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Knopf v. Morel.

■dence was of such a character as not to prejudice the substantial rights of the appellant; for, if the proceeding was •entirely destitute of force, it can not be that evidence tending to prove by parol what ought to have been proved by the record could have harmed the appellant. As the record, on its face,showed that the proceeding was void, evidence tending to establish the same thing, even if incompetent, did not impair the rights of the appellant, since from a void judgment no legal right could jlow.

There was no error in permitting the appellee to prove that the appellant and Emerick, after the execution of the note, entered into an agreement that the latter should pay the former five dollars each week, and that, under this agreement, the sum of fifteen dollars was paid. This testimony tended to prove that the appellant was liable on the note as surety, and in that capacity had received money from his principal, although in itself it was not sufficient to accomplish that result. We do not think that the testimony was admissible for the purpose of charging the appellant with the money he received, for there was no allegation in the complaint on that subject; but we do think the evidence was competent, because it is to be regarded as an admission by conduct.

We have carefully studied the evidence, and we can not resist the conclusion that the trial court erred in applying the law to it. Knopf signed as an endorser, and, as we have seen, was prima facie liable in that capacity. We can find no evidence that he undertook in any other capacity, although we have given it the most careful scrutiny. The uncontradicted evidence is, that he refused to sign as maker, and there is no evidence that he agreed to be held as a co-surety. In the absence of evidence showing that he undertook as cosurety he can not be compelled to contribute. Schulz v. Klenk, 49 Ind. 212; Nurre v. Chittenden, 56 Ind. 462; Hillegas v. Stephenson, 75 Mo. 118 (42 Am. Rep. 393); Smith Vol. 111.—37

Amick t!. Butler, Administrator.

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v. Smith, 1 Dev. Eq. (N. C.) 173; Briggs v. Boyd, 37 Vt. 534.

Evidence of the fact that the endorser received money from the principal to apply on the note is not, of itself, sufficent to entitle one who signs as mater to contribution. This is obviously so, because the endorser is liable to the creditor, and has a right to protect himself by taking money from the debtor without changing his position. He is, to be sure, bound to apply the money so received to a reduction of the debt, but he does not change his position to that of a cosurety.

Judgment reversed.

Filed Sept. 27,1887.

No. 11,906.

Amick V. Butler, Administrator.

Life Insurance.Insurable Interest.—No one can have the benefit of art insurance effected by himself upon the life of another, unless he has an insurable interest in the life insured.

Same.—Creditor's Insurable Interest in Life of Debtor.Amount of Insurancr Pa-mksible.—A creditor has an insurable interest in the life of his debtor, and may in good faith take insurance upon his life. The amount of the insurance obtained must bear some just proportion to the debt, or the extent of the obligation assumed, and the contingencies attending the maintenance of the policy, though it can not be limited to the amount of the debt.

Same.lAabilUy of Creditor for Surplus After Payment of Debt.—Where monev has been collected upon a policy of insurance which had its inception in a scheme of mere speculation on the life of the insured, or where insurance is taken out by a debtor as security for the benefit of his creditor, the expense of procuring and continuing the policy being borne by the former, the amount collected, less the debt secured or the sums advanced in obtaining and keeping the policy in force, may be recovered by the personal representatives of the person insured.

Same.— When Creditor Entitled to Full Amount of Policy.—Where a creditor receives from his debtor a policy of insurance on the life of the latter, Amick v. Butler, Administrator.

paying all the expenses attending the issuance thereof, and all subsequent assessments and charges thereon, and being named therein as beneficiary, and upon the death of the debtor receives the amount stipulated therein, which is largely in excess of the indebtedness and the expenses of insurance paid by him, he is not liable to the representatives of the debtor for such excess, although it had been agreed between the parties that if the debtor should pay'the indebtedness and the expense of insurance the policy should be turned over to him.

/From the Jennings Circuit Court.
/. Overmyer, for appellant.
JT. C. Balchelor, for appellee.

Mitchell, J.-^-Suit by Butler, administrator of the estate of Frazee, deceased, against Amick, to recover part of the amount which the latter received on a policy of life insurance which had been effected on the life of the plaintiff's decedent.

The facts most favorable to the plaintiff's theory are comprised in the following statement: On the 23d day of March, 1877, Decatur M. Frazee was indebted to Amick in the sum of about six hundred dollars. By agreement with Amick, Frazee made an application to the U. B. Mutual Aid Society of Pennsylvania, a mutual life insurance company, for membership in that society. Upon due examination he was admitted as a member, receiving a certificate in which Amick, his heirs and assigns, were designated as the beneficiaries, and were to become entitled upon the death of Frazee to two thousand dollars, upon condition that the terms and conditions of the certificate of membership should be complied with. Amick was designated in the application and in the certificate of membership as a creditor. The amount of the indebtedness was erroneously stated in the application at two hundred and fifty dollars. The proof showed that it was about six hundred dollars. All the expenses incident to the issuance of the certificate, and all the annual payments and assessments stipulated in the certificate of membership to be paid by Frazee, were to be and were paid by Amick. At the Amick f. Butler, Administrator.

time the policy was issued it was orally agreed that if Frazee should at any time thereafter pay his indebtedness, and reimburse Amick for the cost of obtaining the policy and carrying the insurance, the latter would turu over the policy to the former.

On the 16th day of April, 1879, Frazee died without having paid any part of his debt, and without having paid any part of the cost of procuring and continuing in force the certificate of membership.

The society, upon due proof of the death of Fiazee, paid to Amick about nineteen hundred and sixty-three dollars, in discharge of its liability upon the certificate. After deducting the amount of the indebtedness and the sums advanced for the insurance, it was found that there remained of the sura received from the society twelve hundred and fifty-nine dollars and fifty-eight cents, which the administrator of Frazee had demanded from Amick. The latter having refused payment, the court gave judgment in favor of the administrator for the amount.

The propriety of the conclusion of the learned court on the foregoing facts involves all the questions in the record.

In support of the judgment so given, it is contended that the right of a creditor in the proceeds of a policy of insurance upon the life of his debtor, is limited to the amount of the debt and necessary expenses on account of which the insurance was taken out and maintained. When the debt and expenses are extinguished, the argument is, the excess belongs to the legal representative of the deceased debtor, and may be recovered from the creditor, to whom payment has been made, as money had and received to the use of the debtor's representative.

This conclusion is predicated upon the rule, the effect of which is that one having no insurable interest in the life of another may not, by means of insurance, speculate upon the life of the person insured. The insurable interest can not,

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it is contended, exceed the amount of the d«bt; hence, the person obtaining the insurance must account for the excess.

Upon considerations of public policy, the general rule has long prevailed that insurance taken out and obtained by one upon the life of another, in whose life the person procuring the insurance had at the time no insurable interest, is invalid. Elkhart, etc., Ass'n v. Houghton, 103 Ind. 286 (53 Am. R. 514); Continental Life Ins. Co. v. Volger, 89 Ind. 572 (46 Am. R. 185).

A policy taken upon the life of another, for speculative purposes merely, is regarded as nothing more than a wager on the life of the person insured. Such a transaction is assigned a place in the catalogue of gambling, and is justLy. condemned by the law. Ruse v. Mutual Benefit, etc., Co., 23/-IN. Y. 516; Brockway v. Mutual Benefit, etc., Co., 9 Fed. Rep. 249; Bliss Life Ins., section 9.

No one can have the benefit of an insurance effected by himself upon the life of another, unless he has an insurable interest in the life insured.

Where money has been collected upon a policy which had its inception in a scheme of mere speculation upon the life of the person who is the subject of insurance, or where insurance is taken out by a debtor as a security for the benefit of his creditor, the expense of procuring and continuing the policy being borne by the former, the authorities justify the conclusipn in either case that the amount collected, less the debt secured or the sums advanced in obtaining and keeping the policy in force, may be recovered by the personal representatives of the person insured. Gilbert v. Moose, 104 Pa. St. 74 (49 Am. R. 570); Cammack v. Lewis, 15 Wall. 643; Page v..Burnstine, 102 U. S. 664; Warnock v. Davis, 104 U. S. 775; Button v. Willner, 52 N. Y. 312; Drysdale v. Piggott, 8 DeGex, M. & G. 546; Lea v. Hinton, 5 DeGex, M. & G. 823.

In case the policy originates in a transaction which the law condemns, or where the debtor, having taken insurance on

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