case, for this Court has often said that mercantile questions ought to be decided in the Courts of law according to equitable principles.

Lord MANSFIELD. It is certainly true, in many instances, that first thoughts are best. I am now very much inclined to my first opinion. There are two sorts of policies of insurance: mercantile and gaming policies. The first sort are contracts of indemnity, and of indemnity only; and from that principle a great variety of decisions and consequences have followed. The second sort may be the same in form, but in them there is no contract of indemnity, because there is no interest upon which a loss can accrue. They are mere games of hazard; like the cast of a die. In the present case, the nature of the insurance is known to both parties. The plaintiffs say, "We mean to game; but we give our reason for it. Captain Lawson owes us a sum of money, and we want to be secure in case he should not be in a situation to pay us." It was a hedge. But they had no interest; for, if the ship had been lost, and the underwriters had paid, still the plaintiffs would have been entitled to recover the amount of the bond from Lawson. This, then, is a gaming policy, and against an Act of Parliament; and therefore it is clear that the Court will not interfere to assist either party, according to the well-known rule, that, in pari delicto, &c. Not that the defendant's right is better than that of the plaintiffs, but they must draw their remedy from pure fountains. I have returned to my old opinion; sometimes you miss the mark by taking too long an aim.

[471]

WILLES, J. I shall make no apology for differing from the rest of the Court, in a case where such great abilities have entertained two different opinions. The premium has been paid, and yet no risk run; for the policy was void from the beginning, and the insured could not have recovered from the underwriters if the ship had been lost. But I cannot think it a gaming policy. It does not appear to me that the parties had an idea they were entering into an illegal contract. The whole was disclosed, and they thought there was an interest. This was a mistake, but it is a new point of law. The case cited from Precedents in Chancery is not, perhaps, decisive, but it goes a great way; and it would be very hard that a party should lose what he has paid under a mere mistake. I think, in conscience, the defendant ought to refund the premium.

No. 99. Lowry v. Bourdieu, 2 Dougl. 471, 472.

ASHHURST, J.-I am clear that there ought not to be a new trial. A policy of insurance ought to be a mere contract of indemnity, and nothing more; but here the money might have been paid twice, which shows decisively that this was a gaming policy.

BULLER, J. It is very clear to me that the plaintiffs ought not to recover. There was no fraud on the part of the underwriters, nor any mistake in matter of fact. If the law was mistaken, the rule applies, that ignorantia juris non excusat. This was a mere gaming policy, without interest. There is a sound distinction between contracts executed and executory, and if an action is brought with a view to rescind a contract, you must do it while the contract continues executory, and then it can only be done on the terms of restoring the other party to his original situation. There was a case of Walker v. Chapman some years ago in this Court, where a sum of money had been paid in order to procure a place in the Customs. The place had not been procured, and the party who had paid the money having brought his action to recover it back, it was held that he should recover, because the contract remained executory. So, if the plaintiffs in the present case had brought their action before the risk was over, and the voyage finished, they might have had a ground for their demand; but they waited till the risk (such as it was, not, indeed, founded in law, but resting on the honour of the defendant) had been completely run. It makes no difference whether the premium was paid before the voyage or after it. The rule discharged.

Lord MANSFIELD said, he desired it might not be under- [472] stood that the Court held that, in all cases where money has been paid on an illegal consideration, it cannot be recovered back. That in cases of oppression, when paid, for instance, to a creditor to induce him to sign a bankrupt's certificate, or upon an usurious. contract, it may be recovered, for in such cases the parties are not in pari delicto.

No. 100.- Vandyck v. Hewitt, 1 East, 96, 97.

[96]

Insurance.

Vandyck and others v. Hewitt.

1 East, 96-98 (5 R. R. 516).

Illegal Voyage. - No Return of Premium.

The premium paid on an illegal insurance to cover a trading with an enemy cannot be recovered back, though the underwriter cannot be compelled to make good the loss.

The plaintiff declared upon a policy of insurance on goods at and from London to Embden or Amsterdam, at a premium of ten guineas per cent, to return five upon their arrival at the place of destination; with an averment that the insurance was made for the benefit of certain persons therein named; and then declared as upon a loss by capture in the course of the voyage insured. The declaration also contained counts for money paid and for money had and received.

The goods were shipped on board a Prussian neutral vessel, on account, partly, of the plaintiffs, who were naturalised foreigners, resident in London, and partly of certain other persons, aliens, then resident in Holland. At the trial at Guildhall the insurance itself was abandoned on the ground of its being intended to cover a trading with an enemy's country, Holland being, at the time of such insurance, in a state of hostility with this kingdom, and therefore falling within the decision of the case of Potts v. Bell, 8 T. R. 548 (5 R. R. 452); but it was contended that the plaintiffs were entitled to recover back the premium, because the policy never attached, and, consequently, the defendant's risk never commenced. Lord KENYON permitted a verdict to be taken for the plaintiff for that amount, with liberty to the defendant's counsel to move to set that aside and to enter a verdict for the defendant. A rule nisi was accordingly obtained on a former day in this term for that purpose; against which

Erskine, Park, and J. Warren now showed cause. Here

was no fraud intended, as in the case of smuggling [* 97] *transactions. The assured are neutral foreigners, who have paid money to the defendant for a certain consideration, the benefit of which they are precluded from receiving by a rule of public policy: it is but just, therefore, that as the insurance never attached, and the underwriter has not incurred any risk, he should not be suffered to retain the consideration. Tyrie

v. Fletcher, 2 Cowp. 668 (p. 502, ante). Admitting the contract to be illegal, yet, according to Lacaussade v. White, 7 T. R. 535, the party who has deposited money upon an illegal consideration (as in that case upon an illegal wager) may recover it back again, even after the event is determined against him. They also referred to the case of Nesbitt v. Whitmore, in Easter Term last, where this point was agitated, and where, finally, the premium was returned.1 Law and Garrow, contra, were stopped by the Court.

Lord KENYON, Ch. J.-There is no distinguishing this on principle from the common case of a smuggling transaction. Where the vendor assists the vendee in running the goods to

evade the laws of the country, he cannot recover * back the [* 98] goods themselves or the value of them. The rule has been settled at all times, that where both parties are in pari delicto, which is the case here, potior est conditio possidentis.

LE BLANC, J.-The ground of the determination in Lacaussade v. White has been since very much canvassed in a later case, of Howson v. Hancock, 8 T. R. 575, where it was considered that money deposited upon an illegal wager, and paid over to the winner, could not be recovered back from him.

PER CURIAM.

Rule absolute for the verdict to be entered for the defendant.

ENGLISH NOTES.

In Lubbock v. Potts (1806), 7 East, 449, a ship and goods were insured from Trinidad to Gibraltar. At this time it was contrary to the navigation laws to ship colonial produce to any port of Europe except the ports of Great Britain. It was held that the premium could not be recovered back.

So in Andree v. Fletcher (1789), 3 T. R. 266, 1 R. R. 701, where the policy was a reinsurance which was at that time unlawful by statute.

1 In that case, under similar circumstances with the present, Giles for the plaintiff admitted that he could not recover the loss upon the policy since the determination in Bell v. Potts; but he contended that the plaintiff was entitled to take a verdict for the premium, which had not been paid into Court. This was resisted by Park for the defendant, on the ground that no such question had been reserved at the trial. Et per Curiam. That point not having been made, and the jury not having assessed any such damages, but

only the amount of the loss to be recov ered, supposing the plaintiff to be entitled to it in point of law, we cannot now interpose any other sum in lieu of their verdict. Whereupon Giles prayed leave to amend the verdict by the Judge's notes. The Court, with much reluctance and with a view to a compromise, granted a rule to show cause. And afterwards it was agreed between the parties that the premium should be repaid, without costs on either side.

This was followed in Howard v. Refuge Benefit Society (1886), 54 L. T. 644, where the insurance was a wagering policy, and illegal under 14 Geo. III., c. 48.

AMERICAN NOTES.

These cases are cited and approved in 1 Parsons on Marine Insurance, p. 515, and in 14 Am. & Eng. Enc. of Law, p. 401.

So an underwriter cannot recover on a premium note given for an illegal insurance. Russell v. De Grand, 15 Massachusetts, 35. The Lowry case was cited and approved (obiter), by KENT, J., in Juhel v. Church, 2 Johnson Cases (N. Y.), 333. See Richardson v. Maine Ins. Co., 6 Massachusetts, 102; 4 Am. Dec. 92.

If the illegality arose by force of subsequent law, the premium may be recovered. Gray v. Sims, 3 Washington (U. S. Circ. Ct.), 276.

INTEREST.

See also No. 20 of "ADMINISTRATION" and notes, 2 R. C. 172, et seq.: also Nos. 1 and 2 of "INFANT," and notes, 13 R. C. 1, et seq.

By the common law of England, there is no right to interest upon money except by contract.

In an ordinary contract for repayment of money lent or for payment for goods sold, there is no implied contract for payment of interest.

And where interest is allowed upon money payable under a written instrument at a fixed date, or wrongfully withheld after demand under the statute of 3 & 4 Will. IV., c. 42, s. 28, or otherwise than by contract expressed or implied, it is only allowed by way of damages, and subject to a consideration by the Court or jury of all the circumstances of the case.