itself be not delivered over, and the mere deposit of the policy 2 with a verbal agreement for an assignment, or even the latter alone as a pledge for a valuable consideration, will entitle the transferree to avail himself of the policy, as against the assured, and if proper notice has been given him, against his assignees under a bankruptcy or insolvency. Moreover, if the policy has been deposited with a third person, merely as a security, and without notice to any party, it would appear that the assignees in bankruptcy cannot bring an action for the recovery of the instrument itself, for that was not in the order or disposition of the bankrupt, whatever may be their rights as to recovering the amount from the insurers when it becomes due. Should the purchaser unfortunately have omitted to take the necessary steps in order to prevent the operation of these enactments, he may, nevertheless, in any action at law 5 which the assignees may institute to recover the amount, after it has been received by him, deduct the sums he has paid by way of premiums to keep the policy alive; and in any suit in equity or proceeding in bankruptcy commenced by them, the court will give him a lien on the policy to the same extent. A volunteer, who in the absence of any assignment from, or contract with, the person entitled to the policy, upon his declining to keep it up, comes forward and pays the premiums, acquires only a title of the like limited nature, and, therefore, after deducting the sums he may have expended, and interest upon them, he will be compelled to pay the surplus to the original owner." 7

1 Fortesque v. Barnett, 3 M. & K. 36.

2 In re Styan, 1 Phillips, 105.

3 Tibbitts v. George, 5 Ad. & Ell. R. 107.

4 Gibson v. Overbury, 7 M. & W. 555.

5 Schondler v. Wace, 1 Campb. 487; Gibson v. Overbury, 7 M. & W.

559.

West v. Reid, 2 Hare, R. 249.

7 Burridge v. Row, 1 Y. & C. V. C. 183; S. C. 13 Law Jur. Rep. C. C. 173. The following are the views with respect to the assignment of both fire

and life insurance policies, expressed by an English author, who has lately given to the public a work treating of them:-"By custom of marine insurance, policies are transferable with the bills of lading. There is no custom, however, recognized, which makes policies of fire and life insurance pass current to successive owners of the property insured, nor to other persons, by transfer merely of the possession of the policy. As a general rule, where the possession of property is in one party, and an acknowledged claim to it resides in another, such claim can only become a transferable interest by the possessor being a party to the transfer by some act or admission; his acceptance of the notice of transfer is sufficient for this purpose. On this general principle, several cases upon policies of life insurance have been determined. An equitable mortgagee can assign; and an action of trover for detention of deeds does not lie. But not so when a depositee only holds for safe custody without lien. On fire insurance, no case of transfer of policies has come within the courts within a recent period, (see ante, Chap. IX). Whether with regard to both or either of these kinds of insurance a custom will grow up, making policies of insurance to run with the property insured, as custom has made several covenants (originally only personal contracts) to run with the land,' is a fair subject for conjecture. In a work recently published on Insurance, [see ante, Introd. § 11,] it is stated that the mercantile world are not satisfied with the decisions of the courts against the free transferability of policies. Perhaps the decisions are sound in principle, and custom alone can give new properties to policies, separating them from bonds, trusts, covenants, and other choses in action, [see ante, Introd. § 1, and § 199 of the Treat.] From a regulation of the West of England Insurance Company, which does away with the requirement of a notice to the office of any assignment of policies, it would appear that the practice of giving notice is thought objectionable by some, who do not like disclosure of assignments of their property; the prospectus accordingly states, that assignments shall be valid without notice." James, Life and Fire Ins. 73. (London, 1851.)

CHAPTER XVII.

OF THE CONSUMMATION AND DURATION OF THE CONTRACT OF LIFE INSURANCE.

§ 341. THERE seems to be no good reason why the established construction of law in respect to to the consummation and duration of the contract of fire insurance, which has been elaborately considered in a former chapter,1 should not apply to the contract of insurance upon lives. By having recourse to the chapter referred to, the reader will perceive, 1st, that when a fire policy has been executed in conformity to the terms agreed upon, the contract is complete, though there has been no actual delivery of the policy to the assured; 2dly, that immediate effect is to be given on a mere agreement to insure, and much insurance by such an agreement (and especially with a receipt of premium) has been effected; the contract may in the first instance be only executory, it being executed when drawn up in due form; the design being to supply the place of a formal policy, until such instrument can be prepared; 3dly, that a special writ

1 Ante, Chap. III, p. 67.

2 "The same principles," says Professor Greenleaf, "course of proceeding, defences, and rules of evidence, are applicable here, (i. e. Insurance upon Lives,) as in policies on other subjects which have been already considered." 2 Greenl. Ev. § 409. Ellis on Fire and Life Ins. p. 161, says "The general principles of proceedings on policies against fire, are applicable to those on policies upon lives."

3 Ante, § 31-33.

4 Ante, § 33-39, 50. A promise to procure an insurance to be effected, makes the party promising liable in case of loss without an insurance having been effected according to the promise. Wilkinson v. Coverdale, 1 Esp. R. 75; Wallace v. Telfair, 2 T. R. 188 n.

ing, even signed by the parties, is not absolutely required to complete the contract of insurance; and that the contract may be and has been frequently consummated, and made mutually obligatory, by a correspondence by letter between the person proposing for an insurance and the insurer; such correspondence satisfactorily disclosing the fact, that the minds of the two parties have met.1

§ 342. In respect to the DURATION of a policy upon a life. The ultimate limit of the risk is the event of the death of the party insured; and the loss thereby is always a total loss, so that the full sum insured is to be paid; not so in a policy against fire.3

§ 343. Whenever it is a condition of a life policy, that the insurance shall not commence before the premium is actually paid; this is waived by the issuing of a policy by the insurer before payment. The annual premiums must be paid in the succeeding years, on the day of the month on which the policy was executed, or bears date. If it be declared by the insurer, that fifteen days beyond the expiration of the year shall be allowed for the payment of the next annual premium, if a loss happens within that number of days, the policy will be continued if the premium is paid before such time elapses, though a loss may have taken place after the year has expired. But otherwise if a loss happen, and the premium is

not paid within the fifteen days.5

§ 344. Upon a policy of insurance on the life of A., the pre

31 Bell, Comm. 546; Beaum. on Fire and Life Ins. 56, and see ante, Chap. IX., "Of the Adjustment and Settlement of Loss," in Fire Policies. 4 1 Phillips on Ins. p. 520, 521, sec. 952, and ante, § 51; McDonnell v. Carr, Hayes & Jones, R. (Irish) 257.

5 Ibid; Mutual Ins. Co. v. Ruse, 8 Georgia, R. 534.

mium became due on the 15th of March, but was not paid until the 12th of April, when the country agent of the insurance company, through whom the insurance had been effected,1 gave a receipt for the amount of the premium. The instructions given by the company to the agent were, that the premium on every life policy must be received within fifteen days from the time of its becoming due; if not paid within that time, that he was to give immediate notice to the office of that fact, and in the event of his omitting to do so, that his account would be debited for the amount, after the fifteen days had expired. No notice was given to the company of the non-payment of the premium within the fifteen days; it was, therefore, entered in their books as paid on the 15th of March, and the agent was debited. It was held, first, that the mere debiting the agent with the premium could not be considered as a payment to the company by the assured; secondly, that as the agent had no authority to contract for the company, the fact of his receiving the money after the expiration of the fifteen days, and the entry in the company's books, debiting him with the amount, were no evidence of a new agreement between the company and the assured. The provision that the agent should be debited as if the premium was paid, was to operate as a penalty on him; but did not authorize third persons to take advantage of that which was a mere private arrangement between the company and the agent, for the purpose of insuring the due payment of all moneys which were to be received by him; it was simply the company's mode of keeping their own agents in order, by holding over them in terrorem that they should be responsible for the amount of money not received.

§ 345. Where, in a policy for life or years, there is a clause. that the policy is to cease unless the premium is paid within a certain time, the assured dying within that period, but

1 Acie v. Fernie, 7 M. & Welsb. R. 151.