Souder v. Home Friendly Society

Bryan, J., delivered the opinion of the Court. The appellant brought suit against the appellee to recover certain sums of money alleged to have become due and payable by reason of an insurance of the life of one Samuel Herman. The appellee demurred to three counts in the declaration and the demurrers Avere sustained. We Avill give our opinion on the questions in controversy Avithout at present making any particular examination of the pleadings.

The facts, on which our opinion is desired, appear to be as folloAvs : Herman, the deceased, Avas indebted to one Sibbet, Avho was his son-in-law; Sibbet in eighteen hundred and seventy-seven insured Herman’s life for three thousand dollars in the Home Mutual Life Association of Pennsylvania, and assigned the policy of insurance to the plaintiff (now appellant) to secure a large sum of money, which he owed him; the plaintiff paid the dues and assessments on the policy, and continued to pay them until eighteen hundred and eighty-seven, when the defendant (now appellee) agreed to assume the risk taken by the Pennsylvania Company on the life of Herman, and in accordance with this agreement issued three certificates for the proceeds of an assessment to be levied at his death upon its surviving members, not to exceed a thousand dollars for each certificate; and they were declared by writing endorsed on them to be issued for the purpose of taking the place, in part, of Policy No. 388, in the Home Mutual Life ⁵¹⁶ Association of Pennsylvania, which was thereupon surrendered; these certificates were made payable to “W. EL Souder, assignee and creditor, if then living,” within ninety days after satisfactory proof of the death of Herman. Herman is dead; and we understand that the sole question now in controversy is whether the plaintiff acquired a right of action on these certificates. It is not questioned that Sibbet as creditor of Herman had the right to insure his life. And we regard it as fully settled in this State that he could assign the policy to Souder.

This question has been decided differently elsewhere, but the opinion of this Court in Rittler vs. Smith, Adm’x, 70 Md., 265 , settles the law for us. In that case it was said: “In support of the view taken by the appellee’s counsel, cases have been cited in which it has been held that the assignee of a life policy, who has no insurable interest in the life, stands in the same position as if he had originally taken out the policy for his own benefit. In other words, the contention is that the assured himself can make no valid absolute assignment of his policy to one who has no insurable interest in his life. But our own decisions are opposed to this.

It is settled law in this ¡State that a life insurance policy is but a chose in action for the payment of money, and may be assigned as such finder our Act of 1829, ch. 51. New York Life Ins. Co. vs. Flack, 3 Md., 341 ; Whitridge vs. Barry, 42 Md., 150 . It is quite a common thing for the bond or promissory note of a private individual, to be sold through a broker to a bona fide purchaser, for less than its face value ; and when the latter takes an assignment of it, without recourse, he becomes its absolute owner, and is not bound to refund to the vendor anything he may recover upon it over and above what he paid for it.

So a life policy being a similar chose in action may be disppsed of and assigned in the same way, provided the assent of the insurer is obtained where it is so stipu ⁵¹⁷ lated in the instrument. In such case the assignee must of course keep the policy alive by the due payment of premiums, if he wishes to realize anything from it. Such an assignment is