licies. ers, they are greatly encouraged and protected both by common law and acts of parliament †. But, as a practice Wagering pohad obtained of insuring large sums without having any property on board, which were called insurances, interest or no interest, and also of insuring the same goods several times over; both of which were a species of gaming, without any advantage to commerce, and were denominated wagering policies: it is, therefore, enacted by the stat. 19 Geo. II. c. 37, that all insurances, interest or no interest, or without farther proof of interest than the policy itself, or by way of gaming or wagering, or without benefit of salvage to the insurer (all which had the same pernicious tendency), shall be totally null and void, except upon privateers, or upon ships or merchandize from the Spanish and Portuguese dominions, for reasons sufficiently obvious; and that no reassurance shall be lawful, except the former insurer shall be insolvent, a bankrupt, or dead: and lastly, that, in the East India trade, the lender of money on bottomry, or at respondentia, shall alone have a right to be insured for the money lent, and the borrower shall (in case of a loss) [461] recover no more upon any insurance than the surplus of his property, above the value of his bottomry, or respondentia bond +. + Mr. Christian observes, that "the contract of insurance is founded upon the purest principles of morality and abstract justice. Hence, it is necessary that the contracting parties should have perfectly equal knowledge or ignorance of every material circumstance respecting the thing insured. If on either side there is any misrepresentation, or allegatio falsi, or concealment, or suppressio veri, which would in any degree affect the premium, or the terms of the engagement, the contract is fraudulent and absolutely void. See various instances in Park's Ins. c. x." Mr. Christian observes, that "this statute does not extend to foreign ships, upon which, as before the statute, there may still be insurances, interest or no interest. These were not included in the act, on account of the difficulty of bringing witnesses from abroad to prove the interest. (Doug. 302). But, where there is an interest on board, the owner by a valued policy, in which the value of the goods is agreed upon and fixed between the parties, may insure far beyond the extent of the real value. For the excess of the insurance is held not to be within the statute, unless it As to annuities for lives. Thirdly, the practice of purchasing annuities for lives at a certain price or premium, instead of advancing the same sum on an ordinary loan, arises usually from the inability of the borrower to give the lender a permanent security for the return of the money borrowed, at any one period of time. He therefore stipulates (in effect) to repay annually, during his life, some part of the money borrowed; together with legal interest for so much of the principal as annually remains unpaid, and an additional compensation for the extraordinary hazard run, of losing that principal entirely by the contingency of the borrower's death: all which considerations, being calculated and blended together, will constitute the just proportion or quantum of the annuity which ought to be granted. The real value of that contingency must depend on the age, constitution, situation, and conduct of the borrower; and therefore the price of such annuities cannot, without the utmost difficulty, be reduced to any general rules. So that if, by the terms of the contract, the lender's principal is bona fide (and not colourably) (1) put in jeopardy, no inequality of price will make it (1) Carth. 67. should appear that the interest is so "Re-assurances are prohibited by "A double insurance is where the owner insures his goods twice or several times over, with different underwriters, which he may lawfully do; and though he cannot recover more than a single satisfaction for his loss, yet he may bring his action against any one of the underwriters, and compel him to pay the whole extent of the interest insured. And this underwriter may afterwards recover from each of the rest, a rateable satisfaction or apportionment of the sum which he has been obliged to pay to the assured. (Park, Ins. 280). The law of insurance is fully and ably collected and arranged by Mr. Justice Park, in his System of the Law of Marine Insurances." an usurious bargain; though, under some circumstances of imposition, it may be relieved against in equity. To throw, however, some check upon improvident transactions of this kind, which are usually carried on with great privacy, the statute 17 Geo. III. c. 26, has directed, that, upon the sale of any life annuity of more than the value of ten pounds per annum (unless on a sufficient pledge of lands in fee-simple or stock in the public funds) the true consideration, which shall be in money only, shall be set forth and described in the security itself; and a memorial of the date of the security, of the names of the parties, cestui que trusts, cestui que vies, and witnesses, and of the consideration money, shall, within twenty days after its execution, be inrolled in the court of Chancery; else the security shall be null and void (27); and in case of collusive practices respecting the consideration, the *court in which any action [ *462] is brought or judgment obtained upon such collusive security, may order the same to be cancelled, and the judgment (if any) to be vacated: and also all contracts for the purchase of annuities from infants shall remain utterly void, and be incapable of confirmation after such infants arrive to the age of maturity. But to return to the doctrine of common interest on loans: Upon the two principles of inconvenience and hazard, compared together, different nations have, at different times, established different rates of interest. The Romans at one time allowed centesimæ, one per cent. monthly, or twelve per cent. per annum, to be taken for common loans; but Justinian (m) reduced it to trientes, or one third of the (m) Cod. 4. 32. 26. Nov. 33, 34, 35.-A short explication of these terms, and of the division of the Roman as, Rates of interest Romans; allowed by the (27) The statute cited in the text was repealed by the statute of 53 Geo. III. c. 141, which last-named act was explained by the subsequent one, of 3 Geo. IV. c. 92, and lastly by that of 7 Geo. IV. c. 75: by these three acts as or centesimæ, that is, four per cent.; but allowed higher interest to be taken of merchants, because there the hazard was greater. So, too, Grotius informs us (n), by the Dutch; that, in Holland, the rate of interest was then eight per for understanding the civilians, but also petually refer to this distribution. Thus Romani pueri longis rationibus assem It is, therefore, to be observed, that, in USURE. And all denomi nated according to the relation they bore to this centesimal usury, or usuræ asses for the several multiples of the unciæ, or duodecimal parts of the as, were known by different names according to their different combinations; sextans, quadrans, triens, quincunx, semis, septunx, bes, dodrans, dextans, deunx, containing respectively, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, unciæ, or duodecimal parts of an as. (Ff. 28. 5. 50, s. 2, Gravin. Orig. Jur. Civ. l. 2, s. 47). This being premised, the following table will clearly exhibit at once the subdivisions of the as, and the denominations of the rate of interest. Asses, sive centesima Deunces... PER ANNUM. 12 per cent. 11 10 9 8 7 .... 12 6 Trientes Quadrantes Sextances. Uncia (n) De jur. b. & p. 2. 12. 22. cent. in common loans, but twelve to merchants. And Lord Bacon was desirous of introducing a similar policy in England (0): but our law establishes one standard by our law. for all alike, where the pledge or security itself is not put in jeopardy; lest, under the general pretence of vague and indeterminate hazards, a door should be opened to fraud and usury: leaving specific hazards to be provided against by specific insurances, by annuities for lives, or by loans upon respondentia, or bottomry. But, as to the rate of legal interest, it has varied and decreased for two hundred years past, according as the quantity of specie in the kingdom has increased by accessions of trade, the introduction of paper credit, and other circumstances. The statute 37 Hen. VIII. c. 9, confined interest to ten per cent., and so did the statute 13 Eliz. c. 8. But, as, through the encouragements given in her reign to commerce, the nation grew more wealthy, so, under her successor, the statute 21 Jac. I. c. 17, reduced it to eight per cent.; as did the statute 12 Car. II. c. 13, to six: and lastly, by the statute 12 Ann. st. 2, c. 16, it was brought down to five per cent. yearly, which is now the extremity of legal interest that can be takent. But, yet, if a (0) Essays, c. 41. If a contract carrying interest + Mr. Christian observes, that "this statute not only makes the lender liable to a penalty of treble the amount of the sum lent, but, it declares all usurious bonds, contracts, and assurances, absolutely void." [But, though an instrument might be totally void at law, as being grounded on an usurious contract; (Roberts v. Goff, 4 Barn. & Ald. 92); a court of equity will not even give a discovery, unless on terms of having the money actually advanced, refunded. (Duke of Bolton v. Williams, 2 Ves. jun. 151. Dalbiac v. Dalbiac, 16 Ves. 124. Mason v. Gardiner, 4 Br. 438). And at law, if an annuity deed is set aside, and |