an inquiry was directed whether he had any securities for his debt other than the policy in order to ascertain such interest (ƒ). A deposit and agreement to assign, or a mere letter charging What an assignment the policy with a floating balance, is a sufficient assignment within within clause, this clause (g); and notice need not be given to the office (g). A stipulation to take effect in case of the suicide of the assured, "if any third party have acquired a bonâ fide interest by assignment or by legal or equitable lien for a valuable consideration, or as security for money," does not apply in favour of the trustee in bankruptcy of the assured (h). Where an insurance company advanced money on the security of a policy effected in their office, and containing such a stipulation, the company was held to be a "third party" within the meaning of the stipulation; the condition being intended for the benefit of the assured in order to render the policy an available security (i). Where the policy is to be void if the assured "died by his own hands," all acts of voluntary self-destruction are included, and the clause is not limited to acts of felonious suicide (). (10.) Effect of misrepresentation. The validity of a security on a policy of assurance may be affected by misrepresentations of the assured as to health or age at the time when the policy is effected, even although the fact may be immaterial (7). It is of great importance, therefore, that the mortgagee of a policy of assurance should ascertain that no misrepresentation or suppression of facts was used in effecting the policy, and also if the policy is not in the name of the cestui que vie, that the assured had an insurable interest at the date of the policy. (f) Cook v. Black, sup. (g) Cook v. Black, sup.; Dufaur v. Professional Life Ass. Co. sup.; Jones v. Consolidated Investment Co. sup. (h) Jackson v. Foster, 5 Jur. N. S. 547, in Exc. Ch. ; 1 E. & E. 463; 5 Jur. N. S. 1247. (i) White v. The British Empire Mutual Life Assurance Co. 7 Eq. 396, V. C. Malins. (k) Borradaile v. Hunter, sup.; Clift v. Schwabe, sup. (1) Anderson v. Fitzgerald, 4 H. L. 484; 17 Jur. 995; Casenove v. British Equitable Insurance Co. 5 Jur. N. S. 1309; 28 L. J. C. P. 259, in Exc. Ch. ; 6 Jur. N. S. 826; 29 L. J. C. P. 160. 14 Geo. III. c. 48. Insurable interest in policy. (11.) Interest in life. The 14 Geo. III. c. 48, prohibits insurances to be made by persons having no interest in the event insured; and, by s. 3, provides that no greater sum shall be recovered or received from the insurers than the amount or value of the interest of the assured on such life. It is a question whether this Act applies to benefit insurance societies constituted under the Friendly Societies Acts (m). As to what constitutes a sufficient interest to support a life policy, see (»). An insurance, effected upon a life in which the person effecting it has no interest, is void under 14 Geo. III. c. 48; but a person's interest in his own life, and a creditor's interest in the life of his debtor, are sufficient to give validity to an assurance (0), though the debtor be an infant (p); but the debt must not be won at play (p), and the debtor must not be an alien enemy (7). A surety has an insurable interest in the life of his principal (r). It has been held that a wife has an insurable interest in the life of her husband (s); but the principle of this is not obvious, for a husband has not an insurable interest in the life of his wife (s), nor a father in the life of his child (†). The Income Tax Act, 16 & 17 Vict. c. 34, s. 54, seems to assume that a husband has such an interest in the life of his wife. The expectancy of an heir or next of kin does not give an insurable interest (u). (m) Brown v. Freeman, 4 De G. & Sm. 444. (n) 2 Dav. Conv. 530, n. ed. 3; 127, ed. 4; Bunyon on Life Assurance, pp. 14 et seq. (0) Lindenau v. Desborough, 8 B. & C. (p) Dwyer v. Edie, 2 Park, 914. (r) Lea v. Hinton, 19 Beav. 324; affirmed, 5 De G. M. & G. 823; 24 L. T. 101. (s) Reed v. Royal Exchange Assurance Co. Peake's Add. Ca. 70; see 45 & 46 Vict. c. 75, s. 11, sup. p. 234. (t) Halford v. Kymer, 10 B. & C. 724 ; Henson v. Blackwell, 4 Ha. 434; 9 Jur. 390. (u) Lucena v. Crawford, 2 B. & P. N. R. 324. But see Cooke v. Field, 19 L. J. Q. B. 441; Bunyon, Ass. 16. (12.) In whose name policy should be taken. As an insurance effected upon a life, in which the person effecting it has no interest, is void (x), it was formerly held, that the interest in a policy effected in the name of the creditor failed when the debt was paid off (y), and consequently the policy was effected in the name of the debtor (z); but Godsall v. Boldero (y) is overruled (a), on the ground that life assurance is not a contract of indemnity, but simply a contract to pay a certain sum in the event of death. When payment had been made covering the whole amount of the plaintiff's insurable interest in the life assured, payment of a further policy upon the same life could not be enforced (b). (13.) Necessity of an assignment. Hence, if a policy be effected for the purpose of a mortgage security, there are advantages in taking it in the name of the mortgagee, which removes some of the risks, and avoids the necessity of an assignment. Where a policy is deposited as security without assignment, the assignees, though entitled to the money, must take it subject to the lien (c). (14.) Statute 30 & 31 Vict. c. 144. Before this statute, the receipt of or consent by the representatives of the mortgagor was necessary before the assurance company could be compelled to pay (d); and that, although the mortgage debt exceeded the policy moneys, and the mortgagor died insolvent (d), but his personal representative might have been dispensed with under s. 44 of the Chancery Amendment Act, 1852 (e). By 30 & 31 Vict. c. 144, an assignee of a policy of assurance, (x) 14 Geo. III. c. 48. (y) Godsall v. Boldero, 9 East, 72. (2) Ashley v. 4. 3 Sim. 149. (a) Dalby v. The India and London Life Assurance Co. 15 C. B. 365; Law v. The London and Indisputable Life Policy Co. 1 K. & J. 223; 1 Jur. N. S. 178; Robson v. McCreight, 25 Beav. 272; 4 Jur. N. S. 269. (b) Hebdon v. West, 3 B. & S. 579. (c) Gibson v. Overbury, 7 M. & W. 557. But see Green v. Ingham, 2 L. R. C. P. 525; Broadbent, app. Varley, resp. 12 C. B. N. S. 214. (d) Webster v. British Empire, &c. Co. 15 Ch. D. 169, C. A. (e) 15 & 16 Vict. c. 86; Webster v. B. E. &c. Co. sup. ; and see Crossley v. City of Glasgow, &c. Co. 4 Ch. D. 421, Jessel, M. R.; Curtius v. Caledonian, gc. Co. 19 Ch. D. 534, C. A. c. 144. 30 & 31 Vict. who has given notice to the assurance company as required by the Act (f), may sue in his own name, and the date of the receipt of the notice will regulate the priority of all claims under any assignment (g). An agreement for a mortgage, though accompanied by a deposit of the policy, is not an equitable assignment within the Act (h). A written notice must be given of the date and purport of the assignment to the insurance company, at their place of business, as in the Act mentioned, and the assignment may be in the form set forth in the schedule to it (i). As to the necessity of a power of attorney, and receipt clause in a mortgage of a policy since this statute, see (k). (15.) Contingencies for which the mortgage should provide. Mortgages of policies and other analogous descriptions of property, in order to give proper security to the mortgagee, should be prepared with a view to three contingencies: namely, foreclosure, for which purpose there should be the ordinary proviso for redemption (7); the receipt by the mortgagee of the money assured or other property mortgaged, which is the object of the usual declaration of trust; and sale, for which the usual power is inserted, with such additions or qualifications as the nature of the property may suggest, and which, where there is a policy, should include an authority to sell by way of surrender to the office granting it (m). (16.) Covenant to keep up policy. The mortgage must contain a covenant to keep up, and if required, to restore the policy. The covenant to keep up the insurance should be in terms negative, i.e., that the mortgagor will not do any act by which the policy may be avoided, and not merely affirmative that he will do all acts requisite for keeping up the policy, otherwise the avoidance of the policy by the suicide of the (f) 30 & 31 Vict. c. 144. (g) Ib. s. 3. (h) Crossley v. City of Glasgow Life (k) 2 Dav. Conv. 1043, ed. 3; 132, 494, ed. 4. (1) See Slade v. Rigg, 3 Ha. 35; Wayne v. Hanham, 9 Ha. 62; 15 Jur. 506; and per Turner, L. J. in Drysdale v. Piggott, 8 De G. M. & G. 552; 2 Jur. N. S. 1078. (m) 2 Dav. Conv. 681, ed. 2; 529, ed. 4. assured will not be a breach of the covenant (). Where a policy was assigned with a covenant to do no act by which the policy might be avoided, and the covenantor avoided it by going beyond the limits of Europe without the required licence, the Court directed that the measure of damages should be the market value of the policy at the time of the breach of covenant, considering as a fact that the defendant had covenanted to pay, and would pay the premiums (o). Where the mortgagor merely covenants to keep up the policy, or in default that the mortgagee may pay the premiums and add the amount to his debt, the damages for breach of such covenant are nominal; the remedy is to add the premiums to the debt; but where the covenant is to repay the premiums, the amount paid is the measure of the damages (p). Where the policy lapses through the misconduct of the mortgagor, a substituted policy forms part of the mortgage (4). (17.) Future premiums barred by certificate in bankruptcy. A covenant by the mortgagor to pay future premiums is now provable in bankruptcy, and any claim for them is barred by the certificate. Under the earlier bankruptcy laws contingent debts were inadmissible to proof. By 6 Geo. IV. c. 16, s. 56, and B. A. 1849, s. 177, debts payable upon a contingency were admissible to proof; but a covenant to pay future premiums was held not to fall within these sections ("). By B. A. 1861, s. 154, a special provision enabled a value to be set upon a covenant to pay future premiums for the purpose of proof, and the certificate was a bar, whether the covenantee proved or not (8). By B. A. 1869, s. 31, a still wider provision was made for proof (n) Ib. 683, 684; Dormay v. Borradaile, 5 C. B. 380; 11 Jur. 231; S. C. 10 Beav. 335. See 2 Dav. Conv. 528, n. (c), ed. 3; 134, ed. 4. (0) Hawkins v. Coulthurst, 12 W. R. 825; 2 Dav. 683, 684, ed. 3; 134, ed. 4. (p) Brown v. Price, 4 Jur. N. S. 882889, V. C. Stuart. (a) Nesbitt v. Berridge, 33 Beav. 282; 9 Jur. N. S. 1044, M. R. (r) Attwood v. Partridge, 4 Bing. 209 (under Act Geo. IV.); Mitcalfe v. Hanson, L. R. H. L. 242 (under B. A. 1849); Warburg v. Tucker, 5 E. & B. 384; 1 E. B. & E. 914; 1 Jur. N. S. 871; 4 ib. 1142. (8) Saunders v. Best, 17 C. B. N. S. 731; 10 Jur. N. S. 1204. |