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Supreme Court of Pow-Wow. Life Insurance. Insurable InterestSource: Harvard Law Review, Vol. 1, No. 8 (Mar. 15, 1888), p. 402Published by: The Harvard Law Review AssociationStable URL: http://www.jstor.org/stable/1321124 .Accessed: 15/01/2015 03:11

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402 HARVARD LAW RE VIEW.

THE LAW SCHOOL.

SUPREME OURT OF POW-WOW.

Life Insurance - Insurable Interest.The case was submitted on the following facts: One Brown agreed

to enter the plaintiff's employ and to serve him for the period of fiveyears; whereupon the plaintiff insured Brown's life with the defend-ants for his own benefit. Brown died before the date fixed for enteringplaintiff's employ, and the defendants refuse to pay the policy onthe ground that the plaintiff had no insurable nterest.

Contracts of Marine or Fire Insurance, and contracts of Life Insur-ance, differ essentially in their nature. The former are strictly con-tracts of indemnity, and an insurable interest is necessary to preventsuch contracts being made the means of speculation and profit. Butcontracts of life insurance are not contracts of indemnity. They arespeculative contracts, whereby, in consideration of the payment of anannual premium, the insurers agree to pay a lump sum upon the deathof the insured.' There is no reason why these contracts should not beenforced n all cases, - no matter what may be the relation between theinsured and the assured. Yet the death of the insured is the contingency

upon which the insurance money is payable, and the law must providethat these contracts do not prove an incentive to crime. This consid-eration of public policy is complied with if the assured at the time oftaking out the policy has a reasonable expectation of pecuniary benefitor advantage from the continued ife of the insured, and this is what iscalled an insurable interest.2 No circumstance of loss need be takeninto account, for it would be absurd to talk of one's loss in his ownlife, and the idea of loss in the law of life insurance is due to a mis-conception of the likeness between life and indemnity policies.

Has the plaintiff an insurable interest in the present case? We

think that he has. He held a valid contractual relation to the insuredwhich the law recognizes, and from which he had reason to expect abenefit. The fact that the contract relation was voidable by the in-sured does not alter the matter. The Statute of Frauds is an affirma-tive defence and personal to the insured. The defendants in this casecannot avail themselves of that defence, to rid themselves of their obli-gation to the assured.

LECTURE NOTES.

THE STRICr LEGAL SIGNIFICANCE F THE TERM EQUrrABLE Es-TATE. - (From Prof. Ames' Lectures.) - It is a misnomer to say thata cestui que trust has an equitable estate in land. What is meant byan equitable estate is, strictly speaking, not an estate (i.e., any owner-ship in the res itself) at all, - it is a right in personam as distinguishedfrom the right in rem possessed by the owner of a true estate. Whatis called a conveyance of an equitable estate is really only the assign-ment of a chose in action. Such conveyances are made without

I Dalby v. India Ass. Co., I5 C. B. 365.2 Conn. AMt. .L. Ins. Co. v. SchafPr, 94 U.S. 457, 46o0.

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