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Published online by Cambridge University Press: 12 February 2016
Israel judges usually have regard to English precedents which fit (or appear to them to fit) the case they are dealing with—sometimes, even when a local norm exists that may be applicable. And apparently they have not freed themselves from this practice even in those cases where it is neither Ottoman nor Mandatory law that is involved but Israel law in the narrow sense of that term, or in respect of those statutes which are intended to be part of an evolving Israel codification. The practice is likely to come into conflict not only with the view that English law—as referred to in Article 46 of the Palestine Order-in-Council, 1922–47—is no longer relevant to our current law since the establishment of the State or the view that at least these Israel laws do not require supplementation from outside, but also with the view of those who, having reservations about such outlook, simply urge that English law need not apply, even under Article 46 itself, so long as a domestic legal order exists.
1 Cf. the observations of Witkon, J. in Kochav v. Baker (1951) 27 P.E. 258, 271Google Scholar to the effect that since the establishment of the State, Article 46 has ceased to be binding.
2 In favour of these two views, see Yadin, , “How the Bailees' Law is to be interpreted” (1968) 24 HaPraklit 493Google Scholar, 494; Id., “Again on the Interpretation of Laws of the Knesset” (1970) 26 HaPraklit 190, 196–200. For another view, see Shiloh, , “Return to Jewish Law” (1968) 24 HaPraklit 363Google Scholar; Tedeschi, , “On the Gift Law 5728–1968” (1969) 1 Mishpatim 639Google Scholar; Id., “The Rules of Intepretation and Stare Deems” (1971) 27 HaPraklit 42, 45–46; Procaccia, , “Israel Legislation in Stages: Notes and Criticism” (1971) 1 Iyune Mishpat 45–46.Google Scholar
3 At p. 348.
4 Cohn J. in his judgment also dealt with the question of the attribution to the company of the agent's knowledge, although he ultimately decided the matter from another point of view by rejecting the idea that the error which occurred in the entry of the particulars on the proposal form involved giving false particulars or concealing important facts.
5 At p. 353. In this article the terms shelihut, sholeah and shaluah are used when the reference is to the concepts of the Israel Agency Law, whereas “agency”, “principal” and “agent” are used with reference to English law. Nevertheless “insurance agent” will be employed (the term [sokhen bituah] is common in this country although it is not unambiguous: see the observations in Weissman v. Arye Insurance Company Ltd. (1971) 74 P.M. 67, 72) even where the reference is not to English law. Generally, in order to indicate the placing of a task upon someone who accepts the same, without regard to the particular effect this may have in one or another legal system, the term “mandate” will be employed.
6 See Elech v. La Foncière Insurance Company (1964) (II) 18 P.D. 271; Hadar Insurance Company Ltd. v. Drimar (1966) (IV) 20 P.D. 763; Tessler v. Niago (1967) (I) 21 P.D. 337 (the last case concerned a pre-Agency Law situation) for judgments in the direction of the annotated judgment; and in the reverse direction see National Insurance and Guarantee Corporation Ltd. v. Movshovitz (1958) 12 P.D. 132.
7 See the survey of the authorities in Ivamy, , General Principles of Insurance Laiv (2nd ed., London, 1970) 495.Google Scholar Recently, two judgments have been given (Buxton v. Scottish Legal Life Assurance Co., N.L.J., 17.2.1972, 154; Stone v. Reliance Mutual Insurance Co., ibid., 23.3.1972, 267) which affect the question and apparently deviate from Newsholme. These cases not yet fully reported will not be considered here.
8 See National Insurance and Guarantee Corporation Ltd. v. Movshovitz, ubi supra.
9 This assumption of Scrutton L. J. is somewhat weakened by a number of observations he makes at different points in his judgment. At p. 374 he speaks of the person contracting for the company as if he had constructive notice, apparently contrary to this assumption. At p. 375 he says that “[i]f the answers are untrue and he knows it, he is committing fraud which prevents his knowledge being the knowledge of the insurance company”. One can logically infer from the last sentence that if there is no fraud on his part, the knowledge of the agent will be regarded as the knowledge of the company.
10 At p. 355: “[The company] which is interested in proposals for insurance from Israeli clients draws up and prints the proposal forms in a foreign language, supplies its agents with these forms and expects (and perhaps even requires) its agents to explain them to clients who do not know English and to complete them on their behalf and get the clients to sign: it is reasonable to regard these agents, when carrying out the orders of the second respondent [the company] as its agents”.
11 At p. 369.
12 As against this, the decision in Newsholme was explained as negativing this duty of the agent who fills in the form, as if, in doing so, he discards the uniform of the company and puts on the uniform of the person requesting the insurance. See Jenks, , English Civil Law (4th. ed., 1947) vol. 1, pp. 193, 256.Google Scholar
13 See Re Croggon, Exp. Corbis (1834) 4 Deac. & Ch. 354.
14 Société Générale de Paris v. Tramways Union Co. (1884) 14 Q.B.D. 424; aff'd. (1886) 11 App. Cas. 20.
15 At pp. 375–376.
16 At p. 348.
17 Ibid.
18 At p. 347.
19 Biggar v. Rock Life Assurance Co. [1902] 1 K.B. 516.
20 At p. 364.
21 See Wells v. Smith [1914] 3 K.B. 722; Sharpe v. Foy (1868) 4 Ch. App. 35.
22 Some hint of criticism from this point of view of the judgment in Newsholme is to be found in Stoljar, Law of Agency (1961) 86, n. 95.
23 At p. 376.
24 Ibid.
25 Landau J. says at p. 348: “It is stated at the end of the form that the proposer is responsible for the truth of what is contained therein and that the proposal shall be the basis of the insurance between him and the respondent. The appellant signed this declaration although he did not understand what was written there in English”.
26 Or, when the acceptor is an incorporated body, assuming that the matter would be known to the person having power to make contracts for it.
27 At pp. 373–374.
28 Cf. Ayrey, v. British Legal and Provident Assurance Co. [1918] 1 K.B. 136.Google Scholar
29 [1902] 1 K.B. 516. There the policy contained the following: “Any of the circumstances in relation to these conditions corning to the knowledge of any local agent shall not be notice to or be held to bind or prejudicially affect the company […]”. One should stress this material difference between Biggar and the Israel case, since Landau J. relied on Biggar in addition to Newsholme.
30 M'Millan v. Accident Insurance Company [1907] S.C. 484, 491.
31 At p. 370.
32 [1892] 2 Q.B. 534.
33 Bowstead on Agency (13th ed., 1968) 1.
34 Powell, , Law of Agency (2nd. ed., 1961) 4Google Scholar: “[…] a representative, who acts for P[…] the result of the representative acting for P must be to affect the legal relations between P and a person with whom the agent has been dealing”. Cf. Dowrick, , “The Relationship of Principal and Agent” (1954) 17 Mod. L.R. 24.CrossRefGoogle Scholar 37. And, in the United States, Seavey, , “The Rationale of Agency”, 29 Yale L.J., 859CrossRefGoogle Scholar, 886.
35 See Stoljar, op. cit. supra n. 22, at pp. 2–3. Stoljar mentions that this expression is used by Abbot, , “The Nature of Agency” (1896) 9 Harv.L.R. 507CrossRefGoogle Scholar, 512, and that it was apparently fashioned by Byles J. in Dingle v. Hare (1859) 7 C.B.N.S. 145, 159.
36 See Fridman, G. H. L., Law of Agency (3rd. ed., 1971) 8Google ScholarCf. Anson, , Law of Contract (23rd. ed., 1969) 543.Google Scholar
37 We have dealt with this matter elsewhere, Studies in Israel Law (Jerusalem, 1960) pp. 232, 233, citing the opinion and testimony of the late Norman Bentwich who was Attorney-General of Palestine during the period in which the Palestine Order-in-Council, 1922 was drafted.
38 Op. cit. supra n. 22, at p. 86 and at p. 87.
39 At p. 353.
40 Law Reform Committee, Fifth Report, Conditions and Exceptions in Insurance Policies, 1957, Cmnd. 62, para. 14.
41 At p. 353.
42 This docs not mean that where the shelihut is directed towards a legal act, and non-legal acts are also involved, the Agency Law (the provisions affecting the internal relations of sholeah and shaluah) would not apply to the non-legal acts.
43 According to what was said above on the nature of agency in English law—that it also touches non-legal acts—the English rules of agency and not the general rules of contract would apply here.
44 The question may be raised, e.g., of the rescission of an insurance contract made by the sholeah regarding certain property when his shaluah knew that the property had already been destroyed: see in English law. Proudfoot v. Montefiore (1867) L.R. 2 Q.B. 511. Another possible question concerns a claim in torts by a sholeah because of a deceit practiced by a particular person when the true situation was then known to the shaluah. In English law see Wells v. Smith [1914] 3 K.B. 1722 against taking into account the knowledge of the agent in such a case in order to deny the claim. But see also, on the other hand, Cowen v. Simpson (1795) 1 Esp. 290.
45 The need to give the provision a reasonable interpretation and therefore to limit its scope does not merely concern the aspects which we have mentioned above. Thus it is necessary to understand as self-evident that the whole section only extends to acts inter vivos concerning patrimonial matters (although Jewish Law from which the maxim—a person's shaluah is like the person himself—was taken does not restrict its application to “dine mamonot” matters).
46 Certainly by using the word “binds” the legislature also intended a conveyance of the property of the sholeah, effected by the shaluah, a matter for which the word is not apt.
47 41 Divrei Haknesset 464. The construction of the provision in question as being concerned with the “knowledge rule” was also assumed by the public committee that prepared the draft which later became the bill.
48 43 Divrei HaKnesset 2559.
49 “Where application for insurance is made out by an insurance agent in the course of his agency, and the insured truthfully gives agent the correct answers, but agent records answers in application incorrectly, without fault, knowledge or collusion of the insured, and the insured signs the application without first having read it although he had an opportunity to do so in reliance upon good faith of agent, the insurance company is not relieved from liability on policy, and the act of the agent in recording incorrect answers is deemed the act of the insurer: Pomerenke v. Farmers Life Ins. Co. 228 Minn. 256 (1949); 36 N W 2d 703; also Toler v. Missouri Ins. Co., 243 S W 2d 788, (Mo. App. 1951); Boggio v. Calif.-West. States Life Ins. Co., 239 P 2d 144, 108 Cal. App. 2d 597 (1952); Turner v. Mutual Benefit Health & Ace. Assn., 316 Mich. 6, 24 N W 2d 534 (1946); Providence Washington Ins. Co. v. Rabi-nowitz, 227 F. 2d 300 (5th Cir. 1955); Tri-State Ins. Co. v. Ford, 120 F. Supp. 118 (N M 1954). Where answers to question propounded in application for life policy were correctly given by applicant, but false answers were inserted in application by sales agent for insurer, agent's knowledge of falsity of answers would be imputed to company: National Life & Ace. Ins. Co. v. Goolsby, 91 Ga. App. 361, 85 SE 2d 611 (1955).—Where the applicant answers questions contained in an application for life insurance, fully and without withholding material facts, and the agent does not correctly write such information in answer to the question propounded, the company is bound, in the absence of fraud or collusion, by the information furnished by the applicant, whether or not the agent correctly answers the questions from the information furnished him: Atlas Life Ins. Co. v. Sullivan, 52 P. 2d 28; 172 Okl. 595 (1935). Wyatt v. State Farm Fire and Cas. Co., 322 P. 2d 137; 78 Wyo. 228 (1958). Taylor v. Met. Life Ins. Co., 214 A 2d 109; 106 N.H. 55 (1965). American Fire and Ind. Co. v. Lancaster, 415 F 2d 1145 (8th Cir. 1969). Bible v. John Hancock Mut. Life Ins. Co., 256 N.Y. 458, 176 N.E. 838 (1931) (Cardozo C. J.) (agent making out the application and writing down the answers of the insured). Cf. Frinet, and Murphy, , “Einfluss des Verhalten des Versicherten auf die vertraglich zugesagte Gefahrtragung” Zweiter Weltkongress für Versicherungsrecht, IV (Karlsruhe, 1967) 251, 256.Google Scholar
50 “The examining physician in questioning the applicant was the representative of the insurer. If he, after having been informed of the facts by the applicant, chose to ignore them, this conduct would estop the company from avoiding the policy on the ground that the questions were incorrectly answered”: New York Life Ins. Co. v. Parker, 64 SW 2d 556, 558; 188 Ark. 39 (1933). See also Brasier v. Benefit Association of Ry. Emp., 369 Mich. 116, 119 NW 2d 639, 94 ALR 2d 1385 (1963): Insurer defended on grounds that insured had obtained policy through concealment. Insured had a static, long-standing condition of muscular atrophy, which must have been apparent to physician making the medical examination. Held (94 ALR 2d at 1387): In view of the fact that the atrophy was of long standing, that it was static, and that it must have been apparent to the examining physician, it cannot be said that plaintiff made a false statement or that he concealed his condition. See also Neimann v. Sec. Ben. Assn. 350 111. 308, 183 N.E. 223 (1932); Franklin L. Ins. Co. v. Galligan, 71 Ark. 295, 73 S.W. 102 (1903).
51 Where insured did not reveal the fact of amputation of her left breast, the fact that that portion of the body was exposed to view of the medical examiner did not estop the company from relying upon concealment, since insured did not act in good faith: Telford v. New York Life Ins. Co., 9 Cal. 2d 103 69 P 2d 835 (1937).
52 Cass. civ., 17.3.1969, D. 1969, Somra., 85; Rev. gén. assur. terrestres, 1969, 500; Rouen, 21.1.1876, D.P. 1877, 2, 126; Paris, 2.1.1891, D.P., 1891, 2, 318; Caen 17.4. 1867, D.P., 1867, 5, 28. Cf. Picard, et Besson, , Assurances terrestres, 3d. ed., I, n. 96Google Scholar, II, n. 685, 2; Picard, , in Rev. gén. assur. terrestres, 1935, 17Google Scholar; Deschamps, , L'Agent général d'assurances, 1958, para. 107Google Scholar, p. 67.
53 Douai, 3.11.70, Gaz. Pal. (1971) 1, Somm., 37.
54 Paris, 12.2.1878, D.P. (1878) 2, 58; Trib. civ. Bar-sur-Seine, 15.5.1933, Rev. gén. assur. terrestres, 1934, 555.
55 Donati, , Trattato del diritto delle assicurazioni private, II (Milano, 1954) para. 421, p. 313Google Scholar; Buttaro, , “Assicurazione (contratto di)” in Enciclop. del diritto, III (1958) §20, p. 486ff.Google Scholar; and decisions cited by them.
56 Cassaz, 23.7.1931, Massim. Foro it., 1931, 587; Cassaz., 11.6. 1932, ibid., 1932, ibid., 1932, 441; Cassaz., 25.7.1932, Foro it., Rep. 1932, v. Contr, assic., n. 20; Cassaz., 17.1.1934, Massim. Foro it., 1934, 20; Cassaz., 10.7.1935, ibid., 1935, 611; Trib. Genova, 12.5.1939, Ciur. ital, 1940, II, 20.
57 Greco, “Concorso dell'agente di assicurazione nelle risposte al questionario e responsabilità dell' impresa”, Assicurazioni, 1938, I, 1Google Scholar; Salandra, , “Le dichiarazioni inesatte dell'assicurato e la conoscenza dell'agente” Giur. ital., 1940, II, 20.Google Scholar
58 Buttaro, loc. cit.
59 Buttaro, loc cit.
60 Enneccerus-Nipperdey, , Allgemeiner Teil des Bürg. Rechts, I, 2Google Scholar, 14. Aufl. p. 577, 909–912; Tuhr, von, Der allg. Teil des Deutschen Bürg. Rechts, II, 1, 1914, p. 120.Google Scholar
61 Donati, loc. cit.
62 Bruck-Möller, , Kommentar zum Versicherungsvertragsrecht, I, 8.Google Scholar Aufl., Berlin 1961, Anm. 49 zu §16, pp. 329–332. An interesting decision of the Bundesgerichtshof of March 1, 1972 (IV Z.R. 107/70) N.J.W. 1972, 822, should be added to the judgments mentioned there. Here a person signed an application form in blank and handed it to an “introduction” (or “mediation”) agent (Vermittlungsagent) for filling up. He did not go over the entries made by the latter. Later it transpired that the policy covered an articulated haulage truck to be used within the insured's undertaking but not outside it, as he had intended, such insurance requiring a much higher premium than that actually paid. Subsequently the truck was totally destroyed whilst on a journey away from the undertaking. The court held inter alia (a) that the “introduction” agent was not authorized to accept declarations of will and that the statement “I request you to insure my truck for the following purposes …” was a declaration of will and not of knowledge; (b) that signing the blank form without examining the particulars afterwards entered by the agent constituted negligence on the part of the insured as did also his failure to read the policy upon receiving it; (c) that the agent was guilty of culpa in contrahendo and the insurer to some degree was responsible for that since it had employed him for its own purposes (to find clients and assist them in filling up forms); (d) that for the above reasons an intermediate solution was called for, giving the insured partial insurance.
63 RG 26.11.1907, RGZ Bd 66, 275–277.
64 RG 12.III.1918, (1918) Annalen, 90–91.
65 RG 16.1.1906, (1906) JW, 146; VA 1906 Anh. 22, Nr. 189.
66 Bruck-Möller, op. cit., Anm. 24 zu §44, p. 1019.
67 LG Berlin 12.11.1953, (1953) VersR, 254.
68 Haasen, , Versicherungsrecht (1951) 249.Google Scholar
69 Bruck-Möller, op. cit., Anm. 37 zu § 16, p. 325.