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is a clear interest. On the other hand, suppose the case of an heir-at-law of a man who has an estate worth 20,0007. 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-atlaw 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 G. F. of the one part, and the plaintiff of the other part, in *which, after reciting that G. F. was in expectation of becoming entitled to certain [*17] hereditaments at A., as devisee of one E. S., who was then living, in consideration of the sum of 20007., to be paid in manner therein mentioned, viz., 5007. down, and 15007. in October following, G. F. 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 20007. to the plaintiff, but without interest.

A policy of assurance on the life of G. F. was assigned by deed to the plaintiff as a security for the payment of the 20007., and upon this deed, to which the defendant was a party as surety for the payment of the premiums 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. 38, the said agreement 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 contract may resemble an insurance on the life of E. S., in that the plaintiff advances money for a benefit to be received from G. F. upon her death, yet it has circumstances which are not incidents to a life

insurance. The intention of G. F. is to obtain a present sum of [*18]

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 E. 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.

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 G. 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 consideration for a promise to pay for it in a contract not under seal, and the purchaser of such an excepted devise would have an interest, so far as to prevent his policy from being considered the gaming or wagering prohibited by the statute."(ƒ)

The doctrine in this case is not perhaps very obvious, as it might be thought the purchaser could not be in a different position to that of his vendor in respect 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 recognise, 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 testimony, namely, that although the next of kin or heir apparent of a lunatio intestate could not file a bill, yet that they might respectively enter into contracts with respect to their expectations *and possibilities, the [*19 ] evidence upon which they might perpetuate; that the law would frame an interest in respect of the contract, and with reference to that they would have a right to perpetuate testimony, although they could not qualify themselves as to any interest in the subject itself.(g)

14. Every man is presumed to possess an insurable interest in his own life, since by insuring it he can protect his estate from that loss of future gains or savings which might be the result of his premature death, and as they cannot be limited neither can the amount for which he may insure.(h)

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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 circumstance that the creditor has a real security does not vary the rule.

And it seems that a debt contracted during the minority of the borrower 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.(k)

The life of an alien enemy cannot, however, be insured by his creditor, although the latter be a British subject.(7)

Cooke v. Field, Q. B. 19 L. J. 441.

(g) Dursley v. Fitzhardinge, 6 Ves. 261.

(h) Wainwright v. Bland, 1 Mood. & Rob. 481.

(i) Anderson v. Edie, 2 Park. on Ins. 914.

(k) Dwyer v. Edie, 2 Park. 914.

Flenot v. Waters, 15 East, 360; Harman v. Kingston, 3 Camp. 153, 8 T. R. 548-561.

A trustee has an insurable interest in respect 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 ;(n) 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 have for any premiums paid by him out of his own funds,) be [ *20 ] clothed with a trust in his hands, upon the principle that a trustee is 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 sufficient that 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 ;(p) 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 interested, 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 standing 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 thould be inserted in the policy as well as that of the trustee.(g)

16. We have seen that any person may effect insurances to any extent upon his own life, but this right cannot be *made a means of [*21] evading the statute, so as to enable a person who is without an 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 upon the statute.(r)

17. In such a case in Ireland, where it was considered that the statute 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 circumstances of the case should be looked at, and that when a party sought the benefit of a transaction, which, though not against the express provisions of the law, was indirectly against the condition of the

(m) Tidswell v. Ankerstein, Peake, 151.

(n) Ez parte Yallop, 15 Ves. 60; Ex parte Houghton, 17 Ves. 253.

Ex parte Andrews, 1 Madd. 573; Armitage v. Winterbottom, 1 M. & G. 130; Holland v. Smith, 6 Esp. 11. See Clay v. Harrison, 10 B. & C. 99.

Tidswell v. Ankerstein, Peake, 151; Hill v. Secretan, 1 Bos. & Pul. 315.
Collett v. Morrison, 9 Hare, 162.

Wainwright v. Bland, 1 Moo. & Rob. 481.

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 constructions the latter has been preferred, and it has been held that the question was decided by the common *law doctrine [*22 ] already referred to. Thus, in the leading case upon the subject, the plaintiffs being creditors of the late Mr. Pitt, insured his life to secure 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 assurance, as every other to which the law gives effect (with the exceptions only contained in the 2nd and 3rd sections in the stat. 19 Geo. 2, c. 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; 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 prevented 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 objection 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 deceased, for although it were derived aliunde the debt of the testator is equally satisfied thereout; and the damnification of the creditors, in respect of which their action upon the assurance contract is alone maintainable, was fully obviated before their action was brought. This is agreeable to the doctrine of Lord Mansfield in Hamilton v. Mendes.(t) The words of Lord Mansfield are: "The plaintiff's demand is for an indemnity; his action must then be founded upon the nature of the damnifica

(8) Scott v. Roose, Long & Town. Ir. Rep. 54. (t) 2 Burr. 1210.

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tion as it really is, at the time the action is brought. It is repugnant, upon a contract for indemnity, to recover as for a total 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 degree. It is a contradiction in terms to bring an action for indemnity where, upon the whole event, no damage has been sustained."(u)

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 inquiry 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.(v) So great indeed, according to the general opinion 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.(w) There is, however, a prodigious difference 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 restricted construction, it is then submitted that the case calls for the interference of the legislature, and the statute should be amended in accordance with the ordinary practice, which would be done by [ *24] 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 respectable office would willingly undertake them. To require an adequate insurable 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 insured should be continuous, but that, on the contrary, when it has expired, as in the case of a debt, by its payment, a fresh interest subsequently acquired, such as a further debt incurred between the same parties, 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 v. Boldero, 9 East, 72.

Phillips v. Eastwood, Ca. temp. Sugd. 291.

(w) See evidence given on that point, Barber v. Morris, 1 Moo. & R. 66.

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