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 Ellenborough in the case referred to, "as every other to which the law gives effect, is a contract of indemnity, as distinguished from [*7] 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 necessarily obnoxious to the rule which thus avoids illegal wagers. The fear of the law is considered quite sufficient to countervail the temptation to assassination;(k) and the objection that the law will not allow a wager concerning the person of another from tenderness to the feelings of himself or his surviving relatives, fails as applying equally where there is an interest as to those in which there is none.(1)

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 consideration of an immediate advance of money, bonds are given, or contingent or reversionary property charged, for the payment of a much larger amount upon the death of a particular person.(m) Early cases may, moreover, be found involv ing the very question: thus, in a case before Lord Hardwicke, in consideration of 50007. immediately advanced, a bond was given by Mr. Spencer, the condition of which was, that he should pay 10,000l. to *the defendant within a given time after the death of the Duchess

of Marlbrough, in case he should survive her, but not otherwise. [*8] In delivering the judgement of the court, the Master of the Rolls remarked, "In this case, 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."(n)

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 proposal 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.

British Insurance Company v. Magee, Cooke & Alcock, Irish Rep. 187. (m) Curling v. Marquis Townshend, 19 Ves. 628; Wharton v. May, 5 Ves. 27; Free v. Hinde, 2 Sim. 7.

(n) Earl of Chesterfield v. Janssen, 1 Atk. 346; 2 Ves. 125. () March v. Pigot, 3 Burr. 2803, Lord Mansfield, C. J.

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; 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 were permitted until expressly forbidden by the statute *19 Geo. [*9] 3, c. 37; and that if this was the case with marine, à 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 premiums 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 indemnity, but as between man and man it is generally treated as an additional permanent security. There may be various sorts of policies; a man *has an interest in his own life, and may insure it; that is [*10] 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) Jarman's Conveyancing, by Sweet, vol. v. p. 309.

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 debenture 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 Government 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 complied with. Now there is no uncertainty about the event of death, except as to the time when it is to happen; and it can make no difference 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."(q)

But express decisions are not wanting to prove that the statute is not declaratory. Thus in the British Insurance Company v. Magee,(r) 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 [*11] insurances)(s) where the want of interest was expressly stated, but that such an insurance was in fact illegal at common law, independently of the statute.(t) 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 England 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 existing doubt or prevailing mistake as to the law, but on the contrary recites, that making insurances on lives or other events in which the assured shall have no interest, has been found by experience to have introduced 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 insured 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 affirmative to this position being maintained by Mr. J. Buller in Good v. Elliot, (u) but overruled by the majority of the Judges. From this and the accompanying cases, however, it would appear that the legislature

Phillips v. Eastwood, Lloyd & Goold, 291.

In the Exch. Chamber in Ireland, Cooke & Alcock, 182; Scott v. Roose, Longfield & Townsend, Ir. Rep. 54; Shannon v. Nugent, 1 Hayes, Ir. Rep. 539. Cousins v. Nantes, 3 Taunt. 513. (t) 14 Geo. 3, c. 48.

had in contemplation such contracts only as were either ordinarily considered or were conceived in the form of insurances. It seems to have been the opinion of Lord Kenyon that to bring the case 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 insurance should be made on any event wherein *the person on [*12] whose account the policy shall be made shall have no interest, or by way of gaming or wagering, would invalidate any contract of insurance 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 mentioned 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 contract 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 God, Amen?' or refer to Lombard Street? A mercantile policy we all know, but a gaming 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. Hamerton, (w) 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 immediate 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 number 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 similar contract in the event of there being an open trade, that is, a cessation of hostilities between Great Britain and the province of Mary[*13] land before the 6th of July, 1778. And in Paterson v. Powell, (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 forbidden by the statute. The risks or events upon which the contingent payment depended were not such as were ordinarily considered the subjects of insurance. The two first were indeed such as had been considered 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.

(*) Cited by Buller, J., in Good v. Elliot, 3 T. R. 702.

(w) Cowper, 737.

(y) 9 Bing. 320.

(x) Park on Insurance, 140, n.

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; 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."(z) 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, have 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), contract by which a sum of money was agreed to be returned without interest upon the death of E. F., provided A. B. (an expectant *devisee under the will of E. F.) could not then make a good title to certain real estate, was held not to be an insurance or within the Act. (a)

a

[*14]

11. The first section of the Act requires an interest at the time at which the policy is effected; 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 husband;(b) but the converse is not true, for a husband has not such an interest in the

life of his wife.(b) Neither has a parent, as such, an insurable interest in the life of his child. Thus, in Halford v. Kymer, (c) it appeared that, upon the marriage of the plaintiff, certain funds had been 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 appointment, 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 intestate

(2) Morgan v. Pebrer, 3 Bing. N. C. 454.

(a) Cooke v. Field, Q. B., 19 L. J. 441.

(b) Reed v. The Royal Exchange Assurance Company, Peake, Additional Cases, 70. The Income Tax Act, 16 & 17 Vict. c. 34, s. 54, seems to assume that assurances may be effected by a husband on the life of his wife.

(c) 10 B. & C. 25.