c. Contracts in Furtherance of illegal Purposes

3.d. Contracts Conferring Benefits as a Result of Crime

Brissette Estate v. Westbury Life Insurance Co.

• 
  It is public policy that a felon cannot benefit from his/her crime
  
• 
  If an individual is rewarded a benefit because of a crime they/their estate will be granted the benefit if a contract directly makes them a beneficiary and they were not privy to that contract
  

• 
  Married couple takes out life insurance under which they are labelled "the insured"
  
• 
  In the death of one, the insurance proceeds would be paid to the survivor
  
• 
  Husband murders wife.
  
• 
  Estate of the deceased wife claims entitlement to the proceeds of insurance
  

• 
  Does the dead wife's estate have an interest in the policy
  

• 
  For Defendant
  

In Demeter v Dominion Life Assurance Co.

• 
  Husband insures wife's life.
  
• 
  Husband arranges wife's death
  
• 
  Husband is denied from claiming the policy because they would not let the felon benefit
  
• 
  The wife was not party to the claim and had no interest in the claim (Only the husband would receive the money if she died)
  
• 
  Court decided not to give her estate anything
  

• 
  Man insured his own life w/ wife as beneficiary
  
• 
  Wife murders husband
  
• 
  The money goes to the estate of the wife in trust
  
• 
  Wife is denied money, but it remains in her estate as public policy couldn’t abrogate a right held by her estate according to some statute
  

 This case:

• 
  Court assesses it as being closer to Demeter as they are both "the insured" and the beneficiary is "the survivor"
  
  • 
    The wife's estate cannot be deemed to be a beneficiary
    
  • 
    There is no unjust enrichment by denying the wife's estate
    
  • 
    Further problematic… if the denial of the wife's estate was unjust there would be no way to get the money
    
    • 
      The interest is in the husband, so the money would have to be transferred in trust to the husband, so that the wrongdoer does not benefit, and then transferred to the wife.
      
    • 
      A trust can't be set up because payment of the insurance policy is unenforceable
      
      • 
        This would be different if it were payable to the state initially like in cleaver
        

 Oldfield v Transamerica Life Insurance Co. of Canada

Ratio:

• 
  Public Policy Rule:
  
  • 
    A criminal should not be permitted to profit from crime
    
  • 
    Operates independently from contract law unless modified by statute
    
  • 
    Rule extends to those who claim through the criminal's estate
    
  • 
    Rule is inapplicable to innocent beneficiaries
    
• 
  For this case: Public policy does not apply to bar a claim by an innocent beneficiary named in an insurance policy merely because the insured dies while committing a crime 
  

Facts:

• 
  Plaintiff is trying to claim the proceeds of a life insurance police under which she is named beneficiary
  
• 
  Ex-husband was required to name her beneficiary until their children reached 18; he is paying child support and life insurance is in case he dies and can’t pay
  
• 
  Husband died in Bolivia, as drug mule, when cocaine balloon burst inside him
  
• 
  Insurer refuses to pay on policy grounds
  

 Issue:

• 
  Should she be able to collect the policy when the husband died committing a criminal act
  

 Decision:

• 
  For plaintiff
  

 Reasons:

• 
  Public Policy Rule:
  
  • 
    A criminal should not be permitted to profit from crime
    
  • 
    Operates independently from contract law unless modified by statute
    
  • 
    Rule extends to those who claim through the criminal's estate
    
  • 
    Rule is inapplicable to innocent beneficiaries
     
    

• 
  Two Rationales for public policy rule
  

1. 
   Enforcing illegal contracts would remove the restraint men have from committing crimes
   
   • 
     If you could commit a crime and profit greatly from an enforceable contract you made in relation why not? (contract to be paid for assassinating someone)
     
2. 
   A Court will not permit injustice
   
   • 
     To deny an innocent beneficiary proceeds from claim would be inconsistent with justice
     
     • 
       The victim would be punished
       
       
       
• 
  Obiter Dicta: Public Policy rule Reform
  

1. 
   The distinction between innocent beneficiary and those claiming through criminal's estate seems arbitrary
   
2. 
   "It might be appropriate to modify the public policy rule so as to permit an innocent person who claims through the criminal's estate to take insurance proceeds.
   
   
   

Directory: outlines
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outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11
outlines -> Course Outline as/huma 2650 0A

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