*PART THE SECOND.

OF INSURANCE ON LIVES.

CHAPTER I.

OF THE CONTRACT, AND ITS INCIDENTS.

AN insurance upon life, is a contract by which the insurer, in consideration of a premium proportioned to the age, health, and other circumstances of the person whose life is the object of insurance, agrees to pay a certain sum in the event of his decease, either, within a certain fixed time, or, generally, at any indefinite. period. The advantages resulting from this species of insurance, when effected by a creditor, annuitant, or dependent, whose income is liable to be determined or lessened by the death of the person whose life is the object of insurance, are too evident to require enumeration. It may also, on the other hand, when effected by masters of families, or others having persons dependent upon them, be made a means of securing a provision available at their decease. These, and other considerations of the like nature, are said to have influenced the Bishop of Oxford, Sir T. Allen, and some other gentlemen, to apply to Queen Anne to obtain a charter for incorporating them and their successors, whereby they might provide for their families in an easy and beneficial manner, and accordingly a corporation called the Amicable Society, was established in the year 1706, which has been since followed by several others of a like nature.

Interest.

To prevent life insurance from being converted to purposes of useless or mischievous speculation, it was enacted by the statute 14 Geo. 3. c. 48. s. 1. "That no insurance shall be made by any person or persons, bodies politic or corporate, on the

life or lives of any person or persons, or on any other event or events whatsoever, wherein the person or persons, for whose use, benefit, or on whose account, such policies should be made, should have no interest, or by way of gaming or wagering; and every insurance made contrary to the true intent and meaning thereof should be null and void to all intents and purposes." And in order to enable insurers to ascertain what the interest of the person, entitled to the benefit of the insurance, really was, it was further enacted by the same statute, "that it should not be lawful to make any policy or policies on the life or lives of any person or persons, or other event or events, without inserting in such policy or policies the person's name interested therein, or for whose use, benefit, or on whose account such policy was so made or underwritten." The 3d section enacts, "that in all cases where the insured had an interest in such life or lives, event or events, no greater sum should be recovered, or received from the insurer or insurers, than the amount or value of the interest of the insured, in such life or lives, or other event or events." The 4th section declares, "that the act shall not extend to insurances bona fide made by any person or persons on ships, goods, or merchandizes." A creditor has an

insurable interest in the life of his debtor; for the means by which he is to be satisfied may materially depend upon it, and the death must at all events in some degree lessen the security. (a) The circumstance of the creditor being secured by a mortgage or otherwise does not seem to affect the question of interest; although, perhaps, in a court of equity, the insurer might have a right to require the security to be put in force, or if satisfaction of the debt were obtained by any means, it would operate as an ademption of the claim upon the policy. (b) A debt for money won illegally at play, is clearly insufficient to *support a policy; (c) but a debt contracted by a debtor during infancy is perhaps sufficient, as the plea of infancy can in general only be pleaded by the debtor, and is not available for third persons. (d) A trustee though not clothed with a beneficial interest, may effect an insurance on life. As where a person entitled to an annuity during the life of William Holden devised it to various persons, and made the plaintiff his executor directing him to insure, an insurance effected by the executor was held valid by Lord Kenyon. (e)

The consequence of the construction given to a policy as a contract of indemnity is that if the debt or other interest upon which the policy is founded, be satisfied, no claim can be made under the policy. As in the case of a policy effected on the life of Mr. Pitt by a creditor, when it was pleaded in bar to an action on the policy, that the debt due to the plaintiff was, after the death of Mr. Pitt, and before the exhibiting of the plaintiff's bill fully paid to him by

(d) Dwyer v Edie, ubi supra, per Buller, J. (e) Tidswell v Angerstein, Peake's Rep

151.

the Earl of Chatham and the Lord Bishop of Lincoln, executors of the will of Mr. Pitt, the plea was holden to be an answer to the action. And it affords no objection to this plea that the fund out of which the debt was paid did not originally belong to the executors as part of the assets of the deceased, for although it was derived aliunde, the debt was equally satisfied; and the damnification of the creditor, in respect of which alone the action on the insurance contract was maintainable, was fully obviated before the action was brought. (f) If a trader assign to a creditor, as security for his debt, a contingent interest to which he is entitled upon his surviving his wife, and, upon her death, before the bankruptcy of her husband, receive the sum insured from the insurance office, such creditor can prove under a commission against the husband, only for the difference between the whole debt, and the amount received from the insurance office. (g)

Right to policy.

A policy of insurance effected by a bankrupt upon his own life, at an annual premium, passes to his assignees, however small the apparent value of it *may be at the time of his bankruptcy, and although there are considerable arrears of premium then due upon it; and if, instead of delivering it up as part of his effects, he secretly assigns it to another person, who pays the arrears of the premium, and upon the death of the bankrupt receives the sum insured, this sum, deducting the amount of the arrears so paid, may be recovered by the assignees as money had and received to their use. (h) The premiums paid for the insurance of the life of a grantor of an annuity, cannot be charged against him on rescinding the annuity, unless the insurance was effected in pursuance of an agreement. (i)

When a WARRANTY is inserted, that the person whose Warranty. life is insured is in good health, this means that he is in a reasonably good state of health: it cannot mean that he is free from the seeds of disorder. And though he may have laboured under a particular infirmity, yet, if it be proved by medical men, that it did not in their judgment contribute to his death, the warranty of health is complied with, and the insurer is liable. As where a policy was effected on the life of Sir James Ross, who, from a wound received in the battle of La Feldt in 1747, was troubled with a disorder, attributed by the physicians to a local relaxation or paralysis, he was still upon the evidence adduced considered to have been insurable as in good health; his death was not occasioned by that cause, but by a malignant fever. (k) So, in the case of a policy on the life of Sir Simeon Stuart, the policy was held valid, with a warranty of good health, though he was subject to violent

(f) Godsall and Others v Boldero, 9 East, 72.

(g) Ex parte Andrews, 1 Madd 574. (h) Schondler and Other v Wace, 1 Campb 437. And see as to the assignabil. ity of a policy in equity, I TR 26. 2 New Kep 283, 2 Atk 555. 4 Bro P C 431. But if a sum be paid as a gratuity, the as

signees cannot recover that, but only the value of the parchment in an action of trover. 1 B Moore, 247. 8 Taunt 264 S C. IT R 22. 7 Ib 157. 6 lb 681. 2 Stark 395.

(i) Burder v Browning, 1 Taunt 522, when they may, 5 Ves 620, 623.

(k) Ross v Bradshaw, 1 Bla Rep 312.

fits of the gout, accompanied with spasms and convulsions. (1) Nor is it to be concluded, that a disorder with which a person is afflicted before he effects an insurance on his life, is a disorder tending to shorten life within the meaning of the declaration of the insurance offices, from the mere circumstance that he afterwards dies of it, if it be not a disorder necessarily having that tendency. (m) The declarations of a wife made to an acquaintance concerning her state of health, are good evidence to shew the ill state in which she was, in an action by the husband on the policy. (n)

A warranty is always inserted in the policy, and amounts in law, to a condition, upon the compliance with which the validity of the contract depends. Whether the breach of the warranty is occasioned by design, or by accident, is immaterial. A REPRESENTATION of facts not embodied in the policy, is of a different nature; for a misrepresentation or concealment does not, in general, invalidate a policy, unless made with a fraudulent design. As where the broker who effected the policy, told the underwriters that the gentleman for whom he acted, would not warrant, but from the account he (the broker) had received, he believed it to be a good life, the insured recovered in an action on the policy, although suspicion was said to attach from the person having gone to the south of France, and died shortly afterwards. (0) So where the conditions of a life insurance required a declaration of the state of health of the assured, and the policy was to be valid only if the statement were free from all misrepresentation and reservation; and the declaration described the assured as resident at Fisherton Anger, at a time when she was a prisoner in the county gaol there: it was held to be a question for the jury, whether the imprisonment was a material fact, and ought to have been communicated, there being no condition which required the imprisonment to be expressly stated. (p)

premium.

The conditions annexed to a personal contract, like Payment of a policy of insurance, must be performed according to the terms used, and the apparent intent of the parties, and are not satisfied by a performance cy près. And therefore where a member of a life insurance society for the benefit of widows and female relations, entered into a policy of assurance with the society for a certain annuity to his widow after his death, in consideration of a quarterly premium to be paid to the society *during his life; and the society covenanted with him and his executors, &c. that if he should pay to their clerk the quarterly premiums, on the quarter days, during his life, and if he should also pay his proportion of contributions which the members of the society

(1) Willis v Poole, Park, 650.

(m) Watson v Mainwaring, 4 Taunt 763, but if particular questions be asked, which are not fairly answered; as if the name of a physician who last attended be withheld, this avoids the policy if material; though the death happened from another disorder, and the creditor for whose benefit the policy was made, was in no

wise privy to the fraud. Watson v Bevern, K B Car Rep K B R for NT refused. Morrison v Musprat, 3 Bing 60.

(n) Aveson v Lord Kinnaird, 6 East, 188. 2 Smith, 646 S C.

(0) Stackpole v Simeon, Park, 648, but it was suggested that he went to France to avoid his creditors. Ante, 348, &c. (p) Huguenin v Rayley, 6 Taunt 186.

should during his life be called on to make in order to supply any deficiencies in their funds; then on due proof of his death, the society engaged to pay the annuity to his widow and by the rules of the society, if any member neglected to pay up the quarterly premiums for fifteen days after they were due, the policy was declared to be void, unless the member (continuing in as good health as when the policy expired) paid up the arrears within six months, and five shillings per month extra: it was held that a member insuring, having died, leaving a quarterly payment over-due at the time of his death, the policy expired; and that a tender of the sum by the member's executors, though made within fifteen days after it became due, did not satisfy the requisition of the policy and the rules of the society, which required such payment to be made by the member in his lifetime, continuing in as good health as when the policy expired. (h)

(h) Want v Blunt, 19 East, 183. V 3 Campb 137. 5 T R 695.