phatically made, the reason given being that the rule which forbids the reception of parol evidence to vary a written contract is wise and salutary, and should always be respected by a court of equity, and that no mistake should be corrected unless upon evidence that was entirely clear, exact, and satisfactory. It was indeed said by Lord Thurlow (Irnham v. Child, 1 Brown's Chan. Ca. 94) that there had been no instance where the evidence of mistake was permitted to prevail against a party insisting that there was no mistake; this is certainly not the rule now, but the expression of Lord Hardwick, that a written contract could be reformed (1 Vesey, 319) "only on the strongest possible evidence," although thought by Mr. Duer to be "rather meant to apply to the circumstances of the particular case in which they were used than to be material stipulation by mistake. And a policy of insurance is just as much within the reach of the principle as any other written contract. But a court of equity ought to be extremely cautious in the exercise of such an authority, seeing that it trenches upon one of the most salutary rules of evidence, that parol evidence ought not to be admitted to vary a written instrument. It ought, therefore, in all cases to withhold its aid, where the mistake is not made out by the clearest evidence, according to the understanding of both parties, and upon testimony entirely exact and satisfactory." And see Franklin Fire Ins. Co. v. Hewitt, 3 B. clear, and satisfactory." See also WoodMon. 231.

Mr. Arnould cites, as the only wellauthenticated instance in which a court exercised the power of reforming the instrument, Motteux v. London Ass. Co., 1 Atk. 545. In that case, the policy was on the ship Eyles, and the risk was described as "to commence from and immediately after her departure from Fort St. George." In another part of the policy the risk was described to be "at and from" that fort, and the policy was proved to have been filled

up from a label signed by the assured

and two of the directors of the insurance company. It was not disputed by the insurers to have been the intention of both parties that the policy should be "at and from." It seems also that the label was considered of great authority in practice. Lord Hardwicke decided that the policy should be considered at and from.

But the case of Phoenix F. Ins. Co. v. Gurnee, 1 Paige, 278, decided in the Chancery Court of New York, exercises the direct authority of such a court in ordering the correction of a mistake in filling up a policy, on the application of the assured, the proof being "distinct,

bury Sav. Bank v. Charter Oak Ins. Co., 31 Conn. 517.

Where the sole object of an alteration is to correct a mistake in an existing policy, no new stamp is required to give it validity. It is not a new contract, but an act to render operative that which already exists, and to which, as corrected, the original stamp was meant to be affixed. Robinson v. Touray, 1 M. & S. 217; Sawtell v. London, 5 Taunt. 359; 1 Duer, Ins. 86; 1 Arn. Ins. 61.

intended as a general rule," seems to us scarcely if at all too strong as an expression of the general rule. Mr. Duer himself remarks that it is owing to the strictness and difficulty of the proof that so few cases have been found in the reports in which the relief sought has been actually given.1

And in the third place a distinction has been taken which seems to rest upon sound reason. It is, that equity will interfere more readily in the correction of a mistake, in the execution of a power, than in the reformation of a written contract.2 As where a policy 1 1 Duer, Ins. 133.

was made which purported to be "on account of A, and payable to him or order," and a loss occurred, and the complainant, being the owner of a vessel, brought a bill in equity praying that the policy might be reformed by inserting after the name of A the words, 66 as agent and for whom it may concern," which the court ordered. In the next place the mistake must be perfectly innocent, for if made purposely and with any design to gain any advantage by it, this the court would regard as an attempted fraud, and would not correct. There is yet another distinction which may be considered as having much force; it is that a mistake is more readily rectified by a court of equity if the mistake be that of the party seeking relief by reforming an instrument drawn by the other party, than if the instrument were drawn by the party seeking relief, and the mistake were his own. It is quite certain, however, that a mistake has been rectified where it occurred in an instrument drawn by the party seeking relief.1

trol." There was evidence that McKay purposely, and not through mistake, declared the interest to be in McLimont, in order that they might share the scrip dividends. Mr. Justice Curtis said: "If this were so, a court of equity could not treat an attempted fraud as an innocent mistake; and though the principal, in such a case, would be in no fault, it could not relieve him, but must leave him to his remedy against his agent." The court were of opinion that though it appeared that they probably intended to take the scrip dividends, yet it did not appear that they intended to take them without the consent of their principal.

That courts interfere much more readily, and upon the footing of presumed intention, in cases of correction of mistakes in the execution of powers, than the reformation of a written contract, are cited, 1 Story, Eq. Jur. § 169-179; 2 Sugden on Powers, 94; Ashurst v. Mill, 7 Hare, 502.

1 In Bull v. Storie, 1 Simon & Stuart, 210, where, however, the mistake was

admitted by the answer, it was held by the Vice-Chancellor that a mistake may be rectified even in an instrument drawn by the party seeking relief. He said: "The rule at law, that evidence is not admissible to contradict or explain a written instrument, stated simpliciter, is received in equity as well as at law. A court of equity does, nevertheless, assume a jurisdiction to reform instruments, which, either by the fraud or mistake of the drawer, admit of a construction inconsistent with the true agreement of the parties. And, of necessity, in the exercise of this jurisdiction, a court of equity receives evidence of the true agreement in contradiction of the written instrument. If the true agreement and the consequent mistake in the written instrument be established by the evidence, can a court of equity refuse relief because it appears that the party seeking relief himself drew the instrument, unless it be a principle in a court of equity not to relieve a party against his own mistakes? There is no such principle in a court of

CHAPTER V.

OF INSURABLE INTEREST.

SECTION I.—Of Wager Policies.

CONTRACTS of insurance, where the insured has no interest in the subject-matter thereof, are called wager policies. Not very long ago such policies were valid in England. Indeed gaming transactions of any kind were scarcely considered disreputable, if only they were entirely honest and neither party attempted by any fraud to gain an advantage over the other. The civil law called a certain class of contracts aleatory, from alea, a die, because these contracts were regarded as dependent upon risk or chance, like a game with dice.2 In one of the classes into which these contracts were divided, one of the parties paid at once a sum of money, and the other party took upon himself a certain risk. A lottery is of this kind, where the purchaser of a ticket pays a certain sum, and the other party takes the risk of the ticket-holder, drawing a certain number. The common contract of maritime insurance

equity. Common mistake is the ordinary head of jurisdiction; and every party who comes to be relieved against an agreement which he has signed, by whomsoever drawn, comes to be relieved against his own mistake."

11 Marshall on Insurance, Book I. 97: "An insurance, being a contract of indemnity, its object is, not to make a positive gain, but to avert a possible loss; and, as a man can never be said to be indemnified against a loss which can never happen to him, a policy without interest is no insurance, but a mere wager. It is spei emptio and not aversio periculi, which is the true idea of an insurance. A policy, therefore, made without interest, is properly denominated a wager policy, and has nothing in common with insurance but the name and form. * This is the name given in the civil law to a mutual agreement, of which the

effects, with respect both to the advantages and losses, whether to all the parties or some of them, depend on an uncertain event. Civ. Code of La. 2951. These contracts are of the two kinds mentioned in the text, namely: 1. When one of the parties exposes himself to lose something which will be a profit to the other, in consideration of a sum of money which the latter pays for the risk. Such is the contract of insurance; the insured takes all the risk of the sea, and the assured pays a premium to the former for the risk which he runs. 2. In the second kind, each runs a risk, which is the consideration of the engagement of the other; for example, when a person buys an annuity he runs the risk of losing the consideration in case of his death soon after, but he may live so as to receive three times the amount of the price he paid for it.

has been thought to be of this kind. The other kind is where each party takes upon himself a risk, as where in life insurance the insured agrees to pay, every year, so much money; thus taking on himself the risk that the aggregate amount of his payments may be more or less than the amount receivable from the policy; while the insurer takes upon himself the risks of receiving more or less, and paying sooner or later, according to the length of life of the assured. Mr. Christian, in his notes to Blackstone's Commentaries, considers that every contract of insurance is only a wager; because if the insured pays a premium of five per cent on the property insured, the insurer in fact bets with him ninety-five to five that the ship will return in safety.1

It is ovbious, however, that an important distinction exists between wager policies or policies without interest on the part of the insured, and those where he has an interest, and is to be indemnified for the loss of it by the insurers. And wager policies are no longer valid in England or in this country.2 The reason is undoubtedly the same with that which has made it illegal in many states for a man to make a contract to sell stocks or property of any kind which he does not own or expect to own. And this reason is founded on a clearer perception than once prevailed of the pernicious effect of gambling in all its forms, and under any disguise, not only upon the mind and character of the gambler, but upon the public prosperity.

Thus, it has been said, that wagers on the arrival of the ship are against public policy, because they give the party insured an interest in the destruction of the ship, and make its safety adverse to his interest. And as foreigners are always permitted to insure

1 Insurance is in effect nothing more than a wager, for the underwriter who insures at five per cent receives five pounds to return one hundred upon the contingency of a certain event; and it is precisely the same in its consequences as if he had betted a wager of ninetyfive pounds to five that a ship arrives safe, or that a certain event does not happen. 2 Blackstone's Com. (Christian's ed.) 459, note a.

Prohibited by Stat. 19, Geo. II. c. 37. See also Aberfold v. Beard, 2 Durnford & E. 610, in which the limitation of