the insurance to be from Lady Day, 1811, to Lady Day, 1812: and it was held that the covenant was broken by reason of the non-payment of the premium on or before the 9th of April, and that the lease was forfeited, upon a clause of re-entry. Lord Ellenborough says: "There was an interval during which the insurance was discontinued. The fifteen days, which are an excrescence from the preceding year, expired on the 9th of April. The policy then became extinct, and the landlord was deprived of all protection till the 25th of that month. A fire might have happened in the meantime; and there is no pretence for saying that in that case the Phoenix office would have been liable. For a certain period the landlord ran the risk of fire, and the sum of 8001. was not kept insured upon the premises in any office. It may admit of considerable doubt whether by the revenue laws the policy could be lawfully renewed by the payment of the premium after the expiration of the fifteen days. At any rate, its existence was suspended from the 9th to the 25th of April. The covenant to insure was, therefore, broken; and the landlord is entitled to recover at law, whatever relief there may be for the tenant in equity." [CRESSWELL, J.-There was an express insurance there for a year and fifteen days.] Provided the premium for renewal was paid within the fifteen days. [CRESSWell, J.—I do not so read it.] There is this important provision at the beginning of the fourth condition,-"In every case where a new premium shall become payable, the directors shall be at liberty to terminate the risk, by refusing to accept such premium; and shall also be at liberty, *284] previously to accepting any *new premium, to require such further information as they may think fit regarding the insured." [COCKBURN, C. J.-Suppose they ask for information, and find that the insured has met with an accident likely to result in death, may the company then refuse to receive the premium? WILLIAMS, J.-The information might be as to habits of life rendering him an ineligible subject for insurance. Milward. Or as to his occupation.] The company must at all events be liable until the expiration of the twentyone days. [COCKBURN, C. J.-If the party means to drop the insurance, and meets with a serious accident within twenty-one days after the expiration of the year of insurance, he may, according to your argument, tender the premium which he never intended to pay, and so make the company liable?] The first condition admits of no other construction. [COCKBURN, C. J.-Is not this the true construction of the first and fourth conditions, taken together,-If the insured chooses to renew the policy, he may do so by paying the premium within the twenty-one days, provided the directors do not exercise the option given them of terminating the risk by refusing to receive the money; and, in that case, the company shall be liable notwithstanding the happening before the expiration of the twenty-one days of the event upon the happening of which the money secured by the policy becomes payable ?]

Any other construction than that which makes the twenty-one days part of the portion of time covered by the insurance, renders the reservation of that period useless. If this was not an existing policy during the twenty-one days, it could not be revived. It is submitted that it was a continuing policy at the time of the death of the insured, and there was then an inchoate claim against the company,-defeasible, possibly, under the fourth condition. Then, as to the option of the directors, how and when is it to be exercised? When a new premium becomes payable. *Now, the new premium accrues or becomes due on the 22d of January. That appears from the second con[*285 dition, which provides, that, "if the premium on this policy be unpaid for the space of twenty-one days next after it shall first accrue or become due, then this policy shall become and be absolutely void, and the person or persons entitled to the benefit of such policy shall forfeit all his, her, or their claim on the company under the same." The same meaning must be given to the same words in the fourth condition. If it be optional for the directors to refuse the premium at any time during the twentyone days, the provision giving the twenty-one days for payment of the premium, which was intended for the benefit of the insured, is altogether nullified. The policy, which is made by the company themselves, must be construed most strongly against them. In Salvin v. James, 6 East, 571, by a policy under seal referring to certain printed proposals, a fire-office insured the defendants' premises from the 11th of November, 1802, to the 25th of December, 1803, for a certain premium, which was to be paid yearly on each 25th of December, and the insurance was to continue so long as the insured should pay the said premium at the said times, and the office should agree to accept it: and by the printed proposals it was stipulated that the insured should make all future payments annually at the office within fifteen days after the day limited by the policy, upon forfeiture of the benefit thereof, and that no insurance was to take place till the premium was paid: and, by a subsequent advertisement (agreed to be taken as part of the policy), the office engaged that all persons insured there by policies for a year or more had been and should be considered as insured for fifteen days beyond the time of the expiration of their policies: it was held, that, notwithstanding this latter clause, the assured having, before the expiration of the year, had *notice from the office to pay an increased premium for the year [*286 ensuing, otherwise they would not continue the insurance, which the assured had refused, the office was not liable for a loss which happened within fifteen days from the expiration of the year for which the insurance was made, though the assured after the loss, and before the fifteen days expired, tendered the full premium which had been demanded,--the effect of the whole contract, &c., taken together, being only to give the assured an option to continue the assurance or not during fifteen days after the expiration of the year, by paying the

premium for the year ensuing, notwithstanding any intervening loss, provided the office had not before the end of the year determined the option by giving notice that they would not renew the contract. In delivering the judgment of the court, Lord Ellenborough there says,"The office had the power at any time during the year of saying to the assured, we will not contract with you again: we will not receive from you the premium for another year; and, by such declaration, the object would cease for which the fifteen days were allowed; and, as no premium would be in such case to be received, no indemnity could be claimed in respect of it. The consideration of the indemnity during the fifteen days, is, the premium which may be paid within that period; but, when that cannot be any longer looked to, or expected, the right to the indemnity must determine also. The effect of the third article and advertisement are, to give the parties an option for fifteen days to continue the contract or not; with this advantage on the part of the assured, that, if a loss should happen during the fifteen days, though he have not paid his premium, the office shall not after such loss determine the contract; but that it shall be considered as if it had been renewed but this does not deprive them of the power of determining the contract at the end of the term, by *making their option *287] within a reasonable time before the end of the period for which the insurance was made. When the premium is received, the effect of it is to give the assured an assurance for another year, to be computed from the expiration of the first policy, and not from the expiration of the following fifteen days, which would be the case if the argument of the plaintiffs' counsel were well founded, that the interval of the fifteen days is not comprised in the policy: if that were so, a new policy and new stamps would be necessary; whereas, according to the present policy, regard being had to its relation to the printed proposals, it is an insurance for one year, and for so long as the parties please, provided the assured pay the annual premium within fifteen days of the expiration of each year; with a restriction of the office alone from determining the policy after the year during fifteen days of the following year, in case a loss should happen during that period." The language of the conditions here is somewhat different; but the effect was intended to be the same. [WILLES, J.-The conditions do not provide for payment of the premium for renewal by any one but the assured. That is the difficulty I feel. CRESSWELL, J.-What answer have you on the record to the first plea? That plea alleges that the premium became due on the 22d of January, 1856, and that it never has been paid.] It would, in effect, be paid by adjustment. The plaintiffs claim 20001. less the 121. premium.

Then, as to the replications. The first replication in substance is, that the defendants are by the conduct of their secretary and agent estopped from saying that the premium had not been paid. [CRESS

WELL, J.-Where is the evidence that the plaintiffs were intentionally misled? COCKBURN, C. J.-The directors abstained from communicating to the executors the fact of the premium not having been paid, until after the expiration of the *twenty-one days.] It was an [*288 unintentional misleading at first, but became culpable when the directors subsequently were made aware of the true state of things. [COCKBURN, C. J.-Were they bound to give the executors notice that the premium was unpaid? If they had done anything actively to induce the executors to abstain from inquiry, possibly the directors might be estopped from objecting that the policy had dropped. But the question is, whether there is any evidence of conduct on their part which amounts to such a misleading as to excuse the non-payment of the premium.] This is very analogous to the case of Gregg v. Wells, 10 Ad. & E. 90 (E. C. L. R. vol. 37), 2 P. & D. 296, where it was held, that the owner of goods, who stands by and voluntarily allows another to treat them as his own, whereby a third person is induced to buy them bonâ fide, cannot recover them from the vendee. The facts of that case were these:-Gregg, the owner of the fittings of a public-house, demised them to one Durham, who thereupon became tenant of the house to a third party, under an agreement which gave his landlord a lien on the fittings. Gregg was present at the execution of such agreement. Durham afterwards sold the goodwill and fittings, without Gregg's knowledge or assent, to Wells, who, being told by the landlord that Durham was his tenant, bought them bonâ fide, in ignorance of Gregg's title, and was accepted by the landlord as tenant in the place of Durham. And it was held that Gregg could not maintain trover for the fittings against Webb. In giving judgment, Lord Denman, who tried the cause, said,- Pickard v. Sears, 6 Ad. & E. 469 (E. C. L. R. vol. 33), 2 N. & P. 488, was in my mind at the time of the trial; and the principle of that case may be stated even more broadly than it is there laid down. A party who negligently or culpably stands by and allows another to contract on the faith and understanding of a fact which he can contradict, cannot afterwards dispute *that fact in an action against the person whom he has [*289 himself assisted in deceiving." Would the principle of that case have been at all varied, if the plaintiff had been ignorant at first that the goods were his, and had allowed the sale to take place after he had become acquainted with the fact? Surely not. In the judgment in Pickard v. Sears, the court say that "the rule of law is clear, that, where one by his words or conduct wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time." [WILLIAMS, J.-The rule in Pickard v. Sears is somewhat qualified by the judgment of the Court of Exchequer N. 8., VOL. II.-14

as delivered by Parke, B., in Freeman v. Cooke, 2 Exch. 654, 663,† which must now be considered as the governing rule. After referring to Pickard v. Sears, and Gregg v. Wells, and the earlier cases of Greaves v. Key, 3 B. & Ad. 313 (E. C. L. R. vol. 23), and Heane v. Rogers, 9 B. & C. 577 (E. C. L. R. vol. 17), 4 M. & R. 486, that learned judge says: "Whether that rule has been correctly acted upon by the jury in all the reported cases in which it has been applied, is not now the question; but the proposition contained in the rule itself, as above laid down in the case of Pickard v. Sears, must be considered as established. By the term wilfully,' however, in that rule, we must understand, if not that the party represents that to be true which he knows to be untrue, at least that he means his representation to be acted upon, and that it is acted upon accordingly; and if, whatever a man's real intention may be, he so conducts himself as that a reasonable man would take the representation to be true, and believe that it was meant that he should act upon it, and did act upon it, as true, the party making the representation would be equally precluded from contesting its truth; and conduct by *negligence *290] or omission, where there is a duty cast upon a person, by usage of trade or otherwise, to disclose the truth, may often have the same effect. As, for instance, a retiring partner omitting to inform his customers of the fact, in the usual mode, that the continuing partners were no longer authorized to act as his agents, is bound by all contracts made by them with third persons on the faith of their being so authorized." And he adds,-" In truth, in most cases in which the doctrine in Pickard v. Sears is to be applied, the representation is such as to amount to the contract or license of the party making it." Then, as to the second replication, which is substantially the same as the first, but pleaded on equitable grounds. [WILLIAMS, J.-Can there be an equitable replication to a plea showing a legal objection to the plaintiffs' recovering upon the policy ?(a)] The matter alleged in the replication is matter of defeasance, which it was not necessary for the plaintiffs to allege in their declaration. The defendants clearly are liable for having wilfully abstained from removing from the minds of the plaintiffs the delusion under which they knew them to be labouring.

court.

Hawkins and Milward, in support of the rule, were stopped by the Cur. adv. vult. CRESSWELL, J., now delivered the judgment of the court:This was an action by the executors of William Warre Simpson on a policy effected by him with the defendants on the 22d of January, 1851; and the declaration averred that it continued in force at the time of William Warre Simpson's death, and that, while it continued in *force, he met with an accident which within three months after

*291]

(a) See Vorley v. Barrett, 1 C. B. N. S. 225, 234 (E. C. L. R. vol. 87).