Chap. IX. the party on whom the obligation lies to which of two persons he is to discharge it (a); or where it relates to personal requirements (b). Assignment against public policy. Assignments forbidden by statute. In some cases an assignment is void as being against public policy. "There are various cases in which public duties are concerned in which it may be against public policy that the income arising for the performance of those duties should be assigned: and for this simple reason, because the public is interested not only in the performance from time to time of the duties, but also in the fit state of preparation of the party having to perform them. Such is the reason in the cases of half-pay (c), where there is a sort of retainer and where the payments which are made to officers from time to time are the means by which they, being liable to be called into public service, are enabled to keep themselves in a state of preparation for performing their duties. So, also, where a pension or remuneration is given for a purpose which tends less directly to the public benefit, as the pension given to the Duke of Marlborough" (d). It is hardly necessary to state that assignments prohibited by statute are absolutely void. For instance (e), deferred pay or military reward payable to any officer or soldier of the army, royal marines, and His Majesty's Indian forces and the Royal Malta Fencible Artillery, or any pension, allowance, or relief payable to any such officer or soldier, or his widow, child, or other relative, or to any person in respect of military service (with certain exceptions (f)). Naval pensions payable to an officer in the navy, seaman, or marine, or to an officer's widow, allowances from the compassionate fund, marine half-pay, payments, &c. in respect of services in the navy and marines to a subordinate officer, seaman or marine (g), pensions under the In R. R. 569; Griffith v. Tower Co., [1897] (a) Tolhurst v. Associated, &c. Co., (c) Flarty v. Odlum, 3 T. R. 681; (d) Per Lord Langdale, M.R., Grenfell v. Dean of Windsor, 2 Beav. 549; 50 R. R. 279. See Davis v. Marlborough, 1 Swanst. 79; 53 R. R. 29. (e) See as to judicial salaries, Flarty v. Odlum, sup. (f) The Army Act, 1881 (44 & 45 Vict. c. 58), s. 141. See Lucas v. Harris, 18 Q. B. D. 127; Crowe v. Price, 22 id. 429. (g) The Naval and Marine Pay and Pensions Act, 1865 (28 & 29 Vict. c. 73), s. 4, as extended and amended by 47 & 48 Vict. c. 44. cumbents' Resignation Act, 1871 (h), are incapable of being Chap. IX. assigned. "Maintenance" is the maintaining of another person in his suit Maintenance. by one who has no valuable interest (i) in the matter, or an interest arising from relationship, or from the connection between the parties, e.g., as master and servant, or that which charity (i) gives to a man who assists a poor man whom he believes to be oppressed. "Champerty Champerty" is the maintaining of another in his Champerty. suit in consideration of receiving a share of the proceeds. As being contrary to public policy they are common law offences, and also may be actionable wrongs, and agreements or assignments of that nature cannot be enforced (k). (h) 34 & 35 Vict. c. 44, as amended by 50 & 51 Vict. c. 23. Gathercole v. Smith, 17 Ch. D. 1. See Gathercole v. Smith, 7 Q. B. D. 626. Secus, as to an annuity granted to a retiring incumbent under the Union of Benefices Act, 1860 (23 & 24 Vict. c. 142); McBean v. Deane, 30 Ch. D. 520; or the salary of a chaplain to a workhouse; Re Mirams, [1891] 1 Q. B. 594. (i) Holden v. Thompson, [1907] 2 K. B. 489; British, &c. Co. v. Lamson Co., [1908] 1 K. B. 1006. (k) Bradlaugh v. Newdegate, 11 Q. B. D. 1; Harris v. Brisco, 17 id. 504; Guy v. Churchill, 40 Ch. D. 481; Alabaster v. Harness, [1895] 1 Q. B. 339; Rees v. De Bernardy, [1896] 2 Ch. 437; Fitzroy v. Cave, [1905] 2 K. B. 364. See notes to Ryall v. Rowles, 1 W. & T. L. C. 156; and 6 Law Quarterly, 169. G.P.P. 10 CHAPTER X. Chap. X. Premium. Duty of assured to disclose material facts. Wilful misrepresentation. Innocent misstatement. POLICIES OF ASSURANCE. A POLICY of assurance is a contract by which the assuror undertakes to pay a sum of money to the assured on the happening of an event, or to indemnify him from the loss arising from the happening of the event. The consideration paid by the assured is called the premium, and is generally a sum of money paid down or payable annually until the event happens or the policy is allowed to lapse. The most important class of policies are those on life, on maritime risks, and against fire. It is the duty of a person seeking to effect a policy of any nature to communicate to the assuror every material fact in his knowledge, and, if he does not do so, the policy may be avoided by the assuror (a). If any wilful misrepresentation of a material fact is made by the assured, the assuror may avoid the policy (b). The question whether a policy is liable to be avoided by a misstatement made by the assured of a material fact, which, though untrue, is not untrue to his knowledge, is one of some nicety, and probably must receive different answers in the cases of policies on life and policies of marine insurance respectively. Where the policy is on life, if it is a term of the contract that the statement is true, the policy is voidable if the statement is false (c). This is in accordance with the general rule as to avoiding contracts (d). On the other hand, any material misstatement, (a) Blackburn v. Vigors, 12 A. C. 531; Lindenau v. Desborough, 8 B. & C. 586; London Assurance v. Mansel, 11 Ch. D. 363. Post, p. 154. (b) Fitzherbert v. Mather, 1 T. R. 12; 1 R. R. 134. (c) Anderson v. Fitzgerald, 4 H. L. C. 484; Macdonald v. Law Union Co., L. R. 9 Q. B. 328; Hambrough v. Mutual Co., 72 L. T. 140; Biggar v. Rock Co., [1902] 1 K. B. 516. (d) Leake on Contracts, 275. though innocent, renders a policy of marine insurance voidable, even where there is no express stipulation to that effect (e). Chap. X. facts. Whatever is necessary and essential to enable the assuror to Material determine what is the extent of the risk against which he undertakes to insure, is a material fact (ƒ). An insurance upon the property of an alien enemy during the Public policy continuance of war is void as being contrary to public policy (g). Policies on Life. A policy on life contains a contract by the assuror (almost invariably a company) to pay a sum of money on the death of a specified person (h). The consideration is generally the payment of an annual sum, called the premium, during the life assured; Premium. but occasionally the premiums are only payable during a certain number of years if the assured should so long live, and sometimes, instead of premiums, a sum of money is paid down. Sometimes Bonus. the policy provides that on the occurrence of certain events the company will pay a share of the profits made by the company to the policy-holder either immediately on the happening of the event or on the death of the person assured; this sum of money is called a "bonus." Sometimes it is provided that instead of the bonus being paid it shall be applied in reduction of the subsequent premiums. The ordinary form of a policy on life provides, in consideration Terms of policy. of the first payment of the premium, for the payment of the sum named in the policy if the person whose life is assured dies within a year, and for payment of the same sum if he dies after that date and the next premium is paid on the day appointed for payment of it, or within a limited number of days afterwards, called “the days of grace" (i), and so on from year to year. Generally it also provides that the payment of the policy moneys is to be made solely out of the property of the assurance society, and that no member of the society is to be personally liable. (e) Anderson v. Pacific Insurance Co., L. R. 7 C. P. 68; Macdowall v. Frazer, 1 Doug. 260. (f) Bates v. Hewitt, L. R. 2 Q. B. 605, per Cockburn, C.J. See Seaton v. Burnand, [1900] A. C. 135. (g) See Janson v. Driefontein Co., [1902] A. C. 484; Nigel v. Hoade, [1901] 2 K. B. 849. (h) Dalby v. India Assurance Co., 15 (i) See Stuart v. Freeman, [1903] 1 Chap. X. 14 Geo. 3, c. 48. Insurable interest. Occasionally the policy contains certain conditions, as, for instance, that if the person whose life is assured goes to a tropical country the premium is to be increased. It being found that the making insurances on lives, or other events, wherein the assured had no interest, introduced a "mischievous kind of gaming," in 1774 the statute 14 Geo. 3, c. 48, was passed. By this Act all insurances (k) made upon lives or events in which the assured has no interest (1), or by way of gaming or wagering (m), are void; the name of the person interested therein must be inserted in the policy (n); and no greater sum can be recovered from the assuror than the value of the interest of the assured at the time when the policy was effected (o). The Act does not prevent persons effecting bonâ fide insurances upon their own lives (p). It is not necessary for the assignee of a policy to have any interest in the life assured (q). Where a policy is void for want of insurable interest, the premiums paid cannot be recovered from the insurer (r); unless both parties are not in pari delicto, for instance where the assured has been induced to effect the insurance by fraud, duress, or oppression (s). By "interest" in the Act is meant pecuniary interest (t). But every man is presumed to have a pecuniary interest in his own life, and therefore when an executor sues on a policy effected on the life of and by his testator, he is not bound to show what reason the testator had for making the insurance (u). And a policy may be effected on A.'s life by B. in trust for A. if both names appear in the policy (x). A creditor has an insurable interest in his debtor's life to the (k) This Act does not apply to marine insurances; s. 4. See 28 Geo. 3, c. 56, repealed as to marine insurances by 6 Ed. 7, c. 41. (1) Halford v. Kymer, 10 B. & C. 724; 579; Barnes v. London Co., [1892] (m) See Carlill v. Carbolic Co., [1893] (n) Hodson v. Observer Co., 8 E. & B. 40; Evans v. Bignold, L. R. 4 Q. B. 622; Shilling v. Accidental Co., 2 H. & N. 42. |