PROPOSAL.

The present case seems to me to be quite different from Biggar v. Rock Life Assurance Co., [1902] 1 K.B. 516. There the untrue answers were filled in by the agent without the knowledge or authority of the proposer, but after they had been filled in, the proposer signed the form without reading it, and it was held that it was his duty to read the answers before signing them and that he must be taken to have read and adopted them. The agent was held to have filled in the answers as agent of the proposer and not as agent of the company because he was "allowed by the proposer to invent the answers and to send them in as the answers of the proposer (at p. 524). That, it seems to me, is not the case of the present proposer. She had no opportunity of seeing the answers or of allowing them to be sent in as her answers. It seems to me that the company cannot, in the circumstances, set up in its defence the fact that the proposer was not the wife of the life assured and cannot refuse to pay the claim.

Alternatively, I think the proposer would be entitled to set up the actual insurable interest, which she possessed, and to claim in respect of that, instead of the insurable interest which is alleged in the proposal form.

In Parsons v. Bignold, 13 Sim. 318, affirmed 15 L.J. Ch. 379, the nature of the plaintiff's interest in the life of his son, which he was assuring, was added by the assurance society's agent after the plaintiff had signed the proposal. The statement of interest was incorrect, and when the Society refused to pay, the plaintiff sued it and filed a bill for rectification of the mistake or that the Society might be restrained from availing themselves of it as a defence to the action. The bill was dismissed, because the evidence did not show what the plaintiff told the agent and did not establish that the statement of interest did not correspond with what the plaintiff told the agent. But, as Malins V.C. said in In re Universal Non-Tariff Fire Insurance Co., L.R. 19 Eq. 485, at p. 495: "It was assumed throughout that if the misrepresentation had been the fault of the insurance company the policy would have been valid," or perhaps more accurately, as reported in 44 L.J. Ch. 761, at p. 764," if the mistake was made by the agents of the insurers then, of course, the policy was valid."

Indeed, it is obvious that this must be so from what Lord Lyndhurst L.C. said on the appeal: "Assuming that Nowell [the agent], when he inserted this representation, was acting as agent for the Society, which is the most favourable view of the case for the plaintiff, and that in so doing he misrepresented the statement made by the plaintiff, the Court might, upon these facts being substantially established, have acceded to the plaintiff's prayer and reformed the declaration."

But it must be remembered that under the Life Assurance Act, 1774, S. 3, no greater sum can be received from the assurer

PROPOSAL.

than the amount or value of the interest of the assured in the life assured, and it appears from Hebdon v. West, 3 B. & S. 579, that, while an employee has an insurable interest in the life of his employer, the amount of his insurable interest which he can receive from the insurer is not greater than the pecuniary interest that he has in his employer's life arising out of his contract of employment. The amount, therefore, which the plaintiff could. recover in the present case, since the contract of employment was a weekly contract for wages of £1, would be very small. (See Simcock v. Scottish Imperial Insurance Co., 10 S.L.T. 286.) But it is unnecessary for me to discuss this matter further, as the plaintiff is, in my opinion, entitled to an award on the first ground which I have mentioned.

Solicitor for Mrs. Violet Brunskill: G. E. A. Bellingham, Wimbledon.

Solicitor for the Company: W. H. Warne, London.

In the Matter of A. G. Haynes and the British Widows Assurance Company, Limited.

London, 21st October, 1925, Pontypridd, 12th January; Award 12th January.

Proposal-Misstatement as to previous assurances-Alleged waiver-Alleged knowledge of Company's agent as to such

assurances.

The Commissioner's written judgment was as follows:Albert George Haynes claims £5 2s. half benefit under a policy on the life of his mother, Emma Haynes, proposed by him on 11th January and issued on 26th January, 1924. She died on 28th August in the same year.

The Company resists the claim on the ground of a misstatement in the policy as to previous assurances. The claimant replied "None" to a request on the proposal to give particulars of all existing policies on the life of the proposed in any other company or society, and warranted his answer to be true, whereas he admits that policies on the same life proposed by him were then in force in the Royal Co-operative Society and the Bristol and West of England Society. He was, in fact an agent of the Royal Co-operative Society.

It is not very usual for a claim to be resisted on this ground, but the Company is perfectly entitled to take the point, and on the face of it the point is a good one.

The claimant makes a two-fold answer.

First, he says that in the conversation which took place between himself and Harry Avigdor, the assistant superintendent of the Company and David Thomas Lewis, the Company's agent,

PROPOSAL.

at the time when they negotiated the policy with him, he asked how he had to answer the question, as his mother was already assured elsewhere, and that Avigdor told him to put down "None" or said the Company didn't ever take any notice of the question. Avigdor denies that any such conversation took place, and Lewis denies that he heard any such conversation. In my opinion, it is improbable that such an incident occurred, or that the applicant, who was an assurance agent, should have asked Avigdor such a question, and I do not think it would be safe on the evidence to hold that the Company, through its agent, had waived the question and the answer.

Secondly, he says that Lewis knew that his mother was already assured in the Royal Co-operative, and that, as Lewis's father was already on his book, he put his mother into Lewis's Company at Lewis's request as a sort of quid pro quo. Lewis denies this, but here, I think, the probability is in favour of the truth of the applicant's version. Even if his version be accepted, however, it does not amount to an acceptance by the Company of the proposal in spite of knowledge through its agent that the answer on the proposal was untrue, so that it would be estopped from now resisting the claim on the ground of the untruth of the answer for this reason-Lewis's knowledge admittedly only extended to the Royal Co-operative assurance and it is not suggested that he knew anything about that in the Bristol and West of England. Therefore as neither he nor his principals knew all the material facts, there can have been no waiver by either of them and no estoppel by waiver could arise.

With some doubt, therefore, as to the first of the claimant's two points, I think I ought to dismiss his application.

In the Matter of Robert William Long and the Scottish Legal Life Assurance Society.

Blyth, 18th August; Award, 17th December.

Proposal-Untrue warranty-Agent informed of the true factsKnowledge of agent imputed to principal-Collecting Society -Application of rules.

Where a proposer signs a proposal containing a warranty which is untrue, but the agent of the society or company has knowledge of the true facts acquired by him as such agent and in the course of the transaction, the society or company is liable on the policy.

Bawden v. London, Edinburgh and Glasgow Assurance Co., [1892] 2 Q.B. 534, and Biggar v. Rock Life Assurance Co., [1902] 1 K.B. 516, discussed and reconciled.

The Commissioner's written judgment was as follows:This is a claim by Robert William Long under a policy for £40 taken out by him on the life of his sister, Blanche Mary Hill, on 10th October, 1925. The life assured died of tuberculosis following diabetes mellitus on 21st December, 1925. My

PROPOSAL.

findings on the evidence are that the applicant untruly stated on the proposal form dated 5th October, 1925, that the health of the life assured was good, but that at the same time the agent of the society, who took the proposal, was informed that the life assured was suffering from diabetes or, as one of the witnesses put it, "sugar diabetes." He did not so inform the district. manager or the society. The statement in the proposal form. was in print and was therefore not filled in by the agent.

Before I deal with the general result of these findings, for which purpose I am afraid a lengthy discussion of the authorities will be required, I will dispose of the particular arguments based on the rules of the society which were put before me by their counsel. He pointed out that in the proposal the proposer stated that he desired insurance subject to the rules and that the policy was expressed to be subject to the rules of the society which are printed on it.

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The rules on which he relied were Rule 28, which provides that managers and agents must not enter in the books of the society as a member any person they suspect is not in good health," and Rule 25, which is as follows:

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If at any time it be proved to the Board of Management that any person or persons have obtained membership by having given a false account of their age or state of health, or by having made any false statement in the Proposal at the time of their entry, such person or persons shall be expelled and forfeit all benefits; and although such proofs be not obtained during the life of such persons, but are obtained after death, all benefits shall be forfeited, and there shall be no claim whatever on the Society by any person claiming through them."

There is a simple and conclusive answer to his arguments, namely that neither of these rules has any application whatever to the present case. It is made perfectly clear by Rules 3 and 4 that the member in the case of a life-of-another policy is not the life assured but the proposer. As to Rule 28, the health of the proposer is not in issue, and as to Rule 25, it seems to me clear from the wording of the clause as a whole that it only refers to false statements made by persons who become members for the purpose of insuring their own lives.

Apart from this, there seem to me to be several excellent reasons for disagreeing with counsel's contentions, but it is unnecessary for me to set them out.

I now turn to more general considerations.

The two lines of cases which are in point in a matter of this sort are represented by Bawden v. London Edinburgh and Glasgow Assurance Co., [1892] 2 Q.B. 534, and Biggar v. Rock Life Assurance Co., [1902] 1 K.B. 516. It was admitted by counsel that the present case did not come within the principle of Biggar's Case inasmuch as the declaration as to health was

PROPOSAL.

not filled in by the agent but was printed on the proposal form.. Prima facie, therefore, the case must be taken to be of the type of Bawden's Case, but as that decision has been much discussed and, I think, a good deal misunderstood, especially in Scotland, where the defendant Society comes from, I think it well to take this opportunity of discussing the authorities generally.

In Bawden's Case the proposal, which was for an assurance against injury by accident, was filled in by the agent, Quin, at the plaintiff's dictation and was signed by the plaintiff. It contained a statement that he had no physical infirmity. He, of course, knew, and so did the agent, that he had a very material physical infirmity, namely, that he was minus an eye, but it is not stated how the agent acquired that knowledge, apparently it was by inspection. No evidence was given as to the extent of the agent's authority, but Lord Esher M.R. said that it was to be gathered from what he did, and that it was to negotiate the terms of a proposal for insurance and to induce the intending assured to make the proposal, but not to make the contract. He was the agent of the company to obtain a proposal which the company would accept and not merely to take the piece of paper containing the proposal to the company. The proposal must therefore be taken as having been negotiated and settled by the agent with a one-eyed man, and in that sense the knowledge of the agent was the knowledge of the company. The company accepted the proposal, knowing through their agent that it was made by a one-eyed man.

Lindley L.J. says that it was admitted that the agent was the company's agent for the purpose of obtaining proposals. That implied that he saw the person who made the proposal. He obtained a proposal from a man who was obviously blind in one eye and saw that he was so. He then mentions the fact that the plaintiff was illiterate, but, in my opinion, that was not one of the grounds of his decision, and neither of the other judges refers to the fact. He continues: "Are we to be told that Quin's knowledge is not the knowledge of the company? Are they to be allowed to throw over Quin? In my opinion, the company are bound by Quin's knowledge, and they are really attempting to throw upon the assured the consequences of Quin's breach of duty to them in not telling them that the assured had only one eye. The policy must in, my opinion, be treated as if it contained a recital that the assured was a one-eyed man."

Kay L.J. delivered judgment to much the same effect, the only substantial difference being that he referred to a note in the margin of the form: "If not strictly applicable, particulars of any deviation must be given at back," and said that Quin ought to have filled up the "deviation" and to have pointed out to the plaintiff that without it the form would not be properly filled up. But this matter was not referred to by either of the other judges, and was not, in my opinion, material to the ratio