for

SURANCE.

Recital of policy.

—of debt and

probability of further ad

vances.

[mortgagee], of the other part: WHEREAS the said A. B. POLICY OF ASis entitled to a policy of assurance on his own life in the Assurance Society, bearing date the day of numbered, for the sum of £, and under the annual premium of £- -: AND WHEREAS the said A. B. is indebted to the said C. D. in the sum of £monies advanced, and the said C. D. may hereafter make further advances to or for the use or on the account of the said A. B. AND WHEREAS the said A. B. hath agreed to secure in manner hereinafter mentioned the re-payment to the said C. D., his executors, administrators, or assigns, of the said sum of £- so due and owing as aforesaid, with interest for the same after the rate of £ per cent. per annum, and also of such other sum or sums of money as the said C. D., his executors or administrators, shall or may hereafter advance, lend, or pay to or for the use or on the account of him the said A. B., or as may

to hold good; and it has been decided in the Irish Court of Chancery, that where a creditor had insured his debtor's life, and had been paid by the office, he could not be compelled to set off the sum received by him from the office less the amount of the premiums and interest against the debt due. (Humphrey v. Arabin, 1 Lloyd & Goold, Cas. Tem. Plunk. 318).

A policy of assurance alone is a very insufficient security, inasmuch as it yields no income for the payment of interest; and, generally speaking, produces a very small sum if sold in the lifetime of the assured. But policies are of great value as collateral securities when coupled with some annual income, (as a life-interest), which may serve as a fund for the payment of the premiums. (See infra, Precedents LXVII. and LXVIII). But even then their value is subject to be destroyed by any act of the mortgagor which transgresses the rules of the office and vitiates the policy. If the policy be effected for the occasion, it should always be in the name of the mortgagee, which removes some of the risks, (supra, p. 91), and avoids the necessity of an assignment. The security will then consist of the covenant for payment of the principal and interest, of a declaration of trust of the policy, a power of sale, and covenants for payment of the premiums. The draft may be easily adapted from the form in the text; and the subsequent Precedents LXVII. and LXVIII., may likewise furnish assistance.

If the policy be a subsisting policy at the date of the security, inquiry must of course be made of the assurance office as to the exist ence of any prior charge; and notice of the security, when effected, must be given to the office. (See supra, p. 374, n. (d)).

of agreement for security.

Value of a policy of assurance as a security.

Precaution to be observed.

SURANCE.

Witnesseth, Covenant for payment of principal and interest.

POLICY OF AS- become due from the said A. B., his executors or administrators, to the said C. D., his executors or administrators, with interest thereon after the rate aforesaid, from the time or respective times of the same respectively being advanced, lent, or paid, or becoming due: NOW THIS INDENTURE WITNESSETH, that, in pursuance of the said agreement, and for securing the re-payment of the said sum of £ and other the sum and sums aforesaid with interest as aforesaid, he the said A. B. doth hereby for himself, his heirs, executors, and administrators, covenant with the said C. D., his executors and administrators, by these presents, that he the said A. B., his executors or administrators, shall and will, on the day of , pay or cause to be paid unto the said C. D., his executors, administrators, or assigns, the sum of £ with interest for the same at the rate of £5 for every £100 for the year, from the day of the date of these presents, without any deduction or abatement whatsoever, and shall and will at any time or from time to time, upon demand, pay or cause to be paid unto the said C. D., his executors, administrators, or assigns, all and every other sum and sums of money which may at any time or times hereafter be lent, advanced, or paid by the said C. D., his executors or administrators, to or for the use or on the account of the said A. B., or which may at any time or times hereafter become due or owing to the said C. D., his executors or administrators, from or by the said A. B., his executors or administrators, with interest for the same sum or sums of money respectively, after the rate aforesaid, from the time or respective times of the same respectively being advanced, lent, or paid, or of the same respectively becoming due, as the case may be, without any deduction or abatement whatsoever: AND THIS INDENTURE ALSO WITNESSETH, that, in further pursuance of the said agreement, and for the considerations aforesaid, he the said A. B. hath assigned, and by these presents doth assign unto the said C. D., his executors, administrators, and assigns, ALL THAT the said policy of assurance hereinbefore particularly mentioned, and the full benefit

Witnesseth, also assign

ment.

-of policy.

ney.

SURANCE.

thereof, and all and every sum and sums of money to POLICY OF ASbecome due or payable, or to be had or received under or by virtue of the same, AND ALL the estate, right, title, Power of attorinterest, property, claim, and demand whatsoever, both at law and in equity, of him the said A. B., of, in, to, out of, or upon the said premises or any of them, or any part thereof, TOGETHER with full power and authority for the said C. D., his executors, administrators, or assigns, to ask, demand, sue for, recover, and receive, and give effectual receipts and discharges for the said sum or sums of money, or any part thereof, in the name or names of the said A. B., his executors or administrators (b), TO HAVE, HOLD, receive, and take the said policy of as- Habendum. surance, sum and sums of money, and all and singular other the premises hereinbefore assigned, or expressed and intended so to be, unto the said C. D., his executors, administrators, and assigns: UPON TRUST, that the said C. D., his executors, administrators, or assigns, do and shall enforce payment of all and singular the monies to become payable under or by virtue of the said policy as and when the same shall become payable, AND DO AND SHALL, in the first place, by and out of the same monies, reimburse himself or themselves, or pay and discharge or retain all the costs and expenses attending the obtaining payment of and receiving the said monies, or which shall be incurred in or about the execution of the trusts of these presents or in relation thereto; AND DO AND SHALL, in the next place, pay and apply such monies in or towards satisfaction of all and singular the monies which for the time being shall be due or owing on the security of these presents; AND DO AND SHALL pay the surplus, f any, of the said monies to become payable under or by virtue of the said policy unto the said A. B., his executors, administrators, or assigns, for his or

(b) A much longer power of attorney is often used, but the short form in the text is quite as effectual. (See the longer form, ante, Vol. 2, p. 385; supra, p. 384; and see too, supra, p. 605, n. (c), as to the occasions on which powers of attorney ought to be employed).

SURANCE.

Covenant for payment of premiums.

-and not to vitiate policy.

POLICY OF AS- their proper use; AND THE SAID A. B. doth hereby for himself, his heirs, executors, and administrators, covenant with the said C. D., his executors, administrators, and assigns, that he the said A. B. shall and will, during the continuance of this present security, from, time to time, duly and punctually pay or cause to be paid the said annual premium of £ and such other sum or sums of money (if any) as shall from time to time become payable, for keeping on foot the said policy of assurance, and shall and will make such payments at least ten days before the last day on which the same respectively must be paid, in order to keep the said policy on foot, and shall and will forthwith deliver the receipt for every such payment to the said C. D., his executors, administrators, or assigns; AND SHALL not nor will at any time hereafter do, commit, or suffer any act or thing whereby the said policy may be vitiated or become void or avoidable, or the said C. D., his executors, administrators, or assigns, may be prevented or hindered from recovering or receiving the money thereby intended to be assured, or any part thereof; AND THAT it shall be lawful for the said C. D., his executors, administrators, or assigns, in case the said A. B. shall neglect or refuse to make such payments as aforesaid, or any of them, at any time or times to pay the said annual premium of £ and such other sum or sums of money (if any) as from time to time shall become payable, for keeping on foot the said policy of assurance; and in case the said policy shall at any time be vitiated or rendered void or voidable, then to effect a new policy or policies of assurance on the life of the said A. B., in any sum or sums not exceeding the sum of £, and to pay all expenses of effecting such policy or policies, and the annual premium or premiums, or other sum or sums of money (if any) which shall from time to time become payable, for keeping on foot the same, (such new policy or policies, and the monies to become payable under or by virtue of the same respectively, to be held and applied upon and for the trusts, intents, and purposes hereinbefore declared of and concerning the said policy hereinbefore assigned, or expressed and intended so to be,

-and that

mortgagee may pay premiums and renew policy.

SURANCE. -and that

mortgagor will repay sums advanced by mort

repayment the

same shall be a

charge on the mortgaged pre

and the monies to become payable under or by virtue POLICY OF ASof the same): AND THAT the said A. B., his executors or administrators, shall and will from time to time, on demand, pay or cause to be paid unto the said C. D., his executors, administrators or assigns, all and every such gagee. sum and sums of money as shall have been paid or advanced by him or them in or towards payment of the said annual premium of £, or any such other premium or premiums, sum or sums of money or expenses as aforesaid, with interest for the same after the rate of £per cent. per annum, from the time or respective times of the same having been advanced or paid (c): AND THAT in the and that till meantime, and until such sum or sums of money shall be so paid with interest as aforesaid, all and singular the monies to become payable under or by virtue of the said policy of assurance hereinbefore mentioned to have been effected, or under or by virtue of the policy or policies to be effected in pursuance of the aforesaid covenant in that behalf, shall stand and be charged with the payment as well of such sum or sums of money, and the interest thereon, as of the said sum of £ and interest, and other the principal monies and interest hereinbefore covenanted to be paid: AND THE SAID A. B. doth hereby for himself, his heirs, Covenants for executors, and administrators, further covenant with the right to assign. said C. D., his executors, administrators, and assigns, that he the said A. B. now hath in himself good right, full power, and lawful and absolute authority to assign the said policy and premises hereinbefore assigned, or expressed and intended so to be, unto the said C. D., his executors, ad

mises.

(c) All securities on policies of assurance should contain this clause. But it seems that if the mortgagee pay the premiums, he is entitled (even in the absence of a special agreement) to have them repaid with interest at £4 per cent., and that the mortgagor cannot redeem the policy until such repayment has been made. (Hodgson v. Hodgson, 2 Keen, 704). Such is the established doctrine with regard to any sums which mortgagees may pay for the renewal of leases, (supra, p. 563, n. (ƒ)); and the same principle is evidently applicable to the premiums on policies of assurance. It is not, however, usual or proper to trust to general rules of courts of equity in matters of this description; and the subject is always made matter of special agreement.

Provision for repayment of premiums advanced by mortgagees.