whether of consanguinity or of affinity, was such between the person whose life was insured and the beneficiary named in the policy as warrants the conclusion that the beneficiary had an interest, whether pecuniary or arising from dependence or natural affection, in the life of the person insured." The court adds (the italics are ours) the following: "Insurers in such a policy contract to pay a certain sum, in the event therein specified, in consideration of the payment of the stipulated premium or premiums, and it is enough to entitle the insured to recover if it appear that the stipulated event has happened, and that the party effecting the policy had an insurable interest, such as is described, in the life of the person insured at the inception of the contract, as the contract is not merely for an indemnity, as in marine and fire policies." In Insurance Co. v. Schaefer, 94 U. S. 457, 24 L. Ed. 251, the case of Dalby v. Assurance Co., supra, is cited with approval. The court said: "But supposing a fair and proper insurable interest, of whatever kind, to exist at the time of taking out the policy, and that it be taken out in good faith, the object and purpose of the rule which condemns wager policies is sufficiently attained; and there is then no good reason why the contract should not be carried out according to its terms. * In our judgment, a life policy, originally valid, does not cease to be so by the cessation of the assured party's interest in the life insured." * * These expressions of the supreme court seem very pertinent to the question here examined, but neither case on the facts was exactly in point. In each case the insurable interest involved depended on the relationship between the insured and the beneficiary in the policy, but did not involve a question of debtor and creditor. The principles stated, however, sustain the view that an insurable interest existing at the time of the issuance of the policy is sufficient to sustain the contract. In Crotty v. Insurance Co., 144 U. S. 621, 624, 12 Sup. Ct. 750, 36 L. Ed. 568, the policy sued on was made payable to a named creditor if living, and, if he should die, to the executors, administrators, or assigns of the insured. Suit on the policy was brought by the creditor, alleging in his declaration the existence of the debt at the time of insurance and at the time of loss. The court held that to recover he must prove the continuance of the relation of debtor and creditor and the amount of the debt. In the course of the opinion the court said: "If a policy of insurance be taken out by a debtor on his own life, naming a creditor as beneficiary, or with a subsequent assignment to a creditor, the general doctrine is that on payment of the debt the creditor loses all interest therein, and the policy becomes one for the benefit of the insured, and collectible by his executors or administrators. *** But whatever doubts may exist as to the law applicable to such cases, or the rights of action on such a policy, the plaintiff in this case put his own construction on the contract, and tendered an issue which was accepted by the company. He alleged that he was a creditor at the time of the contract and at the time of the death. Upon the issue thus presented the case went to trial. The promise of the policy is to pay to Michael Crotty, his creditor, if living; and it is contended that this is an admission on the part of the company sufficient to justify a verdict against it. If an admission at all, it is good only as an admission of the date at which it was made, to wit, the date of the policy. The relation of debtor and creditor is not a permanent one, like that of parent and child, but one which may vary from day to day, changing both in fact and amount, according to the successive business transactions between the parties." In the case last quoted the policy was made payable on its face to Michael Crotty, his creditor, if living, and, if he should die, then to the executors, administrators, or assigns of the insured. On the trial no evidence was furnished of the plaintiff's interest in the policy except the policy itself. There was no evidence that the creditor had paid any premiums on the policy, or that the debt equaled in its sum the amount of the policy, or that the debt in fact ever existed. The creditor suing on the policy alleged the existence of the debt at the time of the contract and at the time of the death. Issue was joined on these allegations, and the plaintiff failed for want of evidence. We do not find in the result of this case any departure from the doctrine of Dalby v. Assurance Co., supra, which was previously cited with approval by the supreme court. In the present case the assignment of the policies was made in good faith. The assignee's claim against Hennessy was much greater than the amount of the policies. The policies were delivered to the assignee. The underwriter was notified and assented. The assignee paid the annual premiums for a period of 20 years, paying in the aggregate $4,544.82. The assured, claiming that his debt to the assignee was discharged by law (it certainly had not been paid in fact), asserted no interest in the policy, but demanded its cancellation. The underwriter continued to receive the premiums from the assignee. On the death of the insured the assignee proved loss, and offered to deliver the assignments and policies on payment of the policies. On these facts the underwriter could surely be forced by suit to pay the assignee. The insurance company had agreed to pay him, and had received annual premiums for a number of years, paid on the faith of this agreement. In such case the law will enforce payment to the assignee, and, if others have equitable claims, a question not for decision here, they must be asserted in a suit to which the assignee is a party. Smith v. Insurance Co., 4 Dill. 353, Fed. Cas. No. 13,083; Insurance Co. v. Flack, 3 Md. 341; Cheeves v. Anders, 87 Tex. 287, 28 S. W. 274; 2 May, Ins. (3d Ed.) § 459d; Insurance Co. v. Armstrong, 117 U. S. 591, 6 Sup. Ct. 877, 29 L. Ed. 997; Investment Co. v. Baum, 29 Ind. 236; Swick v. Insurance Co., 2 Dill. 160, Fed. Cas. No. 13,692. The decisions of the New York court of appeals are to the effect that the assignee of the policy can collect and hold the proceeds even when he never had an insurable interest in the life of the insured. St. John v. Insurance Co., 13 N. Y. 31; Olmsted v. Keyes, 85 N. Y. 593. But the supreme court does not approve this doctrine. The rule established by the latter court is that the assignee must have an insurable interest. His position must be such that the policy could have been legally issued payable to him. Warnock v. Davis, 104 U. S. 775-782, 26 L. Ed. 924. On the undisputed facts we think that the assignee of these policies could have collected them by suit against the insurance company. The law that would enforce the payment to the assignee would be unjust and illogical if it failed to protect the insurance company in such payment against the claim of the assignor. The insurer has made no promise to pay twice. The appellee does not claim that the debt of Hennessy to the J. L. Mott Iron Works was actually paid. It is claimed that the acceptance by the latter of the benefit of the general assignment was equivalent to payment. This general assignment was executed on August 23, 1875. The J. L. Mott Iron Works proved its debt, amounting to $48,309, and received dividends on the same on November 11, 1875, of $3,381.63, and on March 2, 1876, $1,811.63. This left due on the debt $43,115.79. But the deed of assignment provided that those who accepted the benefit of it should release their claims in full. The validity of state laws permitting assignments on such terms is recognized. Livermore v. Jenckes, 21 How. 126, 144, 16 L. Ed. 55. But, in the absence of statutory provision, it is a rule of the common law that the payment of a less sum at the time and place where a greater undisputed sum is due is not a satisfaction of the greater sum, even though accepted as such, because there is no consideration for giving up the rest. In the absence of a statute to the contrary, this rule prevails in Texas. Lanes v. Squyres, 45 Tex. 382, 385; Bennett v. Butterworth, 11 How. 669, 674, 13 L. Ed. 859. No Texas statute is called to our attention prior to the law of March 24, 1879, which is subsequent to the date of the assignment and the receipt of the dividends. Cunningham v. Norton, 125 U. S. 77, 81, 8 Sup. Ct. 804, 31 L. Ed. 624. This statute could not affect the transactions here considered. But such statutes, when applicable, serve only as a defense when pleaded. Their application does not constitute payment in the full sense. The equitable obligation of the debtor to the creditor would not be discharged. Even after discharge in bankruptcy, there remains a moral obligation to pay the debt that will sustain a new promise of the bankrupt. The fact that the debtor may be armed with a legal defense against the creditor does not destroy the insurable interest of the latter in the life of the former. The debtor may be an infant, and yet the fact that the plea of infancy might be interposed would not make the life policy in favor of his creditor void. 1 May, Ins. (3d Ed.) § 108. If the debt be barred by the statute of limitations, it nevertheless constitutes an insurable interest. Rawls v. Insurance Co., 27 N. Y. 282; 1 May, Ins. (3d Ed.) § 108. The undisputed facts in the present case show that the J. L. Mott Iron Works had a continuing insurable interest in the life of Hennessy. Payment of the amount of the policies to the J. L. Mott Iron Works was, we think, a valid defense to this action. The circuit court erred in directing a verdict for the plaintiff. The jury should have been directed to find for the defendant. The judgment of the circuit court is reversed, and the cause remanded. NOTE. What Constitutes an Insurable Interest in Human Life. 1. In General. [a] (U. S. C. C. A., Ky., 1894) One not the wife, child, parent, brother, sister, or creditor of insured may have an insurable interest in his life.-Insurance Co. v. Hamilton, 63 Fed. 93, 11 C. C. A. 42. [b] (U. S. C. C., Tenn., 1883) Where there is, when the contract is made, an adequate insurance interest to support the policy, the insurer must pay the full amount of insurance according to the contract, without reference to the subsequent diminution or cessation of the insurable interest.-Sides v. Insurance Co., 16 Fed. 650. [c] (Mich. Sup. 1892) The beneficiary in a mutual benefit policy must be a relative of the insured by blood or marriage, or in a position to expect some benefit from the continuance of the insured's life, or the contract is a wagering one, and void, as against public policy.-Insurance Co. v. O'Brien, 52 N. W. 1012, 92 Mich. 584. [d] (Mo. App. 1894) The prohibition by Rev. St. § 5866, of life insurance in favor of a person having no insurable interest applies only to insurance in assessment companies, and is only declarative of the common law.-Insurance Co. v. Rosenheim, 56 Mo. App. 27. [e] (Pa. Sup. 1887) The insurance premiums paid by B. on former policies on A.'s life, which were subsequently canceled, were proper items to make up his insurable interest. Such items did not make the contract immoral or wagering, and no one but A. or the insurance company could object to them.— Grant v. Kline, 9 Atl. 150, 115 Pa. St. 618. [f] (R. I. Sup. 1898) Where there is a mutual interest as a moral obligation existing between the assured and beneficiary, it is sufficient to rebut the presumption of wager in a life insurance contract, and to constitute an insurable interest.-Cronin v. Insurance Co., 40 Atl. 497, 20 R. I. 570. 2. Necessity of Interest. [a] (U. S. C. C., Pa., 1881) No one can procure valid insurance on a life unless he has an interest. in that life. A policy taken out nominally in the name of the assured, and for his benefit, but in reality as a cover for the benefit and in the interest of one having no insurable interest, is void.-Brockway v. Insurance Co., 9 Fed. 249. [b] (Ill. App. 1886) The fact that the beneficiary in a life insurance policy has no pecuniary interest in the life of the insured does not of itself render the contract void as against public policy, but whether or not it is a wagering contract is a question of fact to be determined by the jury.—Association v. Blue, 24 Ill. App. 518. [c] (Kan. Sup. 1887) A person who has no insurable interest in another's life cannot recover upon an insurance policy on such life, which is purchased during the lifetime of the insured, as a policy so obtained is a mere wager, and void.-Insurance Co. v. McCrum, 12 Pac. 517. [d] (N. C. Sup. 1891) Policies of insurance on the life of one in whose life the policy holder has no insurable interest are mere wagers, and a promise to pay a certain sum of money to the insured person's wife after his death, in consideration of his permission to the promisor to insure his life, cannot be enforced.-Burbage v. Windley's Ex'rs, 12 S. E. 839, 108 N. C. 357, 12 L. R. A. 409. 3. Insurable Interest in One's Own Life. [a] One may insure his own life in favor of one having no insurable interest therein, unless such insurance is taken for the purpose of avoiding the law against wager policies. -D. C. Sup. 1896) Association v. Hodgkin, 4 App. D. C. 516; (Ill. Sup. 1887) (N. C. Sup. 1898) Albert v. Insurance Co., 30 S. E. 327, 122 N. C. 92; Crosswell v. Association, 28 S. E. 200, 51 S. C. 103. [b] (U. S. C. C., Iowa, 1887) The voluntary selection by the holder of a mutual benefit certificate of a new beneficiary, who has no insurable interest in the life of the holder of the certificate, does not render the transaction void as a wagering contract, where there is no evidence from which it can be inferred that the parties intended it as such.-Lamont v. Grand Lodge, 31 Fed. 177. [c] (Ky. App. 1895) A mere friend has no insurable interest, and cannot be the beneficiary of a life insurance policy, though the insured voluntarily makes it payable to him.-Coudell v. Woodward, 29 S. W. 614. [d] (Pa. Sup. 1885) The fact that a purchase of a life insurance policy, taken out by the insured for his own benefit, was made in good faith and with correct motives, will not justify a relaxation of the rule that the holder must have some pecuniary interest in the life of the insured; and where the purchaser is neither a relative nor a creditor of the insured his right to participation in the proceeds of the policy is limited to the amount actually paid by him to the insured and to the company, with interest thereon.-Downey v. Hoffer, 20 Atl. 655, 110 Pa. St. 109. 4. Parent and Child. [a] (Ill. App. 1898) The mere relationship of father and son does not give the son an insurable interest in the father's life. An insurable interest must be a pecuniary one in the continuance of the father's life.-Society v. Dyon, 79 Ill. App. 100. [b] (N. Y. Sup. 1888) Insurance by a son on his own life for the benefit of his father is valid.-Tucker v. Life Co., 4 N. Y. Supp. 505, 50 Hun, 50. [c] (N. Y. Sup. 1896) A minor daughter has an insurable interest in the life of her father.-Geoffroy v. Gilbert, 38 N. Y. Supp. 643, 5 App. Div. 98. [d] (N. Y. Com. Pl. 1894) Under Laws 1893, c. 175, conferring on a mother rights and duties in respect to her children equal to those possessed by the father at common law, she is liable for the support of her child, within Laws 1892, c. 690, § 55, allowing the one so liable to insure its life.-O'Rourke v. Insurance Co., 31 N. Y. Supp. 130, 10 Misc. Rep. 405. [e] (Pa. Sup. 1894) One has an insurable interest in the life of another, who, out of friendship, and without any bonds of kinship, has assumed the position of father to him.-Carpenter v. Insurance Co., 28 Atl. 943, 161 Pa. St. 9, 34 Wkly. Notes Cas. 195, 23 L. R. A. 571. [f] (Pa. Super. Ct. 1897) An orphan brought up by her uncle, with whom she lived until her marriage, and thereafter living near and receiving support from him, has an insurable interest in his life.-McGraw v. Insurance Co., 5 Pa. Super. Ct. 488, 28 Pittsb. Leg. J. (N. S.) 170, 41 Wkly. Notes Cas. 62. [g] (S. C. Sup. 1897) A child is presumed to have an insurable interest in the life of its mother.-Crosswell v. Association, 28 S. E. 200, 51 S. C. 103. 5. Relatives. [a] (Ind. App. 1896) An uncle living on his sister's place and keeping his nephew, the child of his sister, has no insurable interest in such child.-Insurance Co. v. Jenkins, 43 N. E. 1056, 15 Ind. App. 297. [b] (Ky. App. 1896) Where a widow, with two unmarried children, and her son-in-law, live together as one family, both before and after the death of his wife, pursuant to a temporary and indefinite arrangement between him and his mother-in-law, and he pays no more than a reasonable price for his board, the mother-in-law has no insurable interest in his life.-Adams' Adm'r v. Reed, 36 S. W. 568. [c] (Mich. Sup. 1895) At common law, a sister has an insurable interest in her brother's life.-Hosmer v. Welch, 67 N. W. 504, 107 Mich. 470. [d] (Ohio Com. Pl. 1897) A grandfather has an insurable interest in the life of his grandchild.-Hilliard v. Sanford, 7 Ohio Dec. 449, 4 Ohio N. P. 363. [e] (Pa. Sup. 1888) A stepson, who is neither a creditor of his stepfather, nor responsible for his support, nor in any way dependent on him, has no insurable interest in the stepfather's life.-Society v. McDonald, 15 Atl. 439, 122 Pa. St. 324, 1 L. R. A. 238. [f] (Pa. Sup. 1888) A son-in-law has no insurable interest in the life of his mother-in-law, though she lives with him, and is dependent on him for support. -Stambaugh v. Blake. 15 Atl. 705. [g] (Pa. Com. Pl. 1896) A son-in-law has no insurable interest in the life of his father-in-law.-Ramsay v. Myers, 6 Pa. Dist. R. 468. [h] (R. I. Sup. 1898) An aunt has an insurable interest in the life of her niece, living with her at different times from early childhood, and whom she supports.-Cronin v. Insurance Co., 40 Atl. 497, 20 R. I. 570. 6. Husband and Wife. [a] One living with a person as his wife, though she is not such, has an insurable interest in him. -(U. S. C. C., Mo., 1884) Watson v. Association, 21 Fed. 698; (Colo. App. 1898) 249. Lampkin v. Insurance Co., 52 Pac. 1040, 11 Colo. App. [b] (Ind. T. 1899) Under Mansf. Dig. § 4621 (Ind. T. Ann. St. 1899, § 3021), providing that the property of a feme covert shall be her separate estate, the husband has no insurable interest in his wife's separate property.-Insurance Co. v. Paul, 53 S. W. 442. |