INSURABLE INTEREST   241

RUSE v. MUTUAL BENEFIT LIFE INS. CO. Court of Appeals of New York, 1861. 23 N. Y. 516.

Appeal from the Supreme Court. Action to recover $2,000, insured by the defendant, a corporation chartered by the State of New Jersey, upon the life of one Bugbee, a resident of Florida. The plaintiff, who took out the policy for his own benefit and in his own name, was a resident in Georgia. In his written application for insurance he stated: "I have an interest in the life of the said I. D. Bugbee to the full amount of the said sum of two thousand dollars: and I hereby agree that this declaration (which was in the form of answers to various interrogatories in respect to the age, health, habits, etc., of Bugbee,) shall be the basis of the contract between myself and the said company." * * *

Upon the trial it was proved that the premium for the second year, which, by the terms of the policy. became due April 10, 1847, was not then paid. Bugbee died April 13, 1847. Within a day or two afterwards, the plaintiff tendered the premium to the defend-ant's agent, and he declined to receive it. * * *

The plaintiff gave no evidence of any pecuniary interest in the life of Bugbee, or of any relationship to him. The defendant moved

social parasite. useful business and industry are thereby discouraged. On the moral side, idleness leads to vice; and the impoverishment of the loser entails misery, and, in consequence, crime.

"The scope of the term `unearned gain' is primarily a question for the social sciences. Still, when the occasion arises, the courts must draw the line. Thus, a contract for the buying and selling of stock or produce is valid if entered into with a contemplation of performance by actual delivery, yet is void if entered into with no intention of delivery. The important thing to be noticed, how-ever, is that not every unearned gain is forbidden by the policy of English law. The descent of property to the heirs or next of kin of the decedent represents an unearned gain as to the former, yet as an encouragement to industry, as a means of preserving the family, and as a solution of a bad dilemma, the rule is allowed to stand. The most conspicuous class of eases is gifts, whether by devise, mortis causa, or inter vivos. Freedom of gift is one of the incidents of property in English law, yet it has not been won without a struggle and its extension has been criticised. However, the tendency, with few exceptions, has been toward greater freedom of alienation. These observations will be seen to have some bearing upon the freedom allowed in procuring and transferring life insurance policies.

"There are two differences, however, between a gift and a wagering contract: First, the donee has usually little initiative in procuring the gift, and hence the procuring of gifts does not open up an attractive means of acquiring a livelihood without industry. Whenever the procuring of gifts is sought to he used as a vocation, it is discouraged, as in the case of professional beggars. On the other hand, if wagering were unrestrained by law, the initiative in procuring the unearned gain would be open to everyone, and gambling would become an attractive means of livelihood. Secondly, the impoverishment of the loser in a wager has no counterpart in the ease of a gift. It may be, too, that a greater necessity is felt for freedom of alienation as a necessary incident to a property right, than for freedom of contract; but the distinction, if any, is a subtle one." Patterson, E. W., Insurable Interest in Life (1918) 18 Colum. L. Rev. 381, 386.