Scottish Court of Session Decisions

Lord President.—When the case was last before the Court, we were unanimously of opinion, that, if the right of Miss M'Dougle rested only on an assignation to the policy, it was ineffectual without intimation, as it was brought into competition with a party who is, hoc statu, assumed to be a true creditor, and who has used arrestments. But we were desirous of seeing farther argument on the effect of the actual depositation and delivery of the policy which had been made in the hands of the creditor for her security. I consider that to be a question which is not free from difficulty. I do not perceive that any party has a right to compel Miss M'Dougle to part with the policy, except on payment of its contents; and, if the office cannot be compelled to pay without delivering up the policy to them, it does not appear clear how far her right can be defeated by the measures which have been taken in this case. For I do not think the rights of parties can be altered by the mere circumstance, that a process of multiplepoinding is the form of action in which these rights now require to be extricated, and that Miss M'Dougle has produced the policy in process in support of her claim. It is to be considered as a document in her hands at this moment, to the effect of preserving entire any right of retention which would have been competent to her had the document not been produced.

Lord Balgray.—I think the decision of this case is not to be arrived at without experiencing some embarrassment. I attach no weight to the plea that the contents of the policy were not arrestable, because they were payable only to the heirs or assignees of the assured, and not to himself. He could have assigned the contents of the policy, and I think them equally liable to be attached by arrestment. Then, it appears that no new premium of assurance fell due after the date when the arrestments were used. The death occurred during the current term, which was then covered by the premium previously paid. Holding the arrestment, then, to be an effectual diligence, I conceive that, according to the principles of the law of Scotland, the right of Strachan is clearly preferable to that of Miss M'Dougle. The letter of the late Robert Strachan to her, and the delivery of the policy, I have no hesitation in considering to be equal to an assignation; but it was never intimated, and nothing can be clearer in our law than that an unintimated assignation is ineffectual in competition with an arrestment. But I have some doubt whether the case should be decided with reference solely to the law of Scotland. Policies of insurance are a new species of instrument, which are of recent introduction in England, and are still more recent here. But they are highly useful and beneficial. They have become important from the extent to which the business of insurance is carried on, and this is every day increasing; and I think the Court ought to view them favourably, and give every facility, consistent with law, to their transference between debtor and creditor. I am doubtful, therefore, whether a question of this kind should not be viewed as belonging to the law mercantile, and whether we ought not to see more of the English practice and decisions in such cases, before we determine in this cause. In general, the assurance office, I understand, holds the jus exigendi to ho inseparable from the; custody of the policy, and will refuse to make payment until it is produced and delivered to them. Miss M'Dougle acquired a legal right to the custody of it under the letter of the late Robert Strachan, and she is now the actual custodier of the instrument. I am very unwilling to give any extension to the doctrine which holds obligatory deeds to be transferred and effectually pledged by mere delivery, but I think it would be proper to see more of the law and practice of England before deciding.

Lord Gillies.—I do not feel the same difficulties with your Lordship and Lord Balgray. An arrestment is preferable to an unintimated assignation. But I do not see how any thing more can be made of the right in favour of Miss M'Dougle than to account it equivalent to an assignation. Even had the policy been indorsed to her, still if an assignation was subsequently executed in favour of another party, and that was first intimated to the assurance office, I am at a loss to see how they could afterwards pay the contents to the indorsee producing the policy. The analogy of a bill of exchange which passes by indorsation is a very dangerous one, because bills necessarily possess extraordinary privileges. But these are not to be rashly extended to documents of a different nature. I think the right of the arrester is preferable; and, in coming to this conclusion, I am not at all influenced by the circumstance that the question arises in a multiplepoinding, where the contents of the policy have been consigned and the policy has been produced by one of the claimants. But, giving to her every benefit which she can legally claim as the custodier of the policy, I think the arresting creditor has a preferable right to the sum assured on the life of his debtor.

Lord Mackenzie.—I concur in much of what has been stated by Lord Gillies. There are some questions of importance raised by the parties in this case, and there is one of some difficulty on which I wish to reserve my opinion, as it is a point not necessary for the extrication of the case. I mean the question, whether an arrestment used during one year would be effectual to attach the contents of the policy not only for the year which is actually current when the arrestment is used, but also for subsequent years, and after other premiums have been paid to keep up the policy? An arrestment is quite good though the day of payment has not come if the term be current; but if it is only after a new term has begun, and a new payment of premium has been made that the contents of the policy ultimately become exigible, the question is very different whether these contents have been effectually attached by arrestments used during a preceding year. On that point I offer no opinion, for in this case the assured party died before any new premium fell due, and I have no doubt that an arrestment was an apt diligence to attach the contents of the policy which became exigible on his death.

The question then remains, whether the right of the arrester was excluded by the prior right of the assignee? I think there is in substance a good assignation in her favour, but it was not intimated, and, by the law of Scotland, an unintimated assignation cannot compete with an arrestment. To obviate this it is pleaded that the delivery of the policy completes the assignee's right without intimation. This is a doctrine of a dangerous tendency. It is an important general principle of our law, and there is none more vital, that the delivery of the corpus of a deed or instrument will not carry the real right that is contained within such deed or instrument. But then it is said, that, from the origin and nature of policies of insurance, the law of Scotland is excluded by what is called the law mercantile; and if any serious doubt is to be raised upon this, I should wish to know what are the precise averments made by the assignee as to the law and practice of England and of Europe, I am a little at a loss to know what she states it actually to be. Is it that a policy will pass from hand to hand like a bill of exchange by a blank indorsation? Or is it that it does not even require an indorsation, but is transferable like a bank note, which is payable to the bearer? If it be only the former which is averred it will not avail the assignee, for there was no indorsation in this case, and it would only injure her right to plead that an indorsation would have availed her, seeing that she has got none, and I can scarcely believe that the latter averment is seriously made, viz. that a policy of insurance, which may be for a very great sum, and generally is for a considerable amount, should circulate from hand to hand like a bank note, to be payable to the bearer, so that whoever presented it at the office, and he alone, should be entitled to uplift its contents, and discharge the office of their obligation.

If such an averment as this should now be seriously made, I should still hesitate whether to give time for enquiry or whether we ought not at once to decide in conformity with our own laws. But I should at all events require a specific averment on the subject, and I think it highly improbable that any such law or practice should any where prevail; for whatever expediency, or rather necessity, there may be for according to bills and notes the extraordinary privileges which they possess, I cannot perceive any reason for extending these to policies of assurance. I am not at all influenced by the plea of Strachan, that the question arises under a multiplepoinding in which the contents of the policy have been consigned and the policy itself produced by a claimant. All that would not alter the rights of the parties. But, independently of that, I think the arresting creditor is to be preferred.

Robertson, for Miss M'Dougle, brought under the notice of the Court that Miss M'Dougle resided in Berwick, and the policy had been sent and delivered to her there. The legal effect of such deposit ought, therefore, to be governed by the law of England.

Lord Gillies intimated that he thought the law of Scotland must rule this case, and

The other Judges concurred.

The Court found, “that the arrestment at the instance of the claimant, John Strachan, was a competent diligence to affect the sum due under the policy of insurance in question, and that the same is preferable to the right contended to be conferred on the claimant, Miss M'Dougle, by the letter of February 20, 1830, accompanied by delivery and possession of the policy of insurance, and remit to the Lord Ordinary to proceed,” &c.