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Colonial Cases

In re Joly v. The Sun Life Insurance Company of Canada, 1898

[insurance - evidence]


In re Joly v. The Sun Life Insurance Company of Canada

Supreme Court for China and Japan
Hannan CJ, 7 December 1898
Source: North China Herald, 12 December, 1898




Shanghai, 7th December.

Before Sir Nicholas J. Hannan, Chief Justice (sitting in Chambers).


   Mr. A. P. Stokes (Messrs. Johnson, Stokes and Master) applied to the Court to grant a commission to obtain evidence in London, Paris, and New York, on behalf of his clients, the Sun Life Insurance Company of Canada, defendants in an action brought by Mrs. Clara Agnes Joly, widow and executrix  of the estate of the late Mr. Henry Bencraft Joly formerly in Her Majesty's Consular Service, for the recovery of £2,500 alleged to be due on a  policy of insurance granted to the said Henry Bencraft Joly. Mr. H. P. Wilkinson, Crown Advocate, appeared for Mrs. Joly.

   The summons read as follows:-

   Let all parties attend this Court on Wednesday the 7th day of December 1898 at 10.30 o'clock in the forenoon on the hearing of an application on the part of the defendants for an order that commissions do issue directed to H.B.M.'s Consul-General or acting Consul-General at New York, United States, America, to H.B.M.'s  Consul or acting Consul at Paris, France, and to two commissioners in London one to be named by the plaintiff and the other to be named by the defendants for the examination viva voce at New York, Paris, and London and elsewhere in the United States, America, France, or England of witnesses in this action resident in the  said countries respectively on behalf of the defendants to this action and that the depositions to be taken under and by virtue of the said commission  may be ordered to be filed in this Court, and that all parties may be at liberty to  see the same evidence in this action, saving all just exceptions and that the attendance in Court in the trial of this action of any witnesses who shall have been examined under the said commissioners may be dispensed with. And that the trial of this action may be postponed until after the return of the said commission. And that the costs of this application and of the execution of the order to be made thereupon and all costs incidental thereto may be costs in the action.

Dated this 5th December, 1898.

Mr. A. P. Stokes, Counsel for defendants.

To the above-named Clara Agnes Joly and H. P. Wilkinson, Esq., her Counsel.

   Mr. Stokes in supporting his motion said: This my Lord is a summons in which on behalf of the defendants the Sun Life Insurance Company of Canada I am applying for permission to issue a commission for the examination of witnesses at New York, Paris, and London. This summons, my Lord, I may mention would have come before you a fortnight ago immediately on the case being set down for hearing but being on the eve of my departure from Shanghai I consulted with Mr. Wilkinson and he consented to an adjournment until the 15th inst., in order that I might make this application on my return.  I made my application on Monday last and it was returned for hearing today. The summons is supported by an affidavit by myself which your Lordship has before you.

   His Lordship - Have you seen the counter affidavits?

   Mr. Stokes - There are two counter affidavits entered by Mr. Wilkinson and I think it will be convenient if I take them under notice at first.

   In the first affidavit of Mr. Wilkinson which states that application had been made for permission to issue a commission he complains that it does not contain the names of those whom it is proposed to examine nor the issues on which it is proposed to examine them. In Paragraph 3 Mr. Wilkinson states that the true issue as between the parties hereto is as to the grant of the interim receipt by the defendants to the plaintiff. I leave that matter to Mr. Wilkinson to deal with first, and I will reply to it with your Lordship's permission afterwards. 

   Paragraph 4 says the defendants had had, since the death of Henry Bencraft Joly in regard to whom fraud is alleged in the answer filed as aforesaid, ample time to procure the attendance before this Court of any material witnesses and the production of the documents if any relied upon by them. The witnesses are in New York London and Paris and even supposing they are servants of our own company the question of getting them over here would make a much greater expense than if we sent a commission and I submit that I have made a proper application in asking for a commission.

   With regard to the production of documents in a case of this kind Mr. Wilkinson is right in making every possible objection he can. Of course, documents do not prove themselves and I want to produce such evidence as will prove them. It is not sufficient for me to say those are the applications made by Mr. Joly, but I have to produce the testimony of the secretary or other officer of the company whoever he may be to whom the application was made and also that of the medical officer who examined him and the agent who canvassed for him in Paris. It may be that these persons cannot be found and I shall have to take evidence, that is I shall be entitled to call secondary evidence, which is materially important as to certain evidence which I believe the medical officer gave to the company. Paragraph 5 of Mr. Wilkinson's affidavit reads:

   "As to the defences raised in paragraphs 2, 3, 4 and 5 of the answer of the defendants filed as aforesaid including the said allegation of frauid on the 29th day of October last past, the same were raised and referred to in a letter written by Messrs. Ilbert & Co. of Shanghai, resident secretaries of the defendant Company to me the deponent, and dated the 25th day of August last past, in which they allege that they then had "documentary proof" of the matters therein alleged. A copy of the said letter is hereunto annexed and marked "A."

   I do not propose to read that letter as your Lordship has it, but there are two documents referred to in that letter, and the facts alleged in those documents do not prove themselves, and with regard to them I would point out how necessary it is to have evidence thereon and as I say in my affidavit I believe it is material and necessary.

   His Lordship - If you wanted that to come before me you ought to have put in your affidavit "the reason for my belief is so and so." You are evidently both of you fighting this on every point and it is necessary for me to be careful. I don't wish you, Mr. Stokes, to expose yourself to the danger of putting in something which I cannot receive in evidence.

   Mr. Stokes-In the letter referred to and which is referred to in Mr. Wilkinson's affidavit, Messrs. Ilbert & Co. write-

Sun Life Assurance Co. of Canada,

Head Office, Montreal.

Shanghai, 25th August, 1898.

H. P. Wilkinson, Esq.

   Dear Sir, - we beg to acknowledge the receipt of your letter of 23rd inst. accompanied by formal proof of death and claim of the representative of the late Mr. H. Bencraft Joly.

   We regret that the Company are unable to pay the claim for the following reasons:

   In answer to question No. 14 of the application:-

   "Has any company ever declined to assure your life or offered you a policy on a different plan or at a higher premium from that for which you applied?"

   Mr. Joly replied:-

   "Put back 12 to 14 years ago on account of  ill health after long residence in the tropics, never re-applied" and in the application being returned to him with the request to name the office which had declined him he added to his previous answer "Standard Home Office."

   We have, however, received information supported by documentary proof that on the 28th of March, 1896, and on the 30th of November, 1896, Mr. Joly applied to and was declined by two insurance companies.

   In answer to question 9 c of the questions to be asked by the medical examiner, "Have you ever suffered from any complaint of affection of the heart, or blood vessels. Palpitations included?" Mr. Joly replied "No."

   Mr. Joly's examination by the medical examiner of one of the companies to which he was applying in the year 1896 elicited the following information. Mt. Joly during foot race ruptured one of the cusps of the mitral valve. Dr. Beasley Thorne of London treated him for this rupture.

   In answer to question 8 a, "On what occasions have you consulted a physician?" Mr. Joly replied, "Not since (referring to the preceding answer) four years ago. We are in a position to prove that this answer also is not in accordance with fact.

   We therefore consider that there has been on the part of the decreased wilful concealment of material facts whereby he obtained the interim policy under which his representative claims. And acting as the agents of this company, we find that the claim of Mr. Joly's representative is untenable.

We are, &c.

(Signed) ILBERT & CO.

   Now I am entitled to use that because it is this evidence and which I think is material evidence which the doctor in Paris forwarded to the Company in New York, and that evidence must have been supplied by Mr. Joly himself, there was no other person. At least there was a very strong inference that no other persons have that information. Mr. Joly was applying for life insurance with the Company and was examined by them with regard to the condition of his heart. That being so it leaves nothing further for me to say beyond pointing out the extreme importance that evidence will be to the defendants. 

   He also says that Dr. Beasley Thorne of London treated him for this rupture. That makes Dr. Beasley Thorne's evidence just as important, for Dr. Thorne is a specialist in heart disease and his evidence is most important. 

   Then coming to paragraph 6 in this affidavit:

               "The plaintiff in this suit is without the necessary funds to pay the great expenses on her part of the Commission or Commissions asked as is well known to the defendants."

   As to that it is a matter of great regret that Mr. Wilkinson should be obliged to make such a statement but at the same time I would point out that the expense of the commission falls on the person who applied for it. Of course if plaintiff wishes to join the defendants in this examination in Paris, London, and New York then of course it will be a great expense to her, but although it is a matter of great prejudice to us that she should be poor yet the fact should not be allowed to interfere with this application if your Lordship comes to the conclusion that this evidence is necessary to the defendants' case.  It would be a matter for great regret if such a proceeding resulted in a miscarriage of justice, and I submit that this paragraph should not be considered by your Lordship at all.

   As to paragraph 7:

   "As to the allegation in the 3rd paragraph of the answer of the defendants filed as aforesaid that the Equitable Life Assurance Company of the United States had declined to insure the life of Henry Bencraft Joly deceased I am informed and believe the material and direct evidence is obtainable in Shanghai as is well-known to the Defendants but no steps to procure the attendance thereto on the hearing of this suit or for the production of documents have been taken by them."

   I do not quite see the relevance of that.

   Then Paragraph 8 says:

   "The application of the Defendants I therefore believe is made for delay to coerce the plaintiff to abandon her suit or to compromise the same." 

   That I submit, my Lord, is not justified by the affidavit you have before you and by what I have said this morning. I do not know, your Lordship, whether you are aware of the status of the Company. It is a very rich Company of many years' standing. The agents here are well-known to be Messrs. Jardine, Matheson & Co., and Messrs. Ilbert & Co. are the resident secretaries. It is entirely in their discretion as to whether they shall pay claims or not, and if Messrs. Jardine, and Ilbert & Co. could possibly have seen their way to exercise their proper discretion as agents of the Company to pay the claim they would not only have been willing but eager to do so. But their decision is such that the only reason I am able to offer for not paying this claim is that they considered they would not be doing their duty to the Sun Company. This application I say most emphatically is not brought with any idea of coercing the plaintiff or bringing about a compromise. It is in the ordinary course of business and I maintain that it is essential to our case that this evidence should be produced.

   Mr. Wilkinson - I have filed two affidavits in this suit, your Lordship, one of which has been dealt with by Mr. Stokes. The first thing to be proved is whether the evidence which he proposes to  get and which he says he must have has anything to do with the suit before the Court at all. I will refer your Lordship to the decision In re Boyse (Chancery Division 760), but it is not necessary for me to quote it. 

   Coming to the pleadings, the petition brought by me is that:

"The defendants on the 4th day of February, 1898, entered into a contract in writing with the said Henry Bencraft Joly known as an interim receipt whereby in consideration of the sum of £76 paid by the said Henry Bencraft Joly to them they agreed inter alia to pay to the plaintiff the sum of $2.500 upon the death of the said Henry Bencraft Joly should he die before the expiration of six months from the said 4th day of Fe btruary, 1898."

   Mr. Wilkinson reads paragraphs 3 and 5 of Answer:

   [4.] The said Henry Bencraft Joly died as aforesaid before the expiration of six months from the said 4th of February, 1898.

   [5.] The defendants have received due notice and proof from the plaintiff of the death of the said Henry Bencraft Joly as aforesaid and have accepted the same.

   In the letter from Messrs. Ilbert & Company they admit proof of death. The answer put in by the Defendants is practically one on which I might apply for judgment because they have admitted the allegations contained in paragraphs 2, 4 and 5, and the allegation in paragraph 3 in relation to the granting of an interim receipt in payment for a certain sum. The rest of the answer is taken up with allegations as to the suppression of material facts and a charge of fraud in not making known certain facts. Now there is nothing clearer than that an interim receipt is something entirely different from a policy of insurance and the allegation  as to the suppression of material facts has not the slightest bearing on the case at all. Therefore I say this evidence could not be heard.

   His Lordship - You say in effect that you could apply for judgment on that answer.

   Mr. Wilkinson - I might.

   His Lordship - I am bound to take it that they have put in a prima facie case. You cannot come on a summons to get a commission and spring the whole point whether there is an answer to the case at all.

   Mr. Wilkinson - Mr. Stokes has a memorandum from me to the effect that the whole point was that the interim receipt was the sole contract and that this point would be raised on the application for a commission.

   His Lordship - It is quite plain that you must be able to show that the evidence is irrelevant, but you want to show that it is irrelevant because there is not answer at all, no answer has been really made.

   Mr. Wilkinson - No, I do not put it exactly like that.

   His Lordship - That is what it is in effect. I think you ought to have raised it in a different way. What is passing in my mind is the delay that has taken place. Why did you not apply Mr. Stokes for a commission before?

   Mr. Stokes - One does not apply until issue is joined.

   His Lordship - This has been going on since the 27th of October.

   Mr. Stokes - I have looked up the practice in these matters and gather that application is not made until the plaintiff and defendant have joined issue.

   Mr. Wilkinson - It has been going in since the letters now put in evidence, and months before the petition was filed they have had notice of my case.

   His Lordship - Surely, Mr. Stokes, you could have found out the names of these people, knowing you would want them, but you do not come forward until the moment a jury s applied for. I think the thing ought to be in some way arranged because if Mr. Wilkinson's contention with regard to the interim receipt holds good, of course there is no use having this commission. I think the wisest course would be to settle that point first.

   Mr. Stokes - I am not prepared, my Lord, to argue that point today.

   His Lordship - If you like I will adjourn the matter in Court. I think it must be so on the issue.

   Mr. Wilkinson - They say they have evidence here and I think it is absolutely   waste of time and expense to the plaintiff in making her go over to America and Europe in regard to this commission. She cannot afford to do so and cross-examine the witnesses in America, Paris, and London will prejudice her case.

   Mr. Stokes - With regard to what my friend refers to, we have certain evidence from the Equitable Company. I know what the evidence is and it is not sufficient for the defendants' case.

   Mr. Wilkinson - I will refer you to the case of Armour v. Walker (Chancery Division, 25, page 77), in which Lord Cotton held that a roving commission could not be allowed.

   His Lordship - As it is manifest that the case will have to be adjourned, I will adjourn on the understanding that the first point to be argued and determined is whether that interim receipt is the only question to be decided.

   The summons was accordingly adjourned into Court until Friday morning at half past ten.

   The affidavit with regard to the interim receipt was as follows:-

I Hiram Parkes Wilkinson, barrister-at-law, Counsel for the plaintiff, make oath and say Messrs. Ilbert & Co. as agents for the defendants on the 12th day of March, 1898, wrote the letter addressed to H. Bencraft Joly, now deceased, a copy of which is hereto annexed (marked A.)

   A copy of the Interim Receipt therein referred to is annexed and Marked B.

Sworn by the said Hiram Parkes Wilkinson, this 7th day of Decemer, 1898.

9th Dec.

   On resuming,

   Mr. Wilkinson - May it please your Lordship - At the hearing in Chambers of the summons for a Commission now adjourned into Court I raised the point that the interim receipt granted by the defendants to the late Mr. Joly was such a contract that the evidence sought to be got by this Commission would be immaterial, and your Lordship suggested that the point which I raised should be clearly put to your Lordship. As I understand the position, I am not arguing before your Lordship that when the case is brought before yourself and a jury, it will be a matter of law for your Lordship to direct the jury that any evidence brought with regard to these allegations of fraud will be immaterial and ought not to be [attended] to by them. 

   This Interim Receipt is a wagering contract whereby in consideration of a sum then paid in full the life of any applicant for a Life Policy (which latter may or may not be granted on a further consideration of the application, and also certain steps have been taken to test the truth of statements there made) is absolutely insured for a short time fixed on until notice meanwhile given. It is a contract in itself and while that investigation as to the truth of the statements is being made the applicant is absolutely insured.

   I will first deal with an interim receipt as distinguished from a policy of insurance. The definition of a policy of insurance is given in Dalby v. The India and London Life Assurance Company, reported in Law Journal, 1855, Vol. 24, Common Pleas, page 3.

"A policy of insurance on life is not a contract to indemnify against loss like a fire or a marine policy but is a contract to a definite sum in consideration of an annuity paid during the life."

   An interim note is I say a wagering contract left legal by the Act of Parliament 14 Geo. III, Chap. 48. There is a case, and a Canadian case too, which lays it down in absolute words that an interim note or an interim policy is not a policy of insurance. In 7, Appeal Cases, there is a  case, The Queen Insurance company, defendants, and William Parsons, plaintiff. That was a case taken to the Privy Council on appeal from the Supreme Court of Canada. It begins at page 96 and is carried onto page 126. The two cases were there tried on appeal and in the second of them, the Queen Insurance Company v. Parsons, the question as to whether an interim receipt was a policy of insurance and therefore as such liable to certain statutory acts of the Dominion and provincial parliaments was or was not liable to the same construction as placed on policies by the Legislature. At page 122 the second case is taken up, and it says Parsons applied to an agent of the company to insure and a premium of $40 was agreed on. An interim receipt was thereupon given to the respondent by the agent. This I might say is a fire interim receipt but they have been considered and are taken on the same basis, that is as preliminary contracts given prior to the entering into a contract for a further and longer period and on different terms.  The receipt was in the following terms:

"Interim Receipt: Fire Department, Interim Protection Note, Queens Fire and Life Insurance Company.

   Mr. William Parsons having this day proposed to effect an insurance against fire, subject to all the usual terms and conditions of yhis Company for $2,000, for twelve months and having paid the sum of $40 as the premium on the same it is hereby held assured under these Conditions until the policy is delivered or notice given that the proposal is declined by the Company when this interim note will be thereby cancelled and of no effect."

A fire occurred before a policy had been delivered to the respondent. Now judgment of the Privy Council was given by Sir Montague Smith and he said:

"This note is not a policy of assurance in the common understanding of the word and certainly was understood so by the parties to it. It is expressly a contract with a view to a policy making interim provision until a policy is prepared and delivered."

My learned friend may be able to lay before your Lordship where any insurance company has fought an interim policy on life assurance. Of course I cannot say. No lawyer can say such a case does not exist because no one knows his reports thoroughly. If it exists I shall be very surprised and I think I can show your Lordship why such a case had never been dared to be brought before any English Court. Macke v. The European Assurance Company reported in the Weekly Reporter number 17, for the years 1868 and 1869, page 987, is a case where an interim note was given in respect of an application for fire insurance, which was stated not to be a policy, but stated to be of the same nature as slips given in the case of marine insurance. This case is extremely strong on this point and is quoted on all hands. It is headed "Fire Insurance - Agent - Authority." A man entered into a contract with the agent of an insurance company to insure him under the impression that he was dealing with the agent of another company. For several years he had been insured in the Commercial Union Assurance Society. The assurances were effected by a man who had up to just before then acted as agent for the last-named Society. He paid a deposit and received a receipt. When he got the receipt he found he was insured in the defendant Society and had no idea that the agent in question had ceased to act for the Commercial Union or that he would be insured in any other office. He wrote to say that he did not want to change the office, if the old office were willing to take the insurance; as far as the "European" he knew nothing about it and should require to be satisfied of its respectability and standing before he consented. 

   While the correspondence was passing, his premises were burnt down, and the defendants repudiated his claim. The Court however held that there was a contract, and that the company whose agent he dealt with was liable.

   I have placed before your Lordship the form of the interim receipt in this case which is embodied in an affidavit which I have filed. It is to the following effect:

"Sun Life Assurance Company of Canada; Interim Receipt £76 Sterling; Shanghai, 4th February, 1898. Received £76 being the first half year's premium for a life assurance policy on H. Bencraft Joly, Esquire of H.B.M.'s Consular Service for £2,500 for which an application dated the 19th day of January has been made to the Sun Life Assurance Company of Canada. The said applicant is assured in accordance with the conditions of the policy applied for of the Company and of the application above mentioned, for six months or until notice of declinature within this time is sent. If the application be not accepted the amount herein acknowledged, less the premium for the time the applicant was assured will be returned. 

(Signed) A. Macauly, Managing Director; Ilbert & Co. Agents.

   We have examined the above-named applicant and consider him in every respect a first class life for insurance at ordinary rates as per my report.

(Signed) E. B. Landis, M.D., Hamilton Merkey, L.R.C.P. S. (Edin.), medical examiners.

   The terms of this contract cannot be altered by any agent, general agent or inspector for single premium or annuity business."

It states the said applicant is assured. There is no evidence whatever before this Court that he ever saw a policy or that the policy had got any conditions whatever. Your Lordship has got no evidence whatever that any conditions were pointed out.

   Your Lordship will hear on the other hand that the policies were absolutely unconditional. I have an affidavit here signed by Mr. E.D. Horsey, and filed yesterday, why I don't know, to which is attached a pamphlet or prospectus of the company. On page 3 of this prospectus, talking of the causes of the success of the company it says:

"The causes which have contributed to this success have been numerous. The Company's influential connections, its prudent management, and the great care exercised in the selection of its risks have all been important factors. But of greater consequence, probably than anything else was the adoption at an early stage of its history of an unconditional term of policy. To those who had been accustomed to the old style of contract with its complicated small type conditions and absence of special privileges this seemed to inaugurate a new era in life assurance. The wisdom of the decision has been abundantly proved by subsequent experience and the loss of extra premiums which would otherwise have been collected has been trifling."

Then on page 5 it says referring to unconditional policies:

   "The extent to which a life assurance company considers the interest of those assured with it is a point of the utmost importance to the individual policy holder. Life assurance contracts differ from all others in this essential point that the maker of the contract, in other words the assured, will not in the very nature of the case be present to enforce or explain the terms of the agreement when it becomes a claim. The collecting of the money usually falls on the inexperienced widow or children. 

   The life assurance company to be chosen should therefore not only be one of first-class financial standing, but one with a well-established reputation for upright, honest, and liberal treatment of its policy holders.  The Sun Life Assurance Company of Canada had not only its long and honourable record to refer to, but can point to the fact that it issues an unconditional policy as proof of its desire to deal fairly with both rich and poor and to avoid all legal quibbles and phrases of ambiguous import." 

It also explains every condition in a policy when it is granted meaning something as regards the future. That is, an ordinary policy contains stipulations about war risks, travel and residence in hot climates and they point out what they themselves mean by a condition. 

   "A policy holder in the company may congratulate himself when he sees that not only is his insurance carried at a lower cost to himself than it could be carried in most other companies, but that he has no fear of breaking conditions, some of which he does not even understand, for there are no restrictions on residence, travel, occupation, militia service, war, violation of railroad bye-laws, etc."

As regards the question of conditions, it says here distinctly that the policies of this company are without condition, therefore that phrase is groundless. 

   There is nothing in the affidavit to show that in time between the 4th of February and the time of his death Mr. Joly broke any conditions. There is no evidence to show that he had, but on the contrary there is evidence as shown by this pamphlet, that there was no condition to break. 

   On the question of condition alone the next thing is to look at the application made by the assured. This contract is not issued on the faith of any representations made, but issued in accordance with the conditions of the policy applied for. On that application there are several conditions quite apart from any warranty and quite apart from the truth of any answer. There are no conditions in the policy, but there are some in the application. The condition is this:

"I declare  that I am now and usually in sound health and that the above answers are to the best of my belief; and I agree that this declaration, with the answers to be given by me to the Medical Examiner, shall be the basis of the policy; that the methods which may be adopted by the Company for any distribution of surplus and its determination of the amount apportioned to said policy are hereby accepted for every person who shall have any interest in said policy; that I will accept said policy when issued and pay the first premium thereon; that said policy shall not take effect until the first premium had been paid during my life and in good health; that if any premium  be settled wholly or in part by cheque, note or other obligation such obligation shall not be considered as payment, but only as an extension of the time for payment, and if not fully paid when due, the Company shall not be liable if death occurs while such obligation remains unpaid." Herewith comes the condition,

   "I will accept such policy when issued and pay the first premium therein."

   Now, my Lord, we come to what the defendants themselves through their agents have settled with respect to this interim receipt. Mr. Leonard J. Kerr Secretary of Messrs. Ilbert & Company has filed an affidavit together with a number of documents. Apparently it shows all the letters that have passed but I notice that one is only an extract so that it is not a complete exposition of the letters between them. As regards Mr. Horsey's affidavit I have something to say. It is accompanied by the following letter written on the 22n of December, 1897, addressed to Mr. Joly:

Dear Sir, - At the suggestion of Mr. E. F. Birchal I write you in connection with the matter of Life Assurance.

   Mr. Burchal was good enough to inform me that you were thinking of effecting some insurance on your own life.

   I therefore take the liberty of writing you on the subject and enclosing for your perusal several different forms of the most popular policies now being written together with a statement of the Company's accounts.

   Should you be contemplating taking a policy I trust you may see your way to give our office a fair consideration.

   I may mention en passant that the Sun Life Assurance Co. is the only British Office doing business in the East on the Tontine system of assurance at present so popular with all classes.

   Should you decide to favour us would you kindly fill in the enclosed application and have yourself examined by any convenient English-speaking man whose fee (Ten Taels) the Company pay.

   On receipt of same duly completed we will be pleased to forward you your policy.

(Signed) Edw. W. Horsey, etc.

   In reply to that Mr. Joly wrote back:

Dear Sir, - In reply to your letter of the 22nd December last I enclose, while thanking you for the information supplied bearing on the various plans of Insurance, a proposal duly filled up and I hope you will find it in order.

   I venture to add that in the event of a favourable reply the policy should be drawn up in three parts, one of £1,000, the second for £1,000, and the third for £500 or at least in two parts, if possible the one for £2,000 and the other for £500.

   The insurance I desire is on the Reserve Dividend Plan as taken out by Mr. Birchal and as I fancy is explained on Pge 15 of the pamphlets kindly sent me. For further explanation I enclose the memorandum submitted to me by you. The term of payments is for 15 years and the premium I make out to be £146 4. 6d. per annum paid half yearly.

   The intimate friend whose name I give is Mr. Fulford at present Vice-Consul in the Shanghai Consulate-General. As regards the medical fee I shall be much obliged if you will forward it to Dr. Landis at this port.

   While recommending that this remittance should with the policies if granted be forwarded in registered covers to ensure safe delivery,

I am, etc. H. Bencraft Joly.

P.S. - The policy is of course worldwide as we are liable to transfers. Would you please favour me with a memo such as is enclosed giving me the full particulars re my policy, i.e. as to premium, profits, etc., etc. The policy I would prefer is the first choice - cash.

   Then there is an extract from a letter to Mr. Joly before the examination saying: "We enclose interim policy for the first half-year's premium and this will hold you assured until the arrival of your policy from Montreal in about three months' time." So they themselves proved by their letter that before the medical examination they sent him a binding document, so that any answer to that examination had not the slightest effect on their minds. 

   In the face of that would your Lordship waste your time listening to any evidence as regards the truth or untruth of any statement made by Mr. Joly? They want to get the evidence of a doctor perhaps 25 years ago to say what Mr. Joly did in a foot race after they have sent him a binding contract. The extract from the letter quoted above asking Mr. Joly to kindly have himself examined by another doctor, is as follows:

Dear Sir, - We have under reply your favour of 19th ult. addressed to Dr. Horsey who is temporarily absent from Shanghai.

   We beg to thank you for the proposal which you put forward, viz. £2,500 on the Life 15 K.D. plan, which will have our best attention.

   With regard to medical examinations Dr Horsey apparently forgot to tell you that the Company requires two independent medical reports by different medical men for proposals of $2,000 and upwards. Will you please therefore have yourself examined again by another doctor and forward his report to me. We regret having to return Dr. Landis' report as he has inadvertently omitted to answer questions 5 and 9 B. (Is there any peculiarity in shape, capacity, etc.) and before sending it back will you kindly state on page 12 question 14, the name of the Company to whom you were applying when rejected 12/.14 years ago.

   We enclose interim policy for the first half year's premium and this will hold you covered, after you have paid the premium until the arrival of your policy from Montreal in about three months' time.

   You have made a slight error in calculating the premium, the yearly premium for your age as per Dr. Horsey's memorandum is £146 2s. 6d. (not £146 4s. 6d.) but when premiums are paid half-yearly the rule is to add 4% to the premiums to cover the additional trouble which is given to the Company in dealing with the payments. This will make your half-yearly payment £76 Sterling for which amount we have made out the interim receipt and shall be glad to receive your cheque. Kindly note that the interim receipt should be also signed by both the examiners.

   We note that you would like to have three policies for £1,000, £1,000 and $500 respectively. This shall be attended to.

   We enclose P.O.O. for the equivalent of Taels 20, which kindly divide between the medical examiners forwarding us their receipts for the same. This is the (Tls. 10) amount which it is customary to pay in Shanghai for examinations.

  They wanted something from a doctor. They did not care what it was, having once delivered this interim receipt.  Your Lordship will see there is a reply of the 12th of March to Mr. Joly from Messrs. Ilbert & Co. It reads -

SIR, - We beg to acknowledge with thanks the receipt of your favour of 7th instant handing us your application, two medical reports, receipt for medical fees, your cheque for £76 and interim receipt.

   The latter you should have retained as it constitutes your policy of insurance until the Company's policies arrive.

   Your application goes forward by mail leaving next Saturday and we hope to have your policy by about the end of May.

We are, &c.

   His Lordship - Of course it did. Mr. Joly seems to have sent it back by mistake.

   Mr. Wilkinson - Then as regards the absolute construction I submit that there is no doubt that what the defendants meant was a gamble. A life insurance policy is a certain contract in consideration of the possible duration of human life provided the company gets an annuity. They are not going to get any more on this interim receipt and they say "we take you for six months for £76. If you die before we have been enabled to examine the case and you are refused you get the money back."

   His Lordship - Not only do they say they return the money but they add less the premium for the time the applicant was assured.

   Mr. Wilkinson - Yes, they pay themselves for their risk. And there is another point in Mr. Kerr's affidavit. "The terms of this contract cannot be altered by any agent, inspector, etc." but in this case I am afraid that he (Mr. Kerr) went against his instructions. Shall I go on as to the general question?

   His Lordship - I think perhaps it would be better to separate the two and I would remind you that you have not yet dealt with the question of fraud. To my mind it is quite manifest if it says this contract, no matter what it was, was obtained from them by fraud and then they propose to prove it was obtained by fraud that cuts away all the ground with regard to the conditions. If it was by fraud, that he obtained such interim receipt, I do not see how you are to exclude such a point from coming before me and a jury and if they want to prove there was fraud in the obtaining of the receipt they will be entitled to bring evidence on that. 

   Now comes the question whether they are entitled to issue a commission. They distinctly state in one of the paragraphs of their answer that this receipt was obtained by fraud and I think they are entitled to prove, or try to prove it.

   Mr. Wilkinson - On the general question itself, as supplied to me in the copy of the application, there is no declining by the New York Life and the Equitable. Before Mr. Joly's death the defendant in a letter of the 13th of April, 1898, maintained that they had evidence which they now allege on that petition as to Mr. Joly being refused. If they thought it was true and attached any weight to this wonderful fact they might have telegraphed cancelling this receipt and refusing to issue any policy whatever. But having in their possession the fact that he had been declined by both the New York Life and the Equitable, they took no steps whatever to put an end to that receipt. I suppose that they trusted Mr. Joly would live six months and then they would decline the policy. But now they come here and ask for a commission to find out details of what they knew themselves. I submit to your Lordship that it is if no use their getting evidence as regards the question of fraud when they themselves find out certain information and take the running risk that Mr. Joly will not die. 

   There is a further matter which is still more important. They say this is running until decline or death, but they had never declined Mr. Joly at all. He never has been declined by them for they sent him a policy with a lien on it.

   His Lordship - Don't put your case higher than necessary. I do not know, but as one hears, although it was accepted it was accepted in a perfectly different form. Is that not so?

   Mr. Wilkinson - Yes, my Lord.

   Mr. Stokes - What the Company were prepared to do with the knowledge in their possession that he had been declined by two companies was to offer him a risk of a totally different nature, or of a much more onerous character.

   His Lordship - You say, Mr. Wilkinson, it had absolutely no effect upon their minds, but we know and it will be proved that it had.

   Mr. Wilkinson - It did not have the effect of freeing themselves of liability under this note. They knew presumably what they know now, whatever it was. And they with this knowledge in their possession chose to remain bound by this interim receipt, therefore I say it is needless to find out where they got this knowledge from, as they had it. I will refer you to the well-known case of Horsfall v. Thomas where the plaintiff purchased a canon and took delivery without inspecting it. A defect which he mentioned at the time of purchase but in respect of which he took no steps caused the cannon to burst when fired, whereon he refused payment. He was afterwards held liable. 

   Well, as regards the point whether they will be able to obtain any evidence if it exists from the New York Life Insurance Company, my learned friend has been precluded from bringing it before your Lordship and giving it at all because order 31, rule 15 says:

"Every party to a cause or matter shall be entitled at any time by notice in writing, to give notice to any other party in whose pleadings or affidavits reference is made to any document to produce such document for the inspection of the party giving such or of his solicitor and to permit him or them to take copies thereof; any party not complying with such notice shall not afterwards be at liberty to put any such documents in evidence on his behalf in such cause or matter, unless he hall satisfy the court or judge that such document related only to his own title, he being a defendant to the cause or matter, or that he had some other cause or excuse which the court or judge shall term sufficient for not  complying with such notice, in which case the court or judge may allow the same to be put in evidence on such terms as to costs and otherwise as the court or judge shall think fit."

   His Lordship - I don't propose to allow things to be done which don't appear to be just. Do you find anything there as to what time they must be produced because you say nothing in your notice as to what you want them to produce.

   Mr. Wilkinson - Mr. Stokes very properly mentioned the day when I could come round and see them.

   His Lordship - This application for permission for the commission has nothing to do with the Equitable Company?

   Mr. Wilkinson - Nothing whatever. It is the New York Life I am referring to.

   His Lordship - So that the Equitable may be laid aside. You need not elaborate that; I can see grave objections to one part of the question, but I shall hear what Mr. Stokes has to say, though I may say at present my mind is against you, Mr. Stokes, for the commission in New York and Paris. My difficulty is this.  You will first of all have to go to New York and apply there to find out the names of those people you want to examine in Paris. But when you have found out their names in New York you may find that they are not in Paris and may want to apply to someone else. It is therefore impossible to sanction a roving commission of that kind, though it might be different if you came here knowing all about the persons you wanted to examine there.

   Mr. Stokes - Your Lordship has put the difficulty I am in quite correctly. In the first place I should have to send to New York to ascertain who these gentlemen we want are, and having found them we should then require to find the doctor who examined him. Following up this line it would then be necessary to produce that evidence here. I should have to get the evidence of the doctor and probably also of the agent who proposed him, that would be the best evidence I could get on that point, and the plaintiffs are clearly entitled to have the best evidence and to be able to have no objection to any evidence I shall present to the Court as being of inferior quality. We are not only entitled but are bound to bring into Court the very best evidence we can get. 

   If, on the other hand, we get this name in New York, the name of the doctor or agent in Paris, we may find he is not in Paris and we may have to go to Paris to examine some persons, those who can say that this witness we want is no longer in Paris. In that case I should then have to get secondary evidence not having been able to get primary evidence, and that is the only way which I consider I can put myself in a safe position to produce that evidence in this Court. But if we cannot get hold of the witness we want himself we should have to get the best secondary evidence we can, but we must use our best endeavours to find him in Paris.  We should be enabled to produce the report that doctor made at the time and which no doubt is still in the archives of the Company in New York.

   His Lordship - No, I do not quite agree with you. In the caser of Coch v. Alcock, (Law Reports, Q.B. Div.21, p. 1812,) Lord Esher, M.R. says:

"The Court must take care, on the other hand, that it is not granted when it would be oppressive or unfair to the opposite party, and, on the other hand, that a party has reasonable facilities for making out his case."

Here I think it would be clearly oppressive to allow this commission to go to New York to find out the name of somebody from whom they might obtain evidence in Paris, and then if they could not find him to examine some-one else as to why he was not there. These are the objections to a commission like this, but no doubt it often happens that parties are not able to get the evidence they want in a case, but yet it is a hardship which is entailed upon all litigants for the benefit of the whole community. Here you may not be able to get all the evidence you want but I cannot help that. You have not laid before me sufficient evidence as to who you want first to examine in New York about somebody in Paris. Therefore I cannot give you permission with regard to the commission in New York or Paris. 

   Is there any evidence you require besides these in New York or Paris which has reference to the New York Life Assurance Company and Dr. Beasley Thorne?

   Mr. Stokes said the evidence he required from New York was on the name of the officer and doctor of the New York Life Assurance Company in Paris.

   His Lordship - I am quite clear with regard to Dr. Beasley Thorne that there ought to be a commission to examine him. I cannot see any sufficient reason why that evidence should not be taken. The last point on which I will decide is this: You can have your commission to examine Dr. Beasley Thorne in London and also some other particular person or officer of the New York Life Assurance Company, whom you must specify. I do not know his name yet, but you must particularly specify  him before the commission issues.

   Mr. Stokes - Our examination is not limited to two particular persons?

   His Lordship - Whatever is the ordinary form.

   Mr. Wilkinson - There is the much larger question in the order sometimes raised about the party examined but this commission being produced before this Court, and also as regards the costs. They have raised it and these orders varying so considerably is it to be signed in Chambers?

   His Lordship - As to that I think I should certainly not make it a condition.

   Mr. Wilkinson - It is laid down that unless the Court is absolutely assured that cross-examination shall be efficiently done no order for a commission will issue. The plaintiff being poor will in all probability take no part at all in this commission.

   His Lordship - The words are "may be" efficiently done. This is no reason why it should not be efficiently done in London and New York.

   Mr. Wilkinson - Has your Lordship quite made up your mind? If not what about the Doctor in Chemulp?

   His Lordship - What has he to do with it? I had quite made up my mind.

   Mr. Stokes - My Lord - I have just been instructed by my clients to say that Mr. Wilkinson had put forward that his client is in a difficulty with regard to the question of expenses, they are willing to contribute the sum of a thousand taels to enable her to have legal assistance for the cross-examination. The company, I may add, in defending this suit are not acting simply for the purpose of getting the benefit for their shareholders, but they are trustees for the whole of the policies in the Company, 93 ½ per cent of their funds going to the policy holders, and in defending this suit they are actuated by no improper motives, and I repeat they are willing, if it will be of any assistance, to contribute Tls. 1,000 towards her expenses whether they succeed or not.

   Mr. Wilkinson - My learned friend is always acting personally from the best of motives, but I am not in a position to discuss charity. My client does not want to have it thrown at her in this way and I must decline.

   His Lordship - Suppose I make an order that the defendants pay this Tls. 1,000 and costs?

   Mr. Stokes - What I say is that we are willing to indemnify her up to Tls. 1,000.

   His Lordship - I cannot possibly make that order, Mr. Wilkinson. Suppose your client or the representative of your client, Mr. Wilkinson, is made out to have committed a gross fraud can you possibly conceive that I could then make them pay the costs of that?

   Mr. Wilkinson - Yes, they say they are doing it from very high motives of morality.

   His Lordship - If you decline it you will make the offer more complicated. I think you had better refer to your client. 

   Then the other question of importance is the point of time for the return of this commission. I fear you will hardly come to an argument about that. It now takes a month to get home and a month to get back and say one month for getting the evidence that will therefore be three months.

   Mr. Stokes - It is rather a short time.

   Mr. Wilkinson - The parties to take the evidence should be named.

   It was ultimately decided to leave the nomination of the parties who shall take the evidence open, till his Lordship looked through the Law Lists; Mr. Stokes mentioned that Messrs. Harwood and Stevenson of London could act for his side, his Lordship deciding also that the costs were to be costs in the cause.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School