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

months after said lapse providing premiums have been duly paid for at] three full years of assurance, the Society will give the assured the either a cash value or nen-participating paid-up life policy, at the lapse, as fixed in the following table of surrender values. . . sideration of the premises, it is understood and agreed that all righ for temporary assurance or any other surrender value than that this contract is hereby waived and relinquished whether required Statute of any State or not." It contained also a further provision that consideration of the premises . . . all right or claim for tempor ance, or any other surrender value than that provided in this hereby waived and relinquished, whether required by the Statute of or not."

Section 22 of the Life Assurance Companies Act 1901 provides # policy shall be forfeited for non-payment of premiums, solong as the and interest in arrear are not in excess of the surrender value. were commenced before the due date of a certain premium and

n the security of the policy, and that the Society should retain thereout. in sum in payment of the premiums in arrear, and thus keep the policy

ously assigned by him, had been cleared. Meanwhile Bogie died, but his was subsequently cleared.

Id that, under the circumstances, there was no such default made within terms and conditions of the policy as to cause a lapse.

, further, that the policy was subject to the provisions of sec. 22 of the

Life Assurance Vompanies Act 1901, and therefore did not become forfeited eC

for non-payment of premiums, so long as the premiums and interest in arrear not, at the time, in excess of the surrender value.

fild, further, that the provisions of sec, 22 of the Life Assurance panies Act 1901 were not excluded by the terms of the contract in stion, for the reasons (1) that the Act was not in existence at the time the t was made, and (2) that the legislature intended, in the interests of e general public, that the protection given by the section in question was to absolute and incapable of being bargained away.

by him in the appellant Society. The policy, dated 28th iber 1900, contained a provision that "the loans, surrender bonus guarantee options, privileges and conditions stated

owing table of surrender values. . . . In considera- ithe premises, it is understood and agreed that all right or 'temporary assurance or any other surrender value than

it date, resulting in an agreement that the Society should lend £29 H. C. or A.

. The assured executed an assignment of the policy to the Society ; but THE Equrr-

y refused to grant the loan until Bogie's title to the policy, which had been Avcuaxor

H, 0. or A. that provided in this contract is hereby waived and reling 1905.

whether required by the Statute of any State or not. "VI. Loans.

" After this policy shall have been in force three years tl

exceed the loan value of the policy as specified condition that at the time of making such loan, the policy shall be duly assigned to the Society as collateral security for such Joan's ASSURANCE

Casualty Co. (1); Inswrance Co. v. Norton (2); Inswrance Eggleston (3). Before the company could cut off negotiations treat the policy as lapsed they would have to give re notice to Bogie: Hatten vy. Russell (4). Other instances, policies remain in force even though premiums are in default, " Tennant v. Travellers' Inswrance Co.(5); Lebanon Mutual Ins ance Co. v. Hoover (6); Miller v. Life Inswrance Co. (7); St v. Freeman (8); Bristol, Cardiff and Swansea Aérated Co. v. Maggs (9).

Lilley, in reply. The agreement with the Society was for loan on the giving of the proper legal security. [He referred Egerton v. Earl Brownlow (10).}

GrirritH C.J. This is an action brought by the person representative of Joseph Dickson Bogie against the appe for the recovery of the amount of a life policy effected by in his lifetime. The plaintiff's title to the poliey is not in dis The defence was that, by a term in the policy, the policy was to lapse on the non-payment of a premium when due; and it alleged that, on 28th May 1904, a premium became due, a nd default was made in the payment of it, whereupon the policy lapsed and became forfeited. In answer to that defence, th plaintiff sets up what is called estoppel or waiver in three ways. She says first, that the premium, as to which Bogie made default in payment, was duly paid by him, or appropriated by th 7 defendants from the proceeds of a loan from defendants to B about the date that the premium became due. Then she that the defendants were estopped from alleging that default was made by reason of an agreement, which she says was m between the parties, and she relies practically upon the same facts, saying that the payment of the premium was waived an excused by the defendants. She also relies upon a provision |

(1) 41 Fed. Rep., 506. (6) 57 Amer. Rep., 511. (2) 96 U.S., 234, at p. 242. (7) 12 Wall., 285.

(3) 96 U.S., 572, at p. 578.» (8) (1903) 1 K.B., 47. (4) 38 Ch. D., 334. (9) 44 Ch. D., 619.

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

fife Assurance Companies Act 1901, to which I will refer H.C. oF A.

cs Tue Equir- ABLE LIFE ASSURANCE OF THE Unrrep Srares v. Boars.

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

to the company in the form that they used, and which had

d, because, some years before, the assured had assigned Jiey to some persons as collateral security for a debt due by ody else, that that assignment had been recorded in the ny's books, and there was nothing to show that the rights er the policy were not still vested in these assignees. As a of fact, that assignment had become inoperative. It was

'ignment by way of mortgage, and the trustees under it had

in the policy, although there appeared on the Society's books a ification that somebody else might have a claim to it. When

y could not give him the actual cash until his title was cleared, | before that was done he died. It was afterwards cleared, ind there is no question raised that his administratrix is not itled to the benefit of the policy if it continued in force. The ines applicable to that state of circumstances seem to be

• • The contract was one for valuable consideration relating ific property of such a nature that a Court of Equity would entertained a suit for the specific performance of it; and if assured in his lifetime had sued to enforce that contract, he d have claimed a declaration that the policy was a valid and isting one, if, when he brought an action of that sort, the y had then disputed it. In such an action it would, no doubt, have been essential, before he could get final judgment, to ea valid assignment to the Society, and it would have been ary for him to show that he had a good title; but in the ng of that proof, time would not have been of the essence of contract, and a Court of Equity would not have allowed his to be defeated by the Society showing that there was

ntly an outstanding blot on the title. According to the 'ines of the Court of Equity that would have been treated matter of conveyancing. In my opinion, then, this was a contract capable of being enforced in a Court of Equity, ind the objection to it is merely what a Court of Equity calls a matte of conveyancing, and not a condition, and there would be wer to such a suit in the face of a contract of that sort. I

him for the purpose. It is said that that assignment was H.C. or A.

Tue Equir. ABLE LIFE ASSURANCE, OF THE Unirep Srates

oe Tae Equrr- ABLE LIFE ASSURANCE OF THE Usitep Srares v Boer.

think it cannot be asserted that there was a default mad the terms and conditions of the policy which has caused a In one sense, that might be properly described as a case of though I prefer not to use that term. The term waiver, inclined to think, is not the right term to use either. In th

quoted a passage from Mellish J. He said : - * But e plaintiff himself did not intend to abandon the notice, yet, conduct was such as to put the defendants off their guard, an lead them to believe that the six months' notice would n insisted on, there is ground for giving relief in equity. result of waiver is different, for the notice is gone at law, wl Courts of Equity, though they relieve against the forfeiture, wil still compel the lessee to put the house into substantial repair, will give the landlord all that he is really entitled to, only p venting him from enforeing a forfeiture that would be able." But in any event, in this case, there was a clear equits answer to the original lapse or forfeiture of the policy.

That itself is sufficient to dispose of the case, but another pow was raised, and we were pressed to give an opinion upon subject, and I think it is right that we should give an expre: of our opinion. That was with regard to the effect of see. 22 the Life Asswrance Companies Act. That Act was passed aft the date of this policy. The section provides : - * No policy is by a Company shall lapse to the Company for non-payment 0 premiums so long as the premiums and interest in arrears are in excess of the surrender value as calculated in accordance w the answer to the ninth question contained in the statement prepared by the Company in the form of the Eighth Schedule this Act." The eighth schedule contains the form of statemen which, by sec. 13, are required to be made by the Company, aft other investigation of its financial condition has been made. has to be done once every five years, or at such shorter inte as may be prescribed by the constitution of the company. See. I says : - " Every Company shall, on or before the thirty-first day December, one thousand nine hundred and three, and ther within nine months after the date of each such inves

a nee and annuity business in the form contained in the hth Schedule to this Act." The statement must contain, lia, an answer to question 9 of the eighth schedule of the unely, "a table of minimum values (if any) allowed for the render of policies for the whole term of life." By sec. 52 of 'Act, it is declared that the provisions of the Act extend and y to all companies and to all policies and contracts for life ance, endowments and annuities, heretofore granted or or hereafter to be granted or made, whether they are sub- to the provisions of any particular or special Statute or

ise. The first question is whether this policy falls within terms of that section. The words of the schedule are: - " A £ minimum values (if any) allowed for the surrender of for the whole term of life, and for endowments, and ment assurances, or a statement of the method pursued in lating such surrender values, with instances of its application icies of different standing, and taken out at various mterval from the youngest to the oldest." A company is not bound ive a surrender value at all. It is well known that the old ranee companies did not grant surrender values. The policies equently contained a rigid condition that, upon the non-payment fa premium, the policy should lapse, and there was an end of it. n later years, however, many of the companies granted what 'called surrender values, which was a short term to express ne by which the assured was credited with some pecuniary e, in consideration of the premiums that had been received, according to the rules of the companies, fixed for themselves, 'Incompetition with one another. The benefit of and the amount y surrender value vary, and it was, in the case of some of

le premiums. But the legislature in 1901 thought fit to say hat no poliey should lapse, so long as the premiums and interest ars are not in excess of the surrender value. The first \ n, then, is whether in this case there is a surrender value.

Society say that they do not grant a surrender value under i 1s of their policy within the meaning of the sec. 22. The

the company would apply this surrender value to keeping up'

into its financial condition, prepare a statement of its life H. C. or A.

~ of the policy is headed "Surrender Values," and it is also

section clearly does not make it obligatory on the Society grant a surrender value, but the form of the table mention

question 9 is "a table of minimum value (if any) allowed the surrender of policies for the whole term of life." Condition V fi

lapsing condition: "This policy shall lapse and together with premiums paid thereon shall forfeit to the Society on the non-p ment of any premium when due; excepting that upon dues render of this policy within six months after the said providing premiums have been duly paid for at least three year of assurance, the Society will give the assured the choice of either a cash value or non-participating paid-up life policy, at the d of lapse, as fixed in the following table of surrender values." doubt that condition does not say in plain words that every policy shall have a surrender value which the assured may any time apply for and obtain at his option, but it does pro' for a surrender value which may be claimed within six mont after forfeiture. On the first page of the policy there is the statement : - ' The loans, surrender values, bonus guarantee options, privileges and conditions stated on the second and ,thi pages thereof form a part of this contract, as fully as if recited at length over the signatures hereto annexed." The second p begins : - ' Privileges and Conditions," amongst which is cond tion V. On the third page is a "Table of Loans and o Surrender Values." The first column is headed - * Loan at 5 Interest," and there is a footnote "loans granted subject to te of paragraph VI. of privileges and conditions, page 2," I have read. The next column is headed - Cash Value," there is no note attaching any condition to it. The proper con struction of the policy, it seems to me, is that there is an uncon- ditional promise by the Society that the assured may, at time after three years, at his own option declared within months after lapse, claim the entire cash value set out in th table. That is, I think, a table of minimum values allowed for the surrender of a policy within the meaning of question 9 of eighth schedule of the Life Assurance Companies Act. Sec. therefore, in my opinion, applies to this policy.

Then another question is raised. The same condition:

ch I have partly read - concludes with these words : - "In #- eat a tion of the premises, it is understood and agreed that all ©

or claim for temporary assurance or any other surrender 'pyr Eqorr- than that provided in this contract is hereby waived and ABE Lire

ASSURANCE quished whether required by the Statute of any State or not." oF THE

sort. There is no doubt that that was the object of the pro- "In consideration of the premises " - that is, the right to n the surrender value under certain conditions, namely, by ning it within six months after the policy has lapsed - ' any to temporary insurance," that is, to have the policy kept in e during the exhaustion of the surrender value - "or any other der value than that provided in this contract is hereby ved and relinquished whether required by the Statute of State or not." In some of the American States, at least, ehave been Statutes granting such a temporar I will assume, therefore, that that express provision is in sufficient to include the operation of sec. 22, or rather, at it operates as an express stipulation that, instead of the ileges granted by sec. 22, the assured shall have the privileges d by this Society, and nothing else. If that is so, and e stipulation is valid, the provisions of sec. 22 do not y to the case. It is said, however, that this is a condition ed by the legislature that cannot be waived by the There are two difficulties in the way of waiving it. first is that this contract was made before the Act was and therefore cannot be construed as haying reference 4 provision which was passed subsequently. The words her required by the Statute of any State or not," cannot, my opinion, be held to meet, or to refer to, any future law may be passed by the legislature of Queensland for the of assured persons. Leaving that out of consideration, iuestion arises whether the provisions of sec. 22 of the ie Assurance Companies Act ave capable of being waived, and 'isa question of very general importance. In considering

H.C. or A. that question, it is necessary to have regard to the objectal t! 1905. Jegislature in passing the Act. Up to the passing of this 'Tux Eqerr- there was practically no control over life assurance com

'ABLE LIFE 2 3 AStnaxcs AY company could come to Queensland and carry on b

pene It might have no assets, and it might be insolvent; but, sob : Srares or insolvent, there was practically no protection for persons Boc:, entering into any contract with it. When I say could come Queensland, I mean foreign companies could come, or a comp might be established, without any realizable assets at all. remember an instance of that sort coming under my notice I was on the Queensland Bench. _ It is, therefore, provided every insurance company carrying on business must deposit with the Treasurer £10,000 in cash or securities, and mu 7 make periodical returns. Companies were at liberty to ¢ on those conditions, or to stay away. It is further pro by see. 17 that they shall not be allowed to earry on busi until they have been duly registered under the British Co panies Act 1870, or the Foreign Companies Act 1895, and it is provided by sec. 22 that policies shall not lapse for n payment of premiums as long as the surrender value is exhausted. Under the law, as it stood before, a great number ; policies used to lapse for non-payment of premiums. This recognized to be a great hardship, and the legislature thought to say : - * We wi wat regulate insurance companies. If they

and we will not cite thst catitodih form of provident provisi

for the future to be destroyed by the mere non-payment of an instalment at a particular time. Those are the conditions r which we will allow companies to do business in Queensland." think a law of that sort lays down a rule of public policy, that it would be making the law nugatory if a stipulation policy inconsistent with it were allowed to prevail over i that the parties could contract themselves out of the section. suppose a company might frame its policies in such a way escape the operation of the section altogether. For ii suppose there were a simple provision that upon the non-p ment of a premium the policy shall lapse, and there were 1 provision for any surrender value, the section would not ap

a stipulation that, notwithstanding sec. 22 of the Life ance Companies Act,the policy shall lapse for non-payment premiums, notwithstanding the existence of a surrender value, , it seems to me, be in direct conflict with the intention of the legislature as declared by the Act. I have, therefore, come the conclusion that this is a provision that cannot be waived. is a provision not solely for the benefit of the assured; it was considered by the legislature to be an important condition, which ought to attach to all such contracts for the future. I am of inion, therefore, that all the answers the Society have made to claim of the plaintiff in this case fail, and that the decision of the learned Judge was correct. Bartoy J. I agree with the judgment which has been vered with respect to the questions that arise on the plead- s, as far as they are questions of estoppel or waiver, and I do not propose on that point to make any lengthy remarks. I agree vith His Honor the Chief Justice in attaching the greatest ght to the authority of the case of Hughes v. The Metropolitan jilway Oo. (1). Iam of opinion that if the documents in the sent case did not show a completion of the contract, there was 'apendency of negotiation amply within the decision in that case which would render it inequitable for the company to set up a or forfeiture of the policy pending the negotiations. The ets of that case I do not propose to repeat, but I wish to' refer to some of the remarks of Lord Cairns L.C. (2). The appellant d spoken of a letter which he had received, and the Lord ellor said: - "I read this as a definite intimation on the of the respondents that they would not proceed to execute € repairs (although they stated their readiness to commence forthwith), if they found that there was a probability of

received that letter, might have said, I have no intention of ing a purchaser ; or he might have said, I may become a rt; but if a negotiation is to be commenced you must nd that it is to be without prejudice to my notice to } you must go on and make the repairs as if there was no

2 App. Cas., 439. (2) 2 App. Cas., 439, at p. 445. You. TI, 61

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 |

the one arising from the Statute - that is, the Life As ¢

Act 1901 of Queensland. The 52nd section of that : [His Honor here read sec. 52]. The 22nd section

'is contended that in effect this Society gives no surrender and therefore it is exempt from the provisions of the ion in respect of any agreementy which it may make with policy-holder. Now, there are some passages in the case

us very relevant to the correctness or otherwise of that ention. I find in the answer to interrogatory 26 this state- In calculating the minimum value allowed for the render of policies for the whole term of life the guaranteed h value is determined by a certain percentage of the cash e held by the defendant at the end of the third year of the e of such policies." And the answer to Interrogatory 23 question being what was the surrender value of the said licy on the 28th May 1904, was: - "The surrender value of id policy, No. 1,019,296, on the 28th May 1904, was the set forth in the table on the third page of the said policy, as the cash value at the end of the third year, which, to the

ould be the sum of £20.) The table set forth on the third page the policy is "Table of Loans and of Surrender Values," con- g calculations of cash value, which is the only value ble to this case. We find on the same page : - "If the be living, and this policy is in force on the twenty-eighth of November nineteen hundred and fifteen, the society will the assured or assigns a cash bonus consisting in the full share of surplus profits, as determined by the wies of the society, this policy may then be continued or tendered by said assured or assigns under one of the following

options," among which is - < Draw entire cash value (consisting of

Now, the guaranteed cash value has already been in that table with the surrender value, and there is evidence of the intention of the Society, as between them se who contracted with them, that there shall be a compu- 'called surrender value, and that value is applicable within

the terms of this section for the purposes of the section. ; same policy we find, a little above the signature of the offi the Society, these words : - ' The loans, surrender values, guarantee options, privileges and conditions stated on the and third pages hereof, form a part of this contract as fully recited at length over the signatures hereto affixed." So th: Society in this policy has contracted for such a surrender yal as it describes, and if this surrender value is considered so

by a Company shall lapse to the Company for non-payment premiums so long as the premiums and interest in arrears are, in excess of the surrender value as calculated in accordance the answer to the ninth question contained in the statem prepared by the Company in the form of the eighth sehedul this Act." Now, it is important to remember that the A Parliament which we are considering is not a private Act; i not an Act dealing with private relations. There might be som difference in the view one would take of it in the event of having been a private Act incorporating this society in Q land, but this Act is nothing of the sort. It is a public regulating the entire relations between insurance companies al the public doing business with those companies, and in case any doubt or ambiguity as to the construction of such an Ae regard must be had to its scope and purpose. The very in question is one of a series of enactments dealing with and protecting the relations of the public with any s companies which comply with the provisions of the Act, their deposit, and are registered to do business. 'The con under which they are to do business are defined in the J Such an Act is prima facie for the adjustment of public inte and not for the accommodation of purely private rights. If th the correct view, as from the scope and purpose I have not the hesitation in saying that I take it to be, those who seek to sh that the maxim cwilibet licet renuntiare juri pro se intrody is applicable here, must show that it is not only applicable t Statute regulating private relations, but also to a Statute d

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

• 556): - * But the Counsel further contends that, by re stipulation in the policy, the Statute does not apply a govern as to the extent of the defendant's liability. Tt the parties were abundantly able to contract for themsel

they could restrict or change the rule provided by the and that the assured did expressly waive that rule, by agres that the loss should be established according to the tru

actual cash marketable value of the property when destro We have no doubt that the Statute applies to the poliey far as there is any conflict or inconsistency between it a provisions of the policy, the Statute must control." A s c analogous question was presented to the United States Ci

Court for the Western District of Missouri, in White y. 0 Mutual Life Insurance Co. (1). In that case, it was held tha' Act of the legislature of Missouri, in respect to policies of I insurance, extended to all policies delivered after the Act to effect ; and that where the provisions of the Act were in confli with the stipulations of the policy, the Act controlled. is a further case cited, namely, Grifith v. The New York Insurance Co. (2). Although it is not authoritative, so far this Court is concerned, it is competent, of course, for us examine' it, for the purpose of seeing whether it conta propositions to which our reason assents. In that it is s "Where the object of a Statute is to promote great interests, liberty, or morals, it cannot be defeated by a stip lation made by one of the class of persons entitled to its pr tection. If a Statute declares that no life insurance comp

reason of non-payment of premiums, unless notice shall be g as in the Statute stated, any contract between the company the assured stipulating for a forfeiture of the policy in absence of such notice is ultra vires and void. The Sta indicates the legislative will, that, as a matter of public life insurance corporations shall be deprived of the po declare forfeited policies of insurance for the non-pay premiums except in the prescribed mode, and a waiver 0

(1) 4 Dill, 177. (2) 40 Amer. St. Rep., p. 96 ; 101 California, 627.

h the Statute has taken away." And then, on the ques- hus stated - * Did the non-payment of the second annual um whieh fell due June 1, 1900 (but upon the payment of a grace of one month was, by the terms of the policy, d), work a forfeiture of the policy?" the report pro- s(1): - " The law of the State of New York under which policy is issued is set out in the twelfth finding of the art, and need not be repeated. It is also found that the t did not give the notice, as required by said Statute.

n avoidance of this Statute, and as a waiver of the notice provided for, respondent relies upon the following clause in ipaliey : : - ' Notice that each and every payment of premiums sdue at the date named in the policy, is given and accepted by delivery and acceptance of this policy, and any further tice required by any Statute is hereby expressly waived.'

he policy also provided as follows : - That if the premiums not paid as hereinbefore provided, on or before the days when then this policy shall become void, and all payments previously e shall be forfeited to the Company.' Such provision as the law prescribes for the advantage or Dp ion of individuals may, as a rule, be waived by them, where ot inhibited by public policy.

"Where no principle of public policy is violated. parties are at y to forego the protection of the law: Sedgwick on and Constitutional Law, 109.

e stipulation. referring to other cases, the Judge continues (2): - * The e in question is regarded as indicative of the legislative will as a matter of publie policy, life insurance Companies should eprived of the power to declare policies forfeited for non-pay- of premiums, except in the prescribed mode, and that being kl rived of the power so to do,a waiver on the part of the dcannot be construed to confer such power in the face of aw which has taken it away. The reasons for such a policy

)40 Amer. St, Rep., 96, at p. 102, (2) 40 Amer. St. Rep., 96, at p. 104. ia

t of the assured cannot be considered to confer a power H. U. or A.

Tue Eguir- ABLE LIFE ASSURANCE OF THE Unirep SraTEs . Bocix.

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.'

" Now, in the policy sued on there is a non-forfeiture clause, b

on the insured waived and relinquished all right or 1 to any other surrender value than that provided in the whether required by the Statute of the State or not. the doubtful question. It is strenuously insisted by the nt that the Statute of Missouri neither forbids, nor null, nor makes anywise illegal, such a waiver as the one yestion; that it merely gives a right or privilege to the red which, like any other personal right or privilege, he may i cient consideration waive, and that such a waiver, not ng forbidden by the Statute, 1s not contrary to publie policy such sense as that the Courts should refuse to enforce it. of this argument and strongly supporting it is that liberty contract which Courts are so strenuous to uphold. While I strained to hold adversely to the defendant, it is with doubts as to the correctness of my conclusion. In the first a technical argument can be made on the language of the It says the value of the policy shall be determined in a way, and then that, if the death of the insured occur g the term of temporary insurance covered by the value of thus determined, the company shall be bound to pay nt of the policy, 'anything in the policy to the contrary ding' This language is broad enough to include a er, and may be construed as meaning that no stipulation, no no agreement for a different forfeiture, - in fact nothing party can put into a policy, - shall defeat the right to the full amount, if death occurs during this time of insurance. Of course, this is a purely technical con-

ct on of the Statute, and I am disposed to rest my conclusion re upon the matter of public policy. And here the history of ce must be taken into consideration. It is notorious that insurance companies were rigorous in insisting upon s, (I think that possibly there is some parallel in the here related and some happenings in these States of tralia), "sometimes under very inequitable circumstances, and é was no little public clamour by reason thereof. Such nour prompted many legislatures to interfere, and to seek by 'lation to protect what they supposed the rights of the insured.

a different provision, and it is alleged that in the H. ©. or A.

Tue Equit- ABLE LIFE ASSURANCE OF THE Unirep Srates v. Bocre.

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

ny may induce the assured to enter. This clearly appears unequivocal words of command and of prohibition above . ." The Judge winds up by saying : - It follows that ertion, in the policy of a provision for a different rule of nmutation from that prescribed by the Statute, in case of default ment of premium after three premiums have been paid ; as s the insertion, in the application, of a clause by which the

iy other surrender value than that so provided, whether required a Statute of any State or not; is an ineffectual attempt to -and nullify the clear words of the Statute." Although that ision does not bind us, it compels the assent of my reason. matters determined are completely analogous - in fact, the soning is so clear that I cannot escape its conclusions in dealing h the present case, and here I am referring to the judgment of J., as well as to that from which I have just quoted. The The Netherseal Colliery Co. v. Bourne (1) was referred to. ,was decided the year before the United States Court case ich Ihave just read, but there is no similarity in the facts of cases. There is something similar in the principle involved. were employed in a mine, under a contract that coals H d be paid for at 1s. 6d. per ton, and heading slack at 7d. per no other slack to be paid for; all other slack to be deducted ithe different places in proportion to their loading, and a ium of 2d. a ton on the coal to be paid to all those places se boxes of coal did not contain an average of more than

s. of dust each week. The coal (including the slack gotten) weighed close to the pit's mouth, and was then sorted and forty yards, and shot on a screen, more slack being caused he operations; a note of the slack which passed through the

ht by the miners, to recover from their employers the rence between the wages so ascertained and the full wages if ch deduction had been made. It' was held, affirming the

decision of the Court of Appeal (1), that the miners were entitled to recover. By Lord Halsbwry L.C. and Lords Herschel and Mucnaghten: " Because, by the contract the amount of wages paid depended 'on the amount of mineral gotten' within the meaning of sec. 17 of the Coal Mines Regulation Act 1872 (35 & 36 Vict. 76), but the miners were not paid "according to the weight of the mineral gotten' nor was 'such mineral truly weighed accordingly, within the meaning of that section; for 'the mineral contracted to be gotten' was coal including slack, and slack was not 'material other than mineral contracted to be gotten' and was, therefore, not one of the deductions allowed by that section." The miners had made an agreement outside the terms of the Statute, but as they contested it afterwards, I pre- sume that they found it not profitable to themselves. It was held that that agreement did not hold, because the miners were not entitled to contract themselves out of the terms of the Statute. Although there might have been a good deal of room for the

rgument that private relations only were concerned, it is clear that it was held that the Statute was a matter of publie policy because it was for that reason that the miners could not contract themselves out of it. The decision given by the majority of the Judges in the House of Lords shows conclusively that they thought that this Statute created a statutory duty, which deprived the parties concerned of the right to contract them- selves out of it. But it seems to me that the reasoning in the United States cases completely establishes the position of the plaintiff that this is a public Statute, dealing with public interests, and not merely a regulation of private rights. I have already expressed my opinion on that point, and the reasons for my opinion, and it follows that I am bound to hold that this Statute is not rendered inapplicable by the condition in the policy, and that the condition by which it is sought to take the matter out of the section and create a lapse, which then would be the position, is of no effect. I agree therefore that the appeal should be dismissed.

O''Coynor J. I entirely concur in the conclusions of His (1) 20 Q.B.D., 606,

am of opinion that those conclusions must be supported, for the _ reasons given by my learned brother the Chief Justice. On that part of the ease, I do not think it necessary to add another word, but the other ground, upon which His Honour Mr. Justice Power did not think it necessary to express an opinion, involves con- siderations of such importance, that I propose to add something to

~ what has been already said by my learned brothers. In defend- ing the action, the insurance company set up the fifth condition 'of the policy, which is in these words : - " This policy shall lapse and together with all premiums paid thereon shall forfeit to the

_ society on the non-payment of any premium when due." They alleged that such being the terms of the contract, as a premium had not been paid, the policy lapsed. The plaintiff, on the other hand, relied on sec. 22 of the Life Insurance Companies Act 1901, which is in these words : - * No policy issued by a Company shall lapse to the Company for non-payment of premiums so long as the premiums and interest in arrears are not in excess of the surrender value as calculated in accordance with the answer to the ninth question contained in the statement as prepared by the Company in the form of the Eighth Schedule to this Act." The plaintiff alleged that the insurance company had in their hands surrender value to an amount sufficient to prevent the policy from lapsing within the meaning of that section, and therefore that they could not rely upon the fifth condition of the policy. 'The rule with regard to the interpretation of Acts of this kind may be very simply stated. Generally speaking, enactments of the legislature must be obeyed by all persons, and when the legislature enacts that a policy shall not lapse to the company under certain circumstances, that law must be obeyed, but there is an exception. Where the legislature has enacted something which only gives a tight to an individual, and nothing more, that individual may waive that right. In order, however, to bring the case within that exception, it must be shown that the enactment of the legis- lature is one which deals only with an individual right. If it has behind it some object of public policy, indicated by the enactment itself, which makes it an enactment, not only for the benefit of one individual or one party to the contract, but

haiti Mr. Justice Power on the facts decided by him, and I H. ©. or A.

a Tue Equir- ABLE LIFE ASSURANCE OF THE UnitEp Srars v. Boor.

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

whi h are willing to carry on their business in accordance with ese provisions, and it practically prevents any other company carrying on business in competition with them. There, of course, _ isno obligation on any insurance company to carry on business n Queensland, but if it does so it will be under the protection, and

must comply with the provisions, of the Act. I pass by some sec- Z tions, which are not very material to the question under considera- tion, that is to say, such provisions as those relating to the filing

• of accounts and the making of statements, and I come at once to _ the sections which deal with the protection of policy-holders. ~The first of them is sec. 21, which provides : - * No policy shall be declared void by a Company by reason only of the person upon whose life the policy was effected having understated his age in _ his application for the policy, but the Company shall be entitled ther to so reduce the amount payable under the policy that it _ shall bear the same proportion to the original amount of the _ poliey as the annual premium payable thereunder bears to the annual premium which would have been payable if the true age had been stated according to the premium table of the Company in use at the date of the policy, or to accept payment from the _ assured of an amount equal to the difference between the annual Premium paid by him and the annual premium which would have been payable as aforesaid if the true age had been stated, together ith compound interest on such amount at the rate of five per itum, upon the assured undertaking to pay the proper annual 'mium in the future." That is directed at what is often merely mistake on the part of the policy holder, which may often arise, without any fraud, but which we know, under the form of con- tract of a large number of companies, would absolutely vitiate the "poli y. Then we come to sec. 22, the section under considera- Further on we find, under sec. 25, the forfeiture of what called industrial policies, by reason of any default in payment Tany contribution or premium, is prohibited until after certain e, stating the amount of premium due, has been given to the y-holder. Again, sec. 26 provides that, upon proof to a com- ly that a person upon whose life a policy was effected has over-

his age in his application for the policy, the company shall t his option do one of two things, either increase the amount of

H.C. or A. the insurance money payable, so as to make it equal to eae would have been if the true age had been stated, or return to th 'Tue Eovrr- assured in cash the amount of over-payment that he had niade ee reason of the over-statement of age. Now, these are the p sad visions in which the legislature steps in between the insured ar States the insurance companies. It says in effect to the company : - " Boor, Contract which you make in the business which you carry on h under the protection of the State must, whatever else it contaii

include provisions giving these rights to your policy-holders,

we will not allow the forfeiture of those rights except on ce conditions." It does appear to me that, having regard to

purpose and object of life assurance, which is in fulfilment of the obligation to provide for those who are dependent upon him, wi

each individual owes to the community, when it is remembered -

that that kind of a contract is generally made subject to a large

number of conditions which require very often skilled persons understand, the legislature has thought fit to step in and say

" We take charge of the business of the making of these contracts

to such an extentas will insure financial stability in the insuran companies, and, in addition to that, we shall take care that th conditions on which you accept premiums are of such a nature

as not to press unduly upon the persons who insure with you."

Under these circumstances, it is clear that these provisions,

instead of being merely intended for the benefit of the individu

who make the contracts, are, in pursuance of a general p

laid down in this Act, for aiding the individual in the di gi

of a duty which is a duty to the State as well as to those depend-

ing upon him. These provisions, therefore, come under the

general rule, they are legislative enactments which must be

obeyed, like the provisions of any other Act of Parliament. -

Now, coming to the section itself, the argument of Mr. Lilley

He argues that a contract evil provides that there shall be i q surrender value is not a contract which is invalid in accord- : ance with this law. The soundness of that argument dep altogether on what meaning you are to put on the words "

" x value." Mr. Lilley is quite right in stating that the nal meaning of surrender value is a value which the company

surrender of a policy, like the surrender of a lease or any right, imports that there must be an existing right before

inal meaning of surrender value. There are a great many urance companies that have provisions in their policies which enable the insured to voluntarily put an end, with the consent of he company, to the insurance, the company undertaking if he s so, to allow him a certain value for the premiums which he already paid. But it is beyond all question that surrender yalue in the business of insurance companies has also another ming, that is the present value of the premiums paid after luctions have been made in regard to investment, cost of insur- ance, and other matters of that kind, the deductions being made on actuarial principles to ascertain what is the fair proportion o return to the person whose money the insurance company has for a certain number of years, but who on the other hand had the benefit of insurance during the same period. It has efore come about that the meaning of the words "surrender ue" has long ago been extended beyond its old meaning, and come to mean that amount which, on the termination of the » whether by lapse or by voluntary surrender, the insurance company is willing to pay over to the insured. It appears to me, her oe that we have, in order to decide this question, to Webs

gis 'ised i in a Statute, primd facie, it must be given Eg il meaning. Therefore, primd facie, the meaning of "sw

er" is voluntary surrender. Then, the next rule of pet ition becomes applicable, that is, that, if such a construc- on would render the provision of the Act to a large extent ¢, then, if there is another meaning - it may be the popular

aning - which if given to the words will make the Statute 'VOL. 111. 62

effective, it will be taken that the legislature has used the as having that popular meaning. If"surrender value" m the value which the company allow on the voluntary surrender _ of the policy, it would be in the power of a company to escape the provisions of this Act by providing that there should be no~ surrender value except in cases where the policy was subsisting, and the company chose to allow it to be surrendered. An inter. pretation of that kind would render the prohibition against the lapse of a policy in sec. 22 nugatory, and, therefore, we must. look | to the other interpretation. The other interpretation, giving the more extended meaning which I have referred to, is an interpre- tation which will enable the provisions of sec. 22 to be carried

out in every case where the insurance company have in their hands a sum of money representing the amount of the premiums | received which, after the proper deductions, leaves a sum exceeding * the amount of the premium due. I think there can be no doubt, : if the object of the legislature is to be considered, that it was to secure that benefit to the policy-holder when those circumstances - existed, and also to secure that, so long as an insurance company hold such moneys in their hands, the policy shall not lapse. o The next question is, was there a surrender value in the sense k in which I have used the expression, and in the way provided for in the table of this company? It is quite clear that there was. _ I do not think one need go beyond the policy itself, because in that there is the plainest possible statement that there is a surrender value. In the heading of the conditions, it is stated that "the loans, surrender values, bonus guarantee options, privi- | leges, and conditions, stated on the second and third pages hereof, - form a part of this contract as fully as if recited at length over the signatures hereto affixed." We find in condition V. that what is spoken of there as "surrender value" is not a surrender value in the old sense, but a surrender value in the popular sense to which I have alluded, because it is there provided that the "policy shall lapse and together with all premiums paid thereon shall forfeit to the Society on the non-payment of any premium when due; : excepting that upon due surrender of this policy within six months after said lapse, providing premiums have been duly paid for ij least three full years of assurance." In that event it is provid s

hat the insured shall be entitled to certain privileges, according "the following table of surrender values." That is not a

months after lapse. I need not go through those provisions of the policy, which have been already referred to by my learned brothers. It is almost impossible to look at any portion of this "y which deals with the matter under consideration without finding that the insurance company has provided a surrender value which fulfils all the conditions of a surrender value such as have indicated, and which, although often described as a "cash lue," is just as often described as "surrender value." Such the provisions of the policy, I have no doubt that it was a der value upon which a computation may be made under 22, and that, therefore, the section in this respect applies.

_ The only remaining question is whether the plaintiff has con- ed himself out of that section. I have already dealt with he impossibility of the plaintiff legally contracting out of the ion, because both the insured and the insurance company are bound to obey the law; but, in addition to that, I think it is plain, on the ordinary interpretation of language, that the

nderstand is used in America. The words "gives up all right or im to temporary assurance," is a phrase used in the American Acts, in respect of which this clause of the contract was intended

han are used here to indicate an intention to give up, not only Irights already given by Statutes in existence at the date of

ed under this Life Insurance Companies Act. As to the econd ground, therefore, which was not decided by Mr. Justice

Power, 1 agree that the defence cannot be sustained, and the ff must succeed.

ender in the old sense of the word, but a surrender within Tue Equrr-

H.C.or A. Solicitor, for appellants, J. C. Tyler, by his agents, Flower & 1906. grant, 7 Tur Equir. Solicitors, for respondent, Fitegerald & Walsh. ABLE LIFE Unirep + States Bocre, 'i Aba | Baeecely nis ERS (HIGH COURT OF AUSTRALIA.} WILLIS AND ANOTHER . . ' . APPELLANTS; DEFENDANTS, AND TREQUAIR . : i z ' , . RESPONDENT. PLAINTIFF,

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES.

H.C. or A, Zvidence - Commission to examine defendant abroad - A pplication by co-defendants 1906. - Witnesses Examination Act (N.S. W.), (No. 34 of 1900), secs. 4, 5.

Practice - Appeal from Supreme Court - Interlocutory Judgment - Judiciary Act

Sadat 1903 (No. 6 of 1903), sec. 35 - "ae (No. 6 of 1903), sec. 35. .

'ae anes On an application by a party for a commission to examine a witness out of the jurisdiction, under sec, 4 of the Witnesses Examination Act 1900, if it is

nec shown to the satisfaction of the Court that the witness is out of the jurisdic: VARESE tion, that his evidence is material, that the Court has no power to enforee his

attendance, and that the party applying cannot procure it, the Court is bound - in the exercise of its discretion to order the commission to issue, unless the - other party can satisfy the Court that the witness can and will attend.

This principle applied to the case of an application by two of three co-defendants to have the evidence of the third defendant taken on com-