Grigsby v. Russell, 222 U.S. 149 (1911)

Grigsby v. Russell


No. 53


Argued November 10, 13, 1911
Decided December 4, 1911
222 U.S. 149

CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SIXTH CIRCUIT

Syllabus

A condition in an insurance policy that it shall be void for nonpayment of premiums means only that it shall be voidable at option of the company.

The rule of public policy that forbids the taking out of insurance by one on the life of another in which he has no insurable interest does not apply to the assignment by the insured of a perfectly valid policy to one not having an insurable interest.

In this case, held that the assignment by the insured of a perfectly valid policy to one not having any insurable interest but who paid a consideration therefor and afterwards paid the premiums thereon was valid, and the assignee was entitled to the proceeds from the insurance company as against the heirs of the deceased.

A valid policy of insurance is not avoided by a cessation of insurable interest, even as against the insurer, unless so provided by the policy itself. Conn. Mut. Ins. Co. v. Schaefer, 94 U.S. 457; Warnock v. Davis, 104 U.S. 775, distinguished.

Where there is no rule of law against paying to an assignee who has no insurable interest in the life of the insured, and the company waives a clause in the policy requiring proof of interest, the rights of the assignee are not diminished by such clause as against the insured’s administrator.

Even though a court below might hesitate to decide against language of this Court referring to a debated point, if there has been no direct decision, this Court is not precluded by such references when the point is actually before it.

168 F. 577 reversed.

The facts are stated in the opinion.