Mutual Life Insurance Company of New York v. Armstrong/Opinion of the Court

From the charge of the court, and its opinion on the motion for a new trial, (20 Blatchf. 493, and 11 Fed. Rep. 573,) it appears that the refusal to admit testimony of Hunter's fraudulent purpose in procuring the policy, and his feloniously causing, while the sole owner of it, the death of the assured, was founded upon the assumption that the insurance money, payable in case the death occurred before the expiration of the policy, went to the legal representatives of the assured, and was not assignable; and that the assignment not taking effect, Hunter had no interest in the policy, and therefore if he did feloniously cause the death, the fact could have had no effect in controlling the payment. Assuming this to be the reason for excluding the evidence offered, the ruling cannot be upheld. The position that the assignment did not take effect because the assured died before the expiration of the policy is untenable. The provision for payment in such case to his legal representatives was intended to meet the contingency of his dying without having disposed of his interest, and not to limit his power over the contract during his life, and pass the insurance to those who should represent him after his death. The term 'legal representatives' is not necessarily resticted to the personal representatives of one deceased, but is sufficiently broad to cover all persons who, with respect to his property, stand in his place and reporesent his interest, whether transferred to them by his act or by operation of law. It may, in this case, include assigns as well as executors and administrators. ''New York Life Ins. Co. v. Flack'', 3 Md. 341.

A policy of life insurance, without restrictive words, is assignable by the assured for a valuable consideration equally with any other chose in action, where the assignment is not made to cover a mere speculative risk, and thus evade the law against wager policies; and payment thereof may be enforced for the benefit of the assignee, and, under the system of procedure in many states, in his name. Warnock v. Davis, 104 U.S. 775, 780; Archibald v. ''Mutual Ins. Co. of Chicago, 38 Wis. 542, 545; De Ronge v. Elliott'', 23 N. J. Eq. 487, 495. The assignee here, Hunter, represented that he was the special partner of Armstrong, and had placed $5,000 in the partnership, and was apprehensive that he might be charged as a general partner. If he was a special partner, the contract was not a wager policy; and as it was not a contract for the benefit of the wife of the assured, it does not fall within those cases where, for the protection of the beneficiary, the power of the assured to divert the course of payment is restricted. The assignment conveying to Hunter the whole interest of the assured, his representatives alone would have a valid claim under it, if the policy were not void in its inception. Proof, therefore, that he caused the death of the assured by felonious means must necessarily have defeated a recovery, and the court erred in refusing to admit testimony tending to prove that such was the fact.

The theory of the defense is that the purpose of Hunter in obtaining the insurance was to cheat and defraud the company. In support of that position evidence that he effected insurances upon the life of Armstrong in other companies, at or about the same time, for a like fraudulent purpose, was admissible. A repetition of acts of the same character naturally indicates the same purpose in all of them; and if, when considered together, they cannot be reasonably explained without ascribing a particular motive to the perpetrator, such motive will be considered as prompting each act. A creditor has an insurable interest in the life of his debtor, and may very properly procure an insurance upon it for an amount sufficient to secure his debt; but if he takes out policies in different companies at or nearly the same time, and thus increases the insurance far beyond any reasonable security for the debt, an inquiry at once arises as to his motive, and it may be considered as governing him in each insurance. In Castle v. Bullard, 23 How. 173, where the defendants were charged with having fraudulently sold the goods of the plaintiff, evidence that they had committed similar fraudulent acts at or about the same time was allowed with a view to establish their alleged intent with respect to the matters in issue. The court said: 'Similar fraudulent acts are admissible in cases of this description if committed at or about the same time, and when the same motive may reasonably be supposed to exist, with a view to establish the intent of the defendant in respect to the matters charged against him in the declaration.' In Lincoln v. Claflin, 7 Wall. 132, an action was brought for fraudulently obtaining property, and evidence of other frauds of a like character, committed by the defendants at or near the same time, was held to be admissible. 'Its admissibility,' said the court, 'is placed on the ground that where transactions of a similar character, executed by the same parties, are closely connected in time, the inference is reasonable that they proceed from the same motive. The principle is asserted in Carry v. Hotailing, 1 Hill, 311, and is sustained by numerous authorities. The case of fraud, as there stated, is among the few exceptions to the general rule that other offenses of the accused are not relevant to establish the main charge.'

In Butler v. Watkins, 13 Wall. 456, 464, speaking on the same subject, this court said: 'In actions for fraud, large latitude is always given to the admission of evidence. If a motive exist prompting to a particular line of conduct, and it be shown that in pursuing that line a defendant has deceived and defrauded one person, it may justly be inferred that similar conduct towards another, at or about the same time and in relation to a like subject, was actuated by the same spirit.' In Bottomley v. U.S., 1 Story, 135, Mr. Justice STORY held the same doctrine, and cited several instances of its application. Thus, in the case of a prosecution for uttering counterfeit money, the fact that the prisoner has in his possession, or has uttered, other counterfeit money, is held to be proper evidence to show his guilty knowledge; and upon an indictment for receiving stolen goods, evidence that the prisoner had received at various other times different parcels of goods which had been stolen from the same persons is held admissible in proof of his guilty knowledge. So, on an indictment for a conspiracy to create public discontent and disaffection, proof is admissible against the prisoner that at another meeting, held for an object professedly similar, at which the prisoner was chairman, resolutions were passed of a character to create such discontent and disaffection. 'In short,' said the learned justice, 'wherever the intent or guilty knowledge of a party is a material ingredient in the issue of a cause, these collateral facts, tending to establish such intent or knowledge, are proper evidence. In many cases of fraud it would be otherwise impossible satisfactorily to establish the true nature and character of the act.' Many other authorities might be cited to the same purport.

The evidence offered that Hunter obtained insurances in other companies on the life of Armstrong at or near the same time, was, under these authorities, clearly admissible. It tended to establish the theory of the defendant that the insurance in this case was obtained by Hunter upon the premeditated purpose to cheat and defraud the company. Especially would it have had that effect if followed by proof of the manner of the death of Armstrong. But, independently of any proof of the motives of Hunter in obtaining the policy, and even assuming that they were just and proper, he forfeited all rights under it when, to secure its immediate payment, he murdered the assured. It would be a reproach to the jurisprudence of the country if one could recover insurance money payable on the death of the party whose life he had feloniously taken. As well might he recover insurance money upon a building that he had willfully fired.

This view renders it unnecessary to consider the effect upon the policy of the statements made in the application of the assured as to the amount of other insurances on his life.

Judgment reversed, and cause remanded for a new trial.

MATTHEWS, J., did not sit in this case, nor take part in its decision.