Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University -■■/■• And Presented February 14, 1893 ' IN HEnORY OF JUDQE DOUQLASS BOARDMAN FIRST DEAN OE^ THE SCHOOL By his Wife and Daughter A. M. BOARDMAN and ELLEN D. WILLIAMS Cornell University Library KD 1864.B94 A treatise upon the law of life assuranc 3 1924 022 392 389 Cornell University Library The original of this bool< is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924022392389 TREATISE TTPON THE LAW OF LIFE ASSUEANCE; BPOK THE CONSTITUTION OP ASSURANCE COMPANIES, THE CONSTRUCTION OF THEIR DEEDS OF SETTLEMENT, THE SALE OF REVERSIONARY INTERESTS, EQUITABLE LIENS AKISING IN CONNECTION WITH , LIFE POLICIES. ®it| m lipnfe, OP PRECEDENTS FOR THE ASSIGNMENT OE POLICIES BY WAT OF SALE, MORTGAGE, AND SETTLEMENT ; NOTES OF CASES j STATUTES ; AND AN INDEX OP PEITATE ACTS OBTAINED BY INSTJEANOE COMPANIES. BY CHARLES JOHN BJJNYON, M.A. OP THE INKER TEMPLE, ESQ., nREISTEK-AT-LAW. PHILADELPHIA: T. & J. W. JOHNSON, LAW BOOKSELLERS, PUBLISHERS AND IMPORTERS, NO. 197 CHESTNUT STREET. 18 54. KITE * WALTON. PREFACE. In laying the present Volume before the public, the Author trusts, that a sufficient apology may be found in the growing interest that is felt in all that relates either to the law or practice of Life Assurance, and the increasing importance of the institutions by which the latter is con- ducted. To this he may add, that he has been himself induced to un- dertake its preparation, by the belief that notwithstanding the eminent array of authors who have written on the subject of Assurance, the law of Life Assurance, has not, up to the present time, been treated from its Equity side. He therefore hopes that an essay, in which some of the numerous equitable and conveyancing points continually arising in practice are considered, may prove not unacceptable either to the pro- fession or to that numerous and important class to which the management of Life Office is entrusted. He has endeavoured to condense into a small compass, such an amount of legal information as he has imagined likely to be useful, and which, if considered as a mere compilation, would at least require many bulky and expensive volumes to produce. His task has been rendered the easier in that he has found it desirable to deal with the subject in its legal aspect alone, leaving it to other pens to treat it commercially, financially, or mathematically. To have done otherwise would have been to trespass upon the province of others, and, he apprehends, have materially injured the usefulness of the book by clogging it with extraneous matter, and so far prevented it becoming that which its Author has desired to make it — a concise practical Law Book. Temple, Novemher, 1853. TABLE OF CONTENTS. The pages referred to are those between brackets. [ ]. Index of Cases cited ...... Page ix. P A E T I. CHAPTER I. The nature of the Contract at Common Law and as modified by the Statute Law.— How far it fulfils the legal Conditions of a Wager, or necessarily operates as an Indemnity .^The Irish Decisions. — God- sail v.Boldero. — The Gambling Act and its Provisions. — The Insurable Interest.— The 8 & 9 Vict. c. 109 . . . . . 1 CHAPTER IL The premises of the Contract. — The disclosure of material Pacts; — The form and manner of the Proposal. — The construction of its Stipula- tions. — The effect of Warranties and Representations . . 30 CHAPTER III. The private and medical Referees. — Their Duties and Responsibilities. — The right of the latter to Remuneration for their Professional Ser- vices ......... 51 CHAPTER IV. The Policy. — Its form, execution and conditions, and the General Rules of its Construction ....... 59 CHAPTER V. The Onus of Proof of the truth of the Warranties, &c.— Indisputable and unchallengeable Policies. — The right of the Insurers to set aside the Contract in Certain Cases. — The return of the Premium, and the reformation of the Contract . . ... . . 81 CHAPTER VI. Insurances against Accident. — Insurances against the birth of Issue. — ■ Fidelity or Guarantee Policies. — The combination of Guarantee and Life Insurance . i . . . . .96 VI CONTENTS. CHAPTER VII. The insurer, and herein of the donstitution of Insurance Offices . 114 CHAPTER VIII. Charters of Incorporation and the Construction of Deeds of Settlement, and private Acts of Parliament amending the same, and giving special powers to Insurance Companies, and herein of the Partnership Eights of the Members inter S6 . . . . . .135 CHAPTER IX. Friendly Societies ....... 147 CHAPTER X. The Powers and Duties of Directors, Officers, and Agents . . 15T PART II. CHAPTER I. The Assignment of PoliSies for valuable consideration, and herein of Considerations, of the Bankruptcy of the Assured, and eonflicting Equities of Consecutive Incumbrancers .... 169 CHAPTER II. The Evidences of Contracts by which sales are effected or Liens created 188 CHAPTER III. Notice ......... 201 CHAPTER IV. Concerning advances by Insurance Offices by way of Mortgage of their own Policies with or without additional Security, and herein of the Securities for Money usually accepted by them . . .216 CHAPTER V. The Sale of Reversionary Interests ..... 226 CHAPTER VI. Equities arising from Contracts other than Contracts of Sale, or the Creation of Liens by the Assured ..... 244 CHAPTER Vn. The application of Policies as Securities for the Pines payable on the renewal of Leaseholds for Lives or Years 260 CHAPTER Vm. Voluntary Assignments . . . . . . .212 CONTENTS. vii PAET III. CHAPTER I. The Rights and Interests of Persons under Disabilities. — Infancy. — Coverture. — Lunacy. — ^Felony ..... 298 CHAPTER 11. The Claim and its Payment. — The Proof of Death. — The Receipt. — The custody of the Evidences of Title . . . .311 CHAPTER III. The enforcement of Claims by Action at Law or Suit in Equity. — Inter- E leader. — The construction of Stipulations for the limitation of the liability of the Insurers ...... 328 CHAPTER IV. Annuities ........ 334 CHAPTER V. Stamps ......... 353 CHAPTER VL The Succession Duty Act, 1853.— The Income Tax Acts, 1853.— The prospect of future Legislation on the subject of Life Assurance as developed in the Report of the Select Committee of 1853. — ^Recom- mendations for the Amendment of the Law .... 374 APPENDIX. PRECEDENT I. Conditions of Sale . . . . . . .391 PRECEDENT IL Assignment upon Sale of a Policy of Assurance effected by the Vendor upon the Life of a Nominee [with Variations whem the Policy is on the Life of the Vendor] ...... 393 PRECEDENT IIL Assignment upon Sale of a Policy of Assurance, [to be indorsed upon the Policy] 397 PRECEDENT IV. Assignment by a Creditor of a Policy of Assurance effected by him upon the Life of his Debtor to the latter after satisfaction of the Debt, [to be indorsed upon the Policy] ...... 398 PRECEDENT V. Mortgage of a Policy of Assurance upon the Life of the Mortgagor for securing a gross Sum and Interest thereon .... 399 vm Deed of further Charge CONTENTS. PRECEDENT VI. PRECEDENT VII. Mortgage of a Policy of Assurance to Three Persons upon a Joint Ac- count, with Provisions for effecting a new Policy in the event of For- feiture ......... PRECEDENT VIII. Deed of Covenant with Sureties, and the assignment of a Policy for securing a Sum of Money re-payahle by Instalments . PRECEDENT 12. , ; Deed of Covenant with the collateral Security of a Policy effected upon the Life of the Debtor in the Name of the Creditor for securing a Sum already due and future Advances ..... PRECEDENT X. Assignment of a Policy of Assurance in contemplation of Marriage upon Trusts to be declared by an Indenture of even date therewith PRECEDENT XI. Settlement of Moneys assured by a Policy on the Life of the intended Husband assigned by a Deed of even date to the Trustees PRECEDENT XIL Settlement of a Policy of Assurance on the Life of the intended Husband (short Form) ........ PRECEDENT XIII. Voluntary Settlement 403 405 409 412 417 422 428 430 Form of a Resolution adopted by the Equitable Society for the fluctua- tion of the Rate of Interest of their Securities with the rise and fall of Consols ■ . . . . ... Reports of Cases decided in the County Courts upon the Claim of the Medical Referee of the Assured to the payment of a Fee by the Com pany . . . , . How far the Principle of the Thellusson Act is applicable to Trusts for the Payment of Premiums upon Policies of Insurance . The Report of the Select Committee on Assurance Associations The Annuity Act, 53 Geo. IV. c. 141 . The Joint-Stock Companies' Registration Act, 7 & 8 Vict. c. 110 Act amending the same, 10 & 11 Vict. c. 78 . luDEi OF Private Statutes obtained by Insurance Offices General Index ....... 437 437 441 444 451 455 491 495 503 INDEX OF CASES CITED. The pages referred to are those between brackets [ 66. A. Abboi, V. Straiten Aberdeen t. Jerdan Acey T. Fernle Addis T. Campbell Albrecht v. Sussman Aldborough v. Trye 185. 230. Alexander v. Oana Allan V. Backhouse Allen v. The Sea Assurance Com- pany Amicable Society v. Bolland Amicable Society of Lancaster ex- parte Anderson v. Edie V. Fitzgerald 356 347 165 238 309 232. 239 242 267 129 71 32. 35. 39. 91. • V. Thornton Andrews ex parte [ — V. Bousfield Angler v. Stannard Annerly v. Simon Anon. Case Anson, Lord v. Hodges Antrobus v. Smith Armitage v. Winterbottom Arnott V. Holder Arkwright ex parte Ashby T. Bates v. Ashby T. Blaokwell Ashley v. Ashley Ashton T. Dawson T. McDougall Atkinson in re ■ V. Gylby Attorney-General t. Cleobury Australia, Bank of, t. Breillat Aynsley v. Wordsworth B. 148 19 80. 94 93 20. 26. 249 211 214 329 309 239 174. 290. 294 20 195 197 82 301 320 24. 170, 171. 198 295 306, 179 134 356 159' 247. 249 Baker t. Best Balfour v. Welland Ball V. Storie Bamford t. lies Bauerman v. Radenius Baunester v. Norris Barber v. Morris Barclay v. Lucas Barker t. Parker V. Walters Bagshaw v. The Eastern Union Rail- way Company 141 238 214 47 106 328 159 23. 28 106 106 90. 91. 338 208 241 200 273 •336 239 95 338 368 247 Barnett ex parte Barron in re Bassil T. Lister Bayley v. Schofield Bawden v. Howell •Bawtree v. Watson Beaumont v. Bramley Beech t. Sir F. Eyre Belcher v. Sykes Bell T. Ahearne V. The London and North- western Railway Company 280 Benham t. The United Guarantee and Life Assurance Company 34. 104 Bennett t. Colley 262 Bennett T. Cooper 189 Bentley v. Maokay 278 Benyon v. Nettlefold 174 Berkeley t. Hardy ( 190 Bernard's Case 161 Berry ex parte 173 Berman v. Woodbridge 92 Bignold V. Audland 333. 336 Birch T. Blagrave 289 Bird V. Pegrum 301 V. Brown 164 Bishop T. Curtis 170. 318 Blakely v. Brady 280. 286 Blakemore v. The Glamorganshire Railway Company 143 Blandy v. Herbert , 368 Blewett T. Gordon 338 Blount T. Barron 295 Bolland T. Disney 71 Bolton T. Dugdale 62 X INDEX OF CASES CITED. Bonar v. McDonald 102 Boothby v. Boothby 237 Borrodaile y. Hunter 73. 76. 78. 193 Bosanquet v. Shortridge 139 Boswell v. Mendhani 239 Boughton T. Sandilands 173 Bowes T. Heaps 237 Boussmaker ex parte 308 Brace v. Harrington 330 Brandon v. Woodthorpe 98 Brazier T. Hudson 191 Brealey v. CoUina 39. 187 Bridge t. Bridge 279. 289. 294 Briercliffe v. Dorrington 243 Briggs V. Chamberlain 241 British Empire Mutual Life Assu- rance Company v. Browne 129 British Empire Insurance Company T. Magee 7. 10 Bromley v. Holland 350 Brougham v. Squire 199 Brown v. Carter 186 v. Pringle 98 Bruce v. Hunter 225 Burbidge v. Cotton 225 Burdon v. Browning 350 Burnes v. Penuell 162. 168 Burridge v. Row 195. 302 Bush V. Brown 309 Bushman v. Morgan 333 Butcher v. Butcher 306 Butt V. Morrell 158 Calcraft v. Roebuck Caldwell v. Dawson Calleuder v. Olericks Capes' Case Oapel V. Wood 333 368 167 130 261 Carlisle v. The Southampton Rail- way Company 343 Carr T. Jackson 164 Carter v. Boehme 47 T. Taggart 300 Cathcart v. Lewis 330 Caton V. Rideout 303 Cecil v. Butcher 289 Chaffers v. Headlam 332 Chandelor v. Lopus 56 Chandos, Lord t. The Inland Reve- nue Commissioners 361 Chapman v. Fraser 92 V. Chapman 196 Chattock T. Shaw 43 Chedworth, Lord, v. Edwards 167 Chesterfield, Earl of, v. Janssen 8 Church's Case 310 ClaTell T. Littleton 289 Clay T. Harrison 20 — r. Rufford 142 Clements v. Bowes 132 Clift V. Schwabs 72. 75. 78 Oockell V. Taylor 228. 238 Cohen v. Wilkinson 136 Colegrave t. Manby 262 Coles V. Trecothick 163 CoUett T Morrison 20. 25. 95 303 Collier v. Laurie 333 CoUinson v. Patrick 277 Collins T. Blantern 174 Colman t. The Eastern Counties' Railway Company 136 Cooke V. Coleham 62 T. Alcock 7. 10 V. Blake 73 T. Field 14. 18 CoombeST. The Queen's Proctor 309, 310 Copper Miners of England, Gover- nor and Company of, v. Pox 163 Cotton V. King 289 Courtenay v. Courtenay 153 Courtney v. Ferrers 186. 317 Cousins V. Nantes 11 Const V. Harris 137 Cowper V. Godmond 94. 350 Cox V. Barnard 287. 289 V. Midland Railway Company 163 Craig T. Fenn 38 Crawshay v. Collins 131 Creed in re 313 Crelliu t. Calvert 337 Cross V. Sprigg 103 Cumberland v. Kelly 361 Curling v. Marquis Townshend 7 Curtis ex parte 204 Cutts V. Salmon 227 D. Dalgleish v. Jarvie 30 Dalton V. The Midland Railway Company 302 Damer v. Lord Portarlington 216 Dane v. Kirkwall 307 Davies v. Hawkins 137 V. Cooper 238 Dawson v. Wrench 338 V. Paver 144 Dearie V. Hall 176. 180. 184. 206 Dee ex parte 132, 133 Denoir v. Gyle 114 Derby Canal Company v. Wilmot 61 Deering V. Winchelsea 109 Desborough v. Rawlins 91 Detastet v. Tavernier 273 Dillon V. Coppin 174. 287 Dodd V. Wake 98 Doe d. Church v. Poutifex 347 Doolubdas v. RamloU 29 Dormay V. Borrodaile 185.193 Dowdall V. Hallett 159 Downes v. Green 223 Drake v. Rogers 347 Duberley v. Day 241 Ducarry v. Gill 162 Duckett V. Williams 94 Duffield V. Elwes 295 INDEX OF CASES CITED. Duplex V. The Economic Life of- fice Dursley v. Fitzharding Dwyer v. Bdie Dyson v. Morris E. Bastwick t. Caillaud East and West India Dock T. Littledale Ede T. Knowles Edge T. Duke Edwards v. Barron T. Baugh T. Browne T. Burt V. Jones T. Scott Ellis T. Reg. T. Nimmo Ellison T. Ellison Bspey V. Lake Etty V. Bridges Evans v. Protheroe Everett v. Desborongh F. 56 19 19 19T, 198 2le Company 334 196 26. 219 38 112 234 234 292.294 203, 204 109 174 283. 285. 297 102 242 189. 370 44. 46 Fallon ex parte Farrer v. Hutchinson Farquharson t. Cave Featherstone v. Hutchinson Feise v. Parkinson Fenn v. Edmonds Ferguson v. Fyffe . V. Lomax 346 320 294 174 93 334, 335 225 5. 349 279. 290 259 37 290. 294 19. 308 346, 347 241 Field V. Lonsdale Pitzgibbon v. Scanlan Fitzherbert v. Mather Fletcher v. Fletcher Flenot T. "Waters Plight V. Buckeridge Forbes v. Adams , Sir William v. The Edin- burgh Life Assurance Company 38 Ford V. White 186 T. Stewart 239 Fortescue v. Barnett 175. 280, 281. 283. 286. 291 Forth Marine Insurance Company in re 133 Poster in re 194 V. Blackstone 180 V. Cockerell 181 Fox V. Wright 227 Frank v. Edwards 106 Fraser v. Eraser 98 Free v. Hinde 7 G. Gale T. Lewis Gardeners t. Parker Garrard v. Hardy 118 Garrett v. Barclay 76 Geach v. Ingall 43 George v. Milbanke 185. 276 German Mining Company in re 159 Gibson t. Overbury 177. 196 Gilbert v. Sykes 7 Giles V. Grover 310 Gladstone v. King 37 Glaholm v. Eowntree 200 Glyn V. Locke 191. 322. 330 Godsall V. Boldero 6. 23. 27, 28 V. Webb 293 Good V. Ash 61 V.Elliott 12 Gordon v. Ellis 320 Gore T. Gibson 307 Goring t. Edmonds 103 Gotlieb V. Cranoh 25. 257, 258 Governor and Company of Copper Miners of England v. Fox Gowland v. De Faria Gray v. Mathias Greedy v. Lavender Green v. Ekins Greenstreet v. Cumyns Greenwood v. Evans Grogan v. Cooke Groves v. Lane Gurney v. Eawlins 229. 163 239 175 300 318 99 267 276 332 317. 338 Halford v. Kymer 14 Hallett V. Dowdall 336, 337. 339 V. Merchant Traders' Ship Loan and Assurance Company 341 Halse T. Peters 365 Hamilton v. Mendes 22. 27 166. 205, 206 328 Hammond v. Messenger V. Bendyshe Hansard v. Eobinson Hanson v. Keating Hargrave v. Smee Hargreaves v. Lancaster and Pres- ton Railway Company Harman v. Kingston Harris ex parte Harrison v. Round V. Heathorn Hassell v. Merchant Traders' Ship Loan and Assurance Company Hawtayne v. Bourne Hawkins v. Woodgate Hays ex parte Headen v. Rosher Heap v. Tonge Heathcote v. The North Stafford- shire Railway Act Hedges v. Hedges Hennessey ex parte 166. Henkle v. The Royal Exchange As- surance Company Henson v. Blackwell 247. 329 149 325 242 105 144 19. 308 157 269 118 341 164 256 299 230 172 143 294 204 95 249 xu INDEX OF OASIS CITED. Heslop ex parte H'ewison v. Negus Hewitt V. Loosemore Heywood v. Rogers ex parte Hicks V. Hicks Hiern v. Mill Higgins T. Sargent Hill V. Gomme V. Spencer T. Secretan Hitchena v. Congreve Hitchcock T. Clendinnen Hobby V. Collins V. Allen 1T8 173 184 4T 1T7 350 180. 202 332 288 lU 20 142. 114 300 241 241 Hodgson T. Hodgson 103. 195 Hoffman v. Cooke 350 Hoghton T. Hoghton 239 Holland T. Pelham 220 V. Smith 20. 25. 244. 249 Eolloway v. Headington 284 Holman t. Loyues 238 Holme ex parte 162 Holmes v. Blagg 298 Hooper ex parte 196 T. The Gresham Life Assur- ance Company 56 Houghton ex parte 19 Houlditch T. Wallace 185 Howard's, Sir B., case 64 Huokmau t. Fernie 44. 52. 81 Huddleston v. Whelpdale 264. 269 Hughes T. Stubbs 289 Huguenin v. Rayley 35. 38 Humberstone v. Chase 201 Humphrey v. Arabin ^ 26. 247 Hunter v. Leathley 182 Hurst V. Beach 295 Husband v. Davis 320 I. Inderwick v. Suell L41 India and London Life Assurance Company v. Dalby 28. 90 Irnham, Lord v. Child 253 Irving T. Richardson 24 Jackson v. Lever 351 Jaoomb v. Horwood 315 James v. Bidder 197 277 Jeffreys v. Jeffreys , 282 284 Jenkins v. Hutchinson 164 Jodrell V. Jodrell 172 Johnson v. Ball 296 -r ^miffi 288 186 317 JoUiffe ex parte Jones V. Jones 264 269 V. Gibbons ■175 208 V. Keene 187 V. Smith 183 Jones V. Starkey Jones V. Winwood 190 297 K. Kavanagh v. Waldron Kelson v. Kelson Kemp V. Westbrook , in the goods of Kendall v. Beckett Kensington ex parte Eepp V. "Wiggett 254 174 197 313 239 196 __^^ „„... 106 Kekewich V. Manning 272. 284. 289. 292 Kenney v. Weiham 352 Keys T. Williams 328 Kingsbridge Hnll Company v. The Plymouth Baking Company 160 Kinnear v. Borrodaile -76 Kirk V. Bell 160 Kirkpatrick v. Tattersall 172 Langston ex parte 196 Law T. Warren 252 V. The London Indisputable Life Policy Company 342 Lawe's Case 137, 138 Lawrence t. Maggs 261 T. Boston 365 Lee ex parte 308 Leeds v. Lancashire 62 Legard v. Hodges 171 Leete v. The Gresham Life Assur- ance Society S3 Leng V. Hodges 89 Lett V. Morris 175 Lewis V. Nicholson 164 V. Hilman 346 ex parte 847 Lindenau v. Desborough 31. 35. 38. 54 Lloyd ex parte 185 Lockyer V. Offley 311 Lock T. Lomas 322 Lockhart. T. Hardy 198 Lomas v.^rightr. , 288 London, Brighton, and South Coast Railway Company v. Goodwin 105 London and Westminster Mutual Life Assurance Company in re 133 Lord V. The Governor and Co. of Copper Miners 141.159 Lothian v. Henderson 34 Loveridge v. Coover 180 Lowry v. Bourdieu 92 Lowther v. Carlton 186 Lucenav. Crawford 16 Lund V. Blanchard 142 Lushington v. Boldero 99 M. Mac Bride v. Lindsay Mac Padden v. Jenkins 142. 161 278. 284. 291 INDEX OE OASES CITED. XIU Mac Intyre t. Oonnell 121 Mackenzie v. Mackenzie 296 Mac Owen t. Hunter 145' Magawley's Trust in re 275. 2Y8 Mangles r. Dixon 185. 209 Match V. The Attorney-General T. Pigot Martin t. Sedgwick Martindale t. Booth Massey t. Banner 166, Master v. Miller Masterman v. Lewin ■ ex parte 282. May V. Roper in re Mayhew y. Crockett Meek t. Kettlewell Meggiuson t. Foster MelvjUe v. Doidge Merchant Traders' Ship Loan and Assurance Company in re Messenger t. Clarke Metcalfe v. Bruin Meux v. Bell 183. 180 Mildmay t. Lord Methuin Miles V. Williams T. Knight MiUiken v. Kidd Milsintown, Lord v. Lord Portmore Minnet t. Whitney Moens t. Heyworth MoUoy T. French Molton y. Oamroux 306. 350. Money t. Jordan Monmouth and Glamorganshire Banking Company in re Monro ex parte Montague v. Tidcombe Moore v. Hammond T. Darton 318 8 203 292 161 ITO 335 205 241 196 109 284 197 105 342 302 106 242. 292 211 110 98 255 262 IS'? 31. 50 115 310 290 Morgan T. Halford T. Pebrer ex parte Morian v. PoUey Morris v. Jones Wilkinson Morrison y. Muspratt Morton y. Tewart Moss ex parte Mossop y. Eaden Motteux V. London Assurance Com- pany 95. 304 Mountford y. Cadogan 261 ex parte 197 Mozley y. Alston 141 Murray y. Lord Elibank 300 Munt y. The Shrewsbury and Ches- ter Railway Company 136 Myers y. Perigal 144.318 131 176 103 159 295 189 13 138, 139 243 219, 220 196 38.44 259 200 326 N. Naish in re Napean y. Doe 220 312 Natusch y. Irying 136 Neale y. Molyneaux 182 Newport Marsh Act in re 144 Newry Railway Company v. Moss 130 Newton v. Askew 287 Nield y. Smith 349 Nightingale y. Lawson 265 Norcutt y. Dodd 273 Norrish ex parte 148 Norwich Yarn Company in re 159 Nun y. Wilsmore 276 0. O'Brien y. Lord Kenyon 115. 217 Oldham y. Hubbard 249 Olding y. Smith 164 Ottley y. Gray 190. 321, 322. 331 Oyerhill's Trusts in re 98 Owen y. Homan 102 y. Thomas 356 P. Padwick y. Stanley 103 Page y. Cox 284 Paget T. Gee 249 Parkes y. Bott 186. 317 Parsons y. Bignold 37. 47. 95. 168 Pasley y. Freeman 55 Paterson y. Powell 1 y. Black 313 Pawson y. Watson 34 Peel y. Tatlock 103 Pemberton y. Oakes 106 Pendlebury y. Walker 109 Perkins y. Bradley 309 Phelps y. Lyle 338 Phenev. Gillan 130 Philbrick y. Whetham 56 Phillips y. Clagett 329 y. Eastwood 10. 23 Pisani y. Lawson 308 Playters y. Abbott 264 Plumb y. Fluit 183 Pooley y. Goodwin. 368 Pope y. Root 351 Pott V. Todhunter 174 Potts V. Curtis 231 Powell's Trust in re 333. 351 Prudential Mutual Assurance Com- pany y. Curzon 366 Pugh y. The Duke of Leeds 64 Pulsford y. Richards 161 Pulyertoft y. Pulvertoft 286 Purdew y. Jackson 185 R. Raikesinre 207 Ray y. Fenwick 330 Rawlings y. Bell 56 Reed y. The Royal Exchange Assu- rance Company 14 XlV INDEX OF CASES CITED. Reed t. Allea^ SSV Reeves t. Creswick 267 Reg. T. Registrar of Joint Stock Companies, in re The Sea, Fire, and Life Assurance Company 125 V. Registrar of Joint Stock Companies, in re The Sheffield, Rotheram, and Chesterfield In- surance Company 126 V. York and North Midland Railway 146 T. Cotton 148, 149 T. Bannatyne 148 V. Aldham and the United Parishes Insurance Society 148 T. Grant 149 T. Welman 161 RexT. The Inhabitants of Harborne 312 T. Clapham 314 T. Ridgway 369 Rice V. Gordon 106 T. Shute 337 Richardson v. Hastings 132 V. Smallwood 276 Ridley v. The Plymouth Baking Company 160 ■ T. The Plymouth Grinding Company 164 Ripley v. Waterworth 318 Robarts v. Tucker 319 v. "Walker 309 Rochfort v. Battersby 179 Rodick V. Gandell 189 Roffey V. Greenwell 62 Rogers v. Bradshaw 114 Ross T. Bradshaw 40 Ryall T. Rowles 176 S. Sadlers' Company t. Badcock 24 Saltern v. Meluish 287 Scarf v. Soulby 174.273 Sceales t. Scanlan 34 Scarth v. The Bishop of London 316 Schondler v. Wace 196 Scott V. Spashett 300 V. Avery 149 V. Roose 10. 21 Sevier v. Greenway 252 Sewell V. Walker 236 V. Moxsey 287 Shaftesbury, the Earl of v. Duke of Marlborough 262 Shallcross v. Weaver 227 Shannon v. Nugent 10 Shaw ex parte 350 Shelly T.Nash 227 Shepherd v. Beecher 103 Shrewsbury v. Blount 56 Sibbald v. Hill 48 SibberLng v. The Earl of Balcarres 239 Silver v. Barnes 225 Sims V. Thomas ■ 273 Simpson v. Denison 136. 141; 143 Simson t. Cooke 106 Skaife v. Jackson 320 Slade T. Rigg 197 Stiffe V. Everett 241 Sloaue T. Cadogan 277. 285 Small V. Atwood 228 Smith V. Nightingale 62 V. The Hull Glass Company 129. 159 V. Goldsworthy V. Smith South ex parte Southcombe v. Merriman Spackman ex parte Stackpole v. Simon Staniland v. Willot Stevenson v. Snow Stewart v. Greaves V. Aberdeen 140 205 175 39 133 32, 33 295 91 146 "166 175. 185 263 102 128. 158 Stocks V. Dobson Stone V. Theed V. Compton Straffon's Executors' Case Stratford and Morton Railway Com- pany V. Morton 146 V.Powell 288 Stright ex parte 203 Strickland v. Turner 352 Sturgis V. Champneys 242. 300 Styan ex parte 178 Sunderland Marine Insurance Com- pany V. Kearney 336. 343 Surcombe V. Pinniger 173 Swaun ex parte 346 Swayne v. Swayue 243 Swete V. Fairlie 31. 33. 54 Talbot's (Lord) Case 342 Tanner v. Elworthy 259 Tartleton v. Stainforth 66 Taylor ex parte 241 V. Ashton 56 V. Sharp - 250 Thames Haven Dock and Railway Company v. Rose 160, 161 Thompson v. Spiers 203 V. The Universal Sal- vage Company 129 v. The Wesleyan News- paper Association 129 Thornton v. Knight 28. 91 Tibbetts v. George 205 Tidswell v. Ankerstein 19, 20 Tidd V. Lister 241, 242 Toppin v. Field 194 Townshend, Lord v. Windham 276 V. Westmacott 275 Traill V. Bull 318 TrentNavigation Company V. Harley 103 Trevor v. Trevor 99 Triston v. Hardey 246 INDEX OF OASES CITED. XV Turner v. Harvey 187 Wayne v. Hanham 197 198 Twne's Case 276 Weatherall v. Geering 169 Tyrie v. Fletcher 91 Webster v. Webster ' Weddell v. Lynam 26 350 U. West T. Eeid T. Skip 183 201 177 Uuiacke v. Giles 289 Wharton y. May 7 Underbill v. Horwood 219 Wheatley v. Parr Whitbread v. Jordan 286 183 V. ex parte 196 White V. White 261, 262 265 Vanderzee v. Willis 196 Whitmore in re 194 Vaughan t. Buck 300 Whittingham t. Thornborough 48 114 Verner t. Winstanley 251 Wilkinson v. Ooverdale 167 Vickers v. Oowell 320 v. Byers 173 Vyse T. Wakefield 69 . 193 Willey T. Bignold Williams t. Beaumont 329 146 W. .... rru ....^ 169. 175 1 "77 X 1 1 V. Atkyns 256 Wain T. Warltera 272 Williamson v. Goold 350 Wainwright v. Bland 19. 21. 48 287 Waldrou v. Sloper 243 Wills T. Sutherland 146 WaUace v. Kelsall 320 Wilson V. Keane 298 Walsh V. Walsh 299 Wilmot T. Pyke 243 Walmsley t. Child 326 Winthropp v. Murray 192 259 Walker y. The British Guarantee Wolfe T. Pindlay 333 Association 105. 148 167 Wood's Case 137 -n- T?iT»iT>i-\Trmn 275 Worcester Corn Exchange Company Want T. Blunt 66 in re 157 Warburton v. Loveland 179 Worthington v. Morgan 184 Ward V. The Society of Attorneys 141 Wray's Trusts 276 295 Wright T. Wright 170, 171 318 V. Audland 281 Warren v. Howe 368 T. Waters T. Mansell 350 Watson T. Alcock 103 Yallop ex parte 19 Watson V. Earl of Charlemont 161 Yeates v. Groves 62 288 T. Mainwaring 41 Z. 55 Watts T. Symes 186 ZoU v. Lord Curzon 337 A TREATISE LA¥ OF LIFE ASSURAJJfCE. PAET I. CHAPTER I. THE NATUEE OF THE CONTEAOT AT THE COMMON LAW, AND AS MODIFIED BY THE STATUTE LAW. 1. The contract of Insurance has been defined by Tindal, C. J., to be that in which a sum of money " as a premium is paid in consideration of the insurers incurring the risk of paying a larger sum upon a given con- tingency."(a) The contract of life insurance may be further defined to be that in which one party agrees to pay a given sum upon the happen- ing of a particular event contingent upon the duration of human life, in consideration of the immediate payment of a; smaller sum or certain equi- valent periodical payments by another. This consideration in money is termed the premium or premiums, and is paid either in one sum, when it is termed a single premium; or by a succession of periodical instal- ments, usually yearly or half-yearly, in which case the first instalment is always paid in advance. The party receiving the premium and giving the security, is termed the assurer or insurer ; the party jiaying the pre- mium, and to whom or to whose representatives the security is made, the assured or ^insured ; the contingency insured against, the risk | and the written instrument containing the contract, the policy. .: ■ 2. The uses of such a contract are obviously manifold^ " it having *been found by experience," to use the words of Charters of the p jjto -i Royal Exchange and London Assurance Corporations, "to .be of: .I- - -' i" ■ ■■ ' (ffl) Patterson t. Powell, 9 Bing. 329. July, 1853.— 2 18 bunyon's life assukanoe. benefit and advantage for persons having ofiSoes, employments, estates, or other incomes determinable on the life or lives of themselves or others, to make assurances on the life or lives upon which such oflSces, employ- ments, estates, or incomes are determinable." By this means the mer- chant or professional man may secure for his family, by anticipation, that provisicfe which would otherwise have required a long life of care to obtain. The debtor, whose income is dependent on his life and exertion, may protect his creditor from that loss which his early death would occasion, and thereby obtain time and opportunity for the gradual extinc- tion of his liabilities. The tenant for life, or the annuitant, the lessee for lives or years determinable with lives, or the copyholder, may, by a moderate payment proportionate to his means, obtain for his property the advantages of a permanent investment, and thus in the latter case relieve it, at least to a great, extent, from the onerous character of its tenure. 2. In addition, however, to these legitimate uses, such a contract is obviously liable to -abuse, and may become a matter of speculation or mere gambling, rather than of prudent investment; and to such an extent was this abuse formerly carried, that, in the year 1774, it became the subject of parliamentary discussion,(6) and a statute was passed P ,u„ , *intitled " An Act for regulating Assurances on Lives, and for L -I prohibiting all such Insurances, except in cases where the per- sons insuring shall have an interest in the life or death of the person (6) From the year l'r20 much of the legitimate business of the city of London was usurped by speculative or gambling assurances. "Policies were opened on the lives of public men with a recklessness at once disgraceful and injurious to the morals of the country. That of Sir Robert Walpole was assured for many thou- sands ; and at particular periods of his career when his person seemed endangered by popular tumults, as at the Excise Bill, or by party hate, as at the time of his threatened impeachment, the premium was proportionately enlarged. "When George 11. fought at Dettingen, 25 per cent, was paid against his return. The rebellion of 1745, as soon as the terror which it excited had passed away, was productive of an infamous amount of business. The members of Garraway's, the assurers at Lloyd's, the merchants of the Royal Exchange, being unable to raise or lower the price of stocks any more by reports of the Pretender's movements, made sporting assurances on his adventures, and opened policies on his life. Sometimes the news arrived that he was taken prisoner, and the underwriters waxed grave. Sometimes it was rumoured that he had escaped, and they grew gay again. Thousands were ventured on his whereabouts, and tens of thousands on his head. The rebel lords who were captured in that disastrous expedition, were another source of profit to the speculators. The gray hairs of Lord Lovat did not prevent them from gambling on his life. The gallantry of Balmerino, and the devotion of Lady Nithsdale, raised no soft scruples in the minds of the brokers : and when the husband of the latter escaped from the Tower, the agitation o'f those who had perilled their money on his life, and to whom his violent death would have been a profit, is described as noisy and excessive. No sooner was it known that he had escaped, than fresh policies were opened on his re-capture; arid great must have been the indignation of his high-minded wife when she afterwards heard this trait of city character." As subsequent events occurred, the game proceedings were repeated. "Successes and disasters were all the same to the assurers. The' seals of a Prime Minister or the life of a highwayman answered equally the pur- pose of the policy mongers ; and India or Minorca, Warren Hastings or Admiral Byng, were alike to them if they could put money in their purses." " There was absolutely nothing on which a policy could be opened that was not employed as the opportunity of gambling." — Francis, Annals of Life Assurance, p. 140. NATURE or THE CONTRACT. "19 insured," and enacting that "no insurance should be made by any per- son or persons, bodies politic or corporate, on the life or lives of any per- son or persons, or on any event or events whatsoever, wherein the per- son or persons for whose use and benefit, or on whose account, such policies should be made, should have no interest, or by way of gaming or wagering ; and every insurance made contrary to the true intent and meaning thereof should be null and void to all intents and purposes. "(c) *This statute, which is commmonly called the G-ambling Act, r ,^4-, is extremely important, and calls for our consideration section by L J section ; but, in the first place, it is desirable to consider what is the true nature of the contract as originally defined at common law, and afterwards the general scope and construction of the statute as modifying or explaining it. In so doing, we may premise that the statute does not extend to Ireland. When policies have been effected by persons resident in Ireland with English companies, the question may arise upon actions brought in that country, whether the statute operates upon them. As, however, the object of the statute is to discharge certain transactions *on r j-r t the part of the assured, and not to relieve or benefit the insurers, L J it is conceived that it cannot do ao-ld) 4. Life insurances seems divisible into two classes; first, that in which the risk is, strictly speaking, a contingent event, or one that may or may not happen ; as, for example, when a premium is paid to secure a sum of money if A. should die before B. : secondly, these in which the event assured against is certain, and the only element of uncertainty is the question of the length of time which will elapse before it will hap- (c) 14 Geo. 3, c. 48. "An act for regulating insurances upon lives, and for pro- hibiting all such insurances, except in cases where the persons insuring shall have an interest in the life or death of the persons insured. I. " Whereas it hath been found by experience that the making assurances on lives or other events wherein the assured shall have no interest, hath introduced a mischievous kind of gaming: for remedy whereof be it enacted by the king's most excellent majesty, by and with the advice and consent of the lords spiritual and temporal, and commons, in the present parliament assembled, and by the authority of the same. That from and after the passing of this act, no insurance shall be made by any person or persons, bodies politic or corporate, on the life or lives of any person or persons, or on any other event or events whatsoever, wherein the person or persons for whose use, benefit, or on whose account such policy or policies shall be made, shall have no interest, or by way of gaming or wagering; and that every assurance contrary to the true intent and meaning hereof shall be null and void to all intents and purposes whatsoever. "11. And be it further 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 events, without inserting in such policy or policies the person or persons' name or names interested therein, or for whose use, benefit, or on whose account such policy is so made or underwrote. "III. And be it further enacted, That in all cases when 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 in such life or lives, or other event or events. "IV. Provided always, That nothing herein contained shall extend or be con- strued to extend to insurances bona fide made by any person or persons on ships' goods or merchandizes; but every such insurance shall be as valid and effectual in the law as if this act had not been made." (d) See Ferguson v. Lomax, 2 Drury & War. 120. 238. 20 BUNYON'S LIFE ASSURANCE. pen, and the sum assured become, consequently, payable ;: as wlien the premium is paid to secure a sum of money upon the death of A. The first of these appears simply a wager, or mere aleatory contract, the pre- mium being a stake put at hazard upon the chance of the contingency happening, or, according to Johnson's definition of a wager, "a thing pledged upon a chance." If the^ contingency occurs, the assurers lose the sum assured ; if it does not, the assured loses the premium. A contract of the second class seems to diflFer from a mere wager, in the element of certainty involved, the event being sure to happen at some period, and may be thought to, assimilate to a purchase at a proportionate price of a sum of money payable at a future day, the only risk being the profit of the transaction — a risk inherent to every contract, and more partieulg,rly to those of which the completion is future ; as for example to the pur- chase of a cargo of merchandize which had been lately shipped, but has not yet arrived at the port of debarkation. On further examining, how- ever, even an insurance for the whole term of life, it is remarkable that when the principles upon which it is adjusted are ascertained, it is found not indeed to be a wager, but the equivalent of a series of wagers. . ■ It is sometimes supposed that the insurers, in calculating the premium' to be r *R "I V^^^) ascertains the average term or expectation of life, as *it is L J called, of persons of the particular age, and according to this term fixes the rate. This is not the case. . He ascertains the exact pre- sent value of the chance of having to pay the sum assured in every future year during which it is possible for the assured to live, assuming the payment to be made in the event of death at the end of the year, and the sum of all these chances is thotsingle premium to be paid to him. Neither is the practice difierent when the premium is an annual one, for in this case the annual' premium is the mere resolution of the single premiium into its equivalent in another forni,^to meet the convenience of the as- sured, fe) 5. Such contracts differ very materially from marine and fire insur- ances, which have been always oohstrued, in the absence of express stipulation, as contracts of indemnity,, the assurer agreeing to indemnify the assured, to the amount named in the policy, against any loss or dam- age occurring to certain specific property by the event assured agaiist. Life insurances are of course independent of, the value .of the subject^ matter of the insurance; and hence Emerigon, in iis treatise on Insur- ance, remarks, (/) "At Naples, in Plbrence, in ' England,, and various other places, it is permitted to make insurance upon' the lives of people; but this kind of insurance are not properly so termed, they are really wagers." By the French law at that time life insurances were not per- mitted, (g-) On the other hanidj it has been laid down in a leading cas§>|W) which has been repeatedly recognised as law, that this, as friell as the (e) See Milne on Annuities, vol. i. p. 161; Jones, on AnnuitieSj vol. i. p. 154. (/) Emerigon on Insurances,, by Meredith, p. 157i [g) lb. Life assurance in Prance was prohibited by law in 1681,, and was not re-introduced until the latter part of the 18th century, pee Ass. Mag. vol. 3, .p^ 16. ,=, ; V , I r : (A) Godsall T. Boldero, 9 East, T2. ■ ' , ' , ' NATURE OP THE CONTRACT. 21 cognate contracts of marine and fire insurance, is a contract of indemnity not only requiring an interest in the. assured in order to give validity to it at its inception, but. continuing good only so far as it is rendered so by the permanence of such an interest. " This assurance," said Lord Ellen- borough *in the case referred to, "as every other to which the r- ^n- -i law gives effect, is a contract of indemnity, as distinguished from L J a contract by way of gaming or wagering." 6. This case was decided subsequently, to the statute; but it has been thought that it turned upon the common law :{i) hence it is important to consider whether the statute is in fact declaratory or enacting. Now, in the first place, it is clear that by the common law a wager is not illegal, provided that it is not an incitement to a breach of the peace, or to immorality, or generally, for some reason inherent to the particular case, contrary to sound policy. Neither does there appear anything in a wager dependent upon the death of a human being which renders it neces- sarily obnoxious to the rule which thus avoids illegal wagers. The fear of the law is considered quite sufficient to countervail the temptation to assassination jik^ and the objection that the law will not allow a wager concerning the person of another from tenderness to the feelings of him- self or his surviving relatives, fails as applying, equally where there is an interest as to those in which there is none.(?) Other contracts involving such contingencies, and differing little but in form, are moreover continually entered into and considered binding : such are post-obit securities, in which, in-eonsideration of an immediate advance of money, bonds are given, or contingent or reversionary pro- perty charged, for the payment of a much larger amount upon the death of a particular person. («i) Early eases may, moreover, be found involv- ing the very question: thus, in a case before Lord Hardwicke, in consi- deration of 5000?.. immediately advanced, a bond was given by Mr. Spencer, the condition of which was, that he should pay 10,OOOZ. to *the defendant within a given time after the death of the Duchess r :|.o -i of Marlbrough, in case he should survive ter, but not otherwise. L -' In delivering the .judgement of the court, the Master of the Rolls re- marked, "In this ease, if the contingency happened on one way the whole money was lost, and therefore it may be properly called a wager between the parties whether Mr. Spencer or the Duchess of Marlborough died first." And the Lord Chancellor, " It is a plain fair wager, and not within the statutes of usury, because no loan."(m) And in .another case,(o) in the year 1771, a wager had been proposed, as the report quaintly expresses it, "between young Mr. Pigot and young Mr. Codrington,.at Newmarket, to run their fathers, to use the phrase of that place, against each other." The Earl of March adopting the pro- posal in the place of Mr. Codrington, notes were given in the following (i) 2 Smith's Leading Cas. 170. {k) Gilbert v. Sykes, 16 East, 155. (l) British Insurance Company v. Magee, Oooke &; Alcock, Irish Rep. 187. (m) Curling v. Marquis Townshend, 19 Ves. 628^ Wharton v. May, 5 Ves. 27; Free v. Hinde, 2 Sim. 7. Earl of Chesterfield t. Janssen^ 1 Atk. 346 ; 2 Ves. 125. March v. Pigot, ^ Burr. 2803, Lord Mansfield, C. J. 22 BTJNTOn's LIFE ASSURANCE. form : " I promise to pay to the Earl of March 500 guineas, if my father dies before Sir William Codrington. — ^W. Pigot;" and "I promise to pay to Mr. Pigot 1600 guineas, in case Sir William Codrington does not survive Mr. Pigot's father. — March." At the time of the contract Mr. Pigot's father was actually dead j and it was contended that, according to the principles of insurance law, it was avoided by the omission of some appropriate words equivalent to lost or not lost in marine policies : but the Court upheld the wager, considering that the mere survivorship was the thing intended to be betted upon, and there was no suggestion that it was illegal on the ground of public policy. Can there, however, be anything in the form taken by the contract, namely, that of a policy, which may render it void as an insurance by the custom of merchants, while in any other form it would be valid ? To this it may be answered, that, interest or no interest, policies upon ships r =i:Q 1 '^^^'^ permitted until expressly forbidden by the statute *19 Geo. L J 3, c. 37; and that if this was the case with marine, a fortiori it must have been so in life insurances, since the Law Merchant can only be applied to the latter by analogy. Under the statute it may be material whether the contract is one commonly carried out by a policy, or the actual evidence of it is a policy, since the provisions of the Act are then expressly applicable : but by the Common Law such a question must be decided not according to the form, but by the substance of the contract. An additional argument — that a policy of life insurance cannot be a mere contract of indemnity — is found in the fact that the terms upon which it is entered into are regulated by the nature of the contingency alone, and not at all by the interest of the assured, in respect of which he is to be indemnified, the probability of his interest ceasing not being taken into consideration. A whole life policy, moreover, is not like a fire or marine assurance, made for a short period, and renewable with the consent of both parties, but is a contract to receive a sum of money upon an event which, although deferred, will certainly happen; and although renewed year by year, by the payment of an annual premium, that premium is so calculated, that the right of renewal rests with the assured, and is a portion of the consideration for which all past pre- miums have been paid.(p) In a case before Lord Chancellor Sugden, in Ireland, the question at issue was, whether life policies would pass under the word Debentures in a will. The policies were either English policies or Irish policies, with a stipulation, that if the interest of the assured in the life should cease, the insurance should be void. His lordship observed, — " As between the insurance office and the insured the policy is only a contract of in- demnity, but as between man and man it is generally treated as an addi- tional permanent security. There may be various sorts of policies; a r *10 1 ™^° *^^^ ^° interest in his own life, and may insure it; that is L -• in effect a contract with the office to have a sum at his death. The character of an insurance by way of indemnity is to provide for the case where the party may sustain a loss. But where the object is to {p) Jarmau's Conveyancing, by Sweet, vol. v. p. 309. N A T U a E F T H E C N T R A C T. 23 secure a debt or sum of money in the nature of a loan, there it is in the hands of a creditor, and, as between him and the debtor, in the nature of an additional security for the debt ;" and he added — " I am of opinion, that the policies are debentures. There is no magic in words. A de- benture is an acknowledgment or declaration of a present or future right to receive payment of a certain sum out of a given property, so as not to make the person issuing it personally responsible. The form of a Gov- ernment debenture is this : ' This is to certify, that A. B. is entitled to a certain sum, &c.' What is a policy ? Nothing but an engagement by the directors that the funds of the company are liable to pay a certain sum of money upon a given event ; it is therefore within the meaning of the word debenture ; it is not to be paid unless a certain person die, and except certain annual payments are made, and other conditions are com- plied with. Now there is no uncertainty about the event of death, ex- cept as to the time when it is to happen; and it can make no difiference with regard to the instrument, whether it is an agreement that the funds shall pay a certain sum on a given event, or at all events.'Yg') But express decisions are not wanting to prove that the statute is not declaratory. Thus in the British Insurance Company v. Magee,(j") it was contended that a policy effected where there was no interest and which was silent on the subject was void, on the ground that the contract was one of indemnity only; that, even 'if a wagering life policy were lawful, it could only *be so (according to the rule in marine ^^^^-. insurances) (s) where the want of interest was expressly stated, L J but that such an insurance was in fact illegal at common law, independ- ently of the statute.(<) The Court in giving judgment, observed, "No authority has been cited to show that such an insurance has been held illegal, as being against policy or morals, in any case decided in Eng- land before the statute; and it is only necessary to look into the statute, to be satisfied that it is not declaratory, for it does not recite any exist- ing doubt or prevailing mistake as to the law, but on the contrary re- cites, ' that making insurances on lives or other events in which the as- sured shall have no interest, has been found by experience to have intro- duced a mischievous kind of gaming ;' and then enacts, ' that from and after the passing of this act, no insurance shall be made in which the in- sured shall have no interest.' Thus recognising the frequency of the practice, and the necessity for preventing it in future." 7. This statute, it is to be observed, applies not only to policies on lives, but to policies on any other event or events whatsoever; and so sweeping are its words, that it is not very easy to say what description of wager, if reduced to writing, might not be invalidated by them, the affir- mative to this position being maintained by Mr. J. BuUer in Good v. Elliot, (tt) but overruled by the majority of the Judges. From this and the accompanying cases, however, it would appear that the legislature (q) Phillips T. Eastwood, Lloyd & Goold, 291. \r) In the Exch. Chamber in Ireland, Cooke & Alcock, 182 ; Scott v. Eoose, Longfield & Townsend, Ir. Rep. 54; Shannon v. Nugent, 1 Hayes, Ir. Rep. 539. (i) CouBins V. Nantes, 3 Taunt. 513. (<) 14 Geo. 3, c. 48. \u) 3 T. E. 693. 24 bttnyon'slifeassitkance. had in contemplation such contracts only as were either ordinarily con- sidered or were conceived in the form of insurances. It seems to have been the opinion of Lord Kenyon that to bring the ease within the Act the contract must have been reduced to writing, since it had required the insertion therein of the names of the parties interested. 8. At the same time the words of the first section, enacting that no r:f.-iq-\ iDsurance should be made on any event wherein *the person on L J whose account the policy shall be made shall have no interest, ot by way of gaming or wag6ring, would invalidate any contract of insur ranee conceived in the form of a bet for the purpose of evading the Act, It may be thought that this would be the case whether the words " or by way of gaming or wagering" had been inserted by way of explanation or on the alternative ; but the latter construction has received the sanction of Mr. J. Grose in the lastly memtioned case, who observed the statute meant that every insurance on lives or on any other event in which the assured had not an interest, should be void, whether effected in the form of a policy or by way of gaming or wagering. When therefore the con- tract is an insurance, the form will not be material. " What," said Lord Mansfield, " is a policy ? It is derived from a French word which means a promise. Is a particular form necessary? Must it begin 'In the name of Grod, Amen V or refer to Lombard Street ? A mercantile policy we all know, but a gamiiag policy is a mere wager. If the form were essential under the Act, it might be evaded immediately."('v) 9. Every other aleatory contract however, if in the form of a policy, will be considered an insurance, and be comprehended by the words " or on any other event or events whatever." Thus in Roebuck v. Hamer- ton,(i«) the contract was to pay a certain sum in case the Chevalier D'Eon should at any time prove a female, the consideration being an im- mediate payment of 35 per cent, upon the sum to become payable in that event. " The parties themselves, said Lord Mansfield, have called this a policy. It is indorsed as a policy, opened as a policy, and any num- ber of persons whatever might have subscribed it as such, and therefore it is clearly within the Act. In Millison v. Staples,(x) there was a sim- ilar contract in the event of there being an open trade, that is, a cessation r *1^ 1 °^ hostilities *between Great Britain and the province of Mary- L J land before the 6th of July, 1778. And in Paterson v. Pow- ell, (y) upon the event of an Imperial Brazilian mining share reaching a specified value on a share list by a certain day (the 31st of December, 1829). In each of these three- cases the contract was set aside as for- bidden by the statute. The risks or events upon which the contingent payment depended were not such as were ordinarily considered the sub- jects of insurance. The two first were indeed such as had been consid- ered in other cases improper to form the subject of a wager, upon grounds of morality and sound policy ; but the third was not open to any objection on that account, and in every case the ground of the decision was that the contract had taken the form of a policy. (i>) Cited by BuUer, J., in Good t. Elliot, 3 T. R. '702. (w) Cowper, 737. (x) Park on Insurance, 140, n. (y) 9 Bing. 320. NATURE OF THE CONTRACT. 25 10. In conformity with this view a contingent contract, .of, a nature similar to those lastly mentioned, was not considered to be within the Act when not in the form of a policy. Thus, where the risk Was the value of Spanish bonds and scrip at a future day, time bargains in foreign securities at that period not being void by the Stockjobbing Act, the Lord Chief Justice said : — " As to the statute 14 Geo. 3, c. 48, there is no case which has treated a simple wager as within the enactments against wagering policies on lives j and I cannot. see how a simple wager, unobjectionable in other respects, can be said to fall within the statute when it does not even assume the form of a policy of assurance."(2) It is not, moreover, every contract for the payment of money upon the death of a particular person, that will be considered an insurance, and within the Act. Thus, post-obit bonds, as we have observed, hav§ never been, so; nor settlements containing covenants for. the payment of money in any such event ; and in a late case (where the question was raised), a contract by which a sum of money was agreed to be returned with- out interest upon the death of E. F.,, provided A. B. (an expectant *devisee under the will of E. P.) could not then make a good r^-i^-, title to certain real estate, was held not to be an insurance Or L J within the Act. (a) 11. The first section of the Act requires an interest at the time at which the policy is eflfeotedj and this interest, which, when sufficient to support an insurance, is termed an insurable interest, must be pecuniary; no ties of blood or affection are sufficient. The interest must arise out of some subsisting right of property which may be prejudicially affected by the occurrence of the event assured against, and which, whether in possession, in reversion, or contingent, would give the assured a standing in a court of equity if the title were in question. To this there appears to be one exception. It has been considered that a wife has an insurable interest on the life of her husbandjffi) but the converse is not true, for a husband has not such an interest in the life of his wife. (6) Neither has a parent, as such, an insurable interest in the life of his child. Thns> in Halford v. Kymer,(c) it appeared that, upon the marriage of the. plaintiff, certain funds had beeni settled " after the decease of himself and his wife, who were successively entitled to life interests, upon trust for the children of the marriage, according to the appointment of the plaintiff and of his wife ; and in default of appoint- ment, if there should be but one child of the marriage, then in trust for such child, to become a vested interest in such child, if a son, at the age of twenty-one years; and if no child of the said marriage, or issue of such child, should become entitled to a vested interest in the said trust moneys, then upon such trusts as the wife should appoint, and in default of her appointment, in trust for her next of kin, as if she had died intestatd {«) Morgan v. Pebrer, 3 Bing. Jf. 0. 454. '■ (a) Cooke v. Field, Q. B., 19 L. J. 441. (b) Reed v.. The Royal Exchange Assurance Coiiipany, Peake, Additional Cases; 70. The Income Tsix Act; 16 & 17 Vict. c. 34, s. 54, seema to assume that assu- rances may be effected by a husband on the life of his wife. (c) 10 B. & C. 25. 26 EUNYON's LIFE ASSURANCE. and unmarried." They had one son, and no other children; and the f if-it:-i marriage *having been dissolved by Act of Parliament, the L J plaintiff married again, and effected a policy with the Asylum Life Office on the 13th of February, 1826, for two years upon the life of his son, to provide against his death before he attained the age of twenty-one years. The son did attain that age on the 2nd of June, 1827, and on the 5th of January following made his will, and thereby gave all his real and personal estate to his father, and appointed him sole executor, and died on the 11th of the same month. In an action against the office, Lord Tenterden nonsuited the plaintiff, on the ground that, not having any pecuniary interest in the life of his son at the time when he effected the policy, the same was void under the statute ; giving him , liberty to move to enter a nonsuit if the Court should be of opinion that he had an insurable interest. In delivering the judgment of the Court, Bailey, J. said, " It is enacted by the 3rd section of the 14th Geo. 3, c. 48, s. 3, that no greater sum shall be recovered than the amount of the value of the interest of the insured in the life or lives. Now, what was the amount or value of the interest of the party insuring in this case ? Not one farthing. Certainly it has been said that there are numerous instances in which a father has effected an insurance on the life of his son. If a father, wishing to give his son some property to dispose of, make an insurance on his son's life in his (the son's) name, not for his (the father's) own benefit, but for- the benefit of his son, there is no law to prevent his doing so ; but that is a transaction quite different to the present ; and if a notion prevails that such an insurance as the one in question is valid, the sooner it is corrected the better." . In the argument upon this ease it was urged that by the statute of Elizabeth, (fZ) a father falling into poverty in his old age, was entitled to a maintenance by his son if able to support him, and that the maintenance r *1 fi 1 'wtich the *parish must give, may be much less than that which L -la son would be ordered to pay. But this argument did not vary the decision. Neither can a child who has attained his majority have any greater insurable interest in the life of his parent, as such, than the parent in the life of the child ; but it must not be supposed that a husband or father may not insure the life of his wife or his child, or a child that of his parent, when he is possessed of any interest in property dependent upon the life in question. 12. The mere chance or expectancy which a person may have as the heir or next kin of another will not give him an insurable interest in the life of his ancestor, although the premature death of the latter might deprive the former of property which might otherwise devolve upon him. The idiocy or incurable lunacy of the ancestor does not vary the rule which has been thus illustrated. Suppose A. to be possessed of a ship, limited to B. in case A. dies without issue; that A. has twenty children, the eldest of whom is twenty years of age, and B. is ninety years of age ; it is a moral certainty that B. will never come into possession, yet this {d) 43 EUzabeth, c. 2, s. Y; 59 Geo. 3, c. 12, s. 26; 4 & 5 W. 4, c. 16, s. T8. N A T U R E F T II E C N r R A or, 27 is a clear interest. On the other hand, suppose the case of an heir-at-law of a man who has an estate worth 20,000?. per annum, who is ninety years of age, upon his death-bed, intestate, and incapable from incurable lunacy of making a will. There is no man who will deny that such an heir-at- law has a moral certainty of succeeding to the estate; yet the law will not allow that he has any interest, or anything more than a mere expectation. (e) 13. Neither can an expectant devisee insure the life of his testator, so as to secure the value of a promised devise ; but it has been thought that a purchaser from him of the subject of the expected devise might do so. In a late case there was an agreement made between Gr. F. of the one part, and the plaintiff of the other part, in *which, after reciting r «■] ^ -i that Gr. E. was in expectation of becoming entitled to certain L J hereditaments at A., as devisee of one E. S., who was then living, in con- sideration of the sum of 2000Z., to be paid in manner therein mentioned, viz., 500?. down, and 1500?. in October following, Gr. P. agreed that within three calendar months after the death of E. S. he would, in case he should become entitled as such devisee, convey the said premises to the plaintiff and make a good title thereto ; and in case he should not become entitled as such devisee, or should not be able to make a good title to the said premises within six calandar months from the decease of the said E. S., that he would then repay the said sum of 2000?. to the plaintiff, but without interest. A policy of assurance on the life, of G-. E. was assigned by deed to the plaintiff as a security for the payment of the 2000?., and upon this deed, to which the defendant was a party as surety for the payment of the pre- miums to the insurance office, the action of covenant was brought. The case did not turn upon the policy, but it was objected that the whole transaction was void ; first, as being the sale of a pretended title under the 32 H. 8, c. 9; and, secondly, "because that at the time of the making of the said contract for securing the said benefits to the said plaintiff upon the decease of the said E. S., the said plaintiff had not nor had he at any time any interest in the said event, or in the life or death of the said E. S., whereby by force of the stat. 14 Geo. 3, c. 88, the said agree- ment was void and of none effect," or that it amounted to a policy of insurance by the plaintiff on the life of E. S., in which life he had no insurable interest. The first objection was overruled in the course of the argument. As to the second, the judgment of the Court was delivered by Lord Campbell, C. J., to the following effect : — " Although the con- tract may resemble an insurance on the life of E. S., in that the plaintiff advances money for a benefit to be received from Gr. F. upon her death, yet it has circumstances which are not incidents *to a life r^io -i insurance. The intention of Gr. E. is to obtain a present sum of L -I money ; the intention of the plaintiff is to obtain the assignment of an expected devise, and if there should not be such a devise, a repayment of the money without interest. The death of B. S. is made important only for the purpose of ascertaining whether there be or be not the (e) Lucena v. Crawford, 2 Bos. & P. 324. 28 bunyon's liee assurance. expected devise. This contract would not be commonly understood to be a policy on the life of E. S., and therefore would not fall within the words of the 14 Geo. 3, c. 38, taken in their ordinary acceptation. . On the other hand, if it is correctly called an insurance on life, it is not without an interest, within the meaning of the said statute ; for although Gr. F. had^ no vested interest in the property of Mrs. Smith which he could sell, still a promise to assign a devise which he expected would be a sufficient I consideration for a promise to pay for it in a contract hot under seal, and the purchaser of such an excepted devise would have: an interest^ so >far as to prevent his' policy from beingi.considered the gaming or wagering prohibited by the statute."(/) The doctrine in this case is not perhaps very obvious, as it might be thought the purohaiser could not be in a different- position to that of his vendor in irespeet ) of his interest; and this undoubtedly would be the case as. regards the property; but it appeared that the contract itself ^being! one that the law would xeecrgliise, became an insurable interest in the purchaser so as' to entitle him to secure himself: by insurance against the contingency of the death of the proposed: testator without having made the devise ;—^a principle which may be illustrated by the rule of courts of equity as laid down in an early : case, as to the interest. required to give a standing! therein; as, for instance,, to perpetuate teatimonyj namely, that although the next of kin or heir apparent of a lunatic intestate could not file a bill, yet that they might respectively icnter into r «iq n contracts with respect to their expectations *and possibililaes, the L J evidence upon which they might perpetuate ; that the law would frame an interest in respect of the contract, and with reference to that they wouldhave aright to perpetuate testimony, although they could riot qualify themselves as to any interest in the subject itself. (g') 14. Everyman ispresumeid to possess an insurable interest in his own life, since by insuring it hfe can protect his estate from, that loss of future gains or savings which might bfe the result of his premature death, and as they cannot' be limited neither can the amount for which he may insure. (A) A creditor has an insurable interest in the life of. his debtor, as the chance of obtaining payment is considered- to be diminished by the death of: the latter, (i) and the cirdumstance that the creditor has a real security does not vary the rule. And it seems that a debt contracted during the minority of the bor- rower is sufficient for the purpose, as the plea of infancy cannot be made by third persons ; but a debt for money illegally won at play will not support the policy.(^) The life of an alien enemy cannot, .however, be insured by his creditor, although the latter be a British subject.(?) (f] Oooke V. Field, Q. B. 19 L. J. 441. tg) Dursley t. Fitzhardinge, 6 Ves^ 261. (A) Waiuwright T. Bland, 1 Mood. & Rob. 481. h) Anderson t. Edie, 2 Park, on Ins. 914. (ft) Dwyer v. Edie, 2 Park. 914. (l) Fleuotv. Waters, 15 East, 360; Harman v. Kingston, 3 Camp. 153, 8 T; B 548—561. NATTJREOFTHECONTRACT. 29 f A -triiistee has an insurable interest in respecti of the legal right or interest vested in him, (m) in like manner as the cestui que trust has in respect, of the equitable interest ;(«) but' the fruits of any such insurance in the form of any payment made by the insurers will in like manner (subject to any lien which the trustees, effecting *the policy, may p ^„^ -. have for any premiums paid by him out of his own funds,) be L J clothed with a trust in his hands, upon the principle that a trustee ia not to be allowed to derive any benefits from the trust estate. (o) And- any vested interest,' although subject to a power of revocation, will afford an insurable interest. 15. The second section requires that the name of;the person interested therein, or for whose use, benefit, or on whose account the policy is made, should be inserted in it. Upon this section it has been decided that when' a policy is effected by a trustee or executor in respect of any legal interest vested in him, it is sufficientthat his name be mentioned in the policy, and it is not requisite that of the cestui que trust should be- disclosed by it. Thus, where a person who was entitled' to an annuity for the life of A., bequeathed •■ it by his will, and directed his executor (who took no beneficial interest,) to insure the life of A., Lord Kenyon was of opinion that an insurance effected by the executor in his own name was valid ;(j») but there is no authority that an insurance may be effected in the name of a trustee, who is without an interest, by a person possessing a sufficient interest, without the name of the latter, who is to be beneficially inter- ested, appearing upon the policy, for this would be against both the spirit and letter of the Act. In such a case, where there is an object in the insurance standi,ng in the name of a trustee, as when the party on whose account the policy is effected is a married woman, the premiums being paid out of her separate income, it would seem that the name of the cestui que trust thonld be inserted in the policy as well as that of the trustee. (2) 16. We have seen Ihat any person may effect insurances to any extent upon his own life, but this right; cannot be *made a means of p ^^-i -i evading the statute, so as to enable a person who is without an L J interest to effect an insurance on the life of another in the name of that other person, and thus obtain the benefit of the policy by assignment : this would be a fraud lipon the statute. (»•) 17. In such a case in Ireland, where it was considered that the stat- ute did not apply, but one of the conditions of the policy required that the assured should have an interest, the Court considered that all the cir- cumstandes of the case should be looked at, and' that when a party sought the benefit of a transaction, which, though not against the ex- press provisions of the law, was indirectly against the condition of the s(m) Tidswell v. Ankerstein, Peake, 151. M Mz parte .Yallop, 15 Ve3.|60; Ex parte Houghton, 17 Ves. 253. "(0) Ex parte Andrews, 1 Madd. 513 ; Armitage v. Winterbottom, 1 M. & G. 130 ; Holland v. Smith, 6 Esp. 11. See Clay v. Harrison, 10 B. & 0. 99. (p) Tidswell v. Ankerstein, Peake, 151; Hill t. Secretan, 1 Bos. & Pul. 315. (q) CoUett V. Morrison, 9 Hare, 162. (r) "Wainwright t. Bland, 1 Moo. & Rob. 481. so BUNTON'S LIFE ASSURANCE. policy itself, it was incumbent upon him to show that the assignment was one which he was entitled to uphold in a court of equity .(s) The effect of such a condition in an Irish policy, it may be observed, would depend upon its express terms ; unless the intention was clear it could not import into the contract the enactments of the English statute-. 18. The third section enacts that where the insured hath an interest, no greater sum shall be recovered from the insurer than the amount or value of the interest of the insured in such life or lives, or other event or events. To this section it is obvious that two constructions may be given, the first, that no greater amount shall be recovered than the value of the interest at the time that the policy is effected, which would give the rule that no insurance should be effected to a greater extent than the value of the interest of the insured ; or secondly, that no greater amount shall be recovered than the value of the interest of the insured at the time of the recovery or payment of the claim, which latter construction would cut down the contract to that of an indemnity only. Of these constructiona the latter has been preferred, and it has been r *o9 n ^•'l^ *'^** ^^^ question was decided by the common *law doctrine L J already referred to. Thus, in the leading case upon the subject,, the plaintiffs being creditors of the late Mr. Pitt, insured his life to se- cure the amount in whicn he was indebted to them, and the debt having been paid by. his executors out of a sum of money voted by Parliament for the liquidation of his debts, it was held that the assured could not recover upon the policy. Lord Ellenborough observed: "This assu- rance, as every other to which the law gives effect (with the exceptions only contained in the 2nd and 3rd sections in the stat. 19 G-eo. 2, o. 37.), is in its nature a contract of indemnity as distinguished from a contract by way of gaming or wagering. The interest which the plaintiffs had in the life of the late Mr. Pitt was that of creditors, and the probability of loss that which resulted from his death. This action is in point of law founded upon a supposed damnification of the plaintiffs occasioned by his death, existing and continuing to exist at the time that the action is brought J and being so founded, it follows of course that if before the action brought the damage which was at first supposed likely to result to the creditors from the death of Mr. Pitt were wholly obviated and pre- vented by the payment of his debt to them, the foundation of any action on their parts on the ground of such insurance fails. And it is no objec- tion to this answer, that the fund out of which their debt was said did not originally belong to the executors as part of the assets of the de- ceased, for although it were derived aliunde the debt of the testator is equally satisfied thereout ; and the damnification of the creditors, in res- pect of which their action upon the assurance contract is alone maintain- able, was fully obviated before their action was brought. This is agree- able to the doctrine of Lord Mansfield in Hamilton v. Mendes.(<) The words of Lord Mansfield are : " The plaintiff's demand is for an indem- nity ; his action must then be founded upon the, nature of the damnifica- (s) Scott V. Koose, Long & Town. Ir. Hep. 54. (t) 2 Burr. 1210. NATURE OP THE CONTRACT. 31 tion as it really is, at the time the action *is brought. It is re- p ^jjn -i pugnant, upon a contract for indemnity, to recover as for a total L *' J loss, when the event has decided that the damnification is in truth an average, or perhaps no loss at all. Whatever undoes the damnification in the whole or in part, must operate upon the indemnity in the same de- gree. It is a contradiction in terms to bring an action for indemnity where, upon the whole event, no damage has been sustained." (w) 19. This decision has been repeatedly quoted and followed, but it is submitted that it is most unsatisfactory. We have already seen that there are the greatest difficulties in considering the contract as that of an indemnity apart from the statute ; and the principle upon which the decision is based is the assumed common law doctrine, rather than the words of the Act. To the objections already stated may be added, that so great is the injustice involved in it, that in practice it is universally rejected, and policies are for the most part bought and sold without in- quiry as to the continued subsistence of an insurable interest. The offices themselves, as was remarked by Lord Chancellor Sugden, have not found it to be for their benefit to act upon the rigid rule of law, but generally pay without inquiry. (tj) So great indeed, according to the general opin- ion of mankind, would be the impolicy and injustice of doing otherwise, that an office taking such a course might as well, it would seem, shut its doors at once.(io) There is, however, a prodigious diffisrence between obtaining a thing as a concession and being entitled to it as a right ; and so strong appears the feeling at the present time in the profession against this decision, that it is by no means improbable that it may be shortly reviewed in a higher court than that in which it was decided. Should the decision of the highest court of appeal be in favour of the more res- tricted construction, it is then submitted that the case calls for the inter- ference of *the legislature, and the statute should be amended in ^ „ . -. accordance with the ordinary practice, which would be done by L -I enacting that no greater sum should be recovered than the value of the interest of the assured in respect of which the policy is effected. It is by no means desirable that the restrictions against gambling insurances should be removed, and in fact the chances would be so much against the insurers in such transactions, that it may be assumed that no respect- able office would willingly undertake them. To require an adequate in- surable interest at the time at which the insurance is effected, would be sufficient to discourage wagering insurances ; but no subsequent cesser or failure of that interest ought to have the effect of destroying a valuable property, and altering a contract with a third party. 20. It does not appear that it is necessary that the interest of the in- sured should be continuous, but that, on the contrary, when it has ex- pired, as in the case of a debt, by its payment, a fresh interest subse- quently acquired, such as a further debt incurred between the same par- ties, would be sufficient to satisfy the statute, if owing at the time at which the claim is made. Neither is it necessary that the insurable in- (u) Godsall T. Boldero, 9 East, 12. (v) Phillips T. Eastwood, Ca. temp. Sngd. 291. (iv) See evidence given on that point, Barber v. Morris, 1 Moo. & R. 66. 32 bunton's life assurance, terest and the beneficial bwnersliij) of the pblicy should remain in the same person, but an afesigaee; possessing no such interest, will b® enti- tled as the purchaser of the policy, to bring an actioii- up'on it, in the name of' the' assured, and will be protected by the insurable interest of his vendor.(a;) ', i' 21. To satisfy the statute, the interest must be in the assured, thatis^ in the grailtee of the policy, and hence the assignment of a policy after the termination of the interest, to a person who possesses an interest arising aliunde, would iiOt give the assignee a claim upon the insurer. (^) One of the most frequent cases upOb which this question arises, is that r *of; T i"* which tho policy is effected by a creditor *upoti the life of his L - Ji debtor, and is assigned to the latter upon the satisfaction of the debt.; In such a case, apart from the operation of the statute, the debt- or is clearly entitled to the benefit of the insurance; and when he is charged with the premiums, the intention being that they should be paid by him, the policy is considered to be a, security given by him . to his creditor, from whom any surplus arising from it after the satisfaction of the debt, may be recovered in an action for money had and received, (z) Such a case can scarcely be considered contrary to the spirit of the stat- ute, but nevertheless a serious difficulty arises upon the gecond and third sections. If the interest of the creditor 'at the time of effecting the in- surance is insuficient to support the policy, the second section requires the insertion of the name of the party for whose benefit it is made. Does then the policy become void for want of the insertion of the name of the debtor as beneficially interested?' The insertion of his name as that of the assured life can scarcely satisfy the words of the Act, and the better opinion would seem to be, that the objection is fatal,(a) unless the existence of the insurable interest at the inception of the' insurance is sufficient to support it under the statute, notwithstanding the cesser of that interest. Except under the latter view the ordinary form of policy is in fact unsuited to the transaction, and ought to have been modified accordingly, by expressing the interest of the debtor, but nevertheless providing for the entire dominion of the creditor over the policy until an indorsement should be made upon it of the cesser of his interest. If the proposal specified the nature of the arrangement, it would seem that a court of equity might in many cases interfere,, either by reforming the contract, as expressed in the policy, or by dealing with the case on the footing of the proposal ;(6) but as the object of thus effecting the r *26 1 *^^^^^^^^^ '3 *o enable the creditor to deal with the policy as he L -I may think fit, and give a discharge for the money assured in his own name without the concurrence of the debtor or his representatives, notice of the interest of the latter is in most cases concealed from the in- surers. When there is no preconcerted arrangement, and the policy is effected by the creditor at his own risk, upon a sale to the debtor after (x) Ashley v. Ashley, 3 Sim. 149. Sadlers' Co. t. Badoock, 2 Atk. 554; Irving v. Richardson, 2 B. & Ad. 193. Holland v. Smith, 6 Bsp. 11. o) See the remarks of the 'Vice Chancellor in Gotlieb v. Cranch, 17 Jur. 688. (b) Collet V. Morrison, 9 Haie, .162. N'ATUREOi'THEOONTRAOT. 33, the satisfaction of the debt, it seems impossible to contend that there can be any greater insurable interest in consequence of the policy being upon his life. 22. If the office has express notice of the assignment and of the ter- mination of the insurable interest of the assured, and subsequently allows the purchaser to pay the annual premiums, there would appear to be suf- ficient equitable grounds for holding that a new contract is raised upon the footing of the former policy. At the same time this point has never, as far as the author is aware, been expressly decided.(c) 23. We may here also remark, that allowing the proposition that the satisfaction of the debt discharges the insurer, it by no means follows that the converse is true, and that payment by the insurer will amount to a satisfaction of the debt, where there is nothing to raise the relation of trustee and cestui que trust between the creditor and debtor in respect of the policy. Thus, in the case of Humphrey v. Arabin,(d) it was held that a judgment creditor who had insured the life of his debtor, and had received the amount (which was less than the total debt due) from the office, could not, in a foreclosure suit by a mortgagee, whose security was subject to the judgment, be obliged to set off against the debt the sum received under the insurance, minus the amount of the premiums paid by him. In delivering judgment Lord Plunkett, after showing that the case of Ex parte Andrews was decided on the ground that the relation- ship of trustee and cestui que trust *had been created between ^ ^^7 -, the creditor and debtor, observed : " This case must be decided L J on principle, and I must find a clear one before I can say that the debtor, who had no concern, or right, or interest in this assurance, is, by the cir- cumstance of its amount being discharged by a third person, to be ex- empted from the payment of his own just debt. The argument of Lord EUenborough, in the case of Grodsall v. Boldero, rests merely on the decision of Lord Mansfield in the case of Hamilton v, Mendes ; and both cases go altogether upon the contract with the assurers being a contract of indemnity. Now, this grows solely out of the enactments of the legis- lature, and on the contract being one which the law gives effect to, and it is a mistake to say, as has been argued in this case, that therefore the insurer is in the nature of a surety for the payment of the debt of the principal debtor. The protection of the insurer grows merely out of the policy of the law, and the particular enactment of the legislature ; but with reference either to the party who gets the insurance, or with reference to the debtor, there is no one circumstance which puts him in the character of a surety for the debtor. He, has no right to call upon the debtor's executors to pay the debt, and it is no concern of his whether the debtor is able to pay or utterly insolvent. It remains, then, to con- sider the case as between the original creditor and debtor. It is clear that the creditor has no right to call upon the debtor to make the assurance, or pay any part of the expense of it, or, if the assurance company should become insolvent, to repay him any of the premiums (c) Webster v. Webster, 17 Jur. 315, V. C. S.; Edge v. Duke, 18 L. J. Oh. 183. (d) 1 L. & G. Gas. tern. Plunkett, 322. July, 1853 8 34 bunton's life assurance. that he has paid. The debtor, on the other hand, has no right to call upon the creditor to make any assurance, or to keep it alive when made. He knows not whether it has been made or not ; it is a contract with which he has no concern or privity ; and I cannot find any principle or authority for holding that he should, by anything growing out of that contract, be r «28 1 discliarged from the payment of his just debt which he has L -I neither discharged *iQor satisfied, nor caused to be discharged or satisfied." 24. When the policy becomes void, according to the doctrine in Godson V. Boldero, by reason of the failure of the insurable Interest, it has been held that if an action is brought upon it by the assured, a bill in equity to restrain the action, and have the policy delivered up, may be sustained by the insurers ; they are entitled to this relief, and not only to a non- suit, or verdict in the action ;(e) but until the claim is madte, and upon the mere cesser of the insurable interest, it would seem that they are not entitled to file such a bill.(/) 25. Where a policy has been effected on the strength of a redeemable interest^ the cesser of that interest, after the sale and actual assignment to a purchaser, will not entitle him to bring an action to recover the con- sideration and the premiums paid by him. This was decided in a case where the interest was a redeemable annuity, and the policy Was sold on its redemption. The purchaser was a solicitor, and evidence was given of the practice of the company to pay the sums assured by policies not- withstanding the determination of the insurable interest. (^) 26. In all the cases already cited upon the Act, it is clear that a dis- tinction has been taken between mercantile policies and policies of insu- rance, contemplated and allowed by it on the one side, and wagering insurances, condemned by it on the other, (e) When, therefore, by a recent statute(A) it has been enacted, " That all contracts or agreements, whether by parol or in writing, by way of gaming or wagering, shall be null and void ; and that no suit shall be brought or maintained in any court of law or equity for recovering any sum of money or valuable r *2Q n *''bing alleged to be won upon any wager, or which shall have L J been deposited in the hands of any person to abide the event on which any wager shall have been made ;" it may be assumed that policies, where the assured has an interest, will be unaffected by it; but, on the other hand, it may be thought that those in which the assured has no interest are so, since the words of the 14 G-eo. 3, where the assured " has no interest, or by way of gaining or wagering," may amount to a statu- tory definition of such a policy as a wager. This latter Act is not retro- spective,(t) but as it extends to Ireland, wagering policies can no longer be effected there ; but it will not operate so as to extend the enactments of the earlier statute to that kingdom; and hence it may perhaps, still happen that a policy, valid in its inception, but one which, in England, would be avoided by the extinction of the interest of the as- sured, may, nevertheless, continue in force in Ireland. e) India and London Life Assurance Company v. Dalby, 15 Jur. 982, V. C. K. B. /) Thornton v. Knight, 16 Sim. 509. (g) Barber y. Morris, 1 MoO. & R. 62. A) 8 & 9 "Vic. c. 109, s. 18. {() Doolubdass v. RamloU, 15 Jiir. 257. (P. 0.) THE PROPOSAL. 35 Whether contingent contracts, not ordinarily considered insurances, but of the nature of post-obit bonds, and the like, are within the act, may possibly be discussed ; but the same arguments which excepted such contracts from the operation of the earlier act, would seem equally to except them from the latter as not being such transactions as it was the intention of the legislature to prohibit. *CHAPTEK II. [*30] dONOERNINQ THE PROPOSAL, AND HEREIN OP THE DECLARATION, WAR- RANTIES, AND REPRESENTATIONS. 1. The insurers, it maybe assumed, prior to the contract, are entirely ignorant of the premises upon which it may be founded, and must de- pend for them upon the assured ; his statements are therefore the basis upon which the contract proceeds, and their truth as to all material points is essential to its validity? It is important to observe that the principle upon which the maxim caveat emptor is founded does not apply to the contract of insurance. Not only must the party proposing the insurance abstain from making any deceptive representation, but he must observe the utmost degree of good faith, uberrima fides. Not only is he required to state all matters within his knowledge which he believes to be material to the question of the insurance, but all which in point of fact are so. If he conceals anything which he knows to be material it is a fraud ; but, besides that, if he conceals anything which may influ- ence the rate of premium, which the underwriter may require, although he does not know that it would have that effect, such concealment entirely vitiates the policy.fa) An entire disclosure must then be made of all material facts known to the assured ; and not only so, but all representa- tions made by him as to material facts must be substantially correct; and to this may he added, that where a representation amounts to a warranty it must not only be substantially but literally true. *2. The question, whether any fact should be communicated ^^q, -. depends upon whether it is in itself material, and' not upon the L J opinion of the party whether it is so;(5) for policies are entered into upon an implied contract, that everything material shall be disclosed by the assured ; (c) equity requiring that the two parties should contract pari passu, which can only be the case where the knowledge of the assured is so communicated. The contrary doctrine would tend to a suppression of information, as it would be impossible, or at least extremely difficult, to prove that the party withholding the information thought it of import- ance. Here, nevertheless, we find a limit to the obligation, for however ia) Dalglish v. Jarvie, 2 Mac. & Gor. 243. (6) Lindenau v. Desborough, 8 Barn. & C. 586. (c) Moens v. Heyworth, 10 M. & W. 155. 36 bunton's life assurance, important a fact may be, although the assured may be responsible for making an incorrect representation concerning it, he cannot, of course, be prejudiced by omitting to communicate information which he does not possess ; were it otherwise, he would no longer contract pari passu with the insurers.((f) 3. The first step in practice towards effecting an insurance is, to make a formal statement in writing of certain facts relating to the age and health of the person whose life is to be assured, and which are ordinarily, and in all cases, esteemed essential to be communicated. This statement is called the declaration. It is generally, either expressly or by refer- ence, embodied in the policy, and the terms of it, where unconditional and stated as facts, are, then in legal language warranties, and must be strictly and literally true : their correctness is a condition precedent to the responsibility of the insurers ; and, since it is competent to parties to make their contracts dependent upon any conditions which even caprice may suggest, and the very fact that the statement is formally made is evidence that in their opinion it was of some weight, in such a case it r*qo 1 *becomes impossible to estimate its relative weight, and whether L J it was or was not an inducement to the persons to enter into the contract. The question as to how far the fact or circumstance was ma- terial, or the contrary, does not then enter into the consideration. It is simply suf&cient, and ought to be sufiSoient, observed Lord St. Leo- nard' s,(e) to avoid the policy that any one thing warranted is not true. A misstatement in a warranty is therefore fatal, although arising from the most innocent mistake, or from false information afforded by others, or mere inadvertence, and as much so as if made with the most wilfully fraudulent intention. Neither is there any real hardship in this rule, for no person is entitled to state that as a fact which is not actually within his knowledge; and if he does so, it must be at his peril. (/) It is not imperative that he should do it ; on the contrary, when he does not possess positive evidence, he should preface his statement with some such words as, " to the best of my belief," in which ease it becomes no longer a warranty, but it is sufficient that he believes it to be triie.(g') 4. All the information required is not, however, contained in the de- claration, but other statements are made by the proposer, and references are given to the medical attendant of the person whose life is to be assured, and to private friends, who are supposed to be able to give valu- able information to the insurers. He also, in most cases, appears per- sonally before the directors or their agent, to answer any inquiries that they may think fit to put, and to be examined by their medical adviser. The statements then made by the proposer, or by the party examined, or the referees, in answer to the inquiries of the insurers, are considered to be representations made by him, or on his behalf, and form a portion of r #qq -1 tfie premises from which the *insurers draw their conclusions L J either to accept or reject the proposal, and by which they are guided in fixing the rate of premium, and adjusting the conditions of the I d) Swete v. Fairlie, 6 Car. & P. 1. e) Anderson v. Fitzgerald, 21 Law T. 248, (House of Lords.) ') Dougl. 247—260. {g) Stackpole v. Simon, Parke, 932, 8th edition. THJS paoposAL. 37 policy. In suoh representations, therefore, all material, facts must, be substantially correct. Here, as in the case of the warranty, it is not the knowledge of the assured which is of importance, but the actual correct- ness of his statements ; if he has induced the insurers to enter into the contract upon false premises, he, of the two innocent parties, must be the sufferer. It is equally open to him here, as in shaping the declaration, to qualify his representations ; and if he is unwilling thereby to weaken their force, he takes the responsibility upon himself. If he leads the insurers into error, by inducing them to compute their risk upon circum- stances not founded in fact, so that the risk actually run is different to that intended to be run, the contract is as much at an end as if there had been a wilful and false allegation, or an undue concealment of eir- cumstances.(7i) 5. In making a respresentation, therefore, in like manner as a war- ranty, the party making the proposal should avoid any positive affirmative statement concerning facts not within his personal knowledge; but should state the information he has received, with the proviso, that he will not vouch for its truth, but believes it to be correct, or not, as the case may be. Speaking " from information," and not pretending to any knowledge of his own, he will not only avoid the charge of fraud, but of unintentional misrepresentation.(t) 6. It is not material whether a representation be in writing, or made by word of mouth, and in conversation only. The personal appearance and examination of the assured life does not remove the obligation resting upon the proposer, of communicating all material facts in his knowledge to the insurers. (A;) *7. There is, however, this difference between a warranty and p ^n, -, a representation, namely, that while the first must be strictly and L -" literally true, it is sufficient that the latter be so substantially.(Z) In order "to make any statements binding as warranties, they must appear upon the face of the instrument itself by which the contract of insurance is effected : they must either be expressly set out, or by reference incor- porated in the policy.(m) If they are not so they are not warranties, but representations. It is not universally true that every statement in a proposal, although the latter may be referred to in the policy, is to be construed as a warranty.(»i) To be suoh it must amount to an affirmative statement of certain facts or state of facts. Neither is the circumstance that the statement is contained in the declaration or proposal conclusive for the purpose of ascertaining whether it is a warranty or not. Where the policy, without referring to the proposal, singled out some particular statements made in it to constitute them warranties, and then contained a proviso avoiding the insurance " if any thing so warranted as aforesaid should not be true, or if any circumstance material to the insurance should not have been truly stated, or should have been misrepresented (h) Parke, 442. («) Stackpole v. Simon, Parke, 932. (k) Swete V. Fairlie, 6 Car. & P. T. (I) Parke, 661—663. (m) Lothian v. Henderson, 3 Bos. & Pul. 499 ; Pawson v. Watson, Cowp. '790. (n) Benliam v. The United Guarantee and Life Assurance Company, 1 Bxch. 744; Sceales v. Scanlan, 6 Ir. Com. L. R. 387. 38 BTINYON'S IiIFE ASSURANCE. or^ concealed, or should not have been fully and fairly disclosed and communicated to the said company ; or if any fraud should have been practised upon the said company, or any false statements made to them in or about the obtaining or effecting the insurance ;" it was considered that the statements not set out in the policy were not warranties but representations only. At the same time the words " any false statements" were considered to include all representations made to induce the insurers to issue the policy, whether relating to matters material or not ; but |. ^„^ ^ there was a difference of *opinion whether they meant actually L -1 false, or morally false only, — a point unimportant as to the par- ticular case, as the questions in dispute were clearly as to material misre- presentation, (o) 8. Whether a statement is material or no is a matter of fact and a question for a jury, and of which they are alone the judges. At the same time if they are perverse and bring in a verdict contrary to the evidence, an application may be made to the Court to set it aside, as also exceptions may be taken to the Judge's charge if the question of materi- ality be wrongly left to them.(p) 9. The forms of declarations are as numerous as the societies using them ; but they more or less coincide, embracing all or some of the fol- lowing particulars. In some the form is a consecutive affirmative state- ment of the particular facts; in others they are proposed by way of question and answer. In the latter, as in the former case, the proposer should carefully frame his replies, so as to negative the construction of a warranty being put upon any as to which he is doubtful or may be deceived. Where the form is that of a consecutive statement, it is usually simply affirmative when made by a party proposing an insurance on his own life. When on the life of a third party, it is usually made to 1/he best of his belief, at least as to so much of it as relates to the health of the person whose life is to be assured; but sometimes this qualification is omitted, and until lately appears to have been so very commonly, but the practice is obviously extremely objectionable. The declaration then requires the statement of (1.) the names and the de- scriptions of the parties respectively proposing the assurance, and whose life is to be the subject of it; (2.) the place and date of birth of the latter; (B.) his age; (4.) whether he is married or not; (5.) whether he r *9f? 1 ^^ *resided abroad, and if so when and for what period; (6.) L J whether he is employed in military or naval service ; (7.) whether he has had the small pox or been vaccinated; (8.) whether he has had the gout; (9.) whether he has been afflicted with rupture, fits or con- vulsions (since childhood,) asthma, insanity, or spitting of blood; (10.) whether he is afflicted with habitual cough, or with disease of the lungs, or any other disease or disorder tending to shorten the duration of life ; (11.) whether any of his near relations have died of consumption or any other pulmonary complaint ; (12.) whether there is any other circum- stance or information touching the past or present state of health or (o) Anderson v. Fitzgerald, 21 Law T. 245, (House of Lords.) (p) Huguenin v. Rayley, 6 Taunt. 186 ; Liudenau v. Desborongh, 8 B,. & C. 586 ; Anderson v. Fitzgerald, sup, THE PROPOSAL. 39 habits of life of the party whose life is proposed to be assured, which the company ought to be made acquainted with, and whether he is of sober and temperate habits ; (13.) the sum to be assured, and the term for which the insurance is required ; (14.) the name and residence of the usual medical attendant, to be referred to for information as to the present and general state of health, and how long he has known him ;(15.) the names of one or more intimate friends, to be referred to in like manner; (16.) whether a proposal to effect an assurance on the life has ever been declined, or if so, when and by what office or offices, or if accepted, was it at the usual premium or with what addition ; (17.) of the nature of the interest in the life to he assured, where it is a nominee ; (18.) a general declaration by the party whose life is to be assured that he is in good health and ordinarily enjoys good health, and is not aware of any cir- cumstance tending to shorten his life or render an assurance thereon more thaii usually hazardous, and which declaration is further qualified, when any malady exists, by adding, unless such malady (naming it) may be considered such ; (19.) and lastly, a declaration by the party making the proposal, that the statements thus made are true, and an agreement that they shall form the basis of the contract, and that if any or either of them be false or untrue, all money which may be paid on account of the proposed assurance shall be absolutely forfeited *to r :|:07 -i the company, and the assurance itself wholly void.^j) L J 10. It is important to observe, that the person making the proposal cannot escape the obligation imposed upon him of making a full disclo- sure of all material facts within his knowledge, by employing another person for this purpose. Concealment on his part, thus effected, will be equally fatal; and not only so, but the latter being his agent for the pur- pose of effecting the policy, the knowledge of the agent will also be the knowledge of the principal; and the concealment of a material fact known to the agent, but unknown to the principal, will avoid the con- tract.(r) Nor is the case altered if the agent employed be also the reg- ularly appointed agent of the insurers. In such a case even an unin- tentional misstatement, when made in the declaration, will be equally a breach of warranty ; for it would seem that the agent of the office may also be the agent of the assured, and his acts, when so employed, will be distinguished according to the capacity in which he may be assumed to be acting, (s) 11. Should it happen that in any particular form some or one of these clauses are omitted, and there is a material fact known to the party mak- ing the proposal, as to which no inquiry is made, the omission, although the form is prepared by the insurers, is not an excuse for concealment. It must still be mentioned, although it need not be so in writing upon the declaration itself; the question of materiality, it will be remem- bered, being a question of fact, and not dependent upon the opinion of the assured. This, as we have seen, is the universal rule, but it is often further expressed by a general declaration of the absence of any mate- (?) As to the effect of this stipulation, see post. Chapter V. M Fitzherbert.v. Mather, 1 T. R. 12 ; Gladstone v. King, 1 M. & S. 35. (s) Parsons v. Bignold, 15 L. J. Ch. 319. 40 BUNYON'S LIFT! ASSURANCE. rial circumstances which ought to be discloseii. Specific questions, ft f^oo -1 ^^s been said, are preferred as to *points in general affecting all L J mankind; but there may be also circumstances affecting partic- ular individuals which are not likely to be known to the insurers, and which, had they known, would no doubt have been the object of specific inquiries. The general question, " Do you know any other circumstances which ought to be communicated to the directors?" appears to have been proposed to meet such cases ; and upon this the verdict will not depend upon whether a certain individual thought a par- ticular fact material, but whether, in truth, it was so.(<) 12. Certain facts have been judiciously considered to be the material, and requiring disclosure : such is insanity when within the knowledge of the assured, and such, in like manner, is intemperance. (m) Opium eating would, moreover, be a form of intemperance, and, if proved, would vitiate the policy. In one case this objection is stated to have been raised as a defence, but failed for want of proof, (i;) In another case the omission to mention serious illnesses taking place six months before the insurance was effected, although the person whose life was assured had then apparently recovered, coupled with the absence of any men- tion of, or reference to, the medical attendant in those illnesses,(w) was considered the suppression of material information. The materiality of profligacy of character on the part of an unmarried woman, and impris- onment for debt, in consequence of its debilitating effect upon the consti- tution, arc said, in other cases, to have been considered proper questions to be submitted to a jury.(aj) Again, as to temperance, where the dec- laration afiBrmed that the assured was of sober and temperate habits, proof that his habits were, in fact, intemperate was held to avoid the r *QQ 1 poli'^j; ^^^ *^^ *plea was bad, that his habits were not so in- L -I temperate as to injure his health, and that he died from a mala- dy uninfluenced by habits' of intemperance. (y) This statement was a warranty. But intemperance, as already mentioned, apart from the dec- laration, is a material fact, and concealment of it vitiates the policy ; and it is scarcely possible to imagine intemperance not injurious to health. Other matters also, when made the subject of inquiry, have been con- sidered material , such as, whether any of the party's near relations have died of consumption or other pulmonary complaint, or whether propo- sals have been made to, and rejected by, any other company, (a) 13. When there is a general warranty of good health, it is sufficient if the cestui que vie is in a reasonably good state of heaith ; for it cannot mean that he is perfectly free from the seeds of disorder. Even if he laboured under a particular infirmity, if it can be proved by medical men that it did not at all, in their judgment, contribute to his death, the (() Lindenau v. Desborough, 8 B. & 0. 586. (u) Craig v. Fenn, 1 Car. & M. 43 ; Lindenau v. Desborough, sup. («) Sir W. Forbes v. The Edinburgh Life Assurance Company, Jones on Annui- ties, p. 1165. (w) Morrison v. Muspratt, 4 Bing. 60. (x) Edwards v. Barron, EUis, 116; Hugueniu t. Rayley, 6 Taunt. 186. [y) Southcombe v. Merriman, Car. & Marshman, 286. S) Anderson T. Fitzgerald, 21 Law T. 245, (House of Lords.) THE PROPOSAL. 41 warranty of health has been fully complied with, and the policy is valid, (a) Thus in an action on a policy made on the life of Sir James Ross for one year, from October, 1759, to October, 1760, " warranted in good health at the time of making the policy,'" it ap'peared that Sir James had received a wound in his loins, at the battle of La Feldt, in the year 1747, which had occasioned a partial relaxation or palsy, so that he could not retain his urine or faeces, and which was not mentioned to the insurers. Within the time of the insurance he died of a malignant fever. All the physicians and surgeons who were examined for the plaintiff swore that the wound had no sort of connexion with the fever, and that the want of retention was not a disorder which shortened life, but that he might, notwithstanding, have *lived to the common age of man ; and ^ ^ . „ _ the surgeons who opened him said that his intestines were all L J sound. There was one physician examined for the defendants, who said that the want of retention was paralytic ; but, being asked to explain, he said it was only a local palsy arising from the wound, and did not affect life, but that, on the whole, he did not look upon him as a good life. Lord Mansfield, C. J., said : " The question of fraud cannot exist in this case. When a man mates an insurance upon a life generally, without any representation of the state of the life insured, the insurer takes all the risk, unless there was some fraud on the person insuring, either by his suppressing some circumstances which he knew, or alleging what was false. If the person insuring knew no more than the insurer, the latter takes the risk. In this case there is a warranty, and whenever that is the case, it must at all events be proved that the party was a good life, which makes the question on a warranty much larger than that on fraud. When an insurance is upon a representation, every material circumstance must be mentioned; but when there is ?i 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 m,ay he, although he have a particular infirm- ity. The only question is, whether he was in a reasonably good state of health, and such a life as ought to be insured on common terms t" On this direction the jury, without going out of Court, found a verdict for the plaintiff. (6) And in another case, where there was a warranty that the assured was in good health on a certain day, it was proved that he was troubled with spasms and cramp's, from violent fits of the gout ; but was in as good health when the policy was effected as he had been for some time before. It was also proved that the underwriter was told thas he was subject to the gout. Lord Mansfield directed *the jury, that such a war- ^ ^.■. , ranty could never mean that a man has not the seeds of disorder. L J " We are," he said, " all born with the seeds of mortality in us. A man subject to the gout is a life capable of being insured, if he has no sickness at the time to make it an unequal contract." There was a ver- dict for the plaintiff, (c) a) 2 Parke, 933, 8th edition. See Brady v. Collins, 1 Ton. 317. bj Ross T. BradshaW, 1 Black. Sep. 314. c) 2 Parke, 935, 8th edit. 42 bunton's life assurance. 14. Again, where there is a warranty that the assured is not afflicted with a disorder tending to shorten the duration of, life, the policy will not be rendered void by the fact that the assured is then afflicted with a dis- order, of which he afterwards dies, if it be not a disorder necessarily having that tendency. The fact that the particular malady subsequently causes death, does not necessarily prove, that at the time of the execu- tion of the declaration it was a disorder" tending to shorten lih.[d) Many of these clauses in the declaration relating to specific diseases have been the subject of judicial decision. In construing any one of them, the first question is, whether the words of the clause amount to a declaration that the party has never been attacked by it, or only that he is not habitually or constitutionally subject to it. Should the warranty amount to the former, any instance in which he has been so attacked, however slight the seizure, and however unimportant it may appear, as not having pro- duced any permanent effect upon the constitution, will still avoid the policy. 15. Thus in a leading case the assured had stated in the declaration 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 affection of the liver ; and that he had not had any spitting of hlood, consumptive symp- toms, asthma, cough, or other affection of the lungs. Upon an action brought upon the policy, evidence was given by the defendants, that the assured about four years before its date had spit blood, and exhibited r *4.9 1 ^^'^^r consumptive symptoms ; and it appeared *that he died, L J three years after its date, of consumption. Lord Denman, C. J., told the jury that it was for them to say, whether at the time of making the statement the assured had had such a spitting of blood, and such affec- tion of the lungs and inflammatory cough, and such a disorder as would have a tendency to shorten life. Upon a verdict being found for the plaintiff, a new trial was granted on the ground that this was a misdirec- tion. "By the expression spitting of blood," observed Pollock, C. B., "is no doubt meant the disorder so called, whether proceeding from the lungs, the stomach, or any other part of the body; still, however, one single act of spitting of blood would be sufficient to put the insurers on inquiry as to the cause of it, and ought therefore to have been stated." And Rolfe, B. : « I have no doubt but that if a man had spit blood from his lungs, no matter in how small a quantity, or even bad spit blood from an ulcerated sore throat, he would be bound to state it. The fact should be made known to the office, in order that their medical adviser might make inquiry into its cause." And Alderson, B. : " So if he had spit- * ting of blood only once, but that once was the result of disease, called spitting of blood, he ought to state it ; and his not doing so would probably avoid the policy. Again, 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 life ; still that would be no answer to the case of \d) 'WatsonS.v. Mainwaring, 4 Taunt, f 63. THE PROPOSAL. 43 the defendants ; for it is clear that the company intended that the fact should be mentioned. Again, it is obvious that the insurance company meant to guard against the disease of dysentery. Now a man may have had a dysentery and been cured of it, still the office should know of the cir- cumstances ; and, indeed, that disorder may have been mentioned by name, as being one of a nature likely to return. AH these circumstances show that it was not intended to restrict the statement of the assured to dis- orders having a tendency to shorten life at *the moment of exe- y ^ .„ ., outing the policy. What the company demanded was, a security L J against the existence of such disorders in the frame." At the same time the attack must have been of the particular malady intended to be guarded against. An attack of some cognate disorder of little importance and not within the meaning, although perhaps within the words of the clause, will not have this effect. Thus in the same case, Alderson, B., observed, " 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 ; and 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 it shows a weakness of some organ that contains blood, he ought to com- municate the fact to the insurance company, for no one can doubt that it would most materially assist them in deciding whether they should exe- cute the policy, and good faith ought to be kept with them ; and again, as to the word ' cough,' it must be understood as a cough proceeding from the lungs, or no one could ever insure his life at all ; and, indeed, it is so expressed in the policy — cough, or other affection of the lungs.'Ye) 16. In like manner, when the declaration averred that the assured had not been afflicted with, nor was subject to fits, it was considered that the true construction was not that he had never had a fit, but that he was not a person habitually or constitutionally afflicted with fits ; a person liable to fits from some peculiarity of temperament either natural or con- tracted from some cause during life. It was therefore held that the policy was not vitiated by the circumstance that, in consequence of a fall, he had two epileptic fits within a short interval several years before the date of the policy, but which the jury were satisfied had never recurred. (/) This was a decision in conformity with the above rule upon the expres- sions used ; had they *amounted to a statement that the assured _ ^., -. had never had a fit, the result must of course have been different. ^ -■ 17. All insurance offices are desirous to consult with the medical man who has been last in attendance on the assured.(^) And when the reference was made to a person who had been the ordinary adviser, but no mention was made of the person attending at the time of the insurance, the policy was vacated. (A) At the same time a reference to a person who immediately before the time at which the policy is effected has been ie) Geach r. Ingall, 14 M. & W. 95. /) Chattock T. Shaw, 1 Moo. & Rob. 498. g) Morrison v. Muspratt, 4 Bing. 60. h) Everett v. Desborough, 5 Bing. 503. 44 bunyon's life assurance. casually consulted for trifling maladies will not satisfy the requisition for a reference to the usual medical attendant, although the person who had formerly attended may have retired from practice at the time.(i) The meaning of the question " Who is your usual medical attendant ?" was elaborately considered in the case lastly referred to. " What is the grammatical sense of that question ?" observed the Court : " it is in the present tense. Suppose a person goes to effect a policy on his life, who had no medical attendant in the last year; if the answer to the question were, on the contrary believed to be cor- rect, will not render him liable in an action, although it may have in- duced the insurers to undertake the insurance, and they may have suf- fered pecuniary loss thereby, since to support an action of deceit the scienter must be proved.(A.) This liability has not, however, it is believed, ever been enforced in (c) Swete v. Fairlie, 6 Car. & P. 1. \d) 5 Dowl. & By. 266. (e) Pasley T. Freeman. 3 T E 51 (/) Watson T. Poulson, 15 Jur. 1111, Exch. (g) Taylor v. Ashton, 11 M. & W. 415. (A) Shrewsbury T. Blount, 2 M. & G. 475 ; Kawlings v. Bell, 1 C. B. 951 ■ Chan- delor V. Lopns, 1 Smith, Leading Oas. 11. ' THE REFEREES. 51 practice, and could only be so in some very exceptional case, when a loss was actually sustained ; as where the insurance moneys had been paid before the fraud was discovered, and could not be recovered from the assured. In the event of a conspiracy to defraud the company, all par- ties implicated might be liable to an indictment, but that would be a criminal proceeding. 7. A claim has of late years been made by some members of the medi- cal profession, when applied to as the medical referees of parties pro- posing insurances on their lives, to the effect that they are entitled to a fee for their certificates ; and to this no objection can be raised. They have, however, endeavoured to extend the proposition, adding to it this further term, namely, that they are entitled to receive the fee from the insurance office, and not from their patient. In three instances the question has been tried in the county courts, the point raised being •whether there was any contract on the part of the company to pay the fee, and in every case it has been decided in the negative. (i) *As a matter of policy, it would seem not very important to ^ ^c„ -. the companies whether they paid the fees or not, since the aggre- L J gate amount of such fees could form but a small item in their annual expenses, more particularly when, as is understood to be the practice with those companies that profess to pay the fee, the application is only made after a full investigation of all the other evidence tendered, and a per- sonal examination by the medical officer of the company, and then only in those cases in which it is supposed that the information possessed by the medical referee is likely to prove of value. As a matter of principle, however, there appear grave objections to such a payment on the part of the company; for, as we have already seen, the medical referee is the agent in respect of his replies of the proposer, and the latter is answer- able for any want of candour or neglect by him ; while, if the fee were paid by the company, the question would arise, whether his position were not changed, and whether he had not become the agent of the insurers instead of the party making the proposal. Again, allowing that, for the most part, the known honour and integrity of the profession would be a sufficient safeguard to the insurers, and putting aside exceptional cases, it would seem unreasonable that they should be obliged to employ a per- son, of whom they know nothing, as their adviser, and to give evidence as to which his bias would be naturally in favour of his patient and against the office, and in which the restraining influence of the ordinary doctrine, that the proposer is answerable for the representations of the referee, might be thought to be taken away. . In the rare case of collu- sion, which is at least possible, the objection might be of more vital im- portance; but, without assuming that the object would be to plunder the office by inducing it to insure unsound lives, it is obvious that it might be continually called upon to pay fees when there was no guarantee that the proposal was bona fide, and in which there might, perhaps, never have been any intention to complete the insurance. (i) Philbrick v. Whetham, 4th Oct. 1850, Oolcheater County Court; Hooper v. The Gresham Life Assurance Company, June, 1851, Shoreditch County Court; Duplex V. The Economic Life Office, Aug. 1852. See Appendix. 52 bunyon's life assurance. P ^ . „ ^ The principle contended for would be equivalent to a *rule that I- J the purchaser should pay the costs of the vendor's solicitor, Vfhether a good title were made or not. It would seem that the medical profession have the cure of the evil, if such it be, in their own hands. Their claim is against their patients. If, therefore, they think it right to combine, they should do so by mutu- ally agreeing, that unless the fee is paid by the patient, they will not reply to the office; the obligation, joined to the absence of any remedy against the compiany, would then be an excuse to the patient for making the claim upon him, and the fee would be paid. Under the present practice, it is likely that the fees will not be paid to those gentlemen who claim them from the insurers, except in exceptional eases, where there is actually a call upon their skill ; while a large portion of the profession, having ascertained that there is no claim at law against the office, will continue to furnish their certificates without any charge to either party. Of course it is optional to the medical man to reply to the letter of application that, without payment, he will give no answer; and there- upon the company, if continuing to request the information, would be bound to pay for it. [*59] CHAPTER IV. THE POLICT AND ITS CONDITIONS. 1. The premises of the contract being complete, the insurers decide to accept or decline the proposal, and the decision is notified to the assured. In some companies this acceptance is unconditional, so that the premium be paid within the month ; the letter of acceptance running to the effect that the proposal has been accepted, "and that a receipt is ready at the office for the premium, upon the payment of which the assurance will commence ; but that, if the same be not paid within thirty days, a re- appearance and fresh certificates will be required." In other companies the acceptance is qualified by the condition, not only that the insurance shall not commence until the payment of the premium, but that no material fact shall have occurred prior thereto of a nature which ought to have been communicated to the insurers if it had happened before the date of the proposal ; or, the policy is executed by the directors or trus- tees, with a condition to that effect endorsed upon it, and is then lodged in the hands of the officers or agents of the company, to be handed over to the assured upon the payment of the premium. This clause has been introduced to meet the case, which has occurred in practice, of a person making a proposal for an insurance which he did not intend to complete, and then taking advantage of any sudden occurrence likely to turn the chances in his favour; as, for instance, when he makes the same proposal to several offices, intending to insure with that which may offer the most THE POLICY AND ITS CONDITIONS. 53 favourable terms, and on the occurrence of an accident or the appearance of a mortal disease affecting the person whose life is to be assured, com- pleting *all the insurances, although the last mentioned-person p ^„^ -. was on the point of death at the time. Such a stipulation is per- L -I fectly fair, and without it the contract is unequal, for the company has no power to compel the completion of the_ insurance by the payment of the premium. 2. The policy or written evidence of the contract is signed by the directors or trustees, according to the provisions of the deed of settlement, sometimes being under seal and sometimes under hand only. When issued by a company completely registered under the Joint-Stock Com- panies' Registration Act, it is invariably sealed with the seal of the com- pany, and authenticated by the signatures of at least two of the directors, in pursuance of the provisions of that act. (a) Such policies, when under seal, are deeds poll, charging the company as specialties. When under hand only, they operate as agreements of the co-partnership, signed by the directors on behalf of themselves and their co-partners. When under seal, they are occasionally somewhat informal as to their execution as compared with other deeds poll ; but this wiU not make them the less deeds if otherwise containing the essentials of a deed, namely, signing, sealing, and delivering. With regard to the sealing. Lord St. Leonard's, in his book on Powers, observes, " that it is not necessary that an im- pression should be made with wax or with a wafer. If the seal or other instrument used be impressed by the party on the plain parchment or paper with an intent to seal it, it is clearly sufficient; and therefore, when the instrument is a deed, and on proper stamps, and it is stated in the attestation to have been sealed and delivered in the presence of witnesses, it will, in the absence of evidence to the contrary, be presumed to have been sealed, although no impression appear on the parchment or paper." (6) Again, as to delivery, although essential to a *deed, yet it re- y ^„, -, quires no special form, and may be without any words, and the L J delivery of the document to the officers of the society, to be handed over, as the custom is, upon the payment of the premium, would, in the absence of any express declaration of delivery, be sufficient for the purpose, (c) In the case of a corporation, affixing the common seal is itself tantamount to delivery, except when accompanied by a direction to a clerk to retain the deed until a particular event has occurred, in which case the delivery is suspended until that event takes place. (cZ) The attestation clause is, moreover, immaterial; for witnesses are not essential to a. deed. (e) 3. The sum assured, as we shall hereafter see, is a chose in action, and will devolve, as every other similar interest, upon the personal repre- sentatives of the assured, or upon his assigns, by act of law, and cannot be assigned to any other party, although the beneficial interest may be transferred in equity. This arises from the rules of the common law, by which no personal contract is assignable at the will of the cdntractee, ( a) \ 46. (S) Sug. Powers, vol. i. p. 282. (c) See 4 Cruise Dig. 34, 35; Com. Dig. Fait (A 3), (A 4.) (rf) Good V. Ash, 3 Keb. 307 j Derby Canal Company t. Wilmot, 9 East, 360 ; Grant on Corporations, 63. (c) Com. Dig. Fait (B 4 a). 54 BUNTON'S LIFE ASSURANCE. with the exception of bills of exchange, which became so at an early period by the custom of merchants, and promissory notes, which became so subsequently by statute.(/) There is no suchexception in favour of policies of insurance, which cannot, therefore, be made negotiable or payable to order or to bearer, unless they fulfil the conditions of bills of P ^„n -, exchange and promissory *notes. Now a bill or note may be L J made payable at a future time, although uncertain, provided that^ it must happen some time or other : thus, a note payable on the death of A. B., or of the maker, is good ;(^) but it cannot be made payable out of a particular fund,(A) or on a contingency, and the happening of th& contingency will not cure the defect ; or be subject to a condition, although the condition be made by indorsement before the completion of the note.(i) It must be for a sum certain, and cannot be susceptible of contingent or indefinite additions. It must in fact be a contract for the payment of the particular sum simpliciter.(A) Hence policies of insurance are never attempted to be made in this form, which would not admit of the usual conditions, or even of the payment of the consideration by an annual premium, or of a stipulation entitling the assured to participate in the profits of the concern. 4. The wording of the policies themselves is as various as that of the declarations, but they also for the most part follow one general form. They commence by recitals of the desire of the assured to become a member of the society or to efiect the insurance, of the declaration more or less at length, and of the payment of the first year's premium. The witnessing, or operative part, then consists of an agreement, "that if the assured shall die within the term of one year, ending on the day of inclusive, or if he or his assigns shall, in the event of his living beyond the said term of one year, pay at the office of the company, during his life, the like premium, on or before the day of in every subsequent year, the funds and property of the company shall be liable, r *fi^ T ^.ccording to the provisions of its deed of settlement, *to pay and L -I satisfy, within three calendar months after satisfactory proof shall have been received at the office of the company of his death, unto his executors, administrators, or assigns, the principal sum assured, and such further sums as may be appropriated as a bonus upon the policy." Or the directors or trustees executing the policy covenant, that they or their assigns will make such payments out of the stock or fund of the company. And in one offioe(?) the sum assured is made payable at the expiration of three months, if the policy is in the hands of the personal representa- (/) 3 & 4 Anne, c. 9, enacting " That all notes in writing after the date of the act, whereby any person or persons, body politic or corporate, should promise to pay to any other person or persons, his, her, or their order, or unto bearer, any gum of money mentioned in such note, should be taken and construed to be due and payable to any person or persons to whom the same is made payable, audthat notes payable to order should be assignable by indorsement in like manner as in- land bills were made payable." {g) Cooke v. Colehan, 2 Stra. 121'7; Eofifey v. Greenwell, 2 Per. & Dav. 365, 10 Ad. 4; Ell. 222. [h) Teates v. Groves, 1 Ves. J. 280. (i) Leeds t. Lancashire, 2 Camp. 205. (k) Smith r. Nightingale, 2 Stark. 375; Bolton v. Dugdale, 4 B. & Ad. 619; Byles on Bills of Exchange, 72. 74. {I) The Equitable. THE POLICY AND ITS CONDITIONS. 55 tives of the deceased, or, if otherwise, within six calendar months. Then, follow the conditions of the policy, making it void in certain specified events, and which are either there set forth or referred to, as indorsed upon it. And, lastly, any special provisoes rendered necessary for ex- plaining the particular contract, or called for by the constitution of the company, such as, in a proprietary company, a stipulation limiting the liability of the insurers to the amount of their shares, including such part of them as may have been paid up. When, moreover, the powers of the company under the deed of settlement are defective, and the in- tention exists of an application to the legislature to enlarge them, or it is desirable to obtain the assent of the individual insurers to some beneficial change in the constitution of the company, it is not unusual to insert an express stipulation to that effect in the policy. (m) When the policy is on the life of a nominee, it runs in a similar form, the sum assured being made payable, upon the lapse of the life named, to the assured or his representatives, the principal distinction being, thai in some offices the conditions are framed more favourably to the assured than "in own life policies." This distinction will *be more r- ^(>i-, particularly adverted to in considering the nature of the condi- L J tions. Where the bonus is to be applied in reduction of the annual premium, the policy is made renewable upon the payment of the annual premium, or such reduced premium as may from time to time, according to the regulations of the company, be determined to be payable in respect of the assurance by the directors thereof, which determination is, in all cases, to be taken as conclusive by the said assured or his assigns. (■«) 5. A difference formerly existed between policies expressed to be granted for a certain period " from the day of the date" and " from the date," the one being considered to mean exclusive, and the other inclu- sive of the day,(o) and which gave rise to the words "both inclusive;" but the distinction, it is said, is now exploded,(p) and that as the ex- pressions may mean the same thing, and they are of doubtful import, they must be interpreted according to the intention of the policy, to be gleaned from the whole instrument ; and as the words are those of the insurers, they ought, according to the general rule of law, to be taken most strongly against them.M 6. In examining the conditions adopted by the different offices, it is necessary to premise that where any particular form is referred to, as having been adopted by any office, it is so merely to show that it is a form that has been, and therefore may be again in use ; but it is not to be assumed that either all the policies issued by the company cited have been so in the form in question, or that it necessarily continues to use it, for it will be found that it is by no means uncommon for insurance com- panies from time to time to alter or amend their conditions. (m) See Policies of the Eock Office, 1853. (n) Royal Exchange Policy, 1853. (o) Sir R. Howard's case, 2 Salkeld, 625; 1 Ld. Raymond, 480. Ip) Pugh T. The Duke of Leeds; Oowp. TU. (y) 2 Parke, 930 ; Dowdeswell, 55. 56 - bttnton's life assurance. r-^ot:-! *0f these, the first is usually declaratory of the first princi- L J pies of assurance law, that the policy depends upon the truth of the declaration, the disclosure of all material facts, and the correctness of the representations as to any such facts. Or it sets out these princi- ples with the modification that the policy shall be void if the declaration shall h,e untrue, or if the referees are proved to have knowingly given false testimonials. 7. A second condition relates to the payment of the premium, which must be done on or before the day at which it falls due, or within thirty days, or in some cases fifteen days after. The proper form of such a condition is, that the policy shall not become void before the expiration of thirty days from the day on which the premium shall become due, notwithstanding the death or other event, upon which the sum assured shall become due, shall have happened within the thirty days, provided that the premium due be paid before the expiration of that day. In some offices no such condition is inserted, and the right to renew within the further term depends upon -a provision of the deed of settlement, or the custom of the company, of which the letter of notice of the renewal premium falling due, and which always contains a statement of this na- ture, would probably be sufficient evidence. It is, however, of import- ance that the condition should be strictly complied with ; for it seems that, at law at least, it will be strictly construed. Thus where a party, as a member of a life insurance society for the benefit of widows and female relations, effected a policy for an annuity payable to his widow in consideration of a quarterly premium to -be paid during his life; and the society covenanted with him and his executors, that if he should pay to their clerk the quarterly premiums on the quar- ter-days during his life, and if he should also pay his proportion of con- tributions which the members of the society should, during his life, be called upon to make, in order to supply any deficiencies in their funds ; r *RR 1 then, upon proof of his death, the annuity should become *pay- 1- J able. By the rules of the society, if any member neglected to pay up the quarterly premiums for fifteen days after they were due, the policy was declared to be void, unless the member (continmng in as good health as when the 'policy expired) paid up the arrears within six months, and five shillings per month extra. It was held, that the member insur- ing having died, leaving a quarterly payment due at his death, the policy expired J and that a tender of the sum due by his executors, though made within fifteen days after it became due, did not satisfy the requisi- tions of the policy, and the rules of the society, which required such payment to be made in his lifetime, continuing in as good health as when the policy expired.(r) To keep the policy in force, moreover, the renewal premium must be actually paid : it is not sufficient that there was no intention to discontinue the policy, and that the office is not in fact dam^ nified by the delay.(s) The common equitable relief in respect of money payments does not apply, for the company has no power of compelling (r) Want v. Blunt, 12 East, 183. See Tartleton v. Stainforth, 5 T. E. 695, 1 Bos. k Pull. ill. («) Acey t. Fernie, ■: M. & V. 151. THE POLICY AND ITS CONDITIONS. 57 the payment of the premium. Neither is it any excuse that the assured has received no notice from the company, reminding him that the pre- mium is falling due. , Such a notice, commonly termed the renewal no- tice, is customary, but the company is under no obligation to send it. 8. A third condition, often incorporated with the last, relates to the revival of the policy within a limited term after the time of an omission to pay the premium, which is generally done upon proof of good health, and the payment of a moderate fine to the company. The following is a specimen of such a condition: "Policies will not be considered to be in force beyond thirty days after the expiration of the year, unless the pre- mium then due shall have been actually paid at the office of the society in London, on the receipt of two directors. But should proof be given *to the satisfaction of the directors that the party or parties ^ ^„^ ^ whose life or lives hath or have been insured, continue in good L J health, the policies may be revived at any period within six months, on the payment of a fine, to be fixed by a board of directors, not exceeding ten shillings per cent, on the sum assured ; or at any period within thir- teen months, on the payment of such fine as a board of directors may think reasonable." (<) 9. A fourth condition relates to travelling by sea, and varies very much in different policies. In some it avoids the policy if the assured " shall die upon the high seas, unless license be obtained from the court of direc- tors."('!<) In others, if he " shall die upon the high seas unless in pass- ing direct from one part of the United Kingdom to another, or in passing during peace from any part of Europe to any other part of Europe with- out previous license from the directors to go upon the seas."(?^) In others, if he " shaU die on the high seas, except in passing from one part of the United Kingdom of G-reat Britain and Ireland to another, or from or to any part of the United Kingdom of G-reat Britain and^Ireland, to or from any of the Islands of G-uernsey, Jersey, Alderney, Sark, and Man, or fifom any one of the same islands to any other of them, or from or to Ma- deira; and also in time of peace from any part of Europe to any other part of Europe; but the foregoing exception is not to extend to persons who, at the time of diCath on the high seas, shall be employed in a sea- faring capacity, unless in each case permission shall have been granted by the directors ; which may be obtained on such parties giving every requisite explanation, and paying an extra premium to be settled by the directors.'Vio) In others, or " if without the consent of the directors for the time being, he shall engage in the preventive service or any seafaring occupation, or shall go upon the sea in a vessel not decked or seaworthy, *or shall proceed to any part of the globe within thirty-three de- ^ ^„g^ -, grees of the equator."(a;) L -" In these conditions the most obvious distinction is, that in one class the policy is avoided in th^ event of going on the high seas : in the other, in the event only of dying while on them. The distinction is important, as such a condition would be strictly construed. Any going on the high (<) The Law Life Office conditio-ns. . (m) The Equitable. («) The Rock. (w) The Law. (x) The Eagle. 58 BUNTON'S LIFE ASSURANCE. seas, therefore, although attended by no evil result, would in the one case avoid the policy, while in the other the assured is made his own insurer as to maritime risks, and during the term of the voyage as to all other risks, but on its termination the insurance by the policy revives if unaffected by any other condition. 10. A fifth condition is, if the assured " shall go beyond the limits of Europe ;"{y) or again, " shall go beyond the limits of Europe, except to Madeira ;"(«) or in other companies, "if he shall proceed to Australia or to any place distant less than thirty-three degrees from the equator, or voyage within that limit ;"(a) or again, "shall proceed to any part of the globe within thirty-three degrees of the equator, or during actual warfare shall go beyond the limits of Europe."(6) 11. A sixth condition is, "if the assured shall enter into any military or naval service without previous license from the directors j"(c) or, "if he shall, without the consent of the directors for the time being, engage in the preventive service or any seafaring occupation, or during actual warfare shall engage in any military or naval service whatsoever ;(£A or, " if he shall become a seafaring person, or engage in active naval or mili- tary service,(e) or being or becoming a military or naval man, shall be called into actual service without permission from the directors. "(/) r *fiQ 1 *^^* ^^'^ last conditions are inserted to guard the insurers against L -I risks not contemplated in the original contract, or covered by the stipulated premiums received, and they will be also strictly construed ;(^) but it is usual to grant permission to the assured to undergo such risks upon the payment of an equivalent additional premium. As, moreover, where policies are effected on the lives of nominees, or where own life policies have been sold, it will often happen that the persons beneficially interested not only have no control over, but may not be even cognizant of the movements of the person whose life has been assured, it is not unusual to add a further stipulation that " if the person whose life is assured go beyond the limits allowed, or become a seafaring person, or engage in active military or naval service, before the fact has been communicated to the directors, the policy shall not become void if the party interested make the communication as soon as the fact comes to his knowledge, and pay the additional premium which would have been required if the fact had been known at the time it had occured." Such a provision appears to meet the justice of the case, and it is believed will always be readily added by indorsement, when it does not actually form one of the printed- conditions of the policy. 12. A seventh condition is, "if he shall commit suicide, or die by duelling, or the hands of justice, or shall die by his own hands, or by the hands of justice;" (A) or, again, "if he shall die by his own hands, being at the time sane or insane, by duelling, or by the hands of justice ;(i) or, again, " shall die by his own act, whether sane or insane, or by duel- M The Equitable; The Rock. (z) The Law. (a) The Legal and General. (6) The Eagle, (c) The Rock. (d) The Eagle. (c) The Legal and General. (/) The Law. (g) Vyse v. Wakefield, 6 M. & W. 442. th) The Bock. (i) The Equitable. THE POLICY AND ITS CONDITIONS. 59 ling, or by the hands of justioe,(/(;) or shall be convicted of felony ;"(?) or, again, " provided always that the person whose life is hereby assured, being also at the time the party interested in this insurance, *do ^ ^-^ -, not commit suicide;" with the further condition, "In case of L J suicide by the person whose life is insured, and who is also the party entitled to the benefit of the policy, the whole of the premiums will be returned j"(m) or, again, "Assurances made by persons on their own lives, who shall die by duelling, or by their own hands, or by the hands justice, will become void, so far as respects such persons ; but shall re- main in force so far as any other person or persons shall then have a bona fide interest therein, acquired by assignment or by legal or equitable lien, upon due proof of the extent of such interest being made to the directors. And if any person assured upon his own life, and who shall have been so assured for at least five years, shall die by his own hands, and not felo de se, the directors shall be at liberty, if they shall think proper, to pay for the benefit of his family any sum not exceeding what the society would have paid for the purchase of his interest in the policy, if it had been surrendered to the society on the day previous to his decease ; pro- vided that the interest in such assurance shall be in the assured, or in any trustee or trustees for him or for his wife or children, at the time of his decease."(n) The effect of the additions of the words "or shall be convicted of felony," would be to prevent the policy vesting in the crown in that event. It would leave the directors of the company at liberty to apply the value of it, if they thought fit, in favour of the wife or family of the felon. 13. Where death is caused by the felonious act of the assured, as when he dies by the hands of justice, by duelling, or felo de se, public policy avoids tte contract. Thus in Fauntleroy's case, an insurance by him on his own life was deemed void in consequence of his subsequently committing a felony, for which he suffered death. The policy had been sustained at the Rolls, but upon appeal to the House of Lords p ^^, -, the decree was reversed, upon the advice of Lord Lyndhurst, 0. '- J He thought that an insurance expressly against the event would be void, and therefore effect could not be given to a general policy, upon an event which, if expressed in terms, would have rendered the policy, as far as the condition went, at least, absolutely void.(o) A stipulation to uphold a policy in any such case would, it is said, be contrary to sound policy, as taking away one of the restraints operating on the minds of men against the commission of crimes, by the interest which they have in the welfare and prosperity of their connections ; nay, more, it would render those natural affections which make every man desirous of providing for his family, an inducement to crime ; for the ease may be well supposed of a person insuring his life for that purpose, with the intention of committing suicide. For a policy, moreover, to remain in force when death arose from any such cause, would be a fraud (k) The Eagle. (l) The Norwich Union. (to) The Legal and General. (n) The Law. (o) Amicable Society t. BoUand, 4 Bligh, N. S. 194, 2 Dow. & Cla. 1. In the Court below, Holland t. Disney, 3 Russ. 351. 60 BUNYON'S LIFE ASSURANCE. upon tie insurers, for a man's estate would thereby benefit by his own felonious act. 14. The above rule of law shows the origin of this condition, when felonious suicide only is intended. The condition is then inserted, by way of notice to the assured, for it is of importance that ignorance of the law should not neutralise the effect of its maxims. But the insurers may reasonably desire to exclude, from all questions between themselves and the representative of the assured, the topic of criminality, so likely to excite the compassionate prejudice of a jury, by whom the act of self- destruction might be considered of itself a sufficient proof of insanity. Remembering, moreover, that the conduct of insane patients is in some degree under the control of their hopes and fears, and that their affection for others often excereises a sway over theif minds, when fear of death or of personal suffering may have no influence, the insurers may well r *79 1 **^^si'® "^o* *<* P^'* ^^^^ ^^^^ restraint from the mind and conduct ■- -I of the assured, nor to release from all pecuniary interest in the continuance of his life, those on whose watchfulness its preservation may depend. For these reasons the words sane or insane are sometimes in- serted, or the condition is otherwise worded, so as to include all cases of self-destruction, whether felonious or not. At the same time, in order to render the policy the more valuable, as a security in the hands of third parties ; and having regard to the fact, that the reason for the condition is removed, when the insured life has no beneficial interest in the policy, it is, as we have seen, very commonly abrogated in favour of a purchaser or mortgagee. In like manner it is often modified by a provision, that even when the assured, being beneficially entitled, dies by his own hands, or felo de se, it shall be in the discretion of the insurers to return a pro- portion of the premiums paid, or the office value of the policy, to the representatives or family of the deceased. Such a return, however, to the extent of the office value of the . policy is invariably made, even in the absence of any stipulation. An insurance office is the creature of public opinion, and the reputation of illiberality is esteemed fatal to its progress. It would appear a hard thing to repudiate the contract, and retain the entire consideration. In one case the office did more, and paid all the premiums received, with interest at four per cent. ; but this was the compromise of a disputed claim -.{p) to make such a payment when the case was clearly in favour of the office, would be giving more than the consideration, for nothing would be ratained to cover the risk incurred prior to the death ; and this remark also applies to the stipulation already referred to, for returning the whole premiums in such a case. In one case, when the condition was, that, if the policy was assigned, fn-tjo-i bona fide, the assignee shall have the benefit *of it to the extent L J of his interest, notwithstanding the assured. should commit suicide, the assured deposited it with a creditor, with a letter promising to assign it, when requested, as a security for the debt ; but no notice was given to the insurers, and he then committed suicide. It was held that the transaction amounted, in equity, to a valid assignment as between the (p) Clift v. Scjiwabe, 3 C. B. 481. THE POLICY ^ND ITS CONDITIONS. 61 parties to it, and was, therefore, an effectual assignment within the con- dition, (y) 15. When the policy is effected upon the life of a nominee, the above reasoning fails ; the insurance can be no inducement to the criminal act, and may reasonably be construed to cover this as well as every other risk. There is, indeed, no reason why it should not do so ; for the general tables of mortality, which form the basis of the calculations upon which the policy is founded, include this as well as every other cause of death ; so that the particular risk is actually insured against. In policies, therefore, on the lives of nominees, it is very usually, but not invariably, omitted. 16. The construction to be given to a condition of this nature will be best ascertained by examining the recent cases. In Borrodaile v. Hun- ter,(r) the words of the proviso were, "should die by his own hands, or by the hands of justice, or in consequence of a duel." The verdict of the jury, at Nisi Prius, was, " that the assured voluntarily threw him^^ self from the bridge with the intention of destroying himself; but at the time of committing the act he was not capable of judging between right and wrong." " In construing the words of the condition, it is proper," observed Justice Maule, " to consider first what is their meaning in the largest sense, which, according to the common use of language, belongs to them; and if it should appear that that sense is larger than the sense in which they must be understood in the instrument in question ? secondly, what is the object for which they are used? They ought not to be extended beyond their ordinary *sense in order to comprehend j- ^-. . -. a case within their object, for that would be to give effect to an L J intention not expressed ; nor can they be so restricted as to exclude a case both within their object and within their ordinary sense, without violating the fundamental rule which requires that effect should be given to such intention of the parties as they have used fit words to express. To protect the insurers against increase of risk arising from the temptation to self-destruction offered by the assurance, is the object for which the condition in question is inserted. It ought, there- fore, to be so construed as to include those cases of self-destruction in which, but for the condition, the act might have been committed in order to accelerate the claim upon the policy, and to exclude those in which the circumstances, supposing the policy to have been unconditional, would show that the act could not have been committed with a view to pecu- niary interest. This principle of construction requires and accounts for the exclusion, from the operation of the condition, of those cases falling within the general sense of its words to which it is admitted not to apply, such as those of accident and delirium. To apply it to the present case, it appears by the finding of the jury, that the testator voluntarily threw himself into the water, infending to destroy his life, but that at the time he did so, he was not capable of judging between right and wrong; and, as a man who drowns himself voluntarily may do it to found a claim on a policy, though he may not think it wrong to do so, or though his mind (q) Cook T. Blake, 1 Hare, 390. (f) 5 Man. & Gr. 639. 62 BUNTON'S LITE ASSURANCE. may be so diseased that he does not know right from wrong, which, as I understand the finding of the jury, was the case with the testator, it seems to me that the object of the condition would not be effected unless it com- prehended such a case of self-destruction." The claimants had contended that the words "dying by his own hands" were synonymous with " suicide," and suicide with " felo de se," and that they did not include insanity where there could be no felonious intention. But the Court (s) P ,^^K -, was not *of this opinion, with the exception of Tindal, C. J., who L J thought that, from the context and position of the words, a felonious killing of himself, and no other, was intended : that, by the acknowledged principles oflegal construction, they were to be taken most strongly against those who had used them, namely, the insurers. That the expression, " dying by his own hands," was merely a translation into English of the word of Latin origin, " suicide," and that, if the exception had run in the terms " shall die by suicide," &c., no doubt could have arisen that a felonious suicide was intended. In Clift V. Schwabe,(<) however the words were, — " If such person shall commit suicide, or die hy duelling or the hands of justice ;" and it was held by seven Judges in the Exchequer Chamber against two, that the words "commit suicide" did not necessarily imply a felonous inten- tion, but simply meant shall intentionally kill himself j that the word suicide was not a word of art to which any legal meaning was to be given ; and both the commentators and lexicographers were consulted. The dictum of Tindal, C. J., was explained to show, that although his judgment might have been in favour of the plaintiff, yet that in his opin- ion the word suicide did not necessarily ex vi terminis import a criminal act, since he distinguished between a felonious suicide and- a suicide not felonious, and that a similar distinction was taken by Brskine, J. in the use of the words " criminal suicide ;" that the exception was not framed with reference to the commission of any felony or crime, but to guard against the payment of the sum assured being accelerated by the volun- tary act of the party interested in the money, and that it was so accelera- ted if the deceased knew the consequences of his act, and intended death to follow, whether he was sane or under some delusion as to the moral quality of the act done. It will, however, be observed that the authori- ties against the decision were very strong. Pollock, C. B., and Wight- P ^f.„ -. man, J. dissented from it, and to them may be *added Cress- L J well, J. in the Court below ; and it may be inferred that Tin- dal, C. J. and Brskine, J. would have done so upon the authority of Borrodaile v. Hunter ;(m) Alexander, C. B., and Lord Tenterden, C. J., from their decisions at Nisi Prius, in the unreported cases cited in the notes to that case; and perhaps Lord St. Leonard's, C, who, referring to the principal case, adds in a note sed qua3re the decision. (u) Lastly, the case was compromised by the return by the office of all the premi- ums received, with interest. The argument of the Lord Chief Baron is very strong as to the general policy which should govern the construc- s) Coltman and Erskine, JJ., concurring with Maule, J. (j) 3 C. B. 481. ' 5 Man. & Gr. pp. 643, 644 ; Garrett v. Barclay, Kinnear v. Borrodaile, ib. Sir B. Sugden's Law of Property, p. 15. ■i THE POLICY AND ITS CONDITIONS, 63 tion, and as to the measure of insanity required for the application of the principle laid down by the majority of the Judges. " In the eye of the law/' he said, " a man is either compos mentis and responsible, or he is non compos mentis, and not responsible. It is admitted that 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 in- tended. So, if the insanity 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 fancy he was playing upon it when he was destroying his own life; this would not be committing sui- cide within the proviso of the policy. But what if the delusion, instead of applying to the pistol or other instrument of death, applied to the man himself? Suppose he believed that he was Marcus Curtius, and ought to leap into a gulf? or that he was one of the Decii, and must sa- crifice himself for the benefit of his country ? What, if he fancied him- self an Apostle, and that it was his duty to die the death of a martyr ? What sound philosophy is there in taking a distinction between a delu- sion about a pistol, and a delusion in respect of a man against whom it is to be directed ? *or what distinction, in point of good sense, can p ^„-. -. be taken between physical blindness, in consequence of which the L J party insured walks into a well, and intellectual or moral blindness, which, leaving him the use of his senses and a knowledge of the physi- cal consequences of his acts, has deprived him of all judgment which should control and govern them, and of all sense to perceive their moral consequences ? It may be said that when the delusion extends to the character, ofiBce, or condition of the party, so that he mistakes his iden- tity, 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 delu- sion he believed he had committed a crime for which he ought to put himself to death, and that this was the result of insanity; is this a mistake of his identity ? 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 happiness, and security of thousands of families ;" and he ad- ded, "In my judgment, if death be the result of disease, whether afiect- ing the senses or the reason, the insurance office is liable under this pol- icy. The act, which is not the act of a sane responsible creature, but is the result of any delusion or perversion, whether physical, intellectual, or moral, is not the act of the man." 17. The words " by duelling" are not so precise but that disputes may arise upon them. It has been suggested that the question as to the felo- nious intent might arise when the deceased, although killed in a duel, had fired his pistol into the air, and never contemplated shooting his op- ponent; but the reply to this might well be, that the office had stipulated that he should not expose himself to such a risk ; or, again, that the duel might be in the course of war, in which it might be fatal, but not felonious ; but this case would seem to be covered by the condition as to military service. Again, as to the words " by the hands of justice," would it be competent to the plaintiff to prove that the deceased was in 64 EUNYON'S LIFE ASSURANCE. truth innocent of the crime for which he suffered? In the opinion of r *7R 1 *P2'**'6S0°> J-> it would seem that he would not,(«o) but it such L J a case the reporter, in Borrodaile v. Hunter,(a3) adds, in a note, « Suppose the attainder to be reversed upon error brought by the heir or executor of the party Executed, it would hardly be contended that this wrongful act in, invitissimum should deprive his family of the benefit of a contract entered into by him on their behalf." The cases also may be Buggestedj or an execution after a reprieve, or by the mistake of the sheriff, who supposes the assured to be another person, who is actually under sentance of death. 18. Lastly, we have a condition requiring that evidence that the age is correctly stated in the declaration shall be given at some time before payment of the claim, which has been thus expressed : — " Beasonable proof will also be required of the date of the birth, unless that fact shall have been previously established; in which case the same will be admit- ted by indorsement on the policy."(y) This admission should never be neglected, and may become extremely important, greatly increasing when made the market value of the policy. It is notoriously true, that evi- dence on this point is often very difficult to obtain ; as, for instance, in the case of children which have been bom abroad, or those of dissenters, of whose baptism no evidence is preserved; or where they have been privately baptized, and no entry made in the parish books ; or where the books themselves — and this is especially common in Ireland — have been imperfectly kept. After the death of the party the proof becomes doubly difficult. Secondary evidence, which he might have suggested, is then lost. He may have been the last of bis family, so that even a statuatory declaration by a person actually cognizant of the circum- stances becomes impossible ; the admission, too, without proof, is often rendered the more difficult by the entry of an incorrect age in the regis- ter of burials or upon the coffin plate. When persons die at advanced i" *7cn ^S^®> *surrounded by comparative strangers, perhaps in lodg- *- J ings, the tendency to exaggeration common to ignorant persons renders this error very prevalent. It often happens, too, that persons make mistakes as to their own ages, which, on reconsideration, and after search for evidence of the fact, they would be able to rectify. When the mistake occurs, it is not usual for the office to declare the policy forfeited, but to deduct from the sum assured the amount of the pre- miums underpaid, with interest thereon, to the time of the death. This is not, however, imperative upon the office; and it may happen that the application of such a rule of deduction may swallow up nearly the whole of the sum assured. This took place in a case which occurred in the year 1835, with a well known proprietary office at the west end of Lon- non. An insurance was effected, in May, 1827, on the joint lives of two grantors of an annuity, by the grantee, the policy containing a warranty that the age of one of the assured lives did not exceed 61. In Septem- ber, 1835, this person died, and her age, according to the policy, ought vi) Clift T. Schwabe, 3 C. B. p. 466. {x) 5 Man. & Gr. p. 66T. y) The Law Life, 1853. THE POLICY AND ITS CONDITION g. 65 not to have exceeded 70 years. She was residing, at the time of her death, with a son-in-law, who directed the age to be put upon the coffin- plate as 81 years, but who, it afterwards turned out, had no grounds for sup- posing this to have been the actual age. On the production of the burial certificate the policy was declared void, and the deceased having been the child of Baptist parents, no evidence of birth could be obtained ; although it was said that secondary evidence could be so to prove that she could not have been more than two or three years older than she was stated to have been in the declaration. The company, however, not only declared the policy void, but although the sum of 525?. 7s. Qd. had been received, refused to make any allowance : they said that they would have returned the balance of the sum assured, after deducting the difference between the premium that was paid, and that which ought to have been paid, ac- cording to the age in the certificate, but that the application of this rule would leave nothing to be returned. *Another, and perhaps p ^j,„ ., fairer mode of adjusting the claim, when the misstatement was L J unintentional, is to declare the policy good for such sum as would have been insured at the real age by the premium actually paid. 19. The construction of policies of insurance, as Lord St. Leonard's has observed, is exceedingly important from the consequences flowing from it, since upon these instruments many people entirely depend as their security for a provision for their families. As they are prepared by the company, any ambiguity which may be found in them must — and this remark has been repeatedly made — be taken most strongly against it. At the same time the Courts, observing how very often com- panies of this nature have been subjected to frauds, will carefully guard them against fraud, and will give effect to any part of the contract which has this object. Nay, more, it is from the very advice given in courts of law, that the companies have endeavoured to protect themselves by those stringent provisions which we so usually find in policies of assu- rance. But however severe the terms, there should be no ambiguity upon the instrument itself. " A policy ought to be so framed, that - J insurers from showing that, in fact, there was none, since the evidence of an insurable interest is not a matter of contract (unless expressly men- tioned,) but is required by public policy and the act of the legislature. 3. In order to escape the hardship, sometimes real, often rather appa- rent than real, of the rules of law as to warranties and representations (c) Leete v. The Gresham Life Assurance Society, 15 Jur. 1161, Exch. ^8 BUNYON'SLIFEASSHEANOE. treated of in the former chapters, schemes have been proposed, by which policies may be issued, as far as possible, free from the objections thus arising, and such policies are to be termed " indisputable and indefeasi- ble." Now, in the first place, every contract may, in a sense, be said to be BO that does not contain a power of revocation ; but this is not, of course, the intention, which must, on the contrary, be to prohibit the company from defending an action in some, if not in all cases ; or that the policy is issued subject to one single condition, namely, the occur- rence of the death of the assured, or perhaps subject only to this and the further condition, that the assured shall not proceed beyond certain specified limits. It is clearly open to the parties to contract where no representations whatever are made by the assured, or for the insurers to issue the policy free from all conditions, («^) The object of the assured in such a case is to obtain an assurance representing an unconditional obligation to pay on the occurrence of the event. This is readily carried out : the difficulty is to combine therewith the preliminary investigation by the assurers through the medium of the assured and his agents, with- j- ij_^ _ out which it is obvious that the company *cannot safely issue L -I the policy. The problems then present themselves for solution, how far the preliminary investigation can be the basis of the contract prior to the issue of the policy, and yet be separated from the contract ■when completed; and, if this is not possible, how far the proposal may itself be modified, so as to prevent its importing any condition into the contract. The two questions must be considered together. It is clearly open to the assured to stipulate that any information given by him shall not be taken to be a representation, the truth of which is to be imported as a condition into the policy, as, for example, he may state it " to the best of his belief," or simply as a fact "of which he has been informed." He may also, it would seem, stipulate, that tendering general informa- tion, he is not to be answerable for the unintentional suppression of a material fact within his knowledge. Here, however, would appear to be the limit of his power of controlling the effect of his own acts and state- ments; such a course could not make the policy indisputable, and its application is no new invention. In such cases the question would be one of intention, and for a jury; but it could rarely happen that a sup- pression of a fact proved to have been present to the mind of the party at the time, or a misrepresentation made without some grounds for it, could be oth^r than fraudulent. Now it is quite clear that a condition that the insurers shall not raise any objection, even in the case of fraud, is a void condition. It has even been questioned whether it would not be sufficient to render the policy itself wholly void ab initio as an illegal contract. Fraud is, however, it is believed, never mentioned in these policies, and, if so, must be assumed to be excluded, since that construe- (d) The old form of policy, observes Mr. Meredith, in a note to his translation of Emerigon's Treatise, contains no warranty of any kind, is short, but runs in part thus — "Dicto tempore durante dictus pater Ferandus decederet, seu vita careret in qu8.vis morte tSim naturali, quJim accidentali, quto etiam quovis alio modo quo dici, imaginari, seu cogitari posset, nemine excluso tali casu infrascripti assecuratores solvere teneantur," p. 157. INDISPUTABLE POLICIES. 69 tion is always to be preferred which will support a contract, and it is never to be supposed that the parties to it intend an illegal stipulation, where a lawful meaning can be given to their words. It would also seem open for the assured to stipulate that he should not be answerable for the statements made by the referees; and where there is no complicity on his *part with them, there does not seem on principle any reason why ^ ^„„ -. such a stipulation should not be good. The only difficulty is L J where the replies of the referees are actually fraudulent. As regards the medical referee, there can be no choice of the party j but, as regards those who are the choice of the assured, an objection might be raised, if it could be proved that the party referred to were in his knowledge of impeachable veracity. Here, however, the practical difficulty arises, whether the insurers can be advised to enter into such contracts. It is certainly hard that the unintentional neglect of a referee to mention a material fact within his knowledge should vitiate a policy, more particu- larly when the reply is not only made without the privity of the assured, but is actually withheld from him by the company, who in their applica- tion for information expressly agree that the reply shall be strictly pri- vate and confidential: but, on the other hand, it may be objected that the operation of some such rule, making a full disclosure of all material facts by the referee necessary for the safety of the assured, is absolutely necessary to obtain such disclosure. It is also apparently hard that a similar neglect on the part of the assured should have this effect, although here, if an innocent party is to suffer by a mistake, it wotild seem at least equitable that he by whom it is made should do so. It may be said that if it is a fundamental rule of the company, that notwithstanding any omission or representation, not actually fraudulent, the policy should remain in force, all the assured are equally benefited, the risk of having a share of any possible loss being an assurance, as it were, by each in- surer, against the risk of hazarding the whole of his insurance by an unintentional omission. But to this there is the obvious objection, that such a rule would operate as an inducement to suppression and prevari- cation. There must be some limit to the indefeasibility of the policy, and actual fraud must at any rate be so ; and although a jury may refuse to find a suppression or misrepresentation to be fraudulent, the boundary line between fraud and negligence *or mistake, in such a case, is p ^n» -, very indistinct, and difficult, if not impossible, to define. The L J equitable rule requires that the two parties should contract pari passu ; they certainly do not do so where one party is to be allowed to conceal or suppress material points, and then plead his own ignorance or stu- pidity as {t defence. 4. The preceding observations are thrown out for the consideration of the reader, and are generally applicable. In one company claiming for its policies the title of indisputable, the claim is attempted to be car- ried out by the following proviso : " That every policy issued by the Company shall be indefeasible and indisputable, and the fact of issuing the same shall be. conclusive evi- dence of the validity of the policy; and it shall not be lawful for, the company to delay payment of the money assured thereby on the ground 70 bunyon's life assurance. of any error, mistake, or omission, however important, made by or on the part of the person or persons eflfecting suoh insurance ; and that, on the contrary, the amount so assured shall be paid at the time stipulated by the policy, as if an error, mistake, or omission had been made or dis- covered." It is more than probable that this clause may hereafter receive a judi- cial interpretation, pending which it may be suggested that the construc- tion must be governed by the last sentence in it, and that its effect is to stipulate that the unintentional or non-fraudulent, omission to communi- cate a material fact shall not vitiate the policy, and that the onus of proving the intention is thrown on the insurer, but ^ that no farther or greater effect can be given to it. The policy would still be rendered void, even in the hands of the assignee for value, by an intentional sup- pression, although by a referee, or in any other case of fraud. The clause, moreover, does not include misrepresentati(Jns, although not fraudulent, unless the words " error or mistake" are sufficient, which seems doubtful. Neither does it prevent the insurers raising any ques- tion as to what is the true nature of the contract proposed by the policy, r *ss 1 *^' ^^ ^^ important to observe that indisputable policies con- L J tain the usual conditions as to residence, maritime risks, sui- cide, and military service, while a really indisputable policy should be subject to no conditions whatsoever. Such policies could not be issued except at an advanced rate of premium. Residents in the tropics^ and persons whose lives were subject to more than ordinary risk, would other- wise, all seek such an office, and its funds would soon be unabl^ to meet the demands upon them. It has, however, been observed, that a very small proportion of the assured under ordinary policies actually incur the liability of having to pay extr^, premiums; and hence it has been thought by some companies in Scotland, that if, after the expiration of a term of years, usually five years, the assured, upon making a full disclosure of all circumstances connected with the probability of his ever proceeding beyond the limits of Europe, can make a statutory declaration that he has no present prospect or intention of so doing, the benefit of the condi- tion of the policy may be safely released by> the company. 6. This release is carried out by a certificate signed by three of the directors, and in the following form, and purporting to render the policy unchallengeable : — " Whereas policy No. dated granted by the Life As- surance Company on the life of for the sum of having been in force for five years, and the directors being satisfied that the said pol- icy should be declared unchallengeable ; and being further satisfied that it is unnecessary to place any restriction on the said (assured) with refer- ence to residing or travelling abroad : — Therefore it is hereby declared that the aforesaid policy shall be and is hereby admitted to the first class of " Select Assurances," and that the whole terms and conditions of said policy are now restricted to the following obligations, which shall be binding mutually on the company and on the parties having right, or UNCHALLENGEABLE POLICIES. 71 who may come to have right to said policy." " That *the capital r qq -, stock and funds of the Life Assurance Company shall be L J subject and liable to pay the sum assured under said policy, at the stipu- lated period, after the death of the said (assured) shall have been duly proven in terms of the policy, provided the annual premium or premiums exigible be duly paid at the date or within the period specified by said polr icy ; the clause in said policy as to the power of renewal within three months, in case of forfeiture by non-payment of the premiums, beiag retained." If the policy were under seal, it would be necessary, it will be ob- served, for this agreement to be so also, otherwise it would be inopera- tive at law. This certificate speaks of the first class of select assura,nces, and it would seem that the said company has opened a second class of select as- surances rendering a policy unchallengeable, but without relieving the assured from the effect of the conditions of the policy as to residing or travelling beyond the limits of Europe, and as to military or naval ser- vice. The certificate of release is in this case also given by a certificate signed by three directors, and in the following form : — " Whereas Policy No. dated granted by the Life As- surance Company ou the life of for the sum of having been in force for five years, and the directors being satisfied that the said pol- icy should be declared unchallengeable, subject however, to the condi- tions of the policy as to residing or travelling beyond the limits of Europe, and as to military or naval service : — Therefore it is hereby de- clared, that the aforesaid policy shall be, and is hereby, admitted to the second class of " Select Assurances," and that the whole terms and con- ditions of said policy are now restricted to the following obligations, which shall be binding mutually on the company and on the parties having right, or who may come to have right to said policy :" — *" That the capital stock and funds of the Life Assur- r- „« -, ance Company shall be subject and liable to pay the sum as- L J sured under said policy, at the stipulated period, after the death of the said shall have been duly proven in terms of the policy, provided always that the annual premium or premiums exigible be duly paid at the date or within the period specified by said policy, and that the condi- tion of the policy as to residing or travelling beyond the limits of Europe, and military or naval service, be observed; the clause in said policy as to the power of renewal within three months, in case of forfei- ture by non-payment of the premium, being retained." It is obvious that such a release as is contained in these certificates stands upon a very different ground to that of the indisputable clause in the policy already considered. There can be no doubt but that the right to set aside a contract may be released, even although that right may have arisen by reason of the fraud of the relessec. At the same time they are in principle open to this objection, that, by a general rule of law, releases given by persons not conusant of their rights are inoperative. When the policy is void on account of the fraud of the assured, the au- 72 BUN ton's life assurances. thor presumes that such a release could not improve his position if given by the insurers, so long as they were ignorant of the fact. 7. When a policy is void by reason of any fraudulent misrepresenta- tion, the company is entitled to file a bill, to have it delivered up to be cancelled; and this is a right possessed in common with every person from whom any deed or other instrument has been obtained by fraud or misrepresentation. (e) And when the policy has become void, by reason of the breach of any condition or the failure of interest after its issue, and an action has been brought upon it, the company is entitled to the like relief. (/) At the time it has been considered that, in the r *Q1 1 *^**''^' ^^^^! since the policy would be void at law upon the face ■- J of it, equity, until the action were brought, would have no juris- diction, (^i) although it could entertain a bill of discovery in aid of a de- fence to an action,(A) — a relief, however, it is presumed, unnecessary in the present state of the law. 8. Where equity relieves in ordering an instrument to be cancelled, the general rule is, that the party in whose favour the decree is made shall do equity by returning the consideration ; but this would not over- ride an express stipulation for the forfeiture of the premiums on avoid- ance of the policy. In a case where a bill was filed by the directors, who had signed a policy issued by the Alfred Home and Foreign Association, for the delivery up of the policy, on the ground of fraud and misappre- hension, '« or that the plaintifiF might otherwise be relieved therefrom in such manner as the court might think fit;" and one of the conditions of the policy was, that, if the policy should become void, all premiums paid to the association should be forfeited : on a demurrer for want of equity, on the ground that the plaintiffs ought in their bill to have offered to repay the premiums, it was replied that the plaintiffs had suflSciently sub- mitted to the judgment of the court the terms on which the relief was to be granted, and the demurrer was overruled, (i) 9. When the policy has been void ab initio, or in any case " where a premium has been paid but the risk has not been run, whether this has been owing to the fault, pleasure, or will of the assured, or to any other cause, the premium shall be returned by the insurers ;" but if the risk has once commenced, there shall be no apportionment or return of the premium afterwards.(i) r *Qo T *" Thus, in an assurance upon a life," said Lord Mansfield, L J "with the common exception of suicide and the hands of justice, if the party is executed or commit suicide twenty-four hours after the completion of the policy, there shall be no return ;" and the reason of this is, that the contract is for the entire risk, and a stipulation for the return of any portion of the premiums is no term' of it.(Z) i; te) Barker v. Walters, 8 Bear. 96. (/) The India and London Assurance Oomp. v. Dalby, 16 Jur. 982, (V. C. B.J (g) Thornton v. Knight, 16 Sim. 509. ' (A) Desborough v. Rawlins, 3 My. & Or. 515. (t) Barker v. Walters, SBeav. 96; Anderson v. Fitzgerald, 21 Law T. 245, (House of Lords.) Ik) Tyrie v. Fletcher, Cowp. 666; Stevenson t. Snow, 3 Burr. 123T. (l) Berman v. Woodbridge, Dougl. 789. RETURNOi'THEPEEAIIIIMS. 73 When, however, the contract is divisible, that portion of the premium which may have been paid for the risk not run shall be returned, as when, in addition to the renewal premium, a further premium is paid for a license to proceed to any foreign place. Should the assured remain in England, and never incur the risk, the premium must be returned. 10. An exception to this right to recover the premium where no risk has been run, arises where there has been actual fraud on the part of the assured or his agent.(m) And, in like manner, when the insurance is illegal, either as contrary to the statute, as, for example, where it has been effected without an in- surable interest, or for any other reason. The cases upon this point have been cases of marine insurances, in which it has been considered that, where both parties are in pari delicto, potior est conditio possidentis. In these cases a distinction has been taken between executory and executed contracts ; and in the latter the decision has been rested upon this further ground, that the plaintiff should not be allowed to lie by waiting until the risk, such as it was (not, indeed, founded in law, but resting on the honour of the defendants,) had been completely run, and then, when in the event no loss had occurred, to bring an action to recover the pre- mium, — a distinction, however, which does not appear to have been ever acted on, and obviously would not apply except in merely contingent in- surances, (w) *11. With these exceptions the right will exist, notwithstand- r-^qoT ing it may have been the fault of the assured that the insurance L ' has not operated ; as where there has been a breach of warranty, or an omission to communicate material information, (o) and even where there has been concealment and misrepresentation, not fraudulent on" the part of the assured or his agent, (js) The cases appear to have been decided upon policies where the pre- mium was paid in a single sum, but where the premium is annual the same rule would apply to each annual payment. If no risk has been run there would be a return of all the premiums. If the policy has become void from some subsequent cause, such as the cestui que vie going beyond the limits of Europe, the premium paid after the avoidance would be re-payable. 12. When the assured is entitled to a return of the premiums, he may recover them in an action for money had and received ; but when there has bpen no actual fraud, but misrepresentation or suppression only, it is conceived that, since no man is entitled to take advantage of his own wrong, the policy is not strictly void, but voidable at the election of the insurers, as in the analogous case of an annuity void for want of inrol- ment by the grantee. The assured in such a case, ^desiring to discontinue the insurance, would not be entitled to abandon the contract and recover the premiums paid by him. 13. By the statute of limitations the expiration of six years from the time at which the right pf action accrued, would be an absolute bar to (m) Chapman v. Fraser, 1 Parke, 456. («) Lowry T. Bourdieu, Doug. 468, (o) Feise v. Parkinson, 4 Taunt. 640. (p) Anderson v. Thornton, 8 Bxch. 425. T4 bunyon's life asstjranoe. the right of the assured to recover the premiums, but the question would remain to be decided in each case as to the time at which the right of action accrued. In the absence of any distinct authority, the author submits that, in the presupposed case in which the policy would be void- able at the election of the insurers, the time at which the statute would P *Q4. n ^^g''' ^0 *run, and the right to recover the premiums would L J accrue, would be the time at which the insurers elected to avoid the contract, and not the time at which the payments were actually made. (5) 14. The return of the entire premium, however, may be hard justice to the insurers. The assured, more particularly in a mutual office, hav- ing voluntarily joined the company and become subject to its laws, would seem in equity liable at least to hig proportion of the interim expenses j and if a valua,tion has been made since his policy was efifeeted and a bonus declared, a portion of the funds applicable thereto must have been derived from his contributions, and been distributed, while it is by no means probable that the bonus to which his policy was entitled was in proportion to his actual subscription. For these reasons, a clause is, as w§ have already seen, inserted in the declaration or embodied as a condi- tion in the policy itself, stipulating that, in the event of the policy be- coming void by reason of any untrue or incorrect statement or breach of warranty or condition, the premiums paid shall be forfeited to the com- pany. To such a condition full effect will be given in an action for the recovery of the premiums. " It was contended," observed Lord Lynd- hurst, <^ in a late case that the words must mean, truly or untruly, within the knowledge of the party making the statement; and that, if the party insuring ignorantly and innocently makes a misstatement, he is not to forfeit the premiums under the clause in question. We are of opinion, however, that this is not the real meaning of this clause. A statement is not the less untrue because the party making it is not 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.(»-) As r #QK n "^^ ba^y^ already observed, it does not appear that equity, in *act- L J ing at the instance of the insurers, would pay less regard to such a condition. When the policy issued is not in accordance with the terms of the pro- posal as accepted by the directors, but is drawn up by the office in a dif- ferent form, varying the right of the assured, a court of equity will inter- fere and deal with the case upon the footing of the proposal, and not of the policy, or will compel the issue of an amended policy upon the terms agreed upon.(«) The Court will act the more readily in that the preparation of the policy is the duty of the company. In a late case where this was done. Sir G. Turner, V. C, observed, '( 111 dealing i?! See post, Pt. in. Ch. iv., citing Oowper t. Godmond, 3 Moo. k Sc. 219. Duckett V. Williams, 2 C. & M. 348 ; Anderson v. Fitzgerald, 21 Law T. 245, (House of Lords.) (») CoUett V. Morrison, 9 Hare, 162 ; Henkle v. The Royal Exchange A,ssurai^ce Company, 1 Ves. Senr. 317; Motteux v. The London Assurance Corpo^^tioIl, 1 Atk. 545. INSURANCES AGAINST ACCIDENT. 75 ■with this case I have abstained from entering into the question of fraud, as I do not believe that any actual fraud was intended ; but, in having taken this course, I must not be understood to give any countenance to the notion that insurance companies, issuing policies under such circum- stances as occur in this case, would not be liable in equity on the ground of fraud. The cause of fraud is more strong for the interference of the Court than the case of mistake. Lord Eldon refers to the distinction in cases when the duty of perfecting the instrument rests on the party who is to become liable under it ; and the distinction is clearly well-founded in principle, and I believe supported by authority.fi) But the mistake must be evidenced by undoubted proof,(M) sufficient to satisfy the con- science of the Court, or of a jury, if sent to a jury; and it is only after great consideration that such a case should be sent to a jury, and such a course was termed by Lord Eldon a very dangerous way of proceed- ing."(w) *CHAPTER VL [*96] INSURANCES AGAINST ACCIDENT INSURANCE AGAINST THE BIRTH OF ISSUE. FIDELITY OR GUARANTEE POLICIES. 1. There are moreover other contracts, not strictly life insurances, or ordinarily so considered, but more or less partaking of their character, which are occasionally undertaken by life offices, or which, analagous thereto in their nature and the laws by which they are governed, have called into existence companies for their especial purposes. Such are in- surances for the payment of gross sums of money upon death occurring by accident, and of compensation of a limited amount when severe but non-fatal injuries are received; contracts for the payment of money upon the birth of issue of any particular persons, and guarantee policies, as they are termed, or agreements by which the company becomes surety for the fidelity of persons employed in offices of trust, and which latter contract is sometimes associated with an ordinary life insurance, — a single sum of the amount insured forming the limit of the company's lia- bility. 2. Insurances against accidents are indeed in principle strictly life insurances, with a condition that the claim shall only arise in the event of death occurring in a particular way. The original form of these in- surances appears to have comprehended railway accidents only ; but the contract", thus suggested, has been extended so as to include those which may arise from any other cause. Again, since of the numerous severe accidents which are continually happening, but a few are actually fatal, (t) CoUett V. Morrison, ib. (u) Parsons v. Bignold, 15 (v) Beaumont v. Bramley, 1 Tur. & Euss. 55. Parsons V. Bignold, 15 L. J. Ch. 3T9. 76 BUNYON'SLItE ASSURANCE. j^q- -] policies are issued providing in addition a limited *compensation,' L J in the form, in the more ordinary case, of a payment for medical expenses, and a weekly allowance until a cure is effected. In all such cases the premium varies with the risk and occupation of the assured, commencing at a small sum where death by railway accidents is alone in- tended, and increasing where compensation for partial injury is to be also given, and again where accidents of all kinds are included, and in like manner where in the latter case compensation is also added. In some companies, moreover, the further contingency of loss of limb or sight, is taken as an alternative to that of death for the payment of the assurance moneys. In making the proposal a declaration is made in the same form as for a life insurance, the particulars concerning which information is required in addition to the description of the assured for his identification, being as to his occupation, and how long it has been followed by him, and whe- ther he has ever been afflicted with epileptic or other fits, coupled with the general question, " Whether there is any circumstance or information touching his profession, business, occupation, or habits of life, with which the directors ought to be made acquainted, as rendering him peculiarly liable to accidents." Occupation is, of course, a very important element of the risk ; hence, in fixing the rates this point is considered of primary importance, and the assured are divided into different classes with rates varying according to the hazards of their respective employments. On the question of occupation there seems to be almost the only point of dispute likely to arise as peculiar to this kind of insurance. A policy effected by a person under his then description, who had at that very time an intention of entering on a more dangerous occupation, but which, nevertheless, he studiously concealed, would be clearly fraudulent, if not provided for by the general question; but a bona fide change, not antici- pated when the policy was issued, would not, it is conceived, avoid the policy,. unless a special provision to that effect was contained in it. r *QS T *^' ^^^ insurance of a sum of money upon the contingency of L ' the birth of lawful issue of specified persons, is of more rare occur- rence, but of importance from the magnitude of the sums which are gene- rally involved in it. This risk may be either coupled or not with some contingency, dependent upon the duration of human life; such as the attainment of. a particular age by the issue. The more common case is that in which a tenant for life, under a settlement, is entitled to the re- version in fee simple, subject to an estate tail in his own issue (if any) by the particular marriage, and is desirous of mortgaging the estate without burdening his life-interest with the premiums of insurances on his own life. In such a case, after the lapse of a considerable number of years since the marriage, without the birth of a child, the probability of issue is very small, and seems a fair subject of insurance. The principal ele- ment for consideration is evidently the age and state of health of the lady, and the risk depends so much upon the circumstances of the particular case, that no general law can be said to prevail by which it may be esti- mated. It may, however, be convenient to cite some cases in which the Courts have presumed that women have been past child-bearing at parti- INSURANCES AGAINST ISSUB. 77 cular ages. In Leng v. Hodges (Jao. 586), the presumption was raised at 69 ; the money being paid out of court on the party's own recogni- sance to refund in the event of children being born. In Fraser v. Fraser (Jac. 586, note), the same course was taken when the age of the woman was 55. In Miles v. Knight (12 Jur. 666), at 68. In Brown v. Pringle (4 Hare, 124), the presumption was raised at 66. In Dood v. "Wake (5 De Gex and Smale, 226), at 65. In Brandon v. "Woodthorpe (10 Beav. 463), at 63. On the other hand, in re Overhills Trusts, 17 Jur. 342, (V. C. S.,) is an authority that the Court will not presume that a married woman, aged 49, cannot have children j and by a great authority, it is stated as a fact, that a woman aged 60 bore a child, (a) *4. When the contingency insured against, is not only the p ^^^ -. birth of children by a particular marriage, but includes children L J by any future marriage of a male, whose wife, to whom he has been married for some years without the birth of a child, is still living, the risk appears to depend almost entirely upon the life of the wife. There is scarcely any age at which the presumption arises that a man becomes incapable of begetting children. In Trover v. Trover, (2 My. & K. 677,) it seems to have been thought that there was no such presumption at the age of 80; nor in Lushington v. Boldero, (15 Beav. 1,) at 95. It would seem, moreover, that on such an insurance a moral risk might arise, exceeding the ordinary risk of a subsequent marriage taking place. Such an insurance might create a spurious desire of having children in the mind of the party, more particularly in a case of partial insanity; and it will be remembered that marriage taking place immediately before the birth of a child is sufficient to legitimatise it. When the contin- gency includes the birth of issue of a future marriage of a female, some weight must be given to the fact, that it by no means follows, that be- cause there has been no issue by the first marriage there should be none by a second ; and i,t is believed that cases have occurred in which there have been unfruitful marriages followed by a divorce, after which both parties have had issue by subsequent marriages. (6) The principal difficulty in effecting such insurances seems to be, that few companies are empowered by their deeds of settlement to undertake them, so that notwithstanding the issue of the policy the assets of the company granting it might not be liable to pay the money in the event of the contingency taking place. This is a very *important |-*-inn-| question, as to which inquiry should be made by the assured be- L J fore paying his money, unless he be content to fall back upon the perso- nal security of the directors alone, who would not, it would seem, be en- titled to be indemnified by the other shareholders. 5. The onerous nature of the office of surety, the severe effect of the obligation when enforced, and yet the comparative rarity of cases in which the necessity to enforce it arises when the fidelity is alone guar- (ffi) Co. Litt. 40 b. (i) And this the author is informed has been the case where a sentence of nul- lity of marriage has been pronounced by the Ecclesiastical Court on the ground of impotentia quoad banc. As to such suits, see Anonymous Case, IT Jur. 628 ; Greenstreet v. Cumyns, 2 Phil. 10, 3 Curt. 16. 78 BUNTON'SLIFE ASSURANCES. anteedj oafurolly suggested it as one wbich might be conveniently sus- tained by a public company for profit. Yet tiie business of such com- panies is at present in . its infaacy, and apparently beset With difficulty j for however simple the mere guarantee of honesty may appea,r by the necessity of the case, it is continually resolving itself into the far more difficult question of the guarantee of commercial credit or at least of sol'- vency. This is obviously the case when the I'elation between the em- ployer and the employed is such that the account between them assumes the form of a debtor and creditor account, and a deficiency ceases to be felonious. 6. When application is made- to a company for a guarantee, a propo- sal or declaration is made both by the applicant and the employer, in which a minute disclosure is required of the relative positions of the two parties and the circumstances of the former. Although the forms of proposal vary, the following appear to be the principal points of inquiry ; namely, the applicant, (1) as to his agej (2) and condition and the state of his family ; (3) whether he is a householder ; (4) whether he has any other business or calling than that in which the security is required; (5) the particulars of his employment for a term of years prior to the application j (6) whether he is himself security for any other person ; (7) whether he has ever made any previous application to any guaran- tee company, and if so, the result and the terms of acceptance, if ac- cepted ; (8) the particulars of his private property, whether in posses- sion, reversion, or expectancy, and whether incumbered or not, and r*1 ni 1 °^ ^'® income from other, *sources ; (9) the amount of his pri- L -J vate debts and other liabilities ; (10) whether he was ever bank- rupt or insolvent or compounded with his creditors, and if so, the parti- culars. Replies to other questions are, moreover, required from the em- ployer, or as to some of them in some companies from both parties, namely, (11) as to the capacity in which the applicant is engaged, or to be engaged ; (12) his duties and responsibilities ; (13) the largest sum at any time to be held in his ha,nd, and for how long a period ; (14) whether any stock in trade be entrusted to his custody for sate ; if so, its probable value and description, and how often stock will be taken by the employer j (15) the checks used to secure accuracy in his accounts, how often they are balanced, and whether the balance is then immediately paid over ; (16) whether there is any outstanding account or cash bal- ance then due from him, and whether there has been any previous de- fault or irregularity in his accounts; (17) the manner in which the ap-. plioant is to be remunerated, and the amount and nature of his allow- ance ; (18) the amount of the security required ; (19) whether any other security is to be given ; (20) the time during which the applicant has been engaged in the particular employment, and why the security is thus required ; (21) whether it has been a rule with the employer to re- quire security from the parties previously holding such employments ; (22) if so, the amount and particulars; as also of any defalcations which may have occurred. In addition to these statements by the appli- cant and employer, references are required to persons of respectability, QtlARANTEEOFi'IDELITT. 79 to ■whom the applicant has been personally known for some years, and who can testify to his integrity. 7. ]?rDm these questions it will be observed that their object is to as- certain, in the first place, the exact position of the applicant, and how far his circumstances, whether arising from past transactions, or from the benefits derived from hid present employment, are such as to prevent his being attacked by any more than ordinary temptations to dishonesty. Secondly, that sufficient checks are ^employed to secure his rsciAn-i exactness, and that the negligence of the employer is not of L J itself a temptation to improper conduct on his part ; thirdly, that the requirements of security does not arise from any want of confidence on the part of the employer, and that there have been no circumstances of such a nature as to elicit it, and particularly that the accounts are then correct ; so that, by the process of carrying on a balance, the company may not be made ultimately liable for past deficienciesw Accurate state- ments on those points are absolutely necessary for the security of the company J but, on examination, they will be found, as in the case of a proposal for an ordinary life policy, for the most part but the expression of the common rules of law upon this subject, or a limitation of the lia- bilities thereby implied. 8. In this contract, as in that of life assurance, the company relies upon the representations of the parties, and the observance of perfect goad faith on their part is a condition precedent to its validity. A mis- representation, or even a concealment of any material fact, which if known to a society, might have prevented it from undertaking the risk, will render the suretyship contract in valid, (c) Hence it is important that the points considered generally material should be defined, and this is done by putting the preceding questions in the proposal. If, however, there, were any material fact arising on a particular proposal not refer- red to in any of such questions, the general rule of law would require that it should be mentioned. 9. Again, in order to support the contract, perfect good faith must be preserved by the obligee as to all subsequent transactions, and the rela- tive positions of the parties must be preserved ; any act on the part of the employer which has the efi'ect of altering the possession of the surety, will discharge the latter, («?j in mere debtor and creditor trans- rjifiAq-i actions *even such an act^ as having no further cflFect, may ope- L J rate to give further time to a debtor without the consent of the surety.(e) Hence, a fraudulent concealment of an embezzlement by the employer would discharge the company, or the release of a specific security, should such be given, in respect of the same transaction in which the surety is liable,//) whether he is aware of its existence or iiot,(^) or of any other (c) Owen y. Homan, 3 Mac. & Gror. 378 ; Espey v. Lake, 16 Jur. 1106, (V. 0. T. ;) iStone V. Oompton, 5 Bing. N. C. 142. See cases cited, 2 Leading Cases in Equity (Tudor), 712. (d) Bonar v. Macdonald, 3 H. L. Ca. 226. (e) Padwick v. Stanley, 9 Hare, 627; Cross v. Sprigg, 2 Mac. & Gor. 113. •{/) Watson V. Alcock, 17 Jut. 482, (V. C. S.) (g) Peel v. Tatlock, 1 Bos. & Pul. 419; Goring v. Edmonds, 6 Bing. 99. Ste cases cited Burge on Suretyship, 353. 80 BUNYON'S LIFE ASSURANCE. guarantee by other parties contracted for by insurers, at least for a pro- portion of the liability. (A) 10. But a mere neglect to enforce the obligation will not have that effect, and notwithstanding that a considerable delay may have occurred on the part of the employer in settling the accounts, or even in giving notice of an embezzlement after its discovery, (i) 11. The "obligee must also, to be entitled to recover, have performed his own part of the contract. Thus, in a case where a man put his son apprentice, and gave a bond for his fidelity, and his employer covenanted that he would settle the cash-book every month ; on an embezzlement occurring, and its appearing that the employer had neglected to settle the cash, it was held that the father should be relieved from the payment of so much as was embezzled after the first month. (A;) In this case a separate covenant was entered into, but the effect would be the same if there was a distinct contract or warranty that a particular course should be pursued, although it would be otherwise where there was no warranty r«l 04.1 ""^ agreement, but *a mere representation of the usual practice or ■- -I intention of the employer. 12. This distinction was taken in a late case where an action was brought against a guarantee company. The answer to the inquiry " as to what checks w'ould be used to secure accuracy in his accounts, and how often they would be balanced and closed," was " examined by the finance committee every fortnight." No such examination took place, and a loss occurred. In an action upon the policy it was contended that the provision as to the mode of examining the accounts was to be read as a warranty, and that the neglect had put an end to the guarantee. The Court, however held that the manner in which the question was put and answered, showed that it was not understood as more than a declaration of the course that was intended to be pursued, and if made bona fide and honestly at the time, did not prejudice the right of the employer to re- cover. In reply to the argument that the stipulation operated as a war- ranty, the Chief Baron remarked : " If this is a warranty, it must be construed literally, and therefore, although the employers had found out a better mode of checking his accounts, they would still be obliged to go through the idle ceremony of having them examined by the finance com- mittee." (/) In consequence, apparently, of this decision, a change has been made in the proposals of some companies, and instead of simply requiring a series of replies to the questions above mentioned and a de- claration of their truth, the 15th question is put in the following'form : " What checks will you use to secure accuracy in the applicant's accounts ;" and the declaration signed by the employer is made in the following form : " I, A. B., declare that the answers and representations above made by me are true, and that the same, so far as th^y relate to future acts and omissions, shall be complied with on the part of A. B. and Co., (h) Hodgson V. Hodgson, 2 Keen, 704. («■) Shepherd v. Beecher, 2 P. Wma. 288 ; Trent Navigation Company v. Harley, 10 East, 34, and see cases cited ante, note (g). I (i) Montague v. Tidcombe, 2 Vern. 518. {I) Benham t. The United Guarantee and Life Assurance Comp., 7 Bxch. 744. GUARANTEE OF FIDELITY. 81 and *their representatives ; and that the truth of the said answers, r#iAc-i and representations, and future compliances therewith, shall be L J deemed to be a contract entered into, by us with the above company, and the basis of the proposed guarantee." 13. Upon a bond conditioned for the faithful service of a person as clerk, the surety may be liable for complicity by the clerk in the default of another, notwithstanding there may have been no misapplication of moneys by him in his own favour. Thus, where the cashier of a railway suffered moneys to remain in the hands of the booking clerks, making up moneys on one day by appropriating to it a portion of the moneys re- ceived on the following day, the sureties were held liable. The fact that there were no moneys of the company in the hands of of the clerk at the termination of his engagement, was held not to discharge them.(m) And gross negligence on the part of the clerk will occasion a similar liability. (n.) But the surety is only liable for money becoming actually due from the employed : thus, when the treasurer who was the paid ofiB.cer of a building society and bailee of the moneys entrusted to him, was robbed of a sum belonging to the society, it was held that the surety was not liable on a bond, the condition for which was, that the treasurer should duly account to the trustees for all money received by him.(o) 14. The sureties will only be liable for the default of the employed in the due performance of the business to which their guarantee contract relates. Should there be any ambiguity in the words of the guarantee, they will, as in the case of other written instruments, be construed more strictly against the grantor ;(p) but the obligation itself is to be con- strued strictly, and not extended to any other *subject, to any ^^^ f.„-. other person, or to any other period of time than is expressed L J or necessarily included in it.(2') Thus, upon a bond given by sureties for the due payment of moneys received by a collector of income tax (under 56 Vict. c. 35,) as such collector, it was held that the surteies were not answerable for moneys improperly received by him, and which he had no legal authority to collect, (r) And where the sureties were such for a person in the due performance of his duties in an office, on his reappointment upon different terms, the sureties were held to be re- leased,(s) although a mere reduction of salary would not have that effect. {<) And where the surety agrees to undertake the obligation jointly with another, in the event of the refusal of that other person, he will not be liable on any document that he may have previously signed.(M) 15. It is also to be observed that the contract of guarantee is personal, and that when entered into with partners nominatim the surety is released as to future transactions by the death or retirement of one of the part- (m) LoniJon, BrigMon, and South Coast Railway Company v. Goodwin, 3 Bxch. 736. (n) Melville v. Doidge, 6 0. B. 450. (o) Walker v. The British Guarantee Association, 16 Jur, 885, Q. B. (») HargraYe t. Smee, 6 Bing. 244. (?) Burge on Suretyship, 40. (r) Kepp V. Wiggett, 10 0. B. 35. (s) Bamford v. lies, 3 Bxch. 380. h) Frank v. Edwards, 8 Exch. 220. • (m) Rice V. Gordon, 11 Bear. 265. See 4 Beav. 319. July, 1853 — 6 82 BTJNTON's LIFE ASSURANCE. ners,(t)) or even by the introduction of a new partner into the firm.(e») And when the executors of the employer continued to carry on the business, the surety was not held answerable for moneys received by the employed while in their service, although the condition of the bond was for payment to the obligee, his executors or administrators, of all moneys received by the employed on account of the employer, his executors or administrators; (a;) but when the intention is clear, the obligation will continue, as where the guarantee is given to a firm by its name of trade, or to a company, by which a fluctuating body is necessarily intended, (y^ r*in'7n *^^' •'■^^ proposal having been accepted, the guarantee is L ' issued in the form, of an agreement between the company and the employer, or of a policy, as it is termed, having that effect, or in the common form of a bond for the due performance of services. The form is not, however, very material, and the general provisions of the contract seem common in all cases ; but the different companies adopt additional stipulations of their own, more or less affecting it. Thus, in one com- pany a deduction of 10 per cent, upon every claim is required, thus making the employer to a limited extent the co-assurer with the company. A further condition, which is usual, but not universal, is, that the gua- rantee is granted upon the express condition that every person making any claim thereunder, shall at the costs of the company, whenever re- quired by the directors, or other duly authorised agents thereof, afford every description of assistance in their power to enable the company to prosecute or bring to justice the employed for any criminal offence com- mitted by him while in such employ. In one company virhose conditions seem peculiarly unobjectionable, the contract is issued in the form of an agreement signed by the employer and three directors on behalf of the company. It recites the agreement of the employer to accept the guarantee of the association, and of the association to give the guarantee, that the employer and employed have executed the proposal or declaration as the basis of the contract, and that the premium has been paid ; and then witnesses that the association, as surety for the employed, thereby agrees that during the space of one year, and during every succeeding year in respect of which the association shall consent to receive, arid the employer or employed shall pay the renewal premiums, the funds and property of the association shall, according to the provisions of the deed of settlement, be liable to reim- burse and make good, to the amount of the sum guaranteed to the em- ployer or his representatives, within three calendar months next after proof shall have been given to the reasonable satisfaction of the direct- r*1 nsi °^^> ^^^''y *loss which shall be susta,ined by the employer by L J reason of the want of integrity, honesty, or fidelity of the em- ployed, in or arising out of his employment. Provisions are then con- tained to the effect that the contract shall be subject to the conditions indorsed upon the agreement, and for a reference to arbitration in case of («) Simson t. Cooke, 1 Bing. 452. (w) Pemberton v. Oakes, 4 Kuss. 154. ' ' Barker y. Parker, 1 T. R. 28T. Barclay v. Lucas, 1 T. B. 291, in notis; Metcalf v. Bruin, 12 East, 400. a GUARANTEE OF FIDELITY. 83 dispute. By the indorsed conditions (1.) fifteen days are given for the payment of the renewal premium ; (2.) the agreement is declared void in the event of fraudulent misstatement or the suppression of a material fact; (3.) it is provided that the right to make a claim under the said agreement shall cease three months after the death of the person whose integrity is guaranteed ; (4.) that after notice and satisfactory proof of any loss the guarantee shall become void as to all future claims in respect of any loss sustained by any subsequent want of integrity, &c., but sub- ject to a discretionary povrer in the directors not to take advantage of such avoidance ; (5.) that a written report of the loss and of all particu- lars is to be made within fourteen days after its discovery, or in default the agreement becomes absolutely void; (6.) that the assurer shall only be liable to make good such loss in the event of the employer giving, within fourteen days after such loss shall have come to his knowledge, a statement in writing, declaring that he hath been damnified, and stating the full particulars and amount so far as then ascertained, to be verified if required by proofs and statutory declarations, and that after the deli- very the association shall be, ipso facto, discharged from all liability in respect of the subsequent acts of the employed; (7.) that the written discharge or receipt of the employer for any sum of money paid in respect of any loss contemplated by the agreement, shall be sufficient and conclusive evidence against the employed, of the fact and amount so paid, which amount shall be repaid by him or his representatives, and shall be a binding charge against him or them without any further or other proof. An additional stipulation is sometimes added, but which, if omitted, would be supplied in equity, that on "paying any claim the com- r:|c-|nq-i pany shall be entitled to the right of rateable contribution and L J all other the rights and remedies of co-sureties against every other cor- poration or person then or thereafter becoming surety for the em- ployed, (z) 17. Persons employed in the service of the Crown in public offices, and in collecting the revenue of the state, are required by statute to give security by bond, with sureties, for the due performance of their func- tions.(a) By subsequent statutes the privilege has been granted of making deposits of stock or exchequer bills in lieu of giving such secu- rity. (5) Bonds to the Crown are, however, subject to this specialty, that the lands of sureties thereunder, as well as of the principal, are bound for the due performance of the obligation, and in such a manner that even future debts will bind such lands in the hands of a purchaser, although at the time of the sale to him there was no debt existing, (c) This charge will bind not only an estate or vested interest, but even a power of appointment which the accountant can exercise in his own favour, (ci) As to Crown debts and obligations, however, whose existence has com- (z) Deering v. Winchelsea, 1 Cox, 318, 2 B. & P. 2T0; Pendlebury v. Walker, 4 You. & C. 424; Mayhew v. Crockett, 2 Swanst. 185. (a) 50 Geo. 3, c. 85; 52 Geo. 3, c. 6S. (6) 6 & •? Wm. 4, c. 28, 1 & 2 Vict. c. 61, (in lieu of bonds given for tlte due payment of fire duties,) 5 & 6 Vict. c. 79. (c) Sugden, Purch. p. 644. (rf) Ellis v. Reg. 6 Exch. 921. 84 bunton's life assurance. menced after the 4th of June, 1839, it is now enacted,(e) that no pur- chaser or mortgagee shall be bound unless a memorandum or minute of the sum in which the obligor shall be bound, or for which the obligation or specialty shall be made, and the date of the same, with the names and descriptions of the parties, shall have been left with the Senior Master of the Court of Common Pleas, who shall enter the same in an index, r*nm ^^^''^ ™*y *^® searched by any person on the payment of the fee L J of one shilling. (/) It is also enacted, that the Commissioners of the Treasury may, if they think fit, grant a quietus, discharging any lands without affecting the obligation ^^g") find this quietus is to be also registered.(^) This liability to the Crown affects the real estate of all shareholders in guarantee companies. More than one private bill has, it is believed, been laid before the legislature, the object of which has been to free some particular company from this burthen ; but up to the pre- sent date no such bill has been passed. 18. A further form which the contract of guarantee has taken is in association with life insurance. The object, in this case, is to make the premium of the life insurance, or, at least such part of it as the actuary terms the loading or surplus premium, over and above that which is re- quired to meet the risk at the assumed normal rates of mortality, an ijiterest applicable as an indemnity fund, by virtue of which a reduction of the annual premium on the guarantee becomes admissible. Hence, the aggregate premium on the two risks, when insured together, becomes less than the sum to which the separate premiums would amount if sepa- rate insurances were effected- In a bonus-giving office, where all the assured are also applicants for guarantees, whether mutual or not, such an arrangement seems sufficiently reasonable ; but where the life-policy holders are entitled to divide the profits of the concern, and many of them have no interest under the guarantees, there is a danger of their interests being sacrificed to those of the guaranteed parties. This would seem to be the case whenever the guarantee premiums are insufficient to cover the guaranteed risks, since the mere right to confiscate the policy or apply its value in reduction of the loss in the individual case, may be no compensation for insufficient premiums in the entire mass of cases. _jij...^_ 19. When the double contract is intended, proposals *are made L J to the company in the same form as if separate contracts, viz., of insurance and guarantee, are required. It is then carried into effect by the issue by the company of two documents, namely, the life policy, which is the property, and rests in the custody of the employed, and the guarantee, which is-deliverpd to the employed. The latter is in the usual form, and in no way differs from the ordinary evidence of the guarantee contracts issued, when no life insurance is effected; but the policy is granted subject to a lien on behalf of the company, with a right or power of declaring the policy surrendered at the office value, or as a con- tingent contract, to take effect only in the event of no claim arising under the guarantee. The reduction in the premium appears to be car- (e) 2 Vict. c. 11, (7 & 8 Vict. c. 90, sg. 11, 12, 13, 14, Ireland;) Sugden, Purch. 1009. . / ; (/)Pect. 8. (i?) Sect. 10. (A) Sect .9. GUARANTEE OF P IDE LtTY. 85 ried into effect by granting the guarantee at the usual rate, and the life policy with a provision for reducing the rate of premium so long as the guarantee is kept on foot. 20. When a lien only is intended to be created, the arrangement has been carried into effect by the following additional conditions endorsed upon the policy, viz. : " That no part of the moiley within made payable by virtue of this policy of assurance shall be or become a charge upon, or payable by the said association, until the said association shall have been fully paid and satisfied all claims and demands made and enforced, or to be made and enforceable, against the said association, under or by virtue of the within mentioned agreement of guarantee, or any other similar guarantee agreement; and the indorsement or discharge written on the back of such agreement of guarantee, setting forth the amount of loss or damage payable thereunder, and stating that the same had been satisfied by the said association, or the receipt for such amount signed by or on behalf of the party entitled to receive the same, shall be sufficient and conclusive evidence against the said (assured) of the truth of such loss or damage and of the amount thereof, and shall form a valid and binding charge against the said (assured), his heirs, executors, and ad- ministrators, without any further proof *being given by the said p^, ^ „, association." Also, " In case of any claim being made and en- L J forced, or enforceable, under and by virtue of the within mentioned agreement of guarantee, or any other similar guarantee agreement, during the continuaiice of this policy of assurance, the said (assured) shall be entitled to credit for such an amount as shall be the office value of this policy at the time of such claim, such value to be fixed and determined by the actuary for the time being of the said association, whose certificate, setting forth the amount of such office value, shall be binding and con- cl'usive evidence against the said (assured) of the amount thereof, and thereupon this policy of assurance shall be, and be considered to be, can- celled and surrendered to the said association." 21. When the policy has been intended to take effect as a contingent contract only, after the usual condition respecting the payment of the renewal premiums, the following clause has been inserted : " And if, moreover, no claim shall, at any time during the life of the said assured, or at any time within the space of three calendar months next after the day of his decease, be made and enforced, or be made and be enforceable within the meaning of the said rules of the said company, upon or against the said company, under the said recited policy of guarantee, then, and in such case, but not otherwise, the general funds and property ; &e. should be liable," and the following have been added to the indorsed conditions : viz., That a policy of assurance, conditional upon the integrity of a person, for whose integrity the company is responsible under a policy of guarantee, becomes void, if and so soon as a bona fide claim is made and actually enforced, or is made, and capable of being enforced, under the latter policy." Also, " And that, for the purposes of the last-mentioned rule, the custody of and production by the company, or its agents, of a receipt in writing, 86 btjnton's life assurance. signed by the person entitled to a policy of guarantee, or his or her agent, for any sum therein expressed to have been paid by the company, r*1 1 ^1 *^^^^^ ^^^ policy of guarantee, shall be final and conclusive evi- L -• denoe, that a bona fide claim has been made and actually enforced under such policy; and that, for the like purposes, a memorandum in writing, signed by three of the directors of the company, referring to a policy of guarantee by its number and date, and declaring that a bona fide claim, capable of being enforced, has been made under such policy, shall be final and conclusive evidence that such bona fide claim was so made, and that the same was capable of being enforced." [*114] CHAPTER VII. CONCERNING THE INSURER, AND HEREIN OE THE CONSTITUTION OF IN- SURANCE OFFICES. 1. Every person lawfully entitled to enter into a contract on his own behalf, may be an insurer ; and any number of individuals may enter into a joint contract for granting a life policy, or join as underwriters, each for a separate sum, as in marine insurances. (a) Nevertheless, although this description of contract is still occasionally undertaken by the underwriters of Lloyd's, the business of life insurance in England has fallen almost exclusively into the hands of public companies or asso- ciations, established for that purpose. 2. Insurance offices are popularly said to have three forms of constitu- tion : The first is that of a joint-stock company, with a subscribed capital, trading in life insurance contracts, and dividing the profits among its shareholders. The second form is also that of a joint -stock company, with a proprietary capital j but, in addition to the specific sums payable upon the death of the insured, they are allowed to participate, to a cer- tain extent, in the profits of the concern. The third is that of a mutual insurance office, the members sharing among themselves the entire pro- fits, after deducting the expenses of Tnanagement. These are called pro- prietary, mixed, and mutual insurance offices. The division, however, is scarcely satisfactory to the legal apprehension, when it is considered j.^^ ^ __ *that it is doubtful whether a single office exists belonging to the L -' first class alone. All, or nearly all, of those that formerly did 80, now allow their insured, or certain classes of them, to participate in the profits ; and in like manner, mutual insurance offices very generally undertake to insure the lives of persons who, paying a lower rate of pre- mium, are not entitled to share in the profits, and are consequently not members of the society, or mutual insurers. It may indeed be safely stated, that there is no mutual society, not being a friendly society, which (a) Dowdeswell, p. 21, citing Denoir t. Oyle, Style, 166 — 112; Whittingham v. Thornborough, 2 Vein. 206; Rogers v. Bradshaw, 1 Bla. 312. THE INSURER. 87 does not undertake other insurances for profit, either such as are entitled special risks or annuity transactions. 3. In all of these companies the accumulated fund derived from the premiums paid by the assured, is that which is primarily liable to all claims upon them ; but in an ofS.ce of the proprietary or mixed cl^ss, the subscribed capital is a guarantee fund of securing the due performance of its engagements, in addition to the personal liability of the shareholders when the company is not incorporated, in the event of the failure of the preceding sources. Lastly, the policy-holders are finally liable as parti- cipating in the profits of the concern. (6) 4. In a purely proprietary oflSoe this last liability does not of course exist. It is, however, a risk in theory rather than in practice, and arising only in very extreme case's ; since even supposing a failure in all other funds liable in priority, it is now invariably the custom to provide, either by express stipulation upon the policy, or by reference in it to the deed of settlement, in which a corresponding clause is contained, either that the funds of the society shall- alone be subject to a claim thereupon, or that no liability shall attach upon the policy-holders. (c) This is the case both in the mixed and mutual of&ces, and the assured are thus re- lieved from all personal responsibility in respect *of the policies p^, , „., of their co-insured, while they can scarcely be any very heavy L J claims from other sources. When the funds are small, and the company is grossly mismanaged, it can alone happen that the risk thus incurred by the insured is of importance, and it may, perhaps, be an argument to prevent an intending insurer joining a very young office; but a far stronger argument in this respect is found in the limited liability stipu- lated for by the policy, which, in such a case, may in fact reduce the se- curity therein proposed to a shadow. 5. Thus premising, we shall find it more convenient, in treating of in- surace companies, to adopt the division suggested by the Joint-Stock Companies Registration Act, and to divide them into two classes : name- ly; first, companies prior to in date, or exempt from, the operation of that act; and, secondly, companies subject to its provisons. The first of these must again be subdivided into, (1.) companies incor- porated; (2.) companies empowered by letters patent from the. Crown, but not incorporated ; (3.) companies neither incorporated nor acting un- der letters patent, but governed by their own deeds of settlement only, and which do not, except in the number of the partners or members, dif- fer from ordinary partnerships; (4.) friendly societies, which last divis- ion of insurance companies will be treated of separately in a following chapter. 6. Incorporated companies are created by royal charter, either by vir- tue of the royal prerogative alone, or in pursuance of some Act of Par- liament expressly authorising their creation. They may, of course, be created by Act of Parliament alone ; but in this case also their creation (i) O'Brien v. Lord Kenyon, 6 Exch. 403. (c) As to the construction of clauses thus limiting the liability, see post, Pt. III. Ch.3. 88 BUNYON'S LITE ASSURANCE. is the exercise of the royal prerogative, the assent of the Crown being an indispensable ingredient in every statute.( registration of a promoter, such a company springs at once into a quasi corporate existence, and seems to require but a taking name to ensure it, if not success, at least a chance of it. So freely, indeed, has the abuse of the act been recognised, that during the last session of parliament it has largely engaged the attention of a select committee of the House of Commons sitting for the consideration of the subject of assurance asso- ciations. The recommendations of that committee would seem to involve the repeal of the act now under consideration, but only, it may be as- sumed, to re-enact its .provisions, altering the sections relating to the registration of accounts, and giving to the registrar new powers to enforce compliance with them.fm) 11. By the present act, "Every assurance company or association for the purpose of assurance or insurance on lives, or against any contin- gency involving the duration of human life, or for granting or purchasing annuities on lives; and also every institution enrolled under any of the acts of parliament relating to friendly societies (which institutions shall make assurance on lives, or against any contingency involving the dura- tion of human life to an extent upon one life, or for any one person, to an amount exceeding 200?., whether such companies or societies, or insti- tutions shall be joint-stock companies, or mutual assurance societies, or both,") is defined to be a joint-stock company. The act applies to every such joint-stock company established in any part of the United Kingdom of Great Britain and Ireland, except Scotland, and to Scotch companies having offices or places of business in any other part of the United King- dom. («) 12. The companies are divided into two classes, viz. : — first, those existing previously to the 1st of November, 1844, and such as might thereafter be incorporated by statute or charter, or authorised by r-^^-. „q-. statute or letters-patent, *to sue and be sued in the name of some L J oflicer; and secondly, undertakings not so otherwise incorporated or au- thorised whose formation commenced after that date. Existing companies were required to register their names, purposes, and principal places of business,(o) but were not otherwise affected by the act, or entitled to exercise the privileges conferred by it; and assurance companies were excepted from the provisions of the 59th and 62d sections, by which other existing companies, if constituted as required by the act, were enabled to obtain a certificate of complete registration, and for that pur- (m) See post, Pt. III. Oh. 6. (n) Sect. 2. (o) Sect. 58. 92 bunyon's life assurance. pose to modify tteir constitutions with the consent of three-fourths it number and value of the shareholders present at a general meeting speci- ally summoned, 13. Upon all companies of the second class, natuely^ those established after the 1st of November, 1844, compliance with the provisions of the Act is compulsory. Before proceeding to make public their intention to form any such company, the promoters are required to make returns of the following particulars to the office for the registration of joint-stock companies, namely, (1), the proposed name of the intended cotapany ; (2), the business or purpose of the company ; (3), the names of its pro- moters, together with their respective occupations, places of business (if any), and of residence. They are then entitled tO a certificate of provi- sional registration, (p) and may assume the name of the intended company, coupled with the words " provisionally registered/' may open subscrip- tion lists and allot shares, and receive deposits not exceeding 10s. for every 1001. of the capital subscribed, and perform such other acts as are necessary for constituting the company, or for obtaining letters patent, or a charter or an act of Parliament, but not to make calls or enter into con- tracts except so far as the same may be necessary for establishing the company, or may be made conditional uponi its completion. (g) The cer- r*l 94.T ^^^"^'^ ^s ™ *force for twelve months from its date, and may b6 L J renewed for a similar term, within which extended period it is necessary that the company should be completely registered. (»•) Before complete registration it is provided(s) that it shall not be lawful to dis- pose by sale or mortgage of ahy shares or of any interest therein, but every such contract is declared void, and a penalty not exceeding 10?. i^ imposed upon every person party to it ; but this section does not apply to the sale of shares in companies tyhich cannot be carried into execution without the authority of Parliament, such as a Railway company. Returns are moreover required(«) of the following additional particulars as decided upon from time to time, namely, (4), of the place of business ; (5), the names of the committee-men or other body acting in the formation of the company, with written consents on the part of each to become such, and an agreement to take one or more shares in the undertaking; (6), the names and descriptions of the officers; (7), of the subscribers; and formerly (8), a copy of every" prospectus or circular, handbill, advertise- ment, or other document addressed at aUy time to the public or to sub- scribers or others, relative to the formation or modification of such com- pany : but this last Very burdensome requisition has been repealed by the 10 & 11 Vict. c. 78,(m) which lastly mentioned statute added two addi- tional particulars to those of which a return was required by the previous statute, namely, (9), the amount of the proposed capital of the company; (10), the amount and number of shares into which the same is to be divided. («) And returns must be made of all additions or alterations made in any of the above partieularS.(OT) ip) Sect. 4. (?) Sect. 23. (r) Sect. 23. («) Sect. 26. (t) Sect. 4. («) Sects. 4r—1. (v) Sect. 5. (w) T & 8 Vict. c. 110, a. 4; 10 & 11 Vict. c. 78, s. 5. REQISTEATIONACT. 93 14. Every such company must be formed by deed, in which r#-ioKn not less than three directors and one or more auditors must be L J appointed, and in a schedule thereto must be set forth certain particulars shpwing the nature of the business, the capital, management, the names of the shareholders, and proposed duration of the company, (ce) Upon the production of this deed duly certified by two directors, by an indorsement in a form appointed by the act,(y) and signed by at least one-fourth in number of the persons who at tne date of the deed have become subscribers, and who shall hold at least one-fourth of the maximum number of shares in the capital of the company, together with a complete abstract or index thereof to be previously approved by the registrar of joint-stock companies, and also a copy of the deed for registration, a cer- tificate of complete registration is to be granted. (2) Any defect or omis- sion may be remedied by a supplementary deed to be duly registered, (a) and any insufficiency or inconsistency apparent upon the deed is to be notified by the registrar i to the company or the parties presenting the deed for registration. (6) 15. Upon complete registration the company is incorporated, but only according to the provisions of the Act and of the deed of settlement, and for the purpose of suing and being sued, and taking and enjoying the property of the company, but not so as to confer upon it the privileges and immunities derived from a charter of the Crown, except so far as they may be expressly given by the Act ; and hence it is not entitled to call itself a corporation, assuming such a name as the Sea Fire and Life As- surance Corporation, instead of the Sea Fire and Life Assurance Com- pany.(c) It is then empowered, (1), to use the registered name of the company, adding thereto " registered," and it cannot subsequently change the *name;((^) (2), to have a qommon seal inscribed with the r^-ipf.-! name of the company ; (3), to sue and be sued by its registered L J name ; (4), to enter into contracts : (5), to purchase and hold lands for occupation, as its place or places of business and for other purposes upon obtaining a special or general license from the Board of Trade ; (6), to issue share certificates ; (7), to receive instalments or shares ; (8), to borrow money within the prescribed limits ; (9), to declare dividends ; (10, 11), to hold general meetings and make by-laws ; (12), to perform all other acts necessary for carrying on the business of the company ; and also, and these provisions are imperative, (12, 13), to appoint a cer- tain number of directors and auditors.(e) 16. The directors are to be not less than three in number, and ap- pointed for a period not greater than five years, and are to be re-eligible or not for election, according to the provisions of the deed of settlement, or any by-law.(/) No person is to hold the office of director, whether honorary or otherwise, or of patron or president, or any other office of (x) Sect. 1, and see Schedule (A.) to the said act. (y) Schedule B. to said act. , (z) Sect. 1. (a) lb. (b) Sect. 8. (c) Reg. T. Registrar of Joint-Stock Companies, In re the Sea Fire and Life As- surance Company, 14 Jur. 348, Q. B. (d) Reg. T. Registrar of Joint-Stock Companies, In re the SheflSeld, Rotheram, and Chesterfield Fire and Life Insurance Company, 10 Q. B. 839. (e) Sect. 25. (/) lb. 94 btjnton's life assurance. the like description, or to act in any such cajiacity, without holding at least one share in the capital, under a penalty of 201. for each such offence ;(^) and he is to cease to hold office upon the failure of his qualifi- cation, upon his bankruptcy, insolvency, suspending payment or compro- mising with his creditors, or being declared lunatic ;(A) but until the dis- covery of some defect in his appointment or qualification, his acts are to be valid, (t) The directors are to manage the affairs of the company ; to ap- point, employ, and remove the officers, servants, and agents; to hold meetings and appoint a chairman to preside at them, subject, neverthe- r*19'7l ^^^^> *" *^® provisions of the Act and the deed of settlement. L J *They are not to purchase any shares, or sell any shares, except such as may be forfeited for non-payment of calls, or to lend money to any of their body, or any officer of the company, without the sanction of a general meeting; (A) and without the like sanction, any such person is not to enter into any contract with the company, unless it be an insurance contract upon the ordinary terms. (A 17. Greneral meetings are to be held periodically, and estraordinary meetings when duly summoned : and such meetings are to have power to make bye-laws for the regulation of the shareholders, so that the same be not repugnant or inconsistent with the provisions of the Act or of the deed of settlement;(ni) but such bye-laws must be reduced to writing, and sealed with the common seal of the company, and are of no force until registered at the registration office. (n) By the deed it is to be pro- vided, that ordinary general meetings be held at least once in every year, and extraordinary meetings when convened by the directors, or upon the requisition of not less than five shfireholders; and provisions are to be in- serted therein as to the business to be performed, and manner in which it is to be conducted, (o) The entry of the proceedings of any meeting of shareholders or directors, purporting to be signed by the chairman, and sealed with the company's seal, is prima facie evidence of the correctness of the proQeedings.(p) 18. One or more auditors are to be annually appointed at a general meeting. Of these, one at least is to be appointed by the shareholders ; and upon default or failure of such appointment, upon the application of any shareholder, the same is to be made by the Board of Trade, with r*198n such salary as may appear suitable.(2') They *are to examine L J the accounts and the balance-sheet of the company, and to confirm the accounts, or the contrary, and report generally or specially thereon :{r\ and their report and the balance-sheet are to be printed and sent to each shareholder, and read at the general meeting.(s) Within fourteen days of the general meeting copies are to be returned to the registrar of joint-stock companies, who is required to register the same.(£) 19. Nor is the balance-sheet alone required to be registered, but half- yearly returns are to be made by the'directors of all transfers of shares, (g) Sect. 28. (A) Sect. 29. (j) Sect. 30. *) Sect. 27. (I) Sect. 29. (m) Sect. 25. (n) Sect. 47. o) Schedule A. (p) Sect. 32. (y) Sect. 38. V) Sects. 40, 41. (») Sect. 42. [t) Sect. 43. REQISTRATIONACT. 95 of the names and residences of all persons becoming or ceasing to be shareholders, and of all changes of name which may take place among them, whether by marriage or otherwise. (m) A registration of the name and business of the company is also required to be made an- nually. (i)) The documents thus registered may be inspected by any per- son upon the payment of a fee of Is., and he may require certified copies from the registrar on payment of a fee not exceeding 6d. for each folio, (w) It .will be remembered that it is probable that large alterations as to the publication of accounts will be made in consequence of the recommendations of the select committee. 20. When a shareholder has executed the deed of settlement, or some deed referring to it, which is in effect the same thing,(a;) and paid up all calls, and been registered at the registry office, — then, and not until then, he is entitled to the privileges of a shareholder, and may attend and vote at all general meetings of the company, either in person or by proxy. Until he has been thus registered as a shareholder, and until the com- plete registration of the company, he is not entitled to sell or mortgage his shares; and, *a3 we have seen, every contract to that effect is rsuinqT void, and subjects the parties to it to a penalty. (y) L J 21. Contracts entered into by the company, with some unimportant / exceptions, must be in writing, and signed by at least two of the direc- tors, and sealed with the common seal, or signed by some ofiScer expressly authorised by a minute or resolution of the directors applying to the par- ticular case, otherwise they are void except as against the company, (z\ the requisition of these formalities not being intended to limit the lia- bility of the company in ordinary transactions.(a) The exceptions are contracts for the purchase of any article the consideration for which does not exceed 50Z., or for any service for a period not exceeding six months, and the consideration for which does not exceed 50Z. Bills of exchange and promissory notes are also, of course, within the exception, being, by their nature, unsealed documents; but they cannot be issued at all by the directors, unless authorised by the deed of settlement or a bye- law, in which case they must be made or accepted (as the case may be) by two directors, and expressed to be so made on behalf of the company, and countersigned by the secretary or other appointed officer. (6) 22. The incorporation of the company, according to the provisions of the Act, has not the same effect as a charter in restricting the liability of the shareholder, but every judgment or decree is to be enforced in the iu) Sect. 11. This would include the policy holders in a mutual office. v\ Sect. 14. {w) Sect. 16. x) Straffon's Executors' Case, 1 De Gex, M. & G. 576. y) Sect. 26. (z) Sect. 44. a) Smith t. The Hull Glass Company, 8 C. B. 668. As to what is a contract on behalf of the company, and that a security given to it and to trustees on its behalf, and which is binding, whether executed by the company or no, is not within the section. See The British Empire Mutual Life Assurance Company v. Browne, 16 Jur. 1157. C. B. (6) As to such bills of exchange and promissory notes, see Thompson t. The Universal Salvage Company, 1 Bxch. 694; Allen v. The Sea Assurance Company, 19 L. J., C. P, 305; Thompson v. The Wesleyan Newspaper Association, 19 L. J., C. P. 114. 96 BUNTON'S LIFE ASSURANCE. first instance against the property of the company ; and after due dili- r*1 <101 &^^^^ *^^^ heea used in enforcing execution against its effects, L J execution may be issued, by leave of the Court, against any shareholder or former shareholder, upon motion or summons for a rule to show cause, without any suggestion or scire facias; but no such motion is to be made, or summons granted, until ten days' notice shall have been given to the person sought to be charged thereby, (c) Every person against whom execution shall have been issued may recover against the company, and is also entitled, as in ordinary partnerships, to contribution from the several other persons against whom excution might have also been issued. (tZ) 23. No execution, however, can be issued against any former share- holder after the expiration of three years after he shall have ceased to be a shareholder; and to be liable, he must have been such when the con- tract was entered into, or while such contract was unsatisfied, or at the time that the judgment or decree was obtained ;(e) but the liability of a person disposing of his shares will remain until a return of the transfer shall have been made to the registrar,(/) and this return the transferror can compel the company to make, and if his request is neglected by the directors, may make it himself. (^) 24. Immediately after a contract for the sale of shares the vendor will be entitled to be indemnified by the purchaser, although he will remain liable to those who may have claims upon the company; but neither such lastly-mentioned persons nor the company itself, in making calls can en- force this equity for their own benefit, since a trust can only be enforced at the instance of the parties to it. (A) 25. Complete registration does not preclude a joint stock company r*l^n ^^°^ obtaining a private Act giving additional *powers, and I- J modifying any sections of the public Act which may be inconsis- tent with its lawful constitution. Thus, in 1852, the British Empire Mutual Life Assurance Company obtained an Act, relieving it from com- pliance With the 11th, 12th, 13th, 14th, and 26th sections, which are obviously inapplicable to a mutual insurance office, and gran^g addi- tional powers of investing its funds and holding real estate which may have been in mortgage to it, and have been foreclosed for a limited time, until an opportunity of sale.(*) 26. Having thus seen in what manner insurance companies may be established, we may, lastly, consider in what manner they may be dissol- ved. Their constitution rendering them unaffected by the acts or incapa- cities of individual members, it would seem that there are but three modes of dissolution : (1.) by the consent *f the whole body; (2.) by virtue of some special provision for that purpose inserted in the deed ;(3.) by the interposition of the Court, aided by the Joint-Stock Companies Winding-up Acts. When a particular course of proceeding is pointed out for winding up a concern, this is the method to be adopted, and is as (c) Sect. 68. {d) Sect. ST. («) Sect. 60. (/) Sect. 13. (g) Sect. 12. (h) Phene v. Gillan, 5 Hare, 1 ; The Newry Railway Compaiiy v. Mosa, 14 Bear. 69; Cape's Case, IT Jur. 355. (L. 0. and L. J. J.) (i) 15 Vict. 53. (Local and Personal.) WINDING-UP ACTS. 97 binding upon the members as any other stipulation, (/c) Where, also, an effort is made by the partners of an insolvent concern to settle their affairs without the interposition of the Court, it will suspend its proceed- ings in a proper case to give them the opportunity of so doing. (?) When the company becomes unable to meet its engagements, and it is absolutely necessary to seek the assistance of a Court of Equity, it may be presumed that in future the Joint-Stock companies Winding-up Acts(m) will, in all eases, be put into operation, since without their assistance the dissolu- tion *is rendered all but impracticable by the necessity of bring- j-^.. „„-. ing all persons interested before it, unless, indeed, it be ultimately L J decided that the Chancery Amendment Act, 15 & 16 Vict. c. 86, (see section 49,) has rendered this unnecessary, by enabling Courts of Equity to deal with such cases without the intervention of those Acts.(TO) It has been considered that an ordinary suit for the winding up of a partner- ship implies a complete settlement of all the rights and liabilities arising between the partners ; and the rule of the Court, recognised in other cases, of allowing absent members to be represented by others in the same interest, does not apply, (o) The operation of the Winding-up Acts is, on the contrary, to vest the entire estate of the company in a trustee, under the name of the official manager, who is thereupon taken to represent all parties interested, and then to administer the estate much in the form of an ordinary administration suit. 27. Life offices, whether incorporated or not, are within the Acts, and several have been already wound up under them.(p) They apply(g') in cases when an act of bankruptcy has been committed by the company, or proceedings are taken for the recovery of money due by it against a contributory, and he is not in due time indemnified by the company ; or if it has been dissolved or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs ; or by the 8th clause, if any matter or thing shall be shown which, in the opinion of the Court, shall render it equitable that the com- pany shall be dissolved. This latter clause, however, has been con- sidered to have a restricted interpretation, only extending to other cases the test of insolvency, defined by the *preceding part of the r«i oo-i section, and not giving any particular member a right to seek the L J interference of the Court, on the ground that the capital is insufficient to meet the contingent liabilities of the concern, so long as it continues to carry on its business, and there is no proof of actual insolvency or incom- petency to meet its engagements, (r) When a company is brought within the Act, the Court will grapple with the most difficult questions. The circumstance that the policies granted by it are still in force, and that the liabilities arising upon them cannot be settled for many years, is not (k) Crawshay t. Collins, 2 Euss. 342. h] Re The Monmouthshire and Glamorganshire Banking Company, 15 Beav. 1i. (m) 11 & 12 Vict. c. 45; 12 & 13 Vict. c. 108. (n) See Clements v. Bowes, (V. C. K.,) 23 June, 1853, Jurist, pt. 1, p. 249. (o) Richardson v. Hastings, 7 Beav. 323. Ip) Ex parte Dee, 3 De Gex & S. 116. (?) 11 & 12 Vict. c. 45, s. 5. (r) Ex parte Spackman, 1 Mac.&Gor. ITO. Aa to what is insolvency, see Sugd. Vendors, 9i1. July, 1853.— 7 Vo BUNYON S LIFE ASSURANCE. 9. bar to its operations ;(s) and ^hen a company, lehich had been ordered to be wound up, had previously gold it^ business at a premium to anothes eompany, and by the terms of the dieei of settlement the profits were to be divided in, certain propartioipts. between the shareholders and policy holders,, th© Comrt, considering the latter entitled to participate, under* took to adjust the respective dairos upon the surplus.(«) 28. A popular notion appeals to have got abroad, that a/a insurance company, however insolvent, will always be able to find some solvent company willing to take a transfer qf its business. Assuming, however^ that it can do so on paying over a suffieient sum to counterbalance the ex- cess of its ljta,bilities, and that the consent of the shareholders and policy holders can be obtained, it would seem that unless such a proceeding is contemplated by the deed c^ settlement; an Act of Parliameut will always be desirable, if not absolutely necessary, sitice a variety of eot r*l ^d.1 ^^^^'^^^ contracts will be, as it were, unhinged by- an *attempted L J transfer of them to a new ooiopany. Fo? example, covenants to insure in the transferring ofijoe, to keep policies effected with it in foree, would seem to be rendered void by the transfer, and iasuffieient to com- pel the payment of premiums to the other company. (w^ (;*135] *CHAPTBR VIII. CONCERNING CHARTERS OP INCORPORATION AUP THE CONSTRUCTION OP DEEDS OP SETTLEMENT, AND OP PRIVATE ACTS OP PARLIAMENT J AMENDING THE SAME, AND GIVING SPECIAL POWERS TO INSURANOE COMPANIES, AND HEREIN QP THE PARTNERSHIP RIGHTS OP THE MEMBERS INTER SE. 1. An Act of Incorporation, or charter, obtained by a company, ope- rates as its deed of settlement, the provisiops of which it is bound to pursue ; but it is so even more strictly than an unincorporated company by its deed, for not even the unanimous consent of aU the members can alter the terms upon which it has been constitnted, or give validity to an Act beyond their scope.(a) It wil^ however, be entitled to make bye- laws for its regulation, either in accordance with any special power con- ferred upon it, authorising the calling of general meetings, or, in the absence of any such power, by the inherent right of every corporation to make bye-laws, so that they are not inconsistent either with the law of the land, or its special Act or charter. 2. The provisions of deeds of settlement may be divided into two SEx parte Dee, 3 De G. & S. 116. In re The London and Westminster Mutual Life Assuranee Company, 14 Jur. 929. For the form of an order for winding up the affairs" of a bankrupt joint-stock company, see In re The Forth Marine Insurance Company, 3 Mont. D. & De G. 335. (u) Atkinson v. Gylby, 2 L. J., Chano. 848. (V. C. K.) (a) Grant on Corporations, T3. PARTNERSHIP CONTRACT. 99 classes : first, those which relate to the coastHution of the company, and are, so to spook, the primary camditions of its iustitutioB and continu- ance. These are binding upon the whole body, and cannot be varied except with the consent of e^ery individual member, or by virtue of an express power, applicable to the case in question, and authorising the alteration, which ia generally carried into effect by the resolutions of one ar more ordinary or extraordinary general meetings of the members. Secondly, those which relate to the administration of the affairs of tk? ♦partnership, and the alteration and modification of which are r^itioc-i either expressly provided for, or are consistent with the general l J scope of the deed and object proposed. The latter may be varied mtla, the consent of the majority of the partners at one or more general meet- inga of shareholders, or to be called in manner appointed by the provi- sions of the deed ; or, in the absence of any provision should such a case occur, after notice to the whole body. 8. Premising that the question as to which of the two classes any par- ticular provision belongs can only be decided with any certainty after an inspection of the particular instrument, we may state that there are cer- tain provisions which may be usually assumed to belong to the first class, as being of primary injportance. Such is that which desfinea the nature of the business. Thus wh«n a joint stock company was formed for the purpose of effecting fire and life insurances, Lord Eldon held that it eould not, without the consent of all the members (of whom the plaintiff was one), be extended to marine insurances ; and that notwitstanding thie other partners offered to indemnify the dissenting partner. " The Court,*' ' said his lordship, " could restrain particular members from engaging e>ther members in projects in which they had pot eonsented to be en- gaged, assented to, empowered, or acquiesced in expressly or tacitly, go as to make it not equitable that they should seek to constrain them."(6) And by the extension of the same principle, incorporated companies, who are possessed of funds for objects distinctly defined by Act of Par- liament, will be prevented at the instance of a single member from apply- ing them to any other purpose, however advantageous or profitable it may appear to the company or to individual members of it.(c) In like manner, the method of distributing the *profits and the (}etermi- p^- „„ nation of the individual interests of the respective members is a L J primary article of the constitution,(«?) as is also the amount of the capi- tal, the style and term of duration of the partnership, as well as the mode agreed upon for keeping and rendering the accounts, and the gene- ral scheme for the management of the concern, (e) 4. In ordinary partnerships very considerable powers of determining and varying the mode in which the business is to be conducted, are con- sidfred to be- vested in the majority of the partners acting boiia fide after (J) Natusch v. Irving, Gow. Partnership, App. 407 ; Simpson v. Denison, 10 Hare, 51. (o) Munt v. The Shrewsbury and Chester Railway Oompapy, 13 Beav. 5i,>«nd gee Colman v. The Eastern Counties Railway Company, 11 Beav. 1; Cohen v. Wil- kinson, 12 Beav. 125— 128. (d) Collyer on Partnership, 113. (c) Davies v. Hawkins, 3 Maule & Sel. 488. 100 BUNTON'S LIFE ASSURANCE. due notice to all of the proposed arrangements. It is trae, that it is said th"at articles agreed upon for the regulation of a partnership cannot be altered without the consent of all the partners. But on the other hand, it is considered, that in many cases the decision of a majority, when a fair exercise of the discretion of the whole body, may be binding, and that if alterations are made by some of the partners and acquiesced in by all, this will amount to the adoption of new terms.(/) In cases un- provided for by any express stipulation, the decision of the majority will then be the ordinary and proper mode of deciding questions arising upon the partnership business, and this will hold good as well in the case of joint-stock companies as of partnerships where the number is limited; but in the case of the former these rules will be applied with great caution (if at all), so far as they may be supposed to authorise any variation in the provisions of the deed of settlement, (^r) 5. The mode of taking the sense of the main body in such companies is provided for by appointing that general meetings shall be held at stated periods, and extraordinary general meetings upon any emergency, or when any important step appertaining to the constitution of the company r«1 «?81 *'^ '" ^^ taken. When the latter are to be held, notice is given L -"to the members not only of the time and place but of the object of the meeting, such notice being in general directed to be given by advertisement in the newspapers, and which notice is thereby made such to the whole body. The acts and resolutions of such meetings must be strictly limited to the execution of the powers given to them by the deed. For it is said that the members of such company must be strictly held to the letter of their contract with each other j otherwise, when it is proposed to deal with its affairs in pursuance of resolutions passed at such general or extraordinary meetings, many of the partners who may be unwilling to attend may find themselves bound by proceedings directly opposed to the terms upon which they have entered into the partnership. Neither is it sufficient that a resolution should be passed by a general or even an extra- ordinary general meeting ; the very form prescribed by the deed must be followed. Thus, when it directed that at ordinary general meetingsregu- lations might be made consistent with the existing constitution of the company, and provision was made for fundamental changes by extraor- dinary meetings convened with certain prescribed formalities, and par- ticularly with notice of the specific object of the meeting to each share- holder, a resolution passed by an ordinary general meeting making a radical change by altering the amount of the capital of the company was held to be invalid ; and the case was not altered by the fact that the resolution had been previously sanctioned by an extraordinary meeting, which had, however, been convened without the necessary notice having been giyen.(A.) In such a case the Court thought that the partnership could not be bound by what took place at a meeting which was ostensibly (/) Const. V. Harris, Tur. & Russ. 469. Lawe's Case, 1 De Gex, Mac. & G. 429; Wood's Case, 11 Jur. 813. (Court of !&.ppeal.) (A) Lawe's Case, 1 De Gez, Mac. & G. 421. POWEES OF GENERAL MEETINGS. 101 called for a purpose different from that which was the conclusion to which they came.(t) 6. In any of such cases, where resolutions have been actually p^, „„-. passed and bye-laws purported to be created, the question of acqui- L J esoence may be raised, and it has been held that a joint-stock company may be bound by acquiescence. But upon this point Lord Cottenham C, remarked : " As to acquiescence, I cannot enter into that, unless I have it proved that each individual member of the company was present at the meeting. Partners no doubt, however numerous, may, as other people may, depart from the general contract between them ; but they cannot depart from it without the consent of every individual member composing the partnership : if what they do is not done within the limits of the partnership contract, it is not binding on their co-partners. Having entered into a partnership for certain purposes, and under certain condi- tions, they may undoubtedly, if they please, alter the contract and agree to enter into a new contract ; but then they cannot bind any one indi- vidual not agreeing, and it cannot be said that the partnership as such is bound, unless individuals are bound.'Vi) And in another case of a banking company, the deed of settlement provided, that no person should be registered as a shareholder without the consent of the board of directors, who might testify the same by a certificate signed by three directors ; a certificate thus signed was given upon a transfer, but there was no consent of the board, and the transfer was held ineffectual. The original body of shareholders having agreed for a stipulated mode, by which changes in the partnership should be made, the provision was binding upon all, unless it could be shown that all the partners had at any time assented to the adoption of a different mode of transfer.(Zj 7. Such unauthorised resolutions are simply nugatory and inoperative, and cannot dissolve the partnership or otherwise affect it, except so far as when certain acts may have been done in pursuance of them, they quoad third persons, or in respect of any liability arising therefrom, *may r:).i^rv-i be binding upon the members present and sanctioning them. L -I The manner in which clauses containing powers of this nature will be construed, will be well explained by examining the leading case of Smith and G-oldsworthy,(m) in which the deed of settlement of the British Iron Company was considered. By this deed it was ordained that the com- pany's stock should consist of 2,000,000?. sterling, divided into 20,000 shares, of 1001. each, and that the affairs of the company should be con- ducted under and subject to the regulations therein-after contained ; and a following clause (No. 29,) decreed, " That for the letter conduct and management of the affairs of the company, a special general meeting, called for the purpose, might, from time to time, amend, alter, or annul, either wholly or in part, all or any of the clauses of the deed, or of the existing regulations and provisions of the company," and substitute others, provided that such amended or altered regulations or provisions should not extend to alter the regulations afterwards laid down in the i) Ex parte Morgan, 1 Mac. & Gor. 235. [h) Ex parte Morgan, sup. I) Bosanquet v. Shortridge, 4 Exch. 700. ) Smith V. Goldsworthy, 4 Q. B. 430. 102 bunyon's life assurance. deed confining the individual respoflsibili'ty of estoh proprietor to the amount of his shares in the company for the time being. It was also provided, that the number of directors should never Consist of more nor less than sixteen. By resolutions of general meetings, the original number of directors, as fixed by the deed, had been reduced from six- teen to six, and the shares from lOOZ. to 50?. each, eclthougfa again raised to 100?. It was observed by th4 Court : " It is contended that the^ resolutions are not within the authority of the 29th clause of thie deed of settlement. Looking at the several clauses together, we are of opinioily that it was competent to two special general meetings, properly convened, to alter the number of directors, such an alteration being a regulation for the better conduct and management of the company. The second ofejection is of a more formidable description ; the amount of the shares r»l 11 1 ^* properly part of *tlie constitution of the company, and does L J not strictly dep-end on any claasee, regulations, or provisions of the deed. The alteration of the shares, therefore, seems not to come within the meaning of the 29th clause. If it did, we should hardly con- sider that the proviso in that clause forbade the alteration, because the reduction in the value of the shares could not have the effeet of rendering any proprietor liable, aS between himself and the other proprietors,' beyond such reduced value, although it might, as was ingeniously argued^ diminish the fund to which he had to look for indemnity in the event of being sued by third pisirties for the debts of the cotnpany." 8. In all cases of partnership, equity has a primary jurisdiction j but courts of equity will not in general Interfere with the discretion vested in the majority of an incorporated company, or in the general meetings of an unincorporated company, when the acts complained of are within thfe powers of the corporation or partnership, («,) In the case of a corpora- tion, when the object is to compel compliance with the terms of th© charter, and the interests of the whole body are concerned, the course to be pursued will in general be by mandamus, and, when there is nothing to prevent the company from filing a bill in its corpoiSite character, where there is ground for the prayer for relief, the bill of an individual sharte- holder will not be entertained.(o) But a court of equity will interfere by injunction to prevent an act contrary to the charter, and from which irreparable damage may ensue, as where it Was proposed to surrender the charter, the powers of general meetings "being inconsistent with the per* mission of such an act,(j3) or to engage the_ company in undertakings not within its scope and object. (5) r*l 4.91 *^' ^^^"^ ^^^ directors in an unincorporated company commit L J a breach of trust or a fraud against the shareholders, equity will Iso interfere at the instance of any number of them suing on behalf of themselves and their co-partners ;(»•) but when the prayer is for indivi- (*) Lord v. The Governor and Company of Copper Miners, 2 Phil. T49 ; Ibder- •wlck T. Snell, 2 Mac. & 6or. 216. (0) Mozley v. Alston, 1 Phil. 802, (p) Ward v. The Society of Attorneys, 1 Coll. 378. (2) Bagshaw v. The Eastern Union Railway Company, 2 Mac. & Gor. 389 ; Simp- son V. Denison, 10 Hare, 51. (r) Hitchens v. Congreve, 4 Russ. 562 ; Lund t. Blanshard, 4 Hafe, 9. PRIVATE ACTS OF PARLIAMENT. 103 dual relief, the separate interests must be fairly represented, which can- not be considered to be the case where the interests of the absent mem- bers are not identical with those who are paTties to the bill.(s) 10. Public companies being thus strictly bound by the terms of their partnership contract, and differing from ordinary partnerships in the cir- cumstance that the aiembers are so numerous that it becomes almost im- possible to obtain the assent of the whole body to any change in the constitution, however beneficial, great inconvenience would ensue were it not that the legislature, in the union of its judicial and legislative func- tions, entertains a remedial jurisdiction. Hence, we find, in searching the Statute Book, under the head of " Local and Personal Public Acts," a very considerable number of acts of parliament passed for the purpose of giving new powers to insurance ofSees, and enabling them to alter and amend the provisions of their deeds of settlement. Parliament possesses the power of altering and affecting pre-existent rights, whether arising by the tenure of property or by contract, exercising, nevertheless, a pe- culiar discretion in so doing, and invariably providing, or intending to provide compensation to the parties affected, or saving the rights of those who are unrepresented or unassenting. Thus, it will be observed, that the interests of policy holders in proprietary offices, who are not repre- sented in any general meeting held prior to the application for the act, are invariably preserved unaffected, as "well as those of any subsequent policy holder, as regards future changes, where powers are given author- ising general *meetings to make material alterations in the distri- r^-i^q-i bution of the profits. Where, however, due notice has been L J ^ven, and a general consent obtained, such as the approval of two or" more general meetings, specially convened for the purpose, parliament has not scrupled to materially affect the interests of particular olasSfes, without either requiring individual consents or providing any other com- pensation than the consequential benefit derived from an improvement in the constitution of the company. This appears to have been done in the act obtained, in 1850, by the Clerical, Medical, and General Life Office, 13 Vict. c. 9, (local and personal,) and again by the grant of powers to that effect to general meetings of the shareholders of the Globe Assu- rance Company, by the 7th Yiot. c. 39. Every person has a right to seek the benefit of parliamentary interference, and to apply for a special law to supersede the rules of property, by which he finds himself bound, whether arising from contracts or otherwise, and hence the court will refuse to interfere by injunction to prevent an application of this nature, the success of which is altogether in the discretion of the legislature, (<) although it will interfere at the instance of a dissenting shareholder to prevent the application of the partnership funds for such a purpose, as inconsistent with the provisions of the deed of settlement. (m) 11. The construction of such an act is that of a supplementary deed of settlement, the enactments operating as contracts made by the legis- lature on behalf of every person interested in anything to be done under >) Maobride v. Lindsay, 9 Sare, 74; Clay v. Rufford, 8 Hare, 281. t) Heatheote t. The North Staffordshire Railway Act, 2 Mac. & G. 110. u) Simpson r. Denison, 10 Hare, 51. 104 BUNYON'S LIFE ASSURANCE. thein.(v) But there is this distinction between joint-stock companies established by act of parliament, or when the agreement or contract of partnership takes the form of law under the authority of the legislature, and joint-stock companies established by deed, and unincorporated: r*l 4.4.1 *'i*i''6ly> tb^t ^^^ specific provisions of the constitution in the L J case of the act of parliament become law, and will produce the effect specified ; while the same, embodied in the deed of partnership, may not have the same effect(w) — in the one case actually changing the laws of property in favour of the company, while in the other the provisions may be binding only upon the parties to the deed ; thus, for example, a declaration in a deed of settlement that policies should be assignable at law or payable to bearer, would be simply inoperative, but in an act of parliament would effectuate the intention. Private acts of parliament, it is said, do not bind strangers, unless by express words or necessary implication, the intention to affect the rights of strangers is apparent in the act ; and whether an act is public or private does not depend upon any technical considerations (such as having a clause or declaration that the act shall be deemed a public act,) but upon the nature and substance of the case : and the Vice-Chancellor Wigram considered that the fact, that an act was distinguished from the general public acts by being headed local and personal, was proof that it was a private act; and that a clause containing a declaration that the act should be deemed a public act, was immaterial. (a;) ^ In another case, however, the court considered that an act containing such a clause could not be treated and construed as a private assurance.(y) 12. Private acts of parliament, it will be remembered, never contain any limitation of the liability of the members of the company, where it is not intended to incorporate it j and to prevent the act from having this effect by implication, since no particular form of words is necessary to „,,.-. create a corporation, (z) it is always expressly declared *that no- L J thing contained in the act shall extend to incorporate the com- pany. With this exception, however, all the advantages given by an act of incorporation may be obtained. The company will be empowered to sue and be sued in the name of an officer or in its own name, and to be a party to any legal proceedings either as plaintiff or defendant, including proceedings as plaintiff in bankruptcy, and in any criminal proceedings in respect of any felony committed against its property, as if it were a cor- poration, and if in respect of any contracts with the company, notwith- standing they may have been taken in the name of any person in trust for the company and may be under seal. Suits may be entertained be- tween the company and individual members, and provisions may be in- serted similar to the machinery of the Joint-Stock Companies Registra- tion Act for enforcing judgments against the company and its members, (ti) Blakemore y. The Glamorganshire Railway Compay, 1 Myl. & K. 154 — 162. (w) Myers v. Perigal, 17 Jur. 145. L. C. ix) Dawson v. Paver, 5 Hare, 434; Sug. Vendors, 11th edit. 1044. (y) Hargreaves v. Lancaster and Preston Railway Comp. 1 Railway Cases, 416. (z) Co. Litt. 250; Re Newport Marsh Act, 16 Sim. 346. FRIENDLY SOCIETIES. 105 and providing for contribution between the latter, (a) An enrolment in the Court of Chancery is required of a memorial of the names of the trustees, directors, and oflScersj and by the enrolment of a new memo- rial and the payment of a small fine in lieu of stamp duties, the securi- ties may be from time to time transferred to the new trustees as effect- ually as if by actual conveyance. As a further facility, the secretary or act^ary is appointed the attorney of the mortgage trustees to convey the mortgaged estates either before or after foreclosure by the order of the board of directors, or of three of the directors appointed for that pur- pose by the board, and whose receipt is made a good discharge for the consideration moneys for the conveyance. These latter provisions re- specting the transfer of securities are extremely convenient, but appear to be not without conveyancing difficulties, as, if care is not taken, a pre- judicial effect may follow the enrolment of a new memorial in the mer- ger of charges or legal estates intended to be kept outstanding. 13. The recitals in private Acts of Parliament will not *be r:)ci4o-i allowed to operate as it were by a side-wind, and without a clear L J intention expressed. Thus, when it was recited that the rules, and reg- ulations, and provisions of the deed had been varied by resolutions of the company made in pursuance of powers contained in the deed, it was held that the recital must be taken to refer to resolutions legally made, and did not incidentally confirm illegal resolutions. (6) 14. When a company has obtained powers from the legislature for any particular purpose, it has been thought that it is bound to use them; and thus that, when a private Act had been obtained authorising a com- pany to sue in the name of its public officer, in suing it was bound to sue in that manner.(c) Questions have been repeatedly raised whether statutory powers for an officer to sue on behalf of the company authorises such a course where the contract to be enforced has been entered into with trustees on its be- half and is under seal, but in these cases an enlarged construction has been invariably adopted, and it has been held that they do so. ((f) *CHAPTEK IX. [*147] FKIENDLY SOCIETIES. 1. As we have already seen, any institution enrolled under the Friendly Societies Acts, and making assurances on lives or on any con- (a) M'Owen v. Hunter, 1 Dru. & Walsh, 347. (b) Stratford and Morton Railway Company v. Morton, 2 B. & Ad. 518. (c) Steward v. Greaves, 10 M. & W. '711. As to the effect of permissive words in a private act, see Reg. t. The York and North Midland Railway, 17 Jur. 35, Q.B. (d) Williams v. Beaumont, 3 Mo. & So. 705, 10 Bing. 260 j Wills v. Sutherland, 4 Exch. 211. 106 BTJNTON'S life A6SUEAN0E. tingency' inTOlvibg the dutatioB of human life, upon one life or for any one person, to an amount eseeedSng 200?., is defined by the Joint-Stook Gcflnpanies Registration Act to be a joint-stoek company. Other sode- tios, genettally eBtablished for other purposes than assurance oper&tioiiS, although perhaps undertaking them to this limited extent, are, it is con- (Seived, scarcely within th© seope of this work, and the reader is referred for information concerning them to those which treat of friendly soeie- ties alone. By the 13 & 14 Viet. c. 11&, no society established after the 15th of Augljat, 1850, is permitted to und^riak*?^ assurances for larger sums than lOOZ. ; but, with certain e5ftJeptions,'(ds) the provisions of the pre- ceding Acts remain in force as to all societies established under them. 2. The statiite 10 Geo. 4, o. 56) repealed and consolidated a number of Acts of Parliament j/assed, sinne the year 17S9, for the encourage- ment of friendly societies. By this A<#6 any number of persons were allowed to form themselves into a society for the mutual relief of the mem- bers thereof, their Wives or children, or other relations, in SickneBS, infancy, advanced age, widowhood, or any other natural state or contin- gency whereof the occurrence is susceptible of calculation by Way bf r*1 4.81 ^^^^$^ } **"'^ these objects were further defined and explained I- J by subsequent Acts(6) to include, among other things, the lawful insurance of money to be paid on the death of the members to their hUS' bands, wives, br children, kindred or nominees. The object *f the re- pealed Acts appears to have been the encouragement of provident habits in the lower classes, and the diminution of the public burdens arising under the Poor Law. In this statute the legislature pursued the same cours'e, by an act, as it were, of national bounty towards the pOor, granting great and extended privileges to these Boeieties. Their transactions were for the most part exempted from stamp dutieis ;](c) they were permitted to pay their funds into the savings' banks and into' the Bank of England, to the account of the national debt commissioners, on extremely favour- able terms. ( *' ^^°-^W not foe lawful for any society to grant any L J assurance whereby the sum assured sbowld be made payable to (my nominee, gr to aay other person than the widower or widow of the piember^ as the case might be, or the child or the esecvttors, administra- tors, or assigns of sueh member/^ After thia enactment the rules of tbes@ gociietiea were altiefsd,, and the sum assured was no longear made payable to the nominees, but either to the executors, aidmipistrators, or assigns of the member, as in an orddiiary policy; or to bis widow or ohildre^n, in some form agreeable to his wishes with a power enabling him, DOtwithstandisg, to assign the policy at his pleasiare, and giving to his assignee the priority over the widiow or children mentioned in the policy,(d) r*l fifli *Shortly after the passing of the act the rule seems to Tame L J been framed so as to enable such an appointment to take effect, whether made by deed or imM.; but the inconvenience probably of the h) 13 & U Vict. e. 115,, s. 42, (d) The foUowipg is an extr?.ct from tte rul? on this point of one of these asso- piatipna, authorising an insurance of any sum of monej not exceeding 5Q0OZ., upon the death of the assurer, or upon the death of the assurer, in case of its happening within the term of one or seren years, to ike person or persons following ; that is to say, if sueb pum shall become due under an insurance effected before or upon the 16th day of August, 1850, it shall be paid upon the death of the assurer to his or her mominee, executors, administrators, or assigns ; and if such sum shall become due und'er an assurance effected after the 15th diay of August, 1850, it shall be paidj upon the death of the assurer, to l»is ^r her executors, admi^^stratDrs, qi assigns,: provided always, a,nd it is hereby declared, that if any person effecting such an assurance after the 15th day of August, 1850, shall require that, by the policy by which such aasuramoe shall be granted, the sum assured shall be made payable in any of the four foUo^iug modes (that is to say) : " 1st. To the widow or surviving husband of the assurer, and if tjiere shall be no such widow or surviving husDand, then to the executers, administrators, or assigns of the assurer. " Or 2d, To tim Qhild or children of the aasijrer Jiving at his or her death, if njore than oije in equal shares, and if thgre ?h£*U be no gucjj chU(i, the^ to the executors, administrators, or assigns of the assurer. "Or 3d, To the widow or surviving husband of the assurer, and if there should be BO such widow pr surviving husbaud, th^n to the child or children of the assurer living at bis or her death, if more than one in ^ftual shares,, a»d if there sjjall be no such child, then to the executors, administrators,, or assigns of the assurer. " Or 4th, To the qhild or children of the assurer living at his or her death, if Riore than one in equal shares, and if there shall be no such child, then to the widow or surviving husband of the assurer, and if there shall be no such widow or surviving husband then to the executors, administrators, or assigns of the as- surer. "Then and in any such case the sum assured shall be made payable by the policy in the mode so required by the person effecting the assurance, and when due shall be paid accordingly: provided also, and it is hereby further declared, that any money payable upon the death of an assurer, under an assurance effected after the 15th day of Aug,i»st, 1850, shall he paid when due to the 3,ssigns of such assurer, so far as the claim of such assigns shalj extend, in preference as well to his or her widow or surviving husband and child or children, as to his or her exe- cutors and administrators, and all other persons, in every case where the claim of such assigns shall have arisen under any deed or writing (not being testamentary) duly signed, and, if a deed, duly sealed by the assurer, and of wbiph due natice shall have been given to this institution." DIRECTORS, OFFICER Sj AND AGENTS. Ill Qperatioo of the new Wills Act upon this, as a general power, iAduco4 ite ourtailm^nt so far as it was te^taiseBtery. XJader these amended rules, the widow or child would claim in the same way as under the nomination papers; their interests would be vested on the ex,eoution of the policy, althoi^gh subject to be divested on the esecutioT^ of the power. No probate duty would, of eourse, be then pi^able, as the assurance moneys would not form par,t of the personal estate of the deqeased, but it is conceived that, they would be liable to tihe payment of the succession duties. It ia to bq observed that the acts only permit the assurance of the lives of the members of the society, and do not admit of the ordinary assu- rances by one person on the life of another, nor do they seem to make an exception in this respect in favo^ of wives and children, but rather present a machinery by which they may he benefited by the assured. *7. It remains to be observed, that, as the sets now stand, they . appear to h^ve been little better than experiments. The IS & L 4 14 Vict. 0. 115, was passed for the term of one year from the date of th« aqt, and thenceforward to the end of the then next session of parliamentj fmd the 15 & 16 Vict. c. 65, for the like term only, so that in the next session (1854) legislation on this subject is of necessity. *OHAPTEIl X. [*157] CONCERNING THE POWERS AND DUTIES OF DIRECTORS, O^'flOBES, AND AGENTS. 1, At commQn law every partner is the implied agent of the rest) and may pledge the credit of the firm in all matters and contracts relating tp the co-partnership business. This power may be restrained by agree- ment between the partners, which will, however, be inoperative as re- gards any person dealing with the firm without notice of it, but will be binding upon every person having snch actual notice. (a) In joint-stock companies, these powers and the management pf the concern are invariar bly confided to a small number of the members, selected for that pur- . pose from the whole body, and who are c^led the directors : and when there are directors, the common l^w power of pne partner to bind the other ceases ; for it is considered that notice that there are directors, is notice to the contracting party that he is not dealing with an ordinary partnership. As between themselves and the other members of the company, the directors are bound to follow the provisions pf the deed- Their acts are then binding upon the company by virtue either of their express authwi-' ties therein contained, or the implied authority resulting from their posi- (a) Mianet v. Whitney, 1 Bro. P. 0. 489 ; Ex parte Harris, 1 Madd. 583 ; Jn re the Worcester Corn Exchange Company, 17 Jur. 721. L. C. 112 BTJNTON'S tlPE ASSURANCE. r*l i^sn ^^'"^ ^^ directors. When it is shown that the directors *have L J exceeded their authority, the question whether their acts are bind- ing upon the general body must, it would seem, depend very much upon the nature of the transaction objected to. If it is not within the part- nership contract and the business or proposed object of the partnership, the other shareholders will not be bound ; but when it is so, and is one which in an ordinary partnership of a limited number would be binding when performed by a single member, in the absence of any stipulation it may be assumed that the company is bound, provided that the party contracting with the directors had no express notice that they wore ex- ceeding their authority. ' 2. When the contract, such as a policy of insurance, is made express- ly subject to the provisions of the deed of settlement, the assured will, of course, be affected with notice of them; but it has never been decided that notice that there is a deed of settlement, is notice of its provisions. The enrolment of a deed in Chancery is not notice. (6) Neither is a pri- vate act of Parliament notice ; and whether an Act is public or private does not depend upon any technical considerations, such as a clause or declaration that the Act shall be deemed a Public Act, but upon 'the nature and substance of the case.(c) There would indeed be no safety for the public in the ordinary transactions of human life if it were neces- sary to inquire at every step as to the specific powers of the managing partners in the conduct of the ostensible business of the co-partner- ship M) but there is no iinplied authority in the directors to enter into contracts unusual or unnecessary for the ordinary business. Thus, in general, the directors have no implied authority to bind the company by bills of exchange,(e) and in companies completely registered under the r#l fiQT Joint-Stock *Companies Registration Act, when authorised by a L -I deed of settlement, can only do so when complying with the re- quisitions of the statute. (/) Neither can they without special powers borrow money upon the security of the undertaking,(5') unless perhaps to discharge liabilities lawfully incurred.(A) It has been said that a party seeking to enforce a contract against a company is not bound to show that the directors were authorised to enter into it, because, unless restrained by the deed or any byelaw, they have all' the authority given to partners at common law ; that their power is implied, and it will be for the company to rebut such implication by showing that they ha,ve exceeded the power vested in them.(i) On a late occasion, however, Alderson, B., observed: — "When once you show that there is a limited authority, the question is, whether the lb) Sagden, Vendors, 11th edit, p. 1044. (c) Ante, p. 144. \d) See remarks of Lord St. Leonards, 0., on an analagous point. StrafiFon's Executors' Case, 1 De Gex, Mac. & 6. 590. (e) Butt V. Morrell, 12 Ad. & Ell. lib. (/) Sect. 44. Iff) Australasia, Bank of, v. Breillat, 6 E. P. Moore, 152 ; Lord v. The Governor and Company of Copper Miners, 2 Phil. 740; Bannester v. Norris, 6 Bxch. 796; see cases cited Re The Norwich Yarn Company, 13 Bear. 426. (h) In re the German Mining Company, 17 Jur. 745. (Court of Appeal.) (i) Chitty's Statutes, by Welsby & Beavan, 642, 2d edit. Smith v. The Hull Glass Company, 8 C. B. 668. DIEEOTOES, OPFIOERS, AND AGENTS. 113 party who relies on the act of the directors to bind the rest, must not show the extent of the authority given to them. Is not the onus of proof shifted ?"(ft) 3. We have hitherto spoten of directors as possessing certain powers, but these powers are not (ftdinarily intrusted to individual directors, but to the joint discretion of a certain number of them in a meeting which is called the board, court, or committee of directors. For the validity of the acts of such a committee it is essential that the formalities prescribed by the deed should be observed, such as the giving a due notice of the day, or a previous agreement or appointment of the time for holding it;(l) *and in like manner that a quorum of directors should be present. ^^^ „„_ It is considered that in such a case the members at large have L -• stipulated for the protection of the collective discretion of at least the number required. Hence, when the deed empowered five directors to bind the company, a contract by three only was set aside ;(m) and when the deed provided that the directors should not be less than five or more than seven, and that three or more should constitute a board and be com- petent to transact ordinary business, and by a subsequent clause " the di- rectors" were authorised to transact extraordinary business, and the surviv- ing directors were empowered to fill up vacancies in the direction occur- ring from other causes than the directors going out in rotation, it was held that no fewer than five directors were competent to transact extra- ordinary business, and it was queried whether a board of three could transact even ordinary business unless it was a board of three out of five directors, although the feeling of the Court seemed to be that they might do so.(»i) In all such cases, however, it will be the intention that governs as expressed by the clauses of the deed ; and in general, in the absence of a provision to the contrary, it will be sufficient if a quorum of directors are present. Thus, when in an incorporated company the special Act (6 & 7 Wm. 4. c. 108, local and personal) provided that the business of the company should be under the management of twelve directors, but that at the commencement of the business the number should be limited to nine, to be increased on the retirement of the original directors, and five were to constitute a court, it was held that the mention of the number was directory only, not affecting the powers of management vested in a court consisting of five of seven surviving di- rectors, (o) 4. In the last case it was thought that the proprietors were p^^^,-. entitled to a mandamus to compel the directors to fill up the vacan- L -I oieB.(p) And in an unincorporated company there would be a similar relief through a court of equity. This would be in analogy to the ordinary rule that the number of a body of trustees should be kept up. (it) Dowdall V. Hallett, 16 Jur. 466. Q. B.; see 16 Jur. pt. 1, Hi. (l) Moore y. Hammond, 6 Barn. & Cress. 456. (m) Ridley v. The Plymouth Baking Company, 2 Exch. 711 ; The Kingsbridge Hull Company v. The Plymouth Baking Company, 2 Exch. V18. (») Kirk V. Bell, 16 Q. B. 290. (o) The Thames Haven Dock and Railway Co. v. Rose, 3 Railway Cases, 177. (p) The Thames Haven, Dock, and Railway Company v. Rose, 3 Railway Cages, 177. July, 1853.— 8 114 BUNTON'S LITE ASSURANCE. 5. When a shareholder or insurer is induced to become such by th« fraudulent representations of the directors, this cannot be a ground for setting aside the transfer or contract, for the directors cannot be the agents of the general body to commit a fraud ■.{q'j rei turpis nullum man- datum est.(r) And when the fraud has been general no member can sue the company in equity for indiTidual relief in the absence of other members, who may be as much entitled to such relief as himself.(s) But when the directors, either themselves or by their general agent, put forth false or fraudulent statements, they will be themselves personally liable to those who may have been thereby deceived.(<) The declara- tion of a fictitious bonus, payable out of capital instead of realised profits, would impute a false prosperity to the concern, and thus deceive intend- ing insurers. The case is parallel to that of declaring a fictitious divi- dend upon shares, and the remarks df Lord Campbell in a late case are very apposite : '' It is most nefarious couduct," he said, " for the direc- tors of a joint-stock company, in Order to raise the price of shares which they arfe to dispose of, to order a fictitious dividend to be declared out of the capital of the concern. Dividends are supposed to be paid out of profits only, and when the directors order a dividend to any given r*l fiOl ^™<'"'^*j without expressly saying *so, they impliedly declare to L J the world that the company has made profits which justify such a dividend. If no such profits have been made, and the dividend is paid out of the capital of the concern, a gross fraud has been practised, and the directors are not only civilly liable to those "whom they have deceived and injured but in my opinion are guilty of a conspiracy, for which they are liable to be prosecuted and punished."(«) The directors, however, would not be answerable for the fault of the actuary in incor- rectly estimating the liabilities where they were not privy to it, nor in most cases fairly chargeable with negligence in not ascertaining it. In such a case, where false balance-sheets have been exhibited, and unreal profits divided, although the parties committing the fraud may have incurred liabilities thereby, it is conceived that as between the innoceat members of the society such balance-sheets and divisions must be accepted as binding, at least in favour of those who have ceased to be members. (■») 6. While the governing power rests in the directbrs or managing part- ners, the transaction of the business of the company is necessarily car- ried on by means of agents, under which general term all the officers may be included. They are appointed either by the board, or iii some special cases chosen by the general body. When the deed of settlement vests the appointment in a particular body, with the consent of other parties, such consent must be duly obtained. Thus, where it was directed that no act should be binding unless four directors were present Cq] Bernard's Case, 5 De Gex & S. 283. \r) Kg. lib. 17, tit. 1, | 3. (a) Macblide v. Lindsay,' 9 Hare, '5^4. (t) Watson T. Earl Charlemont, 12 Q. B. 856; Eeg. v. WelMan, 17 Jur. 421 Crown Cases Reserved; Pulsford v. Richards, 17 Jur. 865. (M. R.) " ) Burnes v. Pennell, 2 House of Lords Oases, 49'7. Ex parte Holme, 2 De Gex, M. & G. IIS. M DIRECTORS, OFFICERS, AND AGENTS. 115 at any meeting, the appointment of an agent, by power of attorney, given by the trustees of a company under the sanction of a meeting at ■which three directors only were present, was held be invalid ;(w) the appointment of an agent, however, when no particular form is required by *the deed of settlement, may be by parol, and not even be in ^^ „q, writing, (a;) L ^»*^J In considering the character and authorities of officers and agents, it is unimportant whether the company for which they act is incorporated or not. The simple employment of persons by a corporation carrying on business cannot give them, as incidental to that employment, a larger authority than if the appointment were made by a partnership of as many individuals as the shareholders of the company, nor does it appear to make any difference that it is carried on by fewer members, qr even by a single individual. A partnership of many who do not mean to act personally in the management of their affairs, may think it right to in- vest some of their servants with all or part of the authority of partners ; but supposing th«y do not, the functions and authorities of servants in different capacities must be the same in both cases.(y) 7. It is, indeed, a general rule that a corporation acts by its common seal alone, and cannot be bound except by deed made thereunder; but to this rule there are exceptions, the most important of which is that of trading companies when acting within the scope of .their charter, and entering into commercial coniracts in the usual manner ; other excep- tions are, when the contract is too trivial to demand such a formality, or perhaps when it is so far executed as to remove it from the operation of the statute of frauds, (z) With regard to companies completely registed under the Joint-Stock Companies Kegistration Act, those quasi corporations may be bound by contracts, although not under seal, and not having the requisites pre- scribed by the 44th section of the statute; for it contains a clause tha* *contracts not having these requisites shall not be effectual ex- rijcie^-i cept as against the company on whose behalf they have been L J made. If, therefore, any contract has been made by the company, it is no objection in their mouth that it was not made under seal, although it is of course competent to them to say that it iwas not niade by an agent having authority to bind them, (a) '8. In all the questions arising upon the acts of agents, it must be reniembered that they are only binding upon the principal to the extent of the agency or the delegated authority j(6) and for any such act, the power may be either express or incidental to the office conferred. The employment of an agent in any particular capacity gives the ne- cessary authorities to act under ordinary circumstanced only. If ,an emergency occurs, an act of agency in excess of his authority is upon (jo) Ducarry v. Gill, Moo. & M. 450. 'x) Coles T. Trecothick, 9 Ves. 250. y) Cox V. Midland Railway Company, SrEjeh. 268. '.:() The Governpr and Co-wpany of Capper i Miners lof England v. 5'ox, 16 ;Q. 229. (a) Ridley v. The Plymouth Grinding GowEaoy,:2Jlxch.,,'?ll. , (6) Olding V. Smith, 16 Jnr. 497. Q.B. 116 bunton's life assurance. his own responsibility, and he must take his chance upon the approval or disapproval of his principal.(c) But if the' principal afterwards adopts the act or contract of the agent, such a confirmation will operate from the time of the contract, and not only from the time at which it is given.(c?) An agent professing to act for a particular party cannot be sued as principal on the contract, although he may be answerable in dam- ages;(e) alitor if no principal be disci osed, and the agent, in fact, takes the liability in the first instance upon himself. (/) 9. The power of a general agent for a mercantile company must be ascertained by the usages of trade j and the mode of transacting business in that department in which he is employed will, in the absence of ex- press directions, often determine a doubt as to the liability of the prin- P^.„.-. cipal.(5') *The principal officers of an insurance office, such as L -" the managing director, secretary, or actuary, will fill the charac- ter of general agent, and possess all such powers as may be necessary for enabling them to conduct the business of their offices. 10. The term agent, however, is commonly applied in practice to per- sons who are invested with a very limited authority, being employed in places distant from the principal seat of business to receive proposals for insurances, and collect the annual premiums of policies when issued. To such persons the general law respecting agents and their capacity for agency will apply. It is not necessary that they should be sui juris, and capable of contracting in their own right ; but may be infants, mar- ried women, aliens, or otherwise under disabilities, if not physically in- capacitated. They must closely follow the instructions of their princi- pals, and by no means presume to exceed the limits of the delegated authority. They cannot bind the company so as to alter the conditions of any contract of insurance, or revive a lapsed policy without the express previous approval of the directors ; and a fortiori cannot involve it in any fresh liability by pledging it to any new or additional insurance contract. ^^Thus, in the case of Acey v. Fernie,(A) the renewal premium of a policy of insurance became due on the 15th of March, 1833, but was not paid until the 12th of April following,' and the assured died on the 14th of the same month. It appeared that the following clause was printed at the bottom of the receipts : " If this receipt is not taken up within fifteen days from the day the premium becomes due, it must be returned to the office, as, after that period, the insurance being cancelled, the ssve- ral receipts will be of no avail. (See conditions of insurance in the printed proposals of the company.)" Instructions were given by the company to their agent that if any premium was not paid within the fif- r*1Rfil ^^^^ ^^ys, he was to give *immediate notice to the office; and in L -I the event of his omitting to do so, his account would be debited for the amount after the fifteen days were expired, and he would be held ic) Hawtayne v. Bourne, 7 M. & W. 595. d) Bird v. Brown, 14 Jur. 134, Exch. «) Lewis V. KicholsonI 16 Jur. 1041. Q. B. j Jenkins v. Hutchinson, 13 Q. B. 744. /) Carr v. Jackson, 21 L. J. Ex. 137. g) Chitty on Contracts, 63. (A) 7 M. & W. 151. DIRECTORS, OFFICERS, AND AGENTS. 117 accountable for the same. No notice was given by the agent of the non- payment of the premium, and, accordingly, he was debited with the amount, and it was entered in the office books as paid on the 15th of March. It was held that these entries were a*mere private arrangement between the office and its agent to secure the due payment of moneys received by him, and one of which a third party could not take advan- tage; and that there was no evidence of any new contract having been made, nor, in any sense, an authority in the agent to make a new con- tract ; that the receipt itself proved that the agent had no authority, as such, to bind the company to a new contract upon the terms of the old one, but varying the time of payment ; that, not being a general agent, but one with limited powers to receive premiums, he had authority to bind the company in respect of the money as if paid to the company itself, and hence it would seem that an agreement on his part to advance the money might be considered as payment on the day when it became due, but that he had no other power or right in the matter. Neither are they empowered without express authority to receive notices of assign- ments on behalf of the company, which shall be binding upon it.(t) 11. It is, above all things, the duty of an agent to keep regular accounts of all his transaotionSj and to pay over all moneys received by him on behalf of his principal. Should he mix the moneys received by him on the agency account with his own, paying them to the same account with a banker, he must bear the loss of the failure of the latter,(^) and may even become liable for interest on a balance, when improperly retained. Should he presume to *speculate with the rii:-io'j-i sums received, he will be liable to account for the profits; and L J such investments, even in stock, may be subject to a specific lien on the part of the principal. (Z) He will not, however, be liable for unavoidable losses, as the failure of a banker in whose bills he may have made a remittance, or in whose hands, in the absence of directions, he may have deposited the money received to a separate account ;(to) or where he is robbed of the specific moneys, whether the felony is committed in his house or upon his person ; and in this respect the officer of a friendly society does not differ from any other bailee of specific moneys under the Friendly Societies Acts, 6 & 7 W, 4, c. 32, s. 84, 10 Geo. 4, e. 56, s. 20.{n) 12. And, lastly, when an agent undertakes to obtain an insurance for a third party, he should execute the commission with diligence, for he may be liable to an action for neglecting to do so ; and this is equally true whether the party undertaking the commission is an insurance agent or not, and although he may act gratuitously in the matter.(o) Should he be unable to effect the policy, to prevent any right of complaint or liability attaching against himself, he should give notice of his inability (i) Gale v. Lewis, 9 Q. B. T42, Ex parte Hennessey, 1 Connor & Lawson, 56. See Stewart v. Aberdeen, 4 M. & W. 211. (k) Massey v. Banner, 1 Jac. & W. 241. h) Lord Chedworth v. Edwards, 8 Hare, 48. (m) Massey v. Banner, Sup. (n) Walker y. The British Guarantee Association, 16 Jurist, 885. Q. B. (o) Wilkinson v. Coverdale, 1 Esp. 74. 118 BUNYON'S LIFE ASSURANCE. to the intending assTirer.(j>) Should he be likely to succeed in eflFeeting the insurance, it will be of importance that he should remember that, although he may be the agent of the society for the purpose of receiving and forwarding the proposal, yet at the same time, in acting for the party making it, to the extent of the delega^ted authority h^ is also his agent^ and it is imperative upon him to attend to those rules respecting warran- ties and representations laid down in a previous chapter. Notwithstand- r*lfiST '°S his,*official capacity, carelessness or mistake on his part may L -I jeopardise the insurance, (g') 13. The law officer or solicitor of the company is also its agent as regards the law business intrusted to him, but unless especially so ap- pointed, he cannot be considered the general agent of the company, ot even its agent in> the more limited sense of the term already consi- dered.(r) PART II. [*169] *C H A P T E K I. ON THE ASSIGJJifMENT OP POHCIEfe FOE VALUABlE CONSIDERATION, AND HEREIN OF CONSIDERATIONS, OF THE BANKRtTPTOY OF THE ASSURfi», AND CONFIiIOTING EQtlI*IfiS OF OdNSEOUTIVE INCUMBRANCERS. 1. The "trisdbin and policy of the sages and fotthders of the laws, sSys Lord Coke, have provided that no possibility, right, title, 6r thiilg in atStion, shall be granted or assigned to strangers, for that Would be the Occasion of multiplying coisteiiticttJS and suits;(a) and it was thought that it would be a great encouragement to litigiousness, if a man were allowed to make over to a stranger his right of going to law. Hence, choses in action, that is, things of which the insured has not the posses- sion, but only a right to recover them by a suit or action at law; and sttch is the sum assured by a policy, payable only lipoii the happening of the particular event, are at law regarded as iuffapable of assignment; and that although by the terms of the policy the sum assured is made payable to the executors, administrators, or assigns of the assured.(6) f^) Oallender v. Oleficks, 5 Bing. New Oases, 58, 6 Scott, 161. Iq) Parsons v. Bignold, 13 Sim. 518, ante, p. 37. \r) Humes v. PenMfeU, 2 House of Lords Cases, 49T. (o) 10 Co. 48, a. ; Co. Litt. 232, b., note 145. (b) Williams v. Thorp, 2 Sim. 257. The word assigus would probably be con- sidered as satisfied by asSgns by aet of law, as in bankruptcy, the only assigns possible by the nature of the case ; as where a lease was tnade to A. and his as- signs, with a condition against assignment. We&theraU v. Qeering, 12 Yes. ^04. ASSIGNMENT OF POLICIES. 119 With regard to choses in action, moreover, *it has been suggested r;|tiiTA-| that there may be a further ground for this doctrine, and that <- J it may rest upon the same foundation in this as in other countries; namely, that the credit being a personal right of the creditor, the debtor being obliged to that person cannot, by a transfer of the credit, which is not an act of his own, become obliged towards another : and the more especially, as the mode of transfer, which was invented by the Roman juris-consults, namely, by constituting the assignee the mandatory of the creditor, has been adopted into our system of jurisprudence. (c) 2. To the general rule of law, forbidding the assignment of choses in action, there is one exception, namely, that they may be assigned either by or to the Crown,(• J and he added : "The case can only be decided by the equities of the parties." And in the very recent case of iNeale v. Molyneux,(5r) which was an action of detinue, 'brought by an executor against a banker, to recover possession of a policy of assurance, it appeared that the assured had assigned th« policy by deed, in 1832, to the testator, who thereupon gave notice of the assignment to the office, and paid the sub- sequent premiums. Tie assured, however, retained possession of the policy until 1843, when he deposited it as a security with the banker. Upon the plea of the latter that the policy was not the property of the testator, and that he had fraudulently ipermitted the insured to hold it and represent that he was entitled to the money secured by it, it was held, first, that the property in the policy passed to the testator by the deed of 1832, although be never obtained possession of it; and, secondly, though the testator had 'been guilty of negligence in allowing the assured to retain the policy, that the defendant had not proved his special plea, unless the jury were satisfied that the testator had so left the policy, with the fraudulent intention of enabling the assured to borrow money on it; and the judge would not ask the jury what they would have found, if the word "fraudulently" had not been inserted in the plea. 12. In the case of an assignee who has obtained possession of the policy, but has. neglected to give notice, it has been sometimes thought that his priority in point of time would give him a superior claini to that of a subsequent purchaser who has given notice but omitted to demand pos- session of the policy, according to the well-known maxim that, between successive equitable mortgagees without notice, qui prior est tempore potior est jure. The better opinion would seem to be that which gives the preference to the person by whom notice has been first given. In ^ *the case of Meux v. Bell(A) already cited, the Vice-Chancelloi' L J remarked that "a party who has advanced money upon a bond which has been already assigned, and notice given of the assignment, cannot complain that he was induced to part vrith bis money upon a security to whieh the negligence of tiie prior assignee had given credit, for inquiry at the time-Of advancing his money wou'ld'have saved him /) Foster t. Cockerell, 9 Bligh, N. S. 376. g) 2 Car. & Kir. 672; aud see Hunter v. Leatht^, 10 B. & 0.,858. h) Supra. ASSIGNMENT OF POLIOIES. 127 from the loss ;" thus making in effect the notice to the trustee eonstruo- tive notice to the mortgagee. But in the converse ease now under con- sideration, the purchaser has no means of obtaining information open to him. He may, and in prudence will, inquire for the policy, but if he does not do so, and nevertheless aets bona fide,(t) or if his request is evaded by the mortgagor^ (A) it is submitted that the fact that the policy is not immediately forthcoiming cannot be notice of the deposit to him. The purchaser may, of course so conduct himself that notice will be imputed to him from his own actions in conducting the purchase. Thus, in the important case of Jones v. Smith,0 Ld. Cottenham, C, remarked upon the case of Whitbread v. Jordan, (m) in which the deposit of title- deeds was held to be binding upon the mortgagee, that that case was decided upon the ground that the learned judge was satisfied that the transaction was not bonfi, fide, and that the party had expressly abstained from making inquiry; in short, that there had been wilful blindness. Such questions hav« generally arisen upon the deposit of title-deeds of real estate in which it has been considered, that where there is no impu- tation of moral fraud or actual collusion, there may be negligence (crassa negligentia) suf5.cient to postpone a subsequent mortgagee, and in legal apprehension equivalent to fraud ;()i) and that in such a ease a subsequent mortgagee, who had obtained the legal estate, was ♦postponed to a prior equitable mortgagee;(o) and in a very late r^-ioj-i case it was said that, although the Court will not impute fraud, L -I or negligence equivalent to fraud, where there had been a bona fide inquiry after the deeds, and a reasonable excuse for the non-delivery of them, it will do so where there has been the omission of all inquiry after them.(/>) But in the case in question, when the first mortgagee of a policy has omitted to give notice, and the second has given it but omitted to inquire after or obtain the delivery of the policy, it is submitted that no crassa negligentia equivalent to notice as between the two incum- brancers can be imputed to the latter, and that at least the negligence in omitting to inquire for the policy is not greater than that of omitting to give notice to the office. The possession of the policy gives no legal right. Both incumbrancers claim through and possess equal rights against the assignor, but neither has, according to the doctrine in Dearie V. Hall,.^^) any right in rem. until notice has been given. Then however, an interest analogous to a trust is created, and, as Jias been seen, >actually attaches upon the subject-matter in favour of the party giving notice. It may be then contended that the operation of the notice is similar to that of the transfer of a legal estate, as between the conflicting claims of equitable incumbancers without notice upon real property, in addition to which, according to the lastly mentioned case, the omission to give notice is expressly a giving of credit to the depositor ; and if this had not been done when the second mortgagee has made injuiry before advancing his (i) Sug. Vendeira) 1054, 11th edit. (k) Plumb & Muit, 2 Anst, 438. (f) 1 Phil. 255. Im) 1 Y. & CoH. 302. (n) West v. Eeid, 2 Hare, 249. (o) ■Worthington \r. Morgan, 16 Sim. 54?. {p) Hewitt v. Loosemore, 9 Hare, 449. (?) Supra. 128 BUNYON'S LIFE ASSURANCE. money, the omission Las been the actual cause of the double advance having been made upon the same security, and, as we have already seen, whether the inquiry was made prior to the advance or not has been consi- dered immaterial. r*1 8'il *"^ ^^^^ recent case may indeed be thought equivalent to an ex- L J press decision u,pon this point. A judgment debthad been assigned to a purchaser, and notice given of the assignment. Subsequently he him- self assigned it, at the same time handing over the original deed of assign- ment. No notice was given of this second assignment, and upon a set- tlement of accounts between the judgment debtor and the first assignee the latter executed a release by deed to the former without the produc- tion of the original deed of assignment. The release was held to be con- clusive upon the second assignee who had neglected to give notice, (r) 13. As the assignee of a cJwse in -action is entitled to all the remedies of the as&ignor,(s) so he takes it subject to all the equities to which it was liable in the hands of the assignor.(<) The latter cannot give more than he possesses, and any vice affecting the property in his hands will equally affect it in the hands of the assignee. Thus if by reason of any breach of warranty or false statement made to the insurers, the policy is an invalid contract, it will be equally so after as before the assignment. And where it was one of the conditions of the policy that it should be void in the event of the suicide of the assured, it was held that the con- dition was equally operative after a transfer to purchasers for value.(M) 14. An assignee for value of a chose in action may, however, be in a better situation than the party assigning to him;(i;) as where he pur- chases of one entitled under a voluntary settlement, which is ineffectual against the creditors of the settlor, for the equity of such a purchaser for value has been thought superior to that of the creditors who had no r*1 8fil ^P^"^^" charge upon the property.(zo) And a *subsequent mar- L -* riage is a valuable consideration where the voluntary settlement was an inducement to it, and the presumption will be in favour of its having been so.(aj) 15. And a transferee with notice lOf a prior incumbrance may shelter himself under the want of notice in his vendor,(y) although, whether a purchaser without notice will be affected with notice of an equitable claim in his vendor, himself an assignee, seems more doubtful, (z) As there can be no transfer of the legal interests, a third incumbrancer, without notice, cannot, it may be thought, by obtaining a transfer of the security of the first mortgagee, tack his own mortgage debt to the preju- dice of a second incumbrancer, unless indeed he actually receive the sum assured by virtue of the receipt clause in the first mortgage. 'In a late (r) Stocks V. Dobson, It Jur. 223. (J. C. P.) 539. Court of Appeal. h) Ex parte Lloyd, IT Ves. 245. (t) Purdew v. Jackson, 1 Russ. 264. 547; Mangles v. Dixon, 3 House of Lords Cases, 702. («) Dormay v. Borrowdale, 10 Beav. 335. (v) Sngden, Ven. 93T— 1026; Aldborough v. Trye, 1 Clark & Pin. 436. (w) George v. Milbanke, 9 Ves. 190 ; Houlditch t. Wallace, 5 CI. & Pin. 629. (x) Brown t. Carter, 5 Ves. 862. (y) Lowther v. Carlton, 2 Atk. 241. (2) Sugden, Vendors, 1037. The affirmative is stated to have been held in a late case. Ford t. White, M. E., May, 1852. Monthly Digest, 342. FRAUDULENT CONOEALMENT, ETC. 129 case, however, it was held that a purchaser of a equitable reversionary iuterest in personalty which had been mortgaged, was not entitled to redeem, without also paying off another mortgage debt, due between the same parties but secured upon a separate property. (a) 16. The assignment of a policy pf assurance will carry with it, unless a contrary intention appear on the instrument by which it is effected, all the bonuses or other benefits, whether accrued or accruing to the princi- pal sum J and the same rule will apply when the policy has been be- queathed, the legatee will be entitled to the full benefit of the bonuses unless a contrary intention appear upon the will, and notwithstanding that they may far exceed the principal sum asBured.(i) 17- Lastly, where a policy has been the subject of sale, *fraud r^-iow-i on the part of the purchaser will vitiate the contract, and such a L J fraud will be the concealment of, or juere omission to mention, the death of the person mentioned in the jiolicy, if unknown to the vendor, (c) And the law vrould seem to be the same if, instead of death, a serious ill- ness had occurred, and been concealed by the purchaser. This was de- cided in a case in which, in the early part of 1840, the attorney of the vendors had unsuccessfully endeavoured to sell the policy, asking 40Z. for it, and of this the defendant was aware- On the 15th of -August fol- lowing, the assured, who was previously in ex^sellent health, was taken iU, and died on the 20th. On the 18th iiie defendant instructed an agent to purchase the policy if still in the market, authorising him to give sixty guineas for it. The agent applied to the attorney, and pur- chased it for about that sum. Both the defendant and his agent were aware of the illness, and in the course of the treaty of sale, the attorney asked the agent how much he thought the policy would be worth, to which he replied, " not more, perhaps, than three quarters of a year's pre- mium," which proportion about amounted to sixty guineas. The learned Judge observing, " that if the defendant had privately ascertained the illness of the assured, and had then treated with the plaintiffs without communicating the fact to them, they supposing he was still in good health, there could be no doubt but that 8u«h conduct was grossly dis- honourable," added ''that he had no difficulty in going further, and say- ing that if the jury believed the facts as stated, the defendant's conduct) amounted to a legal fraud, and he could not set up any title to the pol- icy so aequired."((Z) The case of illness may of course give rise to dis- putes from the ^liffieulty of measuring the intensity of the disease, and deciding what was in fact a concealment. But even in the absence of a legal fraud, equity might refuse its aid to uphold the inequitable con- tract. (a) Watts v. Symes, IDs Gex, Mac. & G. 240. Parkes v. Bott, 9 Sim. 388; Courtney v. Ferrers, 1 Sim. IST, as to tlie ques- tion whether the boiius accming after the death bf the testator, upoa insurance shares that have been bequeathed, is to be considered in the natwfe of income, or an increase of the capital. See Johnson v. Johnson, 15 Jur. 714. (V. G. B.) (c) Turner v. Harrey, Jac. 169; Brealey v. Collins, You. 3 it. (d) Jones r. Eeene, 2 Moo. & Bob. 348. July, 1853 9 130 BUNTON'S LIFE ASSURANCE. [*188] *CHAPTER II. CONCERNING THE EVIDENCES OF THE CONTRACT WHEN A SALE IS EFFECTED OK A LIEN CREATED, AND THE RIGHTS AND REMEDIES OF THE MORTGAGEE, AS AGAINST HIS MORTGAGOR. 1. It is usual to effect assignments of policies of assurance by deeds, of which forms of assurance precedents, applicable to the several most usual transactions of which they are the subject, are subjoined to this treatise. 2. In some companies arrangements of this nature may be very readily accomplished by a practice, adopted by them, of accepting a surrender of the old policy, and granting a new policy to the purchaser for the same sum, and with the like privileges, which belonged to the former insur- ance. The conveyance stamp is then unnecessary, the only stamp re- quired being the policy stamp upon the policy ; although when the con- tract is for a mortgage, the mortgage stamp might attach upon any docu- ment executed as evidence of the conditional nature of the transfer. It would, however, appear that, without a sufficient authority in the deed of settlement, the directors of any company would rightly hesitate in being parties to such an argument, if the privileges of the old policy were to be transferred to the new one, as the grant of such a new policy might be allowed ultra vires. In like manner, the purchaser would prefer the ordinary assignment, as he might jeopardise the benefits which he might otherwise receive from his purchase. In a case, in which it was the usual practice of the office, and, it is pre- r#1 801 ^'^•'1^'^) authorised by its deed of settlement, *the following was L J added to the conditions of the policy : " Where an assignment of a policy could be made, the directors are empowered to accept a sur- render of such policy by indorsement, and to issue, at the cost of the as- sured, in lieu thereof, a new policy of assurance, in the name of the as- signee, or proposed assignee, for the same life, at the same sum, and on the same terms, as the policy to be surrendered." 3. Dismissing this method of transfer by surrender, it is to be observed, that it is not necessary that a contract respecting personal property of this nature should be evidenced by deed, or even by writing. There is no legal estate to pass, and the case except where it is that of a mar- riage settlement, is not within the operation of the statute of frauds. (a) And as any engagement to pay out a particular fund is sufficient to con- stitute an equitable assignment, or give a lien upon a chose in action,(5) so any evidence of a contract concerning a policy of assurance is suffi- cient to operate as an assignment of it. The form of the instrument is immaterial j for example, a deed poll, in the form of a power of attor- ney, when executed for a valuable consideration, was considered to (o) 29 Car. 2, c. 11. (b) Eodick v. GandeU, 1 De Gex, Mac. & G. 163. EVIDENCES OF THE CONTRACT. 131 amount to an assignment of, or a covenant or agreement to assign, the sums which the donee was empowered to receive ;(c) and indeed, for the mere purpose of a transfer of the interest upon a sale, an agreement, an intercliange of letters offering and accepting the sale,(t^) coupled with proof of payment of the purchase money, or even a simple receipt, will be as effectual as the most elaborate deed as a conclusive evidence of the contract, (e) The evidence of a mere agreement to charge must, how- ever, be clear, for the leaning of a court of equity will be against creat- ing partial *liens, at least in mercantile transactions, upon the rss-inn-i strength of equivocal expressions. (/) L J 4. A deed, nevertheless, possesses many advantages over a simple agree- ment. It is the best and most usual evidence of the complete contract, and generally contains a power of attorney (which, however, need not necessarily be by deed,)(g') and by which payment of the sum assured may often be more readily compelled in a court of law, and covenants for title. To these may be added, in the case of a mortgage, the remedy given by the covenant of the mortgagor for the payment of the mortgage debt and interest, and the recurring premiums, and that the mortgage debt becomes thereby a specialty debt, so as to entitle the mortgagee to priority over the simple contract creditors of the mortgagor in the admin- istration of his assets upon his decease, in the event of the insufficiency of the insurance moneys for its satisfaction. 5. A well-drawn mortgage deed will, moreover, contain a power for the mortgagee to sell the policy, either by public auction or private con- tract, or to surrender it to the office ; and also a power, usually termed the receipt clause, entitling him to give a good discharge for the pur- chase or surrender moneys, as well as, in the event of the policy becom- ing a claim upon the failure of the life upon which it depends, for the whole of the insurance moneys, irrespective of the state of the account as between himself and the representatives of the mortgagor, and with- out the concurrence of such representatives, or the persons entitled to the equity of redemption of the policy. (A) The ordinary power of attor- ney, it will be observed, is not equivalent to the receipt clause. The object of the former is to enable the assignee to sue at law, but does not rebut the equitable liability of the assurers to see to the application of *the money. "I do not think," said the late Vice-Chancellor p^,Q„ of Bngland,(i) " that the Court has ever decided that a receipt L J under the former is to be taken as equivalent to a receipt given under the latter." In that case, there was the ordinary power of attorney and a receipt clause inapplicable to the event which had happened. The donor of the power was dead, so that it failed at law, and it was thought that the difference of language in the two parts of' the deed proved that it was not intended that a receipt under the one clause should be equiva- (c) Bennet t. Cooper, 9 Beav. 258. Id) Morgan v. Halford, 17 Jur. 223. (V. C. S.) (e) Evans T. Protheroe, 3 De Gex, Mao. & G. 512. (/) Jones V. Starkey, 16 Jur. 511. (V. 0. T.) \g) Berkeley v. Hardy, 5 B. & C. 355. h) See Ottley t. Gray, 16 Law J. Chan. 512. (i) Brazier v. Hudson, 9 Sim. 1. 132 bunton's life assurance. lest to a receipt under the other. Where, however, the power of attor- Hey is sufficiently extensive to rebut the equitable liability, it is con- ceived that it may be safely relied on, and where sach a power is inserted in the assignment of a policy upon the life of the assignor, either by way of mortgage or upon trusts, and it expressly declares that the receipt of the assignee, or his assigns, iu the name of the assignor, his execu- tors, or administrators, shall be a sufficient discharge to the insurers, without any liability on their part to see to the application of the money, it is submitted that the true construction of such a povper, failing as it does, ex necessitate rei, as a power of attorney by the death of the donor, is identical with tJiat of the receipt clause. Of course, when the trusts of the deed are of such a nature as to negative the liability of the assurer to see to the application of the money — as for instance, when an assignment is made for the payment of debts or for any other purpose requiring time and the exercise of a discretion, on the part of the trustees, — no express power of giving discharges can be required. (A) 6. it would seem that a covenant, to effect and keep on foot an insu- rance upon a life, will be construed strictly in like manner as a covenant to keep on foot an insurance against fire, when found in any instrument by which any right or indulgence is granted to a debtor. Therefore r*iQOT *'^t^''® ^^^ defeasance of a warrant of attorney provided that so L -I long as a policy of assurance effected in the name of the creditor was kept on foot by the debtor, judgment should not be entered up, or execution issued ; and it was stipulated that, upon the fault of the debtor, the creditor might pay the premiums, or effoet a new policy in his own name at the expense of the debtor ; it was held, that upon the policy becoming forfeited by reason of the nonpayment of the premiums, the creditor was entitled to enter up judgment, and issue execution upoa the warrant of attorney, although four days after the policy had become void, he being a director of the insurance company, had paid the pre- mium, and induced the office to renew the policy ; and a bill to restrain the execution, and praying that it might be declared that the renewed policy ought to be deemed a substitute for the original policy, was dis- missed with costs. (Z) 7. A covenant not to vitiate a policy, will moreover, receive a strict but reasonable construction. Thus, where upon the sale of a reversion- ary life interest the vendor covenanted that he would at any time or times, at tfee request of the purchaser, appear at any office Or offices for the insurance of lives in London, or within the bills of mortality, and would answer all necessary questions, &c., to enable an insurance to be effected, and would not afterwards do, or as far as in him should lie, per- mit any act, deed, or thing whatever, whereby such insurance might be avoided or prejudiced, and in compliance with this covenant he appeared at the Rock Life Office, and a policy was issued containing a condition that the assured should not go beyond the limits of Europe ; but the acceptance of the proposal was not notified to him j it was held, that in (k) Glynn v. Lock, 3 Dru. & War. 11. Q) Winthrop v. Murray, 14 Jur. 302. (V. C. W.) EVIDENCES 01' THE OONXKACT. 133 the absence of notice that the polifly had been issued, an action would not lie for breadi of covenant by infringing this condition, and stress was laid upon the generality of the provision for effecting the rMooT *policy.(m\ In such a case, it wotdd seem that no greater effect L -I will be given than that clearly expressed upon the deed, the Court not being studious to extend such an obligation. 8. In Dormay v. Borrodaile,(w) a policy was assigned to trustees by an ante-nuptial settlement, which contained a covenant " to do and perform all such acts, matters, and things as should be requisite for continuing and keeping on foot the said policy." It was subsequently rendered void by reason of the assured drowning himself, when, as the jury found (see Borrodaile v. Hunter, 5 Man. & G. 639), incapable of judging between right and wrong, and a creditor's suit having been instituted for the administration of his estate, a claim was made by the trustees of the settlement for the amount insured by the policy. Upon exceptions being taken to the report of the Master aUowing the claim, a case was ordered for the opinion of the Court of Common Pleas upon the question, whether the trustees were entitled under the covenant to recover the amount ; and the judges certified their opinion that they were not so entitled at law.(o) On the one side it was argued that the covenant " to do all acts necessary to keep the policy on foot," implied a covenant to do no act to destroy it,^ and that a lunatic might be answerable in damages, although , not personally responsible for a felony ; on the other hand, that the case turned on the construction of the covenant, the words of which could not be taken negatively, and that the acts there referred to meant the pay- ment of the premiums, and obtaining a license before going abroad, or entering into military service, not to the possibility of suicide, which was not contemplated. Upon the case coming on upon the equity reserved, this opinion was reconsidered, and was confirmed by the Master of the Kolls, who remarked, it is said justly,, " that covenants are to be con- strued according to the *intent of the parties, and then it is r^iQ/n argued that this covenant must bei understood negatively, as if it L J had been that the grantee would not do anything by which the policy should be forfeited. It does not appear to me that I can give this effect to the words of the deed. The subject of the settlement was the policy and the money payable thereon, and nothing else; and there are not, I think, words 'to which the negative effect contended for can be properly attributed," 9. Of covenants for the payment of premiums, a bankrupt's certificate is no discharge, unless the amount recoverable upon the breach could have been proved under the bankruptcy. Under the old law, there could be no such proof in respect of any sums to fall due subsequently thereto. Thus, when upon the mortgage of a policy the mortgagor covenanted to pay the annual premiums, and if he did not do so, and they were pdd by the mortgagee, that he would repay him the amount, it was held that he was not discharged from the liability to pay to the mortgagee the (m) Vyse t. Wakefield, 6 M. & W. 442. (to) 10 Beav. 335. (o) 5 C. B. 830. 134 bunyon's life assurance.- amount of a premium falling due after the bankruptcy and paid by the latter. " The liability of the defendant," observed the Court, " to pay the premium to the insurance offices did not, in our judgment, constitute any debt contingent or otherwise, and, consequently, was not ^roveable under the commission." (p) Again, where a trader covenanted, by an ante-nuptial settlement, to pay the premiums on certain assigned policies, or, if he failed to do so, to repay to the trustees the amount that they should pay in respect thereof, it was held that trustees could not prove for the amount required by the offices as a commutation of the premiums to accrue during the remainder of the life of the bankrupt. (§') These decisions were upon the 56th section of the 6 Geo. 4, o. 16, re-enacted |.ji^-.„^_ by the 177th section of the Bankrupt Law Consolidation *Aut, L J and permitting the proof of contingent debts,Cr) and there were similar decisions under the Insolvent Debtors' Acts. Under the new law, if any trader who shall have become bankrupt after the commence- ment of the Act(s) shall have contracted, before the filing of a petition for adjudication of bankruptcy, a liability to pay money upon a contin- gency which shall not have happened, and the demand in respect thereof shall not have been ascertained before the filing of such petition, in every such case, if such liability be not proveable under any other provision of the Act, the person with whom such liability has been contracted shall be admitted to claim for such sum as the Court shall think fit. When any such covenant is, however, entered into by any person as a surety of an apparently solvent principal, it would seem that the proof will still be inadmissible upon the bankruptcy of the surety. (<)' 10. When the mortgagor neglects to pay the premiums, which are thereupon paid by the mortgagee, the latter wiH be entitled, even in the absence of an express stipulation, to interest upon the sums so paid by him, and that whether the payment of the premiums by the mortgagor is expressly provided for by the mortgage-deed or not.(M) This is a right, however, which the mortgagee shares with every volunteer who is entitled to a charge upon the policy for the amount of the premiums paid by him, with interest at 4 per cent., although in the absence of an express con- tract the payment of such premiums for any period, however extended, c&nnot confer a title by purchase to the entire policy upon the volun- teer ;(«) and every mortgagee or purchaser will thus be entitled to a lien upon the policy for the premiums paid by him, and interest thereon at the rate aforesaid, when by reason of an omission to give notice, and the r*iQRi consequent operation *of the Bankruptcy Law, or for any other L -I cause, he is deprived of the benefit of the policy, or postponed to another incumbrancer.(w) 11. A mortgage may also be made by a deposit of the policy, either (p) Toppin Y. Field, 4 Q. B. 386. (q) In Re Whitmore, 3 De Gex & S. 565; In Re John Foster, 14 Jur. 815. C. B. (r) 12 & 13 Vict. c. 106. (a) 12 & 13 Vict. c. 106, s. 178. it) Arnott V. Holder, 17 Jur. 318. (Q. B.) \u) Hodgson v. Hodgson, 2 Keen, 704. M Barridge v. Row, 1 Y. & Coll. 0. 0. 583. (w) Schondler v. Wace, 1 Camp. 487 ; Gibson t. Overbury, 7 M. & W. 559. REMEDIES OF MOKTGAGEE. 135 with or without a memorandum in writing. The mere possession of the policy will not, indeed, give a creditor a lien thereon,(a;) particularly where that fact may be otherwise explained, as in the case of a solicitor, who ordinarily holds his clients' title-deeds.(y) But the deposit upon an advance of money will, without more, give an equitable lien,(2) and the contract to charge will be inferred ; and the deposit will cover subsequent advances, if it appear by evidence that they were made upon the faith of the security,(a) or that the original deposit was continued with an agree- ment for a further advance.(&) And in like manner a policy may be deposited with a banker as a security for a running account, and the deposit may be enlarged by a subsequent agreement to secure advances made by the bank after a change of partners ;(c) but when deposited for a certain sum it would not give a lien for a further sum, when the account was overdrawn -.{d) and it is to be remembered that in every case it is the agreement that gives the lien, either as expressly shown by a written contract or by parol evidence, or necessarily to be inferred from the acts of the parties. As the Statute of Frauds does not interfere, there seems moreover to be no reason why the security given by a mortgage by deed should not be extended by a parol agreement to cover further advances. A *depQsit may also- be made to secure a debt already in exist- r#-iqi,-| ence;(e) and that although the debt be due upon a previous vol- L -I untary bond, or to the trustees of a voluntary settlement : and the deposit in such a case, although voluntary, is good in the event of a sub- sequent bankruptcy, unless there be fraud or.insolvency at the time. (A Every such deposit, however, it will be remembered, to be valid in the event of bankruptcy, must be accompanied with notice to the o&oe;(g') and, generally speaking, incumbrances will take priority according to the order of dates at which such notices shall have been given. 12. In the absence of a power of sale, the mortgagee will be enabled to sell through the medium of a court of equity, whether the mortgage is by deed or by a simple deposit.(S.) Where an equitable charge only is made (as must be the case in the assignment of a policy,) the proper form of the decree prima facie will be for a sale.(i) It would seem, however, that there may be a foreclosure of a policy, as there may be a foreclosure of a mortgage of stock, whether the interest therein be in possession or reversionary,(A) or generally of any chattel personal. (Z) Formerly the choice of the remedy would be with the mortgagee ; but now, by the new Chancery Practice Amendment Act,(m) sect. 48, it is enacted " that it shall be lawful for the court in any suit for the foreclo- (x) Chapman v. Chapman, 13 Beav. 308. (y) In re May, 1 Fonb. N. U. 243. (2) Morris v. Wilkinson, 12 Tes. 198. (a) Ex parte Laugston, 17 Ves. 227; Ex parte Whitbread, 19 Ves. 210. (b) Ex parte Hooper, 19 Ves. 479. (c) Ex parte Kensington, 2 Ves. & B. 79; Bdev.Knowles, 2 Y. & CoU.C.C. 172 '/) Vanderzee v. Willis, 3 B. 0. C. 20. e) Ex parte Mountfort, 14 Ves. 606. '/) Meggison v. Foster, 2 T. & Coll. C. C. 336 ; James v. Bidder, 4 Bear. 600. g) Ex parte Arkwright, 3 Mont. D. & D. 129. 132. 'h) Dyson v. Morris, 1 Hare, 422. (i) 2 Spence, 769. 791. k) Slade v. Rigg, 3 Hare, 35; Wayne v. Hanham, 9 Hare, 62. (I) Kemp V. Westbrook, Belt. Sup. Ves. S. 141. (m) 15 & 16 Vict. c. 86. 136 BUNTON's tIFE ASSURANCE. sure of the equity of redemption in any mortgaged property, upon the request of the mortgagee, or of any subsequent incumbrancer, or of the mortgagor, or any person claiming under them respectively, to direct a sale of such property, instead of a foreclosure of such equity of redemp- r#lQRT *^°°' '*P°° ^^'^^ terms as the court may *thinfc fit to direct, and, L J if the court shall so think fit, without previously determining the priorities of incumbrances, or giving the usual or any time to redeem ; provided that if such request be made by any such subsequent incum- brancer, or by the mortgagor, or by any person claiming under them respectively, the court shall not direct any such sale without the consent of the mortgagee, or the persons claiming under him, unless the party making such request shall deposit in court a reasonable sum of money, to be fixed by the court, for the purpose of securing such terms as the court may think fit to impose upon the party making such request." 13. When the security is composed of land and stock, or personal chattels, or a policy of assurance, simply assigned as a security, the pro- per relief, it has been said, is first to direct that the collateral security be realised, and then to foreclose the real estate, if the deficiency be not paid;(»i) but there does not appear to be any valid reason why the mort- gagee should not, if he think fit, at once proceed to foreclose the whole security, (o) In the above named case of Dyson v. Morris, (j») where a mortgagee upon making^ a further advance took a further charge and covenant, and also as a collateral security an assignment of a policy updn trust to receive the insuranee moneys when payable, and thereemt pay the mortgage, it was held that he was entitled to the usual decree for a fore- elosure of the real estate, and to retain the policy upon the terms of the trust, but not to a sale, as he would have been if the policy had been simply assigned as' a security. In this case it will be observed that the mortgagee incurred the risk of having the foreclosure opened in the event of his resorting to the policy moneySj^ff) and that the form of the secu- rity was therefore defective, according to the principle of the decree, as r*i QQi *^® creation of a trust, although probably only *intended to ope- L J rate as a security, went very far towards depriving the mortgagee of the benefit of his collateral security. 14. In a very recent caseW there was a deposit of policies on the life of one J. J., with an agreeinent consisting of three instruments : namely, first, a bond for GOOD?., the condition of which was, that the mortgagor and his representatives should pay the mortgagee, his executors, admin- istrators, or assigns, all moneys advanced by him or them not exceeding 3000^. in payment of the premiums of the policies as mentioned in a letter then referred to, with interest at 5 per cent., at the expiration of six cale^dg/r months after the decease of the qesswred' life : secondly, the letter which was endorsed upon the bond, and which stated the agree- ment to be that, on the security of the policies, the bond for 6OOOI (to secure what might be advanced from time to time with interest at 5 per cent.,), and an equitable mortgage of certain real estate, the mortgagee n) Ashley Vi AsMey, 3 Sim. 19. (0) Wayne v. Hanham, 9 Hare, 62. >) 1 Hare, 422. (y) Lockliart v. Hardy, 9 Beav. 349. (?) Brougham v. SquiJe, 1 DreWiy, 151. REMEDIES or MORTGAGEE. 137 stould from time, to time advance the premiums to become payable on the policies during the life of the said J. J. : thirdly, an agreement reciting the bond and letter, and charging the real estate with the several sums to be advanced in payment of the premiums with interest ; such several sums and interest so charged to be paid at the expiration of six calendar months after the decease of the said J. J., the policies to be the primary security. Upon the death of the mortgagor, after assigning the policies for the benefit of his creditors, the mortgagee applied to the court, claim- ing to have his advances and interest paid, and that if necessary the policies might be sold, and the agreement rectified so as to conform to what was said to be the true intention of the parties. The bill was, however, dismissed with costs, on the ground that, upon the true con- struction of the three instruments, the mortgagee had no security availa- ble upon the policies until after the *expiration of six months r^itoAQ-i after the death of J. J., and that there wasi no evidence by which L J to rectify the agreement. 15. If the equitable mortgagee by deposit be appointed the executor of the assured, he will be entitled, although he give a receipt to the office as executor and there are specialty creditors, to retain the amount of his debt, and the residue of the insurance moneys will alone be assets in his hands ;(s) and an equitable mortgagee appointed administrator as, a creditor upon the neglect of the next of kin to answer the citation of the ecclesiastical court, will have an equal right in this respeot.,(«,) 16. Lastly, the mortgagee will be entitled against the mortgagor and all claiming under him, including subsequent inqumbrancers, to his prin- cipal, interest, and full costs of realising his security; and this will be true as well when the mortgage is by deposit, as when a formal assurance has been executed, with one exception,, namely,, where there is a deposit unaccompanied by any memorandum specifying the purpose for wbieh it has been made, and application to the court of bankruptcy becomes ne- cessary; the costs of asserting his. title will not then be allowed to the equitable mortgagee. But where it is the ordinary custom of business, as in the case of a banker, to take no memorandum, it would seem that this exception is inapplicable, (m) 17. We may here observe, that trusts created either by deed or will for the payment of the premiums of a life insurance, are not a^ected by the Thellusson Act, notwithstanding that they may continue for a longer period than any of those during which an accumulation is permitted by that act. A note of a, late case in which this was decided, and which is interesting from the general way in which the law upon this subject is ennunciated, will be found in the Appendix. («) (a) Glaholm v. Eowntree, 6 M. & Ell. UO. {t) "Will, Ex. 364. [u) Ex parte Moss, 3 De G. & S. 599. («) Basstl v. Lister, 9 Hare, 11*1. 188 BTJNYON'S LIFE ASSURANCE. [*201] *CHAPTBK III. CONOEENINQ NOTICE. 1. As we have already seen, it becomes necessary, after the assignment of a policy, to give notice of the transaction to the ofiSoe. No time should be lost in taking this step, which should be done by serving a formal notice in writing, addressed to the directors of the company, upon the secretary or some other duly authorised officer, and obtaining an acknow- ledgment of the service either by letter or by an endorsement upon a duplicate of the notice. Where the rules of the company do not allow the acknowledgment of notices, the service should be personal and evi- dence preserved of its having been made. No particular form is requisite, provided that it clearly convey information of the claim. 2. Notice to affect a depositary must be distinct : it is not sufficient that it should be such as might lead to inquiry, and hence to the know- ledge of the fact.(a) Thus, where a policy had been assigned to a firm of solicitors, and one of the partners called at the office and made some communication to the company, the result of which was that a memorandum was entered in the books, — " Letters to C. & W., Chancery Lane, by Mr. C.'s order," it was held that there was no sufficient notice of any transfer of interest. Messrs. C. and W. might have been the solicitors of the assured. (6) At the same time, we shall see that when the circumstances are such as to have conveyed a clear notice of the fact to the company through its r*9fl9n *authorised agent, it is immaterial in what manner the know- L J ledge may have been acquired or communicated. Notice is of two sorts, — actual notice, which must be proved as any other fact j and constructive or notice by construction of law, as where notice to an agent is notice to the principal, if the agent comes to the knowledge of the fact while he is concerned for the principal and in the course of the very transaction which becomes the subject of the suit.(c) 3. The question of notice is material for three purposes : namely, (1), to charge the office with negligence or fraud, where it neglects to take notice, as where after the receipt of notice it accepts a surrender of the policy from the assured, or pays the policy moneys to a subsequent pur- chaser; (2), to determine the priorities between consecutive incum- brancers ; and (3), to prevent the policy remaining in the order and dis- position of the assured in the event of his bankruptcy or insolvency. 4. With regard to the two first purposes, the sufficiency of the notice seems to stand upon the same footing. If it is such that the insurers would be chargeable for negligence in accepting a surrender, it will in like manner be sufficient to render them answerable for neglect in reply- ing to the inquiry of a subsequent incumbrancer; and this may be thought (a) Humberstone v. Chase, 2 Y. & Coll. 209. (b) West t. Eeid, 2 Hare, 249. (c) Hieu T. Mill, 13 Ves. 120. CONCERNING NOTICE. 139 the test as regards the sufficiency of the notice for the second purpose. For the third, the question stands upon an entirely different footing; for although notice to the insurers will prevent the policy remaining in the order and disposition of the bankrupt, the question in each case is not whether such and such a notice was given, but whether the jury, upon the entire circumstances, consider that the policy was in his reputed ownership with the consent of the true owner. The object of the statutes is to prevent persons from obtaining credit by reason of their apparent possession of property which is not really their own. The law thus *punishes incidentally the rightful owner, for allowing his pro- r-jKnno-i perty to remain in such a position, that it may be the means, L J whether such is the case or not, of creating a fictitious credit in another ; but when there is no such permission, or the fact of the beneficial ownership is notorious, the reasons for these enactments do not apply. (cZ) 5. The notice must be a notice to the company ; the mere knowledge of a shareholder, or when the office is a mutual insurance office, of one of the mutual insurers, is not sufficient, (e) Upon the receipt of the notice, the insurers, that is the company, are bound to take cognisance of it, and, if they do not, may become themselves responsible j but this being the case, it would obviously be a great injustice if a liability could be founded where no authority to create the responsibility is given : hence the notice, to affect the company, must be given to the directors or managing partners, who are duly authorised to conduct its affairs, or to some agent by the constitution of the company appointed to act for them in this respect; but notice to an agent will not affect the company, unless he is duly authorised to receive it. Notice served upon the board collectively is clearly good notice, for the board represents the company ; and a notice to an authorised agent is good notice, for he, in like man- ner, represents the company for this purpose. The principal officers of the company, such as the secretary or actuary, may be assumed to be its agents to receive notices : thus, where a letter was addressed to the secre- tary, by an equitable mortgagee, by deposit, in the following terms : — " Sir, I am holder of the undermentioned policies ^ and shall feel obliged if you will inform me what sum the office will give if they are delivered up to be cancelled, with the consent of the parties" — it was held that this was a sufficient notice. (/) But *the mere mention of the fact ni)(\A.-i of the assignment to one of the clerks upon paying the annual L J premium, it not appearing that such mention was intended as a notice, or was such as the clerk would think necessary to report to his principal, was held to be no notice to the office.(3') The distinction between a notice to an agent authorised and unauthorised for this purpose, is clearly ex- plained in a late case in the Queen's Bench. In this case, a creditor, consenting to advance a sum of money upon the security of (among other things) a policy to be effected upon the life of the debtor, gave directions to his attorney, who was an agent of the West of England office, to effect id) Edwards v. Scott, 2 Scott's N. R. 16Q, 1 M. & G. 962. e) Thompson v. Spiers, 13 Sim. 469 ; Martin v. Sedgwick, 9 Beav. 333. f) Ex parte Stright, 2 D. & 0. 314. g) Ex parte Curtis, 4 D. & C. 354;" Edwards v. Scott, 2 Scott's N. B. 266. 140 BUNYON'S LIFE ASSUEANOE. the policy, and which he ac'cordingly did in th« name of the debtor, but handed it over to the creditor without it ever having come into the pos^ session of the debtor. In an action to recover the sum assured from the office, the plea of the bankruptcy of the assured was raised j and the question thereupon was, whether the policy was in the order and disposition of the bankrupt at the time of his bankruptcy. The jury found that the agent did not mention at the head office, to those there conducting the business, that the creditor was the beneficial owner, but that the company had authorised their agent to receive notices on their behalf, and had thereby agreed that a notice to him should be as valid as a notice served upon them- at the head office. A verdict was there- upon found for the plaintiff. Upon a motion for a rule to show cause why there should not be a new trial, on the ground of misdirection, and that the verdict was against the weight of the evidence. Lord Denman, C. J., in delivering the judgment of the Ceurt, said: "It has been eon- tended for the defendant that a notice ought to have been sent to the head office, and that a notice to such an agent as the attorney was not sufficient; and Ex parte Henessey(A) was cited. But on referring to that r*20'ST ''*^^' '*■ *^PP6*''s *^^* *^^ I>ablin Company expressly forbid their '- J agents in the country to receive notices of assignments of poli- cies ; and therefore such a notice to an agent at Cork was void. But as the West of England Company are found by the jury to have given authle^' rity to their country agents to receive such notices, the case has na appli- cation. It was further contended, that the creditor communicated to the attorney in his capacity of attorney, and not as agent for the insurance office. But when the two capacities are united in one person, a notice re- ceived in one capacity, for the purpose of being transmitted in the other, is an effectnal notice in both capacities." (i) 6. It will be observed from the last case, that a formal notice is not required, much less a notice in writing: it is sufficient if the fact is com- muBicated.(^) It would also seem to be unimportant that any partictt'- lar form of notice or transfer is required by the rules or deed of settle- ment of the company j the rights of the assignee and the liability of the company d& not arise on contract, but fr&m the common principles of equity, which create a responsibility in any person who knowingly and deliberately participates in the wrongful act of another. Thus, when a mortgage of shares in an insurance office was made in a form different from that prescribed by the deed of settlement,, and the deed contained a clause to the effect that the company should not be bound by any trust or mortgage, and that the cestui que trust or mortgagee should have no rights but through the trustee or mortgagor, and that no transfer should be made but by a deed in writing in a prescribed form, and that in the case of a proprietor his assignee should be proprietor for all purposes, and no transfer was therefore made, but the following memorajidum was affixed in the office books : " Not to be transferred : see H. and Oo.'s (h) 1 Connor & Lawaon, 65. (i) Gale v. Lewis, 9 Q. B. 14:2-. (k) Tibbits v. George, 5 Ad. & B. 101; Smith v. Smith, 2 D. & M. 231. CONOEENING NOTICE. 141 netice." On the bankruptcy of the mortgagor it was held that a suffi- cient notice h^d been given. (A *7. The case of Gale v. Lewis(m)is moreover extremely import- p^on/.-. ant, as showing that the company may be affected by construe- L J tive notiee ; bat it is not very clear to what extent the principal may be carried, nor does it necessarily follow from the case that the knowledge of the agent wherever acquired would affect the principal. On the con- trary, the doctrine of constructive notice in its ordinary form of applica- tion requires that the notice should be given in the same transaction, or at least that it should have been received so shortly before the time at which the agent is acting for his principal,(m) that it must necessarily have been in his mind at the time, and hence a duty have arisen on his part to communicate it. In the case of Gale v. Lewis the notice was thus acquired, and it was the duty of the solicitor to communicate it to the company, and the mortgagee might assume that he would perform it. The present disposition of the Court is not to extend this doctrine j but it would be doing so far beyond its present limits to assume that the mention of the fact to an authorised agent at the time when he was not acting in his official capacity, and when the communication was not given to the intent that the notice should be recorded, would be notice to the company. 8. When the agent is himself the party pledging the policy, it maybe assumed that from the nature and justice of the case a general license to receive notices would not include notices respecting his own policy. The onus, moreover, of giving the notice is on the assignee, and his omission to give it to any other person than the assignor would seem to be ex- pressly within the doctrine of Dearie v. Hall,(o) that the neglect to give notice is giving credit to the assignor or borrower. And the same prin- ciple would apply when the agent was the assignee. His omission to re- cord the assignment would seem to raise an equal equity in favour of any subsequent incumbrancer, *9. Whether notice to a single director is notice to the com- r^^QA--, pany is not perhaps very easily determined. Notice to one of L -I several trustees is sufficient at least during his lifetime for all purposes, lor the fund could not be distributed without his assent; but this reason- ing does not hold good as regards a single director. In most cases, more- over, he would have no agency to bind the company by his individual act. Nevertheless, he is one of the managing body, and it may be as- sumed to be his duty to record a notice given for that purpose. In one case in bankruptcy,(j)) the bankrupt, being one of the directors of a life office, deposited his policy effected in that office with his bankers as a coUaterial security for advances, one of the bankers being one of the au- ditors of the assurance office ; and it was held that there had been suf- ficient notice of the transfer of the bankrupt's interest in the policy. This ease, however, it is submitted, cannot be relied onj the onus of giv- ing the notice lay with the bankers, and an auditor is certainly not the (l) Ex parte Masterman, 2 Mont. & Ayr. 211. (m) 9 Q. B. 742. (n) Sug. Vendors, p. 1043, 11th edit. (o) 3 Rus. 24. (p) In the matter of Baikes, 4 Dea. & Gh. 412. 142 BUNYON'S LIFE ASSURANCE. agent of the company for the purpose of receiving notice of assignment, even assuming that, if he were so, his knowledge in such a case would be constructive notice to the company. 10. Where a policy has been mortgaged to secure a particular sum, and notice has been given, it would seem proper that a fresh notice should be given upon a further advance between the same parties, to pre- vent a subsequent incumbrancer, who has notice of the first mortgage only, claiming priority over the further charge. But as regards the question in bankruptcy, it is not necessary that when a policy has been deposited by way of security a distinct notice should be given of each consecutive advance, and that notwithstanding a change in the firm of one of the parties prior to the later advances ; and ithe law would seem to be the same as regards successive liens, where the company has re- r*9n8l •'^i^®'^ ^ notice *that the deposit is to secure a running account. L -I When the policy is, moreover, pledged by a purchaser from the assured, it would seem that the ofiSce will still be the party to whom the notice should be given. These latter propositions appear to have been determined in a late case in bankruptcy. A trader deposited two policies with his bankers, with a memorandum in writing explanatory of the transaction, to secure a running account. One had been effected by him on his own life, the other, effected on the life of another person, had been assigned to him by the assured by way of mortgage only. Notice of the deposit was given to each of the insur- ance offices, but not to the mortgagor, of the latter policy. The deposi- tor then took his son into partnership with him, and the documents re- mained in the custody of the bankers, upon the understanding that they were to be a security for the balance due to them from time to time from the new firm. No further notice was given ; and the bankruptcy ensu- ing, the question was, whether the policies were in the order and dispo- sition of the elder bankrupt, except as to the debt due from him alone, at the time of the change of the firm. The Chief Judge of the Court of Review was of opinion, that, as to the first policy, although no notice of the variation of the agreement had been given to the office, it was never- theless not in the order and disposition of the bankrupt, that being effectually prevented by the prior notice rendering it impossible to deal with the policy without inquiries. (2) He also expressed a similar opin- ion without regard to the second policy ; and this would seem to follow, for no person could with safety deal with the mortgagor without inquiry at the office, and he would then ascertain the lien ; but there is some lit- tle difficulty in following the reasoning of the argument and decision, so Pj^„„Q., far as it rests upon the principal laid down in *Jones v. Gib- L -I bons,(»') which was a case of the transfer of a mortgage of real estate without notice. Perhaps it may be thought that the decision may stand without that authority. 11. An important question may be raised as to the duty of the insurers, in answering questions concerning the notices received by them, (g) Ex parte Barnett, 1 De Gex's Oases in Bankruptcy, 194. (r) 9 Ves. Jun. 410. CONCERNING NOTICE. 143 and giving information when inquiries are made by intending mortgagees or purchasers. The rule appears to be — (1), that it is the duty of the insurers to answer all inquiries made bona fide for this purpose ; (2), that it is not obligatory upon them to volunteer information, unless, from the terms of notice or inquiry, they are distinctly informed of a state of facts in which a pecuniary loss would be sustained by reason of their withholding it. The author is not aware of any decisions expressly in point in which insurance offices were interested, but the results appear to flow from the doctrine laid down in the very recent case of Mangles v. Dixon, in the House of Lords. (s) In this case, at the time of the execution of a char- ter-party, an agreement was signed, under which the owners became in effect joint adventurers with the charterers. The owner, without mentioning the agreement, assigned the charter-party (which was a chose in action assignable in equity only) to his bankers as a security : the bankers gave notice of the assignment to the charterers. A loss occurring upon the adventure, the question was, whether the assignees were entitled to the full freight, or whether the charterers were entitled to set off the share of the loss sustained : the House decided in favour of the charterers. Lord St. Leonard's, C, in delivering judgment, observed : " If there is one rule more perfectly established in a court of equity than another, it is, that whoever takes an assignment of a chose in action takes *it subject to all the equities of the person who made the assign- r-^n-in-] ment. The rule applies when there is no notice : the assignee <- J takes with all the liabilities of the assignor. He gives notice of the assignment. But when the notice was given, was it incumbent on the charterers to write back to the bankers and tell them of the additional document ? In the first place, who is to inquire and to take the trouble in these cases? Who ought to do that? Why, the person who ought to do this is, undoubtedly, he who is fixed with the liabili- ty. If he desired to remove that liability, he ought to have made due inquiry, and, therefore, prima facie at least, the loss ought to fall upon him who, having the duty to inquire, has not though fit to do so. He has no right to speculate whether he shall obtain an answer which may disclose circmstances which he is not desirous to know; and if there is to be a loss, the loss ought to fall upon him who, being subject to the liability, and having to remove that liability, if he can remove it, ought to inquire and does not inquire. I must take care to guard myself on this important point, as not for a moment meaning to say, that if that notice of the bankers had shown that they had been deceived, that they were advancing money upon a ground which they misunderstood ; and if the charterers had stood by, well knowing that circumstance, and had been silent, the result would have been the same : I acknowledge that the case would have been different. It would then have been incumbent upon the charterers to disclose the real circumstances of the case. It is certainly a new point. I admit that the books do not establish the rule ; but I think the principle perfectly clear that, when there is no fraud, (i) 3 House of Lords Cases, 702. 144 BUNYON's life ASStrRANOE. nothing to l6a4 to the oooclusioo ia the mind of the party who receives the notice, that the part^ who gives it has been deeeived, and is likelj to sustain a loss, I say it is clear that the former is not bound to volunteer iaformatioa. I conceive that eqni<^ wiU not require the party who re- ceives the notice impertinently ftlmost to interfere between the two parties r*0111 ^^'^ iiB,ve dealt behind his baclr, *and also have never made any L J communication to him, or even seen him on the subject. Is he to assume that a fraud will be committed V 12. As may have been gathered &om this and the preceding chapter, it is not optional for the company either to disregard or to register notices of assignment served upon them. After due notice it becomes a. quasi trustee for the assignee, or at leasti a depository with notice of a trust, and is liable in equity for any miseipplieatiou of the fund to which it is a party. This is a liability attaching upon the company, not in con- sequence of any peculiarity of insurance law, but arising from the ordinary doctrine of the Court. It may be illustrated by an extreme case lately decided at the Bolls, in which a woman prior to her marriage, being entitled to a sum of money in the hands of A. B., the same was assigned by the settlement then made to trustees, upon trust, when thereunto requested by the intended wife, by any writing under her hand, to call in and invest the fund, which was to be held by them upon the trusts of the settlement. Notice of the settlement was served upon A. B., and he was furnished with a copy of it, and thereupon gave to the trustees a promissory note for the amount. He subsequentiy, after many remon- strances oil his part against such an application of the trust funds, and after receiving written notices from the trustees xequiring him to make the payment, but without any request in writing by the wife to him or the trustees, paid the money in part to the husband and in part to the trustees, believing, »s was the £act, that they intended to advance it to the husband, by whose bankruptcy the kjrger part of it was lost : it was held, that A. B., as well as the trustees, was responsible as being a party to the breach of trust in the application of the fund.(«) And not only will the insurers be compelled by a Court of Equity to take tiotiee of the assignment, but even at law, where the action is brought by the assignee r!|coi OT *''^ ^^^ name of the assignor after proof of notice of the assign- L -I ment, the Court will refuse to allow a plea of release or payment to stand.(u) Hence, it will be observed, that it is at the peril of the company to disregard notices of assignment served upon it. There can be no doubt but that if it were to pay the sum insured to the executors c£ the deceased, having notice of a prior assignment or lien, it might be compelled to pay the money over again to the party having the better equity, and ■ that although the policy might have found its way back to the assured, and been delivered up to the company with a receipt by tke parties, in whom at law the right to sue and give a discharge was 18. An attempt has been made to escape from the liabilities thus (t) Andrews t. Bousfield, 10 Beav. 511. (u) Chitty on Contracts, 605^ 14 Jur. 931'. CONCERNING NOTICE. 145 arising, by insertiflg a clause m the deed of settlement or in tike policy, expressly to rebut them. And in one case in a private Act, amending the deed of settlement of a life ofiSoe, the clause was added to the provi- sions of the deed : the section of the Act was as follows : — " And be it enacted, that in regard of any poliey or annuity which after the passing of this Act shall be issued or granted by the company, the deed of settle- ment of the company hereinbefore recited shall be read and construed, and have force and effect, as if the following pr&viso had been inserted therein ; that is to say, ' provided always, that in all cases where any policy or annuity which shall be issued or granted by the company, shall either originally or at any time be or become subject to any trust or trusts whatsoever, the receipt of the trustees or trustee for time being shall, notwithstanding any equitable claim or demand whatsoever of the person or persons beneficially entitled to the said policy or annuity, be a good and sufficient discharge for the money which may become payable in respect of the said policy or annuity, and shall discharge the company and the mem- bers thereof from all obligation of seeing to its application, *or j-^n^ „^ from being answerable for its misapplication or nonapplication .'"(■«)'- -^ The effect of this section, it will be observed, is not to enact the clause in favour of thecompany, but simply to insert, quantum vaJeat, in the deed of settlement. It is extremely important for companies adopting such clauses that their true construction should be ascertained. If it is that they simply express the rule in equity when no notice is given, and all notices re- ceived are duly registered, no evil can ensue, and eases may arise in which they may be found convenient in practice. If they have a more exten- sive operation, it should be ascertained whether the trustees referred to include, as a class, trustees by construction of equity, such as the assignor of a policy upon a sale, or express trustees only, and to what extent the rights of the cestui que trust are bound by them. Taking the general case of trusts, as well constructive as express, it is clear that the assured is not entitled to stipulate that his receipt shall be a good discharge not- withstanding he may have assigned the policy, such a provision being con- trary both to justice and sound policy, and the rules forbidding a res- traint upon the alienation of property belonging to persons sui juris. Is then the office, in order to avoid futuie trouble and responsibility, en- titled to make it a condition previous to the issue of the policy, that such a provision shall be inserted in it, the effect of which is to make the assignor an express trustee for the purchaser, with an irrevocable power of giving receipts for the sum assured ? The rule that the purchaser can only claim, subject to the equities to which the policy would be sub- ject in the hands of the assignor, is obviously inoperative in this case ; for if this is an equity, it does not arise until after the assignment. Is it, however, a condition of the policy or term of the contract inseparable from it, so that the benefit of the contract can only be enjoyed subject to it? The reply to this appears to be *that although the insurers r*2l4l and assured may stipulate inter ee, the contract itself does not L J (») 12 & 13 Vict. c. VO, s. 35. (Local aad Personal.) JuiT, 1853.— 10 146 bunyon's life assurance. assume that the policy is assignable. That the benefit of it is transfera- ble arises from a rule of equity dehors the stipulations of the policy, and uncontrollable by them ; and the liability arising from notice is so equal- ly. This construction of the clause would doubtless be a surprise upon a purchaser, who should find that in the teeth, so to speak, of a notice from him, the sum assured had been paid to the vendor or his representa- tives. Its operation is very difierent from a receipt clause in a mort- gage which depends upon the right of the mortgagee exercising it; and if it is compared to that of the receipt clause in a settlement or will over- riding all the trusts contained in it, it is to be observed that when such trusts are created and the entire beneficial interest centres in one party, he can terminate the trust at his pleasure, so that its execution would be- come a breach of trust on the part of the trustee. Again, the com- pany, it is true, is not a trustee but a depositary only, while the as- signor becomes a constructive trustee for the purchaser. Now, it is clear that whenever a party paying money or conveying a legal estate so acts as to sanction any act by the trustee to the prejudice of the cestuis que trust, he thereby becomes a party to the breach of trust and is answera- ble for it,(M) according to the equitable rule that when an act is a breach of duty by the trustee, it is very fit that those who deal with him should be affected by an act tending to defeat the trust of which they, have notice, (ai) And, so far from its being the duty of the assignor to receive the amount assured, it is actually a breach of trust or fraud on his part to do so. Can then the office, having notice from the cestui que trust not to pay, — for such is the effect of at least every express notice of assignment, — make such a payment with safety, and can it be entitled r*91 fil ^^^'^^^ ^^^ creation of the relationship of trustee and cestui que <- J trust, but in anticipation of it, to stipulate that it shall be enti- tled to do so ? In the case of express trusts arising out of contracts to which the insurers are not parties, the same argument is in a great measure applicable. The power to give a receipt as against cestui que trusts flows from the contract under which they are entitled; but where -they are purchasers, the clause is no term of their contract, although it may perhaps be otherwise where they are mere volunteers claiming un- der the assured. The rule that every express trustee should have power to -give receipts, may be very convenient in many cases, but the principle has been most distinctly rejected by the legislature in the repeal of the 7th & 8th Vict. c. 76, s. 10. It is given to the Bank of England, but on public grounds, by act of Parliament ; and it may be thought that any attempts by a private company, when no such grounds exist to pass a special enactment in its own favour, must signally fail. The latter question may not be without difficulty, and the clause carries with it con- siderable weight, as having originated under the sanction of an eminent conveyancing authority, and having been very extensively used. The foregoing suggestions are therefore offered to the reader for his consid- eration, not as a statement of the law. The subject, moreover, would not have been dwelt upon at any length had the author not been informed (w) Angier v. Stannard, 3 My. & Keen, 571. (x) Balfour v. Welland, 16 Ves. 156. INVESTMENTS. 147 that an impression existed that suoh a provision relieved the insurers from all responsibility, so that some companies, relying upon it, have habitually neglected any registration of the notices served upon them. *CHAPTEK IV. [*216] CONCEENINQ ADVANCES BY INSTJRANOE OPFIOES, BY WAY OF MORT- GAGE UPON THEIR OWN POLICIES, WITH OR WITHOUT ADDITIONAL SECURITY. 1. Since it is the province of insurance companies to accumulate the savings of their members, we may next consider them in the character of capitalists, and that of a very important class. Uniting the resources of many thousand contributors into one fund, they are capable of carry- ing out transactions far beyond the powers of private lenders of money. Col'onial loans, when guaranteed by the legislature of this country, have been repeatedly taken by them ; sometimes an entire loan by a single society. Their importance to the landed interest, as affording the means of raising large sums of money upon mortgage upon the best possible terms, and with the certainty of honourable treatment, has been more than once acknowledged in debate in the House of Commons. It is, in fact, a case of frequent occurrence, that a great landed estate, burthened with a variety of incumbrances, many of them bearing interest, at a rate exceeding the current annual value of money, is retrieved, and its pos- sessor rescued from ruin, by the assistance given by an insurance office in paying off the accumulated charges, and capitalising them in one prin- cipal mortgage, at a moderate rate of interest. In one such case men- tioned in the books,(a) one of the numerous incumbrances was a mort- gage made to trustees, for securing a sum of 344,000Z., advanced by a number of private individuals in different proportions. In another, *whieh came under the notice of the author, the sum of 250,000?. p^^.. „_ was lent upon the life estate alone, the total advances exceeding <- J half a million of money. The company, moreover, while able to give the borrower the full benefit of a low rate of interest when occurring for a long series of years, being in itself unaffected by the hazards of commerce, is under no necessity of calling in its advances when a crisis happens in the money market ; but is content with a reasonable increase in the rate of interest to be paid. In some offices the interest upon their mortgages fluctuates with the price of consols. In such cases it is not, it is be- lieved, usual to encumber the mortgage deed with any stipulations to this effect, but the highest legal rate, viz. 5 per cent., is reserved, and the borrower trusts to the rule of the office, which is generally embodied (a) Darner Lord v. Portarlington, 15 Sim. 380, 2 Phill. 30. 148 BTJNYON'S HI'E ASSURANCE. in a clause of the deed of settlement, or in the bye-law of a general meet- ing.(6) 2. Life policies, moreover, form a very important part of a mortgage security made upon an estate for life or other limited period, or which is subject to any of those contingencies which, as we have seen, are usually insured against. Such securities are much in favour with insurance com- panies, since in them is, at the same time, found a profitable investment for their capital, and an extension of their business. They produce a higher rate of interest than fee simple securities, and justly so, for they are more difficult to realise, and some risk at least is run of the infringe- ment of the conditions of the policies, particularly when some of the policies are effected with other companies than that maiking the advance ; added to which may be taken, quantum valeat, the risk of the insolvency of the assurers. (c) The policies thus effected, unless covering a mere contingency, are rarely commensurate in existence only with a loan ; but, after its satisfaction, are more often treated as an investment, and J. „- el retained by the borrower to their termination *with the life of L J the assured. On the common case, where the mortgage is upon a life estate, and the remainder, either in fee simple or fee tail, is in the eldest son of the mortgagor, it is very usual, upon his majority, to charge the debt upon the fee, to obtain the benefit of a reduction in the rate of interest: but in such an event the policies are rarely surrendered j they become a family property, and ought, in justice to the remainderman, to be kept up. 3. When policies are effected for the occasion it is usual to do so in the names of the mortgagees, in order that, the legal interest being vested in them, they may the more readily compel payment of the insurance moneys when due. The mortgage-deed should, nevertheless, contain the usual receipt clause, rebutting any equitable lialsility to see to the applica- tion of the money attaching by reason of any notice of the mortgage security given to the office. When the policies are already in existence ■they should be assigned by a separate deed, to obviate the necessity of the production of the mortgage-deed, which is often of great length, and may become one of the title-deeds of the estate, or of separate covenants with the respective companies for its production. The separate deed, comprising the policies alone, will then, on the deaith of the assured, be d^osited with one of the companies, while the others will usually be satisfied with such a deposit and the delivery of attested copies to themselves. 4. The company making the advance will not, as regards the policy effected with it, be in a different position to the other insurers, but willte entitled to the full benefit of the conditions ; and if the premium is not paid the policy will lapse in like manner as if effected by a stranger to the mortgage contract ; neither will a subsequent demand of the premium revive the forfeited policy, unless followed by payment. In one case a court of equity declined to deprive the office of the benefit of the for- (b) See Appendix for form of auch a resolution. (c) O'Brien v. Lord Kenyon, 6 Bicti. 382. INVESTMENTS. 149 feitmre, although at the time of the death of the assured actions had been brought to recover the premium unpaid, *holding that, if there rjifo-iq-i had been a revival, it was neutralised by the refusal to pay. The L J death of the assured was, then, no bar to an' action for the principal and interest due.(cZ) 5. It may be observed that, formerly, advances of money upon the security of life interests were generally made by way of annuity, the annual payment being calculated at an agreed rate of interest, with the addition of the amount of the annual premiums necessary for insuring the life of the grantor of the sum advanced. It was then left to the option of the purchaser or grantee to insure or not. Sometimes it was expressly stipulated that an insurance should be efiFeoted, and a right to repurchase was given to the vendor ; but the great distinction between such transactions and mortgages upon life interests coupled with policies is, that in the former there is no personal liability attaching upon the person raising the money, except for the payment of the instalments of the annuity, while in the latter he is personally responsible for the pay- ment of the principal advanced. The cases in which annuities are now usually resorted to are those in which it is desired to evade the usury laws, and to obtain a higher rate of interest than that allowed by law upon real securities ; for the money not being a loan, and the principal being put at risk, the statutes of usury do not apply. (e) The Court will not in annuity transactions investigate the terms on which the annuity is granted, for the purpose of ascertaining that no more than the legal rate of interest is obtained, although if the terms are so extremely inadequate as to satisfy the conscience of the Court, by the amount of the inadequacy, that there must have been imposition or pressure amounting to oppres- sion, it will set aside the securities.(/) *In such a case this rule is not affected by the assignment of r^nnr.-x old policies to the purchaser, the object being to save in the L J amount of the premiums ;{g) nor by a covenant on the part of the grantor of the annuity to effect the policy and pay the premiums. (^) In these cases the policies were held to be the property of the purchaser on the death of the grantor without redeeming. 6. Keversionary interests are often proposed to insurance companies as securities, with an arrangement that the contingency, if any, should be covered by an insurance; but are objectionable, as providing no income by which the interest and premiums may be paid during the life of the tenant for life, — an objection poorly compensated by the power of sale which always forms part of such a mortgage-deed. A mortgage, indeed, in the usual terms is in such cases generally rejected, and the transaction takes the form of the sale of a reversionary charge, or of a post obit, or, where the borrower is the tenant for life only, of the sale of a reversionary annuity subject to repurchase at any time after it falls into possession, upon the payment of a gross sum specified as the redemption-money. Such transactions, as will be noticed in the next chapter, are liable to all Id) Edge V. Duke, 18 Law J. Chan. 183. (e) (/) Underbill v. Horwood, 10 Yes. 217. (g) [h) Holland v. Pelham, 1 C. & J. 5T5; In re K (d) Edge V. Duke, 18 Law J. Chan. 183. (e) Morris v. Jones, 2 B. & C. 232. ■ ~ " ■ "f- (5') Morris v. Jones, 2 B. & C. 232. In re Naish, T Bing. 150. 150 BUNYON'S LIFE ASBUEANOE. the hazards attendant upon the purchase of reversionary interests. When companies, however, make it a part of their business to grant annuities, it will very often be easy for them to carry out a mortgage transaction upon the security of a reversionary interest, whether vested or contingent, by granting a policy to cover the contingency, and an annuity sufficient to pay the intermediate interest both on the purchase-money of the annuity and the sum advanced and the premium of the policy, and taking a mortgage upon the policy annuity and reversion for a sum equal to the aggregate of the sum advanced and the purchase-money of the annuity. Such a transaction would recommend itself to the insurers, as enabling r*99n *'^^''' *° ^^ *their own terms without being subject to the rule of L -I equity requiring the purchaser of a reversion or reversionary sum to show that he has given the market price for it, and to the borrower, in that he would not only avoid the apparent sacrifice of a sale, but in comparing it with the sale of a reversionary charge he might find him- self the gainer by the right of claiming the policies as his property subject to the loan. It will, moreover, occasionally enable a company to secure the policy, its presumed object in such a transaction, notwithstanding that it may possess no power to invest in the purchase of reversions. 7. A practice has of late years sprung up among some companies of making advances upon the security of the bond of the borrower and two or three sureties, upon condition that he shall effect an insurance upon his life for at least double the amount advanced, depositing such policy as a collateral security. In some cases there is the further stipulation that the sureties shall also effect insurances upon their lives in the office of the lenders. Where the assured have occasion for life policies this may be one of the most economical ways of .raising money upon personal security ; but where the intention is to abandon the policies at the expi- ration of the short term for which alone the advance is generally stipu- lated to be made, such a transaction becomes simply the machinery for obtaining a higher rate of interest than 5 per cent, upon the loan. It is, however, altogether a question of intention ; and the excess is not very easily calculated. The insurance itself has, as we shall see, been consi- dered in a court of law as equivalent to the premium paid, and most offices repurchase their policies, so that the entire premium is not for- feited ; but the sum thus given for the surrender is rarely the true or mathematical value of the policy, and the risk for the short term of the loan, being that of the failure of a select life which has been tested by a medical examination, is much less than the average risk deduced from the tables, and therefore, even assuming the mathematical value allowed, rucoon-i tl's risk actually incurred, including the *right of continuing the L -I insurance, which might be rendered valuable by the deterioration of the life, is not equivalent to the ultimate cost of the policy. To the individual raising the money such nice calculations scarcely apply, for it is as onerous to him to purchase an insurance that he does not want as to waste his funds in any other unnecessary expenditure. This is the objection to the scheme. Losses must occasionally occur upon loans for which the security is solely personal, and these must be met by increased ADVANCES UPON POLICIES. 151 profits or a higher rate of interest. This is, of course, true in all trans- actions in which a higher rate of interest is paid than 5 per cent. The rate will always vary with the validity of the security, and hence politi- cal economists object in principle to the usury laws, which it will be remembered are now in force as to real securities only. The office does not differ from other lenders in this respect ; but as the article sold by it, namely, the risk actually run, is of some value to it, if not to the assured, it might be thought that upon such a transaction a higher rate of interest, and a smaller insurance, might be more beneficial to both parties. 8. In mortgages of real estate the question assumes another aspect; here, however insufficient the security, no higher rate than 5 per cent, can of course be required, and in such cases, as well as when the secu- rity is personal alone, it has been considered that it is not usurious for an insurance company to require that, as a collateral security, insurances should be effected to a greater amount than is necessary to secure the repayment of the loan. In a case in which this was decided it was said that, if the plea had alleged that the amount of the premium, after allow- ing for the risk, had, together with the interest on the money borrowed, exceeded 5 per cent., that would have raised a question fit to be left to a jury to determine j but that the insurance, being on the life of the bor- rower, was for his benefit rather than that of the insurance company, who had a risk in proportion to its amount, and must pay the sum insured on his death however soon it might happen. If *the agreement had rjicoooT been for an excessive amount of premium that would have been L J colourable, and would have raised the question whether it was corruptly made in order to evade the statute, (i) 9. This description of advance upon personal security is, it is believed, confined to a few companies ; it is a species of trading in money not usually contemplated by the deeds of settlement of insurance offices, and, without express powers authorising the directors to transact it, could not be carried on with safety by them : sucl} transactions would be breaches of trust on their part, in respect of which they would be personally lia- ble to make good all losses, and would not be entitled to set off against them the profits made upon the more successful portion of the business. 10. It is to be observed that, where a policy has been issued to a surety upon his own life, the company will not have any lien upon it in the absence of an agreement to that effect, although it may be entitled to set off against any claim upon such policy, while in the hands of the representatives of the assured, any moneys actually recovered against them upon the bond or other securities. A guarantee being a contract of indemnity, and not an absolute debt, a claim thereupon until the amount is ascertained, being in the nature of a claim for unliquidated damages, is not the subject of a set-off. (^) 11. It is also the practice of most insurance offices, and should be so, it may be thought, of all, to make advances to their insurers upon the deposit of their policies to the amount of their official value. Assuming (i) Downes v. Green, 12 M. & W. 491. (i) Pitman, Principal and Surety, 92. J52 BUNTON'S LIFE ASSURANCE. the solvency of the office, such a secnrity is the best that it can possess, since it always retains in its possession funds of greater value than it advances. In such a case it is conceived that the insurers are not justi- fied in putting the borrower to the expense of a mortgage-deed, but that a simple deposit, coupled with a memorandum of agreement expressing r*2241 *^*® object, is sufficient. This is more especially the ease where I- -< such advances are made on the understanding that the policy is to be the only security, and that no personal liability is to be incurred by the borrower, who is to have the option of relieving himself of the obligation at any time by the abandonment of the policy. This, it is believed, is the course adopted in practice by many companies, although, of course, where the advance is made without an express stipulation to that effect, it remains a debt due by the assured, and may be recovered from him, notwithstanding the lapse of the policy. The principal ad- vantage of a deed would be the covenant for the payment of the money j but it would seem somcvrhat hard that, in a case in which the official value of the policy is the measure of the advance, the perhaps uninten- tional discontinuance of the insurance should convert the claim which the estate of the assured might otherwise possess against the company into a liability to an action of covenant by it. The only danger against which it appears important for the insurers to guard, is the neglect of the borrower to pay the interest on the loan, while at the same time he pays the renewal premiums, thus exposing the company to the loss of compound interest on its investment. This may, however, be easily guarded against by an appropriate provision, or even by the simple remedy of reserving the interest at a high rate, on the uaderstanding that, if paid within a given time, a lower rate shall be accepted. To such a security the statutes of usury will not apply, notwithstanding that the assets of the company may consist in part of real securities; and it may be noted that this is not altered by the addition of a security upon any other personal property, not even of railway shares which are made personal estate by act of parliament. It is not moreover to be doubted that, when the policy is participating, an express clause providing for the accumulation of the interest would at compound interest be good : for, although such a stipulation is in most cases void, yet there are exceptions (■*99cn to *li6 general rule, when the transaction is between *partners,(?) ■- -1 or there are mutual transactions ;(m) and it is obvious that in this case the policy holder is a partner, and that there is an implied agreement by the directors of the company with him to accumulate all moneys paid into its coffers at compound interest, since, if this were not done, the company itself must eventually become insolvent. (l) Burbidge v. Cotton, 15 Jur. lOTO. (V. C. P.); Silver v. Barnes, 1 Blng. N. C. 180. ■ (m) Ferguson v. Fyffe, 8 CI. & F. 121 ; Bruce r. Hunter, 3 Camp. 469. REVERSIONARY INTERESTS. 153 *CHAPTER V. [*226] ON THE SALE OP REVERSIONARY INTERESTS. 1. In discussing the subject of investments as usually adopted by in- surance companies the purchase of reversions must not be overlooked. To such a purchase the ordinary rules as to the mutual rights of the contracting parties, do not apply ; but the case is beset by one impor- tant diflSculty peculiar to, and inherent in this particular contract ; namely, that an obligation lies upon the purchaser, at the time at which the re- version falls into possession, to show that he has paid a full and ade- quate consideration ; and the vendor has been held entitled to file his bill to set aside the sale, and call upon him to prove it. This rule, arising in the first instance from the protection thrown by the Court over expectant heirs, has been also extended to other persons selling reversion- ary interests. Hence great difficulty arises in supporting purchases of pro- perty of this nature. The same rule is, moreover, applicable when the purchase is of a reversionary sum in the nature of a post obit, as where the property upon which such a sum might be charged, is itself sold to a purchaser. 2. The point to be ascertained is, that there has been no fraud or im- position, either expressly proved, or implied from the inadequacy of the price J and this must be done by showing that the full value, or as it has been explained, that the market value was given. (a) A bona fide sale by auction is always sufficient; such *a sale, j-jj,„„-.-. it is said, being the means of ascertaining the value as nearly <- -I as possible ; for the sum that a thing will fetch in the market, is the sum which the thing is worth, and therefore negatives the imputation of fraud. But this principle, of couse, does not apply where the auction is used to cover a private bargain,(6) and post obits were in one case set aside where sold by auction, advertised to take place without reserve.{c) Where the sale is by private contract the whole question is opened ; no specific rules of valuation are laid down in the books, but every case has been ultimately referred to its own peculiar circumstances. 3. In setting aside a sale the Court will have regard to anything like oppression, or the absence of fair dealing, on the part of the purchaser j and even to the fact that the vendor has not had proper advice, as where the solicitor of the purchaser has acted for both parties; but even assum- ing that there is no positive fraud or evidence of improper conduct, the adequacy of the consideration must still be proved. The fact that the solicitor of the vendor is himself the purchaser, might alone be the ground for setting aside a sale;(c?) but this equity is not peculiar to sales of reversionary property ; and the same remark applies where the (a) For the anthorities proving these propositions, see Sug. Van. p. 314, et seq. 11th edit. (6) Shelly v. Nash, 3 Mad. 232, (c) Fox V. Wright, 6 Madd. 111. Id] Cutts v. Salmon, 16 Jur. 623, Ld. C; Shallcross v. Weaver, 15 Beav. 272. 164 BUNTON'S LIFE ASSURANCE. purchaser is in any fiduciary position towards the vendor ; as, for exam- ple, trustee for sale of the property. Where there are no objectionable circumstances, the question as to the adequacy remains simpliciter ; and the absence of any such circumstances does not render it unnecessary to prove it. In considering any such case, it must be remembered : (1) that the question is to be decided with reference to the circumstances ex- isting at the time of the contract, and not to the event; (2) that the state of the money-market at the time is to be duly regarded ; (3) that the r*298T ^°'"* will *weigh all the evidence produced, which will for the •■ -' most part consist of declarations as to the nature and state of the property, and the age and health of the lives upon which the rever- sion depends, and the opinions of actuaries and auctioneers or surveyors, as to the value. A distinction has been made between the opinions of actuaries on the one side, who have been supposed to have been able to depose only as to the theoretical value ; and those of auctioneers who have been sup- posed to speak of the appraised or market value, to approximate to which latter is the ultimate object of the Court. The opinions, however, of either class it will be found, are not received as positive evidence that the market value was any particular sum, the Court not undertaking to ascertain any such value; but are applied to the particular sale, to ascer- tain whether the consideration actually was, or was not less than the mar- ket value. ■4. With regard to the opinion of surveyors a difficulty has always been felt by the Court, which looks, it is said, " with suspicion at the evidence of value derived from the mere opinion of surveyors, unsup- ported by any other circumstancee :"(e) and Lord Lyndhurst once ob- served, that he had been so long accustomed to courts of justice, and to evidence of that desciption — ^he had seen so much of its flexible charac- ter, and its means of adapting itself to the interest of the party on whose behalf it was given — ^that he placed little reliance upon evidence of this nature. (/) Great pains have been taken to shew that the valuation of an actuary, or rather that the value, as it has been said, calculated by the tables, is not conclusive. It has been considered that, however true the principles upon which the actuary proceeds as regards average questions, the excep- tional conditions of the particular case may upset all his calculations. Such would be the infirmity of health of the tenant for life. Thus, in a r*99QT '^^^^ ™ *^^ House of *Lords now the leading case upon the sub- L -I jeet, the appellant, being in 1825, 43 years of age, and tenant in tail, subject to the life estate of his father, who was then 79 years of age, and being in great distress for money, in consideratoon of the two sums of 6000?. and 12,000?. paid to him in 1825 and 1827, sold two reversion- ary sums of 12,000?. and 20,000?., payable in the event only of his sur- viving his father, and charged them upon the reversion of the settled estate. Fines were levied and, in 1828, a recovery was suffered, with the concurrence of the tenant for life, subject to whose life-interest and a joint power of appointment the estates were limited to the appellant in (e) CockeU v. Taylor, 15 Beav. 114. (/) Small v. Attwood, You. 491. REVERSIONARY INTERESTS. 155 fee. On the death of the tenent for life, the bill was filed to set aside the sales of the reversionary sums ; and it was referred to the Master, to in- quire whether, under the circumstances, they were their fair market values, and, after examining six witnesses, actuaries, and auctioneers, he found that they were so. The report was confirmed by the Lord Chancellor in Ireland, and the decree by the House of Lords on appeal. The Lord Chancellor (Lord Cottenham), repudiated the idea that there was any such rule as that the Court has only to look to the value of the rever- sionary interest calculated according to the tables, or that Sir William Grant intended to lay down any such rule in Gowland v. De Faria. " Such a rule," he said, " would make it impossible for an expectant heir to dispose of his interest at all ;" that under it the lives are sup- posed to be of average value ; but the life in question might be extraor- dinarily good,(p') or an extraordinarily bad one ; one which is likely to last beyond the usual time, or the contrary ; and how, then, could it be right to establish a rule not applicable to the particular case, but apply- ing to a majority of oases collected together, and to make that r^nonn rule govern an individual case, to which it might not apply at L J aU?(A) 5. Assuming the lives, however, to be of a fair average quality, it has then been said, that it is perfectly well known that reversions upon sales, even by auction, fetch, on an average, only two-thirds of the sum at which they are valued in the tables. When, therefore, the evidence tendered was the valuation of an actuary, at the sum of 928/. 8s., and the actual price given was 630Z., the Court refused to set aside the sale. Chief Baron Alexander observed, he did not dispute Mr. Morgan's val- uation, but' the price put by the actuary could never be procured; in fact, the price set was the arithmetical value. Now, no man would part with his ready money, and all the advantages which his power over it confers, in exchange for a future interest, without some compensation beyond the dry arithmetical value of it. To set the bargain aside would be, in effect, to decree that no valid bargain for a reversion could be made, except by auction ; and he did not know how any other sale of such an interest could be sustained, unless judges proceeded on the same princi- ple as he did : this would be a very inconvenient restraint on the power of owners of such property. A private sale was, no doubt, sometimes an imprudent exercise of that power ; but in many situations, and under circumstances of no unfrequent occurrence, it was wise and provident. Every case should turn on its particular circumstances ; and he thought there were none in the present, which according to sound sense, or to any established course of precedent, affected it.(i) In another case where the bill was filed by the purchaser, the rever- sion appears to have been one-eighth of 25,132?. 17s. 6d., 3L per Cent. (ff) It would be a curious problem to be solved by the joint experience of the reversionary interest conapanies, how far the right of selection, as it is termed, exercised against them by the vendors and their connexions, overbalance the benefit derived from compulsory sales. (A) Lord Aldborough v. Trye, 1 Clark & Fin. 436. (0 Headen v. Bosher, 1 M'Olel. & You. 89. 156 BUNYON'S LIFE ASSURANCE. Consolidated Bank Annuities, and 3250?. Bl. per Cent. Reduced Bank Annuities, and 2000?. cash, receivable on the decease of the survivor of a gentleman of 62 years of age, and a lady of 65 years of age ; hut sub- r*23n ^^"^ *° * deduction of 3000?. cash to be raised on *the death of '<• J the gentleman. It was valued, on the part of the plaintiff, by Mr. Charles Farebrother, the auctioneer, at 530?. ; and by Mr. James Abbott at 500?. On the part of the defendants, by Mr. Charles Ansell, the actuary of the Atlas Life Office, at 847?. lis. ; by Mr. Morgan, the actuary of the Equitable at 855?. 8s. ; by Mr. Charles L. Hoggart, the auctioneer, at 94W. ; and by Mr. Wyatt, a laidi-agent and surveyor at 890?. These valuations assumed the stock at 56J and 56f per cent, respectively, the market price on the day of the sale. The two latter wiitnesses, however, were of opinion that, having regard to the aspect of the money market and the then state of Europe, the stocks should have been taken at 60, in which case their valuations were respectively in- creased to 1018?. and lOOOZ., the actual price given was 550?., and Lord Lyndhurst C. B. supported the sale. It turned out at the trial that the 2000?. was not included in the sale, and on this account his lordship thought that one-eighth should be deducted from the valuations. He said : " There are valuations on the one side making it 530?. and 500?., adding them together the sum is 1030?., which divided by two makes an average 515?., from which one-eighth being taken, reduces it to 450?. Then on the other side taking Morgan's valuation at 855?., and Ansell's at 847?., they make together 1702?., which divided by two makes the average 851?., taking oue'Cighth from which reduces it to 744?. ; so that the average on one side is 744?., and on the other 450?., which give 597?. as the average of the whole, or just 47?. more than the price actually paid." His lordship concurred in, and restated the opin- ion of Sir W. Alexander ; and laid great stress on the facts that the ven- dor was 25 years of age at the time of the sale, and had had the advice and assistance of his own solicitor ; that there had been no fraud and im- position on the part of the purchaser ; and that the case rested entirely on the adequacy of the consideration.(&) P^nqn-i 6. The Courts have not, however, fallen into the snare *of as- t J suming as a rule, that two-thirds of the actuary's value is the market value. On the contrary, the rule is, that the market value must be given, and the valuations are received as evidence from which it may be ascertained. This, as the true rule, may be deduced from the cases already cited ; hvA in a very late case it was laid down more distinctly, although it was applied with such strictness as almost to cast a doubt upon the possibility of any sale by private contract being supported. In 1846, Mrs. Edwards, being then 38 years of age, was tenant for life in reversion, after the decease of a lady »ged 74, of certain real estate at Keigate. In that year the reversion of one portion of the property, con- sisting in part of a pottery, was sold to the defendant for 250?. In 1848, the residue, consisting of a house and land let on lease for 21 years, com- mencing in 1840, was sold for 500?., and an additional sum of 50?, if {h) Potts v. Curtis, You. 543. REVERSIONARY INTERESTS. 157 the tenant for life in possession should die within 10 years. A bill filed to set aside the sale for inadequacy of value, was dismissed at the Rolls ; but was brought on again on appeal before the Lords Justices. Lord Cranworth considered that the preceding case of Aldborough v. Trye following the previous authorities, clearly established that the purchaser of a reversionary interest, or at all events, the purchaser of such an in- terest from an expectant heir, or from a person standing in the sitmation of an expectant heir, which he considered the plaintiff to do, was bound, if the transaction was impeached within a reasonable time, to satisfy the Court that he gave the fair market value for what he purchased. As to the first property evidence was adduced on behalf of the plaintiff, of two surveyors of experience, well acquainted with the property, who respec- tively valued it at 501?. 4s. and 841?. On the other hand, on the part of the defendatit, two London surveyors, Mr. Shuttleworth and Mr. Marsh, not being personally acquainted with the property, valued it, not as it actually existed at the time of the sale, but as a well secured annui- ty of the same yearly value as the actual rent, at 318?. and 321?. The •Lords Justices rejected the argument that some dedaotion should r^ooqi be made from their estimates, in consideration of the perishable L J nature of the property and its being out of repair, holding that the de- fendant could not abstain from examining persons of skill acquainted with the property, and then call upon the Court to made deductions from the estimates of those whom he produced, in consequence of their imper- fect information ; and remarking that according to his own witnesses the price paid, viz. 250?., was less by about 70?. than the fair market value, being a deficiency of above one-fourth of the actual consideration, de- termined that the sale could not stand. With regard to the second Jjroperty sold in 1848, the plaintiff's surveyors respectively valued it at 1100?. and 900?. Mr. Smith, formerly the actuary of the Eagle Com- pany, stated that the calculated value of the interest sold, treating it as a well secured annuity of 100?. per annum, was 870?. ; but from this he said one-third should be deducted, in estimating the probable result of a sale, making the true market value 580?. This deduction of one-third seems to have been made, on account of the loss of rent which might en- sue from the property remaining unlet, and the expenses of repairs and insurance, and other outgoings ; but he did not appear to have taken into account the probable rise in the rent at the end of 13 years from that time, in consequence of the property having then become more val- uable, as was proved in evidence in consequence of, among other thinga, the tenant's expenditure. On the other side, the same London survey- ors, valued the property at 475?. and 476?. ; but the defendant, not ap- parently relying on their evidence, stated that he believed the value to have been 580?.; "and if 580?. was the true value," said the Court, « the sum paid was still too small for the difference between 580?. and' 500?., with an additional 50?. payable On a contingency only, was not to be disregarded." Hence, upon the whole evidence, but without assum- ing that the true market value had been shown by the witnesses for the plaintiff, the Court held that the defendant had not, as he was 158 BUNTON'S LIFE ASSURANCE. r*9^4.1 *^°^'^^ *° '^°> shown that the consideration given was the true L J market value at the time of the sale, and that the transaction could not stand. The Court expressly repudiated the idea that it was deciding that no sale of a reversionary interest could be sustained, unless made by public auction ; but seemed to consider, that previously to such a sale the vendor and purchaser should concur in ascertaining from per- sons of complete skill, and having knowledge of the property and of all the circumstances likdy to influence the value, a well considered estimate of what the property would be likely to fetch on a sale, and should act on that opinion ; and that the opinion of an actuary was very unsatis- factory, with reference to the local circumstances likely to influence the market value.(Z) 7. It seems to have been assumed that the opinions of actuaries are mere quotations from the tables, and that they apply one Procrustean rule to all questions ; while in fact it is notorious, at least among actua- ries, that the tables will prove any result, according to the rate of mor- tality' and interest selected. On examining the cases it may be thought, that justice has scarcely been done to their opinions; but if so, it is sub- mitted, that the blame to a very great extent rests with the actuaries themselves.' Their custom has been, in replying to questions proposed to them to give a value, but to withhold their reasons for fixing it. In this respect they have followed the practice of auctioneers and valuers, who have been guided by their own practice in valuing other descriptions of property. The question in each case is thus reduced to a mere matter of opinion or guess, which is sufficiently justifiable when the subject valued is a chattel of a kind ordinarily sold by the valuer, but in the present case is not satisfactory. The opinion of an eminent actuary or valuer may satisfy the mind of the vendor at the time, but • cannot alone satisfy the Court; and indeed the remark of a learned judge - P^„„ ,-, as to the opinions of counsel, seems here especially Applicable ; L -I namely, that opinions are only eminent when they give eminent reasons. Were actuaries to follow the example of counsel, and not only give their opinions, but the reasons from which their conclusions are drawn, it may be thought that much greater weight would be given to them. The object, it will be observed, is to ascertain what the reversion would have fetched, or would fetch in the market ; which of course, as regards a past transaction, can never be proved absolutely. We can turn to the list of prices current, and find the value of corn or Consols at a particular day, and apply it to a disputed question ; but this arises from the fact, that of them there is a constant supply and demand; and that it can scarcely happen that the quantity concerning which the dispute may have arisen, would have been sufficient to influence the market. But with regard to a reversion or contingent interest, although • it may be assumed that it may always be sold at some price, yet that price must depend very much on the caprice of purchasers ; and unless the insurance offices and reversionary interest companies are taken into account, it is difficult to assume that there must have been a market at a (I) Edwards v. Burt, 2 De Gex, M. & G. 56. See Edwards t. Browne, 2 Coll. C. C. 100. EEVERSIONAKY INTERESTS. 159 fair price. Now, the opinions of actuaries are evidence of what might have been obtained, or might be obtained from such companies taking all circumstances into consideration, and are, therefore evidence of a market price, or at least a price in a particular market at the time. Any other valuation, indeed, can only amount to quotations of what the person giving them considered a fair price ; and if so, it may be thought that mere opinions can scarcely carry the same weight as the reasoning in mathematics of an actuary, when fairly stated. Por him, however, to give an opinion that may be acted on, he must also have the premises fairly stated. It is not sufficient that the annual income and the ages of the parties should be given ; the whole case laid before him must be correct, and he must draw his conclusions from the premises, giving, it may be thought, his reasons at each step. It can then scarcely happen but that, by a judicious application of the means at hand, a result rjnooo-i very closely approximating to the truth may *be obtained. The <- -^ life may be an exceedingly good one; let, then, a table showing the mor- tality among lives selected as of a superior class from the ordinary mass, be chosen : or the life may be infirm; let, then,, the measure of deterio- ration be ascertained by the opinions of medical persons, and calculation adjusted accordingly. This is done every day by the insurance offices, and the principle may be extended with the increase of scientific know- ledge. Again, the purchaser is entitled to some further inducement than the mere prospect of the return of his money with the ordinary interest. The very statement of this proposition suggests the remedy, in the calcu- lation by a higher rate, although what that higher rate should be, must of course depend upon the particular case. To apply a fixed rule, such as that of calculating on the ordinary rate of interest and then reducing the result one-third, is manifestly absurd, even assuming that some fixed rate is the ordinary rate, which is a mere assumption, for the ordinary rate, in fact, depends on the nature of the security. This will be at once seen, on applying such a rule to two cases where the amount is the same, but in the one the tenant for life is very young and in the other of a very advanced age, and then considering the relative proportions of the deductions as the compensation for the loss of the dominion over the money. A further allowance must be made for expenses, which form a very serious item in the purchase of small rever- sions, and are yet necessary conditions to realising the property. There is no rule to prevent the costs of the purchase deed being borne by the vendor.(m) The above remarks, it will be at once observed, apply equally to the opinions of persons of skill, such as the eminent London auctioneers whose names have been mentioned in the cited cases, although not call- ing themselves by the name of actuaries, since they would probably pro- ceed in a similar manner, and use the same mathematical formulas which would be applied by the actuary. 8. *It is to be especially remarked, that the property, where not p*9q7T a mere sum of money, and particularly where consisting of real L J estate, may be such that the annual income produced by it may be no (m) Sewell v. Walker, 12 Jur. 1041. (V. 0. B.) 160 BUNTON'S LIFE ASSURANCE. test of its value : the land may contain unworked mines of coal or other minerals ; it may be subject to a lease at an extreme or insufficient rent ; and property in the county or locality in which it may be situate, may have attained a very high saleable value. It is well known that the sell- ing value of land, apart from the question of interest, varies very much in different couBties. AH these queBtions should be taken into account, and without them the valuation of ike actuary is imperfect. 9. When the reversion is subject to the farther contingency that the tenant for life shall die without issue, or that there shall be no issue of any other person, the same rules will be applicable. Whether any indi- vidual will marry and have issue, is an event not easily reducible to cal- culation ; but this 'contingency will not prevent the Court from setting aside an unconscientious bargain, although no improper conduct may be charged against the defendant other than accepting the offer of the vendor at an under value ;(w) nor will the Courts, notwithstanding the difficulty, consider that as a rule, such a contingency is incapable of valuation. (o) Where the circumstances are such that the contingency is, in the opinion of the Court, of no value, it will disregard it; and when the parties have mutually acted upon the assumption that it is of a particular value, and agreed to reduce the value of the reversion in a given ratio, the Court will estimate the sum that should have been paid on the basis of that assumption. Thus, where a woman, aged 35 or 36, had been married 8 years, and had never had a child, and the contracting parties upon the sale of a reversionary interest, to take effect upon her death without issue, r*9!?S1 *'^^'^ °°* appear to have attached any importance to the contin- L -■ gency, Lord Cottenham, C, thought that the value of the rever- sion should be estimated with reference to the duration of her life oniy;(^) and in another case, the Court, observing that the probability that a bachelor of 63 will marry and have issue, depending upon the pe- culiar habits and disposition of the party and the accidents of life, is not the subject of estimate or calculation, but that when the contingency was discovered, the purchaser proposed to deduct one-half of the sum that he had offered, and that proposal was ultimately the basis of the agreement, referred it to the Master to inquire and state the value, first estimating the reversion as if not subject to the contingency, and then deducting one-half of the value in respect of it.(g') 10. Where a reversion was sold for an inadequate consideration, and subsequently by the purchaser for a full consideration, which was paid to him, and the vendor was prevailed upon to join in confirming the second purchase, it was held that he was entitled, notwithstanding such confirmation, to set aside the sale, which was allowed to stand as a secu- curity only for the money paid upon the first purchase. The second pur- chaser had neither himself committed the fraud nor benefited by it, but he was cognisant of it.(>') (n) Bowes v. Heaps, 3 Ves. & B. 111. h) Bootliby v. Boothby, 1 Mao. & Gor. 606. (p) Davies v. Cooper^ 5 My. & Or. 2H. (?) Baker v. Best, 1 Buss. & My. 231, (r) Addis v. Campbell, 1 Beav. 258, 4 Bear. 401. See Cockell v. Taylor, 16 Beav. 103. REVERSIONARY INTERESTS. 161 Hi And where the consideration for the sale was an annuity, and was considered by the Court to be inadequate on account of the then state of health of the purchaser, the transaction was set aside, (s) 12. When, the inadequacy of the price is the sole ground for the inter- ference of the Court, and the purchase is set aside, upon the principle that he who seeks *equity must do equity, the decree is, that the rj-Qqan conveyance shall stand as a security for the price and interest L J thereon,(<) and the suit is considered as in the nature of a bill of redemp- tion, and the vendor is charged with the costs of the suit ; but where there are special circumstances, and there has been a fraudulent abuse of influence by the purchaser, the plaintiff will be entitled to a decree with costs J (m) and if there has been no actual conveyance, relief will only be given to a vendor as plaintiff, on his repaying the money advanced, with interest ;(i)) but where the bill was filed by the purchaser for specific performance, and the alternative prayer of the bill was for the repayment of the deposit, and the bill was dismissed with costs for inadequacy of price, the Court refused to order the return of the deposit ;(w) the pur- chaser would, however, be entitled to recover the deposit in an action for money had and received. Although Equity will give the relief already explained, it will consider a great lapse of time a bar, notwithstanding that the term prescribed as a bar by the Statute of Limitations has not passed, (ce) 13. The rules, with regard to the adequacy of the consideration neces- sary to support the sale of reversionary property, do not apply to family arrangements, (y) although even here the Court will inquire as to the general fairness of the transaction, and that a child parting with any interest was aware of the effect of his acts.(«) But, at the same time, where an actuary is called in to adjust a settlement in a family on equi- table terms, it *does not seem that the value of a reversion r-s^nAn-i brought into the arrangement, should be ascertained, at the high L J rate of interest applicable when a sale is to be effected to a stranger ; the advanced rate as an inducement to lock up the money, does not seem to be required in such a case. 14. It will often happen that reversions offered for sale or as securi- ties for money, are the property of married women, in which case other important principles are brought into play, which it may not be out of place to glance at in closing this chapter. When such an interest has beed settled to the separate use of a married woman, she can deal with it as a feme sole, unless a restriction against alienation has been superimpo- sed; and unless the subject to be disposed of is real estate, and it is (i) Davies v. Cooper, 5 My. & Or. •274; Holman v. Loynes, July, 1853. (V. C. S. not yet reported.) It) But not compound interest. Gowland v. De Faria, 11 Yes. 20. (u) Bawtree v. "Watson, 3 Myl. & Kee. 339. (v) Lord Anson v. Hodges, 5 Sim. 227. (w) Kendall v. Beckett, 2 Russ. & Myl. 88. (z) Sibbering v. The Earl of Balcarres, 14 Jur. 753. (V. C. B.) (y) Aldborough v. Trye, 1 Clark & Fin. 436; Ford v. Stuart, 21 L. J. C. 514. (M. B.) (2) Boswell T. Mendbam, 6 Mad. 3T3; Hogbton v. Hogbton, IT Jur. 99. (M. R.) July, 1853.— 11 162 BtJNTON'S lilJFE ASSURANCE. necessary to ]pass a legal estate 'so as to bind her heir, 'in Which case a deied acknowledged, in a'ccord'ailce with tie jprOvisiohs of the Fines aiid Keooveries Act, becomes requisite. In this last caSe, as in all caSes of real estate, her mode of alienation is restrained, but not her power. When the property consists of personal est&,te, and there has b6eh h6 settlement either by deed or VHl, being unable herself to enter itltb St valid contract, a niiirried woman cannot dispose of it; but her hu^batidj who by thfe common law is bound to support his wife and pay all her debts, whether cofi'tracted before or duriiig the coverture, acquires an absolute interest in all the personal chattels and estate of which she ia actually possessed, or to which she is entitled at any time during the coverture. With this condition, that so far as regards her choses in action, they must be reduced into possessibn, in order to enable him to dispose of them in such a manner as to 'bind her kurvivihghim, although upbii her death such interests vest absolutely in him, subject only to thte obligation of taking out letters of administration of her estate. Hence, the reversionary interest of a itiarried woman in personal estate, being incapable of being redticed into possession, cannbt be'absolutely disposed of during the life of the tenant for life ; but the hnsband may assign his r*24.n °^™ Contingent *rights, arising in the form above mentioned; L J namely, his right of reducing the property into possessibn, and his right or chance of survivorship to a purchaser for value. To this restrictioii, lipo'n his right of alienation bf his wife's rever- sionary personal estate, therb is one exceptibn ; he may dispose of her reversibnary term of years, provided that it be such as may possibly vest in possession during his life, (a) When her annuity or Kfe interest is disposed of, th'e Court considers such part as may be enjoyed aftei^ her husband's death to be reversionary i(6) With regard to her nnsettlbd real estate, a married woman may dispose of it with the consent of her husband, Or without his consent where he is under certain diSabilities,(c) by an appropriate deed acknowledged under the Fines ahd Recoveries Act. And in like manner, of her interest in any money-fund subject to a trust for its investmenti in land or other- wise, and said to be fconvertfed in equity into real estate.(t?) Or of her sbiye of the prbduce of any real estate devised in trust fOr sale;(e) but it has be6n decided that her acknowledged deed will ttot p&as a sum of money to be taised out of rfeal estate at a future period Y/) Where, moieover, the property is equitable, that is to say, such that the husband cannot recover it in a Court of latf, the wife will be entitled to her e'quity to a settlement out of it, and to assert this right against both her husband and his assignees whether by deed or by act of law ; ib] Stiffe V. Everett, 1 My. & Or. 37, Ti&v. Lister, 10 Hare, 140. (c) Ex parte Taylor, T C. B. 1, see 1 0. B. 1^0; In re Barron, 18 L. J. 0. B. 243. (a) Duberly v. Day, 16 Jur. 581. (M. R.) i* " ■" " •■ " " ""^ ("I . . . (<;) 3 & 4 Will. 4, c. U, E. 11. («) May V. Roper, 4 Sim. 360, see 1 Jkrman on Wills, 537; Forbes T.'iAdatiiB, 9 Sim. 466; Briggs v. Chamberlain, 21 L. J. 218. (V. 0. W.) (/) Hobby V. Collins, 17 Law J. 2. (V. C. B.) See contra Siig. Real Property Stat. p. 420, referring to this case under the name of Hobby v. Allen, 20 La% J., 199, REVERSIONART INTERESTS. 163 and this she must do by application to the Court, which will settle the whole or apart of the property upon her and her *i83ue, exercising a r^nAq-i discretion as to the amount, and in the event of her death after •- "-' a bill filed and an order made, her right will survive to her children. (5') This equity will attach upon any reversionary property upon its falling into possession during the coverture, and upon the income of her real estate during her husband's life,(A) and even upon her trust estate in a term of years,(i) but not, it would seem, where she is entitled to a life interest only, which has been speeificstUy assigned by her husband to an assignee for value ;^^) and where the property becomes at any time such that the husband, by the exercise of a legal right, can transfer it, equity will compel him to do so.{Z) 15. When a reversion or any interest in equitable personalty is pur- chased, or any lien thereon is created, notice is necessary, as on the pur- chase of a policy, to rebut the doctrine of reputed ownership and to secure a priority over subsequent incumbrances. Notice should be given to all the trustees in whom the property may be vested, since if given to one of several, it will operate only during the life of him who has received it.(m) Not only may notice-be given, but when the property consists of stock or shares either in the Bank of England or any public company, whether incorporated or not, a writ of distringas out of ehancery,(M) or when the property consists of a fund in court a stop-order, (0) may be obtained to restrain a transfer. When there is no acting trustee to whom notice can be given, and th« fund consists of stock, the party first serving a distringas upon the bank will be entitled,(j)), and this would seem to give the rule as to all other funds, shares and choses in action. Where a fund has been paid into "court, and the trustee is r^^n a or, functus officio, the party first obtaining a stop-order will obtain <- J the priority, and where trustees having a Hen pay a fund into court witb- out stating their claims or obtaining > the security of a stop-order, th'Cy will be postponed. (2) But where notice has been given to trustees, and subsequently the sum is paid into court by them in a suit to which the assignee is not a party, he will not lose his priority; by negkctingi to obtain a stop-order, as against a, party obtaining a charge under a judge's order in one of the common law courts,{r) nor it would seem by a stop- order in equity. When a reversionary chose in action of a married woman has been assigned, a stop-order may be obtained, that during the life of the huslsand the fund shall not be transferred without notice to the petitioner.(s) When the property consists of a reversion in leal; es- tate, the doctrine of notice whether as regards the question of a,ppar«ot (g) 2 Spence, 488. (h) Sturgis v. Ghampneys, 5 My. & Cr. 9^. (t) Hanson V. Keating, '4 Haire, 1, and Bee post, Pt. 3, Ch. 1. h) Tidd' v.. Mster, 10 Har6< 1-40. h) Alexander v. Cana, 15 Jur. 51. (V. 0. B.) (m) Meux v. Bell, 1 Hare, 91. («) 5 Tict. c. 5. General Orders, 17 Nov. and 10 Dec. 1841, 2 Dau. Chanc. Pr. 2555, (0) 2 Dan. Ghaac. Pr. 2559. Ip) Etty V. Bridges, 2 Ton. & Coll. C. C. 486. (j) Swayne v. Swayne, 11 Beav. 464. (r) 'Brearcliffe v. Dorrington, 14 Jur. 1101. (Vi C. B.) (s) Morian v. Polley, 1 De Gex & S. 144. 164 bunyon's life assurance. ownership, or in fixing the priority of incumbrancers, does not apply j(A the first charge in point of time will have the priority, unless the second incumbrancer can obtain a transfer of the legal estate without notice. In- quiry should however be always made of the trustees, and except upon the personal integrity of the parties, a purchase or advance upon the se- curity of property of this description cannot be recommended. The title-deeds, it will be observed, are generally in the possession of the tenant for life. The latter remarks apply also to any security made sub- ject to a prior mortgage in fee. Where a mortgage was made with a power of sale, and the power was exercised and followed by the bank- ruptcy of the mortgagor, a preference was given to the assignees over a second mortgagee, who had neglected to give notice to the first mortga- gee, (m) [*244] *CH AFTER VI. EQUITIES ARISING TROM CONTRACTS OTHER THAN CONTRACTS OF SALE, OR THE CREATION OP LIENS, BY THE ASSURED. 1. When an insurance has been effected by one party upon the life of another, the latter independently of any contract has no interest in the policy. Such a contract may be either express, or implied from the acts of the parties. In such a case the want of an insurable interest in the assured, is a circumstance of which the insurers alone are entitled to take advantage. Its existence 'or absence is unimportant, as regards the person whose life is assured, except, perhaps in explaining circumstances from which a contract may be inferred. 2. Such questions, have very frequently occurred where insurances have been effected by creditors on the lives of debtors. Thus when a creditor insured the life of his debtor, and debited him in account with the premiums upon the policy, it was assumed that it was effected as a security for the payment of the debt, subject to which it reverted to the debtor ; and when the assured after the satisfaction of the debt from other sources, had received the policy moneys from the office, it was held that the executor of the debtor might recover the sum so received as money had and received to his use. (a) 3. A formal agreement is not necessary as evidence of such a con- tract, but there must be evidence ; and a fact which may be referred to pun.c-] some other object will not be *sufficient proof when standing L J alone. Thus, the payment of the first and certain other of the premiums by the debtor was not considered necessarily to raise any pre- sumption that the latter was interested in the policy. This was decided (<) Wilmot V. Pike, 5 Hare, 14. (u) Waldron v. Sloper, 1 Drewrv, 193. (a) Holland T. Smith, 6 Esp. 11. ETC. 165 in a very late case, in which a policy in the Scottish Widows' Fund Office was effected in 1840 by James Hardey, in his own name upon the life of his brother Sebastian, and the policy recited that James had de- posited a declaration setting forth the age of Sebastian, &c., and " that the said James Hardey had an interest in the life of the said Sebastian Hardey to the extent of that assurance." The first three premiums ap- peared to have been paid by Sebastian, who died in 1847, and it was contended that the policy was his property, and not that of his brother James, by whom it was effected. Sir J. Romilly, M. R. observed, " The policy was effected in the form usual where one person insures the life of another claiming an interest in such life. In the absence of any evi- dence, I should assume that the policy was the property of the person who appeared to have effected it, and that the allegation of his having an interest to the extent of that policy was a sufficient allegation. The plaintiff," he added, "upon whom the burden of proof of establishing that Sebastian was the owner of the policy lies, contends that if he es- tablishes the payment of these premiums by Sebastian, James must be held to be a trustee for him, in analogy to a principle established in cases where the purchase money for an estate is paid by one person and the conveyance taken in the name of another, in which case the latter is held to be a trustee for the former. In the first place (assuming, as I do for the present, that these premiums were paid by Sebastian out of his own money) I do not think that the analogy applies to a case of this descrip- tion. If a man buys an estate, for a sum of money to be paid down, it is very material for the purpose of ascertaining the owner of the pro- perty to see who paid the consideration money ; but if the estate be pur- chased for an *annuity, the same principle does not apply, until rjf.nA(i-i you ascertain by whom the whole annuity has been paid." L J ' " The presmption arising from the payment of the consideration money is liable to be rebutted by a great number of circumstances. The money might have been lent for the purpose of enabling the party to effect the purchase. Here there were various dealings and transactions between the parties, and it would seem to be a stronger matter to make the ownership of an estate depend, either upon what might turn out to be the result of taking some complicated accounts, or upon certain items of payment in the account, and which might possibly turn out to have been made by one person on behalf of another. In order to have enabled me, in this case, to ascertain the clear weight to be attached to these particular items, it would undoubtedly have been of great importance for me to have known the state of the accounts between James and Se- bastian when the policy was effected ; for if it should be true, as is alleged, that Sebastian owed James a considerable sum of money, it would not seem an unreasonable thing for James to effect a policy upon his brother's life for the purpose of making a good security. I have nothing to guide me with respect to these accounts; but assuming it to be proved, as I do, that the payment of the first and the two subsequent premiums was made by Sebastian out of his own proper moneys* I do think that that is sufficient to enable me to come to the conclusion that the policy belonged to Sebastian, or to rebut that which appears to be 166 bunyon's life assurance. established, prima facie, by the form and declaration upon the face of the polioy."(6) 4. We have seen, in a former chapter, that assuming that the payment of the debt will discharge the insurers as regards any policy effected by the creditor on the life of the debtor, the payment by the insurers will not discharge the debtor unless he is entitled by contract to an interest r*94-71 '° *^^ policy. Were it otherwise there would be little *inducer L -I ment to a creditor to insure the life of his debtor; since, while in the absence of any agreement he could have no right to call upon Mb debtor for an insurance, or for the payment of the premiums of a policy already effected, he would nevertheless be entering into a contract which the other would be entitled to adopt or reject accoiding as it promised to become a profitable transaction or the contrary. This reasoning holds good as well where the policy is effected on the, life of a surety as of the principal debtor. Thus in a case in Ireland where the mortgagee effected an insurance upon the life of the mother of the mortgagor, who had joined her son in a collateral bond as surety for securing the mortgage- money, and subsequently went into possession of the mortgaged premise* and received the amount insured from the office, it not being proved that there had ever been any arrangement that a policy should be effected as part of the security, or that the mortgagor has been charged with the premiums; it was held, upon a bill filed to redeem, following Humphrey v. Arabin,(G) that the mortgagor was not entitled to credit for the amount received upon the policy.(rf) Again in Henson v. Bfackwell.(e) The plaintiff and his wife in August 1831, assigned two reversionary choses in action of the latter — namely, the tenth share of an annuity for the lives of two persons, and the survivor of them, and the fifth share of a legacy, to the enjoyment of both of which she was entitled on the death of her father, to the defendant as a security for a sum of 3007. due to him from the plaintiff. It was provided that upon the death of either of the cestuis que vies, it should be lawful for the defendant to effect an insurance upon the life of the sur- vivor, and add the premiums to the mortgage debt. This latter provision Was not acted upon, but in August 1832, the defendant, without the privity r*94.8i "' knowledge of the *plainliff or of his wife, insured the life of L -1 the latter in the Norwich Union Life Office for the sum of 200?. which amount was paid to him upon her death in July 1835. The plaintiff thereupon filed his bill to redeem,, praying that the defendant might be charged with the amount received upon the policy, subject to the premiums and expenses paid by him. The Vice-Ohancellor (Sir James Wigram), however, held that the plaintiff was not entitled to the benefit of the insurance. This decision is unimpeachable, but the rea- soning of the learned judge who decided the case is not so obvious. It was assumed that if the defendant had an insurable interest, the Court would refer the policy, although silent upon the subject, to that interest; and that the plaintiff might have rights dependent upon the validity of the p'olicy, as a contract of indemnity, that the policy was intended to a Triston v. Hardey, 14 Bear. 232. (c) Ante, p. 26. Bell V. Ahearne, 12 Ir. Eq. Rep. 578. (e) 4 Hare, 434. Li:^NS FROM OONIBAOTS, E 1 0. 167 guard against the wife surviving the husband, in respect of which con- tingency the defendant had an insurable interest in her life ; but that risk ceasing with her death, the policy became void ; and the office having paid the money in its ov^ wrong, the plaintiff could not be entitled to the benefit of such a payment. It is, however, difficult to discover the insurable interest possessed by the mortga,gee in the life of the lady. The risk consisted in her living, and not ii» her ^ying ; and although the Vice- Chancellor remarked that, in the event of her surviving her husband, the policy would be the only security for the debt, this remark would have been equally applicable to a policy effected upon the life of any other person, although ^A entire stranger to the mortgage transaction ; or, to speak more correctly, the policy in such a case would not be a security for the debt at all, any more than the defendant's own balance at his banker's could be so. The lady would pot be his debtor, neither would he possess any property dependent upon her life ; from whence then could his insurable interest arise ? and in what manner could the policy b^ome impress,ed with the character of a security? The risk to *be insured against was evidently the contingency of the death r^nAn-i 0^ the husband before that of his wife, without having ^)een able <- -■ to reduce the share of the legacy into possession. Perhaps the explana- tion of the expression^ of the Vice-ChancpHor may be, that they were not intended to do more than enunciate that the Court will refer the policy to the insurable interest, and if it finds that interest bound by a trust, will not allow the trustee a pecuniary benefit derived from his fidu- ciary character. 5: In a late case in Ireland, (/), already mentioned, it was said that ex parte Andrews(5') proceeded on the ground that the party assuring effects the insurance from the interest which it is necessary for him to have, according to the stat^ of the law in England. The parties were trustees upon an express, trust, the contingent interest which was insured having been assigned to them in trust, payt^y for themselves, and partly for the creditor. They thereby got a title to effect the insurance, and the Court held that being trustees they could not be entitled to take the benefit of it themselves, because in any other character than that of trustees they could not have any right to insure. 6. This case of Hei^son v. Blackwell,(^) moreover, thus explained, must not be supposed tp decide that the failure or want of an insurable interest would entitle the part^J; who might happen to receive the sum insured from the office, to retain it for his own use, notwithstanding any rights arising from contract, or by way of frust, to which it might be otherwise subject in his hands. The case of Holland v. Smith would be a case in point to the contrary ; but the question would be decided by the general principle of the Court, th^tt where a man pays money from consciesntious mqjiives which he is not legally bpund to pay, such money shall be diArided £|,ccording to equity,(i) and *that the Court, rjKOKn-i although it will not, of course, enforce an illegal contract, will L J (/) Bell V. Ahearne, 12 Ir. Eq. Eep. 578. (g) 2 Rose, 410. (A) Supra. . (i) Aynsley v. Wordsworth, 2 Ves. & B. 334; Paget v. Gee, Amb. 198; Oldham V. Hubbard, 2 Y. & 0. 0. 0. 209. 168 BTTNTON'S LIFE ASSURANCE. not refuse to adjudicate upon rights arising out of such contracts, when, frcen an account stated or some other circumstances, it is unnecessary to investigate their origin. (A) 7. Questions of this nature have also repeatedly arisen upon the exer- cise of powers of repurchase in annuity deeds, where policies have been effected by the annuitants upon the lives of the cestui que vies. The vendor on his repurchase claiming the assignment of the policy as well as the release or reconveyance of the securities given by him for the an- nuity, the annuitant, on the other hand, claiming to retain the policy as his own property. Here, as in the more simple case of debtor and creditor, the point at issue is the existence of a contract respecting the policy. An annuity, as already remarked, will not be set aside for mere inadequacy of price, unless such as to be evidence of fraud, and the principal being put at hazard, the statutes of usury do not apply. There is, therefore, no tenable ground for contending that the annuitant cannot be entitled to more than the amount of his advances with legal interest thereon. Again, the effect of an 'annuity transaction may be, that the money advanced is to be repaid by instalments, continuing during the life of the cestui que vie, and composed partly of interest and partly of principal, and the annual premium of a policy for a sum equal to that advanced may be the measure of the annual return of principal, but without a stipulation for the insurance. The annuitant is under no obli- gation to insure, and if he does so, there appears no more equity to take away the policy from him on the repurchase, than there would be to compel him to refund the gales of the annuity, after deducting therefrom interest upon the sum advanced. (?) The reported decisions depend very r«9iin ™"^^ upon the circumstances peculiar *to each case; but it is sub- L -I mitted that on the whole they will be found to contain the fol- lowing general rules; namely, first, that where there is a sale of an annuity with a power to repurchase on payment at any time of the ori- ginal consideration, and no stipulation as to an insurance, or a mere power for the grantee to insure if he shall think fit, and that the grantor will appear at the office and do all necessary acts for completing the policy, the grantor on a repurchase is not entitled to call for the assign- ment of any policy which may have been effected. That there will be the same result when, in order to decrease the amount of the annuity, an old policy has been assigned in absolute terms to the grantee, or when there is an additional covenant by the grantor to pay any extra premiums for keeping on foot the insurance which may become payable by reason of an infringement of the conditions of the policy. Secondly, that if, upon the sale of an annuity, it appears to have been a term of the contract that any policy effected to provide for the return of the principal shall be assigned upon the repurchase to the grantor, then that he will be en- titled to such an assignment notwithstanding that the grantee may be under no obligation to effect the insurance, or to keep it up when effected. Thirdly, that if on the whole it appears that the transaction was intended as a security for money advanced, and the grantor is entitled to redeem (k) Taylor v. Sharp, 2 Phill. 818. (I) 2 B. & 0. 232, 1 C. & J. 575. LIENS PROM CONTRACTS, ETC. 169 the annuity, the policy, if effected with his concurrence, must be assumed to be a security for the debt, and will be transferable with the other securities on the payment of the principal, Interest and costs. When the purchaser takes the risk upon himself, it can scarcely ever be considered that the grantor can be so entitled to redeem, (m) At the same time it must be admitted, that the cases are not altogether so precise as to what may be considered a purchase and what a security, *as to render r^QSOT it always easy to arrive at a decision upon this point. The cir- L J cumstances of each case must be taken into account and due weight given to them all 3 for it will be remembered that equity gives effect to the substance of the contract rather than the form, and that assurances appa- rently absolute, may in effect be proved to have been given as securities only.(M) 8. Thus premising, it may be convenient to examine the cases in which upon the repurchase of annuities, the title to the policy has come under the consideration of the court. In the case of Law v. Warren, (re) it was held, that if a man buy an annuity at a given price, and a part of the bargain is, that a sum shall be allowed for the expense of an insurance upon the life of the grantor, the grantee may nevertheless either abstain from effecting an insurance, retaining the money for his own purposes, and thus standing his own insurer, or he may effect the insurance ; and that in the latter event the policy becomes his own property, and the per- son granting the annuity has no more right to call for the assignment of a policy upon a repurchase of the annuity than he has to require a sum equivalent to the value of the insurance, in case no policy has been effected. In this case upon the grantors electing to repurchase, and ten- dering the price and arrears of the annuity, but at the same time requir- ing an assignment of a policy effected by the grantee, it was held upon a bill to enforce payment of the arrears, that no evidence could be received on the part of the grantor to show that the transaction was intended as a security only, but that such relief, if obtained at all, must be by a bill filed by him to reform the conveyance, as not being in conformity with the intentions of the parties. And further, that if, as was stated to have been the case here, upon the treaty for the purchase of an annuity there occur this difficulty, that if there be a particular stipulation which, ac- cording to *the belief of the parties would, if inserted in the deed, rjifocqn render the transaction usurious, and by the omission of which the L -I grantor, trusting to the honour of the other incurs a risk, — that if they make their election, and omit such a stipulation, — the court cannot after- wards supply that which the parties themselves agreed to omit.(j3) In another case. A., under his marriage settlement tenant for life of real estate, in consideration of 500/., granted an annuity of Gil. 19s. 2d., charged thereon to B. for her life. The annuity was irredeemable, and secured by covenant as well as by the warrant of attorney of the grantor, and by the annuity deed, " in order more effectually to secure the said (m) Verner t. Winstanley, 2 Sch. & Lef. 394. See cases collected, Coote on Mortgages, pp. 16 — 21, 2 Spence, Eq. 624, et seq. (n) Sevier v. Greenway, 19 Ves. 413. (o) Drury, Ir. Eep. 31. (p) Lord Imham v. Child, 1 Bro. 0. C. 92. 170 bunton's life assurance. B. in the payment of the said annuity and in the repayment of the said sum of 5002:/' the said A. assigned a policy of assurance, effected by him upon his own life, to B. ; and it was provided that during the first year of the term the said B. should receive 50?. only ; " and that so soon as the said A. should give unexceptionable security for the payment of the said annaity," the said B. should be entitled to receive the annual sum of 507. o^ly, the sum of lili 19s. 2d, being the amonat of the insurance which was intended to be paid out of the annuity by B. until such secu- rity should be given. No further security was ever given. B. died, haviag received all the arrears of her annuity, and subsequently, upon the death of A., the amount of the insurance on his life became payable, and it was held that the insurance moneys were the property of B.'s re- presentatives. The Lord Chancellor (Sir Edward Sugden) considered that the assignment being to B., her executors, &c., "as her and their property for ever," was emphatically absolute, and that, although the amount of the premium added to the bOl. was to cover the infirmity of the security by reason of the ^ife estate of A. not being certainly com- mensurate with B.'s q,nnuity for her life, yet that the policy must not be considered as a security only. He added, " if the security contemplated rit^KA.-] ^^^ heen given, *fthe aid of the policy would not have been re- L J quired. The intention, then, was that the grantee should stand her own insurer for the 500L out of the 10 per cent. The annuitant would in the ordinary course of these transactions wish to secure the re- payment of her principal ; this the policy enabled her to do. It was assigned to, her absolutely ; it was under no circumstances to be taken from her ; but in the event provided, the amount of the annual premium was no longer to be paid by the grantor. The grantor stipulated that, as she chose to have the annuity for her own life, if he would give her a perfect security for it, he should no longer be liable to bear the burden of keeping the policy of his own life on foot ; but that stipulation still left in her the power to do so." This case is certainly one of difficulty j for an equable contract would have considered the policy as given in lieu of the security, by which it was to be replaced ; and had B. insured her own life, or otherwise provided for the return of the 5,00?. out of the 10 per cent., as the Lord Chancellor considered the contract to assume she ■ would do, she might in this case have been twice repaid the principal. The question, however, was, what was the construction of the deed as it stood, and what the intention of the parties as evidenced by it.(g') The view taken by the court that the additional instalment, either ap- plied ^s a premium or retained by the grantee, is a compensation for the decreasing value of the annuity, is further explained by another recent case in Ireland. A. and B. granted an annuity for their joint lives and the life of the survivor of them, and assigned to the grantee policies of assurance for 200?. upon the life of A., and for 700?. upon the life of B. A. died, and the 200?. insured was received by the grantee, and the gales of the annuity then falling into arrear, a bill was filed to raise the amount of such arrears. It was held that B, had no right to have the 200?. $et (g) Eavanagh v. Waldrop, 3 Jones & I^at. 214, I(IENS FROM OONTRAOTS, ETC. 171 against the arrears, but without deciding whether upon the repuuchase of the *annuity that sum must he taken as part of the consideration ^:^ocK-l money, since it was not compulsory upon the grantor to redeem ; ^ -i that the grantee was entitled to retain the 2002. as a compensation for the loss of the life, and the consequent decrease in value of the annuity. (»•) 9. In other cases evidence has been discovered of a contract entitling the grantor to redeem the policy with the annuity. In one of these A., a married woman, entitled to an annuity charged upon real estate for her separate use, and B., her husband, in consideration of 2275Z. assigned the annuity to C, and covenanted for its payment. The deed contained a clause empowering B., at any time after the expiration of seven years from the date thereof to determine and revoke " the assignment upon payment of the 2275/. and all arrears of the annuity up to the next (quarterly) day of payment immediately following the day of repayment, and all proportion of such annual and increased premium as thereinafter mentioned to be paid by her or them to the Hope Assurance Company if any should be so paid ;" and a proviso that, whereas A. had assured or agreed to assure the life of B. for the sum of 2275?., the annual preminm for which was payable in. advance at the beginning of each year, it was agreed that if such redemption shall take place at any time after the payment of the premium for the then current year, B. or his representa- tives should repay unto C. or her representatives " the full proportion and part of such annual premium as should have been so paid as should or might belong to such part of such current year as should be then un- expired." "Whether the said B., his heirs, executors, &e., should require the said policy of assurance to be assigned to him or them by the said C, her executors, &c., or whether he or they should not require the same." The deed also contained a covenant for the payment of all ex- traordinary premiums and expenses by B. Upon this deed it was held to be entirely free from doubt that the grantors of the annuity were enti- tled upon its repurchase to an assignment of the policy^ *and that r^ntia-i the stipulations above set out concerning the repayment of the L ^ J portion of the premiums proportionate to the unexpired time before the next payment of premium should become due, was evidence of the oon- tract.(s) In Hawkins v. Woodgate(^) there were two annuity transaptions, the terms of which were ultimately settled by a deed of arrangement between the parties. By this deed it was provided, that if the plaintiff should at any time thereafter during the continuance of one of the annuities (and there were similar provisions as to the other,) be minded to repur- chase the same annuity, and of such his intention should give one calen- dar month's notice in writing to the defendant, and should, at the expi- rjition of such notice, pay to the said defendant the sum of 2500?. (the original consideration,) together with all arrears of the said annuity, and a proportionate part of the growing payment thereof, and should also pay (r) Milliken v. Eidd, 4 Drury & Warren, 2T4. (o) Wjjliams V. Atbyjfs, 2 Jones & Lat. 653, (0 9 Jur. U3. (M, R.) 172 BUNTON'S LIFE ASSURANCE. all costs and expenses sustained by reason of any default in the payment of the said annuity, and all such extraordinary premiums and expenses as the said defendant might expend or be put unto in keeping on foot, renewing, or effecting any policy or policies of insurance for the afore- said sum of 25001. by reason of the plaintiff's going beyond the limits allowed by the conditions of policies then effected for that amount by the defendant; then that the said annuity should thenceforth cease and de- termine, and in case the plaintiff should at the time of making such a repurchase by notice in writing elect to take the policy or policies there- inafter mentioned, but not otherwise, the defendant would at the request of the plaintiff assign unto him any policy or policies which might have been effected on his life in respect of the said annuity,' and which might be then vested in the defendant or his representatives. And it was also provided that it should not be incumbent on the defendant to effect, renew, or keep on foot any such policy or policies as aforesaid, or at any P^nc^-i time after the completion of such *repurchase, without such elec- L J tion being made by the plaintiff as aforesaid to assign or make over such policies to him. The plaintiff gave notice of his intention to repurchase the annuity, and added therein that he elected to take the policies of insurance on his life then vested in the defendant, and pursu- ant to the provisions of the indenture of arrangement would take an assignment to himself of the same policies. The defendant claimed the right to surrender the policies to the office, for value, before the expira- tion of the month, contending that there was nothing to prevent him from so doing at any time before the actual repurchase, when, and not before, the election was to be declared. The Master of the Kolla (Lord Lang- dale) decided that though the defendant was under no obligation to keep up the policies, yet that the plaintiff had a prospective right in them. That it did not appear to him that the defendant had ever a right to sur- render the policies for profit, although he might decline to keep them up ; and that even if he had such a right before notice, it ceased as soon as such notice was-given, which must be considered a part of the trans- action of the repurchase. 10. In a very recent case, the law upon this subject was illustrated and confirmed, although a difference of opinion existed between the Vice- Chancellor (Sir J. Stuart,) and the Lords Justices in the Court of Appeal, as to the proof of the existence of any contract entitling the grantor to the policy. The plaintiff answered the advertisement of an attorney stating that he had money to put out at interest for a client, and in the correspondence which ensued, the terms of the advance were proved by the following extract from a letter of the attorney. " The tferms of loan are 81. per cent., besides insurance of your life. One or two guarantees also of undeniable responsibility and character, will be required. I should like a reply at your earliest convenience, as in the hope of our negotiation being final, I have discontinued the advertisement." The transaction was carried out by a bond with sureties for the sum of 400?.j r*2181 ^^^ * warrant of attorney to enter up judgment *for the same L -I amount. The conditions of the bond were for the payment of an annuity of 211. 9s. 2d. (being the amount of interest at 8 per cent. LIENS i-ROM CONTRACTS, ETC.. 173 on 200?. advanced, and the premium upon a policy then effected, payable during the life of the grantor by quarterly instalments,) and of all addi- tional premiums of insurance which might be occasioned by the foreign travel, &c. of the grantor, and for the redemption of the annuity on payment of the original purchase-money, and all arrears of the annuity, costs, damages, additional premiums of insurance, and other expenses up to the date of redeeming the same. The Vice-Chancellor, adverting to the fact that the bond was not inconsistent with the letters, and that it recognised the policy, considered that the latter was effected as a security, and that on the redemption the grantor was entitled to it. He also ob- served, "Now, on the one side or the other, we must find, not from ex- press contract, for there is none, except with reference to the obligation imposed on the plaintiff as to the policy, what, when the money was paid off, was to become of it :" and, remarking on the expiration of the insu- rable interest in the annuitant, and seeming to think that it would be kept alive in the grantor on the delivery of the policy to him, held, that there would be an implied contract in his favour, (m) This decree was, however, reversed on appeal: the Lords Justices laid down the law broadly, according to the current of the previous decisions, in favour of the annuitant. Sir G. Turner, L. J., however, is reported to have ad- mitted that the effect of the letters was that of a stipulation that the grantee would apply the money he received in respect of the annuity in effecting a policy on the life of the grantor, which admission, unless the author is in error, would seem inconsistent with the uncontrollable inter- est of the grantee in the policy.(«) 11. It not unfrequently happens, that where the title to *the r^ocq-i policy has become involved in a variety of conflicting claims, an L J application is made to the directors of the company to allow the policy to lapse by nonpayment of the premium, and subsequently to grant a new policy upon the same terms to the applicant. Specious arguments may be urged in favour of such a step, but it is one which the company can rarely be advised to take : the new policy, if granted to any one of the parties interested in the old one, would probably, by an application of the doctrine of the court as to the trusts of renewed leasehold estates, be considered subject to the like claims and equities as the former policy, of which, in fact, it would be a revival.(w) The arrangement itself might be considered as tainted with legal if not with moral fraud, and the company might be liable in respect of any claims of which it had notice; and the very transaction itself might be considered notice that there were claims. On the other hand, when a policy has lapsed by mistake, or at least without agreement or tacit understanding with the company, and both the legal and equitable rights to the renewal are gone, the revival of it, or the creation of a new policy of the same value in favour of third parties, as, for instance, in favour of the family of the assured, as a matter of grace or favour on the part of the company, (u) Gotlieb v. Cranch, IT Jur. 686. (V. 0. S.) (v) Gotlieb v. Cranch, 17 Jur. lOi. (Court of Appeal.) (w) Fitzglbbon v. Scanlan, 1 Dow. 261 : Tanner v. Alworthy, 4 Bea. 487. See Winthrop y. Murray, 14 Jur. 302. (V. C. W.) 174 BUN ton's life assurance. wblildj inithte dbsenoe of'ibollusionj'Crea-te no equity as against them, to bribg 'the pbliey into assets, oi" to rali^ve the lien 6t an incumbrancer upon the old policy. The regrant would opesate iu 'fef oUt Of those par- ties whom it was intended to benefit, (a;) [*260] *C HAP TEE Til. concerning the renewal of leaseholds for LtVtS OR YEARS THAT HAVE BEEN THE SUBJECT OF SETTLEMENT, AND THE APPLICATION OP POLICIES OF INSURANCE AS SECURITIES FOR RAISING THE RENEWAL FIJTES. 1. WhSn the entire ownership of renewable leaseholds for lives or years is vested in one person, common prudence dictates the setting aside of a portion of the annual ineome towards the pa;ymcnt, in the one case of the premiums of a policy upon the livefl of the eeStuis que vie, or, in the othier ease, to accumulate at compound interest, so as to form a fund for the future renewal, the amount reserved beiug proportionate to the leiigth of the term. When, however, such a property has been settled, and suceesSive' interests have been carved out of it, if there is no separate fund provided for the purpose, questions arise between those entitled for life and in remainder, whether' there -is in the particular ease any obliga- tion to renew at all, and, in the event of renewal, by vfrhom the expense is to be borne. In such cases the first point to be considered is, what are the pravisions of the instrument by which the leaseholds are settled •^whether they prescribe renewal expressly or by implieation; and if so, whether they J>&iiit'out the mode by which the expenses of the renewal are to be paid : for (!),■ property of tbis descriptiou may be given in such a mode as to indicate thktiit was not intended to impose any obligations to renew j and (2), the donor or settlor may so model his di^ositions as to throw the burthen upon 'all or any of those in whose 'fa-vour he has created- limitations of the estate; or (3), he may expresily charge the re- f^B-,-, newals upon the anniuaL income, to *bhe intent that they may be- L J come as it were incidents to the estate, prior tO' any beneficial en- joyment by the objects ofhis bounty ; or (4), upon the corpus, with the intent that the estate should be settled subject to the subordinate direc- tion that it is to Undergo a perpetual dimiaution, with a view to its being otherwise preserved. 2. The direotiODS of a settlor are of course invariably to be followed ; but jgreat difficulty oomtinually itrises, and more particularly when the settlement is testamentaify, in determiTjinjg w^hat construction is to be given to them; whether any particular provision is intended, or the questions to arise are left to the general rules of equity to determine. ^T ^^^^^y ™ possession *were bound to sustain the expenses of the L J renewals becoming necessary during their several periods of en- joyment; and on payment over to an incumbrancer of the tenant for life of the balance of the rents and profits, a provision was required, of a fund for securing the payment of fines and expenses of future renewals, in the event of their occurring in the lifetime of the tenant for life, which was done by insuring his life against that of each of the lives on which the leases were held. Not only was the income accruing from the lease- holds during the life of the tenant for life subject to these payments, but it was considered that the trustees might have paid them out of the gen- eral income of the whole devised estate ; which leads to the remark, that such an interest as is now under consideration may, as well as any other property, be devised subject to a condition which may in fact be more onerous than the value of the interest given may be beneficial, in which case the devisees will be bound to elect either to bear the burthen or to renounce any interest under the will. The case of Stone v. Theed(/) is one in which the charge was consi- dered to be upon the rents and profits as they annually accrued, and excluding the common construction, that a charge upon or gift of the rents and profits is equivalent to a charge upon or gift of the corpus, it was likened to the case of an estate requiring an embankment to be kept up to protect it, in which case the expense of keeping up the embank- ment would be a primary charge upon the income. The successive ten- ants for life were then made chargeable, on renewals taking place in their respective lives, in each case to the full amount of the receipts past and prospective of the particular tenant. When the amount of the fines was to be raised out of the rents and r*9fi4.1 P'^ofi*^) "'" ^y *'^^* ^^ mortgage, it was considered *that the expen- L J ses of renewal were primarily charged upon the corpus, and the tenant for life was not bound to contribute to the payment of the princi- pal of a sum raised by mortgage on the estate, but only to keep down the interest. (5') 6. The directions to raise suflScient sums out of the rents and profits, or by mortgage, have been considered not to indicate any particular mode of charging those entitled to the income. In such cases, as where there is a bare direction to renew, the general rule of the court is appli- cable. In forming this rule there were obviously two courses to be adopted ; namely, that provision should be immediately made for the gra- dual creation of a fund to meet future renewals ; or that provision should be made as the occasion arose, the expenses thereupon being borne by the then tenants for life and in remainder in proportion to the benefits derived by them from the renewal. The first course has at first sight much to recommend it, since the property would thus always remain in the condition in which it was devised by the testator ; namely, unencum- bered, and subject only to the charge of the renewals j but it is open to (/) 5 Hare, 451 in notis, 2 B. 0. 0. 243. \g\ Playters t. Abbott, 2 My. & K. 97. RENEWAL OF LEASEHOLDS, ETC. 177 this objection, that there does not appear to be any fixed principle upon which the tenant for life is to be charged before a renewal becomes ne- cessary, more particularly when the lives are old and deteriorated ; and it may be dismissed as having never been adopted. The theory on the con- trary appears to be, upon each renewal to look upon the property (that is, the further term or interest) ,as about to be purchased for the benefit of the settlement, and then to consider in what way the fine for renewal is to be borne.(A) In the absence of any express direction, it has been always held that the court would raise the necessary *funds by a mortgage of the es- r^nar-i tate, or would apply any other funds subject to the like limitations ; L J but some time elapsed before anything like an equitable rule was laid down as to the proportions in which the money raised was to be ultimately borne. At one time it was thought sufficient that the tenant for life should pay the interest of the mortgage; at another, that he should pay a third, and the remainderman two-thirds, of the fine j but such rules were obviously absurd, and are exploded. It is now clearly settled, that each party is to pay in proportion to the benefit he actually or de facto derives from the transaction. (i) It is, however, easier to lay down abstract principles of justice than to apply them; and in this particular instance great difficulty has been felt in practice in the application of the rule, which may be considered to have been settled by Lord Thurlow in an early case, when the leasehold was not for lives but for years. 7. In this case(A;) a tenant for life, not bound to. renew, renewed a term of which there were 12 years to run for a further term of 28 years, and died at the expiration of 9 years from the commencement of such further term. The question was as to the sum in which her estate should be recouped by the remainderman. " The Master," observed the court, " should take the sum paid by her for the renewal of the lease as the value of the term purchased — that is, of the term of 28 years, to com- mence at the expiration of 12 years. He should then consider the value of the term of 9 years after the existing term (viz. the 12 years), and what the term of 19 years after the existing term and the 9 years was worth ; and the latter is the proportion of the fine actually paid to be borne by the remainderman :" and on such sum he directed compound in- terest at 4 per cent, to be calculated. *Here there is an intelligible rule as regards leaseholds for r#na('-f years. The tenant for life is considered as purchasing at the time L J of the renewal a reversionary term, equal to that which he actually en- joys, and the residue of the fine is to be borne by the remainderman. 8. How then is the rule to be applied to leaseholds for lives? There appear to be four ways. The first, by insuring the life of the new cestui que vie for the amount of the fine, and compelling the tenant for life in possession to keep down the interest and pay the premiums upon the policy; the second, by estimating the probable benefit derived by the (h) Jones v. Jones, 5 Hare, 463 ; Huddleston v. Whelpdale, 9 Hare, 485. (i) White V. White, 9 Yes. 558. (k) Nightingale t. Lawson, 1 Bro. 0. C. 440. August, 1853 — 12 178 bunyon's lite asstjkancb. tenant for life or successive tenants for life and remainderman b^ the ad- dition of the new life, and dividing the fine in such proportions; the third, by waiting until the death of the tenant for life, and then estimating the proportions according to the result then experienced ; and lastly, by wait- ing until the lapse of the additional life, and estimating the term thereby gained as if an absolute term. Of these four methods the first alone recommends itself as possessing both simplicity and perfect justice. The burden of the fine is imposed upon the income during the term of the life of the new cestui que vie, and is borne by the recipients of that income in exact proportion to their receipts. It is also equally easy of applioationj however numerous the successive tenants for life. The second is equally fair, but it is liable to ' the objection that by it the parties paying the respective proportions of the fine undertake the office of an Insurance Company. For example : the tenant in remainder at once bears a proportion of the fine, although he may in the result either derive no benefit, or at least only the benefit of a subsequent re- newal upon more favourable terms, or may be benefited to a much greater extent than the value of the fine paid by him. It is also open to this further objection — that if the amounts to be respectively paid are to be calculated upon mathematical principles, they cannot be correctly ascer- r*9fi71 ^^ii'^^ except upon the assumption *that the life of the tenant for L J life is insurable upon the ordinary terms; that is, that he is in a state of health sufficiently good to make his expectation of life equal to that indicated by the tables at the age which he has attained : for if he is not so, although' an- approximation to the truth may be obtained in a case of chronic malady by assuming'- him to be of- a higher age;- yet such an assumption is altogether arbitrary, and in the case of a confirmed- and incurable disease seems to be altogether inapplicable. The new cestui que vie is of course always a healthy life. The first plan was adopted in the case of Greenwood v. Evans,rZ) but by consent ; the second in an earlier ease,(»n) in which it was referred to the Master to ascertain what proportions should be borne by the tenant for life and in remainder, and the decree was acquiesced in (but it does not appear upon what principle the Master's report was made;) and again, in the case of Reeves v. Creswick,(»i) in which the prindiple upon which the Master's report was made is clearly and accurately laid down. In that case the testatrix devised leases for lives to a married woman for her life, with remainder to l^er children absolutely. Upon the decease of the testatrix one of the oestuis que vie alone remained ; and, the chil- dren being infants, a bill was filed by the trustees, to obtain the sanction of the Court to a mortgage of the property^ and its direction as to the apportionments of the charge between the tenants for life and the per- sons entitled in remainder. The assistance of the actuary of an assu- rance office was called in, to ascertain the relative proportions. It was considered that, the period of enjoyment of the property by the tenant (I) A Beav. 47. (m) Allan v. Backhouse, 2 Ves. & B. 65. {«) 3 You. & 0. 0. 0. 115. 1 ETC. 11\) far life under each of th&old legges heiDig the joint duration. of her C|wn life and that of the then surying cestui que vie named in such, lease, and th^ period of her "enjoyment of the property under each corres- rjKQf.Q-] ponding renewed lease being in like manner the jojnt duration of l J her life and those of the new cestuis que vie, or the longest liver of them, the difference between the values of the estates for these two periods gave the benefit derived by the tenant for life from the renewals in question. The residue of the. increased value of the property neces- sarily expressed the benefit derived from the renewals by the children in remainder. The relative .proportions being thus ascertained, it was directed that a policy should be effected upon the life orthe tenant for life, for the amount which fell to her share, for the purpose of providing at her decease a corresponding portion of the fine charged by mortgage on the estate. The policy was then ordered to be assigned to t|;e, mortgagee ; and direfitiong were gixejdior.payitfg the premiums upon the policy^ and keeping down, the interest on the entire mortgage debt, out of the; annual rents and profits of -the estates. In reading this case it is impossible to fail to remark, that although the. principle .is correctly laid down, it is not so correctly applied; for the tenant for life paid, in excess of her sh9.re, the interest during her life of the share of the remainderman. We have observed that the Court will direct the raising of the money by a mortgage of the estate, in which case the interest of the mortgage- money must be paid out of the rents, so that the result is the same as if the money had been advanced by the tenant for life. The method we have been considering assumes that both he and the remainderman pay their own shares of the fine: if, therefore, , the former pays the interest of the share of the latter during his own life, his estate is entitled to compensation, as in Nightingale v. Lawsonj or the amount of his share should be at once decreased in calculation by a just estimate of the addi- tional burthen. This principle is clearly enunciated in a dictum of .Lord St. Leonard's in a very late case, wheii, speaking of the manner in which a sum r-^naa-i of money raised by mortgage, *by a tenant for life and remain- L J derman, should be divided between them. He said : " I should therefore conceive' that the father taking upon himself, as he was bound to do, the payment of the interest of the whole of the charge during the lifetime of the eldest son, would take such a portion of the money raised as would represent Ms life interest t/oitk that burtJieri) and the son would take that which would represent his interest to take effect after the father's interest, (o) Upon two late occasions, however, the principle of these cases has been disapproved. In Jones v. Jones,(p) there were both, leaseholds for lives and years; and Vice-Chancellor Wigram considered, that there was no distinction between them, and that the proportion and planner in which the tenant for life and remainderman were to bear the charge must be the same in both cases. "The rule," he gaid,,ffis, that the (o) Harrison v. Round, 17 Jur. 563. L. C. (p) 5 Hare, 465. 180 bunton's lite assueanoe. parties must bear the expense of the renewal in proportion to their re- spective interests in the estate." This, it is clear, is Lord Eldon's doc- trine; but the Vice-Chanoellor further added this construction: — "The rule," said he, " is, that the parties are to pay in proportion to their en- joyment; by which I understand their actual enjoyment to be meant, aud not an extent of enjoyment to be determined by mere speculation, or by a calculation of probabilities. If the tenant for life renews, if he has not the whole enjoyment his estate will have a lien for whatever ought to be paid by the remaindermen;" and when the renewal was by the latter or by a charge upon the estate, he held that the tenant for life should give a security for the sUm that he might eventually be liable to pay. In a still more recent case,(2') the doctrine in Jones v. Jones was com- mented on with approbation. A policy on the life of the new cestui que r*97m ^^® ^^^ heen approved, *as a proper security to be given by the L J tenant for life ; and on the case coming on, upon further direc- tions, the Court observed, "The object in these cases is, that the sum paid out of the capital shall be borne by the parties in proportion to the benefits they derive; and the security, therefore, is for the purpose of bringing back to the capital so much as the tenant for life has had the benefit of, leaving the rest to be borne by the parties who may succeed him ; and it is difficult to see how, when this amount would be payable on the death of the tenant for life, a policy of insurance on the life of another person could be a proper security for it. It may indeed be said that, if a fund be provided for the renewal, the remainderman would not sufier; but this is not the principle on which the order of reference to the Master was made, nor, so far as I am aware, a principle on which the Court has ever acted; and it is, in my opinion at least, open to very grave doubt whether it is a principle on which the Court ought to act. What the remainderman ought to bear is so much of the capital paid for the renewal as may not be paid by the tenant for life, in respect of the benefit he has derived; but the principle of this report would throw upon him not merely the interest of the whole capital, but the burden of keeping up a policy for the full amount. It was said, too, that the remainderman would himself be bound to give security, and that he would have the benefit of a policy at a less rate of premium in conse- quence of the early insurance of the life ; but whether this advantage would countervail the additional burden which might fall upon him, would be mere matter of speculation." It may be doubted whether this reasoning would prove satisfactory to an actuary; and, admitting it to be correct, it must still be asked upon what principle the calculation is to be made. Assuming the additional life to be in existence at the death of the tenant for life, after the expi- ration of a considerable term, in what manner is the amount to be paid by him to be estimated ? If he is to be taken to have been the pur- r«o7n chaser of a term absolute, equal *to that which he has enjoyed I- J the value of, the term may be more than the fine, leaving nothing for the remainderman to pay for the benefit he actually receives. If the remainderman is to be assumed to be the purchaser of an additional life (q) Huddleston v. Whelpdale, 9 Hare, T87. VOLUNTAET SETTLEMENTS. 181 of the age of the particular cestui que vie, when he comes into posses- sion he bears the risk of the deterioration of the life, which, when first named, will of course have been a perfectly sound and insurable life, but may then be in any state of infirmity. The Vice-Chancellor directed that the policy should be held as a security for what the tenant for life might ultimately be liable to contribute ; and, as it was a participating policy, the decree was doubtless correct; for the premium was not in this case the exact measure of the annual contribu- tions, but was in excess, the result of which, namely the bonus, was rightly held to belong to the estate of the person from whose payments it had arisen. As .to the proposition of waiting until the death of the cestui que vie to fix the proportions, such an arrangement (which has never, in fact, been suggested in practice) would be liable to this insuperable objection, that it might prevent the complete winding up of the affairs of a deceased tenant for life for a quarter or even more than half a century. 9. Difficult as the settlement of such cases as that now under conside- ration proves itself, it will not escape the reader that under the new Chan- cery statutes they are more likely to obtain a correct solution than for- merly, since their determination, instead of being referred to the Master and reconsidered in Court under the light of precedent alone, will now be settled by the judge in chambers, who will, it may be presumed, avail himself of that competent professional aid suggested by the Masters in Chancery Abolition Act, and call to his assistance a professional ac- tuary, (r) *CHAPTER VIII. [*272] VOLUNTARY SETTLEMENTS, WHEN SUPPORTED IN EQUITY. 1. It is one of the incidents of property, that the owner may give it away as well as sell it ; and it is clear, both on legal and equitable princi- ples, that a person, sui juris, acting freely, and with sufficient knowledge, ought to have, and has it in his power to make, in an effectual and bind- ing manner, a voluntary gift of any part of his property, whether capable or incapable of manual delivery, whether in possession or reversionary. A policy of assurance may, therefore, be the subject of gift as well as of sale. There are, however, two requisites to support such a gift; namely, first, that the circumstances of the donor should be such as to entitle him to make a transfer of his property ; and, secondly, that the gift should be perfect, or executed : it must not rest in fieri only, for a gratuitously expressed intention, or promise merely voluntary, is, in the estimation of the law, nudum pactum, and does not bind legally or equitably, (a) (r) 15 & 16 Vict. 0. 80, 342; Mildmay v. Lord Methuen, 1 Drewry, 219. (o) Kekewich t. Manning, 1 De Gex, M. & G. 188; Wain y. Warltera, 5 East, 10. 182 bunton's life assurance. 2. First, then, the circumstances of the donor must be such as to entitle him to make the! settlement. The policy of thei latir being to prjivent the voluntary transfer of pro- perty in sucb a manner as to defeat the just rights 6f' the creditors of the settlor, it was enacted by'the 13th of Eliz. c. 5, "that all and 6tery gift r*97m 01" alienation had'ormadfi tool" for any intent or purposes to delay, t J *hinder, or defraud creditors or others, shall, as against sUcb per- son or persons, be utterly void." A policy of assurance being a choSe in action, and not, therefore, prior to the 1 &' 2 Vict. 6. 110, liable to be taken in execution, a Voluntary settlement of such property was not, under the statute of Elizabeth alone, liable to be set aside as fraudulent; but Tinder that statute, taken in connection with the Insolvent Debtors' Act, (a) it was held to be so, as well as upon the death of the settlor, because the Creditors could then reach all' his personal property of what- ever kind.((;) And this is now thfe case in the preset state of the la,w.(d) 3. If a man in embarrassed' circumstatiCes,' and actually insolvent, makes a Voluntary settlement for the purpos'e of securing to his family that provision which he otherwise would be unable to Effect,' the settle- ment is clearly fraudulent within the meaning of the Act ; but in what manner the test of fraud will be applied is a more difficult question, and one which has been repeatedly before the Courts. In some cases it has been contended that any indebtedness' is a suffi- cient evidence of fraud ; in other's, that there must be actual insolvencyi[e) at the time of the settlement, or at least an inability to solve liabilities, such inability either existing at the time, or consequent upon the abduc- tion of the subject of the settlement from the assets of the settlor. The true principle, it is apprehended, may be collected from the very recent case of Skarf v. Soulby,(/) and was thus enunciated : that, in order to set aside a voluntary settlement under the IBth Eliz., it must be shown r*274T **'^** ^^^ settlor was at the time in such circumstances that ina- L -1 bility to pay his debts was actually existent or reasonably to be apprehended by him, so that a presumption may arise that the settlement was made with an intent to hinder creditors ; that indebted or not in- debted, and the extent to which the settlor was indebted, a,re merely evi- dence from which the Court will conclude that such a presumption does arise ; and that a trifling debt due at the time of the^ settlement and re- maining unpaid, if it W«re shown that the settlor was th6n abundantly solvent, would not be sufficient to set aside the deed. In this case, which' is exceedingly important in connection With the subject of this chapter, by an instrument dated December, 1842, and made between A. 'B., a married man,'of the'one part: arid C. D., of the other part,— after reciting that A. B. and C. D. had for seVeral years co- (6) Y Geo. 4, c. 57. (c) Noroutt v. Doda,-)Cr. & Ph. 100. Id) Sinis v. Thomas, 12 Ad. & Ell. 636. (e) Insolvency, aS regai'ds a trader, has been defined to mean that he is not in a situation to mal^e his payments as usual, and that it does not follow that he is not insolvent because he may ultimately have a surplus in winding up his affairs. Bayley y. Schofield, 1 Mau. &:Sel. 338 ; De Tastet v. Tavernier, 1 Keen, 161. (/) 1 Mac. & Gor. 364. VOLUNTARY SETTLEMENTS. 183 habited together, during which time C. T>. had had four children by A. B., who were then living, and that he had' determined to discontinue such cohabitation, and was desirous and had agreed to make such provision for C. D. and her children as was thereinafter mentioned, the said A. B. covenanted to pay unto the said C. D. an annuity during her life, and thereby assigned unto her two policies of insurance upon his life (the annual premiums of which he also covenanted to pay), to hold the same policies and the sums assured thereby upon the trusts and for the pur- poses therein mentioned; and it was declared that the moneys to be re- ceived on the policies should be invested in the names of trustees, to be named by the said A. B., upon trust, to pay the dividends to 0. D. for her life, and upon her death to divide the fund among her children. Upon the death of A. B. it appeared that his assets were insufficient for the pay- ment of his debts, and a bill was filed by the plaintiffs on behalf of them- selves and the other creditors to set aside the settlement. The bill alleged that no notice of the assignment was given to the assurance com- panies, *and that the policies were not handed over to the defen- r^oY^ii dant, C. D., until some time after the death of the settlor ; the <- J defendant, C. D., however, in her answer stated, that upon the execution of the settlement on the 7th of December, 1842, it, together with the policies, was handed to her by the settlor, and that she retained the same until after his death. No proof was adduced of the settlor's insolvency at the date of the settlement, or of any other debts owing by him than a sum of 200?. due upon an I. 0. U. to one of the plaintiffs, who was aij; that time in his employ, and deposited his savings in his hands, and a trifling sum for articles of household consumption supplied by the other plaintiff. Upon an appeal by C. D., from a decree of the Vice-ChancellqB of England, setting aside the settlement, the Lord Chancellor, — remark- ing that the existence of property at the time of the settlement, and no* included in it, amply sufficient for the payment of debts then due, would negative the fraudulent intention ; and that in Townsehd v. Westma- cott,(5') Lord Langdale put the rule upon its true principle, holding that it was not necessary to show insolvency, but that the mere evidence of some debt at the time of the settlement was not sufficient, and that, if he were to dismiss this bill, any other creditor might raise the question in another suit, — directed a reference to inquire what debts were owing by the settlor at the time of the execution of the settlement and at his death, and what at the time of the settlement was the amount of the settlor's property not included in it. 4. Where a settlement is voluntary, and, there being creditors at the time, it is on that account declared fraudulent, the property so settled becomes part of the assets, and all subsequent creditors are let in to par- take of it.(A) And it should seem, that the subsequent creditors rtovfin may *assert their rights as plaintiffs, (t) But it has been said L -I that a settlement will not be set aside, if it provides for the payment of debts existing at the time.(A:) j) 4 Beav. 58. In re Magawley's Trust, 6 De Gr. & S. 1. h) W" ~ - . - - . - ..... (A) Walker v. Burrowes, 1 Atk. 94. See 2 Atk. 600. (i) Williams's Exors., 638, citing Eichardson v. Smallwood, 1 Eoper, Husb. and Wife, 313, n. (c), Jacob's edit. (i) George v. Milbanke, 9 Ves. 194. 184 BUNYON'S IIFE ASSURANCE. 5. When the settlor is a trader, any transfer which is fraudulent within the meaning of the statute of Elizabeth is also fraudulent, and an act of bankruptcy, by virtue of the provisions of the Bankrupt Act: as is also an assignment to a creditor, where the consideration is a pre-existent debt, if made voluntarily, and in contemplation of bankruptcy. (?) 6. But when the settlor is not within the operation of the bankrupt laws, it has been held that such an assignment cannot be set aside. Thus, where a person indebted to insolvency assigned a policy upon his life, upon trust, that the assignee should receive the sum assured at his death, and thereout pay a life annuity to his, the assignor's, mother, who was a creditor to a greater extent than the value of the annuity, and the residue of the interest, together with the principal; after her death, to his, the assignor's, children, — ^it was held that he had a right to prefer one creditor to another, and that his mother was a purchaser, in respect of her debt, of the benefits of the settlement, both on her own account and the account of the children. (m) 7. In a case in which a voluntary post-nuptial settlement had been made by a person who was insolvent at the time, but of personal property of the value of 600Z. belonging to his wife, and the trusts of the settle- ment were for the separate use of the wife, for her life, with remainder to her children, — the Court ordered a moiety to be paid to the assignees of the husband, and the other moiety to the trustees of the settlement,(») in effect setting aside the settlement, or treating it as a nullity. P^„„i__ *8. And, secondly, the gift must be complete; the donor L J must not have reserved to himself any locus poenitentiae. We will then consider what will be a complete gift, and what a locus poeni- tentise, taking seriatim the methods of transfer, which, as we have already seen, are effectual when the consideration is a valuable one, namely, declaration of trust, assignment by deed, or mere contract whether by writing under seal, or under hand only. 9. Where the grantee of a policy expressly declares himself a trustee of the moneys assured, the transaction will be binding upon him and his reprentativesj(o) and upon such a declaration of trust, a power of revo- cation may be expressly reserved.(p) In like manner, when the legal interest is vested in a trustee, the equitable owner may direct that the trustee shall become such for the person he is desirous to benefit. " You may constitute one a trustee for a volunteer," said Sir William Grant.fg') And where a chose in action is vested in trustees upon trust for such persons as A. shall appoint, the beneficial interest may be trans- ferred by an appointment without consideration. (r) A declaration of trust is considered in a court of equity as equivalent to a transfer of the legal interest in a court of law j and if the transaction by which the trust is created is complete, it will not be disturbed for want of oonsideration. {I) See Smith's Lead. Oa. 1 vol. p. 14, in notis ; Twyne's Oa. (ot) Grogau v. Cooke, 2 Ball & B. 230, and see Bastwick v. Caillaud, 5 Term Rep. 420; Nun v. Wilsmore, 8 Term Rep. 521; Lord Townshend v. Windham, 2 Ves. 6. (n) In re Wray's Trusts, 16 Jur. 1126. (M. R.) lo) James v. Bydder, 4 Bear. 600. (ji) Post, p. 29t. Iq) Sloane v. Oadogan, Sug. V. & P. App. 1119. (r) CoUinson t. Patrick, 2 Keen, 135. 'VOLTJNTAEY SETTLEMENTS. 185 10. Whether the declaration of trust or appointment is by deed or not is immaterial, unless a power has to be executed and the execution of a deed is a formality imposed upon the donee by the instrument creating the power, (s) The execution of an instrument under seal is, it is true, a more solemn act, and evinces a more decided intention than the signing of a mere memorandum ; #but no writing is absolutely necessary rs^jo-i for a declaration of trust may be by word of mouth only.(<) L J 11. It is clear that a direction to a trustee to stand possessed of the subject of the trust, for the benefit of a third party, if acknowledged and acted on by the trustee, will be effectual. («) Thus a person, having effected a policy in his own name and upon his own life, assigned it to a mortgagee, who thereupon wrote a letter to him, at his request, acknow- ledging that he held the policy as a security, and concluding as follows : " Apd in the event of your death, and after the recovery of this insu- rance from the above-mentioned office, I hold the remainder at the dis- posal of Mrs. M. T. Magawley, of Cadiz." This letter the assured sent to Mrs. Magawley, inclosed in one of his own explaining the arrange- ment. Upon his death the mortgagee recovered the amount insured, and invested the residue, after satisfaction of the debt, in the name of himself and another as trustees. This amount was claimed by creditors, and it was held that there was a good declaration of trust, subject only to the rights of the creditors at the time that it was made.(u) 12. And when there is no person previously constituted a trustee, a direction to a debtor or person liable to pay a sum of money, to stand possessed thereof upon trust for a third party, when assented to or acted on by him, will be sufficient to raise a trust in favour of a volunteer. Thus, in the case of JIcFadden v. Jenkins,(io) the testator, Thomas Warry, had lent a sum of 500^. to the defendant, Jenkins, to be returned within a short period. Some time afterwards Warry sent a verbal direction to Jenkins to hold the 500?. in trust for Mrs. McFadden. This he assented to, and, upon her application, paid her a. small sum, 101, as part of the debt. The question was, whether such a *transaction r^nwq-i was binding upon the estate of Thomas Warry. Lord Gotten- L J ham, C, observed : " Some points were disposed of in this case which are indeed free from doubt, and appear not to have been contested in this court, viz., that a declaration, by parol, is sufficient to create a trust of personal property; and that if the testator had in his lifetime declared himself a trustee of the debts for the plaintiff, that, in equity, would perfect the gift to the plaintiff, as against the testator and his estate. The distinctions upon this subject are undoubtedly refined, but it does not appear to me that there is any substantial difference between such a case and the present. The testator, in directing Jenkins to hold the money in trust for the plaintiff, which was assented to and acted upon by Jenkins, impressed, I think, a trust upon the money which was complete and irrevocable. It was equivalent to a declaration by the testator that the debt was a trust for the plaintiff. The transaction bears no resemblance to an (s) Sugden on Powers, 252—280. (i!) M'Fadden t. Jenkins, 1 PhilL 157. (u) Bentley v. Maokay, 15 Bear. 12. {v) In re Magawle/s Trust, 5 De G. & S. 1. (w) 1 Phill. 157. 186 bunton's life asstjeanoe, undertaking or agreement to assign. It was in terms a truSt, and the aid of the Court was not necessary to complete it." 13» In all these Cities, it will be observed, a trust was expresssly con- stituted j -but thfefe is tio magic in the words "trust or trustee," and therefore a written declaration of trust, if madediverso intuitu, and un- eommunicated to the cestui que tinist during the life of the donor, will hot be operative as a settlement, (a;) Where a policy haS been assigned by deed, and the legal interest in such policy is vested in a trustee, if notice of the aasignmeht is given to him by the assignor, aiid he acknow- ledged the interest of the' assignee, this will bring the case into the prei ceding class. The mere fact that an assignment has been executed can- ' not prejudice the assignor,' but a trust will have been oonstituted.(j/) A debtol', moreover, ^r depositary*, and such is the position of the insurers', r*2kVii "^^y ^^ ^^^ towards *the assignee as to raise a trust or Oreate an l.T' I J obligation ' towards him; although what would be sufficient for this purpose does not seem to have been and to bb very easily deter- mined. But such acts must have been at the inistahce of the original owner, (is;) for no recognition or- act of a depositary can vary a contract. 14. Where there is ho express declaration of trusfr, or constitution of another as trustee on the part Of the donor, but the policy has in form been assigned by deed or written agreement, the question becomes one of great doubt and difficulty. In one class of cases it has been held that an assignment by deed must be considered effectual when communicated to the trustee or oestni que trust, and especiailly where the deed is in the custody of the trustee or aSsigiieey and the pdlicy has also been handed over and -notice given to the office. All, it has been said, has then been done which the nature of the subje(^t of the- gift will admit of, 'and tWe gift' is complete. In another class of eases,' however, it has been lield that such an assignment being void at law will -notbe completed in equity, and that, admitting that the Court of Chancery will compel the execution of a trust' when once declared, yet, in the absence of a valuable conside- ration, it will not raise a trust, or decree specific performance of an agree, luent, although tinder seal; and that an assignment 16 not equivalent to a declaration of trust. 15. In order to appreciate the difficulties of thfe case, it will be neces- sary to consider briefly the prinoijal decisionsi' In Fortesque v. Bar- nett(a) the grantee of a policy'assigned it to trustees upon trust for volun- teers, and covenanted to pay the future premiums, and handed over the deed to one of the trustees. He retained the policy,'which he afterwards surrendered to the office ; no notice having befen given of the assignment. r*9Sn ^'* '^' -'^^"'^j ^- K.; decided that'*the transaction was binding L • J upon the settlor,' considering that it was complete, and that nothing remained to be done by him. He observed, that if the trustees Field v: Londsdale, 13 Beav. T9. Bridge V. Bridgej 16 Jur.. 1031. (M. R.) Bell T. The London and North-Western Railway Company, 19 L. J. 292. (M'. E.) (a) 3 My. & Keen, 36, followed in Ireland, Blakely v. Brady, ^'t)ru. & Walsh, 311. VOLUNTARY SETTLEMENTS. 187 had given notice to the office, the settlor would not have been able to have defeated hia grant j and that the omission to give notice could not, in his opinion, affect th^ infant children. 16. In direct opposition to this 'ease, vie have that of Ward v. Audland.(6') W. W., a single man,' without children, being entitled, inter alia, to a policy of assurance upon his own life, by an ' indenture made between himself, of the first partj his niece, M. W., and her husband, of the second part; and J. ■W'.,'a3 trustee, of the third part; assigned to J. W., inter alia, all suins of money then owing to hiin, and all securities for money, and all other his personal estate, together with the mortgage-deeds and writings relating to the pretnises, upoii trust for himself (the settlorj) for his life, and after his death" upon trusts for the benefit of his two nieces and their childreii, and he covenanted for further' assurance. The deed was executed by the afettlor and trustee, and delivered to the latter ; but the policy and other' seeuri ties word not delivered td him, and no notice was given, either by the settler or trtistee, to the office. This settlor subseqtiently bequeathed the policy upon other trusts to the defeB- dant, whom he appointed his oxeiutor^ and by whom the sum insured was actually received from the insurance office. The bill was filed to establish the validity of the settlement. 'Ufton a reference to the Master, to inquire as to the property included in it, it was found that the policy was so in'cluded, and, further, that the testator's debts which had been paid amounted in the whole to a smaller sum thaii the value of the per- sonal estate not included in-tho settlement. On- the one hand, it was contended, Upon the authority of Fortescue v. Barnett, that, although the policy did not pasS at law by the assignment, effect would be given to it in equity ; secondly,' that,' whether or not the policy passed at law, *the assignee had a legal reihedy, as he was entitled tO' bring an r*2g21 action in the name of the party in whom the legal interest Was •- -• vested and which action a court of law would hot have ststyed or permitted the nominal plaintiff to interfere with ; and further, that if the transfer was incomJplete, the representatives were bound, by the covenant for further assurance, to perfect it, under which, to prevent circuity of action', the plaintiff had a legal 'remedy, and. that a court of equity would relieve, by giving the specific ' property^ instead of daHiageS for the loss of it. On the other hand, it was argued, that if the 'plaiiatiff had a legal right his remedy was at law, but that if th^ legal title was incomplete, it was firmly settled that a court of equity would "not interfere to assist a mere volunteer ;(c) and also that, without disputing that a voliiiitary 'covenant might be the Subject of a demand in equity, theeovenant was such that nominal damages Would alone be recovered at law. Upon these argu- ments, the following judgment was delivered by the Master of tile Rolls, Lord Langdale; "The intention Of the settlor at the date of 'the deed was to assign the property in question to the plaintiff (J. W.) absolutely, send to declare trusts to be executed out of the estate j wiieh, bytheagsigri- ment, was intended' to be vested in the plaititiff. The covenant appears .8 8 Bear. 202, 0. P., Oooper'a Kep. 147. Jeffi-eys V. Jeffr^s, Or. & Ph. 138; Meek v. Kettlewell, 1 Phill. 342, 1 Hare, 464. 188 btjnyon's life assukance. to me to have been entered into in aid of the form of the transfer, or assignment, intended to be made. Mr. W. intended to make a gift by assignment, and not to declare a trust to be executed by himself. Sup- posing the assignment to have been a complete and effectual assignment, there is not only no conflict, but no question. If the property was legally vested in the plaintiff he might have recovered it at law, and applied it on the trusts ; if the property was not legally and effectually vested in the plaintiff then, as the deed was voluntary, this Court could afford no assistance to the plaintiff in recovering it : and under these circumstances r*28m **'^® °°^y question between the parties is, what is the legal effect •- -I of the assignment. The debt (a mortgage debt had been also assigned by the deed,) and the policy of insurance are choses in action not assignable at law j and it is plain that the whole estate and interest of the assignor did not and could not pass to an assignee, and I apprehend that, in the case of a voluntary deed, neither the assignor nor his exe- cutor could have been compelled to permit the assignee to use his name for the recovery of the debt. The assignment was deficient, because it did not vest in the assignee all that the assignor professed and intended to pass, and no instance except the case of Fortescue v. Barnett has been produced, in which this Court has given effect to such an assignment." His lordship, after observing further upon that case, continued, " It appears to me that neither a voluntary assignment by deed of a mortgage debt, accompanied by a grant not specifying the particular estate ; but of all estates held in mortgage, and by a covenant for further assurance without delivery of the mortgage deed or notice to the mortgagor, nor the voluntary assignment of a policy of assurance retained in the hands of the assignor, and without notice given to the grantor {i. e. the insu- rance office,) though accompanied by a covenant for further assurance, can be considered as a complete and effectual assignment, to be acted upon and enforced by the assignee, without any further or other act, to be done by the assignor. On the whole I think that the plaintiff is not entitled to any relief, and that the biU must be dismissed, but without costs." 17. The Court of Chancery, it has been said, will exercise its jurisdic- tion where there is a trust, and the relation of trustee and cestui que trust has been created, but will not afford its assistance to constitute a volunteer cestui que trust,((Z) in like manner as in cases to enforce r*284.T *,and her, mother should, subject tp the life ipterest of the latter^ staad possessed- pf the funds- in trust for the purpose of- settlement, or for the trustees of it in th^t character." , In this case all those which we have referred to were -cited and-oom- mented on ; 'and not onl>y ^li^^au^u.^hwi^'Ccm^urring .with Eortescue v. Barnett, and which, while it pverjules Ward v. Audland, is a decision by a court of equal jurisdiction with that by which Meek v. Kettlewell aud MoFadfJen; y.,.^fenkins was decided ;,,but it may be opnsidered.aa express dLecJsion that an 4-ntetttiQn ^iearly epsprepsed, by ,ap iRatr,^m?n(;^u,i3^qr, seal, is equivalent to a formal declaration of trust. 20- It will also be material to considerj assuming, that a court of equity will not give effect, to the assignment by specially performing the contract, whether the value of th.e pplioy can be recovered at law as dam- ages upon! the covenants- in the deed, i either implied, as from the, use of words of assignment., ox expressed, as where there are the usual, cove- nants for title and further assurance, and whether- a similaj* relief can be obtained by the volunteer in any •procieedings in equity, as in a, suit fpr the administration of the estate. of the settlor^- . In an action, then, upon the covenant for -further assurance contained in the deed which was the. subject of the suit in equity in Ward. v. Audland, it .was held that dam- r*9871 ^S^s could not, be recovered ;(o) and in *like manner it , has been L J decided that a court of equity will not practically- give effect to an assignment which fails as such, by decreeing satisfaction of the cove- nants of the donor.(j3) . In the case of an impljed; covenant, it -has been, held that there is no ground of relief, where the grantee never had any property in the subject of dispute.(2) And where a settlor,, having no power of revocation, attempted, ineffectually to vary a valid settlement,, the donees under the second deed were held, to have no claim against the assets of the settlor.(»-) And. in a very recent case before Sir R. Kindersley, V. C, it was held that the voluntary assignee of a debt from a person deceased could not maintain. a, suit for the administration of the estate of the deceased. " To entitle the plaintiff , to sue," said the Vic«- Ghancellor, " she must be a creditor ; and , she says she. is so by virtue. (i) 6 Ves. 656. (h) Sug. V. & P. 1119, 11th edit. ■ 3 My. & K. 36. . . (m) 1 Keen, 5&1. (») 2 Dru. & Walsh. 16 U. & W. 862; Pulvertoft v. Pulvertoft, 18 Ves. 93. >') Dillon T. Ooppin, 4 My. & Or. 653. (q) Saltern T. Melhuish, Amb. 247, and see 4 My. & Cr, 671. (r) Newton v. Askew, U Beav. 145. a VOLUNTARY SETTLEMENTS. 191 o£ the assignment. But an assigBment of ra chose of aetion dqea not convey any legal right. Intheiyiew pf the court of equity it operates only as an agreement ; and if jt is voluntary the court vyill not enforce! it at the suit of ike assignee against the assignor."(s) In opposition, however, , to these cases we have that, of Cox v. Bar- nard,(<) before Sir J. K. Bruce when Vice-Chancellor. , There had beea a volunljary assigi^ment by deed of a policy, with a covenant for further assuranee, the trusts in favour of the volunteers being declared by a deed of even date. It does not appear from the report whether the deeds and policy were lodged with the; trufitees^ who may, however, be assumed to have executed a trust deed. .In a suit for the administration of the estate of the settlor the case of Ward v., Audland was cited, and it was suggested tha:t the Court might give the parties claiming the benefit of the covenant the opportunity. of bringing an *aotion. r;|) but subsequent in- structions, or declarations, not connected with acts or declarations which took place at the time, *cannot be received in Qvidence.(w) De- r^oon-i livery of th^ deed to; a third person has been considered evidence ^t -I Sewell T. Moxsy, 2 Sim. N. S. 189. . 8 Hare, 310; see Williamson v. Oodrington, 1 Ves. Sen. 514. i) Watson v. Parker, 6,Beav. 288; Lomas t. Wright,- 2 My. & K. 115. (») Stratford v. Powell, 1 Ball & B. 14—21; Johnson v. Smith, 1 Ves.i314; Hill V. Gomme, 1 Beav. 540, 5 My. & Or. 250, x. {«>) Clavell v. Littleton, Prec. Ch. 305. 192 bunton's life assurance. of an intention that it should be absolute; (a;) retaining it in the hands of the donor, and non-communication to the donee, evidence of a contrary intention.(y) Very much must depend upon the circumstances of the case. If it should appear that the deed was kept by the donor only that he might secure to himself a locus poenitentiae during his life ; if he should die without having done anything indicative of an altered inten- tion, then it may be presumed, observes Mr. Spenee,(2!) the act would be considered as consummated and complete as against all persons claiming as volunteers under the donor. 23. From the preceding examination of the cases it will be seen, that it is impossible to reconcile them j but upon the whole it is submitted, that the better opinion is that acted on in the cases of Kekewich v. Man- ning, and Cox v. Barnard, and that the remark of a learned Judge upon another disputed point in a court of law is not inapplicable j namely, that in the latter cases, if there has been less science, there has been more common sense imported into the law. At the same time, in the last case decided upon this subject, the Master of the EoUs, noticing that Kekewich v. Manning was irreconcileable with the preceding cases, acted in conformity with the latter, (a) It will have been observed that the important points to be considered are, first, whether the assignment is by deed, with or without a covenant for further assurance. Secondly, whether notice has been given to the assignee, trustee, or cestui que trust. Thirdly, whether the policy and deed have been delivered to the assignee or trustee. Fourthly, whether r*9Qfn ^°*i<'^ ^^^ ''^^'^ given to the insurers. *Fifthly, whether when L J the legal interest is vested in a trustee for the settlor, notice has been given by him to such trustee. Sixthly, whether any act has been done, either by the office or such lastly mentioned trustee, as to amount to an effectual acknowledgment of the assignment. Upon these the following propositions are submitted to the considera- tion of the reader: (1.) That when the first five questions can be answered in the affirma- tive, the assignment is inoperative. Nevertheless, this cannot be consi- dered as beyond a doubt j and we may here remark, that the argument which has more than once been used, that the assignment must be com- plete because all has been done which the nature of the case renders possible, seems to. fall to the ground before the reply, that this is not so, for the donor might have declared an express trust, but did not. (2.) That in such a case the deed is binding upon the settlor, and will be en- forced against his estate where he surrenders with the concurrence of the trustee, or fails to keep up the policy, at least where there is a covenant for further assurance. (3.) That when the first question can alone be answered in the affirmative, the donor has reserved to himself a locus poenitentiae, and the assignment fails.(6) That while the continued secrecy or absence of communication is a sufficient evidence of intention (x) TJniache v. Giles, 2 MoUoy, 286; Cotton v. King, 2 P. W. 358. (v) Birch v. Blagrave, Amb. 264; Cecil t. Butcher, 2 Jac. & W. 5T3; Hughes V. Stubhs, 1 Hare, i19. (z) 2 Equity, 884. ' (a) Bridge v. Bridge, 16 Jur. 1031. (M. E.) (6) Antrobus v. Smith, 12 Yes. 39; Field v. Lonsdale, 13 Beav. 79. VOLUNTARY SETTLEMENTS. 193 on the part of the settlor to reserve to himself the power of suppressing the deed,(c) on the other hand giving notice to the volunteer (and for this purpose notice to the trustee might be of equal efficacy) would de- stroy any locus poenitentiae by creating a belief in the mind of the volun- teer of an act having been executed, upon which he might calculate in estimating his own engagements, very different from the expectation of a promised legatee, the gift to the latter being ex necessitate rei revoca- ble.(cZ) (5.) That the importance of the third point depends upon whether the continual *custody of the documents by the donor r^itnni -i is consistent with the provisions of the deed; that, if this is the ■- J case, no presumption will be raised of any intention on his part to reserve to himself a locus poenitentiae, but that if this is not so, and he retains no ultimate or other interest, the fact of his continued custody of the documents must be duly weighed, together with the other circumstances of the case, in considering how far the donor in executing the deed in- tended it to be a final and binding obligation upon himself. (6.) That the absence of notice to the office cannot be conclusive when the only question is, not as to the right of consecutive incumbrancers, but whether the donor is himself bound by the deed ; that as the notice might have been given, as was remarked in Fortescue v. Barnett, by the trustee, the omission on his part ought not to prejudice the innocent cestui que trust. (7.) That at the same time in every case an important argument may be raised upon the fact of notice, for, applying the doctrine upon which MoFadden v. Jenkins(e) was decided, it may be- said that the notitee ^s a sufficient direction on the part of the settlor, and that the registration of the notice by the office was a sufficient assent thereto ; that a notice by the direction of the settlor was equivalent to a notice by him, and that an assignment was a sufficient authority to the trustee or assignee to give it. Again, with regard to the assent of the assurers, it may be said that they are bound to give it : can they, or a trustee, the grantee of the policy, control the right of donation of the settlor, in whom the entire beneficial interest is vested? The solution, however, of this question, will doubtless be found to be, that upon the assent of the trustee or de- positary an express trust is raised, obligatory upon the latter as between him and the volunteer, and that this obligation, having been contracted at the instance of the donor, becomes equally binding upon him also ; that this direction and *assent, thus raising an express trust, p-nqo-i becomes a species of equitable conveyance, while the direction, L -I unless completed by the assent, may be a mere promise, void for want of consideration. 24. As in the case of an assignment. for a valuable consideration, notice to one of several trustees in whom a policy may be vested will be effectual at least during his lifetime. (/) 25. Assuming for argument the validity of an assignment by deed, we will in the next place consider the effect of words of assignment in a mere memorandum or unsealed writing. No case can be cited in which c) Sed vide, Fletcher v. Fletcher, 4 Hare, 67. d) See Money v. Jordon, 2 De Gex, M. &'G. 318. (e) Supra. /) Kekewich v. Manning, 1 De Gex, M. & G. 189; Meui v. Bell, 1 Hare, 73. August, 1853.— 13 194 bunyon's life assurance. an assignment not under seal has been supported as such, while there is express authority that such a gift is incomplete;(g^) It has, however) been said, that although it is a general rule of law that an intention or promise, where expressed in a deedj is binding at law as a covenant, and the consideration is immaterial) yet in equity, where specific performance of the covenant is sought, it stands scarcely or not at all on a better foot- ing than if it were contained in an instrument unsealed. (A) In the case of chattels personal, capable of delivery, it is certainly the law, that a gift to be effectual must either be by deed, or perfected by delivery, (i) The right to the instrument or policy which is the mere evidence of the contract, as between the office and the assured, may pass by delivery, but it cannot carry with it the benefit of the contract. 26. As we have 'already seen, a voluntary settlement not otherwise valid, may be rendered so by an ex post facto cdnsideration;(^) and it may be considered whether this will not always be the case as regards the interest of any person who may have been thereby induced to alter P^hQo-i liis position, as by the payment of the premiums upon the policy; L J *and for this the case of G-odsall v. Webb,(Z) maybe thought an authority. In this case a policy upon the life of a married woman was by the settlement vested in a trustee, in whose name it had been effected, and by whom the premiums were to be paid out of the settlement funds (to the income of which she was entitled for her separate use, and after the decease of her husband in the event (which hajtpened) absolutely,) upon trust after her decease to pay the income to arise from the invest- ments of the sum assured' unto her husband. during his lifcj and after his deceasCj as to the principal thereof as she should appoint by will, and in default of such will upon trust for her next of kin. ' By a subsequent deed, after reciting the' decease of the husband, and that the policy was effected to make a provision for him in case he should be the survivor, and that the widow was unwilling to keep it up and pay the annual pre- miums, in consideration of the natural love and affection that she bore to the plaintiff, who was her cousin, and his wife, who was her sister, the trustee by her direction assigned the policy to the plaintiff for his own use. On a bill being filed by the plaintiff after he had received the money, against the widow's executors and next of kin,- the Master of the Kolls held, that the next of kin were not entitled to have the policy kept up against her; and he said, "Thinking that she had a right to refuse to keep up the policy or to permit the trustee to keep it up, I think the trustee was entitled to assign it according to her direction, and conse- quently, that the plaintiff is entitled to the fund in question." It will be observed, however, that this case may also be independently sup- ported upon the ground of the concurrence of 'the trustee in the assign- ment. 27. The great difficulty in these cases of voluntary assignments- arises from the fact that the policy is not assignable at law, and courts of (g) Edwards T. Jones, 1 My. & Or. 226. (A) Kekewich v. Manning, 1 De Gexj M. & G. 188. (i) Martindftle v. Booth, 3 B. & Ad. 506. (A) Ante, Pt. 2, Oh. 1. (Q 2 Keen, 99. VOLUNTARY SETTLEMENTS. 195 equity do not consider that any interest^ passes equivalent to an equitable estate j for when *the legal interest is transferred, as upon a r»9QH-i transfer of stock, or an estate legal or equitable passes by deed, L J the act is. oonclusive against the settlor and all persons claiming under him, subject to the operation of the statutes of the 13 th and 27th of Blizabeth.(«t) Hence, when the settlement takes the form of a covenant to effect an insurance, and the policy is actually effected in the name of the trustee, it is effectual as 'Hot requiring the assistance of equity to per- fect it. It is also said that when, the settlor has executed a bond or obligation to make the pa,rtieular provision for. the- doneej the 'Court will always enforce it.(n.) 28. Should policies of assurance ever be made assignable at law by statutory enactment, as may possibly be the case, this cause of the fre- quent shipwreck of voluntary settlements will be at an end. The law, however, on this subject will still be useful as to all cases prior to the Act, and also in cases when the solemnities required by it may be in- complete, unless the doctrine in Antrobus v. Smith and Edwards v. Joneg, namely, that no equitable assignment will be supported when a legal transfer was practioable but neglected,- should operate to render invalid, after the passing of the Act, settlements which might have been effectual before it. 29. This subject will be somewhat further elucidated by the consid- eration that a policy of assurance may be the subject of adonatio mortis causa, which has been defined to be, "where a man lies in extremity, or being surprised with sickness, and not having an opportunity of making his wUl, but lest he should die before be make it, he gives with his own hands his goods to his friends. This, if he dies, shall operate as a legacy; but if he recovers, then does the property revert to him again." (c) Such a gift, *indeed, differs little from a legacy,- except in not re- r^onKT quiring the assent of the executor : it is not complete until the L J death of the donor, and is of no avail against creditors in case of a. de- ficiency of assets, and by the 86 Greo. 3, c. 52, s. 7, is subject to legacy duty.(p) It is, moreover said to require three conditions :,-^rst, the gift must be with a view to the; donor's deathi; secondly, it must be con- ditioned to take effect only upon the death of the donor by his exist- ing disorder; thirdly, there must be a delivery of the subject of the donation. A donatio mortis eausS, cannot be by deed without delivery ;(g') but where the subject of the gift is in -action, and not' in possession, the. de- livery of the instrument by which it is secured! has been held sufficient. Thus a bond may be the subject of suoh a gift, and the executor ,becomes a trustee for the donee ;(»•) and in like manner a mortgage, by delivery (m) c. c. 4. 18. Thf latter referring to real estate only, (ra) Fletcher v. Fletcher, 4 Hare, 67 ; Bridge T. Bridge, sup. (o) Hedges v. Hedges, Free. Chan. 269; Farquharspn v. Cav^e^ Qpll.,C. C. 356. (j>) Ward T. Turner,*2 Ves. Sen. 434. (?) Will.' Ex, 659.' (r) Ashton v. Dawson, 2 Coll. C. C. 363, in notis ; Blount v. Barrow, 4 B, C. C.12. 196 BUXTON'S LIFE ASSURANCE. of the mortgage deeds. («) Gifts of this nature are not abolished by the new Wills Act.(<) It may be thought that that which was equivalent to delivery for the purpose of a donatio mortis causa, ought to have been so upon a voluntary assignment by deed. This would be a further argu- ment for the validity of such an assignment, coupled with the delivery of the policy. 30'. In Johnson v. Ball,(M) a testator after the passing of the new Wills Act, bequeathed a policy of assurance on his own life to B. and C, " to hold the same upon the uses appointed by letter signed by them and myself." Subsequently, at the request of B. and C, he signed a memorandum to the following effect : — " I wish my policy of assurance, left to B. and C, to be divided as follows : I give," &o., mentioning the r*2Qfi1 ^^^^^^ ™ which he desired *certain volunteers to take. This L J memorandum was not attested. Sir James Parker, V. C, ob- served, " Even supposing that the will referred to an existing letter to be afterwards signed, it would be impossible to give effectJa any such let- ter as a declaration of trust ; to do so, would be to give effect, as a codi- cil, to a paper subsequent in date to the will, and not properly attested. A testator could not by his will prospectively create for himself a power to dispose of property by an instrument not properly attested." The memorandum, moreover, his Honour thought, could not operate as a gift or settlement, inter vivos. 31. When policies upon a man's own life were subject to his general pow6r of appointment, and lie appointed tha& the moneys payable should be paid to his executors an^ administrators, it was held that the effect of the appointment was to make the policy moneys part of his personal es"- tslte, and not to give an^ interest to his next of kin as cestuis que trust designated by him.(t;) 32. The inducements to effect voluntary settlements, up to the present time, have been twofold ; namely, first to avoid the payment of the heavy duties charged upon probate and legacies by the Stamp Actsj and secondly, to make a provision for the objects intended to be benefited which shall not be liable to be lost by any fluctuation in the fortunes of the settlor. The first of these inducements, more especially powerful in the case of natural children, who are in the estimation of the law strangers in blood to the settlor, and whose legacies are consequently liable to the highest duties chargeable, is for the most part destroyed by the Succession Duties Act, the provisions of which, as affecting policies of insurance, we shall consider in a subsequent chapter. Voluntary settlements for the future will therefore, in all probability, be comparatively rare ; but the second inducement still remains ; and in considering this object it is to be re- marked, that the settlement of a policy of assurance seems to be almost r*Q^7T *^® °°^y method *by which a person without realised property, L -I but in solvent circumstances, can make an effectual provision for a volunteer. (») Hurst V. Beach, 5 Madd, 35T ; Duffield v. Elwes, 1 Bligh, N. R. 498. (i) Moore v. Darton, 20 L. J. Ohanc. 626. (V. 0. B.); Staniland v. Willott, 3 Mac. & G. 664. (u) 5 De G. & S. 85. (v) Mackenzie v. Mackenzie, 3 Mac. & Gor. 559. PERSONS UNDER DISABILITIES. 197 33. A power of revocation may always be reserved by a settlor; but, to render the provision entirely secure in the event of a subsequent bank- ruptcy, it must be omitted. Such a power, exercisable by a settlor at his pleasure, is equivalent to the entire interest, and may be exercised by the assignees for the benefit of the creditors. A power, indeed, to be exercised only with the consent of another person, as, for instance, the wife of the donee of the power, in this case the settlor, will not have this eflFect;(«tf) but the insertion of such a colourable power by the settlor for his own benefit would be hazardous, as exposing the settlement to the statute of Elizabeth(a3) as fradulent. Hence, when the circumstances of the settlor are such as to render this object of importance, the power or revocation should be avoided. Of course, a power of appointment among designated objects, such as children, will not be objectionable on this account. Few settlors are willing to part irrevocably with their pro- perty J and when the power of revocation is retained, it has been sug- gested that the safer course may be to reserve it to be exercised by deed only, and not by will ; for a general residuary disposition of the personal estate might, under the 27th section of the Wills Act (2 Vict. 26), be construed as an exercise of the power of revocation and new appointment, and so unintentionally defeat the settlement, by passing the property com- prised therein to the residuary legatee. (y) 34. If a settlor, when the transaction is complete, desires to regain his interest in the property, he must duly exercise his power. A mere re-conveyance or re-assignment by the trustee will not terminate the trust. («) PAET III. *CHAPTER I. [*298] UPON THE EIGHTS AND INTERESTS OF PERSONS UNDER DISABILITIES. 1. A POLICY of assurance may be effected for the benefit and in the name of an infant, upon his own life or the life of another ; but if he enters into a contract for a policy, or a term of which is the issue of a policy, as regards any liability that may arise thereon, it will be subject to the ordinary rule affecting the contracts of infants, namely, that they are void or voidable at their election, on arriving at the age of 21 years, or according as the Court may pronounce them to be to their prejudice or benefit, (a) Should, however, the infant decline to complete or affirm (w) Jones V. Winwood, 10 Sim. 158. {x) 13 Eliz. c. 5. (y) Watkin's Principles, 9th edit. Addenda. (z) Ellison V. Ellison, 6 Ves. 656; 2 Sug. Pow. 99. (a) 2 Stephen's Com. 335. 198 BTJNYON'S LITE ASSURANCE. I the contraety it would seem that he cannot maintain an action to recover the premium paid by him, or any deposit: in respect of it.(8) When the policy is on the life of the inftint, ithe < person to receive' the amount assured upon his death will be his administrator. If the policy is iipoa the life of another, the amount assured, as in the case of a simple legacy, cannot be paid during the minority of the infant without the sanction of a court of equity, (c) '■ ' It may also be observed that the Court will some'- times exercise a large discretion in dealing with the interest of an infant r*OQQi *^° property of this description. Thus, when a policy on the liif6 ■- J of the igrandfather had been settled, upoii the petitions of the infant and her fatherj made after the decease of her mother, andetsltilig that the father was in indigent circumstances, and about to emigrate, an ordierwas made for the surrender of a bonus accrued thereon, and for its application by the trustees of the settlement in the maintenance of the infant. There was no suit in court for the administration of the trust ; and the Vice-Chancellor made it a condition for making the order that the father should give up his interest, not only iu the bonus, but in the principal sum assured, which was 760l.(dy The statutes relating to Friendly Societies will be found to contain special provisions for enabling infantSj and also married women, to effect ibsurances for small sums upon their own lives. ' 2. If a married woman is entitled in her own right to any policies of as- surance, as marriage operates as a gift to the husband of all such choses in action belonging to his wife, and not settled to her separate use>'as he may be able to reduce into possession during her life, he will be entitled, when the policy is on the life of a third party, upon the death of that party happening during the coverture, to recover in an action at law, and give a good discharge for the amOunt insured, making, never- theless, his wife a party to the^ action in all cases where the interest accrued prior to the coverture. Her receipt will then be no discharge to the office, unless she have' an authority from him, either express or implied, to receive payment.(e) Should he, however, be unable to recover without recourse to the assistance of a court of equity, the wife will be entitled to her equity to r*^ftm ^ settlement out of the *fund,(/) a right which she will have the L J option of waiving or enfoi^cing, which will not necessarily be lost by her adultery,(g') and is equally valid against the assignees for a valu- able consideration, or in bankrtptcy of the husband as against himself.rA) Effect will be given to this right or equity, by settling the whole or a part of the fund; and the amount will be in the discretion of the Court, and according to the circumstances of the ca3e,(t) in the names Of trustees, (i) Holmes v. Blogg, 2 Moore, 552; 'Wilson v. Keaue, Peake, Add. Caa.'l96. (c) Lee V. Brown, 4 Ves. 366 j Chambers on Infancy, 426 ; 'Will. Ex. 1206. d) Ex parte Hays, 3 De O. & S. 485; 'Walsh v. 'Walsh, 1 Drewry, 64. e) Roper, Husband and 'Wife, 210. /) Sturgis T. Champneys, 1 My. & Or. 97. g) Greedy v. Larender, 13 Beav. 62. A) Ibid. "Vaughau t. Buck, 1 Sim. N. S. 284. i) Scott V. Spashett, 16 Jur. 15T ; 2 Spence, 485. FEBSOXS UXDEB DISABILITIES. 199 upon trust for the benefit of the wife and her issue. (^) Until a bill is filed, however, payment either with or without the assent of the wife will, in all cases, be properly made to the. husband, and his receipt will be a good discharge. (Z) By the Scotch law a married woman is not entitled to any equity to a settlement ; and this holds good, although the property is in England, if the domicile is in Scotland.(TO) Upon the death of the wife in the lifetime of the husband, he will be entitled to obtain administration of her effects, and in the capacity of her administrator becomes the absolute owner of the policy and the amount assured, whether it has been effected upon her own life or the life of another, together with all her other choses, in action. Should she happen to outlive him, the property in the policies will survive to her, discharged from all claim on the part of her husband's representatives, or any lien or charge made by him j and that although such lien or charge may have been made by assignment, at a time when the money might have been reduced into possession, being payable, but not having been so during his life, it equally survives to the *wife.(n) His representatives, p^o ai -i however, may be entitled to a lien upon the policies for any pre- L J miums paid by him out of his own funds, and without the intention of making a present of the money to his wife. 3. Questions respecting policies of assurance to which married women are entitled, more often arise in cases in which the insurance is effected during the coverture upon the life and in the name of the wife. We have seen that a husband, as such, has no insurable interest in the life of his wife. But there seems to be no reason why a husband may not effect an insurance upon the life of his wife, or on his own life in her name, in order to give her the benefit of the policy. In such a case, the policy would be in the nature of a voluntary settlement by the hus- band upon her, to which she would become absolutely entitled upon sur- viving him, and the benefit of which, even upon her death in his life- time, would pass by her will when made with his assent, (o) If the insurance is effected by the wife without the intervention of the husband, and paid for out of his money, he will, doubtless, be entitled to dissent from and , avoid the contract. If, howeverj he does not do this immedi- ately that he becomes cognisant of it, it is submitted that she will be assumed to have acted under an authority from him, and the policy will be her chose in action. Here, however, a somewhat nice distinction is to be noted. If a mar- ried woman lend the money of her husband, it is still his money, and he can sue for it in his own right ;(p) but if, in exchange for that money, she becomes owner of a chose in action, the legal incidents of a chose in action attach, — she must be joined in an action if the policy becomes a claim, and on her death he can only become entitled as her representa- k) Carter v. Taggart, 1 De Gex, Mac. & G. 212. I) Murray t. Ld. Elibank, 11 Ves. 90. m) Hitchcock v. Clendinen, 12 Bear. 534. n) Ashby v. Ashby, 1 Coll. C. C. 553. (o) Sngden's Real Prop. Stats., 30t. p) Bird T. Pegrum, 17 Jur. 577. C. B. 200 , BTJNTON'S LIFE ASSURANCE, tive. In the words of the judgment in a very late case, where a married r*sn9T ^°™^'^ ^^ *purchased railway stock : "It is a settled rule that L J a married woman, although incapable of making a contract, is capable of having a chose in action conferred upon her; which, on the death of her husband, will survive to her, unless he shall have reduced it into possession by some act of his own."(2') 4. When, moreover, a married woman is entitled to property settled for her separate use, she may effect an insurance, and pay the premiums out of the income of her separate property; and, in such a case, accord- ing to the rule, that " the sprout is to savour of the root, and go the same way," she will be also entitled to the policy as part of ber separate estate ;(»•) and such property she may convey by deed, or bequeath by her will,(s) in either case without the concurrence of her hnsbaitd. Should she, however, omit to deal with her separate property, her husband will be entitled thereto as her administrator, as well as to that which is subject to no trust for her separate use. And when no valid trust is created for valuable consideration, but an allowance is made by the husband to his wife, as upon a parol agreement for a separation, he will be entitled to the produce of her savings not disposed of for valuable consideration, and so as to defeat a voluntary transfer and gift made by her to a third party. (<) Where a married woman, as a volunteer, paid the premiums upon a policy upon the life of her husband, settled by him at her marriage out of the income of a fund settled to her separate use by the same settle- ment, she was, under the circumstances, held to be entitled to a lien upon the proceeds of the policy for the amounts paid by her.(M) But P^„„„-. had she allowed her husband to receive the income, *and he had L J so applied it, she would not have been entitled to any lien; such an arrangement, while it lasted, would operate as a gift of the income to her husband. («) 5. Where a policy is effected by a married woman upon her own life, and is intended to form part of her separate property, it would seem that it should be granted to a trustee for her, and that the trust should be expressed upon the policy, to avoid the operation of the second section of the 14 G-eo. 3, c. 48. In the case of CoUett v. Morrison,(i«) E. C. was living apart from her husband, with an allowance from him tor her sepa- rate maintenance : and a proposal for an insurance upon her life was made on the 9th of September, 1844, to the Britannia Life OflSce. The proposal was signed by W. J. R., abd the answer to the first inquiry therein, namely, " Name, residence, and description of the party propo- sing the assurance," was in the following terms : " Mrs. E. C, of, &c., by her trustee, W. J. R., of, &c." The usual inquiries having been made, the proposal was accepted by the directors on the 16th of Sep- tember, and on the 19th W. J. R. called at the office, and paid the first (q) Dalton T. The Midland Railway Company, 17 Jur. 719. 0. B. M 3 Koper, Hue. and Wife, 140. («) Sugden's Real Prop. Stats., 307. h) Messenger t. Clarke, 5 Exch. 388. (u) Burridge v. Row, 2 T. & C, C. C. 583. Iv) Catou T. Rideout, 1 Mac. & Gor. 599. (w) 9 Hare, 162. PERSONS UNDER DISABILITIES. 201 year's premium and stamp duty upon the proposed policy; but, at the same time, a question having been raised by one of the officers of the company as to the propriety of any trust being recognised by the com- pany, a fresh proposal was filled up by W. J. R., purporting to be made by him on his own account ; the answer to the first question being simply " W. J. R., of, &c., Esq." This second proposal was not submitted to the board of directors, and the policy was shortly afterwards issued in the usual form when efiected by one party on the life of another; but when issued, it was sent from the office of the company to E. C. In June, 1845, she died, and W. J. R. set up a claim to the policy for his own benefit, which was resisted by the company upon the plea that he had no insurable interest in the life of E. C, and *that the policy r-r^onA-t was void for fraud and misrepresentation. Administration to the L J estate of E. C. was granted to the plaintiff, who thereupon filed his bill against the company and W. J. R. to compel payment of the amount assured to himself as administrator. On the one side it was contended that the original proposal was the only contract binding upon the parties, and that which the company was bound to carry out, and that it in no way contravened any statutory provision relating to policies of assurance ; and the bill prayed that the insurance should be treated in equity as an insurance effected by E. C. through W. J. R. as her trustee, and that the plaintiff should be entitled to have the policy rectified accordingly. On the other hand it was stated that the company had dealt with W. J. R. as contracting upon his own behalf, and that the fresh proposal had been filled up so soon as the original form recognising the trust had been observed ; that the first proposal had been laid before the directors merely to consider whether the life was one which the company would accept, and not with reference to any other details in the proposal; that the policy was a proper policy for the only proposal which had been accepted; namely, one to insure W. J. R. against the death of E. C. ; and that every such policy presumed an interest, and was rendered void by the want of it. Sir G-. Turner, V. C, considered that if authority were wanted upon the point, the case of Motteux v. The London Assurance Company,(a;) fully established, that if there be an agreement for a policy in a particu- lar form, and the policy be drawn up by the office in , a different form, ' varying the right of the assured, a Court of Equity will interfere and deal with the case upon the footing of the agreement, and not of the policy. That although it was said on the part of the company that there was no agreement to grant the policy to W. J. R., in trust for E. C, he could not impute to the directors that they overlooked the form of the original proposal, and that it was the duty *of the officers of the rsKonc-i company to act upon any proposal approved by the directors, if L J it could be in any way carried out. That the original proposal must be held to have been accepted wholly, and not in part, and not having been cancelled, but annexed to the second proposal, which was not even sub- mitted to the directors, by whom, and not by the officers, any contract (a;) 1 Atk. 545. [*306^ 202 btjnton's life assueanoi-' binding upon the company must be made, remained in force at the time at_ which the policy was issued. "At these conQlusions," said the Vioe- OhaBcellor,i "I arrive,! the more readily from- its appearing.iby.the fourth eonditionendorsed' upon, the policy, that it was eoptemplated that policies might be,; issued which were subject' to trusts, at the tifte of being graj]ited>(y) It may be said, indeed, that, takitjgthe rules and. regula- tions;! of 'the company, and the provisions of the statute together, the agreemetiiti made upon the first proposal Could not, by any means, have fceen carried -oi^tt; but, independently of what I have observed as to poli- cies in trust being, contemplated, I think that the company, having had the ehtooe of the agreement turning out in theiij^fwour, cannot bfe per- niitted .to escape from, it, now thai it has turned out against them. With Reference to. the; questionsi raised iby;the statute, I do not think it neces?- sary to enter into them. . If. the. statute had prohibited any policy being granted to one person in trust for aiwther' where both'names appeared iipon the /ace .of the policy, or if the effecting such an insurance hadj in any manner j' eontrawened the policy of the statute,- Z might have felt my- self bound to abstain from interference; but lam of opinion that the statute has no such operation, and is directed to a wholly -. differemi object." *6. An unmarried. woman or feme sole can of course dispose of or bind her interest in a chose in action of any description, and. that although she may have entered into an engagement to marry, if the disposition be made with the intended husband's consent, as by a marriage settlement to which he is a party, (a) But if she be an infant at the time, the fihose ini action is only bound by the .fcovenant of the husbaad,' that is if it fall into possession daring his lifetime, although she may, subsequently, that is after his death, acquiesce in and adopt the settlement if to her advantage, (a) 7. It may be laid down generally that a lunatic or idiot is incapable of entering into a contract.' of insurance, the absence of the mind capabk: of assenting necessarily invalidates the agreement, since duorum vdplu- vium in idem placitum consensus. (F\ ! It. would, however, atppear that when a person apparently of sound mind enters into; a contract which is fair and bonfi. fide and executed atd completed^ and the property, the. subject matter of the^ contract^ cannot be restored, so; as to put the parties in statu quo, such contract cannot afterwards 'be set aside either by the alleged lunatic or those who repre- sent him. (c) ■ In the case lastly referred to, an immediate and a deferred annuity were purchased by a. lunatic. of the National Loan Fund Life (y) Tie fourth condition, was, " That in every case where any policy issued by the company shall be at the time of issuing the same, or shall at anyjt^ni.e afM': wards become subject to any trusts wtatsoever, the receipt of the trustee or trus- tees for the time being for the sum assuredby such policy shall, notw^ithstanding any equitable claim or 4einand whatsoever of the person or persons beneficially entitled to the policy, or sum assured thereby, be an effectual discharge to the company and the proprietors thereof." (z) Butcher V. Butcher,' 1'4 Beat. 222. (a) Aahton v. M'Dougal, 5 Bear. 56. (i) Pothier, Dig. lib. 2, tit. 14. 21, ? 1. (c) Molton y. Camroux, 2 Exch. 487; 4 Exch. IT. / PERSONS rNDER DISABILITIES. 20S Assurance Society ;• but the lunatic dying' before any instalment of the annuities beeamd due, an action was brought by his adminifitratrix to re- cover the money paid to the office, on the ground that the contract was void by reason of the incapacity of the lunatic } the Court, howevei*, held that as, upon the finding of the jury, the purchases of the annuities were transactions in the course of the affairs of human life, and the granting of the annuities were fair transactions and of good faith on the part of the *society, without any knowledge or notice of the unsound- r^qA7T ness of mind of the deceased, the action could not be sustained. L: J From this it would seem to follow that a Similar transaction, whether for an annuity or life insurance, would be equally binding upon the office. At the same time if the company knew of the unsoundness of mind of the assured, and took advantage of it to induce him to enter into the contract, it would be clearly voidable by him or his representatives.(£Z) When an originally valid contract has been entered intoj it will not of course be affected by a change of condition in one 6f the parties becom- ing lunatic, (e) 8. When a lunatic is entitled to the money ' payable upon a claim under a life policy, if a commission have issued and a committee has been appointed, he will be the party to receive the money. (/) The grant of the custody of the person and estate of a lunatic seems large enough to enable the committee to give a good 'discharge for all moneys forming part of the estate. (5-) Mr. Shelford howevfei', in his book respeeting lunatics, abservesj(A) In many cases the safer course appears to be, for the party not to'pay a legacy or other sum of' money due to a lunatic without an order ihaving beeti obtained', either on his own petition or that of the committee, which would idemnify the person making the payment from any misapplication of such money by the committee. ' This point does not seem to be affected by the new Act.(i) 9. The law respecting aliens is now principally governed by the 7 & 8 Vict., c. 66) by the fourth section of which it is enacted, that after the passing of the Act, every alien, being the subject of a friendly state, shall and may take *and -hold by purchase, gift,bequest, repre- r^itqno-i sentation,. or otherwise, every species of personal property, except L -J chattels real, as fully and effectually to all intents andpurposes^ and with the same rights, remedies, exemptions, privileges, a,nd capacities, as if he were ai natural born subject of the United Kingdomi Previously to this Act, however, an alien, not being an alien enemy,' might have effected a life insurance and enforced the contract by an ap- propriate proceeding in any court of this country either at law or equity, and that although resident abroad at the tirQe.(^) During war with the native country of an alien, his right to enforce a contract entered into previous to the commencement of the war, is suspended Until the resto- (d) Dane v. Kirkwall, 8 0. & P. 679; Gore v. Gibson, I3 M. 4 W. 623., (e) Sug. Vendors, 233. (/) A guardian, under the 95th sectioii of the 8 & 9 Vict. c. 1 00, hag the same powers as a committee., . > , (g) Shelford on the Law of Luniatice, 851 ; Roper on Legacies, 4th edit. p. 8S6. (A) p. 269. (i) 16 & IT Vict. c. 7o: (k) Pisani v. Lawson, 6 Bing. N. 0. 90. 204 bttnton's life assurance. ration of peace,0 but a contract entered into during war is absolutely yoid.(»ra) And it may be doubted whether, if the policy were valid at its inception, but, after the declaration of war, the assured died in battle contending against the forces of this country, his representatives could, even after peace was restored, recover upon it.(») And as we have already seen, the life of an alien enemy cannot be insured, even for the benefit of a British subject.(o) It is, however, to be observed, that an alien, resident in this country by permission of the Government, will not be considered as an alien enemy, and that the Queen in her proclamation usually qualifies the dec- laration of war by permitting the subjects of the enemy resident here to continue so long as they peaceably demean themselves,^ and that without doubt such persons are to be deemed in effect as alien friends. (p) On the other hand, residence accompanied with trading in an enemy's r*S0Q1 *"'"'^*'''y ^ill constitute the party an alien *enemy, whether he is L J originally a neutral or one of the Queen's subjects.(g') We may observe, also, that an alien friend may make a will and dis- pose of his personal estate, and may be an executor or administrator.(r) 10. Upon the conviction of the assured for treason or felony before a competent tribunal,(s) any policies of assurance to which he may be entitled, whether upon his own life or the lives of other persons, as well as all other goods, chattels, and ohoses in action(<) of which he may be possessed at the time, or which may afterwards accrue to him during the term of his punishment, (m) including those accruing to him by survivor- ship by virtue of his marital right, to the exclusion of the next of kin of a deceased wife,(«) will be forfeited to the Crown. This forfeiture takes place from the time of the conviction, and not, as in the case of the forfeiture of lands, from the time of the commission of the offence. The felon may, therefore, before conviction, assign his personal property for valuable consideration, as when the assignment is made to secure an antecedent debt, or the costs to be incurred for his defence.(io) But if the alienation be colourable and without consideration, for the purpose of avoiding a forfeiture, it is void against the Crown.(a;) 11. As we have already seen, when the assurance iff on the life of the criminal, the policy becomes ipso facto void upon his death either by the hands of justice, or his own, where he is felo de se. But when the insurance is upon the life of another, the Crown is entitled in both cases ;Q/) and that notwithstanding that the felo de se may have made a (t) Ex parte Boussmaker, 13 Ves. Tl. (m) Ibid. (») Ex parte Lee, 13 Ves. 64. (o) 8 T. E. 548—561; Plenot T. Waters, 15 East, 269; Harman v. Kingston, 3 Camp. 153. (p) Daniel, Oh. Pr.45, citing Harg. & Butler's Co. Litt. 179, b. n. 2 & 3. I Albrecht v. Sussman, 2 Ves. & B. 328. (r) Will. Ex. 181. 368. Bush V. Brown, 2 Atk. 399. (t) R. Noy, 165. Roberts t. Walker, 1 Rus. & My. 766. Ooombes v. The Queen's Proctor, 16 Jur. 820. (li) Perkins v. Bradley, 1 Hare, 219. he) Com. Dig. Forfeiture, B. 6, note, edit. 1822; Anon. Case, 2 Sim. N. S. 71. (y) Williams, Ex. 53. PROOi" 01' DEATH. 205 *will, and appointed executors, for his personalty is forfeited by |-#qinT the act and manner of his death.(a) But, in order to render the L J property liable, the felon must be beneficially entitled; for now by statute,(a) no lands, chattels, or stock vested in any person upon any trust or by way of mortgage shall escheat to the king or the lord of any manor, or other person, by reason of the attainder or conviction of any such trustee, but shall remain, survive, or descend as if no such attainder or conviction had taken place ; and hence it would seem that such pro- perty will pass by his will as well as when he is himself entitled as exS- cutor.(6) If the convict, whether traitor or felon, obtain the pardon of the Grown, he is restored to his former estate, although no words of resti- tution are used.(c) But a conditional free pardon in the penal colony will not have this eSeot(d) And the Crown, becoming entitled, will take subject to the same equities as the property was liable to in the hands of the subject.(e) , 12. Where an inquisition of felo de se is taken before the coroner super visum corporis, it is not conclusive against the executors or admi- nistrators of the deceased, but may be revoved into the King's Bench by certiorari. But no traverse can be taken to make a man felo de se ; as if the inquisition find that the party was non compos mentis at the time he did the act, neither the king nor his grantee can traverse it, (/) and it is presumed that such a finding is equally conclusive upon the insurance officer CHAPTEK II. [*311] i.ND ITS PAYMENT, THE PROOF OF DEATH, THE KEOEIPT, THE CUSTODY OF EVIDENCES OF TITLE. 1. Upon the happening of the contingency assured against, the policy is said " to have become a claim. The terms of the policy must, how- ever, be construed strictly and the very event have occurred. Thus if a man's life be assured for the term of one year, and he die the day next after its expiration of a wound received the day before, the insurers will not be liable, (aa) In like manner, when the policy is for a longer period, and renewable periodically, the payment of the premium is a condition precedent to the validity of the assurance, and the omission to pay it, for one single day, will avoid the policy. Should, however, the death occur within " the thirty days' grace" as it is called, the assurance cannot, in the form in which it is now granted, be impeached, provided that the (z) Williams, Ex. 53. (a) 4 & 5 Will. 4, c. 23, s. 3. (6) Will. Ex. 53. (c) 3 T. E. '730—4. (d) Church's Case, 16 Jur. 51'7. (V. C. P.); Coombeg v. The Queen's Proctor, 16 Jur. 820. Prerog. Ct. (e) Giles v. Grover, 6 Bligh, N. S. 292. (/) Will. Ex. 112. (aa) Lockyer t. Offley, 1 T. R. 60. 206 BTJNTON'S LIPB ASSURANCE. premium be paid withia the term j although subsequently to the death of the assured. (6) .. ■ 2. The burthen; of proof of the feveilt having happened, will in all oases rest with the assured, who must tender due^eividenee.to the insurers. In the policy it is usual to stipulate for satisfactory evideiioe; but this does not mean guch as the mere caprice of the insurers may require, but-satis- factory is,, in fset, eqiii-sFalent'.tosufficient.(rc) -In ordinary cases,, where the death oecursin this counlryyafeufial certificate will be required) and in most insurance offices) an additional certificate to be signed .by the medical attejidant of the deceased, stating the cause of death, a:nd the r*'-i191 '^'^'■^''W'l of ^^^ illness.. *In lieu of an ordibajiy parochial burial L ,^-1 certificate,, a certificate under the <3-eneraliRegistry.Act((^) maybe obtained, on which it will ibei observed that thQ cause as well as the fact of death is certified fey the -medical attendant; This will moreover be the proper evidence where the death of a British subject occurs at sea on board of a British- vessel, the commanding officer being ■Tequired(e) to make, a minute of the particulars, and fosward a certificate of such minute to the, registrar, bywhomit.is filed and a copy ^entered in the f Marine Registry. Book."' ■ .When the deaths occur' in the Company's territories in India, (Certificates' may be obtained at the India House, i In the cases of military i or navai persons in. active service abroad^ at the War Office- and Admiralty.. '-When death ■occurs 'in any of the colonies' or in a foreign country, the best evidence to be obtained under the circumstances, and according to the custom of the country, should be furnished. In many countries, as in France and some parts of G-ermany, very accurate official registers are preserved, certified copies of which, when duly authenticated would be the proper evidence to be given. ; 3i In some cases, howevter, great difficulties may arise, owing to the uncertainty of the fact or time of death. It not unfrequently happens that a person, whose life is assured, goes abroad, and is not subsequently heard of. In such a case it is a rule of law, that a prestimption of death arises at the expiration of seven years ;(/) not that th.e death occurred at the beginning or end of any particular period during the" term, but that after it has elapsed' the party is not living." If it be important to establish the precise time of the death, evidence of some sort must be r*^i ^T ^'i'^"*'^'^ ^^^ *^? 'question decided by a jury.^^') . But it *seems L J there must have been a sufficient inquiry made ; and in a ease in which the arrival in New York of the party in question had been ascer- tained, the mere facts that he had not been again heard of for seven years, and that a letter addressed to him under an assumed name had not reached him, were held not sufficient to ground a presumption of death within the seven years, much less of any particular period of death. (A) Presumptive evidence may, however, be sufficient to decide a question of . (b) Ante, p. 65. ■ (c) Strong v. Harvey, 3 Bing. 304. (d) 6 & 1 Vict. c. 86. (7 Will. 4, & 1 Vict. c. c. 1. 22; 10 & 11 Vict. c. 65, s. 33.) (e) 6 & r' Will, i, c. 86, s. 21, 26. (/)- In conformity with the statutes, 19 Car. 2, c. 6, as to estates, pur autre vie, and 1 Jac. 1, c. 11, s. 2, against bigamy. (g) Napean v. Doe, 2 M. & W. 910; Rex v. The Inhabitants of Harborne, 2 Ad. lia .& 540. (A) In re Creed, 1 Drewry, 235. PROOr OF DEATH. 207 this kind. Thus, when the assured saiJsd for the Cape in a siiiall vessel of war which must have been overtaken by a storm so violent that it was weathered with difficulty by much larger vessels, and the ■ ship in question was not heard of for two years, it was held that this was suffi- cient evidence to warrant a jury in finding that she was lost in the stormy and that the party perished with her.(i) An insurance office paying upon presumptive proof of death would be entitled, it would seem, to security that the money should be refunded if the payment should turn out to'bave been er-roneotisly'made.(A) i. At this time toO) unless the age h&s been previously admitted upon the policy, it is usual for thfe company to^ require proof that it was cor' rectly set forth in the declaratioilv The usual evidence tendered is a baptismal certifeatei, extrac>ted from the parish books by the officiating minister, or, in the case of Dissenters, of an extract from the registers of births and baptisms kept by- those bodies,"orj in the case of Jews, from the register- of births and circumcisions kept at the Synagogue j in every case signed and certified as a true copy by the officer to whose custody the original is intrusted, or generally^ since the Registry Act, a certificate of birth under that Act.0 . It is to be observed that parish registers are not evidence of the time of- the birth, but of the baptism only, r^sjlli since it is not the duty of the minister to register the former;(OT) L J but under the Registry Act it is enacted, that all certified copies of entries purporting to be sealed, and stataped with the seal of the general register officer, shall be received as evidence of the birth, death, or marriage to which the same relate.(7i) When the registers do not co;itainthe neces- sary prdof, recourse must be had to secondary evidence ; such will be the production of an entry in the family bible ■ or prayer book, or even in an almanac, or a statutory declaration made by some member of the family or other party who can speak from personal knowledge of the fact testi- fied. , 5. In some cases, moreover, the internal evidence of the certificate may not be sufficient to identify the assured with the person mentioned in the policy, or the name may have been changed-. The link should be sup- plied according to the nature of the case : when the change of name has occurred by marriage, by the production of a certificate of marriage; when byEoyal License or Act of Parliament, by the production of the license !t) Paterson v. Black; 2 Park, 919; 8th ed. ft) See In bonis J. Eemp, IT Jur. 240. Prerog. Ct. i) See 14 & 15 Vict. c. 99, ss. 14, 15; 9 Hare, app. xvi. m) Rex T. Clapham, 4 0. & P. 29; and see 5 B. & 0. 508, 6 0. & P. 690. «) 6 & 7 Will. 4; c. 86, 3.. 38. The registers of whatever kind, and indexes, under the act appoinlted to be kept by the registrars at the register offices, niay be searched upon the payment of a small fee, namely : for searx;hing the registers, for every search over a period not exceeding one year the- sum of one shilling, iihd sixpence additional for every additional year ; for searching the indexes at any superintendent registrar's office, for a general search the sum of five shillings, an^ for every particular search one shilling ; for searching the indexes at the General Eegister Office, for a general search twenty shillings, for a particular search one shilling; for a certified copy of any entry or certificate, in every case the sum of two shillings and sixpence; — the fees being payable to the rector, vicar, or curate, or registrar or' other officer having charge of the registers. 6 & 7 Will. 4, c. 86, ss. 35, 36, 37. 208 btjnton's life assurance. with the royal sign manual affixed, and of the Gazette or of a printed copy of the Act of Parliament. 6. The facts upon which the claim arises having been thus proved, the r*^1 'il *'^^™^''* ^''^st deduce a good title to, and *and be prepared to L J 'give a sufficient receipt for, the sum assured. When the policy has not been the subject of assignment or charge, the person to receive the money will be the legal personal representative j all the personal property, including choses in action, passing (as the case may be) to the executor by virtue of the will, or to the administrator by virtue of the grant of the ordinary. The receipt of an executor will be good before probate of the will, and that although he should die before obtaining it ; but as the fact of his being executor can only be proved by the probate, in any court either of law or equity, and a debtor is entitled to have the evidence of the fact legally testified and preserved, before the payment is made the executor must prove the will in the proper ecclesi- astical court. No person, moreover, making any such payment can be required to form an opinion as to the validity of the will, of which that court is the only competent judgej and should the will turn out to be spurious, or a will of later date be discovered, he would run the risk of being compelled to pay the money a second time, unless probate had been obtained of the spurious or revoked will. The title of the administrator depends solely upon the grant of the ordinary. Until that has been ob- tained, no act or receipt expressed to be so given possesses any validityv When the executors or administrators are more than one in number, although they must all join in an action at law for the recovery of the money, yet any one of them can give a valid discharge for the sum assured; and there is no difierence in this respect between the powers of an executor and administrator, (o) When a married woman is executrix or administratrix, the receipt of her husband is absolutely necessary. When the assured is bankrupt at the time of his decease, his executor is r*m fil ^^^ entitled ; but the policy, *with the other choses in action of L -■ the bankrupt, vest in his assignees.(j3) ~ 7. It is not, moreover, sufficient that probate or letters of administra- tion should be taken out, unless they are so in a court of competent juris- diction, and stamped with an amount not less than the particular demand; for the probate can only be received in evidence when properly stamped, and a larger demand would prove the insufficiency. For ascertaining the court in which probate or grant ought to be obtained in each particular case, it may be convenient to state shortly the general rules upon this subject. When all the goods and chattels (bona notabilia, that is, legal personal estate to the value of 61 or upwards)(2') are within the jurisdic- tion of the bishop of the diocese in which he died, probate or administra- tion in the diocesan court is the only proper one;(r) but when the de- ceased possessed bona notabilia in more than one diocese of the province, a metropolitan or prerogative probate or grant will be requisite. When there are bona notabilia in more than one province, there must be a sepa- (o) Jaoomb v. Harwood, 2 Ves. S. 265. (p) Will. Ex. 716. (?) Went. Off. Ei. 1856, 14th edit. (r) Will. Ex. 248. rfHE RECEIPT. 209 rate probate or grant for each province j and in each province it will be diocesan or prerogative, according as the deceased possessed bona nota- bilia in one or more dioceses. When a man, not being in itinere, dies in one diocese not having property there, but having bona notabilia in another diocese of the same province, it is said that the archbishop shall grant probate ;(s) but when the deceased dies out of the provinces, leaving bona notabilia in one diocese only, the archbishop and bishop have a concurrent jurisdiction. (^) The question as to the diocese in which the sum to be recovered shall be taken to be bona notabilia, must be decided by the circumstance of the policy being under seal or the contrary ; by the application of the rule, that simple *contract debts are bona ^^,50171 notabilia at the place in which the residence of the debtor lies ; L J whereas specialty debts constitute bona notabilia at the time of the death. Thus, in an action of covenant upon a policy of assurance under seal, whereby the directors did order, direct, and appoint that upon the occur- rence of the particular event the capital stock and funds of the company should be liable to pay the sum assured; upon its appearing that the de- ceased died in the dioeease of Exeter, where the policy also lay at the time of his death, it was held, that a probate of the diocesan court of Exeter was sufficient to enable the executors to recover upon the polidy, although the defendants resided, and the entire funds of the society were situate, in the diocese of London. (m) 8. When the probate or letters of admim;*ration ought to have been obtained in the Prerogative Court, a diocesan probate will be absolutely void ; while a probate obtained in . the Prerogative, but which ought to have been obtained in the Diocesan Court, is not void, but voidable only.(«^) Whether the probate or letters of administration, however, are void or voidable, if the grant be made by a court of competent jurisdic- tion, a bona fide payment to the executor or administrator of a sum of money owing to the estate will be a legal discharge to the debtor.(w) At the same time, it is incumbent upon the person making the payment to see that the recipient is actually the person to whom the grant has been made : thus a payment was set aside, which was made to a party by virtue of a probate granted to him, under an assumed name, as executor appointed by a will which was itself a forgery.(a;) 9'. A policy may be specifically bequeathed ;(^) but the *lega- 1-^01 0-1 tee will be entitled, not because the policy is vested in him by ■- J the will, for the legal interest or right to sue remains in the personal representative, but because the Court will not permit an executor, or ad- ministrator with the will annexed, to claim in contradiction to it ; but will make him a trustee in order that the intent of the testator may prevail. (z) The insurers indeed, and every other person dealing with (s) Will. Ex. 254. (t) Scarth v. The Bishop of London, 1 Hagg. 625. (u) Gumey v. RawKns, 2 M. & W. 87. (v) Will. Ex. 266. (w) Ibid. 492. See cases cited, Ex parte Jolliffe, 8 Beav. 168. (x) Ex parte Jolliffe, 8 Bear. 168. - (y) Courtney t. Ferrers, 1 Sim. 131 ; Parkes v. Bott, 9 Sim. 385. (z) Wright T. Wright, 1 Ves. 411; Green v. Ekins, 2 Atk. 475; Eipley v. Water- worth, 1 Ves. 440; Bishop v. Curtis, 17 Jur. 23. Q. B. August, 1853.— 14 210 bunton's life assurance. such an executor or administrator, have notice of the provisions of the will ; but since all dispositions of personal property are by law subject to prior charge, for the payment of debts, they have a right to assume that the claim is made in the due course of administration, and are not to inquire into the sufficiency or deficiency of the assets. Hence the . be- quest is of no effect, even as regard^ the equitable interest, until the assent of the executor j but should this have been given, and a consi- derable period have elapsed since the death of the testator, the receipt of the legatee may be reasonably required, (a) This would especially be the case where the policy is on the life of a nominee, and the annual pre- mium has been paid by the legatee since the testator's death, or when a similar policy has been bequeathed to the executor as legatee in trust, and his acts amount to a clear assent to the bequest. (6) A policy may be bequeathed to a charity; and the bequest is not obnoxious to the Mort- main Act by reason of the funds of the company having been invested on mortgage or even in the purchase of real estate ;(c) and the rule is the same with regard to shares in companies possessing similar invest- ments.(c2) 10. When the executor or other claimant happens to be abroad at the time at which the payment should be made, some care must be taken to |-^qiq-| obtain a sufficient discharge. * Where a mere receipt is required, I- -I the proper course to be pursued is for the claimant to draw a bill of exchange, upon the trustees or directors of the insurance office, in favour of the party to whom he wishes the payment to be made. In a late case, where the bill was drawn by a country agent of the company in favour of the claimant, and handed to his solicitor, who forged the indorsement of the claimant, after which it was accepted by the company, it was held the bankers were responsible for paying the wrong party, and that the fact that the company, as its rule was, had accepted the bill after the indorsement, and had by its officers satisfied itself of its genu- ineness, did not discharge the bankers, it not appearing that they were aware of the practice of the company in this respeet.(e) Drawing ai bill in the case of a simple payment is preferable to appointing an attorney, as a power of this nature expires upon the death of the principal, and that notwithstanding the person making the payment has no notice of the death ; and this is said to be true equally in equity as at law.(/) When, therefore, a payment is made under such a power, some security should be given to the insurers for the return of the money in the event of the death having previously occurred, (^) for which purpose a deposit at a banker's to abide the event may be most convenient. When the amount is payable upon the joint receipt of two or more trustees, and the survi- vors or survivor of them, or to two or more parties, and there is evidence (a) See Sugden's Vend. 855. (J) Traill T. Bull, 1 Coll. 0. 0. 352. (c) March r. The Attorney-General, 5 Beav. 433. (rf) Myers v. Perigal, 2 De Gex, Mac. & G. 599. (e) Robarts v. Tucker, 16 Q. B. 560. For draughts payable to order on demand, the bankers are now expressly exempted from liability iu this respect, 16 & IT Vict. c. 59, s. 19. {/) Story's Agency, ? 488, et seq. (j?) Sugden's Vend. 693. THE RECEIPT. 211 that the interest is joint in equity as well as at law, and one of them is abroad, the power of attorney will be properly resorted to ; upon the death of the party giving the power, the right of giving a discharge will survive to his co-trustees. An appointment by a trustee for this purpose is not *a delegation of the trust;(A) but where a payment is r-i^onn-i made under a power, it is at the peril of the insurers to ascertain "- J that the power is genuine ; a receipt under a forged power is as regards the party paying the money a nullity, and in consideration of law and equity the rights remain as before, (t) Of course, the law is the same ■under a forged bill. 11. When a policy has been granted to two or more persons jointly, on the claim arising any one of them may discharge it, and that either before or after an action has been commenoed,(A) and the payment is good, although the contract has been entered into with trustees ; nor does the mention that they are so, without more, seem to fix an obligor with notice of the trust, so as to curtail the right of each contractee.(?) The case may indeed be altered where there is a custom, as in the case of bankers, only to pay upon the joint authority,(»i) or there is collusion or other improper conduct in the party making the payment.(m) But unless the interest of the assured has been originally joint at equity as well as at law, upon the death of one of them, his representatives will be entitled in equity as tenants in common with his co-assured, in whom the legal right of action will vest by survivorship, and upon their receipt of the insurance moneys will be entitled to recover from them their share.(o) Hence to a bill in equity in such a case the representatives will be proper parties, (^) and it is not unusual nor an undue precaution in the insurers to require their approval to a payment to the survivors. *The principle of the rule enabling one joint contraotee *to r:|,q9i-| give a good discharge for the entire sum, has been thus enun- L J cited : " the effect of an obligation by which the obligees are consti- tuted creditors in solido, that the whole sum being due to each, as truly as if there were only one obligee or creditor, if one receives payment of the debt, the other creditor in solido has no title to demand it. The obligation made to all is an obligation for one sum only, and that sum being once paid by the debtor to one of the joint creditors, it is a pay- ment and discharge as between the other creditors and the debtor."(2) 12. "When the policy is subject to any mortgage or lien, the receipt, both of the mortgagor or his representatives and of the mortgagee must be given. In such a case the insurers have notice of and cannot disregard the interests of either party, and are not obliged to enter into any ques- tions of account between the two, to ascertain whether on the one hand the lien is satisfied, or on the other whether it exceeds the sum assured, and the incumbrances is entitled to have the full amount applied in satis- (h) Lewin on Trusts, 236, 1 Sugden on Powers, 214. («■) Ashby T. Blackwell, 2 Ed. 299. (k) Wallace y. KelsaU, 7 M. & W. 272; Gordon v. Ellis, 2 D. & L. 308. h) Husband v. Davis, 10 0. B. 649. (m) Ibid. (n) Skaife v. Jackson, 3 B. & Or. 421 ; Farrar v. Hutchinson, 9 Ad. & El. 641. (0) Will. Ex. ri5. (p) Vickers v. Cowell, 1 Beav. 529. (j) Burge on Suretyship, 398. 212 bunyon's life assurance. faction of the debt. The only exception is, where the terms of the mortgage deed expressly exonerate the insurers from any equitable lia- bility to see to its application, and declare that whatever be the state of account, the receipt of the mortgagee shall be a sufficient discharge for the whole insurance moneys, (r) A provision to this effect is inserted in all well drawn mortgage deeds, and is called the receipt clause. It may be relied on not onjy on the authority of the case cited above, but of the universal practice of conveyanoerSi(s) 13. When the policy is assigned to trustees upon trusts declared by the deed itself, or any deed with even date therewith, a receipt clause will almost invariably be found in the assignment. Should this be wanting by reason of any neglect in its preparation, the ordinary rules P^onn-, of equity *must be applied in the consideration of the particular L -' provisions of the deed. Without any express declaration, they may be such as to rebut the implied liability, as where the trusts are such as to require time, and the exercise of a discretion in their execu- tion ; as for example, where they are for the benefit of unborn children or other issue, (i) or to invest with power to vary the investments, (m) or for the payment of debts not specified ;(v) in such cases the receipt of the trustees will be a sufScient discharge. And where the power to give a discharge is not clear, but the trust is to lay out the money in the funds, &o., upon trusts, if the insurers see it invested according to the trust, and a declaration of trust executed, it has in practice been con- sidered that they have done all that could be required, (w;) Should, how- ever, the trusts be for the benefit of a limited number of persons sui juris, and capable of giving receipts for their shares, or for the payment of a limited number of specified debts, the receipts of the cestui que trusts or creditors as the case may be, will be necessary, (a;) Where the entire interest is not exhausted, and the trust is for the payment of spe- cific or scheduled debts, it will at once be observed that it may be neces- ary to treat it as a mortgage for securing the latter, and to require the concurrence of the assured or the personal representative. 14. When the consideration for an assignment is voluntary, the insu- rers can in no case be advised to pay the volunteers without the concur- rence of the personal representative. (y) 15. In all cases of assignments it will be remembered that no legal interest passes to the assignee, the legal right to sue still remaining in the assignor, but to be exercised for his benefit, not only, therefore, are r^qoon ^^^ insurers Entitled to a receipt which shall be an equitable L J discharge, but also to be rendered secure from any exercise of the legal right to their prejudice. 16. A vexatious exercise of this right would doubtless be visited upon the insurers in a court of equity, in the payment or refusal of costs ;(«) but it is an additional reason for entitling the.m, on their waiver, of it, to (r) Ottley T-. Gray, 16 Law J. 0. 512. («) Ante, p. 190. (t) Glyn v. Lock, 3 Dru. & War. 11. («) Locke Ti Lojaas, 5 De G. & S.,326. («) Sugd. Pureh, 836, 11th ed. (w) Ibid. 838. (x) Ibid. 834. (jr) Chap. VIII. Pt. 2. (z) Ottley V. Gray, 16 L. J. C. 512. PAYMENT OF ClAIMS. 213 the custody of the documents evidencing the equitable title ; hence in such cases, the assignments must be delivered to the insurers with the policy ; or in cases where they are contained in deeds forming part of the title deeds to real estate, or operating as settlements, or other trust deeds which the claimants cannot part with, attested copies must be given, and a covenant for the production of the originals. Shortly before the ele- vation to the bench of the late Vice-Chaneellor, Sir James Parker, a case was submitted to him for his opinion, under the following circum- stances : A policy had been assigned upon certain trusts, the deed of assignment containing a sufficient receipt clause. The trustees claimed payment of the money, without the concurrence of the personal repre- sentative in whom the legal interest was vested, and produced this deed, with which it was clear they could not part, but refused to give any cove- ilant for its production. The question was, whether they could sustain their claim, coupled with this refusal. Mr. Parker considered they could not, and gave the following opinion : " I am of opinion, that upon payment of the insurance money the directors are entitled to such a dis- charge as shall be a bar to the legal right of action on the policy ; and that if they are willing to dispense with such a discharge, they are entitled to such other reasonable protection against any possible claim, as they may think fit to require. As the personal representative of the assured is not in this case to join in the discharge, I am of opinion, that the di- rectors, are entitled upon payment of the insurance money, either to the possession *of the deeds of assignment or to such deed of cove- r-iiionA-] nant for their production, as shall be satisfactory to themselves, *- -I and to require that the insurance society shall not bear the expense of the deed of covenant." The author is indebted to the solicitors of the company for the perusal of the original opinion, and he may add, that he has been informedj that Sir James Parker followed it in another pre- cisely similar case, subsequently brought before him judicially : the ease was argued in Court, but no decree was pronounced, and the Vice- Chaneellor recommended that the bill should be withdrawn. 17. When a legal as well as an equitable discharge is given, the insu- rers do not necessarily depend for the support of their payment upon the validity of the equitable title, which they have recognised in making it, but they are entitled to evidence sufficient to rebut any liability arising from notice. Thus, in such, a case, where assignees under any deed cannot safely part with it, and have power to give a receipt in equity, and notice of the deed has been given, but no notice of any other claim has been recorded, it is conceived that the insurers are entitled to an attested copy of the deed, but not to any covenant for its production. The legal discharge would be sufficient but for the deed, and upon its production the correctness of the equitable discharge would be proved. Where, however, there are successive liens duly registered, and the assig- nees under a deed evidencing the first, have power to give a good dis- charge, but cannot part with the deed, it is then conceived that the insu- rers are entitled to a covenant for its production. Without the produc- tion of that deed they would have no reply to a bill in equity by the subsequent incumbrancer, and are not to be compelled to tely upon their 214 BUNTON'S lilfE ASSURANCE. equitable right to its production, nor would it appear that the new stat- utes as to evidence make any difiference in this respect. In practice, however, the covenant is very often waived, where the in- surers are satisfied as to the custody in which it is intended that the deed P^qnr-. shall remain, and they are *content with attested copies and a L J parol undertaking, or in some cases an indemnity is given. When policies in several offices are comprised in the same deed, it is not unusual to deposit it with one company for the benefit of the rest ; but the company holding it would not be advised to" enter into a covenant for its production. When the deed including policies in several companies has been once delivered to one of them, that company will be entitled to retain it, notwithstanding the larger amount of the insurances efiFected with the others. 18. Upon the payment of the claim, the insurers are entitled to the delivery of the policy ; but it does not follow that, because the policy cannot be produced, an action upon it cannot be sustained. 19. When an instrument is negotiable, and the interest in it passes from hand to hand by delivery, its loss is an insuperable bar to an action at law; (a) but where it is not negotiable (and policies of assurance are not so,) this is not the ease. A distinction was formerly taken between instruments of the latter class of a parol nature, or under hand only, and those which are under seal, and therefore specialties; and at one time, in consequence of the rules respecting profert and oyer, an action upon an instrument under seal could not be sustained without the possession of it. This strictness has, however, been long since modified by the rule that profert might be excused in the declaration on the grounds that the instrument was lost or destroyed, or was in the possession of the defend- ant; and now that profert and oyer have been abolished, it would seem that in all cases an action may be sustained upon proof of the execution or grant of the policy, which may be readily done under the new law of evidence, by calling the officers of the company, and obtaining the pro- duction of the office books. Since an assignee acquires no right of action, the company would incur no liability by paying the claim to the r*^9f!T S"^^^^^) provided that no notice of lien has *been given by the L -I assignee ; and the payment of the claim would be a discharge both at law and in equity. Should it, however, be necessary for the assignee to proceed in equity, the bill must contain an ofier to give a proper indemnity under the direction of the court, and an affidavit of the loss must be annexed.(5) In such a case it has been said, that the ofier entitles the court to require an indemnity not strictly attainable at law, and founds a just jurisdiction. (c) At the same time it has been consi- dered, that if recovery can be had at law, equity will not entertain the bill, notwithstanding the offer of indemnity ; but, having regard to the rights of the party pajring the money, the propriety of this exception has been doubted,((i) for he is entitled upon payment of such a security to have it delivered up to him as a voucher of its payment, or extinguish- (a) Hansard v. Robinson, T B. & C. 90. [ (4) Walmsley v. Child, 1 Ves. 344. (c) 1 Tea. 344, 345. 446, 2 Ves. 38, 16 Ves. 430. 439, 1 Yes. 19. 21, 9 Ves. 468, 469. (d) Mossop T. Baden, 16 Yea. 430. PAYMENT or CLAIMS. 215 ment: and it may have been assigned in equity to a third party; and although in such a ease the assignee would be affected by all the equities between the original parties, yet the insurers may not always, after a great length of time, be able to establish those equities by competent proof; and, at all events, he may be put to serious expense and trouble to establish his exoneration from the charge. The jurisdiction of courts of equity under such circumstances seems perfectly within the principles on which such courts ordinarily proceed to grant relief, not only in cases of absolute loss, but of impending or probable mischief or inconveni- ence; and a bond of indemnity, under such circumstances, is but a just security to the promisor against the vexation and accumulated expenses of a suit. It would therefore seem equally reasonable for the company to require such a bond, whether the claim was one upon which recovery might be had at law or in equity only.(e) *20. A question may be raised as to the effect of the statutes ^^„i^.- of limitation upon a claim of this nature ; but from the form in L J which policies are for the most part granted, namely, making the sum assured payable not at the expiration of a certain time after the death of the assured, but " after satisfactory proof of the death shall have been given to, or received by, the directors," the point can rarely be of im- portance ; the statutes do not begin to run until the cause of action arises, after which twenty years would be a bar when the policy was under seal,(/) and six years when it was under hand only;(^) but the cause of action would not arise on such policies upon the death, but upon the proof. Hence, ignorance of their rights is not likely to prejudice the representatives of an assured person. A question might, however, be raised where the directors had received proof aliunde, as where another person had assured the same life by a separate policy, and received the assurance moneys. When the policy is upon the life of the assured and he dies intestate, the statute could not in any possible case begin to run until the grant of letters of administration by the Ecclesiastical Court. (A) 21. Lastly, should the insurers, in ignorance of their rights and of the facts of the case, have paid a claim upon a void policy, — as, for example, where it was obtained fraudulently, or without an insurable interest to support it, — they will be entitled to recover the money, un- less it has been paid after the commencement and under the pressure of legal proceedings against them, or voluntarily, or under a mistake not of the facts, but of the law.(i) ■(e) 1 Story, Com. 104. (/) 3 & 4.Wm. 4, c. 42, 3. 3. (g) 21 Jac. 1, c. 16. (A) 2 Will. Ex. 1599. (i) Harriot v. Hampton, 7 T. B. 269. See 2 Smith's Lead. Ca., p. 237, with the cases there cited. 216 bunton's life assurance. [*328] *CHAPTBIl III. ENFORCEMENT or CLAIMS. 1. When the policy has heoome a claim, the payment of the assurance moneys, unless duly made by the company, may be enforced by the as- sured; or, where the policy has been effected by him upon his own life, by his personal representatives. When the policy has been assigned, the assignee, as in the case of a purchase upon a sale, will be entitled to sue the office in the name of the assignor, or, as the case may be, of his exe- cutor ; and a court of law will take notice of the equitable interests of the assignee ;(a) and, in so simple a case, a court of equity will probably re- fuse to interfere without some special circumstances calling for its inter- vention — more -particularly, if the deed of assignment contains a power of attorney, which is subsisting at the time of the suit. (6) But if there are special circumstances, and if it is represented that the assignor, not- withstanding the right which the assignee has obtained to sue in his name, will interfere and prevent the exercise of that right, a court of equity will interpose; and if the assignor or his representative refuse to allow the matter to be tried at law in his name, will compel them to do -£o;(c) and also has a jurisdiction in the first instance to oompel payment to the assignee, especially when there is collusion between the parties r*^9cn ^y whom the payment is to be made and the assignor; and in L -1 such a case will set aside a release fraudulently given to the assurers by the \a,ttei,(d) which, indeed, would be also done by a court of law, in not allowing the release to be pleaded, (e) The assignor is, however, entitled to be indemnified against the costs of the action, which a court of equity will restrain until security is given. (/) 2. The right of the assignee to sue in the names of the personal repre- sentatives of the assured is, however, further controlled by the possession of the probate or letters of administration by the latter. Prior to the Common Law Amendment Act, profert must have been made of these, and oyer might have been demanded, in which event their nonprodnetion was a bar to this action. A certificate from the Prerogative Court was not a substitute for them. This was decided expressly in a case shortly before the act, in which a policy had been assigned by a deed absolute in form, but in fact intended as a mortgage only. The claim was made for the payment of the full sum assured, which exceeded the debt, and was resisted by the insurers at the request of the widow and executrix, (^i) Profert and oyer are now abolished ;(A) but it is conceived that the same result would ensue under the plea ne unques executor, for the real plain- (o) Bauerman v. Eadenius, 2 Smith's Leading Cases, 236. (6) Keys v. Williams, 3 You. & Coll. 466-T. (c) Gardeners v. Parker, 3 Mad. 184. (d) Hammond v. Messenger, 9 Sim. 327. (c) Phillips v. Clagett, 11 M. &W. 90. (/) Annerly v. Simon, 4 Mad. 390. (g) Willey v. Bignold, 11 Jur. 309. O.B. (A) 15 & 16 Vict. c. 76, s. 55. ENJOROEMENT OP CLAIMS. 217 tiff would have no power to compel the nominal plaintiff to produce any documents in his possession. 3. As we have already observed, when the policy has been assigned and the legal and equitable rights are vested in different parties, the office is in general entitled to a receipt, not only from the equitable claimants, but also from the party who possesses the legal right. This arises from the legal and equitable doctrines relating to the assignment of choses in action. Such an assignment not *being reco^ised in a court of r^oqm law, but being good in equity only; the recovery in equity by L J the assignee, would be no answer to an action at law by the assignor, in whom the legal right to sue would still remain, and who might exercise it to the prejudice of the party liable, who would then be driven to the circuitous process of filing another bill against the plaintiff at law to stay his proceedings, (i) When, therefore, it is necessary to enforce payment of the claim in a court of equity, the assignor or his executors (as the case may be) must bfi made parties to the suit, in order that the legal rights may be bound by the decree of the Court, (/c) 4. The distinction taken between the legal and equitable title is well shown in the case of Griyn v. Locke,(?) before Lord Chancellor Sugden, in Ireland. In this case, two policies were effected by A., upon his life, with the Globe Insurance Office; one for 425Z., in his own name, and the other for 1700Z., in the name of B., as trustee. Shortly afterward? A. assigned these policies, by deed, to B.,, upon certain trusts, for the payment of debts, and advances then made and thereafter to be made by B. on A.'s account, and subject thereto for A.'s daughters, as he should appoint. The deed of assignment contained no proviso that the receipt of the trustee should be a good discharge for the amounts insured. Upon A.'s death, claims were made upon the office by B.'s executor, and noti- ces were served upon the company by A.'s administrator, by one of his daughters, and the husband of another daughter, cautioning the company against paying the amount to B.'s executor. Upon a bill of interpleader being filed, another notice was served on the company by A.'s adminis- trator, withdrawing his claim to the two policies, and the bill was subse- quently taken as confessed against him, and also against A.'s daughter. *The Lord Chancellor considered that the case stood upon en- rj^oo-i-i tirely different grounds with regard to the two policies. As to L J that for 1700Z., the legal right to sue being in B.'s executor, and the nature of the trusts of the deed being such as to absolve the company from seeing to the application of the money, he considered that the bill must be dismissed with costs. But as regards the policy for 425?., he observed, « that policy was effected by the settlor, and, therefore, the person who had the legal right to recover was his personal representative, who, unfortunately, insisted upon the company paying hin the amount of both policies. The notice shows that he was acting under a misappre- hension of his rights, but, nevertheless, claiming for the general benefit of the family. I do not feel at liberty to say this was not a case for in- («') Daniel Ch. Pr. 207-8; Brace v. Harrington, 2 Atk. 235; Kay v. Fenwick, 3 Bro. C. 0. 25; Cathcart v. Lewis, 1 Ves. J. 463. {h) Mitford, 206. 179. Dan. Ch. Pr. 202. {I) 3 Drn. & War. 11. 218 bunyon's life assurance. terpleader, for here was a conflict." The question, it will be remarked, had become entirely one of costs, and the Lord Chancellor continued : "As to so much of the bill as relates to the policy for 425Z., I think that the plaintiffs are entitled to their costs up to the service of the notice of the administrator withdrawing his claim. If the bill was filed in error as to that policy, the fault lay with the defendant; but upon the service of that notice the company ought to have stopped, because it was his claim alone that entitled them to file the bill ; and the moment he withdrew his claim, from that time the smaller policy stood upon the same ground as the policy for 17001." Again, in another case(m) before the late Master of the Rolls in England, an assured deposited a policy on his own life with a creditor, to secure a sum due, and further advan- ces, and thereupon the usual notice was given. Subsequently he assigned the policy to the same party by deed, containing a power of attorney to receive the insurance moneys when payable, and, in addition, a full receipt clause. On the death of the assured, the company refused to pay without the receipt of his personal representative (whom they alleged r*^^9T *° ^® ^ necessary party to a bill,) or *an indemnity. The per- L J sonal representative was accordingly made a party, and disclaimed any interest; and thereupon payment of the money was decreed, with interest at 4 per cent., from three months after the decease of the assured; but no costs were given. 5. It does not appear that the rules to be derived from the preceding eases are altered, in the first instance, by the provisions of the New Chancery Procedure Act,(n) but by the 44th section it is enacted, "that if in any suit or other proceeding it shall appear that any deceased person who was interested in the matters in question has no legal personal repre- sentative, it shall be lawful for the Court either to proceed in the absence of any person representing the estate of such deceased person, or to appoint some person to represent such estate for all the purposes of the suit, or other proceeding, on such notice to such person (if any) as the Court shall think fit; and orders so made by the Court shall bind the estate of the deceased in the same manner as if a duly constituted per- sonal representative had been made a party." This section will doubtless be applicable to all cases in which the interest of the personal represen- tative is merely nominal, the object being to bind the estate ;(o) but it does not appear clear that it will be held so, when an account has to be taken between the plaintiff and the estate of the deceased, as in the case of a mortgage ; perhaps, it might be so when the receipt clause is ample, or the provisions of the deed are equivalent thereto. (/)) 6. No interest was formerly recoverable in an action upon a policy, notwithstanding that the sum insured was not paid at the time stipu- lated ;(2) but now it is enacted by a late statute, that the jury, on any inquisition of damages, may, if they shall think fit, give damages in the m) Ottley v. Gray, 16 Law J. C. 512. n) 15 & 16 Vict. c. 86. (o) Groves v. Lane, 9 Hare, App. 47. p) ChaflFers v. Headlam, 9 Hare, App. 46. ■y) Higgins v. Sargent, 3 Dowl. & By. 613. ENFORCEMENT OF CLAIMS. 219 nature of interest over and above the money recoverable, *in all r^ooq-i actions on policies of assurance made after the passing of that L J aot.(»-) The statute does not give interest at all events from the time at which the money becomes payable, but enables a jury to give it in its discretion. And equity would follow the law, equally awarding it in a proper case,(s) although the discretion of a court of equity is not con- trolled by the act.(<) No interest would, therefore, be recoverable, except upon the expiration of the stipulated time after the death, and after a valid discharge had been tendered for the insurance moneys. Thus, prior to the statute, no interest was given on the sum assured by a policy which had been lost, and which the office in consequence had refused to pay(M) and this would appear to remain unaltered by that sta- tute, (jj) Every case must depend upon its own particular circumstances; but where the company is in the position of being liable to pay the money at any instant, there appears no equity to compel it to make or retain an investment at its own hazard, (w) In a case in which there was likely to be great delay and difficulty, it is conceived that the company could always prevent any question by giving notice to the claimant that the money was lying at their bankers, making no interest, and by never reducing their floating balance below the specified amount, (a;) 7. When there are conflicting claims at law, and the respective claim- ants each' require payment of the sum assured, upon an action being brought by one of them relief may be obtained by the office by a motion by way of interpleader, under the 1 & 2 Will. 4, c. 58. (y) As how- ever, it can scarcely happen but that the claim of one *party is r-jKoo^-i of a purely equitable character, upon receiving notice of the con- L J flicting claims, relief must be sought by the insurer by a bill of inter- pleader. It is not necessary to wait until an action is brought or other proceedings taken, nor even until an apparent title is shown in each de- fendant, but as soon as the conflict of claims arises, the insurers are en- titled to be protected against the double vexation, and may file a bUl against the rival claimants, praying that they may interplead, and for protection in the interim against their demands, which will be granted by injunction restraining any action at law against the plaintiff in equity.(2!) 8. To justify a bill of interpleader, it is not sufficient that there should be an imperfect title, — there must be a conflict of claims. The recent case of Fenn v. Edmonds(a) well illustrates what is a conflict. In March, 1842, a policy effected with the Asylum Company upon the life of one Kobert Stuart was assigned by A. B., the assured, to a mortgagee to secure a debt of large amount, with power for the mortgagee to de- mand and sue for the sum assured in the name of A. B., her executors, or administrators. Notice of the assignment was duly served upon the Ir) 3 & 4 Will. 4, c. 42. (s) Bignold v. Audland, 11 Sim. 23. i) In re Powell's Trust, 10 Hare, 134. (u) Bushman v. Morgan, 5 Sim. 635.' Coote on Mortgages, 3 edit. 438. (w) Wolfe t. Findlay, 6 Hare, 66. Calcraft v. Roebuck, 1 Ves. 221; see Sug. Vend. 793, et seq. (y) ColUer t. Laurie, 3 C. B. 334; 13 M.,& W. 800; 15 M. & W. 194. z) East and West India Dock Company v. Littledale, 1 Hare, 61. a) 5 Hare, 314. a 220 bunyon's liie absuranoe. company, and subsequently, in November in the same year, A. B. became (bankrupt. In April, 1844, the sum insured became payable by reason of the death of Eobert Stuart, and in the course of the next month the solicitors of the insurers applied to the solicitors of the assignees, inquir- ing whether they had any objection to the payment being made to the mortgagee, or if they would concur in the discharge to the company. To this letter an undecided reply was given by the assignees; and upon the 8th of June following an action was brought against the company by the mortgagee in the name of the bankrupt. Upon this the solicitor of the company a,gain applied to the assignees, to the same effect as before, P^„qr-i and giving *notice of the action, to which the solicitor of the as- •- ' J signees replied, that he was not in a position to answer the let- ter. Upon this an interpleader bill was filed by the company against the bankrupt, the mortgagee and the assignees, and it was held by Sir James Wigram, V. C, that the bill was properly filed. " Looking," he said, " at the nature of the security and the property which it conprised, and the right of action against the company; looking also to the corres- pondence which took place before the bill was filed, and the answers of the assignees in the suitj which do not exclude their claim, I cannot say that the company might not have been liable to pay the sum due upon the policy a second time, if they had not instituted this suit." By the terms of the decree the costs were payable in the first place 0*111 of the fund in court, and untimely by the assignees. 9. The money is usually paid into Court for the benefit of the party to whom, upon the hearing, it shall be found due ; and the office is en- titled to costs, to be paid by the party wrongfully claiming ; and in the last case they seem to have been given in the first instance out of the fund;(S),and not only in the Court in which proceedings are commenced, but also in the Court above, in the event of an appeal, and that which- ever party is successful, (c) To sustain this title to costs, however, the insurer must not seek for any further relief, and hence where a bill was filed for protection against conflicting claims, in respect of a sum of money payable under a life policy, upon which interest would be recov- erable at law, and the bill disputed the liability to pay such interest, it was held that it could not be sustained as a bill of interpleader ; and raising also a question as to the costs of an action commenced against the plaintiff, was dismissed as multifarious, and that notwithstanding (-non-. *the plaintiff had amended his bill, and submitted to pay such L J sum on account of interest as the Court might direct.((i) 10. When it is necessary to enforce payment of the sum assured in a court of law, the answer to the question against whom the action is to be brought will depend upon the constitution of the particular office, and the form and provisions of the policy upon which the demand arises. It will be remembered that the form of action, when the policy is not under (J) Fenn v. Edmonds, 5 Hare, 314. "The plaintiff, it would seem, has a lien on the fund when the suit is properly instituted." — Seton on Decrees, 341. Sed vide Martiuiua v. Halmnth, 2 V. & B. 407 ; 7 Hare, 59. (c) Masterman v. Lewin, 2 Phil. 189. {d) Bignold v. Audland, 11 Sim. ^3. ENFORCEMENT OF CLAIMS. 221 seal, will be assumpsit; when it is so, covenant; or debt, when the sum to be recovered is liquidated, (e) 11. When the company is incorporated either by Koyal Charter or Act of Parliament, the policy will be under their common seal, and the action must be brought against the corporation as such; in which case it must appear by attorney made uuder the common seal, and execution can be levied upon the partnership property alone. 12. When the policy is issued by a company established prior to the Joint Stock Companies Kegistration Act, the action may be brought against the directors signing the policy, as if upon a covenant or under- taking by them. Thus in Bawden v. Howell, (/) when it was objected that all the mem- bers of a loan society should have been joined as plaintiflFs, to two of whom a promissory note had been given on behalf of the society, it was held that such joinder was unnecessary, and in giving judgment, Maule, J. said, "The case is perfectly free from doubt. It is a matter of every-day occurrence for the business of unincorporated companies to be transacted in the manner in which the affairs of this society are conducted. Poli- cies of assurance are generally signed by three directors; and it has never been suggested that the whole of the company *must sue and be r:|;qD7n sued upon such policies." When the policy is not under seal, L -1 not only, however, are the subscribing directors chargeable, but every other shareholder may be sued separately, or in conjunction with any other or others of his co-partners, and with or without the subscribing directors. (5') 13. It is, it is true, a general rule, that in actions upon contract every partner must be made a defendant, but it is also true that all contracts with partners are joint and several, each being liable to pay the whole, and that the objection of the nonjoinder of any of them must be raised by a plea in abatement by the defendants.(A) To this plea the statute 3 & 4 W. 4, c. 42, seems in the cases in question to form an insuperable impediment; for it is thereby enacted(i) that no such plea shall be allowed, unless the co-defendant whose nonjoinder is pleaded be therein stated to be resident within the jurisdiction of the Court, and unless the place of his residence be stated with convenient certainty in an affidavit verifying such plea. The plea should, moreover_, mention all the defendants not joined, as otherwise, if the plaintiff takes issue on the plea, he will recover a ver- dict ;(^) and if one of several co-contractors reside out of the jurisdiction, there can be no plea in abatement for nonjoinder of those within it.(?) Hence, when the parties are very numerous, as in the case of a joint- stock company, the plea cannot, practically, be used. 14. When a contract is under seal, those only who are parties to it can be sued upon it; and unless it is several, as well as joint, the right (c) Sunderland Marine Insurance Company v. Kearney, 15 Jur. 1006. Q. B. m 3 Man. & Gr. 642; Hallet v. Dowdall, 16 Jur. 4T6, Exch. per Parke, B. g) Eeid V. Allen, 4 Exch. 326; Hallett t. Dowdall, supra. ■" Eice T. SLute, Burr. 2611. (i) Sect. 8. Crellin v. Calvert, 14 M. & W. 11. (2) ZoU v. Lord Curzon, 4 C. B. 249. 222 BUNYON'S LIFE ASSUKANCE. of action will survive, and must, in the case of the death of one or more of the covenantors, be enforced against the survivors or survivor of them and his executors or administrators. It is immaterial that the defend- p»oQg-| ants no longer fill the characters of directors or "trustees; the L -• construction of such a policy being that it is a personal covenant or undertaking on their part, which they have been duly authorised to enter into by the company, and against which they are subsequently en- titled to relief on performance of the contract ; and that although, by the terms of the policy, they may simply order and appoint that the capital stock of the company shall stand charged with the payment of the sum assured, (m) In such a case, when the funds alone are expressed to be charged, the construction of such an instrument is that of a covenant by the subscribing directors upon a condition, namely, that the funds prove adequate, and they will be personally liable upon an averment that they are so, unless the contrary is pleaded, fw^ In equity, also, the directors subscribing the policy will, in the first instance, be the proper parties to represent the company, either as plaintiffs, as when a bill is filed praying that the policy may be delivered up to be cancelled, or as defendants, upon the refusal of the company to satisfy a claim thereon. The other members having authorised the directors to enter into obligations for them, and having thus placed them in a situation of responsibility to third parties, will be bound by a decree against them;(o) and, in any case, it will be unnecessary that all the co-partners should be made par- ties, according to the well-known rule that, when the persons in the same interest are inconveniently numerous, they may be represented by a limited number of them. (p) 15. When a private Act has been obtained, it will be convenient to proceed in accordance with its provisions : but, unless the terms of the Act are imperative, it does not follow that a claimant must do so ; on the contrary, he may still proceed against parties executing the policy, r-^qoQ-\ O"^ against an individual shareholder, (j) When the policy is *is- L -• sued by a company completely registered under the Joint-Stock Companies' Registration Act, the claim must be enforced against the company according to the provisions of that Act.(r) 16. The general principles on which demands are to be enforced upon policies of insurance are greatly modified by the stipulations which are now usually, if not universally, contained in such instruments, to the effect that the contract is to be satisfied out of the funds of the under- taking alone. The rule that partners are both jointly and severally lia- ble upon every one of the partnership contracts — so that a partner in any such undertaking, whose interest is scarcely more than nominal, may become answerable upon the default of his co-partners for the entire liabilities of the concern, to his last shilling and his last acre, holds uni- versally. But this liability exists according to the contract upon which (m) Gumey T. Rowlings, 2 M. & W. 87 (n) Dawson v. Wrench, 3 Bxch. 229. (o) Barker v. Walters, 8 Beav. 96. (p) Ibid. (g) Beech v. Sir P, Byre, 6 Scott, N. R. 327, 5 M. & G. 415; Blewett v. Gordon, Dowl. N. S. 815; Phelps v. Lyle, 1 Ad. & EU. 113. (r) See sects. 25. 66, 67, 68, and ante, p. 130. ENFORCEMENT 01" CLAIMS. 223 the demand is to be made, and into wbioh the general rule of law is not to be allowed to import, as against individual shareholders, any increased responsibility. It has, indeed, been questioned whether such provisions are lawful, and whether they must not be rejected as repugnant to the original contract, and therefore void ; but this objection seems to be fal- lacious — for although an agreement, inter se, would not vary the liability of partners towards a third party, there can be no doubt but that the general liability of individual partners may be varied, or modified, by agreement with the party with whom they contraot.(s) Of course such a clause might be void, if so imperfectly expressed as to be incapable of any reasonable and definite construction, although the intention might be guessed at. But, short of this, the Court will grapple with the difficulty, however great, in the construction of these provisions. 17. In the very important case of Hallet v. Dowdall,(<) *in r^itqa^m the Exchequer Chamber, a clause of this nature was much con- L J sidered. The policy was not under seal, and contained the following proviso : " And it is declared and agreed, by and between the said com- pany and the assured, that the capital stock and funds of the said com- pany shall alone be liable to answer and make good all claims and de- mands whatsoever, under, or by virtue of this policy ; and that no pro- prietor of the said company, his or her heirs, &c., shall be in anywise subject or liable to any claims or demands, nor be in anywise charged by reason of his policy, beyond the amount of his or her share in the capi- tal stock of the said company, it being one of the original and funda- mental principles of the said company that the responsibility of the indi- vidual proprietors shall, in all cases, and under all circumstanpes, be lim- ited to their respective shares in the said capital stock." The action was brought by the assured against four shareholders and one director who had not subscribed the policy. The questions raised were, first, whether there was a joint contract by all the shareholders (including the directors) to pay out of the capital stock, and of this opinion were two of the judges (Cresswell and Williams, JJ.);(m) secondly, whether the joint contract was not by the entire body, but by the directors only who had signed the policy, — and of this opinion were Alderson, B., and Martin, B. ; thirdly, whether there was a separate right of action against every shareholder, to the amount of his unpaid subscription, analogous to that founded by the 36th section of the Companies' Clauses Consolidation Act (8 & 9 Vict., c. 16,) whereby, after a fruitless execution against the company, execution may be issued by leave of the Court, to the like ex- tent, against any of the 'shareholders, or to the separate and limited liability of ordinary underwriters upon a marine policy, as was thought by Martin, B.; fourthly, whether there was, in fact, any liability at law upon the *policy, as was questioned by Parke, B. It seems to r^^q^i-i have been considered that, in such a case it was necessary to L J aver the sufficiency of the funds, although it has been said that it had (s) Hallett V. Dowdall, 16 Jnr. 473, per Piatt, B. h) 16 Jur. 462, Bich. (u) Concurring with Coleridge, Wightman, and Brie, JJ., in the Court below. 224 BUNYON'S LIFE ASSURA-NOE. not been decided that it was so,M and that the want of funds must be pleaded by the defendants. Some difference of opinion existed as to the meaning of the words " Capital stock and funds." In the court below, it was thought that the available funds or money in hand was thereliy meant; but, in the court of error, that the capital not paid up, or so much thereof as could be obtained, was included. The whole case is, no doubt, involved in great difficulty; but it may be suggested whether, in fact, the three separate rights of action did not coexist, the first two sub- ject to the sufficiency of the Fund, namely, either against the subscribing directors^ or all, or any, of the co-partners ; the third) to the amount of the unpaid subscription of the shareholders against them individually. 18. In a policy issued by a company completely registered under the Joint-Stock Companies' Act, there was a similar clause ;(«>) and judg- ment having been recovered against the company, and a return of nulla bona made to a fieri facias issued against it, a rule was obtained to show cause why execution should not issue against an individual shareholder under the 66th section of that Act. It was held that no action should have lain against the shareholder upon the policy, to which he was not individually a party, and that the plaintiff was precluded altogether from taking proceedings against him at law.(x) rsfOAn-i *19- But, however, great may be the difficulty in proceeding L J against a shareholder at law, he may, at all events, be made liable in equity to the extent of the unpaid portion of his shares, and particu- larly as a contributory by virtue of the Joint-Stock Companies' Winding- up Acts. In the case of the same company (In re the Merchant Tra- ders' Ship Loan and Assurance Company, and the Joint-Stock Companies' Winding-up Acts, Lord Talbot's case,(y) when all the policies contained the clause already recited, limiting the liability of the respective share- holders, it was objected that, as no call could be made under the machi> nery provided by the company's deed of settlement, no call could be enforced by the Court. But Sir J. Parker, V. C, said : "The cases cited leave untouched the question^ which seems to me not to admit of Sspute, that the claims of the policy holders are in the nature of charges' upon the property or assets of this company, which can only be enforced by a bill in equity, or by petition under the Winding-up Acts, or in the Bankruptcy Court under a fiat in bankruptcy." and he added, "If I found in the deed of settlement any precise stipulation that the capital was to be paid at any fixed periods in various instalments, I should have very great difficulty in saying that they were to pay it otherwise. I find (») Dictum per Lord Campbell, 15 Xur. 1007. (to) Hallett t; Merchant Traders' Ship Loan and Assurance Company, 13 Q. B. 964; Hassell r. the same company, 4 Exch. 525. (x) The_prOTiso was in the following terms: — "That the said policy, and any thing therein contained, should in no case extend, or be deemed or construedtc extend; to charge or render liable the respective proprietors of the said company, or any of them, &c., to any claim or demand whatsoever in respect of the said policy, or of the insurance thereby made, beyond the amount of their, his,, or her respective individual share or shares in the capital stock of the said company, but that the said capital stock and funds should alone be liable to answer all claims and demands by virtue of the said insurance or incident thereto. (y) 16 Jur. 855. ANNUITIES. 225 HO such provision, but" that these gentl&men were to pay a certain amount ;" and thereupon the motion of a contributory disputing the order of the master, the effect of which was to require payment of the full amount of the shares subscribed, was dismissed. 20. The effect of these clauses is to create a charge upon the property of the company ; and hence, upon a bill being filed, the assured have been considered to be entitled to be informed of the particulars of the property subject to their charge, unless the defendants distinctly offer to admit the sufliciency of funds, (z) *21. When the proviso that the capital stock and funds of i-,fq jq-i the company should alone be liable was inserted in a policy <- J issued by an incorporated company, in the form of a deed-poll under their common seal, it was held that the stipulation was merely the ex- pression of that which would have been tacitly understood, expressio eorum quae tacitfe insunt, and was unimportant, the limited liability being incident at law to a corporation, (a) 22. Lastly, when a bonus has been actually declared, it may be reco- vered, togetber with the principal, by the assured by any proceeding suit- able to the recovery of the latter. The declaration of the bonus gives to each of the assured a distinct right to the sum allotted to him. (6) Until the amount of the bonus had been ascertained, the representatives of the assured could, however. Only assert their claim in a court of equity, in which alone a suit could be entertained to compel the directors to value the assets of the concern and declare a bonus of the surplus. There is no instance on record of such a suit. »CHAPTER IV. [*344] ANNUITIES. 1. The sale and purchase of annuities are subject to the provisions of the Annuity Acts requiring the inrolment in the Court of Chancery of a memorial of the deed or instrument whereby they are granted, in a form prescribed by those Acts. The original Annuity Act(c8) was intituled " An Act for registering the Grants of Life Annuities, and for the better Protection of Infants against such G-rants," and recites, as the evil which the Act was intended to remedy, " that the pernicious practice of raising money by the sale of life annuities had of late years greatly increased and was much promoted by the secrecy with which such transactions were conducted." It is now completely repealed, except so far as its provi- sions are re-enacted by the present Annuity Act;(6) but the object of (z) Law v. The London Indisputable Life Policy Company, 22 L. T. 19. (ff) Sunderland Marine Insurance Company v. Kearney, 15 Jur. 1006. (Q. B. in error.) !J) Carlisle v. The Southampton Bailway Company, 1 McN. & G. 689. a) 11 Geo. 3, c. 26. (6) 53 Geo. 3, o. 14. August, 1853.— 15 226 bcnton's life assurance. both Acts is the same, namely, in the first instance, to throw aronnd the vendor the protection of its provisions. Judgifng, however, from what we learn from contemporary hiatory,(c) it would seem that the legis- p^qic-i lature ibight have *had a further object, namely, to discourage L J the grant not only of improvident, but of gambling annuities, as well by infants and private individuals as by annuity societies, which at that time existed in great numbers, and matiy 'of which proved them- selves unworthy of the confidence of the public. This is shown by the third section of the Act, which provides that in the registration of annui- ties granted by companies formed for the purpose of granting or pur- chasing annuities, and consisting of more than ten persons, it shall be sufficient to describe such company by the usual firm or name of trade. () r*^4-81 ^^^ person *chargeable may apply to the court in which any I- -I action is brought to set aside the annuity and order every secu- rity given for it to be cancelled. 6. In every instrument granting an annuity the name of the cestui que trust (if any) must be inserted as well as in the memorial, (g) The act also enables any person by whom any annuity is payable to compel the grantee to deliver to him, at his expense, copies of the deeds securing the annuity, and to permit them to be examined by the ori- ginals, (r) 7. The act makes contracts for annuities with infants absolutely void and incapable of subsequent confirmation, and prohibits (under penalties) solicitors and other persons from accepting more than ten shillings per cent, brokerage on the purchase-money of the annuity, (s) By the last section it excepts from its operation annuities given by will or marriage settlement, or for the advancement of a child — every annuity upon real estate in Great Britain or Ireland, or the Colonies, of equal or greater annual value than the annuity over and above any other annuity and the interest of any principal sum charged or secured thereon, of which the grantee had notice at the time of the grant, whereof the grantee is seised in fee-simple or in fee-tail in possession, or the fee-simple whereof in pos- session he is enabled to charge at the time of the grant, or secured by the actual transfer of stock in the public funds of greater annual value than the annuity — voluntary annuities, and annuities granted without regard to pecuniary consideration or money's worth, or by any body cor- porate, or under any authority or trust created by act of parliament. (i) 8. It is also provided by the last section that the act shall not extend to Scotland or Ireland. Where some of the parties are resident in Eng- land, and the others in Ireland or Scotland, a question may arise, whether f^oAQ-t tlie act applies or not. The point was discussed in a case before L : J «Sir Edward Sugden, Ld. C, in Ireland. An annuity was pur- chased by an Irishman : the purchase-money was remitted from Ireland, the annuity was charged upon real estate in Ireland, and judgment for securing it was entered up in Ireland. The grantors, however, were resident and had their domicile in England, where the deeds were exe- cuted. The Lord Chancellor observed : "It is impossible to deny that the act of parliament contemplated the person who sold, not him who bought, the annuity : its object was to throw protection round the seller j and as all persons resident in England are entitled to the benefit of the Act, and as the seller in this case resided there, I should require great consideration before I could hold that which is prima facie an English security to be an Irish one and excepted out of the Act." He added : (' If you execute a deed in England, and are resident there, you cannot say that it is not an English contract." A case was then sent to the Court of Common Pleas, who certified that the contract was an English Ip) Aberdeen v. Jerdan, 15 Q. B. 990. (?) Sect. 4. (r) Sect. 5. (») Sect. 8. (t) Sect'. 10. ANNUITIES. 22y one and within the Act, in aeeordancB with the opinion of the Lord Chancellor, (m) 9. An agreement to grant an annuity is not within the Act, and does not require inrolment.M 10. When the provisions of the Act are infringed, the grantor may apply to a court of equity to direct a reconveyance (if necessary) and the delivery up and cancellation of the securities ; the Court will, how- ever, make terms in favour of the grantee, and will require the repay- ment of the consideration. An account will be taken of the amount paid as such consideration with interest thereon at five per cent, from the time of its advance, and of the sums paid on account of the annuity ; the latter will then be applied, as they have fallen due, from time to time in payment in the first place of the interest, and then of the principal, of the consideration. Should the latter have been wholly repaid, the deeds will be ordered to be delivered *np ; if not wholly, then upon r^ocA-i the payment by the grantor of the balance. If the balance L J should appear in favour of the grantee, such payments of the annuity having been made voluntarily, no repayment will be ordered.(w) When the securities are set aside by a court of law under the sixth section, it will require the same terms in favour of the grantee, who will be alst) entitled to the costs of the conveyance, (a;) but not the costs of endeavouring to support or compel payment of the annuity,(y) or any premiums paid for insuring the life, unless the insurance may have been effected with the privity and consent of the grantor, (z) When the objection arises upon the second or fourth section the annuity is simply void, and a court of law cannot interfere. 11. The grantee cannot object to the existence of an informality in the inrolment, for it is his duty to make it, and not that of the gran- tor, (a) But if the grantor has treated the annuity as void, or refused to' make the annual payments, he may bring an action against the grantor for the consideration money, (&) in which case he must allow credit for the amounts he has received, on the same principle upon which the ac- count is taken in equity. Should he have received more than his prin- cipal and interest, he will be nonsuited, (c) The Statute of Limitations would begin to run against this demand from the time at which the objection is taken, not from the time at which the annuity is granted. (d) When an action is brought to recover, a discretion is vested by statute in the jury to allow interest upon them;(e) and when a bill is filed for the same purpose, a court of equity will exercise a discretion dependent *upon the special circumstances of the case in allowing or refusing r«QKi-. interest. (/) L ■' (u) Ferguson v. Lomax, 2 Drnry & War. 120—238. ly) Nield t. Smith, 14 Ves. 491. I Bromley V. Holland, 5 Ves. 6 , ■Williamson v. Goold, 8 J. B. Moore, 325. (y) Ex parte Shaw, 5 Ves. 620. iw) Bromley v. Holland, 5 Ves. 610, 7 Ves. 3. (x) Williamson v. Goold, 8 J. B. Moore, 325. (z) Ibid.; Burdon t. Browning, 1 Taunt. 520; Hoffman v. Cooke, 5 Ves. 623— 633. (a) Molton t. Camroui, 4 Exch. 19. ib) Waters v. Mansell, 3 Taunt. 56; Weddell t. Lynam, 1 Bsp. 309. c) Hicks V. Hicks, 3 East, 16. d) Cowper t. Godmond, 3 Moo. & So. 219. (e) 3 & 4 Will. 4, 0.-42, s. 28. /) In re Powell's Trust, 10 Hare, 134; see 3 My. & Cr. 459. 230 BUNYON'S LIFE ASSUEANOE. 12. The onus of jnroUing the annuity thus lying upon the purchaser, it is the impression of the author that very few annuities granted by insurance companies are ever inrollecl' But the question is one which well deserves the attention of the purchaser of anoiuitieSi Where a com- pany is of first-rate respectability and of ample capital, no difficulty would be likely to arise in the performance of any obligation of thie nature into which it may have entered j the non-inrolment of the annuity would not seem to affect its vala€ more than the want of an insurable interest that of a life policy : but in the event of the dissolution of the company, or even were it in such a position that it became necessary for the governing body to make terms with the various classes of the assured, and, among others, with its annuitants^ the latter, or at least such as may not have inrolled their annuities, and from the grant of which a consi- derable time may have elapsed, might find themselves entirely at the mercy of their insurers, and be compelled to accept almost any terms that the latter might desire to impose upon them. 13. Where a contract has been entered into for the sale and purchase qi an annuity, in accordance with the general rule that in equity what is agreed to be done is considered as actually done, specific performance will be decreed ; and that although before the execution of the annuity- deed the cestui que vie may hare died, and no payment of the annuity may have been made,(^) although if a payment become due before the death of the cestui que vie, the purchaser, to entitle him to insist on a specific performance, must have either made or tendered such pay- ipent.^^) The Court will not enforce such a contract at the instance of P^nco-i of the vendor, when there have been laches on *his part: where h -I he has done nothing to forfeit his right, it will be sufficient if the contract be a continuing one at the time of the death of the cestui que vie. " The death," observed Sir Edward Sugden, " can form no objection to the specific performance of the contract. The purchaser agrees to buy an interest of uncertain duration, and he cannot complain that the con- tingency is unfavourable to him."(t) Upon the purohase of an annuity, therefore, from an insurance com- pany, the payment of the purchase-money, after the approval of the pro- posal by the board, would be conclusive, notwithstanding the death of the annuitant an hour after, and before< any annuity policy had been executed, (A;) 14. But where, at the time of the purchase, the cestui que vie, or person during whose life the annuity was to be paid, was actually dead, both vendor and purchaser being ignorant of the fact, and the grant was executed, and the purchase-moaey paid, the contract was considered void and the purchaser entitled to recover the purchase-money, in an action for money had and received. It was also considered that an agreement \l Jackson v. Lever, 3 B. C. C. 605 j see Sugden, i?urch. 334. §31. _ Pope V. Boot, T B. P. C. 184. (i)' Sugden, Parch. 338. In the event of delay, as to the time from which the annuity is to run, and interest on the purchase-money to be paid, see Purch. 806. (fc) Kenney t. Wexham, 6 Madd. 357. OONQEHNIMG ST^MFS. 231 for a future sale beoame void by the death of the annuitant before that tiine.(Z) It would, of course, be otherwise in the case of an immdiate sale of an annuity, to commence at a future date. ♦CHAPTER V. [*353] CONCERNING STAMPS. 1. Instruments in writing evidencing a contract will not in general be complete, unless properly stamped ; but when a stamp is required, the effect of the Stamp Laws is not, except in some particular instances, where it is specially provided that the instrument shall not be stamped after execution, to invalidate contracts as such, or to affect the rules of con- veyancing, but to prevent unstamped instruments being received in evi- dence in the courts of law oi equity. As, however, to have left it optional to the parties at what time the stamp should be affixed, would have been virtually to have rendered the Stamp Law a dead letter, the stamp can only in most cases be added after execution upon the payment of a penalty. 2. The principal statutes relating to stamps are the late general Stamp Act, 55 Geo. 3, e. 184, operative in Great Britain, and the provisions of which were extended by the 5 & 6 W. 4, c. 64, to the United Kingdom ; the new Stamp Act, as it is termed, the 13 & 14 Vict. o. 97 ; and the still more recent Acts of the last session, namely the 16 & 17 Vict. cc. 59, 63. The 13 & 14 Vict. e. 97, came into operation on the 11th of October, 1850, the two later Acts on the 10th of October, 1853, and applied (with the exception of certain instruments carrying out previous contracts) to all instruments executed after those days ; but instruments executed by any party before, or dated on or before those days, are liable to the old duties, although subsequently brought to be stamped. *3. By the 5 W. & M. c. 21, a penalty of 500Z., subse- r*354-. quently reduced by the 6 W. 3, o. 12, to 5?., is imposed upon <- -■ any person executing any deed or instrument subject to duty before the stamp is afced ; but the imposition of thia penalty, it is believed, is never enforced by the Commissioners of Stamps; (a) it is entirely dis- n) Strickland v. Tamer, 1 Bxch. 208. (a) Prior to the 13 & 14 Vict. c. 97, the penalty payable on stamping an exe- cuted instrument was 51., except in the case of agreements under hand only, when it was lOZ. The provisions now in force on thia subject are to be found in the 12th section of that act, and are as follows: " And whereas, for securing the due paymept of the stamp duties imposed by law on deeds and other instruments, it is expedient to alter the terms and con- ditions on which any such deed or instrument may be stamped after the execution or signing thereof : Be it therefore enacted,_that wheje any deed or instrumeijt liable by law to any stamp duty shall be written oi} vellum, parchment, or' paper, and shall be signed or executed by any person before such vellum, parchment, or paper shall be duly stamped for denoting the payment of the said duty, then and in every such case there shall be due, answered, and paid to her majesty, her heirs 2S2. bttnton's life assueancb. P^oKc-i tinct from that *paid in respect of the instrument where the L -I latter is not stamped until after the expiration of the prescribed periods. It would seem, morever, that in Great Britain the commission- ers have in general no power to compel the stamping of an instrument, and successors, the whole or (as the case may be) the deficiency of the stamp dnty payable upon or in respect of such deed or instrument, and there shall also be paid and payable, over and abore the said duty or deficiency of duty, by way of piiialty, and in lieu of any former penalty imposed or made payable by law in the like case, the sum of 101.; and where the whole amount of the duty or deficiency of duty, as the case may be, to be denoted by the stamp or stamps required to be impressed on such deed or instrument when the same shall be brought to be stamped shall exceed the sum of 101., there shall be paid by way of penalty, in addition to the said sum of lOi!., interest on the said duty or deficiency of duty computed at the rate of 51. per centum per annum from the date or first signing or execution of such deed or instrument; provided, that if such interest shall exceed in amount the said duty or deficiency of duty, then there shall be paid by way of penalty, in addition to the said duty or deficiency of duty, and the said sum of 101., and in lieu of the said interest, a sum equal to the amount of the said duty or deficiency of duty ; and the Commissioners of Inland Revenue are hereby required, upon pay- ment of the said duty or deficiency of duty, and of the said sum or sums herein- before directed to be paid by way of penalty, to cause such deed or instrument to be duly stamped with a stamp or stamps for denoting the payment of such duty, or deficiency, and also with a stamp for denoting the payment of a penalty, in lieu of the receipt heretofore required by any act to be written or given for such penalty ; and no such deed or instrument shall be pleaded or given in evidence, or admitted to be good, useful, or available in law or equity, until the same shall be duly stamped in manner aforesaid: Provided always, that where it shall appear to the Commissioners of Inland Revenue, upon oath or otherwise, to their satisfaction, that any deed or instrument hath not been duly stamped previously to being signed' or executed, by reason of accident, mistake, inadvertency, or urgent necessity, and' without any wilful design or hitention to defraud her majesty, her heirs or succes- sors, of the duty chargeable in respect thereof, or to evade or delay the payment of such duty, then and in any such case, if such deed or instrument shall within twelve calendar months after the first signing or executing of the same by any person be brought to the said commissioners in order to be stamped, and the stamp duty chargeable thereon by law shall be paid, it shall be lawful for the said commissioners, if they shall think fit, to remit the whole or any part of the penalty payable on stamping such deed or instrument, and to cause such deed or instrument to be duly stamped, upon payment of the whole, or, as the case may be, the deficiency of the stamp duty chargeable thereon by law, and either with or without any portion of the said penalty; and thereupon every such deed or in- strument shall be as valid and available in the law as it would have been if it had been duly stamped before the signing or executing of the same : Provided also,, that nothing herein contained shall extend or be deemed or construed to extend to any deed or instrument for the stamping of which after the signing or execution there'of provision is specially made by any law now in force, or to any deed or in- strument the stamping of which after the signing or execution thereof is expressly prohibited or restricted by any such law as aforesaid, or to repeal, alter, or affect any such provision, prohibition, or restriction." By the 13th section deeds executed in any place out of the United Kingdom, may be stamped without penalty if brought to the Stamp Office within two calendar months after the same shall have been received in the United Kingdom, upon the proof of the facts to the satisfaction of the commissioners. It mustj however, be observed, that although a deed may be stamped after exe- cution upon the payment of a penalty ; an agreement to omit the stamp, and that if it becomes necessary to aflBi it, the expense shall be borne by one party, as, for example, by a mortgagee, is an evasion of the Stamp Act, and will not be recog- nised in a court of law. In such a ease a mortgagee was held to be chargeable with the original stamp duty, but the Court refused to compel the payment of the penalty by him. Abbot v. Stratten, 3 Ja. & Lat. 616; Owen v. Thomas, 3 M, & E. 353. OONOERNING STAMPS. 233 or to recover the stamp duties when unpaid. The duties are, indeed, granted in respect to the particular instruments ; and by the 12th sec- tion the new Act, providing for the stamping of executed instruments, it is declared that duties, or the deficiency of duties, *" shall be r»qccn due, answered, and paid to Her Majesty, but there is no person L J made liable for their payment, or from whom they may be recovered. In Ireland this is not the case. By the 56 Geo. 3, c. 56, s. 82, every per- son executing an unstamped instrument, or who shall have avoided or neglected to pay the duty, is declared accountable for it, and is made' a debt from him, and the Barons of the Exchequer, upon application of the commissioners, may grant a rule requiring any such" person to show cause why an account of all such duties should not be delivered by him upon oath, and subsequently may enforce their payment. 4. Some instruments, such as bills of exchange and policies of marine insurance, cannot be stamped after execution ; but this exception to the general rule does not apply to policies upon lives, which may be stamped upon payment of the ordinary penalty, and do not, as has been sup- posed, incur the penalty of 500Z. under the 35 Geo. 3, c. 63, s. 17, which relates to marine insurances only. (5) 5. The stamps upon life policies have been greatly reduced by one of the recent Acts, coming into operation on the 10th of October, 1853, and are now levied in the following form : Policy of assurance or insurance, or other instrument, by what- ever name the same shall be called, whereby any insurance shall be made upon any life or lives, or upon *any event or contingency r^ocir-i relating to or depending upon any life or lives ; L J Where the sum insured shall not exceed five hundred pounds ; then for every fifty pounds, and any fractional part of fifty pounds, - - - - - - - Qd. And where it shall exceed five hundred pounds, and shall not exceed one thousand pounds; then for every one hundred pounds, and any fractional part of one hundred pounds, - Is. And where it shall exceed one thousand pounds; then for every one thousand pounds, and any fractional part of one thousand pounds,(c) ... - . . 10». « And it is enacted that, for better securing the stamp duties by law chargeable on policies of insurance upon lives, and for preventing frauds in respect of any such assurances, every person who shall make or agree to (b) Attorney-General v. Cleobury, 4 Exch. 65. (c) 16 & It Vict. c. 59, schedule. The previous duties were granted by the 55 Geo. 3, c. 184, and 5 & 6 Will. 4, o. 64, s. 1, and were of the following amounts : — ^ £ s. d. When the sum did not exceed 50^. . . . . .026 When the sum exceeded 501. and did not exceed 1002 . . .050 When the sum exceeded 1002. and did not amount to 5002. . .10 When the sum amounted to 5002. and did not amount to 10002. .200 When the sum amounted to 10002. and did not amount to 30002. . 3 When the sum amounted to 30002. and did not amount to 50002. .400 When the sum amounted to 50002. and upwards . . .500 284 buuxon's lipe assttbanoe. make, or shall receive any premium or valuable consideration for making any assurance or insurance upon any life or lives, or upon any event or contingency relating to ca: depending upon any life or lives, shall, within one calendar month after the payment or giving of any such premium or consideration, make out and sign or execute, or cause and procure to be made out and signed or executed upon vellum, parchment, or paper, duly stamped, a policy of such assurance or insurance, and have the same ready to be delivered to the party entitled thereto, and shall upon demand made by any such party, or any agent in that behalf duly authorized, deliver the same to him, or iu default in any of the cases aforesaid shall forfeit the sum of 50?. Every person who at the time of the payment or giving H,^-Q~ of any such premium or *eonsideration shall be a managing L J director of, or the secretary to, or other principal oflScer of any society or company receiving any such premium or consideration, shall be deemed to be a person making or agreeing to make such assurance or insurance, and shall be subject and liable to the penalty by this Act imposed for any such default as aforesaid."(cZ\ And by the later Act of the same session it is provided, " that the duties granted by the previous Act on the policies of assurance may be denoted either by a stamp impressed upon the paper whereon any such instrument is written, or by an adhesive stamp affixed thereto, and the Commissioners of Inland Bevenue shall provide stamps of both descrip- tions for the purpose of denoting the said duties."(e) " The adhesive stamps to be so provided for the purpose aforesaid shall be adapted for the writing of the following particulars thereon ; (that is to say),^ the date and number of the policy, and the names of the person insured, and of one of the directors of the assurance company, or other person by whom the same shall be signed j and where an adhesive stamp shall be used or intended to be used for or upon any such policy, such stamp shall be firmly and securely affixed and made to adhere to such policy, and all the several particulars aforesaid shall be fairly and dis- tinctly written upon such stamp at or before the time of the signing thereof by such director or other person aforesaid, or in default thereof such director or other person signing such policy shall forfeit the sum oim."{f) The stamps upon agreements under hand only, are 2s. 6d. for the first 1080 words, and 2s. Qd. for every additional entire quantity of| 1080 words over and above the first; and it is provided that any number of letters may be offered in evidence to prove an agreement, when one of them is stamped with a duty of 11. 158.(5") Under the head of Conveyance are found the following provisions in the Schedule to the new Act : — " Conveyance, whether grant, disposition, j-^oKq-j lease, assignment, transfer, release, *renunciation, or of any other L J kind or description whatsoever, upon the sale of any lands, tene- ments, rents, annuities, or other property^ real or personal, heritable or moveable, or of any rigiU, title, interest or claim in, to, out of, or tipon (d) 15 & 16 Vict. c. 59, s. 6. (c) 15 & 16 Vict. c. 63, s. 10. if) s. 11. (ff) 13 & 14 Vict. c. 97, schedule. OONOEBNING STA-MPS. 239 any lands, tenements, rents, annuities,, or other property, thai is ta say, for and in respect of tha principal or only deed, instrument, or writing whereby the lands or other things sold shall be granted, leased, assigned, transferred, released, renounced, or otherwise conveyed to, or vested in the purchaser or purchasers, or any other person or persons by his, her, or their direotion.(^) £ S s. d. "When the purchase or consideration money therein or thereupon expressed, shall not exceed - - 25 — 2 6 " And where the sum shall exceed 2bl. and shall not exceed 50 [*360] 50;. *75l. 1001 12bl. im. 175Z. 200Z. 225?. 250?. 275?, 300?. 350?. 400?. 450?. (( cc tl (I cc IC (C C( cc cc cc (( IC cc ct cc cc cc cc a cc CI cc cc cc cc <( u 75- 100- 125- 150- 176- 200- 225- 250- 275- 300- 350- 400- 450- 500- 5 7 6 10 12 6 13 17 6 1 ,0 12 6 15 17 6 1 10 1 15 ■2 •2 5 ■ 2 10 {g) The preceding clause is precisely similar to that in the 55 Geo. 3, c. 184, by which the following duties were imposed : Consideration not amounting to 202. Amounting to %Ql. and not amounting to 502. Amounting to 502. and not amounting to 1502. Amounting to 1502. and not amounting to 3002, Amounting to 3002. and not amounting to 6002. . Amounting to 5002. and not amounting to T602. , Amounting to 7502. and not amounting to 10002. Amounting to 10002. and not amounting to 20002. Amounting to 20002. and not amounting to 30002. Amounting to 30002. and not amounting to 40002. Amounting to 40002. and not amounting to 50002. Amounting to 50002. and not amounting to 60002. . Amounting to 60002, and not amounting to 70002. Amounting to 70002. and not amounting to 80002. , Amounting to 80002. and not amounting to 90002, Amounting to 90002. and not amounting to 10,0002. . Amounting to 10,0002. and not amounting to 12,500?. Amounting to 12,5002. and not amounting to 15,0002. Amounting to 15,000?. and not amounting to 20,0002. Amounting to 20,0002. and not amounting to 30,0002. Amounting to 30,0002. and not amounting to 40,0002. Amounting to 40,0002, and not amounting to 50,0002. Amounting to 50,00021 and not amounting to 60,0002. Amounting to 60,0002. and not amounting to 80,0002. Amounting to 80,0002. and not amounting to 100,0002. . Amounting to 100,0002. or upwards . £ 1 1 2 3 6 9 12 25 35 45 55 65 75 85 95 110 130 170 240 350 450 550 650 800 1000 236 BUNTON'S LIFE ASSURANCE. And wliere the same shall exceed £ £ s. d. 500?. « " 550—2 15 550?. « « 600— 3 " And where the purchase or consideration money shall ex- ceed 600?., then for every 100?,, and also for every frac- tional part of 100 - - - - - 10 "And it is directed that the purchase money or consideration shall be trull/ expressed and set forth, in words at length, upon every such prin- cipal or only deed or instrument of conveyance j and where such conside- ration shall consist either wholly or in part of any stock or secv/rity, the value thereof respectively to be ascertained" as thereinafter mentioned, shall also be truly expressed and set forth, and be taken to be the pur- chase or consideration money, or part thereof, as the case may be, " in respect whereof the ad valorem duty shall be chargeable."(i) "And where the consideration or any part of the consideration shall be any stock in any of the public funds, or any government debenture or stock of the Bank of England or Bank of Ireland, or any debenture or stock of any corporation, company, society or persons or person, r*^fi1 1 *P^y*^l6 ^^J ^* *^^ wi^l °^ ^^^ debtor, the said duty shall be L -I calculated (taking the same respectively, whether constituting the whole or a part only of such consideration) according to the average selling price thereof respectively, on the day or on either of the ten days preceding the day of the date of the deed or instrument of conveyance ; r if no sale shall have taken place within such ten days, then according to the average selling price thereof, on the day of the last preceding sale J (A) and if such consideration, or part of such consideration, shall be a mortgage judgment or bond, or a debenture,' the amount whereof shall be recoverable by the holder or any other security whatsoever, whether payable in money or otherwise, then such calculation shall be made' according to the sum due thereon for both principal and interest." (?) "And where a purchaser prior to a conveyance to himself from the vendor contracts to sell to a sub-purchaser or sub-purchasers, if the con- veyance is made by the vendor to such sub-purchaser or sub-purchasers the ad valorem duty is payable upon the purchase-money paid by the sub-purchaser or sub-purchasers ; and if an actual conveyance shall have been made in such a case by the purchaser to the sub-purchaser, and the {i) Very heavy penalties are imposed for setting out the consideration untruly in order to avoid the stamp duty. The solicitor, or other party preparing the in- strument, is liable to a penalty of 500^., and the former to be struck off the EoUs, 48 Geo. 3, c. 149, s. 25; And both vendor and purchaser are liable to a penalty of 50Z., and five times the amount of the duty. (k) Prior to the last act the ad valorem duty did not attach when the considera- tion was other than a pecuniary one, and consequently not upon a sale in con- sideration of a transfer of stock: Cumberland v. Kelly, 2 B. & Al. 602 ; and }>, for- tiori not when it consisted of shares in any public company, or any similar security. Q) And that whether the purchaser is under any obligation to pay the mortgage moneys, or to indemnify the vendor against the payment of them or not. 16 & 17 Vict. c. 59, s. 10, passed in consequence of the decision of the Court of Exchequer. Lord Chandos v. The Inland Bevenue Commissioners, 6 Ezch. 464. CONCERNING STAMPS. 237 ad valorem duty paid, any subsequent conveyance by the vendor to the latter will not be subject thereto." 8. The stamps upon mortgages will be governed by the following extract from the schedule to the new Act : " Mortgage, conditional surrender by way of mortgage, further charge, &c., disposition, assignation of, or affecting any lands, estate, or property, real or personal, heritable, or moveable whatsoever." *"Also any conveyance of lands, estate, or property whatso- r^qeon ever, in trust, to be sold, or otherwise converted into money, <- J which shall be intended only as a security, and shall be redeemable before the sale, or other disposal thereof, either by express stipulation or other- wise, except where such conveyance shall be made for the benefit of cre- ditors generally, or for the benefit of creditors specified, who shall accept the provision made for payment of their debts in full satisfaction thereof, or who shall exceed five in number. " Also any defeasance, letter of reversion, back bond, declaration, or other deed or writing, for defeating or making redeemable, or explaining or qualifying any conveyance, disposition, assignation, or tack of any lands, estate, or property whatsoever, which shall be apparently absolute, but intended only as a security. '' Also any agreement, contract, or bond, accompanied with a deposit of title deeds, for making a mortgage, wadset, or any such other security or conveyance as aforesaid, of any lands, estate, or property comprised in such title deeds, or for pledging or charging the same as a security. "Where the same respectively shall be made as a security for the payment of any definite and certain sum of money advanced or lent at the time, or previously due and owing, or foreborne to be paid, being payable — s. d.~ Not exceeding 501. ... — 13 Exceeding 501. and not exceeding 100?. — 2 6 " 100?. « " 150?. —3 9 « 150?. " « 200?. — 5 « 200?. " " 250?. — 6 3 " 250?. « « 300?. — 7 6 And where the same shall exceed 300?., then for every 100?., and also for any fractional part of 100?. — 2 6(m) (m) Prior to the 11th of October, the ad valorem duty was according to the foUowiiig table, under the 55 Geo. 3, c. 184: £ t. d. Not exceeding 50Z. . . . . . . . 10 Exceeding 50/. and not exceeding lOOZ. . . . . . 1 10 Exceeding WOl. and not exceeding 2002. . . . . 2 Exceeding 200/. and not exceeding 300/. . . . .300 Exceeding 300Z. and not exceeding 500/. . . . . 4 238 bunton's life asstjranci. -^oAo-, *"And when thq same respeetively shall be made as a seeu- L -I rity for the repayment of money to be thereafter lent, advanced, or paid, or which may become due upon an account current, together with any sum akeady advanced or due, or wi*hou!t, as the case may be, other than and except any sum or sums of money to be advanced for the insurance of any property comprised in such mortgage or security against damage by fire, or to be advanced for the inguraance of any life or liVes^ [or for the renewal of any grant or lease upon the dropping of any life or lives,] pursuant to any agreement in any a«ed, whereby [any estate or interest held upon such life or lives shall be granted, assigned, or assured, or whereby] any annuity shall be granted or scoured fot sucTi life or }}xes."(n\ "If the total amount of the money secured, or to be ultimately reco- verable thereupon, shall be limited, not to exceed a given sum. The same duty as on a mortage for sueh limited sum." "And if the total amount of the money secured or to be ultimately recoverable thereupon, shall be uncertain and without limit, then the same shaU be available as a security or (Jharge for such an amount only of money or stock intended to be thereby secured as the ad valorem duty denoted by any stamp or stamps thereon will extend to cover." The ad valorem stamp is also made payable when the contract is to secure the cetransfer of stoek or shares. r*^RdT *" -^^^ where the same respectively shall be made as a secu- L J rity for the transfer or re4ransfer of any share in any of the government or parliamentary stocks or funds, or in the stocks and funds of the governor aad -eompafay of the Bank of Bn^aad, or of the Bank of Ireiaad, or of ther Eaist India Company, or of the South Sea Com- pany [or of any other company or coporation,] in consideration of stock or money advanced or lent at the time, or previously due and owing, or foreborne to be paid, being payable." "The same duty as on a mort- gage or wadset, for a sum of money equal to the value of the stock or fund, secured according to the average price theueof, on the day of the date of the mortgage or other instrument aforesalid, or on cither of the ten days preceding ; [or if there shall not have been any known sale on any of such days, then on the latest day preceding on which there shall have been a known sale."](o) Exceeding 5002. and not exceeding 10OO2. Exceeding' 1000?. and not exceeding 2000? . Exceeding 2000?. and not exceeding 3000?. Exceeding 3Q00?. and not exceeding 4000Z. . Exceeding 400O?. and not exceeding 5000?. Exceeding 5000?. and not exceeding 10,000?. Exceeding 10,000?. and not exceeding 15,000?. . Exceeding 15,000?. and not exceeding 20,000?. Exceeding 20,000?. and upwards, or where the amount secured was ■without a limit . . (») The above clauses are alike under the head of Mortgage in both acts, with the (exception of the duties, p,nd the sentences within the brackets, which «re in- serted in the later act only. (o) 13 & 14 Vict. 0. .97. Schedule. £ s. d. . 5 6 . 7 8 . 9 12 . 15 20 8 . 25 CONCERNING STAMPS. 289 The abovie clauses differ from those in the preceding act in the addi- tions of the sentences within brackets, thereby making a security for the transfer of stock or shaires in any company liable to duty. 9. Transfers of mortgages and deeds of further assurance, where- a further advance is made, are subject to the ad valorem duty on the addi- tional sum only. And when no further advance is made, such deeds are liable either to the common deed stamp of 11. 16s. as a maximum, or an amount equal to the original ad valorem duty, when it is less than 11. 15s. ; but no transfer is liable to any additional duty, by reason of its containing any further security, or any fresh covenant, power of sale or other matter in relation thereto^(j7) *10. It is important to observe, that under the old law, a r^q/jr^ power for the mortgagee to pay the premiums upon a policy •- J forming part of the security, conpled with a covenant to repay the pre- miums actually advanced by him was held to call for an ad valoriKm stamp of 25?., as for a mortgage for an unlimited sum.(j) It was not, however, sufficient that any such sums should be charged upon the mort- gage secarity, but they must have been debts recoverable by the mortga- gee. In a very recent case, there was a mortgage of household goods amd a life policy, with a covenant to pay the premiums, and if tha« policy became void, to effect a new policy and assign it to the mortgagee, and in default that he might pay such premiun^, and effect such policy, and that the sums advanced by him for such purposes should be consi- dered as principal moneys, and charged with interest upon the assigned, or any future palicy. There was then a covenant for the payment of the principal mortgage debt, and intejiest, but no covenant for the pay- ment of the moneys to be advanced for the premiums. The Court con- sidraed that, on ike proper construction of the deed, these charges, whem paid by the mortgagee, did not become debts due from the mortgagpr to him, and reeovernJole at law; and thaft, eonse(jti'eMly, the unlimited stamp was not pay able, (r) This distinction permits the case to stand with that of Halse v. Peters; but from the expressions iised in the judg- (/>) Prior to the late act there was considerable difficulty in determining the duties apon transfer of mortgages. The result of the decisions is stated by Mr. Tilsley in the three following propositions (Tilsley's New Stamp Act, 3d edit. 1851, P.3Y):— 1. A transfer of mortgage, where a further sum was advanced, the coTenant for payment being limited to such sum and interest, was chargeable with no other duty than the ad valorem duty on the further advance, and progressive duties of 208. each. 2. In the case of a transfer of mortgage, where no additional sum was advanced, hut a further security or something in the mature of it was given for the money due; whether such security, or quasi security, consisted of other property, or of an enlarged estate in the same property, or of a power of sale not in the original mortgage, or a mene covenant by the mortgagor or other person with the trans- feree for the payment of the money,, the- duties; payable were 11. 15s. in respect of the transfer, the like for the further security, and progressive duties of 11. 53. each. 3. When a further sum was advanced, whether on the occasion of a transfer or not, and adiHtional security was given, as in the last propositionj the proper stamps were, the ad valorem duty on the further sum, and a common deed duty Oi li. IBs. in respect of the additional security, with progressive duties of 11. each. (q) Halse v. Peters, 2 B. & Ad. 807. (r) Lawrence v. Boston, V Ex. 28. 240 BUNTON'S LIFE ASSTJEANOE. r*^fifi1 ™®°*» ^' ™*y ^® thought *that the Court would not have hesitated L J to overrule the present case if necessary. In another case in the same Court, a bond had been given, the condition of which was, that the same should be void on payment to the obligee of the sum of 3007. by instalments, and the interest thereon, and the premiums of certain policies eflfected as a collateral security, and there was a proviso that in default in the regular payment of the interest and premiums, the princi- pal sum of BOQl. should forthwith be recoverable. It was held (dissen- tiente Parke, B.) that the bond was sufficiently stamped as for a sum exceeding 2007. and not exceeding 8007., and that the unlimited stamp was not required, on the ground that the payment of the premiums was not secured, but only that of the 300Z.(s) 11. In the new Act there is a special provision concerning such cases as the above, in the words already set out, but it is either singularly badly framed, or very unequal in its effect. It would have been reasonable to have exempted all moneys advanced for the payment of life premiums, but from the necessary construction of the clause as it now stands, and particularly on comparing it with that in the prior Act, it appears that the words, " or. to be advanced for the insurance of any life or lives," are controlled by the following sentences : — " pursuant to any agreement in any deed whereby any estate or interest held upon such life or lives shall be granted, assigned or assured, or whereby any annuity shall be granted or secured for such life or lives." The result of which con- struction is, that an additional stamp would be required where the per- sonal covenant and the assignment of the policy was the only security, but would be dispensed with where a life estate was conveyed by the same deed. A mortgage for an unlimited sum under the new Act, is good as a security to the extent of the stamp impressed, and in such a P^„-.__ case Mr. Tilsley states that an additional *stamp may at any L -I time be obtained upon the payment of a penalty, («) and such may be considered the practice of the Stamp Office. But, however rea- sonable this may be, the commissioners do not appear to have any express power to affix the additional stamp under the 17th section of the Act.(M) 12. Where a mortgage is effected by several instruments, as in the case of a conveyance by way of mortgage of a life estate, and an assign- ment of policies by a collateral deed, the ad valorum stamp will be only once payable, and will be usually affixed to the conveyance. « That when several distinct deeds or instruments falling within the description of any of the instruments charged with the said ad valorem duty or mortgage, shall be made at the same time for securing the pay- ment or transfer of one and the same sum of money, or one and the same share of any of the stocks and funds above-mentioned, the said ad f») Prudential Mutual Assurance- Company T.Curzon, 19 Law Times, 257, Ezch. h) New Stamp Act, 3d edit. p. 36. (m) The doubt would be met either by stamping the instrument previous to execution, or inserting a clause limiting the amount to be secured according to the former practice. CONCERNING STAMPS. 241 valorem duty, if exceeding 21., shall be charged only on one of such deeds or insruments, and all the rest shall be charged with the duty to which the same may be liable under any more general description of such deeds or instruments contained in the schedule to the Act ; and if required for the sake of evidence, all the rest of such deeds or instru- ments shall be also stamped with some particular stamp, for denoting or testifying the payment of the said ad valorem duty on all the said deeds or instruments being produced duly stamped with the duties charged thereon." 55 Geo. 3, c. 184. 13. It will here also be' proper to remark, that it has been considered a doubtful point whether assignments of policies, either by way of mort- gage or upon a sale, are liable to the ad valorem stamp. In the leading case upon the question, there was an assignment by deed of a judgment debt upon trust, after payment of expenses, to retain thereout the amount of a debt due to *the assignee. The deed was stamped with an r:|.qcQ-i ad valorum duty of 30s. j and was held to be improperly L -I stamped, and that a common deed stamp of 35s. was required. It was argued that the instrument either fell under the term " conveyance" in the schedule of the Stamp Act, or under the description of a mortgage, as being " a conveyance of property in trust to be sold, and intended only as a security." And Lord Tenterden decided that it did not fall under either of these clauses ; and referring to the words under the head of Conveyance, held that the statute enumerating things the sub- ject of conveyance and sale, and usually converted into money — that the expression other property, applied only to property of the same descrip- tion, and therefore did not include choses in action. (?;) This case was followed by another in which, in consideration of a pay- ment of 50,000Z., a share in a partnership, the property of which con- sisted of government contracts, was assigned by deed to the continuing partner, (w) The leading case of Warren and Howe is, however, unsa- tisfactory, in that it may be thought to have been argued with reference to a wrong head in the schedule, and that it properly fell under that of Mortgage ; and thus we find that when the question, whether a mortgage by a deed of policy was liable to duty, was fairly at issue,(x) it was re- marked by the Court " we are now for the first time called upon to put a construction upon this clause of the Stamp Act;" and Parke, B. added ; " I think that this sort of instrument falls under the description of a mortgage affecting property within the meaning of that clause. Its lan- guage affects every description of property, and it is impossible to deny that we are not fettered by previous decisions, that a policy of insurance is not within its meaning." This case may be considered to have settled *the question with regard to mortgages. As to conveyances, |-*QgQ-i however, the point may be thought still open to debate. It was, L J indeed, discussed in Caldwell v. Dawson, and the opinions of two of the judges of the Court of Exchequer appear to have been in the affirmative. (») Warren v. Howe, 2 B. & C. 281 ; (and see 16 & 11 Vict. c. 63, s. 6.) (w) Belcher v. Sykes, 6 B. & 0. 234; Blandy v. Herbert, 9 B.&O. 396. sed vide, Pooley V. Goodwin, 4 A. & B. 94. (x) Caldwell v. Dawson, 5 Exch. 1. August, 1858.— 16 242 BUNYON'S LIFE ASSURANCE. Alderson, B. remarked : " Such an interest as is conveyed by this deed would certainly pass under the word property in a will ; and if so, it i^ strange to say that it is not property within the Stamp Act. In the case of Warren V. Howe, Lord Tenterden seems to have thought that the words of the schedule apply only to such property as could be transferred at law from a seller to a purchaser; whether that opinion is quite correct, is not now the question before us, although it is difficult so to consider it; for equitable estates are sold as well as legal ones, and it is strange to suppose that the Stamp Acts were not meant to apply to such transfers. I think that the words of the schedule are not to be so strictly construed; for they speak of right, title, or interest, in property, and impose a stamp upon any conveyance of such, and there can be no doubt but that this is Such a conveyance." And Kolfe, B., after remarking that the case of Warren V. Howe did not conclude that before the court, added : "I own, if ever I should be the purchaser of a judgment debt, I should insist upon an ad valorem stamp." These obiter dicta, however, it is submit- ted, are not conclusive ; the question itself was not at issue ; and the argument on the other side does not seem to be touched by them. It may be stated as follows ; it is not disputed that the ad valorem duty attaches upon a mortgage ; but, in comparing the clauses in the schedule, it will be seen that they are altogether diverse — the ad valorem duty on convey- ances is not reserved generally, as in the former case; but is "for, or in respect of, the principal, or only deed, instrument, or writing, whereby the lands or other things sold shall he gra/nted, leased, assigned, or other- wise conveyed to or vested in the purchaser. Now, a policy of assurance is incapable of being conveyed or vested in a purchaser. An equitable r*^7m ^^'^^^ i° ^3'°'^ ™*y '^^^ "'^ly "'^ "contracted for, but conveyed, ■^ -I and the proposition, so familiar to conveyancers, that a convey- ance, in such a case, is not a mere form of expressing a contract, is illus- trated by the fact that a conveyance of an equitable estate may be enforced in equity, although without consideration, while specific per- formance will be denied a contract. The property in personal chattels will pass by a conveyance, and the assignee may bring trover for them ; but an action upon a chose in action must be brought in the name of the assignor. Every instrument, moreover, it will be remembered, is to be stamped according to its actual, and not according to its expressed opera- tion; (as) and charges upon the subject must be imposed by clear unam- biguous words, and the construction is to be strict against the revenue.(y) The case may be further illustrated by observing that a contract, accom- panied by a deposit of title-deeds of real estate, and an immediate pay- ment of money, if for a mortgage, must have the ad valorem duty affixed; but if for a sale, requires an agreement stamp only; although immediately thereafter, and before the conveyance, the vendor becomes a constructive trustee for the purchaser. Agaifi, the opposite view will lead to this great inequality — the transfer of a mortgage debt requires common deed stamps only, but the transfer of a judgment debt or a contingent debt, secured in the form of a policy, will be considered to (i) Eex v. Ridgway, 6 B. & 0. 665. (y) Tilaley Stamp Acta, 3. CONCERNING STAMPS. 243 require an ad valorem conveyance stamp, far exceeding that paid at the creation of the contract. 14. The ad valorem stamp upon the grant of an annuity is the same as that upon a conveyance for an equal consideration, with the following additional provision ; — " And where upon the sale of any annuity or other right not hefore in existence, the same shall not be created by actual grant or conveyance, but shall only be securedjby bond, warrant of attor- ney, covenant, contract, or otherwise, the bond or *other instru- r-#Q7n ment by which the same shall be secured, or some one of such L J instruments if there shall be more than one, shall be deemed and taken to be liable to the same duty as an actual grant or conveyance. These clauses, which are the same in both acts,(a) will, it is apprehended, in- clude all instruments issued by insurance offices upon the sale of annui- ties by them. (6) 15. When the deed or instrument shall contain 2160 words or up- wards, then for every entire quantity of 1080 words contained therein, over and above the first 1080 words, there shall be charged the further progressive duty of 10s., unless the ad valorem duty to which the same shall be primarily liable shall be less than 10s., in which case the pro- gressive duty shall be of the same amount as the ad valorem duty.(c) 16. As we have already seen, a contract for the sale of a policy may be parol, and any evidence conclusive of the fact will operate as an assignment; hence a receipt for the purchase-money, as such, will be sufficient for this purpose, and will be conclusive of the agreement. It will be, however, of vital importance that the receipt be written upon a proper stamp, as this cannot be subsequently affixed upon the payment of a penalty, and it is doubtful, whether the document, if a receipt, can be received in evidence as an agreement, with an agreement stamp sub- sequently impressed upon ii.{d) There can be no excuse for omitting the receipt stamp, since, after the 10th of October, 1853, it is levied at the uniform rate of *ld. for any sum exceeding 2Z.(e) The only rj^oyo-i exemption from the stamp being bankers' receipts for money to I- J 1)0 accounted for.(/) (ffl) 55 Geo. 3, c. 184, 13 & 14 Vict. c. 97. h) Molton V. Camroux, 2 Exoh. 487, 4 Exch. 17. (c) 13 & 14 Vict. c. 97, schedule, and sect. 12. Prior to the late act, the progressive duties were similarly calculated, and were, for every such entire quantity of 1080 words, 20s. in conveyances and mortgages, and other instruments subject to an ad valorem duty, and 25«. in settlements, and all instruments subject to the common deed stamp only. (d) Evans t. Protheroe, 2 Mar. & Gor. 319 ; 1 De G. M. & G. 572. («) 16 & 17 Vict. c. 59, schedule. (/) The previous duties upon receipts are governed by the 55 Geo. 3, c. 184, and 3 & 4 Will. 4, o. 23, and are on the following scale. Receipt or discharge given for or upon the payment of money : — £ s. d. Amounting to 51. and not amounting to lOZ. . . . . 3 Amounting to lOl. and not amounting to 202. . . . .006 Amounting to 202. and not amounting to 502. . . . 10 Amounting to 502. and not amounting to 1002. . . . .016 Amounting to 1002. and not amounting to 2002. . . • 2 6 Amounting to 2002. and not amounting to 3602. . . . .040 244 BtJNTON'S LIFE ASSUEAJfOE. For receipts both stamped paper and adhesive stamps are to be issued by the Stamp Office, The act contains the following provisions : — " Sect. 3. The duties of one penny, by this act granted on receipts, and on drafts or orders for the payment of money respectively, may be denoted either by a stamp impressed upon the paper whereon any such instrument is written, or by an adhesive stamp affixed thereto; and the Commissioners of Inland Bevenue shall provide stamps of both descrip- tions for denoting the said duties." " Sect. 4. In any case where an adhesive stamp shall be used for the fj^o'rq-i purpose aforesaid, on any receipt or upon any draft or *order L J respectively chargeable with the duty of one penny by this act, the person by. whom such receipt shall be given, or such draft or order signed or made, shall, before the instrument shall be delivered out of his hands, custody, or power, cancel or obliterate the stamp so used, by writing his name or the initial letters of his name so and in^ such a man- ner as to show clearly and distinctly that such stamp has been made use of, and so that the same may not be again used , and if any person who shall write or give any such receipt or discharge or make or sign any such draft or order with any adhesive stamp thereon, shall not bona fide in manner aforesaid effectually cancel or obliterate such stamp, he shall forfeit the sum of ten pounds." " Sect. 5. If any person shall fraudulently get off or remove, or cause or proctfre to be gotten off or removed, from any paper whereon any re- ceipt or any draft or order shall be written, any adhesive stamp, or if any person shall affix or use any such stamp, which shall have been gotten off or removed from any paper whereon any receipt or any draft or order shall have been written, to or for any receipt, draft, or order, or any paper whereon any such receipt, draft, or order shall be or be intended to be written ; or if any person shall do or practise or be concerned in any fraudulent act, contrivance, or device whatever, not specially provided for by this or some other Act of Parliament, with intent or design to defraud Her Majesty, her heirs or successors, of any duty by this Act granted upon receipts or upon drafts or orders, every person so offending in any of the said several cases shall forfeit the sum of twenty pounds. 17. Drafts or orders for the payment of any sum of money to the bearer, or to order or demand, are subject to the duty of Id., including " all documents or writings usually termed letters of credit, or whereby £ s. d. Amomrting to 3001. and not amounting to 500Z. . . . 5 Amounting to BOOZ. and not amounting to lOOOZ. . . .076 Amounting to lOOOZ. or upwards, or of whatever amount, if acknow- ledged to be received in full of all demands . . . 10 Receipts or discharges written upon promissory notes, bills of exchange, drafts, or orders for the payment of money duly stamped according to the laws in force at the date thereof, or upon foreign bills, or indorsed or otherwise written upon, or contained in any bond, mortgage, or other security, or any conveyance-deed or instrument, duly stamped in manner aforesaid, acknowledging the receipt of the consideration money therein expressed, or of any principal money, interest, or an- nuity thereby secured, were exempted from duty. OONOEENING STAMPS. 245 any person to whom any such document or writing is, or is inteaded to be delivered or sent, shall be entitled to have credit with, or in account with, or to draw upon any other person for, or to receive from such other person any sum of moiiey therein mentioned." Excepting only, " All drafts or orders for the payment of money to the *bearer ^0,07^1 on demand drawn upon any banker or bankers, now by law ex- L 'J empt from stamp duty," and, "all letters of credit, whether in sets or not, sent by persons in the United Kingdom to persons abroad, autho- rizing drafts on the United Kingdom." 18. A settlement of a policy will also be liable to a specific and appro- priate stamp. A settlement is defined to be any deed or instrument, whether volun- tary or gratuitous, or upon any good or valuable consideration other than a bona fide pecuniary consideration, whether any definite or certain principal sum or sums of money, &c., or any definite and certain share or shares in any of the government or parliamentary stocks or funds, or in the stocks and funds of the Governor and Company of the Bank of England, &c., or of any other company or corporation, shall be settled or agreed to be settled upon, or for the benefit of any person or persons either in possession or reversion, either absolutely or for any partial in- terest, and is subject to an ad valorem duty at the rate of 5s. for every 100?. and any additional fractional sum less than 100?. of the sums of money, and of the value of the stock or shares comprised in the settle- ment. And this ad valorem duty, when exceeding the common deed stamp of 1?. 15s., is only once payable, so that where it has been impressed upon marriage articles, or upon one of several instruments efifeoting the settle- ment, the formal settlement, and the other instruments in the two cases, will be respectively chargeable only with the common deed stamp, or the duties to which the same may be liable under any more general descrip- tion in the table, and may be stamped with the denoting stamp to prove the payment of the ad valorem duty. And instruments chargeable with the ad valorem duties, as settlements in respect of such money or stock when comprising any other matter or thing, or any settlement of lands or other property, shall be further chargeable with such other stamp duties as any» separate instrument, in respect of such settlement of lands *or other property or other matter or thing, would have been r^oyc-i liable unto, exclusive of progressive duties.(/) '- (/) 13 & 14 Vict. c. 59, schedule. trnder the old Stamp Act, the duties upon settlements were : — If the sum or sums of money or the value of such share or shares, in all or any of the said stocks or funds, or both, £ s. d. Shall not amount to lOOOZ. . . . . . ■ 1 15 And ifthe same shall amount to lOOOi. and not to 2000i. . .200 And if the same shall amount to 20002. and not to 3000^. . . 3 6 Apd if the same shall amount to 30002. and not to 4000Z. . • 4 And if the same shall amount to 40002. and not to 50002. . . 5 And if the same shall amount to 50002. and not to '70002. . .TOO And if the same shall amount to t0002. and not to 90002. . 9 And if the same shall amount to 90002. and not to 12,0002. . . 12 246 BUNTON'S. LIFE ASSURANCE. [*376] *CHAPTEE VI. THE EEOENT LEGISLATION AFFECTING LIFE INSURANCES, AND PARTICU- LARLY THE SUOOESSION DUTY AND INCOME TAX ACTS. ALSO THE PROSPECTS OF FUTURE LEGISLATION ON THIS SUBJECT AS DEVELOPED BY THE REPORT OF THE SELECT COMMITTEE OF 1853. The Succession Duty Act of 1853(a) is the most important measure of the session, and marks an epoch in the history of taxation, not only on account of the magnitude of the sum proposed to be levied under it, but as evolving a new principle, in permitting a tax upon past transac- tions. By this Act the legacy duties, or their equivalent, are extended to real estate, and not only so, but every devolution of property, whether real or personal, taking eflFeot at the death of any individual, by virtue of the limitations of an instrument operating as a settlement, is subjected to the like duty to which the same, if personal, would have been liable had such limitations been contained in a will. The duty is payable not- withstanding that the settlement may have been executed long prior to the passing of the Act. So large is its operation, that every devolution by law, or disposition by the act of any party whereby any other person may have or shall become beneficially entitled to property, or to the in- come thereof, upon the death of any person dying on or before the 19th of May, 1853,(6) is to be deemed to confer a succession, the party bene- ficially entitled being termed the successor, the person from whom the ™„---, interest is derived the predecessor, (c) An *accruer on the death L -I of a joint-tenant is deemed a devolution, (cZ) a general power of appQintm£nt(e) (if exercised), and church patronage (if sold) property, and the extinction of a determinable charge a succession. (/) An imme- diate disposition not being a bona fide sale when subject to a reservation or contract for a benefit to the grantor, or any other person, for any term of life or period ascertainable only by reference to death, is to be liable to the duty in respect of the property reserved or contracted for by. the grantor. (^) The only exception to the liability appears to be when the reversionary character of the property is created upon a bona fide sale for money or money's worth. Dispositions of property for the purpose of evading the Act are ex^ pressly provided for,(A) and so stringent are its provisions, that the duty appears invariably to attach unless the disposition is an actual gift in presenti, without any reservation. £ s. d. And if the same shall amount to 12, OOOZ. and not to 15,000Z. . 15 And if the same shall amount to 15,O00Z. and not to 20,000Z. . . 20 And if the same shall amount to 23,000 and upwards . . 25 But the stacks and funds then subject to duty were only the public funds. Bank, East India, and South Sea stocks. (a) 16 & 17 Vict. c. 51. (i) Sect. 54. (c) Sect. 2. (d) Sect. 3. (e) Sect. 4. (/) Sect. 5. (g) Sect. T. (h) Sect. 8. THE SUCCESSION DUTY ACT. 247 2. Th$ duty is made a first charge upon the interest of the successor, and all persons claiming under him, as regards real property absolutely, subject only to a provision in favour of bona fide purchasers for valuable consideration without notice,(i^ and as regards personalty while the same shall remain in his custody, or in that of any trustees for him. Tho duty is made a debt to the Crown ; but, as such, is not to charge the other real estate of the successor, or to suspend his right to exercise any power of consenting to any sale, exchange, or partition. (A:) 3. It is expressly provided that when at the time of the commence- ment of the Act any reversionary property shall be vested by alienation or other derivative title in any other person than the person who shall have been originally entitled thereto under any such disposition or devolution, " then the person in whom such property *shall be r-^ona-, so vested shall be chargeable with the duty in respect thereof as i- J a succession, at the same time and at the same rate as the person so originally entitled would have been chargeable with if no such alienation had been made or other derivative title created." And when after the commencement of the Act any succession before vesting in possession shall have become vested in a purchaser, the duty shall be paid at the same time and rate as if no derivative title had been created. (?) 4. To prevent mistakes under the operation of the sweeping clauses of the Act, it became necessary to provide expressly that moneys pay- able upon life policies or post-obit contracts shall not be esteemed to confer successions. To have enacted that they should have done so would indeed have operated as a bar to such transactions, for the insurer or grantor of a post-obit being almost invariably a stranger in blood to the grantee, the highest duty would have been payable. The exemption under the Act is carried out in the following terms : — " No policy of insurance on the life of any person shall create the relation of predecessor and successor between the insurers and the assured, or between the insurers and any assignee of the assured, and on bond or contract made by any person bona fide for valuable consideration in money or money's worth, for the payment of money or money's worth after the death of any other person, shall create the relation of predecessor and successor between the person making such bond or contract and the person to or with whom the same shall be made ; but any disposition or devolution of the moneys payable under such policy, bond, or contract, if otherwise such as in itself to create a succession within the provisions of this Act, shall be deemed to confer a succession." 5. When therefore a person has insured the life of another on the death of the latter, the assured or his representatives will be entitled to receive the money without *any duty being payable in respect of r«QiTQ-i it, and in like manner the representatives of the assured, when L J the policy is on his life, will receive the assurance moneys without the same being subject to any deduction, so long as they form, part of the personal estate of their testator. When, however, the estate itself is administered, these moneys, as well as every other part of such estate, (i) Sect. 52. {k) Sect. 42. {I) Sect. 15. 248 BUNTON'S LIFE ASSURANCE. will be liable to the succession duty in passing to a, legatee or to the next of kin. When the policy has been assigned, the purchaser or mortgagee will be entitled to the full benefit of the policy moneys ; but when they have been assigned upon the trusts of any settlement they will become subject to the succession duty as property falling into- possession under, the trusts of that settlement, the rate at which the duty is payable being determined by the degree of consanguinity between the settlor and his cestui que trusts.(m) r*3801 *^' ■^^ Income Tax Act of 1853,(n) that impost is levied L J for a further term of 7 years up to the 5th of jApril, 1860 ; but upon a descending scale, upon the annual proceeds and income specified under the respective schedules of the Act ; namely, under Schedule (A.) upon the annual value of all real estates in respect of the property thereof J under Schedule (B.) in respect of the occupation of real estate (other than a dwelling-house occupied by a tenant, distinct from a farm of land,) upon the annual value thereof; under Schedule (C.) upon the profits arising from the interest, annuities, and dividends payable out of any public revenue (except as to shares of a less half-yearly value than 50s.) ; under Schedule (D.) upon the annual profits and gains arising to any resident in the United Kingdom, from any property situate there or elsewhere, or from any profession, trade, employment, or vocation, whe- ther carried on there or elsewhere ; and upon the annual profits or gains arising from any property there situate, or any such profession, &c. there exercised to any person, whether a subject of her Majesty or not, although not resident in the United Kingdom. (o) (m) The duties are charged upon the following scale according to the relation- ship between the successor and predecessor,' being the same rates as are charge- able upon legacies by the Legacy Duty Act. Per cent. Where the successor is the lineal issue or ancestor ... 1 Where the successor is the brother or sister, or their descendant . 3 Where the successor is the brother or sister of the father or mother, or their descendant ....... 5 Where the successor is the brother or sister of the grandfather or grandmother, or their descendant ..... 6 Where the successor is in any other degree of consanguinity, or a stranger in blood . . . . . . .10 For the purpose of reducing the rate both upon successions, and legacies be- qileathed by a testator dying after the commencement of the act, every successor or legatee is to be considered as bearing the same degree of consanguinity to the predecessor or testator, as any wife or husband of nearer consanguinity to whom he or she shall have been married,^ and neither in respect of successions or lega- cies is any duty chargeable on gifts between husband and wife.' The interest of any successor in real property is to be considered as the value of an annuity (equal to the annual value of the property) for the term for which it is given, and calcu- lated according to the tables appended to the act, and is payable by eight half- yearly instalments in manner appointed by the act f* and interests in personalty are to be charged as if given by will.^ (n) 16 & 17 Vict. c. 34. (o) For every 20s. of annual value the yearly charge is Id. for two years from the 5th of April, 1853. ' Sect. 10. « Sect. 11. » Sect. 18. * Sect. 21. = Sect. 32. THE INCOME TAX ACT. 249 7. The duty payable under Schedule (A.) is in the first instance paid by the occupier, and by him deducted from the rent paid to his landlord. That payable under Schedule (C.) is deducted from the dividends by the officials paying the same ; while for that chargeable under (D.) and (E.j returns are made by the owners of the respective amounts. But in such return, under Schedule (D.), no *mention is made of any interest p^ooi-i of money, or other annual payment arising out of the property of L J any other person for which such other person ought to be chq,rged by virtue of the Act ; nor is any deduction to be made on account of any interest or annual payment payable out of such income ; but the party liable to such interest, or making such payment, is to pay duty on his entire income, and then deduct out of the interest or annual payment with which he is chargeable the amount of the income tax thereon. Under Schedule (E.), when the salaries, &c. are payable at any public office, the amount of duty is retained or stopped out of such payment. 8. From the duties thus payable, a not unreasonable deduction is allowed to all persons having effected insurances on their lives or on the liy€S of their wives, or having contracted for deferred annuities on their lives or the lives of their wives. This exemption is given in the follow- ing terms : " Any person who shall have made insurance on his life or on the life of his wife, or shall have contracted for any deferred annuity on his own life or on the life of his wife, in or with any insurance company, which shall become registered under any Act to be passed in the present Session of Parliament for that purpose, and which shall comply with the require- ments of such Act, and any person who shall under any Act of Parliament be liable to the payment of an annual sum, or to have an annual sum deducted from his salary or stipend, in order to secure a deferred annuity to his widow or a provision to his children after his death, shall be enti- tled to deduct the amount of the annual premium paid by him for such insurance or contract, or the annual sum paid by him or deducted from his salary or stipend as aforesaid, from any profits or gains in respect of which he shall be liable to be assessed under either of the Schedules (D.) or (E.) of this Act, or to have any assessment which may be made upon him under either of the said Schedules reduced or abated by the deduc- tion of the amount of the said annual premium from the amount of the profits or gains on which such assessment has been made ; or if such person shall be assessed to duties under any of the ^Schedules p^ogo-i contained in this Act, and shall have paid such assessment, or L J shallthave paid or been charged with any of the said duties by deduction or otherwise, such person, on claim made to the commissioners for special purposes, and on production to them of the receipt for such annual pay- For every 20«. annual value the yearly charge is 6(L for two years from the 5th of April, 1855. For every 20«. of annual value the yearly charge is 5d. for three years from the 5th of April, 1857. The occupation tax, namely, that payable under schedule (B.), is one-half of the above in England, with the further deduction in Scotland and Ireland of Id. for the first two years, and f rf. for the five years following from the English rates. 250 bunton's liee assurance. Qjent, and on proof of tbe facts to tlie satisfaction of the said commis- sioners, shall be entitled to have repaid to him such proportion of the said duties paid by such person as the amount of the said annual pre- mium bears to the whole amount of his profits and gains on which he shall be chargeable under all or any of the Schedules of this Act : pro- vided always, that no such abatement, allowance, or repayment as afore- said shall be made in respect of any such annual premium beyond one- sixth part of the whole amount of the profits and gains of such person so chargeable as aforesaid, nor shall any such deduction or abatement entitle any such person to claim total exemption or any relief from duty on the ground of his profits and gains being thereby reduced below 1001. or 150/., as the case may be."(^) 9. No such registration Act for Insurance Companies having been brought in during that session, a short Bill was passed, extending the benefit of the proposed abatement of tax in respect of the annual pre- miums of insurances for the term of one year, to the 5th of July, 1854, to all persons who shall have made any such insurance, or contracted for any such deferred annuity in or with any insurance company existing on the 1st day of November, 1844, or any company completely registered under the Joint-Stock Registration Act.(2') . 10. By virtue of this section, persons making returns under Schedules (I).) and (E.) will deduct the amount of such premiums from their returns. While persons chargeable under the other schedules, and who for the most part, be it remembered, receive their income after the deduction therefrom of the income tax, will be entitled to claim a proportionate allowance from the commissioners, the deduction and allowance in each case being subject to this limit, that the amount of the premiums in P^qQo-i respect of which *they are made, or claimed, do not exceed one- L J sixth of the total amount chargeable under all the schedules. To entitle the premium to this exemption, it must, it will be observed, be annual,' but it need not be so for the whole duration of life. An annual premium, payable for a term, would be within the section, so that any person possessing a policy assuring either a gross sum upon the death of himself or his wife, or a deferred annuity en either of their lives, the pre- mium On which policy being of an amount less than one-sixth of his income was payable for the whole duration of either life, or any other extensive term, would be enabled to commute such premium for a larger premium, payable only for the limited term for which the property tax is granted, and thus obtain the full benefit of the deduction, to the extent of one-sixth of his income. « 10. The enactments that we have lastly considered as affecting life assurance., are, however, it may be presumed, only instalments of those which may be expected. The intention to legislate may, perhaps, be thought to have existed, at least as early as the Joint-Stock Companies' Registration Act, since we find that then existing companies, although required to register, are precluded from taking advantage of its provi- (p) 16 & 11 Vict. c. 34. (q) 16 & 17 Vict. c. 91. EEPOET or COMMITTEE. 251 sioiis ; and in the Private Acta, passed in favour of such companies in the same year, it is expressly provided that they shall not in any way take them out of the operation of any General Act to be passed during that session of Parliament. Be this, however, as it may, the intention un- doubtedly existed at the commencement of the present session, as is evidenced by the section we have quoted from the Property Tax Act ; but the House of Commons paused, before carrying it into effect, to await the report of the select committee, to whom the consideration of the state of assurance associations was referred. That Eeport is subjoined in the Appendix to this work. Touching upon a variety of subjects, it is obvious that in the investigation which was pursued, two only received the *serious consideration of the r^oo^^n committee ; namely, first, what protection was to be required for <- -I the public against the insolvency and improper management of insurance companies; and secondly, in what manner and form periodical accounts of their transactions and the state of their funds were to be required to be registered and published. With regard to the first of these, the com- mittee appears to have determined that the remedy was the publication of accounts, and that, for this purpose, no distinction should be made between the companies existing prior to, and those completely registered under the Joint-Stock Companies' Act ; and further, that, as a reason- able guarantee for the bona fide intentions of the promoters of new com- panies, no such company should be admitted to complete registration until a capital should have been subscribed, and actually paid up, of at least 10,000?. ; which sum should be invested in the public funds, under such regulations as Parliamant might deem fit. With regard to the second point, they recommend that it should be imperative upon each company to make a complete investigation into its affairs at least once in five years, " as is usually prescribed by their deeds of settlement, and at such times so prescribed, which shall show a complete valuation of their risks and liabilities, and of their assets to meet the same ; and all such valuation accounts, which may be for the information and use of the proprietors, are to be registered at the office of the registrar," who is to have power to compel compliance with the regulations to be thus laid down. They also recommend that in every intermediate year accounts should be regis- tered, such as are published or laid before the general meetings of all well-regulated companies, showing the extent of the business, distinguish- ing new business from old, and the nature of the investments ; and, in addition to these particulars, they add the table of mortality, and the rate of interest used in calculating the premiums. It must, however, be doubted whether accounts furnished in the form thus proposed will really afford the *information intended. Such i-jitqocT accounts will be like the play with the character of Hamlet L J omitted by special desire, since they are wanting in the true test of such accounts, namely, the table of mortality, and the rate of interest used in calculating the assets and liabilities of the company in the general valu- tion. It by no means follows that the rates of mortality and interest used in calculating the premiums will be used for the purpose of a valu* 252 BUNYON'g LIFE ASSUEANOE. ation ; on the contrary, in many companies it may be assumed that they will not be so, and certainly cannot in such as in their balance sheets already registered, show a balance in their own favour, between the two items of liabilities in respect of the sums assured and assets from pre- miums to be received. Again, even assuming that the same rates were used in both operations, it is not clear that without some very much more stringent requisitions any real information would be given. It is very true that there are not more than half a dozen tables of mortality existing which have been derived from actual observation, and which can be cited. This indeed excludes any tables made from the experience of the respective offices, but these, except in a very few instances, such as the Amicable, Equitable, Norwich Union, or Rock oflSces, cannot be sufi- ciently extensive, either as regards time or the multitude of observations for practical use, and are only in the possession of the respective compa- nies. It will, nevertheless, be found that an immense number of com- panies claim to be possessed of their own mortality tables, and that even at their very commencement. Such tables are probably derived by a simple process of evolution from a scale of premiums arbitrarily chosen. They may perhaps be safe for practical purposes ; but it is obvious that no information is conveyed by the statement, that a table of mortality is used specially calculated for the use of the company. For the statements proposed, to be of value, they must show clearly the condition of the company after the valuation of its assets by some mortality table of esta- blished reputation, and at a given rate of interest, and some one such table r*^SRT ^^'"^^•^ ^® *adopted as a touchstone for all companies using their L J own tables, the valuations in every such case being made by both tables for comparison by the public. It may be objected that the labour thus entailed would be very great ; but this plea if of any force, would be very readily set aside by not requiring the double calculation in the case of policies, except where the sum assured was payable certainly at death, or at any earlier period, and only in the case of annuities where the value of annuities of all descriptions bore a fixed proportion to the total liabilities of the concern. Again, it is difficult to ascertain the reason for fixing five years as the term at the expiration of which a valuation is at all events to be made. Many companies value their liabilities and declare a bonus once in seven or ten years only. Can it be intended that they are to make valuations simply for the purpose of registering them ? It seems to the author that such a course would be extremely objectionable, and, further, liable to cause injustice, and create internal dissensions in many companies. For example, to take the case of a company whose periods of division are wholly in the discretion of the board of directors, but which nevertheless have always been taken septennially j after such a theoretical valuation it would be very difficult to preserve the established course of division, and yet an alteration might upon some principles of valuation very essen- tially affect the interests of individuals, who might have contracted with the company on the faith that the old established course would be pur- sued. It is submitted that the true rule would only require the regis- REPORT OF COMMITTEE. 253 tration of eTery valuation actually made, and submitted to the share- holders or policy-holders, and also that such a valuation should be made and registered within a specified time prior to every declaration of any bonus. To prevent the evasion of the Act, according to the present practice, the committee recommends that adequate power should be given to the registrar of joint stock companies, to enable him, either hy himself or through one *of the departments of the state, to enforce any rj-qoirT regulation which Parliament may think it wise to enact. It is L -• obvious that it would be futile to enact regulations without the existence of some power to enforce them j but how far it is desirable that the com- panies should be, in e£fect, under the management of some government department will at least admit of debate, and from it the further question seems to arise, how far the creation of such machinery may ultimately lead to the assumption by the state of the business of all insurance com- panies. Assuming the machinery in active operation, and some stringent provisions enacted, which should compel the valuation to be made in every case in such a manner as to fully estimate the liabilities, and pre- vent the anticipation of unrealised profits, it is not impossible that one of the first problems for solution which might present itself, might be the manner in which a number of insolvent companies should be dealt with. Several courses would ofl^r themselves; namely, an immediate call upon the shareholders, or in the alternative, a compulsory amalgama- tion with any solvent company willing to take a transfer of the business, — or, again, in mutual companies, a rateable reduction in amount of all insurance contracts. Either of the former alternatives might be difficult to enforce, and the latter might cause great dissatisfaction, more particu- larly where the policy-holders might justly argue, that there was no guarantee that the same step might not be repeated. In all such cases it is clear that the assured are the parties whose interests are to be con- sidered ; and should a state insurance office be commenced, it might be thought right to compel the merger in it on equitable terms of all com- panies unable to satisfy the conditions which might be laid down as necessary for their continued existence. The scope and limits, however, of this treatise forbid the further investigation of this subject, which in- volves considerations of political economy and finance rather than of law. There are many objections to the assumption of this province by the state ; as, for example, *that it as an insurer would be more than r^ooo-i others liable to fraud; that if successful it must gradually L J swallow up all competitors, while at the same time the exclusion of indi- vidual energy and private enterprise would operate as a bar to the onward progress of life insurance, and the adoption of provident habits by the masses,.^and again, that it would be unable to deal with special cases, particularly those in which the lives were not, in the language of insur- ance offices, " select, or of the first class ;" so that, if the last result actually occurred, a vast number of beneficial and provident contracts of this nature would be prevented. At the same time, assuming that these and other objections, which might well be raised, could be removed, it is 254 BUNYON'S LIFE ASSURANCE. worthy of remark that the way to the desired conversion of the three per cent, annuities would be wonderfully smoothed to a chancellor of the ex- chequer, who, in addition to the powers which he already possesses over that portion of that stock which consists of the funds in Court, and the investments of trustees, would be master of the far greater sums which will in a very few years represent the accumulations of the insurance companies. The committee, moreover, recommends the repeal of all the provisions of the Joint Stock Companies' Act, so far as they relate to assurance societies, and that they should be dealt with in a separate Act. This, it may be assumed, would be for the sake 'of convenience only, since, except as to the questions of the publication and registration of accounts and other documents, the provisions of that Act would be re-enacted as neces- sary for the existence of companies already completely registered. It cannot be supposed that any proposition would be entertained for altering the constitution of such companies as were established prior to its enact- ment. 12. Lastly, we must add that in two respects, at least, the law of Life Assurance and Annuities seems to require amendment. First, in passing an Act either declaratory or altering the law, according as the point may r*q8QT ^® ultimately decided, to the effect that where a bona fide insur- L -I ance *contract has been once undertaken upon a sufficient insur- 'able interest, no subsequent expiration of that interest should invalidate the insurance. Secondly, in dispensing with the enrolment of annuities granted by assurance companies. The first alteration we have already treated of at large in the first chapter of this work ; the second seems equally desirable. The primary object of the enactment requiring the enrolment, is the protection of the grantor from his own improvident acts ; this, it must be admitted, insurance companies scarcely require. The minor object, namely, the control over the companies themselves, is much more fully obtained by the Registration Act, so that the only prac- tical effect of the present state of the law is to entrap the ignorant and unwary ; an important fact when it is considered of what class the pur- chasers of annuities for the most part consist. A further alteration has been from time to time proposed of making life policies assignable at law. There appear, however, to be arguments on both sides this question. If the alteration is to be made, it seems clear that it is not sufficient that there should be a power to transfer the legal right of action, but the assignee must be enabled to give a good discharge to the company. This latter right (in equity), it may be said, is provided for by every well- drawn mortgage deed, and it may be argued, with great force, that where the equitable right is controlled, either by the receipt clause, or by the fact that the entire beneficial ownership is vested in the assignee", it is a hardship that he cannot recover at law in his own name. On the other hand, it may be urged, that the alteration would greatly unsettle the law, which is now very well understood. That the difficulties to which an assignee is subject in enforcing payment of the assurance moneys, are greatly removed by the amendments of the law as to proceedings in courts REPORT OF COMMITTEE. 255 of equity : and, moreover, that the present system works well in practice, and, in addition, protects the interests of the widow and the orphan, which would be greatly jeopardised by the change. These remarks assume *at once that policies could only be made assignable by rjKqofn deed formally executed and registered ; to make policies assign- L -• able by indorsement, or negotiable as bills of exchange or promissory notes, would be an extravagant act, uncalled for by the exigencies of commerce, and one that would greatly detract from the true value of life assurances as family provisions. APPENDIX. [*391] *PKECEDENT, N6. I. Conditions of Sale. 1. The highest bidder shall be the purchaser, and if any dispute arise as to the highest bidder, the lot in dispute shall be put up again at the last undisputed bidding. 2. No person to advance less than £ at each bidding, nor retract a bidding. 3. The purchaser shall pay down immediately into the hands of [the auctioneer], a deposit of £20 per cent, in part payment of the purchase- money, and sign an agreement for payment of the remainder on or before the day of next at the office of , situate in , at which time and place the purchase is to be completed. And if from any cause whatever the completion of the purchase be delayed beyond the said day of next, the purchaser shall pay interest on the balance of his purchase-money, until payment thereof, at the rate of £5 per cent, per annum; but this provision shall not prejudice the right of the vendor to require the completion of the said purchase on the said day of , or any other right or privilege stipulated for by these pre- sent conditions, or any of them. 4. That upon payment of the remainder of the purchase-money at the time above mentioned, the vendor shall assign his interest in the policy at the expense of the purchaser, who shall be entitled to all ad- vantages arising upon the policy from the hour of sale ; but all pre- miums falling due or becoming payable between the day of sale and the completion of the purchase fire to be paid by the purchaser. ^ 5. That the age of the assured life having been admitted by L J *indorsement upon the policy, signed by , such admission shall be conclusive against the purchaser, and no further or other proof of age shall be given or required [and that the issue of the policy by the company shall in like manner be conclusive evidence of the posses- APPENDIX. 257 sion of an insurable interest by tte assured, and no other evidence shall be required of the continued existence of such interest.](a) [6. That the vendor will furnish, at his own expense, an abstract of wills, deeds, or documents under which he derives title. But the ex- pense of all attested, official and other copies of or extracts from wills, deeds, decrees, orders, reports, or other documents, and all certificates of burials, deaths, marriages, births, and baptisms, and all other documen- tary evidence whatsoever, and also the expense of all statutory declara- tions as to identity of parties or otherwise, and deeds of covenant for the production of deeds and documents, whether in verification of the abstract or otherwise, shall be borne by the party requiring the same.](6) [7. That all objections and requisitions as to the title shall be made in writing within fourteen days next after the delivery of the abstract, otherwise they shall be considered to be waved, and if any such objec- tion shall be made within the time aforesaid, the vendor shall be at liberty to rescind the contract by notice in writing to the purchaser or his solicitor, and upon repayment of the deposit paid by such purchaser, but without any interest, damages, or costs.](c) 8. That if any error or mis-statement be inserted in this particular, such error or mis-statement shall not vitiate the sale, *but the rjionQT vendor or purchaser, as the case may happen, shall pay or allow L -• a proportionate value, according to the average of the purchase-money, as a compensation either way; such proportionate value to be determined by any person to be agreed upon by the vendor and purchaser within one week after the objection shall have been made to the vendor, or by the auctioneer selling the property, in case such other referee be not so agreed upon within the said period. 9. Lastly — That should the purchaser neglect or fail to comply with any or either of the above conditions, the deposit-money shall be for- feited, and the vendor shall be at full liberty to re-sell the property, either by public or private sale, and the deficiency (if any) arising by suoh seoond sale, together with all expenses attending the same, shall be made good by the defaulter at this present sale ; and in case of the non- (a) Prior to the putting up a policy to sale by auction, it will always be prnd»nt to obtain an admission of the age. The purchaser will be entitled to evidence, and if any difficulty arises by reason of the imperfection of the available evidence, the company will generally be found easier to satisfy than a purchaser, and of course than an unwilling purchaser; the portion of the condition within brackets, will of course be only added when the policy is on the life of a nominee ; it is not invari- ably used. See Barber v. Morris, 1 Moo. & Rob., 62. (6) Unless the policy has been the subject of previous assignments, conditions 6 and 1 will be unnecessary, and even in such a cas,e they should be, as far as possible, curtailed, as very stringent conditions may damp the sale. (c) When the vendor is a mortgagee with power of sale, it may be desirable to preclude the purchaser from requiring proof of the existence of the mortgage debt ; the following is an example of a condition to that effect. " That as the vendor is a mortgagee selling by virtue of a power of sale in his mortgage deed, the production of Such deed, whole and uncancelled, shall be con- clusive evidence, that the security is subsisting, and of the right of the vendor to sell the policy; and the purchaser shall not be entitled to any other covenants foi title than the covenant of the vendor, that he has not encumbered the property." August, 1853.— 17 258 BUNTON'S LIFE ASSUEANCE. payment of the ^me, the whole shall be recoverable "by the vendor as liquidated damages, and it shall not be necessary previmisly to such second sale to tender a conveyance to the purchaser. Agreement for Purchase to he written at the Foot of or indorsed on the Particulars of Sale. MemorandtiiiI. It is hereby agreed between \the auctiomeer^ as agent of the ven- dor, and ,., that the said has become the purchaser of ' de- scribed in these particulars of sale, at the sum of £ , and that he has paid to the said £the auctioneer^ the sum of £, as a deposit and in part . pa.yment of his purohase-Hioney, on account of the vendor, and that these particulars and conditions of sale shall be taken as the terms of agreement for the said sale and purchase respectively. Dated the day of , 1853. PEECEDENT, No. H. Assignment upon Sale. of a Policy of Assurance eaxcuted hy the Vendor upon the life of the nominee \yiith variations whem ihe Policy is on the Life of the Vendor, "X This Indenture, made the day of , 1853, between A. B., of, &o., (the vendor,) of the one part, and C. D., of, &c. (the purchaser,) r*W41 °^ ^^^ other part. Whereas by a policy of *assHmnce, bearing L -I date the day of ■ , 1836, numbered , and under the hand and seals of three of the directors of the Norwich Union Life Assurance Society, the sum of £ is assurance to be paid unto('(^) the said A. B., his executors, administrators, or assigns, within three calendar months next after s^isfactory proof of the decease of E. F., of, &c. Esquire, shall have been received by the directors of the said society, subject, nevertheless, to the payment of the yearly premium of £, , and the observance and performance of certain conditions, stipulations, and agreements in the same policy mentioned or referred to: And whereas the said A. B. hath contracted with the said C. D. for the sale unto him of the said policy of Assurance, xind all benefit thereof at the price of £ , Now this Indenture witnesseth that in pursuance of the said recited contract, and in consideration of the sum of £ , at or immediately prior to the execution of these presents unto the said [d) Variation where the policy is on the life of the assured:— '"to be paid unto the executors, administrators, or assigns of the said A. B.. within three calendar mouths next, after satisfactory proof of his death shall have been received," iSco. , APPENDIX. 259 A. B. paid by the said C. D. (ftihe receipt whereof the said A. B. doth hesreby acknowledge), he the said A. B. doth by these presents assign [transfer aad set over,'}(e) unto the said C. iD., his executors, administra- tors, and assigns, all that the said recited policy of assurance so effected upon the life of Ae said E. !"•(/) as aforesaid, together with the sum of & -, thereby assured, and all other moneys, bonuses, and benefits wijch are, shall, or may be payable in respect of or otherwise inciden- tal to the said policy, and all .the right, title, interest, property, claim, and demand whatsover of him the said A. B., in, to, upon, or by virtue of the said policy, moneys, and premises hereby assigned or intended so to be, TO HAVE, HOLD, RECEIVE, AND TAKE the Said policy, moneys, and all and singular other the premises hereby assigned or intended so to be, unto and by the said C. D., his executors, administrators, and assigns, for his and their own use.(g') And the said A. B. doth hereby au- thorise the said G. D., hjs executors, *administrators, and riKoqcn assigns, or such person or persons as he or they shall, from time L -I to time, appoint as his or their substitute or substitutes, without any further authority or concurrence by or on the pait of the said A., B., his executors, administrators or assigns, or any other person or persons, to demand, eue for, recover, receive and enforce the said policy, moneys, and premises hereby assigned or intended so to be, and every part there- of ; and to commence, carry on, suspend or discontinue any action, suit, or other proceedings whatsoever concerning the sam-e, and on receipt, satisfaction or discharge thereof, to give effectual releases and'discharges for the same, and otherwise act in relation thereto as fiilly and effec- tually as the said A. B., his executors, administraitors, and assigns, could personally have done if beneficially entitled thereto, and with full power and autbority for the respective purposes aforesaid, or any of them, to use the name or names, or to act as the attorney or attorneys of the said A. B., his executors or administrators : And the said A. B. doth here by^ for himself, his heirs, executors and administrators, covenant with tte said C. P., tis executors, and administrators, in manner following, that is to say, that notwithstanding any act, matter, or thing done, com- [&) Tie word "assign"' is tlie appropriate word ; the others, although commou, may be omitted. if\ Or, "of the said A. B." \g) The object of a power of attorney is to enable "the purchaser to sue in a court of law in the name of the Tfindor, and when given for a valuable considera- tion is irrevocable by him (Walsh v. Whitoombe, 2 Esp. ,Ca. 565). It is very com- monly inserted in assignments of choses in action, whether legal, or equitable ; but it is of no value, except upon assignments of the former, as the assignee does not require such a power to enable him to proceed in a court of equity. When, therefore, the party making the assignment is not the grantee of the policy, the power is mere surplusage, and may .be omiitted ; and in like manner, where the policy is on the life of the vendor, as the power by its nature expires upon the death of the grantor, it may be omitted ;' unless by the peculiar provisions of the policy the sum assured, or any moneys added as bonuses, may become payable during the life of the assured; or if inserted, it should be in the short form given in the following precedent,', as merely the espreasion of the rule of equity, conse- quent upon the .assignmsnt. 1 Ante, p. 190. = Ante, p. 193. 260 bunton's life assurance. mitted or suffered by him the said A. B., the said policy of assurance is, at the time of the execution of these presents, a good, valid, and effectual policy of assurance for the sum of £, , and is now in full force, unforfeited, unsurrendered, and in nowise vitiated or become void or voidable ; and that notwithstanding any such act, matter, or thing as aforesaid, the said A. B. now hath in himself good right, full power, and absolute authority to assign the said policy moneys and premises herein- before assigned or intended so to be unto the said C. D., his executors, administrators, and assigns, in manner aforesaid, according to the true in- r=K^Qfin ^^''^ ^^^ meaning of these presents iQi) and also *that he the said, L J A. B., his executors, and administrators, and all and every other person or persons whomsoever having or claiming, or who shall or may have or claim any right, title, or interest whatsoever in, to, out of, or upon the said policy, moneys, and premises hereinbefore assigned or intended so to be, or any part thereof, by, through, under, or in trust for him the said A. B., his executors, or administrators, shall and will, from time to time, and at all times hereafter, upon the request and at the costs of the said C. D., his executors, or administrators, or assigns, make, do and execute, or cause and procure to be made, done, or executed, all and every such further and other lawful acts, deeds, receipts, assignments, and assurances in the law whatsoever, for the further, better, and more (A) A covenant is sometimea inserted, that the vendor will do no act whereby the purchaser may be prevented from recovering the policy moneys ; but is objec- tionable, since, when the vendor is an assignee, it is totally inoperative, and in like manner, when he is the assured, his release to the company, or that of his representatives after notice, would have no effect, and where the policy is on the life of the assignor, it is sufficiently ambiguous to occasion future disputes. It can scarcely be intended, that without a special agreement, a covenant should be en- tered into, which might render the vendor liable in damages, for any act, not in itself tortuous, which might be an infringement of one of the conditions of the policy, such as going beyond the limits of Europe without the permission of the directors (see the judgment of the Master of the Rolls in Dormay v. Borrodaile, 10 Beav. 34l). A special agreement might be reasonably required, that the vendor, being the party whose life is assured, should not go beyond the limits of Europe, or upon the high seas without the specified limits, or enter jnto active military service, without previously giving notice to the purchaser, so as to enable him to obtain the previous permission of the directors, upon paying such additional premium as they may require. In such a case, a clause sijuilar to the following should be added to the recital of the policy: — "Including certain stipulations thereupon endorsed, and among Other things, providing, that the said policy should be rendered void if the said A. B. should go upon the high seas (unless in passing direct from one part of the United Kingdom to another, or, in time of peace, passing in decked vessels or steamboats from British to foreign ports, between the Elbe and Brest, both inclusive, or in return- ing therefrom), or should go beyond the limits of Europe, or enter into any mili- tary or naval service without license, in every such case, from the said directors." Ap.d the following covenant added, " And also, that the said A. B. will not at any time hereafter, so long as the said policy upon his life shall continue in force, go upon the high seas, except within the limits and in the manner prescribed by the said conditions of the said policy, or pass beyond the limits of Europe, or enter into any military or oaval service, without previously giving notice unto the said C. D., his executors, administrators, or assigns, or leaving notice in writing at his or their last known place of abode in Great Britain of his intention so to do, for the purpose of enabling the said C. D., his executors, administrators, or assigns, in every such case, to obtain from the said directors the previous license men- tioned in the same conditions." APPENDIX. 261 effectually assigning and assuring the said policy, moneys, and premises hereinbefore assigned or intended so to be unto the said C. D., his exe- cutors, administrators, and assigns, and for enabling him or them to re- cover and receive payment of the same moneys as by him or them, or his or their counsel in the law, shall be reasonably advised or required. In witness, &c. *PRBCEDENT, No. III. [*397] Assignment upon Sale of a Policy of Assurance, to he endorsed upon the Policy. {%\ This Indenture, made the day of , 1853, between the within-mentioned A. B. (the vendor,) of the one part, and C. D. of, &c. (the purchaser,) of the other part, WITNESSETH, that in consideration of the sum of £— - — as and for the purchase-money of the within-written policy of assurance by the said C. D., paid unto the said A. B., as he doth hereby acknowledge, he the said A. B. doth by these presents assign unto the said C. D., his executors, administrators, and assigns, all that the said within-written policy of assurance upon the life of the said A. B. [|or upon the life of E. P., gentleman, therein described,] and the sum of £ , and all other moneys assured thereby, and the full benefit thereof, and all the right, title, and interest whatsoever of him the said A. B. in and to the said policy and premises [together with full power and authority to ask, demand, sue for, recover, and receive, and give effectual receipts and discharges for the said sum and sums of money, and every part thereof, in the name or names of the said A. B,, his execu- tors, or administrators :](^) to hold, receive, and take the said policy, and all other the premises hereby assigned or intended so to be, unto the said C. D., his executors, administrators, and assigns, for his and their own use. And the said A. B. doth hereby for himself, his heirs, executors, and administrators, covenant with the said C. D., his executors and administrators, that notwithstanding any act or thing done or suffered by the said A. B., the said policy is now in full force, and in (i) There is very often sufficient space left blank upon the back of a policy for the endorsement of a short deed in the above form. This is very convenient not only as a saving of expense, but as preventing the separation of the policy and assignment. When, however, this is not practicable, and brevity is an object, this form may be used by adding the descriptions of the parties, and in place of the word "witnesseth" inserting the following clause, "Whereas, the said A. B. hath contracted with the said 0. D. for the sale to him of a policy of assurance effected by the said A. B. upon his own life (or upon the life of E. F. of, &c., gentleman), with the Norwich Union Life Insurance Society, numbered , and at the annual premium of £ : Now, this indenture witnesseth." The policy will then be referred to as "the said" instead of the "within written policy," and as- signed as "the said policy." [k) When the policy is on the life of the assignor, this power may be omitted. 262 bunyon's life assuranoe. nowise become void or voidable ; And the said A. B. hath now gdod right and full power to assign the same poliey in manner aforesaid; And r*398T *^*''*'^^'^ ^^^^ '^^ said A. B., his e-secutore^ and adtainistrators, L J and every other person claiming or to claim by, through, or in trust for him or them, any title or interest whatsoever to or in the same policy, shall and will at all times hereafter upon the request and at the costs of the said C. D., his executors, administrators, or assigns, do and execute, or cause or procure to be done and executed, all such further acts, receipts, and assurances for more effectually assigning or otherwise assuring the said policy unto the said C. D., his executors, administrators, or assigns, and for enabling him or them to recover or receive the moneys thereby assured, as the said C. Tf., his executors, administrators, or assigns shall reasonably require. In witness, &e. PRECEDENT, No. IV. Assignment hy a, Oreditor of a Policy of Assur(mce ^eeted by Mm wpon the lAfe of Ms BSttov, to the loMer, after the Satisfaction of the JDeht^ ( To be endorsed wpon the Fblicy.) This Inbenture, made the — — day of , 1853, between the within-named A. B., of the one part, and the within-named C D. of the other part : Whereas the within-written policy of assurance was effected at the cost of the said C. D., as a security for a debt at the date thereof owing by him unto the said A. B., but since paid and satisfied, together with &e., of the other part : Whereas by a policy of assurance under the hands and seals of two of the trustees of the London Life Association, dated the — ■ — day of — ■ — , and numbered — ", the sum of £ is assured to be paid to the executors, administrators, or assigns of the said A. B. within three calendar months next after proof of his decease, sub- ject nevertheless to the payment of the annual premium of £ — — during hia life, and the observance and performance of the conditio!ns and agree- ments in the same policy mentioned or referred to : aad whereas the said A. B. hath requested the said 0. D., E. F., and Gt, H., hereinafter referred to as the " said mortgagees," to advance unto him the sum of £1000 sterling, which they haVe agreed to do out of moneys belonging unto them upon a joint account upon having the repayment thereof, with interest in the Meantime, secured iti manner hereinafter mentioned: Now THIS Ini>enturb WITNESSETH, in consideration of the sum of £1000 out of such moneys as aforesdd, at or immediately prior to the execution of these presents, paid unto the said A. B. by the said mortgagees (the receipt thereof he the said A. B. doth hereby acknowledge,) he the said A. B. doth by these presents [assignment-of the said policy to the mart- 268 bunton's life assurance. gagees subject to thejproviso/or redemjption — see Pecedent Fi] : Provided always, and it is hereby agreed and declared, that in case the said A. B., his executors, administrators, or assigns shall pay or cause to be paid unto the said mortgagees, their executors, administrators, or assigns on the day of next ensuing the said sum of £1000, together with interest for the same after the rate of £5 for s6100 for a year from the day of the date of these presents, without any deduction or abatement whatsoever, then the said mortgagees, their executors, administrators, or assigns, shall and will upon the request and at the costs and charges of the said A. B., his executors, administrators, or assigns, reassign the said policy and premises, if then subsisting, unto the said A. B., his executors, r*4flf51 **dministrators, or assigns, free from all encumbrances by the L J said mortgagees or any of them, their or any of their executors, administrators, or assigns; And the said A. B. doth hereby for himself, his heirs, executors, and administrators covenant with the said mort- gagees, their executors and administrators in manner following, that he the said A. B., his executors and administrators shall and will pay unto the said mortgagees, their executors, administrators, or assigns the said sum of £1000 and interest at the time and in the manner aforesaid, and in case the same shall not be paid on the said day of , shall and will thenceforth pay or cause to be paid unto the said mortgagees, their executors, administrators or assigns interest thereupon at the rate aforesaid, by equal half-yearly payments on the day of and on the day of in every year ; and shall and will, during the con- tinuance of this security, punctually pay the annual or other premiums and expenses for the time being payable in respect of the said policy and of every further or renewed policy to be effected pursuant to the covenants and provisions in that behalf hereinafter contained, and shall produce and deliver unto the said mortgagees, their executors, administrators, or assigns due vouchers for the payment of such premiums and expenses when and as the same shall have become due. And that in case the said policy or any such further or renewed policy shall be forfeited, avoided, or impeached, or shall become liable to any forfeiture, avoidance or impeachment, he the said A. B. shall and will forthwith thereafter at his own costs effect and obtain in the names or name of the said mort- gagees, or the survivors or survivor of them, or the executors or adminis- trators of such survivor, or their or his assigns (all which lastly mentioned persons " are hereinafter referred to as the said mortgagees or mort- gagee,") and of and from the aforesaid assurance. society, or any other assurance company or companies, one or more further or renewed policy or policies upon the life of him the said A. B. for any sum or sums of money not being less than the sum of £ ; and will in every case deliver or cause to be delivered unto the said mortgagees or mortgagee every such further or renewed policy as aforesaid : And moreover, that in case the said A. B. shall make default in payment of the premiums or additional premiums, and expenses (if any) for the time being payable in respect of the said policy or any such further or renewed policy or policies as aforesaid in manner aforesaid, and shall not in like manner produce APPENDIX. 269 upon demand *unto the said mortgagees or mortgagee proper rs^n^-i vouchers for the payment thereof, and shall not obtain and effect L J and deliver unto the said mortgagees or mortgagee such further or renewed policy or policies as aforesaid in pursuance of the covenants in the same behalf hereinbefore contained, or shall commit any other breach of the said covenants on his part hereinbefore contained in relation to such insurances, then and in every such case it shall be lawful for the said mortgagees or mortgagee, if they or he shall think fit, out of their or his own moneys to pay such premiums and expenses, and to obtain and effect any such further or renewed policy or policies for the aforesaid or any less amount ; and the amount which they or he shall so expend, with interest for the same at the rate aforesaid from the time or respec- tive times of the payment thereof, shall upon demand be repaid unto them or him by the said A. £., his executors or administrators, and shall also be secured by and raisable under these presents in the same manner and as fully in all respects as the said principal sum of £ , and the interest thereon [Covenants bi/ A. B for right to assign — to do no act to vitiate the policy , and for further assurance. See Precedent F,] : Provided also, and it is hereby agreed and declared, that if the money assured by the said policy hereby assigned or intended so to be, or any such further or renewed policy or policies as aforesaid, shall by reason of the death of the said A. B. become payable or receivable before payment shall have been made of all such sum and sums of money as are hereby secured or intended so to be, it shall be lawful for the said mortgagees or mortgagee, in their or his discretion immediately after such decease, and although the times at which the sum of £1000 is here- inbefore convenanted to be paid shall not have then arrived, to apply for and receive, and if necessary enforce payment unto them or him of the said principal sum or sums of money so assured, and of all bonuses and additions thereto Vfor continuation of this power, see Precedent Y. ; also see the same Precedent for trusts of the money when received, and power of sale adding to "the said policy." "and every such further or renewed policy or policies as aforesaid""] : Providted a%ay«, and it is hereby agreed and declared, that the covenants on the part of the said A. B., hereinbefore contained shall not bind him to pay the premiums accruing or becoming payable upon any such policy as aforesaid, or to effect any such renewal as aforesaid, at any time after any sale shall have been made under the power in that behalf hereinbefore *contained : -^^ ao-i Provided also, and it is hereby further agreed, that every receipt L J which shall be given by the said mortgagees ol: mortgagee for any money to be received by him or them by virtue of these presents shall be a con- clusive discharge to every insurance society or company, person or per- sons paying the same, and shall release every such society or company, person or persons from all liability to see to the application of the same ; and that neither the said company, nor any other company, nor any pur- chaser or other person making any such payment, shall be bound or entitled to inquire whether any default shall have been made in the payment of the moneys hereinbefore covenanted to be paid, or any of them, or whether the same or any part thereof shall then remain due, or whether there shall have 270 bunton's life assurance. been any such breach tf covenant as aloresaid: Provided also, 'and it is hereby fupther eKpneaslydeclaKed, thaii the several eqmtable powers and dis' creticws by these presents given unto or vested in the said mortgagees or mortgagee shall not be ideemed or construed to be personal trusts or con- fidences reposed in the said €. D., E, F., and Gr. H., or any or either of them, bat on the conferary as rights and remedies incident to the mort- gage (debt hereby seciwed, or so much tJiereof as shall for the time being be due and owing shall be exercisable hy them, and the survivors and survivor of theio, and the executors or i administrators of such survivor, aad their or has aa^gns, and shall be .superadded to and concurrent wi/th the ordinary legal and equitable remedies of such lasliy mentioned per- sons or person, asBUoh mortgagees or mortgagee as aforesaid: Provided lastjy, that the said mortgagee, their or any of their executors, adminis- trators, or assigns, estates, or e&cts shall not be answera-Me for anymore moneys than they or he respectively shall actually receive, and by no means far involuntary or ac(»dental Iossm. In witness, &e. [*409] *PBEGEDENT No. VIII. Deed of Qovmant with wreties, -and the Assignmenf of « P<6licy for iecuriw/a Bum of Money payable h/ Mstaimemts. lais Indentitre, made the ~- — daj of ——,1853, between A- B., of, &c. (hereinafter styled '^ the said borrower"), of the first part, .0. D., of, &c., and E. P., of, &o. (hereinafter styled " the saJd sureties"), of the second part, and &• H., of, &e., and I. K., of, &c,., -(beiEeinasfter styled ■" the said lenders"), .of the third part ^recite Policy of Assurance'] : And whereas the said lenders h,ave consented to advance and lend unto thfi said borrower- the sum of ;S1500 out of the moneys to which ,they are entitled upon a joint-account upon the security of the joint and several covenants of the said borrower, and of the said sureties and of such assignment of the said recited policy of .assurance as are hereinafter respectively contained : Now this Indenture witnesseth that, in con- sideration of the sum of £1500 to the said borrower paid by the said lenders (the receipt whereof is hereby acknowledged), he the said bor- rower and his said sureties do hereby for themselves, their heir, executors, and administrators jointly, and every two of them do hereby jointly for themselves, their heirs, executors, and administrators, and each of them doth hereby for himself severally and for his respective heirs, executors, and administrators, covenant with the said lenders that they the said bor- rower and sureties, their executors or a,dministrfttors, or some or one of them will pay to rthe said lenders, their executors, administrators, or assigns the sum of ^1500 with interest thereon at the rate of £5 for £100 for a year in manner following, namely, by three equal yearly instalments of £500 each on (the -' day of , 1853, the day APPENDIX. 271 of -' , 1854,;aiid ihe day of-; , 1855 respectively ■with interest on the said sum of ^61500, or on so much thereof as shall from itimie to time remain unpaid by half-yearly payments on the day of and the day of in each year during the life of the said borrower, until payment sf suoh residue ; but if default be made in pay- ment of any of the said sums and interest, or any part thereof cm any of the days aforesaid, or any breach or default shall be made in the due performance ©f either of the covenants respecting the said policy of assu- rance and the .premiums to *bepQme -due in respect theraof next r^j^-in-i hereinafter contained, or if the said borrower or the said sureties, or L J any or either of them shall die, or without permigsion of the said leaders go to reside beyond tibe seas, or shall become bankrupt or insolvent, or unable to meefc their or his engagements with their or iis creditors before full repayment of the said sum of ^1500 land interest as aforesaid, then and in any and every of such cases, and notwithstanding that no advantage shall ha^e been ta^en of any such previoiis default or breach as aforesaid, the said bcHProwpr and sureties, their executors or adniiniatrators, or some or one of them- will immediately on such default or death, going tojeside beyond seas, bankruptcy, inrcjiveney, or inability, pay to the lenders, their executors, administrators, or assigns the said sum of £ , or such part thereof as at the time «of such default, death, going to reside beyond seas, bankruptcy, insolvency, or inability, shall remain unpaid, together with interest thereon at the rate aforesaid.;; and that they the said bor-' rower and sureties, their executors or adminiatrators, or some or one lof them, his executors or administrators will, during the continuance of this security, pay the annual premiums, fines, and expenses which ought to be paid for keeping the said policy on foot^ -and also that the said bor- rower shall not do any act, or commit or suffer any default by means whereof the said recited policy shall be impeached or become void or voidable : And this Indenture further witesseth that, for the considerations aforesaid, the said borrower doth hereby assign unto the said lenders, their executors, administrators, and assigns, all that the said recited policy of assurance on the life of the said borrower, together with the money thereby assured, and all bonuses thereon and benefits thereof V power of attorney, short form. Precedent lU.^, to hold the said policy and premises unto the said lenders, their executors, administrators, and assigns, but subject to the proviso for redemption hereinafter contained ; that is to say, provided always and it is hereby agreed and declared that if the said borrower, his executors or administrators shall pay unto the said lenders, their executors, administrators, or assigns the said sum of £1500 with interest thereon in the manner aforesaid, and shall in every respect duly perform the covenants and stipulation on his part hereinbe- fore contained, then the said lenders, their executors, a,dministrators, or assigns will, at the request and charges of the said borrower, his execu- tors, administrators, or assigns, reassign or deliver up the said policy (if then subsisting) unto the said borrower, or *as he may direct : ^^., ^ .. Provided also, and it is hereby further agreed and declared, tiiat L -I every receipt in writing which shall be given by the said lenders, or the survivors or survivor of them, or the executors or administrators of such 272 bunton's life assurance. survivor, or their or his assigns for any sum or sums of money which shall become payable by virtue of the said policy, shall be a conclusive discharge or conclusive dischaTges to the said company and every other person paying the same j and that neither the said company, nor any such person as aforesaid shall be bound or entitled to inquire whether any moneys shall be then due and owing upon the security of these presents, or shall be liable or accountable for the application or misapplication of any such moneys in such receipt expressed to be received :(o) And it is hereby declared that the said lenders and the survivors and survivor of them and the executors and administrators of such survivor, and their or his assigns shall apply all such moneys as shall be so received by them or him by virtue of the said policy, in the first place, in payment of the costs and expenses (if any) incurred in recovering the same, or otherwise in relation to the premises, and, in the next place, in or towards satisfaction of the moneys for the time being, due and owing upon the securities of these presents ; and lastly shall pay the surplus (if any) unto the executors, administrators, or assigns of the said A. B. j Provided always that notwithstanding the advance of the said sum of £ , and the assignment and securety hereby made, the said lenders, their executors, administrators, or assigns shall not be considered to have acquired by the same or otherwise any bona fide interest in the said policy in case the said borrower shall die by his own hands, whether feloniously or not feloniously, and whether being of sound or unsound mind, or by the bauds of justice, or in consequeuoe of a duel. In witness, &c.(^) [*412] *PEECEDENT No. 1?. Deed of Qovenant with the collateral Security of a Policy effected upon the Life of the Debtor in the Name of the Creditor, for securing a Suln already due, and future advc^ces. This Indenture made the —- — day of , 1853, between A. B., of, &c. (the mortgagor), of the one part, and C. D., of, &c. (the mort- gagee), of the other part : Whereas the said A. B. is indebted to the said C. D. in the sum of £ (as he the said A. B. doth herejjy acknowledge), and the said C. D. may hereafter make further advances to or on account of the said A. B. : And where^ it hath been agreed (og This precedent will be applicable for loans by insurance offices, or by any private persons when the debt is to be repaid by instalments, and sureties are to covenant for its due discharge. In the latter case, however, the proviso for the receipt of the insurance moneys, the powers of sale, and other powers, to the con- clusion of the last precedent should be inserted in lieu of this and the following clauses. (p) This clause has been inserted when the form has been used upon an advance made by the insurance office granting the policy, to prevent the operation of the condition for upholding policies to the extent of a boni, fide assignment, notwith- standing the suicide of the assured. Ante, p. 12. APPENDIX. 273 by and between the said parties hereto, that for more effectually securing payment unto the said C. D., his executors, administrators, and assigns, of the said sum of £ , with interest for the same after the rate of £5 for every £100 for the year, and also for such further advances (if any), with interest thereon at the rate aforesaid from the respective dates thereof, a policy of assurance should be effected in the name of the said C. D., upon the life of the said A. B., in the sum of £ , and that such covenants and agreements should be mutually entered into and made in relation thereto as are hereinafter contained ; and whereas in pursuance of the said agreement a policy hath been effected with the Norwich Union Life Insurance Society, numbered , and under the hands and seals of three of the directors of the same society, whereby the sum of £ is assured to be paid unto the said C. D., his executors, administrators, and a,ssigns within three calendar months next after satisfactory proof of the decease of the said A. B., subject, nevertheless, to the annual pre- mium of £ during his life, and the observance and performance of the conditions and agreements in the same policy mentioned or referred to : Now THIS Indentuke witnesseth, that in further pursuance of the said recited agreement, and in consideration of the premises, the said A. B. doth hereby for himself, his heirs, executors, and admin- istrators, covenant with the said C. D., his executors and administrators, that he the said A. B., his executors or administrators, shall and will on the day of next ensuing pay or cause to be paid unto the said C. D., his executors, administrators, or assigns, the said sum of £ , and also all such other sum or sums of money (if any), *as may be then due and owing by the said A. B., his executors r-^.-. „-. or administrators, unto the said C. T>., his executors, adminis- L J trators, or assigns, with interest for the same respectively after the rate of £5 for every ^6100 for the year, that is to say, for the said sum of ^1000 from the day of the date of these presents, and for all such other sum or sums of money from the time or respective times at which the same shall be advanced, lent, paid, or become due, without any deduc- tion or abatement whatsoever, and in case the same shall not be paid in manner aforesaid, shall and will from time to time, and at all times after the said day of , during the continuance of this security, upon demand pay or cause to be paid unto the said C. D., his executors, ad- ministrators, or assigns all and every the sum and sums of money what- soever which at the time of such demand may be due and owing unto the said 0. D., his executors or administrators, from or by the said A. B., his executors or administrators, with' interest thereon at the rate and from the time or times aforesaid, without any deduction or abatement whatsoever ; and shall and will during the continuance of this security well and punctually pay or cause to be paid the annual or other premiums and expenses for the time being payable in respect of the said policy so effected as aforesaid, and of every further or renewed policy to be effected pursuant to the covenants and provisions in that behalf hereinafter con- tained, and shall produce and deliver unto the said C. D., his executors, administrators, or assigns due vouchers for the payment of such premiums and expenses when and as the same shall have become due : And that in AuausT, 1853 — 18 274 BTJNTON'S LIFE ASSURANCE. case the said policy, or any such further or renewed policy to be eflFected as aforesaid, shall be forfeited, avoided, or impeached, or shall become liable to any forfeiture, avoidance, or impeachment, he the said A. B. shall and will forthwith thereafter, at his own costs, effect and obtain in the name or names of the said C. D., his executors, administrators, or assigns, and of and from the aforesaid assurance society, or any other assurance company or companies to be appointed by the said C. D., his exe- cutors, administrators, or assigns one or more further or renewed policy or policies of assurance upon the life of the said A. B. for any sum or sums of money not being less than the sum of £ ,(^q) and will in every such case deliver or cause to be delivered unto the said C. B., his executors, adminis- trators, or assigns every such further or renewed policy as aforesaid ; and that r*4141 *^® ^^^^ ^' ^' *^^^^ "lo* heretofore done, committed, or suffered, L J and will not at any time hereafter do, commit, or suffer any act, matter, or thing, or incur any risk whatsoever whereby or by reason whereof the said policy of assurance so effected as aforesaid, or any such further or renewed policy or policies as aforesaid is or shall or may be forfeited, avoided, or impeached in any way howsoever, or whereby or by reason whereof the premiums and expenses payable thereon may be in any manner increased : And, moreover, that in case the said A. B. shall make default in payment of the premium or additional premiums and expenses (if any) for the time being payable in respect of the said policy, or any such further or renewed policy or policies as aforesaid, and shall not produce unto the said C. D., his executors, administrators, or assigns upon demand proper vouchers for the payment thereof, and shall not ob- tain and effect, and deliver unto the said C. D., his executors, adminis- trators, or assigns such further or renewed policy or policies as aforesaid, in pursuance of the covenants in the same behalf hereinbefore contained, or shall commit any other breach of the said covenants on the part of the said A. B. hereinbefore contained in relation to such insurances, then and in any of such cases it shall be lawful for the said C. D., his executors, administrators, or assigns, if he or they shall think fit, out of his or their own moneys to pay such premiums and expenses, and to obtain and effect any such further or renewed policy or policies for the aforesaid or any less amount, and the amount which he or they shall so expend, with in- terest for the same at the rate aforesaid from the time or respective times of the payment thereof, shall upon demand" be repaid- unto him or them by the said A. B., his executors or administrators, and shall also be secured by and raisable under these presents, and the powers and provi- sions herein contained in the same manner and as fully in all respects as the said principal sum of £ hereby secured, and the interest thereof: Provided always, and it is hereby expressly agreed, that if the said A. B., his executors, or administrators shall, on the said day of now next ensuing,(r) well and truly pay or cause to be paid unto the said C. D., his executors, administrators, or assigns the aforesaid sum of £ , (q) The sum assured by the policy now in force. (r) The day upon which the principal debt and interest are hereinbefore cove- nanted to be paid. APPENDIX. 275 together witli all such interest and other sum or sums of money (if any) as are hereinbefore covenanted to be paid, and shall *then be due r.^... c-. and owing by the said A. B., his executors or administrators, L J unto the said C. D., his executors, administrators, or assigns, and shall in every other respect have duly performed and observed the cove- nants and stipulations on the part of the said A. B. hereinbefore con- tained up to the time of such payment, then and in such case the said C. D., his executors, administrators, or assigns shall immediately, or at any time after such payment, and at the request and expense in all things of the said A. B., his executors, or administrators, assign unto him or them, or by his or their direction the aforesaid policy of as- surance, or any such further or renewed policy or policies as aforesaid (if the same shall be then subsisting respectively,) and the moneys thereby assured, or to become payable thereunder, free and discharged from all intermediate charges or incumbrances by the said C. D., his executors, administrators, or assigns : Provided, nevertheless, and it is hereby fur- ther agreed that tbe said C. D., his executors, administrators, or assigns shall not either before or after payment or satisfaction of the principal and interest moneys hereby secured, be subject to any trust or legal or equitable obligation whatsoever for or in relation to the payment of the premiums upon, or otherwise in respect of the keeping on foot of the said subsisting or any such further or renewed policy or policies as afore- said : Provided 9.IS0, and it is hereby further agreed, that if the money assured by the said policy or any such farther or renewed policy or poli- cies as aforesaid, shall by reason of the death of the said A. B. become pay- able or receivable, before payment shall have been made of all such sums of money as are hereby secured or expressed so to be, it shall be lawful for the said C. D., his executors, administrators, or assigns in his or their discretion immediately after such decease, and although the time at which the said sum of £ is hereinbefore covenanted to be paid shall not have then arrived,, to apply for and receive, and if necessary enforce payment unto him or them of the said principal sum assured, and of all bonuses and additions thereto with full power for him and them to inves- tigate, settle, and adjust all accounts in relation thereto, and to make or agree to any allowance or deduction in respect of costs or otherwise which he or they may deem expedient, and to apply the amount so received in the first place in payment of the interest then current hereunder up to the time of such receipt, and in the next place in payment or part payment, as the case may be, of all and singular the moneys not *being in ^^ , , „^ the nature of interest which shall for the time being be due and L J owing upon the security of these presents ; and lastly, shall pay the sur- plus (if any) unto the executors, administrators, or assigns of the said A. B. : Provided always, and it is hereby expressly agreed, that if the said principal and interest and other moneys hereby intended to be secured, or any part thereof, shall not be paid at the time and in the manner hereby appointed, or if any breach shall be committed of any of the cove- nants on the part of the said A. B. hereinbefore contained, it shall be lawful for the said 0. D., his executors, administrators, or assigns imme- diately or at any time thereafter, and without further concurrence on the 276 bunyon's life assubanoe. part of the said A. B., or any other person or persons, absolutely to sell the policy or policies for the time being subject to this present secu- rity, and the moneys thereby assured, either by public auction or pri- vate contract, and in such manner in all respects as the said C. D., his executors, administrators, or assigns shall think fit, with liberty to buy in the same, or to rescind or vary any contract for the sale thereof, and again to sell the same without being answerable for any loss to be occa- sioned thereby, or if he or they shall think fit to surrender the said policy or policies to the said society,(s) or other company or companies by whom the same respectively hath or shall have been granted, and for such con- sideration as he or they shall deem reasonable, and shall apply the moneys to arise from any such sale or surrender after payment of all incidental expenses upon and for the like trusts and purposes as are hereinbefore expressed of and concerning the moneys to arise from or by virtue of the said policy or policies, in the event of the decease of the said A. B. during such time as the said policy or policies shall continue in force respec- tively : Provided always, that after any such sale shall have been made, the covenants o'f the said A. B. for the payment of the premiums of such policies, and the renewal thereof when forfeited, shall not be binding upon him, his executors, or administrators : Provided also, and it is hereby further agreed, that every receipt which shall be given by the said C. D.J his executors, administrators, or assigns for any money to be re- ceived by him or them by virtue of these presents, shall be a conclusive r*41 71 "discharge to any society, company, *or person paying the same, L . J and shall release the same society, company, or person from all liability in respect of the application thereof, and that neither such society or company, nor any purchaser or other person making any such payment, shall be bound or entitled to inquire whether any default shall have been made in the .payment of the said principal and interest moneys hereby secured, or whether the same or any part thereof shall then remain due, or whether there shall have been any such breach of covenant as afore- said : And further, that the said C. D., his executors, administrators, or assigns shall not be answerable for any more moneys than he or they shall actually receive, nor for any involuntary or accidental losses. In witness, &c. (s) Although the policy is effected in the name of the mortgagee, and the entire legal interest is therefore vested in him, yet, as the office may be affected with notice of the interest of the mortgagor, this clause and the subsequent power to give receipts may be necessary to enable the mortgagee to deal with the policy. APPENDIX. 277 PKECBDENT, No. X. Assignment of Policy of Assurance in contemplation of Marriage, upon Trusts to l)e declared hy an Indenture of even- Date herewith. This Indenture, made the day of , 1853, between A. B., of, &c. [the intended husband,') of the first part; C. D., of, &c. (the in- tended wife,) of the second part; and B. F., of, &c., and Gr. H., of, &c. [the trustees of the settlement,) of the third part : Whereas by a policy of assurance under the hands and seals of two of the trustees of " the Society for Equitable Assurances upon Lives and Survivorships," dated the day of , and numbered , the sum of £ is assured to be paid unto the executors, administrators, or assigns of the said A. B. within three or six calendar months (as therein mentioned) next after proof of his decease, subject nevertheless to the annual premium of £ during his life, and the provisos, stipulations, and agreements in the same policy mentioned or referred to : And whereas a marriage hath been agreed upon, and is intended to be shortly hereafter solemnised between the said A. B. and G. D., and upon the treaty for the same mar- riage it was agreed that the aforesaid sum of £ , and all other moneys assured, or which might become payable under or by virtue of the said recited policy of assurance, should be settled upon and for cer- tain trusts and purposes then agreed upon, and declared by the indenture hereinafter referred to and *mentioned to bear even date here- p^ , , q-, with, and that the said A. B. should accordingly assign the same L J policy unto the said E. E. and G-. H., in manner hereinafter expressed : Now THIS Indentuee WITNESSETH, that in pursuance of the said recited agreement, and in consideration of the said intended marriage, the said A. B., with the privity and consent of the said C. D., (testified by her being made a party to and executing these presents,) doth hereby assign unto the said E. E. and Gr. H., their executors, administrators, and assigns all that the said recited policy of assurance so efiected upon the life of the said A. B. as aforesaid, together with the said sum of £ thereby assured, and all other moneys, bonuses, and benefits which are, shall, or may be payable in respect of or otherwise incidental to the said policy, and all the right, title, interest, property, claim, and demand whatsoever of him the said A. B. in, to, upon, or by virtue of the said policy and premises hereby assigned, together with full power and autho- rity to ask, demand, sue for, recover, and receive, and give effectual receipts and discharges for, the said sum and sums of money and every part thereof in the name or names of the said A. B., his executors'or administrators, or intended so to be, to have, hold and receiye the said policy, moneys, and all and singular other the premises hereby assigned or intended so to be, unto and by the said E. F. and Gr. H., their executors, administrators, and assigns ; but nevertheless upon and for the trusts and purposes and with and subject to the powers and pro- visions hereinafter declared and contained expressly or by reference of 278 bunton's life assurance, and concerning the same.(«) And it is hereby declared and agreed by and between the said parties hereto according to their respective interests, that they the said E. F. and Gr. H., their executors or administrators, shall stand possessed of and be interested in the said policy and premises hereby assigned or intended so to be, upon trust for the said A. B., his executors, administrators, and assigns, until the solemnization of the said intended marriage, and immediately thereafter upon trust that they the said E. F. and Gr. H., or the survivor of them, or the executors or ad- ministrators of such survivor (all which lastly mentioned persons are hereinafter referred to as the said trustees or trustee,) shall upon the decease of the said A. B. apply for and receive, and if necessary enforce, payment unto them or him of the said sum of £ and all other r*41 Q1 *™°'°<'ys *° become payable by virtue of the said policy as afore- '■ J said, with full power for them or him to investigate, settle, and adjust all accounts in relation thereto, and to make or agree to any allow- ance or deduction in respect of costs or otherwise which they or he may deem expedient ; ,3nd upon further trust, that they the said trustees or trustee shall stand possessed of the moneys so to be received; and in the meantime during the life of the said A. B., of the said policy of assu- raoce upon and for the trusts and purposes and with and subject to such powers and provisions as are expressed and declared of and concerning the same policy in and by these presents and an indenture already pre- pared and intended to bear even date and to be executed concurrently herewith, and to be made between the same persons as are parties hereto. [Provided always, and it is hereby agreed and declared, that it shall be lawful for the said trustees or trustee at any time during the lifetime of the said A. B., with the consent in writing of the said G. D. during her life, and if they or he shall think fit, but not otherwise, and after her decease at their or his sole and absolute discretion, in any of the events next hereinafter mentioned — namely, in case the said A. B. shall become bankrupt, or take the benefit of any act for the relief of insolvent debt- ors, or compound with his creditors, or shall in any other manner, in the opinion of the said trustees or trustee, become incapable of performing his covenant for the payment of the annual premiums of the said policy contained in the said lastly mentioned indenture — to make sale and dis- pose of the said policy, moneys, and premises or of any further policy or policies efiected in lieu thereof either by public auction or private con- tract (including herein a power to surrender the said policy to the said insurance office,) and for such consideration and subject to such condi- tions of sale, and generally in such manner, as the said trustees or trus- tee shall think fit, with liberty at any auction to buy in the said premises or to rescind or vary any contract for the sale thereof, and again to sell the same, without being answerable for any loss to be occasioned thereby, and to assign the said premises, when sold, unto or by the direction of the purchaser or purchasers thereof; and all moneys which shall be received by the said trustees or trustee upon atiy such sale or surrender shall be by them or him held upon and for the trusts and purposes and subject to (t) Here covenants for title are sometimes inserted. See ante, Prec. II. APPENDIX. ■ 279 the powers and provisions expressed and declared concerning the same by the said indenture already referred to and mentioned to bear even date *herewith :(m) Provided also, that it shall be lawful for the said r#4ortT trustees or trustee, and they are hereby required at the request of L J the said A. B., at any time or times to surrender unto the said insurance society (and in like manner unto any other insurance company with which any policy or policies may be effected in lieu of the policy hereby assigned or intended so to be,) any sum or sums of money which may be hereafter added by way of bonus to the principal sum assured by the said policy, and to apply the money so to be received or any part thereof in commu- tation, reduction, or satisfaction of the annual premiums and expenses thenceforth payable for keeping the said policy on foot, but so that no larger amount of such bonus shall be surrendered than shall be sufficient for the total extinction and payment of such premiums and expenses as aforesaid :] Provided also, and it is hereby expressly agreed and declared, that every receipt which shall be given by the said trustees or trustee for any money to become payable to or be received by them or him by virtue of these presents shall be a good and conclusive discharge to the aforesaid assurance society or other the person or persons paying the same, and release the said society and such other person or persons from all obliga- tion of seeing to the application of the same money and from all lien or liability by reason of the loss, misapplication, or nonapplication thereof; and that the said society or such other person or persons shall not be bound or entitled to require the production of the indenture of even date herewith hereinbefore referred to, or be in any manner affected by or obliged or competent to inquire into the trusts, purposes, powers, and provisions therein contained, or any matter or thing whatsoever relating thereto: Provided also,(t>) and it is hereby further agreed and declared, that in case the said trustees or either of them, or any trustees or trus- tee to be appointed in their or either of their *places by virtue r^fjoi-i of this preseiJt provision, shall die or be desirous of being dis- L J charged from the execution of the aforesaid trusts, or shall refuse to act or become incapable of acting therein, or shall be about to reside or shall for six calendar months consecutively actually reside out of the jurisdic- tion of the Court of Chancery at Westminster, then and in every such case it shall be lawful, after the solemnization of the said intended mar- (m) The insertion of clauses within the brackets, in this and in the following precedent, is by no means of course, but must depend upon the intention of the parties. («) Where powers of appointing new trustees are omitted, it will be necessary to apply to the Court of Chancery, whenever the appointment of a new trustee is required, and this may be now done with greater facility than formerly under the New Trustee Acts (13 & 14 Vict. c. 60, 15 & 16 Vict. c. 55). But the Court will not interfere, unless it is absolutely necessary, and there is no power (Sugden's Real Property Statute, 408), and cannot delegate its authority by giving to the trustees so appointed, the power of appointing in their turn ; so that it will be necessary to repeat the application whenever a fresh appointment is required (Holder v. Durbin, 11 Bea. 594). At least the same number of trustees must be appointed; but it would seem that the appointment of a greater than the original number will be supported (Meinertzhagen v. Davis, 1 CoU. C. C. 353). The in- sertion of this power will obviate the necessity of producing and giving a covenant for the production of the settlement in the event of any change of trustees. 280 ' BUNTON'S LIFE ASSURANCE. riage, for the said A. B. and C. D., and for the survivor of them, and the executors or administrators of such survivor, and, as to the said C. D., notwithstanding her said intended or any future coverture [or in case of their, his, or her default for the space of three calendar months next after they, he, or she shall have been thereunto requested in writing by the acting or retiring or surviving trustees or trustee for the time being, or the last acting trustee for the time being, or the executors or administra- tors of such last surviving or last acting trustee, then to and for the said acting or retiring or surviving trustees or trustee or last acting trustee, or the executors or administrators of such last acting or such surviving trustee,](M>) by any deed or deeds under their, his, or her respective hands and seals or hand and seal, to nominate and appoint any fit persons or person to supply the place of the said deceased, retiring, or incapable trustees or trustee ; and immediately after any such appointment, the said policy, moneys, and premises hereby assigned or intended so to be, shall be assigned and transferred, so that the same may vest in such new trustees or trustee either jointly with the surviving or continuing trustee or solely, as the case may require, and in their executors and administra- tors, upon and for the trusts and purposes herein declared and contained concerning the same ; and every such new trustee shall have the same powers, authorities, and discretions, and act in the execuliion of the trusts and provisions of these presents as effectually in all respects, as if he had been hereby originally appointed a trustee, instead of either of them the said E. F. and Gr. H. In witness, &c. [*422] *PRECEDENT, No, XI. Settlement of Moneys assured hy a Policy on the Life of the intended Husband assigned hy a Deed of even Date to the Trustees. This Indenture, made the day of , 1853, between A. B., of, &c. {the intended husband^ of the first part, C. D., of, &c. {the in- tended wife\ of the second part, and E. P., of, &c. and Gr. H. of, &c. {the trustees of the settlement,') of the third part : Whereas a marriage hath been agreed upon, and is intended to be shortly solemnized, be- tween the said A. B. and C. D. : And whereas upon the treaty of the said intended marriage it was agreed that a certain policy or instrument of assurance effected by the said A. B. upon his own life for the sum of ,£5000, with " the Society for Equitable Assurances upon Lives and Suvivorships," dated the day of , numbered , and sub- ject to the annual premium of £, and to certain provisos, stipula- tions and agreements in the same policy mentioned or referred to, should (w) By the insertion of these words, trustees retiring need not be driven to file a bill to relieve themselves of the trust in the event of the cestui que trust refusing to concur in the appointment of new trustees. APPENDIX. 281 be settled upon the trusts and subject to the powers and provisions here- inafter expressed or referred to, and that the said A. B. should enter into such covenants for the payment of the annual premiums and ex- panses thereupon and otherwise in relation to the said policy as are hereinafter contained ; And whereas in pursuance of the said agreement, by an indenture bearing even date with but executed prior to the execu- tion of these presents, and expressed to be made between the same per- sons as are parties hereto, the said policy and the moneys thereby assured were by the said A. B. assigned unto the said E. P. and Gr. H., their executors, administrators, and assigns, upon trust for the said A. B. until the solemnization of the said intended marriage, and immediately thereafter upon trust to apply for and receive the said insurance moneys when the same shall become payable by reason of the death of the said A. B., and to stand possessed of the moneys so to be received, and in the meantime during the life of the said A. B. of the said policy upon and for the trusts and purposes and with and subject to the powers and pro- visions to be declared, concerning the same, by an indenture therein mentioned to be already prepared, and to bear even date *with rji-j^no-i the said indenture now in recital, meaning thereby this present L J indenture : [And it was by this said indenture now in recital further declared that it should be lawful for the said B. F., and Gr. H., or the survivor of them, or the executors or administrators of such survivor, at any time during the lifetime of the said A. B. with the consent in writing of the said C. D. during her life, and if they or he should think fit, but not otherwise, and after her decease in the sole and absolute dis- cretion of the said trustees or trustee, or in any of the events following — namely, in case the said A. B. shall become bankrupt, or take the benefit of any Act for the relief of insolvent debtors, or compound with Lis creditors, or in any other manner become incapable, in the opinion of the said trustees or trustee, of perfoming the covenants on his part here- inafter contained for the payment of the annual premium and expenses from time to time to become payable for keeping the said policy in force, to make sale thereof and of the money thereby assured, either by pub- lic auction or private contract (including therein a power to surrender the said policy to the said insurance society), and subject to such con- ditions of sale, and generally in such manner, as the said trustees or trustee should think fit; and that all moneys which should be received by the said trustees or trustee upon any such sale or surrender should be by them or him held upon and for the trusts, interests and purposes, and subject to the powers and provisions, to be declared thereof by the said indenture referred to in manner aforesaid, meaning thereby this present indenture, and it was by the same indenture further declared, that it should be lawful for the said trustees or trustee to surrender any bonus or additions that should be made to the said policy for the reduction or satisfaction of the annual premiums thereon :] This Indenture wit- NESSETH, that in further pursuance of the said agreement, and in con- sideration of the premises, he the said A. B. doth hereby, for himself, his heirs, executors and administrators, covenant with the said C. D. and E. P., their executors and administrators, that in case the said intended 282 btjnyon's life assurance. marriage shall take effect he the said A. B. will at all times thereafter during his life [unless and until any such sale or surrender shall be made of the said policy by virtue of the power in that behalf hereinbe- fore referred to,J pay or cause to be paid the annual or other premiums and expenses for the time being payable in respect of the said policy of assurance, and every further or renewed policy to be effected in lieu thereof, pursuant to the covenants and provisions in that behalf next r*494.1 tfirsin^ft^r *contained ; and that in case, and as often as the said L J policy, or any further or renewed policy. to be effected in pursu- ance of these presents shall suffer or become liable unto any forfeiture, avoidance, or impeachment, he the said A. B. shall and will forthwith thereafter at his own costs, obtain the revival or confirmation of the same policy, from or by the insurance society or company by which the same shall have been granted, and in default thereof effect and obtain of and from the aforesaid assurance society, or any other assurance society or company to be appointed by the trustees or trustee for the time being acting in the execution of these presents, one or more further policy or policies upon the life of him the said A. B. for the said sum of £r- — , [or at the option of the said trustees or trustee, such other greater sum or sums of money as would have been payable or recoverable by virtue of the policy or policies which shall have become forfeited or avoided, in case the same had remained in force, and the said A. B. had died at the time at which such forfeiture or avoidance shall have happened :] and that every such policy or policies, and the moneys assured thereby, shall be assigned unto or otherwise vested in the said trustees or trustee, to be by them or him held upon the trusts, and subject to the powers, by these presents or by the said recited indenture of even date herewith expressed concerning the said policy assigned by such lastly mentioned indenture, and shall and will produce and deliver unto the said trustees or trustee for the time being due vouchers for the payment of all such premiums and e:^penses as aforesaid, when and as the same shall have become due, and also all and every such future policy or policies as may, be effected jn manner aforesaid ; and further that the said A. B. shall not nor will at any time hereafter do, commit, or suffer any act, matter, or thing whereby or by reason whereof the said subsisting policy or any such further or re- newed policy or policies as aforesaid shall suffer or become liable unto any forfeiture, avoidance, or impeachment whatsover : And this Inden- ture ALSO WITNESSETH, that in furthur pursuance of the said agreement, and in consideration of the said intended marriage, it is hereby agreed and declared between and by the parties to these presents, that the said E. F. and Gr. H. and the survivor of them, and the executors and administrators of such survivor (hereinafter referred to as the said trustees or trustee,] shall stand possessed of and be interested in all and every such sum and sums of money as shall be received by them or him by virtue of the said policy of assurance [or any such further or renewed policy or policies as r*49'iT *8'for6said, whether upon the death of the said A. B., or upon L J any such sale or surrender as aforesaid} v^on trust, with the con- sent in writing of the said C. D. during her life, and after her decease at the discretion of the said trustees or trustee, to lay out and invest the APPENDIX. 283 same in the purchase, in the names or name of the said trustees or trus- tee, of a competent share or shares of any of the parliamentary stocks or public funds of Great Britain, or upon government or real securities in England or Wales, or on mortgage, or purchase of any shares of or se- curities lawfully granted by any corporate body, or railway, dock, or other public company paying a dividend upon such shares or interest upon such securities respectively, with full power for the said trustees or trustee, from time to time, with such consent or at such discretion as aforesaid, to alter, vary, and transpose the said stocks, funds and securities in and upon which the said trust moneys shall for the time being be invested for any other stocks, funds, and securities of the kinds and descriptions aforesaid, and shaill pay the annual income of the said trust moneys, stocks, funds, and securities unto the said CD. during her life for her sole and sepa- rate use, independently of any man who may be her husband [and par- ticularly of the said A. B. in the event of any such investment being made during his lifetime upon any such sale or surrender as aforesaid,] and so that she shall not have power to deprive herself thereof by way of anticipation, and that her receipts alone shall be sufficient discharges for the same; and after the death of the said C. D. shall stand possessed of the said trust moneys, stocks, funds, and securities and of the annual income thereof, wpon trust for such one or more exclusively of the other or others of the children of the said intended marriage, in such shares and proportions and with such provision for their respective maintenance, education, and advancement, and for such partial and other interests, and generally in such manner as the said A. B. and C. D. shall, by any deed or deeds, with or without power of revocation, direct or appoint ; and in default of any such joint direction or appointment, and so far as no such direction or appointment shall extend, as the survivor of the said A. B. and C. D. shall, by any deed or deeds, with or without power of revoca- tion, or by his or her will or any codicil thereto, direct or appoint ; and in default of any such direction or appointment, and so far as no such direction or appointment shall extend, upon trust, for all and every the children and child of the said intended marriage, who being a son or sons shall attain the age of twenty-one years, or being a daughter or daughters shall attain that age *or be previously married, to be divided riiAno-x among such children, if more than one, in equal shares, and if L J there shall be but one such child, the whole to be in trust for that one child. [Provided always, and it is hereby agreed and declared between and by the parties to these presents, that the powers of appointment by deed or will hereinbefore given unto the said A. B., in the event of his surviving the said C. D., shall not extend to any moneys which shall be derived from the sale or surrender, in his lifetime, of the said policy or any such further or renewed policy or policies as aforesaid, or to the in- vestments of such moneys, but that in either of such cases the same moneys and investments, notwithstanding any such appointment by the said A. B. as such survivor, shall, without prejudice to any such joint- appointment as aforesaid, be subject to the like trusts, powers, and pro- visions as are hereinbefore declared thereof in default of any appointment being made :] Provided also, and it is hereby further agreed and declared, 284 bu'nton's lite assubance. > ■ that no child or children taking any share in the said trust funds by virtue of any such direction or appointment shall be entitled to any further share in the said trust funds, without bringing his, her, or their appointed share or shares into hotchpot, and accounting for the same accordingly : Provided also, and it is hereby further agreed and declared, that it shall be lawful for the said trustees or trustee, after the death of the survivor of the said A. B. and C. D., to apply all or any part of the annual income arising from the presumptive share of each of the children of the said intended marriage of and in the said trust funds during his or her minority in or towards his or her maintenance, education, or ad- vancement in such manner as the said trustees or trustee shall think fit ; And also at any time after the decease of the said 0. D., or in her life- time, with her consent in writing, to advance unto and for each or any of the said children of the said intended marriage, notwithstanding his or her minority, the whole or any part of the presumptive share of the same child of and in the said trust moneys which shall have been actually re- ceived by the said trustees or trustee in manner aforesaid, and the invest- ments thereof, for the advancements or preferment in the world or in mar- riage of any such child; and all moneys which shall be so advanced shall be deducted and allowed out of the share hereby provided for the same child notwithstanding his or her death before his or her share shall be absolutey vested: And moreover, that so much of the annual income r*4271 ^'^^^^''g itova. the share of each of the *same children which shall L J not be applied for the purposes aforesaid shall from time to time be added to the principal moneys of the same share, and be subject to all the trusts and dispositions herein contained concerning the said principal share; but the savings of any one year may be applied to such mainte- nance, education, and advancement, in any succeeding year or years : And it is hereby further agreed and declared, that in case there shall be no child or children of the said intended marriage who shall live to attain a vested interest in the said trust funds and premises hereinbefore declared in trust in favour of such child or children as aforesaid, the said trustees or trustee shall stand possessed of the said policy moneys and premises upon trust for the said A. B., his executors, administrators, and assigns : ^Provided also, and it is hereby further agreed and declared, that in the event of any such sale or surrender as aforesaid being made of the said policy of assurance, or of any such further or renewed policy or policies as aforesaid during the life of the said A. B., it shall be lawful for the said trustees or trustee, if they or he shall think fit, but by no means imperative upon them or him, upon the request in writing of the said C. D., and either during the life of the said A. B. or after his decease, to invest the said moneys which shall have been received by them or him in manner aforesaid, or, in case any irrevocable appointment shall have been made of any portion of the said trust funds by virtue of either of the powers in that behalf hereinbefore contained, then the unappointed part thereof, (and for this purpose to make sale and dispose of the stocks, funds, and securities upon which such trust moneys may for the time being be invested) in the purchase, in their or his names or name, of a government annuity or an annuity of some one of the public offices in APPENDIX. 285 Great Britain for granting annuities and assurances upon lives, upon the life of the said C. D., and shall stand possessed of such annuity upon trust for the said C. D., for her sole and separate use, but without power of anticipation, in manner hereinbefore expressed concerning the annual income of the said trust moneys and the investments thereof during her life :] Provided always, and it is hereby agreed and declared, that every receipt which shall be given by the said trustees or trustee for any money to become payable unto or received by them or him by virtue of these presents shall be a good and conclusive discharge to the person or persons paying the same money, and particularly to the said or any other assurance society or company for all and every such sum and sums of money as shall be assured to be paid by the said policy *or any such further rji-j^ooT policy as aforesaid, and shall release such persons or person, so- <- J ciety or company, from all obligation of seeing to the application of the same money, and from allien and liability by reason of the loss, mis- application, or nonapplication thereof [Insert power of appointing new trustees froni- preceding Precedent ;] Provided also, and it. is hereby lastly agreed and declared, that the trustees or trustee for the time being, acting in the execution of these presents, and their respective heirs, executors, and administrators, shall be chargeable only for such moneys as they re- spectively shall actually receive by virtue of these presents ; and each of them shall be answerable only for his own acts, receipts, and defaults, and by no means for accidental or involuntary losses, and particularly that no omission or neglect to enforce the covenants on the part of the said A. B. hereinbefore contained, or any of them, shall be chargeable as a breach or breaches of trust upon any such trustees or trustee, and that they or he and their or his executors or administrators shall not be in anywise responsible or accountable for or in respect of any such omission or neglect, or for or on account of the said policy or any such further or renewed policy as aforesaid suffering or becoming liable unto any for- feiture, avoidance, or impeachment whatsoever ; and also that it shall be lawful for the said trustees and trustee for the time being, and their re- spective executors and administrators, by and out of the moneys which shall come to their or his hands by virtue of these presents, to reimburse themselves or himself all costs, charges, and expenses which they respec- tively may sustain or be put unto in or about the execution of the trusts hereinbefore declared, or in relation thereto. In witness, &e. PRECEDENT, No. XII. Settlement of a Policy of Assurance on the Life of the intended Hus- band. {Short Form.{a)) This Indenture, made the day of , 1853, between A. B., of, (a) When brevity is an object, it is intended to rely upon the existing policy only, and a second deed is objected to, this form may be adopted. 286 BTJNTON'S LIFE ASSURANCE. &c. (the intended Jiushand,) of the first part, 0. D., of, &o. (the intended wife,) of the second part, and E. F., of, &c., and G. H., of, &c. (the trustees of the settlement,) of the third part, WITNESSETH that in conside- r*42Q1 '^*'^°'^ "^ a marriage now agreed *upon and intended to be shortly I- J hereafter solemnized between the said A. B. and C. D., he the said A. B. doth by these presents assign unto the said E. F. and G. H., their executors, administrators, and assigns, all that policy of assurance effected by the said A. B. upon his own life with the Norwich Union Life Insurance Society, dated the i day of , numbered , and subject to the annual premium of £ , and the sum of £ , and all other moneys, bonuses, and benefits thereby assured, ,and all the right, title, and interest whatsoever of him the said A. B. in and to the said policy and premises, to hold, receive, and take the said policy and all other premises hereby assigned or intended so to be unto the said E. E. and G. H., their executors, administraj^, and assigns, but never- theless upon and for the trusts, intents, and purposes hereinafter expressed and declared concerning the same f Covenants for title may he here inserted as in Free. IL^ : and he the said A. B. doth hereby, for himself, his heirs, executors, and administrators, covenant with the said E. F. and G. H., their executors and administrators, that, in case the said intended marriage shall take effect, he the said A. B. will at all times thereafter during his life pay or cause to be paid the annual or other premiums and expenses for the time being payable in respect of the said policy of assu- rance, and necessary for keeping the same on foot : And this Inden- TTJKE ALSO WITNESSETH, that for the consideration aforesaid, it is hereby agreed and declared between and by the parties to these presesents, that the said E. F. and G. H., and the survivor of them, and the executors and administrators of such survivor (all of which lastly mentioned persons are hereinafter referred to as the said trustees or trustee), shall stand possessed of the said policy and premises hereinbefore assigned upon trust after the solemnisation of the said marriage, when and as the said sum of £ and all and any other moneys assured by the said policy shall become payable by reason of the death of the said A. B., to apply for and receive, and if necessary enforce, payment unto him or them of all and every such sum and sums of money as aforesaid, with full power for them or him to investigate, settle, and adjust all accounts in relation thereto, and to make and agree to any allowance or deduction in respect of costs or otherwise which they or he may deem expedient ; and upon further trust (but with the consent in writing of the said C. D. during her life) to invest aU and every such sums and sum of money as shall be . „„-. by them or him received in manner aforesaid in *the purchase in L -I their or his names or name of a competent share or shares of any of the parliamentary stocks or public funds of Great Britain, or upon government or real securities in England or Wales (but not in Ireland)(y), with full power for the said trustees or trustee from time to time, with such consent as aforesaid during the life of the said C. D., to alter, vary, and transpose the said investments for any others of the descriptions afore- (y) The investment may be extended, if desired, as in the preceding precedent. APPENDIX. 287 said ; and shall pay the annual income of the said trust moneys and the in- vestments thereof unto the said C. D. during her life for her sole and sepa- rate use, independently of any man who may he her hushand, and so that she shall not have power to deprive herself thereof by way of anticipation^ and that her receipts alone shall be sufficient discharges for the same ; and after her decease shall stand possessed of the said trust moneys and the investments and annual income thereof upon trust {Here follow as in the preceding precedent — trusts for the children of the marriage as A. B. and 0. D. shall jointly appoint, and in default of any joint appointment as the survivor shall appoint, amd in default of appointment equally, — hotchpotch clause, — provisions for the maintenance, education, and advancement — for accumulation of income — with ultim,ate trust in default of children for A. B. — receipt clause {hut applicable to existing policy'^, — power of appointing new trustees — trusteed indemnity clauseV In witness, &c. PRECEDENT, No. XIII. Voluntary Settlement of Stock and Policies of Assurance. (All clauses relating tothestock being Included between brackets.) . This Indentuee, made the day of , 1853, between A. B., of, &c. (the settlor), of the first part, and C. D., of, &c., and E. F., of &c. (the trustees of the settlement), of the second part (Recites three policies of assurance, to which the said A. B. is entitled upon his own life) : And whereas the said A. B, being entitled to the two several sums of stock next hereinafter mentioned, namely, the sum of £ 3 per cent. Consolidated Bank Annuities, and the sum of £, 3| per cent. Bank Annuities, and being desirous of giving effect to his intention concerning the same hereinafter expressed, hath immediately prior to the execution of these presents transferred or duly authorised the transfer of the same sums of stock into the *names of the said C. D. and r^n^oi-i E. F.] ; And whereas the said A. B., in consideration of his <- -• natural love and affection towards E. B. his wife, and his children F. B., of , Gr. B., of, &c., and H. B., of, &c., and K. C. the wife of A. C, of, &c. formerly K. B., and for divers other good considerations, hath determined to settle and assure the said three several policies of assurance [and also the said two several sums of stock] upon and for the trusts and purposes, and subject to the powers and provisions, hereinafter declared and expressed, and hath agreed to enter into the covenant and declaration of trust on his part hereinafter contained : Now this Inden- ture WITNESSETH, that in pursuance of the said recited determination and agreement, and for the considerations aforesaid, he the said A. B., with the privity and consent of the said C. D. and E. F., testified by their respective executions hereof, doth by these presents assign unto the 288 bunton's life assueance. said C. D. and B. F., their executors, administrators, and assigns all those three several policies of assurance effected upon the life of him the said A. B., in manner aforesaid, together with the three said several sums of £ , £ , and £ thereby assured respectively, and all other moneys, &c., and all the right, &o., together with full power &o.,(a) to have, hold, receive, and take the said three several policies of assu- rance, and all and singular other the premises hereby assigned or intended so to be unto and by the said C. D. and E. F., their executors, adminis- trators, and assigns, in as full and ample a manner as the said A. B. can assign or otherwise assure the same, but nevertheless upon and for the trusts and purposes, and with and subject to the powers and provisions hereinafter declared and contained of and concerning the same : And the said A. B. doth hereby ^ovenant to pay the annual premiums upon the said policies, ante, Precedent XII]. And this Indenture also WIT- NESSETH, that for the purposes and considerations aforesaid, it is hereby agreed and declared by and between the said persons, parties hereto, that the said C. D. and E. F., and the survivor of them, and the executors and administrators of such survivor (hereinafter referred to as the said trustees and trustee), shall stand possessed of and be interested in the said [several sums of £ bank annuities and £, bank annuities, and the dividends and annual income thereof, and the aforesaid] policies of assurance, moneys, and other premises hereinbefore expressed to be assigned upon trust [during the natural life of the said A. B., to pay r*4^91 '*'^*''' ^'™ °'' assigns, or authorise or permit him or them *to L J receive the dividends and annual income of the aforesaid several sums of stock or bank annuities for his or their own use or benefit, and upon further trust] that the said trustees and trustee do and shall, upon the decease of the said A- B., apply for and receive, and if necessary enforce, payment unto them or him of the said several sums of £ , £, , and £ , and all other moneys to become payable by virtue of the said several policies as aforesaid, with full power for them or him to investigate, settle, and adjust all accounts in relation thereto, and to make or agree to any allowance or deduction in respect of costs or other- wise which they or he may deem expedient : And upon further trust, to invest all such moneys as shall be by them or him received by virtue of the said policies of assurance, in the purchase, in their or his names or name, of a competent share or shares of any of the parliamentary stocks or public funds of G-reat Britain, or upon government or real securities in England or Wales (but not in Ireland), with full power for the said trustees or trustee, from time to time, to alter, vary and transpose the said investments for any others of the descriptions aforesaid ; but as to every such investment or variation of such investment with the consent in writing of the said B. B. during her life : And it is hereby declared and agreed that the said trustees and trustee shall stand possessed of and be interested in the said trust moneys which shall be by them or him received in manner aforesaid and the stocks, funds and securities in and upon which the same moneys shall, for the time being, be invested [and (z) See preceding precedents. APPENDIX. 289 also of and in the said sums of £ bank annuities and £ bank annuities, from and after the decease of the said A. B.], upon trust to pay the dividends and annual income thereof unto the said C. B. and her as- signs during her life or until she shall again marry :(a) and from and after (a) This limitation is the simplest of all possible limitations, and will be appro- priate when the children are of age, or nearly so, and has the advantage of vesting the shares immediately, so as to enable the children to settle, or otherwise deal with them; those of the male children will, indeed, be subject to their liabilities, and, particularly, would vest in their assignees upon their bankruptcy or insol- vency, and the share of the female will be an equitable chose in action to which her husband will be absolutely entitled by survivorship ; but these objections will be rendered of little weight by the power of revocation retained by the settlor. The trust, however, subsequent to the life interest given to the widow, must depend upon the' circumstances of the family; when it is intended that the widow shall take for her life, and not during her widowhood only, and the estates of the chil- dren living at her decease, or previously dying, leaving children then living, shall alone be benefited, the following limitations will be appropriate : "From and after the decease of the said A. B., upon trust, to pay the dividends "and annual income thereof, unto the said C. B. during her life, for her sole and "separate use. Independently of any man who may then be her husband; and of "his debts, contracts, and engagements. And from and after the decease of the " said 0. B. shall stand possessed of, and be interested in the whole of the said " trust-moneys, stocks, funds, and securities, upon trust, to pay and divide the "same unto and among such of them, the said P. B., G. B., H. B., and K. 0., as "shall be living at the death of the survivor of the said A. B. and 0. D., or shall "be then dead, leaving issue then living, the share or shares of such of them as " shall be then dead, leaving issue then living, to be paid unto his, her, or their "respective executors, or administrators, as part of his, her, or their respective "personal estates." When the children are young at the time that the settlement is executed, it will be generally desirable that the trusts should run as in an ordinary marriage set- tlement, namely, for the wife, for her life, for her separate use, and without power of anticipation, with remainder to the children, including afterborn children, as the parents or the survivor of them may appoint, and in default of appointment, equally at twenty-one or marriage, with the usual clauses. See ante. Precedent, XI. It may sometimes happen that the settlor may wish the share of a daughter to be paid to the trustees of the settlement made upon her marriage, in satisfaction of a covenant already entered into by himself in such settlement, for the payment of a sum of money after the death of himself and his wife. / In such a case, sup- posing the settlor to have three children only, namely, a son and an unmarried daughter, and a daughter upon whose marriage he has entered into an obligation of this nature, the trust will be, "that is to say, as to two equal third parts, or "shares thereof, upon trust for my son X. and my daughter Y. and their respective "executors, administrators, and assigns, in equal shares and proportions as tenants "in common, and not as joint-tenants, and as to the remaining equal third part " or share thereof, upon trust to pay and transfer the same unto and "their executors, or administrators, or other the trustees and trustee for the time "being acting in the execution of the trusts and provisions of an indenture dated Hflie , and expressed to be made between [parties] being the settlement made " previously to and in consideration of the marriage then intended, and shortly " afterwards solemnised between my said daughter [and the said ] ; such "transfer- and payment to be made in satisfaction or part satisfaction (as the case "may be) of the covenant entered into by me in and by the same indenture for "the payment by my executors or administrators unto the said trustees or trustee " of a sum of 1, in manner therein mentioned, and to be by the said trustees "or trustee held upon and for the trusts, interests, and purposes, and with, under, " and subject to the powers, provisoes, declarations, and agreements in and by the " same indenture expressed and declared of and concerning a sum of 1, thereby " settled, or as near thereunto as the deaths of parties and circumstances will "admit." August, 1853.— 19 290 BUNTON'S LIFE ASSURANCE. r*4331 *^^ determination ^i the trust herein-before declared for the benefit L J of the said C. B., whether such determination shall happen by her death or by her second marriage, shall stand possessed of and be inter- ested in the said trust moneys, stocks, funds and securities, and the dividends and annual income thereof upon trust for the said F. B., G. B., H. B., and K. C, and their respective executors, administrators and assigns in equal shares and proportions as tenants in common, and not as joint-tenants [Provided always, and it is hereby declared and agreed by and between the said persons parties hereto that it shall be lawful for the said trustees or trustee, at any time or times, with the consent in writing of the said A. B. during his life, and after his decease with the consent r^AoA-i in writing of the said C. B. during her life,(6) to make *sale' and L -1 dispose of the said sums of £ bank annuities, and £— bank annuities or any part thereof, and invest the moneys to be derived from every such sale in any of the stocks, funds, and securities' herein- before appointed for the investment of trust funds, with full power, from time to time, to alter, vary and transpose the said stocks, funds, and secu- rities in and upon which the said trust moneys shall for the time being, be invested for any others of the like nature.] Provided always, and it is hereby further declared and agreed, that any bonus, accumulation, or profit which may from time to time be declared, or become payable upon or in respect of any or either of the said policies of assurance which shall for the time being be subject to the trusts and provisions of these presents, beyond and in addition to the principal sum or sums thereby originally assured, shall or may be, (but subject to the rules in that behalf of the assurance company or companies by whom such policy or policies shall have been granted,) in the option of the said A. B., testified by some writing under his hand, applied either wholly or in part in reduction of the annual premium or premiums upon the same policy or policies respectively, or shall or may be otherwise applied in such manner in all respects as the said A. B. by any writing under his hand shall direct, and in default of and subject to any such exercise of the afore- said option, and of and to any such direction as aforesaid, the same bonus, accumulation, or profit shall be added to an4 shall be subject to the same trus^ and provisions as the said principal sum or sums so assured by the same policy or policies. Provided always, and it is hereby further agreed and declared, that every receipt which shall be given by the said trustees or trustee for any money to become payable, unto or be received by them or him by virtue of these presents shall be a good and conclusive discharge to the person or persons paying the same, and particularly to the said assurance societies or companies, and every of them, for all and every such sums and sum of money as shall become payable by virtue of the said policies or any of them, and shall release such persons or person, societies or companies, and every of them, frpm all obligation of seeing to the application or non-application thereof: Provided also, and it is hereby further agreed and declared, (b) When it is intended that the trusta should be of longer duration than the life of the'suMvor df the settlor and his wife, the power of investment after their decease should be at the discretion of the trustees. APPENDIX. 291 that in qase the said trustees or either of them,, or any trustees, or trustee to he, appointed in their or either of their places hy virtue of this present provision shall die, or be desirous of being discharged *from the fiK^ocn execution of the ftfo;resaid tEusts, or shall refuse or become inca- L J pable of acting therein, or shall go or be abput, to reaidey or shall for six calendar months consecutively actually reside, out of the jurisdiction of the Court of Chancery at Westminster, then and in every such case it shall be lawful for the sa^d A. B., his executors or administrators, but nevertheless as to every.iappointment to be] made by the executors or administrators of the said A. !3., with the consent in writing of the said E. B. during her life^ by any deed or deeds, under his or their hand and seal, or respective hands and sea|s, to nominate and appoint any fit per- sons or person to supply the place of the said deceased, retiring, or inca- pable trusteesi or. trustee ; and immediately after every such appointment, the said policies, moneys, stocks, funds,, securities, and premises, for the time being subject to the trusts and provisions of these presents, shall be assigned and transferred, so that the same may vest in such new trustees or trustee, either jointly with the surviving or continuing trustee, or solelyj as the case may require, and in their executors and administra- tors, upon and for the trusts and purposes herein-before declared and contained concerning, the same j and^ every^ such new trustee shall have the same powers, authorities, and discretions) and act in the execution of the trusts and provisions of these presents, as effectually, in all respects, as if he had been: hereby originally appointed a trustee dnatead of either of them the said C. D. and-'E.'-Fi {^Trustees' Indemity Clause, ante, Precedent XI.) , Provided nevertheless, and it is hereby expressly declared and agreed by and between the said parties hereto, that not- withstanding the trusts, powers, provisions, and covenants herein-before contained, but without prejudice in any respect to the aforesaid provi- sions for the protection.and indemnity of the trustees for the time being hereunder, it shall and may be lawfial ftir the said A.' B.', aiid he "doth hereby reserve to himself full power and authority, at any time or times hereafter during his life, by any deed or deeds to be by him sealed and delivered in the presence of and to be attested by one or more witness or witnesses, either absolutely or partially to revoke, determine, and make void all, any, or either of the said trusts, purposes, powers, provisions, arid covenants herein-before respectively declared, expressed, and con- tained concerning the whole or any part or parts of the aforesaid [bank annuities,] policies, moneys, and other premises, which shall for the time being be subject to t^e trusts and provisions of these presents or any of *them ; and alsoy if he shall think fit, by the same or any other rsnAoa-i deed or deeds to be respectively executed in like manner, to L J direct, limit or appoint any other trusts, purposes, power%and provisions of and concerning the whole or any part or parts of the aforesaid [bank annuities,] policies, moneys, and other premises, the aforesaid trusts apd provisions concerning which shall have been so revoked, pither, absolutely ; or partially as aforesaid, for the benefit of such person, or persons, ?ind -, otherwise in such manner in all respects as the said A- B. shall ,thjuk fit. Provided, lastly, and he the said A. B. doth hereby expressly declare, 292 bun-yon's life assurance. that subject and without prejudice in any respect to the operation of the assignment of the said policies and premises herein-before contained, and if and so far as may be requisite or expedient for giving full effect in equity thereto, and to the respective trusts, purposes, powers and provi- sions herein-before contained, and for the specific performance and execu- tion of the aforesaid desire, determination and agreement by or on the part of him the said A. B., he the said A. B., his executors or adminis- trators, as concerning the said policies, moneys, and all other premises herein-before assigned or expressed so to be, are and shall be possessed thereof and interested therein respectively, upon trust for the trustees or trustee for the time being of these presents, pursuant to and according to the several and respective trusts, powers, and provisions herein contained, and for that purpose, upon trust, at the request of the trustees or trustee, or of any person or persons beneficially entitled hereunder, and at the expense of the trust estate or of the person or persons making such request, from time to time, to do, execute, and perform or concur in all such deeds, acts, and things as may be requisite and expedient for the vesting, paying or transferring in or to the said trustees or trustee, for the time being hereunder and upon, with, and subject to the said trusts, powers, and provisions all and singular the said policies, moneys, and other premises hereby assigned or expressed so to be, and the moneys and other funds to arise therefrom, or which shall constitute the produce thereof : Provided, nevertheless, and it is hereby expressly declared, that neither the said last preceding declaration of trust nor any other thing herein contained shall prejudice or affect the aforesaid power of revoca- tion and new appointment herein-before reserved unto or vested in the said A. B., or any future exercise thereof. In witness, &c. r*4.*?'7l * Extract from the Minutes of a Special Court of Directors of the L J Equitable Society, 9th December, 1830. Resolved, — That the following scale be adopted for regulating the rate of interest to be received in future on money advanced on mortgage by the trustees of this society. Scale. Price of Consols. Interest, if paid within thirty days after it becomes due. Above 90 per cent At or under 90 and above 86 . At or under 86 and above 78 . At or under 78 and above 70 . At or under 70 £ s. d. 3 10 3 15 4 4 10 5 APPENDIX. 293 Resolved, — That the price of the 3 per cent. Consolidated Bank An- nuities on the last day of April, and on the last day of October in every year (or if the same shall fall on Sunday, or a holiday, on the next open day of business), shall regulate (in conformity with the above scale) the rate of interest on all the mortgages of this society, and that the payment to be made in the half year from April to October, shall depend on the price of 3 per cent, consols on the last day of October then preceding; and in the half year from October to April, shall in the like manner depend on the price of 3 per cent, consols on the last day of April then preceding. Eesolved, — That nevertheless no variation take place in the rate of interest on mortgages until they have respectively endured for three years. If the half-yearly payments of interest remain unpaid at the expiration of thirty days from the time of their respectively becoming due, the same will be charged after the rate of 5 per cent, per annum. Cases decided in the County Gourts upon the Claim of the Medical Referee of the Assured to the Payment of a Fee iy the Company. (From the "Essex Standard," Oct. 4, 1850.) S. A. Philbrick, Colchester, v. Charles Whetham, London. Defend- ant was sued as one of the directors of the National Provident Institution for the fee of one guinea for furnishing particulars as to the health of a party proposing to assure his life. It appeared that on the 6th of August plaintiff received a circular letter from the secretary to the institution, stating that "reference having been made to him,," in a proposal for a life policy, by Mr. James Harwood, as his medical attendant, the Board requested that he would favour them with answers to questions given in the document. It further stated that communications *of this r^^qoT nature were considered as strictly confidential; and a request was L J added in writing that the information should be forwarded forthwith, so that the proposal might be considered and decided upon at the next Board day. The certificate was sent up on the 8th, with a note charging the fee of a guinea; and on the 10th the plaintiff received a letter from the secretary, stating, that it was not the practice of the office to pay fees to medical attendants of assurers. The plaintiff, in his evidence, said for some years he had furnished similar certificates to the office in question, without charge ; life assurance not being then so prevalent as to make the practice a burden to the profession, but since these applica- tions had become so frequent he had refused to supply the information without payment. He mentioned two instances in which he had actually received payment through the society's agent in Colchester, but it ap- peared that in these cases he was aware that the money came from the 294 BUNYON'S LIFE ASSURANCE. parties effecting the insurance, and not from the office. The defence relied upon was in brief that the party being desirous of insuring his life, as it was one of' the requisites to enable him to do so that he should refer to his medical practitioner,' the onus of payment was upon- the assurer and not npoii the society. In answer to the ^udgej the agent of the office said that Mr. ■Philbrick had repeatfedly tbM him' he would not furnish any more certificates without a fee; but he tad never said that in case of applications to him' he should hold the society liable; that he bdieved this was the first circular sent to Mr: Philbrick direct froiu- the secretary, those which had been furnished gratuitously having all come from him- self as ageiit. — Mr. Philbrick submitted that the' last aniswer Was a 'tery material one 'to the plaintiff's case, as showing' a new mode of application to him, after he had declined to furnish more certificates without pay- ment. He also urged that upon the face of the letter itself the agreement was between the office and himself; for he did not see how the letter could be construed otherwise than as a request from the office to perform certain services on their account. — His honour said, if the letter had stood alone, and this had been the first transaction of the kind between Mr. Philbrick and the office, he thought theywould have been liable and ■ must have paid him; but now, as it appeared to him, the whole depended upon what had previously taken place. Of course Mr, Philbrick was not bound to continue furnishing certificates gratuitously, but he was of opinion that he could not claim paylnent without previous notice. Judgment for the defendant. Hooper v. The Gresham Life Assurance Society,, in the. J^hare^itch County Court, before Mr. Ser0ewii\,t Storks.{c\ ,. . This was an action brought by a medical gentleman ip recover a fee of one guinea, as compensation for professional opinion and seryices, con- sisting of answers to certain, inquiries as to-the, sta,te,of health of a pro- posed assurei*. The plaintiff put in evidence a letter which he had received from tiie secretary of the society, commencing thus : — " "Proposer's Medical Keferee. "To Mr. Hooperj Queen'sEoad, Dalston, " Sir, — Mr. Jacob J. Davies, who has been proposed to this office for an assurance on his life, has giyen a reference to you for private and confidential answers to the following queries." r*d;qqi *Then follow certain printed questions ; arid theire is a note at L ^°^i the foot to the effect tha^-| " The directors would be obliged by your answering each of the ques- tions separately." Answers were accordingly returiied, to the society,' and for which the plaintiff some tiine afterwards claimed" a fee of a guinea; but the society refused to pay the demand, on the ground that it was not customary. (c) Post Magazine, 7th June, 1851. APPENDIX. 2y5 It was urged on behalf of the society that there was no retainer, nor was there any contraot either expressed or implied. The legal contract, if any, was with the assured, without whose previous consent the plaintiff could not with propriety have answered the questions at all. The plain- tiff should either have declined to answer the questions, or have made a special contract for remuneration. That there might be some few offices which held out inducements to medical men, but this society, in common with the majority of offices, did not; no'r was it bound by the arrange- ments of others who did. A contract must be either expressed or im- plied. If implied, then it must either be supported by the f)articular circumstances, or by general usage. That in this case the circumstances did not imply such a contract, and the general usage was against it; and where there was a doubt as to the services being gratuitous; the onus of proving an express contract lay upon the plaintiff. In the case of King- ston V. Sir Fitzroy Kelly (18 Law Journal, 360), Baron Parke. held that if the defendant could show thafthe contract was doubtful the plaintiff must clearly prove an engagement to pay. That the cases of Eeason v. Wirdiman (1 Carr. & Payne, 434), Davies v. Davies (9 Carr. & Payne, 871), and Keith v. Eussell (3 Q. B. Eeports, 928), were also in point. If there was any contract at all in this case, it must have been with the assured, for whose benefit the inquiries were made, and who was bound to give all the information required, and if he did not he must abide by the consequences. That the medical referee was the selection of the as- sured, not of the society ; and if the plaintiff had intended to charge the society he ought to have stipulated for payment. That the services ren- dered by the plaintiff, however, were not in themselves chargeable. A referee as to the- responsibility of a party requiring a loan could not charge for giving information, and the only distinction between such a case and the present is, that the one is an inquiry into pecuniary eircum- . stances and the other into the state of health. Both are voluntary, and cannot be converted into a debt. Nor could a former master charge for giving information as to the character and fitness of a servant. In neither case was the referee bound to answer the questions, nor was the plaintiff in this case. His Honour. The question in this case is whether there was an im- plied assumpsit? The argument that the medical referee is the selection- of the assured is certainly a strong one ; for although the questions are put down by the society, the name of the referee is given by the assured. I don't think there is any evidence of an implied assumpsit beyond the sending of the letter. That is my present impression ; but it is a ques- tion of too general importance to be decided off hand. The nonsuit is also a question of considerable nicety ; I shall, therefore, take time to consider my judgment. The following judgment was afterwards delivered by the Court: — "In this case of E. Hooper, a medical gentleman, the plaintiff states that this is an action on contract for 11. Is., due for professional opinion *and r^t^^^A-i services by the plaintiff at the request of the secretary of the L J G-resham Life Assurance Society. There were two points raised in this case : first, that in an action for an apothecary's bill the plaintiff cannot 296 eunyon's life assurance. recover any charges unless he proves his right or qualification to practise, and that he must on the trial produce his certificate to practise from the Apothecaries' Company, or prove that he was in practice on the 1st of August, 1815. The second point raised was that there was no contract, either expressed or implied, as between the society and the medical refe- ree. The one I don't mean to deliver any opinion upon, as upon the other point I am clearly of opinion that the plaintiff must be nonsuited. The question turns upon whether there was a contract expressed or im- plied — what the law calls assumpsit. It is perfectly clear in this case there was no contract expressed^ — that there was nothing approaching a precise and specific contract. Then the question as to whether there was an implied assumpsit arises. Assurance offices have made certain rules and regulations upon which they hold out to the public that they are willing to enter into a contract. Therefore the contract is from the be- ginning as between the assured and the assurer. The contract is that the party shall give certain securities to them, and they assure his life upon certain conditions ; and one of the conditions is that answers by a medical practitioner shall be forwarded to the society in reply to certain inquiries (as set forth in their printed letter) as to the state of health of the proposed assurer. They know not the medical practitioner to whom they are referred, and have never had any communication with him ; but they take it for granted that he must know something of the assured. Now let us advert to the letter sent by the secretary of the society at the request of the assured. A proposal is made which the medical referee knows nothing of, and they agree to assure the party's life on condition that their inquiries are satisfactorily answered. It is necessary to advert to that letter to show how the case stands between the assured and the medical man selected by him as his referee, and from which letter it is clear, at all events, that the society has no communication whatever with the referee before the proposal is made. Hitherto the medical profes- sion, which is composed of a large body of learned and scientific gentle- men, has abstained from making any claim for professional services in matters of this kind. The question has never been decided in any of the superior courts, and there is no substantial opinion making insurance companies liable. The letter which is sent by the secretary — and which makes the case more clear — is addressed to Mr. Hooper (it might have been addressed to Mr. anybody else), and runs thus : — " Sir, Mr. Jacob J. Davies, who has been proposed to this office for an assurance on his life, has given a reference to you — he has given a reference — for private and confidential answers to the following queries." Then the questions are put, but which it is unnecessary to advert to, and the letter is signed by Mr. Evans Hooper and returned to the society. How does this make a contract between the society and the medical referee ? It would be very true, if there was nothing in the letter which showed that it was the act of the party who had proposed to the office for an assurance on his life, and that the opinion of a medical gentleman as to his state of health was one of the conditions upon which the society agrees to assure a party's life, that the medical referee might say, " you have no right to draw upon my skill and services." And if it was put upon that principle abstract- APPENDIX. 297 edly, it *miglit be a question whether the medical practitioner ps^^-i -i would not be entitled to remuneration. But the contract here L , J is between the assurer and the assured. The society say, « the medical man is not of our choosing, nor are we dependent upon his skill." In my opinion it is one of the conditions made with the assured, that a med- ical man shall answer the questions proposed by the society. This is the basis of the contract, and the meaning of it is, " not that we shall trouble ourselves to select a referee," we leave it to your honour to choose some one who shall supply us with the information we require. I can see no contract in this between the company and the third party — the medical man. The plaintiff might have said, I shall not send answers unless I am paid. Upon the whole I am decidedly of opinion that the plaintiff in this case is not entitled to recover j and. that dispenses with the first question, upon which I give no opinion." Duplex and another v. The Economic Life Office, in the Sheriff's Court, August 24, 1852, iefore Mr. Russell Chirney.{a) The question involved in this action was the right of a medical man to a fee from the assurance oflGiee for giving his opinion on the life of a patient proposed for assurance. One of the plaintiffs stated in evidence that he received a communica- tion from the defendants, enclosing a long string of questions to be answered by him respecting a lady whom he attended professionally, and who had proposed her life for assurance in the office of defendants. The communication stated that they were referred by the lady to the plaintiff, and that the answers would be considered as strictly confidential. The questions were returned with answers, and a note stating that the plain- tiff's fee was a guinea, which he requested should be forwarded to him. His Honour thought that no case had been made out against the de- fendants. Mr. Humphreys submitted that there was no one else on whom the plaintiffs could come for the fee, and the answers were returned with a demand for it. His Honour said the plaintiffs need not have answered the questions without the fee, and the letter enclosing the question stated that they were referred by the lady proposing her life for assurance. He felt bound to refuse the claim of the plaintiffs Verdict for defendants. Upon the Question, How far the Principle of the Thellusson Act is ap- plicable to Trust for the Payment of Premiums upon Policies of Insurance. In the case of Bassel v. Lister (9 Hare, 177,) the question was diseus- (d) Post Magazine, August, 1852. 298 BUNTON'S LIFE ASSURANCE. Bed whether a direction given by a will to pay the premiums upon a policy of assurance effected bythe testator upon the life of another person out of the income of the testator's- property was obnoxious to the provisions of the Thellttsson Act, 39 & 40' G-ed'. 3,- that is to say, was valid for the whole of the life assured, or only for the term tof twenty-one years after P4421 **'^^ death of the testator. The law, as it stood •befoi'e iihe L J statute in question, having put no restriction upon the' accumu- lation of property so long as the vesting could' be suspended, Mr'.' Thel- lusson had by his will directed that his' personal property shoUld be invested in land, and the rents and profits of the land to be purdhased, and Of his real estate^ should be accumulated during' the lives' of all of his descendants who shotlld be living at the tinie of death, and Jie then limited the accumulated property in f^voiir of certain of his descendalhts who might be living at the expiration of th'e trust. This will being upheld by the court, it was deemed necessary by the legislature to inter- pose for the purpose of restriction such dispositions for the future. And it enacted, " that no person or persons should, after the passing of the Act, by any deed or deeds surrender or surrenders, will, codicil, or •otherwise soever, settle oir dispose of any real or personal property to and in such manner that the rents, issues, profits, or produce thereof should "be wholly or partially accumulated for any longer term than the life or lives of any such grantor or grantors, settlor or settlors, or the term of tWenty-one years from the death of any such grantor, settlor^ devisor, or testator j or during the minority or respective minorities of any person or -persons who should be living, or in ventre sa m&re, at the time of the death of such grantorj devisor, or testator, or during the minority or respective minorities only of any person or persons who under the uses or trusts- of the deed, surrender, will, or other assurance directing such accumulation, would for the time being, if of full age^ be entitled unto the rents,' issueS) and profits,- or the interest, dividends, or annual pro- duce so directed to be accumulated ; and in every case where any ac- cumulation should be directed otherwise than as aforesaid, such direction should be null and. void,' and the rents, issues, profits, and produce of such property so directed to be accumulated should, so long as the same should be directed to be accumulated contrary to the provisions of this Act, gO' and be received by such person or persons as would have been entitled thereto if such accumulation had not been directed." And it was further provided, that nothing in the Act contained should extend to any provisions for payment of debts of any grantor, testator, or devisor, or other person or persons, or to any provision for raising portions for any child or children of any person taking any interest under any such con- veyance, settlement, or decree, or to any direction touching the produce of timber or wood upon a.ny lands or tenements, but that all such pro- visions and directions shall and may be made and given as if this Act had not passed. Sect. 2. In the case in question, Sir Gr. Turner, V. C, thought that the his- tory of its origin must be taken as the key to the statute, as directed against accumulation of rents and profits, qua rents and profits, and not APPENDIX. 299 against dispositions having reference to any batgains or contra6ts ientered into for other purposes than the mere purpose of accumulation. It was said in argument that the payment of the income to the insu- ance company was of itself an accumulation ; that the company were the ■recipients of the income for' the purpose of accumulation j and that what was done was the same thing as if the rents were paid to an individual to accumulate in his hands, and to be paid over at the d6ath of the life insured; ;but the Vice Chancellor did not consider that the payment 6f the premiums to the insurance o£Bce out of the income was an accumu- lation *of that income. "The premiums," said he, "when paid ^:^44q-l to the insurance ofece bebome part of their general funds, subject L J to all their expenses; and although it is true that the funds in the hands of the companies do generally produce accumulations, it is impossible to say what accumulations arise from any particular preinium. It was said that it was an accumulation as to the estate because the estate receives back a certain sum upon the death of the party whose life was insured ; but what the estate receives back is not the accumulation of the income, but a sum payable by the office by contract with the testator; and is this an accumulation within the meaning of the statute ? The history of the statute goes far to show that it is not; and I think the language of the enactment confirms that view. The enactment is, that no person shall settle or dispose of real or personal estate so and in such manner as that the rents and profits shall be accumulated beyond the prescribed periods ; and there are words which admit of a clear, plain, common sense inter- pretation as referring to the accumulations of rents, profits, and income, qua rents, profits, and income. Why is the Court to put a strained con- struction upon them, and cut down the undoubted right which existed before the statute, beyond what the language of the statute in its ordi- nary interpretation imports? It is said that the Court ought to do so, because the 'spirit and intent of the statute was to prevent accumulations and the suspension of the beneficial enjoyment; but this argument appears to me to beg the question ; for it assumes, that what the petitioner here calls an accumulatioB, suspending the beneficial enjoyment, was an accumulation intended lo be prevented by the statute. Much reliance was placed in the argument upon the mischief which might ensue from policies of insurance being resorted- to for the purpose of evading the statute if the dispositions of this will were upheld ; but I entertain no apprehensions of any such mischief I think that suitors and testators who contemplate accumulations are far too keen-sighted to incur the risks to which such a course of proceedings would be exposed." "If," he added," the construction for which the petitioner contends' can be sup- ported, what is to become of partnership) agreements for long terms of years where certain sums are to be drawn out annually, and the remain- ing profits are to accumulate, and be divided at the end of the terms? What is to be done with policies of insurance on the lives of debtors? And how is the case of a settlement of policies of insurance with stock transferred in trust to pay the premiums out of the dividends to bfe dealt with?" In this case the policies had been effected by the testator upon the 300 bunyon's life assurance. lives of his sons, and he had directed the settlement of them upon the families of these sons, and the payment of the premiums out of the in- come of his property. If, as is probable, these policies thus effected by the testator were in- valid, for the want of an insurable interest in him, it seems strange that this argument was not adduced, as it may be assumed that the court would not have carried into effect a direction to apply the proceeds of a trust estate in carrying out a void contract, although there might be a< strong presumption that one of the parties to it, namely, the insurance oflSce, was unlikely to question its validity. Even upon the hypothesis that an insurance depending upon a considerable number of lives, and a trust for the payment of the premiums, could not be impeached as ob- r*4.4.4.i noxious to the spirit of the Thellusson Act, it is worthy *of note, •- J that the want of an insurable interest in any number of lives would in most cases prevent such an arrangement being carried into effect. The doctrine of the Vice Chancellor, however, seems to go further than merely to support the disposition in question on that case, and to sanction a series of periodical payments for a term however long, when the consideration for them is a gross sum to be paid by some other party. It may, therefore, become a question for insurance of&ces, whether accu- mulations may not practically be carried into effect, by the issue of in- struments in the form of policies, insuring the payment of a gross sum of money at the expiration of a long term of years, in consideration of an immediate single premium, or an annual payment in the nature of a premium payable during the whole of the term. Having regard to the expensive machinery necessary for the management of a large trust estate, it may be a question whether such an arrangement might not be carried into effect, beneficially to the insurance office, and so as to pro- duce a large amount at the expiration of the term that could be obtained by a specific accumulation of the increase of any particular fund by trustees. The result of the accumulation directed by Mr. Thellusson has, as it is well known, proved a miserable failure ; but the rock upon which the trust split was the direction to accumulate in the purchase of real estate. Had the investments been made in the funds alone, the amount, owing to the rise in the value of funded property, might have even exceeded the expectation of its authors. REPORT PROM THE SELECT COMMITTEE ON ASSURANCE ASSOCIATIONS. The Select Committee appointed to take into consideration the Subject of Assurance Associations and who were empowered to report their Ob- servations, and the Minutes of Evidence taken before them, to the Mouse ; have considered the Matters to them referred, and have agreed to the following Report: APPENDIX. 301 Your committee have considered the subject referred to them, and have examined the registrar and assistant registrar of Joint Stock Com- panies; the registrar of Friendly Societies; Mr. Finlaison, the late actuary to the Commissioners of the National Debt ; Dr. Farr, at the head of the statistical department of the registrar-general's office ; and many of the most eminent actuaries connected with insurence offices of every class. II. So far as regards the Joint Stock Companys' Act of 1844, your committee have confined their inquiry chiefly to that portion of it which affects insurance companies, and more particularly the busi- ness of life insurances. From the evidence of the registrar and assistant registrar of Joint Stock Companies, it appears that the law, as it now stands, is extremely defective, and that the provisions of *the Act of 1844 are very imperfectly carried out ; many of r^i-^^H c-i which they have no power to enforce if not complied with. L J III. With regard to provisional registration, it appears that the law, as it now stands, does not afford the security which was contemplated by the Act of 1844; inasmuch as the representations made by the pros- pectuses and advertisements issued by the new companies often vary very materially from the objects for which they have been provisionally regis- tered ; and there appears to be no means at present to prevent deception and misrepresentation being practised on the public in this way. Nor are the regulations required in order to obtain complete registration more perfect for that purpose. It is required by the law that the deed of set- tlement should be signed by shareholders equal to one-fourth in number, and representing one-fourth of the proposed capital of such companies ; but it appears, from the evidence of Mr. Whitemarsh, that this provision has been extensively abused by means of false and fraudulent signatures, and has thus proved to be a very insufficient security for the objects con- templated. It appears, also, that it has been frequently evaded by com- panies commencing business with a very small capital, and, immediately upon obtaining complete registration, greatly increasing its amount, which they are enabled to do without further recourse to the office of the registrar. These observations, however, apply to Joint Stock Companies generally. IV. After Joint Stock Companies are completely registered, one of the chief securities contemplated by the Act of 1844 for the safety of the public is the duty imposed upon them to return annual balance-sheets representing the state of their affairs to the registrar's office, where they are open to public inspection. But from the fact, that that Act pre- scribed no form, and furnished the registrar with no power to enforce a compliance with the spirit, or even with the letter, of the law, it appears that this provision has been very imperfectly complied with in many cases, and in others altogether neglected ; so that it cannot be said that it has afforded, in a majority of cases, either the information or the security which was intended. Much doubt, indeed, has been expressed by some witnesses whether the publication of accounts in their present form has 302 BUNYON'S LIFE ASSURANCE; not rather tended to. jnislead) than i to. jnforiu thei.public, in which view your committee are inclined; tO: aoquiesefij .-Amdidf the system of pub- liahing accounts is in fu.tpre .to be pera^Veiied in, your committee e?:press a decided opinion that the l*w must define more clearly what it requires; apii that a greater power should be gi^en to enforce .whatever provisions are thought necessary for the purpose,. Y. There is one subject which has formed so prominent a, feature during your committee's inquiry, and. which has partly, arisen from the Act of 1844, that they cannot pass it over without some remark, viz. the differences of opinions and views entertained by the two great classes of ofSces, the one including .those established since, the pass.ing of the Act of 1844, and completely registered under that Act, and the other those established prior to that date; and not so registered! , Your committee have arrived at the conclusion, that in many ways that distinction has. operated prejudicially, and that it would be eminently to the advantage r*446l °^ ^^^ offioea. themselves,, as weUias to. the *public at large,, if all L J insurance co^ipanies could be brought, under one law, -.leaving each company to jeco.mmend itself to. the public, upon its own nierits. yi. With regard,, to, the, general condition, of .sxiating.co.mpanies, so far as any evidence has been laid before. your cojnmittee^ they feel, jt their duty to report, that it is more satisfactory than they had been led to believe ^efore -they entered . iipon, their, inqgiry. ^..^Jfadouiblt- instances of great -abuses; and flagrant frauds have been disclosed by the witnesses examined ; but in general these consisted of an open, violation, of all law, more akin to swindling than:, to, regular , trade, and such as it would be difficult for any Legislature to prevent, so long as priyate persons exer- cise so little precaution. in the conduct, of their own affairs. , But while the committee are enabled to speak in these satisfactory terms lof existing offices, so far as the evidence has gone, their attention has been called to the great facilities which exist under, the i present state of the law, for in- surance companies, in , common with others, being brought into existence with no reasonable prospect of, or guarantee for success, and not unftre- quently without any bona fide intention of transacting business. It appears by a return made to your committee from the office of the regis- trar, that since the passing of the Act in 1844, no fewer than 311 insu- rance companies of varioils kinds have been provisionally registered, of which only 140 were completely registered, and of which only 96 con- . tinue to exist at this time. And while your committee have^ reason to believe that some of the companies which have ceased to exist during that period, have been absorbed in other companies by whom their busi- ness has been taken over, yet, at the same tiine, they have no doubt that considerable traffic has been carried on- in the mere creation of companies which nfever had any real prospect of a bona fide existence. VII. So far then as regards the present state of the law, as established by the Act of 1844, it appears to be a very general, if not a universal opinion, that it requires some amendment, and in which your committee APPENDIX. 303 fully concur. They are deeply impressed with the opinion, that las the law now stands, it does either too much or too little ; too much, inasmuch as any legislative enactments professing to protect the public in such matters, have a certain tendency to weaken and impair that : individual vigilance which would be more surely exercised, if no such attempt was; made ; and too little, inasmuch as the securities which the law provides are ill calculated to eflfect the object at which they aim. On the part of all the witnesses examined, your committee found a laudable desire to improve the existing state of the law, differing, no doubt widely, in their, views, as to the best mode of accomplishing that object. . On the part of the old offices of extensive business, the witnesses who more particularly represented them expressed their desire to be placed under one general rule, to make such annual {returns, and to afford' such, other tests as could be given without an undue interferenoe with their business, for the purpose of securing one safe and uniform system) by which a reasonable security may be afforded, for the respectability and solvency of .insurance companies. VIII. In approaching the question of what alterations in the present state of the law your committee are prepared to recommend, r,j ^7-1 *they feel that it is one which is surrounded by great difficulties. '- ' The two distinct principles in respect to subjects of this nature, viz., that of interference by the government for the protection of the public, and that of no interference whatever, have been very fully and ably discussed by the witnesses examined by your committee. On the one hand, even admitting the general wisdom of the principle of non-interference on the part of the government in matters of trade, it has been contended that the question of life insurance differs so materially in its general character from ordinary trading transactions, that it may fairly be considered as an exception to that rule. This exceptional treatment has .been justified and supported, on -the ground that the obligations undertaken by such associations, have reference to a very remote and uncertain, period; that_ the object which persons have in view in effecting insurances upon their lives, is generally of an important and solemn character, viz., the provi- sion for widows and orphans after the death of their natural protectors ; that, unlike any ordinary transaction of trade, a contract once entered into cannot be discharged or abandoned, if doubts of the stability of an office should arise, without a great sacrifice of premiums paid in past years, and the necessity of effecting new policies in other offices at in- creased rates of premium, owing to the greater age of the assured ; and that in the present state of uncertainty which arises from the imperfect knowledge as to the real condition of assurance offices, persons are thus placed in the anxious and unhappy dilemma of being compelled to per- severe in paying premiums from year to year, with some . suspicion and doubt as to the ultimate advantage of doing so, or of incurring the serious loss which, under the most favourable circumstances, must attend the abandonment or sale of a policy. On these considerations as a special case, it has been contended by different witnesses of great experience, that interference on the part of the govornment is not only justifiable, 304 bunton's life assueance. but a matter of high duty, for the protection and information of the public. IX. On the other hand, it has been contended, with equal ability, that insurance business forms no exception to ordinary trade in these respects ; that the Acts which have already been passed with a view of controlling the operations of insurance societies had been rather hurtful than bene- cial for the very objects they had in view ; that an apparent compliance with the provisions of the act of Parliament and a certificate of complete registration, while they have proved entirely ineflfectual for their pro- fessed objects, and no real security to the public, have afforded facilities, under the sanction of Parliamentary authority, embodied in regulations administered by a public department, for the formation of companies, and the perpetration of frauds, which could not otherwise have been accomplished. And it has been further contended that it is impossible to make such regulations consistent with the free development of private enterprise, which, so far as the publo is concerned, will prove more pre- judicial by lulling private prudence and vigilance, than beneficial in respect to any increased security which they can confer. X. Much difference of opinion has been expressed by the different witnesses favourable to the former of the two principles alluded to, as to the extent to which government interference should take place ; some r*4.4.Rl ^^^^ contended, not only for an enactment which should more L J strictly regulate the circumstances under which insurance compa- nies can be formed, but also for the appointment of government actua- ries, under a department of the State, who should have a direct super- vision of the proceedings of all insurance companies ; while the gene- rality of witnesses favourable to some regulations have confined them- selves to much narrower limits, and have contended only for such pre- cautions as should test the bona fides of new companies, and as should from time to to time afford a fair amount of information with respect to the condition of such companies, relying upon the good faith of directors and actuaries for the accuracy of the information furnished. XI. In venturing to express the views which your committee have been led to entertain as to the course which parliament should pursue in future in regard to the subject of life assurances, they will divide their remarks into five heads : 1. As to the mode in which it is desirable to deal with the pre- sent Joint Stock Companies' Act, so far as it relates to insurance companies. 2. As to the registrar's ofiice, duties, and powers. 3. As to the registration of existing offices. 4. As to precautions which it seems desirable to take in order to test the bona fides of new associations, and to entitle them to com- plete registration. APPENDIX. » 305 5. As to the securities which can be afforded to the public by the publication of periodical accounts. XII. Tour committee will now proceed to remark on each of these points separately. 1st, Your committee are of opinion that the business of assurance companies differs so much from ordinary business, that it will be advisa- ble to repeal all the provisions of the Joint Stock Companies Act so far as they relate to assurance societies, and to deal with them in a separate Act. 2nd. Your committee have already adverted to the insufficient power which the existing Act confers upon the registrar of Joint Stock Com- panies to give effect to the provisions of the law. Your committee are df opinion that whatever duties may be intrusted to that officer under any Act to be passed, it is essential that adequate powers should be pro- vided to enable him, either by himself, or through one of the depart- ments of the State, to enforce any regulations that Parliament may think it wise to enact. Experience has proved that without such powers, regulations become a dead letter, and are only calculated to mislead by the apparent sanction which they give to proceedings not in reality con- trolled by them. 3rd. Your committee, in a former part of this report, have alluded to the inconvenience which has arisen from the fact that a portion of the existing assurance offices are completely registered under the Act of 1844, and a portion not so registered. The effect of this distinction has been to lead to controversies between the " old offices" (established prior to 1844), and the "new offices" (established since the passing of the Act of that year;) which have been prejudicial to the interests of the public. Your committee are, therefore, of opinion that it would be highly advan- tageous to all parties if all companies, both *those existing and r-jf^AAQ-, those that may in future be formed, could be placed under one L J general system of registration. In accomplishing this, your committee would recommend that the requirements for registration, as regards exist- ing companies, should be as simple as possible, but that whatever period- ical returns may be deemed necessary, should be the same as regards all companies whatever. With regard to Mutual Assurance Companies, where the claims of the assured are confined to the funds of the society, and where no personal liability attaches, your committee are of opinion that the requirement of the law that the members of such societies should be registered, is of no real utility to the public or the assured, while it is both expensive and troublesome ; and that all the objects of the law would be answered by a registration of the directors and other officers of such societies. 4th. Your committee feel that perhaps the most important part of their inquiry is that which refers to the precautions which should be hereafter adopted with regard to the formation of new companies. On the one hand, your committee feel that the ground hitherto occupied by these useful institutions has been comparatively limited, and that their application is capable of great extension, not only in the higher and middle classes of August, 1853.— 20 \ 306 BUlfrON'S IIEE AS«UKANOE. society, but also among the humbler classes, to whom it has recently been very considerably applied ; and that it is therefore very important that no check or impediment should be placed in the way of the further exten- sion of this enterjirise, nOt absolutely needful for the security of the public. On the other hand, the committee are of opinion that in the interest of the companies themselves, as well as in that of theipublic, it is desirable to interpose such checks as will give a reasonable guarantee as to the bona fide intentions of the promoters of such companies. To this extent only the committee are of opinion that any interference' at this stage is desirable. With this view, in addition to such regulations as may be considered needful for the purposes of registration, the com- mittee are of opinion that no new company should be admitted to com- plete registration until a capital shall have been subscribed, and actually paid up, of at least 10,000?., and which shall be invested in the public funds, under such regulations as Parliament may deem fit to enact; to be considered in the double light of a test of bona fide intentions on the ■part of the promoters, and of a seeurityfor the liabilities of the company at its early stage of existence. 5th. No part of the subject submitted to your committee has received more attention than that of the publication of periodical accounts. Hitherto those accounts, as published, have been of a most unsatisfactory character. Your committee have carefully considered whether it would be practicable to prescribe such a form of account as would accomplish the objects of the L^islature; but after the most careful consideration, they are led to the conclusion that no fixed form could be made appli- cable to all cases, which would not be exposed to much evasion, or which would practically afford any real security. Your committee, therefore, would recommend that it shall be impe- rative upon each company to make a complete investigation into its affairs at least once in five years, as is usually prescribed by their deeds of set- tlement, and at such times so prescribed, which ^hall show a complete valuation of their risks and liabilities, and of their assets to meet the same ; and that all such valuation accounts, which may be made for the r*4'im ™fol'™^''io'i ^^^ iJse of their proprietors, shareholders, or *mem- L -I bers, shall be registered in the office of the registrar; and that in each intermediate year between such periodical balance-sheets or valu- ations, there shall also be registered a statement containing authentic infor- mation on the following particulars : — The amount of receipts during the year for premiums on policies. The amount of expenses during the year. The number and amount of new policies issued. The total number and amount of liabilities on all current policies. ' The total amount of premiums receivable on the same. The whole amount of capital; distinguishing the manner in which invested. How much in cash. How much in Q-overnment securities. How much in mortgage upon real estate. How much in other securities ; Specifying their nature. APPENDIX. 307 The average rate of interest received upon each class of invest- ments. The amount of such investment, if any, on which the payment of interest is in arrears. The table of mortality, and the rate of interest used in calculating the premiums. XIII. The evidence which your committee has obtained, leads them to believe that some such general statement would be of much greater utility in enabling the public to come to a correct judgment as to the condition of the office, than any form of account that could be adopted. In addition to the above, in the case of proprietary companies, the amount of subscribed capital should be stated, and also the amount actu- ally paid up, and how invested. XIV. It has been teought to the attention of your committee, that the business of assurance offices is becoming every year of a more varied character. XV. This your committee regard as the necessary result of the advance- ment of the science on which it is based ; but there is a class of business which some offices have undertaken, viz., that of receiving deposits of money at interest, which appears to your committee totally inconsistent with the business of life assurance. XVI. Tour committee will conclude their report by calling attention to a part of the evidence which advocates the formation of an incorpo- rated society of actuaries, with a view to the advancement of that im- portant science, and also with a view to issue diplomas or certificates to persons qualified to practice as actuaries. If any efibrt should be made to induce Parliament to grant such an incorporation, the committee are of opinion, that it will be worthy of consideration ; but that further investigation would be needful before such measures should be adopted, as considerable diflFprence of opinion prevails on the subject among actu- aries themselves. 16th August, 1853. *53 Geo. III. c. 141. [*451] jin Act to repeal an Act of the Seventeenth Tear of the Reign of his present majesty, intituled " An Act for registering the Grants of Life Annuities, and for the tetter Protection of Infants against such Grants ;" and to substitute other Provisions in lieu thereof. Whereas it is expedient that an act passed in the seventeenth year of his present majesty, intituled "An Act for registering the grants of life Annuities, and for the-better protection of infants against such grants," 308 bunton's life assurance. should be repealed, and other provisions substituted in lieu thereof: May it therefore please your majesty that it may be enacted; and be it enacted by the king's most excellent majesty, by and with the advice and eon- sent of the lords spiritual and temporal, and commons, in this present parliament assembled, and by the authority of the same, that the said recited act shall be, and the same is hereby repealed, save and except so far as regards any annuities or rent-charges which have been granted before the passing of this act. II. And be it further enacted, that within thirty days after the execu- tion of every deed, bond, instrument, or other assurance, whereby any annuity or rent-charge shall, from and after the passing of this act, be granted for one or more life or lives, or for any term of years or greater estate determinable on one or more life or lives, a memorial of the date of every such deed, bond, instrument, or other assurance, of the names of all the parties and of all the witnesses there*b, and of the person or persons for whose life or lives such annuity or rent-charge shall be granted, and of the person or persons by whom the same is to be bene- ficially received, the pecuniary consideration or considerations for grant- ing the same, and the annual sum or sums to be paid, shall Vk enrolled in the High Court of Chancery, in the form or to the effect following, with such alterations therein as the nature and circumstances of any particular case may reasonably require: [See Table next page.] otherwise every such deed, bond, instrument, or other assurance, shall be null and void to all intents and purposes. III. Provided always, and be it further eacted, that if any such an- nuity shall be granted by or to or for the benefit of any company exceed- ing in number ten persons, which company shall be formed for the purpose of granting or purchasing annuities, it shall be suflScient in any such memorial to describe such company by the usual firm or name of trade. IV. And be it further enacted, that in every deed, bond, instrument, or other assurance, whereby any annuity or rent-charge shall, from and after the passing of this act, be granted or attempted to be granted, for one or more life or lives, or for any term of years or greater estate de- terminable on one or more life or lives, where the person or persons to whom such annuity shall be granted or secured to be paid, shall not be r^AKQ-i entitled thereto beneficially, the name or names of the person or L -1 persons who is or are intended to take the annuity *benefioially shall be described in such or the like manner as is hereinbefore required in the enrolment, otherwise every such deed, instrument, or other assu- rance shall be null and void. V. And be it further enacted, that in case any person or persons by whom any annuity or rent-charge, of which such particulars as aforesaid are hereby required to be enrolled, shall for the time being be payable, «hall be desirous of obtaining a copy of every or any deed, bond instru- APPENDIX. 309 10 Aug. 1818. Same date. Same date. a 3 S. B " fD O Indentures ") of lease and V- release. J Bond in penalty of £1,200. Warrant of at- torney to con- fess judgment on the same bond. l-C II A. B. of one part. 0. D. of the other part. A. B. to 0. D. A. B. to I. K. and L. M. attorneys of Court to King's Bench. o rri f^g hn feg °^ °^ ^ jiidge of the court, in which *such judgment, de- L J cree, or order shall have been obtained, upon motion or summons for a rule tp show cause, or other motion or summons consistent with the practice of the'court, without any suggestion or scire facias in that behalf; and that it shall be lawful for such court or Judge to make absolute or discharge such rule, or allow or dismiss such motion, (as the case may be,) and to direct the costs of the application to be paid by either party, or to make such other order therein as to such court or judge shall seem fit ; and in such cases such form of writs of execution shall be sued out of the courts of law and equity respectively for giving effect to the provi- sion in that behalf aforesaid as the judges of such courts respectively shall from time to time think fit to order; and the execution of such writs shall be enforced in like manner as writs of execution are now en- forced : Provided that any order made by a judge as aforesaid may be discharged or varied by the court, on application made thereto by either party dissatisfied with such order : Provided also, that no such motion shall be made, nor summons granted, for the purpose of charging any shareholder or former shareholder, until ten days notice thereof shall have been given to the person sought to be charged thereby. LXIX. And be it enacted, that all penalties and forfeitures inflicted or authorised to be imposed by this Act, and all costs and expenses for which any person may be liable under this Act or by virtue of any bye- law, and the recovery of which has not been otherwise specially herein- before provided, shall and may be recovered, by any person who shall proceed for the same, before any two of her Majesty's justices of the peace of the county, city, or place where the offender or person liable to pay such costs or expenses shall reside, or where the offence shall be com- mitted. LXX. Provided always, and be it enacted, that all penalties and for- feitures recovered under this Act, and not otherwise specially appro- priated, shall be applied as follows : One half thereof shall be paid to the person who shall sue or proceed for the same, and the other half to her Majesty's use, and shall be paid to the sheriff of the county, city, or town where the same shall have been imposed; and that all convictions before justices shall be returned to the court of Quarter Sessions under the provisions of an Act passed in the third year of his late Majesty King George the Fourth, intitled " An Act for the more speedy return and levying of fines, penalties, and forfeitures, and recognizances estreat- ed," and shall be paid to the sheriff of the county, city, or town, and shall be duly accounted for by him. LXXI. And be it enacted, that in all cases in which any penalty of forfeiture or any costs or expenses are recoverable before two justices of APPENDIX. £4i the peace under this Act, it shall and may be lawful for any one justice of the peace to whom complaint shall be made of any such oifenoe to summon the party complained of, and the witnesses on each side, before any two such justices ; and at the time and place mentioned in such sum- mons, or at any adjournment of such summons, the said two justices may hear and determine the matter of such complaint, and upon due proof thereof, either by confession of the party or by the oath of one or more credible witness or witnesses, give judgment or sentence on such com- plaint, *with costs to be allowed by such justices, although no r-^Ann-t information in writing shall have been exhibited or taken ; and L -1 aU such proceedings by summons, without information, shall be as good, valid, and effectual, to all intents and purposes, as if an information in writing had been exhibited ; and all penalties, forfeitures, and costs so adjudged may be levied by distress and sale of the goods and chattels of the party offending, by warrant under the hand and seal of any one jus- tice ; and in default of such distress the offender may be committed to prison by any one justice, by warrant under his hand and seal, there to remain for any time not exceeding three months, unless such penalties, forfeitures, and costs shall be sooner paid. LXXn. And be it enacted, that if any person shall be summoned as a witness to give evidence before such justices of the peace touching any matter which such justices are hereby authorised to inquire into, and shall neglect or refuse to appear at the time and place to be for that pur- pose appointed, without a reasonable excuse for such neglect or refusal, to be allowed by such justices, or appearing shall refuse to be examined on oath, and give evidence before such justices, then every such person shall forfeit for every such offence a sum not exceeding five pounds, to be levied and paid in such manner and by such means as are hereinbe- fore directed as to other penalties recoverabfe before justices under this Act. LXXm. And be it enacted, that every proceeding for any offence punishable on summary conviction by virtue of this Act shall be com- menced within six months after the commission of the offence, and not after. LXXIV. And be it enacted, that if any person shall think himself aggrieved by the judgment of such justices, he may, within one month next after such conviction, and upon giving ten days notice of appeal in writing to the party to whose favour such judgment shall have been given, stating the nature and grounds of appeal, and upon entering into recognisances, with two sufficient sureties, to the amount of the value of such penalty and costs, together with such further costs as shall be awarded in case such judgment shall be affirmed, appeal to the next general quarter sessions of the peace for the county, city, or place where such conviction shall have been made ; and the justices at such sessions are hereby empowered to summon and examine witnesses on oath, and to licar and finally determine the matter of such appeal, and to award such 342 BUNYON'S LIFE ASSURANCE. costs as the court shall think reasonable to the party in' whose favour such appeals shall be determined. LXXV. And be it enacted, that no conviction or other proceeding before justices under this Act shall be set aside for want of form, nor be removed by certiorari or otherwise into any of her Majesty's superior courts of record. LXXVI And be it enacted, that in any case to which a penalty is annexed by this Act the whole or any part of such penalty may be re- covered by action of debt in any court now or hereafter having compe- tent jurisdiction, by any person who shall sue for the same ; and that in r*48^1 ^^^^y ^^'^^ action for the recovery of such penalty, so *much of L -I such penalty as is sought to be recovered shall be endorsed on the writ of summons, and the plaintiff shall not be entitled to recover a greater sum than the sum so endorsed ; and if the party suing for any such penalty recover the same or any part as aforesaid he shall be en- titled to full costs of suit. LXXVII. And be it enacted, that it shall not be lawful for any per- son to commence or prosecute any action, bill, plaint, information, or pro- secution in any of her Majesty's superior courts, for the recovery of any penalty or forfeiture incurred by reason of any offence committed against this Act, unless the same be commenced or prosecuted in the name and with the consent of her Majesty's attorney -general ; and that if any action, bill, plaint, information, or prosecution, or any proceeding before any justices as aforesaid, shall be commenced or prosecuted in the name of any other person than is in that behalf before mentioned, the same shall be and are hereby declared to be null and void. LXXVIII. And be it enacted, that with regard to every act, instru- ment, or writing by this Act required or authorised to be done or to be made or executed by the committee of privy council for trade, that if the same purport to be so done, made, or executed by or on behalf of the said committee, and be signed by one of the secretaries of the said com- mittee, and (if it require a seal) be sealed by the seal of the said com- mittee, then it shall be deemed to be sufficiently done, made, or executed, to all intents and purposes. ' LXXIX. And be it enacted, that it shall be the duty of the registrar of joint stock companies to make a report annually to the said committee of privy council for tra^de, setting forth, 1. A list of companies provisionally registered during the past year : 2. A list of companies completely registered during the past year: 3. A list of cases in which application shall have been made for the enforcement of penalties for failure to register, and the pro- ceedings, whether by prosecution or otherwise, taken in conse- quence of such applications, and the results of such proceedings : APPENDIX. 343 4. A list of companies which shall have been provisionally registered, but which have not obtained complete registration : 5. A return of the regulations made by the said committee with regard to the returns required to be made by companies : 6. A return of persons appointed to the office of registrar of joint stock companies, and other officers and clerks, and of their salaries or other remunerations, and of the rules made for the regulation the said office : 7. A return of the amount of all fees paid for certificates of provisional or complete registration, and for every other purpose : 8. A return of the scale of fees appointed by the commissioners of her Majesty's treasury for the services to be performed by the regis- trar, and of the respective amounts of such fees : . *9. A return of the cases in which the companies had failed t-^aqa-, to appoint auditors, and of the proceedings taken thereon : L J 10. A return of prosecutions under this Act for any offences not here- inbefore specified: 11. A return of the number of bankruptcies of joint stock companies, and of the amount of the debts and assets of such companies re- spectively : 12. A return of modifications made by the committee of privy council for trade in pursuance of this Act, in the conditions and regula- tions to be observed by companies, whether existing or future : And that, within six weeks after the meeting of parliament next after the first day of January in every year, such report shall be laid before both houses of parliament. LXXX. And be it enacted, that this Act may be amended or repealed by any act to be passed in this present session of parliament. SCHEDULES to which this Act refers. SCHEDUDE (A).— See § 7. List of Purposes for which > provision is required to be made by the Deed of Settlement of a Company before such Company can obtain a Certificate of complete Kegistration. • I. Ihr the holding of Meetings, and the Proceedings thereat; viz. 1. For holding ordinary general meetings of the company once at the least in every year, at some appointed place and time. 344 bunton'b life assurance. 2. For holding extraordinary meetings, either upon the convening of the directors of the company, or upon the requisition of not less than five shareholders. 3. For the adjournment of meetings. 4. For the advertisement and notification of meetings, and ihe business to be transacted thereat. 5. For defining the business which may be transacted at meetings, ordinary and extraordinary, or at adjournments thereof. 6. For the appointment of the chairman at any meeting of the com- pany. 7. For ensuring that each shareholder shall have a vote : and where it is not provided that each shareholder is to have a vote in respect of each share, the appointment of the number of votes to be given by shareholders in respect of any number of shares held by them. 8. For enabling guardians, trustees, and committees to vote in respect of the interests of cestui que trusts, lunatics, and idiots. P^.g-, 9. For ascertaining what shall be the majorities or numbers of L J *votes requisite to carry all or any questions, and where a simple majority is to decide. 10. For describing the mode and form of the appcJintment of proxies to vote in the place of absent shareholders, and for limiting the number of proxies which may be held by any one person. 11. For determining questions where the votes are equally divided, whether by the casting vote of the chairman or otherwise. II. — For the Direction of the Execution of the Affairs of the Company and the Registration of its Proceedings: viz. 12. For prescribing the maximum number of directors to be appointed; the number of shares or the amount of interest by which they are to be qualified; the period for which they are to hold office, so that at least one-third of such directors, or the nearest num- ber to one-third, shall retire annually, subject to re-election if thought fit; and for the determination of the persons who shall so retire in each year. 13. For filling up vacancies in the office of the directors as they occur; but not BO as to enable the board of directors (if the filling up be assigned to them) to fill up such vacancy for a longer period than until the next general meeting of the company, 14. For the continuance in office of directors in default of election of new directors. 15. For regulating the meetings of directors, the quorum thereof, the proceedings thereat, and the adjournment thereof; 16. For recording the attendance of directors, and reporting the same to the shareholders. 17. For the determination of questions upon which the votes of the directors may be equally divided. APPENDIX. 345 18. For the appointment of a person to take the chair of the directors, and for supplying any vacancy in the office of chairman. 19. For the appointment of the chairman of the directors at meetings at which the permanent chairman may not be present. 20. For regulating the appointment by the directors of officerSj clerks, and servants. 21. For recording the proceedings of the directors. 22. For keeping and entering of minutes of such proceedings. 23. For ensuring the safe custody of the seal of the company, and for regulating the authority under which it is to be used. 24. For proyiding for the remuneration of the auditors of the accounts of the company. 25. For providing for the appointment of a secretary or clerk (if any) of the directors. 26. For providing for the receipt, custody, and issue of moneys be- longing to the company. 27. For providing for the keeping of books of account, and for periodi- cally balancing the same, 28. For keeping the records and papers of the company. 29. For prescribing and regulating the duties and qualifications of officers. 30. For determining what books of accounts, books of registry, and other documents may be inspected by the shareholders of the company, and for regulating such inspection. *in. — For the Distribution of the Capital of the Company into ritAoo-i Shares, or for the Apportionment of the Interest in the Pro- •- J perti/ of the Company; viz. 31. For determining whether calls or instalments of payments (if any) are to be made in certain amounts and at fixed periods, and if so, what, amounts and at what periods. 32. For determining whether, on failure to pay any instalments or calls, the share shall or shall not be forfeited, and if forfeited, whether and on what conditions the property in such share may be recovered by the shareholder. 83. For determining whether, and under what circumstances, and on what conditions, the capital of the company may be augmented by the cenversion of loans into capital or otherwise, or by the issue of new shares or otherwise. 34. For determining whether the amount of new capital shall or shall not be divided so as to allow such amount to be apportioned amongst the existing shareholders. 'IV. — For the harrowing of Money; viz. 35. For determining whether the company may borrow money, and if so, whether on bond or mortgage, or any other and what security. 346 BUNTON'S LIFE ASSURANCE. 36. For determining whether the directors may contract debts in con- ducting the affairs of the company, and if so, whether to any definite extent. 37. For determining whether and to what extent the directors may make or issue promissory notes. 38. For determining whether and to what extent the directors may accept bills of exchange. SCHEDULE (B.)— See § 7. Certificate required to be endorsed on the deed of settlement, and signed by two directors. We do hereby certify, that the within-written deed is the deed of set- tlement of company, and that to the best of our knowledge the particulars therein contained are correctly set forth. [*487] ^SCHEDULE (C.)— See § 4. Retitrn made pursuant to the "Joint-Stock Companies Registration and Begulation Act," Vict. c. ., 1844. For Provisional Registration. Name and Business of the Company. Name of the proposed company. Business or purpose. Place of business (if any). - APPENDIX. Promoters of the Company. 347 Names. Occupations. Place of business (if any). Places of residence. %* The names of the provisional o£5cers may be added to this return under a separate head, and the subscribers may be given in a similar manner. Provisional Committee or Provisional Directors. Names. Occupations. Places of busi- ness (if any). Places of residence. Signature of consent to act on committee or as director. - Dated this day of 18 ^Signature.'^ •SCHEDULE (D.) [*488] Eettjen made pursuant to the "Joint-Stock Companies Registration and Regulation Act," Vict. c. ., 1844. Change of Place of Business. Name of Company. Business or purpose. Former place [or princi- pal place, if more than one,} of business. Present place [or princi- pal place] of business. [Date.'] [Signature.] 348 BUNTON'S LIFE ASSUKANCE. SCHEDULE (E.)— See § 11. Return made pursuant to the "Joint-Stock Companies Registration and Regulation Act," Vict. c. ., 1844. Transfer of Shares. Name of company. Business orpurpose. Place [or principal place, if more them one], of business. Name and place of abode of person by whom transfer is made. Name and place of abode of person to whom transfer is made. Distinctive numbers of the shares trans- ferred. Date of transfer. \_I)ate.'] [Signaiu/re.'\ [*489] *SCHEDULE (F.)— See § 12. Return made pursuant to the "Joint-Stock Companies Registration and Regulation Act," Vict. c. ., 1844. Change of Shareholders. Name of company. Business or purpose. Place [or principal place, if more than one], of business. APPENDIX. 349 Persons known to have ceased to be shareholders (except by transfer) since the last return, dated the day of Name. Place of abode. Distinctire number of shares. Persons known to have become members (except by transfer) since the last return, dated the day of Name. Place of abode. Distinctive number of shares. Persons whose names have become changed by marriage or otherwise. Former name. Former place of abode. Present name. Present place of abode. Distinctive number of shares. [-Date.] ^Signatwre.'\ 350 BUNTON'S LIFE ASSURANCE. [*490] *SCHEDULE (a.)— See § 56. Return made pursuant to the "Joint-Stock Companies Registration and Regulation Act," Vict. e. ., 1844. ^ For registration of existing companies, name of the company, business, &c. Name of the company. Business or purpose. Place of business, with the branches (if any). SCHEDULE (H.) Return made pursuant to the "Joint-Stock Companies Registration and Regulation Act," Vict. c. ., 1844. Corrected Return. [ Gopy of former incorrect Eeiurn.l (Copy.) Amended return, with correct names and descriptions [in such of the preceding forms as are applicable to the case under the provisions of the foregoing Jict.'^ [Date.'] [Signatme,'^ SCHEDULE (I.)— See § 50. Certificate of Share. The Company, first completely registered on the day of 18 . Number This is to certify, that A. B. of is the proprietor APPENDIX. 351 of the share, number of the company, •subject to the regulations of the said company, and that up to rs^AQ-i -, this day there has been paid up, in respect of such share, the t J sum of Given under the common seal of the said company, the day of in the year 18 . [^Signature of Secretary.'^ (l. B.) SCHEDULE (K.)— See § 53. Transfer of Shares. I, A. B. of in consideration of the sum of ' paid to me by C. D. of do hereby transfer to the said share ^ shares,] numbered in the undertaking called the company, to hold unto the said his executors, administrators, and assigns, [or successors and assigns,] subject to the several conditions on which I hold the same at the time of the execution hereof. And I the said do hereby agree to take the said share [or shares,] subject to the same con- ditions, and to the provisions of the deed or deeds of settlement of the said company. As witness our hands and seals the day of [SignatureJ^ 10 & 11 ViOT. c. 78. An Act to amend an Act for the Registration, Incorporation, and Regu- lation of Joint Stock Companies. [22d July, 1847.] Whereas by an Act passed in the session of Parliament holden in the seventh and eighth years of the reign of her present Majesty, inti- tuled "An Act for the Registration, Incorporation, and Eegulation of Joint Stock Companies," it is amongst other things enacted, that on the complete registration of any company being certified in the manner pre- scribed in the said Act, it shall be lawful for such company, amongst other things, to purchase and hold lands, tenements, and hereditaments in the name of such company, or of the trustees or trustee thereof, for the purpose of occupying the same as a place or places of business of the said company, and also (but nevertheless with a license, general or special, for that purpose, to be granted by the Committee of Privy 352 bxjnyon's life assurance. Council for Trade, first had and obtained,) such other lands, tenements, and hereditaments as the nature of the business of the company may require : and whereas doubts have in certain cases arisen as to the mean- ing of the said provision, and it is expedient that such doubts should be removed, and that further provision should be made as to the granting of such licenses as aforesaid by the said committee of privy council ; be it r*4Q21 *'i^i'^f<'rs enacted, by the Queen's most *excellent Majesty, by L J and with the advice and consent of the lords spiritual and tem- poral, and commons, in this present Parliament assembled, and by the authority of the same, that whenever any company, having obtained a certificate of complete registration under the said Act, is desirous of pur- chasing or holding, taking on lease, holding on mortgage, or in any other manner acquiring an interest such as bodies politic or corporate are by law incapacitated from acquiring in any lands, tenements, or heredita- ments, other than such as it is under said Act entitled to purchase and hold, as a place or places of business, it shall be lawful for such company to make application to the lords of the said Committee of Privy Council for Trade for a license to purchase, take, or hold the same, and the lords of the said committee shall thereupon take such application into their consideration, and may, if they see fit, grant a license to such company accordingly; and in such license the lords of the said committe may either authorise such company to purchase, take, and again let, sell, or otherwise dispose of such lands, tenements, or hereditaments as may in the license be particularly described, and to hold the same for such time as may be specified in such license, or in any license to be subsequently and from time to time granted by the said Committee of Privy Council for Trade on the application of such company, or may authorise them from time to time to acquire, dispose of, and again acquire such lands, tenements, or hereditaments, as the company may from time to time desire, or may authorise them to hold lands, tenements, or hereditaments on mortgage, and may frame such license in such manner, and insert in the same such conditions, as with reference to the special circumstances of each case they may deem expedient ; and^such license shall be held to confer upon such company the rights and powers therein expressed to be given in respect of purchasing, holding, and disposing of lands, tene- ments, or hor^ditaments as^aforesaid. II. And be it enacted, that there shall be presented to both houses of Parliament in each year, within fourteen days after the commencement of the session, an account of the several licenses, and renewals or exten- sions of licenses, so granted by the Committee of the Privy Council for Trade, specifying the nature and extent of the powers contained in each of such licenses, and of the lands so authorised to be held, and also, in the case of any renewal or extension of such licenses, an account of the extent of land actually held by the company at the time of fiuch renewal or extension, and the counties within which such lands are situate. III. And whereas cortain licenses haye from time to time been granted by the lords of the said committee in pursuance of the said • APPENDIX. 353 Act : be it enacted, that Jn case any doubt arise as to the effect thereof, it shall be held that any license so granted before the passing of this Act is valid and effectual for die purposes therein expressed, and shall be deemed sufficient evidence that the lands, tenements, or hereditaments therein described or referred to, or which have been purchased, taken, held, or disposed of under the authority thereof, are such as the nature of the business of the company requires. rV". And whereas by the said recited Act the promoters of any com- pany formed for any purpose within the meaning of the said Act are, amongst other things, required to return to the office for the pi^jqqT *registration of joint stock companies a copy of every prospectus *- J or circular, handbill or advertisement, or other such document, at any time addressed to the public, or to the subscribers or others, relative to the formation or- modification of such company : and whereas the regis- tration of such prospectuses and advertisements has been found to be very burdensome to the promoters of such companies, and it is desirable to relieve such promoters from the necessity thereof, and in lieu thereof to substitute the provisions hereinafter contained : be it therefore enacted, that so much of the said Act as is lastly hereinbefore recited shall be and the same is hereby repealed. t V. And be it enacted, that, in addition to the particulars which the promoters of every such company as aforesaid are by the said Act required to return to the said office for the registration of joint stock com- panies, when and as from time to time they shall be decided on, such promoters shall also return, and they are hereby required to return, to the said office, the following additional particulars, so soon as the same shall be be decided on ; (that is to say) First. The amount of the proposed capital of the company ; Second. The amount and number of the shares into which the same is to be divided : And if the said company be dissolved, or be incorporated by Act of Par- liament, or by royal charter, or by the Queen's letters patent, or be in any way withdrawn or supposed to be withdrawn from the operation of the said Act, the promoters of the company shall forthwith give notice thereof to the registrar of joint stock companies. VI. And be it enacted, that in case of any alteration being made in any of the particulars registered by tire promoters of any company in pursuance of the said recited Act or of this Act, such alteration shall forthwith be returned to the registrar of joint stock companies ; and if such return be not made within one month after such alteration has been made and decided upon, any promoter of the company shall be liable to forfeit for each and every alteration not returned as aforesaid any sum not exceeding twenty pounds. VII. And be it enacted, that it shall not be lawful for the promoters of any company, or for any person connected with any company, at any Sepi£M££B; 1853. — ^23 354 bunton's lite assu.banoe. time before such company has obtained a certi3oate of complete registra- tion under the said recited Act, to issue or publish or in any manner address or cause or suffer to be addressed to the public, or to the sub- scribers or others, any prospectus or circular, handbill or advertisement, or other I such document relative to the formation or modification of the company^' containing any statement at variance with the particulars which may have been returned to the registrar of joint, stock companies under the said recited Act or this Act, nor to issue, publish, or in any manner address or cause or suffer to be addressed to the public, or to the sub- scribers' or others, any such prospectus, circular, handbill, or advertise- ment, containing any statements, of particulars which are by the said recited Act or by this Act directed to be returned to the registrar of joint stock- companies, until such particulars have been. returned; and if any prospectus or circular, handbill or advertisement, be issued, published, or: addressed to the public, or to the subscribers or others, contrary r*4.Q4.1 ^^^^^°> ^°y promoter »of the company shall be liable for: each Li J and every sueh. issue or publication to forfeit any sum not exceed- ing> twenty pounds. iVIII. And be it enacted, that the penalties imposed by this Act shall be sued for, recovered, and applied in the same manner as penalties imposed by the said recited Act are therein diregud to be sued for, reco- vered, and applied respectively, IX., And be it enacted, that this Act may be amended or repealed by sny Act to be passed in .the .present session of Parliament, INDEX OF PRIYATE STATUTES. OBTAINED BY INSURANCE COMPANIES.(a) Aberdeen Fire and Life Assurance Company. See "Scottish Provincial." Accidental Death Insurance Company, and Rail- 1 i c jj, i c Yiot r 5fi way Insurance Company. Act for amalgamating. J Albion Insurance Company. Acts to enable the company to enrol annuities. Alliance British and Foreign Fire and Life Assur- ance Company. Enabled to sue and be sued in the name of their chairman. Alliance British and Foreign Fire and Life Assur- ance Company. Act for carrying into effect an agreement entered into between this company and the Suffolk and General County Amicable Insur- ance Office. Alliance Marine Assurance Company. Enabled to sue and be sued, &c. Alliance Marine Assurance Company. Repealing Act of 6 Geo. 4., and granting powers. Amicable Society for a perpetual Assurance Office. Act to enable the corporation to lend money upon mortgage, &c. Argus Life Assurance Company. Enabled to sue and be sued in the name of any one director, or of the chairman or secretary. Architects', Civil Engineers', Builders', and General * Fire and Life Insurance, Annuity, and Reversion- ary Interest Company. Act to change the name of, &c. Atlas Assurance Company. Act to enable the com- pany to sue and be sued in the name of the chair- man or secretary. Birmingham Fire, Office. Act to enable the com- pany to sue and be sued, &c. 47 Geo. 3. fsess. 1.) c. 31. 4:1. Geo., 3. (sess. 2.) c. 86. 49 Geo. 3. c. 125. 5 Geo. c. 4. 137. :13&14Vict. c. 1. ■ 6 Geo. 4. c. 202. 4 & 5 Wm. 4. c. 34. 8 & 9 Vict. c. 8. 5 & 6 Will. 4. 0. 76. ■ 13 & 14 Vict. c. 10. 54 Geo. 3. c. 79. 50 Geo. 3. c. 90. (a) .The Acts in this Index, prior to the 2 & 3 Vict., have been taken from " Yar- don's Index of Local and Personal and Private Acts, from 1798 to 1839." The author has omitted some Acts obtained by companies which he understands to have ceased to exist, and is apprehensive that he may have retained some others ; but he has thought it better to r^m the risk of mentioning some expired Acts than of omitting any that may be still in existence. 356 bttnyon's life assurance. ■ 50 Geo. 3. c. 89. 4 & 5 Vict. c. 9. 5 Geo. 4 c; 158. 2 & 3 Will. 4 0. 38. 84. Birmingham Life Assurance and Annuity Office. Act to enable the company to enrol annuities. Britannia Life Assurance Company. Act for regu- lating, &c. British Annuity Company, &c. Act to enable the company to sue and be sued, &c. British Commercial Insurance Company. Act en- abling the company to sue and be sued in the name of a director; Act amending the above, }in"&llYict and giving power to sue and be sued in the name I of the secretary. J British Empire Mutual Life Assurance Company. | Act for the better regulation of the company, to >■ 15 & 16 Vict. c. 53. enable it to take and hold property, &c. J British Guarantee Association. Act to incorporate. 9 & 10 Vict. c. 375 Caledonia Insurance Company. Act of incorpora- tion, for enabling the Company to sue and be sued, to take and hold property, for confirming the regulations of, and for other purposes. Church of England Life and Fire Assurance, Trust,"! and Annuity Company. Act to enable the com- }■ 4 & 5 Vict. c. 92. pany to sue and be sued in the name of an officer. City of Glasgow Life Assurance and Eeversionary] Interest Company. Act to enable the company }■ 5 & 6 Vict. c. 65. to sue and be sued, &c. Clerical, Medical, and General Life Assurance Com- pany. Act to enable the company to sue and be I sued, to alter certain provisions of their deed of j constitution, and for other purposes. Colonisation Assurance Company. Act of incorpo- ration. Commercial Insurance Company (Dublin.) To sue i in the name of their secretary. County Fire Office. Act for suing in name of the 1 managing or any other director. ■ 9 & 10 Vict. c. 45. ■ 13 & 14 Vict. c. 9. 13 & 14 Vict. c. 21. ■ 48 Geo. 3. c. 96. ■ 57 Geo. 3. c. 11. District Fire Insurance Company of Birmingham. Act to incorporate by the name of " The District Fire Insurance Cofiipany," for enabling the said company to sue and be sued, and for other purposes. Dublin Commercial Insurance Company. To sue in the name of the secretary. Dublin Marine Insurance Company. For suing in the name of the secretary. Eagle Insurance Company. Act to enable the company to sue in the name of the secretary, and to enrol annuities. Economic Life Assurance Society. Enabled to sue and be sued in the name of one director or trustee. Edinburgh Life Assurance Company. Act to enable the company to sue and be sued in the name of an officer ; Act for conferring on the said company certain of the privileges of a cor- porate body, as to sue and to be sued, to hold pro- perty, and for other purposes. European Life Insurance and Annuity company. Act to regulate legal proceedings by and against, &c. Family Endowment Society. Proprietors of,, ena- bled to sue and be sued by one director, &c. 10 & 11 Vict. c. 4. 48 Geo. c. 96. 63 Geo. 3. c. 211. 53 Geo. 3. c. 207. ■ 3 & 4 Will. 4. c. 66. 3 & 4 Will. 4. c. 65. 8 & 9 Vict. c. 76. ■ 7 & 8 Vict. c. 48. 6&7WiU.4. c. 21. APPENDIX. 357 Farmers and General Fire and Life Insurance and Loan and Annuity Company. Act to enable tlie company to sue and be sued, &c. Forth Marine Insurance Company. Act to enable the company to sue and be sued, &c. • 3 & 4 Vict. c. 95. 5 & 6 Vict. c. 99. General Life and Fire Assurance Company Act' changing to this name that of the Protestant Dissenters' and General Fire and Life Assu- rance Company, and extending to the new com- pany the powers of 3 & 4 Vict. c. 20. General Reversionary and Investment Company. An Act to enable the company to sue and be sued, for facilitating the holding and transfer of the property by and from the present and future trustees, and for other purposes. Glasgow Marine Insurance Company. Act to ena- " ble the company to sue and be sued, &c. Globe Insurance Company. Act for incorporating. Globe Insurance Company. For enrolling annui- ties by the company. Globe Insurance Company. To enable the com-' pany to alter and amend some of the provisions of its deed of settlement. Guarantee Society. Act for regulating legal pro- ceedings by and against. Guardian Fire and Life Assurance Company. Act ' to enable the company to sue and be sued to alter certain provisions of the deed of settlement and to give further powers. Imperial Insurance Company. For suing in name of chairman or any other member of company. Imperial Insurance Company. Act to enable the company to alter some of the provisions of its deed of settlement, and better regulate the com- pany. Indemnity Mutual Marine Assurance Company. Act for regulating legal proceedings by and 10 & 11 Vict. c. 1. 14 & 15 Vict. c. 130. 6 & 7 Vict. c. 107. 39 Geo. 3. c. 83. 47 Geo. 3. (sess. 1.) c. 30. 47 Geo. 3. (sess. 2.) c. 87. 49 Geo. 3. c. 123. 7 & 8 Vict. c. 39. 5 & 6 Vict. c. 64. 13 & 14 Vict. c. 25. Kent Fire Insurance Company. Enabled to sue and be sued in the name of their secretary. Kent Fire Insurance Company. Acts dissolving company. Licensed Victuallers' and General Fire and Life Assurance Company. Enabled to sue and be sued in the name of their chairman, &c. Licensed Victuallers' and General Fire and Life Assurance Company. Act to change the name to " The Monarch Fire and Life Assurance Com- pany," and for' enabling the company to sue and be sued. Liverpool Fire and Life Assurance Company. En-' abled to sue and be sued in the name of their chairman. Liverpool Fire and Life Insurance Company. To ' change the name, and for other purposes. Liverpool Marine Assurance Company. Enabled to sue and be sued in the name of the chairman or of one director. f 54Geo.3. c. 12. 5 & 6 Vict. c. 66. 5 & 6 Vict. c. 67. 5 Geo. 4. 0. 80. 5 Geo. 4. c. 40. 7 & 8 Geo. 4. c. 60. 7 'Will. 4. c. 12. 13 & 14 Vict. c. 18. i- 6 & 7 'Wm. 4. c. 119. 10 & 11 Vict. c. 268. ■ 2 & 3 Will. 4. c. 1. 858 BUNYON'S LLPS ASSUEANCE. London Life Assoeiation. Act for enrolling annui- ties. London Assurance. Act to enable the corporWion- to purchase annuities upoa or for lives, &ci ■ , London Assurance. Act ,to consolidate the stock and powers of the corporation of " The London Assurance of Houses and Goods from Fire," with the stock and powers of the corporation of " The London Assurance," and to confer on the last-named corporation the powers of " The Lon- don Assurance Loan Company," and to give additional powers to the London Assurance. 47 Geo. 3. o. 32. 11 Geo. 4. c. 74. 16 Vict. c. 1. Marine Insurance Company. Enabled to sue and 1, be sued, &c J Monarch. See " Licensed Victuallers." 3 & 4 Vict. c. 94. National Loan Fund Life Assurance Society. En-1 abled to sue and be sued in the name of the ?■ 1 & 2 Vict c. 92. chairman, secretary, or one director. National MercS,ntile Life Assurance Society. En- abled to sue and be sued in the name of a nomi- J- 10 & 11 Vict. c. 269. nal party, and. for other purposes. Neptune Marine Insurance Company. For regulat- ] ing legal proceedings for and against. North British Insurance Company. Act to enable ' the company to purchase annuities, to take and hold property, invest money upon mortgage, and for other purposes. Northern Assurance Company. Act for incorpo- rating under this name the North of Scotland Fire and Life Assurance Company, for enabling the company to sue and be sued, to take, hold and transfer property, for confirming the rules and regulations, and for other purposes. North Wales and Shropshire Assurance Company. ' Enabled to sue and be sued in the name of the managing director. Norwich Union Society for the Insurance of Lives ' and Survivorships. Act to enable the company to sue and be sued in the name of the secre- tary, &c. • 4 & 5 Vict. c. 93, 8 & 9 Vict. c. 28. 11 & 12 Vict. c. 46. 7 "Will. 4. c. 87. 53 Geo. 3. c. 215. Ocean Assurance Company. Enabled to sue andl be sued in the name of the chairman or one V- 4 & 5 Will. 4. c. 9, director. } Patrick, St., Assurance Company of Ireland. Bna-1 abled to sue and be sued in the name of the >5 Geo. 4. c. 160. secretary, or of one member. \ Patriotic Assurance Company of Ireland. Enabled' to sue and be sued in the name of their secre- tary, or of one member. Phoenix Assurance Company of London. Act to' enable the company to sue and be sued in the name of the secretary, &c. Presbyterian Widows' Fund Association. Act for' incorporating the society, for providing annui- ties, &c. 5 Geo. 4. c. 154. ■ 53 Geo. 3. c. 212. ■ 15 & 16 Vict. c. 112. APPENDIX. 359 Protestant Dissenters' and' General Life and Fire Insurance Company. Enabled tb sue &nA be sued in the name of the chairman, deputy chair- man, or of any one of the directors, or of the secre- tary. See "General Life and Fire Assurance Company." Provident Institution for enrolling Annuities. Ena- bled to sue, &c. ■3&4 Vict. c. 20. 4:1 Geo. 3. (sess. 1) c. 34. 50 Geo. 3. 32. 12 & 13 Vict. c. 40. 15 & 16 Vict. c. 100. 8 & 9 Vict. c. 146. Railway Passengers' Assurance Company. Act to confer certain powers. Railway Passengers' Assurance Company. Act for conferring additional facilities. Reversionary Interest Society. Act for regulating legal proceedings, &c. Rock Life Assurance Company. Act to enable the ~ company to sue and be sued, and alter certain provisions of the deed of settlement, and to give further powers. Royal Exchange Insurance Company (Ireland) Royal Exchange Assurance Company. Enabled to ] advance money on freehold, copyhold, or lease- > 6 Geo. 4. c. hold estates. ) 12 & 13 Vict. c. TO. 49 Geo. 3. c. 182. 37. Scotland, Life Assurance Company of. To sue, &c. Scottish Amicable Life Assurance Society. Act to incorporate, to enable the company to sue and be sued, and for other purposes. Scottish Equitable Life Assurance Society. Act for ' incorporating, confirming the rules and regula- tions, and enabling the society to sue and be sued, to take and hold property, and other purposes. Scottish Marine Insurance Company, To sue and be sued, &c. Scottish Provident Institution. Act to enable the company to sue and be sued, &c. Scottish Provincial Insurance Company. Act for Incorporating under this name the Aberdeen Fire and Life Assurance Company, &o. Scottish Union Insurance Company. Act to enable the company to pxu-chase annuities and invest -money on securities in England and Ireland. Scottish Widows' Fund and Life Assurance Com- pany. Act to enable the company to sue and be sued, &c. Shropshire and North Wales Assurance Company. Act to enable the company to sue and be sued &c. Standard Life Assurance Company. Act to enable the company to sue and be sued in the name of manager, &c. Standard Life Assurance Company. Act to amend and alter some of the provisions of, &c. Suffolk and General County Amicable Assurance Office. See " AUiance." Sun Fire Office Company. Act to enable the com- pany to sue, &c. in the name of the treasurer. Sun Fire Office Company. Act to remove doubts as to the validity of life annuities granted or pur- chased by. 2 & 3 Will. 4. c. 81. 12 & 13 Vict. c. 22. ■ 10 & 11 Vict. c. 35. ■ 4 &. 5 Vict. c. 96. ■ 11 & 12 Vict. c. 106. • 15 & 16 Vict. c. 48. 10 & 11 Vict. c. 34. 3 & 4 Vict. c. 41. T Will. 4. c. 87. - 2 & 3 Will. 4. c. 81. . 8 & 9 Vict. c. 76. 4 & 6 Will. 4. c. 36. ■ 54 Geo. 3. c. 9. - 7 & 8 Geo. 4. c. 22. 360 bunyon's life assueance. Sun Life Assurance Society. Act to enable the company to sue, &c. in the name of the chairman or secretary. Sun Life Assurance Society. Act to enable the managers to appropriate profits among the par- ties assured. ■ 54 Geo. 3. c. 8. 1 Will. 4. c. 47. Union Society (Fire and Life).' Act to enable the" company to sue and be sued in the name of the chairman or secretary. United Kingdom Life Assurance Company. Act' to enable the company to sue or be sued, &c. Universal Life Assurance Company. Act to enable' the company to sue and be sued in the name of the actuary, &c. University Life Assurance Society. Act to enable ] the, company to purchase annuities for lives, and Ic t, g wjii 4 „ 4 to lend money or stock upon mortgage, for the | 55 Geo. 3. c. 46. • 4 & 5 Will. 4. c. 38. ■e&r WiU.4. c. 54. money ( purpose of investment. West of England Fire and Life Assurance Com- pany. Act to enable the company to sue and be sued, &c. ; arid Act to amend. Westminster Life Insurance Society. Act to enable' the company to sue and be sued, &c. 54 Geo. 3. c. 10. 4 & 5 Win. 4. c. 37. • 54 Geo. 3. c. 179. Yorkshire Fire and Life Insurance Company. Act 1 to enable the company to sue and be sued, &c. J 1 & 2 Will. 4. c. 7. INDEX. The pages referred to are those between brackets [ ]. ABATEMENT, plea in, on the non-joinder of joint-contra tors, 337. ACCEPTANCE, of the proposal, 59. ACCIDENT, insurances against, 96. ACQUIESCENCE, in the acts of a majority, when binding, 139. effect of, upon unauthorised act of agent, 164. ACTION. An assignee solely entitled may bring his action in the name of the assignor, 328. and, if necessary, equity will compel the assignor to permit the use of his name upon a proper indemity against costs, 329. the non-possession of the policy may be a bar to an action, 329. the form of| to compel payment of the assurance moneys, 336. against a corporation, 336. upon a policy not under seal, may be brought against the subscribing direc- tors or any shareholders, 336. where the policy is under seal, it must be brought against the subscribing directors, 337. it is not imperative upon a claimant to sue the nominal party named in a private act, 338. but against a company completely registered, it must be brought in accord- ance with the act, 339. in what manner it is to be brought when the policy contains a clause limiting the individual liability of shareholders, 339. for money had and received, executor of debtor debited in account with the premiums of a policy on his life, after satisfaction of the debt and payment by the company, may recover the insurance moneys in an, 244. wiU Ue, by the office, when a fraud has been practised upon it, 327. will lie, by an annuitant, for the consideration, where the grantor avoids the grant for non-enrolment, 360. will lie, by the assured, to receive the premiums paid upon a void policy, 93. ACTUARY, the opinion of, in the valuation of a reversion, 229. the manner in which such an opinion should be given, 234. the provision of the Masters in Chancery Abolition Act for enabling the Court to call in the assistance of an, 271. ADMINISTRATION. See Probate. ADMINISTRATOR, the title of the — the validity of his receipt depends upon the grant of the ordinary, 315. one of several co-administrators can give a good discharge, 315. See Executor. AGE, the condition requiring proof of, 78. the course pursued by insurance offices when a mistake concerning the age his been inadvertently made, 79. admission of, 83. proof of, by extract from the registers, 313. secondaiy evidence of, 314. • j 362 BUNTON's lipe'assuranoe. AGENT, when employed to effect an insurance, his acts and knowledge are ■ those of the principal, 37. how appointed, 162. powers of general agents, 164. can only act to the extent of his authority, 164. cannot exceed it in case of an emergency, 164. subordinate or country, who may be, 165. cannot alter an insurance contract or revive a lapsed policy, 165. cannot receive a notice of assignment without an express authority, 166. his ordinary duties and responsibilities towards his principal, 166. duty of, towards the party making the proposal, 167. how far the solicitor of the company can be called its, 168. ALIENS, statute relating to, 307. alien friend, may insure and enforce the contract, except during a subsequent war, 308. may dispose of his policy by will, 309. alien enemy, British creditor possesses no insurable interest in the life of, 19. cannot insure, 308. any trader in an enemy's country is an alien enemy, 308. AMENDMENT OF THE LAW OP LIFE INSURANCE, recommendations for the, 386. ANNUITY, transactions, as usually resorted to to evade the statutes against usury, 219. redeemable reversionary, the grant of, is an ordinary mode of making an ad- vance upon the security of a reversion, 220. when the consideration for the sale of a reversion, must be of adequate value, 238. in the absence of a stipulation, the grantor of an annuity re-purchasing is not entitled to an assignment of the policy, 250. unless the whole transaction is a security only, 251. but he may stipulate for the assignment of any policy in force at the time, although the grantee may not be bound to keep it up, 256. the scope of the Annuity Act, 344. deed must be inroUed, although granted by a company, if not incorporated, 345. the memorial to be inroUed, 345. must be inrolled within thirty days, 346. when to be inroUed where one of the parties is abroad, 347. need not be inroUed unless the consideration is pecuniary, 347. the consideration for, must be bona fide paid, 347. the beneficial ownership must be apparent on the grant, 348. what grants are absolutely void, 348. the Annuity Act does not extend to. Ireland or Scotland, 348. agreements are not within the act, 349. the terms on which an annuity will be set aside, 349. it is the duty of the grantee to inrol the deed, 350. the remedy of the grantee when the annuity is set aside, 350. a Court of Equity wiU decree specific performance of a complete contract for the sale of an, 351. a sale of an, is void, where at the time the cestui que vie, unknown to the parties, is dead, 352. APPOINTMENT, does not require a consideration, 277. under a general power by the donee to his executors or administrators of a sum assured upon his life, makes the fund part of his personal estate, 296. ARBITEATION, settlement of disputes by, in ftiendly societies, 149. persons cannot by prior agreement oust the jurisdiction of the Courts of Law, 149. ASSIG-NEES, the rights of consecutive assignees inter se. Notice, 180,'et seq. an assignee for valuable consideration takes subject to aU the equijties attach- ing to the policy in the hands of the assignor, 185. but he may be in a better position than the assignor,, 185. for assignees in bankruptcy, see BaTikruptcy. INDEX. 363 ASSIGNMENT, at law, policies and other choses in action, are not capable of, 169. but they are so in eciuity, the contract for a valuable consideration raising n trust, 170. of the principal sum carries the bonuses, 186. assignments are usually by deed, 188. . transfer in lieu of, by surrender and re-grant, 188. any evidence of a contract operates as an, 189. the advantages of a deed in the case of a sale or mortgage, 190. ATTORNEY, power of, in an assignment, 190. expires on the death of the donor, 319. BANKER, is entitled by custom to the costs of realising his security in bank- ruptcy, although no written agreement has been signed, 200. BANKRUPTCY AND INSOLVENCY, the priority given to friendly societies on the .bankruptcy, &c., of their officers, 148. to complete an assignment against assignees, notice must be given to the office, and the policy delivered up, 175. but to affect the assignee, the policy must have been left in the hands of the assignor with his consent, 176. where no notice has been given, an assignment accompanied by delivery is void against assignees, and they may recover the policy in an action of trover, 177. ■ ._ _ but they cannot so recover it where a simple lien by deposit is only given, 177. the manner and time in which the policy vests in the assignees,178. the assignees must also give notice to the insurers, 179. concerning proof in, upon covenants for the payment of premiums, 194. although a sale for want of notice is void against the assignees, the purchaser has a lien for the amount of the premium paid by him, 195. costs of the equitable mortgagee in bankruptcy where no memorandum has been given, 200. fraudulent preference is, and voluntary settlement may be, an act of, 276. on the death of the bankrupt assured the right to recover vests in his execu- tor, 315. BEQUEST, a policy may be specifically bequeathed, 317. the bequest may be to a charity, 318. BONUS, follows the disposition of the principal sum assured, 186. and may be recovered in an action therewith, 343. BYE-LAW, every corporation may make, consistent with its charter or act of incorporation, 135. CHARTER, earliest date of, when granted to a Life Office, 117. a coinpany is bound to act in accordance with, 135. CHOSE in action, definition of, 169. See Assignment CODICIL, unattested, cannot be supported as a declaration of trust, 295. COMPANIES, popular division into three classes, the proprietary, mi?:ed, and mutual, 114. order in which the funds of a company are liable in discharging its liabili- ties, 115. the liability of a mutual insurer in a company fuUy established is scarcely ap- preciable, 115. incorporated. See Gorporations. empowered by letter-patent, 1 Vict. c. 73, 118. unincorporated prior to the Joint-Stock Companies' Registration Act, 120. operation of the act thereon, 123. COMPANIES COMPLETELY REGISTERED, 120. their formation, the certificate of provisional registration, ,123. the deed of settlement, 124. the certificate of complete registration, 125. the powers thereby conferred, 125. 364 BUNYON'S LIFE ASSURANCE. COMPANIES COMPLETELY B.TS,01ST1SKED— continued. the directors and their powers, 126. general meetings, 127. the auditors, 127. the balance sheet and registered documents, 128. may he inspected by any person upon the payment of a small fee, 128. the shareholders, 128. their liability, 129. its limit after the disposal of their shares, 130. contracts by, how enforced, 129. bills of exchange and promissory notes, 129. are not precluded from obtaining further powers by a private act, 131. where contracts not under seal are binding upon, 163. the effect of a clause limiting the liability of individual shareholders in the policies of, 341. COMPOUND INTBEEST, 224. CONCEALMENT OP MATERIAL FACTS vitiates the poUcy, whether made by the assured, 31. or by his agent, 31. or by his referree, where an inquiry is made, 51. CONDITIONS, as to the truth of the warranties and representations, 65. ' as to the annual renewals ; "the thirty days' grace," 65. as to the revival of the policy on proof of health and the payment of a fine, 66. as to maritime risks, 67. as to foreign travel, beyond the limits of Europe, 68. as to military and naval service, the preventive service, maritime occupations, 68. as death by suicide, duelling, or the hands of justice, 69. origin of the condition respecting death by the felonious act of the assured, 70. , when it will include all cases of intentional self-destruction, whether felo- nious or not, 71. the exception in such a condition in favour of a bona fide assignee, 72. the exception operating in favour of a mortgagee by deposit only, 72. this condition is omitted in nominee policies, 73. the construction of the condition as regards suicide, 73. as regards duelling or the hands of justice, 77. as to proof of age, 78. as to the return of the premiums, 94. CONSIDERATIONS, valuable, 172. good or meritorious, 173. voluntary, 174. illegal, 174. CONSTRUCTION, of conditions against suicide, 73. general rules of construction of policies of assurance, 80. of the proviso to render a policy indisputable, 87. of covenants in deeds of assignment, 191, 192. of the proviso that the company shall not be affected by notice of trusts, 212. of clauses limiting the liability of individual shareholders, 339. CORPORATION, how created, 116. the liability of the members, 116 — 118. to act as a, without a charter or act of incorporation is an offence at common law, 118 n. when incorporated after complete registration under the registration act is taken out of its operation, 123. ' is bound to act in accordance with its charter or act of incorporation, 136. when contracts not under seal are binding upon, 163. when sued it must appear by attorney made under its common seal, 336. COVENANTS, the construction of, in deeds of assignment, 191. of the covenant not"to vitiate the policy, 192. INDEX. 365 COYENA-NTS.— {continued). the effect of suicide upon a covenant to do all acts necessary for keeping a policy on foot, 193. J f & «Tirv^Jr°xT^ '° bankruptcy upon covenants for the payment of premiums, 194. CROWN, securities required from debtors to the, 109. securities to the, bind all the real estate of the surety to which he is entitled at any time during the obligation, 109. register of securities, and quietus, 110. choses are not assignable by and to the, 1^0. on the conviction of a felon, is entitled to his choses of action, 309. is entitled to the choses in action of a felo de se, 309. free pardon of, restores property, 310. contra, conditional pardon, 310. DAMAGES, whether they can be recovered upon a voluntary settlement, 286. distinction between a specific performance and a mere right to, 288. a jury is now empowered to grant interest in the nature of damages, 332. DEATH, burthen of proof of, rests on the assured, 311. presumptive proof of, 312. DEBENTURE, a life policy passed as a debenture in a will, 89. DEBT, contracted during minority, gives an insurable interest, 19. but not when the money was won at play, 19. DEBTOR has no interest in a policy effected by his creditor on his life without a contract, 244. but such a contract is implied when the creditor debits the debtor in account with the premiums, 244. but not from the mere payment of one or more premiums by the debtor, unless he has a lien, the debtor is not discharged by the payment by the office, 246. DECLARATION, forms of, 35. DEEDS OP SETTLEMENT, of unincorporated companies, 120. the effect of the provisions of, 135. what provisions operate as the primary term of partnership contract, 136. DEFINITION, of contract of insurance, 1. of terms in use, 1. by statute, of that term "joint-stock company," 122. of a chose in action, 169. DIRECTORS, are the managing partners, 157. they act by virtue of the provisions of the deed, 157. notice that they are exceeding their authority binds the party contracting with them, 157. what amounts to such notice, 158. when acts in excess of their authority bind the company, 158. their powers are not usually vested in individuals, but in the board, 159. to give validity to its acts, the board must be regularly convened, 159. a quorum must be present, 160. the appointed number must be kept up, 161. they cannot be the agents of the company to commit a fraud, 161. will be personally liable for sending forth false or fraudulent statements, or declaring fictitious bonuses, 161. DISSOLUTION OP COMPANIES, may be by the consent of the_ whole body, by virtue of a provision in the deed of settlement, or by the interposition of the Court, 131. See Joint-Stock Companies' Winding-up Act. DONATIO MORTIS CAUSA, 294. EMERIGON, his definition of life insurance, 5. EQUITABLE RELIEF, the terms of, when the pplicy is set aside, 91. the terms of, where an annuity is set aside, 349. 366 bunyon's life assurance. EQUITY, may revive a policy on the receipt of the premium, by the office after notice, 26. will order the delivery up of a void policy after an action has been brought, 28. or at any time of a policy fraudulently obtained, 90. requires the parties to contract pari passu, 31. will reform the contract when inconsistent with the accepted proposal, 95. wiU restrain illegal acts of the majority of a corporate body, or unincorpo- rated company, at the instance of any of' its members, 141. audin like manner will restrain illegal acts by the directors, 142. Court of, has jurisdiction to enforce a claim at the instance of an assignee, 328 ' EQUITY TO A SETTLEMENT of a married woman, 241, 299. EVASION, of the statute requiring an insurable interest, 20. of equivalent contract in Ireland, 21. EXECUTOR, the title of the. He may give a receipt before probate, 315. one of several co-executors can give a good discharge, 315. married woman executrix, 315. of bankrupt, 316. until his assent, a bequest does not operate, 318. PELO DB SE, an insurance on the life of, is void, 69— Y7, 309. Ibrfeits his other choaes in action to the Crown, 309. inquisition of, 310. FELONY, is a forfeiture to the Crown of the choses in action of the felon, from the time of the conviction, 309. a colourable transfer after the commission of the offence, and before convic- tion, may be void against the Crown, 309. PITS, construction of the words " not afflicted with fits," 43. FOREIGN TRAVEL, 68. FORM, of the contract as a policy, is not material at common law, 8. but is material under the statute 14 Greo. 3, c. 48, 12. of the declaration, 33. of life policy, 62. of guarantee policy, 107. of policy where the contract of life assurance is associated with that of gua- rantee, 110. FRAUD, what constitutes moral, 58. will avoid any policy, and cause the forfeiture of the premiums to the com- pany, 92. where the policy was obtained by, equity will order its cancellation, 90. and if the sum assured has been paid, the money may be recovered,- 327. to put forth false accounts, or declare fictitious bonuses, amounts to, 161. in the purchase of a reversion, is implied from the inadequacy of the consi- deration, 226. or oppression, wiU set aside any sale, 227. insolvency in a voluntary settlor is evidence of, and of an intent to hinder creditors, 273. FRAUDULENT PREFERENCE, is an act of bankruptcy in a trader, 276. but cannot be presumed in another person, 276. FRIENDLY SOCIETIES, where making assurances for amounts exceeding 200Z., are within the provisions of the Registration Act, 147. established after the 15th of August, 1850, cannot undertake assurances for sums exceeding lOQl., 147. the privileges granted to, by the earlier acts, 147. disputes in, are to be settled by arbitration, or a summary appeal to the justi- ces of the county, 149. the gradual recision of their privileges, 150. their powers of investment, 151. the power t6 appoint nominees, 151. INDEX. 3-67 FRIENDLY SOCIETIES— conUnued. the operation of nominations, 152. the statute 13 & 14 Vict. c. 115, recalling this power, 153. the limited power given for the benefit of the widow, widower, or children, 154. the limited duration of the acts, 156. GAMBLING ACT, whether declaratory or enacting, 1. applies to policies on other events than life contingencies, 11. but not to a contingent contract, not an insurance nor in the form of a policy, 13. requires the insertion in the policy of the name of the party interested, 20. limits the sum to be recovered to the amontit of the interest, 21. GENERAL MEETINGS, the provisions of the act as to companies completely registered, 127. powers of 'General Meetings, whether ordinary or extraordinary, 137. concerning acquiescence in the acts of the majority embodied in the resolu- tions of, 139. the effect of unauthorised resolutions of, 139. the construction of general powers of, 140. the interference of Courts of Equity with the resolutions of, 141. GOUT, mere fact of having had, does not affect a general warranty of good health, 40. GUARANTEE, companies, 100. form of proposal for a guarantee policy, 100. the terms of the, how far expressive of the general rules of law upon the sub- ject, 101. to uphold a guarantee, there must be perfect good faith towards the assurer both as regards, the disclosure of material facts and occurrences subsequent to the contract, 102. mere negligence by the employer will not vitiate the guarantee, 103. but neglect on his part to perform his part of the contract wiU do so, 103. the company may be Liable for the improper conduct of the employed, although he may not have misapplied moneys in his own favour, 105. but not unless the employed has made himself liable to pay, 105. and only according to the precise terms of the obligation, 106. the contract is personal with the employer, 106. the form of the policy or guarantee bond, 107. combination of, with life insurance, 110. IDENTITY, evidence of, 314. INFANT, cannot in general enter into a contract, 298. attaining his majority may avoid his prior contract, 298. but cannot recover the premiums paid by him, 298. who can give a discharge for a sum payable upon an infant's policy, 298. may insure for small sums under the Friendly Societies' Act, 299. the Court will deal with his interests under a poUoy for his maintenance, 299. the effect of the settlement on marriage of the chose in action of a female infant, 306. INDISPUTABLE POLICIES, 84. INDEMNITY, whether life insurance is a contract of, apart from the statute, 6.9. Irish decisions that it is not so, 10. , whether so under the statute, 21. if the policy is so, where effected by a creditor on the life of his debtor, payment of the debt discharges the office, 22. but payment by the office may not discharge the debtor, 26. INQUISITION OF PBLO DE SE, is not conclusive against the personal representatives of the deceased, 310. finding that the party was non compos mentis is conclusive against the Crown, 310, 368 BtlNTON'S LIFE ASSURANCE. INSURABLE INTEREST, the statute requiring, 2. is not required in Ireland, 4. 10. definition of, 14, must be pecuniary, 14. must exist when the policy is efifected, 14. whether arising from the relationship of husband and wife, 14. parent and child, 14. heir or next of kin and ancestor, 16. expectant deyisee and testator, 16. purchaser from an expectant devisee possesseSj although his vendor may not, 16. debtor and creditor, 19. every one possesses an, in his own life, 19. ' trustee or executor possesses, in respect of the legal interest vested in him, 19. whether the subsequent cesser of the interest will avoid the policy, 21. is rarely the subject of inquiry by the office when paying a claim, 23. need not be continuous, 24. is not required in a purchaser, 24. ~ its continuance in the assignor is sufficient, 24. how far existing when the policy effected as a security on the life of a debtor is assigned to him, 24. the lapse of the, does not affect the equities attaching by contract or upon trusts to the policy, 249. INSURANCE, definition of the contract, 1. terms in use in, 1. the uses of, 1. the abuses of, 2. how far the contract of, fulfils the legal conditions of a wager, 5. distinction between life and marine and fire insurance, 6. is not every contract for the payment of money at death, 13. term and commencement of the, 64. INSURER, who may be an, 114. life assurances are occasionally undertaken at Lloyd's, 114. INTEREST, was not formerly given at law upon the sum assured when the payment was delayed, 332. but now the jury are empowered to give it, 332. in equity it is in the discretion of the Court, 333. INTERPLEADER. Upon conflicting claims at law, the insurers may take the benefit of the Interpleader Act, (1 & 2 Will. 4, c. 58,) 333. and before action brought, so soon as a conflict arises, may file a bill of interpleader, 334. costs in a suit of, 335. IRELAND, Gambling Act does not extend to, 3. whether the 8 & 9 Vict. c. 109, includes wagering policies in, 28. Annuity Act does not extend to, 348. stamp duties may be recovered in Ireland from any person executing an un- stamped instrument, 356. ISSUE, insurances against the birth of, 98. JOINT-STOCK COMPANIES' REGISTRATION ACT, history of the act, 121 JOINT-STOCK COMPANIES' WINDING-UP ACTS, 131. LIMITATIONS, THE STATUTE OP, when a bar to an action for the return of the premiums, 93. upon a claim, 327. for the recovery of the consideration for the grant of an annuity void for want of inrolment, 350. LOCUS PCENITBNTI^, 288. LOST POLICY, an action may be sustained upon a, 325. and payment enforced in equity upon an offer to give an indemnity, 326. INDEX. 3159 LUNATIC, cannot contract, 306. but executed contract by, entered into -with another in ignorance of the lunacy, cannot be set aside, 306. contra, where the contracting party knew of the lunacy, 307. to whom a claim due to a lunatic is to be paid, 307. MANDAMUS, is the ordinary remedy to compel compliance by a corporation with its charter, 141. MARITIME RISKS, 67, 68. MARRIED "WOMAN, is presumed to have an insurable interest in the life of her husband, 14. her power of dis;posing of her reversionary property, 240. her right of survivorship, 240, 300. her equity to a settlement, 241. has no such equity by the Scotch law, 299, 300. the interest of her husband in her life policies, 299. the title to policies effected during coverture on her life, 301. when so effected with the husband's ftinds without his assent, 301. when out of the income of her separate property, 302. how the policy should be effected when intended to form part of her separate estate, 303. the disposing power of a woman under contract of marriage, 306. MILITARY OR NAVAL SERVICE, 68. MATERIAL PACTS, in the knowledge of the proposer, whether principal or agent, must be disclosed, 31, 37. although he is not aware that they are material, 31. personal examination does not render the disclosure unnecessairy, 33i. whether a statement is material is a question of feet, and for a jury, 35. must be mentioned, although not referred to in the declaration, 37. what facts are material — ^insanity, intemperance, past serious illness, profli- gacy, imprisonment, 39. MEDICAL ATTENDANT, who is usual, 44. casual attendant is not so, 44. MEDICAL REFEREES, their obligations, 51. their remuneration, 56. MISREPRESENTATIONS, as to the acceptance or rejection of the risk by other insurers, 48. the statement, of the truth with a view to mislead may amount to a misrepre- sentation, 49. what constitutes moral fraud in a, 55. MORTGAGE, the advantages of a mortgage by deed, 190. by deposit, where it will cover future advances, 196. deposit to secure an existing debt, 197. may be made to secure a debt due upon a voluntary bond, or to the trustees of a voluntary settlement, 197. of life interests, with the collateral securities of policies of assurance, 217. such policies are usually effected in the names of the mortgagees, 218. they should be assigned by a separate deed, 218. the relative position of the company as the insurer is not altered by becoming the mortgagee of one of its own policies, 218. the distinction between the mortgage of a life interest and the sale of an annuity, 219. with power of sale of a reversion, 220. upon a mortgage of real estate, the stipulation for additional insurances is not usurious, 222. by deposit, according to the official value of the policies, 223. the remedy in such a case for securing the payment of the interest, 224. MORTGAGEE, the remedies of: he may sell through the medium of a Court of Equity or foreclose, 197. concerning sales, at his instance, under the new Chancery Procedure Act, 197. September^ 1853. — 24 370 bunyon's life assurance. MORT!aA.G^E— continued. the course to be pursued when hia security consists of real estate and a policy assigned as a collateral security, 198. when a partial lien only is given, the ordinary rights of a mortgagee will not be supplied by implication, 199. equitable mortgagee, becoming executor or administrator, may retain to the amount of his Uen, 200. costs of the mortgagee, 200. NAME, of person beneficially interested, must be mentioned in the policy, 20. although it may be granted to a trustee, 19, 305. an action must always be brought in the name of the assignor, although the policy has been assigned, 328. NOTICE. The company is not bound to send notice of the premium falling due, 66. that the managing partners are exceeding their authority binds a party con- tracting with them, 157. but neither the inrolment of a deed in Chancery nor a private act is notice, 158. to the insurers must be given by a purchaser ; until given, the policy may be surrendered to the office, 175. but afterwards the office becomes a quasi trustee for the assignee, 175. assignees in bankruptcy must give notice, 179. neither an act of bankruptcy nor a fiat is of itself, 180. express notice binds the subsequent purchaser, 180. an assignee giving notice, but not obtaining possession of the policy, takes precedence over a subsequent assignee obtaining possession of the policy without notice of a prior lien, 180. a subsequent incumbrancer giving notice takes priority over a prior assignee who has omitted the notice, but obtained possession of the policy, 182. whether in such a case, the non-delivery of the policy is notice of the deposit, 183. whether want of, in a purchaser, enures to the benefit of a [transferee with notice, 186. the manner in which notice to insurers should be given, 201. it must be distinct, 201. the several purposes for which it is material, and its sufficiency, 202. the distinction between notice to afiect a subsequent incumbrancer, and notice ■ te rebut reputed ownership, 202. it must be notice to the company, 203. there must be an agency to receives it in the party to whom it is given, 203. an unauthorised agent cannot receive, 204. no particular form is required, 205. constructive notice, 201 — 206. where the authorised agent is a principal party, his knowledge is not notice to the company, 206. whether notice to a single director is notice to the company, 207. on a further advance, a fresh notice should be given, 207. where the assignor is a purchaser, .the notice should be given to the company, 208. the responsibilities of the insurers in answering inquiries as to notices, 209. it is imperative upon them to regard notices, 211. ■the effect and construction of clauses in deeds of settlement to rebut the equitable liabilities arising from notice, 212. the absence of notice upon a voluntary settlernent, 291. notice to one trustee is notice to all, 292. OFFICERS OP THE COMPANY, how appointed, 162. their powers are not affected by the question whether the company is incorpo- rated or not, 163. INDEX. 371 ^^^u^aLtf^^>,^^^?°^™°v.^'°^^^'^^™P* ^^'l i°^°l^«^t= poUcyis,in and passes to the assignees where no notice is given, 116. PARTY, the person entitled at law must be made a party in equity, 329. TJiTjrrxT-^^a®!"^ ^^^ Chancery Procedure Act on this rule, 332. fAKlJNiiKh, the power of partners to pledge the credit of the firm, 157 the poweroi a majority to bind the rest, 137. PAYllENT OF CLAIM on the receipt of the executor or administrator, 315- to a legatee after the assent of the executor, 318. the course to be pursued when the claimant is abroad, 319. upon a receipt, is given under power of attorney, 319. to one of several joint grantees, 320. to whom it should be made when the polio is in mortgage, 321. when assigned upon trusts, 321. _ when a voluntary assignment has been executed, 322. the insurers are entitled to a discharge which shall bar the legal right, 322. when they are entitled to the custody of a covenant for the production of the deeds by virtue of whicli an equitable receipt is tendered, 323. the limit of the protection to which they are entitled when a legal dis- charge is given, 324 o • they are entitled to the delivery of the policy, 326. when the statutes of limitations are a bar to a claim, 327. insurers unwittingly paying a void claim can recover the money, 327. unless the mistake has been one of law, 327. PERSONAL SECURITIES, advances upon, coupled with policies, 221. are not usually sanctioned by deeds of settlement : in such a case are at the risk of the directors, 223. • PREMIUM, mortgagee, or even volunteer, paying has a lien upon the policy, Xi/O. oUl, oU^. condition as to the annual payment ; " the thirty days' grace," 65. condition for the subsequent payment and revival of the policy, 66. forfeiture and nonpayment if not relieved against, 66. itjs not imperative upon the company to send renewal notice, 66. See Return of the premiums. POLICY, must contain the name of the person interested, 20. the execution of the, 60. cannot be made payable to order unless issued in the form of a promissory note, 61. the form of the, 62. when on the life of the nominee, 63. may be granted without any conditions : ancient form of such policy, 84. form of guaratee policy, 107. the person whose Hfe is assured, not being the grantee, has no interest in the policy unless there is a contract, express or implied, 244. concerning the equitable interests in a policy after its regrant and revival, 259. POWER, of sale, 190. an appointment in exercise of a, does not require a consideration, 277. execution of, does not require to be under seal unless the formality is pre- scribed, 277. unlimited, in a bankrupt, may be exercised by his assignees, 297. of attorney, 190. 319. PRIORITIES, between consecutive assignees. See Notice. PRIVATE ACTS OP PARLIAMENT, incorporating a company, 116. facility of obtaining, by Scotch companies, 117. standing orders of the House of Lords respecting the capital of the company precedent to the grant of an act, 117. to sue and be sued, and to amend the deed of settlement, 120. the jurisdiction exercised by Parliament in granting, 142. 372 BUNYON'S LIFE ASSURANCE. PRIVATE ACTS OP PARLIAMENT— cowitMwed. every person has a right to apply for, 143. their construction, and how far they are binding upon strangers, 144. when- an act is a private aCt, 144. it contains a special clause to prevent its indirectly incorporating the com- pany, 144, with the exception of the limited liability, all the privileges of corporations may be obtained fry, although not incorporating the company, 145. recitals are not enacting contrary to the intention' of the act, 146. statutory powers given by, must be pursued, 146. the power to sue and- be sued authorises the nominal plaintiff to sue upon a covenant entered into with trustees on behalf of the company, 146. PROBATE, or letters of administratioii, must be granted by a court of compe- tent jurisdiction, and properly stamped, 316. the court by which they should be granted, 316. the effect of the grant by a wrong court, 317. PEOPERT AND OYER, 325. 329. PROPERTY AND INCOME TAX ACT, the duties payable- under, 378. the exemption of the portion of income paid for insurance premiums, 379. PROPOSAL, form of, mufitbe aceompanied with full disclosure of material facts known to the party making it, 30. statements in, when incorporated expressly, or by reference in the policy, are warranties, 31. how accepted, 69. PURCHASER, cannot recover purchase money from his vendor on the cesser of the insurable interest, 2'8. concealment by, of the death or serious illness of the life assured, wiU avoid a sale, 186. RECEIPT CLAUSE, 190. 321. 331. REPERBBS, their replies are representations, and must be true where material, 51. how far they are agents of the assured, 52. they need not volunteer information when no ihqjiiry is made, 52. are in general expressly rec|,uired to disclose all material facts in their know- ledge, 53. their representations are fatal, although the assured be ignorant of them, 54- making a wilfully untrue statement, may become personally liable, 55. but not for a misrepresentation not wilfully untrue, 56. See Medical Referees. RENEWABLE LEASEHOLDS, The manner in which the fines are to be borne must be ascertained by the terms of the settlement, 260. when the leasehold is for lives, policies are the best means of raising the fines, 261. the rights of the tenant for life, where there is no obKgatibn to renew, 261. the rights of the remainder-man, 262. the equitable rule, where no mode of division is pointed out, 264. the doctrine of the court as regards leaseholds for years, 265. as regards leaseholds for fives, 266. RENEWAL NOTICE, 66. REPORT, of the Select Committee on Assurance Associations, 3B1. REPRESENTATIONS, as to material facts, must be substantially correct, 30. by the referees, 32. 51. need not be in writing, 33. REPUTED OWNERSHIP, 176. RETURN OP THE PREMIUMS, equity will in general compel, in granting relief to the insurer, 91. the assured are entitled to, when the risk has not been run, 91. notwithstanding this may have been the fault of the assured, 93. except in the Case of actual fi-aud, or when the contract is illegal, 92. whether the premiums are annual or single, 93. INDEX. 373 RETURN OP THE PREMIUMS— cowfewed theassured, where entitled to the return, can recover the premiums in an ac- tion for money had and received, 93. when the statute, of limitations will bar ithis right, 93. the effect of the condition negativing the, '94. REVERSION, the sale of a, must be for an adequate consideration, that ie, for the market value, 226. the onus of proof lies upon the purchaser at the time at which the property falls into possession, 226. the same rule applies to reversionary charges, 226. a sale by auction is generally an adequate test of price, 226. unless there are special circumstances, as where the sale is ■" without reserve," 22T. r » 7 in testing the adequacy the Court wUl weigh all the circumstances, 227. the evidence of value — and elements for its estimation : the opinions of surveyors, 228. of actuaries, 228. the health of the tenant for life, 229. the, costs of realisation, 236. the nature and state of the property itself, 232. 23J. the further contingency of the birth of issue, 237. the purchaser is entitled to a consideration for locking up his money, 230. there is no arbitrary rule that the market value is. any proportion of tJie calculated value, 232. the manner in which the valuation should be made by an actuary, 234. when the consideration is an annuity, it must be of an adequate value, 238. a confirmation is inoperative as a bar to the equitable rule while the property remains reversionary, 238. the terms of equitable relief, 238. when lapse of time is a bar, 239. the equitable rule does not apply to famUy arrangements, 239. when the property of married women: their power over property settled to their separate use, 240. over their unsettled realty, 241. or money converted in equity, 241. the power of disposition of the husband over his wife's unsettled per- sonalty while reversionary, '240. over her term of years^ 241. over her annuities, 241. their equity to a settlement, 241. concerning notice on the purchase of, 242. the effect of a distringas or stop order, 243. the Succession Duty Act charges a reversion in the hands of a purchaser, 375. REVIVAL OP LAPSED POLICY, acceptance of the premium after notice of the avoidance will amount to a, 26. the condition respecting the, 66. a subsequent demand of the premium, if uncomplied with, will not amount to, 218. revives all equities previously attaching, 259. but a re-grant without any prior agreement does not, but operates in favour of the object, 259. REVOCATION, power of, may be reserved in a voluntary settlement, 297. but is inoperative unless duly executed, 297. SCOTCH COMPANIES, incorporation of, limited liability of shareholders in, 117. ^ , ^ Registration Act does not extend to, unless having branches m England or fieland, 122. SCOTLAND, Annuity Act does not extend to, 348. SOLICITOR, the solicitor of a vendor cannot purchase whale the relationship remains, 227. 374 bu'nyon's life assurance. SPITTING OF BLOOD, 41. STAMPS, the scope and operation of tlie Stamp Acts, 853, the stamping of executed instruments, 354. they may be generally stamped after execution on the payment of a penalty, 354. ' with the exception of some specified instruments, such as biUs of exchange, receipts (except within a month), and policies of marine insurance, 356. but life policies may be stamped on paying the ordinary penalty, 356. an agreement to leave an instrument unstamped, and pay the penalty if necessary, is void as an evasion of the law, 356. in Ireland, any person executing an unstamped instrument is liable to the payment of the duty, 356. life policy stamps, 357. the preparation and delivery of a stamped policy is compulsory upon the in- surers, 357. may be either impressed upon the paper of the instrument, or affixed by ad- hesive stamp, 358. agreements, 358. CONVETANCES ON SALES, ad valorem duties payable, 359. in conveyances the consideration must be truly expressed, 360. and the duty is payable where the consideration is the transfer of stock, 361. where the conveyance is to a sub-purchaser, 361. MORTGAGES, ad valorem duties payable, 362. for unlimited sums, 363. to secure the re-transfer of shares or stock, 363. transfers of, 364. under the old law a covenant to repay any premiums paid by the mortgagee rendered the deed liable as for an unlimited sum, 365, but not a mere charge of the premiums, 365. the construction of the provision in the new act, 366. the ad valorem stamp is once payable if exceeding 21., 367. whether the ad valorem stamp is payable on sales or mortgages of policies, 367. annuities, 369. progressive duties, 370. receipts, 370. settlements, 372. STATUTES: 7 & 8 Vict. c. 66. (Aliens), 307. 17 Geo. 3, c. 26. (Annuities), 344. 53 Geo. 3, c. 14. (Annuities), 344. 3 Geo. 4, c. 92. (Annuities), 346. 1 Jac. 1, c. 11. (Bigamy), 312. 15 & 16 Vict. c. 86. (Chancery Proceedings), 332. 6 Geo. 4, c. 91. (Charters of Incorporation), 118. 50 Geo. 3. c. 85. (Crown debtors), 109. 52 Geo. 3, c. 60. (Crown debtors), 109. 6 & 7 WiU. 4, c. 28. (Crown debtors), 109. 1 & 2 Vict. c. 61. (Crown debtors), 109. 5 & 6 Vict. c. 79. (Crown debtors), 109. 2 Vict. c. 11. (Crown debtors), 109. 7 & 8 Vict. 0. 90. (Crown debtors), 109. 19 Car. 2, c. 6. (Estates pur autre vie), 312. 13 Eliz. c. 5. (Fraudulent Conveyances), 272. 27 Eliz. c. 18. (Fraudulent Conveyances), 294. 10 Geo. 4, c. 56. (Friendly Societies), 147. 4 & 5 Will. 4, c. 40. (Friendly Societies), 148. 3 & 4 Vict. c. 73. (Friendly Societies), 150. 9 & 10 Vict. c. 27. (Friendly Societies), 149. 13 & 14 Vict. c. 115. (Friendly Societies), 147, 153. 15 & 16 Vict. c. 65. (Friendly Societies), 150. 16 & 17 Vict. e. 123. (Friendly Societies), 151, 156. 14 Geo. 3, c. 48. (The Gambling Act), 3. INDEX. 375 ST A.TTJT1S,S— continued. 1 Geo. 4, c. 57. (Insolvent Debtors), 2?3. 1 & 2 Vict. c. 110. (Insolvent Debtors), 273. 7 & 8 Vict. 0. 110. (Joint-Stock Companies' Registration Act), 121, et seq. 10 & 11 Vict 0. 78. (Joint-Stock Companies' Eegiatration Act), 124. 1 Vict. c. 73. (Letters Patent), 119. 21 Jac. 1, c 16. (Limitations), 327. 3 & 4 Will. 4, c. 42. (Limitations), 327, 333, 350. 8 & 9 Vict. e. 100. (Lunatics), 307. 16 & 17 Vict. c. 70. (Lunatics), 307. 3 & 4 Anne, c. 9. (Notes and Bills), 61 n. 16 & 17 Vict. c. 34. (Property Tax Act), 378. 16 & 17 Vict. c. 91. (Property Tax Act), 380. 6 & 7 Wm. 4, c. 86. (Registry), 312. 7 Will. 4, & 1 Vict. cc. 1, 22. (Registry), 312. 10 & 11 Vict. c. 65. (Registry), 312. 6 Geo. 1, c. 18. (Royal Bxcbange and London Assurance Corporation, act authorising tbe foundation of), 117. 5 W. & M. c. 21. (Stamps), 354. 6 Will. 3, c. 12. (Stamps), 364. 35 Geo. 3, c. 63. (Stamps), 356. 48 Geo. 3, c. 149. (Stamps), 360. 55 Geo. 3, c. 184. (Stamps), 353, et seq. 56 Geo. 3, c. 56. (Stamps), 356. 5 & 6 WiU. 4, c. 64. (Stamps), 353. 13 & 14 Vict. c. 97. (Stamps), 353, et seq. 16 & 17 Vict. c. 69. (Stamps), 353, et seq. 16 & 17 Vict. c. 63. (Stamps), 353, et seq. 16 & 17 Vict. c. 61. (Succession Duty Act), 374. 4 & 5 WiU. 4, c. 23. (Trust estates of felons), 310. 8 & 9 Vict. c. 109. (Wagers), 28. 11 & 12 Vict. c. 46. (Winding-up Acts), 131. 12 & 13 Vict. c. 108. (Winding-up Acts), 131. SUCCESSION DUTY ACT, 372, expressly exempts policies and post obit securities, 376. SUICIDE, 69—77. SURETY, company has no lien for a debt due by the principal upon the lite poKcy ofthe, 223. but may have a set-off when the demand is liquidated, 223. where the creditor insures the life of the surety the payment by the company does not discharge the debt, 247. TRANSFER, by one company of its business to another, 133. THELLUSSON ACT, trusts for the payment of premiums are not within the, 200. TRUST, policies effected by trustees wiU in general be subject to the trusts of the property out of which the insurable interest arises, 249. attaching upon the insurance moneys, is not affected by the invalidity of the policy, when the company elects to treat it as a continuing contract, 249. a trust of personalty, although voluntary, is complete in equity, even where by parol only, 278. but the Court will not raise a trust upon a voluntary consideration, 283. TRUSTEE, may insure in respect ofthe legal interest vested in him, 19, for sale cannot himself be the purchaser, 227. insuring, the policy is clothed with a trust, 249. may be constituted such for a volunteer, 277. UNCHALLENGEABLE POLICIES, 88. VOLUNTARY SETTLEMENT, to support a, his circumstances must entitle the settlor to make it, and the gift must be perfected, 272. 876 BUNT ON 'S LITE ASSURANCE. VOLUNTARY SETTLEMENT— coM^iwed. if made by a man in insolvent circumstances, is fraudulent within the 13 EKz. c. 5, 273. the manner in which the test of fraud is to be applied, 2T4. when set aside, subsequent creditors are let in, 275. by an insolvent of equitable personalty belonging to his wife, 276. when there is an express declaration of trust the gift is complete, 277. by declaration of trust, neediiot be by deed, 277. unless a deed is required for the executors of a power, 277. a direction to a trustee assented to, and acted on by mm, will be effectual, 278. and in like manner to a debtor or depositary, 278. but it is the intention that operates : there is no magic in the words "trust or trustee," 279. the difficulties of the case when the gift is in the form of an assignsient, 280—288. the court will not raise a trust upon a voluntary confiideration, 283. whether the construction of an assignment may be that of a declaration of trust, 284. whether damages can be recovered at law, or a court of equity wiH give equi- valent relief, 286. the practical difference between specific performflnee and g, mere right to damages, 288. the effect of the reservation of a looijB pcenitentise, 288. when the assignment is not under seal, 292. the effect of an ex post facto consideration, 293. the rights of the next of kin under an ultimate trust, 293. when the settlement is by a covenant executed, it is complete, 293. the effect of an alteration in the law making policies assignable at law, 294. an incomplete assignment cannot be supported as a donatio mortis causa, 295. VOLUNTAHY BOND, 294. WAGERS, not illegal at common law, unless contrary 1;o public policy, 7. a wager respecting a life contingency is not so necessarily, 7. 8 & 9 Vict. c. 109, extends to Ireland, 28. statutes respecting, are not retrospective, 29. WARRANTIES, must be literally true, 31. distindion between a warranty and a representation, 34. effect of general warranty, 39. as to specific diseases, 41. upon whom the burthen of proof of the truth of the warranties Kes, 81. in a guarantee policy^-distinction between a warranty to pursue a particular course, and a mere representation, 104. WINDING-UP ACTS, the dissolution of companies under, 131. the remedy in equity under, when the policy contains a clause prohibiting actions against the shareholders, 342. 1 1 n