy by its terms, or the rules of the company incorporated therein, authorize it. 71 Ark. 295; 52 Ark. 201; 68 Ark 391.

3. A contract of insurance not supported by an insurable interest in the life of the insured, is void; and an assignment of a policy to one not having an insurable interest is also void. It is a speculative or wager contract, and against public policy. 15 Wall. 643; 104 U.S. 775; 92 Mich. 584; 76 Tex. 400; 9 F. 249; 46 Mich. 473; 104 Ga. 446; 51 S.W. 312.

J. H. Harrod and S. H. Mann, for appellee.

1. The term "legal representatives" means, prima facie, executors and administrators, and the only effect of the decisions cited by appellant is that under some circumstances if it can be clearly shown by extrinsic testimony that the party using the term intended that it should be given a meaning different from the prima facie meaning the courts will carry out that intention. The acts of the parties under the contract and the construction they have given to it will be looked to, where its terms are ambiguous or uncertain as to intention. 52 Ark. 95; 46 Ark. 122.

There is no conflict of authorities in the holding that the term means executors, administrators or assigns, where the testimony or statute does not expressly require a different interpretation. 86 F. 255; 117 U.S. 591 (29 Law. Ed. 997); 92 U.S. 728, 23 Law. Ed. 767; 17 Law. Ed. 854; 34 App. D. C. 575; Id. 583; Kirby's Dig. § 7808; 20 Ct. Cl. U.S. 279.

2. The assignment was valid. 77 Ark. 60.

OPINION

HART, J., (after stating the facts).

Plaintiffs offered to prove that Pettus & Buford had no insurable interest in the life of Ben Page, now deceased, and that they paid nothing to the insured for the transfer to them of the policy sued on. The court refused to permit them to make this proof, and they now assign as error the ruling of the court in this regard. They contend that the insured had no right to assign the policy. There is an irreconcilable conflict of authority upon the question of whether or not a person has the right to assign a policy of life insurance taken out by himself to one who has no insurable interest in his life, but we think the weight of authority and the better reasoning is that any person has a right to procure insurance on his own life and afterwards to assign the policy to another, provided it be not done by way of cover for a wager policy, even though the assignee has no insurable interest in the life of the insured. This is substantially the language used in a note to the case of Rylander v. Allen, 125 Ga. 206, 53 S.E. 1032, reported in 5 A. & E. Ann. Cas. 355. See also same case and note in 5 L.R.A. (N.S.) 128. There the authorities on both sides of the question are collected, and an examination of the cases cited in both notes will show that a decided majority of the courts of last resort of the various States have adopted the rule above announced. The objections to such transfer and the answers thereto are tersely and clearly stated in the case of Clark v. Allen, 11 R.I. 439, quoted in the case of Rylander v. Allen, supra as follows: "A life policy is a chose in action, a species of property, which the holder may have perfectly good and innocent reasons for wishing to dispose of. He should be allowed to do so unless the law clearly forbids it. It is said that such an assignment, if permitted, may be used to circumvent the law. That is true, if insurance without interest is unlawful, but it does not follow that such an assignment is not to be permitted at all because if permitted it may be abused. Let the abuse, not the bona fide use, be condemned and defeated. * * * Again, the assignment is said to be a gambling transaction, a mere bet or wager upon the chance of human life. But the wager was made when the policy was effected, and has the sanction of the law. The assignment simply transfers the policy, as any other legal chose in action may be transferred, from the holder to a bona fide purchaser. It is true there is an element of chance and uncertainty in the transaction; but so there is when a man takes a transfer of an annuity, or buys a life estate, or an estate in remainder after a life estate. There is in all these cases a speculation upon the chances of human life. But the transaction has never been held to be void on that account. But finally it is urged that the purchaser or assignee subjects himself to the temptation to shorten the life insured, and that this the policy of the law does not countenance. The law permits the purchase of an estate in remainder after a life estate, which exposes the purchaser to a similar...