Cleaver v. Mutual Reserve Fund Life Association

Life insurance covers death, and death includes murder by a third party. The question this case answers is what happens when the third party is the very person who stands to be paid. It is the clearest illustration of the principle that organises every exclusion in a life policy: no man may take advantage of his own wrong.

M insured his life in favour of his wife. The wife poisoned him. M died and the wife was convicted of his murder. She claimed the policy moneys.

1. Could the murdering beneficiary recover under the policy?
2. Did the crime destroy the policy itself, so that nobody could recover?

The wife could not recover. A person who feloniously causes the death of the life assured cannot take the benefit of the policy on that life. The maxim is ex turpi causa non oritur actio: no action arises from a base cause. Public policy will not lend its aid to a claimant whose own crime is the event on which the claim depends.

But the policy itself was not destroyed. The executors of M's estate could recover, and would hold the money for M's creditors or heirs. The contract was valid; what failed was the particular claimant's title to the proceeds.

Separate two questions, because they have different answers:

1. Is the contract enforceable at all? Yes. The insurer remains liable to pay on the death, and the money goes to the estate.
2. May this claimant take the money? No, where the claimant's own criminal act caused the death.

That distinction explains the outcome, and it is the same structure as the general proposition that an assured who sets fire to his own insured house cannot recover: the contract is not void, but the money is not recoverable by him.

• Wilful act of the insured in fire insurance. Condition 8 of the standard fire policy forfeits all benefits where the claim is fraudulent, where a false declaration is used in support of it, or where the loss is occasioned by the wilful act or with the connivance of the insured.
• Wilful misconduct in marine insurance. Section 55(2)(a) of the Marine Insurance Act 1963 excludes loss attributable to the wilful misconduct of the assured, although the insurer remains liable where an insured peril is the proximate cause even if the loss would not have happened but for the negligence of master or crew. Samuel v. Dumas is the application: scuttling with the owner's connivance, insurer not liable.
• Lawful object. Section 23 of the Contract Act applies to insurance like any other contract, and it is the hook on which the suicide and criminal-act problems hang.

Cleaver concerns one person killing another. The successional disqualification of a murderer is a rule about that situation, and it supplies no automatic analogy for a man's act upon himself. That is why the suicide cases — Beresford v. Royal Insurance Co, Barrandaile v. Hunter, Scottish Union & National Insurance Co v. N.R. Jahan Begum — have to be argued separately, and why, where the insurer has expressly contracted to pay after a stated period, the object of the contract is the provision of a fund for dependants and not the commission of suicide.