Equitable Life Assurance of The United States v Maria Bogie [1905] HCA 55

Equitable Life Assurance of The United States v Maria Bogie [1905] HCA 55 - HCA 1905 case summary — Zoe

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ds. Now, there is no doubt a premium became due on th May. There is no doubt, also, that it was the practice of Society, and, indeed, part of the terms of the policy, that 30 grace should be allowed, which expired on 27th June, and the ium was not paid then; but it also appeared that by corres- ce instituted before the premium became due, and con- ed until after that time had expired, an arrangement, or at negotiations had been entered into between the assured and e Society for a loan. By the policy itself it was provided (by condition VI.) : - * After this policy shall have been in force three the Society will thereupon, or upon any subsequent universary of the assurance, loan hereon, under the terms of the iety's loan agreement then in use, a sum or sums the total of ch shall not exceed the loan value of the policy as specified in table on page 3 hereof, upon condition that, at the time of such loan, the policy shall be duly assigned to the Society iteral security for such loan, and that 5 per cent. interest id loan, and the full premium of one year shall be paid in The assured, therefore, was entitled, under the terms of the policy, to borrow one or more sums of money, not ing in all the loan value of the policy, as specified in the itself, which in this particular instance amounted to £29 That is the maximum amount - whether the assured could that maximum, or any sum not exceeding the amount fied, is immaterial, because, in this case, he asked the com- y what amount they would lend him, and the answer that he ved from their authorized agent was £29 10s. As soon, ore, as this request had been made and the amount fixed, was a binding contract between the parties to lend him that mof money. It was part of the terms of the loan that the £29 should be applied in payment of the premium due on 28th , and also of the next succeeding premium, and that the lance only should be paid to him. 'Therefore, it would appear lear that there was a binding contract on the part of the to pay these premiums themselves, or, rather, to iate some of the money, which they were by their contract

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opinion, the Society cannot be heard to say that there any default made, and I should be inclined to hold, viewin, matter in that way, that the contract that the policy should on the non-payment of a premium, was varied by a sub contract for valuable consideration, that the policy should | lapse on the failure to pay that particular premium on the due dat but that, on the contrary, the Society would apply some of money that they were bound to advance to the assured, in pay ment of the premiums. An exact authority for that pro is found in the case of Hughes v. The Metropolitan Co. (1). I will read a passage from the judgment of Lord LC.: That was a case for the forfeiture of a lease for n compliance with a notice to effect repairs. After notice given there were negotiations which might have reasonably the lessee to suppose that the notice was in abeyance. His ship said: - "TIt was not argued at your Lordships' Bar, could not be argued, that there was any right of a Court Equity, or any practice of a Court of Equity, to give relief i cases of this kind, by way of mercy, or by way merely of savit property from forfeiture, but it is the first principle upon all Courts of Equity proceed, that if parties who have entered definite and distinct terms involving certain legal results penalties or legal forfeiture - afterwards by their own act or their own consent enter upon a course of negotiation which the effect of leading one of the parties to suppose that the st rights arising under the contract will not be enforced, or will kept in suspense, or held in abeyance, the person who other might have enforced those rights will not be allowed to e them where it would be inequitable having regard to the de which have thus taken place between the parties." A fo if the negotiations resulted in a distinct binding ag appears in the present case; but to that it is said by the lants that the agreement was conditional, and the loan was to be made on the assignment of.the policy. The facts oF were these : - The-assured executed an assignment of the

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negotiation ; or he might have said simply, I will adopt what propose, and enter upon a negotiation, saying nothing fa That third course is the course which he took, and it is a e which, as it seems to me, when taken, carried with it the intima- tion that he was satisfied with the footing upon which the ma was put by the letter which he was answering. This is what solicitors say in their letter of the 1st of December : - If company are the owners of' certain other houses, 'and are to sell them all' (that is all the houses), 'and give immediate p session, our client will, on learning the price, consider whether is worth while to acquire the company's interest or not. In men- tioning the price, please to give us particulars of the tena and rents paid to the company.' Now, that being a letter whi as it appears to me, acceded to the suggestion that the re were to be deferred until it was ascertained whether an ment could be made for the purchase, on the 4th December tl letter of the 1st was replied to, and replied to in this way : are in receipt of yours of the Ist inst. The particulars and te asked for shall be sent in the course of a few days. Again, the 30th of December, the agents of the respondents wrote to solicitors of the appellant - We send you herewith a staten of the company's receipts and payments in respect of the ho in Euston Road as requested by you. The company will a to surrender the whole of the leases in consideration of a p ment of £3,000. We shall be glad to hear from you at y early convenience.' That is followed by the particulars of Metropolitan Railway Company's interest in the houses in Road, the property of Mr. Hughes," and so on. Now, I have that passage in order to show the complete parallel in re which exists between the negotiations that took place in case, and the negotiations which have taken place between deceased Bogie and the defendant Society; and for the s reasons that it was held inequitable that the appellant there claim to insist upon his notice to repair within the s time, I think it is quite clear in this case equity would not allo this Society to insist on the lapse or forfeiture of the policy. - attach, however, more importance to the other question, whieh |

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public interests. Maxwell's Interpretation of Statutes, p. 580, says : - " Another maxim which sanctions the ryance of a statutory provision, is that cwilibet licet we juri pro se introducto. Every one has a right to ive, and to agree to waive the advantage of a law or rule made ly for the benefit and protection of the individual, in his capacity, and which may be dispensed with without ging on any public right or public policy." The matter for it purposes is contained in the words jurt pro se introducto, the provision is solely for the regulation of a private right, the person may take advantage of it, and not otherwise. 584, he says: - * But when public policy requires the ance of the provision, it cannot be waived by an individual. m conventio juri publico non derogat. Private are not permitted either to render that sufficient, themselves, which the law declares essentially insuffi- 'or to impair the integrity of a rule necessary for the amon welfare; such, for instance, as the enactment which juires the attestation of wills." The right of persons to from a rule laid down by Statute, if it is purely in the ion of private interests, and not if it is part of a public , has been illustrated in some American decisions, which tv me to contain propositions of reason. One is the case of Franklin Insurance Co, of St. Lowis (1), and in that it "A Statute provided that where real property within insured against fire, should be totally destroyed by fire it criminal fault of the assured, the amount of insurance itten in the policy 'should be taken and deemed to be the true of the property at the time of such loss, and the amount of sustained, and the measure of damages. In a policy ifter the Statute took effect, the parties stipulated that should be established 'according to the true and cash marketable value' of the property when the loss Held, that the amount written in the policy was ve as to the amount of damages, and on grounds of Policy could not be changed by such stipulation." 'Then which was cited to us was referred to (pages 555 and

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are sO numerous and obvious, that it is not deemed neces occupy time and space in specifying them. The conclusion ig reached that, as no notice was given by defendant, the policy not forfeited by failure to pay the annual premium which fell d June 1, 1890." Now, there is a case in which a company of th same name as the defendant company was interested, and I be it to be the same Society, viz., Wall v. Equitable Life Ass Society (1). The Judge who delivered the judgment was J., Judge of the Supreme Court of the United States, but sit on circuit in the Western District of Missouri. The avei of the defendants in the statement of the case (p. 274) was: "That, in the application for insurance, the insured, in eon- sideration of the agreements in the policy, thereby applied (being the agreement in said policy providing for paid-up insurance in the event of the surrender of the poliey at ce periods and under certain conditions specified.) waived a relinquished all right or claim to any other surrender valu than so provided, whether required by a Statute of any State or not ' - words which have their echo in this policy. Brewer J. i giving judgment, said this : - " In respect to the second q the following are the two sections of the Statute which applicable : - Sec. 5983, 2 Rev., St - ' No policy of insurance on life hereafter issued by any life insurance company authorized do business in this State, on and after the first day of August, A 1879, shall, after payment upon it of two full annual premiums, forfeited or become void, by reason of the non-payment of premii thereon, but it shall be subject to the following rules of commut tion, to wit.' (Then follows a statement of the mode of computing the amount payable in such case). Sec. 5985 - 'If the death of insured occur within the term of temporary insurance covered the value of the policy as determined in sec. 5983 and if no dition of the insurance other than the payment of premiums have been violated by the insured, the Company shall be bound to pay the amount of the policy, the same as if there had no default in the payment of the premium, anything in the p to the contrary notwithstanding.'

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Such seems to have been the thought of the Missouri and it evidently intended by its legislation to provide and absolute rule applicable to all cases, - absolute and uni because if it applied only in cases where the policies were or if it could be waived or changed, a child can see that it protect only so far as the insurance companies were wil although no words of penalty are attached, no express the right to waive, in fact no words of negation in any yet it seems to me fair to say that the affirmative lang this Statute discloses a public policy which no Court oug question or refuse to enforce: Railway Co. v. Peai The legislature has by this language declared a rule in res to forfeitures in life insurance policies; it has thus establ h the policy which it believes should obtain in this State, though sitting on the Federal Bench, it is my duty to administ the laws of this State in the spirit in which they were enacte and to uphold both their letter and their spirit. It is volunts with any foreign insurance company whether it shall come int this State to transact business; coming in, it should be willit comply with all the Statutes as to all business arising within State, and no Court, least of all a Federal Court, should has to release it from this obligation. From these views and this feeling, I am constrained, though with grave doubt sustain the motion to strike out." Well, the Supreme the United States, to which the matter went on appeal, up! the judgment of Brewer J., and apparently without sharing doubts. I may as well refer to a few words from the jud of Gray J. (2): - * By the Revised Statutes of Missouri of in force when this policy was made, it was enacted as follo [Then follow the sections which I have read]. "The man object of this Statute, as of many Statutes regulating the policies of insurance on lives or against fires, is to prevent ance Companies from inserting in their policies conditi forfeiture or restriction, except so far as the Statute per The Statute is not directory only, or subject to be set aside Company with the consent of the assured; but it is d and controls the nature and terms of the contract into wh

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for the benefit of the whole community, the ordinary rule will apply and the Statute must be obeyed. Now, it is on these principles that this Act must be construed. The beginning of this legislation in the State of Queensland is an Act called the Life Assurance Act 1879. Its title was an Act to encourage and protect life insurances and other like provident arrangements, and the preamble recites : - * Whereas it is expedient to encourage and protect life insurances and other like provident arrange- ments for the benefit of insured persons their wives and families." It extended protection to insurance moneys in the eyent of death, protection to insurance moneys from creditors, and during insolvency, and from executions. In 1901 the legislature went much further. They repealed the Act of 1879, and enacted the Statute which is now under our consideration. They seem in this Act to have taken up the position that the contract of life insurance was one of such immense importance to the whole community that it was expedient that the business of life insurance should be carried on and controlled by statutory provision; that it should be carried on only by companies which complied with certain statutory provisions; and that the policies should contain - special provisions for the protection and advantage of policy holders. By the fifth section, every company which commences to carry on life assurance business in Queensland is obliged to make a deposit of £10,000, to be invested, and while the company is allowed to receive the interest which that money earns, the deposit is set apart as a security for the payment of the value of the policies of the policy-holders, and, on the winding-up of the company, the deposit must be applied to the payment of policies before any other debt can be paid. The legislature has insured the carrying out of these requirements by enacting, in sec. 50, that any failure to comply with the require- ments of the Act is visited by a penalty of £50 a day, and in the case of companies registered under the Companies Acts, if the default continues for three months after notice of default given by the 'Treasurer, the company may be wound up on the applica- tion of a shareholder. 'The result of this legislative action is that the legislature of Queensland has really given a monopoly of the life insurance business in Queensland to those companies

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Judgment (158 paragraphs)