(The point being that the policy became void by cessation of insurable interest).

So on the recent authority of the highest court in the land a bona fide assignment for value carries title to the policy. Like other choses in action the policy is assignable.

It may now be interesting to consider Justice Field's statement of the general doctrine of insurable interest, sound, it is submitted, and within the very reason, when properly viewed, of the Grigsby case.

In the Warnock case a policy was assigned, not by way of sale, but under circumstances leading to the conclusion that a speculation existed. Justice Field properly stated the doctrine of insurable interest to be "a reasonable ground founded upon the relations of the parties to each other, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured."

Thus the crux of the doctrine as to insurable interest, followed generally, is that the interest must be in the continuance and not the ending of the life. Nevertheless, as Justice Holmes again makes clear, a modern insurance contract is not merely a contract of indemnity, where a blood relation or the insured's estate is beneficiary.

It is different where a corporation of a partnership is the beneficiary. In such case the basis of beneficial interest is indemnity and hence danger lies in a procurement of a larger volume of life insurance than the value of the insured. In the partnership or corporation insurance liberal construction is given to the value of the insured, as fixed by the parties and named in the amount of the policy. It seems analogous to the rule as to consideration in contracts.

In contracts the general rule of law is that mere inadequacy of consideration, in the absence of fraud, will not avoid the contract. Of course, to put a hundred thousand dollar policy on the life of one for the benefit of a firm or corporation, the entire assets and good will of which would be a mere fraction of the amount of the insurance, would be, in itself, evidence of speculation. Nothing is clearer than that the law will not permit speculation in human lives through the device of life insurance. It is hard to conceive a principle more easily comprehended than this. So the courts hold that where the assignment in reality relates

back to the issue of the policy, it is to be judged by the same rule as if the policy was actually payable originally to the assignee as beneficiary. An assignee under such circumstances must be within the rule so well stated by Justice Fields. There is no lack of harmony in this.

Now as to the reasonable ground of interest in the continuance of the insured's life as a necessary basis of insurable interest. This does not mean that the policy must be an accurate measure of the extent of the interest. The courts do not ever mean to make contracts for litigants. The interest must be a reasonable interest, it is declared. "Reasonable" is a broad term.

To the writer that doctrine always seemed cognate to the doctrine giving an interest in one sufficient to support a suit for damages for negligence in causing a relative's death; and again rather similar to the doctrine that testamentary capacity must include the power to realize and appreciate the natural objects of one's bounty. A next-of-kin to one killed by negligence may not recover damages for the negligent killing except as a compensation, but the jury measures the compensation. One may be a son or a brother to the insured and yet be pecuniarily independent of him.

The courts generally hold, however, that kinship supports insurable interest. Of course, there are exceptions. It may be well to consider one.

In the case of the Insurance Company v. Hogan, III Illinois 35, there appeared many extraordinary facts. I purposely do not name the appellant insurance company because its name is similar to two companies now in existence. As will be surmised after a recital of the facts in the case, the appellant insurance company is no longer in existence.

In this Hogan case it appeared that on the persuasion of an agent, a son signed his father's name to an application. The son did not live with the father nor in the same county with him and was entirely independent, owning a farm of some 400 acres. The father's age was given as 60, although he was probably 65. The court says the father was infirm, had only the partial use of one arm and leg, was unable to labor and was engaged in no business.

Nothing is said of a medical examination, but manifestly, if a medical examination was made at all, it was fraudulent. The policy, however, was issued and the insured promptly committed

suicide by taking arsenic. Naturally the court held the policy void and rejected, whilst it patiently considered the contention that insurable interest existed. The court concluded that mere relationship was of little importance in this case and that this son and beneficiary had no expectation of pecuniary advantage from the continuance of the life of his father. Manifestly his interest was to collect the fraudulent claim at his father's death.

It is always true that the beneficial interest must be an interest in the continuance of the life and not in the death of the insured. This, however, is not to be construed as meaning that the policy must be limited to mere compensation where a reasonable interest in the continuance of the insured's life does actually exist.

So the law as to beneficial interest is clear enough. It excludes strangers. It is based on reasonable expectation

of benefit in the continuance of the life of the insured and for such expectation kinship usually suffices. There are cases, too, on the phase of relationship without kinship, where the expectation of interest applies to strangers in blood, such as children taken to raise. The courts hold beneficial interest to exist in such cases, as a direct deduction from the general doctrine, although no kinship or affinity exists.

It is then submitted that life insurance counselors should have little dificulty in determining beneficial interest. In case of doubt, the proper method is to have the policy issued payable to the insured's estate. Subsequently, under circumstances divorcing the assignment from the issue of the policy, an assignment may be made. Authorities are ample that as the insured has an insurable interest in his own life he may procure a policy payable to his estate and subsequently assign it to a friend, as well as a relative, even as a pure benefaction. Nothing can be broader than this. Always and only, it must be remembered that speculation must not be interjected into life insurance.

Even if the assignment of the policy is illegal, the illegality only reaches to the assignment. The liability of the company, in the absence of fraud, becomes fixed by the death. It is a liability always heeded. Life insurance is the very antithesis of hazard as between the insurer and the insured, for the premium, when continuously maintained, provokes inevitably the payment of the fund.

Real Estate Contracts and Titles

By Philip A. Benson in Trust Companies.

(Continued from Last Number.)

The sale of a piece of real property usually involves two transactions: the making of the preliminary agreement called the contract, and the delivery of the deed in exchange for the purchase price. Prior to the making of the contract there may have been a series of negotiations between the parties, but when the contract has been made and signed it is assumed that the final agreement has been reduced to writing and that the contract contains the entire agreement. It is therefore of great importance that the contract be carefully prepared.

It should provide for the sale of the property owned by the seller, subject to such liens and encumbrances as exist and are to remain, and for the price and on the terms that the seller has agreed to accept. The property described should, of course, be that which the purchaser has in mind. The exceptions should be such as he is willing to take, and the price and terms those that he has agreed to pay. It is not advisable for one drawing a contract to try to represent both parties in doing so, as their interests, of course, are opposed.

A contract legally is any deliberate engagement between competent parties supported by a sufficient consideration to do, or refrain from doing, something not illegal and not against public policy. The term contract, however, has been borrowed by the real estate business and is taken to mean the agreement providing for th sale and purchase or exchange of real property. It must possess all of the requisites of any legal contract. In addition, to be legally enforcible under the statute of frauds, it must be in writing and subscribed by the party to be charged.

No particular form is required for the contract. Any agreement, written in an understandable manner, describing the property in such a way that it is capable of identification, is sufficient. It does not have to be in English, and it does not have to be written in ink. The language may be any that is capable of being translated into English, and it can be written in ink or pencil, or any other substance, upon paper or any other fairly durable material. While no particular form is required, usage has shown that it is desirable to use a standard form, and the best form is that in general use by the title companies in this city. This arranges the agreement in a logical manner. It prints that part which is common to most contracts, and leaves blanks to be filled in with the part that pertains to the particular transaction.

REQUIREMENTS OF A REAL ESTATE CONTRACT.

The real estate contract in general use can be considered in four parts: first, the date and the names of the parties; second, the agreement to sell and purchase, the description of the property, and the exceptions or limitations on the title subject to which the sale is made; third, the purchase price and terms of payment; and fourth, miscellaneous stipulations.

The purchaser of the property usually wishes to know that the person selling it is the owner of it and has the right to sell it. He is putting up some money on the contract and it is a wise precaution to know that he is entering into an agreement that can be carried out by the other party. He may be assured of the seller being the rightful owner by responsible people who know it to be so, or he may obtain from a title company a card showing the name of the last owner of record. If the owner holds the title in a fiduciary capacity, it may be necessary for inquiry to be made as to whether he has the legal power to sell it. The seller does not have to inquire into the identity of the buyer provided he gets a sufficient payment on the contract to insure him against any loss.

The description of the property is perhaps the most difficult part of the contract. We want to insert as the description exactly what the owner has and what he has a good right to sell and convey. At the same time it should describe exactly the property that the buyer has in mind. In some cases a description by street and number is sufficient, and to this is often added the lot dimensions, as for instance: "All that certain plot, piece or parcel of land, situate, lying and being in the Borough of Brooklyn, City of New York, known as Number 234 Greene Avenue, being a plot forty (40) feet in width by one hundred (100) feet in depth on the south side of Greene Avenue, two hundred (200) feet east of Grand Avenue." Instead of the description mentioned, it is in many cases advisable to give a full metes and bounds description, that is to say, a description that starts at a definite point and goes completely around the plot, each course as to length and direction being exactly described. In some descriptions reference is made to natural monuments, as a boundary of the property being described as along the lines of a certain stream, or a course running to a certain road, tree, stone wall, or other monumented point.

Following the description we insert anything that encumbers the title or limits the use or possession of the property. The buyer of a piece of property can expect to get the land and the structures that are on the land, and a good right to maintain such structures. It is, therefore, important, especially in the case of city property, to have a survey to which reference is made when the contract is drawn. A survey is a diagram of the plot made by a competent city surveyor, showing the outline of the plot and locating all structures erected on it and structures erected on surrounding property if they in any way affect the plot surveyed. This survey may show that there are encroachments, that is, that the buildings on our plot may encroach over on neighboring property or on the street, or it may show that a neighboring building encroaches on our plot. If so, proper reference to this should be made in the contract.