in the whole, of 11,0007. On the 21st December, 1830, she died suddenly, having, by her will, bequeathed the benefit of the policies to her sister, and appointed the plaintiff her sole executor. It was proved, that at the time the policies were effected she was in indigent circumstances, and without the means of paying the premiums. In the printed list of questions proposed by the Imperial, none was contained as to insurances effected with other offices. The Lord Chief Baron left it to the jury to say-first, whether the insurance was effected by the deceased for her own benefit, or as the agent of Wainwright; secondly, whether the false representations made by Miss Abercromby to the defendants related to a matter material to be known by them as insurers. The jury found that she effected the insurance as the plaintiff's agent, and for his benefit, and that the false representations were on material points; and a verdict, therefore, was entered for the defendants. On a motion for a new trial it was contended, on behalf of the plaintiff, that a person might lawfully insure his life for the benefit of another, whatever be the intention of the other party, and from whomsoever the funds are to come. Upon this point the court did not express any opinion, but said that the policy was clearly avoided by the false representations.

22. In order to amount to a misrepresentation, it is not necessary that the facts should be actually falsely stated; it is sufficient if they should be so stated as intentionally to mislead. Thus in a late case, Alderson, B., observed: "If a person makes a representation, or takes an oath of that which is true, if he intend that a party to whom the representation is made should not believe it to be true, that is a false representation; and so he who takes an oath in one sense, knowing it to be administered to him in another, takes it falsely. This may be illustrated by an anecdote of a very eminent ambassador, Sir Henry Wotton, *who, when he was asked what advice he could give to a young diplo[*50] matist going to a foreign court, said, 'I have found it best always to tell the truth, as they will never believe anything an ambassador says; so you are sure to take them in.' Now Sir H. Wotton meant that he should tell a lie. This no doubt was only said as a witticism, but it illustrates my meaning."(r)

1. WE have seen in the last chapter what are the obligations of a person making a proposal of insurance towards the company; and that where he employs another person to act for him, the same obligations attach upon the agent as upon the principal. We have also seen that it is usual to refer to the medical adviser of the person whose life is pro

(7) Moens v. Heyworth, 10 M. & W. 159.

posed to be insured, and one or more friends who are sufficiently acquainted with him to be able to express an opinion as to the state of his health and habits; these persons are respectively designated as the medical and private referees. We have also seen that it is usual for the person whose life is to be insured to appear personally, either before the board of directors or their medical adviser, to be examined as to the state of his health. When he is not the person proposing to effect the insurance he may also be considered as the referee of that party.

2. In the replies of the referees, as in the statements contained in the proposal, it is equally required that perfect good faith should be preserved. In making them, the referees are the agents of the party proposing the insurance, and their statements are representations made on his behalf, and from part of the contract, which will be avoided by any falsity as to a material fact contained on them. Great discretion is therefore required of a referee, who should be guided in his replies by similar rules to those laid down for the party making the proposal. At the same time, unless employed generally *to effect the insurance, he is [*52] only to a limited extent the agent of the latter; and, although bound to reply fully and truly to all questions put to him, is not obliged to volunteer information, however material in his estimation, which is not required or pointed at by any questions, either particular or general, proposed by the insurers. Thus, in the case of Huckman v. Fernie,(a) which was an action on a policy effected by the plaintiff on the life of his wife, Lord Abinger, C. B., in delivering the judgment of the Court, observed: "The third plea alleges that the plaintiff had concealed certain facts that were material, and which he knew at the time he effected the policy; and the evidence in support of that plea went to show that the wife had been examined by the defendant, when she did not mention the facts which it was supposed she knew to be material. It was contended, in behalf of the defendants, that the wife of the plaintiff was for that purpose the agent of the husband, and that the knowledge of the wife ought to be considered the knowledge of the husband. The jury found that the husband did not know the facts which were supposed to be material. Now, of course, if the wife had been the general agent, going to effect this policy for her husband, it would be like any other agent going to effect a policy for his principal, whose knowledge might be considered the knowledge of the principal for the purpose of effecting the policy; but in this case the wife was not the agent of the husband; she was no otherwise his agent than to answer particular questions, such as the company might choose to ask of her, and she was only to answer questions which they were to put; and if they had put to her and questions of a kind calculated to elicit a particular fact, said to have been concealed, it might be questioned whether or no she was his agent for that It was said that she knew of certain illnesses she had had before, and concealed them : however, she gave general answers to printed questions, and we think the meaning of the plea, therefore, is what the jury have found it."

[*53] purpose; but no such question was put.

(a) 3 M. & W. 505.

3. Although this is the state of the law as to replies to particular questions, it will rarely happen that there are not some such general questions put, as will in fact affect the referee with all the responsibilities of making a full disclosure of material facts, which are incumbent upon the party making the proposal. Such, when addressed to the referee, is the question, "Do you know any other circumstances which ought to be communicated to the directors?" It is no longer inserted to remind the party to whom it is addressed of the general rule of law, but imports a new obligation; and the consideration upon such a question is in like manner, as in the case of the principal proposing the insurance, not whether the individual to whom it is addressed thought the particular fact material, but whether it in truth was so.

In a case, which has been often cited, an insurance was effected, in 1824, upon the life of the Duke of Saxe-Gotha, with the Union Assurance Company, which had an agent in Germany; and that company being requested to effect a further insurance, a proposal was made to the Atlas (against the secretary of which the action was brought,) and the certificates and information obtained by the Union were communicated to the Atlas. These certificates, so far as they were material to the question raised, consisted of certain questions submitted to the physicians of the Duke, and their replies. Many of these questions related to specific diseases and habits; the last was, "Is there any other circumstance within your knowledge which the directors ought to be acquainted with?" and this was answered in the negative. There was also a private certificate of the agent, in which, in reply to a similar question, he said, "Agreeably to our informations the Duke has led a dissolute life in former days, by which he has lost the use of his speech, and, according *to some informations, also that of his mental faculties, which, [*54] however, is contradicted by the medical men; and as little as we believe that this has any influence on his natural life, we find it our duty to mention it." The physicians had stated that the Duke was hindered in his speech, but did not mention the state of his faculties. Upon a new trial being moved for, it was held, that the state of the Duke's mental faculties was a material circumstance within the knowledge of the assured, and uncommunicated by him; and that it was not so distinctly disclosed by the certificate of the agent as to render its communication by the assured unnecessary, and that the judge was right in leaving it to the jury to say whether any material facts were not mentioned by the assured. (b)

4. The omission, however, to be fatal, must be of a fact within the knowledge of the referee; and his labouring under a serious disease which he did not mention to the assurers, would not affect the validity of the policy, if from the nature of the malady he was unconscious of it at the time. Thus, when the person whose life was to be insured in the year 1823, had laboured under delusions arising from incipient insanity of which he was personally unconscious, although his physicians were aware of it, the fact that the insurers were not informed of the circum

(b) Lindenau v. Desborough, 8 Barn. & Cres. 596. JULY, 1853.-4

stance, when he was examined in 1827, and an insurance was effected on his life, was held not to vitiate the policy.(c)

5. Of course a misrepresentation by a referee cannot be less fatal than a mere omission; the referee making it will be considered as doing so on behalf of the proposer, who will be responsible for his statements. This was decided in the case of Maynard v. Rhodes, (d) where the policy was effected on the life of a Mr. Lyon for the benefit of *the plain

[*55] tiff. On the trial before C. J. Abbott it appeared that, it being proposed that the policy should be effected as a collateral security for a sum of money due to the plaintiff, Lyon, in conformity with the regulations of the insurance office, attended to give the usual information as to the state of his health, but concealed from the insurers a disease of long standing, of which he died a few months afterwards. It was contended, that as the plaintiff had himself made no representation as to the state of Mr. Lyon's health, and as the insurers had acted upon a representation made by the latter, they were liable upon the policy. But the learned judge told the jury, that if they were satisfied that the representation made by Mr. Lyon was not substantially true at the time the policy was effected, it must be considered as a condition incorporated in it, by which the plaintiff would be bound, although he might not be privy to the falsehood of the representation. The jury under this direction found for the defendant, and on a motion for a new trial the rule was refused.

6. Lastly, should the referee make a wilfully untrue statement, or collude with the party making the proposal, he may not only avoid the policy, but may, although not personally interested in the contract, render himself liable to an action if loss should ensue ;(e) for if a man will wickedly assert that which he knows to be false, and thereby draws his neighbour into a heavy loss, even though it be under the specious pretence of serving his friend, he makes himself liable for the damage— "ausis talibus istis non jura subserviunt," and that even if no fraud was intended by him.(f) In order to constitute moral fraud in a representation, it is not moreover necessary that it should be false to the knowledge of the party making it; if untrue in fact and not believed to be true, and made *for a fraudulent purpose, it is both a legal and [*56] moral fraud.(g)

A statement false in fact but not known to be so by the party making it, or made with intent to deceive, but on the contrary believed to be correct, will not render him liable in an action, although it may have induced the insurers to undertake the insurance, and they may have suffered pecuniary loss thereby, since to support an action of deceit the scienter must be proved.(h)

This liability has not, however, it is believed, ever been enforced in

(c) Swete v. Fairlie, 6 Car. & P. 1.

(d) 5 Dowl. & Ry. 266.

(e) Pasley v. Freeman. 3 T. R. 51.

(f) Watson v. Poulson, 15 Jur. 1111, Exch.

(g) Taylor v. Ashton, 11 M. & W. 415.

(h) Shrewsbury v. Blount, 2 M. & G. 475; Rawlings v. Bell, 1 C. B. 951; Chandelor v. Lopus, 1 Smith, Leading Cas. 77.

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 parties 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 medieal profession, when applied to as the medical referees of parties proposing 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 the companies whether they paid the fees or not, since the aggre[ *57] 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 personal 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 answerable 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 person, 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 collusion, which is at least possible, the objection might be of more vital importance; 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, Colchester County Court; Hooper v. The Gresham Life Assurance Company, June, 1851, Shoreditch County Court; Duplex v. The Economic Life Office, Aug. 1852. See Appendix.