Gordon v. Ware Nat. Bank

Citations

• 132 F. 444
• 67 L.R.A. 550
• 1904 U.S. App. LEXIS 4338

Syllabus

<p>1. Live Insurance — Insurable Interest — Requisite to Validity.</p> <p>The issue of a policy of life insurance to one who has no interest as a relative, dependent, creditor, or otherwise, in the life of the insured, and who pays the premiums for the chance of recovering upon the policy, is against public policy, and the contract is void, because the interest of the holder is to shorten, rather than to lengthen, the life of the insured, and his maintenance of the policy is of the nature of a wager.</p> <p>2. Same — Creditor has Insurable Interest.</p> <p>A creditor has an insurable interest in the life of his debtor, and the issue or pledge of a policy upon his life as collateral security for the payment of his debt is valid.</p> <p>5. Same — Necessity oe Insurable Interest in Assignee — Question oe General Daw.</p> <p>The question whether or not an insurable interest in an assignee is requisite to the validity of the assignment of a policy of life insurance, which was originally issued to one who had an insurable interest, is a question of general law, upon which the decisions of the courts df the state in which the assignment was made are not controlling in the federal courts.</p> <p>t Same — Assignment Valid Without Insurable Interest in Assignee.</p> <p>An insurable interest in the assignee is not requisite to the validity of the assignment of a policy of life insurance which was lawfully issued to one who had such an interest, unless the assignment was made in bad faith as a cover for the issue of a wager policy. But the use of an assignment immediately upon the issue of a policy to evade the rule that the issue of a policy to one without an insurable interest renders it void avoids the assignment..</p> <p>o. Same — Pledgee oe Policy May Sell to One Without Insurable Interest.</p> <p>The pledgee of a policy of life insurance has the right and power to sell the policy to the highest bidder for the purpose of realizing money to pay the debt which it secures, an