PROPOSAL. neither of the other two judges referred to this feature and it was not referred to in argument. Lord Alverstone seems to treat the estoppel as an estoppel in pais and not by deed, and, as I have said above, I think perhaps the better view is to treat the matter as one of evidence and not of estoppel. 66 Secondly, the society relied on certain rules of the society. The policy states that the society is liable only in accordance with the Registered Rules of the Society" and the rules are printed on the policy. The rules in question are Rules 19 and 20. 66 Rule 19 is headed conditions of membership' and is drafted so as to refer only to own-life assurances. The clauses relied on were the second: "No person is eligible for membership in this society unless in a sound state of health at the date of entrance," and the nineteenth which is as follows: "If any person shall obtain admission to this Society by fraudulent misrepresentation of daily habits and conduct, or previous state of health, or bodily infirmity at the time of admission to membership, such member shall be liable to be expelled, and all his or her contributions forfeited; or if such fraudulent misrepresentations only be discovered and proved by evidence to the satisfaction of the Committee of Management after his or her death, no person whatsoever shall be entitled to receive on his or her behalf any benefit from the Society." This rule is applied to assurances on the life of another by the first paragraph of Rule 20, which runs : "Persons above the age of 16 may become members of the Society upon effecting or becoming entitled to the benefit of insurances for money to be paid for the funeral expenses of the husband, wife, child, parent, grandparent, grandchild, brother or sister of the member effecting such insurance, and the first three paragraphs of Rule 19 shall not apply to such persons (who are hereinafter called 'members entitled to Funeral Benefits '). The remaining paragraphs of Rule 19 shall apply to such members with such variations as may be necessary, and in particular so that the paragraphs relating to age, discrepancy of age, state of health, notice of death, certificate of death, arrears to be paid at death, and payment of grants, shall be read as having relation to the age, health and death respectively of the person for whose funeral expenses the insurance is effected." PROPOSAL. It will be seen that the second paragraph of Rule 19 is struck out for the present purpose by this paragraph and we are left with the nineteenth paragraph only, which has to be adapted to an assurance on the life of another. It is not easy so to adapt it and I suggest that it would be better if the society endeavoured to make Rule 20 complete in itself without reference to Rule 19. But fortunately I am not called upon to make the necessary adaptation, because the nineteenth paragraph only refers to fraudulent misrepresentation. It is clear, in my opinion, that the fraudulent misrepresentation must be such as to be attributable to the person seeking to obtain admission, that is to say, in the case of a policy on the life of another, the proposer, inasmuch as it is upon that person that the penalty is inflicted. The plaintiff made no representation or misrepresentation, fraudulent or other. There is no evidence that his wife's misrepresentation was fraudulent, and, even if it had been, there is no evidence that the plaintiff authorised her to make any representation at all. The society went so far as to embark on the parlous argument that fraudulent misrepresentation on the part of their own agent was enough for the purpose of the rule. The agent misled the society by signing a statement on the proposal form that he had seen the life assured, whereas in his evidence he stated that he had not. If he had seen him, his condition of health must have been obvious. The answer to this argument, which I view with extreme disfavour, is, first, that the agent's conduct is not attributable to and does not affect the plaintiff and, secondly, that probably a party to a contract cannot protect himself against the fraud of his agent, and even if he can, he must do so by express words. In S. Pearson & Son, Ltd. v. Dublin Corporation, [1907] A.C. 351 Lord Loreburn L.C., at p. 354, spoke as follows: : "I will not say that a man himself innocent may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents. It suffices to say that in my opinion the clauses before us do not admit of such a construction. They contemplate honesty on both sides and protect only against honest mistakes. The principal and the agent are one, and it does not signify which of them made the incriminated statement or which of them possessed the guilty knowledge." But it appears to me that the opinion of Lord James of Hereford, at p. 362, is preferable : "When the fraud succeeds, surely those who designed the fraudulent protection cannot take advantage of it. Such PROPOSAL. a clause would be good protection against any mistake or miscalculation, but fraud vitiates every contract and every clause in it. As a general principle I incline to the view that an express term that fraud shall not vitiate a contract would be bad in law, but it is unnecessary in this case to determine whether special circumstances may not create an exception to that rule." This view is supported by Lord Atkinson, at p. 365, who says: "As at present advised I am inclined to think, on the authority of Tullis v. Jacson, [1892] 3 Ch. 441, and Brownlie v. Campbell, 5 A.C. 925, that such a contract would be illegal in point of law.” It would not be right, in my opinion, that any contracting party should be permitted to contract himself out of the consequences of the fraud of his agent, and, anyhow, he could not contract himself out by a general reference to fraudulent misrepresentation. He would have to refer specifically to fraudulent misrepresentations on the part of his agent and that, I venture to think, nobody would care to do. There was one other argument put forward by the society, namely that it was the duty of the plaintiff on general principles to disclose the state of his father's health, after he received the policy. As to this, I must point out that in the policy in Johnson's and Greenhalgh's Cases the proviso included a specific clause that the policy should be void "if it be discovered that at the date of this policy the assured was afflicted with any mental or bodily disease," yet it never occurred either to Counsel for the Company or the Court to suggest that this clause was applicable in the circumstances. Here there is no such clause. The society handed to the plaintiff a policy without any request for information and without any proposal on his part. He had not opportunity either to disclose or fail to disclose anything before the contract was completed. The basis of the principle as to non-disclosure is that there is an "implied contract by an applicant for a policy to make full disclosure of all facts material to the risk" (Joel v. Law Union and Crown Insurance Company, [1908] 2 K.B. 863, at p. 878, per Vaughan Williams L.J.). This is no obligation on the assured to make any disclosure after the contract has been completed and the risk has attached. In my opinion, therefore, this argument also fails, and the plaintiff is entitled to payment of the sum assured under the 1924 policy. Solicitors for the Society: J. Tickle and Co., London. PROPOSAL. In the Matter of Violet Brunskill and the Pearl Assurance London, 29th September, Croydon, 28th October; Proposal-Proposal signed in blank-Untrue statement inserted by agent without information given by proposer-Insurable interest incorrectly stated by Company's agent-Claim in respect of actual insurable interest. Where a proposer signs a proposal form in blank and an agent inserts an untrue statement without the knowledge or authority of the proposer, he does so as agent of the Company and not of the proposer, and the Company cannot set up the untruth of the statement as a defence to a claim by the proposer to the sum assured. Keeling v. Pearl Assurance Co. Ltd., 129 L.T. 573, applied. Where a proposer's insurable interest is incorrectly stated in the proposal form by the agent of a Company without the knowledge or authority of the proposer, and the proposer has an insurable interest of another kind, the proposer is entitled to set up his true insurable interest and claim the amount of such insurable interest out of the sum assured. Bignold v. Parsons, 13 Sim. 318, affirmed 15 L.J. Ch. 379, followed. The following was the Commissioner's written judgment:Violet Brunskill or Sayer claims £32 8s. half-benefit under a policy taken out by her on the life of Digby Sayer on 1st February, 1926. The Company's defence is based on two alleged breaches of warranty in the proposal dated 23rd January, 1926, first, a breach of warranty as to the temperate habits of the life assured, which I disposed of at the hearing, being of opinion that it was not sufficiently established by the evidence, and secondly, a breach of warranty by reason of an untrue statement that the proposer was the wife of the life assured. The material facts, as I find them, with regard to this second contention are as follows: The proposer was not the wife of the life assured. She was his housekeeper at a salary of £1 per week. Subsequently a more intimate relationship began, but she still received her salary, and, in respect of that salary, had an insurable interest in his life. She signed the proposal form in blank. The agent never asked her any question as to her marriage with the life assured. He had been introduced to her as Mrs. Sayer and she passed as Mrs. Sayer, and from what he supposed to be his own knowledge, and without any reference to, or authority from, her described her as wife of the life assured in the proposal. The question then is, if it be assumed that the statement that she was wife of the life assured and took out the assurance as such formed part of the warranty, is she bound by the untrue warranty in the circumstances and, though she has in fact an insurable interest for another reason, is the Company entitled to set up the untruth of the warranty as a defence to her claim? PROPOSAL. In Keeling v. Pearl Assurance Co. Ltd., 129 L.T. 573, the proposer signed a proposal form with the answers to the questions as to the health of the life assured, her husband, left blank. The husband subsequently gave true answers as to his health to the agent, and the agent thereupon filled in untrue answers on the proposal form. It was held that the agent did so as agent for the Company and not as agent for the assured. Bailhache J. says, at p. 575 : No doubt, if the answers had been given by the assured, or by her husband, the policy would be void, but the agent in this case has inserted answers which are not consistent with, and in one case are certainly directly contrary to, the information which he had from this woman's husband. If the knowledge of the agent is to be imputed to the insurance company, or if in filling up the proposal form he was acting as the agent for the insurance company, then, inasmuch as the answers are his own answers and not the answers of the assured, the policy is undoubtedly good." It seems to me that the principle of this decision applies to the present case. The only difference is that there the agent filled in an untrue answer, when he had been supplied with the true answer by or on behalf of the proposer, whereas here the proposer was not asked by him for, and did not supply him with, any answer at all, and he filled in the untrue answer from what he supposed to be his own knowledge. In neither case can the agent be said to have any authority from the proposer to fill in the answer which he filled in or have filled it in as agent for the proposer. There is the Irish case of Connors v. London and Provincial Assurance Co., 47 Ir. L.T.R. 148, 1913 W.C. & Ins. Rep. 409, which also dealt with a proposal signed in blank. The facts are said in the judgment to be "startling " but are not clearly stated in the report. Apparently, however, the proposer of a policy on a child's life told the agent the child's true age, namely 21, but the agent by "mistake" filled it in as 12. The policy contained a condition that the agent's authority is confined to submitting proposals; the company is not bound by any statement or representation of the agent, and the agent has no power to vary, cancel, or waive any of the terms or conditions of the company's prospectus or policies. policies." The policy was in fact illegal. Gibson J. said: "The condition in this policy expressly restricting the agent's authority would make it difficult to take the case out of the decision in Biggar's Case even were the statutory difficulty out of the way." Possibly the decision may be justified in the particular circumstances, but, if it is inconsistent with the subsequent decision in Keeling's Case, I prefer the latter. |
