(Snntrll Cam Srljnol ffiibrarjj 
 
Corrall University Library 
 KF1164.E47 
 
 The Law of lire and life Insurance :wlth 
 
 3 1924 019 260 714 
 
B Cornell University 
 M Library 
 
 The original of tliis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924019260714 
 
THE 
 
 LAW 
 
 FIRE MD LIFE INSURANCE, 
 
 WITH 
 
 PRACTICAL OBSERVATIONS. 
 
 PART I.— THE LAW OF PIRE'INSUR ANCE. 
 PART II. — THE LAW OP LIFE INSURANCE. 
 
 BY 
 
 CHARLES ELLIS. Esa., 
 
 OF Lincoln's inn, barrister-at-law. 
 
 SECOND AMEKICAN PROM THE LAST ENGLISH EDITION WITH 
 NOTES, ADDITIONS AND REFERENCES TO AMERI- 
 CAN AND LATE ENGLISH DECISIONS, 
 
 BY 
 
 WILLIAM G. SHAW. 
 
 BURLINGTON 
 CHAUNOEY GOODB-ICH. 
 
 1864. 
 
Entered according to Act of Congress, in the year 1854. 
 
 Bt CHAUNCEY GOODRICH, 
 
 In the Clerk's Office of the District Court in the District of Vermont. 
 
PREFACE 
 
 TO 
 
 THE SECOND AMEEICAN EDITION. 
 
 The already extensive, and rapidly increasing prac- 
 tice of Fire and Life Insurance in this Country has cre- 
 ated, among the profession, a great want of a distinct 
 and complete work upon those important subjects. 
 
 Though the valuable treatise of Messrs. Arnould, 
 Duer and Phillips touch more or less upon these branch- 
 es of the general subject of Insurance, still they are 
 principally devoted to the examination of questions aris- 
 ing in Marine Insurance,which, from their great number 
 and importance, have necessarily swelled those works 
 to a large and expensive size. ' 
 
 A work devoted solely to Fire and Life Insurance 
 must therefore be of great value to the profession, both 
 on account of the fuller and more complete examina- 
 tion which those subjects would thus naturally receive, 
 and also because throughout a great portion of this 
 Country, where the practice of Life and Fire Insurance 
 is extensive, that of Marine Insurance is entirely un- 
 known, and a general treatise on all the branches of In- 
 surance consequently unnecessary. The treatise of 
 Mr. Ellis is much the most complete English work on 
 
IV PREFACE TO THE SECOND AMERICAN EDITION. 
 
 these subjects, and in the present Edition the Ameripan 
 Editor has carefully added to it, in the form of notes, 
 the many new points in regard to Fire and Life Insur- 
 ance which have been decided in the American and 
 late English cases, and has also cited ajl the cases, both 
 English and American, which have any direct bearing 
 upon those branches of Commercial Law. 
 
 WILLIAM G. SHAW. 
 
 BURLINGTON, Vermont, Nov. 1854. 
 
PREFACE 
 
 TO 
 
 THE SECOND ENGLISH EDITION. 
 
 In this Edition the Author has introduced such al- 
 terations and additions as are called for in the progress 
 of time since the last Edition was published. The 
 Practice of Life Insurance has greatly increased, and 
 appears to be increasing-. Many decisions of the Courts, 
 of much importance upon this subject, have within a 
 few years been made ; they have put a judicial con- 
 struction upon the language ordinarily used in Policies 
 of this description, and have tended to clear away 
 doubts and difficulties from the legal effect of a contract, 
 which deserves to become more popular the better it 
 is understood. When the last Edition was published 
 the doctrine of Notice, as regards Assignments of Pol- 
 icies, had undergone much discussion, but was by no 
 means finally settled. Since that period the doctrine 
 that Notice is necessary to perfect an Assignment of a 
 Policy of Insurance for Life, as against Assignees in 
 Bankruptcy or Insolvency, has assumed a settled form, 
 and several distinctions upon the subject have been es- 
 tablished. As this is a subject of much consideration to 
 the insured and the Offices, as well as third persons, 
 
VJ PREFACE TO THE SECOND ENGLISH EDITION. 
 
 the Author has taken more than usual pains to arrange 
 and distinguish the cases upon it. A few incidental 
 points regarding Life Insurance, not noticed in the for- 
 mer Edition, have been inserted in short Chapters. To 
 the Offices who have contributed their Forms, appear- 
 ing in the Appendix, the Author offers his thanks for 
 their liberal communication of them. 
 
 Stone Buildings, IdncolrCs Inn, 
 June 15, 1846. 
 
PREFACE 
 
 THE FIRST ENGLISH EDITION. 
 
 The Law of Fire and Life Insurance has not hitherto 
 been made the subject of a distinct work, but has been 
 embraced in a few Chapters at the conclusion of Treat- 
 ises on Marine Insurance. Valuable as these works 
 are upon the latter subject, the former contracts appear 
 to have been less elaborately treated than their general 
 and growing importance appears to deserve. The cir- 
 cumstance may be, accounted for by the fact, that these 
 contracts have been, until within a few years, of com- 
 paratively confined extent, and consequently few cases 
 would arise in which they would become the subjects of 
 legal discussion ; but so general has^the practice of both 
 these branches of Insurance become of late ; and so ex- 
 tensively is it increasing, that most persons of property 
 in the kingdom are interested in the proper understand- 
 ing of the legal nature of these contracts. 
 
 Some notion may be formed of the relative import- 
 ance to the revenue and extent of Insurance against 
 Fire, from the fact, that in the year 1830 the sum of 
 £768,855 was paid for duties, at the rate of 3s. on every 
 £100 insured, and Is. upon the policy ; whilst in the 
 
Vln PREFACE TO THE FIRST ENGLISH EDITION. 
 
 same year the sum of £220,007 was paid for duties on 
 Marine Insurance, at about the same average rate of 
 duty per cent.* 
 
 The attention of the Author has been of necessity 
 directed to these subjects in consequence of his being 
 professionally connected with two offices of very ex- 
 tensive business, and in addition to the experience 
 which that connection afforded him, he has been oblig- 
 ingly favoured by them with much valuable information 
 upon the details and practical operations of business : 
 he trusts, therefore, that the following pages will not be 
 found useless to the legal profession or the public. 
 
 As the practice of granting Annuities is common with 
 Companies engaged in the department of Life Insurance 
 the Author thought that a few Chapters affording a con- 
 cise view of the law upon that subject, embracing the 
 latest decisions and statutes, would tend to render the 
 Work more complete ; and with the same object he has 
 added a few practical remarks on the application of Life 
 Insurance to the various purposes of Provisions and En- 
 dowments for Families, Indemnities in cases of Estates 
 determinable on Lives, and Securities for debts or 
 Annuities. 
 
 * In the year 1845 the duties on Fire Insurance amounted to £1,056,029. 
 
CONTENTS. 
 
 PART I. 
 
 THE law' of fire INSURANCE. 
 
 CHAPTER I. 
 
 Page. 
 
 1. G-eneral Nature of a Policy of Insurance . . 33 
 
 2. A clear Bight of Action should be contained . 35 
 
 3. Parties interested to be inserted in it . . 45 
 
 4. Indorsements and conditions x)f the Policy . . 45 
 
 5. Duties payable in respect of Policies, and the Amount 
 
 Insured . . . . .56 
 
 6. Explosion and destruction by way of precaution . 60 
 
 CHAPTER II. 
 
 OF THE OTTEREST OF THE INSUK.ED . . .62 
 
 CHAPTER III. 
 
 THE NATURE AND EXTENT OF THE RISK FOR WHICH THE INSUR- 
 ERS UNDERTAKE . . . . .76 
 
 1. Damage by heat in the process of manufacture without 
 
 ignition . . . .77 
 
 ' • 2. Insurance of specific articles to be construed by the 
 
 general scope of the policy . . . .80 
 
 3. Breach of Warranty and the nature of Warranties . 8 1 
 
 4. Of Misrepresentation of material facts . . 84 
 
 5. Concealment of material Facts . . .99 
 
 6. Construction of the words "Usurped Power" . 103 
 
 7. Construction of the words " Civil Commotion ' 107 
 
 2 
 
X CONTENTS. 
 
 Page. 
 
 8. Bight of an Office to stand in the place of the Insured 
 
 as against the Hundred . . . .110 
 
 9. Commencement and duration of the Contract . 115 
 
 10. Effect of Notice hy an Office to determine a contract 
 
 except upon payment of a higher Premium, and 
 of the fifteen days allowed for payment of Pre- 
 miums . , . . . .117 
 
 1 1. A nominal misdescription and the necessary introduc- 
 
 tion of fire into a building, covered by the com- 
 mon Insurance . . . . .124 
 
 12. Increased hazard after Policy effected . .126 
 
 CHAPTER IV. 
 
 OP THE PROOF OF LOSS . . . . .130 
 
 CHAPTER V. 
 
 OF FRAUDTILENT LOSSES . . , . .138 
 
 1. Malicious setting Fire . . . . ib. 
 
 2. Evidence in support of a charge of arson .140 
 
 3. Negligence of the insured . . . . iS, 
 
 CHAPTER VI. 
 
 OP ASSIGNMENT OP POLICIES. 
 
 1. Assignment in General . . . .142 
 
 2. Assignment of policy after the Fire happens, with pos- 
 
 session of the Property insured before the Fire . 143 
 CHAPTER VII, 
 
 1. Of the Agents for Offices . . . .157 
 
 2. Privity between the Crown and the Agents . . 158 
 
 3. Of the Agents for the Insured . . . 159 
 
 CHAPTER VIII. 
 
 OP EQUITIES ATTACHING UPON POLICIES . . .162 
 
 1. In general no Equity as between Landlord and Tenant ib. 
 
 2. Proceeds ofPolicies in general payable to Exeoutors,&o. 167 
 
 3. But where affected with a trust they may be payable 
 
 to heir or devisee . . . _ jgg 
 
CONTENTS. 
 
 CHAPTER IX. 
 
 OP PROCEEDINGS ON POLICIES OF INSURANCE AGAINST FIRE 
 
 1. Jurisdiotioaof the Courts of Law 
 
 2. Arbitration ..... 
 
 3. Declaration ..... 
 
 4. Pleas to a declaration upon a policy under seal 
 
 5. ETidenoe upon the trial 
 
 CHAPTER X. 
 
 OF THE RECOTERT RACK OF LOSSES HIFROFERLT PAID 
 
 PART II. 
 THE LAW OF LIFE INSURANCE. 
 
 Page. 
 
 171 
 ib 
 173 
 175 
 177 
 179 
 
 182. 
 
 CHAPTER I. 
 
 OF THE NATURE OF THE CONTRACT .... 185 
 
 1. General nature of life insurance . . . ib. 
 
 2. The different purposes to which life insurance may be 
 
 applied ...... 187 
 
 8. Mode of effecting a life insurance . . .188 
 
 4. The form of a policy . .... 189 
 
 5. Stamp duties ..... 191 
 
 6. Death by the hands of justice • .192 
 
 7. Death by the insured's own hands . 194 
 
 CHAPTER II. 
 
 OF THE WARRANTY OF THE AGE AND HEALTH OP THE PARTY 
 TO BE INSURED, AND OF MISREPRESENTATION AND 
 CONCEALMENT ..... 205 
 
 1. WarrtCnty to be strictly true . . . . ib. 
 
 2. As to the clause that the party to be insured "is in 
 
 good health at the time of making the Policy " . 206 
 
 3. As to the clause that the party to be insured has " no 
 
 disease tending to shorten life " . . . 210 
 
 4. Concealment of material facts . .214 
 
XH CONTENTS. 
 
 Page. 
 5. Keference to the "usual medical attendant" of the 
 
 party to be insured .... 226 
 
 CHAPTEE III. 
 
 OF THE INTEREST OF THE LIFE INSURED 
 
 1. General principles . . . 
 
 2. Interest of creditor in the life of debtor 
 
 3. Interest of trustee on behalf of cesui que trust 
 
 4. Debtor or grantor of annuity insuring 
 
 CHAPTER IV. 
 
 232 
 
 ib. 
 
 236 
 
 241 
 
 ib. 
 
 as THE RISK AND ITS DITRATION .... 244 
 
 1. The death must take place during the continuance of 
 
 the policy, in order to entittle a person to recover 245 
 
 2. Construction of the rules of a society as to payment of 
 
 premiums within fifteen days after they become 
 
 due . . . . , .246 
 
 3. Of the words "from the day of the date," and "from 
 
 the date" . . • .253 
 
 4. Of the recovery of interest upon sums due upon poli- 
 
 cies ...... 254 
 
 5. Accumulations upon policies . . . .258 
 
 6. Recovery back of premiums .... 259 
 
 CHAPTER V. 
 
 OF ASSIGNMENTS OF POLICIES OF ASSURANCE UPON LnrBS . 263 
 
 1. Of assignment in general . . . , ih. 
 
 2. Of notice to the office .... 269 
 
 CHAPTER VI. 
 
 OF THE ATTACHMENT OF EQUITIES TO POLICIES OF mSURANCE ON 
 
 , LIFE IN FAVOR OF ,THIRD PERSONS . . 288 
 
 1. In general no Equity in favor of third persons . ib- 
 
 2. An Equity may attach in cases of trust . .290 
 
 3. Effect of voluntary payments of premiums by third 
 
 persons ...... 292 
 
 CHAPTER VII. 
 
 OF THE AGENTS ...... 295 
 
CONTENTS. Mil 
 
 CHAPTER Vm. 
 
 GUT BY WILL OF POLICIES NOT WITHIN THE MORTMAIN ACT 
 
 CHAPTER IX. 
 
 OF PROOFS IN RESPECT OF POLICIES OR. PREMIUMS IN CASE OT 
 BANKROTTCr ..... 
 
 CHAPTER X. 
 
 OF PROCEEDINGS IN ACTIONS ON POLICIES OF INSURANCE UPON 
 LIVES ...... 
 
 . CHAPTER XI. 
 
 OF THE APPLICATIONS OF LIFE INSURANCE TO FORMING ENDOW- 
 MENTS AND MAKING PROTISION FOR FAMILIES AND 
 FOR SBCmtlTT OF DEBTS .... 
 
 1. Where the income terminates with Ufe 
 
 2. Where the income is to he transmitted to an individual 
 
 of a family. . . . . ib. 
 
 3. Where the sum insured is to be pidd to a child attain- 
 
 ing a certain age .... 308 
 
 4. Where the life of a child is insured to whom an ad- 
 
 vance has been made . . . , ib. 
 
 5. Where the creditor insures his debtor's life . . t6. 
 
 6. Insurance money settled upon marriage . . 309 
 
 7. Insurance for the purpose of meeting fines payable on 
 
 the dropping of a life or lives . . . 311 
 
 8. Insurance by way of security on an annuity transaction 312 
 
 Page. 
 
 . 297 
 
 . 299 
 303 
 
 306 
 a. 
 
INDEX TO ENGLISH CASES CITED. 
 
 A. 
 
 Acey V. Femie, 158. 296. 
 Adams v. Liiukell, 33. 
 Alchorne v. Saville, 36. 
 Anderson t. Edie, 238. 
 Andrews y. Ellison, 38. 
 Andrews, ex parte, 290. 
 Arkwright, ex parte, 282. 283. 
 Ashley v. Ashley, 234. 263. 
 Attwood V. Partridge, 302. 
 Austin V. Drewe, 77. 125. 140. 
 
 B. 
 
 Barber v. Morris, 234. 235. 308. 
 Barclay v. Cousins, 65. 
 Barr v. Gibson, 65. 
 Barrett v. Jenny, 128. 129. 
 Bean y. Stnpart, 83. 
 BertJion y. Longman, 180. 
 Bilbie y. Lumley, 182. 
 Bird V. Moreau, 302. 
 Bishop y. Pentland, 140. 
 Bize y. Fletcher, 83. 90. 
 Bolland v. Disney, 192. 
 Bond y. Nutt, 82, 
 Bowman v. Nash, 302. 
 Borradaile v. Hunter, 194. 200 
 
 203. 
 Brown y. Quilter, 162. 
 Bufey. Turner, 102. 221. 
 Burrigde v. Row, 280. 292. 
 Burton ex parte, 276. 
 Buck Y. Royal Ex. Ass. Co., 140 
 Byas, ex parte, 274. 
 
 Calton y. Bragg, 255. 
 Campbell y. Richards, 1 80. 
 Carter y. Boehm, 99. 100. 180. 
 Chapman y. Eraser, 259. 260. 
 Chapman y. Walton, 180. 
 Chattocky. Shawe, 211. 
 Chesterfield y. Janssen, 313. 
 Chitty y. Selwyn, 171. 
 Chourand y. Angerstien, 180. 
 Clift y. Schwabe, 195. 204. 
 ColyiQ, ex parte, 273. 
 Cook y. Black, 264. 
 Cooper V. Fynmore, 277. 
 Courtney y. Ferrers, 258. 307. 
 Crowley y. Cohen, 65. 67. 104. 
 
 D. 
 
 Da Costa y. Frith, 68. 
 
 Da Costa y. Scandret, 260. 
 
 Dayis y. Geldart, 52. 
 
 Dearie y. HaU, 276. 285. 
 
 De Haviland y. Bowerbank, 256. 
 
 De GhekofF, y. London Ass. Co., 
 
 172. 
 
 Delany y. Stoddart, 155. 
 Denniston y. Lillie, 87. 
 Dobson y. Sotheby, 124. 
 Doe d. Pitt y. Laing, 129. 
 Downes V. Green, 243. 
 Drinkwater v. London Ass. Co. 
 
 104. 
 
 Driscoll, V. Passmore, 87. 
 Duckett y. Williams, 260. 
 
XVI 
 
 INDEX TO ENGLISH CASES CITED. 
 
 Duffel V. Wilson, 259. 
 Duncan v. Chamberlayne, 280. 
 Durrant v. Friend, 168. 
 Durrell v. Bederly, 180. 
 Dwyer v. Edie, 241. 
 
 E. 
 
 Earle ex parte, 301. 
 Edwards v. Barrow, 223. 
 Edwards v. Footner, 87. 
 Edwards v. Scott, 282. 
 Everett v. Desborough, 227. 230. 
 
 F. 
 
 Falkener v. Case, 274. 
 Farrington's case, 140. 
 Fitzherbert v. Mather, 48. 
 Friedlander v. London Ass. Co., 
 128. 
 
 G. 
 
 Geachv. Ingall, 213. 
 Godsal V. Boldero, 239. 291. 
 Godsal V. Webb, 264. 
 Goldstone v. Osborne, 173. 
 Gordon v. Swan', 256. 
 Grigg V. Stoker, 241. 
 Grundy, ex parte, 301. 
 
 H. 
 
 Hahn v. Hartley, 182. 
 Halford v. Kymer, 235. 
 Harev. Groves, 163. 
 Hawkesworth's case, 139. 
 Haywood v. Rogers, 180. 
 Heathcote, ex parte, 280. 
 Henson v. Blackwell, 240. 
 Herbert v. Champion, 183. 
 Hibbert v. Carter, 155. 
 Hibbert v. Pigon, 82. 
 Higgins V. Sargenl^ 254. 
 Holland v. Pelham, 241. 312. 
 Holland v. Smith, 288. 
 Holtzapfell v. Baker, 163. 
 
 Howard's (Sir Robert) case, 253. 
 Huckman v. Femie, 228, 230. 
 Huguenin v. Bayley, 226. 
 
 Irving v. Richardson, 182. 
 
 Janson v. Solarte, 172. 
 Jones V. Gibbons, 275. 
 
 K 
 
 Kenyon v. Berthon, 83. 
 KiU V. Hollister, 173. 
 Kinnear v. Borradaile, 197. 
 
 Lancaster Canal Co., ex parte,302. 
 Langdale v. Mason, 107. 
 Leeds v. Chatham, 165. 290. 
 Leievre v. Royle, 305. 
 Levi V. BaiUie, 53. 
 Lewis V. Rucker, 68. 
 Lindenau v. Desborough, 215. 
 Littledale v. Dixon, 180. 
 Lockyer v. OfiS^ey, 245. 
 Loveridge v. Cooper, 276. 285. 
 Lowry v. Bourdieu, 74. 75. 
 Lucenav. Crawford, 62. 235. 236. 
 Lynch v. Dalzell, 72. 143. 146. 
 Lynch v. Dunston, 100. 
 
 M. 
 
 March v. Attorney General, 297. 
 Marshall, ex parte, 302. 
 Mason v. Mason, 247. 
 Mason V. Sainsbury, 110. 112. 
 MayaU v. Mitford, 99. 
 Maynard v. Rhodes, 227. 228. 
 Mildmay v. Folgham, 167. 
 Morris v. Jones, 241. 
 Morrison v. Muspratt, 220. 224, 
 
INDEX TO ENGLISH CASES CITED. 
 
 XTU 
 
 Motteux V. London Ass. Co., 171. 
 Munro, ex parte, 272. 275. 
 Mjers, ex parte, 302. 
 
 N. 
 
 Nush, in re, 241. 
 
 Neale v, Eeid, 164. 
 
 Nepean v. Doe, 246. 
 
 Newby v. Eeed, 52. 
 
 Newcastle Fire Ins. Co. v. Ma^ 
 
 morran, 82. 91. 
 Nichols V. Chalie, 173. 
 Norris v. Harrison, 168. 
 Nurse v. Wilson, 312. 313. 
 
 o. 
 
 Oldham v. Bewicke, 103. 
 P. 
 
 132. 
 
 Palmer v. Hawes, 231. 
 Paris V. Gilham, 172. 
 Parkes v. Bott, 258. 
 Parry v. Ashley, 170. 
 Parsons v. Bignold, 305. 
 Patterson v. Black, 246. 
 Pawson V. Bemevelt, 82. 83. 
 Pirn V. Reed, 104. 126. 
 Pngh V. Duke of Leeds, 253. 
 
 R 
 
 Eatcliffe v. Shoolbred, 99. 
 Reed v. Cole, 65. 69. 
 Reed v. Royal Ex. Ass. Co., 236. 
 Rex V. Doran, 139. 
 Rex V. Gilson, 138. 
 Rex V. Wrangham, 159. 
 Rhind v. Wilkinson, 155. 
 Richards v. Mordock. 180. 
 Richardson, ex parte, 274. 
 Rickmon's case, 140. 
 Roberts v. Fonnerean, 48. 91. 
 Rogers v. Davis, 52. 
 Rose, ex parte, 280. 284. 
 
 3 
 
 Ross V. Bradshaw, 206. 217. 
 Routh V. Thompson, 259. 
 Routledge v. Burrell, 103. 133. 
 Row V. Dawson, 274. 
 Ryal V. Rowles, 275. 
 
 S. 
 
 146. 
 
 281. 
 
 Saddler's Co. v. Badoock, 73. 
 
 152. 156. 
 Salvinv. James, 117. 250. 
 Sargeant v. Morris, 175. 
 Schondler v. Wace, 293. 
 Seaman v. Fonnereau, 100. 
 SeUeck v. Booth, 247. 
 Selwyn's case, 247. 
 Shaw T. Robberds, 127. 140. 
 ShieUs V. Blackburne, 160. 
 Sibbardv. Hill, 86. 
 Skinner v. Stocks, 175. 
 Smith, ex parte, 274. 280. 
 
 284. 
 
 Southcombe v. Merriman, 213, 
 Stackpoole v. Simon, 209. 
 Stockdale v. Dunlop, 65. 
 Stright, ex parte, 282. 
 Sun Fire Office v. Wright, 49. 
 Sweet V. Fairlie, 229. 
 
 Tarletonv. Stainforth, 115 120. 
 
 250. 
 
 Taylor v. Diplock, 247. 
 Tennyson, ex parte, 277. 
 Thompson v. Chamock, 173. 
 Thompson, ex parte, 302. 
 Thompson v. Spiers, 281. 
 Thorogood v. Marsh, 73. 
 TidsweU v. Angeratien, 241. 
 Tindal, ex parte, 301. 
 Tyler v. Home, 259. 260. 
 Tyrie v. Fletcher, 259. 
 
 u. 
 
 Usbome^ ex parte, 272. 
 
xviu 
 
 INDEX TO ENGLISH CASES CITED. 
 
 V. 
 
 Vauxhall BridgeCo., ex parte,272i 
 Vernon v. Smith, 164. 
 
 w 
 
 Wainwright v. Bland, 222. 233. 
 
 241. 
 Walker v. Maitland, 65. 140. ' 
 Wallace V. Telfair, 161. 
 Want V. Blunt, 248. 
 Watchorn v. Langford, 80. 
 Watson V. Brutton, 288. 
 Watson V. Mainwairing, 208. 210. 
 Wentworth v. Tubbs, 203. 
 West V. Reid, 279. 281. 292. 
 Weston V. Ernes, 180. 
 Whitehead v. Price, 99. 
 
 Whitmore, in re, 299. 
 Whittingham V. Thornburgh, 186. 
 
 260. 
 Wilkinson v. Coverdale, 159. 
 Williams v Thorp, 270. 276. 
 Willis V. Poole, 208. 
 Willis V. Wells, 302. 
 Wilson V. Brett, 160. 
 Wilson V. Duokett, 260. 
 Wing V. Harvey, 296. 
 Wood, ex parte, 283. 
 Wood V. Masterman, 52. 
 Wood V. Worsley, 103. 134. 
 Wright V. Pole, 65. 79. 
 Wyld V. Pyckford, 160. 
 
 Yallop V. Ebers, 302. 
 
INDEX TO AMERICAN CASES CITED. 
 
 A. 
 
 Abbott V. Hampden Mut. Ins. Co 
 
 72. 
 Abbott v. Sehor, 65. 
 ^tna Ins. Co. v. Tyler, 50. 63. 
 
 65.67.69.90. 104. 112. 132. 
 
 146. 
 Allen V. Vt Mut. Fire Ins. Co., 
 
 82. 
 Alliance Mar. Ina Co. t. La State 
 
 Ins. Co., 45. 
 Alsop V. Coit, 87. 160. 
 Alsop. V Commercial Ins. Co., 68 
 Alston v. Mechanics' Mnt. Ins. Co., 
 
 86. 87. 
 American Ins. Co. v. Insley, 175 
 Andrevs t. Beecher, 150. 
 
 B. 
 
 Babcock V. Montgomery Co. Mut 
 
 Ins. Co., 77. 
 Barrett v. Buxton, 203 
 Bartlett v. Walter, 65. 67. 104. 
 Bates V. New York Ins Co., 150 
 Beadle v. Chenango Co. Mut Ins. 
 
 Co , 46. 47. 
 Blanchard v. Waite, 36. 
 Bodle Y. Chenango Co. Mut. Ins 
 
 Co., 132. 172. 
 Borden v. Hingham Mut Ins. Co., 
 
 63. 68. 
 Bradley t Bradley, 246 
 Breasted v. Farmers' Loan & 
 
 Trust Co , 198. 
 
 Brichta v. N. Y. Lafayette Iiis. 
 
 Co., 149. , 
 Brinley v. National Ins. Co., 136. 
 Brisban v. Boyd, 34. 159 
 Brown v. Williams, 85. 90. 
 Bryant v. Ocean Ins. Co., 86. 87. 
 Burr V. Sim, 246. 
 Burritt v Saratoga Co Mut Ins. 
 
 Co., 82. 83. 85. 99. 102. 
 
 c. 
 
 Carpenter v. Providence Washing- 
 ton Ins. Co., 64. 66. 90. 104. 
 
 112. 147. 152. 164. 
 Carrington v. Ocean Ins. Co., 34. 
 CarroU v. Boston Marine Ins. Co, 
 
 69. 
 Carter t. Rockett, 164. 
 Carter v. United Interest Ins. Co., 
 
 150. 172. 
 Case V. Hartford Fire Ins. Co., 
 
 56. 79. 
 Catlin V. Springfield Fire Ins. Co , 
 
 47. 84.86.99. 131.141. 176. 
 Catron v. Tennessee Ins. Co., 104. 
 Chandler v. Worcester Mut. Fire 
 
 Ins. Co., 141. 
 Charleston Ins Co. v. Neve, 50. 
 Cheriot v. Barker, 82. 
 City Fire Ins. Co. v. Corlies, 61. 
 
 79. 107. 
 
 Clarke v. Fireman's Ins. Co., 80. 
 Clarke v. Manufacturers' Ins. Co., 
 
 102. 181. 
 Clarke v. New England Mut. Fire 
 
 Ins. Co., 50. 72. 
 
INDEX TO AMERICAN CASES CITED. 
 
 Clary v. Protection Ins. Co., 80. 
 Cockerill v. Cincinnati Ins. Co., 
 
 35. 
 
 Coit v. Commercial Ins. Co., 179. 
 Collamer v. Day, 233. 
 Columbian Ins. Co. v. Lawrence, 
 
 63. 65. 67. 85. 90. 104. 132. 
 
 141. 164. 181. 
 Cornell V. Leroy, 131. 
 Conover x. Mut. Ins. Co., of AI 
 
 bany, 71. 151. 152. 158. 
 Cove V. Leach, 247. 
 Craig V. Murgatroyd, 52. 
 Gray v. Hartford Fire Ins. Co., 
 
 173. 
 Curry v. Commonwealth Ins. Co., 
 
 85. 90. 103. 104. 131. 
 
 D. 
 
 Dadmun Man£ Co. v. Worcester 
 
 Mut. Fire Ins. Co., 69. 72, 
 Davenport v. New England 
 
 Ins. Co., 85. 
 De Forest v. Fulton Ins. Co., 62. 
 
 64. 66. 159. 179. 
 De Longuemare v. Tradesman's 
 
 Ins. Co., 82. 129. 
 Dodge V. Perkins, 257. 
 Duncan v. Lyon. 182. 
 Duncan v. Sun Fire Ins. Co., 82, 
 
 E. 
 
 Edwards v. Baltimore Fire Ins. 
 
 Co., 131. 
 Egan V. Mut. Ins. Co. of Albany, 
 
 83. 
 Ela V. French, 160. 
 Eliason v. Henshaw, 34. 
 Ellmaker v. Franklin Fire Ins. 
 
 Co., 81. 
 Elting V. Scott, 182. 
 
 Fanners' Ins Co., v. Synder, 82. 
 85. 
 
 Farrow v. Commonwealth Ins. Co., 
 
 175. 
 
 Felton V. Brooks, 152. 
 Ferris v. North American Fire 
 
 Ins. Co., 52. 151 178. 
 Fletcher v. Commonwealth Ins. 
 
 Co., 85. 90. 104. 
 Fowler v. ^tna Fire Ins. Co., 82. 
 
 179. 
 
 Francis v. Ocean Ins. Co., 84. 
 French v. Hope Ins. Co., 65. 
 Frost V. Saratoga Mut Ins. Co., 
 
 75. 82. 
 Fuller V. Boston Mut. Fire Ins. 
 
 Co., 68. 151. 269. 
 
 G. 
 
 Gates V. Madison Co. Mut. Ins. 
 
 Co., 82. 89. 99. 102. 128. 
 
 141. 
 Gribson v. Cooke, 266. 
 Pire Gilbert v. North American Fire 
 
 Ins. Co., 131. 
 Grordon v. Mass. P. & M. Ins. Co. 
 
 63 66. 69. 104. 
 Granger v. Howard Ins. C, 151. 
 
 175. 
 Grant v. Howard Ins. Co , 129. 
 Gray v. Sims, 66. 
 Greene v. Merchant's Ins. Co., 103. 
 Grim v. Phoenix Ins. Co., 79. 
 
 H. 
 
 Hamilton v. Lycoming Mut Ins. 
 Co., 35. 36. 
 
 Hancoxv. Fishing Ins. Co.,63. 104. 
 
 Harris v. Eagle Fire Ins. Co., 68. 
 
 Harris v. Ohio Ins. Co , 49. 
 
 Harrison v. McConkey, 264. 
 
 Hart V. Western Railroad Corpo- 
 ration, 112. 
 
 Heath v. Franklin Fire Ins. Co., 
 132. 
 
 Herckenrath v. American Mut. 
 Ins. Co. 67. 164 
 
 Higginson v. DjJI, 82. 
 
mSEZ TO AMEIUCAN CASES CITES. 
 
 XZl 
 
 Hillier v. Alleghany Co. Mut. 
 
 Ins. Co., 55. 79. 
 Hoffman v. Western M. & F. Ins. 
 
 Co., 54. 
 Holmes v. Charlestown Mut. Fire. 
 
 Ins. Co., 68. 180. 
 Homer v. Dorr, 179. 
 Homer v. Pish, 183. 
 Hone V. Mut. Safety Ins. Co., 67. 
 Hoaghton y. Manufacturers' Ins. 
 
 Co 82. 87. 99. 
 Howard v. Albany Ins. Co. 70. 
 Howard v. Kentucky & LouisviUe 
 
 Mut. Ins. Co., 90. 
 Howard Ins. Co. v. Scribner, 52 
 
 Illinois Mut. Fire Ins. Co., v 
 Marseilles Manufacturing Co.. 
 
 90. 104. 
 Inman v. Western Fire Ins. Co., 
 
 131. 
 
 Jackson t. .^Eltna Ins. Co., 67. 
 Jackson y. Mass. Mut. Fire Ins. 
 
 Co., 49. 69. 71, 
 Jefferson Ins. Co., y. Cotheal, 45. 
 
 82. 175. 180. 
 Jennings y. Chenango Co. Mut 
 
 Ins. Co., 47. 81. 83. 99. 180. 
 Jessel y. WiUiamsburgh Ins. Co., 
 
 151. 
 Jones y. Maine Mat. Fire Ins. 
 
 Co., 49. 52. 
 Jones V. Witter, 150. 
 
 Kennedy y. St. Lawrence Co. 
 
 Mut. Ins. Co., 47. 82. 83. 
 Kenniston y. Merrimac Co. Mut 
 
 Ins. Co , 77. 
 Kenny y. Clarkeon, 65. 
 Kingy. State Mut. Ins. Co., 112 
 
 164. 
 
 Kingston y. Wilson, 159. 
 L. 
 
 Lane y. Maine Mut. Fire Ins. Co., 
 
 70. 72. 
 Langdon y. N. Y. Equitable Ins. 
 
 Co., 128. 
 Laurent y. Chatham Fire Ins. Co., 
 
 136. 
 Lazarus y. Commonwealth Ins. 
 
 Co., 64. 69. 104. 149. 175. 
 Leadbettery. ^tnalns. Co., 132. 
 Le Ouen y. Gouyemeur, 182. 
 Lightbody y. North American Ins. 
 
 Co., 158. 181. 
 Liscom y. Boston Mat. Fire Ins. 
 
 Co., 51. 136. 
 Locke y. North American Ins. 
 
 Co., 104. 
 Lord y. Dall, 186. 192. 233. 
 Loring y. Proctor, 36. 
 Loring y. Steinman, 246. 
 Lounsbury y. Protection Ins. Co., 
 
 128. 176. 
 Lucas y Jefferson Ins. Co., 51. 
 
 52.113. 
 
 Lyon V. Commercial Ins. Co., 103. 
 Lyon y. Summers, 150. 
 
 M. 
 
 Mackie y. Pleasants, 83. 
 Mactier y. Frith, 33. 
 Mahon y. Mut. Assurance Co., 85. 
 Mann y. Herkimer Ins. Co.,' 151. 
 Marshall y. M. Ins. Co., 180. 
 Mason y. Franklin Ins Co., 81. 
 Masters y. Madison Co. Mut. Ins. 
 
 Co., 158. 
 McCartee y. Camel, 246. 
 McCuUoch y. Eagle Ins. Co., 34. 
 
 36. 
 MoEwen v. Montgomery Co. Mut. 
 
 Ins. Co., 51. 158. 
 McGiyney y. Fire Ins. Co., 63. 65. 
 McLanahan y. Uniyersallns. Co., 
 
 90. 
 
INDEX TO AMERICAN CASES CITED. 
 
 McLaren V. Hartford Ins. Co., 63. 
 
 72. 
 McMahon v. Portsmouth Mut. 
 
 ' Fire Ins. Co., 51. 
 McMasters v. Westchester Co. 
 
 Mut. Ins. Co., 132. 
 Mickles v. Rochester City Bank, 
 
 64. 
 Millaudon v. Western Mar. & F. 
 
 Ins. Co., 52. 
 Mixv. Hotchkiss, 164. 
 Moadinger v. Mechanics' Fire Ins. 
 
 Co., 80. 
 Moehringv. Mitchell, 247. 248. 
 Moore v. Protection Ins. Co., 54. 
 
 72. 128. 
 Murdock v. Chenango Co. Mut. 
 
 Ins. Co., 46. 47. 70. 83. 
 Murray V. Alsop, 87. 
 Mut. Safety Ins. Co., v. Hone, 
 
 179. 180. 
 
 Newman v. Jenkins, 246. 
 
 N. Y. Bowery Fire Ins. Co , v. N. 
 Y. Fire Ins. Co., 65. 67. 105. 
 
 N. Y. Equitable Ins. Co., v. Lang- 
 don, 128. 
 
 N. Y. Fire Ins. Co. v. Delavan, 
 60. 181. 
 
 N. Y. Fire Ins. Co. v. Walden, 90 
 
 N. Y. Gas Light Co. v. Mechanics' 
 Fire Ins. Co., 90. 
 
 Niblo V. North American Fire Ins 
 Co. 49. 65. 79. 104. 
 
 Norton v. RenseUaer & Saratoga 
 Ins. Co., 132. 
 
 o. 
 
 Ocean Ins Co. v. Eider, 175. 
 
 Olive V. Green, 65. 67. 
 
 O'Niel V. Buffalo Fire Ins. Co., 
 
 84. 99. 128. 129. 132. 
 Oriental Bank v. Tremont Ins. 
 
 Co., 258. 
 
 Pacific Ins. Co. v. Catlett, 175. 
 
 Palmer v. Merrill, 264. 
 
 Parks V. General Interest Ins. Co., 
 
 64. 66. 
 
 Patapsco Ins. Co. v. Coulter, 141. 
 Pentz V. iEtnalns. Co., 113. 181. 
 People V. New York, 257. 
 Perkins v. Washington Ins. Co., 
 
 36. 158. 172. 
 Pern v. Turner, 34. 
 Phoenix Fire Ins. Co. v. PhiUip, 
 
 181. 
 Post V. Hampden Mut. Fire Ins. 
 
 Co., 69. 
 Potter V. Ontario & Livingston 
 
 Mut. Ins. Co., 51. 
 Power V. Ocean Ins. Co., 70. 72. 
 Prentice v. Aohome, 203. 
 Putnam v. Mercantile Marine Ins. 
 
 Co., 64. 
 
 R 
 
 Rafferty v. New Brunswick Fire 
 
 Ins. Co., 128. 
 Rider v. Ocean Ins. Co., 65. 
 Robbins v Beacon, 266. 
 Robert v. Trader's. Ins Co., 150. 
 
 152. 
 Roberts v. Chenango Co. Mut. 
 
 Ins. Co., 46. 
 Robinson v. Georges Ins. Co., 173. 
 
 s. 
 
 Satterthwaite v. Mut. Beneficial 
 ns. Association, 102. 
 
 Saunders v. Frost, 164. 
 
 Scott V. Phoenix Ins. Co., 132. 173. 
 
 Seamans v. Loring, 64. 
 
 Selleck v. French, 257. 
 
 Sexton V. Montgomery Co. Ins. 
 Co., 47. 51. 181. 
 
 Ship Packet, 64. 
 
 Smith V. Bowditoh Mut. Fire Ins. 
 Co., 85. 
 
INDEX TO AMERICAN CASES CITED. 
 
 ZXIU 
 
 Smith V. Knowlton, 246. 
 
 Smith V. Lowry, 182. 
 
 Smith V. Saratoga Co. Mut Fire 
 
 Ins. Co., 147. 149. 
 Smith V. Williams, 63. 
 Stacy V. Franklin Fire Ins. Co., 
 
 45. 49. 52. 
 Stebbins v. Globe Ins. Co., 82. 88. 
 Stetson v. Mass. Mat. Fire Ins 
 
 Co 69. 85. 
 Strong V. Manufacturers' Ins. Co., 
 
 63. 66. 72. 85. 90. 104. 
 Suckley v. Delafidd, 87. 
 Swift V. Vt Mut. Fire Ins. Co., 
 
 63. 
 
 T. 
 
 Tayloe v. Merchants' Fire Ins 
 
 Co., 34. 36. 132. 172. 
 Thayer r Middlesex Mut Fire Wardell v. Eden, 150, 
 
 Ins. Co. 34 35. 36. 
 Thomas v Van Kaff, 164 
 Thome v. Deas, IGO. 
 Thurston v. Koch, 52. 
 Tillou V. Kingston Mut. Ins. Co., 
 
 50. 70. 152. 
 Tittemore v. Vt. Mut Fire Ins. 
 
 Co., 71. 
 Tolman t. Manufactuiers' Ins. 
 
 Co. 60. 151 
 Tracy v. Wood^ 160. 
 Traders' Ins 
 
 63. 64. 147. 150. 151. 152 
 
 176. 
 Trench v. Chenango Co. Mut. Ins 
 
 Co., 47. 
 Trull V. Roxbuiy Mut. Fire Ins. 
 
 Co, 136. 
 Trumbull v. Portage M. F. Ins 
 
 Co., 71. 
 
 Co., v. Robert, 50 
 
 Turley v. North American Fire Wood v. Hartford Fire Ins. Co., 
 
 Ins. Co.. 132. 
 
 Tyler, v. JEtna E^e Ins. Co., 49. 
 50. 52. 85. 104. 
 
 V. 
 
 Yalton & Adams y. National Loan 
 Fund Life Assurance Society, 
 237. 
 
 Vandegraffv. Medlock, 164. 
 
 Vandevoort v. Columbian Ins. Co., 
 82. 
 
 Van Natta v. Mut Ins. Co., 104. 
 
 w. 
 
 Walden v. Louisiana Ins. Co., 35. 
 
 103. 
 Walden v. N. T. Fireman's Ins. 
 
 Co., 90. 
 Wallace v. Ins. Co., 60. 
 
 Warder v. Horton, 65. 
 
 Waters v. Merchants' Louisville 
 
 Ins. Co., 79. 
 Watson V. Delafield, 103. 
 Webb V. National Fire Ins. Co., 
 
 80. 
 
 Welch V. MandeviUe, 266. 
 Welles V. Boston Ins. Co., 56. 79. 
 Wells V. Archer, 150. 
 Wells v. Philadelphia Ins. Co., 64. 
 Whiter. Brown, 164. 
 White V. Mann, 246. 
 Whiton V. Old Colony Ins. Co., 
 
 46. 
 
 Wiggjm v. Suffolk Ins. Co., 52. 
 Williams v. New England Mut 
 
 Fire Ins. Co., 141. 
 Wilson V. Clements, 34. 
 Wilson V. Hill, 64. 146. 149. 150. 
 
 269. 
 
 83. 
 (Workman v. Ins. Co., 80. 
 
THE 
 
 LAV OF FIRE INSURANCE. 
 
 CHAPTER I. 
 
 OF THE NATURE OF THE CONTRACT. 
 
 1. General nature of a Policj/ of Insurance. 
 
 2. A clear Right of Action should be contained in it. 
 
 3. Parties interested to be inserted in it. 
 
 4. Indorsements and Conditions of the Policy. 
 
 5. Duties Payable in respect of Policies and the 
 
 amount Insured. 
 
 6. Explosion and destruction by way of precaution. 
 
 1. This contract (1) is in the nature of an indemnity giv- 
 en by the insurers against such loss or damage by fire as may 
 
 (1) An important queation sometimes arises in regard to the time, when the 
 contract is completed or consummated, when as is very common in cases of in- 
 surance, the negotiation is carried on by letter. The cases are somewhat con- 
 flicting on this subject ; but the better and prevailing doctrine is that an offer to 
 insure made by letter remains open until the letter is received by the other party, 
 and that the offer cannot be retracted before that time except personally, or if 
 by letter, by some special mode of conveyance, so that the notice of the retrac- 
 tion may reach the party before he has despatched a letter accepting the offer. 
 The contract is held to be completed as soon as the letter of acceptance is des- 
 patched—Adams V. Lindsell, 1 Bam. & Aid. 681 ; Mactier v. Frith, 6 Wend 
 
 5 
 
34 LAW OF FIRE INSURANCE. 
 
 happen to the insured in respect of the houses, buildings, 
 stock, merchandize, or other articles covered by the policy. (2) 
 
 104 ; Brisban v. Boyd, 4 Paige Chan. R. 17 ; Tayloe v. Merchants' Pire Ins. 
 Co., 9 Howard 390. See contra, McCulloch v. Eagle Ins. Co., 1 Pick. 277. 
 It is not sufficient that the letter of acceptance should be merely written, it must 
 be despatched and beyond the control of the writer, and that within a reasona- 
 hle time after the receipt of the offer, or, if any time is prescribed, within that 
 time— Thayer v. Middlesex Mut. Pire Ins. Co., 10 Pick. 326 ; Pern v. Turn- 
 er, 1 Fairfield 185 ; Wilson v. Clements 3 Mass. 1 , Mr. Phillips is of the 
 opinion (1 Phillips on Ins. p. 18.) that the letter of acceptemce, after its .des- 
 patch, may be countermanded or retracted, provided, the notice to that effect 
 reach the other party in advance of the letter. The case of Tayloe v. Mer- 
 chants' Pire Ins. Co., cited by Mr. Phillips in support of this doctrine, does not 
 however sustain it. The court put no such limitation upon the effect of an ac- 
 ceptance by the despatch of a'letter. The offer of one party and the accept- 
 ance of the other do not stand upon the same grounds. The offer does not con- 
 stitute or create a contract, and may be withdrawn, if notice to that effect can 
 reach the party before he has committed any act indicative of an acceptance. 
 But as soon as the offer is accepted (and a desf)alch of a letter has been con- 
 sidered a valid acceptance,) the contract is completed, and cannot be rescinded 
 except by mutual consent. — See 1 Duer on Ins. p. 130 ; Brisban a. Boyd, 4 
 Pa^ . Ghem. R. p. 17. Mr. Phillips position is supported by a dictum of Ch. 
 Jus. Parker in McCulloch v. Eagle Ins. Co., but the doctrine of this case in 
 regard to contracts by letter is at variance with the current of authority. 
 
 The offer must be accepted as made. Any qualification of, or departure from 
 its terms by the acceptor, or a conditioned or contingent acceptance will feul to 
 create a contract — Carrington v. Ocean Ins. Co. 3 Conn. 357 ; Eliason v. Hen- 
 shaw, 4 Wheaton, 228. 
 
 " (2.) Whether a valid contract of insurance can be made in this country without 
 a policy, or other writing, is not entirely settled. Mr. Duer is of the opinion 
 that, although, upon the principles of the common Law an unwritten, or in 
 technical language, a parol contract of insurance is su£5cient, still from the force 
 of long usage, and because Insurance, being a branch of the Law Merchant 
 does not depend upon our municipal law, but upon questions not settled by 
 positive decisions, is governed by the general usage of the Commercial World 
 the general and uniform practice in regard to insurance ought to be con- 
 sidered as evidence of the legal necessity of a written contract.— See Duer 
 on Ins. Vol. 1, p. 60. Mr. Phillips says « It does not appear why under the 
 common law, a vahd oral insurance may not be made against loss by fire, if it 
 were upon a real interest, for a good consideration, and made in terms sufficiently 
 
OP THE NATURE OP THE CONTRACT. 35 
 
 The insurers, after reciting the receipt of the premium, 
 usually covenant and agree, or undertake, that from the day 
 named in the policy unto and inclusive of another day named 
 in the policy, and so long as the insured shall pay or cause to 
 he paid the premium agreed upon, and the insurers shall ac- 
 cept the same, the stock and funds of the (Company) shall be 
 liable to make good any such loss or damage as shall hap- 
 pen by fire, (except loss or damage by *fire happening by *2 
 any invasion, foreign enemy, civil commotion, or riot, or 
 any military or usurped power,) to the property specified. 
 
 Several of the exceptions in policies have at different times 
 been the subject of litigation, as to their extent and meaning, 
 which will be considered in their proper places. 
 
 2. It is very important to the insured that they should have 
 a clear right of action against the parties subscribing or exe- 
 cuting the policy, (1) to the extent of the funds of the society ; 
 that right should not be confined to a mere order for payment 
 
 explicit." Phillips on Ins. Vol. 1 p. 9. It has been held, however, in Louisiana and 
 Ohio, that the contract must be in writing; Walden v. Louisiana Ins. Co., 13 La. 
 R. 133 ; CockeriU v. Cincinnati Ins. Co., 16 Ohio R. 149. In England various Stat- 
 utes expressly or impliedly require the contract to be in writing, and several of the 
 commercial codes of the continent have similar provisions. It is believed that 
 there are no statutes in this country on the subject. The ceises of Hamilton v. 
 Lycoming Mut Ins. Co., 5 Barr 339, and Thayer v. Middlesex Mut. Fire Ins. 
 Co., 10 Pick. 325, are actions on oird agreements to insure, and in each case the 
 agreement was held binding. But it should, perhaps, be stated that the con- 
 tracts in each case contemplated the subsequent execution of a policy, and hence 
 the agreement may with more propriety be called a contract to issue a policy, 
 rather than a contract of insurance. 
 
 (1) The existence or delivery of a Policy, so called, is not necessary to the 
 validity of the contract. Any written assent by one party within a reasona- 
 ble time to the terms proposed by the other is sufficient to form a valid con- 
 tract. Frequently a memorandum describing briefly the risk insured against 
 is made by the insurers, and entered upon their books, or a receipt of the pre- 
 mium, specifying the subject and sum insured, and the duration of the risk, 
 is delivered to the insured, and the insurers have been held bound thereby 
 to the same extent as by a policy. See cases cited below. This course is 
 taken, when from some circumstance, it is inconvenient or impossible to issue 
 
36 LAW OF FIRE INSURANCE- 
 
 to be made by the subscribing directors upon the general body 
 of the directors or the company, for an action in such a case 
 will not be maintainable against the parties executing, or the 
 directors generally. 
 
 Upon a case sent by the direction of the Vice-chancellor 
 for the opinion of the Judges of the Court of King's Bench 
 (a), the question was, whether an action would lie under the 
 following circumstances : — On the 20th of May, 1811, the 
 plaintiffs insured a certain house and premises in which they 
 were interested in the Hand in Hand Fire Insurance OfBce. 
 The policy was made and duly executed by T. F., N. W., and 
 J. M., as three of the trustees and directors of the office, where- 
 by, in consideration of the sum of 4Z. 10s. the premises valued 
 at 1800i. were insured for the term of one year from the date 
 thereof. The policy, after reciting that the plaintiffs had paid 
 into the treasury of the amicable contribution or society, com- 
 monly called the Hand in Hand Contributionship or Society, 
 for the insuring of houses and goods from loss or damage by 
 fire, the sum above mentioned, for the purpose above men- 
 tioned, proceeded to declare as follows : " now we the trus- 
 tees and directors of the said society whose names are here- 
 unto subscribed, do order, direct, and, appoint the direc- 
 tors for the time being of the said society to raise and 
 
 a policy at the time, but it always contemplates the subsequent execution of 
 one. In case of loss before the execution of a policy where a contract to in- 
 sure has been made, the insarers can either be compelled by a Court of Equity 
 to issue a policy or held liable to the insured in an action at law for the loss he 
 has sustained to an amount not exceeding the sum agreed to be insured. 
 
 Perkins v. Washington Ins. Co. 4 Cowen 645 ; McCulloch v. Eagle Ins. 
 Co. 1 Pick. 277 ; Thayer v. Middlesex Mut. Fire Ins. Co. 10 Pick. 325 ; Ham- 
 ilton v. Lycoming Mut Fire Ins. Co. 5 Barr389; Loring v. Proctor 26. 
 Maine R. 18 ; Blanchard v. Waite 28 Maine R. 51 ; Tayloe v. Merchants' 
 Fire Ins Co. 9 Howard 390. 
 
 A memorandum, entry or agreement like those mentioned above, in the ab- 
 sence of something specific to the contrary, means thai the Insurance is, or is to 
 be made, according to the ordinary form of policy used at the office where the 
 memorandum, &c., is made. 1 Phillips on Ins. p. 13. 
 
 (a) Alchorne v. Saville and others, 6 Moore's Rep. 202, n. 
 
OF THE NATURE OF THE CONTRACT. 37 
 
 pay by and out of the monies, securities, and effects of the 
 said contributionship, pursuant *and according to certain 
 deeds and settlements," <fcc. The instrument, after de- 3* 
 daring that the order thus mentioned should compre- 
 hend either a total or partial loss by fire, proceeded as fol- 
 lows : — " provided, and it is hereby declared and agreed, that 
 when any assignment shall be made of this policy, such assign, 
 ment shall be entered in the ofiBce book within ninety days 
 from the date thereof, (fee, and also, that if at the expiration 
 of one year from th^ date thereof, the said plaintiffs shall 
 again pay the sum of 41. 10s. then all the conditions and 
 agreements of this policy shall remain in full force for the 
 further term of one year, and so shall be continued from year 
 to year as often as the said sum of 4Z. 10s. shall be paid by the 
 plaintiffs, and the directors for the time being shall agree there- 
 to by accepting or receiving the same. In witness, <fcc." The 
 policy was signed by T. F., N. W., and J. M., three of the 
 trustees and directors of the said office, and sealed and deliver- 
 ed duly stamped and attested. 
 
 The plaintiffs having sustained a loss by fire, and the defend- 
 ants having refused to pay within the time prescribed by the 
 policy, a bill was filed in Chancery against the latter as act- 
 ing trustees and directors of the office, praying that the Court 
 would decree the payment of the loss which the plaintiffs had 
 sustained, and the above case was sent for the opinion of the 
 Court of King's Bench. 
 
 Lord C. J. Abbott. — " I can find nothing in this policy by 
 which the defendants covenanted to pay the loss which, the 
 plaintiffs have sustained. The deed only imports that the 
 trustees and directors for the time being who execute it, do 
 hereby order, direct and appoint the trustees and directors 
 for the time being to pay the loss, in case it should happen, 
 out of the funds belonging to the society. It does not appear 
 to me that the latter words in the policy can have the effect 
 of making that an agreement, which on the face of it appears 
 to be only an order for the payment of money. It never 
 could be intended that this instrument so prepared should 
 
38 LAW OF FIRE INSURANCE. 
 
 haye the effect of making the trustees and directors for the 
 time being personally liable ; nothing could *be more dif- 
 4 * ficult than for a company of this description to find act- 
 ing trustees who would personally pay all the policies 
 which the company might think fit to execute. It therefore 
 appears to me that the only remedy the plaintiffs have is in 
 equity, and they cannot turn round and treat this as a cove- 
 nant at law. I admit that where a party executes an instru- 
 ment and thereby says, " I agree to do so and so," he would be 
 liable to an action of covenant, but how could a declaration in 
 covenant be framed in this case, either against the defendants 
 or the parties who have executed the policy ? As against the 
 latter no such declaration could be drawn, because the policy 
 imports nothing but an order upon other persons to pay the 
 loss in case it should happen ; and as against the former, sup- 
 posing the instrument to have the effect of an agreement, the 
 action would not lie, because it does not appear that they have 
 executed it. This policy imports nothing but an order, and 
 not an agreement, I am therefore of opinion that an action of 
 covenant cannot be maintained." The rest of the Court were 
 of the same opinion. 
 
 But where a deed declared that in case of loss by fire 
 the society would pay, &c., and stipulated and declared 
 that the subscribing directors should not, as members of the 
 society, be liable, except under the articles of the society ; it 
 was held that such declaration and stipulation were substan- 
 tially a covenant to pay out of the society's funds. This 
 case, Andrewes v. Ellison and others (a), was an action of 
 covenant on a policy of insurance, executed by the defend- 
 ants under seal to indemnify the plaintiffs against a loss by 
 fire. The declaration stated, that the defendants,, on the 
 9th of December, 1819, as three of the directors of the 
 National Union Fire Association, made a certain deed-poll, 
 commonly called a policy of assurance, whereby, after re- 
 citing that the defendants, as such directors, had admitted 
 the plaintiff to be a member upon the termsj convenants, and 
 
 (a) 6 Moore 199. 
 
OF THE NATURE OF THE CONTRACT. 39 
 
 conditions prescribed by the deed of settlement of the said 
 •association; and that the plaintiff had consented to become *5 
 a member accordingly, and had subscribed the sum of 6s., 
 being the consideration-money for one year's insurance from 
 the 25th of December, 1819, and that so long as he should con- 
 tinue to pay the same sum annually on that day, he should 
 be entitled to a remuneration out of the society's funds in case 
 of loss by fire to all or any of the property thereinafter men- 
 tioned, not exceeding for each item respectively the sum set 
 against the same, viz., 200Z. on his household furniture, (fee, 
 in his then brick built dwelling-house ; it was declared, that in 
 case of loss by fire happening to any of the above-mentioned 
 property, while such subscription should be regularly deposi- 
 ted, the society was to pay according to the deed of settle- 
 ment to the plaintiff all such loss and damage, not exceeding 
 the sum set against each article respectively, as he might si;is- 
 tain thereto by fire ; and it was further stipulated and there- 
 by declared, that neither of them, the said directors who sub- 
 scribed the said deed-poll or policy of asurance, nor the plain- 
 tiff, as the holder of the policy, should, as members of the said 
 society, be subject or liable to any demand for any loss or 
 losses, except under the articles establishing the said society 
 as was provided by the same. The declaration then set out 
 certain articles and conditions referred to in the policy, and 
 subject to which it was effected (a) and concluded by the 
 usual 'averments. Several special pleas were pleaded, and 
 on these pleas issues were joined. The cause came on *6 
 for trial before Lord Chief Justice Dallas, when the jury 
 found a general verdict for the plaintiff. 
 
 (o) By the eighth of whjch it was provided, that whenever losses should 
 happen the parties were to give immediate notice thereof to the secretary, or to 
 the nearest agent, that a view might be taken and the damage estimated, and 
 also deliver imder their hands the amount and particulars of their claim on the 
 office, and make out the same by the oaths or affirmations of themselves, or by 
 their domesticB or servants, books or vouchers ; and procure certificates of the 
 ministers, churchwardens, neighbors or inhabitants, not interested in such loss, 
 if they were required by the directors so to do. The loss or damage sustained 
 to be made good within ninety days after the same happened, or as soon as the 
 
40 LAW OP FIRE INSURANCE. 
 
 A rule nisi was afterwards obtained that the judgment 
 might be arrested, on the ground that there was nothing on 
 the face of the 'policy ■, or in the declaration, to import any 
 covenant or agreement in law to support the action, or ren- 
 der the defendant liable to pay the loss in question. It was 
 submitted that the plaintiff's only remedy was in equity, and 
 relied on the case of Alchorne v. Saville (a) as bearing a 
 near resemblance to the present, and in which the Court of 
 King's Bench had decided, that an action of covenant could 
 not be maintained, although the words in the proviso there 
 were " declared and agreed," while the words " stipulated and 
 declared " only weca^ adopted here. 
 
 On cause shewn, contra. 
 
 Lord Chief Justice Dallas. — "It has been admitted in the 
 course of the argument that no precise or technical words 
 are necessary to create a covenant, but that whether it be so 
 or not, depends upon the intention of the parties. This, 
 therefore, narrows the consideration of the present question, 
 to the words contained in the policy on which this action is 
 brought; and although there are no precise words in that 
 instrument, still the defendants have stipulated and declared 
 that neither of them as directors of the association, or as 
 members of the society, should be subject or liable to any 
 demand for loss or losses, except under the articles for es- 
 tablishing the society, and as is provided by the same. In 
 the reasonable construction of this stipulation it amounts to 
 an express agreement, and the instrument may be consider- 
 ed as a covenant to .entitle the insured, in case of loss by 
 fire, to receive a remuneration out of the funds of the society 
 to the extent of such funds, as the defendants have expressly 
 declared that the society would be responsible, but they have 
 limited such responsibility to the sufficiency of their funds 
 
 (a) Ante, p. 3G. 
 amoant could be properly ascertained, either by the payment of the sum insur- 
 ed, or by repsiiring or rebuilding the premises destroyed or damaged, as far as 
 the sum insured would %lJi,ow, at the option of the directors. By the ninth arti- 
 cle it was stipulated that the office would not make good any losses by fire oc- 
 casioned by foreign enemies, civil commotions, or any military or usurped pow- 
 er, or in consequence of explosion of gun-powder or steam. 
 
OF THE NATURE OF THE CONTRACT. 41 
 
 The plain and obvious meaning therefore appears to me to 
 be, that the association is liable to the extent of its fiinds > 
 and consequently that the defendants, as three of the direct- 
 ors, have entered into an express agreement to be responsible 
 to the plaintiff as far as the funds of the society will allow. 
 The case is altogether distinguishable from the case of Al- 
 chorne v. Saville, as here the defendants have executed the 
 deed, but there they were not parties to it, (a) they only or- 
 dered the directors of the society for the time being to do par- 
 ticular things, viz., ta raise and pay out of the monies and 
 securities of the contributionship according to certain deeds 
 and settlements, and the Court of King's Bench decided that 
 they were not personally liable, as it was not their deed, and 
 as they merely appointed other persons to pay a loss, in case 
 it should happen, out of the funds belonging to the society. 
 Here, however, the defendants covenanted to pay, if the funds 
 of the society should be adequate. That, therefore, puts an 
 end to the question. Besides, the breach assigned by the 
 plaintiff in his declaration is sufficient, for he states that, al- 
 though the fiinds of the association were adequaet to pay, yet 
 that the defendants refused to do so. As this case, therefore 
 is so mainly distinguishable from that of Alchorne v. Saville^ 
 I have no doubt that the plaintiff is entitled to recover, and 
 more particularly so, as the policy in question was signed 
 by the defendants, who agreed or covenanted to be themselves 
 personally liable as far as the fiinds of the society would e?" 
 tend ; and the Court will not arrest judgment after trial, nap- 
 less it be obvious and clear that there is some material ground 
 on which they are enabled to do so, all the pleas on the ro" 
 cord having been negatived by the jury. I therefore think 
 there is no substantial ground whatever for arresting this 
 judgment." 
 
 Mr. Justice Parke was of the same opinion. " This cas® 
 differs from that of Alchorne v. Saville, which was a special 
 case, sent by the Vice-Chancellor for the opinion of the Coiwt 
 
 («) There appears to he some error heie, the defendants vho were to ntake 
 the order did execute the deed, but the parties to pay did not. 
 
 6 
 
42 LAW OP FIRE INSURANCE. 
 
 of King's Bench, in which it was expressly stated that the 
 'defendants merely ordered the directors for the time be- 
 8* ing to pay, and they did not sign the policy. Here, how- 
 ever, the defendants' seals and signatures are attached to 
 the instrument, in which it is recited that they were three of 
 the directors of the association, and agreed that as long as the 
 plaintiff should continue to pay an annual sum for insurance 
 of his premises from fire from year to year, he should be en- 
 titled to a remuneration out of the society's funds. That was 
 an express undertaking that he should be so remunerated. — 
 Besides, they admitted the plaintiff a member on the termsj 
 covenants and conditions prescribed by the deed of settlement 
 of the association ; and by the eighth clause of the articles 
 which are set out in the declaration, the loss sustained was to 
 be made good within ninety days after the same happened, 
 . either by repaying the sum insured, or by repairing or re- 
 building the premises destroyed. The defendants signed the 
 policy which referred to that article or condition. It is true 
 they are, not themselves personally liable, but the plaintiff 
 was clearly entitled to recover from the funds of the society, 
 if they were sufficient to defray the amount of his loss. The 
 plaintiff has averred that they were, and that, therefore, is all 
 that he was required to do ;• and I fully concur with my Lord 
 Chief Justice that the Court will not arrest a judgment unless 
 it be perfectly clear that the plaintiff is not;' entitled to retain 
 it, for it is a general rule that nothing is to be presumed af- 
 ter verdict but. what is expressly stated in the declaration, or 
 necessarily implied from the facts which are stated." 
 
 Mr. Justice Burrough. — " I am satisfied that this judgment 
 ought not to be arrested. The directors of the society held 
 themselves out to the world as being responsible persons. If 
 they were not so, no person would insure property with them. 
 The defendants admitted the plaintiff^ to insure, and agreed 
 by such admission that he should be entitled to a remunera- 
 tion out of the society's funds, as no precise words are neces" 
 sary to constitute a c ovenant. The words " shall be entitled " 
 
OP THE NATURE OP THE CONTRACT. 43 
 
 are sufficient to imply that the plaintiff should be remunerated 
 out of the funds of the society, provided they were suffi- 
 cient for that purpose ; they therefore had a *right to *£ 
 look to the defendants in the first instance. Unless they 
 were liable, no society of this description would be obliged to 
 pay in case of loss. Even if the words contained in the pol- 
 icy were more equivocal than they are, still, as the defendants 
 have executed the instrument, I think they are liable, and 
 that it was unnecessary for the plaintiff to have set out more 
 than he has done in the Mdeclaration." 
 
 Mr. Justice Richardson. — " This was an action of covenant 
 brought against the defendants as three of the directors of the 
 National Union Fire Association, and the terms of the policy 
 have been set out by the plaintiff in his declaration ; by which 
 it appears, that in case of loss by fire, he was entitled to re- 
 ceive a remuneration for such loss out of the funds of the socie- 
 ty ; and he has averred that they have sufficient funds to cover 
 the damage he has sustained. The defendants should either 
 have demurred, or pleaded that the funds were insufficient ; 
 but they have put a number of other pleas upon the record, 
 imputing fraud to the plaintiff, which the jury negatived, and 
 set him right by their verdict ; and the defendants now seek 
 to turn him round on an objection to the declaration ; but I 
 think it is not well founded, or at all events it is insufficient for 
 the purpose of arresting the judgment. It appears on the 
 face of the policy that the defendants were three of the direct- 
 ors ; that as such they admitted the plaintiff to be a member ; 
 and it then states that he should be entitled to a remuneration 
 out of the society's funds in case he sustained a loss by fire. 
 This policy was executed under the hands and seals of the 
 defendants, and the plaintiff has declared that he has sustain- 
 ed a loss by fire, and that the society had funds, and were 
 bound to pay sbccordingto the terms of the articles under which 
 it was established. The policy also contains a declaration 
 that the society were to pay according to the deed of settle- 
 ment, and that the defendants, as directors, should not be sub- 
 
44 LAW OP FIRE INSURANCE. 
 
 ject to any demaad for losses, except under the articles estab- 
 lishing the society. Under this stipulation the plaintiff 
 *10 was entitled to set out such articles *in his declaration, 
 and which are now properly brought before the Court. 
 The eighth article held out that the society were liable to sat- 
 isfy such loss, in case the insurer did all that was requisite of 
 him to be done within that period. This case is wholly dis- 
 tisnguishable from that of Alchorne v. Saville, as here the sub- 
 stance of the policy is set out, and the deed of settlement re- 
 ferred to. In that case there were no sufficient words to raise 
 a covenant by the defendants, as they merely appointed the 
 directors for the time being to pay out of the monies, securi- 
 ties, and effects of the contributionship pursuant and according 
 to certain deeds and settlements ; and the Court thought that 
 the policy imported an order for the payment of the money, 
 and not an agreement, and that even if it could be considered 
 as Such, and was declared upon as against the defendants, the 
 plaintiff must have been nonsuited on the plea of non est fac- 
 tum, because it was not their deed. My brother Pell, how- 
 ever, has contended that the worcb " declared and agreed " 
 were there introduced in the proviso, whilst here the words 
 ■" stipulated and declared " only were used ; but the former 
 words were introduced in that case for a Very different pur- 
 pose, for they could have no effect as to the order and direc- 
 tion to the directors for the time being to pay out of the funds 
 of the society. I therefore concur with the Court in think- 
 ing that the judgment in this case ought not to be arrested. — 
 Bule discharged." 
 
 Some cautious pleaders, in framitig declarations on behalf of 
 the insured to recover upon a loss, aver that the share of the 
 capital in the company belonging to the subscribing directors, 
 amounts to some large sum of money more than sufficient to 
 cover the sum insured for, with the object of affecting the sub. 
 scribing directors personally, in case, by means of any defect 
 in the internal machinery of the company, or any other cause 
 the joint stock funds of the company should not be made avail- 
 able to the purpose. 
 
OP THE NATURE OP THE CONTRACT. 45 
 
 3. By Stat. 14 Geo. 3, c. 148, s. 2, it is enacted, that it 
 shall not be lawful to make any policy or policies on the 
 *life or lives of any person or persons, or other event or *ll 
 events, without inserting in such policy or policies the 
 person or person's name or names interested therein, or for 
 whose use, benefit, or on whose account, such policy is so 
 made or underwrote. (1) 
 
 4. The oflSces in general, in order to render the opera- 
 tive part of the contract more concise, introduce the scale 
 of premiums applicable to the different risks by indorse- 
 ments upon the policy, referring to them, so as to make 
 them part of the contract ; these indorsements usually con- 
 sist of a table of premiums to be paid — 1. In respect of 
 such as are called "common insurances," or those for 
 which the lowest rate of premium is to be paid, as buildings, 
 which, from their construction, materials, or ^ use, are exposed 
 to the least degree of hazard. 2. In respect of such as are 
 called " hazardous insurances," as buildings, which, from their 
 materials or construction, are more susceptible of ignition, but 
 in which no hazardous trades are caried on, or hazardous goods 
 deposited, buildings not of of a hazardous nature, as those of 
 the Jirst class, but in which^hazardous trades are carried on, 
 or some circumstances of hazard are attached, as the presence 
 of stoves ; the stock and goods of various specified tradersj 
 whose occupation exposes the goods to hazard, various specified 
 articles of trade of a hazardous nature deposited in buildings 
 
 (1) It is believed that there is no such statute in this country. Some Amer- 
 ican Companies insert in their forms, after the name of the person procuring 
 the insurance, the clause " for himself and whom it may concern," or " for the 
 benefit of whom it may concern,'' thus giving any person, interested in the sub- 
 ject insured, the right to sue on the policy in his own name, provided the per- 
 son effecting the policy intended that his interest should be covered. Alliance 
 Mar. Ins. Co. v. La. State Ins. Co., 8 La. R. 11 ; See form used by Delaware 
 Mut. Ins. Co., of Philadelphia; Stacy v. Franklin Fire Ins. Co., 2 Watts and 
 Ser. 506 ; Jefferson Ins. Co. v. Cotheal 7 Wend. 72. 
 
 But the almost universal practice in Fire Insurance is in accordance with the 
 course prescribed by the English statute cited in the text. 
 
46 LAW OP PIRE INSURANCE. 
 
 not hazardous. For insuring these a higher rate of premium 
 premium is to be paid, 3. In respect of such as are called 
 " double hazardous insurances," such as buildings, which from 
 tjieir construction or materials are of a hazardous nature, in 
 which hazardous goods are deposited, or hazardous trades are 
 caried on, thus exposing the insurers to an increased liability 
 of ignition, both from the nature of the buildings and the goods 
 contained in them, or trades carried on, for insuring these a 
 still higher premium is to be paid. There are also cases of ex- 
 traordinary risk, as those of sugar refineries and manufacto- 
 ries, not included in the usual tables of premium. These 
 are usually made the subjects of special 'agreements, all "12 
 the circumstances of the case being taken into consid- 
 eration. Money, and securities for money, are not in genera., 
 insured upon any terms.(l) 
 
 After these tables of premiums, there usually follow the 
 conditions or proposals, which the insured must comply with at 
 his peril, as they form part of the policy and are conditions 
 precedent, upon a due compliance with which must depend his 
 right to an indemnity in case of loss. (2) 
 
 (1) In the absence. of any decleiration in a policy excepting from the risk 
 " money, bullion, bonds, bills, notes or other evidence of debt " &c., the insur- 
 ance being upon property on board a certain vessel, it was held that curren 
 Bank Bills were included under the term property,, and that the insurers were 
 bound to pay for the loss of such bills by fire on board the vessel — Whiton v. 
 Old Colony Ins. Co., 2 Metcalf 1. 
 
 (2) The conditions of insurance, if contained in a paper annexed to a policy 
 and delivered with it, need not be expressly referred to therein, but are consid- 
 ered jirima/ade a part thereof— Roberts v. Chenango Co. Mut. Ins Co , 3 Hill 
 501 ; Murdock v. id. 2 Comstock 210. Parol evidence is however admissible 
 to show that the annexation was by mistake — Roberts v. Chenango Co. Mut. 
 Ins. Co. 3 Hiil. 501. The parties to a policy of insurance may insert in ii, 
 what conditions they please, provided there be nothing in them contrary to the 
 criminal code, or public policy — Beadle v. Chenango Co- Mut. Ins. Co,, 3 Hill 
 161. It has been held that a condition, that a policy should be void in case of a 
 failure on the part of the insured to pay any assessment made by the company 
 upon his premium note, was a good and valid condition, and that a breach of it 
 was a sufficient defence to an action on the policy. Beadle v, Chenango Co. Mut 
 
OF THE NATURE OP THE CONTRACT. 47 
 
 The most important conditions are usually to the following 
 effect: — the insured, upon effecting a policy, must give an ac- 
 curate description of the construction and nature of the prem- 
 ises and goods to be insured, for upon that statement the in- 
 surers fix the amount of the premium to be patd, or exercise 
 their discretion by rejecting the insurance altogether. This 
 is a point of the utmost importance for a party about to insure 
 
 Ins. Co., 3 Hill 161. So also of a condition that the application should state 
 all the buildings witliin ten rods and the distance from each— Jennings v Che- 
 nango Co. Mut. Ins. Co. 2 Denfo 75. j Sextons. Montgomery Co. Ins. Co., 9 Bar- 
 bour 191. So also of a conditio i thi.t the application should state the purpose 
 for which the building insured was occupied — id. ; and also of a condition that 
 the risk should not be increased by any means within the control of the in- 
 sured. Murdock v. Chenango Co. Mut. Ins. Co., 2 Comstock 210 ; also that 
 in all cases the insured will be bound by the application, and that the surveyor 
 who takes it shall be deemed the agent of the applicant — Sexton ■;;. Montgomery 
 Co. Mut Ins. Co., 9 Barbour 191. It seems that a condition, to be binding, must 
 be mutually agreed upon, and contained in or annexed to the policy, or specifically 
 referred to therein. A condition imposed by the Company in the form of a By 
 Law, not brought within the knowledge of the insured, would not. it seems be 
 binding upon him. Beadle v. Chenango Co. Mut. Ins. Co., 3 Hill 161. 
 
 Conditions are to be construed strictly against those for whose benefit they 
 are introduced, when they impose burdens on the parties. Catlin v. Springfield 
 Fire Ins. Co., 1 Sumner 434. This principle is well illustrated by the follow- 
 ing case. One of the conditions of a policy was as foUows : 
 
 " The application shall contain the place where the property is situated ; of 
 what materials it is composed ; its dimensions ; how constructed and for what 
 occupied ; its reloMve sit/uation as to other buildings ; distance from each if less 
 than ten rods ; the incumbrance, if any, on the property &c." 
 
 The policy covered $750 on a paper mill, and an equal amount on personal 
 property therein. The defence in an action on the policy to recover a loss by 
 fire, was that the application did not mention all the buildings within ten rods 
 of the mill. Held that the condition related exclusively to applications upon 
 buildings and flierefore furnished no ground of defence to the plaintiffs claim re- 
 specting the personal property covered by the policy— Trench v. Chenango Co. 
 Mut. Ins. Co., 7 Hill 122. See however Sexton v. Montgomery Co. Mut. Ins. 
 Co., 9 Barbour 191, where this rule of construction is held not to apply when 
 only personal property is insured ; and also Kennedy v. St. Lawrence Co. 
 Mat. Ins. Co., 10 Barbour 285. 
 
48 LAW OP FIRE INSURANCE. 
 
 to attend to, for even, without any special condition, a misrep- 
 resentation, whereby a less premium is paid than would be 
 payable if a true statement had been made, even without a 
 jB?audulent intent, would, upon the common principles of in- 
 surance, be sufficient to render void the policy.(a)(3) Every 
 insurance attended with peculiar circumstances of risk, aris- 
 ing from the situation or construction of the premises, or the 
 nature of the trade carried on. or the goods therein, should be 
 specially mentioned in the order given for the policy, so that 
 the risk may be fairly understood. If not so expressed, or if 
 buildings and goods be described in the policy otherwise than 
 they really are, or if after an insurance shall have been effected 
 the risk shall be increased by the erection or alteration of any 
 stove, the carrying on any hazardous trade, operation, or process, 
 the deposit of any hazardous goods, or in consequence of the 
 formation of any hazardous communication, the insured will by 
 the. conditions of most offices, lose the benefit of his policy.(&) 
 All persohs who have sustained any loss or damage are, in 
 general to give immediate notice to the office and deliver 
 *13 *a statement of their loss supported by the evidence re- 
 quired by the rules of the respective offices ; according 
 to the practice of some, the certificate of the clergyman of the 
 parish, the churchwardens, and some other respectable inhab- 
 itant, is made one of the modes of evidence of the amount of 
 the loss. The production of this certificate has baen held to 
 be a condition precedent, (a) in the absence of a compliance 
 with which the insured cannot recover. As there is no mode 
 of compelling the clergyman, churchwardens, or inhabitants 
 to certify, a hardship is sometimes incurred by the insured ; 
 a clergyman may sometimes refuse to certify, not from the in- 
 tention of throwing an imputation upon the character of the 
 insured, but because as the minister of a large parish he has 
 little opportuny of becoming acquainted with the character of 
 
 (o) Roberts v- Foanereau, Park, 285 ; Pitzherbert v, Mather, 1 T. R. 12. 
 
 (J.) See Protector Policy, Appendix, cond. 2. 
 
 (o) See this subject considered post. Proof of Loss. 
 
 (3) See Misrepresentation— post. chap. 3 art. 4. and notes there refeircd to' 
 
op THE NATURE OP THE CONTRACT. 49 
 
 the insured or the particular circumstances of the, fire or form 
 any estimate of the loss ; this mode of proof has therefore 
 been abandoned by many of the offices. If a landlord insuring 
 wishes to secure the payment of rent from his tenant, in case the 
 premises occupied by him should be burnt, it ought to be speci- 
 fied in his policy ; for a landlord, upon a lease containing a cove- 
 nant for payment of rent, without an exception in case of fire does 
 not lose his right in consequence of the premises being burnt, 
 and therefore needs no indemnity ; besides, rent is not a loss or 
 damage by fire, it may be hazarded or even lost in consequence 
 of a fire, but it never yet seems to have been distinctly held 
 that a policy can cover a consequential loss or damage ; for if 
 so, an office might be called upon to compensate for loss of 
 business or misfortunes in trade, which might eventualy take 
 place in consequence of a fire, and such an indemnity for losses 
 is certainly not contemplated by the insurers. 
 
 Consequential loss, however, as the profits of a business, 
 may by express stipulation be made the subject of insurance. 
 
 («)(1) 
 
 *In general, persons insuring are to give notice of any *14 
 other insurance made (2) elsewhere upon the same proper- 
 ty, (3) in which case the insurers are only to be liable to the 
 
 (a) Sun Fire Office and Wright, In re, 1 Ad. & EU. 621 ; 3 Nev. & Man- 
 819. (38, E C. L.R. 169 ; Id. 421.) 
 
 (1) Niblo V. N. American Fire Ins. Co., 1 Sanford 559. 
 
 (2) The forms in use generally expressly mention in this clause both subse- 
 quent and prior insurance made elsewhere, but it has been held that such spe- 
 cific reference to subsequent insurance is unnecessary, and that the general 
 words " any other insurance made elsewhere " will apply as well to subsequent 
 as prior insurance. Stacy v. Franklin Fire Ins. Co. 2 Watts &Ser. 506; 
 Harris V. Ohio Ins. Co., 5 Ohio 467. 
 
 (3) The other insuTemce must be upon the same property, and cover the 
 same interest, or it need not be represented, Jones v. Maine Mut. Fire Ins Co., 
 6 Shepley 155 ; Tyler v. JEtna Fire Ins. Co., 12 Wend. 507. Notice of a 
 subsequent insurande is unnecessary, when that insurance is in itself invalid, 
 arid will not support £m action on account of some deficiency entering into, and 
 existing at the time of the supposed formation of the contract. Jackson v. 
 Mass. Mut. Fire Ins. Co;, 23 Pick. 418 ; Stacy v. Franklin Ins. Co., 3 W. & 
 
 7 
 
50 LAW OP EIRB INSURANCE. 
 
 paynnept of a rateable proportion, of any loss -or damage ; (4) 
 
 S. 506; Clarke T.N. E. Mut.Fire Ins. Co., 6 Cushing 343. See however, 
 Carpenter v. Providence Washington Ins. Co., 16 Peters 495, where it is held 
 that the assured cannot excuse the want of notice of another policy on the 
 ground that it was void by reason of a material misrepresentatipii ; the insurance 
 beingjnot void, Ilut avoidable) and until so avoided it must be treated as a sub- 
 sisting policy^ There may|be a difference, between this case and those in ]VIas|B. 
 and, Fenn., in the fact that in the latter .the insurance was absolutely void on 
 account ojf the non-perfprjnainee of a condition precedent while in the foriner, it 
 was merely voidable j but Judge Story, in giving the decision in the case in 
 16 Peters, seems to go to the length of deciding that every insurance not ab- 
 solutely' void on its face should be represented, wHeh opinion is plainly irre- 
 concilable with the Mass. and Penh, cases. 
 
 A condition in a policy of insurance' that notice of ail previous inswcmces up- 
 on the property insured shall be given, or the policy Shall be void, applies only 
 to insurances effected by the assw-ed ; and riot to previous insurances by the 
 former owners of the property. Tyler v. ,^tna Ins. Co., 12 Wend. 507 ; unlesA 
 previous policies effected by former owners have been with the consent of the 
 several .insurers assigned to the assured, in which case they should be repre- 
 sented — iEtna Ins. Co. v. Tyler, 16 Wend. 385. Where a previous insurance 
 ^ad beepeffepted in the name of the insured in the, policy in (question, and by 
 the consent of the insurers assigned to a mortgagee of the properjjf insured as 
 eoflqierel secwrify&ir Ijis claim, it was held that notice thereof to the subsequent 
 insurers was necessMy ; Carpenter V. Providence Washington Insurance Co., 
 16 Peters 495. " "' 
 
 The N. Y. decisions on this subject are directly opposed to this case, and 
 in laying down the doctrine that the rights of the assignee cannot, during the 
 continuance of the assignment be prfejudiced by amy acts of the assignor, they 
 seem to make no distinction between a positive and final transfer of the policy 
 by means of which the assizor is entirely divested of any interest therein, and 
 em assignment simply for collateral security — Traders Ins. Co. v. Robert 9 
 "W'end. 404 ; 17 id. 631 ; . TiUou v. Kingston Mut. Ins. Co., 7 Barbour 570 ; 1 
 Selden 405 ; Charleston Ins. Co. v. Neve 2 McMullan (S. Car.) 237. 
 
 As to the sufficiency of the notice the following cases are in point. In a. pol- 
 icy contaimiiiig a condition similar to the one in the tejrt, it was stated that there 
 
 (4) Where there are several policies containing the clause providing that, in 
 case of other insurance, the insurers shall be Uable to pay only a rateable pro- 
 portion of the loss, they are all and each Uable to pay such rateable proportions 
 tlwug^ it happens that some have p?id more than their share, and even enough 
 
OF THE NATURE OF THE CONTRACT. 51 
 
 even without a special ooiidition of the policy, a party insured 
 effecting a double insurance can only recover the real amount 
 of his loss, and if he sues one insurer for the -whole, that in- 
 
 was an additional insurance on the property insured to the amount ' of $5000 
 The other insurance was in fact for $4700. Held that this was a sufficient 
 coiripliaiice with the condition. Liscom v. Boston Mut. Fire Ins. Co., 9 Met- 
 calfe 205 ; atiter it seems, if the other insurance had been understated", id. In 
 the absence of any provision requiring the notice to be given or acknowledged 
 in writing, verbtd notice to an agent authorized to make surveys and receive 
 applications for insurance, and tp receive the moneys paid by the insured is 
 sufficient, such notice being given to the agent while engaged in preparing an 
 application for the policy in question. McEwen v. Montgomery Co. Mut. 
 Ins. Co., 5 Hill 101 ; Sexton v. Montgomery Co. Mut. Ins. Co., 9 Barbour 
 191. 
 
 If there is no special inquiry, or condition to that effect, the insured is not 
 bound to give any deteiils in reference to other insurance, unless on account of 
 their not being disclosed, some fact material to the risk is concealed from the 
 insujers. McMahon v. Portsmouth Mut. Fire Ins. 2 Foster 15. A condition 
 of a policy issued by a Fire Ins. Co. was, that notice of any other insurance on 
 the property insured should be given to the company, and that, the same should 
 be endorsed on the policy, or otherwise acknowledged a/ad, approved by them in, 
 WfUing- The insured subsequently effected another insurance on, the property, 
 dnd forwarded a written notice of the fact to the secretary of the company, who 
 replied the next day, " I have received your notice of additional insurance." 
 Held that this was both a sufficient acknowledgment aai approy^ in writing, 
 and that there was no breach of the condition. Potter v. Ontario and. Livings:^ 
 ton Mut. Ina. Co., 5 HiU 147. ' 
 
 to cover the whole loss, and this whether they had knowledge of all the policies 
 at the time or not. There is no contribution between policies containing this 
 clause. Where, however, there are several policies, which do not aU contain this 
 clause, add those not containing it pay to the extent of their subscriptions which 
 is more than their rateable share, this will be a defence ^o tanto in an action on 
 the policies containing this clause, and if the policies without the clause have 
 paid enough to cover the loss it is a complete defence for the others, for they are 
 liable to contribute to the underwriters who have paid. Lucas v. Jefferson Ins. 
 Cch, 6 Cowen 635. 
 
62 LAW OP PIRE INSURANCE. 
 
 surer may compel the others to contribute their proportional 
 part8.(a) (1) 
 
 In the policies of most offices there is a condition, that if 
 there appear any fraud in the claim made for the loss, or false 
 swearing or affirming in support thereof, the claimant shall 
 forfeit all benefit under the policy.(2) Now fraud is in law 
 allegatio falsi or suppressio veri, and therefore any wilful 
 misstatement of the extent or amount of the loss, in the claim 
 preferred, with the view to injure the office, may subject the 
 insured to lose his indemnity even in respect of that loss or 
 damage which he has actually sustaii^ed. In a late case of 
 Wood V. Masterman and others, {b) in which a claim was re- 
 sisted, and the condition vacating the policy in case of fraud 
 was insisted upon by the insurers, Lord Tenterden told the 
 
 (a) Newby v. Eeed, 1 Bla. 416 ; Rogers v. Davis, Beawes, Lex Merc. 242 i 
 Davis V. Geldart, Beawes, ubi supra, 
 (i) K.B.Feb. II, 1822, MS. 
 
 (1) Stacy V. Franklin Fire Ins. Co., 2 Watts and Ser. 506 ;' Lucas v. Jeffer- 
 son Ins. Co., 6 Cowen 635 ; Howard Ins. Co. v. Scribner 5 Hill 298 ; Park 
 on Ins. 423; Godin v. London Ass. Co., 1 Burr 489; Craig v. Murgatroyd 
 
 4 Yeates 161 ; Thurston v. Koch, 4 Dall. 348; Millaudon v. Western Mar. and 
 F. Ins, Col, 9 La. 27 ; Wiggin v. Suffolk Ins. Co., 18 Pick 145. 
 
 To constitute a double insurance, the insurances must be on the same sub- 
 ject. Jones V. Maine Mut. Fire Ins. Co., 6 Shepley 155 , Tyler v. Miaa Fire 
 Ins. Co., 12 Wend. 507. In action on a policy containing a clause providing 
 for only a proportional payment in case of loss, where there is a double insu- 
 rance, and the policy insured f 1000 on fixtures and S3000 on stock, though it 
 appeared that the Plff. had procured another policy insuring $5000 on the stock 
 and fixtures as one parcel, held not a case of double insurance, and that the un- 
 derwiters were liable to the same extent as if the latter policy had never existed. 
 Howard Ins. Co. v. Scribner, 5 Hill, 298. 
 
 The authority of this case is doubted by Mr. Phillips. ,See Phillips' on Ins 
 Vol.1, p. 204. 
 
 (2) A condition of a policy, declaring that all fraud or false swearing shall 
 'cause aforfeiture of claims on the insurer, relates solely to the preliminary proofs 
 of loss. Ferris v. North American Fire Ins. Co., 1 Hill 71. 
 
OP THE NATURE OP THE CONTRACT. 53 
 
 JU17, that if they thought the plaintiff had overrated the 
 amount or value of his loss from mere mistake or misappre- 
 hension, they would find only for such loss or damage as he 
 had actually incurred ; but if, on the other hand, they thought 
 he had done so with a firaudulent intent, then they should find 
 a verdict for the defendants. -These are rules which the offi- 
 ces have been obliged to adopt for their own security. In the 
 multiplicity of their concerns, it would be absolutely impossi- 
 ble for them to ascertain the truth or falsehood of representar; 
 tions made to them at ^e time the insurance is effected, or 
 after the loss takes place ; and as the knowledge of all the facts 
 necessarily rests with the insured, he is bound to furnish a 
 true statement, upon which he is to stand or fall. The 
 *offices, however, are seldom in the habit of availing *15 
 themselves of the clause relating to fraud, unless they 
 have good reason to suppose that a gross imposition is attemp" 
 ted to be practised upon them. When a person insured de- 
 mands twice as much in respect of his loss or damage, as he 
 can give any probable evidence of, or a jury will give him,(andi 
 juries are in general very liberal to the public as against the 
 offices,) it is a fact which strongly indicates fraud ; and in a 
 recent case of Levi v. Baillie and others, (certain directors of 
 the Palladium,) (a) it appeared that the policy of insurance 
 upon which the action was brought contained the usual condi- 
 tion, requiring the insured suffering a loss to deliver in to the 
 office as full an account thereof as the nature of the case would 
 admit of, accompanied by the usual evidence ; and it also con- 
 tained the other usual condition, that " if there should be any 
 fraud in the claim made, or false swearing or affirming in sup- 
 port thereof, the claimant shall forfeit all benefit under such 
 policy. The plaintiff, an upholsterer, carried on business in a 
 small house in the New-cut, in the St. George's Fields, and 
 the insurance to the amount of 1,000Z. was effected on his 
 stock in trade, the 22d of November, 1827. The premises 
 were buynt down on the night of the 14th of February, 1830. 
 The plaintiff made affidavit, that, in consequence ofttiefire, 
 
 (d)'7 Bingh. 349, , 
 
54 LAW OP FIRE INSURANCE. 
 
 he had sustained a loss of stock to the amount of 1, 086^., viz. 
 851. for goods which were injured in the removal, and l,O00i- 
 for goods which had been abstracted by the crowd assembled 
 on the occasion, and had never been recovered. The goods 
 so lost were alleged to consist of four-post bedsteads, mE\hog- 
 any tables of various sizes, couches, chairs, stools, chimney 
 glasses, pier glasses, carpets, and the like. 
 
 The defendants contended that this claim yfas fraudulent, 
 and called witnesses to show that it was impossible for goods 
 so numerous and bulky to have been carried off undiscoveredi 
 These witneses stated, that policemen were on the spot 
 16* *as soon as the fire broke out ; that a cordon was es- 
 tablished round the premises almost immediately ; that 
 the fire was over in about two hours, and that no article of 
 size could be carried away. The plaintiff's witnesses denied 
 that the blockade had been so effectual ; and the Chief Jus- 
 tice left it to the jury to say whether the plaintiff had made a 
 ' fraudulent demand or not. The jury having found a verdict 
 for the plaintiff with 5001. damages, a rule nisi for a new trial 
 was obtained, on the ground that the finding of 5001. damages 
 instead of the wtole amount sworn to by the plaintiff, amount- 
 ed, in effect, to a verdict for the defendants, under the condi- 
 tion which avided the policy if there were any fraud or false 
 swearing in the plaintiff's claim ; a claim of 1,085Z., wheire a 
 party had lost 5001., could not be otherwise than firaudulent. 
 It was also objected that the verdict was contrary to evidence- 
 On cause shewn, it was contended that the finding of the 
 jury was not necessarily a proof that there had been any 
 fraud in the plaintiff's claim, he might, by mistake, have esti- 
 mated the goods lost at more than their value ; as to the pro- 
 bability of the loss, the evidence was merely conflicting. 
 
 The Court having taken time to consult, made the rule ab" 
 solute on payment of costs. (1) 
 
 (1) An over estimate of the loss is not a forfeiture under the condition against 
 fraud or felse Bwearing, Hoffinan t. Western M. anii F. Ins. Co-, 1 Rob. R.' 
 (La.) 216. As wtere the insured estimated the loss at $2S00, and the verdict 
 was for S1853. " Moore v. Protection Ins. Co., 29 Maine R. 97. 
 
OP THE NATURE OP THE CONTRACT. 55 
 
 A remark' may be made upon another singular feature in 
 this case, that the claim in general was made, not in respect 
 of goods lost or damaged by fire, but in respect of goods ab- 
 stracted in consequence of the opportunity which the fire af- 
 forded, the plaintiff in fact claimed to be indemnified for loss 
 by theft. It does not appear whether the learned Judge di- 
 rected the jury upon this point, though it might be supposed 
 that a jury would not have found damages to such an extent 
 without a direction to that efiect. 
 
 In consequence of th# numerous fires which have recently 
 taken place in the agricultural and manufacturing districts by 
 the acts of incendiaries, the offices in general have been under 
 the necessity of adopting the average clause in their policies 
 upon farming stock, by which, where a person insures 
 property collectively of larger value 'than the amount *17 
 insured, he shall only recover in the proportion which 
 the whole value bears to the part insured. For example, 
 if having property worth 10,000Z. he insures it only for lOOOZ* 
 in case of a fire producing loss or damage to the amount of 
 1000/., he will recover only lOOZ. 
 
 As an encouragement to the insured to use active diligence 
 in the preservation of property after a fire has broken out, it 
 frequently forms a part of the proposals that the office will 
 repay all real and actual expenses incurred in the removal, of 
 goods in case of fire.(l) It is indeed difficult to conceive any 
 conduct more nearly approaching to fraud, if not partaking of 
 
 (1) Mr. DowdesveU considers it doubtful whether, when the policy is silen 
 on the subject, the insured can claim from the insurers re-payment of any ex- 
 penses, which, in the exercise of a sound discretion as a prudent man, he may 
 have incurred in the removal or protection of goods upon the emergency of a 
 file, and he accordingly recommends the insertion of a provision to that effect — 
 Bowdeswell's Law of Life and Fire Ins. p. 109. In the ceise of Hillier v. Alle- 
 ghany Co. Mat. Ins. Co,, 3 Barr 470, where neither the goods insured, nor the 
 house which contained them were touched by the fire, but the goods were dam- 
 aged in their removal under the reasonalile apprehension that they would be 
 
56 LAW OP FIRE INSURANCE. 
 
 it, than for a party insured to abstain himself, or prevent oth. 
 ers from using every possible means to extinguish the fire or 
 save the property from destruction. 
 
 5. The Legislature has imposed certain duties both upon 
 the policy and the amount insured ; as the premiums upon 
 the latter have of late years been considerably reduced, and 
 the duties still continue the same as they were before the re- 
 reached by the flames, wliich had caught in one of houses of the same block, it 
 was held that the injury sustained by the insured, in the removed of his" goods 
 was not a loss within the policy — But see contra, Case v. Hartford Fire Ins. Co 
 13 lU. R. 676. 
 
 The following case of Wells v. Boston Ins. Co., 6 Pick. 182 lays down an 
 exceedingly liberal and enlightened doctrine on this subject. 
 
 Insurance against fire was made on a sto(fk of cutlery and jewelry in a 
 store. A fire happening in the neighborhood, the insured, with the approba- 
 tion of the insurer, procured blankets, and, having saturated them with water, 
 spread them on the outside of the .store, whereby the building and its contents 
 were preserved, but the blankets were rendered worthless. Held that this 
 loss was not covered by the policy, but that it was a subject of general average, 
 to which the insurer and insured should contribute in proportion to the amount 
 which they respectively had at risk in the store and its contents. Held also that 
 buildings in the neighborhood, which would have been endangered if the store 
 had taken fire, and upon some of which the insurers had outstJinding risks, were 
 too remotely affected to be liable to contribution. 
 
 The Fenn. ceise cited above agrees with this decision in reference to the ques- 
 tion whether ^uch sacrifices and expenses are a loss covered by the policy. — 
 But it is difficult to see why in the former ceise, if there was no question about 
 the imminence of the peril, the insurers should not have been held Uable on the 
 principle of general average, eis well as in the latter. 
 
 Many of the American policies contain a condition that, in case of fire, or ex- 
 posure to fire, it shall be the duty of the insured to use aU possible diligence in 
 saving and preserving the property, and in case of failure, so to do the insurers 
 shall not be liable for the loss occasioned by such neglect. Clusere : Would not 
 all prudent and reasonable sacrifices and expenses be comprehended under the 
 terms, " aU possible diligence," ? If so, and inasmuch as the liability of the in- 
 surers is by this condition, limited to such loss only as is or would be sustain- 
 ed after such precautions had been taken, it seems that the expenses and losses 
 attendant thereon, are not the subject of general average. 
 
OF THE NATURE OF THE CONTRACT. 57 
 
 duction, the duties bear an unequal proportion to the premi- 
 ums, and operate as a check upon the more general extension 
 of the salutary practice of insurance. By stat. 55 Geo. 3, e. 
 184, a duty of Is. is imposed upon every policy ; and also the 
 yearly sum of 3s. for every 100?. insured for a year, and at 
 and after that rate for every fractional part of a year.(a) Thus 
 upon the common insurance of 1*. 6d., a duty of 200 per cent, 
 is imposed. 
 
 Insurances on public hospitals, and on property in any for- 
 eign kingdom or state in amity vrith his majesty, are exempt- 
 ed from duty. 
 
 By the same act a higher rate of duty is imposed in re- 
 spect to insurances (made by persons not licensed pursuant 
 t6 stat. 22 Geo. 3, c. 48,) upon property in the colonie8) 
 namely, on the policy 2s. Qd., and on the sum insured 5s. per 
 
 cent. 
 *18 *And by a more recent statute of 9 Geo. 4, c. 13, it is en- 
 acted, that in every case where any insurance from loss or 
 damage by fire shall be made or renewed or continued upon 
 two or more detached buildings, or upon two or more 'build- 
 ings so separated from each other as to occasion a plurality 
 of risks ; or upon any goods, wares or merchandize, or other 
 moveable property contained in two or more such buildings as 
 above described, or lying or being hi two or more places ao 
 separated from each other as to occasion a plurality of risks, 
 (except the implements and stock upon any one farm,) then, 
 and in any of the cases aforesaid, every such separate build 
 ing shall be separately valued, and a distinct and separate 
 sum shall be insured upon the goods, wares, merchandize, or 
 other moveable property contained in every such separate 
 building, or lying or being in every such separate place ; and 
 it shall not be lawful to insure one gross sum upon two or 
 more of such separate subjects or parcels of risk as aforesaid 
 taken collectively. S. 1. 
 
 If any policy shall be granted, or renewed, or continued, 
 whereby any insurance from loss or damage by fire shall be 
 
 (a) See Scliedule of the Act, pi. I. 
 
 8 
 
58 LAW OF FIRE INSURANCE. 
 
 made of or upon two or more such separate subjects or parcels 
 of risk as aforesaid collectively in one sum, contrary to the true 
 intent and meaning of this act, such policy shall be void and 
 of none effect ; and the person or persons, &c., by whom any 
 such policy of insurance shall be granted, (fcc, shall forfeit 
 the sum of lOOZ. S. 2. The act, however, is not to prevent the 
 insuring collectively, in one sum, any number of distinct build- 
 ings, or lying in any number of separate and distinct places, 
 provided there be in such policy the average clause. 
 
 By Stat. 3 & 4 Wm. 4, c. 23, no insurance from loss or dam- 
 age by fire made, or continued by any policy effected upon or 
 after the 24th of June, 1833, on any agricultural produce, 
 farming stock (hve or dead,) or implements in husbandry 
 19* being upon any farm, shall be liable to the yearly *per 
 centage duties or to any other stamp duty imposed in re- 
 spect of insurances from loss or damage by fire, provided such 
 insurance shall be effected by a separate and distinct policy 
 relating solely to such agricultural produce, farming stocb 
 and implements or utensils. 
 
 By s. 6, companies and persons insuring against loss by fire, 
 at the time of delivering their quarterly accounts at the Stamp 
 OfSce, shall also deliver a separate account of all insuran- 
 ces of agricultural produce, farming stock, &c., made, re- 
 newed, or continued during the quarter for which the account 
 shall be rendered, and in such account there shall be truly 
 specified the number of every policy by which such insurance 
 shall be made, &c., on default a forfeiture of lOOZ. is imposed. 
 
 In the schedule to the stat. 55 Geo. 3, c. 184, tit. Agree- 
 ment, an exemption from preceding and all other Stamp duties 
 is contained in respect of the label, slip, or memorandum, con- 
 taining the heads of insurance to be made by the corporation 
 of the Royal Exchange Assurance and London Assurance, or 
 by the corporation of the Royal Exchange Assurance of houses 
 and goods from fire, and London Assurance of houses and 
 goods from fire. 
 
 It would appear, therefore, that these memorandums are to 
 be considered as agreements, and if so, it should seem that 
 
OP THE NATURE OF THE CONTKACT. 59 
 
 they could not be given in evidence (except by the two corpor- 
 ations above mentioned, unless stamped as such,) where the 
 premium exceeds 20^. ; for by stat. 55 Geo. 3, c. 184, sched. 
 tit. Agreement, an agreement, or any minute or memorandum 
 of an agreement, made in England under hand only, or made 
 in Scotland without any clause of registration, (and not other- 
 wise charged in this schedule nor expressly exempted from all 
 stamp duties,) where the matter thereof shall be of the value 
 of 20/. or upwards, whether the same shall be only evidence 
 of a contract or obligatory upon the parties, from its being a 
 written instrument, &c., requires a 11. stamp. As it would 
 be difficult to assess the value of a contract of insurance by 
 any other standard than the amount of the premium 
 paid, it would appear that the necessity *of a stamp up- *20 
 on the memorandum depends upon the circumstance 
 whether the premiums (without duty) amount to 20Z. or not. 
 It would be too much to say that the sum insured is the value 
 of the contract, inasmuch as insurance is only an indemnity, 
 rendering the insurers liable only upon the happening of a 
 contingency. It is sufficient that an agreement have the pro- 
 per stamp at the time when it is given in evidence. 
 
 By the stat. 14 Geo. 3, c. tS, s. 83, entitled an " Act for 
 the further and better regulating of buildings and party-walls , 
 (fcc, within the Weekly Bills of Mortality," (fee, it is enacted, 
 that " it may be lawful for the directors and governors of the 
 several insurance offices, and they are hereby authorized and 
 required, upon the request of any person, (fee, interested in 
 or entitled unto any house or houses or other buildings, which 
 may hereafter be burnt dowil, demolished, or damaged by fire, 
 or upon any grounds of suspicion that the owner, (fcc, occu- 
 pier, (fcc, or any other person, &m., who shall have insured 
 such house or other building, have been guilty of fraud, or of 
 wilfully setting their house or other building on fire, to cause 
 the insui;ance money to be laid out and expended, as far as the 
 same will go, toward rebuilding, reinstating, or repairing such 
 house or houses or other buildings so burnt down, (fcc, unless 
 the party, (fcc, claiming such insurance money shall, within 
 
60 LAW OP PIRK INSURANCE. 
 
 sixty days next after his, &c., claim is adjusted, give sufficient 
 security to the governors or directors of the insurance office, 
 where such house or houses or other buildings are insured, 
 that the same insurance money shall be in that time settled 
 and disposed of to and amongst all the contending parties, 
 to the satisfaction and approbation of such governors and di- 
 rectors."(l) 
 
 . By the statute 55 Geo. 3, c. 184, sched. tit. Receipt, an ex- 
 emption is given in respect of a receipt given solely for the 
 duty on insurance against fire ; and receipts given for the pre- 
 mium and duty on such insurances are to be liable only to the 
 receipt duty in respect of the premium. If the premiums 
 therefore do not amount to 5/., no duty will be payable on the 
 receipt, 
 21* 6. *It has now become a very general practice of the 
 London firemen in order to prevent the extension of a 
 fire already in action, to pull down or blow up with gunpow- 
 der the adjoining buildings. It would be difficult to assert 
 that the common fire policy will, as regards such buildings, 
 indemnify the insured in such a case. It would be more pru- 
 
 (1) Both the American and English policies usually contain a provision giv- 
 ing the insurers the right to reinstate the property injared or destroyed, if they 
 shall so elect. But insurers have no right to rebuild except through an express 
 stipulation in the policy. Wallace v. Ins. Co. 4 Im. R. 289. Where, by the 
 terms of a policy of insurance, the insurers have a right within tventy.days 
 after proof of loss, to elect to replace the articles lost or damaged by the fire, 
 they are not entitled to file a bill for an injunction to restrain the assured from 
 removing or disposing of his goods until after the expiration of the twenty days ; 
 to enable them to take an inventory, &c., with a view to such election. N. Y, 
 Pure ins. Co. v. Delavcm, 8 Paige Chan. R. 419. After a loss under a policy 
 containing a provision that the insurers might elect to replace property des- 
 troyed within sixty days after notice, the insured, by an order on the policy, 
 directed the loss to be paid to another, and the insurers assented theretb ; Held 
 that the right of the insurers to replace, if they should so elect, was not afiected 
 by the order, and assent— TV^TRanT.Jfanu/actoner'f/TU. Co.,1 CuMng R.p.'IZ, 
 
OF THE NATURE OF THE CONTRACT. 61 
 
 dent to introduce an express stlpuktion.(l) In the proposals 
 of a recently ond well constituted office explosion is expressly 
 excepted from indemnity. 
 
 (1) But see City Fire Ins. Co. v. Corlies, 21 Wend. 3G7, where it was held 
 that the destruction of property insured by the blowing up of a building with 
 powder under the direction of the Chief Magistrate of a City, to prevent the 
 spreading of a conflagration, was a loss within a policy against fire. 
 
 The Court decide this case on the ground that a loss by the explosion of gun- 
 powder is a loss by fire, and hence it seems that the question of the necessity 
 or legality of the explosion does not affect the liability of the insurers. 
 
CHAPTER II. 
 
 OP THE INTEREST OF THE INSURED:(1) 
 
 (1) It is to be regretted that Mr. Ellis has devoted so small a portion of his 
 work to the very important subject of Insurable Interest. This subject has 
 been thoroughly considered in this country in a series of decisions, a somewhat 
 extended examinination of which, it is thought, will in some measure supply 
 the defect in the principal work. We will consider 1st. What constitutes an 
 insurable interest. 2nd. The value of such interest. 3d, The effect, a^scord- 
 ing to genera! principles, of a sale, or other alienation of the subject insured, 
 on this interest, and 4th. The construction of the veirious provisos and con- 
 dition of policies in regard to alienation. 
 
 1st. Insurance being purely a contract of indemnity, the insured can ob- 
 viously have no claim upon the insurers except in case of an actuM loss, which 
 he himself has incurred. Hence it is not sufficient in an action upon a policy to 
 show that the subject insured has been injured by a peril insured against, but 
 proof -is also required that the insured had an interest therein, which has been 
 affected by the injury. An interest of some sort being therefore necessary, it 
 becomes an important question what is an interest sufficient to support a pol- 
 icy, or in other words, what is an Inswrable Interest ? 
 
 It may be here remarked that there is no difference between marine and fire 
 policies in regard to the interest required to support them ; the distinction be- 
 tween these two branches of insurance consisting merely in the risk assumed, 
 and the mode of settling loss. De Forest v. Fulton Ins. Co., I Hall IV2. Lord 
 Eldon has defined an insurable interest to be " a right in the property, or a right 
 derivable out of some contract about the property, which in either case may be 
 lost upon some contingency affecting the possession or enjoyment of the party.'' 
 iMcena v. Crawford, 5 Bos. <f> Pul. 321. It will therefore be seen that it is 
 not necessary that the interest should amount to the legal ownership. An equita' 
 
OF THE INTEREST OP THE INSURED. 63 
 
 ble interest is equally insurable— Ste/i v Vt. Mid. F%re Ins. Co. 18 Vt. 305 ; and 
 even inchoate interests arising from executory contracts of sale, and expectancies 
 founded on subsisting titles, like profits and freight, have been frequently held 
 insurable interests — CohimMa Ins. Co. v. Lawrence 2 Peters 151 ; McCfivney v. 
 Fire Ins. Co., 1 Wend. 85 ; ^tna Fire Ins. Co. v. T)/ler 13 Wend. 507 ; 16 id. 
 385 J Hancox v. Fishing Ins. Co., 3 Sumner 132. All that seems to be neces- 
 sary to establish an insurable interest is to show such a connection between the 
 subject matter of the contract, and the party insured, as may be sufficient for the 
 purpose of deducing the existence of a loss to him from the occurrence of an injii. 
 ry to ifc Am. Leading cases Vol. 2 p. 394. Therefore it has been held that a mort- 
 gagor of property retains an insurable interest therein, so long as his right of re- 
 demption continues. Strong v. Manufacturers Ins. Co., 10 Pick. 40 ; Traders' 
 Ins Co. V. Robert, 9 Wend. 404. But a sede of the property by a Master in 
 Chancery under a decree of foreclosure, will terminate the interest of the mort- 
 gagor, although the decree may not have been enrolled, and no deed executed by 
 the Master. McLaren v. Hartford Ins. Co., 1 Selden 151. 
 
 But the mortgagor's insurable interest will not be affected by the fact that the 
 mortgage equals or exceeds the value of the property. Gordon v. Mass. F. tf- M. 
 Ins. Co., 2 Fick. 249. 
 
 Mr. Phillips is of the opinion that the owner of a vessel, which he has sub- 
 jected to a bottomry lien for more than its vfJue, has no insurable interest in 
 her, because if the vessel is lost, the debt is cancelled" 1 PMBips Ins. nS. But 
 inasmuch as in the absence of any specific clause to a contrary effect, the debt re- 
 mains entirely undischarged, if the vessel is saved, though in a damaged con- 
 dition, it seems that the borrower has an interest in being protected from all 
 losses, the occurrence of which will not cancel the debt. > The case of Smith v. 
 WiUiams 2 Caines 13 and 110, cited by Mr. Philips in support of the above doc- 
 trine, hardly sustains it, because there the bottomry bond had been given by a 
 former owner, and it did not appear that the insured was personally liable for 
 its payment, and therefore that case goes no farther than to decide that a pur- 
 chaser of property, already subject to a lien or mortgage for a debt exceeding its 
 value, has no insurable interest therein, unless he has assumed the payment of 
 the debt The learned author of the note on Insurable Interest in Am. Lead. 
 Cases, Vol.2, p. 405, seems to think the case of Borden v, Hingham Mut. Ins. 
 Co., 18 Pick. 523, opposed to that of Smith v. Williams. But the cases do not 
 conflict, because the facts in them are not analogous. In Smith v, Williams, 
 the vessel was bottomried for more than its value, while in the other case, the 
 mortgage subject to which the premises insured had been purchased, did not 
 exceed their value, or rather it covered a quantity of land in addition to the 
 buildings, and the buildings and land together were worth much more than the 
 
64 LAW OF FIRE INSURANCE. 
 
 amount of the mortgage. Therefore, the purchaser plainly had an insurable in- 
 terest in tlic buildings, and though; in point of foot, it did not equal in value 
 the amount insured, still, the policy being a vahied one, the Court held, in ac- 
 cordance with a principle that ■will be noticed hereafter, that in the absence of 
 .fraud, the valuation was conclusive, and the insurers were liable for the amount 
 insured. 
 
 It seems that a mortgagor of property to secure a debt due from him will con- 
 tinue to have an insurable interest therein, even after he has sold the property 
 subject to the mortgage. WUson v. HiU, 3 Metcalfe 66. Any injury to the 
 mortgaged estate will necessaril) diminish its value as a security for the m(»t- 
 gage debt, and thus tend to throw the personal responsibility upon the mort- 
 gagor- . 
 
 Where one makes an assignment of his property for the benefit of creditoiE, 
 he continues to have em insurable interest in the property assigned, unlesB it is 
 made a condition of the assignment, that all the debts shall be releeised, and 
 even then, if it can be shown that there is or probably will be a surplus remain- 
 ing after paying all the debts. Lazarus v. CommoriweaUh Ins, Co., 5 Pick. 76 ; 
 S. C. 19 U. 81. 
 
 But the insurable interest in property mortgaged or subject to a lien is not 
 confined to the person who has so encumbered it, but the mortgagee, or he, for 
 for whose benefit the lien exists, has an interest equally insurable. Traders' Int. 
 Co. V, Robert, 9 Wend. 404; Carpenter v. Providence Wash. Ins. Co., 16 Peters 
 495. Therefore a lender in Bottomry and Respondentia, a creditor having a 
 lien on property by a judgment or otherwise, a consignee, factor, agent, com- 
 mission-merchant, or carrier, all have ein insurable interest in property to the 
 amount of their liens upon it. Mickles v. Rochester City Bank 11 Paige Chan, 
 lis r Welles V. Phil. Ins. Co., 9 Serg. <f- R. 103; Parks v. General Int. Int. 
 Co., 5 Pick. 33; De Forest v. Fulton Ins. Co., 1 Hall 84; Putnam v. Mercan- 
 tile Marine Ins. Co., 5 Metcalfe 386. 
 
 But no insurable interest will exist uutil everything has been done which i« 
 necessary to give the lien legal effect and validity. Ship Packet, 3 Mason 255; 
 Seamans v. Laring, 1 Mason 127. The vendee of property under an executory • 
 contract of sale has an insurable interest, though he has paid no part of the con- 
 sideration, nor even obtained actual or constructive possession of it. The test 
 of his interest, if he has expended nothing upon the property, is his liability, to 
 the vendor. If the destruction or injury of the property will not cancel or di- 
 minish this liability, his interest is insurable. Neither will his interest be af- 
 fected by his failure to do some act, upon the performance of which tlie obliga- 
 tion of the vendor depends, because notwithstanding this breach of the contract 
 by the vendee, the vendor may not choose to take advantage of it, and may 
 
OP THE INTEREST OF THE INSURED. 65 
 
 still compel the vendee to receive the property, and comply with the remain- 
 ing terms of the purchase — Sparks v. Marshall, 2 Bing. N. C. 761 ; Kenny v. 
 Clarkson, 1 Johns. 385 ; Rider v. Ocean Ins. Co., 20 Pick. 259 ; McGivney v. 
 Pire Ins. Co., 1 Wend. 85 ; .^Ina Fire 7ni. Co. v. T^ler, 12 Wend. 507; S. C. 
 16 id. 385 ; OdumMa Ins. Co. v. Lawrence, 2 Peters 25. But the contract must 
 be a valid one, and made according to law, or an insurance will not be sustained. 
 Slockdale v. Dnnlof, 6 Mecs. tf- W. 224 ; Warder v. Horton, 4 Binney 529. 
 When one is so connected with property ,either by contract or by a rule of law, 
 that he is liable to indemnify the owner in case of its destruction or damage by 
 certain perils he acquires an insurable interest therein. 
 
 Such is the interest of a carrier, wharfinger, or other bailee. Crowley v. Cohen, 
 Z B.i^ Ad. 478; Waiker v. Maitland, bid. 171. Also that of an agent, or other 
 person who has teiken the property of another at his own risk, or agreed to get it 
 insured for the benefit of the owner, and who will be liable for any loss if he fail 
 to do so. Reed-ir. Cole, 3 Burr. 1512; Olive v. Green, 3 Mass. 133; Barttetty. 
 Walter, 13 id. 267; Barr v. Gibson,, 5 Mses «f- W. 390. Under this class of 
 interests comes also that of an insurer, which supports and renders valid a con- 
 tract of re-insurance for his benefit. N. Y. Bowery Fire Ins. Co. v. If. Y. Pire 
 Ins. Co., 17 Wend. 359. 
 
 A Railway Company has an insurable interest in buildings along the line of 
 its road, which are liabl^ to be burned by sparks from the locomotives, and for 
 which injury the company would be obliged to indemnify, unless they had taken 
 every reasonable precaution against it. Statutes have been passed in several 
 States of the Union making such interests insurable, but there appears to be no 
 reason why they are not so by the Common Law. See Railroad Laws of Maine, 
 Kew Hampshire, Vermont, and Massachusetts. 
 
 One having an insurable interest in property may also insure the prospective 
 earnings or profits likely to grow out of that property. Of this nature is the fre- 
 quent case of insurance on freight. It is necessary, however, that such interest 
 should be insured specifically as such. Aibott v. Sehor, 3 Johns Cos. 39 ; Bar- 
 clay V. Cousins,^ Bast 544 ; French v. Hope Ins. Co., 16 Pick. 397; Wright y. 
 Pole, 1 Ad. <f- El. 621 ; Niblov. North Am. Ins. Co., 1 Sandf. 551. 
 
 Mr. ElUs cites Lord Chancellor Hard wick in support of the proposition that 
 a fire policy can be made only on an interest subsisting at the time. 
 
 Policies against fire, being usually on time, are seldom made in anticipation of 
 interest, because part of the premium would be thus thrown away, but still there 
 seems to be no reason why a future interest cannot be protected by a fire policy, 
 as well as by one against the perils of the sea, 1 Phillips on Ins. 118. 
 
 An important requisite of an insurable interest is its legality. If it is illegal, 
 it will not be insurable. The general principle in regard to the illegality of the 
 
 9 
 
66 LAW OF FIRE INSURANCE. 
 
 interest is well stated by Mr. Phillips to be, " that if a contract be intended to 
 indemnify the owner from loss on property by reason of its being implicated in 
 an illegal trade, or applied to an illegal use, or which according to the laws ot 
 the country where the contract is made, it is criminal for the owner to hold, 
 sDch contract is void ; and accordingly the owner has no insurable interest." 1 
 Phillips 'ins, 133. 
 
 This principle is frequently applied to Marine insurance in cases of polibies 
 on cargoes of contraband goods, or on ships sailing in violation of an embargo, 
 &c., and though no cases are reported of its application to fire insurance, there 
 seems to be no reason why it does not govern that branch of the subject, as well 
 as the other. It is forcibly remarked by Mr. Duer, that " that there can be no 
 more direct encouragement to the violation of a law than a contract that secures 
 an indemnity to the transgressor." 1 Duer's Ins. 315. Therefore it may 
 well be questioned whether in such States, as have enacted very stringent pro- 
 hibitory laws in regard to the sale of intoxicating drinks, as Maine, Vermont, 
 Massachusetts, and others, an insurance upon a stock of liquor's, held in contra- 
 vention of such a law, would not- be invalid In Marine Insurance, if the trade 
 be illegal, it defeats the policy on the ship as well as that on the cargo. Gray 
 V. Sims et al., 3 Wash. C. C. R. 276 ; but it is doubtful whether an illegsd trade 
 on land would vitiate the insurance upon the building in which it is carried on, 
 particularly when the owner of the building is not the person engaged in the 
 prohibited traffic. 
 
 2d. Tke vakte of an insurable interest, or the anumnt which the insurers are 
 liable to pay in case of the destruction of the property insured. 
 
 The valv£ of an insurable interest is the amount of loss which the insured 
 may sustain by the destruction of the property. This will, of course, vary with 
 di6Ferent interests. 
 
 A mortgagor may generally insure and recover to the full value of the pro- 
 perty. Gordon v. Mass. F. <f M. Ins. Co., 2 Pick. 249; Strong v. Manufac- 
 turers' Ins. Co., 10 Pick. 40. 
 
 But the interest of a mortgagee, pledgee, or any one having a lien upon pro- 
 perty is limited to the amount of his lien. Carpenter v. Providence Washing- 
 ton Ins. Co., 16 Peters 495 ; Park v. General Interest Ins. Co., 5 Pick. 33. 
 
 But it has been held in New York that a consignee or commission merchant, 
 in possession of goods with a power to sell the same, may insure them against 
 fire in his own name to their full value. De Forest v. Pulton Fire Ins. Co., 1 
 Ball 84. The Court in this case lay stress upon the fact that the insured was 
 something more than a bare consignee, and because he is intrusted with a pow- 
 er to sell, they put his interest upon the same ground as that of a trustee, and 
 whatever amount he may recover from the insurers in case of loss, he will hold 
 
OF THE NATURE OF THE INSARED. 67 
 
 in trust for his consignors. This case has been recognized as authority in Ken- 
 tucky in the recent case of Jackson v. ^tna Ins, Co., reported in Am. Law Reg. 
 Apr. No. 1854 p. 374. 
 
 The vendee of property under an executory contract of sale has an insurable 
 interest to its full vedue, provided the destruction or injury of the property would 
 not affect his liability to the vendor. If he has paid the purchase money, or 
 expended anything upon the subject insured, he has a direct insurable interest 
 in the nature of an equiiable ownership, without regard to his liabiUty to the 
 vendor, and if he has not, he may still be obliged to pay the price and redeive 
 the property, notwithstanding any diminution of its value, and he is conse- 
 quently materially interested in its preservation. JEtna Fire Ins. Co. -v. Tyler, 
 12 Wend. 507; S C, 16 id. 385 ; Columbian Ins. Co. v. Lawrence, 2 Peters 25. 
 The vendor also, as long as he retedns the legal tide, has an insurable interest 
 to the amount of the sum remaining due upon the contract, for though he has 
 the right to compel the purchaser to pay for the property, notwithstanding its 
 destruction by fire before the execution of the contract, still he may be unable 
 to do so by reason of the insolvency of the vendee, or from some other cause, 
 in which case the property is his only security, and any injury to it will be 
 a loss to him. Mima Fire Ins. Co. v. Tyler, 16 Wend. 385. 
 
 The interest of a vendor, mortgagor, &o., is so entirely distinct from that of 
 the vendee or mortgagee, that the simultaneous existence of two policies on the 
 same property, one affected by the former, and the other by the latter*, will not 
 amount to a double insurance. Mtna Fire Ins. Co. v. Tyler 13 Wend. 507 ; 
 S. C.,16 id. 385. 
 
 A Bailee of property, who is liable to the owner in case of its loss, has an in- 
 surable interest therein to the full extent of its value. Crowley v. Cohen, Z B. <f- 
 Ad. 478; and the value of the insurable interest of an insurer of property is the 
 amount he has at risk upon it. Olive v. Green, 3 Mass. 133 ; Bartlett v. Wal- 
 ter, 13 U.2eT; N. Y. Bowery Fire Ins. Co. v. N. Y. Fire Ins. Co., 17 Wend. 
 359 ; and the amount of the reinsurer's liability to the reassured is the sum 
 which the latter is legally liable to pdy the origined insured, and is not subject 
 to be reduced by the insolvency of the reassured, and his consequent inability to 
 pay to the original insured the full amount, for which he is liable. 1 Marshall 
 on Ins. 143 ; Hone v. Mut. Safety Ins. Co., 1 Sanford Rep. Sup. Ct. of City of 
 N. Y. 137; Hsrckenrath v. Am. Mut. Ins. Co., 3 Barbour's Chan.R [N. Y.) 63. 
 
 In the case of insurance upon expectancies founded on a subsisting title, like 
 freight or profits, it is so difficult to estabUsh by positive proof the exact £unount 
 of loss, that it has become the almost universal custom to issue what are called 
 
68 LAW OP FIRE mSCRANCE. 
 
 Policies are either open or valued. " A policy is open, which contains no 
 declaration of the amount of the interest of the assured, and which consequently 
 casts upon him the burden of proof, when he claims an indemnity. A policy is 
 valued, when the parties, having agreed upon the value of the interest insured, 
 in order to save the necessity of further proof, have inserted the valuation in 
 the policy in the nature of liquidated damages.'' 1 Dv4ir on Ins. p. 97. 
 
 Fire policies are most commonly of the former cletss. Still it is sometimes 
 found convenient to issue valued policies against fire. This is particularly the 
 case with insurances on profits and expectancies, and also in policies issued by 
 such Mutual Insurance Companies, as are by their charters prohibited fi-om in- 
 insuring property beyond a certain fraction of its veilue, usually two thirds or 
 three fourths. 
 
 The principles governing valued policies are the same in Fire, as in Marine 
 Insurance. In the absence of fraud, the valuation is conclusive on both parties, 
 and neither CEin introduce evidence to show that it differs from the amount 
 really at risk. The application of this principle to valued policies in Marine 
 Insurance is fully recognized by Lord Mansfield in Lewis v. Rocker, 2 Burr 
 1171, and Da Costa v. Frith 4 id. 1969, and by Judge Story in Alsop. v. Coot- 
 mercial Ins. Co , 1 Sumner 451, and by the Courts generally in many cases, 
 both in this country and in England. The same rule has been applied to val- 
 .ued policies against fire in Harris v. KagU Fire Ins. Co , 5 Johns 368 ; Borden 
 V. Hingham Mat. Fire Ins. Co., 18 Pick. 523 ; FiMer v. Boston MiU. Fire Ins. 
 Co., i Metcalfe S.06; Holmes V. Charlestoim Mat. Fire Ins. Co., 10 Metcalfe 211. 
 In the last case the valuation was made in the application for insurance, and 
 not in the policy itself, neither does it appear from the report of the case, though 
 most probably it was so in fact, that the application was referred to in the pol- 
 icy, and made a part thereof. The Court, however, held that a valuation was 
 as conclusive upon the insured as the insurers, and that in this case it was bind- 
 ing upon the former, though contained only in the application. But it will not 
 do to assume as a general rule on the authority of this case, that the insurer, in 
 a policy, open on its face, will be concluded, or in any wise affected by a valua- 
 tion which the insured may have -set upon the property in his application. The 
 estimate, which the insured has made of the property must be accepted by the 
 insurer, either in express terms in the policy, or by making the application a 
 partthereof, or by some clause therein recognizing the necessity of a valuation, 
 as in the case under consideration, before it will bind the insurer. It may be 
 proper that the insured should be estopped from denying the truth of a valuation, 
 which hf himself has made in his application, but it is different with the insur- 
 er, unless he has accepted it, or made it a part of the contract 
 
OP THE INTEREST OP THE INSURED. 69 
 
 The insurer may ho-wever avoid the binding force of a valuation by insert- 
 ing a clause in the policy that he shall not be precluded from having a fair es- 
 timate made of the property in case of loss. — Post v. Hampden Mut. Fire Ins. 
 Co., 12 Metcalfe 555. With the same object in view, some Insurance Compa- 
 nies provide in their poUcies that the losses shall be " estimated according to the 
 true and actual value of the property at the time the same shall happen," while 
 others go still feirther, and insert a clause, that an over valuation shall render 
 the policy absolutely void. See forms of Vt, Mut. Fire Ins.Co., and of the Ins. 
 Cos. of Hartford Conn. 
 
 3rd. The effect, according to the general principles of insurance, of a sale or 
 other alienation of the property insured upon the insurable interest therein. 
 
 It is plain that there must be a subsisting interest at the time of the loss, or 
 the insured cannot recover, but it is not necessary, unless there is some specific 
 provision in the policy to that effect, that the interest should be the same, either 
 in quantity or nature, at the time of the loss as wlien the contract is made. 
 
 Then fore, though the interest of the insured is changed from an absolute 
 to a qualified or contingent ownership, or from a legal to an equitable interest, 
 he may still recover, in case he suffers any loss, if his remaining interest is not 
 one which the policy requires to be specifically i described. This doctrine has 
 been applied to the case where the interest of the insured has, after the execu- 
 tion of the policy, been changed from the absolute ownership to that of mort- 
 gagor, in Gordon v. Mass. P. <f- M. Ins. Co., 2 Pick. 249, and Jackson v. Mass. 
 Mut. Pirellis. Co., 23 Pitt. 418; and to that of assignor for the benefit of cred- 
 itors in Lazarus v. Commonwealth Ins. Co , 5 Pick. Tti; S. C, 19 id. HI. See also 
 Stetson V. Mass. Mat. Pirn Ins. Co., 4 Mass. 330, and yElna Pire Ins. Co. v Til- 
 ler, 16 Wend. 397. The case of Reed v. Cole, 3 Burrow 1512 goes farther than 
 the other cases here cited, but is no different in principle. Ir. that case, where 
 one sold a ship on which he had effected an insurance, but agreed with the pur- 
 chaser, that in case ol' her loss he would pay him five hundred pounds, it was 
 held that he still possessed an insurable interest to that amount, for an injury to 
 which he might recover under the policy effected by him before the sale. 
 
 But if the insured makes a conveyance absolute on its face, he will not be 
 permitted to prove, in order to preserve his claim upon the insurers, that it was 
 intended to be conditional, and that he therefore retained an interest, when this 
 will show an attempt on his part to conceal his property fraudulently from his 
 creditors. Carroll v. Hoslon Marine Ins. Co., 8 Mass. 515; Dadmun Manufac- 
 turing Co. V. Worcestir Mut. Pire Ins. Co., 11 Metcalje 429. 
 
 An absolute sale of property, so that the insured retains no interest, and is 
 
 uninjured by its destruction, will of course prevent any recovery of his part upon 
 
 the policy. And a conveyance ofpart ofthe property will bar arecovery^ro tamto. 
 
 Therefore, in the case of two joint owners or tenants in common, a convey- 
 
70 LAW OF FIRE INSURANCE. 
 
 ance from one of them to a stranger, or to the other, will discharge the insur- 
 ers from liability in regard to the share so conveyed. But there seems to be 
 no good reason in the absence of a clause prohibiting any alienation or transfer 
 of the subject insured, why there may not be a recovery in the names of both 
 the insured for the share not conveyed. The case of Howard at aZ. v. AHe/m/ 
 Ins. Co., 3 Denio 301 , is in point, and Bronson C. J. there asserted with great 
 force the doctrine here stated, but was overruled by ihe majority of the court, 
 who held that the want of a joint interest in thePlffs. at the time of the loss pre- 
 vented a recovery in their names. It is extremely difficult to reconcile the de- 
 cision of the majority of the Court in this case, with the general principles of 
 insurance, on which it must of course depend, as there was no special clause in 
 the policy providing for its avoidance in case of the alienation of the subject in- 
 sured. The cases of Murdock et al. v. Chenamgo Co., Mat. Ins. Co., 2 Cormtock 
 210, and T'dlov, v. Kingston Mid. Ins, Co., 1 Selden 403, though they may at 
 lirst seem to support this case, are really not analagous, because in the former 
 the Statute required the action to be brought in the name of the assignee, on 
 which ground rests the decision of the court that twojointowners who were the 
 original insured, and one of whom had sold his share to the other, could not 
 sue in their joint names, and in the case of TiUou v. Kingston Mut. Ins. Co., 
 there was an express condition in the contract avoiding the policy in case of 
 alienation. 
 
 A subsisting interest at the time of the loss being, as we have seen, the main 
 test of the right of the insured to recover on the policy, it seems that a sale, and 
 s ubsequent repurchase of the property before loss, will not, on general principles, 
 affect his claim Intermediate injuries to the property will, of course, not be pro- 
 tected, because they are not losses to the party insured, but it is otherwise with 
 injuries after a repurchase, and it seems that they properly come within the 
 scope of a contract of insurance, the spirit of which is to secure indemnity to 
 the assured. 
 
 The risk is merely suspended by the alienation, and is revived by the re- 
 purchase — Lane v. Maine Mat. Fire Ins. Co., 3 Fairfield 44 ; Fewer v. Ocean 
 Ins. Co., 19 La. R. 28. 
 
 Instances are frequent of the suspension of risks by reason of the unseawor- 
 thiness, or hazardous use of the property insured, and their subsequent revival 
 by the restoration of the navigability of the vessel, or the cessation of the haz- 
 ardous use of the premises, and there appears to be no reason why, if the insur- 
 ers are not thereby prej udiced, a similar suspension may not take place on ac- 
 count of the temporary want of an insurable interest— See 1 Phillips Ins. p. 63 
 and 2 Am. Lead. Cos. p. 434. 
 
OF THE INTEREST OP THE INSURED. 71 
 
 4th. The consiraction of the various provisos and conditums %suaUy in- 
 serted in policies in regard to alienation. 
 
 The principles founded on the general nature of the contract of insurance, 
 ani particularly those governing the questions of insurable interest and aliena- 
 tion and which support the numerous cases already cited, which hold that the 
 interest may survive em assignment of the property, are much too liberal to the 
 insured to be very satisfactory to the various incorporated companies, which in 
 this country conduct the whole business of fire insurance. They have, there- 
 fore, almost without an exception, now introduced into their various forms of 
 policies clauses, which impose restrictions upon the insured, that do not natural- 
 ly result from the contract of insurance in its broadest sense but which are made , 
 in express terms, conditions on which the validity of the policy depends, dues- 
 tions are continually arising in regard to the construction of these conditions 
 and provisos, and indeed the greater part of the later decisions in fire insur- 
 ance have turned upon the construction of some peculiar phrase in the particu- 
 lar policy upon which the suit was based. The Courts have generally agreed 
 in construing such clauses strictly, as they tend to narrow the rights of the in- 
 sured, and deprive him in a great measure of that substantial protection from 
 loss which is the grand object of the contract of insurance, and which so much 
 encourages industry and enterprise. The usual clause in regard to the interest 
 of the insured is, that the policy shall be rendered void, '' by any sale, transfer, 
 alienation or change of title in the property insured," or other words to that ef- 
 fect. 
 
 A valid and binding agreement to convey the insured premises is not an al- 
 ienation undet' this clause, so long as the assured remains in possession, and 
 the contract is not performed. Trumbull v. Portage M. F. Ins. Co., 12 Ohio 
 R. 305. 
 
 A mortgage is not considered an alienation within a clause providing for the 
 avoidance of the policy in case " the property insured shall be alienated by 
 sale or otherwise." Jackson v. Mass .Mid. Fire Ins. Co., 23 Pick. 418 ; Conover 
 V. Mid. Ins Co. of AXbatvy, 3 Denio 254. But a sale of the premises with 
 a mortgage taken back immediately to secure the payment of the purchase 
 money, thus changing the interest of the insured from that of a mortgagor to that 
 of a mortgagee, which,we have seen above,would not invalidate a policy without 
 an express provision to that effect, was held in TUtemore v. VI. Mat Fire Ins. 
 Co., 20 Vt. 546 to be an alienation within this clause. In this case, however, 
 where the insured deeded the premises, and at the same time took a re-convey- 
 ance conditioned upon the payment of a stipulated sum to him within three 
 years, and that he should remain in possession in the mean while, and it appear- 
 ed that there was no obligation upon the grantee in the first deed to pay the 
 sum mentioned, the Court held that the two conveyances were to be regarded 
 
72 LAW OF FIRE INSURANCE. 
 
 The party insuring must have an interest in the property in 
 Bured to a entitle him to recover. To permit the existence of 
 wager policies upon such a subject as insurance against fire 
 would be a pernicious principle, as it would necessarily lead to 
 the commission of those nefarious practices which it is one of 
 the objects of legitimate insuranceagainst fire to prevent. 
 Thus, even before the passing of the stat. 14 Geo. 3, Lord 
 Chancellor King, in the case of Lynch v. Dalzell, (a) said, 
 in a case where a policy upon a house and goods had been as- 
 signed after the fire happened, " the party insured must have 
 a property at the time of the loss or he can sustain no loss, 
 and consequently can be entitled to no satisfaction." Again, 
 in a case somewhat similar, and which will hereafter be more 
 particularly noticed, (6) Lord Chancellor Hardwicke said, " I 
 am of opinon that it is necessary that the party insured should 
 have an interest or property at the time of injuring and at 
 the time the fire happens. It has been said for the plaintiflFs,'' 
 observed his lordship, " that it is the nature of a wager laid 
 by the insurance company, and that it does not signify to whom 
 they pay if lost. Now these insurances from fire have been 
 introduced in later times, and threfore differ from insurance 
 on ships, because there interest or no interest is almost con- 
 stantly inserted, and if not inserted you cannot recover unless 
 
 (b) 4 Bro. p. C. 431. ed. Toml. 
 
 (J) The Saddlers' Comp. v. Badcock and others, 2 Atk. 554 
 
 as but one instrument, that they amounted merely to a conditional sale, and did 
 not constitute an alienation within the clause. 
 
 Assignments in bankruptcy, or for the benefit of creditors, have been held alie- 
 nations within this clause. Dadmwn Manvfactaring Co. v. Worcester Mvi. 
 Fire Ins. Co., 11 Metcalfe 429; Moore v. Protection Ins. Co., 39 Maine 97.— 
 But a policy is not forfeited under this condition by a compulsory sale on exe- 
 cution, provided the assured retains a right to redeem the property by paying 
 the debt. Strong v. Marmfactmrers' Ins. Co., 10 Pick. 40; Clark v. N. E. Mut. 
 Fire Ins. Co,, 6 Cushing 342. 
 
 See also on the general subject of conditions in policies, restrictive of aliena- 
 tions. Lane v. Maine Mid. Pre Ins. Co., 3 Fairffeld 4A ; Abbott v. Hampien 
 Mat. Ins. Co., 17 Skepley 414; Power v. Ocean Ins Co., 19 La. K. 28 ; Mc- 
 Laren V. Hartford Im, Co., I Selden 151 ; Clark t iV. E. Mat. Fire Ins. Co., 
 6 Cashing 34:2, 
 
OP THE INTEREST OP THE INSURED. 73 
 
 you prove a property." His lordship afterwards proceeds 
 thus, " to whom or for what loss are they (the offices) to make 
 
 satisfaction 1 Why to the person insured and for the 
 23* loss he may have sustained, for it cannot *properly be 
 
 called insuring the thing, for there is no possibility of 
 doing it, and therefore must mean insuring the person from 
 damage." 
 
 The stat. 14 Geo. 3, c. 48, although by its title it appears to 
 relate only to insurance upon lives, embraces in its preamble 
 and enactments all kinds of insurance except marine insur- 
 ances. It recites, " that the making insurances on lives or other 
 events, wherein the insured shall have no interest, hath intro- 
 duced a mischievous kind of gaming ;" and then enacts, " that 
 no insurance shall be made by any person or persons, bodies 
 politic or corporate, on the life or lives of any person or per- 
 sons, or on any other event or events whatsoever, wherein the 
 person for whose use and benefit, or on whose account such 
 policy or policies shall be made, shall have no interest, or by 
 way of gaming or wagering ; and that every insurance made 
 contrary to the true intent and meaning hereof shall be null 
 and void ;" S. 1. " And in all cases, where the insured hath 
 interest in such life or lives, event or events, no greater sum 
 shall be recovered or received from the insurer or insurers 
 than the amount or value of the interest of the insured on such 
 life or lives, or other event or events." S. 3. 
 
 It appears, however, that the insured need not have an abso- 
 lute and unqualified or immediate interest in the property insur- 
 ed. Thus a trustee, a mortgagee, a reversioner, a factor or agent 
 of goods to be sold by commission, and probably a pawneei 
 depository, or common carrier, may legally insure their re- 
 spective interests, subject to the rules of the different oflBces, 
 by most of which the nature of the property insured is to be 
 specified :(a) and it may be observed in general, that although 
 the stat. 14 Geo. 3, c. 48, has a tendency to throw considera- 
 ble difficulties in the way of recovering upon a loss both on 
 fire and life policies, by putting the claimant to the proof of his 
 
 (a) 2 Marsh. 789 ; aqd eee Tborogood v. Manb, 1 Gow, 108. 
 10 
 
74 LAW OF FIRE INSURANCE. 
 
 interest, in order to entitle him to recover, the offices in gen- 
 eral, from a sense of liberality and the good faith due to 
 24* the *public, seldom avail themselves of this objection 
 when the claim is even tolerably fair and honest. In 
 fact, such would be the difficulty of ascertaining the precise 
 quantum of interest in many cases, in order to comply with 
 the third section of the act, that this clause would, if insisted 
 on, materially affect the whole system of fire and life insur- 
 ance, by making the sum to be paid upon the event happening 
 a constant subject of doubt and litigation. 
 
 It is made a. condition with most offices, that persons insur- 
 ing property should give notice of any other insurance made 
 elsewhere on the same property, on their behalf, and cause a 
 minute or memorandum of such or other insurance to be in- 
 dorsed on their policies ; and in this case the company is only 
 to be liable to the payment of a rateable proportion of any 
 loss or damage which may be sustained, and unless such notice 
 be given, the insured are not to be entitled to any benefit un- 
 der the policy. 
 
 According to the general principles of insurance, whenever 
 the risk to be run is entire, there is no return of premium, 
 though the contract should cease and determine the next day 
 after its commencement. This rule applies to insurances 
 against fire, which generally are made for one entire and con- 
 nected portion of time, which cannot be severed ; and there- 
 fore if the property insured should be destroyed by fire, aris- 
 ing from the act of a foreign enemy, the very day after the 
 commencement of the policy, though the underwriters would 
 be discharged, yet there can be no apportionment or return of 
 premium.(a) 
 
 Even if the insured have no interest, yet it would appear 
 that he can not recover back the premium after taking the 
 chance of a loss, and of obtaining from the generosity of the 
 sum insured.(6) (1) 
 
 (a) Parke, c. 23 ; 2 Marsh. 652. 
 (i) Lowry v. Bourdieu, Dougl. 468. 
 
 (1) The general rule is that if the risk be entire, and the policy has attached 
 even for a day, there shall be no return of premium, but if the risk has never 
 
OF THE NATUKE OP THE INSURED. 75 
 
 begun from any cause whatever, except the fraud of the insured, the premium 
 maybe recovered. This doctrine has been apphed to Life as well as Marine 
 Insurance, and its application to the former is approved by Mr, Ellis himself, 
 (See post Law of Life Ins. Chap. 4, Art. 6,) and it is difficult to discover any 
 {bundaiion for his opinion as expressed in the text, that the same principle is 
 not equally applicable to Fire Insurance. 
 
 The case of Ltrwry v. Sourdieu, cited by Mr. Ellis in support of his position 
 was in relation to a gaming contract of insurance, known by both peu-lies to be 
 such, and where consequently they were both equally in fault, and besides, the 
 policy being a Marine one, the case lays down no rule peculiar to Fire In- 
 surance. And in that very case Lord Mansfield,C. J., aiid BuUer, J., expressed 
 the opinion that even in the case of an intentional gaming insurance, the pre- 
 mium might be recovered back, if the action were brought before the termina- 
 tion of the risk. The better opinion seems to be that in Fire, as well as in Ma- 
 rine or Life Insurance, in case of a policy without interest made by mistake, 
 or of one with interest which has been avoided so that the, insurers h^ve at no 
 time been liable upon it, in consequence of innocent misrepresentauon or con- 
 cealment, or by reason of the non-fulfillment of a condition or warranty on 
 which its validity depended, the premium should be returned, and may be re- 
 covered in an action at law. See PAiUips on Ins. Vol. 2, pp. 507, and 524 et 
 seq., and also Frost v. Saratoga Mut. Ins. Co., 5 Denio 154, where it is held 
 that a premium note is void for want of consideration, which is given for apol- 
 icj , which has never taken effect on account of a breach of warranty on the part 
 of the insured. 
 
CHAPTER III. 
 
 THE NATURE AND EXTENT OF THE RISK FOR WHICH 
 THE INSURERS UNDERTAKE. 
 
 1. Damage hy Heat in the process of manufacture with- 
 
 out Ignition. 
 
 2. Insurance of specific Articles to be construed by the 
 
 general scope of the Policy. 
 
 3. Breach of Warranty and the nature of Warranties. 
 
 4. Of Misrepresentation ofm,aterial Facts. 
 
 5. Concealment of material facts. 
 
 6. Construction of the words " Usurped Power." 
 
 7. Construction of the words " Civil Commotion." 
 
 8. Right of an Office to stand in the place of the insured 
 
 as against the Hundred. 
 
 9. Commencement and duration of the Contract. 
 
 10. Effect of Notice by an Office to determine a Contract, 
 
 except upon payment of a higher Premium,, and of 
 the 15 days allowed for paym,ent of Premiums. 
 
 11. Misdescription and occasional introduction of Fire into 
 
 a Building, or more hazardous use of Buildings 
 insured, after the policy has been effected. 
 
 The insurers, in consideration of the premium paid, usually 
 undertake to pay or make good to the insured, his executors, 
 administrators, and assigns, all such loss or damage as shall 
 
NATURE OP insurer's RISK. 77 
 
 happen by fire, (except loss or damage by fire happening by 
 any invasion, foreign enemy, civil commotion or riot, or any 
 military or usurped power whatever,) to the property specified 
 to the extent of the sum for which it is insured, but they 
 sometimes also give notice, by the indorsements of the policy 
 that they will not be answerable for loss or damage 
 *on stock of any kind occasioned by the misapplication *26 
 of fire heat under process of manufacture, or for loss or 
 damage to hay or corn, or stock of any kind, occasioned by its 
 own natural heating. It is obvious, that to indemnify the.insured 
 against ignition under either of these circumstances would be to 
 open a door to negligence and fraud, if not directly to encour- 
 age it. On the other hand, to remove any doubt in the minds 
 of the insured, though little could exist upon the terms of most 
 policies, it is sometimes expressly stated that losses occasioned 
 by fire from lightning will be made good.(l) 
 
 1. A case has occurred which shows, that, in order to re- 
 cover upon a policy against loss or damage by fire, it is not 
 sufficient to show that the property has been damaged by the 
 heat of fires usually employed in the manufacture, and increas- 
 ed by the negligence of the insured, or his servants, beyond 
 its usual intensity. 
 
 An action was brought (a) on a policy of insurance effected 
 " against all the damage which the plaintiffs should suffer by 
 fire " on their stock and utensils in their regular built sugar- 
 house, and plaintiffs averred that " their stock and utensils 
 were very much damaged by fire in the sugar-house." The 
 defendants pleaded that the stock and utensils were, through 
 the negligence and improper conduct of the plaintiffs and their 
 servants in managing the fires usually employed in the sugar- 
 house, damaged by the smoke arising from such fires, and not 
 from any other cause, and traversed the damage by fire. It 
 
 (a) Ansteu v. Drewe, 6 Taunt. 436. 
 
 (1) Injuries caused by lightning, without any combustion, are not losses with- 
 in s policy against fire; Kenniston v. Mer. Co. Mat. Ins. Co., 14 N. H. 341 ; 
 Bttbciock V. MoTUgomery Co. Mut. Jns. Co., 4 Omstock 326. 
 
78 LAW OP PIBE INSURANCE. 
 
 appeared that the building insured contained eight stories, 
 and in each story sugar, in a certain state of preparation, was 
 deposited for the purpose of being refined ; in order for refin- 
 ing, a certain degree of heat was necessary, and a chimney, 
 running up through the whole building, formed almost one 
 side of one of the stories, and by means of this chimney heat 
 was communicated to each of the stories. At the top of 
 27* the chimney, above the eight *stories, was a regulator, 
 which the plaintiff's used to shut at night, in order to 
 retain in the chimney and building all the heat they could. — 
 They shut it one night, and lighted the fires next day, and 
 they soon afterwards found the building full of smoke and 
 sparks ; and it was found that the regulator, which always 
 ought to be open when the fire was burning, was continued 
 shut down. There was much smoke, but the only injury done 
 to the sugars proceeded from heat ; nothing was on fire that 
 ought not to be on fire ; the damage was occasioned by the 
 sparks, heat, and smoke taking a wrong direction. Gibbs, C. 
 J. directed the jury, that inasmuch as the damage was occa- 
 sioned entirely by the increased heat which was produced by 
 keeping the regulator closed, it was not a loss by fire within 
 the meaning of the policy, but was occasioned by the impro- 
 per management of the regulator. The jury found a verdict 
 for the defendants. A motion was afterwards made for a new 
 trial, on the ground that the words of the policy " were damage 
 by fire," not " excess of fire," or " improper fire." If flame 
 caused the mischief, it was said, it mattered not whether the 
 fire was properly or improperly lighted, the question was, 
 whether fire occasioned the damage ? It could not be neces- 
 sary that the fire, to produce a loss within the policy, should 
 be only such fire as was communicated to some substance not 
 contained in the proper receptacle of fire. Suppose the inten- 
 sity of heat necessarily required for any process should be so 
 great that the fire made in a chimney, though confined there, 
 might ignite neighboring bodies, it might in thxt case as well 
 be said that it was not a damage by fire. Put the case of a 
 chimney on fire, there is only the usual quantity of heat be- 
 
79 
 
 low, but the miscHef is occasioned by an accumulation of soot 
 in the chimney, yet the insurers would be bound to pay any 
 loss thereby occasioned. Gibbs, C. J. — I think it is not nec- 
 essary to determine any of those extreme questions. In the 
 present case I think no loss was sustained by any of the risks 
 in the policy — the loss was occasioned by the extreme mis- 
 management by the plaintiffs of their regulator. I have 
 no reason *to alter my opinion. Dallas, J. was of the *28 
 same opinion, and the rule was refiised. 
 
 It does not appear whether the proposals of the policy in 
 this case protected the insurers from making good any loss or 
 damage occasioned by the misapplication of fire heat under 
 process of manvfacture. It probably did not, or it would 
 otherwise have been made a strong point for the defendants. 
 It may be inferred, therefore, from this case, that damage by 
 heat alone, without ignition, even where there is no express 
 provision, is not covered by the ordinary indemnity against 
 loss or damage, by fire, and a fortiori, where this provision is 
 introduced, and the misapplication of fire heat occasions igni- 
 tion, the insurers will not be liable.(l) 
 
 (1) In order to bring a loss within the protection of a fire policy, it must ap- 
 pear that fire was its proximate, or rather its efficient cause, and not merely in- 
 cidental to it. 
 
 Therefore injuries to property by removing it from fear of combustion, and 
 expenses in saving it from destruction, are not losses within the policy. Hil- 
 lier V. AUeghany Co. Mat. Ins. Co., 3 Barr 470; Welles v. Boston Ins. Co., 6 
 Piek. 182,- (but see contra Case v. Hartford Fire Ins. Co., 13 III. R. 676); but 
 as has been already stated, ceises like these would sometimes support a claim 
 upon the insurers in the nature of general average. See ante page 55, note (I). 
 
 So injuries to property, arising from the explosion of a steam boiler, are not 
 covered by a policy against fire. Millaudon v. New Orleans Ins. Co., 4 La. 
 Annual R. 15. Otherwise, however, with damage from the explosion of gun- 
 powder. Crrim V. Pkeenix Ins. Co., 13 Johns. 451 ; City Fire Ins. Co. v Cor- 
 lies, 21 Wend. 367; Waters v. Merchants' LouisviMe Ins. Co., 11 Peters 325. 
 
 This, however, supposes the explosion to be caused by fire. Q,uere. How 
 would it be if it was produced by lightning T 
 
 An insurance against fire on a building does not cover a loss arising from 
 the suspension of business while the building is repairing. Wright v. Cole 1 
 Ad. <f- El. 621 ; Niilo v. North Am. Fire Ins. Co., 1 Samd/ord 551. 
 
80 LAW OF FIRE INSURANCE. 
 
 2. The contract is to be construed according to the inten- 
 tion of the parties at the time it is entered into, and whether 
 a specific article is covered by a policy must be inferred from 
 the context and general scope of the policy.(l.) 
 
 In the case of Watchorn v. Langford, (a) which was an ac- 
 tion upon a policy of insurance against the Eagle Insurance 
 Company, the" plaintiff, a coach plater and cow-keeper, insured 
 his " stock in ' trade, household furniture, linen, wearing ap- 
 parel, and plate," against fire for one year. A fire happened 
 within the year, and consumed, amongst other things, a large 
 stock of linen drapery goods, which he had purchased a short 
 time before on speculation, and which, it was contended, were 
 protected by the policy under the denomination " linen." But 
 Lord Ellenborough was clearly of opinion, that the word in the 
 policy did not include linen drapery ; noscitur a sociis, and 
 therefore the linen being preceded by the words " household 
 furniture," and succeeded by " wearing apparel," must mean 
 household linen or apparel. 
 
 (a) 3 Campb. 422. 
 
 (1) The term '' stock in trade " when used in a policy of insurance in refer- 
 ence to the business of a mechanic, includes not only the materials used by 
 him, but also the tools, fixtures, and implements necessary for carrying on his 
 business. Moadinger v. Mechanics' Fire Ins. Co., 2 Hall 490. 
 
 A policy on " stock, household furniture and wearing apparel, in a grocery, 
 and dwelling house," has been held not to protect secreted articles of clothing, 
 no mention of such articles having been made to the insurers when they suv 
 Teyed the premises previous to issuing the policy. Clary v. Protection, Ins. Co., 
 1 WrigWs Ohio R. 227. 
 
 A policy on furniture in a dwelling house, covers articles used only occasion- 
 ally as furniture, which are at other times, stowed in the garret for want of 
 room below. Clarke v. Fireman's Ins. Co., 18 La. 431. 
 
 A policy on a ship builder's stock continued in his yjird bounded by certain 
 specified street^, covers timber lying on the sides of one of those streets, it being 
 customary in ship yards to place timber in that manner. Webb v. National 
 Fire Ins. Co., 2 Sandfard 497. 
 
 In Louisiana it has been held that the term "house" in a policy includes out- 
 buildings belonging to the house. Worhium v. Ins. Co., 3 La. 507. 
 
NATURE OP insurer's RISK. 81 
 
 8. A breach of warranty will avoid the contract. 
 The Mootrino of warranties has been a more frequent *29 
 subject of discussion in cases of marine policies, but 
 80 far as it is applicable to the subject, the doctrine of war- 
 ranties is of equal authority in cases of life and firo iiisuramo. 
 A warranty is a stipulation or agreement on the part of the 
 insured, in the nature of a condition precedent, and as appli- 
 cable to fire policies is usually of an affirmative nature, as 
 that the property insured is of the nature described in the 
 policy. 
 
 A warranty being in the nature of a condition precedent, it 
 is quite immaterial for what purpose or with what view it is 
 made ; but being once inserted in the policy it becomes a bind- 
 ing condition on the insured ; and unless he can show that it 
 has been strictly f\ilfilled, he can derive no benefit from the 
 policy. The meaning of a warranty is to preclude all question 
 whether it has been substantially complied with or not. If it 
 be affirmative, it must be literally true ; if promissory, it must 
 be strictly performed. 
 
 The breach of warranty, therefijre, consists either in the 
 falsehood of an affirmative, or the non-performance of an exec- 
 utory stipulation. In either case the policy is void, and 
 whether the thing warranted be material or not, whether the 
 breach of it proceeded from fraud, negligence, misinformation, 
 mistake of an agent, (unless the agent of the insurers,) or any 
 other cause, the consequence is the same. With respect to the 
 compliance with warranties, there is no latitude nor equity. (1) 
 
 The only question is whether the thing warranted has ta> 
 
 So a policy upon a ''bark now being built" does not apply tu apars and oth- 
 er articles made tor it and ready to be attached to it, remaining in the yard 
 flrom which tlie bark was launched, and near which it lay. Mason v. fYat^- 
 Un Ini. Co., 13 QUI <^ Johnson 468. 
 
 But a policy on an unfinished house, does not cover wood work prepared 
 for tliat house, and deposited in an adjoining one. EUmaker t. FYanklin Firt 
 Jm. Co., 6 Barr 183. 
 
 (I) The rule, whicli prevails upon sales of property, that a warranty does no 
 extend to deibots which are known to the purchaser, does not apply to warran- 
 ties contained in eontracu of insurance. JewMngs t. CAcnm^ Co, Mut, Int. 
 
 11 
 
82 LAW OF FIRE INSrRANCE. 
 
 ken place, or be true or not ? If not, the insurer is not 
 answerable for any loss, even though it did not happen incon- 
 sequence of the breach ofthevrarranty.(a) (1) 
 
 An express warranty being in the nature of a condition 
 precedent, it must appear on the face of the policy (2) ; there- 
 fore instructions in writing fpr effecting the policy, un- 
 30* less 'inserted in the instrument itself, do not amount 
 to a warranty (b), but only to a representation(3), up- 
 on which the doctrine differs, as will hereafter be seen. 
 
 (0) See hoti Mansfield's observations, Hibbert v. Pigou, 2 Park, 498 ; Mar- 
 shall on Insurance, 375. Lord Eldon's observations, Newcastle Fire Ins. Co. 
 V. Maomorran, 3 Dow. P. C. 255. 
 
 (*) Pawson D. Partievelt, Dougl. 12 n Bond v. Nutt, Cowp 606, 607. 
 
 Co., 2 Denio 75 ; Kennedy v. St. Lawrence Co Mat. Iv/S, Co , 10 Barbowr 285; 
 Vandevoortv. Colmnbian Ins. Co., 2 Caines 156; Cheriot -v. Barker 2 Johiis. 
 343; Higginson v. Dali, 13 M:iss. 96. 
 
 (1) Fowler v. vEn.a Fire Ins. Co., 6 Cowen, 673 ; S. C, 7 Wend. 270; Dim- 
 can V. SimFirelns. Co.,6 Wend. 488; Farmers' Ins. Co.y. Snyder, 16 Wend. 
 481 ; Burritt v. Saratoga Co. Mut. Fire Ins. Co., 5 Hill, 188 ; Gates v. Madison 
 Co. Mut. Ins Co., 2 Comstock, 44. 
 
 But the insurers may be estopped from setting up a breach 'of warranty, or 
 a misrepresentation on the part of the insured, as a defence to an action on the 
 policy, by having, with a full knowledge of the breach, laid assessments upon 
 the premium note of the ihsured. Frost v . Saratoga Mid. Ins. Co., 5 Denio, 
 154; aliter, if they were not aware of the breach, Allen et al. v. Vt. Mat. Fire 
 Ins. Co , 13 n 366. 
 
 (2). The stipulations and conditions printed upon the same sheet as the pol- 
 icy, and delivered with it, form a part of the policy, and are considered as ex- 
 press warranties. Duncan v. Sun Fire Ins. Co , 6 Wend. 488. 
 
 (3) A reference in the policy to the application for a further description of 
 the subject insured will not constitute the statements therein made warranties. 
 Houghton Y. Manufactmeri Ins. Co., 8 Met. 114; De Longuemare v. Trad's- 
 men's Ins. Co., 2 HaU 589 ; Stebbings v. Ghbe Ins. Co , id. 633 ; J:firson Ins. 
 Co.v. Cotheal,'! Wend.l2; Farmers' Ins. Co. w. Sti/yder, 13 id. 92; S. C.,16id. 
 481 ; BwrrUt v. Saratoga Co. Mat. Fire Ins. Co., 5 HiU 188. 
 
 But if the application is in terms mode a part of the policy, or referred to as 
 
NATURE OF INflVRER's RISK. 83 
 
 Where a slip of paper describing the state of a ship, the 
 particulars of the voyage, (fee, was wafered to a policy at the 
 time of subscribing. Lord Mansfield held that this was not a 
 warranty, or to be considered part of the policy, but only a 
 representation{a) ; and where evidence was oflFered to prove 
 that a written memorandum enclosed in the policy was always 
 among merchants considered as a part of the policy. Lord 
 Mansfield held, that whether this was or was not a part of the 
 policy, was a question of law, and therefore that such evidence 
 could not be received, and that a written paper, by being fold- 
 ed up in the policy, did not become a warranty(6). 
 
 But it is sufficient that the warranty appear upon the face 
 of the policy, although not written in the body of it. If it be 
 written in the margin, either in the usual way(c), or transverse- 
 ly(d), it being part of the written contract when signed, it 
 will be a good warranty.(l) 
 
 (a) Bize v. Fletcher, Dougl. 12, n. 
 
 (4) Pawson v. Barnevelt, Dougl. 12. 1 Marsh. 356. 
 
 (c) Bean v. Stupart, Dougl. 11. 
 
 (d) Per Lord Mansfield, in Kenyon v. Berthon, Dougl 12, n. 
 
 forming a part of the policy, the statements of the insured, which would other 
 wise be merely representoMons, are thereby converted into icarranties, and are 
 binding upon him as such. Bwrritt v. Saratoga Co Mitl. Fire Ins. Co., 5 Hill, 
 188; Jennings v. Chenango Co. Mid. Ins. Co., 2 Denio, 75; Egan v. Mid. Ins. 
 Co. of Albany, 5 Denio 326 ; Kennedy v. St. Laierence Co. Mui. Ins. Co., 10 
 Barbow285; Murdockv. Chenango Co. Mid. Ins. Co., 2 Comstock 210. 
 
 (1) Every statement upon the face of the policy, is not necessarily a warran- 
 ty. It must, in order to be a warranty, relate to the risk, and contain some- 
 thing more than 'facts incidentally expressed, or introduced by way of recital, 
 or to identify the subject insured, and not purporting on the face of the policy to 
 be stipulations." 1 Phillips Ins. 418; Wood v. Hartford Fire Ins. Co., 13 
 Corm. 533. 
 
 Thus where a policy was issued against sea-risks only on the '■ good British 
 Brig, called the John," it vias held that this description did not constitute a 
 warranty that the vessel was British, because the risk of capture being excluded 
 from the policy, the national character of the vessel could have no relation to, 
 or effect upon the risk. Mackie v. Pleasamts, 3 Binney 363 ; aad see also a die- 
 
84 LAW OF FTRE INSURANCE. 
 
 4. A misrepresentation,{l) if material, will avoid a policy, 
 A representation in insurance is in the nature of a collateral 
 
 turn of Sutherland, J., to the same effect in Francis v. Ocean Ins. Co., 6 Cow- 
 en 430. 
 
 Also where in a policy against fire, the premises insured were described as 
 occupied by a certain individual as a jirivate residence, it was held that this 
 did not amount to a warranty that that person would continue to be the occu- 
 pant during the whole duration of the risk ; and that if it was a warranty at all, 
 it was merely one that he was the occupant at the date of the policy. O'Niel v. 
 Buffalo Fire Ins. Co.. 3 Comstock 123; See also Catlin v. Springfield Fire Ins, 
 Co., 1 Sumner 434. ^ 
 
 The' Court, however, held in O'Niel v. Buffalo Fire Ins. Co , that if a fact is 
 in express terms warranted, it will be considered a warranty, and must be liter- 
 ally fiilfilled, notwithstanding its unimportance and entire disconnection from 
 the risk, but where it is otherwise, and is sought to be made a weurranty because 
 it is stated upon the face of the policy, it must relate in some degree to the 
 risk. 
 
 Mr. Arnould favors the rigid rule that every allegation in the policy amounts 
 to a warranty, and must be literally fulfilled. 1 AmcvZd Ins. p. 584, Perkins 
 Ed. 1830 ; while Mr. Phillips recognizes the distinction taken in the cases 
 above cited, but holds that it must be rigorously confined to cases where it plain- 
 ly appears that thefact alleged could not possibly, in the opinion of any man, 
 have any relation to the risk assumed. 1 PkUlips Ins. 418. But it will be pre- 
 sumed that every fact stated in the policy dies relate to the risk, until the con- 
 trary is shown, id. 
 
 A statement of information, expectation, belief or intention, in the policy, on 
 the part of the insured, is not a warrranty of the truth of which is intended, be- 
 lieved, &c, but at most a representation, or perhaps a warranty that such is 
 really the information, expectation, belief or intention of the insured at the time 
 ihe statement is made. Catlin v. Springfield Fire Ins. Co., 1 Sumner 434; 2 
 Dusr's Ins. 644; 1 PkiUips Ins. 474. 
 
 (1) There is no difference between Marine, Fire or Life Insurance in re- 
 gard to the construction of Represeniatioiis. The rule is, that so far as ihey 
 are material lo ihe risk, they must be substantially fulfilled. If the insurer has 
 relied upon them and has thereby been induced to enter into a contract which 
 he would otherwise have declined, a.iy material want of truth in them will render 
 invalid the policy based upo i them. It is not necessary that the misrepresen 
 tati .ns should be intentionally made ; they may be the result of mistake, acoi 
 dent or inadverti nee, on the part of the insured, and still be binding upon hin 
 
NATURE OP INSOREr's RISK. 85 
 
 contract, either by writing not inserted in the policy, or by 
 parol, and is a communication of facts and circumstances rel- 
 it is enough that ihe insurer has been misled, and although no fraud was in- 
 tended by the assured, it is nvertheless a f aud upnn the insurer, and avoids the 
 policy. But a misrepresentation of an immaterial fact will not generally vi- 
 tiate the contract. Stetson v. Mass. Mat. Fire Ins. Co., 4 Mass. 330 ; Strong v. 
 Maniifactmrers' Ins. Co., 10 Pick. 40 ; Curry v. Commonwealth, Ins. Co., id 535 ; 
 Parmer's las Co. v. Snyder, 16 Wend 481. Thus it has been held, that where 
 the interest of the insured in the subject matter of the contract is a qualified, con- 
 ditional, temporary, or equitable one, a description of the property by him as 
 "his,'' or a representantion that he is the owner ofit, is not such a misrepresenta- 
 tion as will avoid the policy. Strong Y. ManvfaUurers' Ins Co \0 Pick. Hi; Cii/r- 
 ry V. Commonwealt/i Ins. Co.,id 535; FletcherT. CommonweaMh Ins.Co., 18 Pick. 
 419 ; Tyler v. JEtna Is Co , 12 Wend. 507 ; S C , 16id 385. But see con- 
 tra, CohimMon Ins. Co. v Lawrence, 2 Peters 25 ; S C 10 id. 507 ; and also 
 this point further considered in note in regard to concealment at close of Art 
 5 of this chapter 
 
 But still, somtimes, the actual state of the title, and the peculiar character of 
 the interest of the insurei', may, from the nature of the case, be material, and 
 a misrepresentation in regard to them will, therefore, be fa'al tn the policy. 
 
 Thus where one insured by a Mutual Insurance Company, which by its 
 charter was entitled to a lien upon all property insured by it. represented him- 
 self as the owner of the building insured, when in fact, he had merely a bond 
 for a deed of it upon conditions which had not been performed, the court held 
 that this was a material misrepresentation which invalidated the policy, because 
 the actual state of the tide was sueh that no lien could be acquired but at 
 the same time, they expressed the opinion that it would have been otherwise in 
 such companies as were not conducted upon the mutual system Brown v 
 WiUiams, 15 Shepley 252; Smith, v. Bveditch \Tut. Fire Ins. Co.i, 6 Cushing 
 448 ; Mahon v. Mid Ass Co, 5 Call (Va.) K 517. 
 
 But if a fact usually immateri.il, like the actiial state of the title to the prop- 
 erty insured, for instance, be specifically inquired about by the insurer, it will 
 be considered material, and a substantial misstatement in regurd to it will avoid 
 the policy ; for it is not to be presumed that the party would make such inquiries 
 unless he had supposed the fact material, and hence by a false answer he will be 
 misled, and induced to make a contract which he would otherwise have declined 
 Burritt v. Saratoga Mid. Fire Ins. Co., 5 H'M, 192 ; Daven/port v. N E. Fixe 
 Ins Co., 6 Cushing 340. 
 
 It is therefore seen thut the materiality of the representation to the risk need 
 not be absolute, that is, it need not affect the value of the risk considered in itself. 
 The materiality required, on the contriiry, is relative, and its test is its influ- 
 
86 LAW OP FIRE INSITKANCE. 
 
 ative to the insurance made to the underwriters, with the 
 view to enable them to estimate the risk and calculate the pre- 
 
 ence upon the insurer. Therefore, although a representation is really immate- 
 rial to the risk itself, and would perhaps generally be so regarded, still if it can 
 be shown to liave influenced the mind of the insurer, suid induced him to take 
 the risk, its falsity will avoid' the policy. 
 
 Thus if an applicant for insurance falsely represents the rate he has paid 
 other insurers on the same property, and thereby induces one to take a risk 
 which, but for such representation, he would have declined, he will not be al- 
 lowed to prove that the representation was in reality immaterial to the risk as- 
 sumed. Sibbard v. Hill. 2 Dmo, 263. 
 
 On the other hand, if the insurer was entirely uninfluenced by a material 
 misrepresentation, and regarded it as unimportant to the risk, be has not been 
 misled by it and cannot take advantage of its falsity. 
 
 Neither will a representation, made with positive intent to deceive, whether it 
 be material or immaterial discharge the insurer, if it can be shown that it had 
 no influence upon him, but this must be clearly and undoubtedly proved, it be- 
 ing a strong, though not a conclusive presumption of law, that a representation 
 made widi intent to deceive has had that effect. 
 
 An expresbion of the belief, expectation, or intention of the insured, is not 
 a representation that the fact or thing believed, expected or intented, either ac- 
 tually exists or will certeiinly occur, but it refers solely to his mental condition 
 at the time it was made, and will not affect tlie policy, unless the purpose of 
 making it was to deceive the insurer. Callin v. Springfield Firr Ins Co., 1 
 Sumner 434 ; Bryant v. Ocean Ins. Co., 22 Pick. 200. 
 
 It has been recently contended by an able jurist, that there is no such thing 
 as & promissory representction. Sec opinion of Chancellor Walworth in Al^on 
 V. Mechanics' Mut. Ins. Co , 4 Hill 329. 
 
 This learned judge insists that any agreement on the part of the insured, in 
 regard to the future, must, in order to bind him, be expressed in the policy, and 
 that unless it is so expressed, any allegation and proof of it as a defence, on the 
 part of the insurer, will be a direct violation of tlie rule, that extrinsic evidence 
 is inadmissible to vary or control a written contract, and consequently should 
 not be permitted. Though he admits that the case is different with a represen- 
 tation of an existing fact, his argument necessarily bases the effect of such a 
 representation in invalidating the policy, simply upon its untruth at the time it 
 is made, and therefore holds that it is of no force, so far as regards any injplied 
 stipulation, that the fact represented shall continue to exist during the whole pe- 
 riod of the risk. Thus where one represents his building as occupied for a 
 certain specified purpose, or his vessel as of a neuU-al character, the result of the 
 
• 87 
 
 mium to be paid. A representation is said to be material, 
 ■when it communicates any fact or circumstance which may be 
 
 Chancellor's tirguraent is, that if these facts are not true at the time the represen- 
 tation is made, then the policy is void, but if, on the next day or week after the 
 policy is issued, the house is permanently put to a more hazardous use, or the ves- 
 sel loses her neutral character, it will constitute no defence fi.r the insurer to an 
 action on the policy. But this conclusion is opposed to the invariable tenor of the 
 decisions both in England and this country, such representations having been al- 
 ways construed to be representations, not only that the fact exists, but also that 
 it will continue throughout the duriition of the risk, so far as this depends upon 
 the insured Indeed, almost every representation is promissory in spirit, though 
 affirmative in terms. But the opinion of the Chancellor, even in regard to rep- 
 resentations, purely and solely promissory, is not supported by the decisions 
 See Edwards v. Foolner, 1 Camp. 530 ; DriscoU v. Passmore, 1 Bos. if- Put. 
 300; Denniston v. Lillie, 3 Bligh, 1st series Wi ; Murray v. Alsip, 3 Johns. Cas. 
 47 ; Suckley v. Delajidd, 2 Caines 222 ,- Alsop v. Coit, 12 Mass. 40 ; Hough- 
 ton V. Mav/iifacturers' Mut. Fire Ins. Co , 8 Metcalfe U4. Mr. Duerhas ably re- 
 viewed the position taken in Alston v. Mechanics' Mut Ins. Co , and has show- 
 ed its error as well as that of Bryant v. Ocean Ins Co , 22 Pick. 200, which 
 supports the opinion of Chtincellor Walworth, and he has plainly demonstrated 
 by an analysis of the vEirious decisions on the subject, that promissoiy represen- 
 ations have been Irom the first recognized by the courts, and that a substantial 
 compliance with them is necessary to the validity of the poUcy. See Duer on 
 Ins., Sect. 14 note 6. 
 
 It must, however, be admitted that the settled law, in regard to the effect of 
 misrepresentations without fraud upon the policy, eis laid down In the cases 
 above cited, and denied in Alston v. Mechanics' Mat Ins. Co., is a departure 
 from the rule in reference to the admissibility of parole, or extrinsic evidence, 
 to vary or control written contracts. If the representation is admitted in evi- 
 dence, it is plain that the insurer is perm tted to show by proof of nn agreement 
 extrinsic to and independent of the policy, that the contract is not such as the 
 terms of the policy taken by itself, would imply Mr. Duer and Mr. Arnould 
 agree that this salutary rule of evidence has been, in a measure, violated ; ar d 
 while they consider the law as too well settled,both in this country, and in Eng- 
 land, to be shaken, they still express a decided preference for the doctrine preva- 
 lent on the continent of Europe, which requires the insertion in the policy of 
 all material facts, which, however, are not to be construed as warranties unless 
 an intention to that effect is expressly and unequivocally declared 
 
88 LAW OF FIRE INSURANCE. 
 
 reasonably supposed to influence the judgment of the under- 
 writers in undertaking the risk, or calculating the premium ; 
 
 These learned writers, however, are directly at varianre in regard the nature 
 of a representatation, and its connection with the contract of insurance. Mr. 
 ^rnould maintains, and the other English writers on Insurance are of the same 
 opinion, that a representation is collateral to the contract, and invalidates the 
 policy only on the ground of fraud upon the insurer. But he holds that the 
 fraud required is not moral, but simply Isgat fraud ; it is sufficient if the insur- 
 er is misled, even by an innocent mistake of the other party, this coustituting 
 a fraud in contemplation of law. 1 Arnould on Ins. 495. Mr. Duer, on the 
 other hand, insists with his accustomed force and clearness, that every positive 
 representation, is a part i if the contract of insurance, though not inserted in the 
 policy ; and that its substantial correctness is thereby made a condition pre- 
 cedent, on which the validity of the policy depends ; that a representation is 
 equivalent to a warranty, except in regard to the strictness of fulfillment requir- 
 ed; " that where there is no actual intention lo deceive, there is no other fraud 
 than exists in every case where a party relies or a promise that is not fulfilled"; 
 and ihiit, therefore, the effect of an innocent misrepresentation in invalidating 
 a policy, cannot be on the ground of fraud, but on account of the non-perform- 
 ance of a condition precedent Duer un In:. Vol 2, Led. lip G53. 
 
 But by the forms of pleading, it is seen, that every action for the breach of a 
 promise is founded upon legal fraud, and it is always so charged in the decla- 
 ration. Therefore, inasmuch as insurance is a contract of a peculiar nature, 
 entirely on speculation, and vi. rrimae fidei, it would seem that the slightest 
 fraud is sufficient to defeat it, and that an/ thing which the law terms fraudu- 
 lent will produce that result. 
 
 Mr. Phillips' doctrine is that " it is an implied condition of the contract of 
 insurance, that it is free from misrepresentation or concealment, whether fraud- 
 ulent or through mistake." 1 PJiiUips Ins. 287, 
 
 No piiint in the law ot Insurance is better settled than that, in every case of 
 misrepresentation nf existing facts material to the risk, the insurer is not liable 
 for an injury to the property insured, though it has no connection with the fact 
 misrepresented, but is owing entirely to another cause. This is on the ground 
 that the insurer has been misled by the misrepresentation, and would, if the 
 fact had been truly stated, fcither have declined the risk entirely, or demanded 
 a larger premium But the case of Stebbms v. Gliibe Ins. Co., 3 Hall 633, de- 
 nies the applicability of this doctrine to promissory repiesentations, and holds 
 thai the material increase of the risk by a breach ot a representation of that char- 
 acter-constitutes in itself no defence for the insurer, but that he must also show 
 that, but for its non-fulfillment, the loss would not have occurred. 
 
NATURE OF INSURER'S RISK. 89 
 
 and whatever may be the form of expression used by the in- 
 sured or his agent in making a representation, if it have 
 
 The case referred to was an action on a policy of insurance against fire, and 
 the facts material to the point in question were these : The Plff 's application 
 for insurance, after giving a general description of the property, referred for par- 
 ticulars to a diagram annexed thereto. On this diagram the space in the rear 
 of the buildings on which insurance was requested was marked vacant . After 
 exhibiting the diagram, the Defts. offered to prove that after the insurance was 
 effected, and during the continuance of the risk, the Plff; had erected other build- 
 ings on the ground marked vacant, and immediately contiguous to the prem- 
 ises insured, and that the risk was thereby incresised. But the Court rejected 
 the evidence, unless the Defts. meant to show that the intention of the Plff. at 
 the time of effecting the insurance, was to erect these buildings, and that he had 
 concealed that intention, or that the fire was occasioned by or originated in the 
 adjacent buildings so erected. The Defts; appealed to the Superior Court of 
 the City of New York, where, however, the decision of the Court below was 
 affirmed. This case is referred to, and a similar decision made in Gates v. 
 Madison Co. Mwt. Ins. Co., 1 Selden 469. 
 
 It will be observed, that by this doctrine, the effect of promissory represen- 
 tations in invalidating the policy is not entirely denied as in Alston v. Mechan- 
 ics Mut. Ins. Co., but limited in an importjint peulicular. There appear to be 
 no other cases in the Reports where the same doctrine is maintained, neither 
 is it recognized by any of the writers on insurance. Indeed, it seems to be op- 
 posed to the general principles governing that branch of the law, and to work 
 an entire change in the mode of construing representations, whether affirmative 
 or promissory. If, as has been before stated, (and in regard to this the decis- 
 ions leave no room for doubt,) a representation of the occupation of a building, 
 or the national character of a ship, means not only that such is the fact at the 
 time the statement is made, but also that it will continue substantially so during 
 the risk, it is difficult to see why a representation of the situation of the proper- 
 ty insured in regard to other buildings, being a matter equally material to the 
 risk, should not receive as broad as construction. 
 
 There was, therefore, in the case under consideration, (and this is acknowl- 
 edged by Judge Oakley, in his opinion) an implied stipulation or promise op 
 the part of the insured, that the situation of the premises with respect to the ad- 
 jacent buildings should not be changed by any act of his so as to increase the 
 risk, or in other words, that the ground marked vacant, should remain so ; the 
 insurers must have relied upon this stipulation in fixing the rate of premium; 
 and the contract is necessarily avoided by its non-fulfillment, whether it is put 
 on Mr. Arnould's ground oi legal fraud, or on that of Mr, Duer, that the repre- 
 
 12 
 
90 LAW OP FIRE INSDRANCE. 
 
 31* *the effect of imposing upon or misleading the underwri- 
 ter, it will be material, and fatal to the contract. 
 
 sentation is a part of the contract, and its performance a condition precedent to 
 the validity of the policy. It seems, therefore, that the question, whether the 
 loss is occasioned by the fact misrepresented, has nothing to do with the liabil- 
 ity of the insurer, but that the sole inquiry must be, was the misrepresentation 
 material to the risk ^ But see the recent case of Howard y. Kentucky if- Lmiw- 
 viUe MiU. Ins. Co., decided in the Supreme Court of Kentucky and reported 
 in Am. Law Reg. Jor Sept. 1853, j). 686, where the decision in the case of Stei- 
 ins T. Globe Ins. Co., is approved. 
 
 Though, as has been already seen, proof of the representations of the insured 
 are sometimes admitted for the purpose of affecting or varying the construction 
 of the policy, this is never the case when the representations and the poUcy are 
 eontradictory of, and inconsistent with each other. In a case like this, the 
 general rule applies, and the policy is considered the sole evidence of the actual 
 agreement. Bize v. Fletcher, Doug. 271 ; N. Y. Gas Light Co. v. Mechanic^ 
 Fire Ins. Co., 2 HaU 108. 
 
 It is now well settled in this country, that the question of the materiality of a 
 representation or concealment is one of fact, and falls within the province of 
 the jury. Walden v. N. Y. Fireman's Ins. Co., 12 Johns. 128 ,- N. Y. Fire- 
 man's Ins. Co. V. Walden, id. 513 ; McLanahan v. Universal Ins. Co., 1 Pe- 
 ters 170. 
 
 Mr. Duer is of the opinion, and such is certainly the inference firOm the au- 
 thorities cited below, that when the materiality does not " depend on the testi- 
 mony of witnesses, but results as a necessary consequence, from the nature of 
 the fact, or has been established by prior adjudications, it is the duty of the 
 Judge to give a positive instruction to the jury, and that their verdict in oppo- 
 sition to his charge would be set aside as contrary to law." 
 
 Thus, in regard to the insured's representation, that he is the owner of pro- 
 perty, when he is not the actual and legal owner, but his interest is inchoate, 
 equitable, qualified or contingent, the Courts of N. Y. and Mass. have decided 
 that it is not material to the risk, while in the United States Courts, as well as 
 in Tennessee and Illinois, directly the contrary is held, and in neither case was 
 the question of materiality submitted to the jury. Strong v. Mantifaetiirers' Ins. 
 Co , 10 PiJck. 40; Curry v. Commonwealth Ins. Co., id. 535; Fletcher v. Com- 
 monwealth Ins. Co., 18 Pick. 417; jEtna Ins. Co. v T^fer, 12 Wend. 507; S. 
 C, 16 id. 385 ; CohmMan Ins. Co. v. Lavrrence,, 2 Peters 25;iS. C, 10 id. 507 ; 
 Carpenter y. Providence Washington Ins. Co., 16 Peters 495 ; Brown v. Wil- 
 liams, 15 Shepley 252; Illinois MiU Fire Ins. Co. v. Marseilles Manufacturing 
 Co., 1 Oilman 236. 
 
NATURE OF insurer's RISK. 91 
 
 There is thia material difference between a representation and 
 a warranty — a warranty is always a part of the written policy, 
 and must appear upon the /ace of it ; but a representation is 
 only a matter of collateral information on the subject of the 
 insurance, and makes no part of the policy. A warranty 
 must be strictly knd literally complied with ; but it it is suf- 
 ficient if a representation be substantially correct. An un- 
 true representation is not in itself a breach of the contract, 
 (although by the terms of the contract it may become so,) but 
 if the untrue representation be material, it will in itself avoid 
 the policy either on the ground oi fraud or because it has mis- 
 led the insurer (a). 
 
 Macmorran «fc Co. (b) cotton and woolen spinners, insured 
 their premises with the Newcastle-upon-Tyne Fire Insurance 
 Company. The policy was dated April 16, 1806, and con- 
 tained a receipt for the premium, which was accounted for to 
 the company by Hamilton, their agent at Glasgow, through 
 whom the insurance had been effected. The policy was re- 
 tained by Hamilton till September 5, 1805, when it was deliv- 
 ered to the insured upon their paying the premium. The policy 
 referred to certain printed proposals, a copy of which was, accor- 
 ding to the practice of the o£Sce, always delivered to the person 
 transacting the insurance ; in which proposals it was stated, 
 that where the persons insuring gave a description of the sub- 
 ject, in order to its being insured at a lower premium, and 
 that where there should be fraud or false swearing in stating 
 the amount of the loss, the policy was to be of no force. Cer- 
 tain classes of builc^ngs were likewise specified, according to 
 the particulars of which the premium was to be lower or higher, 
 and the premises in question were warranted to be of the first 
 class, for which the lower premium only was charged. On De- 
 cember 7, 1805, the mill was burnt, and the insurers re- 
 fusing to pay the sum claimed for the loss, the insured *32 
 brought an actian regularly preceded by an arrestment 
 ad fund. jur. before the Court of Session, concluding for pay- 
 
 (a) Roberta v. Fonnereau, 1 Park. 285, 7th ed. , Stra. 327. 
 
 (i) NewcasJe Fire Insurance Company v. Macmorran & Co., 3 Dow. 255, 
 
92 LAW OF FIRE INSURANCE. 
 
 ment of 164TZ.and interest from December 7, 1805. A conde- 
 scendance having been ordered, the insurers stated two chairg- 
 es as the ground of their refusal to pay : first, that there was 
 fraud and false swearing as to the amount of the loss ; sec- 
 ond, that the fire was intentional. Upon proof it appeared 
 that there was no foundation for this latter charge ; but it also 
 appeared that at the time of the date of the policy the prem- 
 ises were of the second class, contrary to the warranty. In 
 answer tc this it was alleged that Hamilton, the agent of the 
 Newcastle Company, had taken it for granted that the prem- 
 ises were of the first class, and made out the policy accord- 
 ingly, without any representation on the part of the insured ; 
 and that before the policy was delivered, and the loss hap- 
 pened, the premises had been altered so as to bring them with- 
 in the first class ; it did not appear very distinctly, in proof, 
 how the demand of 1647^. was made up. The Court below 
 decerned against the insurers in terms of the libel, and from 
 this decision the Newcastle Company appealed. 
 
 Lord Eldon, C. — This is an appeal by the Newcastle Com- 
 pany from a judgment of the Court of Session, by which 
 they were held liable in the payment of a sum of 1647Z. upon 
 a policy of insurance, and the question is, whether this judg- 
 ment was right or not ? The summons, which is in the na- 
 ture of our declaration, stated, that the Newcastle Company 
 were indebted to the pursuers in a sum of 1647Z. in terms of 
 a policy dated April 16, 1805, and concluded for payment ac- 
 cordingly. 
 
 The policy itself was in these terms : " Whereas Mr. Hugh 
 ■" M'Morran & Co., &c. have paid the sum of 211. 5s. 8d. to 
 " the society of the Newcastle-upon-Tyne Fire Office ; and do 
 ''agree to pay, or cause to be paid, to the said society^at their 
 " office in Newcastle-upon-Tyne, the sum of 111. 17s. on the 
 " 24th day of June 1806, and the like sum of 111. 17s. 
 *33 " yeai-ly, " on the 24th day of June, during *the contin- 
 " uance of this policy, as a premium for the insurance 
 •" from loss or damage by fire, of 501. on millwright's work, in- 
 " eluding all the standing and going gear in their mill, which 
 " is used as a cotton and woolen mill, situated at Garshew, 
 
98 
 
 " being in their occupation only, and stone built and slated ; 
 " 550i. on clothmaker's -work, carding and breaking engines, 
 " aud all movable utensils in the second floor, occupied as a 
 " cotton mill ; 160Z. on stock of cotton in the same ; 600Z. on 
 " clothmaker's work, carding and breaking machines, and all 
 " moveable utensils in the first fioor, occupied as a woolen 
 " mill ; and S501. on stock of wool in the same :" then fol- 
 lowed this very material passage, " warranted that the above 
 " mill is conformable to the first class of cotton and woolen 
 " rates delivered herewith." 
 
 The materiality of it consisted in this, (though in one view, 
 whether it was material or not did not signify, if it was a con- 
 dition precedent,) that if it was of the second class, and not 
 of the first, a larger premium ought to have been given. And 
 then it goes on, " Now know all men by these presents, that 
 " from the day of the date hereof until the said 24th day of 
 " June 1806, and so froin year to year, so long as the said 
 " Hugh M'Morran & Co. shall duly pay, &c. the sum of 111, 
 " 17*. &c. and the same shall be accepted by the trustees or 
 " acting members of the said society for the time being, the 
 " stock and fund of the said society shall be subject and liable 
 " to pay, &G. aU such damage and loss as the said Hugh 
 " M'Morran & Co. shall suffer by fire not exceeding the sum of 
 " 1700Z. &c. and then followed at the bottom an entry of re- 
 ceipt of the government duty of 21. from April 16, 1805, up 
 to the 24th of June, 1806. Their lordships would observe 
 the materiality of that, as this instrument could never have 
 been produced in Court, if it were only on account of the rev- 
 enue, save as a policy of AprU 16, 1805, on which as a policy 
 so dated the demand could have been made. But whether 
 that was so or not, the demand was made on this policy. On 
 June 24, 1806, the premium must again be paid, and 
 *the duty to government, and whether the demand was *34 
 on the policy originally entered into, or on the renewed 
 policy, it must be on a policy liable to such a duty and of this 
 date. 
 
 In the appellant's case it is stated, that the printed propo- 
 sals formed part of the contract, and that besides being refer- 
 
94 LAW OF FIRE INSURANCE. 
 
 red to, a copy is always delivered to the party insuring ; and 
 that it is there set out, among other things, that if any " person 
 "or persons shall insure his,- her or their houses, mills, &c., 
 " and shall cause the same to be described in the policy other- 
 " wise than as they really are, so as the same shall be insured 
 " at a lower premium than proposed in the table, such insur- 
 " ance shall be of no force." As to their so setting it out in 
 their printed proposals, in the case of awarranty it is unneces- 
 sary to consider that ; for if there is a warranty the person war- 
 ranting undertakes that the matter is such as he represents it ; 
 and unless it be so, whether it arises from fraud, mistake, neg- 
 ligence, of an agent, or otherwise, then the contract is not en- 
 tered into ; there is in reality no contract. 
 
 Then they further state, that by another article of these 
 proposals it is provided, " that all persons insured- by this so- 
 " ciety sustaining any loss or damage by fire, are forthwith to 
 "give notice thereof at their oflBce in Newcastle, and as soon 
 " as possible after, to deliver in as particular an account of 
 " their loss or damage as the case will admit, and make proof 
 " of the same, by their oath or afSrmation, according to the 
 " form practiced in the said office, and by their books of ac- 
 " count or other proper vouchers, as shall be reasonably re- 
 " quired." That they shall also procure a certificate under the 
 hands of the minister, «fcc. and others relative to the cause of 
 the loss, " and until such affidavit and certificate shall be made 
 " and produced the loss money shall not be payable, and if 
 " there appear any fraud or false swearing, such sufferers shall 
 " be excluded from all benefit by their policies." 
 
 They further represent that in the second set of proposals 
 for the insurance of cotton mills, &c. certain classes of 
 *35 'buildings were specified, according to the particulars 
 of which the premium is at a higher or lower rate. 
 
 Thus, class 1 comprehends " buildings of brick or stone and 
 " covered with slate, tile, or metal, having stoves fixed in arch- 
 " es of brick or stone on the lower floors, with upright metal 
 " pipes carried to the whole height of the building through 
 " brick flues or chimnies, or having common grates, or close 
 
95 
 
 " or open metal stoves or coakles standing at a distance of not 
 " more than one foot from the wall, on brick or stone hearths, 
 "surrounded with fixed fenders." I request your lordship's 
 particular attention to the following words, " and not having 
 "more than two feet of pipe leading therefrom into the 
 " chimn&y ; and in which, or in any building adjoining theretOj 
 "although not communicating therewith, no drying stove or 
 " singeing frame shall be placed." 
 
 Class 2 comprehends "buildings of brick or stone, and 
 " covered with slate, tile, or metal, which contain any singeing 
 " frame, or any stove or stoves having metal pipes or flues more 
 " than two feet in length, and in which, or in any building ad- 
 " joining thereto, although not communicating therewith, no 
 " drying stove shall be placed. 
 
 As I understand it, the reason for requiring a higher pre- 
 mium for mills of the second class is, that the greater length of 
 the pipe increases the danger. If the pipe of a stove is a 
 yard in length, for instance, the difference arises from this, 
 that if the pipes be more than two feet, the danger is increased 
 beyond what belongs to pipes of that length. But it is imma- 
 terial whether I understand this or not ; for if the mill wa^ 
 warranted as being of the first class, it must be such as it is 
 warranted to be, unless there is something to oust the war 
 ranty, otherwise there is no contract. 
 
 Then this mill was burnt ; and an action was brought to 
 compel payment, to which defences were given in. As to that 
 defence which was the most unwelcome to hear, viz, that the 
 premises had been wilfully set on fire, it appeared that there 
 was no ground for it; and the Court of Session 
 *seems to have thought that there was no ground for *36 
 the imputation of fraud and overvalue. It is not likely 
 at any rate that the articles were undercharged ; and it was 
 extremely difficult to make out a case of overvalue where the 
 books and papers were all destroyed, and when the amount of 
 these improvements and the value of spinning jennies and 
 such articles were to be calculated. But though one cannot 
 help beKeving that enough was charged, yet it might be dan- 
 
S6 LAW OP FIRE INSURANCE. 
 
 .gerous to say under the circumstances that that defence ought 
 to be sustained. 
 
 But there was another very material point of defence sta- 
 ged, that this mill which was warranted as being of the first 
 (class, with a pipe of two feet, was in reality of the second 
 doss ; and that being of the second class, whether there was 
 fraud or not, whether the misstatement on the part of the in- 
 fflired arose from fraud, or from mere error or inattention, or 
 itLe mistake of an agent, (unless they were misled by the agent 
 •of the Newcastle Company,) or from whatever other cause, the 
 ' contract never had effect. 
 
 Then evidence was gone into as to whether the mill was of 
 the first or second class. The Court of Session seems to 
 haive thought it immaterial whether it was or not. But if the 
 mil was warranted as of the first class, and was really of the 
 .'Seoond class the judgment of the court below was clearly erro- 
 nesus ; for it is a first principle in the law of insurance on 
 all occasions that where a representation is material it must 
 'be complied with ; if immaterial, that immateriality may be 
 incpjired into and shown ; but that if there is a warranty, it 
 is part of the contract that the matter is such as it is repre- 
 sented to be. Therefore the materiality or immateriality sig- 
 nifies nothing. The only question is as to the mere fact. It 
 is proposed then that the matter should stand over for a day 
 or two, in order to examine the case again, for the purpose of 
 further inquiry as to that fact ; but my present impression is, 
 that the mill was not such as it was warranted to be, and that 
 theiefore all consideration of fraud or overvalue is out of the 
 question, unless it can be effectually answered that the 
 '*2>1 insured were misled by the 'insurers or their agent. 
 Then they say that the misrepresentation was owing 
 to the agent of the Newcastle Fire Company. I cannot say, 
 however, that they have made out that point, and it is de- 
 nied on the other side, and may therefore be laid out of the 
 question. 
 
 Then they say farther, that there was no effectual policy 
 till the premium is paid, and refer to the terms of the fourth 
 article of the printed proposals, which declares " that no in- 
 
NATURE OP insurer's RISK. 97 
 
 surance is considered by this office to take pkce till the pre- 
 mium is actually paid by the insured, his her, or their agent 
 or agents." The premium they say was not paid till a consid- 
 erable time after the date of the policy, that the alteration 
 was made which brought this mill within the description of 
 the first class of mills before the premium was paid, and that 
 the alteration had been communicated to the agent of the 
 company. The company deny that any such communication 
 was made, and even if it had been made, it would have been 
 still necessary to consider how far that circumstance could al- 
 ter the law as applicable to the case. But as the fact was de- 
 nied, and there was no proof of it, that point may be consid- 
 ered as out of the question. With respect to the effect of the 
 article referred to, the appellants contend that it did not relate 
 to the first policy, but to the renewals of policies. But in the 
 present case it is not necessary to consider whether it related to 
 the first policy or any renewals of it, as they say that as between 
 the respondents and them the premium had in point of fact 
 been paid before the alteration took place, as the Scotch agent 
 had accounted for it to his constituents, the Newcastle Com- 
 pany, before the period of the alteration, and it had therefore 
 become a personal debt due to him from the Scotch Company. 
 That may be considered as an answer to the argument raised 
 upon that ground. But suppose that were entirely out of the 
 question, we must in this case, as in all others, proceed secun- 
 dum allegata et probata, according to what is alleged and 
 proved. If they could succeed at all on this summons it must 
 be on a policy or contract dated April 16, 1805, and 
 when they have founded upon that only, they cannot *af- *38 
 terwards in that action turn round and say, though we 
 cannot succeed on that policy we are entitled to recover on a 
 subsequent contract. See how the contract would be varied. 
 This was a bilateral contract of the date of April 16, 1805, 
 from which period to June 24, 1806, the premium was acknowl- 
 ledged to have been paid ; and it was agreed that a certain 
 premium should continue to be paid on June 24, de anno in 
 annum. Can your lordships convert that into a transaction 
 commencing notjin April, but in September, 1805. 
 
 13 
 
98 LAW OF FIRE INSURANCE. 
 
 Suppose the fire, after being smothered for some time in the 
 mill, had burst out the day before the money was paid to the 
 agent of the Newcastle Company, could that company say, 
 " Though the premium has been paid us by our agent, and we 
 own the receipt of the money, yet as you did not pay the agent 
 we are not bound." Acquitting M'Morran <fc Co. then of all 
 fraud in the business, the question is reduced to this : "Are 
 you M'Morran & Co., looking to the facts and evidence as ap- 
 plicable only to the policy of April, 1805, entitled to recover 
 under this contract?" 
 
 I have said so much, because I consider it of the greatest im- 
 portance that the mercantile law should be uniform all over the 
 country, and because it is dangerous therefore to decide these 
 questions of insurance without being sure what may be the 
 effect of the decision, and the nature of the doctrine which 
 may result from it. ' If this is to be taken as as a contract of 
 April, 1805, and the premises were not of the class of which 
 they were warranted to be, it appears to quite clear that the 
 respondents ought not to recover. If the Court of Session 
 was of opinion that the danger and risk was not greater in 
 mills of the second class than in those of the first class, though 
 that were sworn to by five hundred witnesses, it would signify 
 nothing. The only question is, " what is the building de facto 
 that I havs insured ?" The judgment of the Court below was 
 reversed. 
 
 It is the practice of most ofiBces to insert the state- 
 *39 ments or representations, made at the time of effecting 
 the insurance, in the body of the policy. By this 
 means they become a warranty, and preclude questions from 
 arising upon the subject of the materiality or immateriality 
 of the sta';ements(l). 
 
 But the courts will look into the intention of a warranty, 
 and will not construe it more strictly than it really importB(2) 
 
 (1) In Tegaid to the effect upon a representation by a reference to it in the 
 policy. See ante page 82, note 3. 
 
 (2) In an application for insurance on a building, which was in terms refer- 
 red to in the policy as forming a part thereof, occurred the question, " How 
 bounded, and distance from other buildings if less than ten rods." The an- 
 
KATuftE OP insurer's risk. 99 
 
 In May&ll V. Mitford, (o) there was a warranty that certain 
 mills were brick built, warmed and worked by steatn, lighted 
 l>y ga^i ^^^ worked by day only, and it was held that the 
 stipulation as to working by day only meant that the usual cot> 
 ton manufacture carried on by the mills in the day time should 
 not be carried on at night ; and, therefore, that it was not a 
 breach of the warranty that on one occasion, in order to turn 
 machinery in an adjacent building the steam engine which was 
 not in the mill, but in an adjoining building, and certain per- 
 pendicular and horizontal shafts in the mill were at work. 
 
 6» Concealment, or the suppression of any fact or circum- 
 stance material to the risk, will be equally fatal to the con- 
 tract ; without any special agreement it is a species o{ fraud, 
 suppressio veri, which renders the contract vcad from the com- 
 mencement ; but it is not solely on the ground of fraud that con- 
 cealment avoids the contract ; the omission to state material 
 circumstances, though the omission be the result of accident 
 or negligence, will avoid it ; and a fortiori if any thing be 
 suppressed or misrepresented from/raue2(6). 
 
 (a) 1 Nev. & Perr. 732, and see Whitehead v. Price, 3 Cromp., Mees. & 
 Rose. 447. 
 
 {b) Per Lord Mansfield, Carter v, Boebn, 1 Bla. 594 : 3 Bur. 1909. Rat- 
 cliffe V. Shoolbred, 1 Park, 290, 7th Ed. 
 
 Ewer in the same application stated the nearest buildings on the severid aides 
 of the insured premises, but did not mention all the buildings within ten rods. 
 Held that such answer was not a warranty, that there was no other building 
 within that distance than those mentioned. Gates v. Madison Co. Mvt. Ins. 
 Co., 2 Comstock 43; S. C, 1 Selden 469. 
 
 But aiiter, when the question in the application was " relative situation as to 
 other buildings, distance from each if less than ten rods." Burritt t. Saratoga 
 Co. Mvi. Ins., Co., 5 tliU 188; Jennings v. Chenango Co. Mut. Ins. Co., 2 
 Denio 75. See also ffSiel v. Svffalo Pire Ins. Co., 3 Comstock 122; Cailin 
 T. Springfield Fire Ins. Co., 1 Sumner 434 ; Houghton v. lUaimfaciurers' Mvi. 
 Ins. Co.. 8 Metcalfe 125. 
 
100 LAW OF FIRE INSURANCE. 
 
 " Insurance is a contract upon speculation, the special facts 
 upon -which the risk is to be computed lie commonly in the 
 knowledge of the insured only. The underwriter trusts to his 
 statement, and proceeds upon confidence th^t he does 
 *40 not keep back any circumstances within his "knowledge 
 to mislead the underwriter into a belief that the cir- 
 cumstance does not exist, and to induce him to estimate the risk 
 as if it did not exist. The keeping back such circumstance 
 is a fraud and therefore the policy is void. Although the 
 suppression should happen by mistake, without any fraudulent 
 intention, yet still the underwriter is deceived, and the policy is 
 void ; because the' risk run is really different from the risk 
 understood and intended to be run at the time of the agree" 
 ment."(a.) 
 
 The insured has no right by tendering an increase of pre- 
 mium to require the insurer to confirm a contract invalid in it- 
 self ; for the insurer has in such a case a right to say, that he 
 would not have subscribed the policy upon any terms if he 
 had been informed of the circumstances which were withheld 
 from him. His intention being to undertake only for the risks 
 that were communicated to him, if he is deceived, that is sufiB- 
 cient to avoid the contract ; nor is the concealment less fatal, 
 though the circumstance concealed turn out to be unfounded 
 in fact, though supposed to exist(6). 
 
 The following case has oc .urred upon the doctrine of con- 
 cealment : — 
 
 An action of covenant was brought against the directors of 
 the Phoenix Fire Office, upon a policy of insurance dated July 
 25, 1814, effected by the plaintiff on a certain warehouse in 
 Heligoland. The policy referred to a letter of the plaintiff of 
 July 11, 1814, containing the instructions for the insurance 
 and certain conditions of the policy annexed ; amongst which 
 was " that if any person should insure his buildings or goods) 
 and should cause the same to be described in the policy other- 
 
 (a) Per Lord Mansfield, in Carter v. Boehm, 3 Burr. 1905 ; Bla. 594. 
 
 (b) Emerig. torn. i. p. 20, 21, 68, 69. Seaman v. Fonnereau, 2 Stra. 1183. 
 Lynch ii. Dunston, 14 East, 494. 
 
101 
 
 ■wise than as they really were, so as the same were charged 
 at a lower premium than was therein proposed, such insur- 
 ance should be of no force ; and that persons should give in a 
 particular of their losses, signed and verified upon oath, 
 and if there appeared *any fraud or false swearing, the *41 
 claimant should forfeit his claim to restitution or pay- 
 ment." The defendants, amongst several pleas, pleaded, that 
 before and at the time of the writing the plaintiff's letter re- 
 ferred to in the declaration, the warehouse, and the merchan. 
 dize contained therein, being the premises intended to be in 
 sured, were in imminent peril of being consumed by fire, which 
 the plaintiff, at the time of writing the letter well knew, that 
 the policy was effected upon the representation contained in 
 the letter, but that the plaintiff fraudulently, and with intent 
 to induce the defendants to effect the policy, concealed from 
 the defendants the fact, that the premises were in such peril ; 
 by reason of which concealment the defendants averred that 
 the policy was void. The plaintiff replied, and defendants 
 joined issue on the replication. The cause was tried at Guild- 
 hall, at the sittings after Trinity Term, 1815, before Gibbs, 
 G. J. It appeared that the plaintiff was possessed of two 
 warehouses in Heligoland, one of which was separated by only 
 one other building from the workshop of Jasper, a boat build- 
 er, wherein a fire broke out in the evening of the 11th of July. 
 That fire, however, was apparently extinguished in half an 
 hour, and four persons were employed by the plaintiff, who 
 was a magistrate there, to watch during the night, - lest the 
 fire should break out. The plaintiff, in the same evening, 
 wrote the letter referred to in the declaration to his agent in 
 London, requesting him to effect the insurance against fire for 
 three months at 400Z. upon the plaintiff's warehouse, (therein 
 described,) as also upon the coffee in casks and bags then 
 stored in the same warehouse, value 3500^. The mail for 
 England was to sail that day, and was then closed ; but the 
 plaintiff procured the master of the packet-boat to take the 
 letter with him and put it in the post oflSce at Cuxhaven, so 
 that the letter left Heligoland at a late hour on the same 
 night, and it reached England by the same packet on the 24th, 
 
102 LAW OF FIRE INSURANCE. 
 
 and the plaintiff's agent on the following day effected the pol- 
 icy in question. Early in the morning of the 13th, a fire 
 
 again broke out in the work-shop of Jasper, the boat 
 42* builder, and consumed the premises insured. The *jury 
 
 acquitted the plaintiff of any fraud or dishonest design, 
 the fire being apparently extinguished when he ordered the 
 insurance, but thought that the circumstance^ of the fire on 
 the 11th, ought to have been communicated to the defendants, 
 who, without this information, did not engage on fair grounds 
 with the plaintiff, and for whom, under these circumstances, 
 they gave their verdict. A motion was afterwards made to 
 set aside the verdict and have a Hew trial, but the CoBrt re 
 fused the rule(a). (1) 
 
 (0) Bufe V. Turner, 6 Taunt. 338. 2 Marsh. Rep. 46, 
 
 (1) The Courts in this country, hare, in some cases, recognized a distinction 
 between Fire and Meirine Insurance, in regard to the strictness of the rule re- 
 specting concealment. Burrittv. Saratoga. Co. Mut. Fire Ins. Co.,5SiU 
 188; Clark v. Manufacturers' Ins. Co., 8 Howard 235; Gates v. Madison Co, 
 Mut. Ins. Co. , 1 Selden 474 ; Satlerthwaite v. Mut. Beneficial Ins. Assn., 14 
 Perm. R. 393. ' 
 
 This difference, however, seems to be rather one of the subject matter insured 
 than any deviation from the general principle that the contract of insurance, 
 whether Marine, Pire, or Life, is one of vJ/errimae fidei, or "the most abounding 
 good faith." The risks to which the subject of a fire policy is usually exposed 
 are so much more limited than those covered by a Marine Insurance, and are 
 naturally or can so easily, by a few inquiries, be brought within the knowledge 
 of the insurer ,that it is not consideredincumbent upon the insured, unless inqui- 
 ries are made especially in regard thereto, to describe his property particularly, 
 or represent its situation in respect to other buildings, provided there is no ex- 
 traordinary circumstance in the case, which would not naturally orusually exist 
 in connection with the risk. Thus, in the absence of inquiries, no representa- 
 tion need usually be made of what materials are building is constructed, how 
 it is situated in reference to other buildings, to what uses it is applied, or how 
 it is heated. Bmritt v. Saratoga Co. Mut. Fire Ins, Co., 5 Hill 188 ; Clark v. 
 Manufacturers' Ins, Co., 8 Howard 'iZb; Gates v. Madison Co. Mwt, Ins. Co., 
 1 Selden 474. 
 
 But if the circumstance concealed is of an extraordinary and unusual nature, 
 the existence of which would not naturally be presumed or expected by the in- 
 surers, the strict rule of Marine insurance applies, and the concealment, if ma- 
 
NATURE OF INSURER'S RISK. 103 
 
 6. In the policy of the Royal Exchange, and most other 
 oflSces, is contained the following exception in the printed pro- 
 posals (6) :— " No loss or damage by fire happening by any 
 
 (i) That the proposals form a part of the contract, if referred to, see Oldham 
 V. Bewicke, 3 H. Bla. 577. Routeledge v. Burrell, 1 H. Bla. 254. Wood v. 
 Worsley, 2 H. Bla. 574; 6 T. R. 710. 
 
 terial, will avoid the policy. Of this nature, is the case of Bufe v. Turner cit- 
 ed in the text. Also, where it was proved on the trial of an action on a fire 
 policy, that a convict in the State's prison had, before the insurance was effect- 
 ed, threatened, in the presence of the insured, to burn the house of the latter, 
 as soon as he should be released, the Court charged the jury, that if they con- 
 sidered the risk of fire thereby increased, the omission of a disclosure to the in- 
 surers of the threat at the time of efiecling the insurance was a material concecd- 
 ment, and avoided the policy. Curry v. Commonwealth Ins. Co., 10 Pick. 535. 
 Thus, in Louisiana, the Court held a policy void, because the insured did 
 not communicate to the underwriters the fact of a rumor of an attempt to set fire 
 to the building adjacent to the one on which he requested insurance. Walden 
 V. Louisiana Ins. Co,. 12 La. R. 135. 
 
 Also, in the same State, it was held that if the jury considered that the vicin- 
 ity of a gambling establishment to the building insured enhanced the risk, the 
 concealment of that fact would discharge the insurers. I/yon v. Commercial 
 Ills. Co., 2 Rob. (La.) 26G; see also Clark v. Manufacturers' Ins. Co., 8 How- 
 ard 235. 
 
 But a full and complete disclosure, is not only necessary at the time applica- 
 tion is made for insurance, but is also required, if a material circumstance 
 comes to the knowledge of the applicant at any time before he knows that a 
 policy has been issued, even though his application has already been submit- 
 ted, or forwarded to the insurers by letter or otherwise. 
 
 The intelligence of a material fact, obtained by a party after he has applied 
 for insurance, must be communicated to the insurers by the earliest and most 
 expeditious usual route of mercantile communication, but due and reasonable 
 diligence is sufficient, and the insured need not employ an express to convey 
 the intelligence, unless that be the usual mode. Watson v. Delafield, 2 Johns. 
 525; Green v. Merchards' Ins. Co., 10 Pick. 402. 
 
 It has been seen that in general, if there is any diiference between Marine 
 and Fire insurance in regard to the effect of concealment of material facts the 
 rule is less strict in the latter than in the former. But some of the Courts of 
 this country have required greater strictness of disclosure in one particular 
 
104 LAW OP FIKE INSrRANCE. 
 
 invasion, foreign enemy, or any military or usurped power 
 whatsoever, will be made good by this company." 
 
 A question arose in the following case (c) : what species 
 
 (c) Drinkwater v. The Corporation of the London Assurance, 2 Wils. 363. 
 
 from the insured in Fire, than in Marine policies. Itis perfectly well settled by 
 numerous decisions, that in Meirine Insurance, no description is required of the 
 peculiar nature of the interest of the insured, whether it be legal or equitabtej 
 absolute or contingent, permanent or temporary, but that any particular or 
 special interest, even when not basei on property in the subject insured, may be 
 protected by a policy in general words. Crowley v. Cohen, 3 B. if- Ad. 478 ; 
 HuncoxY. Fishing Ins. Co., 3 Sumner 132; LockeY. N. Am. Ins. Co., 13 Mzis. 
 61 ; BarOet v. Walter, U. 2J7 ; Gvdim v. F. <f- M. Ins. Co., 2 Pick. 249,- La- 
 zarus V. Commonwealth Ins. Co., a Pick. 75 ; S. C , 19 id. 81 ; Van Natta v. 
 Mat. Ins. Co., 2 Sanford 490. 
 
 But in Columbian Ins. Co. v. Lawrence, 2 Peters 25 ; S. C, 10 id. 507, the 
 Supreme Court of the United States held that the rule is differiict in Fire Insu- 
 rance, and that in cases of that kind the nature and extent of the interest insured 
 are material to the risk, and that any concealment or misrepresentation in re- 
 gard to them will avoid the policy. These decisions have been followed by 
 the same Court in CarpeTiter v . Providence Washington Ins. Co., 16 Peters 
 495, and by the Courts of Tennessee and Illinois. Catron v. Tennessee Ins. 
 Co., 6 Humphreys 170 ; Illinois Mai: Fire Ins. Co. v. Marseilles Man'g. Co., 1 
 Oilman 236. 
 
 The Courts of Massachusetts and New York, on the other hand, recognize 
 no distinction in this respect between Marine and Fire Insurance, and hold that 
 the insured's duty of communicating the nature of his interest is no greater in 
 the latter than in the former. Their position is, that in either case, if the insur- 
 er deems the character of the interest material, and desires to limit the general 
 and liberal nature and scope of the contract of insurance, it is his business to 
 make special inquiries in regard thereto, to whi(.h, of course, the insured will 
 be bound to reply fully and correctly. Strong v. Manufaclureri Ins. Co., 10 
 Pick. 40; Curry v. Commonwealth Ins Co., id. 535; Fletcher v. CommonweallA 
 Ins. Co._ 18 Pick. 419; Ti/lerr. Mtna Fire Ins. Co., 12 Wend. 507; ^ina 
 Fire Ins. Co. v. T)/ler, 16 id. 385 ; Nible v. N. American Fire Ins. Co., Sand- 
 ford 551. 
 
 This latter doctrine is supported by the ruling of Tindal, C. J., at the nisi 
 prins trial of Pim v. Reed, (see case reported 6 Man. 4" Gr. 1,) and is more con- 
 sistent with the general and liberal principles regulating the law of insurance. 
 
NATURE OP insurer's RISE. 105 
 
 of insurrection or rebellion was an usurped power within the 
 meaning of the provision? And it was held by three judges 
 of the Common Pleas (including the Chief Justice) agMustthe 
 opinion of Mr. Justice Gould, that it meant only to extend to 
 houses set on fire by means of an invasion ftom abroad, or of 
 an internal rebellion, when armies are employed to support 
 it. An action of covenant was brought against the defendants 
 apon a policy of insurance on a malting office at Norwich, in 
 which policy was the proviso before mentioned. The defend- 
 ants, amongst other pleas, pleaded that it was burnt by an 
 usurped power: the plaintiff replied that it was not burnt by an 
 usurped power, and thereupon issue was joined. The cause 
 was tried at Norwich assizes ; a verdict was given for the 
 plaintiff, subject to the opinion of the Court upon the follow- 
 ing case, viz : upon Saturday, the 27th of November, a mob 
 arose at Norwich upon account of the high price of provisions, 
 
 It is true that there may be cases where correct information in regard to the 
 nature of the insored's interest is necessary to a proper appreciation of the risk 
 by the insurers, but these cases are not confined to fire insurance, but may fre- 
 quently occur in Marine Insurance, to which, however, the applicability of the 
 doctrine laid down in Columbian Ins. Co. t. Jjamreace in regard to fire insur- 
 ance, has never been asserted or claimed. Neither does the more extended and 
 liberal construction of the contract work any heudship upon the insurer, 
 who can always protect himself by a few prudent and natural inquiries, and 
 thereby obtain exact and complete infi>tmation in regard to the title and owner- 
 ship, whoever he deems them material to the risk. 
 
 The duty of a lull and complete disclosure is no less binding in cases of rein- 
 surance, than in those oi original insurance, and sometimes the rule is even 
 stricter in the former than in the latter. Thus, the party applying for reinsur- 
 ance is obliged to communicate all materiid fiu^ in relation to the character fX 
 the original assured, a duty which is not incumbent upon the latter in making 
 his own application. iV. Y. Bouxry fSre Ins. Co. v. N. T. Fire Ins. Co., 17 
 Wend. 359. 
 
 The question of the materialily of a concealment as well as of a representa- 
 tion, belongs to the jury, but in both cases the Courts hare sometimes taken its 
 decision excIosiTely upon themaelTes. See cases oted in note on Representa- 
 tions. Ante p. 90. 
 
 14 
 
106 LAW OP FIRE INSURANCE. 
 
 and spoiled and destroyed divers quantities of flour, 
 43* thereupon, *the proclamation was read, and the mob dis- 
 
 pered for that time. Afterwards another mob arose, 
 and burnt down the malting office in the policy mentioned. 
 The question was, whether the plaintiff was entitled to recover 
 in this action. The case was twice argued at the Bar, and 
 the Court took time to deliberate. After which, as the judges 
 differed in opinion, they delivered their opinion seriatim. — 
 Mr. Justice Gould was of opinion, that the malting office be- 
 ing burnt by the mob who rose to reduce the price of provis- 
 ions, the same was burnt by an usurped power, within the 
 meaning of the proviso in the policy, and he cited Popham, 
 122. Mr. Justice Bathurst was of opinion, that the words 
 " usurped power " in the proviso could only mean an invasion 
 by foreign enemies to give laws and usurp the government 
 thereof, or an internal force or rebellion assuming the power 
 of government by making laws, and punishing for not obeying 
 those laws. That the plea did not allege " the usurped power " 
 as a rebellion,that a mob rose at Norwich on account of the price 
 of victuals, and as soon as the proclamation was read they dis- 
 persed. Mr. Justice Clive was of opinion, that the words 
 must mean such an usurped power as amounts to high trea- 
 son, which is settled by the 25th Ed. 3. The offence of the 
 mob in the present case was a felonious riot, for which the of- 
 fenders might have suffered, but it cannot be said to be an 
 usurped power. Chief Justice Wilmot was of opinion, that 
 the burning of the malting office was not a burning by an 
 usurped power within the meaning of the proviso. That the 
 idea of the words " burnt by an usurped power " from the con- 
 text was, that they meant burnt or set on fire by occasion of 
 an invasion from abroad, or of an internal rebellion, when the 
 laws are silent, and the firing of towns is unavoidable. The 
 difference between a rebellious mob and a common mob is, 
 that the first is high treason ; the latter, a riot or felony. — 
 Whether was this a common or a rebellious mob ? The first 
 time the mob rises, the magistrates read the proclamation, 
 and the mob disperse. They hear the law and obey it. 
 
107 
 
 The *next day another mob arises on the same account, *44 
 and damages the houses of two bakers ; thirty people, 
 m fifteen minutes, put this army to flight, they were dispered, 
 and heard of no more. Where are the species belli which 
 Lord Hale describes ? The mob wants an universality of 
 purpose to make it a rebellious mob or high treason, 1 Hale, 
 P. C. 135. Postea to the plaintiff by three judges against 
 one.(l) 
 
 The Sun Fire Office, it appears, introduced the exception 
 before noticed in the year 1726 ; and in the year 1727, they 
 added to the exception the words " civil commotion," thus pro- 
 viding against the effects of internal rebellion, as well as in- 
 ternal invasion ; and another question arose upon the con- 
 struction of the words " civil commotion," in consequ.ence of 
 the outrages committed upon private property in the year 
 1780. 
 
 An action was brought (a) on a policy of insurance, to re- 
 cover from the Sun Fire Office a satisfaction fcr damage done 
 to the plaintiff's house and goods by rioters. The plaintiff 
 was a Roman Catholic, and his house and effects were set on 
 fire by the rioters. The office defended this action, consider- 
 ing that they were protected by the proviso " that they would 
 not answer for any loss or damage by fire happening by any 
 invasion, foreign enemy, civil commotion, or any military or 
 usurped power whatsoever." The point was argued at length 
 by the counsel on both sides. 
 
 Lord Mansfield, in his address to the jury, said, " most un- 
 doubtedly every man's leaning must be to the side of the plain- 
 tiff, in order to divide the loss in so great a calamity, but the 
 leaning must be governed by the rules of law and justice ; and 
 the only question that arises for your determination and 
 that of the Court is singly upon the construction of two words 
 
 (a) Landgale v. Mason, 2 Park, 657, 7th Ed. ; 3 Marsh. 793. 
 
 (1) The words " usurped power," usually contmned in a fire policy, mean a 
 usurpation of the power of goTemment, and not a mere excess of jurisdiction 
 by a lawful magistrate. City Fire Iiu. Co. ▼. Cerlies, 21 Wend. 367. 
 
108 LAW OP PIEE INSURANCE. 
 
 in the policy. It •will be necssary, in order to investigate this 
 matter, to go into the history which has been opened and 
 45* explained to you of other insurance policies. *In the 
 year 1720, the London Assurance Company put into 
 their policies all the words here used, except civil commotion. 
 Whatever fire happens by a foreign enemy is clearly provided 
 against ; when they burn houses, or set fire to a town, that 
 is also provided for. What is meant by military or usurped 
 power ? They are ambiguous, and they seem to have been 
 the subject of a question and determination. They must mean 
 rebellion when the fire is made by authority ; as, in the year 
 1745, the rebels came to Derby, and if they had ordered any 
 part of the town or a single house to be set on fire, that would 
 have been by authority of a rebellion. That is the only dis- 
 tinction in the case. It must be by rebellion got to such a 
 head as to be under authority. In the year 1726, some years 
 after the London Assurance Company had done it, the Sun 
 Fire Office put in the exception ; and, in 1727, they put in 
 other words ; they do not keep to the form of the London As- 
 surance ; they do not say by invasion from foreign enemies 
 merely ; they clearly provide against rebellion, determined 
 rebellion with generals who could give orders. Though this 
 be so guarded, the Sun Fire Office did not think it answered 
 their purpose, and therefore they took the words civil commo- 
 tion. Not only using those words, applicable to guard against 
 a foreign enemy, against a rebellion, where there are officers 
 and leaders that can give authority and power, but they add 
 other words as general and untechnical as can possibly be used, 
 " civil commotion," not civil commotion that amounts to high 
 treason. They avoid saying " civil commotions " that amount 
 to misdemeanors ; but they use a general expression, " if the 
 mischief happens from a civil commotion," taking the largest 
 and most general sense of the words that the language will 
 allow ; they do not even say a riot. In that case, they do not 
 say committing a fellony, but speak of fire occasioned by 
 civil commotion. The single question is, whether this has 
 been a civil commotion ? If there be a case to which these 
 
NATURE OP insurer's RISK. 109 
 
 words can be applicable, it is to a case of this sort. *I *46 
 cannot see any of the other words to which it can be 
 applied. tJnsurped power takes in rebellion, acting by usurp- 
 ed powers amongst themselves. From a foreign enemy the 
 office is secured, but what is a civil commotion ? It is some- 
 thing else. The present was an insurrection of the people 
 resisting all law, setting the protection of the government at' 
 nought, taking from every man who was the object of their re- 
 sentment that protection, as appears from the evidence given 
 by the witnesses upon the facts, and which you all know as if 
 no witnesses had been produced. What was the object and 
 end of this violent insurrection ? It certainly was meant to 
 aim at the very vitals of tlie constitution." His lordship then 
 stated the leading particulars of the well known disturbances 
 in 1780. " What is this but a dvil commotion 7 No defini- 
 tion has been attempted to be given of what it is. It is said 
 that this is a civil commotion distinct from usurped power and 
 rebellion. It is admitted that this kind of insurrection may 
 amount to high treason ; and, to be sure, it may. But the of- 
 fice do not put their expectation upon trying whether they 
 were guilty of high treason or not. There is no manner of 
 doubt that this was an insurrection for a grand purpose, to 
 take from a set of men the protection of the law. That is 
 levying war against the king ; there is not any doubt of it. 
 It is not put upon that, but on the ground of a civil commo- 
 tion. It is not an occasional riot, that would be another ques- 
 tion. I do not give my opinion what that might be. You 
 will give your opinions whether the facts of the case bring it 
 within the idea of a civJ commotion. I think a civil commo- 
 tion is this : an insurrection of the people for general purposes, 
 though it may not amount to a rebellion, where there is an 
 usurped power. If you think it was such an insurrection of 
 the people for the purposes of a general meeting, though not 
 amounting to a rebellion, but within the exception of the pob 
 icy, you will find for the defendants. If not, you will find for 
 the plaintiff." The jury found for the defendants. 
 
no LAW OP FIRE INSURANCK. 
 
 *47 *The plaintiff, Mr. Langdale, afterwards recovered 
 
 satisfaction for the loss lie had sustained by bringing 
 an action against the hundred, under the stat. 1 Geo. 1, c. 
 5, s. 6. 
 
 8. Where a riotous demolition by fire had taken place un- 
 der stat. 1 Geo. 1, c. 5, and the oflSce paid the loss to the in- 
 sured even without suit, it was held that the oflSce had a right 
 to stand in the place of the insured, and to proceed against 
 the hundred in the name of the insured. 
 
 An action (a) was brought against the hundred on the 
 above-mentioned statute, to recover satisfaction for damage 
 sustained by the plaintiff by the demolition of his house in 
 the riots of 1780. There was a verdict for the plaintiff, with 
 259Z. damages, subject to the opinion of the Court on a case, 
 which stated in substance that the plaintiff had insured his 
 house in the Hand in Hand Fire Office ; that the office had 
 paid the loss without any action being brought against them ; 
 and that this action was brought against the hundred in the 
 plaintiff's name, and with his consent, for the benefit of the 
 insurance office, and to reimburse them the loss they had paid. 
 The question was, whether, as the plaintiff had already re- 
 ceived a satisfaction, this action could now be maintained 
 against the hundred on behalf of the insurers. It was con- 
 tended, on the part of the hundred, that it was the policy of 
 the act, besides the inducement to suppress riots, to divide 
 the loss, and prevent the ruin of individuals ; but there could 
 be no reason of policy or justice to extend this beyond the par- 
 ty himself to bodies or individuals who have wilfully put them- 
 selves into this danger ; that though it was true that a man> 
 having different remedies, might pursue either, and it was no 
 defence to the one that he might have pursued the other, yet, 
 when he has recovered by one, he shall not afterwards seek a 
 second satisfaction by the other ; but the Court were unanim- 
 ously of opinion that the office had a right in this case to re- 
 cover against the hundred in the name of the insured. 
 48* *Lord Mansfield said, " Though the office paid without 
 
 (a) Mason v. Sainsbiuy, 2 Marsh. Ins. 796, 3rd ed. 
 
NATURE OF INSURER'S RTSK. Ill 
 
 a suit, this must be considered as vithout prejudice ; 
 and it is, to all intents, as if it never had been paid. The 
 question comes to this : Can the owner of the house, having 
 insured it, come against the hundred under this act? Who 
 is first liable ? If the hundred be first liable, still it makes 
 no difference ; if the insurers be first liable, then payment by 
 them is a satisfaction, and the hundred is not liable. But 
 the contrary is evident from the nature of the contract of in- 
 surance. It is an indemnity. We every day see the insured 
 put in the place of the insurer. In abandonment it is so, and 
 the insurer uses the name of the insured. It is an extremely 
 clear case. The act puts the hundred in the place of the tres- 
 passers ; and, on principles of policy, I am satisfied that it is 
 to be considered as if the insurers had not paid a farthing." 
 Mr. Justice WiUes said, " I cannot distinguish this from the 
 case of an escape. If the sheriff pays, he has his remedy over 
 against the party. Though the hundred is not answerable 
 criminally, yet they are not to be considered as wholly free 
 from blame. They may have been negligent, which is partly 
 the principle of the act." Mr. Justice Ashhurst said, " At all 
 events the plaintiff is entitled to a verdict to the amount of the 
 premium, having had no compensation as to that. But, on the 
 larger ground I am of opinion that the hundred is liable in 
 this action for all the damage sustained by the plaintifil" Mr. 
 Justice BuUer said, " Whether this case be considered on 
 strict or on liberal principles of insurance law, the plaintiff 
 must recover. Strictly, no notice can be taken of any thing 
 out of the record. The contract with the office, if strictly ta- 
 ken, is a wager ; literally, it is an indemnity. But, oi the 
 words, it is only a wager, of which third persons shall not 
 avail themselves. It has been rightly admitted that the hun- 
 dred is put in the place of the trespassers. How could the 
 trespassers have availed themselves of the satisfaction made 
 by the office ? Gould they have pleaded it by way of accord 
 and satisfaction ? It was not paid as a satis&ction for 
 the trespass, and the facts of the case 'would not have *49 
 supported such a plea. The best way is to consider this 
 case as a contract of indemniiy, in which the prindplD ia, tiiat 
 
112 LAW OF FIRE INSURANCE. 
 
 the insured and insurer are as one person, and in that light 
 the paying before or after can make no difference."(l) 
 
 (1) It is a general principle of the law of insurance, illustrated by the case of 
 Mason v. Sainsbury, cited in the text, that where the assured has any claim to 
 indemnity for his loss against a third person who is primarily liable for the 
 same, the underwriters, on the payment of the loss, are entitled to the benefit of 
 such claim, and the assured consequently holds, and can recover it merely 
 as their trustee. On this principle rests the doctrine of abandontnent in Ma- 
 rine Insurance, and though this term is seldom used in Fire insurance, it is 
 still, in a measure, applicable to this species of equitable assignment, which is 
 as likely to occur in that branch of insurance, as in any other. The insured, 
 on receiving the fuU value of the property destroyed, abandons to the insurer 
 all right, interest or claim, which he may have in, to, and arising from it, and 
 whatever proceeds from such right or claim is of the nature oS salvage emd be- 
 longs to the insurer. Thus, where the vendor of property, by an executory 
 contract of sale, has effected an insurance thereon for his own benefit, and, af- 
 ter its destruction by a peril insured against, has recovered of the insurer the 
 amount due him upon the contract from the vendee, the insurer is entitled to 
 his cleiim upon the vendee, odA may use the vendor's name in an action against 
 the other party to recover the amount which is still due. MVtui Ins. Co. v. T)/- 
 ler, 16 Wend. 385. 
 So, also, the insurer of the interest of a mortgagee, on payingto the insured af- 
 ter the destruction of the property the amount of the mortgage debt, takes an 
 equitable assignment thereof, and may recover it of the mortgagor in the name 
 of the mortgagee. Carpenter v. Providence Washington Ins. Co., 16 Peters, 
 501 ; 2 Phillips Ins. 248 and 399. But see contra King v. State Mvt. Ins. Co., 
 7 Cushing 16. 
 
 Thus, also, where A's house, which was insured, was injured by a fire com- 
 municated by a locomotive engine of a railroad corporation, and the underwri- 
 ters paid to A. the amount of his loss, for which the railroad corporation was 
 also by law responsible to him, it was held that such payment did not bar A's 
 right to recover also of the railroad company, and that A. by receiving payment 
 of the underwriters becemie trustee for them, and, by necessary implication, made 
 an assignment to them of his right to recover of the railroad corporation.; and 
 that the underwriters, on indemnifying A., might bring an action in his name 
 for their own benefit against the railroad company, and moreover that A. could 
 not legally release such action. Bart v. Western Railroad Corporation, 13 
 Metcalfe 99. 
 
 Therefore, it will be seen that the insured frequently has two means of ob- 
 taining compensation for his loss, one by aa action against the wrong doer oo- 
 
NATURE OP insurer's RISK. 113 
 
 9. By Stat. 7 & 8 Geo. 4, c. 31, s. 2, the above-mentioned 
 Stat. 1 Geo. 1, st. 2, c. 5, has been repealed, as also stat. 
 9 Geo. 1, c. 22 stat. 22 Geo. 2, c. 46, stat. 57 Geo. 3, c. 19, 
 and stat. 3 Geo. 4, c. 33, by -which the hundred had been 
 made liable for injuries to private property. And it is enact- 
 ed by stat. 7 & 8 Geo. 4, c. 31, s. 2, "that if any church or 
 chapel, or any chapel for the religious worship of persons dis- 
 senting from the united church of England and Ireland, duly 
 registered and recorded, or any house, stable, coachhouse, out- 
 house, warehouse, office, shop, mill, malthouse, hop oast, barn 
 or granary, or any building or erection used in carrying on 
 any trade or manufacture, branch thereof, or any machin- 
 ery, whether fixed or moveable, prepared for or employed 
 in any manufacture, or branch thereof, or any steam-engine 
 for sinking, draining, or working any mine, or any staith, 
 building or erection used in conducting the business of any 
 mine, or any bridge, wagon way, or trunk for conveying min- 
 erals firom any mine, shall hefetonumsltf demolished, pulled 
 down or destroyed, wholly or in part, by any person riotously 
 and tnmultoasly assembled together, in every such case the 
 inhabitants of the hundred, wapentake, ward, or other district 
 
 casioning it, or, in the case of the insurance of the mortgagee's or vendor's in- 
 terest, against the debtor, and the other, by a suit on the policy against the in- 
 surer; and he may elect of which of the two he will avail himself. But since 
 insurance is purely a contract of indemnity the law will suffer him to recover 
 no more than is siifficicnt to indemnify him for his actual loss. Therefore, if, 
 before payment by the insurer, the insured receives anything from any other 
 party on a claim connected with the subject matter of the insurance, and which 
 goes to diminish the amount of the loss he has sustained, his right of recovery 
 against the insurer will be diminished pro tanto. Pentz v. ^tna Ins. Co., 9 
 Paige Chan. R. 568. But if, after payment by the insurer, he receives anything 
 on such a claim from a third party, who can never set up eis a defence to his 
 own liability the payment by the insurer, he wiU hold it as the insurer's trus- 
 tee to be surrendered to him at his request 
 
 But the basis of the payment by the third party must be a legal claim belong- 
 ing to the insured on that party, which the law will enforce; a simple gratuity 
 received by the insured to compensate for his loss, or a payment to him under 
 a mistaken supposition of an obligation to indemnify him, will not dischaige or 
 diminish the insurer's liability. Lucas t. Jefferson Ins. Co., 6 Covxn 635. 
 
 15 
 
114 LAW OP FIRE INSURANCE. 
 
 in the nature of a hundred, by whatever name it shall be de- 
 noininated, in which any of the said offences shall be commit- 
 ted, shall be liable to give full compensation to the person or 
 persons damnified by the offence, not only for the damage so 
 done to any of the subjects hereinbefore enumerated, but also 
 for any damage which may at the same time be done by any 
 such offenders to any fixture, furniture, or goods whatever, in 
 any such church, chapel, house, or other of the buildings or 
 erections aforesaid." 
 
 *50 By the 3d sec. it is enacted, " that no action or *sum- 
 mary proceeding as hereinafter mentioned, shall be main- 
 tainable by virtue of the act for the damage caused by 
 any of the said offences, unless the person or persons damni- 
 fied, or such of them as shall have knowldge of the circumstan- 
 ces of the offence, or the servant or servants who had the care of 
 the property damaged, shall, within seven days after the crnn- 
 mission of the offence, go before some justice of the peace re- 
 siding near and having jurisdiction over the place where the 
 offence shall have been committed, and shall state upon oath 
 before such justice the names of the offenders, if known, and 
 shall submit to the examination of such justice touching the 
 circumstances of the offence, and become bound by recogni- 
 zance before him to prosecute the offenders when apprehended; 
 provided also, that no person shall be enabled to bring any 
 such action, unless he shall commence the same within three 
 calendar months after the commission of the offence." 
 
 The following sections prescribe the process against the 
 hundred. 
 
 The 30th section of the statute states what it is that con- 
 stitutes Oifehmious demolishing, pulling down or destroying, 
 which entitles the sufferer to his remedy against the hundred. 
 
 " If any persons, riotously and tumultuously assembled to- 
 gether to the disturbance of the public peace, shall unlawfully 
 and with force, demolish, pull down, or destroy, or begin to 
 demolish, pull down or destroy (any of the subjects before- 
 mentioned,) every such offender shall be guilty of felony, and 
 being convicted thereof, shall suffer death as a felon." 
 
NATURE OF INSURER'S RISK. 115 
 
 The words of the statute appear, therefore, to indicate, that 
 mere damage done to a house, (for example, breaking wind- 
 ows,) even hy persons riotously and tumultuously assembled, 
 will not give the remedy against the hundred, but there must 
 be either a demolition, pulling down, or destruction, or such 
 a beginning as would intimate an intention on the part of the 
 rioters to demolish, pull down, or destroy. 
 
 *9. In general the risk commences from the signing *51 
 the policy, the payment of the premium or duty, or of a 
 deposit account thereof; and it will in general end with the 
 term for which it is made. Insurances against fire are in 
 general, either annual, or for a term of seven years, at an an- 
 nual premium ; and the offices, as an indulgence to the insur- 
 ed, generally allow fifteen days from the expiration of each 
 year for the payment of the premium for the next succeeding 
 year ; and the insured is considered to be under the protec- 
 tion of the policy till the expiration of the fifteen days, provid- 
 ed the premium be paid within that time.(l) 
 
 In the printed proposals of the Sun Fire Office, and of some 
 others, there is the following article : 
 
 On bespeaking policies, all persons are to make a" deposit 
 for the policy stamp, duty and mark, and shall pay the pre 
 mium to the next quarter day, and from thence for one year 
 more at least ; and shall, as long as the managers agree to ac- 
 cept the same, make all future payments annually at the said 
 office within fifteen days after the day limited by their respec- 
 tive policies, upon forfeiture of the benefit thereof ; and no in- 
 surance is to take place till the premium be actually paid by 
 the insured, his, her, or their agent or agents. 
 
 In an action (a) against the Liverpool Fire Office, which 
 had adopted the above article, the plaintiffs declared on a pol- 
 icy dated the 10th of December, 1788, in which (after, reciting 
 
 (a) Tarleton and others i;. Stainforth and others, 5 T. R. 695- 1 Bos & Pull 
 483. ... 
 
 (1) No such practice as that mentioned in the text is customary pmong the 
 fire insurance offices in this country. 
 
116 LAW OP FIRE INSURANCE. 
 
 that the plaintiffs had paid 11. 10s. and had agreed to pay 71. 
 10s. on the 10th of June, 1789, and the like sum every six 
 months during the continuance of the policy,) it was declared, 
 that from the date of the policy, so long as the plaintiffs should 
 pay the sum of 11. 10s. at the times and places aforesaid, and 
 the trustees or acting members of the society should agree to 
 accept the same, the funds of the society shall be liable to pay 
 the plaintiffs such damage and loss as they should suffer by 
 - fire, not exceeding 6000Z., according to the exact tenor of their 
 printed proposals. 
 
 *The declaration, after setting forth the exact tenor 
 52* of the printed proposals, stated, that the society had, 
 from the year 1777, been in the practice of insuring for 
 periods less than a year by policies similar to the present, re- 
 ferring in like manner to the same printed proposals, and that 
 they had received the premiums within the fifteen days after 
 the time limited in such policies, and the policies thereupon 
 remained in force. It then stated a loss to the amount of 
 6000/. on the 11th of Dec. 1789, before the expiration of the 
 fifteen days, and before any refusal to accept the renewed pre- 
 mium or to continue the policy. There was a second count, 
 stating, that before the expiration of the fifteen days the plain- 
 tiffs tendered at the office 11. 10s. to the managers of the so- 
 ciety, they then not having disagreed or refused to accept the 
 same. The defendants, amongst other pleas, pleaded to the 
 first count, that the plaintiffs did not pay the sum of 7/. 10s. 
 on or before the 10th Dec, as they ought to have done, in or- 
 der to have continued the policy to the time when the loss 
 happened. To the second count they pleaded that the sum of 
 11. 10s. was not tendered to the managers until after the 10th 
 of Dec. Upon a demurrer to these pleas the Court determin- 
 ed, that, under the above circumstances, the plaintiffs were not 
 entitled to recover, and gave judgment for the defendants. — 
 Lord Kenyon said, " It is admitted that the insurance did not 
 extend to half-a-year and fifteen days, and that completdly 
 puts an end to the whole case. The plaintiffs stipulated to 
 pay 11. 10s. half-yearly on the 10th day of June and the 10th 
 of Dec, and that they would, as long as the managers agreed 
 
NATURE OP insurer's RISK. 117 
 
 to accept the same, make their payments within fifteen days 
 after the time limited ; but no insurance is to take place until 
 the premium be actually paid. The continuation of the term, 
 therefi)re, depends on two circumstances, which may both con- 
 cur, namely, that the insured shoidd pay the 7Z. 10s., and that 
 the insurers should agree to accept that sum. Barely stat- 
 ing these facts is sufficient to show that the plaintiffs are not 
 entitled to recover." The judgment was afterwards afBrmed in 
 the Exchequer Chamber. 
 
 *Soon after this decisipn, the Royal Exchange As- *53 
 surance Company, the Phoenix, and some other com- 
 panies, gave notice that they did not mean to take advantage 
 of the judgment so pronounced, but would hold themselves 
 liable for any loss during the fifteen days which are allowed 
 for the payment of the renewed premium upon annual policies, 
 and others for a longer period, but that every policy for a 
 shorter period than a year would cease at six o'clock in the 
 evening of the day mentioned therein. 
 
 10. After notice by the Sun Fire Office under the follow- 
 ing circumstances to determine a contract, except upon pay- 
 ment of a higher premium, and refusal on the part of the in- 
 sured to pay such premium, the insured were held not to be 
 protected by the policy during the fifteen days allowed by the 
 office for the payment of the premium (fee, for the following 
 year. 
 
 The allowance of fifteen days is to be considered as form- 
 ing part of the period covered by the policy for the following 
 year, and, in order to discharge the office from liability during 
 that period, there must be notice to determine the contract. 
 
 Upon a cause(a)tried at Guildhall before Lord EUenborough, 
 C. J., a verdict was found for the plaintiff, subject to the opin- 
 ion of the Court, on the following case : — The defendants, and 
 C. Bewicke, since deceased, were three of the managers and ac- 
 ting members of the Sun Fire Office, being a society for the 
 insurance of property against fire, according to the terms of 
 
 (a) Salvin v. James, 6 East, 571. 
 
118 LAW OF FIRE INSURANCE. 
 
 their printed proposals, wMch were annexed to this case. An 
 adyertisement was published in the public newspapers by the 
 managers of this society, which advertisement has not been 
 retracted, and is as follows : — " Sun Fire Offie, 10th July, 
 1794. In consequence of several applications, the managers 
 of this office do hereby inform the public, that all persons in- 
 sured, in this office by policies taken out for one year, 
 54* or for a longer *term, are, and have always have been, 
 considered by the managers as insured for fifteen days 
 beyond the time of the expiration of the policies ; but this al- 
 lowance of fifteen days does not extend to policies for shorter 
 periods, which cease at six o'clock in the morning of the day 
 of the expiration of the time mentioned in the policies. — Hugh 
 Watts, Secretary." On the 11th of November, 1802, the plain- 
 tiffs caused to be effected in the said office the insurance in 
 question to the amount of 3000Z., and paid the premium and 
 duty, and on that occasion the policy set out in the declara- 
 tion, which is in the common form used in the office for insur- 
 ing 3000^. on the said property, from the 11th of November, 
 1802, to the 25th of December, 1803, was executed on behalf 
 of the office by the defendants and G. Bewicke. The plain- 
 tiff's cotton mill (the premises insured) was stone and slated, 
 and conformable to the rules of the first class of cotton rates, 
 &C.J and in the plaintiff's tenure, and they were duly interest- 
 ed in the premises insured. In Nov. 1803, the defendants 
 gave notice to the plaintiffs, that unless they agreed to pay 
 IZ. 18*. per cent, upon the said insurance as from the 25th of 
 Dec. 1803, instead of 11. Is. per cent, which the plaintiffs paid 
 upon the policy in the pleadings mentioned, the defendants 
 would not continue the insurance. To which notice the plain- 
 tiffs returned for answer, that they would not give that sum, 
 as they had made their premises so secure. On the 7th of 
 Jan. 1804, being within the period of fifteen days after the 
 expiration of the policy, the insured premises were consumed 
 by an accidental fire ; and on the 18th of January the plain- 
 tiffs gave notice of the loss to the agent of the defendants at 
 Durham, and wrote to the office a letter giving them similar 
 notice, and on the same day tendered to the defendants' agent 
 
NATURE OF INSURER'S RISK. 119 
 
 the premium of 11. 18s. per cent., the then rate of insurance 
 used by the said office, for another year, and the duty ; but the 
 defendants by their agents, ■whose acts were approved and rat- 
 ified by the office, immediately declared that they did not con- 
 sider the plaintiffs as insured at the time when the fire hap- 
 pened ; whereupon no further steps were taken by the 
 plaintiffs, and no money had *been paid. When the *55 
 loss happened, the plaintiffs had not paid or tendered 
 the premium for another year. The question for the Court 
 was, whether the plaintiffs were entitled to recover ? — If they 
 were entitled, the verdict to stand ; if not, a nonsuit to be en- 
 tered. 
 
 The only article of the printed proposals particularly refer- 
 red to in the argument was the third, as follows : — " On be- 
 speaking policies, all persons are to make a deposit for the 
 policy, stamp duty and mark, and shall pay the premium to 
 the next quarter-day, and from thence for one year more at 
 least, and shall, as long as the managers agree to accept the 
 same, make all fiiture payments annually at the said office 
 within the fifteen days after the day limited for their respec- 
 tive policies, upon forfeiture of the benefit thereof ; and no in- 
 surance is to take place till the premium be actually paid by 
 the insured, his or her agents." 
 
 Lord Ellenborough, C. J., delivered judgment ; after stat- 
 ing the pleadings. — This question arises on the construction 
 of the advertisement published by the Sun Fire Office on the 
 10th of July, 1794 ; and the point to be decided is, whether 
 this advertisement be an engagement by the office to indemni- 
 fy all persons who may insure their property at that office for 
 a year, for the space of fifteen days after the determination of 
 the period of their insurance, without any regard to an inten- 
 tion of continuing the insurance ? or whether it must not be 
 considered as having relation to the third article of their prin- 
 ted proposals, and as being to be construed with reference to 
 that article ? The terms of the advertisement being general, 
 have furnished the argument, that the right attached as soon 
 as the policy was effected ; that no condition being mentioned 
 or referred to in the advertisement, the right does not depend 
 
120 LAW OF FIRE INSURANCE. 
 
 on any thing ex post facto, and that it mnst be understood, 
 not as an exte nsion of the original policy, nor as an agreement 
 to grant a new policy, which shonld have relation back to the 
 determination of the old policy, but as an independent and ab- 
 solute agreement to indemnify for the space of fifteen 
 56* days. And on this supposition the declaration is 'fram- 
 ed, by which it is alleged that, in consideration the 
 plaintiffs would insure for one year, the officb undertook that 
 the property of the plaintiffs should be considered as insured 
 for fifteen days beyond the time of the expiration of the pol- 
 icy. To this mode of construing the advertisement, it has 
 been objected, that all insurances by the office, according 
 to the first article of the printed proposals, are to be " by pol- 
 icies signed and sealed by three or more of the trustees or act- 
 ing managers," and that the office never professed to insure 
 in any other way ; and in order to give effect to this term 
 or condition on which the office professes to insure, that the 
 Court ought not to construe the advertisement to be an en- 
 gagement independent of the terms and stipulations contain- 
 ed in and referred to by the policy, if by fair and reasonable 
 construction it may be referred to and connected with the 
 policy. The mode of insuring at this office, both before 
 and since that advertisement, has been the same, namely, 
 by a policy under seal referring to certain printed proposals ; 
 by the third article of which, it is provided, that all persons 
 bespeaking policies are to make a deposit for the policy, 
 «fcc., and to pay the premium to the next quarter-day, and 
 for one year more at least j and shall, " as long as the man- 
 agers agree to accept the same, make all future payments 
 annually at the office within fifteen days after the day 
 limited by their respective policies, upon forfeiture of the 
 benefit thereof," and that no insurance should take place till 
 the premium be actually paid. On the construction of a 
 similar policy, in the case of Tarleton v. Stainforth, 6 T. 
 R. 695 (a), the Court held, that until the premium was paid 
 persons who had insured were not protected by this article 
 during the fifteen days ; and that the intention of the par- 
 (a) Ante, p. 115. 
 
NATURE OP insurer's RISK. , 121 
 
 ties, as it was to be collected from the policy and article, was, 
 that the policy should have no effect until the premium was 
 paid, the object of the provision being to avoid the expense of 
 new stamps, <kc. ; and, in the course of the argumentin the 
 *case before us, it has been admitted that the advertise- *57 
 ment was published in consequence of that decision, to ob- 
 viate doubts which had arisen on account of it. And it is, in 
 effect, a declaration by the office, that though the legal con- 
 struction of the instruments did not bind them to make good 
 losses happening during the fifteen days, unless the premium 
 was previously paid ; yet that by the proposals they meant, 
 and their intention had been and was, to protect the parties 
 during the fifteen days, though a loss might happen before the 
 payment of the premium ; and if that be so, there can be no 
 question but that the advertisement must be construed with 
 reference to the article, and as if the article were qualified 
 and corrected by the advertisement. The policy refers to the 
 printed proposals, and the advertisement must either have the 
 effect of annulling the third article or of varying it, if they 
 cannot wholly stand togjether, of which there can be no doubt ; 
 and that the true way of understanding the advertisement is 
 as a correction of the article, and not as a substitution of a 
 new provision in its place, will appear from this, that the ad- 
 vertisement does not merely declare how persons insured shall 
 be considered, but how they always have been considered, 
 which must necessarily refer to and respect the engagements 
 the office had before made, that is, the policies and proposals 
 which, before the time of the advertisement, had been execu- 
 ted and published by the office. It is, in fact, a declaration 
 on the part of the office of the construction they at that time 
 did, and always before had, put upon their own instruments ; 
 it is no substitution of a new engagement different from what 
 they had formerly made in place of such former engagements, 
 but an exposition of the sense in which the instruments form- 
 ing those engaements had been understood by themselves and 
 were to be understood by others. If this be so, it brings us 
 to what will be the true construction of this third article, if it 
 
 16 
 
», 
 
 122 tAW OP FIBE INSCRANCK. 
 
 be read as varied by the advertisement ; and, if so varied, it 
 ■would stand as if at the end of the article, after the words " no 
 insurance is to take place till the premium be actually 
 58 paid by the insured," then had been added this sen- 
 tence, " that all persons insured at this office by poli- 
 cies taken out for one year, or for a longer term, are consid- 
 ered by the managers as insured for fifteen days beyond the 
 time of the expiration of their policies " ; the effect of which 
 would be to confine the words " no insurance is to take place 
 till the premium be actually paid," (on which the Court relied 
 in Tarleton v. Stainforth,) to the premium to be paid on the 
 original effecting of the policy, and to leave the article as to 
 the continuance of the insurance just as if nothing had been 
 said in it as to the time when the insurance was to take place. 
 Suppose then the article to be thus altered, it will still con- 
 tain the clause of option in the managers to receive the pre- 
 mium, which though it cannot be exercised during the fifteen 
 days, within which the assured may renew his assurance, so 
 as to leave the assurers liable to a loss within that period, 
 as that would make the advertisement nugatory, for it would 
 be in effect saying that they should be insured or not accord- 
 ing as the office should think fit to accept or refiise the pre 
 mium for another year ; yet as the option was most unques- 
 tionably intended to enable the office to determine the insur- 
 ance, and to retain to them the power of refiising to renew it 
 for another year, what is there, in case of their having made 
 their option not to renew the assurance, which entitles an as- 
 sured to an indemnity for the fifteen days, who is in no condi- 
 tion to renew his insurance ? The office had the power at any 
 time during the year of saying to the assured, " We will not 
 contract with you again, we will not receive from you the pre- 
 mium for another year " ; and by such declarationj the object 
 would cease for which the fifteen days were allowed, and as 
 no premium would be in such case to be received, no indemnity 
 could be claimed in respect of it. The consideration of the 
 indemnity during the fifteen days is the premium which may 
 be paid within that period ; but when that cannot be any 
 
NATURE OP insurer's RISK. 123 
 
 longer looked to or expected, the right to the indemnity must 
 determine also. The effect of the third article and ad- 
 vertisement is to give the parties an *option for fifteen *59 
 days to continue the contract or not ; with this advant- 
 age on the part of the insured, that if a loss should happen 
 during the fifteen days, though he have not paid the premium, 
 the ofiSce shall not after such loss determine the contract, but 
 that it shall be considered as if it had been renewed ; but 
 this does not deprive them of the power of determining the 
 contract at the end of the term, by making their option within 
 a reasonable time before the end of the period for which the 
 insurance was made. When the premium is received, the ef- 
 fect of it is to give the assured an assurance for another year 
 to be computed from the expiration of the first policy, and 
 not from the expiration of the following fifteen days, which 
 would be the case if the argument of the plaintiff's counsel 
 were well founded, that the interval of the fifteen days is not 
 comprised in the policy. If that were so, a new policy and 
 new stamps would be necessary, whereas, according to the 
 present policy, regard being had to its relation to the printed 
 proposals, it is an insurance for one year, and for so long as 
 the parties please, provided the assured pay the annual pre- 
 mium within fifteen days of the expiration of each year ; with 
 a restriction of the oiBce alone from determining the policy af- 
 ter the year during fifteen days of the following year, in ease 
 a loss should happen during that period ; and on this head 
 the argument used by the defendant's counsel from the annual 
 duty on insurances, has weight to show that the understand- 
 ing of the parties was not that for the fifteen days there 
 should be an absolute indemnity, as in such case the duties 
 would have been paid for that fractional part, from the non- 
 payment of which the assured could not but conclude that his 
 assurance was not meant to be an absolute unconditional as- 
 surance for more than a year, and such as the oflBce had no 
 power to determine until fifteen days after the year's end. 
 Under this view of the question, it will not be necessary to 
 say whether an insurance can be made by parol against the 
 perils insured against by this policy ; and as in this case 
 
124 LAW OP FIRE INSURANCE. 
 
 there has been a determination of the contract by the 
 "60 plaintiffs' having informed the oflSce that they *could 
 not give the increased premium demanded by them 
 for another year, there must be judgment for the defen- 
 dants. 
 
 11. A nominal misdescription of a building, if substantially 
 correct, will not vitiate the policy, neither will increased haz- 
 ard by the occasional use of fires, or occasional deposit of 
 hazardous goods after a policy has been effected whereby an 
 increased rate of premium would be required by the office, in 
 all cases vitiate a policy unless proper provisions are made by 
 the policy. 
 
 An action (a) of assumpsit was brought upon a policy of 
 insurance against the defendants, three of the directors of the 
 Beacon Insurance Company. The policy was effected upon 
 " a barn, situate in an open field, timber-built, and tiled." The 
 conditions indorsed on the policy required the usual description 
 of the property. The policy was efiected at the lowest rate of 
 premium,such as was only payable for buildings of a certain des- 
 cription, where no fire is kept, and no hazardous goods deposited. 
 There were articles fixing a higher rate of premium for build- 
 ings of other descriptions, with the same proviso against haz- 
 ardous goods ; and a proviso, that " if buildings of any de- 
 scription insured with the company shall at any time after 
 such insurance be made use of to stow or warehouse any haz- 
 ardous goods " without leave from the company, the policy 
 should be forfeited. ^ The premises were agricijltural build- 
 ings, but not such as were strictly to be described as a barn, 
 but they were of such a nature that they would have been in- 
 sured by the company at the same rate if they had been more 
 accurately described. They required tarring, and a fire was 
 consequently lighted in the warehouse, and a tar-barrel was 
 brought into the building for the purpose of performing the 
 necessary operation. In the absence and by the negligence 
 of the plaintiff's servant the tar boiled over, took fire and com- 
 municated with that in the barrel, and the premises were 
 burned down. 
 
 (a^ Dobson v. Sotheby, 1 Mood. & Molk. 90. 
 
126 
 
 It was contended that the plaintiff could not recover, 
 *lst. because the premises ■were incorrectly described *61 
 as a barn ; 2d. because the lighting a fire was a, con- 
 travention of the terms of the policy, which required that no 
 fire should be kept in buildings on which the rate of insurance 
 in the present case was paid ; 8d. that the tar-barrel came un- 
 der the description of hazardous goods, which was a breach 
 of the condition. 
 
 Lord Tenterden, C. J. — If the property insured has not 
 been correctly described, the defendants certainly are not lia- 
 ble ; but I do not think there is in this case any misdecrip- 
 tion which will discharge them. The word " barn " is not the 
 most correct description of the premises, but it would give 
 the company substantial information of their nature ; there 
 would be no difference in their risk, and the insurance would 
 have been at the same rate ; whether the word " barn " or a 
 more correct phrase had been used, I think, therefore, that 
 they are substantially well described. Nor do I think that 
 the other circumstances relied on furnish any answer \to the 
 action. If the company intended to stipulate, not merely that 
 no fire should habitually be kept on the said premises, but 
 that none should ever be introduced upon them, they might 
 have expressed themselves to that effect ; and the same 
 remark applies to the case of hazardous goods also. In the 
 absence of any such stipulation, I think that the condition 
 must be understood as forbidding only the habitual use of fire 
 or the ordinary deposit of hazardous goods, not their occa- 
 sional introduction, as in this case, for a temporary purpose 
 connected with the occupation of the premises. The common 
 repairs of a building necessarily require the introduction of 
 fire upon the premises, and one of the great objects of insur- 
 ing is security against the negligence of servants and work- 
 men. I cannot therefore be of opinion, that the policy in this 
 case was forfeited ; and certainly if it is valid, the circum- 
 stance that the fire happened through the negligence of the 
 plaintiff's servant furnishes no answer to the action(a). — 
 Verdict for plaintiff. 
 
 (fi) See Austin v. Drew, 6 Taunt. 436 ; 1 Holt, N. P. 0. 12C. 
 
126 LAW OP FIRE INSURANCE. 
 
 62* Pirn V. Reid (a) was a case of increased "hazard 
 
 after the policy had been effected, and it was held not 
 to vitiate the instrument ; it was held that the condition upon 
 which the case principally turned applied only to a misrepre- 
 sentation or omission to communicate cases existing at the 
 time of effecting the policy, and that an insurance was not vi- 
 tiated by carrying on a more hazardous trade upon the prem- 
 ises, or placing hazardous goods after the date of the policy 
 and pending the current year of the insurance(l). By another 
 condition the insured were to give notice to the oiEce of an 
 alteration, and it did not appear that a reasonable time had 
 occurred for giving such notice between the alteration and 
 the occurrence of the fire. The case principally turned upon 
 the first-mentioned condition and the absence of a precise 
 condition applying to the particular case : the conditions of 
 most ofiSces require that any alteration or addition, requiring 
 a higher premium, shall be communicated to the office, and an 
 indorsement made upon the policy and the additional premium 
 paid, or that the policy will be void. 
 
 The principal condition was in the following language, " In 
 the insurance of goods, wares, or merchandize, the building 
 
 (a) 6 Scott. New S. 982. 
 
 (l)The decision in this case, seems to hare tamed enUrely on the construc- 
 tion of a particuleir condition in the policy, and the point was not raised, that 
 the. change in the occupation of the building was a breach of the representation 
 of the use to which the premises were devoted. Indeed it does not positively 
 appear that there was any such representation. By the strictness of the Eng- 
 lish rules of pleading the issue had been so narrowed down that the only ques- 
 tion presented for trial, was how a certain condition of the policy should be 
 construed. If there was in truth a representation of the occupation of the 
 building at the time of effecting the insurance, and the case had been presented 
 to the Court upon its whole merits, it is difficult to see why the Defls. should 
 not have prevailed. A representation of that nature is, as has been already 
 said, not only affirmative that the fact is so at the time the statement is made, 
 but also promissory that it shall remain substantially so during the continuance 
 of the risk, and a material misrepresentation is equally fatal to the policy 
 whether it be affirmative or promissory. See note ante p. 86 ei seq. 
 
NATURE OP insurer's RISK. 127 
 
 or place in which the same are deposited is to be described, 
 the quality and description of such goods, also whether any haz- 
 ardous trade is carried on, or any hazardous articles deposited 
 therein, a.nd if any person or persons shall insure his or their 
 buildings or goods, and shall cause the same to be described 
 otherwise than as they really are, to the prejudice of the Com- 
 pany, or shall misrepresent or omit to communicate any cir- 
 cumstance which is material to be made known to the Com- 
 pany, to enable them to judge of the risk which they have un- 
 dertaken or are required to undertake, such insurance shall 
 be of no force." 
 
 So in Shaw v. Kobberds (o), where a granary with a kiln 
 for drying corn attached was insured, and the third condition 
 on the back of the policy stated, that unless the trade 
 "carried on in the insured premises be accurately describ- *63 
 ed, and if a kiln or any process of fire heat be used and 
 not noticed in the policy, the policy should be void ; and the 
 sixth condition stated, that if the risk to which the insured 
 premises were exposed should be by any means increased, no- 
 tice should be given at the office and allowed by endorsement 
 on the policy, or otherwise the insurance should be void ; and 
 it appeared that a cargo of bark had sunk near the premises 
 of the plaintiff, the insured, and he allowed the bark to be 
 dried at his kiln grates, and in consequence of the fire at the 
 kiln during this process which lasted three days, the premises 
 were burnt down, and it was found, as a fact, that drying bark 
 was a more dangerous trade than drying corn ; it was held, 
 first, that the subsequent use of the corn kiln for a different 
 purpose from that intended at the time of making the policy 
 was not a misdescription within the meaning of the third con- 
 dition ; secondly, that the single gratuitous use of the kiln as 
 a bark kiln was not such an alteration or increase of risk as 
 required notice to the office (1) ; thirdly, that the the two con- 
 
 (a) 1 Nev. & Perr. 279. 
 
 (1) The change in the occupation of a building must be permanent, and the 
 policy is not made void by the mere temporary exercise therein of a hazard- 
 
128 LAW OF FIRE INSURANCE. 
 
 ditions taken together did not amount to a warranty that the 
 plaintiff would not use the kiln for other purposes than dry- 
 ing corn. 
 
 In Friedlander v. the London Assurance Company (a), 
 goods were described as in the dwelling house of the insured, 
 but he had but one room as a lodger where the goods were 
 kept ; but it was held that they were well described within 
 the condition, which required that the houses, buildings, or 
 other places where goods are deposited, shall be truly and ac- 
 curately described : it was considered that such condition re- 
 lated to the construction of the house and not to the interest 
 of the party. 
 
 (o) 1 Mood. & Rob. 171, and see Warranty, p. 98. 
 
 ous trade or vocation. Gates v. Madison Co. Mut. Ins. Co,, I Seldeni69; 
 O'Niel T. Buffalo Fire Ins. Co., 3 Comstock 122; Barrett v. Jermy, 8 WeU. 
 Hwrls (f- Gordon [Ex. S.) 535. 
 
 The customary condition in a policy that it shall be void in case the build- 
 ing is used for storing any articles, goods or merchandise of a hazardous or ex- 
 tra-hazardous character, has been held not to be violated by keeping such ar- 
 ticles in quantities not unusually large for the purposes of ordinary retail — 
 Langdon v. N. Y. Equitable Ins. Co., 1 Hall 226; N. Y. Equitable Ins. Co. v. 
 Langdon, 6 Wend. 623 ; Rafferty v. New Brunswick' Fire Ins. Co., 3 Harrison 
 {New Jersey) 480 ; Moore v. Protection Ins. Co., 29 Maine 97 ; O'Niel v. Buf- 
 falo Fire Ins. Co., 3 Comstock 122. 
 
 A condition avoiding the policy in case the building insured shaU be used 
 for the purpose of carrying on any one of certain specified hazardous trades, 
 or any such trade generally, is not broken by exercising any such business in 
 the building, provided it be auxiliary to, and necessary for, the business recog- 
 nized in the policy as carried on therein. Thus, where a building was insured 
 as a manufactory of hat bodies, and priviliege was given in the policy for all 
 the process of said business, it was held that the policy was not avoided by the 
 existence of a Carpenter's shop in the building, which was used for the purpose 
 of repairing the machinery in such manufactory necessary for making hat bo- 
 dies ; notwithstanding the fact, that in the printed conditions of the policy, 
 among the trades and occupations denominated extra-hazardous, the introduc- 
 tion of which into the building was to invalidate the insurance, was specified 
 " carpenters in their own shops or in buildings repairing." Lownsbwry v. Pro- 
 tection Ins. Co., 8 Cown. 459. 
 
 Thus, also, a policy on a China ware {actory, with a similar condition 
 
129 
 
 It appears that a coffee-house is not an inn -within the mean- 
 ing of a policy, enumerating the trade of an innkeeper amongst 
 others as doubly hazardous(o). 
 
 (a) Doe d. Pitt v. Laing, 4 Campb. 76; 
 
 in regard to carpenters' shops, weis held not to be invalidated by the fact 
 that a room in the , building was used by a carpenter in the ordinary and nec- 
 essary business of the manufactory, as erecting shelves and making moulds 
 and boxes, for instance. De Ltmguemare v. TVadesmen's Ins. Co., 2 Hall 589. 
 So, also, the words " houses building and repairing '' mentioned among ex- 
 tra hazeirdous trades interdicted in the policy, were held not to apply to repairs 
 made upon the building insured, but to mean carrying on the trade of house 
 building or house repairing in or about it. Grant t, Howard Ins. Co., 5 Hill 
 10; O'Niel v. Buffalo Fire Ins. Co., 3 Comstock 122. 
 
 Mere alterations or new erections in or about a building insured do not al- 
 ways increase the risk ; the enhanced hazard arises from the use of such altera- 
 tions and erections in the ordinary way. In such cases, it is not sufficient for 
 the insurer to prove the fact of the alteration, he must also show that its use and 
 employment followed, and that the risk was thereby increased. Thus, where 
 after insurance of a building, the insured changed the position of two boilers 
 from the outside to the inside of the building, and the judge directed the jury to 
 consider whether the alteration increased the risk of fire, it was held a misdi- 
 rection, the question being whether the use of the boilers after the alteration in- 
 creased the risk. Barrett v. Jermy, 8 Wels. Hurl, if- Gordon {Ex. R.) 535. 
 
 17 
 
CHAPTER IV. 
 
 OF THE PROOF OF LOSS. 
 
 1. Proof in general. 
 
 2. Production of the Certificate under the head of the Min- 
 ister, Churchwardens, ^c, when required by the Condi- 
 tions. 
 
 1. Most offices have a condition or proposal indorsed on their 
 policies to the following efiFect : " all persons sustaining any 
 loss or damage by fire are forthwith to give notice to the com- 
 pany, at their head office in London, and as soon as possible 
 to deliver in as particular an account of their loss or damage 
 as the nature of the case will admit, and make proof of the 
 same by affidavit, declaration, or affirmation before a justice 
 of the peace, and produce such other evidence as the" directors 
 of the company may reasonably require ; and until such affida- 
 vit, declaration or affirmation, account, and evidence are pro- 
 duced, the amount of such loss, or any part thereof, shall not 
 be payable or recoverable ; and if there appear fraud in the 
 claim made for such loss, or false swearing, declaring, or af- 
 firming in support thereof, the claimant shall forfeit all bene- 
 fit under such policy, except such as the directors may think 
 fit to allow." Others have varied this condition, in terms re- 
 quiring, in addition to the usual requisite evidence, " a certi- 
 ficate under the hands of the minister and churchwardens, to- 
 gether with some other reputable inhabitants of the parish, 
 
OP THE PROOF OF LOSS. 131 
 
 not concerned in such loss, importing that they were well ac- 
 quainted with the character and circumstances of the person 
 or persons insured, and do know or verily believe that 
 he, she, or they really *and by misfortune, without any *65 
 fraud or evil practice, have sustained by such fire the 
 loss and damage as his, her, or their loss to the value therein 
 mentioned ; but till such affidavit and certificate of such insur- 
 ed's loss shall be made and produced,the loss-money shall not be 
 payable." The offices usually undertake to pay the loss, not 
 exceeding the sum insured, " according to the conditions in- 
 dorsed on the policy," or according to the exact tenor of the 
 printed proposals. The offices, upon application after a fire, 
 usually furnish the insured with necessary information for prov- 
 ing their loss.(l) 
 
 (1) Notice of the loss is usually required to be given forthwith, and 
 any unreasonable delay on the part of the insured in giving it will prevent 
 his recovery upon the policy. Thus the stipulation for notice forthimih -was 
 held not to be complied with when the notice was not given till more than a 
 month after the fire. Inman v. Western Fire Ins. Co., 12 Wend. 452. 
 
 But the peculiar circumstances of the case, as the employment of the insured 
 in saving the property, or the frequency of the mails, are to be taken into con- 
 sideration for the purpose of ascerteiining whether the notice and other prelim- 
 inary proo& were communicated with due diligence. Edwards v. Baltimore 
 Fire Ins. Co., 3 GiWs R. 276; Inman v. Western Pire Ins. Co., 12 Wevd, 
 452. 
 
 Where the- form of notice is not specified, a verbal notice or a notice directed 
 
 to the agent of the insurers, £ind deposited in the post office is sufficient. 
 
 Curry v. Commonwealth Ins. Co., 10 Pick. 535 ; Inman v. Western Fire Ins. 
 Co., 12 WeTid. 461. 
 
 Where the policy has been assigned with the consent of the insurers before 
 loss, thp notice may be given by the assignee instead of the original insured. — 
 Cornell V. Leroy, 9 Wend. 163. 
 
 Most policies require, in addition to the notice, a particular account of the 
 loss sigiied and sworn to by the insured. This clause has been held to mean 
 an account of the property destroyed or injured, and not of the manner and 
 cause of the loss; Catlin v. Spring fiM Fire Ins. Co., 1 Sumner 434. Nei- 
 ther is it necessary to state in such account of loss the nature of the interest of 
 the insured. Gilbert y. North American Fire Ins. Co., 23 Wend. 43. 
 
132 LAW OP FlfeE INSURANCE. 
 
 2. It has been held, upon the construction of the policies of 
 the Sun and Fhcenix Fire OfiSces : — 1st. That the production 
 of this certificate under the hands of the minister and church- 
 wardens, together with some other reputable inhabitants, ia a 
 condition precedent, without compliance with which the plain- 
 tiff cannot recover(2) : 2dly. That the printed proposals, if re* 
 ferred to in the policy, are to be taken as part of the policy. 
 
 In Oldman and another, assignees of Ingram v. Bewicke 
 and others {a), in an action against the Sun Fire Office, where 
 the plaintiffs, in their declaration, after stating that the bank- 
 rupt, the insured, had conformed to the above article, as to the 
 notice, account, and affidavit of loss, stated that the minister of 
 
 (ffl) 2 H. Bla. 577, n. 
 
 Where all the books and papers of the insured were burnt, together with his 
 stock of goods, his affidavit of that fact, and that he had, a short time before the 
 fire, examined his books and found that his stock amounted to $5000, which 
 had nbt been much reduced by sales previous to the fire, was held a sufficient 
 compliance with this requirement, Norton v. R. <f- jS. las, Co., 7 Cowen 645. 
 
 (3) Though the strict rule of the English cases, cited by Mr. Ellis in this 
 chapter, in regard to the necessity of the precise certificate, and other prelim- 
 inary proofs, required by the conditions of the policy, has been recognized and 
 approved in America, (See Leadbetter v. ^taa ha. Co., 1 Shepley (13 Maine) 
 265, and Scott v. Pkanix Ins. Co., Stuarts {L. C.) Rep. 354,) its severity has 
 been much mitigated by the now well settled doctrine, that all objections to the 
 preliminary proofs are waived, except those which are taken at the time the 
 proofs are received, and that if the insurers accept them without pointing out 
 their deficiencies,or refuse to pay the loss on some other ground,they cannot sub 
 sequently allege that the proofs were insufficient, or not rendered within the 
 required time. Heath v. Franklin Fire Ins. Co., 1 Cushing 257 ; Mbna Ins. Co. 
 V. Tyler, 16 Wend. 385 ; TurUy v. North Am. Fire Ins. C0.,2b Wtnd. 375 ; Mc- 
 Masters v. Westchester Co. MiU. Ins. Co., id. 379; Bodle v. Chenango Co. Mut. 
 Ins. Co., 2 Comstock 53 ; OfNiel v. Buffalo Fire Ins. Co., 3 Comstock 122 ; 
 Tayloe v. Merchants' Fire Ins. Co., 9 Howard 390. But see contra Colum- 
 bian Ins. Co. V. Lawrence, 2 Peters 25. This last decision, however, was vir^ 
 tually overruled in a subsequent trial of the same case, reported, in 10 Peten 
 507, and was also expresssly disapproved by the same Court in Tayloe v. Mer- 
 chants' Fire Ins. Co., 9 Howard 404. 
 
OP THE PROOF OP LOSS. 138 
 
 Portsea, in which the loss had happened, resided at a distance 
 from the parish and was wholly unacquainted with the charac- 
 ter and circumstances of the insured, and unable to make the 
 certificate required by the policy; but that the insured had 
 procured and delivered to the oflSce a certificate under the hands 
 of several reputable inhabitants of the tenor required by the 
 article. No notice was taken in any of the pleas of the want 
 of certificate. The cause went to trial, and the jury found a 
 verdict for the plaintiffs for a fifth of the sum demanded. 
 The defendants *moved in arrest of judgment, on the *66 
 ground that the plaintiffs had not set forth in their decla- 
 ration ^ sufiScient title to recover upon the policy against the 
 defendants. In answer to this application it was said, that it 
 was grounded on the title being either defective or defective- 
 ly set forth ; that the latter objection was cured by the ver- 
 dict, and the former waived by the defence set up by the pleas. 
 The Court, however, arrested the judgment. The Chief Jus- 
 tice said, " though I am satisfied that the verdict was right, 
 that the fire was accidental, and that the certificate could not 
 have been procured because the insured had not sustained all 
 the loss claimed ; yet the rule of indentment cannot be applied 
 where therejs an absolute defect of title, as there is in this case. 
 As to the pleas, they are wholly collateral to the title." Mr. 
 Justice Gould said, " till the a£Sdavit is made and the certifi- 
 cate procured, the money is not payable. The time of pay- 
 ment, therefore, is not yet come. Though a bona fide suffer- 
 er, still she is not entitled without a certificate. The stipula- 
 tion is a condition precedent, that there shall be a certificate 
 to shew that there is no kind of fraud. Nothing is said about 
 the churchwardens, and the excuse of the minister living at a 
 distance is frivolous." 
 
 In the next case upon this subject, upon a policy of the Sun 
 Fire OflSce, Routledge v. Burrell (a), the declaration, by way 
 of excuse for not producing the certificate, stated, that although 
 application had been made to the proper parties for the certi- 
 ficate, that the defendants, by false insinuations and promises 
 
 {«) 1 H. Bla. 254. 
 
134 LAW OF FIRE INSURANCE. 
 
 of indemnity, prevailed on the minister, &,o., to refuse to sign 
 it. The defendants, as to the first breach of covenant, pleaded 
 1st, that the insured had no interest in the goods, &o., insur- 
 ed ; 2dly, that they did not prevail on the minister, &c., to re- 
 fuse to sign the certificate. As to the second breach they 
 pleaded, 1st, no interest : and 2dly, that neither the testator 
 in his lifetime, nor the plaintiff since his death, had pro- 
 cured such certificate. 'Issue was joined upon the three *67 
 first pleas, and the plaintiff demurred to the last. In 
 arguing that demurrer, it was contended on the part of the 
 plaintiff, 1st, that a condition or restriction could not be annex- 
 ed to and made part of a deed by words of mere reference to a 
 printed paper distinguished only by the date of the yeai* in 
 which it was priuted, without any signature, seal or stamp, to 
 give it authenticity ; and 2dly, that the restriction in ques- 
 tion, though it were properly annexed to the deed, was bad in 
 itself. Many authorities were cited in support of these propo- 
 sitions ; but the Court said, that the matter was too clear to 
 admit of a doubt, and gave judgment for the defendants. 
 
 Finally, in the case of Wood and others, assignees of Lock- 
 yer and Bream v. Worsely (a), in an action brought by the 
 assignees of the insured, who had become bankrupts, against 
 the Phoenix, the plaintiffs in their declaration amongst other 
 things, alleged, that the bankrupts, soon after the loss, procur- 
 ed and delivered to the company a certificate under the hands 
 of divers reputable householders, in the usual form ; and that 
 as soon as possible after the loss, they applied to and request- 
 ed the minister and churchwardens of the parish to sign such 
 certificate ; but that they, without any probable cause, wrong- 
 fully i-efused to sign such certificate. To the first count the 
 defendants, amongst other pleas, pleaded, that the minister 
 and churchwardens did not wrongfully and without probable 
 cause refuse to sign the certificate, and that neither the bank- 
 rupts nor the plaintiffs had procured any certificate from the 
 minister, churchwardens and reputable inhabitants, as is re- 
 
 (<i)3H.Bla.574i6T. R.710 
 
OP THE PROOF OP LOSS. 135 
 
 quired by the said printed ftopouia. The cause iraB tried, 
 and the pkindSs obtained a verdict of 3000/. The defendant 
 moved in arrest of jndgment on the same gromid as in the case 
 of Oldnum v. Sevicke, namely, tliat the production of the cer- 
 tificate was a condition precedent to the payment of the 
 loss, *«id that the plaintifis not having averred perfimn- *68 
 ance, had shown no title to recover. After the argnment, 
 Lord Chief Jnstice Eyre, Mr. Justice Bnller, and 3Ir. Justice 
 Booke, seemed to be of opinion, that supposing tjie printed pro- 
 posals to be conditions precedent, there had been a perfiirm- 
 ance cy pres ; but that in troth the policy being a commerdal 
 contract was to be construed liberally, and the true question 
 was whether the loss had been Mrly incurred. If it had, vaA. 
 it appeared on the record to have happened, the refusal of tlie 
 minister and churchwardens was without cause, and therefinre 
 the plaintiffs were entitled to maintain their action. But Mr. 
 Justice Heath appeared to differ from the rest of the Court, 
 and time was taken to deliberate. Afterwards judgment was 
 g^en for the plaintiffis pro forma, upon the understanding that 
 a writ of error would be brought whichever way the jndgment 
 should be given. Upon this writ of error, the Court of King's 
 Bench, after two arguments reversed the judgment of the Court 
 of Common Fleas, being unanimously of opinion that the pro- 
 duction of the certificate was a condition precedent. ImtA 
 Kenyon 8«d, he did not see how the term cy pres was ap- 
 plicable to the Bttbjeet ; thai, the argument firanded on this 
 went to show, that if none of the inhabitants of this parish 
 would certify, a certificate from the inhabitants of the next or 
 any other parish would have answered the purpose. But, he 
 sud, that the insured could not substitute other terms or con- 
 ditions in lieu of those which all the parties to the contract had 
 originally made : the iosured cannot substitute one thing finr 
 tatoiShet. In the case of Campbell ,v. French (a), his lordship 
 explained die grounds of this doctrine. It was ccmipetent to 
 tlie insurance office to make the stipulations stated in the prin- 
 ted proposals ; tliey had a right to say to individnals who were 
 
 (a)6T.E.20O. 
 
136 LAW OF FIRE INSURANCE. 
 
 desirous of being insured, " knowing how liable we are to be 
 imposed upon, we will, among other things, require that 
 *69 the minister, churchwardens, and some of the 'reputable 
 inhabitants of your parish, shall certify that they believe 
 that the loss happened by misfortune, and without fraud, other- 
 wise we will not contract with you at all." If the assured say, 
 "that the minister and churchwardens may obstinately refuse 
 to certify ;" the insurers answer, " we will not stipulate with 
 you on any other terms." 
 
 There is no foundation for the action, and the judgment be- 
 low must be reversed{l). 
 
 (I) There is a marked distincUon between Marine and Fire Insurance not 
 noticed by Mr. Ellis, in regard to the mode of adjusting losses, which may be 
 as appropriately mentioned here as in any other part of this work. In the for- 
 mer, in all cases of partial loss, the insurer pays only such a proportion there- 
 of, as the amount insured bears to the whole value of the property at risk,whUe 
 in the latter he is liable to m&ke good all the actual damage sustained, if within 
 the amount insured, whether the loss be total or partial, without any regard to 
 the amount of the risk which the insured may have chosen to take upon him- 
 self. 
 
 In Fire insurance also, there is no constructive total loss, neither is the law 
 of Marine insurance respecting salveige, nor the one third new for old rule ap- 
 plicabls to a loss under a fire policy. In fire insurance, whatever portion of the 
 insured property is saved belongs to the insured instead of the insurer, and its 
 value is deducted from the whole value of the property in order to ascertain the 
 amount of the underwriter's liabihty. BrirUeij v. National Ins. Co., 11 Met- 
 calfe 195 ; lAscom v. Boston Mut. Fire Ins. Co., 9 Metcalfe 205; TyvMv.Rox- 
 bury Mm. Fire Ins. Co., 3 Gushing, 267. 
 
 An interesting inquiry is suggested by the remarks of Jones, Ch. J., in Lavr 
 rent v. Chatham Fire Ins. Co., 1 HaU 41, in regard to the measure of indem- 
 nity which the owner of a building insured under a fire policy is entitled to re- 
 ceive. Is this governed by the intrinsic value of the building itself, as for in- 
 stance, its cost, or the cost of erecting one predsely similar to it, or is it the 
 amount of money for which it would have sold immediately previous to the 
 loss, affected as this amount must necessarily be, by the special and peculiar 
 circumstances of the insured, and the local advantages or disadvantages of the 
 building 1 Thus, suppose a new building, which cost S5000, to have been in*- 
 sored for that amount for the term of five yeeurs. Shortly after the insurance 
 was effected, and before the building had become at all deteriorated by age or 
 
OF THE PROOF OF LOSS. 137 
 
 osage,sappose that on aocoant of titt decline of bosines in the plafie,ar die con- 
 tigaily of some noisance, or by beii^ rendered difficult of access througii Utt 
 oection (tf a laiboBd embankment near it, or tbe ezeavation of the street before 
 it, its ytlae became ranch d^precialed, so that it woold not have sold, together 
 -widi dte bnd tm which it stood, fin' more than §3500. In case of its destrac- 
 tioi by fire, unda diis slate of things, what would be die measure of the insur- 
 er's lialnlity, the sann for i^ch the building would haTe soU, or $5000, die 
 sum which it originally cost and which it would cost to rebmlditt 
 
 In the ease in 1 Ball, Jimes, Ch. J., inclines to the latter opinion, and aup- 
 pcxts it by a dear and eograit aigoment, and this is probably the more correct 
 ■new of die qoe^m, though it most be admitted that the argument on the other 
 side is not entirdy destitute offeree. 
 
 18 
 
CHAPTER V. 
 
 OP FRAUDULENT LOSSES. 
 
 1. Malicious setting fire with intent to injure.. 
 
 2. General evidence in support of a charge of Arson. 
 
 3. Negligence of the insured. 
 
 The statute of 7 Wm. 4 and 1 Vict. c. 89, s. 3, enacts, tliat 
 whosoever shall unlawfiilly and maliciously set fire to any 
 church or chapel, or to any chapel for the religious worship 
 of persons dissenting from the United Church of England and 
 Ireland, duly registered or recorded, or shall unlawfidly and 
 maliciously set fire to any house, stable, coachhouse, outhouse, 
 warehouse, office, shop, mill, malthouse, hop oast, bam,or gran- 
 ary, or to any building or erection used in carrying on any 
 trade or manufacture, or any branch thereof, whether the same 
 or any of them respectiyely shall then be in the possession of 
 the oflFender, or in the possession of any other person, with in- 
 tent to injure or defraud any person thereby, every such of- 
 fender shall be guilty of felony, and be subjected to transpor- 
 tation or imprisonment as therein mentioned. 
 
 The material parts of this section are the same as those of 
 Stat. 43 Geo. 3, c. 68, under which last statute, sect. 1, E. Gill- 
 son was indicted(o). The indictment was for feloniously setting 
 fire to a certain house, being in the possession of the said E. 
 
 (a) Rex V. Gillson, 1 Taunt, 95. 
 
OP FRAUDULENT LOSSES. 189 
 
 Gillson, with intent to defraud the London Assurance Com- 
 pany. At the trial, a policy of insurance was given in evi 
 dence on the pajrt of the prosecution, hy which the prisoner's 
 gooda in a house there described were insured against fire ; 
 and upon this policy a memorandum was indorsed, stat- 
 ing, that the goods insured had been 'removed £rom the *7l 
 house described in the policy to another house men- 
 tioned in the memorandum, in which last mentioned house the 
 prisoner was charged with having committed the felony. The 
 policy was properly stamped, but the memorandum had no 
 stamp, and the objection taten for the prisoner was, that in 
 support of the charge it was essentially necessary to show 
 that there subsisted a legally effective contract, and that, by 
 the provision of the stamp acts, the memorandum in question, 
 not being stamped, could not Tie given in evidence, or be good 
 or available in any manner whatever ; and a distinction was 
 taken between the case where an unstamped forged instrument 
 was admitted in evidence against the party charged with hav- 
 ing forged it, or with uttering it or knowing it to be forged(a). 
 Another objection was also urged on behalf of the prisoner, 
 that a corporation cannot bind itself by a mere agreement, it 
 can only contract by deed, and without a contract which could 
 be en&Med, the intent to defraud cannot be contemplated. — 
 This latter point, however, does not appear to have been much 
 labored. After argument before eleven of the judges, Mr. 
 Justice Booke being absent, the prisoner was ordered to be 
 discharged ; six of the learned judges being of opinion, as it 
 was understood, that the memorandum was not admissible evi- 
 dence. Where the intent is laid to defraud the insurers, the 
 policy is the best evidence on their part to show that the house 
 was insured, and the books of the insurance company are not 
 evidence vrithout notice to the insured to produce the pol- 
 icy(6> 
 
 It has been held under stat. 43 Geo. 3, c. 58, s. 1, and the 
 doctrine is equally applicable to 7 Wm. 4, and 1 Vict. c. 89, 
 
 (a) See Hawkeswood'g case, 3 East, P. C. 955 ; 1 Leach's Cr. C. 292 ; Re' 
 culist's case, 2 Leach's Cr. C. 811. 
 
 (4) Rex V. Doran. 1 Esp. C. 127. 
 
140 LAW OP PIKE INSURANCE. 
 
 8. 3, that the act of wilfully burning the property carries with- 
 in itself sufficient evidence of an intention to injure the owner, 
 
 without proof of any other act which indicates malice, 
 •72 although the principal object of the former statute was 
 
 to comprise the case of a person burning a house, of 
 which he was tenant or owner to the injury of his landlord or 
 neighbor, or to de&aud the insurer(o). 
 
 2. The general evidence in proof of the offence, as in other 
 cases, resolves itself into the probable motives of the prisoneri 
 his opportunity and means of committing the offence, and his 
 conduct ; and where the prisoner is charged with setting fire 
 to his own house with intent to defraud the insurers, the value 
 of the property as compared with the amount insured, ap- 
 pears to be a question of great importance, in order to estab- 
 lish or repel the inference of motive(6). 
 
 3. Mere negligence, whether of the insured or his agents 
 or servants, constitutes no defence for the insurers. In Shaw 
 V. Kobberds (c) Lord Denman, C. J., thus expresses him- 
 self: — "One argument remains to be noticed, namely, that 
 the loss here arose from the plaintiff's negligent act in allow- 
 ing the kiln to be used for a purpose to which it was not 
 adapted. There is no doubt that one of the objects of insur- 
 ance against fire is to guard against the negligence of ser- 
 vants and others, and therefore the simple fact of negligence 
 has never been held to constitute a defence ; but it is argued 
 that there is a distinction between the negligence of servants 
 or strangers, and that of the insurer himself. Wo do not see 
 any ground for such a distinction, and are of opinion that in the 
 
 (a) Farrington's case, Russel, 1674. 
 
 (i) See 2 Starkie on Evidence, 69 ; Rickman's case. East's P. C. 1035. 
 
 (e) 1 NeT. & Per. 379. See Busk v. Royal Exchange Assurance Company, 
 3 Barn. & A. 73. Walker v. Maidand, 5 Bam. & A. 171. Bishop v. Fent- 
 land, I Mann & R. 49 ; 7 B. & G. 219. Austen v. Drewe,6 Taunt. 430, 
 •nU, p. 125. 
 
OF FRAUDULENT LOSSES. ^41 
 
 absence of all fraud the proximate cause of the loss only is to 
 be looked to."(l) 
 
 (l)CatUny. Springfield FHre Ins. Co., 1 Sumner 434; PaU^sco Ins. Co., v. 
 CouUer, 5 Peters 237 ; Columtian Ins. Co. v. liowrence, 10 Peters 507 / Wil- 
 liams ▼. N. E. Mut. Fire Ins. Co., 31 Maine (1 Red.) 219 ; Gates v. Madison 
 Co. Mvt. Ins. Co., 1 Selden 469. 
 
 But it was held in Chandler t. Worcester Mut. Fire Ins. Co., 3 CtiMng 338 
 that the negligence of the insured may be so gross and culpable, that the law 
 will presume fraud, and the insurers will be discharged, though there be no 
 positive proof of an actual design on the part of the insured to burn the 
 property. 
 
CHAPTER VI. 
 
 OF ASSIGNMENT OP POLICIES. 
 
 1. Assignment in General. 
 
 2. Assignment of Policy after the Fire happens, with 
 Possession of the Property insured before the Fire. 
 
 It das been before observed, that the insured upon a policy 
 of insurance, in order to recover, must have an interest in the 
 subject of insurance at the time of insuring, and also at the 
 time the loss by fire happens. The mere assignment of a pol- 
 icy would be useless, unless the subject insured be assigned 
 also ; but if a policy be assigned to a person already in pos- 
 session of the subject insured, and the office allows the as- 
 signment, it may bind them, the assignment being as against 
 them to be considered a new contract. Without reference 
 to illegality, it would be highly dangerous to permit any traf- 
 ficking in policies against fire, and offices would be extremely 
 negligent of their duty to the public if they consented to pay 
 upon a policy where there was no accompanying interest. In 
 the printed proposals of the offices in general it is declared, 
 that, upon the death of an insured his interest in the policy 
 shall be continued to his representative, to whom the property 
 belongs, provided such representativee, before any new pay- 
 ment be made, procure his right to be indorsed on the policy 
 at the office. 
 
 In the proposals of the Hand in Hand Office it i^ declared, 
 that if the premises insured should be assigned, the assign- 
 
OF ASSIGNMENT OF POLICIES. 143 
 
 ment must be eoter^ atthe office^^^thin forty-two days after itis 
 executed, or else that^^tke assignee shall have no benefit there- 
 by. In the proposals of the Union it is declared, that 
 every member transferring his policy shall, 'within three *74 
 months,"giTe notice. to the directors, and bring his pol- 
 icy to the office to have such transfer indorsed. The West- 
 minster Office requires that the assignment shall be entered 
 at the office as soon as possible. 
 
 Some of the offices give notice generally upon the policy, 
 that "it shall be of no force if assigned, unless such assign- 
 ment be allowed by an entry in the books of the office or in- 
 dorsed on the policy." Even without this provision, upon 
 the general principles of law, it is very questionable whether 
 the holder could have any legal demand against the insurers 
 without notice to them ; but this condition, moreover, re- 
 quires allowance (a). Upon reasonable principles, offices 
 should have the power of exercising a discretion in the se- 
 lection of the persons whose property they may be called up- 
 on to insure, and of late years frauds and fraudulent claims 
 upon fire offices have been so frequent, and to so large an 
 amount, that an attention to the character of the party pro- 
 posing to insure, has become a subject of considerable im- 
 portance. 
 
 2. Although a person may have become possessed of the 
 premises or goods insured before the time of the fire, if the 
 policy of insurance which covers them be assigned to him af- 
 ter the fire happens, and without the consent of the office he 
 cannot recover. 
 
 In July 28, 1721, Richard Ireland (i) obtained a policy 
 from the Sun Fire Office for the insurance of his house, the 
 Angel Inn at Gravc^end,, with his goods therein, and it was 
 thereby a^eed^ that so long as Ireland should pay 5s. a quar-. 
 terj the society; would satisfy the said Ireland, his executors, 
 
 (a)See Insuraiice upon Liyes, post, Chapter on assignment of Policies. The 
 principle is equally applicable. 
 (i)Lynch and another v. Dalzell and others, 4 Bio. P. C, 432, ed. TomL 
 
144 LAW OP FIRE INSURANCE- 
 
 administrators and assigns, his loss not exceeding 1000^ Ire- 
 land afterwards died, and his son being his sole executon 
 brought the policy to the office, and had an indorsement made 
 
 thereon, thstt the same belonged to him, and afterwards 
 *75 paid a year's premium up to Christmas, 1727. *In 
 
 August, 1727, the house was destroyed by fire ; and 
 some time after. Lynch and another (the plaintiffs) applied to 
 the office ; alleged that they had purchased the house and 
 goods of Anthony Ireland ; that the same were their prop- 
 erty at the time of "the fire ; that they had an assignment of 
 the policy made to them at the time that the house and goods 
 were assigned, and they produced an affidavit from R. Lynch, 
 in which he swore that their loss by the burning of the 
 house amounted to 5002. and upwards ; and upon this affidavit 
 was indorsed the certificate from the minister, churchwardens, 
 (fee, ; but neither in the affidavit nor certificate was any men- 
 tion made of any loss sustained by the plaintiffs by the burn- 
 ing of any goods, nor was any affidavit made by A. Ireland 
 that he had suffered any loss. The plaintiffs, however, in- 
 sisted that the office should pay them 10002. for their loss by the 
 burning of the house and goods ; and they filed a bill in chan- 
 cery, setting forth that A. Ireland, on the 24th of June, 1727, 
 for 2502. assigned to them a lease of the house and stables, 
 but that the goods for which the plaintiffs, as they alleged, 
 were to pay 6002. being intended for one T. Church, who was 
 to hold the inn under them, Ireland, by bill of sale of the 
 same date, sold the same to Church for his own use. The bill 
 also stated the assignment of the policy to the plaintiffs, and 
 that, although the bill of sale of the goods was made to 
 Church, yet the plaintiffs paid the purchase money, and 
 Church assigned the bill of sale to them for securing it, and 
 also released to the plaintiffs his interest in the policy. The 
 defendants (certain directors of the office) by their answer al- 
 leged, that the affidavit produced was not agreeable to the 
 proposals ; that no assignment of the policy was made to the 
 plaintiffs, nor any assignment of it made to them by Church 
 till after the fire ; they insisted that the policies issued by 
 
ASSIGNMENT OF POLICIES. 
 
 145 
 
 the office were not in their nature, assignable, being only con- 
 tracts to make good the loss which the contracting party him- 
 self should sustain, and that no other person was entitled to 
 any benefit from it. Witnesses were examined on both 
 sides* It appeared, upon the plaintiff's *own evidence *76 
 that the agreement for the assignment of the policy, if 
 any, was not till after the agreement for the purchase of Ire- 
 land's term in the house, and that the assignment of it, though 
 bearing date before, was not made till some time after the fire ; 
 so that the agreement for assigning the policy was voluntary 
 on the part of Ireland, and independent of the bargain for the 
 house, and not made till after Ireland's interest in the house 
 was determined^ nor carried into execution till after the fire 
 happened. As to the plaintifi''s property in the goods, they 
 proved an assignment from Church to them as a security for 
 SOO^.bnt omitted to state when this assignmentwas made,though 
 the defendants, by their answer, had put the fact of time in is- 
 sue. The respondents, on their part, proved that the office did 
 not insure any persons longer than they continued their prop- 
 erty in the thing insured, and that persons dealing with them 
 might not be mistaken, such notice was usually given. Lord 
 Chancellor King said, " These policies are not insurances of the 
 specific things mentioned to be insured, nor do such insurances 
 attach on the realty, or in any manner go with the same as 
 incident thereto, by any conveyance or assignment, but they 
 are only special agreements with the persons insuring against 
 such loss or damage as they may sustain. The party insuring, 
 must have a prdperty at the time of the loss, or he can sustain 
 no loss, and consequently can be entitled to no satisfaction.-'— 
 There was no contract ever made between the office and the 
 appellants for any insurance on the premises in question j not 
 only the express words, but the end and design of the con- 
 tract with Ireland do, in case of any loss, limit and restrain 
 the satisfaction to such loss as should be sustained by Eichard 
 Ireland only ; and the endorsement on the policy declared that 
 right to his executor, Anthony Ireland only. These policies 
 are not in their nature assignable, nor is the interest in them 
 ever intended to be transferable from one to another, without 
 19 
 
146 LAW OP FIRE INSURANCE. 
 
 the express consent of the offiee{l). The transactions in the 
 present case,by charging the property backwards and forwards, 
 
 (1) Though able jurists have in several cases declared that a policy of insur- 
 ance agsdnst fire is in its general nature so purely a personal contract that it is 
 not susceptible of the seune equitable assignment as choses in action generally, 
 and therefore, that its aasigameatj'iirU&out the consent of the insurer, to a purchaser 
 df the property insured will not confer any right upon the assignee to recover 
 of the insurer in the name of the assignor, still it is somewhat remarkable that 
 this doctrine has never been the subject of a direct legal decision, nor is there 
 any case reported, in which the facts presented demeinded its approval or dis- 
 approval. This circumstance, taken in connection with the &ct that no such 
 consent is required in the assignment of a marine policy, serves to show that 
 the doctrine is by no means positively settled, and at best still remains an open 
 question. Even in the two English cases I/yndt v. DalzeU and Saddler^ Co. 
 V. Badcock, cited by Mr. Ellis as the leading cases in support of this doctrine, 
 are not direct authorities in its favor. In both the decision made was required 
 on other grounds, and the question now imder examination was not presented 
 for decision. In the latter case there was an express condition in the policy 
 prohibiting its eissignment except with the consent of the insurers, and in 
 neither of them did the assignment of the policy take place till after the loss, 
 though the insured had parted with their interest in the property before. 
 
 The only American cases, in which this doctrine is reco^ized, are Wilson v. 
 Hia, 3 Metcalfe 66, and -^tna Ins. Co. v. T)/ler, 16 Wend. 385. In the former 
 case there was no assignment of the policy and the FlfTs. claim rested on 
 the position that the policy passed without assignment as an incident to 
 the estate, a doctrine which is entirely unsupported by authority, and altogether 
 different from the one under consideration. Therefore, though the remarks of 
 the Court are entitled to great respect on account of the distinguished repu- 
 tation of the learned Chief Justice who delivered the opinion, still, so &r as 
 they maintain that a fire policy in its general nature differs firom Marine poU- 
 eies and other choses in action, in being incapable of equitable assignment ex- 
 cept with the consent of the insurers, they must be considered unnecessary to 
 the decision of the case, and consequently of not binding authority. The 
 same may be said of the remarks of Chancellor Walworth in ^Ina las. Co. 
 V. T^ler, which presented no question pertaining to the assignment of a pol- 
 icy, the policy in fact not having been assigned, and the action being brought 
 in the name, and solely for the benefit of the person mentioned as the assured in 
 the policy. 
 
 But, on the other hand, equally eminent Judges have, in three cases in this 
 Country, made expressions (incidental indeed to the point really at issue before 
 
ASSIGNMENT OF POLICIES. 147 
 
 and rendering it uncertain whose the true properly 
 
 *is, raise a suspicion, and fully justify the custom of the *77 
 
 office in preventing the assignment -without consent of 
 
 them, but still no more so than the contrary opinions of Ch. Justice Shaw and 
 Chancellor Walworth in the cases above referred to) which deny any difference 
 between Marine and Fire policies in regard to their assignable qualities. Thus 
 in Trader^ Ins. Co. v. Robert, 9 Wend. 404, where the question at issue arose 
 on a fire policy, Savage Ch J. says, " a poUcy of insurance is not assignable at 
 Iaw, t/urngk it is in EquiLy." In Smith y. Saratoga Co. Mat. Fire Ins. Co., 
 1 Hill 497, Bronson J. says, " In Its own nature the policy is assignable so as 
 to pass an equitable interest to the assignee," and in Carpenter v. Providence 
 Waskirigton Ins. Co., 16 Peters 502, Story J. remarks " If then the mortgagor 
 procures a pohcy on the property against fire, and he afierwards assigns the 
 policy to the mortgagee, with the consent of the underwriters (if that is regvirei 
 by the contract to give it vaUdvly,) as collatered security, that assignment oper- 
 ates solely as an equitable transfer of the policy, so as to enable the mortgagee 
 to recover the amount due in case of loss; but it does not displace the interest of 
 the mortgagor in the premises insured." Now the words in italics plainly show 
 Uiat it was the opinion of that eminent Judge, that it depended entirely on the 
 words of the contract, whether the consent of the insurers was necessary to the 
 validity of the assignment of the policy, and that if the policy itself contained no 
 clause requiring such consent, the iissigmnent was valid, and passed an equita- 
 ble interest without it This is also the opinion of Mr. Phillips, who says 
 " Where the insured's interest is assignable, whether in a marine, fire or life 
 insiirance, the policy is assignable in equity to the assignee, to whom the subject 
 matter or interest thereby insured is assi^eA, provided it contains no provis- 
 ion to the contrary." 1 PhiUipi Ins. 58. 
 
 Tne remeirks of Mr. EUis in this chapter (See page 143) imply that, in his 
 opinion, simple notice to the insurers is sufficient to render valid an assignment 
 of the policy, and that their consent is only required when there is a special 
 provision to that effect. But such notice, as in the case of assignments in other 
 choses in action, need not be given at the time of the assignment ; its only ob- 
 ject is to protect the assignee from the fraud of the assignor, who, unless the 
 insurer is notified of the assignment, may, by receiving payment &om or giving 
 a discharge to the insurers, prevent the eissignees claim upon them. Therefore 
 notice to the insurers, at the time of the assignment of the poUcy is rather a 
 matter of precaution against fraud, than a condition precedent to a recovery, 
 and moreover is not peculiEur to the assignment of fire policies. 
 
 The principal and indeed the only argument for this alleged difference be- 
 tween marine and fire insurance is, theit in the latter, it is presumed that the 
 
148 LAW OF FIRE INSURANCE. 
 
 the managers, which method is pursued by all the insurance 
 offices. Besides the appellant's claim is at best founded only 
 
 property insured is more within the control of the owner, and that the udder- 
 writers repose greater personal confidence in the assured than in marine insur- 
 ance, and that, therefore, if the property changes heinds during the rislc, they 
 may become insurers for persons, whom, they would not in the first instance 
 have agreed to indemnify. But this seems to be giving altogether too narrow 
 a construction to the contract of fire insurance. It is simply a promise to in- 
 demnify the assured for all loss -he may suffer from the destruction or injury of 
 certain specified property by fire, and there is nothing in the general nature of 
 the contract itself, which requires or supposes the property to be in the posses- 
 sion, or under the supervision of the insured. Indeed in many cases the very 
 fact that the property is out of one's possession, and subject to dangers which 
 he is utteriy unable to provide against, constitutes his principal inducement to 
 insure ageiinst fire. 
 
 In such cases as these, it is plain thai the persohid confidence of the under- 
 writer in the assured amounts to nothing, and they are not at all prejudiced by 
 a bona fide assignment of their contract to a purchaser of the property. It 
 will therefore be seen that the argument against the assignibility of a fire pol- 
 icy applies to only a limited class of cases in fire insurance, while the doctrine 
 which it is claimed to sustain, is asserted to be a necessary and general inci- 
 dent to thfit eootract, ai}d tp constitute a radical distinction between it and ma- 
 rine insurance. 
 
 The better doctrine seems to be that all policies of insurance are, in their 
 general nature, susceptible of a vaUd assignment without tie consent of the in- 
 surers, with this equitable and salutary exception however, that whenever the 
 contract, or the circumstances attending its execution, import that th^ subject is 
 to be under the personal care of the assured, and the transfer, if the insurance 
 was not thereby invalidated, would e;i:pose the insurers to be injuriously affected 
 by the acts of new parties, contrary to their expectation, the assignment will 
 render the insurance inoperative. This exception, it is obvious, will not apply 
 to all cases of fire insurance, while on the other hand it will embrace many 
 contracts of indemnity against the perils of the seas. If the insurers desire to 
 go beyond this rule, and prohibit all assignments unless made with their con- 
 sentgthey can and frequently do do so, both in marine and fire insurance, by in- 
 serting a clause in the policy to that effect. The non-assignability of a policy 
 is not incident or peculiar to fire insurance, but depends entirely upon the ex- 
 press terms of the policy, or the peculiar circumstances attending its execution. 
 
ASSIGNMENT OF POLICIES. 149 
 
 on an assignment never agreed for till the person insured had 
 determined his interest in the policy by parting with his whole 
 
 It is probable that if fire policies were in their own nature incapable of assign- 
 ment without the assent of the insurers, it would not be usual, as it certainly 
 would not be necessary, for insurance Companies so almost universally to in- 
 sert clauses and conditions in their fire policies invalidating the contract in case 
 of such assignment. 
 
 Such clauses, whenever they do occur, like those prohibiting any trans- 
 fer or change of title in the subject insured, are always construed most strongly 
 against the insurers, on the principle that every instrument, in cases of uncer- 
 tainty, is taken contra proferentem. 
 
 Thus, where the insured made a general assignment of all his property, in- 
 cluding " all policies of insurance," in trust for creditors, a particular policy, 
 which at the time of the assignment was in the hands of an agent, and subject 
 to a lien on his account, was held not to invalidated, notwithstanding it con- 
 tained a condition that it should become void by assignment without the con- 
 sent of the insurers. The Court held, that the provision applied only to such 
 policies as the insured could legally and effectually assign, and consequently 
 did not affect the one in question which was, in a measure, out of his control. 
 Lazarus v. Commonwealth Ins. Co., 5 Pick. 76 ,- S. C, 19 id. 81. 
 
 Neither does this provision prevent assignments of the policy after loss, be- 
 cause its plain and manifest intention is merely to prevent an increase of the 
 insurers' risk by a change in the ownership of the property insured. 
 
 Assignments of the policy after loss, therefore, being merely a transfer of a 
 perfected claim upon the insurers, though within the letter of the restrictive 
 clause, have been held not to be within its spirit, and consepuently do not re- 
 quire the insurer's consent. Brichta v. N. Y. Lafayette Ins. Co., 2 Hail 373 ; 
 WUson V. Hill, 3 Metcalfe 66. 
 
 The mere fact of issuing a policy, with notice fi:om the insured of his desire 
 to assign it, is not of itself, a consent of the insurers to such assignment, where 
 one of the conditions requisite for the assignment has not been performed, nor 
 do the insurers by issuing the policy under such circumstances waive the per- 
 formance of any condition specified as prerequisite to the validity of the assign- 
 ment. Smith. T, Saratoga Co, Mut. Fire Ins. Co., 1 Hill 497; iS. C. 3 id^ 
 508. 
 
150 LAW OF FIRE INSURANCE. 
 
 property, and never executed till the loss had actually hap- 
 pened." His lordship therefore dismissed the bilL Upon this 
 
 When there are tv70 bona fide assignments of a policy, one accompanied 
 by a delivery, and the other not, the former will prevail. Wells v. Archer, 10 
 Serg. ^ RawU 412. 
 
 When the policy contains no clanse prohibiting its assignment, if it be as- 
 signed, all legal proceedings upon it in Courts of law must be in the name of the 
 original assured, and the underwriters may set off to the claim upon the policy, 
 any claim against the ori^al insured, which accrued before they had notice of 
 the assignment. Policies in their usual form are no more negotiable than other 
 ckoses in action, and the rights of an assignee are equitable in their nature, and 
 cannot be enforced in his own name. The insurers, however, are disdiarged 
 from any further liability, if they pay the loss to, or receive a discharge from 
 the original insured before receiving notice of the assignment, but in such cases 
 the assignee may have a remedy agcUnst the assignor for the fraud thus perpe- 
 trated upon him. But after notice to the underwriters the sissignor cannot de- 
 feat or prejudice the claims of the assignee, neither will the insurers be excused 
 from liability to the latter by a payment to or release from the assignor. An- 
 drews V. Beecher, 1 Johns. Cos. 411; Wardell y. Eden, 2 Johns. Cos. 121; 
 Bates V. N. Y. Ins. Co., 3 Johns. Cos. 242; Jrnies v. Witter, 13 Mass. 304 ; 
 I/yon V. Swnvmers, 7 Conn. 393 ; Trader^ Ins. Co., v. Robert, 9 Wend. 404 arid 
 474 ; Robert v. TYaders' Ins. Co., 17 WctuI. 631. 
 
 But though the rights of the assignee of a policy, are in then: nature equitable, 
 he is not obliged to resort to a Court of Equity to enforce them, but has always 
 an ample remedy in the Courts of Law in the name of the assignor, who will 
 be (impelled to allow the use of his name, and hence a bill in Equity filed by 
 the assignee against the underwriters will be dismissed, unless it contains ad- 
 ditioned facts showing the inadequacy of the remedy at law. Carter v. United 
 Ins. Co., 1 Johns. Chan. R. 463. 
 
 But though the authorities are all agreed that in the case of a simple assign- 
 ment of a policy, the action must be brought in the nsune of the original insured, 
 they differ on the question, whether the rule is the same, when the terms of the 
 policy require, and the assignment has actually receiyed the consent of the in- 
 surers. 
 
 The doctrine is laid down by Shaw, Ch. J., in WOsonY. Hill,3 Metcalfe 
 66, that the consent of the insurers to the assignment of the policy, constitutes a 
 new contract between them and the assignee, on which the latter may sue in 
 his own name. This doctrine is reasserted by the same Judge in PuUer v. 
 
ASSIGNMENT OP POLICIES. 151 
 
 decree there was an appeal to the House of Lords,~ and, after 
 hearing counsel on both sides, it was ordered and adjudged 
 
 Boston Mat. Fire Ijis. Co., 4 Metcalfe 206. But in Tb2ma;^ v. Manufacturers' 
 Ins. Co., 1 Cushing 73, where the insured after loss wrote and signed upon the 
 policy the following order, " Pay the loss under the within policy to Joseph A. 
 Tolman," and under this order was written, " Assented to. C. W. Cartwright, 
 Pres.," it appears by the report that Ch. J. Shaw held at tlie trial below, that 
 the action ageiinst the insurers for the loss must be brought in the name of the 
 original insured, on the ground that the assignment and consent constituted no- 
 thing more than an assignment of a dose t» action, which did not authorize the 
 assignee to sue in his own name. This point was not examined by the Su- 
 preme Court, the case being decided for the Deft, on another ground. It is ex- 
 tremely difficult, if not impossible, to reconcile the decision of the learned Chief 
 Justice in this case with his remarks in Wilson t. Hill and Puller t. Boston 
 Mat. Fire Ins. Co., or to see why the consent of the insurers to an assign- 
 ment after hss is any the less a new contract with the assignee than a similar 
 consent to an assignment before loss, nor does it seem that a rule can be applied 
 to one case, which does not also govern the other. 
 
 But in Jessel t. WiMamsburgh Ins. Co._ 3 Hill 88, it is expressly decided 
 that the simple consent of the insurers to an assignment of the policy will not 
 authorize the assignee to bring an action in his own name, but, that to give 
 such right, there must be an express promise by the insurer to be responsible to 
 the assignee. The same prindple is incidentally recognized in some other New 
 York cases, which seem to make the right of the assignee to sue in his own 
 name depend entirely upon an express promise of the insurer to him, or on 
 some provision in the policy, or some statute by which such right is in terms 
 granted. Granger v. Howard Ins. Co., 5 Wend. 200 ; Traders Ins. Co. v. Rob- 
 ert 9 Wend. 404 ; Ferris v. N. Am. Ins. Co., 1 HiU 71 ; Mann v. Herkimer Ins. 
 Co., 4 JSfiS 187; Convcer v. Albany Mut. Ins. Co., 3 Denio'254t; S. C, 1 Com- 
 stockWO. 
 
 But when the assignee of the policy is not also the assignee of the whole in- 
 terest of the original assured, which was covered by the policy, but the assign- 
 ment is made merely for the purpose of creating collateral security for an ex- 
 isting debt, as in the frequent case of assignment &ora a mortgagor to a mort- 
 gagee, the action against the insurers must be brought in the name of the as- 
 signor, notwithstanding the insurers have consented to the assignment. 
 
 This is because the assignor is not in the least divested of interest in the pol- 
 icy, but the insurance is still his insurance, tmd on his property, and for his ac- 
 count If the insurers pay the loss to the assignee, the assignor's debt is there- 
 by disdiarged pro tanto, and if the assignor himself pays the assignee his claim 
 
152 LAW OF FIRE INSURANCE. 
 
 that the same should be dismissed, and the decree therein 
 complained of affirmed. 
 
 Some years afterwards this case was cited with approba- 
 tion by Lord Hardwicke, and relied upon by him as the ground 
 of his opinion, in the case of the Sadlers' Company v. Bad- 
 cock and others (a). Ann Strode, having six years and a 
 half to come in a lease of a house from the plaintiffs, on the 
 27th of April, 1734, became a proprietor of the Hand in Hand 
 Office.by insuring the sum of 400Z. on the house for seven 
 years, and, on paying 12*. down and 3Z. some time after, the 
 company agreed " to raise and pay out of the effects of the 
 contribution stock the said sum of 400Z. to her and her ex- 
 ecutors, administrators, and assigns, so often as the house 
 should be burnt down within the same term, unless the di- 
 rectors should build the said house, and put it in as good 
 plight as before the fire ;" and on the back of the policy it was 
 indorsed, that " if this policy should be assigned, the assign- 
 ment should be entered within twenty-one days after the 
 making thereof." Mrs. Strode's lease expired at Midsummer, 
 1740. The house was not burnt down till the January after 
 1740 ; and she made an assignment of the policy to the plain- 
 tiffs the 23d of February after 1740(6). The question was, 
 whether the plaintiffs, the assignees of Mrs. Strode, were en- 
 titled to the 400^., or to have the house built again, or 
 78* whether the house being *burnt down after Mrs. Strode's 
 property ceased in it, the company were obliged to make 
 good the loss to her assignee of the policy. The company 
 made an order subsequent in time to Mrs. Strode's policy in 
 1738, " that whereas policies expire upon the property of the 
 insured's ceasing, if there is no application of the insured to 
 
 (o)2Atk. 554. 
 
 (4) N. B. This was according to the old style. 
 
 against him, the policy ipso facto reverts solely to the assignor. Traders Ins. 
 Co. V. Robert, 9 Wend. 404; Robert v. Traders Ins. Co., 17 Wend. 631 ; Conover 
 V. Albany Mut. Ins. Co., 3 Z>emo 254; S. C, 1 Comstock 390; TUIouy. Kmg' 
 ston Mat. Ins, Co., 1 Selden 405 ; Carpenter v. Providence Wash. Ini. Co., 16 
 Peters 501 ; FeUon v Brooks, 4 CnsUag 203; 
 
OF ASSIGNMENT OF POLICIES. 153 
 
 assign or to have the loss made up, then the person having 
 the property may insure the said house in the said office, not- 
 ■withstanding the term for which the house was originally in- 
 sured is expired." There was evidence read for the plaintifiFs 
 to show that they tendered the assignment to the defendants 
 to enter in their books, but they refused to accept it. 
 
 Lord Chancellor Hardwicke. — " During the progress of this 
 cause, while the defendants seemed to depend chiefly upon 
 the subsequent order, I Wjas of opinion against them ; but up- 
 on hearing what was further offered, I think the plaintiffs are 
 not entitled to be relieved. There may be three questions 
 made in this cause. 1st. Whether this accident which has 
 happened, is such a loss as obliges the defendants to make 
 satisfaction to the plaintiffs? 2ndly. Whether, upon, the 
 terms of the original policy, the office is obliged to do it ? 3dly. 
 Which is rather consequential of the former, whether the plain- 
 tiffs are properly assignees of Mrs. Strode under this policy ? 
 If this matter rested singly upon the policy itself, I should 
 not think it such a loss as would oblige the defendants to 
 make satisfaction under this policy. The state of the case is, 
 Mrs. Strode was only a lessee, her time expired at Midsum- 
 mer, 1740, the house was burnt down in January after, with- 
 in the seven years ; the plaintiffs, the Sadlers' Company, 
 were ground landlords, and entitled to the reversion of the 
 term ; upon the 23rd of February, seven months after the ex- 
 piration of the lease, and one month after the fire, the assign- 
 ment was made, and in consideration of 5^. only, so that it 
 must be taken as a voluntary assignment as it stands before me. 
 It has been insisted, on the part of the the defendants, that the 
 plaintiffs were not entitled to recover as standing in the place 
 of Mrs. Strode, because she had no loss or damage, her 
 •interest ceasing before the fire happened. And this '79 
 introduces the second and third questions. I am of 
 opinion, it is necessary th.a.t the party insured should have an 
 interest or property at the time of insuring, and at the time 
 the fire happens. It had been said for the plaintiffs, that it 
 is in nature of a wager laid by the insurance company, and 
 that it does not siffliify to whom they pay, if lost. Now, these 
 20 
 
154 LAiW OF FIRE INSTIHANCE. 
 
 msuranoes from firei havelaeeii introduced i in* later times,, and 
 therefore differ from: insurance of ships, because there interest 
 or no interest is sikaast constantly: inserted, andlf.not inserted 
 you! cannot recover unless you prove a property(a). By the 
 first clause in the deed of contribution in 1696, the year this 
 society, called the Hand in Hand Office, incorporated them^ 
 selves, the society are to make satisfaction in case of any loss 
 by fire. To whom br for what loss are they to make satisfac- 
 tipn 1 Why, to the person insured, and for the loss he may 
 have sustained, for it cannot properly be called insuring the 
 thing, for there is;no possibility of doingi it, and therefore must 
 mean insuring the.perSonifrom damage; By the terms of 'the 
 policy, the defendants might begin to build aind repair within 
 six days af^er the fire happens. It has been truly said, this 
 gi^es the society an option to pay or bebilild, and shlowS' most 
 manifestly they meant to insure upon the property of the in- 
 isured, because nobody elSe can give them leave to lay even a 
 brick, for another person might fancy a house of a different 
 kind.!.- Thus it; stands upon the original agreement; ' The 
 next question will be, whether the subsequent order, made by 
 the, defendants, jn 1738,. ;has made any alteration; Jam , of 
 opinion it .has not, for it was made only to explain a particu- 
 lar casein the policy; for it might ha;ve:been a question whe- 
 ther Mrs, Strode cduld have come tefor'e the expiration of the 
 term.to examinfe theibooks of the office, and therefore this or- 
 der, was made to give jlieir. such a power. It has been 
 strongly objected that *th0 society could not npiaifce > suci, *80 
 an order. I am very tender of, saying' whethear they . 
 can or not, because, on, one hand, it might be hardito say that 
 as a society^ they cannot make any by-order for the good of 
 the society ; on the Qther hand, it would be a dangerous thing 
 to give them, a power to make an alteration, that may material- 
 ly vary the interest of the insured. The assignment is not all 
 withal, the terms of this order, because it is plain it meant an 
 assignment before the loss happened. Now, with regard to 
 
 (ffl) This case was decided in ttie year 1743, previous to the statute 19 George 
 3, c. 57. 
 
OP ASSIGNMENT OF POLIICIBS. 155 
 
 the loss liaj)p'ening before the assignmeilt < made, Mrs.iStjrodie 
 was entitled to nothing but ; -what was to be paid back upon 
 the deposit. It is plain she thought so : fori if she had imag- 
 ined she had been entitled to 400Z. would any friend haiTO' ad- 
 vised her to make a present of it to the plaintiffs '/ The case 
 of Lynch v. Dalzell, in the House of Lords, shows how strict 
 this Court and that House are in the construction of policies 
 to avoid frauds. The bill here must be dismissed." ' '' 
 
 We may here observe, that as policies of iqsuraiice against 
 fire cannot be assigned so as to entitle the a8sign,ee,tp.dej](i9,]jq^ 
 the sum insured without notice tp the oiEce(a) ; iiji ^hjs respect 
 they appear to.di%r fron;, marine policies, in jWhjfih ,the con- 
 tract of insurance is more spocificalty. applicable ito the, prop- 
 erty insured than to the owner of it. Indeed, marine policies 
 in England were formerly in blank as to the insured, until 
 some mischiefs having arisen the law was altered by a statute 
 of 25 Geo. 3, c. 44, which statute having been found productive 
 of inconvenience was subsequently repealed by stat. 28 Geo. 
 3, c. 26, which, though it restrains the making of policies in 
 blank as a general rule renders it necessary only to insert the 
 name of one or more of the persons interested in the property 
 insured, or of the consignee or consignees, or of the person res- 
 ident in Great Britain who shall teceive the order for or effect 
 such policy, or of the person who shall give the order to the 
 agent immediately employed to negotiate or effect such pol- 
 icy. 
 
 *The right to assign or give the benefit of a marine *81 
 policy, when the property has been transferred also,does 
 not appear to have ever been disputed(6) 
 
 Another distinction may also be observed between marine 
 policies and those against fire. It is sufficient if a marine pol- 
 icy be effected before the interest of the property commences, 
 if it be made in time to meet the risk insured against (c), for 
 the stat. 14 Geo. 3, c. 48, s. 1, does not extend to marine poli- 
 
 (a) See Delany v. Stoddard, 1 T. R. 33. Hibbert v. Carter, 1 T. R. 745. 
 (4) See Delany v. Stoddart, 1 T. R. 33. Hibbert v. Carter, 1 T. R. 745. 
 (c) Rhind v. Wilkinson, 3 Taunt. 337. 
 
156 LAW OF FIRE INSURANCE. 
 
 cies, and such restraint would be highly prejudicial to com- 
 merce ; but, as we have seen both by the decisions anterior to 
 the statute, as well as by the statute, the insured must hare an 
 interest in the property at the time of effecting an insurance 
 against fire, as well as when the loss happens(l). 
 
 (1) There is no statute, it is believed, in any of the States of this country, 
 similar to the 14 Geo. 3, C. 4S, S. I, aiid, moreover, it is the opinion of Mr. 
 Phillips in opposition to the dictum of Lord Chancellor Hardwicke, in Sad- 
 dlers' Co. V. Strode, 3 Atkyns 555, that there is no principle of Common Law, 
 which prevents a valid insurance on a future or expectant interest against fire, 
 any more than against the- perils of the sea, but that either a Marine, or Fire 
 policy, will cover such an interest in the absence of fraud, misrepresentation, oc 
 concealment. 1 PMUipa' Ins. 118. 
 
CHAPTER VII. 
 
 OF THE AGENTS. 
 
 1. Of the Agents for the Offices. 
 
 2. Privity between the Crown and the Agents, 
 
 3. Of the Agents for the Insured. 
 
 1. Upon the payment of a deposit at the head office or to the 
 respective agents, the offices usually hold themselves liable 
 for any loss by fire which may take place between the pay- 
 ment of the deposit and the making out the policy ; and the 
 slip, or memorandum of agreement usually delivered at the 
 time of applying to insure, specifies the head3 of the contract 
 afterwards to be carried into effect. The powers of the agents 
 however, differ according to the rules of the different offices. 
 In general, the agents are restricted from definitely underta- 
 king that a policy shall be granted where large amounts are 
 to be insured, or circumstances of doubt or difficulty are in- 
 volved ; and where the agents are not authorized to bind the 
 company, the slip or memorandum should be accompanied with 
 a proviso to that effect(l). 
 
 (1) The power of an agent of an insurer to bind his principal, does not de- 
 pend so much upon the actual authority conferred upon him, as upon the au- 
 thority which the public, and those who deal with him, would be justified by 
 his acts, and those of his principals, in presuming be possessed. 
 
 Thus, if an insurance company furnishes an agent with blank policies duly 
 
158 LAW OP FIKE INSURANCE. 
 
 Where no special regulations are made, the general rule of 
 principal and agent will apply(a). • 
 
 2. It has been held, that there is a suflBcient privity be- 
 tween the Crown and the agent of an insurance office, who 
 had received duties and riot accounted for them, to enable the 
 Crown to issue an extent against the agent's goods. 
 
 An agent for the County Fire Office became indebted 
 83* to *the office in a large sum of money for premiums and 
 duties received on their account, which he was unable to 
 pay, and he afterwards became bankrupt. It appeared that 
 he had received 1171. in the y(&j of duties to the Crown, and 
 an extent had issued against his property. An application 
 was made on behalf of the assignees, to have the extent set 
 
 (a) See Acey. v. Femie, 7 Mees. & Wels., 150, and post, Life Insurance. 
 
 signed by the proper pffiosips, he will <b& oonsideresd a general agent of the com- 
 pany, and they will be bojij)d by all policies ,he may i^jj? tPj persons dealing 
 with him in good faith, though, in issuing Uiem, he violates his instructions 
 from the company. . lAglMody y. North A-qi- Ins. Co., 23 Wend. 18. 
 
 So also, if insurers authorize an a!gent to receive applications for insurance, 
 fix the rates, and receive the premiums, suid to give a receipt therefor in their 
 name, specifying' the risk and its duration, arid it further appears that they are 
 in the habit of transmitting to him, for delivery to the assured, policies executed 
 in conformity to the receipts, those who apply to him for insurance will have 
 a rightto jnfer from these -fects,. that the payment;of the premiums to him binds 
 thej contract as muchas if ,it were paid at the office of the insurers. Perkins v. 
 WiishimglXml'ns. Co.,4 .CowenGi^. . . 
 
 Where a policy required the insured to give: notice to the insUrters of 
 any other insurance in force upon the, same property ,;it was held that, notice 
 to l^hat effect, given to a travelling agent, was sufficientj though' it never reached 
 the insurers themselves, it appearing that the business of tjie agent was to so- 
 licit insurances, make surveys and receive applications, aijd that he, wss noti- 
 fied while actually engaged in preparing an application for the policy in ques- 
 tion. McEwen v. Montgomery Co. Mut. Ins. Co., 5 HUl 101 ; See also JMos- 
 tersv. Madison Co. Mut. Ins. Co., 11 BarbomiN. Y.)R.e2i. 
 
 The authority of a principal officer, or agent of an insurance compiariy; to do 
 any act pertaining to the business of the company, will 'be presumed until 
 the contrary appears. Conover v. AUiami/ Mut. Iris. Co':, 3 Demio 264 ; S. C, 
 I CBmOttk, 390. 
 
OP THE AGENTS. 159 
 
 aside. It was argued that it was an experiment made by the 
 insurance office to avoid the payment of the duties themselves, 
 for by stat. 22 Geo. 3, c. 48 (a), they were accountable to 
 the Crown for the duties, and that the defendant was liable 
 to the company only, and that the company ought to come in 
 for a. dividend like any other creditor. If the extent were en- 
 forced it would swallow up all the assets, and no other credi- 
 tor would get any thing. But the Court were of opinion, that 
 as the defendant had received money which belonged to the 
 Crown, there was a sufficienj privity between him and the 
 Crown to enable the extent to be issued. — Motion refused(6). 
 
 3. Insurances against fire are not in general effected by 
 agents on the part of the insured, but where such is the casej 
 the general rules as between principal and agent will apply, 
 even if a a person voluntarily, and without the expectation of 
 any remuneration for his trouble, undertakes to procure an 
 insurance to be effected, though, perhaps, he is not bound to 
 perform his undertaking ; yet, if, in fact, he do proceed to ex- 
 ecute it, he will be answerable for any negligence or unskil- 
 fulness in the conduct of it, as appears by the following case 
 (1) (c) :— In an action on the case, the declaration stated that 
 
 (as) See also stat. 55 Geo. 3, c, 184, s. 32. 
 
 (4) Rex V. Wrangham, Excheq. 1 Cromp. & Jerv. 408. 
 
 (e) Wilkinson v. Coverdale, 1 Esp. Eep. 75. 
 
 (1) An agent may be bound to procure insurance for his principal, either by 
 an express agreement between them, or by force of a usage of the business in 
 which he is engaged, or the place where he resides. Thus, by the custom of 
 merchants, it is the duty of a consignee or commission merchant to insure the 
 goods of his consignor against fire, after they have come into his hands, though 
 he may have received no express directions to that effect. Kingston v. Wilson, 
 4 Wash. C C. R.3W ; Brisban v. Boyd, 4 Paige Cham,. R. 30 ; De Forest v. 
 Fulton Ins. Co., 1 flaM, 84. 
 
 If, when so bound, he fails to procure insurance, or the insurance procured, 
 is invedid through his fault, the agent is liable to his principal, in case of the de- 
 struction or injury of the property, to the amount which the latter would have 
 received from the insurers on such a policy, as it wsis the duty of the agent to 
 procure. In the absence of all other testimony in regard to the amount of the 
 insurance to be obtained, a duty on the part of the agent to insure for his prin- 
 
160 LAW OF FIRE INSURANCE. 
 
 the plaintiff purchased certain premises of the defendant, who 
 had a subsisting policy from the Phoenix Fire OfiSce, which he 
 undertook to get renewed on account of the plaintiff, and reg- 
 
 clpal implies that he is to insure to the full yalue of the property. Ela m. French, 
 11 New Hampshire 356. But where, if the agent had followed the instrucdons 
 of his principal, the insurance would have been void, he is not liable to the lat- 
 ter for neglecting to procure the insurance. Alsop v. Cait, 12 Mass. 41. 
 
 A mere gratuitous promise to insure, disconnected from any subsisting rela- 
 tion of principal and agent between the parties, or from any duty arising from 
 usage, is not binding upon the promisor, provided he does not enter on its per- 
 formance. Thorne v. Deas, 4 Johns. 84. 
 
 But if he attempts to fulfill his promise, and is guilty of gross negligence or 
 unskilfulness in the execution of his voluntary trust, he will be liable to the 
 other party in an action on the case for all damages resulting from such neg- 
 ligence. Tracy v. Wood, 3 Mason 132; Thorne v. Deas, 4 Johns. 84. 
 
 But when the situation or profession of the one who makes this gratuitous 
 offer, is such as to imply skill, as if, for instance, he is an insuremce broker, or 
 known to be well acquainted with the business of insurance, em omission of 
 that skill will be held to be gross negligence. ShieUs v. Blackbume, 1 H. Bl. 
 158; Wyld-v. Pyckford. 8 Mees. <f- Wels. 443 ; Wilson v. Breit, 11 id. US. • , 
 
 The powers, duties, rights and liabilities of the agents of both underwritefs 
 and assured, more particularly of the latter, are thoroughly and ably considered 
 by Judge Story in his treatise on Agency, passim, emd by Mr. Duer in his ex- 
 cellent work on Marine Insurance, Lectures lOth, lllh, and 12th. 
 
 Though the questions treated by these learned authors, have arisen in, and 
 are more intimately connected with Marine than with Fire insurance, still an 
 examination of them will be found very valuable to the student of the nature and 
 incidents of the latter contract It is very probable that in the increasing ac- 
 tivity and extent of the internal commerce of our country, and from the exten- 
 sive use of means of transportation, the principal risk of which is that of fire, 
 fire insuremce will not only be more frequent, but become a more commercial 
 contract, and that, in many instances, questions of the most delicate nature and 
 vital importance will arise in regard to the duty of agents to insure the property 
 of their principals against fire, and their rights and liabilities connected with 
 such insurances tifber they have been effected. The principles laid down by 
 these distinguished writers, are as applicable to fire insurance in its general na- 
 ture, as to marine insurance, and the only reason, why tiiey have not been ap- 
 plied to the former by actual decisions, is because, from the limited use of that 
 contract, such application has not been required. 
 
OP THB AGENTS. 161 
 
 Tilarly transferred to him ; that he did, in fact, rene^r 
 the policy and paid 161. which he 'charged to the plain- '84 
 tiff, but neglected to get it transferred from himself to 
 the plaintiff by the proper indorsement, in consequence of 
 which the plaintiff, who sustained a loss by fire, was unable to 
 recover on the policy. It was admitted that there was no con- 
 sideration moving from the plaintiff to the defendant, who had 
 gratuitously undertaken to get the policy renewed and trans- 
 ferred, on which Lord Kenyon expressed a doubt whether any 
 action could be maintained on such an undertaking. To re- 
 move this doubt, the plaintiff's counsel cited Wallace v. Tell- 
 &ir (a), a case similar to the present, in which Mr. Justice 
 Buller ruled, that though there be no consideration for one 
 party's undertaking to procure an insurance to be effected by 
 another, yet where a party voluntarily undertakes to do it, and 
 proceeds to carry his undertaking into effect by getting a pol- 
 icy underwritten, but does it so negligently and unskilfully 
 that the insured can derive no benefit from it, an action will 
 lie against him. Lord Kenyon acquiesced in this distinction 
 and suffered the cause to proceed, but the plaintiff failed in 
 the proof of any such undertaking and was nonsuited. 
 
 (a) 2 T. R. 188, n. 
 
 H 
 
CHAPTER Vm. 
 
 OP EQUITIES ATTACHING UPON POLICIES. 
 
 1. In general), no Equity as between Landlmd and Ten- 
 ■ ant. '■ •■■ 
 
 2. Proceeds of Policies in general Payable to Executor^, 
 
 3. But where affected with a Trust, they may he Paya- 
 
 ble to Heir or Devisee. '• 
 
 It may be sufficient to state, that at present it appears that 
 no equity attaches upon the proceeds of policies in favor of 
 third persons unless there be some contract, or agreement, or 
 trust to that effect. ' A policy of insurance against fire is a 
 distinct independent contract between the party effecting the 
 insurance and the insured(a). 
 
 1. In Brown v. Quilter {b), the plaintiff took premises of 
 the defendant for a term of years, and in the lease covenanted 
 to repair, &c. {accidents by fire excepted,) the defendant cov- 
 enanting in the usual manner for quiet enjoyment ; the house 
 was burnt down, the defendant having insured it for 500Z. 
 and received the insurance money. The defendant neglected 
 to rebuild the house, and the plaintiff refused to pay the rent, 
 which became due after the house was burnt ; anoTthe defen- 
 
 (a) See ante, p. 145 (i) Ambl. 619. 
 
OP EaUITlES ATTACHING UPON POLICIES. 163 
 
 dant having brought an action for the rentjthe plaintiff brought 
 a bill for an injunction, and to compel the defendant either to 
 rebuild the house or pay the insurance money to the plaintiff 
 towards satisfaction of his loss. The defendant insisted 
 upon his*right to the insurance money, and to be paid *86 
 the rent without rebuilding the house, but offered to dis- 
 charge the plaintiff from his lease. Lord Northington (Lord 
 Chancellor) seemed to be of opinion, that in this case, though 
 the covenant did not extend to oblige the defendant to rebuild, 
 yet that when an action is brought for rent after the house is 
 burnt down, that was a good ground of equity for an injunc- 
 tion till the house was rebuilt. The case, howeyei;, was after- 
 wards compromised, aind it does not amount to a decision ; 
 whatever of authority may attach to it, has been very much 
 shaken by Hare v. Groves(a), and Holtzapfell v. Baker(6). — 
 Brown v. QuUter, however, differs from these latter cases, in- 
 asmuch as the landlord, who had insured, had received the in- 
 surance money, and therefore had the value of the thing, 
 which was the subject of the contract with the lessee, and as 
 to him, therefore, no loss had happened. But, as was urged 
 in argument in Holtzapfell w. Baker, it is extremely difficult 
 to conceive how that distinct contract, merely for the advan- 
 tage of the lessor, with which the lessee had no concern, can 
 affect the right as between them. It was thrown out by the 
 Lord Chancellor (Lord Eldon) in the course of the argument, 
 that " some of the fire offices reserve the option of paying the 
 money or laying it out themselves, which may make a consid- 
 erable difference, as that option ought not to affect the lessee ;'• 
 but to this it was objected, that this option is reserved merely 
 for their own protection against fraud, and not for the benefit 
 pf the tenant. Although the cases cited do not go precisely 
 to the point of equities attaching upon policies, but to the 
 question pf payment of rent by lessees for premises after they 
 have been burnt down, yet from the observations scattered in 
 them, we may come to the cooclasiou, that the contract of in- 
 
 (a) 3 Ante. 687. 
 (i)18Ves. 116. 
 
164 CAW OP FIRB mSTTIlAirCE. 
 
 Burance is confined to the parties, and that, as a general prin- 
 ciple, no other person has any right in eqfniiy to the proceeds 
 
 (1). 
 
 .(1) The mortgagee has in general no claim, either in Law or Equity upon 
 the proceeds of a policy effected by the mortgagor in his own name on the mort- 
 gaged premises, unless it be assigned to him. ColumMan Ins. Co. v. Laiormce, 
 10 Peters 512; Carpenter v. Providence Wash. Itis. Co., 16 id. 504; Carter t. 
 RockeU, 8 Paige Chan. B. 437; Neale v. Reid, 1 B. 4- C. 657; 3 DoidI. <f R. 
 138 ;■ Vandegraffv. Medlock, 3 Porter {Alt) 389. 
 
 Neither , has the mortgagor any claim upon an insurance effected by the mort- 
 gagee. And, therefore, the mortgagee will not be allbwed to charge the mort- 
 gagor with money paid for insurance effected by him upon the mortgaged pre- 
 mises. Saunders v. Prost, 5 Pick. 259 ; nor is the mortgagor entitled to haTe 
 the amount recdved by the mortgagee from the insurers on a policy effected by 
 him widioDt any agreement therefor between the parties, deducted from the 
 mortgagee's charge for repairs. White y. Brown, 2 Gushing 412. 
 
 But if the insurance is effected by the mortgagee at the request of the mort- 
 gagor, a privity exists between the parties, the premiums paid become a charge 
 upon the mortgaged premises in addition to, and equally with the original debt, 
 except so far as the rights of subsequent mortgagees or purchasers are concern- 
 ed, and the amount paid by the insurers to the mortgagee, on the policy, goes 
 to reduce the debt of the mortgagor, and if it is more than sufficient for that pur- 
 pose, the balance is held by the former as trusleee for the latter. Mix t. Hotch^ 
 lass, 14 Coim. 32 ; King v. Slate Mut. Fire Ins. Co., 7 dishing 16. 
 
 So, also, where the mortgagor covenanted with the mortgagee, that he would 
 keep the premises insured during the continuance of. the lien of the mortgagee, 
 and in case of loss that the proceeds of the policy should be applied to the re- 
 building of the property insured, it was held in Maryland that the mortgagee 
 had an equitable lien upon the fund, received by the mortgagor from the insur- 
 ers, to satisfy the balance of his debt, which he could not collect by a foreclos- 
 ure and sale of the mortgaged premises. Thomas v. Van Kaff, 6 Gill tf- J. 372. 
 See also Vefnony. Smith, b B. 4" Aid, 1, where it is held that a covenant on 
 the part of a lessee to keep the premises insured runs with the land. 
 
 Where one has underwritten a policy and afterwards causes himself to be 
 reinsured, and after the loss of the property insured, becomes insolvent, the per- 
 son originally insured has no right of action, either in law or equity against the 
 reinsurer, nor any equitable lien or preferable claim on the sum of money due on 
 the contract of reinsurance: HerckenratK y. American Mat. Int. Co., 3 Bof 
 hour Chan. R. 63. 
 
OF EQUITIES ATTACHING VPOV POtlClES. 165 
 
 , This doctrme has been confirmed in a mtich later and 
 ?8troBger. ica8e(o). The defendant, by indenture of "87 
 March 25, 1820, demised to the plaintiff a cotton fect- 
 ory, with the steam boiler, for twenty-one years, &c., reserv- 
 ing a yearly rent : the plaintiff covenanted to pay the rent 
 daring the term, and to repair and keep repaired the inside 
 of the &ctory, the oflces, fixtures, outhouses, and additions, 
 and the steam boiler, engines, and apparatus thereto belong- 
 ing, so long as the same would last, or could be rendered work- 
 able by repair ; the defendant covenanted to maintain the out- 
 side brickwork, plastering, slating, tiling, and all other outer 
 parts of the premises in good substantial and and tenantable 
 repair. There was no exception in respect of accidents by 
 fire, either in the covenant for payment of rent, or in the cov- 
 enant to repair. On June 22, 1825, the factory, buildings, 
 and premises were destroyed by fire. After the lease was 
 granted, the defendant insured the factorjr and buildings for 
 500^, the steam engine for 1001., the engine house for 801., 
 and the^gearing for 40/., so that the total amount of the sums 
 insured was 700/. ; and shortly after the fire he received that 
 sum. The defendant had commenced an action against the 
 plaintiff for a year's rent, ending the 24th of June, 1826. The 
 bill prayed that it might be declared that the defendant was 
 bound to lay out and apply the 700/., or a competent part 
 thereof, together with the old materials, in and towards the 
 rebuilding and reinstating the factory and premises, the steam 
 boiler, steam engine, &c., and that he might be decreed forth- 
 with to lay out the same accordingly, the plaintiff offering to 
 make good out of his own monies, what the 700/. and the old 
 materials should be insuflScient for the purpose, to such extent 
 as he should be deemed liable : and that it might also be de- 
 clared, that the plaintiff was not bound to pay the rent during 
 such time as the factory, &c., should continue unbuilt and un- 
 restored ; and that the defendant might be restrained from fur- 
 ther proceeding in the action. The defendant demurred to 
 the bill for want of equily. 
 
 (o) LMd> «. Chatham, 1 Sim. 149. 
 
166 tAiW OP FIRE INSURANCE. 
 
 88' The Vice Chancellor. — Leach. " There being inithe 
 
 lease no exception as to the case of accident by fire, 
 the plaintiff at law continues bound to pay his rent ; he con- 
 tinues bound also by his covenant to keep: in repair the inside 
 work of the factory, the steam engine, and other apparatus, 
 and all the outbuildings and fixtures which were on the prem- 
 ises. On the other hand, the defendant, for want of the ex- 
 ception as to accident by fire, continues bound by his covenant 
 to repair the outer part of the buildings, and also by his cot- 
 venant to replace the steam boiler and other apparatus during 
 the last fourteen years of the term, and when from long use 
 they are no longer workable, under these covenants the de- 
 fendant is bound to rebuild the factory, and to cover in the 
 same with proper roofing, and elating or tiling ; and the plain- 
 tiff is bound to rebuild the outbuildings, and to do all neces- 
 sary works to complete the inside work of the factory when it 
 is built and covered in by the defendant. It appears to me, 
 that in this respect, equity must follow the law. The plaintiff 
 might have provided in the lease for a suspension of rent in 
 the case of accident by fire, but not having done so, a Court 
 of Equity cannot supply that provision which he has omitted 
 to make for himself ; and it must be intended that the purpose 
 of the parties was according to the legal effect of the contract. 
 With respect to the equity, which the plaintiff alleges to arise 
 from the defendant's receipt of the insurance money, there is 
 no satisfactory principle to support it. The defendant, hav- 
 ing so contracted with the plaintiff as to render himself liable 
 to rebuild the outer work of the factory in case of accident by 
 fire, has very prudently protected himself by insurance from 
 the loss he would otherwise have sustained by such an acci- 
 dent. But upon what principle can it be that the plaintiff's 
 situation is to be changed by that precaution on the part of 
 the defendant, with which the plaintiff had nothing whatever 
 to do ? The plaintiff has sought his protection in the contract 
 by the covenant which he has required from the defendant, and 
 to those covenants he must alone resort" 
 
op EQUITIES ATTACHING UPON POLICIES. 167 
 
 2. *If the insurance money, as secured by a policy '89 
 against fire, is made payable to the insured, his execu- 
 tors, administrators, and assigns ; and houses and buildings 
 in fee are insured, ■which afterwards descend to the heir, and 
 are burnt during the continuance of the policy, the executors 
 of the insured will not be deemed trustees for the heir, and 
 the heir will not be entitled to the proceeds of the policy. A 
 decision (a) to this effect has been made with reference to the 
 constitution and policy of the Hand in Hand OfSce, by one of 
 the articles of which it was declared, that the interest of a 
 member dying should survive to his executors, administrators, 
 and assigns ; and by an order of the society, reciting that every 
 insurance became void at the time when the property of the 
 person insured expired, it was ordered, that upon applying at 
 the office and declaring their property in the houses insured 
 to be expired, any persons may have their accounts adjusted 
 and deposits due paid to them ; and that if they do not apply 
 nor assign the policy to the person having the property of the 
 house insured, the person possessed of the property may in- 
 sure the house, notwithstanding the former policy be not ex- 
 pired. The policy was made payable to the insured, her ex- 
 ecutors, administrators, and assigns ; and it was declared, that 
 when any assignment of the policy be made, such assignment 
 should be entered in the office books within forty-two days, or 
 else the assignee shall have no benefit. Under these circum- 
 stances before mentioned certain houses had descended to the 
 heir, one of the houses was burnt, the policy not being expir- 
 ed, and no assignment to him had been made, the directors of 
 the office refusing to pay upon the application of the heir, he 
 filed his bill, which was dismissed with costs. It was contend- 
 ed, amongst other points, that the executor was a trustee for 
 the heir. 
 
 The Lord Chancellor. — " It is utterly impossible to make 
 the executor a trustee. It seems to me perfectly clear upon 
 the plan of this societjr,, which was formed in 1696(6), that it 
 
 (a) Mildmay v. Folgham, 3 Ves. 473. 
 
 (b) In general) however, policiea are not made pay&ble to the insured, his heirs 
 &C, but to the executors, administrators, &c 
 
168 LAW OF viBB atavKASce. 
 
 90* *ia. not like the other insarance offices since establish- 
 edt but that it is a personal contract, not connected 
 trith the real property nor affecting the real property^ No 
 person can have the benefit of the policy but the personal rep^ 
 reaentatire, with whom they make np the account, and who is 
 entitled to the dividend." 
 
 3. If, however, by the act of the insured, or the party enti- 
 tled to the benefit of the proceeds of the policy, those proceedjf 
 should become clothed with the character of real estate(a), or 
 with a trust, the party entitled to the real estate, as heir or 
 devisee, will become entitled to them, in preference to those 
 who may claim them as personalty(l), 
 
 As where A. was tenant for life, remainder to B. for life» 
 remainder to A. in fee, and during thje life of A. houses on the 
 estate, insured by him^ were burnt down, and the insur^cf 
 money was paid to A., and was placed by him in the funds in 
 his name. A- by his will devised the estate to C. in fee, (sub- 
 
 (a) Norris v. Harrison, 3 Mad. 268. 
 
 (1) See Dwranty. Friend, 11 Bennett ^ Smith's Eng. L. 4- Bq. R:p. 4. — 
 The following opinion of Parker, C. J., presents all the material facts in thii 
 ease, " The Testator, being a sea-faring man, bequeathed chattels to certain 
 personi. He and the chattels perished together. These chattels he had pie> 
 Tiously insured, and the executors rgceiTed from the insurance company tht 
 ^oui)t for which (hey were insvMjed. The question is, whether the legateci 
 ais entitled ^ (hfs money. If the testator, lifld died kavf^g the goods t^ exiitftif/^ 
 pie legaiees ippvM have had an intere^ ia^ thegi, or^dM would have been guile no- 
 ionaiU tlfjit ^ execiUors should have held the policy in tfustfor them. If the chat- 
 tels had wholly or partially pei^shed, in the life-time of tfaetestato^, and no mon- 
 ey had been received from the office, the testator would have had at the time of 
 his death, a right of action on the policy, and it is dear that the legatees would 
 not have had any interest in the money to be recovered by means of it Here, 
 however, the testator and the goods perished together. It is a very difficult diing 
 to lay how such a case should be dealt with. I thought of the case several 
 times ; but I am unable to change the opinion I expressed before, which is (hat 
 the legatees never had any vested interesl under the will, in the chattels, and 
 that ibey are not entitled to the money reeovend from tit* offiea." 8m alio 
 pumps' Ins. va. 1 jp. 69 (< Kf. ' 
 
OP EatTlTIES ATTACHING CPON POLICIES. 169 
 
 ject to B.'s life interest,) and his personal estate to B., and 
 made B. his executor, B. applied part of the insurance money 
 to repairing a house upon the estate ; the insurance money 
 unapplied remained standing in A.'s name. B. by his will 
 bequeathed the residue of his personal property, after stating 
 the circamstances as to the fund standing in A.'s name, as 
 follows : " Whereas, I am sole executor under the will of my 
 brother John Bell, Esq., late of Fludyer Street. Whitehall, 
 deceased, and there is now standing in the books of the Gov- 
 ernor and Company of the Bank of England the sum of 1159^. 
 16*. Id. Three per cent. Reduced Bank Annuities, I here- 
 by inform my executors and sister, Mrs. Lucy Bell, that the 
 said sum of 1159/. l&s. Id. is part of and belongs to what was 
 the real estate of the said John Bell, of which real estate I 
 am now possessed as tenant for life, &c. ; and I do further de- 
 clare for the information of my executors and others 
 whom it may concern, *that the said sum of 1159Z. 16s. *91 
 Id. is the balance or remainder of monies paid by the 
 Sun Fire Office to the said John Bell for houses belonging to 
 the said real estate, which were burnt down in the life-time of 
 the said John Bell, and were not rebuilt by him ; and which 
 monies so paid to the said John Bell were by him laid out in 
 the purchase of 2817/. 5.s Id. Three per cent. Reduced An- 
 nuities, out of which last mentioned sum, after the de- 
 cease of the said John Bell, when the house, No. 128 in Lead- 
 enhall Street, then belonging to me, was burnt down, I took 
 the sum of 1657Z. 9«. Three per cent. Reduced Bank Annui- 
 ties, and with the produce of that sum added to the sum of 
 1125/. sterling, which I received from the Hand in Hand In- 
 surance Office for the said house, I built the present house, 
 No. 128, in Leadenhall Street, to the great improvement of , 
 the said estate," &c. The testator then bequeaths several 
 sums of Bank stock, but not otherwise than as aforesaid refer- 
 ing to the sum of 1159/. 16*. Id. Three per cents. : and it was 
 held, that under these circumstances, the sum was subject to 
 the uses of the settlement, and passed to G. the devisee in fee. 
 So where a testator had devised and bequeathed all his real 
 and personal estate to the defendant the executrix, charged 
 22 
 
170 
 
 LAW OP FIRE INSrRANCE. 
 
 with an annliity to his widow who filed a bill for an account 
 and security of the annuity, and a house, the only real estate, 
 was burnt down after the filing the bill, having been insured 
 by the testator in his life-time, and the policy having been re- 
 newed by the defendant ; the Court (the Viee-Ghancellor 
 Shadwell) ordered the insurance money to be paid into Oourl^ 
 it being to be taken that the defendant had renewed in the 
 character in which she was entitled to renew, viz., as execu 
 trix, and the proceeds as affected with a trust for the benefit 
 of the parties interested in the estate(a). 
 (a) Parry v. Ashley, 3 Sim. 97. 
 
CHAPTER IX. 
 
 OF PROCEEDINGS ON POLICIES OF INSURANCE AGAINST FIRE. 
 
 1. Jurisdiction of the Courts of Common Law. 
 
 2. Arbitration. 
 
 3. Declaration. 
 
 4. Pleas to a Declaration upon a policy under Seal. 
 
 5. Evidence upon the Trial. 
 
 1. The jurisdiction upon questions arising oat of this con* 
 tract exclusively belongs to the Court of Common Law. Courts 
 of Equity, indeed, sometimes in cases of insurance, as in all 
 others, interpose their anthorily for the purpose of advancing 
 justice ; thus they will compel a trustee to permit his name to 
 be used by the cestui que trust in an action on a policy of in- 
 surance(a), or they will issue commissions for the examination 
 of witnesses residing alJroad or out of the Jurisdiction of the 
 Court, and grant injunctions to stay the proceedings at law 
 until the return of such commissions(6) ; or they will compel a 
 phuntiff at law to make a fuU discovery by his answer upon 
 oath of all circumstances within his knowledge touching the 
 matters in question, and the answer may be given in evidence 
 at the trial of the action ; or they will compel a plaintiff at law 
 to deliver up or permit an inspection of all papers and docn- 
 
 (a) Per Lord Haidnicke, Motteax v. London Assurance Comp., 1 Atk. 547. 
 (i) Chitty V. Selwin, 2 Atk. 359. 
 
172 LAW OP FIRE INSURANCE. 
 
 ments wliich. are material to the matters in dispute (a) (1) ; 
 
 except, however, in such cases, and those in whose pol- 
 
 93* icies or the proceeds *may be affected by a trust, Courts 
 
 of Equity have no jurisdiction in questions of insurance. 
 
 A bill of interpleader has been held to lie in favor of an 
 
 insurance company against the landlord of the premises which 
 
 have been burnt down after having been insured by him, (and 
 
 who brought an action against the oflSce upon the policy,) and 
 
 against the tenant who filed a bill against the landlord and 
 
 the office, for specific performance of an agreement for a lease, 
 
 and claiming a right to have the money laid out in rebuilding 
 
 the premises(6). 
 
 (a) De Ghekoff V, London Assurance Company, 3 Bro. F. C. 523 ; 3 Marsh 
 685. Janson v. Solarte, 2 Younge & Coll. 132. 
 (A) Paris V. Gilham, Jones v. Paris, Coop. Ca. Chan. 56. 
 
 (1) A Court of Equity will grant relief where there is no adequate remedy 
 at law. As where the underwriters consented that the policy " remain good '> 
 to the assured, and to an assignee of an undivided interest in the property in- 
 sured. Bodle y. Chenango Co. Mut. Ins. Co., 2 Comstock 53. 
 
 It will also compel the specific performance of an agreement to execute or 
 renew a policy. Perkins v. Washington Ins. Co., 4 Cowen 645; Tayloe v. Mer- 
 chants' Fire Ins. Co., 9 Howard 390. 
 
 But where the Bill states no other ground of equitable relief, than that the 
 policy has been assigned to the orator by the person in whose name it was ef- 
 fected, and that the insurers refuse to pay the loss, a Court of Equity will not 
 interfere, because the orator has an adequate remedy at Law in the name of the 
 original assured. Carter v. United Ins. Co., 1 Johns. Chan. R. 462. 
 
 But a Bill praying for a specific execution of an agreement to issue a policj^ 
 is properly within the jurisdiction of a Court of Equity, and that Court, on 
 such a Bill will not confine itself merely to a decree for the specific perform- 
 ance of the agreement, and send the orator to a Court of Law to pursue his rem- 
 edy upon the policy, but in order to avoid delay and expense to the parties will 
 decree the payment of the loss, if one has occurred, or give such other final re- 
 lief as the circumstances of the case demand. Perkins v. Washington Ins. Co., 
 6 Cowen 645; Tay^e v. Merchants' Fire Ins. Co., 9 Howard 390; I Over en 
 Ins. 66 and 110. 
 
PROCEEDINGS ON POLICIES OF INSURANCE. 173 
 
 2. The deeds of settlement of most of the companies con- 
 tain a clause enabling the parties to refer matters in dispute 
 to arbitration. This clause is, however, unnecessary, as with- 
 out it the parties may, if they agree to do so, refer to arbitra- 
 tion : but if they do not agree, the authority of the supreme 
 Courts at Westminster is so transcendent that nothing but 
 the express words of an^t of Parliament can take away or 
 abridge their jurisdiction in any case,(a) such a clause, there- 
 fore, will not compel a party not agreeing to a reference to 
 have recourse to one(l) ; even a covenant between the parties 
 to refer matters in dispute will not oust the Courts of their 
 jurisdiction{6). If an award be actually made, it will be a bar 
 to an action ; or if the parties have submitted their differences 
 to arbitration, and the reference be still depending, it would 
 also appear to be a bar(c). 
 
 In the case of Goldstone v. Osborn (d), by one of the con- 
 ditions in a policy of insurance, it was stipulated, that if any 
 difference should arise on any claim, it should immediately be 
 submitted to arbitration, and directed how the arbitra- ' 
 
 tors "should be chosen and added, that no compensa- *94 
 tion should be payable until after an award determin- 
 ing the amount thereof should be made, it was nevertheless 
 
 (a) 2 Hawk. P. C. 286 , 2 Marsh on Insusance, 6ti4 ; Kill v. Holli^ter, 1 
 WUs. 129. 
 
 (b) Thompson v. Chamock, 8 T. R, 139. 
 
 (c) Per curiam, Kill v. Hollister, 1 Wils. 129, and see Nichols v. Chalie, 14 
 Ves. 265. 
 
 {i) 2 Carr. & P. 550. 
 
 (1) Robinson t. Georges Ins. Co., 17 Maine(i SAepley,) 131 ; Scott v.Phanix 
 AssuraTux Co., Stuarts {L. Canada) Rep. 52. 
 
 But where a condition of the policy provided, that no action should be 
 brought thereon, unless commenced within the term of twelve months after the 
 cause of action should accrue, it was held a binding and valid condition, and 
 that it was a good defence to an action on the policy, that it was not brought 
 within the time specified. Cray v. Hartjord Fire Ins. Co., Blatchford C. O 
 R. 280, Liringston's LavTjUagazine, Feb. '53 p. 96. 
 
174 LAW OP FIRE mSURANCB. 
 
 held that the insured might maiatain an action on snfih policy 
 notwithstanding the condition, as the insurers denied the gen- 
 eral right of the insured to recover anything, and did not 
 merely call in question the amount to be recovered. 
 
 Some of the companies issue their policies under seal, oth- 
 ers not under seal. Where a company consists ®f numerous 
 proprietors it has been thought more advisable, as a. ftirther 
 security to the insured, to issue policies under seal, thereby 
 putting it out of the power of the insurers (parties to the 
 deed) from pleading in abatement for want of parties, for oth- 
 erwise, in strictness, every proprietor ought to be a party. The 
 policy under seal, had until the framing of the new rtdes, a 
 peculiar inconvenience as against an office that they were put 
 to plead specially, now, however, imder the new system, even 
 in cases of assumpsit, special pleas must to a certain extent 
 and in certain matters be resorted to. (a) 
 
 The form of action in cases of policies under seal, is in gen- 
 eral covenant. A general form of declaration in debt is given 
 against the two public incorporated companies, (the Royal Ex- 
 'change and the London Assurance,) by stat. 6 Geo. 1, c. 18, 
 s. 4, 11 Geo. 1, c. 30, s.,43, but it is not usually adopted in 
 .practice(6)(l) 
 
 (o) See Pleading Rules, Hil. T. 4 Wm. 5, and 2 CMtty on Pleading, 27, 
 Ed. 7. 
 
 (b) 3 Chitty on Plead. 228, et seq. Ed. 7. 
 
 (l)The promise of indemnity in a fire policy is usually made to a particular 
 person or persons mentioned by name in the policy, and every action on such 
 a policy must, of course, be brought in the name of the party so mentioned or 
 his legal representatives, unless by the terms of the policy he is insured as 
 agent. 
 
 But sometimes the form of describing the parties insured commonly used in 
 marine insurance is also adopted in fire policies, and the parties for whom the 
 insurance is effected are not specifically mentioned, but embraced under general 
 words, as " whom it may concern " or " the owners." Frequently the name of 
 the party effecting the insurance is mentioned, and then the general words are 
 inserted. Thus the policy professes to insure "A for whom it may concern," 
 or "A for himself and whom it may concern." In such cases, if the policy is 
 
PROCEEDINGS ON POLICIES OP INSURANCE. 176 
 
 3. In a declaration upon a policy under seal, the policy 
 should be recited verbatim, togetiier with all the proposals and 
 conditions to which it refers, constituting a condition prece- 
 d&nt(a), and any material variance or omission will be fatal(6). 
 The declaration should also state that the plaintiff, at the 
 time of makmff the policy, and from thence until the 
 loss and damage, was iMerested{c) in the goods *or *95 
 premises mentioned it the policy to the amount and 
 
 (o) See 3 Chitty on Pleading, ibi^ 
 
 (4) 2 Marsh. 686 ; 3 Chitty on Pleading, ibid. 
 
 («) By Stat 14 Geo. 3, c. 48, s. 3, in all cases where the insured hath interest 
 in such life &G., ewnt or etKnis, no greater sum shall be recovered or received 
 from the insurer or insurers, than the amount or value of the interest of the in- 
 sured in such life, &c. or other event or events.(l) 
 
 not vmder seal, assumpsit may be brought in the name of A. for the benefit of 
 those concerned, or in the names of those concerned, or of any one of them, for 
 whose benefit it appears that the insurance weis intended by the party effecting 
 it Sargeani v. Morris ,3 B.i^ Aid. 277 ; Slciimer v. Stocks, 4 id. 437 ; Pa- 
 cific Ins. Co. V. Catlett, 4 Wend. 75; Farrow v. CommonweaUh Ins. Co., 18 
 PUk, 53. 
 
 But when the policy is under seal, notwithstanding the general words, cove- 
 nant most be brought in the name of the party mentioned for the benefit of those 
 concerned. American Ins. Co. v. Insley, 7 Barr 223. 
 
 But when A. is insured "loss payable to B.,'' an action may be brought on 
 the policy in B's name. A. may also sue on the policy if it appear that B. 
 consents thereto, or that he has no interest in the loss. Lazarus v. Common- 
 weaUh Ins. Co., 5 Pick. 76 ; Farrow v. CommonweaUh Ins. Co., 18 Pick. S3 ; 
 Ocean Ins. Co. v. Rider, 20 Pick. 259 ; Jefferson Ins, Co. v. Cotheal, 7 
 Wend. 82. 
 
 In regard to the proper party to sue on a policy which has been asssigned 
 by the original insured, see note to chap. 6, on assignment of policies, p. 150. 
 
 (l)Thoagh the Statute 24 Geo. 3 c. 48, S. 3 has probably not been re-enacted 
 in any of the TTnited States, still inasmuch as it as it well settled in this coun- 
 try that wager contracts are invalid, it seems equally, if not more necessary 
 here than in England to aver in a declaration on a policy of insurance that the 
 Plff. was interested in the property insured at the time of the loss, or something 
 else to that effect Granger v. Howard Ins. Co., 5 Wend. 200 ; 2 Phillips' 
 Ins. 613. 
 
ITS LAW OP FIRE INSURANCE. 
 
 valiie of the snm claimed ; it should also state the loss by fire, 
 and that the fire did not happen by any invasion, &c. (or by 
 any of the excepted case's(l),) and that the plaintiff thereby 
 sustained a loss and damage to the amount of the sum claimed. 
 It should also state his compliance ■with the conditions previ- 
 ously recited, and his payment, and the acceptain'ce by the de- 
 fendants of the premium, and that the stock and funds of the 
 .company are suflScient to pay to the plaintiff the amount of 
 damages sustained by him(2). He should then aver the 
 breach, that he hath not in any manner been paid or made 
 good his damage, but that the same is unpaid ; that the de- 
 fendants have broken the covenant made with the plaintiff, and 
 the damages are generally laid at a sum somewhat larger than 
 the sum insured for(a). 
 
 (a)A8 to the averment, that the sheire of the capiteil of the subscribing direc- 
 tors is more than sufficient to pay the loss or damage, see ante, p. 44. 
 
 (l)It is held in Loundmry v. Protection Ins. Co._ 8 Comi. 459, and in Catlin y. 
 Springfield Fire Ins. Co., 1 Swmner 434, that it is not necessary to aver, in a 
 declaration on a fire policy, that the loss did not happen by means of any inva- 
 sion, insurrection &c., notwithstanding the insurers had provided in the policy 
 that they should not be liable for lossss so occasioned. 
 
 So also in regard ta the provision in reference to the hazeirdous use of the 
 premises insured. 
 
 In LovMstniry v. Protection Ins. Co., it is also held, that the declaration need 
 not aver that the magistrate, who made the certificate of loss, as required by 
 the conditions of the policy, was not interested in the loss, or related to the 
 Plff., though the condition in express terms requires the certificate of a magis- 
 trate " not concerned in the loss, or related to the insured or sufferers. '' 
 
 In an action in the name of the original insured on a policy which has been 
 assigned, it is not necesseiry to aver in the declaration that the suit is prosecuted 
 by the direction and for the benefit of the assignee. Traders' Ins. Co. v. i&4- 
 ert, 9 Wend. 404. 
 
 (2)The allegation, that the funds of the Company are sufficient to pay the loss, 
 is unnecessary in this country. 
 
 Its use and necessity in England arise from the peculiar form of the Eng- 
 lish policies, which are not so much the contracts of the Insureince Company, 
 as of the subscribing directors, against whom the action must be brought, but 
 whose liability to pay losses is, by the terms of the policy, limited " to the ex- 
 tent of the stock and funds of the Company." 
 
PROCEEDINGS ON POLICIES OF INSTJEANCE 177 
 
 When the policy is not under seal, tissumpsit is the proper 
 fi>rm of action to be brought upon it against the insurers ; 
 and as the action in such case is founded on a particular and 
 express undertaking made upon a consideration, upon which 
 the law would not, by necessary implication, raise the promise 
 specified in the policy, the plaintiff must declare specially 
 upon it(a). The contents of a declaration upon such a policy 
 are much the same, except in matter of form, as before stated 
 to be essential to the declaration upon a policy under seal, and, 
 as in the latter kind of policy, the contract must be set forth 
 with precision, and any material variance or omission will be 
 equally fatal(6). 
 
 4. The pleas to an action of covenant upon a policy under 
 seal necessarily vary according to circumstances. The 
 •most usual, however, are an absolute denial that the '96 
 articles mentioned in the declaration were burnt or con- 
 sumed, and this plea puts the plaintiff upon the proof of the 
 quantity, quality, amount and value of his loss. Where build- 
 ings, ricks, or the like, exposed to public view, are burnt, it is 
 not usual to include them in such a plea : as the declaration 
 usually states that the plaintiff delivered in as particular an 
 account of the loss and damage as the nature of the case ad- 
 mitted of (according to one of the conditions common to most 
 policies) ; the defendants also by another plea, usually deny 
 this &ct, and this also puts in issue the quantity, qualily, 
 amount and value of the articles alleged to be consumed. It 
 is usual also, in another plea, to allege fraud in the claim 
 made, where the case warrants it, which it commonly does 
 whenever the offices are driven to resist an action, and they 
 then refer to the condition with reference to fraud and false 
 swearing, common to all fire policies, and recited in the dec- 
 laration, whereby the plaintiff forfeits all benefit under his 
 policy, except such as the company may think fit to allow. As 
 the conditions of most offices require the account of the loss 
 
 (a) 3 Marsh. 667. 
 (i) 3 Marsh. 686. 
 23 
 
178 LAW OF FIRE INSURANCE. 
 
 and damage sent in to the office to be verified by affidavit, it 
 is very usual by another plea, to allege /afoe swearing in the 
 claim made ; such a plea' contains the language of the affidavit, 
 alleges that in such affidavit there is false swearing, refers to 
 the before mentioned Condition, and states in general terms the 
 points on which it is false(l). 
 
 tJpon the subject of bringing money into Court, the reader 
 is referred to the book of practice. 
 
 There is a special clause upon this subject in statute, 19 
 Cfeo. 2, c. 37, s. 7, but, upon reference to the preamble (o) 
 and general intent of the act, it seems doubtfiil whether ]i can 
 be applicable to any other than cases of marine insur- 
 *97 ance. Some doubts have, indeed, existed upon *the 
 •subject from the general language of this particular 
 section. The words are these : " and whereas it is unreascn- 
 tible that any person or persons, body or bodies corporate, Sub- 
 scribing sealing or otherwise executing any policy or policies 
 of insurance, should be put to any costs, charges, or expensfes 
 in any suit or action at law to be brought on such policy or 
 policies, in case such person or persons, body or bodies corpo- 
 rate, is or are ready or willing to pay such damages and costs 
 as shall and may be really and bona fide due thereon, which 
 at present they are liable to, and often forced unjustly to 
 bear, for that in many cases no money can be brought into 
 Court ;" for remiedy whereof be it enacted by the authority 
 aforesaid, " that from and after the said 1st day of August, it 
 j^all. and may be lawful for any person or persons, body or 
 bodies corporate, sued in any action or actions of debt) cove- 
 
 (o) It is also thus entitled, " An Act to regulate Insurance on Ships be- 
 longing to the subjects of Great Britain, and on Merchandises and Eflfects laden 
 thereon." 
 
 (1)A Plea, seeking to avoid a policy by reason of &]se swearing, must aver it 
 to be in reference to the matter, to which the clause in the policy against ftlae 
 swearing applies. Ferris v. North Ameriecm Ins. Co., 1 HiU. 74. 
 
 The usual plea to assumpsit on a policy of insurance is the general issue- 
 ChMij on Pleading, Vol. 1 p. 107; 2 PAUips' Ins. 620. 
 
PROCEEDINS IN POLICIES OP INSURANCE. 179 
 
 nant, or any other action or actions on any policy or policies 
 of insurance, to bring into Court any sum or sums of money ; 
 and if any such plaintiff or plaintiffs shall refiise to accept 
 such sum or sums of money so brought into Court as afore- 
 said, vrith costs to be taxed, in full discharge of such action 
 or actions, and shall afterwards proceed to trial in such ac- 
 tion or actions, and the jury shall not assess as damages to 
 such plaintiff, &c., exceeding the sum, «fcc. so brought into 
 Court, such plaintiff &c. in every such case, &c. shall pay to 
 such defendant in every such action costs to be taxed." 
 
 6. ITpon the trial the plaintiff must begin by proving eve- 
 ry material allegation contained in his declaration. If any 
 of the facts of the case on either side have been agreed to be 
 admitted, these admissions are reduced into writing, and sign- 
 ed by the attornies on both sides, and being read, they supply 
 the place of actual proof (o). The rules of evidence are in 
 general the same in trials upon policies of insurance as in 
 other matters, and there appear to be no cases in the books 
 CQntaing points of evidence peculiarly applicable to trials op- 
 en policies of insurance against fire.(l) 
 
 The first step on the part of the plaintiff is to prove *98 
 the contract, which is done by producing the policy, and 
 proving ,the due execution of it, or the subscriptions, if not 
 under seal. It is not often, however that offices ever put plain- 
 tiffs to the necessity of this proof: the production of the pol- 
 icy, if there be no variance, is conclusive evidence of the con- 
 tract stated in the declaration ; and the general rule is, that 
 
 (o) 2 Marsh. 712. 
 
 (l)The rule of evidence in regard to usages is the same in policies of insur- 
 ance, as in other contracts ; they are admitted in evidence to explain and interpret 
 the policy, but not to control or contradict its obvious meaning. CoU. v. Com- 
 mercial Ins. Co., 7 JokTis. 385 ; Funnier y. JEtna Ins. Co., 7 Wend. 270 ; Mvt. 
 Safeiy Ins. Co. v. flime, 2 Comstock 236 ; DePorest v. FuUon Ins. Co., 1 Ball 
 84; Hmaer v. Dtrrr, 10 Mass. 26 ; 1 PMUips Ins. 86. 
 
180 LAW OF FIRE INSURANCE. 
 
 no evidence can be received of any parol stipulation or agree- 
 ment to alter, control or qualify it.(o) (1). 
 
 The receipt of the premium is usually recited in the body 
 of the policy, upon proof of the policy, therefore, proof of 
 that payment is unnecessary, if the loss or damage take place 
 during the period of time which the premium covers. 
 
 The insured must also prove his interest, for as we have 
 seen by stat. 14 Geo. 3, c. 48, s. 31, he can only recover to the 
 amount or value of his interest. It appears that a slight in" 
 terest is sufficient for the purpose of enabling the insured to 
 recover, as that of an agent for the sale of goods, a pawnee or 
 depository for hire, and perhaps a bailee generally. 
 
 Every material averment in the declaration must be proved; 
 one of the most material is that of the truth of such warranties as 
 constitute conditions precedent ; as the delivering in an account 
 of the loss and damage to the office, with evidence in support 
 of it, according to the rules laid down by the respective offices; 
 the construction of the building, if the question be raised ; and 
 the nature of the property insured(2). 
 
 The accident of fire, which was the cause of the loss or dam- 
 age, must also be set forth in the declaration, and proved, if 
 
 (a) Weston v. Ernes, 1 Taunt. 115 ; 1 Marsh. 352 ; 2 Marsh. 715. 
 
 {V^Jennings v. Chenango Co. Mat. Ins. Co., 2 Denio 75 ; Mviual ^afily Ins. 
 Co. T. Hone, 2 Comstock 235 ; Holmes v. Charleston Mat. Fire Ins., 10 Met- 
 cylfe'in. 
 
 (2) An interesting question sometimes arises in regard to the admissibility of 
 the testimony of insurers, policy brokers, and other persons skilled in the busi- 
 ness of insurance, as to their opinion of the materiality of a representation or 
 concealment 
 
 The authorities are conflicdng on Uiis point. The cases of Carter r. Boehm, 
 3 Burr 1905 ; DwrreU v. Bederly, 1 HoU 283 ; CampbeU t. Richards, 5 Bam. 
 ^ Ad. 840, and Jefferson Ins. Co. t. Cothetd, 7 Wend. 72 hold that such evi- 
 dence is no^ admissible ; while the contrary is, either expressly or incidentally, 
 held in Chourand v. Angerslein, 1 Peake's N. P. Bep. 43 ; Berthon t. Long- 
 man, 2 Stark. 229 ; Littledale V. Dixon, 4 Bos. <^ Pul. 151 ; Haywood t. Rog- 
 ers, 4 East. 690; Richards T. Miirdock, 10 Bam. <f- Ores 527 ; Chapinan r. 
 Walton, 10 Bingham. 57 1 MarshaU t. M. Ins. Co., 2 Wash. C. C. R. 558. 
 See also 3 KenU. Com. Sti Slds. 258 net€ b, and 2 Dvsr m Ini. p. 682. 
 
PKOCEEDINGS IN POLICIES OF INSURANCE 181 
 
 not admitted, as it generally is ; the loss or damage must be 
 shown ; and the loss or damage must appear to have happened 
 during the continuance of the risk (a) (1). 
 
 (a) As to the commencement an^ duration of the risk, see ante, ch. 3 sect. 9. 
 
 The general rule, in regard to the admission of evidence of this character, is 
 that the opinions of ejcperts are admissible, when the subject matter of inquiry "so 
 &r partakes of the nature of a science, as to require a course of previous habit or 
 study to acquire a knowledge of it." — Smith's Leading Cases, Phil. Ed., 1852, 
 Vol, 1 p. 544. Under this rule, it is plain and unquestionable, that the testi- 
 mony of medical men is fiequently not only admissible, but indispensable, in 
 regard to the materiality of a representation or concealment in Life Insurance, 
 and we ciui easily suppose questions in Marine Insurance, which cannot be 
 satisfactorily determined by a Jury without assistance from the opinions of 
 those, who are thoroughly acquainted with the various cireumstances, which are 
 likely to affect the risks assumed by that complex contracL 
 
 But the contract of Fire Insurance is so limited in extent and comprehension, 
 and the risks assumed are so much within the cognizance of every person, that 
 it is difficult to suppose a case where the opinion of experienced insurers in re- 
 gard to the materiality of a representation, or conceedment would be necessary 
 to enable a Jury to decide the question, and unless such testimony is necessary 
 for this purpose, it is never admissible. 
 
 (1) Preliminary proofs are not evidence on the question of the amount of dam- 
 ages, unless made so by the the terms of the policy. Sexton v. Montgomery 
 Mut. Ins. Co., 9 Barbour 191. 
 
 The following American cases also relate to the rules of evidence in actions 
 on fire policies. Phoenix JFHre Itis. Co. v. PhUlip, 13 Wend. 81 ; Lightiody v. 
 North American Ins. Co., 23 Wend. 18 ; iV. Y. Fire Ins. Co. v. Delavan, 8 
 Paige Chan. R 419 ; PeiU. v. .^tna Ins. Co., 9 Paige Chan. R. 568 ; Cohim- 
 Ma Ins. Co. v. Lawrence, 10 Peters 507 ; Clark v. Mamifacttirtrs' Ins. Co., 8 
 Howard 235. 
 
CHAPTER X. 
 
 OP THE BECOVERY BACK OF LOSSES IMPROPERLY PAID. 
 
 If, after loss has been paid, the insurers discover that there 
 was fraud in the original contract, or that there were circuin- 
 Btauces attending the loss, which, if known at the time the loss 
 was claimed and paid, would have justified their resisting the de- 
 mand, they may, it appears, maintain an action for money had 
 and received to their use, to recover back the sum improperly 
 demanded and paid(l); but if at the time they paid the money, 
 they knew, or might upoo jnqiiiry have been informod of the 
 grounds upon which they could have resisted the claim, they 
 cannot afterwards recover it back, for this would open a door 
 to infiinite litigation. It seems too, as Mr. Sergeant Marshall 
 conceives(a), that even after the insured has recovered the loss 
 by process of law, the insurers receive intelligence oi fraud 
 which they could not possibly have known whilst the suit 
 was depending, they may in that case maintain an action 
 to recover back the money (6) (2). K money be actually 
 
 (a) 2 Marsh. 740 ; Bilbie v. Lumley, 2 East 469, and see post, par. 2 ch. tO. 
 
 (b) Emerigon, chap iv. s. 6. 
 
 (\)HahnT Hartley, 1 Term. 343 ; Irving v. Richardson; 2 Barn. <f- Ad. 
 393 ; Elting v. ScoU, 2 Johns. 157 
 
 (2) The only remedy in such a case is in a Court of Equity, and even there, 
 no relief will be granted unless the Complainant clearly shows that his failure 
 to avtul himself of the fraud, or other legal defence, did not arise from his i&- 
 feult or negligence. Dimcan v. I/yon, 3 Johnson Ch. R. 351 ; LeChienr. Gomt- 
 erneur, 1 Johns, Cases 494 ; Smith v. Loiory, 1 Johns. Ch. R. 320. 
 
 In Massachusetts where there is no court of Chancery, it was held that an in- 
 surer could not recover back the amount of a loss recovered of him in a former 
 
RCCOVERY BACK OP LOSSES IMPROPERLY PAID. 183 
 
 paid, it cannot be recovered back mthout proof of fraud (1); 
 bu a promise to pay, as by an adjustment, is not binding, un- 
 less founded on a previous liability(a). 
 
 These observations, though applied by the learned serjeant 
 to marine insurances, appear to be equally applicable in prin- 
 ciple to insurance against fire. 
 
 (a) Per Lord Ellenboroogh, Herbert v. Champion, 1 Camb. 134. 
 
 action on a policy, which was discbvered, after the judgment, to have been fraud- 
 ulently procured by the insured. Homer y. Pish, 1 PUk. 435. 
 
 (1) If by Fraad is meant moroi fiaud, in distinction from legal firaud, on the 
 part of the Defendant, this position can hardly be sustained. It seems to be 
 sufficient, in order to enable the Fl£ to recover back the money, to show, that it 
 was paid by him in innocei)t ignorance of some circumstance constituting a le- 
 gal defence, and it is not necessary that this drcvunstance, or the Plffs. ignorance 
 of it, should result from the moral or intentional fraud of the defendant. 
 
THE 
 
 LAW OF LIFE INSURANCE. 
 
 CHAPTER I. 
 
 OP THE NATtRE OP TflE CONTRACT. 
 
 1. General nature of Life Insurance. 
 
 2. The different purposes to which Life Insurance may 
 
 be applied. 
 
 3. Mode of effecting a Life Insurance. 
 
 4. 7%c Form of a Policy. 
 
 5. Death by the hands of Justice. 
 
 6. Death of the insured by his own hands. 
 
 Insurance open life is a contract, by which the insurers tiH' 
 dertake, in consideration of a gross snm paid down, or, as is 
 most nsoal, of an annual payment, to pay the person for 
 whose benefit the insurance is effected, or the personal rcpre' 
 setatives of the insured, as the case may be, cither a stipu- 
 lated sum, or an annuity, upon the death of the party in- 
 sured, whenever it may happen, if the insurance he made for 
 the whole term of life, or if the insurance be for a limited 
 period, in case the death of the insured happens trithin that 
 period. ' 
 
 24 
 
186 LAW OF LIFE INSURANCE. 
 
 It does not appear, nor is it of much importance, when the 
 system of life insurance was first introduced into this 
 *102 'country. There is an old case in Vemon(a) upon 
 the subject, before the establishment of societies or 
 companies for the insurance of lives, by which it appears, that 
 such policies were subscribed by individuals in the sa.me man- 
 ner as marine policies. Nor is the practice totally disused at 
 present time. Insurances upon lives have been held unlaw- 
 ful, and have been even forbidden in foreign countries by pos- 
 itive 'enactments, as being repugnabt to go64 morals, andopen- 
 ing a door to abuses. In France they were expressly prohib 
 ited by an ordinance of 1681(6). It is possible that in a 
 disordered state of society, when, from any defect or weakness 
 in the administration of the law, frauds or acts of violence 
 can be committed with slender chance of detection or punish- 
 ment, life insurance may be dangerous, but in a well-ordered 
 and civilized community the benefits of life insurance appear 
 to be very considerable(l). The modes are numerous in which 
 it may be made applicable to the security and support of in- 
 dividuals, and consequently to the security of the state. The 
 Amicable appears to have been the first society of this kind. 
 This corporation obtained a charter in the reign of Queen 
 Anne ; but as the benefits of it were confined to a limited 
 number of subscribers, and those only for small sums, several 
 other corporations and companies, upon more extensive plans 
 have subsequently been established. 
 
 In many respects the societies of more recent constitution 
 are preferable to the older, as they have the advantage of a 
 
 (0) Whittingham v. Thomburgh, 3 Vera. 206 ; Pre. in Chan. 202, S. C. i. 
 D. 1690. 
 
 (iy Valin on art. 10, tit. dea Assurances ; see also Le Guidon, c. 16, art. 5, 
 Pothier, tit. des Assurances, p. 127. 
 
 (1) The validity of the contract of Life Insurance has never been questioned 
 by the Courts in the United States, but they have, on the contrary, in several 
 instances, testified to its great utility. Lord v. Doll, 12 Mass. 116; Vote v. 
 Eagle lAfe and Health Ins. Co , 6 Cusking 42. 
 
OP THE NATURE OP THE CONTRACT. 187 
 
 more accurate calculation of the probabilities of human life, 
 by which means they are enabled to offer the insured the same 
 advantages at smaller premiums, and benefiting by the expe- 
 rience of the earlier institutions, to adapt and modify their 
 operations in such a manner as may best suit the convenience 
 of the assured. Many offices not aulj give a large 
 share of the profits of the concern to the 'insured, *103 
 but apply the share of profit due upon each policy 
 either by way of bontis or addition to the sum insured, or by 
 way of reduction of the annual premiums, as the holder of 
 policy may eleGt(a.) 
 
 2. The modes in which life insurance may be applied are 
 numerous. The most obvious is that by which a person se- 
 cures to his personal representatives., to be disposed • of in 
 such manner as he may direct by will, a sum of money, paya- 
 ble at his death, by the payment of an annual premium, pro- 
 portioned to his age at the time of effecting the insurance. 
 So a person, possessed of an annual income only, may upon 
 marriage secure to the trustees of the settlement, for the ben- 
 fit of his widow and family, such a sum as it may suit his cir- 
 cumstances to insure. So a creditor, who may entertain doubts 
 about the security of a debt, may protect himself from the 
 loss which may be consequent upon the death of the debtor, 
 by insuring his life either for the whole term of life, or for a 
 limited period. So a tenant holding an estate by lease, re- 
 newable upon the dropping of one or more lives on payment 
 of a fine, may, by insuring the life of the person or survivor 
 of the persons upon whose death the fine would be payable, 
 relieve himself from the inconvenience of having to provide 
 for the payment of a large sum at some unexpected period. A 
 person may also insure a sum to be payable on a child attaining 
 the age of twenty-one, or any other period, for the purpose of 
 advancing him in the world, or, in the case of a fem^e, fat a 
 marriage portion ; or if he has advanced any large sum of 
 
 (a) As the Equitable, the Rock, the Law Li&, the Crown, and some others. 
 
188 I.AW OF LI?E INSURANCE. 
 
 money to a child, he may by insarance secure himself &om 
 the loss of it consequent upon the premature death of the 
 child. 
 
 8. The usual mode of proceeding to effect an insurance up- 
 on a life is as follows : — The party wishing to insure procures 
 at the office a printed form of proposal, which is to be filled 
 up by him. This form in general contains the follow- 
 •104 ing queries or to some such purport or effect, the 'an-- 
 swers to which are to be written upon the adjoining 
 blanks, 1. Name, residence, profession, business or occupation of 
 the person on whose behalf the assurance is proposed. 2. Name, 
 residence, and profession, business or occupation of the person 
 whose life is proposed to be assured. 3. Place and date of 
 birth. 4, Age next birth day. 5, Has the party to be in- 
 sured resided abroad, and if so, where, and for what period 1 
 6. Is the party employed in military or naval service ? 7. Hm 
 the party had the small pox or cow pox ? 8, Has the party 
 had the gout 1 9, Is the party whose life is to be assured, 
 afflicted with rupture, fits, convulsions, asthma, insanity, or 
 spitting of blood, or any other disorder tending to shorten 
 life, and what? 10. Name and residence of the person's usual 
 medical attendant, to be referred to for information as to pres- 
 ent and general state of health. U, Name of an intimate 
 &iend« to be referred to for similar information, 12. Sum to 
 be insured. 13, Term for which the assurance is required. 
 14. Will the party attend personally at the office after this pro- 
 posal filled up has been sent in ? 
 
 The office send printed queries to the usual medical attend- 
 ant and the intimate friend mentioned in the proposal, relative 
 to the habits of life as to temperance, and the state of health 
 of the party to be insured, and thBse are usually to the fol- 
 lowing effect. 
 
 To the Tnedieal man, Whether he is in the habit of seeing 
 the party frequently ? Whether he attends him profession- 
 ally ? When he was last ill ? What was his indisposition ? 
 Whether he has, to the knowledge of the medical man, been af- 
 fected with any illness of such a nature as still to influence 
 
OF THE NATURE OP THE CONTRACT. 189 
 
 his general health, or has experienoed any wound, hurt or 
 other accident ? Whether he is now in perfect health ? 
 Whether he is or has been affected with spitting of blood, 
 asthma, fits, insanity, gout or rupture ? Is he subject to any 
 affection of the head, lungs, heart,- or viscera? Is he temper- 
 ate in his habits of life ? Does he ( the medical 
 man) know of any circumstance in the business *or *105 
 habits of living of the party to be insured, which may 
 be considered as tending to impair his health or shorten his 
 life? 
 
 Queries much to the same effect are usually sent to the in- 
 timate friend referred to by the party. 
 
 If the answers to these inquiries are satis&ctory, the office 
 then proceeds to make out and execute the policy, the party 
 proposing the insurance having first signed a declaration or 
 statement recapitulating the answers to the queries in the 
 printed proposal relating to the age of the party to be insured, 
 and the state of his health, and also that he thereby agrees 
 that such declaration shall be the ba^ of the amtract between 
 himself and the company. 
 
 This declaration is usually recited in the body of the pol- 
 icy ; and the policy in a succeeding part provides, that, in 
 case any untrue allegation be contained in the declaration 
 or statement delivered in to the office of the company on be- 
 half of the said assured, or if it should be proved, or sub- 
 scribed that the referees have knowingly given false testi- 
 monials, then the policy of insurance shall be 'void, and all 
 premiums and monies paid thereunder shall be forfeited to the 
 company. 
 
 4, The form of a policy is generally as follows : — It is a 
 deed-poll, or contract in writing not under seal, executed or 
 subscribed by a certain number of directors of the office, and 
 begins by reciting that the party has proposed to effect an 
 assurance in the sum of upon the life of 
 
 for the term of life, (or for a shorter term,) and has caused to 
 be delivered to the company the declaration (befi}re mentioned) 
 which is shortly recited, and which is stated to be the basis of 
 
190 LAW OP LIFE INSURANCE. 
 
 the contract, that the party has paid the sum of as the 
 
 consideration of the assurance of the said sum of for a 
 
 year commencing on day and terminating on 
 
 day. It is then witnessed that the subscribing directors of 
 the company agree, that in- case the assured shall die within 
 the term of a year ; or if the said assured shall, in the event 
 of his living beyond the term of a year, pay or cause to be 
 
 paid during his life the like annual premium of 
 *106 *on or before the day of in every sub- 
 
 sequent year, the funds and property of the company 
 shall be subject and liable to pay and satisfy the assurer hia 
 executors, administrators, or assigns, within three calendar 
 months next after proof shall have been given to the satis- 
 faction of the directors of the said company of the death of 
 the assured the full sum of together with such further 
 
 sums (if any) as shall have been assigned to or in respect 
 of this policy, as or by way of bonus to the sum thereby as- 
 sured. 
 
 The policy usually contains indorsements to the following 
 effect. That policies will not be considered to be in force 
 beyond thirty days after the expiration of the year, unless 
 the premium then due shall have been paid to the company, 
 but should proof be given to the satisfaction of the directors 
 that the party or parties whose life or lives have been assured 
 continue in good health, the policies may be revived at any pe- 
 riod within six months, on the payment of a specified fine, to 
 be fixed by the directors, or even within a longer period, as 
 twelve or thirteen months, on the payment of such fine as the 
 directors may think reasonable. 
 
 Restrictions are made as to goijig beyond the limits of Eu- 
 rope, except under specified circumstances. That assurances 
 made by persons on their own lives will become void if they 
 die hy duelling, hy their own hands, or hy the hands of jus- 
 tice. The directors, however, may in such cases make such 
 allowances as they may think reasonable(l). 
 
 (1) In addition to the exceptions to the liability of the insurers mentioned in 
 the text, Has American policies usually provide that the contract of insurance 
 
OF THE NATURE OP THE CONTRACT. 191 
 
 By Stat. 65 Geo. 3, e. 184, ached, tit. Policy, a policy of inr 
 surance, or other instrument by whatever name the same shall 
 
 shall be void, in case the person whose life is insured shall die upon the seas, 
 or shall, without the consent of the insurers, previously obtained and endorsed 
 upon the policy, enter into any military or naval service whatsoever, (the mi- 
 litia not in actual service excepted,) or shall, without such previous consent 
 thus endorsed, be personally employed as an Engineer or Fireman in running 
 a Locomotive or Steamer, or in the manufacture or transportation of gunpow- 
 der, or in case he shall become so far intemperate £is to seriously impair his 
 health or induce delirium tremens, or shall die in the known violation of any 
 State, National or Provincial Law. 
 
 Where one person effects an insurance upon the life of another, and there is 
 no express provision in the policy that the insurers shall not be liable in case 
 the life assured, shall die in the known violation of any Law, the insurers will 
 not be discharged from liability by the fact, that the life insured, at the time of 
 his death, was engaged in an unlawful business or pursuit, provided there is 
 no want of good faith, on the part of the person for whose benefit the policy 
 w£is effected. 
 
 A policy was effected by Nancy Lord, for the term of one year, on the life of 
 her brother Jabez Lord, bound on a voyage to South America, or any other place 
 he might proceed to, from Boston. No exception was made to the insurer's lia- 
 bility, except in case of suicide, and forfeiture of life for crime. It appeared 
 that the said Jabez sailed from Boston, after the making of the policy, to Fayal 
 as supercEU'go of a vessel called the Mount Etna, at which place she was con- 
 verted into a Portuguese vesssel called the Yincidero, still belonging to the 
 former owners, but sailing under Portuguese colors. From Fayal the vessel 
 sailed to the coast of Africa, for the purpose of procuring slaves, with intention 
 to carry them to South America ; the smd Jabez acting as supercargo, and having 
 purchased some of the slaves himself. While on the coast of Africa, and be- 
 fore the expiration of the policy, the sedd Jabez died, and an action on the pol- 
 icy weis commenced by Nancy Lord, agetinst the insurer. One objection to 
 the PlaintifTs recovery was, that the policy was void, it being to secure the life 
 of the said Jabez, while in the execution of an unlawful enterprise. But the 
 Court held that it was " a sufficient answer to this objection, that whatever the 
 Law may be as to an insurance upon an illicit voyage, between the parties to 
 a contract, the present Plaintiff, being ignorant of any intended violation of 
 the law, ougltf not to be affected by such illegality. Had the policy been ef- 
 fected for Jabez Lord himself, it might be questionable, whether, as the under- 
 writers had excepted no particular employment in which he might be engaged, 
 
192 LAW OF LIFE INSURANCE. 
 
 be called, whereby any insurance shall be made upon any life 
 or lives, of upon any event or contingency relating to or de- 
 pending upon any life or lives, when the sum insured shall 
 not amount to 5001. is subject to a stamp duty of IL ; where 
 it amounts to 500i!. and not to lOOOZ, to 21. ; where it shall 
 
 amount to lOOOZ. and not to 3000Z., to 3^ .; where it 
 *107 shall amount to.SOOO^. and not to 5000Z-, to 4Z-; and 
 
 where ft shall amount to 5000/. or upwards, to 5/, 
 
 5. It appears that in policies effected by the Amicable Soci- 
 ety, there is no exception as to death by the hands of justice ; 
 and the question arose, whether where a person insured his 
 life in that office, and afterwards suffered death by the hands 
 of justice, the policy was thereby avoided. The Master of 
 the Rolls (Sir John Leach) held, that it was not avoided ; hut 
 afterwards upon appeal to the House of Lords, that decision 
 was reversed, it being considered contrary to the policy of the 
 law, and as holding out an encouragement to the commission 
 of crime, that the representatives of a party should be enabled 
 to recover upon a policy in case of a death consequent upon 
 the party's' own act. 
 
 By a policy of in3urance(a), which, on the 11th of January, 
 1815, H. Fauntleroy effected on his life with the Amicable So- 
 ciety, it was witnessed, that he Fauntleroy, w-as admitted a 
 member of the Society ; and the corporation bound themselves 
 and their successors to pay to his executors, administrators, or 
 assigns, such a proportion of the joint stock or fund as on his 
 death should become due, according to the society's charter 
 and by-laws. In October, 1824, Fauntleroy was declared a 
 bankrupt, shortly after he was convicted of forgery, and on the 
 
 (a) Bolland v. Disney, 4 Russ. 351 ; 4 Bligh, 194, N. S. 
 
 and no cause of death, but suicide and forfeiture of life for crime, whether his 
 engagement in any traiEc prohibited by law would have discharged their lia- 
 bility. If it would, it must be only because it might be thought just apd legal 
 to discourage contracts which might tend to uphold eilterprises forbidden by 
 the Laws.'' Ijord v. Ball, 12 Mast. 130. 
 
OP THE NATURE OP THE CONTRACT. 193 
 
 20th of November lie was executed, pursuant to his sentence, 
 The premiums had been duly paid up to the time of his 4Path. 
 By the sixth by-law the policy was to be vitiated in certain 
 cases therein mentioned, which are common to most insurance 
 offices, but the case above njentioned of dying hy the hands 
 of justice, by their own hands, or by duelling, was not men- 
 tioned. The bill was filed by the assignees of Fauntleroy 
 praying, that an assignment of the policy, which had been 
 made in 1819, might be declared to be void, and that the Ami- 
 cable Society might be decree^ to pay to the plaintiffs 
 'what was due on the insuraQce. The question argued *108 
 was between the plaintiffs and the Amicable Society, 
 who contended that because Fauntleroy had perished by thp 
 hands of justice, no person could make any claim against them 
 under the policy of insurance. 
 
 The Master of the Rolls. — " When the policy does not pro- 
 vide that the ol)ligation to pay shall determine, if the event 
 insured against shall happen in a certain specified manner, 
 then if the event do happen in that manner, the obligation to 
 pay shall not determine merely because the conduct of the 
 party insured produced the event, even though such con4u,c$ 
 was an offence against the criminal law of the country. To 
 avoid the obligation to pay, the act of the party insured, which 
 produced the event, must be done fraudulently, $)r the vei^ 
 purpose of producing the event. Decree for the plainti^. 
 
 This decision was afterwards reversed, upon appeal to the 
 House of Lords(a)(l). 
 
 (o) 4 Bligh, 1|64, new series. 
 
 (1) Lord Eldon, in pronounciDg the decision of the House of Lords in this 
 case, held that even if the insurers had exfresdy agreed to pay the amount men- 
 tioned in the policy, notwithstanding the assured should die by the hands of 
 justice, the agreement would be void " on the plainest principles of public pol- 
 icy, because such a contract would, if available, take away one of those re- 
 straints, operating on the minds of men, against the commission of crimes, 
 m^i^ely, the interest we hj^ve iil the welfare and mpspep^y of our connections." 
 i Bligh, new series, 211. 
 
 25 
 
194 LAW OP LIFE INSURANCE. 
 
 6. If by the conditions of a policy, it is made void in case 
 the insured shall die by his own hands, and he throws himself 
 into a river or other water, voluntarily, and is drowned, know- 
 ing that he shall thereby destroy life, though incapable at 
 the time of judging between right and wrong : that is a 
 death by his own hands within the meaning of the condition) 
 and the policy will be void. The words do not mean merel;y 
 felonixms self destruction, but may include any intentional 
 self destruction. Perhaps, if the word " suicide " had been 
 used, it might have excluded from the effect of the condi- 
 tion all self destruction except felonious self destruction(6). 
 A policy was effected by W. B. upon his own life, with a 
 provision that " in case the assured should die upon the seas 
 (except in such passages as were allowed by the rules of the 
 society), or go beyond the limits of Europe, or enter 
 *109 *into or engage in any naval or military service what- 
 soever, unless license should be obtained from the di- 
 rectors, or should die by his own hands, or by the hands of 
 justice, or in consequence of a duel, the policy should be void." 
 Ten years after effecting the policy the assured threw himself 
 from a bridge into the river Thames and was drowned. Upon 
 an action upon the policy brought by his executors, the jury 
 found that the assured " voluntarily threw himself into the riv- 
 er, knowing at the time that he should thereby destroy life, but 
 that at the time of committing the act he was not capable of 
 judging between right and wrong," and it was held by the 
 opinion of three judges of the common Pleas against the opin- 
 ion of Tindal, C. J., that this provision embraced all cases of 
 intentional self destruction. Three judges, Maule, Erskme, 
 (who tried the case), and Coltman, reasoned that the words 
 were large enough to include this case, that there was a temp- 
 tation to self destruction by its accelerating the payment of 
 the policy. That the object of the office was to guard against 
 this temptation, that the condition was not confined to cases of 
 criminal self destruction, that it was sufficient that the person 
 doing the act should have sufficient powers of mind to under- 
 
 (i) Borrodaile v. Hunter, 5 Scott, N. S. 418., 5 Man. & Qtaxkg. 639. 
 
OP THE NATURE OP THE CONTRACT. 195 
 
 staifid the, conaequences of such an act ; that though in the pro; 
 viso cases involving criminality immediately followed that in 
 discussion, that others preceded and followed involving no 
 criminality. That in this case the assured had an intention, 
 and as found by the jury he acted " voluntarily," and there- 
 fore had power to do the act or abstain from it. Tindal, 0. 
 J., on the other hand, reasoned that the words were those of 
 the insurers, and must be taken most strongly against them- 
 selves, that from the context and position of the words a felo- 
 niotis killing was intended and no other ; that if the insurers 
 meant to include self destruclion not felonious, they should 
 have so expressed themselves, and that as there was a doubt 
 it must be taken against themselves(l). 
 
 In the above case of Boradaile v'. Hunter, Sir T. Wilde, in 
 argument, referred to a case of Garrett v. Barclay (sit- 
 •tings after Easter Term, 1826, Exch.), in which the *110 
 words of the condition were " shall commit suicide," 
 the insured was found dead in a pond, having before exhibited 
 symptoms of an unsound mind. Upon action on the policy, 
 
 (1) In this case of BorradaUe v. Hunter, Tindal, C. J. who holds that the 
 terms " die by his ovm hands " do not include intentional self destruction 
 when the party was of unsound mind and incapable of distinguishing between 
 right and wrong, says that if the term suicide had been used V surely no doubt 
 could hare arisen that a felonious suicide was intended thereby " ; and Erskine, 
 J. though he held that the terms " die by his ovm hands " comprehended the case 
 of Mr. Borradaile, then under examination, says " when I find the terms ' shall 
 commit suicide^ that have been popularly understood and judiciedly considered, 
 as importing a criminal act of self destruction, exchanged for terms not hith- 
 erto so construed, it may, I think, be fairly inferred that the terms adopted were 
 intended to embrace all cases of intentional self destruction." The inference 
 from the remarks of these members of the Court, in the case of Borradaile 
 V. BvMter is, that by the term suicide in a policy, only felonious self destruc- 
 don, that is, self destruction by a sane man, would be implied. But the Court 
 of Exchequer, in the more recent case of Clifl v. Schwaie, 3 Man . Grang. if- 
 Scoii 437, took directly the opposite view, and held (Pollock and Wightman 
 dissenting), that the words " commit suicide " included all acts of self destruc- 
 tion, and therefore, that it was immaterial whether the person insured, was or 
 was not, a responsible moral agent, at tlie time of destroying himself. In that 
 
196 LAW OF LIFE INaXIRANCE. 
 
 the Chief Baron (Alexander) told the Jury that the question 
 was whether they were satisfied that Mr. B. died by his own 
 means, intending to put himself to death, or without any such 
 
 case tlie action was upon a life insurance policy, and the facts were as follows. 
 The Argus Insurance company issued a policy on th6 life of Louis Schwabe, 
 dated July 4th 1836, one of the conditions of which was, that it should be void 
 if the insured should commit suicide, or die by duelling, or the hands of justice. 
 On the 10th of January 1845, Schwabe voluntarily took and swallowed a 
 quantity of sulphuric acid sufficient to occasion death, and died on the follow- 
 ing day by reason of swallowing such acid ;i and evidence was introduced 
 tending to show, that at the time when he took the acid, he was of unsound 
 mind. Cresswell J. at the trial below charged the Jury, that in order to find 
 the issue for the insurers, it would be necessary that they should be satisfied 
 that die insured died by Ms own vohmtary act, being then able to distingvish, be- 
 tween rigU and lerong, and to appreciate the nature and quality af the aidk he 
 was doing, so as to be a responaile Tnoral agent. 
 
 To this charge the insurers excepted, and at the trial in the Court of Exche- 
 quer, the majority of the Court, consisting of Rolfe, Patteson, Parke and Alder- 
 son, held the charge incorrect, and decided that the words " commit suicide " 
 were to be taken in their ordinary acceptation, and meant every act of self de- 
 struction, provided it be the intentional act of a party knowing the probable 
 consequences of what he was about, and that no question should be put as to 
 the sanity of the party, or as to the act done being criminal or not. Butfrom 
 ^his opinion Pollock C. B. and Wightman B. dissented, strenuously main- 
 taining that the term suicide imports only a criminal act of self destruction, 
 which cannot be performed by a person of unsound mind, and incapable of 
 distinguishing between right and wrong. 
 
 Chief Baron Pollock, in the course of his able opinion says : " The object 
 of such a policy is, generally, to make provision for the fiimily of the insurer ; 
 «nd he would naturally desire to include all risks. It is admitted that he is 
 protected, not only against the common chances of death by disease, but against 
 accident, or mere negligence of the grossest kind. He may even be the imme- 
 diate cause of his own death by a deadly weapon, provided he be so insane as 
 to be utterly unconscious of what he is doing. But, according to the argument 
 for the insurers, if he retains a glimmering of reason , just enough to enable him 
 to seek to produce death by competent means — it matters not whether he be 
 lost to all moral sense, and for einy other act or crime a complete madman — his 
 policy is forfeited. 
 
 " I own I cannot, from the nature of the contract, believe that this was what 
 th« partiM intended. A man anxious to provide for his iamily, would, among 
 
OP THfi NATURE OP THE! CONTRACT. 19T 
 
 intention. The jury found for the plaintiff, being of opinion 
 that Mr. B. did toot commit suicide. Sir T. Wilde also cited 
 Kinnear ». Borradaile, (sittings after HUary Term, 1832, K. B.) 
 
 the possible calamities of life that might terminate it, anticipate madness as 
 one ; and vrhether it prostrated his intellect altogether, or produced delusibn, or 
 destroyed only a part of his &culties, would make no difference. The lan- 
 guage used in the agreement between the parties, does not necessarily exclude 
 this risk, I think, therefore, as against the office, the risk ought not to be in- 
 cluded. 
 
 " Examining the question on more general principles, I am induced to come 
 1 the same conclusion. In the eye of the law, with reference to crime, a man is 
 either compos mentis and responsible, or he is non compos mentis and irrespon- 
 sible. Physiologically, no doubt, it is otherwise ; and the gradations are per- 
 haps imperceptible, from the highest perfection of intellect, to the darkest obeeu- 
 ration of the mind. But in point of law as soon as it is ascertained that a per- 
 son (to use the language of my brother Cresswell in directing the jury) has 
 lost his sense of right and wrong, it matters not what else of the human facul- 
 ties or capacities remain, he ceases to be a responsible agent, and in my judg- 
 ment, can no more commit suicide than he can commit murder. 
 
 " Lastly the views taken by the Defendant's counsel, appear to me to be op- 
 posed to all the principles of sound philosophy, which can be applied to the 
 subject. 
 
 " It is admitted of course, that the office would be liable, if death ensued from 
 any of the ordinary casualities of life, even resulting from the act of the party 
 insured ; provided the act was not done with the intention to kill. The act of 
 a raving madman, or of a patient under the influence of disease, is protected 
 by the policy, if the consequences are not foreseen and intended. So if insan- 
 ity should produce delusion, and deprive a man of the use of the ordinary 
 senses, and the party should mistake a deadly weapon for an instrument of music, 
 and &ncy he was playing on it when he was destroying his own life, this 
 would not be committing suicide, within the proviso of a policy. But what if 
 the delusion instead of applying to a pistol, or other instrument of death, ap- 
 plied to the man himself! Suppose he believed he was Marcus Curtius, and 
 ought to leap into a gulf 1 or that he was one of the Decii, and must sacrifice 
 himself for the benefit of his country 1 or what, if he fancied himself an apos- 
 tle, and that it became his duty to die the death of a martyr 1 What sound 
 philosophy is there in taking a distinction between a delusion about a pistol 
 and a delusion in respect of the man, against whom it may be directed ^ or 
 what distinction, in point of good sense, can be taken between physical blind, 
 ness, in eoniequence of which the party insured walks into a well, and intel- 
 
198 LAW OP LIFK INSURANCE. 
 
 there the condition also applied to suicide, and the defence 
 was that the insured was found dead in his bed, having caused 
 his own death by taking poison. The jury found for the 
 
 lectual or moral blindness, which, leaving him the use of his senses and a 
 knowledge of the physical consequences of his acts, has deprived him of all 
 judgment which should control and govern his acts, and of edl sense to perceive 
 their moral consequences. 
 
 " It may be said, when the delusion extends to the character, office, or condi- 
 tion of the party — so that he mistakes his identity — he does not mean to kill 
 himself, and in such case the office would be liable. But, how far is this to be 
 carried % Suppose, under a delusion, he believed he had committed a crime for 
 which he ought to put himself to death, and that this was the result of insan- 
 ity % and how is a judge to direct a jilry, so as to steer clear of the difficulties 
 that would thus arise 1 In my opinion, such subtleties as these ought to find 
 no place in the decision of such a question as the present, in which is involved 
 (from the present extensive practice of life insurance) the peace, the happine^, 
 of thousands of families. Some simple, clear and safe rule ought to be laid 
 down as to a subject in which the public are so deeply interested. 
 
 " In my judgment, if death be the result of disease — whether by affecting the 
 senses or the reason — the insurance office is liable under this policy. Whether 
 the privation of reason be total or partial, whether it produce delusion of on« 
 kind or another — whether it affects sensation, apprehension, memory, judgment, 
 or will or any of the moral and intellectual powers which constitute our nature— 
 if the act be not the act of a sane responsible creature, but is the result of any 
 delusion or perversion, whether physical, intellectual, or moral, it is not the act 
 of the man ; and to hold otherwise, seems to me a departure from the simplic- 
 ity of the law, and to be repugnant to sound philosphy, which is the spirit of all 
 law, and on which all law ought to be founded." 
 
 A similar question arose in the case of Breasted v. Parmer^ Loa/n avA 
 Trust Company, tried in the Supreme Court of New York in 1843, and re- 
 ported in 4 Hill p. 74. 
 
 In that case it appeared that the Defendants had issued a policy on the life 
 of Hiram Comfort, the Plaintiffs intestate. The policy contained a clause 
 providing, that in case the assured should die upon the seas, &c., or by his own 
 hamd, or in consequence of a duel, or by the hands of justice, the policy should 
 be void. To an action upon the policy, the Defendants pleaded that Comfort 
 committed suicide by drowning himself in the Hudson River. Replication, 
 that when the assured drowned himself he was of unsound mind, and wkoWj/ 
 wnamscioua of the act. To this replication the Defendants demurred. By the 
 Court, Nelson, Ch. J., " The question, arising fiom the demurrer is, whether 
 
OF THE NATURE OF THE CONTRACT. 199 
 
 plaintiffs, and no attempt was made to disturb the verdict. 
 
 ' These cases however, do not decide the question, -whether the 
 
 word " suicide," used in the condition of necessity means " fe- 
 
 Corafort's self destruction in a fit of insanity, can be deemed a death by his 
 own hand, within the meaning of the policy. I am of the opinion that it can- 
 not Since the argument of the case, I have examined many precedents of life 
 policies, used by the different insuremce companies, and am entirely satisfied, 
 that the words in the policy in question, import a death by suicide. Provisos 
 declaring the policy to be void, in case the insured commit suicide, or die by his 
 own hands, are used indiscriminately by different insurance companies as ex- 
 pressing the same idea ; and so they are evidently understood by the writers 
 upon this branch of the law. 
 
 " The connnection in which the words stand in the policy, would seem to indi- 
 cate that they were intended to express a crimined act of self destruction ; as they 
 are found in conjunction vrith the provision relating to the termination of the 
 life of the assured in a duel, or by his execution as a criminal. This associa- 
 tion may well characterize and aid in determining, the somewhat indefinite and 
 equivocal import of the phrase. Speaking legally also, (and the policy should 
 be subjected to this test,) self destruction by a fellow being bereft of reason, can 
 with no more propriety be ascribed to the act of his own hand, than to the 
 deadly instrument that may have been used for the purpose. The drowning 
 of Comfort was no more his act, in the sense of the law, than if he had been 
 impelled by irresistible physical power ; nor is there any greater reason for ex- 
 empting the Company from the risk assumed in the policy, than if his death 
 had been occasioned by such means. Construing these words, therefore, a<>- 
 cording to their true, and as I apprehend, universally received meaning among 
 insurance offices, there can be no doubt that the termination of Comfort's life 
 w£is not within the saving clause of the policy. Suicide involves the deliberate 
 termination of one's existence, while in the possession and enjoyment of his 
 mental &culties. Self-slaughter, by an insane man or a lunatic, is not an act 
 of suicide within the meaning of the law. >i Bl. Com, 169 ; 1 Hale's PI. C. 
 411, 412. I am of opinion, therefore, that the pleiintiffs are entitled to judgment 
 on the demurrer." 
 
 This case was afterwards taken to the New York Court of Appeals, the ques- 
 tion of &ct having been previously referred to referees, who reported among other 
 things, " that the assured on the 25th day of June 1839, threw himself into the 
 Hudson River, from the steamboat Erie, while inseme, for the purpose of drown- 
 ing himself, not bang mentally capable at the time, of distinguishing between 
 right and wrong." 
 
200 LAW OP LIFE INSURANCE. 
 
 lonious suicide or self destruction." The jury in both cases 
 may have thought that the insured were in that state of mind 
 which rendered them incapable of forming a predetermined 
 
 The Court of appeals at their June Term 1853, affirmed the iecmaa ol the 
 the Supreme Court, by a vote of five for affirmation, to three for revrarsal. The 
 following is the opinion of the majority of the Court, delivered by Willard J., 
 and reported in the April number of the American Law Register for 1854, 
 page 358. 
 
 " The question raisedby the decision of the referees, is substantially the same 
 as that decided by the Supreme Court on the demurrers. It will be unnecessary 
 to give each a separate examination. 
 
 "It is material to determine in the first place, what is meant by the terms death 
 by his own hands, which is to avoid the policy. If the words are construed ac- 
 cording to the letter, an accidental death occasioned by the instrumentality of 
 the hand of the insured, would fall within the exception. Thus, should the in- 
 sured by mistake, swallow poison and thereby terminate his life, his represent- 
 atives could not recover on the policy, if the poison was conveyed to his mouth 
 by his own hand. The same rule of construction applied to the words death 
 by the hands of justice^ in the same connection, would take the case out of the 
 exception if the death was occeisioned by strangulation by a rope instead of the 
 hands of the minister of justice. But it is too plain for argument, that the lit' 
 eral meaning is not the true meaning of either phrase. Death by the hcmds of 
 justice is a well known phrase denoting an execution, either public or private, 
 of a person convicted of crime, in any form allowed by law. The moral guilt 
 of the party executed has nothing to do with the definition. Socrates, though 
 he took the poison from his own hand, died by the hand of justice, in this sense 
 of the term. ' It would be an abuse of language to charge him with an act of 
 intentional self destruction. The meurtyrs who perished at the stake, in like 
 manner " died by the hands of justice." 
 
 " In popular language, the tei^n death by his own hand, means the same as sui- 
 cide or felo de se. The two first, indeed, are not technical terms, and may be 
 used in a sense excluding the idea of criminality. The connection in which 
 they are used in in this policy, indicates that the phrase death by his own hand 
 meant an act of criminal self destruction. Provisos declaring the policy to be 
 void in case the assured commit suicide or die by his own hand, are used indis- 
 criminately as expressing the same idea. In the note to Borradale vs. Hunter, 
 5 Man. 4- Gr. 648, are given the forms of the provisos used by seventeen of the 
 principal London Insurance Companies, In eight of them the exception is of 
 a death by suicide, and in nine, of a death by the asswred's own hand, are used 
 
OP THE NATURE OF THE CONTRACT. 201 
 
 intention of destroying life, as well as of judging between 
 right and wrong. The word " suicide," as used by some offices, 
 aad " dying by his own hands," used by others, as observed 
 
 V 
 
 a separate provision is made in case of a death by suicide, not felo de se. It is 
 obvious, theiefoie, that the phrase death by his own hrnid and death by suidde, 
 mean the same thing, and that both, unless quaUfied by some other expressions, 
 import a criminal act of self destruction. The connection in which they stand 
 in this policy favors this construction. The first four exceptions in the policy 
 are acts innocent in themselves, three of which become inoperative, if the de- 
 fendemts give their consent, and have it endorsed on the policy. - Then follow 
 the last four exceptions, viz : if he shall die by his own hand, or in consequence of 
 a duel, or by theha/ads of justice, or in tke known violation of amy law, ^c, by the 
 acknowledged rule of constuction, nosUtw a sociis, the first members of the sen- 
 tence, if there be any doubt in its meaning, should be controlled by the other 
 members which are entirely unequivocal, and should be consture^ to mean a 
 felonious killing of himself. Broome's Maxims, 450, 293. It is a rule laid 
 down by Lord Bacon, that copulatio verborum indicat acceptationem in eodem 
 sensu; the coupling of words together shows that they are to be understood in 
 the same sense. And when the meaning of any particular word is doubtful or 
 obscure, or when the expression, taken singly, is inoperative, the intention of 
 the parties using it may frequenly be ascertained and carried into effect by 
 looking at the adjoining words, or at expressions occurring in other parts of 
 the seime instrument for qua non vcUeaat singula juncta juvant. Bacon's Works, 
 vol. 4,p. 26 ; 3 Broome's Maxims, 293. Besides, th? words in this case are those 
 of the insurer, and if susceptible of two meanings, should be taken most strong- 
 ly against him. 
 
 " It weis not contended on the part of the defendant, that the policy would be 
 avoided by a mere accidental destruction of life by the party himself. It was 
 urged that it would be, if the act was done intentionally, although under cir- 
 cumstances which would exempt the party from all moral culpability. It was 
 insisted that the expression must be taken to mean a death by his own act. It 
 seems to me this is a yielding of the whole question. An insane man, incapa- 
 ble of discerning between right and wrong, can form no intention. His acts 
 are not the result of thought or reason, and are no more the subject of punish- \ 
 ment than those which are produced by accideni. The acts of a madman, 
 which are the offspring of disease, subject him to no criminal responsibility. 
 If the insured, while engaged in his trade as a house joiner, had accidentally 
 fallen through an opening in the chamber of a house he was constructing and 
 lost his life, the argument concedes that the insurer would have been liable. 
 
202 LAW OP LIFE INSURANCE. 
 
 by the court in Borradaile v. Hunter, are not well chosen, and 
 are susceptible of much refinement in argument. Possibly the 
 words " self destruction," or " intentional self destruction " 
 
 The reason is, that the mind did not eoncur with the act. How can this differ 
 
 in principle from a death in a fit of insanity, when the party had no mind to 
 concur in or oppose the act 1 
 
 "It must occur to every prudent man, seeking to make provision for his family 
 by an insurance upon his life, that insanity is one of the diseases which may 
 terminate his being. It is said the defendant did not insure the continuance of 
 the intestate's reason. Nor did they in terms insure him against small pox or 
 scarlet fever ; but had he died of either disease, no doubt the defendant would 
 have been liable. They insured the continuance of his life. What difference 
 can it make to them, to them or to him, whether it is terminated by the ordinary 
 course of the disease of his bed, or whether in a fit of delirium he ends it him- 
 self "! In each case, the death is occasioned by means within the meaning of 
 the policy, if the exception contemplates, as I think it does, the destruction of 
 life by the intestate while a rational agent, responsible for his act. 
 
 "It is competent no doubt, for the insurer so to frame his policy, as to exclude 
 him from liability for a death occasioned in a fit of insanity. The parties have 
 not done so in the present case. 
 
 " It was urged, that because a person lum compos mentis is liable civilUer for 
 torts committed while in a state of insanity, therefore insanity has no effect to 
 qualify this exception in the policy. That conclusion is not a legitimate de- 
 duction from the premises. A rational man is liable civilikr for an injury oc- 
 casioned by an accident, unless it be an inevitable one, and yet no one pre- 
 tends that the insurer is not liable for a death by accident, whether inevitable 
 or not. Indeed, the liability for deaths by accident was conceded on the argu- 
 ment. A death by accident, and a death by the party's own hand when de. 
 priyed of reason, stand in the same category. In both cases, the act is done 
 without a controlling mind. If the insurer is Uable in one case, be should be 
 in the other. 
 
 " If the insured was compelled by duress to take his own life, it will hardly be 
 contended that the insurer could avoid payment. In what consists the differ- 
 ence between the duress of man and the duress of Heaven 7 Can a man be 
 said to do an act prejudicial to the insured, when he is compelled to do it by 
 irresistible coercion ; and can it make any difference, whether this coercion 
 comes from the hand of man or the visitation of Providence t 
 
 " But it is urged that this is a civil action, and the contract of insurance a civil 
 contract. Be it so. A person so destitute of reason as not to know the conse- 
 
OP THE NATURE OF THE CONTRACT. 203 
 
 would be safer for the offices and better understood by the pub- 
 lic : the intention of the offices no doubt is to include in their 
 condition all cases of Toluntary self destruction. Habitual 
 intemperance indeed is self destruction ; but it would require 
 
 quences of his acts, can make no valid contract. Whether the incompetency 
 be the result of disease or of intoxication, his contracts made while in that con- 
 dition are void. Barret vs. Baxter, 2 Aiken Vt. R. 167, approved by Ch. 
 Walworth, in Prentice vs. Aeham, 2 Paige, 31, and by Ch. Kent, in 2 Com- 
 mentaries, 451 ; Smith's Law of Contracts 324 — 333 and notes. If the party 
 could do no act to bind himself, he certainly could do none to discharge the 
 insurer. If he could not make a bond, he could not make a release. If he could 
 not make a will, he could not revoke one, 
 
 " The liability of a lunatic for necessaries, rests upon the ground that the law v 
 will raise a contract by implication on the part of the lunatic, in favor of the 
 party who has supplied them in good faith, and therefore does not affect the 
 present question. Wenfworth vs. Tiibbs, 1 Yovrng <f- Col. N. C. 171. The 
 cases on this head are analagous to that of an infant. See Smith's Law af 
 Contracts, 325, et seq., and notes, where the cases are collected and reviewed. 
 The law, to prevent a failure of justice, will imply a promise by a party inca- 
 pable of making a contract ; but it will never imply that a party incapable of 
 distinguishing between right and Wrong was guilty of fraud. 
 
 "At the time this case was decided by the Supi^eme Court on the demurrerj 
 there had been no case, either in this country or in England, in which the same 
 question had arisen. The case of Borradaleva. Hunter, h Man. (f- Gr. 639, 
 decided by the English Common Pleas in 1843, has since been reported. That 
 action was brought by the executor of the insured, upon a life policy contain- 
 ing a proviso, that in case the assured should die by his own hemds, or by the 
 hands of justice, or in consequence of a duel, the policy should be void. The 
 assured threw himself into the Thames, and was drowned. Upon an issue, 
 whether the eissured died by his own hands, the jury found, that he vohintarily 
 threw himself into the water knowing at tlie time that he should thereby des- 
 troy his life, and intending thereby to do so ; but at the time of committing the 
 the act he was not capable of judging between right and wrong. It was held 
 by a majority of the Court, Tindal Ch. J., dissenting, that the policy was avoid- 
 ed, as the proviso included all acts of voVwntary self destruction, and was not 
 limited by the accompanying provisos to acts of felonious suicide. The judges 
 who formed the majority laid the main stress upon the feet, that the jury found the 
 act of self destruction to be voluntary, that he knew when he threw himself into 
 
204 LAW OP LIFE INSURANCE. 
 
 a strong case of intention to bring it within the condition, if 
 the habit was acquired after the policy had been effected ; if 
 before, it would probably be touched by the statement or war- 
 ranty made at the time of the contract. 
 
 the river he should thereby destroy his Ufe, and that he intended thereby to do so. 
 The referees in the present case, have not found that the intestate acted volimta- 
 rHij, or that he knew the consequence of his act. They merely find, that while 
 insane, for the purpose of drowning himself, he threw himself into the river, not 
 being mentally capable of distinguishing between right and wrong. If Bono- 
 dale vs. Hvmter be an authority which we ought to follow, it differs so much 
 from the case before us, that we are at liberty to decide ii upon principle. 
 
 •'After the case of Borradale vs. Hunter, the case of Scwabe vs. Clifl was tried 
 at Nisi Frius, before Cresswell, J. It was upon a policy upon the hfe of the 
 plaintiff's intestate, containing the proviso, that if the assured should commit siir 
 icide, or die by duelling, or by the hands of jusdce, the policy should be void,' 
 The assured died from the effects of sulphuric acid talcen by himself, but ev- 
 idence was given tending to show that at the time he took the sulphuric acid, 
 he was in fact of unsound mind. In his charge to the jury, the learned Judge 
 said, that to bring the case within the exception, it must be made to appear that 
 the deceased died by his own voVmitary act ; that at the time he committed that 
 act, he could distinguish between right and wrong, so as to be able to appre- 
 ciate the nature and quality of the act he was doing ; emd that therefore, he 
 was at that time a responsible being. The jury found for the plaintiff. 3 Car, 
 and Kinawa 134. This cause was afterwards brought into the Exchequer 
 Chamber on a bill of exceptions and will be found in 3 Man. <(• Gr. 437, by the 
 title of Clifl vs. Schwabe. That Court, by a vote of four to two, ordered a 
 a new trial, holding that the direction was erroneous ; for that the terms of the 
 condition included all acts of voVwntary self destruction, and therefore, if A_ 
 voluntarily killed himself, it was immaterial whether he was or was not, at the 
 time a responsible moral agent. 
 
 " This case is open to the same remark as BorradaXe vs. Hunter, supra. It 
 turned upon the assumed fact, that the act of suicide was voluntary; a fact no' 
 found by the referees in this case. 
 
 " Judgment affirmed." 
 
CHAPTER II. 
 
 OP THE WARRANTY OF THE AGE AND HEALTH OP THE 
 PARTY TO BE INSURED, AND OP MISREPRESENTATION AND 
 CONCEALMENT. 
 
 1. Warranty to he strictly true. 
 
 2. 4* to the Clause that the party to be insured " is in 
 
 good health at the time of making the policy." 
 
 3. As to the Clause that the party to be insured has " no 
 
 Disease tending to shorten life." 
 
 4. Concealment of material facts. 
 
 5. Reference to the " usual Medical Attendant " of the Par- 
 
 ty to be insured. 
 
 1. This declaration (when forming a part of the policy) 
 amounts to a condition or warranty, which, as before observ- 
 ed, must be strictly true, or complied with (a), and upon the 
 truth of which, whether a mistatement be intentional or not, 
 the whole contract depends ; the party effecting an insurance, 
 therefore, cannot be too cautious in ascertaining the real state 
 of the facts alleged in this declaration. The ofiSoes in gener- 
 al never avail themselves of any trifling objection to resist 
 
 (o) On Warranty, see ante, p. 81. 
 
206 LAW OF LIFE INSURANCE. 
 
 payment upon a policy unless fraud appears ; thus, in the case 
 of a trifling difference, of the age of the party insured from 
 that stated in the declaration, although there can be no doubt 
 that an office might successfully resist a claim upon that ground, 
 yet they usually content themselves with deducting such a 
 sum of money from the sum insured for, as would compensate 
 the office for additional premiums, with interest, which 
 112* *ought to have been paid, if the age had been accurate- 
 ly stated, 
 
 2. A warranty that the person, whose life is to be insured, 
 " is in good health at the time of making the policy," is to be 
 construed in a liberal sense as regards the assured, and is not 
 to be understood as a warranty, that the person is perfectly 
 free from the seeds of disorder. Though the person may, by 
 accident, be afflicted with a particular infirmity, if his life be 
 in fact a good one, and he be in a reasonably good state of 
 health, so that his life may be insured on the common terms 
 for a person of his age and condition, the party insuring will 
 have a right to recover. 
 
 An insurance was effected on the life of Sir J. Ross (a) for 
 one year, from October, 1759, to October 1760, warranted in 
 good health at the time of making the policy In an action 
 on this policy it appeared that Sir James had received a 
 wound in his loins in bslttle in the year 1747, which had oc- 
 casioned a partial relaxation or palsy, so that he could not re- 
 tain his urine or faeces, and which was not mentioned to the 
 insurer. He died of a malignant fever within the time of 
 the insurance. All the physicians and surgeons, who were 
 examined for the plaintiff, swore that the wound had no sort 
 of connection with the fever ; - that the want of retention was 
 not a disorder which shortened life ; and that he might, not- 
 withstanding that, have lived to the common age of man ; and 
 the surgeons, who opened him, said that his intestines were all 
 sound. One physician, who was examined for the defendant, 
 said, that want of retention was paralytic, but being asked to 
 
 («) Rosa V. Bradshaw, 1 Bla. 312 1 2 Marsh. 773; 3 Parke 749, 7th ed. 
 
WARRANTY OP AGE, &C. OP INSTJRED. 20T 
 
 explain; said it was only a local palsy arising from the wound, 
 but did not affect life, but upon the whole, he did not look up- 
 on him as a good life. Lord Mansfield told the jury " no ques- 
 tion of fraud can exist in this case. When a man makes an 
 insurance upon a life generally, without any warranty of the 
 state of the life insured, the insurers take all the risk, 
 unless some fraud be committed by the person insur- *113 
 ing, either by suppressing some circumstances which 
 he knew, or by alleging what was false. But if the party 
 insured knew no more than tfce insurer, the latter takes the 
 risk. Wherever there is a warranty, it must at all events, be 
 proved that the party was a good life, which makes the ques- 
 tion on a warranty much larger than on fraui Here there 
 was a warranty, and it is proved that there was no represen- 
 tation at all as to the state of the life, nor any question asked 
 about it, nor was it necessary. When an insurance is upon a 
 , representation, every material circumstance should be men- 
 tioned ; such as age, way of life, (fee. But where there is a 
 warranty, then nothing need be told ; but it must in general 
 be proved, if litigated, that the life was in fact a good one ; 
 and so it may be, though he had a particular infirmity. The 
 only question is, whether he was in a reasonably good state 
 of health, and such a life as ought to be insured on the com- 
 mon terms." The jury, without going out of Court, found a 
 verdict for the plaintiff. 
 
 It may be observed, that this is a case of a nature not very 
 likely to occur again, as it appears to have been effected by a 
 private insurer upon a very loosely drawn policy. The war- 
 ranties in policies, as now delivered by the offices, are of a 
 , much more specific nature than that contained in the preceding 
 case. It is now in general inquired, whether the party to be 
 insured has had certain disorders, w;hich, if undergone, his life 
 becomes the better, as being the less exposed to them, as the 
 small pox, or its antidote the cow pox : secondly, whether he 
 has had the gout, a fact which, if answered in the affirmative, 
 must render the life the worse, it being a disorder which gen- 
 erally recurs ; thirdly, it is inquired whether he is afflicted 
 
208 LAW OP LIFE INSUEANCB-. 
 
 with certain specific disorders, which, though not ia them- 
 selves immediately fatal, or so dangerous as gout, have a ten- 
 dency gradually to undermine the constitution, or render the 
 life worse ; and there is also a general question, as to any 
 other disorder not specified, with which the party may be af- 
 ' flicted — ^that question, however, does not apply to any 
 *114 trifling disorder, 'which the most healthy may occasion- 
 ally be afflicted with, but as is generally expressed in 
 the declaration signed by the party effecting the insurance — 
 any disorder tending to shorten life, and the warranty is drawn 
 up according to the answer. If it were always open to the 
 insurers to avoid a policy by proof of the bare proposition that 
 a party was not a good life at the time of effecting a policy, 
 few policies could stand ; as although a party may be free 
 from every specific disorder, yet he may be of plethoric habit, 
 or consumptive, or of a naturally delicate constitution, firom 
 causes not ascertained, or of a short-lived family, which latter 
 fact has been considered by the offices of some importance as 
 affording a prognostic of the fature duration of the life of a 
 member of such a family(a) 
 
 There is a case of much the same kind as the preceding, and 
 in which the warranty is of an equally general nature, but 
 which it is proper to mention, as any observations of such a 
 Judge as Lord Mansfield^upon the subject are worthy of notice. 
 An insurance (6) was made on the life of Sir Simon Stuart, 
 from the first of April, 1779, to the 1st of April, 1780, and 
 during the life of Eliza Edgely Ewer. The policy contained 
 a warranty that Sir Simon was about 57 years of age, and in 
 good health when the policy was underwritten, and that Mrs. 
 Ewer was about 78 years of age. It appeared that though 
 Sir Simon was troubled with spasms and cramps from violent 
 fits of the goiit, that he was in as good a state of health when 
 that policy was underwritten, as he had enjoyed for a long 
 time before. It was also proved by the broker who effected 
 the policy, that the underwriters were told that Sir Simon icos 
 
 (a)See Watson v. Mainwaring, 4 Taunt. 464, post. 210. 
 (4) Willis V. Poole, 2 Parke, 650, 7th ed. ; 2 Marsh. 774. 
 
•WARRANTY OP AGE, &C. OF INSURED. 209 
 
 stihjeet to the gout. Doctor Heberden and other medical men 
 proved that the spasms and convulsions Tvere symptoms inci- 
 dent to the gout. Lord Mansfield said — " The imperfection of 
 language is such, that we have not words for every different 
 idea, and the real intention of the parties must be found 
 out by the subject-matter. *By the present policy, the *115 
 life is warranted to some of the underwriters, in health ; 
 to others in good health ; and yet there was no difference in 
 point of fact. Such a warranty can never mean that a man 
 has not in him the seeds of some disorder. We are all 
 born with the seeds of mortality in us. A man subject to the 
 goutf is a life capable of being insured (a), if he has no sick- 
 ness at the time to make it an unequal contract." — ^Verdict for 
 the plaintiff. 
 
 It would appear that where there is no warranty, the insur- 
 ers run the risk of the life being good or not, unless there is 
 fraud by concealment of a material fact, or an untrue allega- 
 tion of a material fact. 
 
 An insurance was made (6) on the life of Drury Sheppy, 
 from the first of April, 1777, to the 1st of April, 1778. The 
 interest in the life was a debt of 900Z. due from Sheppy to the 
 plaintiff. In an action on the policy, it appeared that Sheppy 
 had a place in the Custom House of Ireland, went to the South 
 of France for the benefit of his health, or to avoid his creditors, 
 and there died within the time limited in the policy. The 
 broker who effected the policy told the underwriters that the 
 gentleman for whom he acted, would not warrant anything ; 
 but from the account he (the broker) had received, he believed 
 it to be a good life. Lord Mansfield said, " as to the interest, 
 this policy may be considered as a collateral security for the 
 debt due the plaintiff. When there is no warranty the under- 
 writer runs the risk of its being a good life or not. If there 
 be a concealment of any knowledge of the state of the life, it 
 
 (a) The offices, when they accept a life subject to gout, usually indemnify 
 themselves by an increased rate of premium. 
 
 Q>) Stackpoole v. Simon, 2 Parke, 648, 7th ed. ; 2 Marsh. 775. 
 
 27 
 
210 LAW OP LIFE INSURANCE. 
 
 is a fraud. It is a rule that every subsequent underwriter 
 may give credit to the representation made to the first(a), and 
 it is allowed that any subsequent underwriter may give in evi- 
 dence a misrepresentation to the first. The broker here 
 116 *does not pretend to any knowledge of his own, but 
 speaks from information. There is no fraud in him," 
 The jury found a verdict for the plaintiff. 
 
 This case is also of a special nature, which, for the reasons 
 before given, is not likely to occur again. 
 
 3. If a person be afiiicted with a disorder at the time of ef- 
 fecting an insurance, of which he afterwards dies, it is not to 
 be concluded that this is a disorder within the clause of a war- 
 ranty " relating to disorders tending to shorten life," unless it 
 be a disorder which has in general that tendency. 
 
 An action (b) was brought by the executors of Dr. Watson, 
 deceased, against the Equitable Assurance Office, to recover a 
 sum which had been insured on his life. Upon the trial of the 
 cause, at the sittings after Hilary Term, 1813, before Gibbs, 
 C. J., the office resisted the demand, on the ground that' when 
 the policy was effected the deceased had (in breach of his de- 
 claration to the contrary) a disorder tending to shorten life, 
 and that the policy was therefore void. For the plaintiff it 
 was proved, by an eminent physician at Bath, to whom Dr. 
 Watson had applied for advice, that his disorder was an affec 
 tion of the bowels ; that this disease may proceed from either 
 of two causes, the one a defect of some of the internal organs, 
 the other a mere dyspepsia ; that the first would tend to shor- 
 ten life, that the second, though it renders the patient uncom- 
 fortable, does not generally, unless it increases to an excess- 
 ive degree, tend to shorten life ; and that the disease with 
 which Dr. Watson was afflicted was not the organic dyspepsia. 
 Several other medical men stated, that they had attended Dr. 
 Watson since the policy had been effected, and that he was 
 then quite free from the disorder. On the other hand, several 
 
 (a) Watson v. Mainwarinfe, 4 Taunt. 763. 
 (J) Watson V. Mmnwaring, 4 Taunt. 763. 
 
WARRANTT OP AGE, &C. OP INSURED. 211 
 
 medicail men stated, as witnesses for the defendants, that they 
 had seen him at the time of his visiting Bath, previously to 
 effecting the insurance, and that they then considered 
 him as a iaJUng man. It was left to the jury "whether *117 
 the patient's complaint was the organic dyspepsia, and, 
 if it was not, whether the dyspepsia under which he labored 
 was, at the time of effecting the policy, of such a degree that 
 by its excess it tended to shorten lif& The jury found that 
 it was neither organic nor excessive. Verdict for the plain- 
 tiff. It was afterwards moved to set aside the verdict and to 
 have a new trial, on the ground that since the assured after- 
 wards died of the same disorder which he had before effecting 
 the policy, that circumstance was conclusive proof that he was 
 then afflicted with a disorder tending to shorten life. 
 
 Chambre, J. — " All disorders have, more or less, a tendency 
 to shorten life, even the most trifling, — corns may end in mor- 
 tification. That is not the meaning of the clause, if dyspep- 
 sia were a disorder that tended to shorten life within the ex- 
 emption, thus lives of half the members of the profession of 
 the law would be uninsurable." 
 
 Gibbs, C. J. — " According to the rule contended for, the 
 assured, to be insurable, must have no disease at aU. It can- 
 not be said that this was not a case, if ever there was one, fit 
 to be left to a jury ; and though the office had very good grounds 
 to try the case, since it has been fairly submitted to a jury, 
 there is as little ground for the Court to interfere as in any 
 case that ever was tried." — Eule refiased. 
 
 So the warranty as to " fits " is applicable only to habitual 
 fits, and not to one or two, the result of accident. In Chat- 
 tock V, Shawe (a), the warranty "was that the assured "has not 
 been afflicted with, nor is subject to, gout, vertigo, fits," <fco. 
 It turned out that the insured -had had two epileptic fits, in 
 consequence of an accident, and he died in consequence of, or 
 of a fit of some kind ; but it did not appear of what kind. The 
 jury found for the plaintiff, the learned Judge (Lord Abinger) 
 
 («) 1 Mood. & Rob. 498. 
 
212 LAW OF tIPE INSURANCfe. 
 
 expressing the opinion that the meaning of the clause was not 
 that the party never accidentally had had a fit, but that 
 
 118* he was not at the time *of the insurance being made, a 
 person habitually or constitutionally afflicted with fits ; 
 
 a person liable to fits from some peculiarity of temperament, 
 
 either natural or contracted from some cause or other during 
 
 life(l). 
 
 (1) In an action upon a policy of life insurance, one of the conditions of 
 which was, that it should be void, if any thing stated by the assured in a cer- 
 tain declaration given by him to the insurers previous to the execution of the 
 policy, should be untrue, it appeared that the assured had stated in his declara- 
 tion that he was not afflicted with any disorder tending to shorten life ; that he 
 had not, at any time, been afflicted with insanity, rupture, gout, fits, apoplexy, 
 palsy, dropsy, dysentery, scrofula, or any other affection of the liver; and that 
 he had not had any spitting of blood; consumption symptoms, asthma, cough, 
 or other affection of the lungs. 
 
 The defendants proved upon trial, that the assured, about four years before 
 the policy was affected, had spit blood, and had subsequently exhibited other 
 symptoms usual in consumptive subjects, and it appears that he died of con- 
 sumption three years eifter the date of the policy. 
 
 Lord Denman charged the jury that it was for them to say whether at the 
 time of his making the statement set forth in the declaration, the assured had 
 sveh. a spitting of blood and siich affection of the lungs and inflammatory cough 
 and such a disorder as would have a tendency to shorten his life. 
 
 But the Court of Exchequer held this a misdirection, and Alderson, B.,in 
 giving the opinion of the Court, says, " My Lord Denman does not appear to 
 have sufficiently called the attention of the jury to the distinction between those 
 disorders respecting the existence of which, ai the time ofexecwtimg thepoUei/, 
 the assured was called on to make a specific declaration and those which might 
 have formerly existed. By " spitting of blood " must, no doubt, be understood 
 a spitting of blood as a symptom of disease tending to shorten life ; the mere 
 fact is nothing; a man cannot have a tooth pulled out without spitting blood. 
 But on the other hand, if a person has an habitual spitting of blood, although 
 he cannot fix the particular part of his frame whence it proceeds, still, as this 
 shows a weakness of some organ which contains blood, he ought to communi- 
 cate the fact to the insurance company, for no one can doubt that it would moat 
 materially assist them in deciding whether they should execute the policy : and 
 good faith otight to be kept with them. So if he had spitting of blood only once, 
 but that one* was the result of the disease called spitting of blood, he ought to 
 
OF INSURED. 213 
 
 But in a case where the party effecting insurance declared 
 that the party to be insured was of sober and temperate habits, 
 the office requiring such a declaration, and it turned out that 
 he was not of sober and temperate habits, although not in- 
 temperate to such a degree as to injure his health, the Judge 
 directed a verdict for the defendants (2) ; the jury having 
 found for the plaintiffs, the defendants afterwards obtained a 
 rule nisi to set aside the verdict, as being against the evidence 
 (a), though it does not appear that the declaration was embo- 
 died in the policy, and thus became a warranty, but it may 
 have been so. 
 
 (a) Southcombe v. Merrim£in, 1 Carr. & Marsh. 286. 
 
 state it and not doing so would probably avoid the policy, ^gain, suppose 
 this man had an inflammation of the lungs which had been cured by bleeding ; 
 many physicians would perhaps, say that it was an inflammation, of the lungs 
 of so mitigated a nature as not to tend to shorten lifej still that would be no an- 
 swer to thp case of the Defendants, for it is clear that the company intended 
 that the fact should be mentioned. As to the word " cough," it must be under- 
 stood as a cough proceeding from the lungs, or no one coujd ever insure his 
 life at all : and indeed, it is so expressed in the policy, " Cough or oiAcr affec- 
 tion of the lungs." Again, it is obvious that the insurance company meant to 
 guard against the disease of dysentery. Now a man may have had a dysen- 
 tery and been cured of it , still the office should know of the circumstance ; and 
 indeed, that disorder may have been mentioned by name, as being one of a na- 
 ture likely to return. All these instances show that it was not intended to re- 
 strict the statement of the assured to disorders having a tendency to shorten Ufe 
 at the moment of executing the policy ; what the company demanded was a se- 
 curity against the existence of such diseases in the frame. There must, there- 
 fore, be a new tried." Geach v. Ingall, 14 Mees. if- Wels. 95. 
 
 (2) It does not appear from the report of this case, that the Judge directed a 
 verdict for the Defendants. He said to the jury that it was for them to decide 
 simply whether the party whose life was insured was of sober and temperate 
 habits at the time of the insurance, not whether he was so intemperate as to in- 
 jure his health, " for," he added, " the society had a right; from many motires 
 of their own, to act upon what rules they please, and to stipulate, as in this case, 
 that even though a man's health be not impaired, every person, whose life is in- 
 sured at their difice, shall be a person of temperate habits." 
 
214 LAW OF LIFE INSURANCE. 
 
 4. It is the duty of the insured to disclose all material facts 
 ■within their knowledge, and the materiality/ does not depend 
 upon the opinion of the insured, but upon the opinion of a jury 
 as a question of fact. Although specific questions applicable 
 to all men are proposed by the ofiSoes, yet there may be par- 
 ticular circumstances affecting the individual to be insured, 
 ■which are not likely to be known to the insurers, and the con- 
 cealment of a material fact, where a general question is put 
 by the insurers at the time of effecting the policy, which should 
 elicit that fact, will vitiate the policy(a) (1). 
 
 (a) See upon concealment, ante, p. 98. 
 
 (1) The rules in regard to Warranty, Representation and Concealment are 
 precisely the sjime in Life as in Fire Insureince, and the reader is referred to 
 Chap. 3 in the part of this work devoted to Fire Insurance for more extended 
 remarks on those subjects. 
 
 The only American case of Life Insurance yet reported, in which questions 
 concerning weirranty, representation and conceedment areinrolred.is the recent 
 one of Vose v. Eagle Life and Health Ins. Co., reported in 6 CnshiTig 4S, 
 
 The plaintiff's intestate, G.F.Pease,on the 1st of Dec, 1848, applied to the de- 
 fendants' agent at Springfield to obtain insurance on his life for$3000,and signed 
 an application for that purpose in the form prescribed by the conlpany. The 
 application contained various interrogatories relating to the circumstances, 
 condition, and state of health of the applicant, to be answered by him ; and the 
 answers to which constituted the representation upon which the insurance was 
 to be effected. One of these questions, the 9th, was: "Have the party's 
 parents, brothers, or sisters, been afficted with pulmonary complaints or 
 consumption V to which the applicant answered, that his mother and sister 
 died of consumption. The 10th was : " Has the party or any of his family 
 been afflicted with pulmonary complaints, consumption, or spitting of blood V 
 to which the intestate answered in the negative. Another, the 17th, was as fol- 
 lows: "Is the party now aiHictedj with any disease or disorder, and what ■!" To 
 this the intestate answered: "He cannot say, that he is afflicted with disease 
 or disorder, but at the present time is troubled vdth a general debility of the 
 system.'' The last interrogatory, the 25th, which the applicant answered in the 
 affirmative, was expressed in these terms : " Is the party awafe, that any untrue 
 or fraudulent allegation, or if there shall be any misrepresentation or conceal- 
 ment made in effecting the proposed assurance, it will render ithe poliey roid. 
 
WARRANTY OF AGfi, &C. OF INSURED. 215 
 
 An action of assumpsit (a) was brought against the secreta- 
 ry of the Atlas Insurance Company on a policy of insurance 
 on the life of the Duke of Saxe Gotha. Plea, the general issue. 
 
 [a) Lindenau v. Desborough, 8 Bam. & Cress. 586. 3 Car & P. 353. 
 
 and that all payments of premium made thereon yrill be forfeited V In answer 
 to the interrogatory inquiring " the name and residence of the applicant's usual 
 medical attendant." or (if he had none) '' of some other medical person to be 
 referred to for information as to his health," the intestate gave the name of Al- 
 bert Lambert, Springfield ; and the name of R. E. Ladd, of Springfield, as " an 
 intilnate fiiend to be referred to for similar information." 
 
 On receiving the application, the agent called on R. E. Ladd, to whom the 
 applicant had referred, and on Dr. Lambert, his medical attendant. The latter 
 not being at home, the agent, at die suggestion of Pease, called on another 
 physician, Dr. Wood, who had sometimes been employed by the agent to make 
 medical ezaminalions for the defendants. Dr. Wood examined Pease the same 
 day, in the agent's presence, and wrote and subscribed a certificate, which he 
 dehvered to the agent as follows : " I hereby certify that I have examined Geo. 
 F. Pease. The organs of his chest give no indication of organic disease, the 
 air passes through every part of liis lungs freely. His physical appearance is 
 good, and has no appearance of chronic predisposition. I consider him a good 
 subject for insurance." 
 
 The application and certificate were forwarded immediately to the directors 
 of the defendants, and thereupon a policy was executed, dated on the same day 
 with the application, and sent to the agent, who subsequently delivered it to 
 the intestate, and received the premium for the first year. 
 
 The policy contained a clause, declaring it to be made upon this express con- 
 dition, " that said application forms a part and parcel of this policy, and if it 
 shall be found, that the said application is in any respect untrue, or that there is 
 any misrepresentation or concealment in the said application, then this policy 
 shall be void and of no effect, and all the premiums paid thereon shall be for- 
 feited to the said company." 
 
 The arbitrators reported, that the plaintiff's intestate, at the time of making 
 his application, was laboring under a tubercular consumption, the incipient 
 symptoms of which had begun to develop themselves as early as, the July pre- 
 vious, and that he died of the same disease in February, 1849 i that he knew 
 of symptoms in respect to himself, which ordinarily indicate the incipient stages 
 and subsequent progress of such disease, at the time of and previous to making 
 
216 LAW OF LIFE INSURANCE. 
 
 At the trial before Lord Tenterden, C. J., it appeared that, in 
 1824, an insurance was effected on the life of the Duke with 
 the Union Assurance Company. That company had an 
 
 his application, but that he did not disclose the existence of these symptoms to 
 the defendants' agent ; that when he made the application, the intestate did not 
 believe he had such complaint, though he had reasonable cause to do so , and 
 that the statement made by him was not intentionally false, but, according to 
 his belief at the time, was true. 
 
 The arbitrators also reported, that so many of the symptoms of the intestate's 
 disease were known to the defendants' agent, before the policy was made and 
 delivered, as to indicate to a man of ordinary intelligence, that he was laboring 
 under disease of a pulmonary character ; and that the agent had reasonable 
 cause to believe, that the intestatfe was laboring under disease of that charac- 
 ter. 
 
 The arbitrators reported farther, that, so feir as the intestate's application con- 
 tained statements inconsistent with the fact, that, at the time of the application 
 and the issuing of the policy, he was laboring under a pulmonary disease, 
 which was incurable, and what is known as consumption, such statements were 
 not true ; and that if the court should be of opinion, that the poUcy and appli- 
 cation amounted to a warranty, on the part of the intestate, that he was not 
 then, and for some months previous had not been laboring under the disease of 
 consumption or pulmonary complaint, the arbitrators awarded and determined 
 that the plaintiif had not sustained his action ; butif the court should be of opin- 
 ion, that the representations contained in the application, together with the pol- 
 icy, did not constitute a warranty, and should also be of opinion, that, upon the 
 facts above stated, the defendants were liable, the arbitrators awarded and de- 
 termined in favor of the' plaintiff, for the amount due on the policy. 
 
 By the Court — Fletcher, J. Insurance on life wtis formerly held to be un- 
 lawful, and was forbidden in some foreign countries by particular enactments, 
 as being repugneuit to good morals, and opening a door to abuses. But a very 
 different view is taken of the subject at the present time. Life insurance has 
 become a very common and a very extensive business, and is regarded as high- 
 ly beneficial to the community. 
 
 The usual mode of proceeding, to effect an insurance upon a life, is, for the 
 party wishing to insure to procure at the office of the insurers a printed form of 
 proposal, which is to be filled up by him. This form, in general, contains a 
 large number of interrogatories, the answers to which are to be written upon the 
 blanks left for the purpose. This was the course of proceeding in the present 
 case, and several of the interrogatories and answers thereto are given in the 
 
WARRANTY OP AGE, &/C. OP INSURED. 217 
 
 agent in Germany, who, on behalf of hie 'principals, *119 
 submitted certain questions to the physicians of the 
 duke, many of them as to specific diseases and his habits of 
 
 statement. This proposal «r dBclar:ition, when fonning a part of the policy, 
 has been held to Amount to a conditioji or warranty, which must be strictly 
 true or complied with, and upon the truth of which, whether a mistatement be 
 intentional or not, the whole instrument depends. The party effecting an in- 
 surance cannot be too cautious, therefore, in ascertaining the leal state of the 
 facts alleged in his declaration. 
 
 In an early case, where ,tlie warranty^ was, that the person whose life was to 
 be insured weis in good health, at the time of making the policy, it was held .that 
 the warranty was to be construed in a liberal sense, as regarded the insured 
 emd was not to be understood to import, that he was perfectly free from .the seeds 
 of disorder. Though the insured may, by accident, be afflicted with ,a paiticu- 
 Isir infirmity, if his life is in fact a good one, and he is in a reasonably good 
 state of health, so that his life may be insured on the common .terms applicable 
 to a person of his age and condition, the party insuring will have a right to re- 
 cover, Ross v. Bradshaw, 1 W. Bl. 312; 2 Marsh, on Ins. 773. 
 
 The warranties in policies bow issued by insurers are of a much more spe- 
 cific nature, than that .contained in the aborermentiooed case. In the present 
 case, the warranties are of .a very particular and specific character, namely, 
 whether the insured had been afflicted with certain specified disorders, or was 
 at the time eifflicted .with any disease or disorder. But where there is no war- 
 ranty, an untrue allegation of a material fact, or, a concealment of a material 
 fact, will avoid the policy, though such allegation or conceedment he the result 
 of accident or negligence and not of design. 
 
 It is the duty of the insured to disclose iiU material facts within his knowl- 
 edge. Although specific questions applicable to all men are proposed by ths 
 insurers, yet there may be particular .circumstances afiecting the individual to 
 be insured, which are not likely to be known to the insurers ; and .the conceal- 
 ment of a material fact, when a general question is put by the insurers, at 
 the time of effecting the policy, which would elicit that fact, wUl vitiate the 
 policy. 
 
 Applying .these principles ,of law to .the present case, and the coinclusion is 
 inevitable, .that .the plaintiff is not entitled to recover. Upon the facts in the 
 ceise, it is not important whether the proposal or application is considered as a 
 warranty or representation. As a warranty it was so manifestly untrue, and 
 as a representation there was manifestly so material a misrepresentation, that ii;i 
 either view the policy is invalid. 
 
 28 
 
218 LAW OF LIFE INSURANCE. 
 
 life ; and the last was, " Is there any other circumstance with- 
 in your knowledge which the directors ought to be acquainted 
 with ?" And this was answered in the negative. There was 
 
 The fact is established, that at the time of making the proposal and issuing 
 the policy, the insured was rapidly declining in a confirmed consumption, and 
 had been so declining for fire months previous, and continued to live but about 
 two months after this time. Yet, in answer to the tenth interrogatory the in- 
 sured expressly denied, that he or any of his family had been afflicted with pul- 
 monary complaints, consumption, or spitting of blood. In answer to the seven- 
 teenth interrogatory, the insured said that he could not say that he was afflicted 
 with any disease or disorder. 
 
 It is immaterial that the insured did not suppose himself in a consumption ; 
 the fact was so, and the statement was manifestly contrary to the factj whieh 
 vfas a most material and conclusive fact. The fact of the general debility of 
 the system, stated by the insured, was not important in the manner in which it 
 was stated; as it might arise from a variety of causes not materially affecting 
 the risk, and would not, therefore, by any means, give the insurers the informa- 
 tion wanted. 
 
 The insured was asked directly, whether he was at the time affected with any 
 disease or disorder, and what ; to which he answered, that he could not say, 
 that he was afflicted with any disease or disorder ; but he could have stated the 
 symptoms of consumption, which he had, and which he knew he had, and 
 which he had had for five months previous ; and which were certainly most 
 material and important to be known by the insurers. It is believed that omis- 
 sions or concealments less important than this, and without any intentiotaal 
 fraud, have been held to avoid policies upon life. But it is not necessary to 
 make this any part of the ground of the decision in this case ; as the answer to 
 the tenth interrogatory is so manifestly and so materially untrue, that whether 
 regarded as a warranty or a representation it must avoid this policy. 
 
 The knowledge, which the award finds that the defendant's agent had in re- 
 gard to the situation of the, insured, cannot be material. The agent did not and 
 could not make the contract. He received the application, and forwarded it to 
 the directors of the company at their place of business, and the contract and 
 policy were there made and signed by the officers of the company wholly upon 
 the basis of the application, which is expressly declared, both in the application 
 itself and in the policy, to form a part of the policy. Both the appUcation and 
 policy are particularly explicit and strong in this respect. 
 
 It is further set out and declared in the application signed by the insured, that 
 if any fraudulent or untrue allegation, misrepresentation, or concealment is 
 contained in the proposal, all moneys which had been or might be paid on ao- 
 
WARRANTY OP AGE, «;C. OF INSURED. 219 
 
 also a priyate certificate, sent by the agent to the direc- 
 tors, in answer to their inquiries' as to certain points. In this 
 also there was a general question, " Do you know any other 
 circumstance which ought to be communicated to the direc- 
 tors ?" which was answered as follows : — " Agreeably to our 
 informations, the duke has led a dissolute life in former days, 
 by which he has lost the use of his speech, and, according to 
 some informations, also that of his mental faculties, which how- 
 ever, is contradicted by the medical men ; and as little as we 
 believe that this has any influence on his natural life, we find 
 it our duty to inention it." The physicians, in one of their 
 answers, said the duke was hindered in his speech, but did 
 not mention the state of his mental faculties. An application 
 was make to the Union to insure a further sum on the duke's 
 life ; but that being contrary to their general rules, their agent 
 handed over the proposal to the Atlas, and at the same time 
 gave the latter company the private answers received from 
 their agent in Germany. The plaintiff signed the usual de- 
 claration, and declarations by the duke's physicians were made 
 to the Atlas similar to those made to the Union. Upon re- 
 ceiving these documents the Atlas entered into the policy. In 
 1825 the duke died, and it was then discovered that there had 
 existed in his head for many years a large tumour pressing on 
 the brain, to which the loss of speech and mental faculties 
 might be attributed. But all the medical testimony went to 
 establish that the symptoms, during the duke's life, were not 
 such as were likely to excite the suspicion that such a tumour 
 
 count of such assurance shall be forfeited to the said company, and the policy 
 shall be void. The insured further declared in his proposal, that he was aware, 
 that any untrue or fraudulent allegation, misrepresentation or concealment, 
 made in effecting the proposed insurance, would render the policy void, and 
 that all payments of premiums made thereon would be forfeited. The instru- 
 ments executed by the parties, in the present case, are certainly peculiarly strong 
 and specific, binding the insured to the utmost care and caution ii^ his statements 
 and representations, and to the most careiiil and scrupulous disclosure of every 
 thing material to the risk. 
 Upon the grounds stated, judgment on the award must be for the defendants. ' 
 
220 LAW OP LIFE INSURANCE. 
 
 existed, or that he was afflicted with any particular disorder 
 tending to shorten life. One foreign physician however, said, 
 that, had he been consulted, he should hare thought it right 
 to state, that he attributed the loss of speech to a paralys- 
 is of the organs of speech. And an English surgeon, 
 120* *caTled for the plaintifiF, on cross-examination, said he 
 should, in answer to the general question, " whether he 
 knew any other circumstance that ought to be communicated 
 to the directors f have thought it right to mention the state 
 of the duke's mental faculties. Upon hearing this evidence. 
 Lord Tenterden toM the plaintiff's counsel he thought it made 
 an end of his case ,- and he should leave it to the jury to say 
 whether there were any facts material to be known which were 
 not mentioned to the assurers, and that if there were the pol- 
 icy was void. The plaintiff's counsel thereupon elected to be 
 nonsuited, leave being given to move for a new trial on the 
 ground of misdirection. It was afterwards moved accord- 
 ingly- 
 
 Lord Tenterden, 0. J. — " At the trial before me, amongst 
 other depositions, that of a foreign physician named Stark was 
 read, wherein he stated that he would have certified that the 
 duke was in bodily health, but that he could not have failed 
 to observe that he labored under an inability to speak, which 
 he attributed to a paralytic state of the nerves of the organs 
 of speech. In. addition to this, Mr. Green, a surgeon,, stated, 
 that if consulted he should have thought it right to mention 
 the state of the duke's mental faculties^ whereupon I expressed 
 an opinion that the cause was at an end, and said that I should 
 direct the jury to find for the defendant, if they thought the 
 plaintiff had failed to communicate to the insurers any mate- 
 rial circumstances within his knowledge. The only question 
 now is, whether that direction would have been correct or not ? 
 At the time of the trial I had in my recollection, although not 
 very accurately, the case of Morrison v. Muspratt (a), which 
 was tried before me at Lincoln. In the present case, the in- 
 surance was upon the life of a foreigner. It appeared that a 
 
 (o) 4 Bing. 60, post, p. 224. 
 
221 
 
 previous insurance had been effected with an oflSce that had 
 an agent abroad. That office was requested to make a further 
 insurance, and, being unwilling to do so, the secretary 
 handed over to the defendant the certificate 'received *121 
 from the foreign agent. If that had distinctly disclos- 
 ed the fact now in qnestioBj I am not prepared to say that the 
 defendants would have had any ground of complaint ; but the 
 state of the duke's faculties is not distinctly stated in the cei"- 
 tificate. Then, it is said, that the party is not bound to do 
 more than answer the questions proposed, unless he can be 
 charged with some fraudulent eoncealment. Admitting this 
 not to fall within any of the sperific questions, which is not by 
 any means clear, still the general question put by the office 
 requires information of every fact which any reasonable man 
 could think material. It certaiiily appears to me, that the 
 circumstances proved as to the state of the Duke of Saxe Go- 
 tha's mental faculties were material, and upon the authority 
 of the case of Morrison «. Muspratt, and Bufe v. Turner (a), 
 I think I should not have done wrong in leaving the case to 
 the jury in the manner proposed at the trial." 
 
 Bayley, J.^-" I think that in all cases of insurance, wheth- 
 er on ships, houses, or lives, the underwriter should be inform- 
 ed of every material circumstance within the knowledge of 
 the assured ,- and that the proper question is, " whether any 
 particular circumstance was, in fact, material ?" and not whe- 
 ther the party believed it to be so. The contrary doctrine 
 would lead to frequent suppression of information, and it would 
 be extremely difficult to show that the party neglecting to give 
 the information thought it material. But if it be held that all 
 material facts must be disclosed, it will be the interest of the 
 assured to make a full and fair disclosure of all the informa- 
 tion within their reach. Besides the cases already mentioned, 
 there are others establishing that the concealment of a mate- 
 rial fact, although not fraudulent, is sufficient to vitiate a policy 
 on a ship. On these grounds and g,uthorities, I am of opinion 
 that the proper question to the jury was not whether the par 
 
 (ffl) 6 Taunt. 338, ante, p. 100. 
 
222 LAW OF LIFE INSURANCE. 
 
 ty believed the information withheld to be material, but wheth- 
 er it was in fact material." 
 
 *122 *Littledale, J. — "I am of the same opinion. It is the 
 duty of the assured, in all cases, to disclose all material 
 facts within their knowledge. In cases of life insurance, cer- 
 tain specific 'questions are proposed as to points affecting in 
 general all mankind. But there may be also circumstances 
 affecting particular individuals which are not likely to be 
 known to the insurers, and which, had they been known, would 
 no doubt have been made the subject of specific inquiries, — 
 The general question appears to have been proposed in order 
 to meet such cases, and I think the question on such a p';Ucy 
 is not whether a certain individual thought a particulju: fact 
 material, bnt whether it was, in truth, material, and of that the 
 jury are by law the judges. The nonsuit ought not to be, dis- 
 turbed." — Rule refused. 
 
 As observed by Lord Tenterden, it seems very questional 
 ble whether the infirmity of the insured did not fall within the 
 specific questions put by the office ; and it seems clear, if to 
 the general question, ' whether there be any other circum- 
 stance within your knowledge which the directors ought to be 
 acquainted with V an answer in the negative be given, and the 
 result be as usual embodied in the policy, so as to constitute a 
 warranty, that the finding of the jury, that a material fact was 
 not disclosed, whether fraudulently intended or not, must at 
 once put an end to the case upon the ground of the warranty. 
 But even upon the common doctrine of concealment in insur- 
 ance cases, although no specific question be asked, the sup- 
 pression of a material fact, although, as we have already seen, 
 innocently done, will be in contemplation of law, a fraud, and 
 vitiate the contract. 
 
 In Wainwright v. Bland (a) a false parol representation was 
 made, at the time of insuring, as to the reason for effecting 
 the insurance, and as to the amount insured at other offices 
 (the same being much larger than as represented ;) both facts 
 
 (o) 1 Tyrr. &Grang. 417! 3 Cromp., Mood. & Rob. 32. 
 
WARRANTY OF AGE, &C. OF INSURED. 223 
 
 were found by the jury as material to be known by the 
 insurers. The false representations were in *answer to *123 
 parol inquiries by the officer of the insurers, not form- 
 ing part of the printed questions put by the office to parties 
 insuring, and the policy so framed was only to be void on 
 false answers being given to the printed questions : but the 
 policy was held to be void. ' 
 
 The circumstance that a, single woman has had a child 
 two or three years before the insurance upon her life was ef- 
 fected, with the knowledge of the party effecting it, map be, 
 under circumstances, a material fact, which he ought not to 
 conceal. 
 
 An action was brought(a) against the defendants, as direc- 
 tors of the Globe, upon a policy of insurance effected upon the 
 life of a Miss S., dated the 10th of September, 1828, for seven 
 years. In March, 1829, Miss S., died. The usual declaration 
 had been made and was recited in the policy, " that the per- 
 son insured was not afflicted with gout, <fcc.. or any disease 
 tending to shorten life." 
 
 It appeared that at Christmas, 1827, she was in a fair state 
 of health. In September 1828, she was in genel-al good health, 
 except that she complained of little pains in the head. She 
 was a pale and weakly looking person. In February, 1828, she 
 had been bled and leached for a supposed determination of 
 blood to the head, but appeared subsequently, and shortly 
 previous to her last illness, to be healthy. 
 
 Upon a post mortem examination, it was the opinion of the 
 medical men, that there was nothing which they would call 
 unhealthy about the stomach or head, or any thing elsewhere 
 which would lead them to suppose that she was affected with any 
 disease likely to shor'ten life. It turned out that in 1825 she 
 had a child. A physician, who was examined, stated that that 
 fact could not have accelerated her death, and that he should 
 not think it necessary for an office to inquire if a female had 
 had a child ; but that he being aware of the fact and being 
 
 (ffi) Edwards v. Barrow and others, MS. C. P., April 23, 1830. 
 
2Sj4 • LAW OP LIFE INSUHANCE. 
 
 applied to by an office should think it material to 
 state it. Some letters frojn *Miss S. to a schoolfellow *124 
 were written shortly before and after the insurance 
 was effected, detailing the state of her h«aUh, which she 
 considered very bad, and stating in one of th^m, " that her 
 health was entirely gone, and her constitution quite under- 
 mined." « 
 
 The Chief Justice interposed, and asked the counsel for the 
 plaintiff if he thought he could get over the declarations in 
 these letters, and also the fact of Mr. H. E. (the party effect- 
 ing the insurance) concealing the circumstanco of Miss S. hav- 
 ing had a child, of which he was aware 3 — A nonsuit was ac- 
 cordingly subniitted to. 
 
 Tf the nonsuit had proceeded upon the fact of the birth of 
 the child alone, it Certainly would appear extraordinary, be- 
 cause it is understood that the offices make no difference in 
 premium between a married and a single woman. It is diffi- 
 cult to see how such a circumstance, which had happened two 
 or three years previously, could be material, unless it be ta- 
 ken as affotding a ground of probability that the female to 
 whom it had occurred, might gradually degenerate into an im- 
 moral course which may tend to shorten life. It however af- 
 terwards appeared, that the child was born under circumstances 
 of extraordinary disease and moral turpitude on the part of 
 the parents. ^ 
 
 Although the party to be insured produces a satisfactory 
 medical certificate from a madical man, jet if another medical 
 man has attended within a short period previous to the effect- 
 ing the insurance, it appears to be a imaterml fact, or, 'at al 
 events, one which should be submitted to the notice of the jury 
 in an action on the policy. 
 
 An action was brought (a) on a policy of insurance executed 
 by the defendants, on the life of a Mrs- Elgie. 
 
 At the trial before Abbott, C. J.., it appeared, that for some 
 years previous to December, 1822, Mrs. Elgie had been in a 
 delicate state of health, exhibiting, particularly in the year 
 1821, symptoms which were thought to be phthisical ; and 
 
 (fi) Morrisom u. Muspratt, 4 Bmg. 61.. 
 
&C. OP INSURED. 225 
 
 having been, in October, 1822, twice *alanningly ill, *125 
 in December, 1822, Mr. Boot, a medical practitioner, 
 who resided some miles off, and was not then in attendance 
 upon her, but who had known her for many years, was sent 
 for to examine her, with a view to the present insurance. He 
 examined particularly the state of her lungs and liver, and 
 finding them as he thought sound, certified to the defendants 
 that the ordinary state of her health was good. On the 19th 
 of March following, he gave another certificate to the same 
 effect, upon which the insurance was effected in April, 1823. 
 Mrs. Blgie died of diseased lungs in April 1824. Between 
 December, 1822, and the 19th of March, 1823, she was at- 
 tended by Mr. Bland, a medical practitioner, who resided in 
 her neighborhood. She had a troublesome cough, and became 
 much emaciated ; her diet was regulated with a yiew to add 
 to her strength, without increasing febrile symptoms and irri- 
 tation, to which she was then subject in the evening ; but Mr. 
 Bland thought that disease of structure had not then taken 
 place. When the insurance was effected, no communication 
 was made of this illness or of the attendance of Mr. Bland. 
 
 The Chief Justice left it to the jury generally to say; 
 whether any misrepresentation had been made to the defend'- 
 ants, but did not expressly call on them to consider whether 
 the illness in January and February, 1823, and the attend- 
 ance of Mr. Bland, ought to have been communicated before 
 the insurance was effected. — Verdict for the plaintiff. 
 
 A rule nisi was afterwards obtained for a new trial, on the 
 ground that there had not been so full a disclosure to the de- 
 fendants of Mrs. Elgie's situation as they were entitled to re- 
 ceive. On showing cause it was contended that all which it 
 was material for the defendants to know was the condition of 
 the life at the time of the insurance, and that there was no 
 evidence to show that Mrs. Elgie was not in good health on 
 the 19th of March and the 23d of April. Provided her 
 health was re-established at the time *of insurance, the *126 
 knowledge of her previous condition could be of no im- 
 portance to the defendants. 
 
 29 
 
226 LAW OF LIFE INSURANCE. 
 
 Best; 0. J. — " Whether or not it was material for the defend- 
 ants to have been made acquainted with the fact which has 
 been withheld from their knowledge, is a question for the jury. 
 It is probable, however, it would be esteemed material, because 
 all insurance offices are desirous to consult with the medical 
 man who has been last in attendance on the life insured. I 
 think, therefore, there should be a new trial on payment of 
 costs, as the attendance of Bland on Mrs. Elgie was not dis- 
 closed to the insurers." 
 
 Burrough, J.^-" The attendance of Bland on Mrs. Elgie 
 ought to have been brought to the attention of the jury, to de- 
 cide whether or not it ought to have been disclosed to the de- 
 fendants." 
 
 Gaselee J. — " If the defendants in the present case had 
 known of the attendance of a medical man from January to 
 March before they signed the policy, it is probable they would 
 have paused or altered their terms. The jury, therefore ought 
 to have considered the materiality of that evidence." — Rule 
 absolute. 
 
 In a case where the conditions of insurance required the 
 usual declaration of the state of health of the insured, and the 
 policy was to be valid only if the statement were free from 
 all misrepresentation and reservation, and the declaration de- 
 scribed the party insured as resident at a particular place, at 
 a time when she was in fact a prisoner in the gaol there ; it 
 was held to be a question for the jury, whether the imprison- 
 ment was a material fact and ought to have been communicated, 
 although there was no condition which required the fact of 
 imprisonment to be expressly stated(a). 
 
 5. Where a party insures upon the life of another, the for- 
 mer is bound by the misrepresentations of the latter, the par- 
 ty to be insured being considered in the light of an agent of 
 the party insuring. 
 
 (o) Huguenin v. Bayley, 6 Taunt 186. 
 
WARRANTY OF AGE, tC, OP INSURED. 227 
 
 •An action (a) was brouglit by the plaintiff to recover *127 
 from the defendants, directors of the Atlas, the sum of 
 1000/. upon a policy effected by him on the life of a person 
 named Howes. Howes had formerly resided at Warminster, 
 and afterwards went to reside at Bath. Whilst'living^at the 
 former place he was sober and temperate in his habits, and was 
 to all appearance a man enjoying a good bodily state of health ; 
 whilst at the latter place he gave himself up to habits of in^ 
 toxication, and ultimately died of a fit of apoplexy. Upon 
 the occasion of the plaintiff's insuring'^Howes's life, j the di- 
 rectors of the Atlas, through their agent, presented the plain- 
 tiff with a paper containing questions touching the health of 
 the person to be insured, and which were most material to be 
 answered. Amongst others, there was one requiring the name 
 of the medical man who usually and of late attended the par- 
 ty whose life was to be insured, in order that he might be re- 
 ferred to. The plaintiff accordingly inquired of Howes who 
 was his usual medical attendant, and who had been attending 
 last. Upon which he referred to a Dr. Vicary, of Warminster. 
 However it turned out on the evidence that Vicary had not 
 attended Hmoes for nearly twenty years. Upon this misrep- 
 resentation of Howes, the question was raised, whether it did 
 not vitiate the policy, although unknown to the plaintiff. A 
 nominal verdict was taken for the plaintiff, with leave to the 
 defendants to move to enter a nonsuit. 
 
 On showing cause against the rule which had previously 
 been obtained, it was admitted,that it was a rule of law that 
 in cases of this kind, if the party insuring the life of another 
 practiced any concealment or deceit on the underwriters, with 
 regard to any material fact concerning the life to be insured, 
 that upon proof of the fact the policy was vitiated ; but that 
 in this case, if any deceit or concealment was practised, 
 it was practised by Howes, whose life was "insured, *128 
 and not by the plaintiff, who was ignorant that any 
 misrepresentation was made by Howes. 
 
 (o) Everett v. Desborough, 5 Bing. 503. See also Maynard v. Rhodes, 5 D. 
 & Ry. 266. 1 Car. &. P. 360. 
 
228 LAW OF LIFE INSURANCE. 
 
 On the other side it was contended, that the plaintifiF in this 
 case must be treated as principal, and the party whose life 
 was insured as the agent, for to what better authority could he 
 go to obtain information necessary to answer the questions 
 put to Mm than to Howes himself? He acted upon these rep- 
 resentations of Howes, who appeared to be his agent, and he 
 therefore should be held liable as the principal for the acts of 
 the agent. The Court adopted the latter argument, and 
 thought, that from all the circumstances, Howes should be con- 
 sidered as the agent of the plaintiff, who, acting upon his rep- 
 resentations, should therefore be answerable for the acts of his 
 agent. Rule for the nonsuit made absolute. 
 
 So where a party effected an insurance on the life of anoth- 
 er, who at the time of examination concealed a disorder;. of 
 which he subsequently died, it was held, that the former was 
 bound by the breach of the conditions on which the policy was 
 effected, although not privy to the falsehood (a). 
 
 It would appear, from the direction of the learned Judge, 
 that the concealtnent or misrepresentation fell within one of 
 the conditions of the policy incorporated with it, and therefore, 
 was within the scope of the warranty, and bound the party ef- 
 fecting the insurance. 
 
 But, if in a nominee insurance, the party to be insured neg- 
 lects to state a disorder with which he has been afflicted, not 
 falling within the conditions and warranty, the party effecting 
 insurance not being privy to such disorder, will not, as it ap- 
 pears, be bound and may recover. In Huckman v. Fernie (6), 
 the action was brought by a party upon a policy effected by 
 him on his wife's life. It was stated in the declaration, 
 129* that the plaintiff had made statements, that the 'insur- 
 ed was not afflicted with any disorder, tending to shorten 
 life, that she had led and continued to lead a temperate life, 
 and it was declared, that the plaintiff's declaration and ans- 
 wers should be the basis of the contract, and that he had not 
 omitted or concealed any matter material to be known to the 
 
 (ffi) Maynard v. Rhodes, 5 D. & R. 266 ; 1 Carr. & P. 360, 
 (b)3Mees. &Wels.505. 
 
229 
 
 insurers : the defendant pleaded, that the declaration was not 
 true, for that at the time, the same was made, (the insured) 
 was afflicted with a dieiorder which tended to shorten life, that 
 the insured had not nor did she continue to lead a temperate 
 life, that she before the making of the policy, had been, and 
 was afflicted with delirium tremens, erysipilatous inflammation 
 of the legs, &c., all which, &,c., the plaintiff well knew, and 
 which were facts material and necessary to be known to the 
 ijiaurers. It appeared that at the time the policy was effected, 
 the wife had been examined at the insurance office, and an- 
 swered several questions put to her, but did not inform the 
 company as to these disorders, and it was held upon the issue 
 as raised by the pleadings, that the wife was not the general 
 agent of the husband to effect the policy, but only sent to an- 
 swer particular questions, and that her knowedge was not in 
 this respect the knowledge of the husband, and the verdict for 
 the plaintiff was not disturbed. It did not appear that ques- 
 tions eliciting these disorders had been put, and it would seem, 
 that the disorders mentioned, if they were found to have exis- 
 ted, were not considered to fall within the scope of the decla- 
 ration, and that the jury did not find the insured to be intem- 
 perate, or that the sta,tement of the disorders was material to 
 be known, for if they had, then upon the authorities of the pre- 
 ceding cases they would have been within the warranty, and 
 the policy would have been avoided. In the preceding case 
 of Maynard v. Rhodes, which was also a case of the insured 
 being sent by the party effecting the policy, to answer ques- 
 tions, the concealment appears to have fallen within the war- 
 ranty. 
 
 In Sweet v. Fairlie (a), a policy was effected on the 
 life of *A., being at the time in a good state of health, *130 
 he had about four years before exhibited symptoms 
 tending either towards apoplexy or insanity, and had taken 
 medical advice, but the disorder was of such a kind as to ren- 
 der the insured unconscious of it, or what had happened whilst 
 he was suffering under it, he made no communication of this 
 
 (a) 6 Carr. & P. 1. 
 
230 LAW OP LIFE INSURANCE. 
 
 disorder to the office at the time of effecting the policy, al- 
 though one of the medical men examined as a witness and who 
 gave his opinion of the good state of health of the insured at 
 the time of insurance, admitted that if he had known that the 
 insured labored under the disorder referred to, he should have 
 thought it his duty to communicate it to the office ; but it was 
 held, that the policy was not rendered void, and as appears up- 
 on the ground that the insured was not conscious of the disor- 
 der, and therefore could not communicate it. The case does 
 not appear to have turned upon warranty or misrepresenta- 
 tion in answer to the printed questions, as the questions do 
 not appear to have embraced the case, nor to concealment as a 
 question of fraud, but upon the fact as material to be commu- 
 nicated coupled with his knowledge of it. If the case had 
 turned upon warranty, the result might have been otherwise. 
 
 A party to be insured is bound to give a reference to the 
 usual medical attendant, or otherwise according to the requi 
 sitions of the policy. 
 
 In Huckman v. Fernie (a), it appeared that a party to be 
 insured, had before and up to her marriage, been frequently 
 attended for serious disorders by a particular medical adviser, 
 and nearly up to the time when the policy was effected ; that 
 after the marriage another medical attendant of the husband's 
 family on one or two occasions, when called in to other mem- 
 bers of the family^ had prescribed for the insured in the case 
 of a cold or some trifling matters, and as it seemed gratuitous- 
 ly. She referred the office to the latter as her usual 
 131* medical attendant, and it was held, that the 'learned 
 Judge ought not to have left it to the jury to say which 
 of the two was her usual medical attendant, but whether tho 
 latter was her usual medical attendant at all. 
 
 It is obvious that if a party to be insured should state that 
 he had no medical attendant, whereas he had been attended 
 for a dangerous disorder shortly before the insurance was ef- 
 fected, such a statement, falling within the provisions of the 
 
 (a) 3 Mees. & W. 517, and see Everett v. Desborough, 5 Bing. 503, and 
 see ante, p 237. 
 
WARRANTY OF AGE, &C. OP INSURED. 231 
 
 policy, -wotild avoid it, and this appears to have been so held 
 in a case of Palmer v. Ha-wes(a) (1). 
 
 (ffl) Norwich Summer Asa. 1841, coram Alderson, B. 
 
 (1) The American policies usaally contEiina clause, providing that the policy 
 shall be void in case the proposal, answers, and declaration of the insured shall 
 be found in any respect untrue. The questions which are always asked of the 
 party applying for insurance, before a policy is issued, are either so minute and 
 particular, or so general and comprehensive, that there is a very slight proba- 
 bility of the existence of any circumstance material to the risk, which the party 
 c an avoid disclosing without giving untrue answers to the inquiries of the in- 
 surers. 
 
 Consequently, inasmuch as anij untrue answers, whether material or not, will 
 by the express terms of the policy avoid the contract, any question in regard to 
 he materialih) of a misrepresentation or concealment can hardly ever arise un- 
 der the forms of policies and declarations now in general use in this country. 
 
CHAPTER m. 
 
 OP THE INTEREST IN THE LIFE INSURED. 
 
 1. General Principles. 
 
 2. Interest of Creditor in the Life of a Debtor. 
 
 3. Interest of Trustee in Life of Cestui que trust. 
 
 4. Debtor or Grantor of Annuity Insuring. 
 
 5. Wagering Policy. 
 
 Besides the most obvious and ordinary mode of insurance, 
 that of a person insuring his own life in a sum payable to his 
 personal representatives, much of the business of the ofSces 
 consists of nominee insurances, that is, where a person insures 
 the life of another. As life insurance became more generally 
 extended, it appears that like many other beneficial practices it 
 became subject to abuse. Persons were in the habit of insuring 
 lives of others with whom they had no connection, and in 
 whom they had no interest, merely by way of gambling spec- 
 ulations, and it requires no very great discernment to see that 
 such a practice was pregnant with serious mischief, and held 
 out dangerous temptations on the one hand to unprincipled 
 speculators, and imminent danger to the unfortunate persons 
 who might happen to be selected by them as subjects of insur- 
 ance. The Legislature became so convinced of the evil, that 
 the practice of life insurance has since been regulated by act 
 of Parliament, whereby these insurances without interest are 
 made void. 
 
OP THE INTEREST IN THE LIFE INSURED. 233 
 
 By the stat. of 14 Geo. 3, c. 48, s. 1, it is enacted, that no in- 
 surance shall be made by any person or persons, bodies 
 "politic or corporate, on the life or lives of any person *133 
 or persons, or any other event or events whatsoever, 
 wherein the person or persons for whose use or benefit, or on 
 whose account such policy or policies shall be made, shall have 
 no interest, or by way of gaming or wagering: and that every 
 insurance made contrary to the true intent and meaning of 
 this act, shall be null and void to all intents and purposes 
 whatsoever. 
 
 And that it shall not be lawful to make any policy or poli- 
 cies on the life or lives of any person or persons or other event 
 or events, without inserting in such policy or policies the name 
 or names of the person or persons interested therein, or for 
 whose use or benefit, or on whose account, such policy is so 
 made or underwrote. S. 2. 
 
 That in all cases where the insured hath an interest in such 
 life or lives, event or events, no greater sum shall be recov- 
 ered 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. S. 3. 
 
 The fourth section contains a provision that the act shall 
 not extend to insurances bona fide made on ships or goods(l). 
 
 In Wainwright v. Bland (a) the question appears to have 
 been touched upon by the Court, but under the circumstances 
 not decided, whether with reference to the point of interest a 
 person can insure his own life for the benefit of another who 
 
 (a) 1 Tyr. & G. 416 ; 3 Cromp., M. & R. 32 , 1 Mood. & Rob. 481. By 
 the latter report of the case, it appears that Lord Abinger thought it a fraudu- 
 lent evasion of the statute. 
 
 (1) Though no statutes hare been passed in the United States in regard to 
 insurance, similar in their provisions to that of 14 Geo. 3 c. 48, that act is nev. 
 ertheless in accordance with the settled law in this cbuntry, it being well es- 
 tablished throughout all the United States, either by decisions Of the Courts, 
 or by express statutes, that all wager contracts are unlawful and void, CoUa- 
 mer v. Day, 2 Vt. 144 ; iMrd v. Dali, 13 Mass. 115. 
 
 30 
 
234 LAW OP LIFE INSUftANCE. 
 
 has no interest, and who provides the premiums. Such an 
 insurance would seem to fall within the letter of the first 
 and second section of the statute, but not so clearly within its 
 intention, as the insurance is the act of the party effecting it ; 
 the more particular object of the statute appears to be to re- 
 strict wagering or speculative policies by third persons, having 
 no interest. 
 
 It may also be remarked — that as a party insuring for him- 
 self has at the time clearly an interest in his own life, 
 *134 there seems to be no reason why he should not give *or 
 convey the benefit of that interest to another. A case 
 nearly analagous to it is of frequent occurrence, that of a 
 party insuring his own life, and then shortly after assigning 
 it to another, that such an assignment for valuable consid- 
 eration is good in the hands of the assignee has been deci- 
 ded(a) as between the insurers and the holder of the policy, 
 and, even if without valuable consideration, the assignment 
 might be valid, as between the insurers and the holders of the 
 policy, and besides the of&ces do not raise questions upon in- 
 terest in bona fide cases, and the practice has been judicially 
 recognised(6). 
 
 Very few questions have arisen upon the subject of inter- 
 est, because the offices are never in the habit of taking that 
 objection, unless they are under the necessity of resisting pay- 
 ment upon some other fair and proper ground, as fraudulent 
 misrepresentation or conce,alment ; and if they are driven to 
 resist on such a ground, they then in order to make their case 
 the stronger, sometimes also object to the want of interest, 
 when the policy is open to the objection. The offices are, in 
 fact, constantly in the habit of taking insurances where the in- 
 terest is upon a contingency which may very shortly be deter- 
 mined, and if the parties choose to continue the policy bona 
 fide after the interest ceases, they never meet with any diffi- 
 culty in recovering : so also they frequently grant policies 
 
 (a) See Ashley ■». Ashley, 3 Sim. 161, and Chap. V post, 
 (i) Barber v. Morris, 2 Mood. & Rob. 62. 
 
 \ 
 
OP THE INTEREST IN THE LIFE INSURED. 235 
 
 upon interests of so slender and precarious a kind, that al- 
 though it may be diiBcult to deny some kind of interest, it is 
 such as a Court of law would hardly recognise(a). This prac- 
 tice of the offices, of paying upon policies, without raising 
 questions as to interest, is so general, that it has been even 
 recognised in courts of Law. As where a person bought a 
 policy of insurance of another after the interest had expired, or 
 was on the point of expiring, and some years after the 
 sale and assignment, the executor of the purchaser, un- *135 
 derstanding that the office was not in law bound to pay 
 upon the policy, brought an action against the seller to re- 
 cover back the purchase-money. But Lord Tenterden, C. J., 
 told the jury, that the only point for their consideration was, 
 whether, at the time of the sale, there was any misrepresent- 
 ation or improper concealment of facts by the vendor. It 
 was true in point of law that the insurance ceased with the 
 interest, but then they had it in evidence that the insurers 
 never availed themselves of that objection(6). Verdict for 
 defendant(l). 
 
 (a) The author has seen a policy effected by a mother upon a son's life, the 
 interest being no other than that he lived with her, and contributed largely to 
 the expenses of housekeeping. So upon the life of a creditor who forbore to 
 call in the debt, but which was likely to be called in by his personal represent- 
 atives at his death. 
 
 (4) Barber v. Morris, 2 Moody & Rob. 62. A new trial was afterwards 
 moved for, and refused. 
 
 (1) The following remarks in regard to the amount and nature of the inter- 
 est required to support a poUcy of Ufe insurance, are taken from Mr. Dowdes- 
 well's excellent treatise on the Law of Life and Fire Insurance, p. 19. 
 
 " The word " interest " in the statute does not mean an anxiety or solicitude 
 about the life of the person, or even a mere expectation of advantage from its 
 continuance, however strong that may be, but contemplates some beneficial 
 right, TEiluable in the eye of the law, the subject of its cognizance, and the de- 
 pnvation of which would occasion a pecuniary loss. Lucena v. Crawford, 2 
 N. R. 269. Hence a parent cannot, in that capacity alone, insure the life of 
 his child. Halford v. Kymer, 10 B. <^ C. 725 ; and it has even been declared 
 by Lord Tenterden, that a husband has not the requisite interest in the life of 
 
236 LATSr OP LIFE INSURANCE. 
 
 2. A bona fide creditor has undoubtedly an interest in 
 the life of his debtor, at least where he has only the personal 
 security of the debtor, and this interest is insurable within 
 the statute. 
 
 his wife. id. ; though there had been a previous decision that, a wife must be 
 presumed to possess it in the life of her husband. Reed v. Royal Exohange 
 Assv/ramce Co., Peake Add. Cases 70. 
 
 " The heir, either presumptive or apparent, of a person incapable by idiotey 
 or incurable lunacy, of making a will or executing a conveyance, has nothing 
 more than a bare expectadon, and cannot insure the life of that person against 
 events, which may deprive him of a descendible estate ; Per Lord Bldon, Lw- 
 cena v. Crowford, 2 N. R. 324. A creditor may insure the life of his debtor 
 for the amount of the debt, because his death would impair the means of pro- 
 curing satisfaction of it ; but the debt must be such as the law does not repudi- 
 ate, hence a gambling debt will not suffice. A right which may be enforced in 
 a Court of Equity, is equally an interest with any right over which a Court of 
 Law has jurisdiction,' and therefore, where the legal title is vested in a trustee, 
 the person beneficially interested may insure in his own name. A trustee or 
 executor does not fall within the prohibition of the act ; but if he do insure, 
 even with his own money, and without the cognizance of the cestui que trust, 
 he will be deemed to have effected the policy, not in his own right, since he had 
 no title to do so, but in his representative character. After deducting, therefore, 
 the amount he has paid in the shape uf premiums, he will be responsible for any 
 surplus he may receive, to the persons to whom the substantial benefit of the 
 interest, which afforded him the means of effecting the insurance, belongs. No 
 objection can be raised under the second section of the statute, on the ground 
 that the right of the insured was liable to be defeated by the act of another, or 
 was merely voidable though not void, provided it was subsisting at the date of 
 the policy, and therefore, an estate subject to a power of revocation, or a debt 
 for matters not necessaries, contracted by an infant, creates a sufficient interest. 
 As a summary of the law, it may then be stated, that any person may insure 
 his own life, and may also insure the life of another, if he has any valuable pe- 
 cuniary interest in the continuance of the life of that other at the time of effect- 
 ing th^ policy." 
 
 In the case of Lord v. DaU, 12 Mass. H5, it was held that a sister had an 
 insurable interest in the life of her brother upon whom she depended for her 
 support and education, and who stood towards her in loco parentis, having for 
 several years supported and educated her at his own expense. 
 
OP THE INTEREST IN THE LIFE INSURED. 237 
 
 An insurance was effected on the life of Lord Kewhaven, 
 from the 1st of December, 1792, to the 1st of December 1793. 
 In an action on the policy, the only question was as to the 
 
 Mr. Reynolds, in his work on Life Assurance, mentions the recent case of 
 Valton and Adams v. National Loan Fund Ufe Asmrance Society, tried in 
 New York at the Albany Circuit, November 1852, in which the following in- 
 teresting question of insurable interest eirose. " Three persons, Valton, Mar- 
 tin and Schoonmaker entered into a copai-tnership, to carry on the liquor busi- 
 ness. Schoonmaker understood the business, and, as sigainst the capital of 
 Valton and Martin, was to put in his sMU. Schoonmaker insured his life for 
 ten thousand dollars, and by the articles of copartnership, in case of his death 
 without children, or unmarried, his partners, Valton and Martin, were to re- 
 ceive the sum secured by the policy. Schoonmaker shortly afterwards died, 
 unmarried ; Martin assigned his interest to Adams, and Valton and Adams 
 brought suit to recover the insurance. The Defendants moved for a nonsuit, 
 on the ground that, the plaintiffs having no interest in the life of Schoonmaker 
 the policy was a wager policy, and therefore void. 
 
 " The plaintiffs insisted, that they had an insurable interest in the life of 
 Schoonmaker ; that, as he wsis to contribute only his skill, they had an interest 
 in his life, not to be deprived of it, and thus of his skill ^nd services. The 
 Court held, that they had an insurable interest, and that the policy was not 
 void for want of interest." Reynolds on Life Assurance, p. 42. 
 
 In many of the United States, statutes have been passed empowering a mar- 
 ried woman, by herself, and in her name, or in the name of any third person, 
 with his assent as her trustee, to insure for her sole use, the life of her husband 
 for any definite period, or for the term of his natural life, and in case she sur- 
 vives her husbeind, the amount due upon the policy shall be secured to her, free 
 from the claims of the representatives of her husband, or of any of his credit- 
 ors, but this exemption shall not apply, where the amount of premium annually 
 paid, shall exceed three hundred dollars. See Session Laws of New York for 
 1840, p. 59 ; and statutes of Vermont, Connecticut and Rhode Island. 
 
 Some States have, also, by statute, made it lawful for any unmarried woman 
 to insure the li& of her father and brother, with the same limitation in regard 
 to the amount of premium as the above. See Compiled Statutes of Vermont, p. 
 404, Sea. 19. 
 
 The effect of these statutes, is to remove the necessity which exists by the 
 Common Law of this Country, and by the Statute 14 Geo. 3 c, 48 in England 
 of proving, in those particular cases, either the existence, or the amount, of an 
 insurable interest. 
 
238 LAW OF LIFE INSURANCE. 
 
 plaintiffs interest in the life insured, which it was contended, 
 was not sufiScient to take the case out of the above statute. It 
 appeared that Lord Newhstven was indebted to the plaintiff 
 and a Mr. Mitchell in a large sum of money, part of which 
 debt had been assigned by them to another person, the re- 
 mainder, being more than the amount of the sum insuned, was 
 upon a settlement of accounts between the plaintiff and Mitch- 
 ell, agreed by them to remain to the account of Mitchell only. 
 Lord Kenyon was of the opinion that this debt was a suflScient 
 interest. He said, " It was singular that this question had 
 never been directly decided before ; that a creditor had cer- 
 tainly an interest in the life of his debtor, because the means 
 by which he was to be satisfied might materially depend upon 
 it ; and that, at all events, the death must in all cases, in some 
 degree, lessen the security." The jury found a verdict for the 
 
 plaintifi(a) 
 *136 *It may be observed that this note is very short and 
 
 not very satisfactory ; because, if the plaintiff had 
 in fact assigned over his interest in the debt to Mitchell 
 before the death of the assured, it is difficult to see how any 
 insurable interest, within the statute, remained in him, unless 
 we assume that the debt still remained legally due, and recov- 
 erable by the plaintiff from Lord Newhaven, the latter having 
 no notice of the assignment of the debt in such settlen^ent of 
 accounts, or upon the principle of Tidswell v. Angersteinj 
 post, we consider the plaintiff to be in the situation of a trus- 
 tee. If a debt is amply secured by mortgage . or otherwise, 
 it would be very difficult to establish such an interest as 
 would entitle the party insuring to recover, because the above 
 act declares that " no greater sum shall be recovered from the 
 insurer than the amount or value of the interest of the in- 
 sured in the life insured ;" perhaps a case of this kind is not 
 likely to occur in practice, as it is not usual to insure by way 
 of collateral security, except when the principal security is 
 doubtful. 
 
 (a) Anderson v. Edie, N. P. B. R. 1795 : 2 Park, 640, 7th ed. 
 
OP THE INTEREST IN THE LIFE INSURED. 239 
 
 Although a creditor may insure the life of the debtor, yet 
 if, after the death of the debtor whose life is insured, and be- 
 fore any action be brought on the policy, the debt be paid, the 
 creditor is not entitled to recover. 
 
 The plaintiffs in this action(a) were coachmakers in Long 
 Acre, and on the 29th of November, 1803, they effected an 
 insurance on the life of the Right Hon. William Pitt for 500^ 
 for seven years, 'at an annual premium of 15^. 15*. In an 
 action on the policy the plaintiffs averred, that " at the time 
 of making' the insurance, and from thence until the death of 
 Mr. Pitt, they were interested in his life to the amount of the 
 sum insured." It appeared that Mr. Pitt, at the time of the 
 execution of the policy and from thence to the time of his 
 death, was indebted to the plaintiffs in more than 500Z. and 
 died insolvent ; and that after his death, and before the com- 
 mencement of the suit, the executors of Mr. Pitt paid 
 to the plaintiffs, out of *the money granted by Parlia- *13T 
 ment for the discharge of his debts, 1109?. 11*. 6d. in 
 full for the debt due to them from Mr. Pitt. The Court de- 
 termined that the plaintiffs were not entitled to recover. They 
 held that this insurance, like every other to which the law 
 gives effect, is in its nature a contract of indemnity, as dis- 
 tinguished from a wager ; that the interest which the plain- 
 tiffs had in the life of Mr. Pitt was that of creditors, in a case 
 where the probability of payment depended on the continu- 
 ance of his life, and the indemnity sought by the insurance 
 was against the loss which might result from his death ; that 
 the action was therefore founded on a supposed damnification 
 of the plaintiff, occasioned by his death, and existing at the 
 time of the action brought ; and consequently, if, before the 
 action brought, the damages occasioned by his death were pre- 
 vented by the payment of his debt, the ground of action was 
 taken away(6) j that it was no objection to this answer that 
 the fund, out of which their debt was paid, did not (as was the 
 case in the present instance) originally belong to the executors, 
 
 (o) Godsal V. Boldero, 9 East. 72. 
 
 (d) The office, it is understood, did not take advantage of this verdict, but 
 paid the money to the plaintiffs before they left the Court, 
 
240 LAW OP LIFE INSURANCE. 
 
 as a part of the assets of the deceased ; for though it was derived 
 to them aliunde, the debt of the testator was equally satisfied 
 by them thereout ; and the damnification of the creditors, in 
 respect of which their action upon the insurance contract could 
 be alone maintainable, was fully obviated before their action 
 was brought('l). 
 
 The holder of a note given for money won at play, has not 
 an insurable interest in the life of the maker of the note. The 
 (insurable interest of a creditor, in the life of his debtor must 
 be upon a good legal consideration. 
 
 An action was brought on a policy on the life of J. R., who 
 was warranted in good health ; by a memorandum at the foot 
 of the policy, it was declared that it was intended to cover the 
 sum of 5000Z. due from Russell to the plaintifi", for which he 
 had given his note. Two objections, were made on the part of 
 the defendants. 1st. That part of the consideration 
 *138 for th^ note was for money won at play. *2d. That 
 Russell at the time he gave the note was an infant. 
 Mr. Justice Buller nonsuited the plaintiff, upon the ground 
 of part of the consideration of the note being for a gaming 
 
 (1) A debtor and his wife joined in an assignment, by way of mortgage 
 of a chose in action, not capable of being leduced into possesjsion during the 
 wife's life, to a creditor, to secure a debt of 300 pounds and interest. The 
 creditor afterwards, without the knowledge of his debtor, insured the wife'^ 
 life for 200 pounds ; and upon her death in the lifetime of her husband, recov- 
 ered that sum from the office. The husband, as administrator to his late wife, 
 filed his bill against the creditor, claiming to set off the 200 pounds against the 
 mortgage debt, and to be let in to redeem on payment of the balcmce. Vice Chan- 
 cellor "Wigram held that the creditor had an insurable interest in the wife's life ; 
 but that, the risk insured against was the wife's survivorship, which, therefore, 
 ceased upon the wife's death in her husband's lifetime, and that the contract be- 
 ing one of indemnity, the office had paid tlie 200 pounds in their own wrong, 
 the money so paid, therefore could not be claimed by way of set-off by the 
 husband. Henson v. BlackweU, 4 Hare 434° Q,u(Bre, whether in this case, 
 the interest was not in the husband's life. 2 Smith's Lead. Cases, p. 262, ith 
 Am. Ed. 
 
OF THE INTEHEST IN THE LIFE INSURED. 241 
 
 transaction, and therefore there Tras a trant of interest in the 
 plaintiff(a)(l). 
 
 3. A trustee may insure for the benefit of the cestui qui 
 trust. An insurance was made on the life of H. for a year, 
 and during the life of the plaintiff H. had granted an an- 
 nuity to the plaintiff's late brother, which annuity he had be- 
 queathed to persons not parties to the insurance, having made 
 the plaintiff executor of his will, and directed him to make in 
 surance. In an action on this policy brought by the executor, 
 it was objected, that as the annuity was not devised to him by 
 the grantee, he had no insurable interest in the life of H. the 
 grantor. But Lord Kenyon thought this a sufficient interest 
 in the executor to support the action(6). 
 
 Every person is presumed to have an interest in his own 
 life, and in all or every parts or part of it, therefore it was 
 held in Wainwright v. Bland(c) that an executor suing on a 
 policy of insurance effected by his testator on two years of his 
 life, is not bound to show that such testator had any special 
 reason for making insurance to that extent only. 
 
 4. In the case of an annuity, a contract for the grantor to 
 make insurance will not be usurious. 
 
 A defendant(rf) by deed covenanted to pay an annuity of 
 lOOL for four lives, and, in thirty days after the dropping of 
 three of the lives, to insure the life of the fourth for the 
 •benefit of the plaintiff, who, in consideration, gave lOOOZ. *139 
 to the defendant : there was a covenant for redemption. 
 
 (a)Dwyer v. Edie, 1788 ; 3 Park, 639, 7th ed.; 2 Marsh, 779. 
 
 (*)Tid3weU v. Angerstein, Peake, N. P. P. 151. 
 
 (c)l Mood &, Rob. 481. 
 
 (i2)HolIand v. Pelham, 1 Cromp. & Jew. 575. And see Grigg v. 'Stoker, 
 Forrest. 4 ; in re Niiish, 7 Bing. 150. Morris v. Jones, 3 Barn. & C. 232. It 
 does not distinctly appeetr &um Holland v. Pelham, whether the grantor cove- 
 nanted to pay the premituns of insurance, qu. if such a covenant would not in 
 effect amount to securing the principal. 
 
 (1) The reader is referred to the note to Chapter 2, in the part of this work 
 devoted to Fire Insurance, for more extended remarks on the subject of insura- 
 ble interest 
 
 31 
 
242 LAW OP LIFE INSUKANCE. 
 
 It was HTged upon a demurrer whether this transaction was 
 usurious. 
 
 The Chief Baron (Lord Lyndhurst) said, " It does not ap- 
 pear to me that this is a loan within the meaning of the stat- 
 ute against usury. It is the ordinary transaction of the pur- 
 chase of an annuity for live^ and the principal is put in haz- 
 ard, and does not fall within the principle of the Usury Laws. 
 The only question is, whether the covenant by the grantor to 
 • insure his life varies this from the ordinary case. In my opin- 
 ion it does not ; it makes no difference whether the grantor 
 covenants to insure, or whether a larger annual sum is stipu- 
 lated to be paid to the grantee to enable him to eSect the in- 
 surance, it comes to precisely the same thing, whether the in- 
 surance be effected by the one or the other," And by Bayley, 
 B. — " If the borrower be the person to return the money, 
 then it is not considered in hazard ; but if the borrower is not 
 the person to return the principal, though it may be returned 
 by some third person through the instrumentality of the bor- 
 rower, it is not a loan within the statute." 
 
 As a general rule, it appears that if an ofBce lends money, 
 and compels the borrower to insure to an amount even double 
 the money lent, it is not usury, neither is the policy wager- 
 ing within the statute. 
 
 An action was brought against the surety in a bond ; the 
 defendant pleaded that at the time of making the bond the ob- 
 ligees were members of an insurance company, and that it was 
 corruptly and against the statute agreed between them and 
 the principal in the bond that the former should advance the 
 sum of 350Z., the money of the company, to be repaid by in- 
 stallments, with interests and costs, and that the latter should 
 effect a policy of insurance on his own life with the company 
 for 800L, at the annual premium of 26^ 2s. 8d., to be payable 
 thereon, being /or the benefit of the said company, (the said 
 fi-um of 800/1. being greater by 200i. than was neces- 
 *140 sary for securing to the obligees, as trustees *for them- 
 selves and the company, the repayment of the said 
 sum of 3502., Sec), and should deposit the said policy with the 
 obligees as a collateral security for the repayment of the said 
 
OF THE INTEREST IN THE LIFE INSURED. 243 
 
 sum of S5QI., &.C., and that the party borroTinng, with hia sure- 
 ties, should enter into a bond to the obligees as trustees for 
 themselves and the company, in the penalty of 700Z., subject 
 to a proviso limiting the amount ultimately recoverable thereon 
 to 5002. ; the plea then alleged that the several proposed trans- 
 actions had been entered into, and the money paid, and then 
 alleged that the only object of the principal borrower was the 
 loan of 350Z., concluding with the averment that the amount 
 of interest so agreed to be secured, together with the annual 
 premium on the sum of 200Z. parcel of the said 800Z., greatly 
 exceeded the sum of five per cent, per annuni, contrary to the 
 statute. It was held that the policy executed under the above 
 circumstances was not a wagering policy within the stat. 14 
 Geo. 3, c. 48, and that the contract as stated was not usur- 
 ious(^a) within the statutes of usury. 
 
 (a) Downes v. Green, 13 Mees. & W. 481 ; 8 Jur. 899- 
 
CHAPTER IV. 
 
 OF THE RISK AND ITS DURATION. 
 
 1. The Death tfiust take place during the Continuance of 
 
 the Policy, in order to entitle a Person to recover. 
 
 2. Construction of the rules of a Society as to Payment 
 
 of Prethiums within Fifteen Days after they become 
 
 3. Of the words "from the Day of the Date" and "from 
 
 the Date." 
 
 4. Of the Recovery of Interest upon Sums due on Pol- 
 
 icies. 
 
 5. Accumulations upon Policies. 
 
 6. Recovery back of Premium^ 
 
 An insurance upon life, when the loss happens, must be paid 
 according to the tenor of the agreement, in the full sum in- 
 sured, as this sort of policy, from the nature of it, being on 
 the life or death of man, does not admit of the distinction be- 
 tween total and partial losses(a)(l.) 
 
 (ffi) 2 Marsh. 780. 
 
 (1) Though there may be, as Mr. Ellis states, no distinction between total 
 and partial losses in Life Insurance, still, it by no means follows, as he seems 
 to think, that, when the loss happens the insurance must be paid in (he fiUl 
 svm vnswed. Life Insurance is as purely a contract of indemnity, as Marine 
 or Fire insurance, and, as well in the former as the latter, nothing more can 
 be recovered of the insurers, on a policy which is not in terms vdlMei, than the 
 
OP THE RISK AND ITS DURATION. 245 
 
 1. In order to entitle a party to recover upon a policy, the 
 loss, and not the cause of the loss only, must appear to have 
 happened during the continuance of the risk. Thus if a per- 
 son's life be insured for a year, and some short time before the 
 expiration of the term, he receives a mortal wound, of which 
 he dies after the year, the insurer will not be liable(ffl): 
 and this doctrine is founded upon the general 'prinOiple *142 
 of marine insurance ; but if it be uncertain whether 
 the death happened within the time limited, this is a question ' 
 of fact which must be left to the decision of the jury. 
 
 An insurance was made on the life of J. Macleane from 
 January 30, 1772, to January 30, 1778. In an action on the 
 policy it appeared; that about the 28th of November, 1777, he 
 sailed from the Cape of Good Hope in the Swallow sloop-of- 
 war, which ship, not being afterwards heard of, was supposed 
 to have been lost in a storm off the Western Islands, The 
 question was, whether Macleane died before the 30th of Jan- 
 uary, 1778. To establish the affirmative of that question, the 
 plantiff called witnesses to prove the ship's departure from the 
 Cape with Macleane, and several captains swore that they 
 sailed the same day ; that the Swallow must have been as 
 forward in her course as they were on the 13th and 14th of 
 
 (o) Per WilKs, J., in delivering the opinion of the Court in Lockyeir v. 
 Offley, 1 T. R. 254. 
 
 actual loss suffered, which, it is plain, may in many cases be less than the 
 amount insuied, as for'instance, in Ein insurance effected by a creditor upon the 
 Jife of his debtor, or by the holder of an estate puir wuter me upon the life of 
 Ihe cestui qui vie. In the former case the amount recoverable will be only the 
 amount of the debt at the time of the death, and in the latter the value of the 
 estate determined, provided it does not exceed the amount of the insurance. 
 
 But where one effects a polity upon his own life, or upon the life of another, 
 in which he has a pecuniary interest the amount of which cannot be computed, 
 as where the insured depends upon the life insured for support, or has an in- 
 definite pecuniary interest subject to be affected by the skill, capacity, or knowl- 
 edge of the insured life, the policy though in form open, is, in effect, a valued 
 one in which the interest is conclusively assumed to be at least equal in amount 
 to the sum insured. 2 Phillip^ on Ins. p. 35. 
 
246 LAW OF life' INSURANCE. 
 
 January, the period of a most violent storm, in vUch she -was 
 probably lost ; and that the Swallow was much smaller than 
 their vessels, which with difficulty weathered the storm. Lord 
 Mansfield left it with the jury to say whether under all the 
 circumstances, they thought the evidence sufficient to convince 
 them that Macleane died before the time limited in the policy, 
 adding, that if they thought it so doubtful as not to be able to 
 form an opinion, the defendant ought to have a verdict. The 
 jury found for the plaintiff (a)(1). 
 
 2. Where a party effected a policy of insurance with a so- 
 ciety, in consideration of a quarterly premiums, to be paid to 
 to the society during his life, and the covenants on the part 
 
 (ffl) Patterson v. Black, 1780, 2 Marsh. 780. 
 
 (1) It is a irell settled rule of law, that upon a person's leaving his usual 
 home and place of residence for temporary purposes of business or pleasure, 
 and not being heard of, or known to he living, for the terra of seven years, the 
 presumption of life then ceases, and that of death arises. — 2 Stark. Mv, 457 ; 
 Loring v. Steinman, 1 Metcalfe 204 ; Newman v. Jenkins, 10 Pick. 575 ; Bun 
 Sim, 4 Wharton 150 ,- Bradley v. Bradley, 4 Wharton 173. 
 
 But in such case, the death is not generally presumed to have occurred 
 until the expiration of the seven years. Smith v. KnowUon, 11 N.H. 191; 
 Nepean v. Doe, 2 Mees. (f- Wels. 894; McCairtee v. Camel, 1 Barheur Chan. 
 R. 455. 
 
 But where a party has remained beyond sea, or at a distance from the place 
 of his birth or original residence, for the term of seven years without being 
 heard &om, if he had a known and fixed place of residence when last heard 
 from, he ought not to be presumed to be dead, without some evidence of in- 
 quiries having been made for him at such known place of residence, and with* 
 out success. McCartee v. Camel, 1 Barbour Chan. R. 455. 
 
 Though these rules in regard to presumption of death do not appear to have 
 been as yet applied to Life Insurance they will, without doubt, become of great 
 importance in cases arising under that branch of Insurance, where the &ct of 
 death cannot be otherwise established. 
 
 But where a party has not been heard from the jury may, firom the circum- 
 stances proved in the case, find die fact of his death, even before the expiration 
 of seven years. Smith v. KnowUon, 11 N. H. 191 ; White v. Mann, 13 Sheplef 
 
OP THE RISK AND ITS DURATION. 247 
 
 of the society to pay the sum insured, were on conditioi^thatAe 
 (the insured) should pay the proportion of contributions which 
 
 361. The )£sue in such a case is entirely one oSfact, there being no presump- 
 tion of law until after the seven years have expired, and therefore falls ezclu- 
 sively within the province of the jury. They may, therefore, take into account 
 the age of the party, his employment, habits, physical constitution, state of 
 health ; the place, or climate of the country, whether he went by sea or land, 
 the facilities of communication between that country and his former home ; his 
 habit of correspondence with his relatives ; the terms of intercourse upon which 
 Iw lived with them ; in short, any cirranmsteinces tending to tiid the jury in find- 
 ing the fact of life or death. AngeU on Fire and Ijife Ins, p 381. 
 
 Am regiuti to presv/nvpttons of swrvivorskip, where there w£is no evidence as to 
 vluch of two persons died first, the civil law established conclusive presump- 
 tions based upon the Age and sex of ^e parties, and their relation to each other. 
 Thus where father and son perished by the same calamity, if the son was under 
 the age of puberty, the fether w£is presimied to have survived, but if the son. 
 was above that age, Has presumption of survivorship was in his &vor. The 
 French code has regard to the .ages of fifteen and sixty ; presuming that of those 
 under the former age, .the eldest survived ; and that of those above the latter 
 age, the youngest survived. If the parties were between those ages, but of dif- 
 ferent sexes, the male is presumed to have survived ; if they were of the same 
 sex the presumption of svirvivorship is in favor of the younger, as opening the 
 succession in the order of nature. These presumptions are clearly arbitrary, as, 
 in the nature of things, a .day, a week, or a month less than the respective ages 
 named, would not usually, in any degree, efiect the ability of the party to sus- 
 taxa and prolong life. They do not seem to have been adopted, either in Eng- 
 land or this country, where the general rule seems to be, that, in the absence of 
 any special circumstances tending to show that one party died before the other, 
 it must .be presumed ithat they perished at the same instant. Coye v. Leach, 
 3 Metcalfe 371 ; 1 .Greenleaf on Ev. p. 30 ; Mason v. Mason, 1 Merivale 
 208; Taylor v. Diplock, 2 PhiUim, 261 ; Selmjin's Case, 3 Hagg. Eccl. 
 Sep. 748. 
 
 But .though the common law recognizes no arbitrary and oonclasive preswmp- 
 iions of law in regard to survivorship, like those of the civil law, still a pre- 
 sumption of fact may be drawn by the jury, or by the Court where there is no 
 jury, firom general circumstances, Buch as the comparative health, age, strength, 
 or experience of the parties. SeUeck T. Booth., 1 Yotmge cf- CoUyer Chan. 
 Rep. 121 ; Coye v. leach, 8 Metcalfe 371 ; Moehring v. Mitchell, 1 Barbour' f 
 Chan. R. 264. 
 
248 LAW OP LIFE INSURANCE. 
 
 the mepibers of the society Bhonld/during his Kfe, be called 
 on to make ; and by the rules of the^ society, if any member 
 
 neglected to pay up the quarterly premiums for fifteen 
 *143 days after they were due, the policy was declared *to 
 
 be Toid, unless the meinber continuing in as good 
 health as when the policy expired, paid up the arrear within 
 six months, and 5s, per month extra ; and the member died, 
 leaving a quarterly payment due at the time of his death ; the 
 policy was held to be expired, and not to be revived by a ten- 
 der of the sum made by his executor within fifteen days after 
 it became due. 
 
 An action(o) was brought on such a policy by executors, 
 effected on the 6th of June, 1796, by which " The life As- 
 surance Society for the Benefit of Widows, &c., in considerst- 
 tion of a quarterly premium of 2l.lSs. Qd„ to be paid to the 
 society every 25th of March, 24th of June, 29th of Septem- 
 ber, and 20th of December, during the life of W. Want, cove- 
 nanted to pay to his wife, after his death, an annuity of 50Z. 
 during her life ;" a rule of the society was added to the policy, 
 providing, " that if any member neglect to pay the quarterly 
 premiums for fifteen days after they become due, the policy 
 will be void, unless the member (continuing in as good health 
 as when the policy expired) shall pay up within six calendar 
 
 (a) "Want v. Blunt, 12 East 183. 
 
 Where a married woman procured a policy of insurance upon the life of her 
 husband, in her own name, and for her sole use, as authorized by a special 
 statute, the insurance money being made payable to her children in case she 
 should die before her husband ; and subsequei^tly both husband and wife, and 
 their only child, perished at sea, by the same disaster and probably at the same 
 moment, it was held that the statute did not extend to the case, and that the in- 
 surance contract stood upon the the same footing as any other contract, mada 
 by a feme covert in her own or in the lifetiiiie of her husband, without the in- 
 tervention of a trustee, and therefore, that the money belonged to the personal 
 representatives of the husband. There being no evidence of sunrivorship, the 
 Court held that there Was no legal presumption that the child survived the 
 mother, Moehring V. MitcheU, 1 Barbowr Cham. R. 264, 
 
OF THE KISK AND ITS DURATION. 249 
 
 months then next, all arrears, together with 5s. for every month 
 elapsed after such premium became due." 
 
 The case was argued upon the particular words of the con- 
 tract. The opinion of the Court was delivered by Lord Ellen- 
 borough, 0. J. — " This came before the Court on a special 
 case reserved at the trial of an action of covenant on two pol- 
 icies of insurance, each dated the same day, viz. the 6th of 
 June, 1796. At the trial before me in Middlesex, after the 
 last Trinity Term, a verdict was found for the plaintiJBF for 
 lOOOZ. damages, subject to the opinion of this Court on the 
 following facts," (his lordship then stated in detail the facts 
 as above). The case then states, that continually from the 
 time of making the two policies the two quarterly premiums 
 therein mentioned, which respectively became due before and 
 on the 29th of September, 1808, were duly paid within 
 the time allowed for that purpose, *but that the quar- *144 
 terly payments which became due on the 20th of De- 
 cember, 1808, were not paid at the time they became 
 due ; that W. Want died on the 25th of December, 1808 ; that 
 he did not in his lifetime pay, or tender, or offer to pay the 
 said quarterly premiums, which became due on the 20th of De- 
 cember 1808, or either of them. But that on the 27th of De- 
 cember, 1808, which was after his death but within fifteen 
 days after the said 20th of December, when they had be- 
 come due, the said two quarterly premiums were tendered,, 
 and offered to be paid by the executors of the said W. W. 
 Want, to the clerk and receiver of the said society, to whom 
 also due proof of his death was offered), who refused to receive 
 them. 
 
 This case has been argued on the part of the plaintiffs, on 
 the ground of its being or bearing an analogy to a real estate, 
 and it was said that the premium to be paid by the assured 
 was a condition to create an estate ; that is, that the annuity 
 to the wife for her life, was to depend on the previous pay- 
 ments of the quarterly premiums by the husband, and which 
 were to create, as it were, the annuity for the life of the wife ; 
 and that such conditions need not be strictly performed ac- 
 
 32 
 
250 LAW OF LIFE INSURANCE. 
 
 cording to the letter, but that it is sufficient if such condi- 
 tions be performed as near to the condition as may be and ac- 
 cording to its intent and meaning, although the letter and 
 words of the condition cannot be performed ; different from 
 conditions which are to destroy an estate, for those are to be 
 taken strictly. And authorities (a) were cited in support of 
 such distinction as to conditions annexed to real estates, but 
 we are of opinion that the analogy does not hold in the pres- 
 ent case, and that the rules applicable to conditions with rer 
 spect to land do not apply. This is a contract of insurance, 
 and must be construed according to the meaning of the parties 
 expressed in the deed or policy. It is an insurance on the 
 
 life of the husband, not as usually is the case, of a cer- 
 *145 tain sum of money payable on the event *of his death 
 
 during the continuance of the policy of insurance ; but 
 of an annftal payment to his wife during her life, in case she 
 shall survive him, to commence from and after his decease. 
 The risk insured against is his death, and the premium is a 
 quarterly payment to be made by him to the society) who are 
 the underwriters, during his life. The duration of the insur- 
 ance is so long as he shall continue to make those quarterly 
 payments, but the insurance is not to be void if he pay the 
 quarterly premium within such time after the quarter-day as 
 is allowed by the rules of the society. The rules of the so- 
 ciety, as stated in the case, are, that if any member should 
 neglect to pay any quarterly premium for the space of fifteen 
 days after the same should become due, then the policy and 
 assurance thereby made should absolutely cease and be void 
 to all intents and purposes ; unless the member making such 
 default should, within six calendar months then next {conti7i- 
 uing in as good health as when his policy was suffered to 
 expire), pay up all arrears of such quarterly premiums and 
 also 6s. for every month and fraction of a month, which should 
 have elapsed since such premium became due. This is the 
 
 (o) Shep. Touch. 140, 141 ; and Lit. s. 334, 337 ; and the cases of Tarleton 
 V. Stainforth, 5 T. R. 695, ante, p. 115 ; and Salvin v. Jones, 6 East, 571, ants 
 p. 117 
 
OP THE RISK AND 1T3 DORATION, 251 
 
 only rule of the society allowing any further time beyond the 
 quarter-day ; and by this rule it seems to be allowed to the as- 
 sured or member, to keep the assurance on foot and his policy 
 in force, on the terms of simply paying up the quarterly pre- 
 mium, if the neglect has not exceeded fifteen days after the 
 same became due, without any additional penalty, and without 
 the condition which is imposed in case of longer neglect, of 
 being- in as good state of health as when his policy expired. 
 But the plaintiff contends, and his whole case depends on ma- 
 king out that point, that by the true construction of this so- 
 ciety and the clause in the policy referring to it, it is not nec- 
 essary that the party whose life is insured should himself 
 pay, or cause to be paid, the premium within fifteen days, 
 though the event insured against may not have happened. In 
 order to determine this point, it is material to consider, 1st, 
 whether, at the time of the death of the person insured the policy 
 were or were not expired ; because if the policy were ex- 
 pired at "the time, the defendants cannot be held liable. *146 
 Now the insurance is for a quarter of a year, and so 
 on from quarter to quarter, and it expires at the quarter-day. 
 Such is the clear understanding of the parties, as expressed 
 in the rule of the society referred to in the policy and stated 
 in the case, viz. (continuing in as good health as when his pol- 
 icy was suffered to expire) ; that must refer to in the quar- 
 ter-day up to which only the premium had been paid, and can- 
 not include the further term of fifteen days. To this point 
 the case of Tarleton and others, 5 T. R, 695(a), is an author- 
 ity. So that the death of Want happened during a period 
 not covered by the policy, viz. on the 25th of December. 
 Again, by the constitution of the society, every person making 
 an insurance on his life becomes a member of this society, and 
 executes the deed of settlement, as it is stated in the policy • 
 that W. W. Want had done in this case, and is liable to con- 
 tribute to answer the claims made on the society, and the 
 committee, that is, the defendants, covenant with Want, to pay 
 the annuity to his widow after his death, if he shall pay the 
 
 (a) ante, p. 115. 
 
52 LAW OF LIFE INSUHANCK. 
 
 premiums on the days specified, or -within the time allowed 
 by the rules of the society ; and if he shall also pay and con- 
 tribute his proportion of the money which the members of the 
 society shall, duHng his life, be called upon to pay and con- 
 tribute, according to the rules of the society, towards making 
 good the deficiency. It is clear, therefore, that he was only 
 to contribute to such claims as the members of the society 
 should be called on to pay during his life, and if any calls had 
 been made on the 26th of December, they could not have af- 
 fected him or his estate ; and yet after he has ceased to be a 
 member of the society, it is insisted, that a payment may be 
 made on his behalf to secure the liability of the society to 
 some person at the time of payment of the premiums not a 
 member of the society. The whole tenor of the policy and 
 rules and orders show, that no person can be assured 
 *147 without being a member. It is a society insuring each 
 other. The first step required is to sign the 'deed of 
 settlement and become a member, and then the premium is 
 paid by him as a member of the society ; so that no person, 
 except that he or she be a member of the society, is entitled 
 to make assurance with them ; and the paying a premium 
 for another quarter is making a new insurance, though under 
 the former policy. The whole frame of the policy too shows 
 that every premium must be paid during the life of the as- 
 sured. The agreement for the insurance, stated in the begin? 
 ning of the policy, is in consideration of a quarterly premium 
 of 21. 13s. M. to be paid during the life of W. W. Want. 
 The covenant of the defendants to pay the wife's annuity after 
 Want's death, is, " if W ant shall pay or cause to be paid, the 
 quarterly premium on every quarter-day during i the life cf 
 Want, or within such time after as shall be allowed by the 
 rules of the society for that purpose ;". in construing which 
 sentence the expression, during the life of Want, must be un- 
 derstood as applying and carried on to the latter part of th^ 
 sentence, and is the same as if the words, " during his life," 
 had been repeated after the words within such time after^ i. 
 e., or within such time after during his life. It is observable 
 that, throughout the policy, the word executors or administra- 
 
OF THE RISK AND ITS DURATION. 253 
 
 tors are used oidy in the covenant of the defendants when they 
 covenant with the said Want, his executors and (idministrm- 
 tors to pay the annuity to his widow after his death ; and 
 then the addition of those words was proper and necessary, 
 inasmuch as the covenant must necessarily be enforced by his 
 executors or administrators, the same not being performed till 
 after his death. In every other act to be done, it is expressed 
 as being to be done by Want, or as being neglected to be done 
 by Want, or by such members of the society, without any 
 added words indicating an indention that it should be any 
 other than the personal act or neglect of the assured. For 
 these reasons we are of opinion, that the death of W. W. Want, 
 which happened on the 25th of December, was during a, 
 period of time not covered by the policy ; and that 
 on the 'true construction of the policy and rules of the *148 
 society, the insurance could not be continued beyond 
 the expiration of the quarter which ended on the 20th of De- 
 cember, by a tender of the premium by his executors after his 
 death, thoUgh within fifteen days after the quarter-day, so as 
 to include within the policy the period of his death. Judg- 
 ment of nonsuit must be entered." 
 
 3. The question, whether a period of time to commence 
 from the day of the date was inclusive or exclusive of that 
 day, occured in an action upon a policy of insurance upon the 
 life of Sir Robert Howard, for one year from the day of the 
 date thereof, which was the 3rd of September, 1697. Sir 
 Robert died on the 3rd of September, 1698, at one o'clock in 
 the morning. Lord Chief Justice Holt held that " from the 
 day of the date " excludes the day, but " from the date " in- 
 cludes it, and therefore the day of the date being excluded in 
 this case, the insurer was held liable (a); but in Pugh v. The 
 Duke of Leeds (6), it was held, after great deliberation, that 
 the words " from the date " and "from the day of the date " 
 mean the same thing ; and that they are to be taken to be 
 
 (4) Cowp. 714. 
 
 (a) Sir Robert Howard's case, 2 Salk. 625 ; 1 Ld. Raym. 480. 
 
254 LAW OF LIFE INSURANCE. 
 
 cither inclusire or exclusive, according to the context and stab' 
 ject-matter ; and that either meaning shall be adopted vhich 
 shall most effectnallj support, not defeat, the intention of the 
 parties. As this case of Pugh v. The Dnke of Leeds would 
 not be snfiScient to abriate epestions from arising in all cases, 
 since it might be very difficult to ascertain the intention of the 
 parties upon a policy of insurance except from a policy itself, 
 it is now usual to state in the policy the day of the commence- 
 ment of, and the termination thereof^ and to> deelaore that both 
 are inclusive, 
 
 4. The party insuring is not^ prima facie, entitled to recoT- 
 er interest upon the principal sum insured from the expira- 
 tion of a certain period after proof of the death of the 
 14&* 'assured, the policy covenanting to pay a oertain sum 
 within such certain period after due proof of the. death 
 of the assured. An action of covenant (^a) was brought upon 
 a policy of insurance, bearing date the 10th of March, 1819, 
 by which the defendants covenanted to pay to the plaiitiff 
 4000Z. at the expiration of six months after due proof of the 
 death of R. C. Burton. The cause was tried before Bayley, 
 J., at the assizes for the county of YorS:, and the principal 
 question was, whether R. C. Burton's life was an insurable 
 life at the time when the policy was effected. The learned 
 Judge summed up the evidence to the jury with reference to 
 that question, no point having been then made as to interest ; 
 but when the jury returned a general verdict for the plaintiff, 
 his counsel then claimed to have interest allowed upon the 
 principal sum insured from the time when that sum became 
 due. It was stated in the afidavits that B, C. Burton died in 
 April, 1821, and that due proof of his death was given to the 
 defendants, so that the principal sum insured became due ob 
 the 6th of November, 1822, and that the interest upon that 
 sum, to the first day of Michaelmas Term, 1823y amounted to 
 (a) Higgins v. Sargent, 2 Biim. & Cress. 348. There is' a report of thit 
 case at ni. pri. in Ferren on Life Insurance, p. 175, but as it was a case of con- 
 flicting evidence, and the directions of the Judge are not stated, it has be^n ad, 
 mitted, as not containing euiy useful doctrine. 
 
OP THE RISK AND ITS DURATION. 255 
 
 200Z. A rule nisi having been obtained for increasing the 
 damages by that sum, cause was shown. 
 
 Abbott, C. J. — " It is now established as a general princi- 
 ple, that interest is allowed by law only upon mercantile secu- 
 rities, or in those cases where there has been an express 
 promise to pay interest, or where such promise is to be im- 
 plied from the usage of trade or other circumstances. It is 
 <rf importance that this rule should be adhered to ; and if we 
 were to hold that interest was payable in this case, the appli- 
 cation of the general rule might be brought into discussion 
 in many others. Interest was not claimed by the plaintiff's 
 counsel in this case nntil the Judge had concluded 
 *his address to the jury upon the principal question for *150 
 their coneideration, and they had pronounced their ver 
 diet upon that question in favour of the plaintiff. It was then 
 contended, for the first time, that the plaintiff was entitled 
 to have interest allowed him upon the principal sum secured 
 by the policy from the time when it had become payable, and 
 that point was reserved by the learned Judge. The only 
 question upon the present rule is, whether the jury ought to 
 have been told that they were bound by law to give the plain- 
 tiff interest from that time ; for if it was a matter for their 
 discretion only, and it was not properly submitted to them, 
 that may be a ground for granting a new trial, but not for in- 
 creasing the damages. Inasmuch as the money recovered in 
 this ease was not due by virtue of a mercantile instrument, 
 and as there was no contract, express or implied, on the part 
 of the defendant to pay interest, I cannot say, that the jury 
 ought to have been told to give interest." 
 
 Bayley, J. — " I am of the same opinion. It was once the 
 opinion that money lent carried interest, and in Calton v, 
 Bragg (a) it was so contended, on the ground that the lender 
 would otherwise, for the accommodation of the borrower, lose 
 the benefit which he might make of his capital, and that the 
 lender ought in equity to be put in the same situation as if he 
 had applied his principal to his own use. But this Court held 
 
 (a) 15 East, 224, 
 
256 LAW OF LIFE INSURANCE. 
 
 th4t interest was not due by law for money lent without & 
 contract for it expressed, or to be implied from the usage of 
 trade, or from special d,rGUmetances. Kow if interest be not 
 diȤ for money lent, which is to be repaid either upon demand 
 or at a given time, it follows, that it is not due for money pay- 
 able within a certain time after due proof of the happening of 
 a particular event. The circumstance of the money having 
 become due in this case by virtue of a contract under seal, 
 does not make any difference. If it were the intention 
 151* of the parties that the 'principal sum should bear in- 
 terest from the time when it became due, that might 
 have been expressly provided for in the deed ; but not having 
 been done, the law will not imply a contract on the part of the 
 defendants to pay interest, and consequently the jury ought 
 . not to have been directed to give interest." 
 
 Holroyd, J. — " I think that the Judge would not have been 
 warranted in directing the jury to give interest in this case. 
 It is clearly established by the later authorities, that unless 
 interest be payable by the consent of the parties, express, or 
 implied from the usage of trade, (as in the case of bills of ext 
 change,) or other circumstances, it is not due by common law. 
 In De Haviland v. Bowerbank (a). Lord EUenboroiigh was of 
 opinion, that where money of the plaintiff had come to the 
 hands of the defendant, to establish a right to interest upon 
 it, there should either be a specific agreement, or something 
 should appear from which a promise to pay interest might be 
 inferred, or proof should be given of the money being used 5 
 and in Gordon v. Swan (6) the same Judge said, that the giv- 
 ing of interest should be limited to bills of exchange, and such 
 like instruments and agreements reserving interest. In the 
 latter case, although the money was payable at a particular 
 day, non-payment at that day was held not to give any right 
 to interest. Independently of these authorities, I am of opin- 
 ion, upon the principles of the common law, that interest is 
 not payable upon a sum certain payable at a given day. The 
 action of debt was the specific remedy by the common law for 
 
 (0) 1 Campb. 50. (J) 13 East, 410 
 
OP THE RISK AND ITS DURATION. 25T 
 
 the recovery of a sum certain. Now in that action the defend- 
 ant was summoned to render the debt, or show cause why he 
 should not do so. The payment of the debt satisfied the sum- 
 mons, and was an answer to the action. If this, therefore, had 
 been an action of debt, the payment of the principal sum 
 would have been a good defence, because the interest is no 
 part of the debt, but is claimed only as damages result- 
 ing from the non-payment of the debt. When 'indeed *152 
 the interest becomes payable by virtue of a contract, 
 express or implied, then it becQmes part of the debt itself, 
 and consequently it will be no answer to an action of debt for 
 the defendant to show that he had paid the principal sum ad- 
 vanced ; here then being no contract, express or implied, to 
 pay interest, it was no part of the debt, but could only be re- 
 covered by way of damages for detaining the debt. Inasmuch, 
 therefore, as it appears that if the plaintiff had pursued that rem- 
 edy, which by the common law is specifically applicable to this 
 case, he could not have recovered interest, I think, that he 
 ought not to be permitted to recover interest by way of dam- 
 ages in an action of covenant." — Rule discharged(l.) 
 
 fl)The English rule, that interest is not recoverable unless expressly reserved 
 by the contract, or the payment of it is to be implied from the course of detding 
 between the parties, or fiom the usage of trade, has not been adopted in this 
 country ; or rather, our Courts have made to it the important addition, that 
 whenever a debt ought to be paid at a particular time, and it is not then 
 paid through the default of the debtor, interest will be allowed as compensatory 
 damages, during the time when the debtor is so in default, SeUeck v. Frencht 
 1 Conn. 32 ; Peojile v. New York, 5 Cowen 331 ; Dodge v. Perkins, 9 Pick, 
 369. There is no distinction, in the application of the American rule in regard 
 to interest, between sums due upon policies of insurance, and claims arising 
 from any other contract. But the allowance of interest in the case of policies, 
 and all other contracts, in which interest is not expressly, or by implication re- 
 served, is based entirely upon the default of the debtor, and is of the nature of 
 damages. Hence, an insurance company will not be held liable for interest on 
 a sum due upon a policy, the payment of which is restrained by the legal oper- 
 tion of a trustee process, or foreign attachment, provided there is no fraud or 
 collusion on the part of the company, or unreasonable delay in making its an- 
 
 88 
 
258 LAW OP LIFE INSURANCE. 
 
 5. According to the constitution of many of the offices, a 
 share of the profits of the business is added from time to tiae 
 by way of bonus, to the sum insured. 
 
 Where(a) a policy of; insurance, effected at the Equitable 
 Office, was assigned to trustees, with '''all sums of money, 
 benefits and advantages, to arise accrue, or become due, or pay- 
 able upon, or by virtue of it^ in any manner howsoever.". which 
 was afterwards included and referred to in a marriage settle- 
 ment, as " all that sum of 30001. assured by the before men- 
 tioned instrument or policy of assurance ; and' the settlement 
 contained a power of one of the cestui que trusts to appoint 
 the same by will, who afterwards by her will,- made in pursu- 
 ance of the power, bequeathed fthe same to certain persoss ; 
 •and' the sum of SOOQZ. had: upon the death of the insured 
 amounted to the sum of 9270^. by accumulations or bonuses 
 added to it ; it was held, that the legatees were entitled, to 
 take the 3000^. according to their several interests, with the 
 respective shares of accumulation or bonuses in addition. . 
 
 In Parkes v. Bott(6), in pursuance of a marriage settlement, 
 
 the husband insured his life, in the names of trustees, 
 
 •153 for 30001., *and the dividends of certain canal ghares 
 
 were to be applied in payment of the premiums, and it 
 
 was declared that the trustees should, stand possessed of the 
 
 policy in trust for the intended husband until marriage, and 
 
 after that they should stand possessed of the said sum of 3000/., 
 
 when received under the policy, upon certain trusts for thfe 
 
 benefit of the wife and children of the marriage. , The hus- 
 
 ■ band became bankrupt, and afterwards died ; on his death 
 
 •three bonuses were payable on the policy, as well as the sum 
 
 secured by the policy ; the assignee of the husband claimed 
 
 the bonuses, on the ground that they were distinct from the 
 
 policy, and were not subject to the trusts of the settlement. 
 
 (a) Courtney v. Ferrers, 1 Sim. 137. 
 (i) 9 Sim. 388. 
 
 swers and disclosures required by the trustee process. OrieTiiai Bank v. Tre- 
 mowt Ins. Co., 4 Metcalfe 1. 
 
OP THE RISK AND ITS DURATION. 259 
 
 But the Vice Chancellor of England, held, that they were sub- 
 ject to the trusts of the settlement ; he referred to the pros- 
 pectus of the office (the Eock Life), and relied principally on 
 the word " policy " being repeatedly used in the settlement as 
 the subject of the trust ; that no trust was declared of any 
 increase on the sum, and therefore that it was the intention of 
 the parties to settie, not merely the SOOOl., but the full benefit 
 of the policy. 
 
 6. Few cases occur upon policies of insurance on lives, in 
 which the question of a return of premium can arise ; in most 
 policies there are express stipulations on the subject. As be- 
 fore observed, where the risk is entire, there is by the geBjeral, 
 law of insurance no return of premium, though the policy 
 should determine the next day. K however the risk has never 
 begun, from whatever cause, unless it be fraud, the premium, 
 as appears from the general law of insurance shall be returned, 
 for a policy of insurance is an indemnity. The underwritP^fL 
 leceive the premium for running the risk of indemnifying the 
 insured and therefore if they run no risk, and no fraud be 
 imputable to the parties insured, the consideration for which 
 the premium was paid to the underwriters fails(a). 
 
 It may be inferred also, that if after the loss had 
 happened, *payment was resisted on the ground of *154 
 want of interest only, in a policy upon life, and the de- 
 fendants succeeded, a return of premium might be insisted 
 iipoB(6). 
 
 If fraud be committed by insurers, the premium may be 
 recovered back (c) ; but if the contract become void by the 
 fraud of the insured, or his agent, it will not be recovera- 
 ble (d). 
 
 It appears, however, from two early Chancery cases, Whit- 
 
 (a) See Tyrie v. Fletcher, Cowp. 668; 2 Marsh. 663. 
 
 (4) Routh B.Thompson, 4 East 428. 
 
 (e) Duffell V. Wilson, 1 Carapb. 401. 
 
 (<Z) Tyler v. Home, Park, 329, 7th>d. Chapman v. Fraser, 3 Marsh. 661. 
 
LAW OF LIFE INSURANCE. 
 
 tingham v. Thornburgh(a), and Da Costa v. Scandret(6), the 
 former of which was a case of life insurance, that where 
 fraud had been committed, the Court decreed the policies to 
 he delivered up to be cancelled, and the premium to be re- 
 paid ; the same rule appears to have been followed at law in 
 the case of Wilson v. Ducket(c), before Lord Mansfield, in 
 which the point was specially argued. His Lordship, however, 
 afterwards altered his opinion, as appears by the case of Ty- 
 ler V. Horne(rf), which has since been followed by that of 
 Chaipman 'v. rraser(e). 
 
 It has been before observed that the party whose life is in- 
 sured by another person, must be considered as the agent of 
 the person effecting the insurance, and that the latter is bound 
 by the misrepresentations of the former. It may be doubted, 
 however, whether a party effecting an insurance is so far 
 bound by the mi'^representationls of the insured as to preclude 
 Mm from Recovering back the preiriium where he is not privy 
 to the fraud or misrepresentation. 
 
 But the question must depend upon the language of the 
 policy. Thus in Ducket v. 'Wil]iams(/), upon the construc- 
 tion of a policy of the Provident OflSce, it was held 
 •155 *that the statement or misrepresentation made to the 
 office being untrue, though made innocently and in ig- 
 norance of the truth, the premium Could not be recovered back- 
 This was afi adtion upon a policy upon the life of J. S., brought 
 fey the Provident Office against the Hope Office. The follow- 
 ing declaration and agreement had been signed on behdilf of 
 the plaintiff before insuring :— " We, S. B. M,, and Q. D., 
 trustees bf the Provident life Office, do hereby declare *nd 
 set forth, that the herein named J. S., is now in good health, 
 and has not labored under gout, dropsy, fits, palsy, insanity, 
 affection of the lungs or other viscera, or any other disease 
 which tends to shorten life, &c., and we agree that the dec- 
 Co) 2 Vera. 206 ; Prec. Chan. 30. 
 (i) 2 P. Wms. 170. 
 (e) 3 Burr. 1361. 
 
 {d) 1 Park, 329, 7th ed. ; 2 Marsh. 661. 
 (0 Ibid. 
 (/) 2 Cromp. & Mees. 348. 
 
OF THE RISK AND ITS DURATION. 2@1 
 
 laration aad statement berel)y made ahaU be the basiSi of the 
 agreemi^it between ourselves and the Hope Assurance Com- 
 pany, and if any untrue averment be contained herein, or if 
 tiie facts required to be set forth in the above proposal be.iiot 
 trvly stated, all monies which shall have been paid on account 
 of the insurance made in consequence hereof shall be forfeited 
 and the insurance shall be absolutely null and void.^' Lccrd 
 Lyndhurst (then C. Baron of the Exchequer), in delivering 
 the judgment of the Court, which embraces the principal &cts, 
 remarked :^— " This was an action on a policy of insurance on 
 the life of J. S. ; upon his death an action was brought to re- 
 cover the amount of the sum insured. The defendant's case 
 was that the life was not insurable at the time of the in- 
 surance, and the jury being of that opinion, the defendants 
 had a verdict. On the discussion of the rule for a new trial, 
 it was contended that the plaintiffs were entitled to a return 
 of the premiums if the life were not insurable, but it turned 
 out that the counsel had omitted to claim a return of the pre- 
 mium at the trial. It was subsequently arranged that this 
 question should be tried in another aotiqn. On a motion for 
 a new trial in the second action, it was agreed that the Court 
 should look into the evidence, and form their own conclusion as 
 to the matters of fact. We Bave done so, and are now come 
 to the conclusion that at the time when the policy was effected 
 Mr. S. had upon bim a disease which tended to shorten 
 life. 'It follows that the facts set forth in the pro- *15Q 
 posal were not truly stated, and the question then turned 
 entirely upon the construction of the declaration and agree- 
 ment made by the assured before the policy was effected. The 
 point is, whether the facts were not truly stated within the 
 meaning of the declaration and agreement. It was contended 
 on behalf of the plaintiffs that the words must mean " truly," 
 or " tintettly," within the knowledge of the party making the 
 statement, and that if the party insuring ignorantly and in- 
 nocently makes a misstatement, he is not to forfeit the premi- 
 ums under the claim in question. We are of opinion, how- 
 ever, that this is not the real meaning of the clause. A state- 
 ment is not the less untrue because the party making it is not 
 
262 
 
 LAW OF LIFE INSURANCE. 
 
 apprised of its untruth, and looking at the context we think it 
 clear that the parties did not mean to restrict the words in the 
 manner contended for ; two consequences are to follow if the 
 statement be untrue ; the one that the premiums are to be for- 
 feited ; the other that the assurance is to be void. Now if the 
 statement were untrue within the knowledge of the party ma- 
 king it, the assurance would be yoid without any such stipu-- 
 lation ; the knowledge of the party is clearly immaterial as to 
 this last consequence, and therefore must be so to the first. 
 We are of opinion that these premiums are forfeited under the 
 clause in question, and that a nonsuit must be taken. , 
 
CHAPTER V. 
 
 OF ASSIGNMENT OP POLICIES OF INSURANCE UPON LIFE. 
 
 1. Of Assignment in general. 
 
 2. Of Notice to the Office. 
 
 The question has been agitated, ■whether an assignment of a 
 policy even for valuable consideration is valid at all, so as to 
 enable the assignee to sue upon it in the assignor's name, and 
 the point turns upon the stat. 14 Geo. 3, c. 48, which re- 
 quires an interest in the life insured ; but it has been held 
 by the Vice-Chancellor (of England), that such an assignment 
 for valuable consideration is good, provided there be no objec- 
 tion to the validity of the policy at the time it is effected. If 
 the party effecting the policy possesses an insurable interest 
 at that time, that interest will be suflScient to support the pol- 
 icy in the hands of the assignee for valuable consideration, 
 and he will be entitled to stand in the place of the original 
 assignee or insured, so as to bring an action in his name for 
 the sum insured. In this case one of the mesne assignments 
 was voluntary, but a valuable consideration had been given 
 for it by a subsequent assignee(a) ; the effect of this decision? 
 however, is not such as can prevent questions being raised 
 
 (a) Ashley v. Ashley, 3 Sim. 151. 
 
26i4 ,f^yr pjp j^pe insurance. 
 
 between the §,|8^g}^e^ a^i^: the ftfipice as to interest, it merely de- 
 cides his right ^p hrjijg an aotion(l.) 
 
 It is a very common thing for a person who has insured his 
 life to assign t^§ policy by way of collateral security for a loan 
 
 of money or a debt. If the assignor be a trader with- 
 *158 in the meaning of the bankrupt laws great danger 'will 
 
 accrue to the assignee in respect of his security, as will 
 
 I , ■ ■ « .' 
 
 (l)It appears now to be settled beyond question, that a. policy of life insurance 
 is assignable to the extent of giving the assignee the right of prosecuting an 
 action in the name of the original assured. In addition to the numerous cases 
 cited by Mr. Ellis in this chapter,^ the assignability of life insurance policies has 
 been recognized in England in Cook v. Black, 1 Hare Cham. R. 390 ; and Goi- 
 sal V. Webb, 2 Keerie Ckam,. R. 99. 
 
 The question has been rarely raised in this country, but whenever it has 
 been presented in our Courts, they have invariably maintiiined the same doc- 
 trine. Thus where a life policy was assigned, and by the terms of the assign- 
 ment the assignee was to receive the proceeds, and if other securities held by 
 lakca were insufficient for that purpose, to apply the same to the satisfaction of his 
 d^ms against the assignor, and to pay th{B residue, if any, to the wife of the 
 letter, the Court held that there was such a consummate deUvery tuid transfer of 
 the„policy i|i question, as took from the assignor the legal power and dominion 
 over it ; that, after he had assigned the policy by endorsement and delivery, 
 there no longer remained in the assignor any authority or control over it ; and 
 that the insurance company had full authority to pay the money to tlie assignee, 
 Harrison v. McConkey, 1 Johns. {Md.), Chan R. 34. 
 
 The assignability of life insurance poUcies is also recognized in Paimer v. 
 Merrill, 6 Gushing 382. In this case the Court held that, in order to make a 
 complete and valid assignment of a policy, there must, as in the case of the as- 
 signment of a bond, bill, or note, be an actual delivery of the policy, the evi- 
 dence and security of the contract. The action was assumpsit against an ad- 
 ministrator, whose intestate had procured an insurance upon his life for $1000, 
 and had endorsed upon the policy an assignment of the same, to the plaintiff to 
 the amount of four hundred dollars, and a request to the insurers to pay that 
 amount to the plaintiff in case of loss, of which assignment and request the 
 insurers had notice at ^e time. The intestate retained the policy with this 
 endorsement thereon, in his own possession, and afler his death, the defendant, 
 as administrator, received the $1000 from the insurers. The plidntiff claimed, 
 that by the assignment he had acquired a lien upon the policy to the amount 
 of $400, and that, consequently, the defendant had received so much money 
 
OP ASSIGNMENT OF POLICIEB. 96S 
 
 hereafter be shewn, unleaa due aotice of the aisigDjneBit he 
 given to tibis office inamring. The djinger indeed exists with 
 
 (0 his (the pWotigg) use, Thf opiujpij of the Qpijrt inras deliTerF4 by .8%^ 
 C J., 93 follows : 
 
 " The ques^on before us is, whedier Ae case shpyrs an assien^ent. '{vhidi 
 Tcstcdaay interest in this poliey, Ifsgal or equjl^le, jp fte ptotiiff, Jh? policy 
 was an ^^ecvtory contract, a chope in action, 9jri^lal)le ^ a leg4 eflntracf o^y 
 to Asa Spudding and his personal rspreseatatlTcs. 
 
 ■'Aceor^Bg to the modern decisions, courts of lawTeeogniEe the assignniBn} 
 of choses in action, so &r as to vest an equitable interest in the assignee, aai 
 authorize him to bring an action in the name of the assignor, and recover & 
 judgment for his own benefit. But^ in order to constitute such an as»gnment, 
 two 'things must concur : first, the party holding the chose in action must, by 
 some significant act, ejcpress Ms intention that the assignee shall have the debt 
 Of 'right in question, and, according to the natcure ^d circumstances of the 
 pa^e, delirer to the assignee, or to some person for his ^se, the security, ^ thos 
 tw oa«, bond, deed, oc note, or written agreement, upQ^ which {h^ 4ie^t ^ 
 chose in action arises ; and secondly, the transfer shall be of the whc)!^ fg^fl 
 mtiredebt or obligaticm, in which the chose in action conwste,.|ifld|W itr as 
 ptacticable place the assignee in the condition of the assignor, so asjto «ia||I« 
 the asragnee to recover the full debt doe, and to give a good and valid disidiai^ 
 to the party liable. 
 
 " The transfer of a chose in action bears an analogy, in some«espeet,-to 4h« 
 tran^r of personal property ; there can be no actual manual tradition of a 
 chose ip action, as there must be of personal property, to constitute a lien ; but 
 theieflmsl be that which is similar, a delivery of the npte, certificate, or other 
 document; if these j^ any, which constitutes the cho9e in action, to the assi^pee^ 
 mlh Ml power to ejisrei^ every ^spiecies of dpminion over it^ an4 a renuqcia* 
 tioB ®f any power pve* it, on Ae part^rf ,t^ assignor. The intpntipn lf,gff ^ 
 as the nature of the case iriB admit, to sidistitute the ,99signe$, jn {tlgc^ pf % 
 assignor as owner. 
 
 " It appears to us, that the order endorsed on fliis poUcy, and retamsd by-ib* 
 a^pj^red, fails of amounting to an assignment, in both of these particulars. W* 
 do ppjt question, .that an assignment may be made of an entire fund, in Aefonii 
 Sf^i» prder drawn by the owner on the holder of the fund, or party indebted, 
 with authority to receive the yrpp^rty or discharge the debt But if it be&r & 
 
 34 
 
266 
 
 LAW OP LIFE INSURANCE. 
 
 respect to individuals not traders, in the event of their taking 
 the benefit of the Insolvent Act. In these assignments it is 
 
 part only of the fund or debt, it is a draft or bill of exchange, which does not bind 
 the drawee, or transfer any proprietary or equitable interest in the fund until ac- 
 cepted by the drawee. It therefore creates no hen upon the fund. Upon this 
 point the authorities seem decisive. Welch v. Mandeville, 1 Wheat. 233; yS. C. 
 5 lb. 277; Rabbins r. Bacon, 3 GreeTd. 346 ; Gibson v. Cooke, 20 Pick. 15. 
 
 " It seems to usl quite clear, that the plaintiff acquired no such interest in this 
 policy, as would enable him to maintain an action against the insurers. He 
 seems himself to have thought so too : for although he demanded the amount 
 which they refused to pay, for reasons which seem to be conclusive j he yet 
 declined bringing any suit against them, but permitted them to pay the money 
 over to the administrator. If the plaintiff had no such legal or equitable inter 
 est in the debt due on the polidy, as would enable him to maintain an action or 
 suit in equity, either in his own name or that of the administrator of the as- 
 signor, for his own benefit, it seems difficult to perceive on what ground he had 
 any equitable lien on the debt due by the policy ; and if he had not, then 
 the administrator took it as general assets, chetrged with no trust for the 
 plaintiff. 
 
 " It appears to us, that a contrary doctrine would tend to a great confusion of 
 rights; A man cannot, by his own act, charge a personal chattel, a carriage 
 and horses, for instance, with a lien in favor of a particular creditor, and yet 
 retain the dominion and possession of them till his death , aforHni where he 
 retains the memorandum or instrument of transfer of such chattel in his own 
 control. It seems to us equally impracticable, to charge a debt due to hip, by 
 an order or memorandum, retained in his own possession, purporting to give 
 .to a particular creditor an equitable lien, by the assignment of such chose in 
 action, without a transfer or delivery of the security by which if is manifested. 
 Such an assignment would not constitute the debtor himself a trustee to the 
 creditors ; what trust then devolves upon the administrator f Were the law 
 otherwise, an administrator, instead of succeeding to the property and rights 
 of his intestate, to be administered and distributed equally amongst all the cred- 
 itors, might be obliged to dispose of it in very unequal proportions, according 
 to such supposed decleuration of trust. These considerations apply with pecu- 
 liar force to a policy of insurance on the life of the assured himself on which 
 no money can become due until the death of the assured, at which time all his 
 rights devolve on his personal representative. If, therefore, it is intended to 
 supersede the right of the personal representative, it must be done in the mode 
 reqmred for a complete assignment of the whole contract. 
 
OF ASSIGNMENT OF POLICIES. 267 
 
 usual to stipulate, that if the debt for which it ia the security 
 be not paid within the period named, it shall be lawful for the 
 
 " The defendant having waived his objection that this action was braught too 
 soon, for the purpose of trying tlie plaintiff^ right, we see no objection to enter- 
 ing a judgment for the amount of the debt actually due from the intestate, to be 
 certified to the judge of probate, to be added to the commissioners' report of 
 debts allowed, so as to enable the plaintiff to take a dividend fro fata with 
 other creditors, but not to have execution de bonis testatoris." 
 
 The Reporter has added tlie following note to this case, " It having been 
 suggested in the argument, that other f^ts existed, not appearing in the report, 
 showing that the assignments had been delivered to the respective assignees, at 
 the time, notice thereof given to the company, and assented to by them, ex' 
 pressly or by implication, a new trial was granted, on which the plaintiffs ob- 
 tained verdicts and judgments." 
 
 Assignments of life insurance policies, therefore, it will be seen, rest upon 
 the same grounds, and are of the same nature, as assignments of choses in ac- 
 tion generally. Where one, by virtue of a contract, has a claim upon another 
 for a sum of money, he may assign the benefit of that contract to a third per- 
 son, provided there is no provision in the contract prohibiting such assignment 
 and though this assignment will not vest in the assignee the legal ownership 6i 
 the contract, so that he can sue upon it in his own name, it gives him an 
 equitable interest therein, of which he can avail himself by an action in the 
 name of the assignor. On the same principle, if one insures his own 
 life, or the life of his debtor, he thereby acquires a claim upon the insurer, 
 which he may assign to a third person. There seems to be no reason, based 
 upon principle, why a similar interest in an insurance of a ship or a building 
 may not be assigned, without it being necessary that the subject of the insurance 
 contract should be assigned, aS well as the insurance contract itself. But such 
 assignments of marine or fire policies will be of exceedingly rare occurrence, 
 because the destruction of the subjects of ,such insurances by the perils insured 
 against is a mere possibility, and an assignment of such a contract would be of 
 little or no value to one, who did not also possess an interest in the subject insured 
 But in the case of a life insurance, there is or need be, at least in policies for the 
 whole terra ot life, no contingency in regeird to the ultimate liability of the insurers 
 for the sum insured. If the premiums are paid regulariy, the loss must sooner 
 or later take place, and the sum insured become payable. Moreover, in view 
 of this fact, the policy becomes more and more valuable every year, and can at 
 any time be sold to the insurers, if to no one else, for a considerable proportion 
 of the premiums already paid upon it. 
 
288 i.AW W &IFE IlfSVIMiirCE. 
 
 assignee, witkoUtths ooneent of th6 assignor, to sell tlie {■ol" 
 i^ ; hud a ^o^i idi inserted to give a receipt fot the puf 
 
 Hehee assignmenls of life insurance policies are frequently liiade, and thor 
 rdidity sustained by Ae Courts, whtn an assignment of the subjefet insured 
 ddes not fttsMmptlby the ateiigiiment of the policy, as is alttrays the practice ill 
 ktsigaments of marine and fire policies. Thus where one insures his Own lift 
 6t die life of his debtor) and assigns the policy to a third person, the asiigifi 
 ment will be held v&lid, though the assignee may possess no interest in the lift 
 msulredi The interest which subsists in the original insured is sufficient to 
 support and keep alive the pcdicy, whether it remain in his hands or be assigned 
 fay him tti another. It is Ms daim upon the insurers, which the policy repre- 
 sents) and so long as this claim is supported by the continuance of his interest 
 ill th't life Insured, the insuiters will be liable upon that claim in ease of loss, 
 though he may have assigned to another the benefit of it. But as soon as his 
 interest in the life insured ceases, his claim upon the insurers ceases also, and 
 Uie assignee, being possessed by, virtue of the asisignment with nothing more 
 than ^s clatm, can consequently recover nothing upon the policy. Theiefore, 
 if one insures the life of his debtor, and assigns the policy to a third person, 
 without assigning the debt at the same time, and subsequently the debtor pays 
 (be debt to the assignor, the policy becomes void, and is of no value to the as- 
 signee. Dowdeswell on Ijife and Fire Ins, p. 72. 
 
 Though an assignment of a life insurance policy may be valid without no- 
 tice thereof to the insurers, it is nevertheless advisable for the security of the 
 assignee, liiat such notice be given immediately after the assignment. The ob- 
 ject of the notice is, not to make the transfer any more complete as between 
 the assignor and assignee, but to protect the latter from the fraud of the former, 
 it being in his power, so long as the insurers are ignorant of the assignment, 
 to reeeive from them the amount insured, and give them a release from their 
 contract, which, if founded on good consideration, will discharge the insurers 
 from any farther liability upon the policy. But a release given by the original 
 insured, after notice to the insurers of the assignment of the policy, will not 
 affect the right of the assignee, to recover of the insurers in an action in the 
 name of the assignors. See note on page 150 amte, and cases there cited. 
 
 The question does not appear to have arisen, whether, where one assigns to 
 the same person and at the same time, both the policy and the debt, which consti- 
 tuted the assignor's interest in the life insured, the policy will be vaUd in the hands 
 of the assignee, without some e:q)ress assent on the part of the insurers to the 
 transfer. From analogy to the practice in marine insurance, it seems that the 
 policy would remain valid, notwithstanding the assignment, and without the 
 
OS ABSieNMENT (MP VOI^eiBS. 2@9 
 
 efaascmoAe^ »nd to exonerate the purchaser from any lift' 
 bility or responsibility, and out of the moniesi ttt ^fttisly any 
 premiums paid by the assignee for the purpose ef keeping the 
 poli^ oa foot, and all costs, and to apply the residue towards 
 pAyfitetit of the sum due, and to pay the surplus to the as- 
 signor. The assignor constitutes the assignee his attorney, 
 to bl'lng actions and give receipts, and covenants to pajr the 
 premiums, and to product to the assignee T^ithin a certain pe^ 
 riod receipts for the same, and that he will observe the terms 
 and conditions of the policy ; ^at if the assignor do not pay 
 the premiums the assignee may do so, and such sums shall 
 stand charged on the policy ; that the assignor 'vrill not do 
 eertainacts whereby the policy Would be vitiated, or require 
 a Mgher premium, as to go beyond the limits of Europe ; and 
 that he will not release the sum due on the policy. 
 
 2. It may now be .considered as the law, that the assign^ 
 ment of a policy of insurance upon a life will not take it out 
 of the order and disposition of th6 assignor within the mean- 
 ing of the bankrupt laws, (nor of an insolvent under the In- 
 solvent Act,) unless notice of the assignment be given to the 
 insurers before the bankruptcy or insolvency, and the policy^ 
 
 assent of the insurers, but it is difficult to come to this conclusion, and still keep 
 the case within the general rulegoTerning asagnmients of chpses in action, which, 
 as we have seen in Palmer v. Merrill, is the ground on which assignments of 
 life insurance policies are sustained. The reason of the difficulty is, that by 
 the assignment of the debt, the original insured ceases to have any interest in 
 the life insured, and can, consequently, have no claim or chose in aclion against 
 the insurer, of which the assignee can receive the equitable ownership; in other 
 words the subject <)f the aSsigtiAient ceases to e:iti^. 
 
 The sa&st course, in a case like the one under coAsideration, would be to il&> 
 tify the insturers of the assignment, and obtain from ^era their assent to it, and 
 a confitUiation of the policy to the assignee, which would be considered as a 
 new contract with the assignee, upon which he could maintain an action in his 
 own name. WUson v. Hill, 3 Metcalfe 66 ; JBhMer v. Boston Mat. Fire Ins. Co., 
 4 Metcalfe 206. 
 
 For ifurther remarks_on the subject of the assignment of policies, see Chap. 6 
 in the first part of this work, and the notes there refraxed to. 
 
270 I,A-W OF LIFE INSURANCE. 
 
 in! defect of sucli notice, -will vest in the assignees in bankrupt- 
 cy or insolvency. 
 
 By a policy of insurance (6), dated October, 17&8, 
 •159 under the hands and seals of two of the trustees of 
 the Equitable Assurance Company, the trustees, in 
 consideration of the annual premium of 27 Z. 5s. Gd.to be 
 paid by John Newman, assured unto him the sum of lOOOi 
 to be paid to his executors, administrators and assigns, within 
 six months after his decease. Newman, being indebted to the 
 defendants Joseph Thorpe and J. T. Thorpe and C. H. Thorpe, 
 deceased, by an indenture,' dated the 8th of August, 1820, 
 assigned his policy, together with another' polity of the Lon- 
 don Life Assurance Company, to C. H. Thorpe and- Joseph 
 Thorpe, subject to redemption on the payment of 2,080/. and 
 interest. 
 
 Soon after the execution of the assignment, Newman, hav- 
 ing paid off part of the debt, C. H. Thorpe and J. Thorpe^de- 
 livered up to him the policy effected with the London Life As- 
 surance Company, but retained possession of the other policy, 
 as a security for the remainder of the debt. No notice of the 
 assignment was ever given to the Equitable Assurance Soci- 
 ety. In November, 1821, Newman became a bankrupt, and 
 the plaintiffs were chosen his assignees. The policy was af- 
 terwards sold by auction to Mr. Briggs for lOOQl. Brigga and 
 the auctioneer were made defendants to the bill ; but upon the 
 deposit and balance of the purchase money being paid by 
 them Into Court, and an assignment of the policy being exe- 
 cuted to Briggs by all proper parties, the bill was dismissed 
 as against them. 
 
 The bill alleged that the bankrupt, at the time of his bank- 
 ruptcy, was left in the apparent ownership of the money se- 
 cured by the policy, and that the right thereto thereupon 
 passed to the plaintiffs as the assignees under the commission. 
 The bill prayed that Thorpe might be ordered to join with the 
 plaintiffs in an assignment of the policy to Briggs, and to de- 
 aver it up to him upon payment of his purchase money ; and 
 
 (i) Williams v. Thorpe, 3 Sim. 257. 
 
OP ASSIGNMENT OF POLICIES. 271 
 
 that the plaintiffs, as assignees of the bankrupt, might be de- 
 clared to be entitled to receive such purchase money, and that 
 the same might be paid to them accordingly. The de- 
 fendants by their answer said, that assignments or *160 
 transfers of policies of assurance granted by the Eq- 
 uitable were never entered in any books belonging to that so- 
 ciety, or in any manner noticed by it, and that there was not 
 any rule or regulation of the society for any such entry ; but 
 that all right and interest in and to every policy of assurance 
 was effectually assigned by the delivery of the policy and the 
 usual assignment thereof; that it never was nor is necessary 
 for any person to whom such assignment is made, to have his 
 name entered in any book belonging to the society, or to be 
 in any manner known to such society as the holder of the pol- 
 icy ; that at the time, and on the occasion of the execution of 
 the assignment, Newman delivered to C. H. Thorpe and the 
 defendant Joseph Thorpe the policy effected at the Equitable, 
 and also the other policy ; and that the former policy had con- 
 tinued in the possession of 0. H. Thorpe and J. Thorpe during 
 the life of C. H. Thorpe, and since his decease it had been 
 and then was in the possession of the defendant Joseph 
 Thorpe ; that no notice was given to the Equitable Assurance 
 Company or their trustees or agents of the assignment of that 
 policy, nor was any entry of such assignment made in the 
 books ' of the company, but that Joseph Thorpe had paid to 
 the Equitable the two years annual premium which became 
 dup on the policy in the month of October, 1822 and 1823 ; 
 and that according to the rules and regulations of the Equita- 
 ble, it was not necessary, in order to give effect and validity 
 to the assignment, that the same should be entered in any 
 book belonging to such society, and that, in fact, the Equitar- 
 ble had not any book wherein to enter the assignment of their 
 policies ; and that, when assignments of their policies were 
 made, it was not usual or necessary in any manner to apprize 
 the society of such assignments ; that at the time of issuing 
 forth of the commission of bankruptcy, Newman was indebted to 
 Charles H. Thorpe and J. Thorpe in the sum of 1,400^., being 
 
^S I.AV OF LIFE inttVnAVCK. 
 
 the r«sid(i« thm temmmg doe of th« debt, for the securing 
 of which Newman b»d executed the Msignmeot »Bd deljyered 
 to them the polieies of imwa,nce, and th»t q.t Ui»t tiise 
 *261 the •policy effected with the Equitfthle was ia the 
 handa of 0. H. Thorpe And J- Thoi^ «« » security &r 
 their debt, and that therefore the hanbrapt was not, at H^ 
 time of his bankruptcy, left in th« apparent 4»wn.^«hip of tht 
 policies <^ of the money seeored by it^ aod that the 1%^ 
 thereto did not pass to ^e plaintiffs as the assigneea onler 
 the eommifision ; that thiare was stUl due and owing to J, 
 Thorpe, as haring sarrivect C. H. Thorpe, upon the secorii^ 
 of the assignment, the sum of 1460Z., including the premimai 
 paid on the policy since the assignment. 
 
 The actuary of the Eqnitohle who was examined f^ tiie de- 
 fendants, deposed that it was not ususJ or cns#o)9iaryf and that 
 the regula^aons of the society did not require that, m order t9 
 give effect or validity to the assignments of the^ policien, ootiee 
 should be given of such assignments to the sode^ ; that al'- 
 though notice of as^gi^neiits of policies effected with the ser 
 eiety was sometimes giren to the society, yet the society had 
 not any books or registOTS of «uch notiees. 
 
 For tiie plaintiffs was cited Ex parte Usbora»(a), Ex pivte 
 the Vauxhall-bridge Gompany(i&), Ex pai*e Mm«Q(fi.) 
 
 For ike d«fendants Ex parte Ei<di#rdson(c{-) 
 
 The Vice-chancellor, Sir I«iUscelot ^j»dwelL-'-'*^The (juea- 
 tion in this case is concluded by the decisioiui in the eases iijui 
 have been cited for the plaintiffs ija Ex parte Manror The 
 ■V"ice-iGhancdl(H!(c) says, ' Pjd the 4eliv«'y <rf tiie hand by the 
 bankrupt take away bis power to receive the debt 2' Q^T^vij 
 not.' Supposing that the executor of Newman had obtained 
 parent of the sum insuri^d r^om the oHe^ eoild the o^ 
 fice have been comp^ed to pay it over again to Thorpe? J 
 flee no ground Tiq)on which the office oo(ild have been comp^^ed 
 to make a second payment. M ^s aocdety does not take no- 
 tice of assignmeote, it takes ajj tb0 mk of AUdhcpodnct ppau 
 
 (^ 1 Glyn & Jam. 358. (<0 Ibid. 489. 
 
 (») Tbia. im. <«!) Sic bHni ' 
 
 (c) 1 Buck. 30a 
 
OP ASSIGNMENT OP POLICIES. 273 
 
 itself. It appears to me, that the question that has 
 
 been discussed is concluded by 'authority. Declare *162 
 
 the plaintiffs entitled to the benefit of the policy." 
 
 This decision has since been further corroborated by the fol- 
 lo-(ving, in -which, as some doubts had been expressed as to the 
 correctness of the former opinion, the Vice-Chancellor detailed 
 the grounds and authorities for his decision at length. 
 
 This was a petition(a) by Colvill and Geddes, assignees of 
 a bankrupt. It stated that Benjamin King had, before hia 
 bankruptcy, effected two life policies ; that the commission 
 had issued ; and that after the bankruptcy, Davis claimed to 
 be entitled to the policies or the monies produced by the sale 
 thereof, by virtue of an assignment to him of the policies be- 
 fore the bankruptcy^; that no notice of the assignment of the 
 policies was given to the office until long after the issuing of 
 the commission, and that, under the circumstances, the poli- 
 cies remained in the order and disposition of the bankrupt ; 
 that by an order of the commissioners, the policies and mon- 
 ies thereby assigned were ordered to be sold by public auc- 
 tion ; that at the time the order was made, the petitioners had 
 no ground for suspecting that notice of the assignment had 
 not been given ; that in pursuance of the order of the commis- 
 sioners, the two policies were sold for the sum of 840Z. and 
 640/. ; that the said two sums form part of the separate es- 
 tate of King ; and the petitioners are advised that they, as 
 such assignees, are entitled to receive the same ; that the said 
 Davis died about the month of April, 1830. The petition 
 prayed, that it might be declared that the said two sums of 
 840Z. and 540/. form a part of the separate estate of King, 
 and that the said two sums might be paid to the petitioners. 
 
 The Vice-Chancellor. — " The question is, whether as no no- 
 tice was given to the assurance companies of the assignment 
 of the policies to Davis, although the policies were delivered 
 to him, the monies secured by the policies did or not 
 remain in the order and disposition of the 'bankrupt *163 
 
 (a) Ex parte Colvill and Geddes, re Severn, Kay and Severn. 1 Mont. 110. 
 
 35 
 
274 LA-ff OP LIFE INSURANCE. 
 
 King, -within the meaning of the 72nd section of the 6th Geo. 
 4, c. 16. For the respondents, it is insisted that the aasign- 
 ment of the 1st of July, 1829, accompanied by the delivery 
 of the policies, passed the ■whole beneficial interest to King, 
 and, in support of that, two cases are cited Ex parte Byas, 1 
 Atk. 124, and Falkener, v. Case, 1 Bro. 125, 2 T. R. 491 (a). 
 It is to be observed, however, that in Ex parte Byas, it is not 
 stated whether notice was given to Mrs. Devereux before Han- 
 kell's bankruptcy of the delivery of the note to Byas ; nor 
 in either of the reports of Falkener v. Case is there any state- 
 ment made as to the notice given to the underwriters. Indeed 
 it must be inferred, that in neither of the cases was notice 
 given to the persons legally liable to pay ; and it appears that 
 both cases were decided without any question being raised 
 upon the effect of there being no such notice. According to 
 the report in 2 T. R. 494, the Lord Chancellor admitted that 
 if the question had been concerning a bond or any chose in 
 action that had remained in possession of the bankrupt at the 
 time of the bankruptcy, it would have been within the statute 
 of James, just as if the possession of Barclay, the broker, of 
 the policy, subject to his own claim and lien, was not the pos- 
 session of the bankrupt. In p. 495, the Lord Chancellor is 
 made to say that there was not a scintilla of property in the 
 bankrupt ; though a few lines above, his Lordship states truly, 
 that his right was merely equitable to redeem from Barclay. 
 The decision in Row v. Dawson, 1 Ves. 331, does not affect 
 the present question, because there the draft, which Lord 
 Hardwicke said amounted to an assignment, was deposited 
 with the officer Swinburn, and therefore, attached immedi- 
 ately upon it ; so in effect, there was notice given to the per- 
 son liable to pay. ' In Ex parte Smith, Buck, 149, it does not 
 appear that the policy of insurance ever was assigned at all, 
 
 and, in fact, the goods insured were destroyed before 
 *164 the bankruptcy, so that *the question in that case 
 
 never did or could arise ; and in Ex parte Richardsoin, 
 
 (o) This case is more fully reported in 2 Term. R. from a MS. produced by 
 Ashhurst, J. 
 
OP ASSIGNMENT OP POLICIES. 275 
 
 Buck, 480, the present Master of the Rolls held, upon the cir- 
 cumstances of the case, that the stock was not in the order of 
 the bankrupt with the consent of the true owner. Whether 
 that inference was rightly drawn, it is not necessrry to dis- 
 cuss ; but I think the learned Judge did not mean to overrule 
 his own decision, in the preceding year, of the case Ex parte 
 Monro {a). Sir T. Parker in Ryal v. Rowles, 1 Ves. 367, 1 
 Atk. 177, lays down the rule, that if a bond is assigned, the 
 bond must be delivered, and notice must be given to the debt- 
 or ; but in assignments of book debts notice alone is sufficient, 
 because there can be no delivery. Only two months before 
 this was stated by Sir Thomas Parker, Lord Hardwicke had 
 decided Row v. Dawson, in which he alluded to the case of 
 Ryal V. Rowles, as being then under the consideration of the 
 Court, and stated it was made a question how far the assign- 
 ment of a bond should be supported against assignees under 
 the commission. Yet Lord Hardwicke allowed the statement 
 of the rule by Sir T. Parker to pass without observation. It 
 is reasonable, therefore, to suppose that he thought it correct. 
 In Jones v. Gibbons, 9 Ves. 410, Sir Wm. Grant alluding to 
 Sir T. Parker's rule, says, " it might, perhaps, have been made 
 a question whether after assent and delivery of the security to 
 the assignee, the bankrupt could be said to have the order and 
 disposition merely because there was no notice to the debtor 
 of the assignment. Probably that requisite was added, as 
 otherwise the debtor might safely pay the money to the per- 
 son who had, without his knowledge, ceased to be his creditor- 
 The debtor would be bona fide in making the payment, and it 
 would be impossible to make him pay again. Sir Thomag 
 Parker lays it down certainly that there must be that notice. 
 In Ex parte Monro re Frazer, Buck, 300, the question that is 
 now before me came before the present Master of the Rolls. 
 The bankrupt being the obligee in a bond, and being 
 •indebted to Monro, as a security for the debt, assigned *165 
 the bond to him, and also delivered the bond into his 
 possession, but notice of the assignment of the bond debt was 
 
 (ffl) 1 Buck 300. 
 
276 LAW OP LIFE INSURANCE. 
 
 giyen to the obligor. A commission issued, and money due 
 on the bond having been paid, under an arrangement, the 
 question was raised whether Monro or the assignees in the 
 bankruptcy were entitled, and his Honor decided that the as- 
 signees under the commission were entitled. He said, ' in 
 this case did the delivery of the bond by the bankrupt, take 
 away his power to receive the debt ; and if the obligor had bona 
 fide paid the debt to the bankrupt, could the petitioner have 
 called upon him to repay it ? Certainly not ; and if an ac- 
 tion had been brought on the bond(a) against the obligor, he 
 might have discharged it by way of set-off. In respect of any 
 dealings with the bankrupt, without notice of the assignment, 
 I find the practice of the commissioners has been conformable 
 to the rule stated in Ryal v. Rowles. . The absence of any de- 
 cision to the contrary since the time of Lord Hardwicke, shows 
 that rule to have been acquiesced in, and I think rightly ; for 
 the obligee, where notice is not given, may obtain payment of 
 the debt, which is sufficient to leave it in his ordering and dis- 
 position within the meaning of the statute.' The same prin- 
 ciple is, in effect, acknowledged in Ex parte Burton v. Fos, 
 sett, and Ex parte Osborne re Baker, 1 Glyn &, James. 207, 
 358, where book debts due to the assignor, being assigned 
 without notice to the debtor, were held to belong to the as- 
 signees in bankruptcy of the assignor. I no otherwise notice 
 the decision in Williams v. Thorpe, 2 Sim. 257, which was pre- 
 cisely upon the point now before me, than to observe, that there 
 has not been any appeal fi-om it. It was made some months 
 before the late Lord Chancellor decided the cases of Dearie ■»• 
 Hall, and Loveridge v. Cooper, upon Appel, 3 Russ 1. These 
 cases, decided first by Sir T. Plumer, and afterwards by Lord 
 
 Lyndhurst, have established, that where there is an 
 *166 'assignment made of a trust fund, of which no notice is 
 
 given to the trustees, it shall be void in equity as 
 against a subsequent assignment, of which notice is given to 
 the trustees. With respect to those two cases I must observe, 
 
 (a) For " by," in Mr. Montague's Report, read " against." See Mr. Buck's 
 Report of Ex parte Monro, 300. 
 
OP ASSIGNMENT OP POLICIES. 277 
 
 that Cooper v. Fynmore, 3 Russ. 60, which follows them, was 
 not noticed in the argument.. It could not have been noticed 
 by me with any effect, because my note does not contain the 
 fact, that notice of the assignment was actually given, though 
 that circumstance appears upon Mr. Russell's report. It does 
 not appear whether the point was much argued in Cooper v. 
 Fynmore, but it was repeatedly and most laboriously argued 
 in Dearie v. Hall and Loveridge v. Cooper. It is clear, that 
 by the assignment of the 1st of July 1829, the bankrupt 
 parted with no legal right to the fruit of the policy. If he 
 had assigned the policies to a second incumbrancer, and his 
 executors had concurred in allowing payment of the proceeds 
 to the second incumbrancer, that payment would have been 
 good. K King after the assignment to Davis, had sold his 
 interest in the policies to the insurance office, his release to 
 them would have been good, and altogether defeated the claim 
 of Davis. If the policies had been lost by Davis, and King 
 had assigned his interest in the proceeds to a second incum- 
 brancer, and had given notice of that assignment, according 
 to Dearie v. Hall and Loveridge v. Cooper, the second incum- 
 brancer would have been entitled. King, therefore, might 
 have sold and released the policies, notwithstanding the as- 
 signment to Davis ; and I am of opinion, both upon prec- 
 edent and principle, that the order of the commissioners is 
 wrong, and that the policies did, at the time of the bankrupt- 
 cy, remain in the order and disposition of King within the 
 meaning of the statute. His assignees, therefore, are entitled 
 to the proceed8"(a). 
 
 (a) This case has been affirmed upon appeal by Lord C. Brougham. The 
 petition also contained the allegation that the said insurance offices do not, nor 
 does either of them require any notice whatever to be given to tliem respect- 
 ively of the assignment of any policy of insurance effected with such offices 
 respectively j and if such notice be given, the same is not in any manner entered 
 or recorded by the said offices, or either of them. This case is reported by the 
 name of Ei parte Tennyson, re Severn King and Severn, Mont. & Bligh, 67, 
 and see Bozon and Bolland, there reported more correctly. 
 
278 LAW OF LIFE INSURANCE. 
 
 *167 "The decisions upon this point have, it is said, given 
 much dissatisfaction to the,mercantile world. This spe- 
 cies of security by assignment of policies is frequently resorted 
 to,but the party assigning is not desirous that a fact,tending to 
 affect his credit, should acquire that notoriety which notice to 
 a public office may have the effect of giving it. If it is to be 
 assumed as a principle of law, without exception, that in all 
 cases of assignments of choses in action notice must be given 
 to the debtor, obligor, covenantor, or trustee, in order to make 
 the assignment available to all intents and purposes as against 
 third persons, the doctrine of the preceding cases is incontro- 
 vertible; however, bills of exchange, and promissory notes, 
 appear to be an exception to this rule. Upon principles of 
 public policy the general doctrine may be sound and whole- 
 some ; at the same time it may with deference be inquired, 
 whether the analogy assumed to exist between bonds and polir 
 cies of insurance has not, in these cases, been carried rather 
 farther than the nature of the several contracts will warrant? 
 It has been repeatedly held, both at law and in equity, that a 
 policy of insuranance is an indemnity, an aversio pericuU. 
 In the case of nominee insurances made for short periods, as 
 to secure a debt, they are obviously indemnities; and even in 
 the ordinary case of a person insuring his own life, a policy 
 is in the nature of an indemnity/ to his family against the hss 
 which might be sustained by his death. Policies of insurance 
 have sometimes also been placed upon the footing of wagers, 
 and they very much resemble a species of wager not uncom- 
 mon in the mercantile world, viz. a periodical payment to be 
 made by one party until a certain event happens, upon the 
 condition of receiving a sum of money from the other party 
 upon the happening of the event. An indemnity is a secu- 
 rity against future loss or damage, whilst a debt is a sum of 
 Tnoney due and owing. Any payment under an indemnity 
 
 is contingent, both as to time and circumstances ; upon 
 *168 *a debt it is certain and imanediate, consequently the 
 
 grounds of the necessity of notice in the case of a debt 
 due in praesenti are obvious. According to natural reason, no 
 man would accept as a security from A., or give valuable con- 
 
OP ASSIGNMENT OP FOLICIKS. 279 
 
 sideration toA. for an assignment of a debt actually due and 
 owing to him from B., unless notice be forthwith given to B., 
 because, if notice be not given, A. may still recover the debt 
 as soon as he pleases ; but the case is very different upon a 
 policy ; until the event happens upon which payment is to 
 be made, no debt has accrued, and therefore the debtor could 
 not have been called upon to pay to .the wrong person. 
 
 With reference to the objection that the insured or party 
 effecting the policy may release the oflSce, unless notice be 
 given, it may also be remarked, that the ofiSces are not in the 
 habit of dealing with policies, either by payment upon a loss 
 happening, or by accepting a release, whether with or with- 
 out a consideration, without also calling for a delivery up of 
 the policy. Nor do they dispense with such delivery up, even 
 npon a suggestion of the loss of the policy, without satisfac- 
 tory evidence of the loss coupled, in general, with an indem- 
 nity. Thus the danger arising from the possible release by 
 the holder of a policy, who has already assigned and handed 
 over the policy, is speculative ; an oflSce would scarcely give 
 valuable consideration for the release of a policy, which could 
 not be delivered up, and if it did so without a satisfactory 
 cause, it might be placed in jeopardy, and possibly have to 
 pay upon it notwithstanding, as the non-delivery of the policy 
 should excite suspicion, that the holder has parted with it. 
 If the ofice accepted a release without consideration, and with- 
 out the delivery up of the policy, the presumption would still 
 be stronger, that the office was dealing improperly with a per- 
 son, who had in &ct no right to deal with it. 
 
 The point however may now be considered as settled by nu- 
 merous authorities ; and it is scarcely possible that any au- 
 thority but an act of the Legislature, can alter the law as it 
 stands. The doctrine of the Vice-Chancellor of Eng- 
 *169 land, *in Ex parte Colvill, has been confirmed by various 
 decisions of successive Lord Chancellors and other 
 Judges, though not without a struggle ; a late Judge in bank- 
 ruptcy. Sir John Cross, evidently disapproved of the rule, and 
 endeavored to relax or escape it ; and V. C. Wigram, in the 
 recent case of West v. B,eid(a), expresses something not on- 
 
 (a) 2 Hare, 249. 
 
280 
 
 LAW OF LIFE INSURANCE. 
 
 like disapprobation of it, though concluded by previous author- 
 ity from deviating from it ; and in Burridge v. E,ow(a), V. C. 
 Knight Bruce appears to lend an unwilling assent to the doc- 
 trine. In Ex parte Rose(6), we find Sir John Cross disposed 
 to hold notice to be a question of fact, and that the assignees 
 in bankruptcy disputing an assignment of a policy, ought to 
 sustain the onus of showing by evidence that the bankrupt 
 was the reputed owner. In Ex parte Smith(c), and Ex parte 
 Heathcote(6f), he appears to' have entertained the same opin- 
 ion ; and it would certainly appear to a person looking at the 
 matter nierely upon the principles of reason and common 
 sense, that in this and some other points arising upon order 
 and disposition and reputed ownership in bankruptcy, the 
 law has gone to that point of extreme justice, which frequently 
 amounts to injustice ; nor does there appear to be anything so 
 sacred or magical in the words " chose in action," that an in- 
 strument, although by strict legal rule falling within that de- 
 scription, an instrument unknown and not contemplated when 
 the description was first introduced, should never be modified 
 as to its legal bearings and relations, by the rules of plain 
 reason and the exigencies of society. 
 
 Not only is notice of assignment necessary to take the pol- 
 icy out of the order and disposition or ownership of the as- 
 signor, in case he becomes bankrupt, but the notice must be 
 express and not merely implied or constructive, as in 
 *the cese where the insured by the rules of an office, *170 
 partakes of the profits of the business, and thus is, in a 
 strict sense, a partner with the insurers. Notice, however, 
 need not be of necessity in writing, though it is the safer course, 
 as being more easily capable of proof. 
 
 The first case in which this point appears to have been put 
 forward is that of Duncan v. Chamberlayne(e), it was the case 
 
 (a) 1 Younge & Coll. 101. 
 
 (i) 2 Mont., D. & D. 137. 
 (c) Id. 217, 219. 
 id) Id. 711. 
 (e)ll Sim. 123. 
 
OF ASStaNMENT Of f>OLICIEfl. 281 
 
 <^a policy in the Equitable Office, in trhich society the profits 
 are divided in certain proportions between the insnrers and 
 the insured. The point appears not to have been touched 
 upon until some time after the principal hearing was conclu- 
 ded, and as appears by the Vice-Chancellor of England's 
 statement, in the recent case of Thompson v. Spiers(a), his 
 Honor decided, that such constructive notice in the former 
 case was sufficient to protect the assignment, only in conse- 
 quence of its being so admitted or taken for granted by both 
 parties. This point was also raised in Ex parte Smith (6), on 
 appeal to the Lord Chancellor (Lyndhurst), but under the cir- 
 cumstances was not decided, as the case turned upon another 
 point, and his Lordship stated, that it was to be understood that 
 he did not decide the case upon this point. However, the Vice- 
 Ohancellor of England has not distinctly held, after argument, 
 in Thompson v. Spiers, that an express notice must be given, 
 in order to be eflfectual. There are other cases decided by 
 Bir John Cross, who was always disciplined to the doctrine 
 of the necessity of notice at all, adopting the argument in 
 &vor of constructive notice in the case of mutual insurance 
 offices, but which must now be considered as(c) overruled upon 
 that point. 
 
 •The case of West v Reed(d), was of a more special *171 
 nature ; it merely decided that a certain act done by 
 the solicitor of the assignee of the policy was not to be deemed 
 a valid notice as against the assignees in bankruptcy. It ap- 
 pears that A. assigned a policy of insurance upon his life, to a 
 trustee, as a security for a sum of money owing to B. Soon 
 after, the solicitor of B. procured a memorandum to be entered 
 at the insurance office, purporting that all letters were to be 
 
 (a) 13 Sim. 469, and Ex parte WiUdnson, Ibid., by the C. J. in Bankniptcy. 
 The Lord Chancellor of Ireland was of the same opinion in the case of Ex 
 parte Henessy, I Connor &, L. 559 ; 2 Dm. & W. 553. 
 
 (i) 2 Mont, D. & D. G. 219, and see Ex parte Arkwright, 3 MonL, D. & 
 D. G. 129. 
 
 (e) See Ex parte Rose, 2 Mont., D. &. D. Q. 131 ; Ex parte Smith, Id. S17. 
 
 (<i) 3 Hare, 249. 
 
 86 
 
282 LAW OF LIFE INSURANCE. 
 
 sent to such solicitor. The premiums were from that time 
 paid by B., through the hands of the solicitor ; but the office 
 was not informed on whose behalf the solicitor acted. Some 
 time after A. became bankrupt, and it was held by Vice^Chan- 
 cellor Wigram, that this was not a sufficient notice, and that 
 the policy was in the order and disposition of the bankrupt at 
 the time of the bankruptcy. 
 
 But no precise form of notice is required ; reasonably sub- 
 stantial notice to the office is sufficient. 
 
 In Ex parte Stright(a), the depository or equitable mortga- 
 gee of two policies, wrote to the office, stating, " I am holder 
 of the undermentioned policies ;" he then went on to inquire 
 what the office would give if they were delivered up ; and at 
 foot he stated the dates and particulars of the policies. The 
 Court of Review, then composed of three Judges, all concur- 
 red in holding that the notice was quite sufficient, and expres- 
 sed themselves rather strongly upon the objection to it. 
 
 In Ex parte Arkwright(6), the, Lord Chancellor (Lyndhurst), 
 considered notice to be a question of law, whilst Sir John 
 Cross always deemed it to be a question of fact. Without 
 doubt there may be cases in which it may be a question of fact 
 as well as law ; in other words, it may be a question of fact 
 and law, whether a bankrupt can be deemed a reputed owner 
 with reference to the point of notice. Thus in Edwards 
 *172 V. Scott(c), an action of trover was brought by *the as- 
 signees of A., a bankrupt, for a policy on his life. In 
 1836, the policy had been deposited by A. with the defend- 
 ant, as a security for an advance. In March, 183T, A be- 
 came embarrassed, and a meeting of his creditors was called. 
 At this meeting a list was read aloud of his debts and handed 
 round the room ; the list contained a statement that the policy 
 in question was deposited with the defendants as a security 
 for 3000Z., from which sum 1200Z., the estimated value of the 
 
 (ffl) 3 Mont., D. & D. a 142. 
 
 (b) 3 Deac. & Chiu 314. 
 
 (c) 1 Mann. & G. 962. 
 
OP ASSIGNMENT OP POLICIES. 283 
 
 policy, -was deducted, leaving the defendants creditors for the 
 balance. On the 15th of July, 1837, an agent of the defend- 
 ants called at the insurance office, and asked if the prendums 
 on the policy had been paid, at the same time stating that the 
 policy had been deposited with the defendants. On the 27th 
 of July 1837, the fiat in bankruptcy was issued ; the insur- 
 ance company kept a book for the purpose of entering written 
 notices of assignments and deposits of policies ; but the book 
 contained no entry with respect to the policy in question ; the 
 insurance company, as they stated, did not regard verbal no- 
 tices and it was held, that a direction by the Judge, that the 
 defendants had got rid of the apparent ownership of A. by 
 that which passed at the meeting of the creditors, and by the 
 oonversation at the office, though not followed up by writing, 
 was wrong ; and that it was a question for the jury, whether 
 A. was the reputed owner of the policy at the time of the 
 bankruptcy ? 
 
 The above doctrine of notice will equally apply, even in a 
 case where the bankrupt is a mere mortgagee or depositary of 
 the instrument, and has subsequently deposited it with a third 
 person by way of security. In Ex parte Arkwright(o), the 
 bankrupts were equitable mortgagees of several policies, and 
 the respective offices had notice of the fact, so that the title 
 of the bankrupts was perfected ; the bankrupts afterwards de- 
 posited them with their bankers, to secure the repayment of 
 advances ; no notice of such second deposit was given, 
 and the fiat issued j and it was held by *the Chief *173 
 Judge in Bankruptcy, that the policies were in the 
 order and disposition of the bankrupts. And the same rule 
 has been held where no notice has been given to the respect- 
 ive offices, either of the first or of the second deposit. Thus 
 in Ex parte Wood(6), a mortgagee of a policy created an equit- 
 able sub-mortgage, as in the preceding case, and became bank- 
 rupt : no notice of the original mortgage was given to the office» 
 nor of the sub-mortgage, either to the office or the original mort- 
 
 («) 3 Mont. D. & D. G. 129. 
 (A) Mont, D. & D. G. 315. 
 
284 LAW OF LtFB mSCRANCE. 
 
 gagor ; and the sub-mortgage was held to be invalid as against 
 , the assignees in bankruptcy. It was pressed by the counsel 
 for the petitioners, that there was a material distinction be- 
 tween this case and Ex parte Arkwright ; namely that in this 
 case, as no notice to the office had been given of the original 
 mortgage, the bankrupt's title was imperfect, and that he could 
 not be deemed to be the reputed owner of the policy ; but the 
 Chief Judge did not adopt the distinction. It does not ap- 
 pear from these cases what was the precise interest which the 
 assignees in bankruptcy were held to take in the policies in 
 these cases : it may be inferred that it was only the interest 
 which their bankrupts had ; namely, a mortgage interest, and 
 subject to redemption. 
 
 If notice of assignment be given to the office, before the is- 
 suing of the fiat, though after the act of bankruptcy, the trans- 
 action will be valid, provided the party entitled under liie as- 
 signment has no notice of the act of bankruptcy ; and this 
 protection arises under the stat. 2 & 3 Vict, c 29. Ex parte 
 Bose(a) was a case where the notice was given before the is- 
 suing of the fiat, but after an act of bankrupt<^, without no- 
 tice of such act, and the 11th section of stat. 2 & 3 Vict. c. 
 12, was relied on. That section, however, does not appear 
 strictly to apply ; the decision was made upon another pointy 
 
 but in a case of like circumstances. Ex parte Smith(6)) 
 "174 on appeal to the 'Lord Chancellor (Lyndhurst), his 
 
 Lordship held, that the depositary of the policy had a 
 good title against the assignees in bankruptcy, and that by 
 virtue of the stat. 2 & 3 Vict. c. 29 ; the words of the section 
 are, " all contracts, dealings, and transactions by and with any 
 bankrupt, really and bona fide made and entered into before 
 the date and issuing of the fiat, against him, and all execu- 
 tions and attachments against the lands and tenements, or 
 goods and chattels of such bankrupt, bona fide executed or 
 levied, before the date and issuing of the fiat, shall be deemed 
 to be valid, notwithstanding any prior act of bankruptcy by 
 such bankrupt committed : provided the person or persons 
 so dealing with such bankrupt, or at whose suit or on whose 
 
 (a)2Mont. D. &D. G. 131. (J) Ibid. 219. 
 
OF ASSIGNMENT OF POLICIES. 285 
 
 acconnt such execution and attachment shall have issued, 
 had not at the time of such contract, dec, or at the time of 
 executing or levying such execution or attachment, notice of 
 any prior act of bankruptcy committed." The section con- 
 tains a proviso against fraudulent preference. 
 
 It is understood to be the usual practice of the offices to pay 
 the holder of the policy who effects a nominee insurance, or 
 the personal representatatives of the party effecting the pol- 
 icy upon his own Kfe, or if it has been assigned, to the holder, 
 •with the consent of such personal representatives, or of the 
 party effecting the insurance, as the case may be. If the deed 
 of assignment gives the assignee a power to give discharges, 
 the offices usually dispense with the consent of the personal 
 representatives. The doctrine of Dearie v Hall and Lover- 
 idge V. Cooper(a), must be held to affect payments upon poli- 
 cies, and offices will be frequently placed in an embarrassing 
 situation, and perhaps be compelled to drive the parties to in- 
 terplead. Sy these cases it was held that the subsequent as- 
 signee in a chose in action (a trust fund), who gave notice to 
 the trustee, should be preferred to a prior assignee who neg- 
 lected to do so. If a party, therefore, takes a policy as a de- 
 posit, accompanied by a regular assignment, if he does 
 not give notice to the office, which *may be considered '175 
 as trustees or debtors, he will be subject to be post- 
 poned to a person holding a subsequent assignment, who does 
 give notice. The second assignee will in equity be considered 
 entitled to the proceeds of the policy, although he is not in 
 possession of it, and cannot deliver it up to be cancelled, (the 
 rule of most offices upon paying upon a policy,) whilst the 
 first assignee with the policy in his hand, and although fur- 
 nished with the consent of the insured, will not be entitled to 
 receive upon it. It may be presumed that in such a case an 
 office would not pay to one or the other without an ample in- 
 demnity. 
 
 The 67th sect, of the Insolvent Debtors' Act (1 «k 2 Vict, 
 c. 110) adopts the language of the Bankrupt Act so closely 
 
 (<t) 3 Ross, 1. 
 
286 LAW OF LIFE INSURANCE. \ 
 
 upon this subject that there can be little doubt that the doc- 
 trine of the above cases, respecting notice of assignment must 
 be considered to be applicable to cases of insolvency. 
 
 No part of the business of an insurance office, as regards 
 the law, requires more care and attention than that relating 
 to assignments of life policies. Upon the simple principle of 
 the right of the creditor to insure his debtor's life, or of what 
 is the same in effect, upon policies effected by the debtor and 
 assigned to his creditor, a large part of the business of a life in^ 
 surance company depends. Some offices of great respectability 
 struggled for a time against the effect of the equitable doctrine 
 of notice of assignment, on the ground that by their rules they 
 were not bound to recognize trusts, and only looked to the le- 
 gal owners of the policy ; but the courts of equity said that 
 they must at their peril recognize or refuse to recognize such 
 notices or trusts. 
 
 Offices also have frequently to- consider the laws of foreign 
 countries. In the prevailing. intercourse with the states of 
 Europe and elsewhere, foreigners or Englishmen residing 
 abroad frequently effect policies ; the good faith usually prac- 
 ticed, and the large funds possessed by the English offices 
 have induced many foreigners of the states of Europe, and 
 elsewhere to effect insurances here. The contract between 
 the insurers and insured, being in English form, is compar- 
 atively plain and simple ; but it frequently happens 
 •176 *that the foreigner or Englishman abroad assigns his 
 policy to another, a foreigner by the law of the coun- 
 try where the assignment takes place — ^for the assignment is 
 as between the parties a new contract, and being personal must 
 be governed by the law of the country where it is made. Thus, 
 when a claim is made upon the office by the assignee or holder 
 of the policy, the office has to consider the validity of the as- 
 signment according to the law of such foreign country, both 
 as regards the instrument itself and the stamps or duties, if 
 any are payable(a]. 
 
 (a)The subject of stamps on foreign instruments frequently renders a very 
 accurate inquiry necessary. The laws are sometimes of an arbitary and eccen- 
 
OP ASSIGNMENT OP POLICIES. 287 
 
 It may only be here remarked, that as the contract was 
 originally only between the insorers and insured, by a well 
 nnderstood contract, an office has a right to expect the fullest 
 information and advice from competent authority upon the le- 
 gal validity of snch assignments, and to throw the expense 
 Kpon the assignee. 
 
 Some offices are in the habit of advancing small loans upon 
 the security and deposit of policies effected with themselves. 
 In such a case, of course, no question of notice can arise. 
 
 tnc form. The Bi B uwii ^ case has latefy oeeoned in the aothcn's experience. 
 A sobject «f Denmaik canie to Londoii to reeeiTe monies on a claim opon an 
 iosoiBnee i^oe ; he daimed for himself and aDother trader em aaagamoA cS a 
 policy made at Hambmg^, bearing the pn^ier stamp, but he produced a letter 
 of attorney as on behalf (£ the other party bearing no stamp. It vas not de- 
 nied that in general a stamp was necessary, but it was alleged that the party 
 r^moi^ it in Holsden was owner of a noble estate, thoeby exemptiog the 
 owDia fiom payment of all duties, taxes, and eren costoms. Upon inquiry of 
 the Danish cobsoI and other anthocities, it was &»nd that this statement vaa 
 
CHAPTER VI- 
 
 OF THE ATTACHMENT OF EftUITIES OK POLICIES OF IN- 
 SURANCE ON LIFE IN FAVOR OF THIRD PERSONS. 
 
 1. In general no Equity infapor of Third Persons. 
 
 2. Equity attaches in cases of Trust, 
 
 3. Liens for Premiums paid. 
 
 1. Policies of insurance, as well on life as on fire, are sep- 
 arate and distinct contracts between the insured, or party 
 effecting the insurance, and the insurers, and made for the 
 sole benefit of the insured, or party effecting the insurance, 
 whatever may be the nature of the intererst covered by it ; 
 and unless there be some contract or agreement, or trust, 
 express or implied, between the insured, or party effecting 
 the insurance, and third persons, the latter can have no 
 more right in a Court of equity than in a Court of law to 
 affect the proceeds of the policy in the hands of the insu- 
 red (1). 
 
 Susannah Baker (a), in consideration of 1150Z., assigned 
 certain premises, called Pond Farm, to Law, for ninety-nine 
 
 (o) Watson v. Brutton, MS. Feb. 24, 1830. 
 
 (l)But where a creditor effects a policy in his own name upon the life of his 
 debtor, and charges the premiums to the account of the latter, who pays them, 
 the creditor will hold the policy merely as collateral security for his debt, and 
 when that is paid the policy will belong entirely to the debtor. SoUand s. 
 Smith fiEsp. II. 
 
, OF THE ATTACHMENT OF EQUITIES. 289 
 
 years, if she should so long live, subject to redemption, and 
 Law subsequently assigned to Collier. S. Baker with other 
 necessary parties, afterwards conveyed the said premises, with 
 others, in fee, to certain persons as trustees to sell. The 
 trustees agreed to sell the equity of redemption of Pond Farm 
 to Collier, to whom it had been assigned as aforesaid during 
 the life of S. Baker, for 48Q01. Law, to whom the life- 
 interest of S. Baker in the premises had been 'originally *178 
 assigned, had insured S. Baker's life, to secure himself 
 from loss in respect of the money advanced, and subsequently 
 assigned the policy to Collier, who kept it on foot, and also effect- 
 ed another policy on S. Baker's life for 700Z., and on the death 
 of S. Baker received the sums due on both policies. Collier 
 agreed to pay the 4800Z. on the 29th of September then next 
 (1819), provided, that in case S. Baker should be living at the 
 time of the payment of the purchase-money. Collier should be 
 allowed 1150Z. thereout (the value of the life-interest previ- 
 ously paid). In case any unforeseen occurrence should prevent 
 the conveyance of the said premises from being executed by 
 the 29th of September, Collier was to pay interest on the 4800Z., 
 subject to such deduction as aforesaid, from the 29th of Sep- 
 tember until the completion of the purchase. If Collier made 
 default, the conveyance being ready on the 29th of Septem- 
 ber, a penalty, as liquidated damages, was to be paid, and the 
 contract was to be void. Delay took place in the conveyance 
 untU after the 29th, but without the default of Collier : S. 
 Baker lived over the 29th of September, and died in 1822. 
 
 It was submitted by the plaintiffs, who were the assignees 
 under the insolvency of the eldest son and heir at law of S. 
 Baker, (and also tenant in fee under a settlement,) that if 
 Collier was entitled to be allowed the 1150Z., that they were 
 entitled to stand in his place as to the sums recovered upon 
 the policies. But the Vice-Chancellor held, 1st, That upon 
 the contract with Collier, the 29th of September was the period 
 upon which the contract for the conveyance was to be comple- 
 ted, and that Susanna Baker having survived that period. 
 Collier was entitled to the 1150Z. to be allowed on that event, 
 37 
 
290 LAW OP LIFE INSURANCE. 
 
 and that lie was also entitled to the llOOZ. secured upon the 
 policy, no equity attaching upon it in his hands in favour of 
 the plaintiffs. 
 
 The case of a tenant for life of premises insuring from fire, 
 and afterwards burnt down, was pressed in argument,and it was 
 urged that the tenant in remainder might have an equity 
 *179 to compel a tenant for life to rebuild, or at least to *be en- 
 titled to the proceeds of the policy for that purpose, on 
 payment of the premiums and interest ; but the Vice-Chan- 
 cellor answered, that the point had never been decided, but 
 that he thought there was no such equity (a). 
 
 2. Where however, a contingent interest is assigned in trust 
 by way of security for a debt, and the assignee insures in res- 
 pect of the contingency, and upon its happening receives the 
 sum insured, it has been held, that, upon the bankruptcy of 
 the debtor, the sum so recovered must be deducted from the 
 proof, for an equity attaches upon it in the hands of the assignee 
 as a trustee (6). S. E. was indebted to C. E. and T. E., and 
 being entitled in right of his wife to 400Z. and upwards in the 
 •event of her surviving her mother, he and his wife assigned 
 to C. E. and T. E. that contingent interest upon trust after 
 payment of their costs and expenses, to retain their debts, or 
 as far as it would extend, and to pay the surplus, if any, to S.B. 
 The debts owing to them respectively exceeded the amount of 
 the contingent interest After the execution of the deed, C. E. 
 and T. E. at their own expense, and without the privity of 
 S. E., effected policies of insurance in 200/. each on the life 
 of the wife ; the wife died, and C. E. and T. E. received the 
 amounts of their respective insurances- Shortly afterwards 
 a commission of bankruptcy issued against S. E., and C. E- 
 and T. E., being both of them creditors of S- E. beyond the 
 amount which it was the object of the assignment to cover, sev- 
 erally proved the whole of their debts under the commission, 
 without noticing or deducting the two sums of 200Z. each re- 
 ceived upon the insurance, and this was a petition to expunge 
 
 (o) See Leeds v. Cheetham, 1 Sim. 146, ante, p. 165. 
 (A) Ex parte Andrews, 2 Rose, 410 ; 1 Mad. 572, S. C. 
 
OP THE ATTACHMKNT OP EQUITIES. 291 
 
 those sums from their proofs. In support of the petition 
 Godsal V. Boldero was cited (c). The Vice-Chancellor (Sir T., 
 Plumer). — " Upon the argument this case was assimi- 
 lated to that of Godsal v. Boldero, *of which it is the *180 
 converse ; here the party has recovered not his debt, 
 but the value of the risk insured by his policy. But it said, 
 that inasmuch as in that case the transactions werp blended, 
 payment by the executors absolving the oflSce, so, e converse, 
 payment by the office discharges the debt ; it does not, how- 
 ever, necessarily follow, from the Court deciding that the 
 party, having been paid by the executors, could not recover 
 from the office, that it could not recover from the executors. The 
 contract with the insurance office is a contract of indemnity, 
 legal only as an indemnity commensurate with the interest of 
 the insured. The contract is an indemnity from loss, and there 
 was no loss ; that case, therefore, though it bears upon this 
 question, does not conclude it. Another point arises on the 
 assignment, which must decide this case. The assignment has 
 placed C. E. and T. E. in the situation of trustees. The 
 bankrupt and his wife conveyed their contingent interests 
 to them as trustees to act for them, with indemnity against 
 expenses, and covenanting not to interfere, in short, ex- 
 pressly transfering their whole right and title. From the 
 date of this instrument, the bankrupt and his wife could 
 not themselves have insured in respect of their property ; 
 they no longer had an insurable interest. The trustees 
 acting in part for themselves, in part for the bankrupt, do an 
 act beneficial to both parties, at their own expense ameliora- 
 ting the property, laying out money for the benefit of them- 
 selves and their cestui que trust. The result of the act isj 
 that the estate is benefited 400?. — shall they be allowed exclu- 
 sively to appropriate this benefit ? It is clear that a trustee 
 never can use to his own benefit the property committed tq 
 his trust ; as in the common instance of the renewal of a lease. 
 Although it appears that the lessee would not have renewed 
 with the cestui que trust, yet the trustee makiug a contract for 
 
 (c) 9 East, 72, ante, p. 238. 
 
292 
 
 LAW OP LIFE INSURANCE. 
 
 himself and with his own money, cannot set up a title adverse 
 to that he has undertaken to protect. That is not precisely 
 the present case, because here the insured had an insurable 
 interest ; but they had it subject to all the jealousy with 
 *181 which the Court 'regards a trustee acting on the pro- 
 perty for his own benefit. They never would have insur- 
 edjunless the property had been assigned to them. The means, 
 therefore, of acquiring the sum received from the insurance 
 office, originate with the bankrupt and his wife. They divest 
 themselves of all dominion over it, by committing it to trus- 
 tees. It is extremely difficult to maintain that they as trus- 
 tees being allowed this payment, are not to account for it as an 
 advantage made of fiduciary property, acquired partly by their 
 own act and partly by the act of the bankrupt. Having thus 
 by the act of the bankrupt been enabled to obtain part of their 
 debt, they cannot prove the whole. They must account. 
 Being allowed what they have expended, including the pre- 
 miums, the surplus must be deducted from the proof. 
 
 3. Questions sometimes arise as to the cases in which and 
 to what extent a person paying the premiums upon a policy 
 for another, can gain a lien upon, or property in the proceeds 
 of the policy ; and it seems that a simple voluntary payment 
 of premiums by a third person, although the effect has been to 
 keep the policy from failing altogether, will not give a lien 
 upon or interest in the proceeds. There must be some con- 
 tract or agreement express or implied with trustees or other 
 persons having the right to contract to create such a lien or 
 title ; though probably such a payment would create a simple 
 contract debt, in most cases, as against the person who ought 
 to have paid the premiums. 
 
 In Burridge v. Row (a), it was held that a person, a mar- 
 ried woman, not bound to pay the premiums, though having 
 an interest, or supposed interest, in the policies, paying them 
 out of her separate or proper estate, was entitled to a lien for 
 the amount paid, and for interest on them (6). It appears that 
 
 (ffl) See V. C. Knight Brace's remarks, in Burridge v. Row, 1 Younge & 
 Coll. 101, Cha. 
 
 (a) And see West v. Reid, 2 Hare, 348. 
 
OP THE ATTACHMENT OF EGUITIES. 293 
 
 upon her marriage a settlement was made, whereby the 
 policies *in question were assigned by the husband to '182 
 trustees as collateral security for securing a sum of 
 5000/. covenanted by him to be paid six months after his death, 
 in which the wife took a life-interest. The wife's father had also 
 given a bond to the same amount, and subject for the most part 
 to similar trusts, but the interest was payable to the wife's 
 separate use. The husband became bankrupt. The father 
 for some time kept up the policies out of the interest of the 
 bond, deducting the sums paid from the wife's income — the 
 husband died — ^the father became bankrupt, and then died, 
 and the wife for some time kept up the policies herself. The 
 case principally turned upon a question of set-off between the 
 trustees of the wife and the assignees of the &,ther, the latter 
 having bought all the interest of the son-in-law in the policies. 
 In West V. Reid (a), A. assigned a policy on his life to secure 
 a sum of money owing to B. The premiums were thenceforth 
 paid by B. by means of his solicitor, so long as B. lived, and 
 after his death by his bankers. A. had become bankrupt, and 
 B.'s estate having lost the benefit of the bulk of the proceeds 
 of the policies in consequence of notice not having been given 
 to the office, was held to be entitled to the amount of the premi- 
 ums with interest. There were special circumstances in this 
 case, A. became bankrupt four years before his death, and B. 
 by his solicitor or bankers continued paying the premium, with 
 the knowledge of A.'s assignees, who for some time declined 
 to interfere. 
 
 There is an earlier case of Schondler v. Wace (6), under the 
 first section of the stat. 5 Geo. 2, c. 30, in which Lord Ellen- 
 borough allowed the assignee under an invalid assignment the 
 premiums paid by him in keeping the policy on foot, but , 
 it does not appear that interest was also allowed him. The 
 action was brought by the assignees in bankruptcy for the 
 proceeds of a policy, the bankrupt did not disclose to 
 the commissioners or the assignees the fact of *the pol- *183 
 
 (ffi) 2 Hare, 248. 
 
 (4) 1 Carapb. 487, N. P. 
 
294 LAW OP LIFE INSURANCE. 
 
 icy, nor at his last examination that five quarters' premi- 
 ums -were in arrear. The policy (in the Amicable) would 
 have been in a short time forfeited if these were not paid. 
 The bankrupt, pending the bankruptcy, secretly assigned or 
 exchanged the policy for a share in a lottery ticket, his assign- 
 ee then paid up the premiums and assigned the policy to the 
 defendant, the bankrupt died, and the defendant received the 
 proceeds of the policy ; the assignees in bankruptcy were held 
 entitled, after deducting so much as they must have paid for 
 premiums, had the policy been regularly delivered up. 
 
 It is dffiicult to call in question the justice of these cases, 
 yet if a voluntary payment of premiums confers no interest 
 in the policy or proceeds, the principle of these cases is not so 
 obvious. In Burridge v. Row, the payment by the wife was in 
 strictness voluntary on her part, though for the purpose of 
 keeping up policies in which she considered herself to be in- 
 terested, but which but for an independent circumstance would 
 have gone either to the father's or husband's assignees, be- 
 sides which no notice had been given to the office. In West 
 V. Reid, the assignee of the policy lost the benefit ofitforthe 
 same reason, of want of notice, aud thus in fact had no per- 
 fect interest in the policy ; there is certainly the additional in- 
 gredient in West v. Reid, that the assignees in bankruptcy 
 had stood by for some time, and seen the assignee of the pol- 
 icy pay the premiums without making a claim, and in Schon- 
 dler V. Wace, the transaction appears to be of a fraudulent 
 character. 
 
CHAPTER VII 
 
 OF THE AGENTS. 
 
 Many of the offices employ agents in the different provincial 
 towns for the purpose of receiving proposals for policies of 
 insurance. They are furnished with a table of rates of pre- 
 miums, both ordinary and extraordinary, by which to form 
 their computations ; they are expected, from their local know- 
 lege of the parties, to communicate any circumstances which 
 may have weight with reference to the particular insurance in 
 question, and to transmit the same to the office, together with 
 the proposal, and other documents before noticed (a). 
 
 Agents are usualy called upon to execute a bond, with su 
 reties to the office for the due fulfilment of the trust ; their ac- 
 counts are to be rendered at fixed periods, and the balance 
 transmitted to the office. 
 
 The general doctrines of principal and agent will apply as 
 between the offices and their agents. (1). 
 
 (a) See p. 157. 
 
 (1) Endorsed upon a life policy was a condition that the policy should be 
 Toid, and the money thereby secured be forfeited to the use of the Insurance 
 Company, if the insured should go beyond the limits of Europe without the li- 
 cense of the directors. The condition was infringed by the insured going to 
 reside in Caniula, where he died ; but after the breach, the local agent of the 
 Company at the place where the policy had been effected, continued to receive 
 the usual premiums upon a policy, with notice of the breach of the condition, 
 which he represented as not invalidating the policy, provided the premiums 
 were regularly paid. The Court held that the notice of the breach of the con- 
 dition given to the agent of the insurance office was constructive notice thereof 
 
296 LAVir OP LIFE INSURANCE. 
 
 Agents cannot bind their employers beyond their instruc- 
 tions, and a mere private entry, as between an agent and the 
 office, ■wUl not make a new contract between the insurer and the 
 insured. 
 
 Upon a policy of insurance upon a life, the premium be- 
 came due on the 15th of March, but was not paid until the 
 12th of April, when the country agent of the company, through 
 whom the insurance had been effected, gave a receipt for the 
 amount of the premium, the instructions of the company to 
 
 the agent were, that the premium upon any life policy 
 *185 must be receiyed within fifteen days from the *time of 
 
 its becoming due, that he was to give immediate notice 
 to the office if it was not paid within that time, and if he omit- 
 ted to do so, his account would be debited for the amount af- 
 ter the fifteen days had expired ; the agent did not give notice 
 of the non-payment within that period, and it was entered in 
 the company's books as paid on the I5th of March, and the 
 agent was debited for the amount, and it was held, 1st. That 
 the mere debiting the agent with the amount of premium was 
 not a payment by the insured. 2ndly, That the agent having 
 no authority to contract for the company in this manner, his re- 
 ceipt of the money after the fifteen days, and the entry in the 
 company's books, and debiting him with the premium ■yvas no 
 evidence of a new agreement between the company and the 
 insured, (a). 
 
 (a) Acie v. Femie, 7 Mees. & W. 150. 
 
 to the company, and that the latter, whether they had express notice of the breach 
 or not, were precluded by the conduct of their agent from insisting upon the 
 forfeiture upon the death of the insured — Wing vs. Hai-vey^lS Ju,t. 394; 23 
 L. T. 20 -.Am. Law Register August No. 1854 y. 639. 
 
 For further remarks upon the subject of agency in connection with Insurance 
 see chap. YII in the first part of this work and notes there referred to. 
 
CHAPTER VIII. 
 
 A GIFT BY WILL OF POLICIES JIOT WITHIN THE MORTMAIN 
 
 ACT. 
 
 Although an insurance company has assets partly consist- 
 ing of real estate, yet policies of insurance by -vrhich the in- 
 surers undertake to pay "out of the funds," or that "the funds 
 shall bo liable," or that "a share of the funds shall be paid" 
 are not so connected with land as to render a gift of them to a 
 charity invalid under the Mortmain act, and the rule is the 
 same where a policy is sealed with the corporate seal of the com- 
 pany, and the assured becomes a member. ' < 
 
 In the case of March v. Atorney General (o), the gift con- 
 tained one policy in the Equitable, one in the Economic, one 
 in the Law Life, and one in the Amicable Insurance Society. 
 
 The policy of the Equitable contained a covenant by the 
 insurers, that they upon the payments becoming due, would 
 pay or cause to be paid out of the stock or funds of the society, 
 unto the executors of the assured the sum assured ; that of the 
 Economic provided, that the funds and property of the society 
 according to the articles of settlement, should be liable to pay 
 the sum assured ; the policy of the Law Life provided that the 
 stocks, funds, securities, and property of the society should be 
 liable according to the provisions of the deed of settlement to 
 pay the sum assured ; the policy of the Amicable admitted the 
 assured as a member of the society, and the society obliged 
 
 (a) March v. Attorney General, 5 Bear. 433. 
 
 38 
 
298 LAW OP LIFE INSURANCE. 
 
 themselves to pay to the person effecting the policy 
 *187 such a proportion or share of the *joint stock and fiinds 
 
 of the society as would become due on the death of the 
 assured, according to the charter or bye-laws of the society ; the 
 ease came on upon exceptions to the Master's report ; the 
 Master was of opinion that the sums secured by the policies 
 were personal estate, connected with the land in the proportion 
 which the funds, subject to the payment thereof, which con- 
 sisted of real estates or securities on real estates, bore to the 
 funds and property subject to the payment thereof, consisting 
 of pure personal estate. It was urged by the counsel for the 
 next of kin, that this was a gift of "real estate charged" within 
 the meaning of the statute, that turnpike bonds, — bonds for 
 the improvement of a town, and money secured on poor rates, 
 had been held within the statute, and that there could be no 
 apportionment in favour of a charity, as suggested by the 
 Master, but Lord Langdale, M. E,., laid stress on the word 
 "funds," as used in the obligation to pay contained in the 
 policies, and expressed the opinion, that the insured had no im- 
 mediate lien upon the property of the insurers, that ordinarily 
 the insured had only a right of action, and that although cases 
 might arise in which the Court might take possession of the 
 property of the company, and apply it for the benefit of all 
 persons having claims upon it, yet that such a possibiliiy did 
 not connect a sum of money payable upon a policy, with the 
 quality of the property held by the insurers- His Lordship 
 appeared to think, that the cases on the Mortmain Act had 
 gone far enough, that if these policies were held within it the 
 same consequence might attach upon a debt owing by a person 
 who has real estate or chattels reaL 
 
CHAPTER IX. 
 
 OP PROOFS IN RESPECT OP POLICIES, OR PREMITJMS IN 
 CASE OF BANKRUPTCY. 
 
 As most of the business of life insurance is now conducted by 
 offices of respectability and capital^ and not by private insu- 
 rers as formerly was the case, the books fortunately do not 
 affiDrd any instances of the position in which the insured are 
 or would be placed, in case the insurers became bankrupts. 
 If such an event should happen, it may be assumed that the 
 policy would be a contingent debt, upon which a value might 
 be set, within the SjSth section of the stat 6 Geo. 4, c. 16, and 
 proveable under the commission of the insurers. The most 
 ordinary case in bankrupt practice is that of the insured or 
 person effecting insurance, after having assigned his policy to 
 a third person by way of security for a loan or otherwise, then 
 becoming bankrupt, and in such a case assuming that the 
 assignment is valid as against the assignees in bankruptcy, 
 the assignment having been perfected by due notice to the 
 office before issuing the fiat, the course is for the assignee or 
 . depositary of the policy to apply for an order for the sale of 
 the security before the commissioner, and to be allowed to 
 prove against the bankrupt's estate, for the difference between 
 the proceeds of the instrument and the amount of his debt. 
 
 A case of some nicety was decided before three commission- 
 ers of bankrupt, sitting as a sub-division Court, in Re Whit- 
 more, Wells and Co. (a), in which the late commissioner 
 Merivale deliverd the opinion of himself and brethren in a 
 very elaborate judgment. 
 
 (a) February 18, 1843. 
 
300 LAW OF LIFE INSURANCE. 
 
 *189 *The principle involved in the case was, that where a 
 person upon marriage, assigned policies to the trustees 
 of the marriage settlement, the proceeds to be applied upon cer- 
 tain trusts, and covenanted only to pay the premiums, but did 
 not distinctly covenant with the trustees for the payment of 
 any sum equivalent .to the amount of such proceeds, or for any 
 other sum so as to constitute a debt, the mere covenant to pay 
 the premiums, though the sums required by the oflSces to keep 
 up the policies were ascertained, was of too uncertain a nature 
 to enable the trustees to prove for it, as for a contingent debt 
 under the 56th section of stat. 6 Geo. 4, c. 16. 
 
 It appeared that A. (who afterwards became bankrupt), by 
 a settlement on his marriage, reciting an agreement* on the 
 part of the lady's father, to secure to the trustees of the set- 
 tlement 4000Z. with interest, and also reciting that it had been 
 agreed by A., that he should, by assignment of two policies of 
 insurance on his life, secure to the trustees the sum of 5000Z. 
 to be paid within three months after his death, and that the 
 trustees should stand possessed of the said two sums of 4000i 
 and 5000Z., upon trusts, for the benefit of the bankrupt, his 
 wife and children ; and further reciting that the lady's father, 
 in pursuance of the agreement, had executed a bond to the 
 trustees for the payqient of the 4000Z. within a year after the 
 marriage, it was witnessed that the trustees should stand pos- 
 sessed of the bond for 4000Z. upon trust, to suffer it to remain 
 on the security thereof, until six months after the death of the 
 father ; and then to receive the proceeds upon the trusts of 
 the settlement, and A. assigned the said two policies to the 
 trustees, to be held on the same trusts, and covenanted that ' 
 he would pay the premiums, and also i-epay to the trustees any 
 monies they might have advanced in paying the premiums, in 
 case of his default ; and for farther security as to the assign- 
 ment of the policies, there was a power for the trustees, when 
 they might think it expedient, to pay the premiums out of the 
 interest of the 4000?. It was also provided, that if the 
 *190 bankrupt should at any time *pay the 5000Z. secured by 
 the policies, then the trustees should resign them to 
 him. The settlement then contained the trusts of all the sums 
 
OP PROOFS IN RESPECT OF POLICIES. 301 
 
 for the benefit of A., his wife and children, bnt it contained 
 no distinct covenant or agreement (ot the payment of 5000^., 
 or any other sum by A. to the trustees at any period. A 
 proof had been tendered for the premiums of insurance cot- 
 enanted to be paid by A. on the part of the trustees of the set- 
 tlement, as a contingent debt under the 56th section of the 
 Bankrupt Act, 6 Geo. 4, c. 16, but the commissioner expressed 
 the opinion, that by reason of the want of such distinct cov- 
 enant constituting a debt, and by reason that the amount of 
 the successive premiums covenanted to be paid, was incapable of 
 valuation under the statute, that the trustees were not at liberty 
 to prove ; the trustees endeavoured to prove for two distinct 
 sums of considerable amount, which it was alleged would be 
 required by the respective oflSces, to keep up the policies for 
 the remainder of A.'s life. That mode of calculation, how- 
 ever, was not admitted ; it was not disputed that circumstan- 
 ces might have arisen, affording a right to prove to some ex- 
 tent, as if the trustees of the settlement had under the pro- 
 visions of it, themselves paid any of the premiums, that would 
 have been a debt as against the bankrupt (o). 
 
 (a) In Ei parte Tindal, 1 Mont. 375, 463, before Lord Brougham, L. C, 
 Tindal C. J., and Littledale, J., A., upon his marriage, covenanted in the set- 
 Uement made thereon, that his executors or administrators, twelve months aAer 
 his death, should pay the trustees 40002. upon trust to pay the interest to A. du- 
 ring his life, and upon his death to his wife, if living, with a trust for children, 
 and in de&ult of children, to the survivors of the husband and wife. This was, 
 held to be a contingent debt, upon which a value might be set under the statute 
 and that upon the bankruptcy of the husband it might be proved by the trustees 
 of the settlement, reversing Ex parte Eagle, Mont & Mac. 424. 
 
 In Ex parte Grundy, Mont, & Mac. 293, A. had covenanted by his marriage 
 settlement, that in case his intended wife, or any issue of the marriage, should 
 survive him, that his executors or administrators, upon his decease, should pay 
 to the trustees of the settlement 20002. upon trust lor the benefit of the children. 
 A. also gave a bond as further security. A. became bankrupt, and obtained his 
 certificate subsequently. A. died, leaving issue of the marriage. There being 
 funds for distribution, a renewed commission issued, and a final dividend adver- 
 tised, and it was held by Lord Lyndhurst, L. C, overruling the decision of the 
 Vice-Chancellor, that this section was retrospective, and that although the event 
 
802 LAW OF LIFE INSURANCE. 
 
 *191 *If a trader assigns a policy, and afterwards becomeB 
 bankrupt and dies, and the insurance o£Sce discorers 
 that the policy is avoided or bad, and pays part of the sum in- 
 sured as matter of bounty, the assignees in bankruptcy are not 
 entitled to recover that sum (a). 
 
 (a) WiUs V. Wells, 2 Moore, 247. 
 
 upon which the debt was contingent had happened after the commission issued, 
 and before 6 Greo. 4, c. 16 came into operation, this sum of 20002. was prore- 
 able under the commission. 
 
 In Ex parte Marshall, 3 Deac. & Chitt. 120, on appeail, a bankrupt had en- 
 tered into a joint bond with a co-obligor to indemnify the sheriff against any 
 loss he might sustain from relinquishing the possession of goods seized under 
 an execution ; but no loss was actually sustained by the sheriff until afler the 
 issuing of the fiat. It was held that this was not a debt proveableby the sheriff 
 under the commission. This case, before the sub-division Court, is reported 1 
 Mont. & Ayr. 168. 
 
 In Attwood V. Partridge, 4 Bing. 209, the defendant covenanted with the plain- 
 tiff for the due payment by A. of a premium upon a policy of insurance ; the 
 premium becoming unpaid afler the defendant's bemkruptcy, the plaintiff paid 
 it. It was held, that this was not a debt proveable within the 56th sect, of 6 
 Geo. 4, c. 16, or otherwise, ' 
 
 See also Bird V. Moreau. 4 Bing. 47. Boorman v. Nash, 9 Barn. & C. 145. 
 Yallop V, Ebers, 1 Barn. & Ad. 698. Ei parte Lancaster Canal Company, 
 Mont. 27. Ex psirte Myers, 2 Deac. & C. 251 ; 1 Mont. & B. 229. Ex parte 
 Thompson, 2 Deac. & C. 126 ; I Mont. & B. 219- 
 
CHAPTER X. 
 
 OF PROCEEDINGS IN ACTIONS ON POLICIES OF INSURANCE 
 UPON LIVES. 
 
 The general principles of proceedings on policies against fire 
 are applicable to those on policies upon lives (a). 
 
 Most of the offices issue their policies upon lives under 
 seal. The following, however, is an outline of a declaration 
 upon a policy of insurance made upon the life of a third per- 
 son, not under seal, against the Atlas Society. 
 
 1. A recital of the policy. 2. The payment of the premi- 
 um, if the death takes place beyond the year covered by the 
 premium, usually acknowledged to be received in the body of 
 the policy. 3. An averment of the declaration made before 
 the execution of the policy, which is the basis of the contract, 
 and referred to in the policy ; sometimes this declaration i» 
 embodied in the policy, so as to become a condition precedent, 
 and when this is the case, if the policy be recited, it may be 
 unnecessary to aver the declaration specially. 4. An aver- 
 ment of the printed proposals issued by the office, and usually 
 mentioned and referred to by the policy. 5. That the declar- 
 ation was in all respects true. 6. That the party insuring 
 was interested in the life of the assured to the amount of the 
 sum insured. 7. The death of the party insured, and satis- 
 factory proof thereof produced to the company. 8. That al- 
 though t^e plaintiff has kept and observed all the conditions 
 
 (a) See the same, p. 171. 
 
304 
 
 LAW OP LIFE INSURANCE. 
 
 and stipulations, and although the funds of the compa- 
 *193 ny are sufficient to *pay and the three months (a) are 
 elapsed, and the said (defendants) were requested to 
 pay, yet that they neglected and refused to do so. A second 
 count may contain counts for money had and receiyed, account 
 stated, and breach (6). 
 
 Few instances are known of offices declining to pay, unless 
 they have strong suspicions of gross fraud having been prac- 
 ticed upon them, and tit has been generally found, that those 
 attempts are most frequent in the case of policies made upon 
 the lives of third persons. But where a person, in duty to his 
 family or connexions, thinks fit .to insure his own life, for a sum 
 of money payable to his personal representatives or to trustees, 
 it must require a very strong case to justify an office in resist- 
 ing ; and to their honour it may be said, that the cases are 
 very rare indeed, in which they have driven executors, admin- 
 istrators, or trustees, to resort to an action. 
 
 The following is an outline of a declaration made upon a 
 policy under seal, upon the life of a third person, against the 
 Koyal Exchange Company. 
 
 1st. Eecital of the policy. 2nd. Interest of the party in- 
 suring in the life of the insured to the amount of the sum in- 
 sured. 3d. That at the time of making the insurance the par- 
 ty insured was in good health, and did not exceed the age of 
 , and that afterwards and within the space of af- 
 
 ter making the said instrument, to wit, on, &c. at, &c. the said 
 insured died ; that he did not in his lifetime (do any of those 
 acts whereby, according to the conditions of the policy, the 
 same was to become void). 4th. Notice of his death to the 
 company. 5th. That although sufficient proof was made to 
 the satisfaction of the company of the death of (the insured), 
 and although the party insuring had performed all the con- 
 ditions required of him, yet that the said company did 
 *194 not within three months pay the *(party insuring) the 
 
 ((z) The offices usually reserve to themselves the right to pay witMn three or 
 six months, 
 (i) See 3 Chit, on Pleading, 153, 155, and the notes to the precedents. 
 
PROCEEDINGS IN ACTIONS OF POLICIES. 305 
 
 sum of £ , or any part thereof, but have refused 
 
 and neglected to do so. Conclusion, breach of covens^nt. 
 
 A case has occurred in which the trustees and directors of 
 the Promoter Assurance Company recovered back from the 
 assignee of a policy a sum of money paid to him by the office, 
 the policy having been effected under circumstances of fraud, 
 and the assignment not being bona fide (a). 
 
 The jurisdiction of a Court of Equity has been appealed to, 
 for the purpose of rectifying a mistake made in the drawing 
 up of a policy. In Parsons v. Bignold (6), an erroneous state- 
 ment was made to a life insurance oflSce, by or through the 
 agent of the oflBce, as to the interest of a person effecting an 
 insurance on his son's life, in that life. The office granted the 
 policy ; and after the son's death, the office discovered the er- 
 ror, and declined to pay the sum insured. The person effect- 
 ing insurance after bringing an action against the secretary of 
 the office, filed his bill, to have the mistake rectified, and pray- 
 ing that the defendant, the secretary, be restrained from avail- 
 ing himself of the mistake, by way of defence to the action ; 
 but the bill was dismissed by the Vice-Chancellor of England, 
 because the evidence did not distinctly show whether the mis- 
 take arose firom the agent's inadvertence, or from his having 
 been misinformed by the father, who effected the policy. It 
 appeared that the office did not resist payment merely on the 
 ground of interest, but on the ground of misrepresentation as 
 to the son's health. 
 
 (a) Lefevre and Others v. Royle, K. B. Dec. 9, 1831 j and see ante, p. 183. 
 (*) 13 Sim. 518. 
 
 39 
 
CHAPTER XI. 
 
 ON THE APPLICATION OP LIFE INSURANCE TO FORMING EN- 
 DOWMENTS, AND MAKING PROVISION FOR FAMILIES, AND 
 FOB SECURITY OF DEBTS. 
 
 1. Where the Income terminates with Life. 
 
 2. Where the Income is to be transmitted to an Individual 
 
 of a Family. 
 
 3. Where the Sum, insured is to be paid to a Parent on a 
 
 Child attaining a certain Age. 
 
 4. Where the Life of a Child is insured, to whom an 
 
 Advance has been made. 
 
 5. Where the Creditor insures his Debtor's Life. 
 
 6. Insurance Monet/ settled upon Marriage. 
 
 7. Insurance for the purpose of meeting fines, Sfc. pay- 
 
 able on the I)ropping of a Life or Lives. 
 
 8. Insurance by way of Security on an Annuity Trans- 
 action. 
 
 A FEW observations upon the practical uses of Life Insurance, 
 with, such remarks on the legal bearings of the subject as 
 occur, may not be misplaced in a work of this nature. 
 
 1. The system of life insurance, if judiciously and prudently 
 applied, is of invaluable use in enabling a parent to provide 
 for a family, when his income principally depends upon his 
 own life or exertions, as in the case of professional men, traders, 
 
 annuitants, and persons holding places or pensions. 
 
 *196 *2. Where although the income arising from property 
 
 may be transmitted to one or more of his children after 
 
 him, there may be danger that others of his children may be 
 
 inadequately provided for, as in the case of tenant for life, with 
 
ENDOWMENTS, PROVISIONS FOR FAMILIES, &C. 307 
 
 remainder to the eldest son in fee or in tail, in which cases, al- 
 though there is generally a provision for raising portions for 
 younger children, yet frequently to an amount very inadequate 
 to the support of the younger branches in those habits in which 
 they have been brought up in common with the elder son. In 
 such a>case, a father, tenant for life, can, by a moderate cur- 
 tailment of his expenditure to a fixed limit within his income, 
 make a much more ample provision in ordinary circumstances 
 than he would be likely to do, unless very diligently careful, 
 by investing in the funds or other securities the same amount 
 of savings from his income ; and for this reason, that individ- 
 uals in general in their savings operate by simple interest, 
 whilst life insurance companies work by compound. Besides 
 which advantage, by the practice of those offices where a divis- 
 ion of profits is made, considerable additions are frequently 
 made, by way of bonus, to the sum insured, to an extent which 
 the insured never contemplated. The difference between in- 
 dividual saving and the working of an insurance office will ap- 
 pear by the following simple statement, and without taking 
 the bonuses into calculation ; supposing a man of thirty to save 
 200Z. a year until he is sixty, which is somewhat more than he 
 is entitled to expect, according to the ordinary calculations of 
 human life, he will have accumulated only 6000Z.; but accor- 
 ding to the average r^te of premiums paid at most offices, a 
 man of thirty can for about 21. 10s. insure lOOZ. ; and, there- 
 fore, by the payment of a premium of 200Z. vrill at once entitle 
 those whom he may select to receive 8000/. even if he should 
 die the next day after insuring ; but if he should live to the 
 avarage limits of human life, he will be entitled then to receive, 
 not only that sum, but also an addition by way of bonus 
 which has been known to be more than *equal to the *197 
 sum insured. As before observed in a preceding chap- 
 ter, where the proceeds of a policy of insurance, together with 
 all sums of money, benefits, and advantages to arise or accrue 
 upon it (o), are settled or given by will, the parties interested 
 
 (o) Courtney v. Ferrers, 1 Sim. 137. ■ 
 
308 LAW OP LIFE INSURANCE. 
 
 ■will take the proceeds, together with the proportionable share 
 of bonus or acumulation. 
 
 3. A parent may insure a sum of money to be paid to him- 
 self in the event of a child (or one or more children) attaining 
 twenty-one, or any given age at which it is probable that a 
 sum of money may be requisite for the purpose of advancing 
 the child in life. Here the objection sometimes made against 
 life insurance is obviated, that the insured has not the satis- 
 faction of reaping the benefit of his frugality himself, for by 
 this operation he is enabled to see his family provided for in 
 his lifetime. 
 
 4. So where a parent may have advanced any sum of money 
 to a child, either by way of provision, or to establish him in 
 any trade or business, he may properly treat such an advance 
 as a debt, and secure himself from the loss which would arise 
 by the premature death of the child, by insuring the child's 
 life to the amount of the sum advanced. 
 
 5. The case of a creditor insuring his debtor's life is so ob- 
 vious, and has been in a preceding chapter so far considered 
 as to its legal bearing, that it is almost unnecessary to enter 
 into it (a). It may however be observed, that where the debt 
 depends alone upon the personal security of the debtor, as is 
 generally the case when the creditor insures, it is the most 
 effectual security the creditor can have under the circumstan- 
 ces ; as he then depends, not only upon the personal credit of 
 the debtor, but he has also the benefit of his own care and 
 caution ; for if the debtor fail to pay the premiums, the credi- 
 tor may upon his failure keep up the policy ; and even 
 
 *198 if the debt be paid, he may *still practically, although 
 
 not legally, have the benefit of the policy, if he chooses 
 
 to keep it on foot ; for although by the statute, the interest of 
 
 the creditor ceasing by payment of the debt, he cannot recover, 
 
 yet as the offices never take the objection in a bona fide case 
 
 (6), he may still treat the policy as a valuable and saleable 
 
 security. 
 
 (a) See ante, Barber v. Morris, p. 235. 
 
 (i) See anU, p. 235. 
 
ENDOWMENTS, PROVISION FOR FAMILIES, &C. 309 
 
 Where a party advances a loan of money to another upon 
 the security only of an estate for the life of the borrotyer, at 
 a legal interest, there appears to be no objection to his compel- 
 ling the borrower to insure his life, and pay the premiums, for 
 the lender does not thereby " take directly or indirectly" more 
 than legal interest ; the borrower by insuring only secures the 
 principal to the lender, in case of his death, the only security 
 which he may have the means of giving. " Thus too," observes 
 Blackstone (6), " on a loan, if the chance of repayment depends 
 on the borrower's life, it is frequent (besides the usual rate of 
 interest) for the borrower to have his life insured till the time 
 of repayment, for which he is loaded with an additional premi- 
 um suited to his age and constitution. Thus if Sempronius 
 has only an annuity for his life, and would borrow 100/. of 
 Titius for a year ; the inconvenience and general hazard of 
 this loan, we have seen, are equivalent to 5/. which is therefore 
 the legal interest ; but there is also a special hazard in this 
 case, for if Sempronius dies within the year, Titius must lose 
 the whole of his lOOZ. Suppose this chance to be as one to 
 "ten, it will follow that the extraordinary hazard is worth lOZ. 
 more, and therefore that the reasonable rate of interest in this 
 case would be 151. per cent. ; but this the law, to avoid abuses, 
 will not permit to be taken ; Sempronius therefore gives Titius, 
 the lender, only 5/. for legal interest ; but applies to Caius, 
 an insurer, and gives him the other Wl. to indemnify Titius 
 against the extrojordinary hazard?^ 
 
 6. It is not unusual for persons about to marry, amongst 
 other modes of provison for a family, to covenant with 
 the 'trustees to insure their lives to a certain extent ; *199 
 the objects and proportions in which the sum insured 
 is to be distributed at the death of the party, are pointed out 
 by the trusts of the settlement. In such cases, however, it is 
 the safer course that some property should be assigned to trus- 
 tees to enable them to pay the premiums in case the insured 
 should make default. It may be observed, on the other hand, 
 that great care and consideration are requisite, before any per- 
 
 (£)3Bla. Com, 459. 
 
310 LAW OF LIFE INSURANCE. 
 
 son is induced, either from conscientious motives or the cupidity 
 of others, to covenant with third persons to insure. In the 
 case of marriage settlements, where trustees are interposed on 
 behalf of the married lady and her issue, as neither a married 
 woman nor infants under age are capable of giving any legal 
 consent, and trustees are bound by their duty to enforce the 
 performance of the covenants, not only in behalf of the lady 
 but the issue which may be born ; they have no power to mod- 
 ify or adapt the amount of insurance to the circumstances of 
 the parties, after the covenants are once entered into, and the 
 marriage has taken effect. A person then who has been un- 
 advisedly induced to covenant to insure to a large amount, may 
 find that in the contingencies of life, he has no longer the dis- 
 posable income he contemplated, and therefore may be utterly 
 unable to keep up his insurance, whilst at the same time the 
 trustees, from the danger of future responsibility to the parties 
 interested in the settlement are driven unwillingly to the ne- 
 cessity of attempting to enforce the contract, an attempt which 
 cannot fail to be productive of great inconvenience, or ruin, to 
 the party insured, as well as to the family prospectively pro- 
 vided for. A case has occured in the author's experience, 
 shewing how very harshly this mode of settlement might ope- 
 rate to the parties more immediately interested, if improvi- 
 dently entered into, that is to say, unless a party covenants to 
 insure for such an amount, and such only as he has a moral 
 certainty, after making every allowance for the ordinary expen- 
 diture of a family, and the possible decrease of his income, 
 that he can conveniently provide the premiums. A 
 *200 gentleman, upon 'his marriage with a lady of considera- 
 ble fortune, in consideration of that fortune, <fec., cove- 
 nanted with the trustees to insure his life for 20,000Z. ; the 
 interest thereof at his death to be paid to the lady for life, and 
 after her death the principal to be paid to the children, sub- 
 ject to a power of appointment, and he also conveyed certain 
 real estates to the trustees of larger annual value than the 
 premiums amounted to, in trust to pay the premiums out of the 
 rents and profits in case he should make default. In course 
 of time, he became embarrassed in his circumstances, and the 
 
ENDOWMENTS, PROVISIONS FOR FAMILIES, &C. 311 
 
 trustees found it necessary to enter npon the estates for the 
 purpose of paying the premiums, the rents and profits of these 
 estates, in the mean time, had become so reduced as to be 
 barely sufiBcient to pay them. The husband lived apart fi-om 
 his wife, and there were no children of the marriage ; neither 
 husband or wife had any property remaining but the trifling 
 surplus of the rents and profits of the real estate, after payment 
 of the premiums of insurance. The husband had also by the 
 settlement covenanted with the trustees to allow his wife an 
 annuity by way of pin money, with which the estates conveyed 
 were also charged, and there was no appearance upon the deed 
 that tii-3 keeping up of the insurance was of primary obligation. 
 Upon a bill filed for the administration of the trusts, the Vice- 
 Chancellor of England, willing to relieve where opportunity 
 ofiered, made a declaration that the keeping up the insurance, 
 and the payment of the annuity, was of equal obligation upon 
 the trustees, and refered it to the Master to inquire and state 
 which of the policies of insurance, and to what amount ought 
 to be cancelled or disposed of, and ordered that so much of the 
 rents and profits as were not necessary for keeping up the rest 
 of the policies, should be paid to the wife on account of the an- 
 nuity. If, however, this annuity had not been settled, the trus- 
 tees would have had no alternative but to keep up the insuran- 
 ces for the benefit of children not in existence, and of the wife, 
 who was thus placed in the unnatural situation of being com- 
 peflled to look to the death of her husband, as the 
 only *means of extricating her from poverty (a). Nor *201 
 is it easy to see how any jurisdiction, short of that of 
 Parliament, could have relieved the trustees from their duty, if 
 it had been imposed upon them by the trusts of the settlement. 
 
 7. In aU cases where a fine, foregift, or other pecuniary 
 advance has been made upon a lease determinable upon a life 
 or lives, insurance upon the life, or the survivor of the lives, 
 where more than one, is usefully applied ; so if a fine is payable 
 upon the renewal of a lease granted for a life, or two or more 
 
 (a) F V W , June, 1830, Vice-Chaiicellor, MS. 
 
312 LAW OF LIFE INSURANCE. 
 
 lives, an insurance for the purpose of covering the fine when 
 payable is desirable, and is a convenient form of spreading 
 over a larger surface a sum which might be with difficulty rais- 
 ed at once, and at some unexpected point of time. It appears 
 also essentially necessary, where a tenant for life is desirous 
 of raising money upon mortgage of his life-interest, as without 
 it, the lender may the next day be deprived of his security, 
 although the more usual practice in such cases is to raise the 
 sum by annuity, and make the life estate a security. 
 
 8. When money is raised by the grant of an annuity there 
 is in general a stipulation in the deed that the grantor shall 
 appear at some insurance office to be insured ; as before ob- 
 served, if the grantor were compelled to stipulate to pay the 
 premiums, the whole transaction might be endangered, it was 
 supposed, on the ground of usury ; for thus the principal would 
 no longer be hazarded, at the same time that annuity interest 
 instead of legal interest would be payable ; however, from the 
 preceding case of Holland v. Pelham, it seems that to make 
 the grantor covenant to insure is not usury (a). The grantee 
 in general virtually imposes upon the grantor the burthen of 
 insurance by purchasing his annuity at such a rate, as com- 
 pensates for the payment of the premiums of insurance 
 *202 by himself. From *the peculiar nature of annuity tran- 
 sactions, there is no contract, with reference to which 
 insurance becomes so necessary ; because in general, few will 
 resort to borrowing money upon annuity who have any security 
 to offer, by which to raise money at the usual and legal rates 
 of interest. Annuities, from their nature, are exempt from the 
 statutes -respecting usury, because in these transactions, not 
 only the interest, but the principal also is by the terms of the 
 contract (6) in hazard. If the principal be secured by the 
 terms of the contract, without reference to the possible insol- 
 vency of the borrower, any device to receive more than legal 
 
 (a) Ant^, p. 240. It does not appeeir from that case whether the grantor cov- 
 enanted to pay the premiums, but it may be inferred from the langua^ of the 
 Court that it was so. 
 
 (d) Nerse v. Wilson, 5 T. R. 353. 
 
ENDOWMENTS, PROVISIONS FOR FAMILIES, &C. 313 
 
 interest will be usurious {a). Interest has been considered 
 as a premium upon the forbearance to sue for the debt, and 
 our idea of usury in this country is founded upon that princi- 
 ple (6). Although an annuity may be purchased for a very 
 inadequate price, yet the transaction does not appear to be il- 
 legal, unless there be fraud, oppression, undue influence, or 
 other circumstances which might induce a Court of Equity to 
 interfere. It was found, from the circumstance that few, but 
 necessitous persons, would resort to a mode of raising money, 
 in which there was no restriction as to terms but the conscience 
 of the lender, and where, on the other hand, from the situation 
 of the borrower, not very many were disposed to lend but the 
 speculative or unprincipled, that great frauds had been prac- 
 tised. These frauds were the more gross and exorbitant, be- 
 cause both parties were usualy desirous that the transaction 
 should be secret. The credit of the borrower and the charac- 
 ter of the lender might equally suffer by notriety. The Leg- 
 islature therefore were compelled at length to interfere, not 
 by putting a direct check upon the practice, but with the view, 
 by rendering publicity necessary, indirectly to put a restraint 
 upon it. It has now been rendered necessary that a memo- 
 rial of the particulars of all such transactions, together with 
 the names of all parties, should be inrolled in Chancery. 
 
 (a) See Chesterfield v. Janssen, 1 Atk. 340 ; 3 Yes. 142. 
 (6) Nurse v. Wilson, 3 T. R. 353. 
 
 40 
 
314 
 
 EXPECTATION OF LIFE. 
 
 As every Fire or Life Insurance Company have their own Forms 
 for Policies — ^Receipts — Assignments &c., a reprint of English Forms 
 is thought unnecessary. The following Tables may be intesesting, 
 which are generally adopted by Life Insurance Companies in the 
 United States." 
 
 Table Showing the Expectation of Life by the CAELISLE 
 TABLES. 
 
 Ages. 
 
 No. Years 
 
 Ages. 
 
 No. Years 
 
 14 
 
 45.75 
 
 43 
 
 25.71 
 
 15 
 
 45.00 
 
 44 
 
 25.09 
 
 16 
 
 44.27 
 
 45 
 
 24-46 
 
 17 
 
 43.57 
 
 46 
 
 23.82 
 
 18 
 
 42.87 
 
 47 
 
 23.17 
 
 19 
 
 42.17 
 
 48 
 
 22.50 
 
 20 
 
 41.46 
 
 49 
 
 21.81 
 
 21 
 
 40.75 
 
 50 
 
 21.11 
 
 22 
 
 40.04 
 
 51 
 
 20.30 
 
 23 
 
 39.31 
 
 52 
 
 19.68 
 
 24 
 
 38.59 
 
 53 
 
 18.97 
 
 25 
 
 37.86 
 
 54 
 
 18.28 
 
 26 
 
 37.14 
 
 55 
 
 17.58 
 
 27 
 
 36.41 
 
 56 
 
 16.89 
 
 28 
 
 35.69 
 
 57 
 
 16.21 
 
 29 
 
 35.00 
 
 58 
 
 15.55 
 
 30 
 
 34.34 
 
 59 
 
 14.92 
 
 31 
 
 33.68 
 
 60 
 
 14.34 
 
 32 
 
 33.03 
 
 61 
 
 13.82 
 
 33 
 
 32.36 
 
 62 
 
 13.31 
 
 34 
 
 31.68 
 
 63 
 
 12.81 
 
 35 
 
 31.00 
 
 64 
 
 12.30 
 
 36 
 
 30.32 
 
 65 
 
 11.79 
 
 37 
 
 29.64 
 
 66 
 
 11.27 
 
 38 
 
 28.96 
 
 67 
 
 10.75 
 
 39 
 
 28.28 
 
 68 
 
 10.23 
 
 40 
 
 27.61 
 
 69 
 
 9.70 
 
 41 
 
 26.97 
 
 70 
 
 9.18 
 
 42 
 
 26.34 
 
 71 
 
 8.65 
 
 EXAMPLES. 
 
 Persons 14 years of age are 
 expected, on an average, to 
 live 45 3-4 years more — and 
 attain 59 3-4 years of age. 
 
 Persons 29 years of age 
 are expected on an average, to 
 live 35 years more — and at- 
 tain 64 years of age. 
 
 Persons 50 years of age are 
 expected, on an average, to live 
 21 1-9 years more — and at- 
 tain a little over 71 years. 
 
ANNUAL PREMIUMS 
 
 315 
 
 The Mowing table shows the premiums payable annually to Se- 
 cure the payment of one hundred dollars, adopted by the National 
 Life Insurance Company of the United States at Montpelier Ver- 
 mont. 
 
 ^^ 
 
 1 
 
 O) ffi 
 
 8^ 
 
 Annual payment 
 
 for seven years 
 
 Insurance 
 
 Annual payment 
 for the whole 
 term of life 
 
 
 Payment for one 
 
 years 
 
 Insurance 
 
 Annual payment 
 
 for seven years 
 
 Insurance. 
 
 Annual payment 
 for the whole 
 term of life 
 
 14 
 
 
 72 
 
 86 
 
 1 53 
 
 38 
 
 1 48 
 
 1 59 
 
 3 05 
 
 15 
 
 
 77 
 
 88 
 
 1 56 
 
 39 
 
 1 49 
 
 1 60 
 
 3 11 
 
 16 
 
 
 84 
 
 90 
 
 1 62 
 
 40 
 
 1 50 
 
 1 61 
 
 3 20 
 
 17 
 
 
 86 
 
 91 
 
 1 65 
 
 41 
 
 1 52 
 
 1 63 
 
 3 31 
 
 18 
 
 
 89 
 
 92 
 
 1 69 
 
 42 
 
 1 56 
 
 1 65 
 
 3 40 
 
 19 
 
 
 90 
 
 94 
 
 1 73 
 
 43 
 
 1 59 
 
 1 68 
 
 3 52 
 
 20 
 
 
 91 
 
 95 
 
 1 77 
 
 44 
 
 1 63 
 
 1 73 
 
 3 65 
 
 21 
 
 
 92 
 
 97 
 
 1 82 
 
 45 
 
 1 67 
 
 1 87 
 
 3 81 
 
 22 
 
 
 94 
 
 99 
 
 1 88 
 
 46 
 
 1 71 
 
 1 96 
 
 3 96 
 
 23 
 
 
 97 
 
 1 03 
 
 1 93 
 
 47 
 
 1 78 
 
 2 07 
 
 4 13 
 
 24 
 
 
 99 
 
 1 07 
 
 1 98 
 
 48 
 
 1 85 
 
 2 18 
 
 4 31 
 
 25 
 
 
 00 
 
 1 12 
 
 2 04 
 
 49 
 
 1 94 
 
 2 30 
 
 4 50 
 
 26 
 
 
 07 
 
 1 17 
 
 2 11 
 
 50 
 
 2 08 
 
 2 44 
 
 4 71 
 
 27 
 
 
 12 
 
 1 23 
 
 2 17 
 
 51 
 
 2 23 
 
 2 58 
 
 4 92 
 
 28 
 
 
 20 
 
 1 28 
 
 2 24 
 
 52 
 
 2 32 
 
 2 74 
 
 5 15 
 
 29 
 
 
 28 
 
 1 35 
 
 2 31 
 
 53 
 
 2 45 
 
 2 94 
 
 5 39 
 
 30 
 
 
 31 
 
 I 36 
 
 2 36 
 
 54 
 
 2 55 
 
 3 17 
 
 5 66 
 
 31 
 
 
 32 
 
 1 42 
 
 2 43 
 
 55 
 
 2 71 
 
 3 43 
 
 5 94 
 
 32 
 
 
 33 
 
 1 46 
 
 2 50 
 
 56 
 
 2 91 
 
 3 72 
 
 6 24 
 
 33 
 
 
 34 
 
 1 48 
 
 2 57 
 
 57 
 
 3 13 
 
 4 02 
 
 6 57 
 
 34 
 
 
 35 
 
 1 50 
 
 2 64 
 
 58 
 
 3 42 
 
 4 34 
 
 6 90 
 
 35 
 
 
 36 
 
 1 53 
 
 2 75 
 
 59 
 
 3 76 
 
 4 67 
 
 7 28 
 
 36 
 
 
 39 
 
 1 57 
 
 2 81 
 
 60 
 
 4 17 
 
 5 01 
 
 7 65 
 
 37 
 
 
 43 
 
 1 58 
 
 2 90 
 
 
 
 
 
INDEX. 
 
 A. 
 
 ACCUMULATIONS ON LIFE POLICIES, 258. 
 ACTIONS AND SUITS, 
 
 fire, 171. 
 " life, 303. 
 
 See Proceedings 171. 303. 
 AGE AND HEALTH, 
 
 Life Insurance, 204. 
 AGENTS OF OFFICES, 
 
 fire, 157. 
 
 general authority, ii. 
 
 privity between tie Crown and agents as to recovery of duties 
 
 by extent, ifi. 
 
 of the insured answerable for negligence though not remu- 
 nerated, 159. 
 
 of Life Insurance Offices, 295. 
 
 where a party insures another's life, the latter taken to be the 
 
 agent of the former, so as to bind him by his representations, 
 
 226. 
 
 this doctrine qualified, 228 
 AKBITKATION, 173. 
 ASSIGNMENT OF POLICY. 
 
 fire, 142. 
 
 after the fire with possession of the property insured before the 
 fire and without consent of the office, 143. 147. 
 
 policies are special agreements with the insured, 145. 
 
 of policies on life on lives, 263. 
 
 if valid at the time of excution good, tS. 
 
 notice of assignment necessary to take policy out of the order and 
 
 disposition of assignor, in case of his bankruptcy, 264. 
 notice must be express, 280. 
 
318 INDEX. 
 
 ASSIGNMENT OF FOLIGY— continued. 
 
 reasonable notice sufficient, 280. 
 
 notice necessary where bankrupt is a mere mortgagee of a policy, 
 282. 
 
 if before issuing the fiat sufficient, 283. 
 
 second assignee, without notice of previous assignment, first 
 giving notice to the office preferred, 284. 
 
 the rule of Williams v. Thorpe and Ex parte Colvill applicable 
 to insolvency, 285. 
 
 assignments in foreign countries. 286. 
 ATTENDANT, USUAL MEDICAL, 
 
 reference to, in Life Assurance, 224. 226. 
 AVEKAGE CLAUSE, 
 
 Fire Insurance, 54. 55. 
 BANKKUPTCY, 
 
 of grantor of annuity, 294. 
 
 of assignor of policy, 264, and see Assignment. 
 
 notice of assignment before issuing the fiat good, 283. 
 
 proofs in, in respect of policies and premiums, 299. 
 BARN, 
 
 description of a building as, though not strictly such, does not 
 invalidate fire policy, 124. 
 BONUSES, ♦ 
 
 on policies of insurance. Life, 258. 
 BREACH, 
 
 of warranty, Fire, 81. 
 
 Life, 204. et seq. 
 BURNING, 
 
 wilful, the law as to, 138. 139. 
 
 c. 
 
 CERTIFICATE, 
 
 production of. Fire Insurance, 130. 
 CIVIL COMMOTION, 
 
 Fire, 107. 
 COFFEE-HOUSE, 
 
 not an inn within the meaning of a policy as doubly hazardous, 
 128 
 COMMENCEMENT, 
 
 and duration of risk, Fire, 151. 
 
 in Life Insurance, 244. 
 CONCEALMENT, 
 
 of material facts. Fire, 99. 100. 
 in Life Insurance, 213 222. 
 
 birth of a chUd by single woman, 223. 
 
 certificate by medical man, another having lately attended, 224. 
 
 residence of a party in a particular town, fact concealed that 
 she was confined in the gaol there, 226. 
 
INDEX. 319 
 
 CONCEALMENT— cow<i«t<«i 
 
 reference to the usual medical attendant must be given, 227. 
 230. 
 
 party insuring another's life bound by his misrepresentations, ib. 
 
 the latter is the agent of the former, ib. 228 
 
 party insuring another's life bound by the latters concealment, 
 221. 
 
 the doctrine qualified where no direct question is put, 228. 
 
 where the insured is unconscions of a material fact, 229. 
 CONDITIONS, 
 
 in policy against fire, 46. 
 
 in policy upon life, 193. 
 CONFIRMATION, 
 
 none, of invalid contract by' tender of increased premium, 100. 
 CONSTRUCTION OF POLICY, 244. See Pdicy. 
 CREDITOR, 
 
 insuring debtor's life, 236. 
 
 D. 
 
 DAMAGE, 
 
 by fire 76. See Pdicv — Insurance. 
 DEATH, 
 
 by the hands of justice, effect of, Life Insurance, 192. 
 
 by the insured's own hands, 193. 
 DEBT, 
 
 insuring as a security for, 236. 309. 
 DECLARATION, 189. 205. And see Proceedings. 
 DESCRIPTION, 
 
 of property, Fire Insurance, 47. 
 DEVIATIONS, 
 
 slight in Fire Insurance, 124. 
 DEVISEE, 
 
 whether entitled to Fire Insurance money, 167. See Equities. 
 DISORDERS, 
 
 tending to shorten life, 210. 
 DOUBLE HAZARDOUS, 
 
 insurance, Fire, 45. 
 DURATION OF POLICY, 
 
 fire, 115. 
 
 life, 244. 
 DUTIES, 
 
 on fire insurance, 56. 
 
 life, 191. 
 
 annuities, 189 
 
 E. 
 
 ENDOWMENTS, 
 
 and provisions for fuuilies, 300. 
 
320 INDEX. 
 
 EQUITIES, 
 
 attaching upon policies, Eire, 167. 
 
 no equity in general as between landlord and tenant, ib. 
 
 nor as between heir and personal representatives, 168. 
 
 under special circumstances insurance money payable to heir or 
 devisee, 168. 
 
 on life policies in general no equity in favour of third persons, 
 288. 
 
 may attach in cases of trust, 290. 
 EVIDENCE See Policy — Insurance — Proceedings. 
 EXPENSES, 
 
 of removing goods in case of fire, 55. 
 EXPLOSION. 60. 
 EXTENT FOR DUTIES. 158. 
 EXTEAOEDINARY RISK, 
 
 fire, 45. 
 
 F. 
 
 FALSE SWEARING, 
 
 fire, 52. 
 FIFTEEN DAYS, 
 
 allowed for payment of premium, fire, 115. 
 FIRE INSURANCE, 33. 
 
 See Policy of Insurance against Fire — Insurance. 
 FITS, 
 
 meaning of, within a policy on life, 211. 
 FORM OF POLICY. See Policy. 
 FRAUD, 52. See Policy — Insurance — Proceedings. 
 
 fraudulent losses, 138- 
 
 H. 
 
 HEALTH OF PARTY, 
 
 to be insured, 205, et seg. 
 HEAT, 
 
 damage by, 77. 
 HUNDRED, 
 
 right of fire offices against, in certain cases, 110. 
 
 remedies against, 113. 
 
 I. 
 
 INSURANCE, 
 fire, 33. 
 common, 45. 
 hazardous, ib. 
 double hazardous, ib. 
 extraordinary risk, ib. 
 of rent, 47. 
 
INDEX. 321 
 
 INSURANCE— cowfmi««f. 
 
 by other offices, to be stated, 47. 
 fraud or fake swearing, 52. 
 
 expense of remoying goods allowed by some offices, 55, 
 duties, 56. 
 plurality of risks, ib. 
 &nning stock, 58. 
 
 memorandnm of agreement upon effecting a policy, whether re- 
 quiring a stamp, ii. 
 
 rights of offices under Party-Wall Act, 58. 
 duties on receipts of premiums, 60. 
 the interest of the insured, 62. 
 at the time of insuring and of the fire, 73. 
 return of premium, 73. 
 nature and extent of risk, 76. 
 
 damage by tieat in process of manufacture not covered by insu- 
 rance from fire, 77. 
 of specific articles, to be construed by general scope of the policy, 
 
 80. 
 breach of warranty, 81. 98. 
 intention of warranty to be considered, 98. 
 misrepresentation, 84. 
 concealment, 99. 
 usurped power, 104. 
 ciyil commotion, 107. 
 
 as to remedies against the hundred, 110. 113. 
 commencement and duration of policy, 115. 
 nominal misdescription, 124. 
 
 increased hazard after policy effected, 126. ' 
 
 proo&, 132. 
 fraudulent loss, 138. 
 assignment of policy, 142. 
 agents, 157. 
 equities, 162. 
 proceedings, 172. 
 upon life, 185. 
 different kinds of, 187. 
 different purposes to which applicable, ib. 
 mode of effecting life insurance, ib. 
 proposal id. 
 inquhies 188. 
 declaration, 189. 
 form of policy, ib. 
 duties, 190. 
 death by the hands of justice, effect of, 192. 
 
 insured's own hands, 194. 
 warranty, 195. 
 health of insured, ib. 
 concealment, 219. 
 41 
 
322 IMDEX. 
 
 INSURANCE— continued. 
 
 reference to medical man, 224. 
 
 insured, agent of person effecting insurance, 228. 
 
 interest, 232. 
 
 creditor, 237. 
 
 trustee, 241; 
 
 duration of risk, 244. 
 
 accumulations or bonuses, 258. 
 
 assignment, 263. 
 
 notice, 269. et seq. 
 
 equities, 288. 
 
 liens for premiums, 292. 
 
 agents, 295. 
 
 mortmain, 297. 
 
 proofs in bankruptcy, 299. 
 
 proceedings, 303. 
 
 application of life insurance, 306. 
 See Policy qf Insurance — Concealment — Interest — Misrep- 
 resentation — Warranty — Proceedings — Endowments 
 and praoisions for Families. 
 INTEREST, 
 
 of money, not recoverable on insurance money, 254. 
 
 at the time of insuring, ond of the fire, is necessary, ih. 
 
 in life insurance, necessary, 232 
 
 party insuring for the benefit of another, 233. 
 
 creditor insuring debtor's life, 236. 
 
 creditor cannot recover where the debt has been psdd, 238. 
 
 holder of a note for money won at play has no insurable interest 
 in the maker's Ufe, 240. 
 
 trustee may insure for cestui que trust, 241. 
 
 insuring life of grantor of annuity, 241. 
 INTEEPLEADER, 172. 
 
 See Proceedings. 
 
 JURISDICTION, 
 fire insurance, 173. 
 life, 303. 
 annuities, 308. 310. 
 
 K 
 
 KILN FOR DRYING, 
 
 com, used for drying baik, 127. 
 
 L. 
 
 LABEL, 
 
 slip or memorandum on, effecting fire insurance, 58. 
 fire insurance, 164. 
 
INDEX. 323 
 
 LANDLORD AND TENANT. See Equities. 
 LODGER, 
 
 goods of, fire policy, 128. 
 LOSSES, FRAUDULENT, 138. 
 See Policif — Insurance. 
 
 M. 
 
 MARRIAGE SETTLEMENT, 
 
 life insurance, 309 
 MEDICAL ATTENDANT, 
 
 life insurance, reference to, 224. 
 MATERIAL FACTS, 83. 99. 219. 
 
 See Mistrepre&entatvm — Concealmera. 
 MISDESCRIPTION, 
 
 fire insurance, 48. 124. 
 MISREPRESENTATION, 
 
 of material fiicts, fatal, 84. 
 
 what are material facts, 84. 99. 
 
 distinction between representations and warrenties, 83. 
 
 in life insurance, 209. 219. a seq. 
 MISTAKE, 
 
 in policy, may be rectified, 306. 
 MORTGAGE, 
 
 of policy, 283. 
 MORTMAIN ACT, 
 
 gift by will, of policies, not within, 297. 
 
 N. 
 
 NEGLIGENCE, 
 
 of insured, no defence for insurers, 140. 
 NOTE, 
 
 for money won at play not an insurable debt, 240. 
 NOTICE, 
 
 effect of, to derermine a contract by an office, except on payment 
 of a higher premium, 117. 
 
 to an office of assignment, 264. 
 See AssignmetU. 
 
 must be express, 280. 
 
 o. 
 
 OFFICE. See Policjf — Insurance — Proceedings — Assignme?tt. 
 
 ORDER, 
 
 for payment, distinction between, and covenant to pay, fire 
 
 insurance, 37. 
 order and disposition of bankrupt assigaor, 264. 
 
 Bee Assignmeni. 
 
324 INDEX. 
 
 PAETY-WALL ACT, 
 
 rights of fire offices under, 59. 
 PEKSONAL, 
 
 representatives and heir, rights to insurance money, 162. 288. 
 See Equities. 
 PLEAS, 
 
 fire insurance, 172. 
 POLICY, 
 
 against fire, nature of, 33. 
 
 light of action ought to be clear upon, 35. 
 
 ought to contain not a mere order for payment, but a covenant, 
 37. 
 
 the words "stipulated and declared" constitute a covenant, 38. 
 
 contents of policy, fire, 44, 
 
 interest, 62. 
 
 indorsements, 45. 
 
 different kinds of risks, ib. 
 
 slight and occasional deviations not fatal to a policy, 124. 126. 
 
 conditions of fire insurance, 46. 
 
 description of the property, 47. 
 
 statement of loss, 48. 
 
 evidence to be given in support of loss, 49. 
 
 rent, if to be insured, should be specified, ib. 
 
 consequential loss, ib. 
 
 insurances with more offices than one, ib. 
 
 fraud or false swearing wiU vitiate fire policy. 52. 
 
 average clause. 55. 
 
 expense of removing goods, ib. 
 
 duties, ib. 
 
 farming stock exempt, 58. 
 
 plurality of risks, ib. 
 
 memorandum on effecting an insurance and before policy deli- 
 vered, 58. 
 
 upon life, nature of, 185. 
 
 mode of effecting, 194. 
 
 proposal, ib. 
 
 inquiries, 188. 
 
 declaration, 189. 
 
 duties, 190. 
 
 death by the hands of justice, effect of, 192. 
 
 by the insured's own hands, 194. 
 See Concealment — Interest — Misrepresentation — Warran- 
 ty — Assignment — Forms. 
 PREMIUMS, 
 
 duty on fire, 56. 
 
 receipt for duty on, 60. 
 
 return of, fire, 74. 
 life, 259. 
 
INDEX. 325 
 
 PKEMIUMS— eoMiiOTMerf. 
 
 lien for preininms paid, 292. 
 
 See Insurance — Policu — Proceedings. 
 PROCEEDINGS, 
 
 fire insurance, 171. 
 
 jurisdiction belongs to the Courts of Law, 172. 
 
 Courts of Equity will assist, td. 
 
 interpleader, ii. 
 
 arbitration, ib. 
 
 upon policies under seal and not under seal, 174. 
 
 declarations on, 175. 
 
 pleas, 177. 
 
 evidence, 179. 
 
 in life insurance 303. 
 
 recovery back of losses improperly paid on policies for lives, 305. 
 
 declaration, 303. 
 PRODUCTION, 
 
 of certificate of the ministers and churehwardens, 130. 
 PROOF, 
 
 of loss, fire, 130. 
 
 See Policy — Insurance — Proceedings. 
 PROVISIONS, 
 
 for families and endowments, 306. 
 
 R. 
 
 REBUILDING, 
 
 or reinstating under the Party- Wall Act, 59. 
 RECEIPTS, 
 
 for premiums, fire insurance, 60. 
 RECOVERY, 
 
 back of premiums, life, 259. 
 
 of losses improperly paid, life, 305. 
 REFERENCES, 
 
 in life insurance, 188. 224. 
 REPRESENTATIONS, 52. 88. 124. 
 
 life insurance, 205. 221. 
 RISK, 
 
 and its duration, fire insurance, 115. 
 life insurance, 244. 
 
 DO partial loss in life insurance, 258. 
 
 the death must take place during the continuance of the policy, 
 244. 
 See PoHcy — Insurance. 
 
 s. 
 
 STAMP DTIES. See Duties. 
 
326 INDEZ. 
 
 STOCK, 
 
 farming, exempt from duties on fire insnrance, 58. 
 SUICIDE, 
 
 life insurance, 194. 
 
 TAR BARREL AND FIRE, 
 
 introduction of, into a bnilding, covered by the common insur- 
 ance premium, 124. 126. 
 TENANT AND LANDLORD, 162. 
 
 See Equities. 
 TRUSTEE, 
 
 may insure for cestut que trust, 241. 
 
 u. 
 
 USUAL MEDICAL ATTENDANT, 
 
 life, 123. 
 USURPED POWER, 
 
 meaning of, fire, 104. 
 
 w. 
 
 WAGERING, 
 
 policy, 242. 
 WARRANTY, 
 
 natureof, fire, 81. 98. 
 
 must appear on the face of the policy, 81. 
 
 instructions or statements not inserted in the policy merely a 
 representation, 82. 
 
 must form part of the policy in life insurance, 205. 
 
 warranty that the party to be insured is in good health, ib. 
 
 if no warranty of health, insurers run the risk, 209. 
 
 as to disorders tending to shorten life, 210. 
 
 as to fits, 211. 
 WILFUL BURNING, 139. 
 

 Date Due 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LIferary Bursiu Cat. No. 1137 
 
KF 116^ eW 
 
 Author 
 
 Vol. 
 
 Ellis, Charles 
 
 Title The law of fire suid life copy 
 
 insiirance and annuities, with •.• 
 
 Date 
 
 Borrower's Name