John Campbell v. Robert Allan, Agent for the Westminster Insurance Society.
Date: 22 January 1800 Case No. No. 3.
Restitution of the premium refused, although the policy was null for want of interest, in terms of 14th Geo. III. C. 48.
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John Campbell insured £2000 for one year, on the life of Thomas Allan, with his father Robert Allan, agent in Edinburgh for the Westminster Insurance Society, and paid £24. 18s. as the premium.
Mr. Allan immediately after wrote the Society, 25th May 1793:
“I now hand you orders from John Campbell, for his brother James Campbell of Calcutta to insure £2000 for one year on the life of my son Thomas Allan, born l7th July 1777, aged near sixteen.
My son is before me in the counting-house; I warrant him not sixteen, and In perfect health. Mr. Campbell has a purpose to serve, of which I know not; he named my son as being a good life, and least trouble attending it.”
Thomas Allan survived the year.
In 1798, Mr. Campbell raised action against Mr. Allan for repetition of the premium on the following statement:
The pursuer's object in entering into the policy in question was, as explained to the defender at the time, to insure £2000 for a year on the life of his brother Dr. Campbell of Culcutta. In conversation with Mr. Allan on the subject, the pursuer learned that a policy on Dr. Campbell's life would be Very expensive; but the defender suggested, that the object might be effected by insurance on the life of some indifferent person in this country, and proposed his son, who happened to be in the office at the time. The pursuer agreed, and paid the premium.
The pursuer was at this time shewn by Mr. Allan outlines of the rules of the Society, from Which it did not appear that the transaction was unsafe or illegal. But it now turns out, that, as the pursuor had no interest in the life of Thomas Allan, the policy was null from the beginning, by 14th Geo. III. C. 48. of which the pursuer was then ignorant, but which was explained in a small treatise, afterward published by the Society.
On that account, the pursuer could have recovered nothing if Thomas Allan had died within the year, and is therefore entitled to restitution of the premium, both because he was misled by Mr. Allan from his ignorance of the law, or culpable inattention, and at any rate condictione sine causa, as no risk has been run by the Society; Cowper's Reports, p. 666. &c. 18th November 1777, Tyrie against Fletcher; D. Lib. 12. Tit. 5. L. 2. § 2. L. 6. Lib. 12. Tit. 7. L. 1. § 2, 3.
Mr. Allan admitted, that Mr. Campbell had at first mentioned his intention of insuring on the life of Dr. Campbell, but added, that he did not explain the nature of his interest; that from his readily going into the proposal of substituting the defender's son, the defender was led to believe, that the interest in view would thereby be secured, and by instructions from the Society, who sisted themselves as parties, he resisted the demand;
Contending: It would be extremely dangerous to the Society to admit claims of repetition of premiums after the policy has expired, upon averments of want of interest on the part of the insured, who must be held to have had, at entering into the insurance, some substantial interest in view, best known to themselves. In such case, there can be no concealment of fact on the part of the Society, or their agents: And both parties are equally presumed to know the law.
When a policy is originally effectual, but the risk does not take place in consequence of some intervening occurrence, the premium must be returned; but here the averment is, that the policy was illegal and null from the beginning, and, in pari casu, melior est conditio possidentis; Douglas, 468; King's Bench 1780, Laurie against Burdien.
The Lord Ordinary reparted the cause on informations.
Observed on the Bench: The pursuer had not sufficiently explained his object in making the insurance. He might have had an interest which might have been effectually secured by it, and the defender had no title to investigate its nature.
No bad intention has been established against him; and supposing the misapprehension to have been mutual, in pari casu melior, &c.
The Lords unanimously assoilzied the defenders.
A petition containing reference to oath of Mr. Allan as to what passed at entering into the policy, was (18th February) refused, without answers; the questions proposed to be put to him having been considered as irrelevant.
Lord Reporter, Cullen.Act. Ar. Campbell.Alt. Thomson.Clerk, Menzies.
Fac. Coll. No. 158. p. 353.
