The opinion of the court was delivered by: KALODNER
Is it against the public policy of Pennsylvania to permit recovery by the beneficiary of an insurance policy on the life of a murderer convicted and executed for his crime?
This issue is presented in the instant action for a declaratory judgment brought by the plaintiff insurance company to determine its obligation on a policy of life insurance written by it.
The facts as they appear in the complaint are as follows:
On May 18, 1936, the plaintiff insurance company issued a policy on the life of Paul Petrillo in the amount of $5,000 with a beneficiary clause in favor of his wife, the defendant Angelina Petrillo. (Louis Petril, the brother of the insured, is joined as a defendant because of an attempt to name him as a beneficiary.) The insured was tried and convicted for murder and was electrocuted on March 31, 1941. All the premiums on the policy were paid. The complaint seeks to have the court declare the policy unenforceable by reason of the "public policy" of the Commonwealth of Pennsylvania. The defendants' amended motion to dismiss is premised on the contention that as a matter of law no public policy exists in Pennsylvania which makes the policy unenforceable.
The amended motion to dismiss sets forth that the insured was indicted for murder on June 21, 1939, by the Grand Jury of the County of Philadelphia, Commonwealth of Pennsylvania; pleaded "not guilty" on July 20, 1939; changed his plea to "guilty" on September 28, 1939; was adjudged "guilty of murder in the first degree" with the penalty of death by the Court of Quarter Sessions and Oyer and Terminer of the County of Philadelphia on February 23, 1940; that an appeal was taken to the Supreme Court of Pennsylvania on April 9, 1940, which affirmed the judgment and sentence on October 28, 1940 ( Commonwealth v. Petrillo, 340 Pa. 33, 16 A.2d 50); that on November 22, 1940, an application was made to the Pennsylvania Board of Pardons for a pardon, which was denied on February 24, 1941; and that the insured died by electrocution on March 31, 1941; that during all this time the plaintiff sent quarterly notices to the insured's residence, and all the premiums (including the last one, thirteen days before the electrocution) were paid by the wife, Angelina Petrillo.
The plaintiff has filed an affidavit "Contra Defendants' Motion to Dismiss" wherein it merely controverts that payments were made by the wife and avers that they were paid by the insured or by some person other than the wife.
The plaintiff maintains that the law of Pennsylvania governs because the application for insurance was made in Pennsylvania; that the policy (though executed in New Jersey) was delivered and the first premium paid in Pennsylvania.
There is no doubt that this is a Pennsylvania contract: See Northwestern Mutual Life Insurance Company v. McCue, 1911, 223 U.S. 234, 32 S. Ct. 220, 56 L. Ed. 419, 38 L.R.A., N.S., 57. Accordingly, the Pennsylvania law governs: See Erie R. Co. v. Tompkins, 304 U.S. 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487.
On the basic issue plaintiff relies chiefly on the case of Collins v. Metropolitan Life Insurance Co., 1905, 27 Pa.Super. 353. The facts in that case are almost identical to the case at bar with the important exception that the proceeds of the insurance in the Collins case were made payable to the legal representative of the deceased murderer. Recovery was denied on the grounds of public policy. I quote at length from the opinion in the Collins case as it attempts to set forth the rationale (pages 356, 357, 358 of 27 Pa.Super.):
"* * * The question, therefore, is whether an ordinary life policy, containing no applicable special provisions, is a binding contract to insure against a legal execution for crime.
"Had the policy expressly insured against this risk: that is, that in consideration of the insured paying a certain sum of money, year by year, the company would, in the event of his committing capital felony, and being tried, convicted and executed for that felony, pay to his legal representatives a certain sum of money; such a contract could not be sustained. It must be held to be void upon principles of public policy. 'Would not such a contract (if available) take away one of those restraints operating on the minds of men against the commission of crimes; namely, the interest we have in the welfare and prosperity of our connections? Now, if a policy of that description, with such a form of condition inserted in it in express terms cannot, on grounds of public policy, be sustained, how is it to be contended that in a policy expressed in such terms as the present, and after the events which have happened, that we can sustain such a claim? Can we, in considering this policy, give to it the effect of that insertion, which if expressed in terms would have rendered the policy, as far as that condition went at least, altogether void?' The Amicable Society v. Bolland et al., 4 Bligh's New Rep. 194. A contract, the tendency of which is to endanger the public interests or injuriously affect the public good, or which is subversive of sound morality, ought never to receive the sanction of a court of justice or be made the foundation of its judgment. As a life policy which expressly covenanted against a legal execution of the insured for crime would be void as against public policy, so an ordinary policy, containing no applicable special provisions, is not to be construed as insuring such a risk. Public policy forbids the insertion in the contract of a condition which would tend to induce crime, and as it forbids the introduction of such a stipulation it also forbids the enforcement of a contract under circumstances which cannot be lawfully stipulated for: Hatch v. Mutual Life Insurance Company, 120 Mass. 550 [21 Am.Rep. 541]; Wells v. [New England Mut. Life] Insurance Company, 191 Pa. 207 [43 A. 126, 53 L.R.A. 327, 71 Am.St.Rep. 763]; Ritter v. Mutual Life Insurance Company, 169 U.S. 139, 18 S. Ct. 300 [42 L. Ed. 693]; Burt v. Union Central Life Insurance Company, 187 U.S. 362, 23 S. Ct. 139 [47 L. Ed. 216]. The reason for the refusal of the courts to aid one who founds his cause of action upon his own criminal act is because of the public interests involved, which require that the laws against crime be enforced and that the courts aid no man to take a profit from their violation. The rule is enforced upon the ground of public policy alone, and not out of consideration for the defendant, to whom the advantage is incidental: Coulon v. Morton, 4 Yeates [Pa.], 24; Mitchell v. Smith, 1 Bin. [Pa.], 110 [2 Am.Dec. 417]; Scott v. Duffy, 14 Pa, 18; Seidenbender v. Charles, 4 Serg. & R. [Pa.], 151 [8 Am.Dec. 682]; Unger v. Boas, 13 Pa. 601; Fowler v. Scully, 72 Pa. 456 [13 Am.Rep. 699]; Holt v. Green, 73 Pa. 198 [13 Am.Rep. 737]; Thorne v. [Travellers'] Insurance Co., 80 Pa. 15 [21 Am.Rep. 89]; Columbia Bank & Bridge Co. v. Haldeman, 7 Watts & S., Pa., 233 [42 Am.Dec. 229]." (Emphasis supplied.)
To paraphrase the language of the decision concisely, it holds that it is against the public policy to covenant "against a legal execution of the insured for crime" so as to permit a person to profit by a violation of the law.
With the same thought in mind, in the case of Wells v. New England Mut. Life Insurance Co., 1899, 191 Pa. 207, 43 A. 126, 53 L.R.A. 327, 71 Am.St.Rep. 763, recovery was not permitted by the administrator of the deceased insured who died as a result of a voluntary illegal abortion.
"Had suicide been actually consummated, this may be admitted and yet not reach the question posed on this record. We are not dealing with suicide accomplished, but with an attempt at self-murder; not with the rights of a beneficiary who is himself guilty of no wrongdoing, but with those claimed by the insured who himself has been guilty of one of the great moral wrongs, of a crime infamous at common law, if completed, species of felony (8 R.C.L. 351). * * *
"We are of opinion that the suicide cases, those in which self-destruction was accomplished, should not control such a case as this; that the guiding principle is different. A principle of public policy, operating on the wrongdoer himself, is and should be invocable here, which cannot be applied against a surviving beneficiary who is guiltless of any act contrary to good morals. " (Emphasis supplied.)
The Elwood case thus clearly distinguishes between "the rights of a beneficiary who is himself guilty of no wrongdoing" and the rights of "the wrongdoer himself" as affected by the public policy of the State.
In Allegheny Trust Co. v. State Life Insurance Co., 110 Pa.Super. 37, 167 A. 251, the Superior Court of Pennsylvania held that a contract permitting a recovery on a policy in case of suicide after one year of its issue is not against public policy in Pennsylvania.
Again, in Longenberger et al., Adm'rs, v. Prudential Insurance Company of America, 1936, 121 Pa.Super. 225, 183 A. 422, the Superior Court of Pennsylvania quoted with approval the distinction made in the Elwood case between the rights of the wrongdoer himself and the rights of a beneficiary guilty of no wrongdoing. Of particular interest is the statement in the Longenberger case that, in the absence of any provision in a contract of insurance that the policy shall be void in the event of ...