Slade v. Life & Casualty Insurance, 202 N.C. 315 (1932)

March 2, 1932 · Supreme Court of North Carolina

202 N.C. 315

JAMES SLADE v. LIFE AND CASUALTY INSURANCE COMPANY OF TENNESSEE.

(Filed 2 March, 1932.)

Insurance D b — In this case held: beneficiary paying premiums did not have insurable interest in life of insui*ed and could not recover.

Except where there are ties of blood or marriage it must appear that a person would be damaged by the death of another in some way which can be measured by rule of law in order for him to have an insurable interest in the life of the other, and where the evidence discloses that the beneficiary in a policy of accident insurance applied for the policy and paid all premiums, that there was no contractual relationship between the beneficiary and the insured and that there were no ties of blood or marriage between them, the insurance contract is a mere wagering contract and is void at its inception, and a motion as of nonsuit should be granted in an action by the beneficiary thereon.

Appeal by defendant from MacBae, Special Judge, at October Term, 1931, of PasquotaNK.

Reversed.

Tliis is an action on a policy of insurance by which the defendant, in' consideration of the payment of premiums as stipulated therein, promised and agreed to pay to the plaintiff as the beneficiary named in said policy, the sum of $1,000, at the death of Charlie Lee, the insured, provided his death resulted from injuries caused “by his being struck by a vehicle which is being propelled by . . .gasoline . . . while insured is walking' or standing on a public highway.”

The policy was issued on 15 October, 1928. On 3 February, 1931, the insured, Oharlie Lee, was struck and killed by a truck which was being propelled by gasoline. At said date, the policy was in full force and effect according to its terms. Proofs of the death of the insured, as required by the policy, were duly furnished to the defendant by the plaintiff. Tbe defendant denied liability on tbe policy, and declined to pay tbe amount thereof to tbe plaintiff. Tbis action was begun on 17 April, 1931.

Tbe defendant denied liability on tbe ground tbat tbe policy was void (1) for tbat its issuance was procured by false and fraudulent representations made by tbe plaintiff witb respect to tbe relationship between himself and tbe insured, and (2) for tbat tbe plaintiff bad no insurable interest in tbe life of Charlie Lee, tbe insured, at tbe time tbe policy was issued, and tbat plaintiff paid tbe first and all subsequent premiums on tbe policy. Tbe defendant further denied liability on tbe ground tbat tbe policy contains a provision tbat it “does not cover a loss sustained by tbe insured while under tbe influence of alcoholic or intoxicating liquors, or while tbe insured is committing a violation of law',” and tbat at tbe time of bis death tbe insured was under tbe influence of alcoholic or intoxicating liquor and was committing an act in violation of law, to wit, transporting intoxicating liquor, unlawfully in bis possession.

Tbe plaintiff, as a witness in bis own behalf, testified: “I knew Charlie Lee, tbe insured in tbe policy sued on in tbis action. He "was not related to me by blood or marriage. He bad been living witb me for about six months at tbe time tbe policy was issued. He continued to live witb me for about a year and a half after tbe policy was issued. He was not living witb me at tbe time of bis death. His mother gave him to me. He was then about 13 years of age. His mother and her husband, tbe boy’s father, were living separate and apart from each other. He bad left tbe State. From tbe time tbe boy came to live witb me, I took care of him, furnished bis meals, furnished him a place to sleep, furnished bis clothes, and bought bis school books. He went to school -while be was living witb me. During tbat time, I provided him witb all tbe necessaries of life, and witb all tbe comforts tbat be bad. I bad charge and control of him. No one else exercised any control over him. He slept1 in a room adjoining mine. I own and conduct a café in Elizabeth City, N. C.

“At tbe time tbe policy sued on in tbis action was issued, I bad several policies issued by tbe defendant. One day tbe agent of tbe defendant asked me if I bad any one — a son or a daughter — on whom I could take out another policy. I told him tbat I bad no lawful children but tbat I bad an adopted son — a boy whom I was treating as a son, and who lived witb me as a son. Tbe boy was not there tbat day. Tbe next day tbo agent came to see me. He asked tbe boy bis age, and then wrote tbe policy. I paid tbe first and all subsequent premiums on tbe policy. I am tbe beneficiary named in tbe policy, and furnished to tbe defendant proofs of tbe death of Charlie Lee, tbe insured.

“The boy was not living with, me at the time he was killed. He had left me about six months before his death. He got to stealing from me and I told him he had better go back to his people. I did not run him off, but he left. I told him to go back to his home. I went to his funeral, but did not stay until it was over. I went to Norfolk that day to see my father who was sick. After the boy went back to his people, he would come to my café, from time to time. I gave him food and money. He washed dishes, swept the floor, and did whatever I told him to do.”

There was evidence tending to show that after the insured was struck and killed by the truck, a pint bottle containing whiskey was found in his belt under his clothes. This bottle was taken from his person by an officer. There was no evidence tending to show that he had drunk whiskey from the bottle, or that he was under the influence of alcoholic or intoxicating liquors at the time he was struck and killed by the truck.

The mother of the insured is dead. His father had abandoned her and her children, prior to the issuance of the policy of insurance. His whereabouts are unknown.

The issues submitted to the jury were answered as follows:

“1. At the time of the issuance of the policy of insurance sued on, did the plaintiff, James Slade, have an insurable interest in the life of Charlie Lee? Answer: Yes.

2. Did the insured, Charlie Lee, suffer loss of life by being struck by a vehicle which was being propelled by ... gasoline . . . while insured was walking or standing on a public highway, as alleged in the complaint? Answer: Yes.

3. Was the said Charlie Lee at the said time under the influence of alcoholic or intoxicating liquors as alleged in the answer? Answer: No.

4. Was the said Charlie Lee at said time committing some act in violation of law as alleged in the answer? Answer: No.

5. In what amount, if any, is defendant indebted to the plaintiff ? Answer: $1,000, with interest from 4 April, 1931, to date.”

From judgment that plaintiff recover of the defendant the sum of $1,000, with interest from 4 April, 1931, and the costs of the action, the defendant appealed to the Supreme Court.

Ehringhaus & Hall for plaintiff.

McMullan & McMullan for defendant.

CoNNos, J.

In Hinton v. Insurance Co., 135 N. C., 314, 47 S. E., 474, it is said: “Whatever conflict there may be, and it must be conceded that there is much, as to what constitutes an insurable interest in the life of a person, this Court has adopted a well-defined principle which meets with our approval. Burwell, J., in College v. Insurance Co., 113 N. C., 244, 18 S. E., 175, 22 L. R. A., 291, after naming several cases, says: ‘These instances and others that might be mentioned, seem to show that except in eases where there are ties of blood or marriage, the expectation of advantage from the continuance of the life of the insured, in order to he reasonable, as the law counts reasonableness, must be founded in the existence of some contract between the person whose life is insured and the beneficiary, the fulfillment of which the death will prevent. It must'appear that by the death there may be damage which can be estimated by some rule of law for which loss or damage the insurance company has undertaken to indemnify the beneficiary under its ¡Dolicy. Where this contractual relation does not exist, and there are no ties of blood or marriage, an insurance policy becomes what the law denominates a wagering contract, and under its rules, made and enforced in the interest of the best public policy, all such contracts must be declared illegal and void, no matter what good object they have in view.”

Applying this principle to the instant case, it is manifest, we think, that the policy of insurance sued on is a wagering contract, and for that reason no action thereon can be maintained in the courts of this State.

The policy was issued-on the application of the plaintiff, who is the beneficiary named therein. The plaintiff was not related by blood or marriage to the insured. There was no contractual relation between the plaintiff and the insured, by reason of which the plaintiff had any interest, pecuniary or otherwise, in the continuance' of the life of the insured. The plaintiff paid the first and all subsequent premiums on the policy.

The policy was void at its inception. There was error in the refusal of defendant’s motion at the close of all the evidence for judgment dismissing the action as of nonsuit. For this reason the judgment is

Reversed.