Weeks v. New York Life Ins. Co.

• Decision Date: 15 April 1924
• Docket Number: 11461.
• Citation: 122 S.E. 586,128 S.C. 223
• Parties: WEEKS v. NEW YORK LIFE INS. CO.
• Court: South Carolina Supreme Court

122 S.E. 586

128 S.C. 223

WEEKS v. NEW YORK LIFE INS. CO.

No. 11461.

Supreme Court of South Carolina

April 15, 1924

Appeal from Common Pleas Circuit Court of Orangeburg County; J. C Featherstone, Judge.

Action by W. G. Weeks against the New York Life Insurance Company. Judgment for plaintiff, and defendant appeals . Affirmed.

Thomas & Lumpkin, of Columbia, and Louis H. Cooke, of New York City for appellant.

Wolfe & Berry and Ed. C. Mann, all of Orangeburg, for respondent.

MARION J.

The plaintiff recovered in an action upon two insurance policies for $1,000 each, issued by the defendant appellant, March 4, 1919, upon the life of Harvey Whaley. On February 20, 1920, the policies were duly assigned for value to the plaintiff-respondent, a creditor of the insured, to secure the payment of an indebtedness amounting at the time of the trial on circuit, to more than $2,000. The insured Whaley, was convicted by a court of competent jurisdiction of the murder of one Walford, and pursuant to a sentence of death imposed by that court was electrocuted by officers of the law on November 4, 1921. The policies are ordinary life insurance policies, and each contains the following clause:

"This policy is free of conditions as to residence travel, occupation and military and naval service, and shall be incontestable after two years in force, from date of issue, except for nonpayment of premium."

It is admitted that all premiums were duly paid, that the company accepted payment of premiums after the conviction of the insured; and that the policies had been in force for more than two years from date of issue and "for more than two years before the alleged homicide had been committed." The defendant resisted recovery upon the ground that the policies were null and void, in that the death of the insured was "brought about by sentence of law for crime committed by the insured." That defense was predicated, not upon any condition or stipulation of the contract, but solely and expressly upon the proposition that it would be against public policy to permit or require the payment of a policy of life insurance where the death of the insured was the result of his legal execution. The appeal raises, substantially, the one question of whether that defense should be sustained.

Whether the legal execution of the insured for a crime committed by him constitutes a valid defense to an action upon a life insurance policy is an interesting question of novel impression in this state. Resting their decision expressly upon grounds of public policy, a number of courts of high standing, including the Supreme Court of the United States, have sustained such defense. Amicable Soc. v. Bolland, 4 Bligh N. S., 194, 5 Eng. Rep. (Reprint) 75; Burt v. Union Cent. L. Ins. Co., 187 U.S. 362, 23 S.Ct. 139, 47 L.Ed. 216, affirming 105 F. 419, 44 C. C. A. 548, 59 L. R. A. 393; Northwestern Mutual Life Ins. Co. v. McCue, 223 U.S. 234, 32 S.Ct. 220, 56 L.Ed. 419, 423, 38 L. R. A. (N. S.) 57; Collins v. Metropolitan L. Ins. Co., 27 Pa. Super. Ct. 353; Scarborough v. American National Ins. Co., 171 N.C. 353, 88 S.E. 482, Ann. Cas. 1917D, 1181, L. R. A. 1918A, 896. Other reputable courts have reached a contrary conclusion. Collins v. Metropolitan Life Ins. Co., 232 Ill. 37, 83 N.E. 542, 14 L. R. A. (N. S.) 356, 122 Am. St. Rep. 54, 13 Ann. Cas. 129; Fields v. Met. Life Ins. Co. (Tenn.) 249 S.W. 798; American Nat. Ins. Co. v. Coates et al. (Tex. Com. App.) 246 S.W. 356; Weil v. Travelers' Ins. Co., 201 Ala. 409, 78 So. 528; Id., 16 Ala. App. 641, 80 So. 348; and see Supreme Lodge, K. P., v. Overton, 203 Ala. 196, 82 So. 443, 16 A. L. R. 649.

The public policy which must be relied on to avoid the contracts in suit is the public policy of South Carolina. The insurance policies are South Carolina contracts (Northwestern Mut. L. Ins. Co. v. McCue, supra), and the question is therefore one to be determined by our own local rules of public policy ( Northwestern Mut. L. Ins. Co. v. Johnson, 254 U.S. 96, 41 S.Ct. 47, 65 L.Ed. 155).

Public policy has been aptly described by one of our judges as "a wide domain of shifting sands." Gage, J., in McKendree v. So. States Life Ins. Co., 112 S.C. 335, 99 S.E. 806. The term in itself imports something that is uncertain and fluctuating, varying, with the changing economic needs, social customs, and moral aspirations of a people. Story on Contracts (5th Ed.) § 675; 23 A. & E. Ency. (2d Ed.) 456. For that reason it has frequently been said that the expressive public policy is not susceptible of exact definition. But for purposes of juridical application it may be regarded as well settled that a state has no public policy, properly cognizable by the courts, which is not derived or derivable by clear implication from the established law of the state, as found in its Constitution, statutes, and judicial decisions. People v. Hawkins, 157 N.Y. 12, 51 N.E. 257, 42 L. R. A. 490, 68 Am. St. Rep. 736; Magee v. O'Neill, 19 S.C. 185, 45 Am. Rep. 765. Hence since, as was well said by Mr. Justice McGowan in Magee v. O'Neill, supra--

"It is the duty of the Legislature to make laws and of the court to expound them, * * * the subjects in which the court undertakes to make the law by mere declaration [of public policy] should not be increased in number without the clearest reasons and the most pressing necessity."

The imperative reasons of policy upon which appellant relies to avoid the contracts here in question are thus stated in the leading case of Amicable Soc. v. Bolland, supra:

"Suppose that in the policy itself this risk had been insured against; that is, that the party insuring had agreed to pay a sum of money year by year, upon condition that, in the event of his committing a capital felony, and being tried, convicted, and executed for that felony, his assignees shall receive a certain sum of money--is it possible that such a contract could be sustained? Is it not void upon the plainest principles of public policy? Would not such a contract (if available) take away one of those restraints operating on the minds of men against the commission of crimes--namely, the interest we have in the welfare and prosperity of our connections? Now, if a policy of that description, with such a form of condition inserted in it in express terms, cannot on grounds of public policy be sustained, how is it to be contended that in a policy expressed in such terms as the present, and after the events which have happened, that we can sustain such a claim? Can we, in considering this policy, give to it the effect of that insertion, which if expressed in terms would have rendered the policy, as far as that condition went at least, altogether void?"

That view was approved and adopted by the Supreme Court of the United States in Burt v Union Cent. L. Ins. Co., supra (Brewer, A. J.). The Burt Case was followed in Northwestern Mut. L. Ins. Co. v. McCue, supra, and the reasoning upon which it was rested is thus restated by Mr. Justice McKenna in the McCue Case:

"The question was before this court in Burt v. Union Cent. L. Ins. Co., 187 U.S. 362, 47 L.

Ed. 216, 23 S.Ct. 139. In the policy passed on, as in the policy in the case at bar, there was no provision excluding death by the law. It was decided, however, that such must be considered its effect, though the policy contained nothing covering such contingency. These direct questions were asked: 'Do insurance policies insure against crime? Is that a risk which enters into and becomes a part of the contract?' And answering, after discussion, we said: 'It cannot be that one of the risks covered by a contract of insurance is the crime of the insured. There is an implied obligation on his part to do nothing to wrongfully accelerate the maturity of the policy. Public policy forbids the insertion in a contract of a condition which would tend to induce crime, and, as it forbids the introduction of such a stipulation, it also forbids the enforcement of a contract under the circumstances which cannot be lawfully stipulated for.' Cases were cited, among others Ritter v. Mutual L. Ins. Co., 169 U.S. 139, 42 L.Ed. 693, 18 S.Ct. 300. There it was held that a life insurance policy taken out by the insured for the benefit of his estate was avoided when one of sound mind intentionally took his life, irrespective of the question whether there was a stipulation in the policy or not. And the conclusion was based, among other considerations, upon public policy, the court saying that 'a contract, the tendency of which is to endanger the public interests or injuriously affect the public good, or which is subversive of sound morality, ought never to receive the sanction of a court of justice, or be made the foundation of its judgment.' "

The state courts which have followed the foregoing cases have added nothing substantial to the reasoning there employed.

Upon analysis, it will be seen that the rationale of those decisions is rested upon the postulates (1) that an express contract to insure against death by legal execution would contravene public policy in that such a contract would remove one of the restraints operating against the commission of crime; (2) that the validity of the insurer's obligation upon an ordinary life policy is to be determined by the test of whether the risk of death by crime could have been expressly assumed in the policy; and (3) that sound public policy requires an implied obligation on the part of the insured "to do nothing to wrongfully accelerate the maturity of the policy," and, as a corollary, reads into the policy contract the implied condition that death by legal execution is not one of the risks assumed by the insurer.

The position embraced within the first two postulates, viz., that because an express...