Reed v. Smith

In Reed v. Smith, 120 S.W.2d 302 (Tex.Civ.App.1938), the court recognized Willis Smith had an insurable interest in the life of Frank Reed, an unrelated man who had previously been married to Smith's mother (making Reed Smith's former stepfather). Although the divorce ended the stepparent relationship, Smith and Reed maintained a close relationship. The court relied upon the continuing benefactor-type relationship to conclude Smith had an insurable interest in Reed's life. Specifically, Reed allowed Smith to live in his home after she married, paid the medical expenses for a baby girl she bore, referred to the baby as his granddaughter, bought his "daughter" and "granddaughter" clothes, gave money to her and her disabled husband to engage in business, wrote her a letter indicating he hoped to use a back-wages recovery from his employer to buy her an automobile, and expressed a desire to see to it that his "granddaughter" was educated. Id. at 305. In recognizing Smith had an insurable interest in Reed's life, the court said "it would be difficult to imagine a case where one, not related within the accepted degrees of affinity and consanguinity, would be entitled to recover on such a policy, unless the facts of this case warrant such a recovery." Id.