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the policy on which the question was raised, was that relating to suicide by the insured. “ The policy will be void if the life assured die by his own hands, the hands of justice, by duelling, or suicide ; but if any third party have acquired a bonâ fide interest therein by assignment, or by legal or equitable lien for a valuable consideration, or as security for money, the assurance thereby effected shall nevertheless, to the extent of such interest, be valid and of full effect.”
The deceased (De Bordes) was a member of a firm of Mickle & Co., which became bankrupt at Valparaiso on 9th July, 1856. By operation of law, the property immediately vested in the Escribano attached to the Consulado Court at Valparaiso. On the 15th of July assignees were appointed, and the property ipso facto shifted from the Escribano, and vested in the assignees. On the day previous, viz., the 14th July, the deceased committed suicide. The question was, did the assignees take any interest under the policy? The object of the condition above extracted, it was said, was to protect the company from fraud, and to prevent the assured having an interest in committing suicide, in order that some one might get the benefit of the policy—that the assignment to the Escribano was a bonâ fide assignment for the benefit of all the creditors, and was as valid as if the deceased had assigned the policy to some one individual creditor. On the other hand, it was urged that the above condition was introduced to prevent suicide, and also to make the policy marketable that the intention was to favour those who had dealt with the policy, and not those who were merely standing in the place of the assured—and that bonâ fides was not a phrase applicable to bankruptcy.
And the court so held, thinking the words referred to one taking the policy as a bonâ fide assignee, having contracted for it, and that the provision does not extend to a case where there is no contract; but that “the provision applies where the policy has been assigned by a contract.” Crompton, J., observed he had had considerable doubt about this during the argument; but eventually he agreed with the rest of the court, who thus limited the term “ assignment” as we have just mentioned. This construction we do not venture to dispute, but we submit that the language employed to express the meaning of the parties to the policy, is improperly obscure, and should be amended.
3. THE LONDON AND NORTH WESTERN RAILWAY COMPANY
v. GLYN. (28 L. J., Q.B., 188.) This is another case decided on a point raised as to the signification of a usual proviso in a policy of insurance against fire. The
London and North Western Railway Co. v. Glyn.
insurance in question was (in December, 1854) effected by the plaintiffs with the Globe Company for £35,000, of which £10,000 were declared to be on a warehouse occupied by Pickford & Co., at Camden Town Station ; and £15,000 “on goods the plaintiffs' own, and on trust as carriers, in the said warehouse.” One of the conditions attached to the policy was, that “goods held on trust or on commission are to be insured as such, otherwise the policy will not extend to cover such property.” It was in respect of the goods to which, it was contended, this £15,000 referred that the dispute arose, the warehouse and goods having been consumed by fire during the existence of this policy.
The plaintiffs are common carriers, and through their agents, Pickford & Co., received certain silk goods, of the value of £10 and upwards, to be consigned to Edinburgh. Although the value and nature of this silk was not declared under the provisions of the Carriers' Act (1 Will. IV., c. 68), the plaintiffs paid its owners in respect thereof, it having been burnt in the warehouse. The decision of the court, whether the plaintiffs were entitled, under the policy, to recover the value of the silk, was to determine the general right of the parties.
By the case of Waters v. The Monarch insurance Company (5 E. & B., 870), it was argued, should the present case be guided. There the plaintiffs were wharfingers and warehousemen, and insured flour, " the property of the insured, or held by them in trust or commission." The flour was the property of the customers, and left at the plaintiffs' warehouse for the purpose of being carted as they might receive directions, and it was held that the flour intrusted to the plaintiffs were "goods on trust;" that there was nothing illegal in such a policy, and that it extended beyond the plaintiffs' personal interest or lien on such goods; that they were entitled to retain so much of the money paid them by the insurance company as covered their own interest, and they were trustees for the owners as to the rest, and were interested in every part of the goods.
On the other side, it was said the payment made by the plaintiffs to the owners was voluntary. Who are the assured ? What loss have they sustained? Why should carriers insure any interest but their own? The reference of “ trust as carriers,” it was urged, pointed to the necessity of their divulging to the insurance company whether the goods belonged to them or to others; that the case of Waters v. Monarch Insurance Company was that of wharfingers, and where it is a custom of trade to have floating policies for the benefit of themselves and the owners of goods alike; that the Carriers' Act removed the liability of the plaintiffs to pay, and therefore deprived them
of the right to recover. Further, it was contended that if the plaintiffs insured for the benefit of their customers, and if a policy happened to cover only the insurer's own property or personal interest, nevertheless they would have to share the sum insured with the cestui que trust, and thus miss realizing a security for their own losses. The question, observed Erle, J., is, whether the plaintiffs, when intending to insure their own interest, made in the term of the policy a special stipulation with the insurance company, that if they had a defence against the owner and sender of the goods, under any provision of law relating to carriers, they would avail themselves of it. “I would add," continued the learned judge, “that if, for the future, insurance companies, allowing a carrier to insure goods passing through his hands, mean to limit the liability that they incur to such liability as by law could be enforced against the carrier in invitum, more definite words to that effect should be employed than are to be found in the present policy."
On the authority of the case already cited, as well as on principle, judgment was given for the plaintiffs. Assuming that the respectable company which defended the action did not mean to enter on the contract as it has been thus interpreted by the court, but had the effect of the Carriers' Act in view when they framed the terms of the policy, they should have taken pains to express their meaning clearly, and we commend the observation of Erle, J., to the notice of their legal advisers.
4. LOFFT v. DENNIS. (28 L. J., Q. B., 168.) Fire Insurance-House burnt down-Rent payable for Use and Occupation
Lord St. Leonards' Handy-book observed upon. An equitable plea had been pleaded in this case, which was for rent due for use and occupation. The effect of the plea was, that the value of the premises holden by the defendant of the plaintiff had been diminished by reason of certain buildings thereon having been burnt down; that, although the plaintiff had received his insurance money from a fire-office, he had not rebuilt, and the defendant thereupon claimed to be exempt from paying the full rent. Among the authorities quoted in this case were Leeds v. Cheetham (1 Sim, 146), Brown v. Quilter (Ambl., 619), and Lord St. Leonards Handy-book (1st Ed., p. 101). The passage from the last authority is as follows :
“ If, therefore, you mean that a tenant at rackrent shall insure at his own costs, you must make him agree to do so by the contract. If you omit this, the lease must be so framed as to exempt him from making good accidents by fire. But, even in
this case you are not bound to insure; and although the house should be burnt down, yet the tenant must continue to pay the rent, so that each bears his burden-you lose your house, and the tenant loses his rent during the term. If, however, you have insured, although not bound to do so, and received the money, you cannot compel payment of the rent if you decline to lay out the money in rebuilding.
Lord Campbell concludes his judgment in Lofft v. Dennis by expressing the deep respect he has for the opinion of Lord St. Leonards, but affirms that what he states in the above passage does not appear to have been made law hitherto. “If it were, the Chief Justice adds, "I should support it.” So Crompton, J., remarked—“If it had not been for the passage in Lord St. Leonards' Handy-book I should not have felt any difficulty in this case. There was no agreement to insure the premises, nor any thing to show any obligation to insure; but it merely appears that the plaintiff chose to do so, and then the tenant says, "Well, if you are going to insure, I will not !' If any inducement had been held out to the defendant not to insure the premises, the case might have been different."
In Brown v. Quilter the plaintiff had rented a house for a term of years, and in the lease he covenanted to repair, &c., accidents by fire excepted, and the defendant entered into the usual covenant for quiet enjoyment. The house was burnt down, and the defendant, who had insured, received the insurance money, but did not rebuild the house ; insisting, nevertheless, upon his right to the rent. The defendant having brought an action for the rent, the plaintiff filed his bill for an injunction to compel the defendant either to rebuild or pay to the plaintiff the insurance money. The defendant, by his answer, offered to take back and cancel the lease ; but the plaintiff, choosing to continue tenant without having the house rebuilt, rather than to give up the lease, he consented to the dismissal of the bill. The main point, therefore, was not decided otherwise than in the remarks by Lord Northington, which we will now quote :
“The justice of the case is so clear, that a man should not pay rent for what he cannot enjoy, and that occasioned by an accident which he did not undertake to stand to, that I am much surprised it should be looked upon as so clear a thing, that there should be no defence to such an action at law; and that such a case as this should not be considered as much an eviction as if it had been an eviction of title, for the destruction of the house is the destruction of the thing. Though this covenant does not extend to oblige the defendant to rebuild, yet when an action is brought for rent after the house is burnt down, there is a good ground of equity for an injunction till the house is rebuilt.”
Turning now to Leeds v. Cheetham: the defendant had there demised by indenture to the plaintiff a factory for twenty-one years. The plaintiff covenanted to pay the rent, and to repair the inside of the factory, and the defendant covenanted to maintain all the outer part of the premises in good repair. There was no exception with respect to accidents by fire, either in the covenant for payment of the rent, or in the covenants to repair. The premises were burnt down, and defendant, who had insured, received the insurance money. Under this state of facts, Leach, V.C., held that there being in the lease no exception as to the case of accident by fire, the plaintiff by law continued bound to pay his rent, he continued bound also by his covenant to keep in repair the inside work of the factory. On the other hand, the defendant, for want of the like exception, continued bound by his covenant to repair the outer part of the building; and, from the particular terms of the defendant's covenant, the judge said that he was “ bound to rebuild the factory, and to cover in the same with proper roofing and slating, or tiling ... It appears to me that, in this respect, equity must follow the law. The plaintiff might have provided in the lease for a suspension of the rent in the case of accident by fire; but, not having done so, a court of equity cannot supply that provision which he has omitted to make for himself, and it must be intended that the purpose of the parties was according to the legal effect of the contract.
With respect to the equity which the plaintiff alleges to arise from the defendant's receipt of the insurance money, there is no satisfactory principle to support it. The defendant having so contracted with the plaintiff as to render himself liable to rebuild the outer work of the factory in case of accident by fire, has very prudently protected himself by insurance from the loss he would otherwise have sustained by such an accident. But upon what principle can it be that the plaintiff's situation is to be changed by that precaution on the part of the defendant, with which the plaintiff had nothing whatever to do? The plaintiff has sought his protection in the contract by the covenant which he has required from the defendant, and to those covenants must he alone resort." To which he adds, “The remedy is at law, and this court cannot interfere.”
The statement of the lawin Lord St. Leonards' book, which we have printed in italics, was founded on the ruling in Brown v. Quilter, and the learned lord in his new edition (7th, p. 127, n.) distinguishes his statement of the law from that in Leeds v. Cheetham, and Lofft v. Dennis. In the first place, in Leeds v. Cheetham there was no exemption from casualties by fire ; while Lord St. Leonards is referring to cases where the tenant is exempt from such casualties. Again, in Leeds v. Cheetham the plaintiff and defendant were