*

66

then comes this larger, and, as it were, more sweeping clause, "or any false statement made to them"; as if it were, or any false statement whatever made to them, in or about the obtaining or effecting of this insurance." At first I had some doubt, as the learned Judges appear to have had, with respect to the word "false," whether it implies merely untrue, or * 506 morally false, untrue, but not within the knowledge of the party making it, or morally false, that is, untrue within his knowledge. At first, I certainly had an impression upon my mind that it was to be taken as implying morally false rather than merely untrue, and that impression was grounded upon what immediately precedes; for "true" is used in a former part of the document, and "fraud” is used in the immediately preceding clause. I had, therefore, the impression at first that "false" there meant morally false, as contradistinguished from merely untrue. I have since come to the opinion which my noble and learned friend and the learned Judges advising the House have come to, that it does not mean morally false, but that it means simply untrue.

But be that as it may, it is quite immaterial; for whether we take the word as untrue absolutely, or untrue within the knowledge of the party making the statement, in either case, it appears to me, as it has done to the learned Judges, perfectly clear that the two questions to put to the jury were, "Was there an untrue statement made, whether with the knowledge of the party making it that it was untrue, or not?" And, "Was it made in or about the obtaining or effecting this insurance?" According to my opinion, agreeing entirely with that of my noble and learned friend and the learned Judges, those were the fit and proper questions, and the only questions to be put to the jury. And I think, further, that it is matter of exception, and made the direction of the learned Judge liable to exception, that he had directed the jury to consider the materiality of the statements in question. The truth of the statement, it being part of the contract, not its materiality, was in issue. I am therefore of opinion, with my noble and learned friend, that in this case we ought to give judgment for the plaintiff in error.

LORD ST. LEONARDS. My Lords, I believe that a more *507 important case than the present has not come before your Lordships during this session. Because, although the point turns

simply upon the proper construction of the instrument, yet it leads to such important consequences with regard to insurances for life, which are so common in this country, and upon which many persons entirely depend as their security for a provision for their families, that it becomes exceedingly important to consider maturely what is the true construction of an instrument of this sort. It is of course prepared by the company, and if therefore there should be any ambiguity in it, must be taken, according to law, more strongly against the person who prepared it. At the same time your Lordships must take care to guard companies of this nature against any fraud, and not to give validity to any part of the contract which has that object. That has been the practice for many years past. The Courts of law, observing how often. such companies have been subjected to frauds, have advised them to protect themselves by a sufficient provision against the commission of fraud, and that has led to such stringent provisions as those which we find in this case, provisions which, I am bound to say, unless they are fully explained to the parties will lead a vast number of persons to suppose that they have made a provision for their families by an insurance on their lives, and by payment of perhaps a very considerable portion of their income, when in point of fact, from the very commencement, the policy was not worth the paper up o which it was written.

In some cases, and it is so in the present, the companies take care to go beyond the law, and to protect themselves by a stipula

tion that a statement, which is not a warranty but a repre

* 508 sentation, if made contrary to the fact, shall

avoid the

policy. At law, if that statement, though untrue, was not untrue to the knowledge of the party who made it, the assured is entitled to recover the sums which he has paid. So that, although provision for the family is not obtained, yet there is no actual damage done to the fortune of the man. He is disappointed in his object, but the money which he has accumulated and paid for the insurance is repaid to the family. This company, however, has taken care that no such consequence shall ensue, but provides that, if any statement within the contract has not been truly made, the man's family shall not only lose the benefit of the policy, but shall not be able to recover a single shilling of the premiums paid, however numerous they may have been.

This, my Lords, is rather a singular case. This company, like

*

*

all others of the same kind, started, in dealing with the assured, by tendering to him certain particulars which he was required to answer, and he was to sign a declaration at the end of them. Questions, twenty-seven in number, were asked, most of them being material. Of those twenty-seven questions, the company, in framing the policy, chose to select fourteen, and to make every one of those fourteen the express subject of a warranty. The others were not included in the warranty. Amongst the questions which are omitted from the warranty, we find that those two very important questions upon which this case has ultimately turned have been omitted. I cannot imagine two more material questions. Supposing them to have been untruly answered, you would look naturally to the policy to see whether they were there; but the policy has excluded them. The policy takes this shape: it states as many of the questions as the company has chosen to take out of the particulars, and it states them as so many warranties, and then it proceeds upon that warranty to grant the 509 policy. The policy begins in these terms: That the assured "hath warranted and doth warrant that his name," and so on, and then it goes through the several terms which the insurers have chosen out of those particulars to constitute what they call their warranty, after which there is the common form of assuring the money. Then comes this proviso, upon which the policy is granted, that in case he should do certain things, such as go abroad, or enter the army or the navy, the policy shall be void. That is all quite right. Then come these important words, making void the policy: "or if any thing so warranted should not be true." There the attention of the assured is drawn at once to the warranty. He reads the terms of the warranty, and he is told that if any thing he has warranted is not true, the policy is to be void. The word "true" there is used, of course, in a general sense, and whether the man knew it to be true or false is utterly immaterial. Whether the circumstances warranted were material, or not, is entirely out of the question. It is simply sufficient, and ought to be sufficient to avoid the policy, that any one thing warranted is not true; and therefore the word "untrue" there is used in its general sense of an untruth in the abstract. It signifies not whether he did or did not know it to be untrue, it signifies not whether the circumstances were material or immaterial, the contract is to be avoided.

Then follows this, I may say, remarkable clause. Your Lordships will observe, that whenever they begin a new limb of a sentence they begin it with a conjunction. The first is this, which I believe I have already read, "Or if any thing so warranted should not be true." The next is, "Or if any circumstance material to the insurance should not have been truly stated, or should have been misrepresented or concealed, or should

not have been fully and fairly disclosed and communicated * 510 *to the said company." This is all one limb of the sentence, and is all governed by the same words, the first words," or if any material circumstance." So that all the misrepresentation and all the misstatements which are there guarded against are with reference to some circumstance material to the insurance, or if any circumstance material to that insurance should not have been," &c. Now, so far again, it is perfectly correct, only it would have been much better if they had inserted. among those things which they meant to consider material, the questions they had asked, and which had been answered. It would have led to a better understanding of the contract, if they, as in my opinion they ought to have done, had inserted them. But still the second limb of this sentence is right enough. The first is, that if any portion of that warranty is untrue, the second, if any material circumstance has been untruly stated. If it is material, then its untruth will avoid the contract, although the party did not know it to be untrue. So far I entirely go along with the contract.

Then follow those words upon which so much has turned, and which have led to so much difference of opinion. And I must say that that very difference of opinion between such very learned persons upon such an important case as this, of itself shows the improper manner in which this policy has been framed. A policy ought to be so framed, that he who runs can read. It ought to be framed with such deliberate care, that no form of expression by which, on the one hand, the party assured can be caught, or by which, on the other, the company can be cheated, shall be found upon the face of it: nothing ought to be wanting in it, the absence of which may lead to such results. When you consider

*

that such contracts as this are often entered into with men * 511 in humble conditions of life, who can but ill understand them, it is clear that they ought not to be framed in a man

ner to perplex the judgment of the first Judges in the land, and to lead to such serious differences of opinion among them.

The words which have led to this great difference of opinion are these, "Or if," and here begins the last limb of the sentence, which is all governed by the first words" or if," " or if any fraud. shall have been practised upon the company, or any false statement made to them in or about the obtaining or effecting of the insurance, this policy shall be void, and the premiums shall be forfeited." Now what does this mean? Nothing can be more simple than the meaning of the first words, "or if any fraud." The provisions before made against untrue statements and other material matters might not hit a great many cases of fraud; there might be personation for example. A great many descriptions of fraud may be in action; there might be many circumstances concurring to a fraud that could not be described, because fraud is a very general term, and it is impossible therefore to particularize beforehand what is meant by fraud. But you know very well what fraud is when it comes before you for judgment. Therefore, if there should be fraud, this policy very properly strikes at it. But the difficulty in which the Judges in Ireland involved themselves. was this. They were endeavouring to import the word "material,” which is found in the second branch of the sentence, into this third branch. Of course, you could not speak of any thing so absurd as a "material fraud." "If any fraud" stands quite right, if any fraud has been committed, the policy is to be void. Then what is the meaning, in conjunction with those words, of that which follows? Surely, my lords, these "false statements mean something which is connected with that which occurs *in the other branch of this limb of the sentence, namely, * 512 "fraud." The company has provided against any untrue statement generally contained in the warranty, and generally, also, against any material misstatement. Then comes "fraud," and fraud may be committed in action without any actual misstatement, and therefore I connect with that "false statement." Now when I find that the contract uses, to express the same thing, two words which may indeed have the same meaning, but which are also open to different senses, I must be very well satisfied, before I apply the same construction to those two words, that such was the intention; for if a proper word is used, and then afterwards a word is used which admits of a different as well as of the same

must