Dalby v The India and London Life Assurance Company: HL 9 May 1851

An insurance company (Anchor) had taken out insurance with the defendant on the life of the Duke of Cambridge in the sum of pounds 1000 for which it paid a yearly premium during the life of the Duke. Anchor had itself granted policies of insurance to a Reverend Wright on the Duke’s life in a total amount of pounds 3000. Anchor’s policy with the Defendant was ‘a cross or counter-assurance’. Before the Duke died Anchor agreed with the Reverend Wright to the surrender and cancellation of his policies in return for an annuity. The issue was whether or not it sufficed that Anchor had an interest in the Duke’s life when the policy with the Defendant was effected or whether such an interest had to subsist at the time of the Duke’s death. No one seems to have bothered with questions whether or not the Reverend Wright had an interest in the Duke’s life.
Held: It was sufficient for the interest to exist at the time the insurance was effected and that its value at that time was recoverable under Section 3. The obligation at that time to pay the Reverend Wright was ‘unquestionably an interest in the continuance of the life of the Duke’ under Section 3.
Parke B said: ‘Now, what is the meaning of this provision? On the part of the plaintiff, it is said it means only, that, in all cases in which the party insuring has an interest when he effects the policy, his right to recover and receive is to be limited to that amount; otherwise, under colour of a small interest, a wagering policy might be made to a large amount, – as it might if the first clause stood alone. The right to recover, therefore, is limited to the amount of the interest at the time of effecting the policy. Upon that value, the assured must have the amount of premium calculated: if he states it truly, no difficulty can occur: he pays in the annuity for life the fair value of the sum payable at death. If he misrepresents, by over-rating the value of the interest, it is his own fault, in paying more in the way of annuity than he ought; and he can recover only the true value of the interest in respect of which he effected the policy: but that value he can recover. Thus, the liability of the insurer becomes constant and uniform, to pay an unvarying sum on the death of the cestui que vie, in consideration of an unvarying and uniform premium paid by the assured. The bargain is fixed as to the amount on both sides. This construction is effected by reading the word ‘hath’ as referring to the time of effecting the policy. By the 1st section, the assured is prohibited from effecting an insurance on a life or on an event wherein he ‘shall have’ no interest, – that is, at the time of assuring: and then the 3rd section requires that he shall recover only the interest that he ‘hath’. If he has an interest when the policy is made, he is not wagering or gaming, and the prohibition of the statute does not apply to his case. Had the 3rd section provided that no more than the amount or value of the interest should be insured, a question might have been raised, whether, if the insurance had been for a larger amount, the whole would not have been void: but the prohibition to recover or receive more than that amount, obviates any difficulty on that head.’

Parke B
(1854) 15 CB 364, [1843-60] All ER Rep 1040, [1851] EngR 463, (1851) 4 De G and Sm 462, (1851) 64 ER 913
Insurance Act 1774 3
England and Wales
Cited by:
AppliedFeasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
CitedParry v Cleaver HL 5-Feb-1969
PI Damages not Reduced for Own Pension
The plaintiff policeman was disabled by the negligence of the defendant and received a disablement pension. Part had been contributed by himself and part by his employer.
Held: The plaintiff’s appeal succeeded. Damages for personal injury were . .
CitedBradburn v Great Western Rail Co CEC 1874
The plaintiff had received a sum of money from a private insurer to compensate him for lost income as a result of an accident caused by the negligence of the defendant.
Held: He was entitled to full damages as well as the payment from the . .

Lists of cited by and citing cases may be incomplete.

Insurance, Damages

Updated: 22 January 2022; Ref: scu.180087