Scottish Court of Session Decisions

In May 1910 William Martin, C.A., trustee for behoof of creditors of the estate of Alexander Robertson, dairyman, 37 Lorne Street, Leith, brought, in the Sheriff Court at Edinburgh, an action against James Riddell, The Clydesdale Bank, Ltd., Leith Walk, Edinburgh, to have him ordained to assign and deliver to the pursuer two policies of insurance conveyed by Robertson to Riddell by assignation dated 22nd December 1900.

The assignation was as follows:—“I, Alexander Robertson, … for certain good and onerous causes and considerations, do hereby assign unto James Riddell, agent, Clydesdale Bank, Limited, Leith Walk, Edinburgh, his executors, administrators, and assignees, the following policies of assurance on my life granted by the Norwich Union Life Insurance Society, videlicet:—(1) policy numbered 61854, dated the 18th day of September 1894, for £250 sterling, and (2) policy numbered 61855, dated the 18th day of September 1894, for £250 sterling: Together with the said assured sum of £500 sterling, and all bonus additions accrued or that may accrue thereon, and my whole right, title, and interest therein, with full power to the said James Riddell and his aforesaids to sell, assign, or surrender the same at pleasure, to uplift and recover the proceeds thereof, and generally to do everything in relation to the said policies of assurance and sums therein contained which I could have done before granting hereof …”

This assignation had been accompanied by the following letter

“Edinburgh, 22nd Dec. 1900.

Sir,—I beg to hand you herewith:—“(1) Policy of assurance on my life granted by the Norwich Union Life Insurance Society, numbered 61854, endowment insurance with profits, dated 18th September 1894, for £250 sterling.

(2) Policy of assurance on my life granted by the Norwich Union Life Insurance Society, numbered 61855, endowment insurance with profits, dated 18th September 1894, for £250 sterling, together with assignations thereof in your favour, which please have intimated, and thereafter hold the said policies and assignations as a general security for any advances or obligations I, or any company or firm of which I am or may become a partner — however the same may for the time be constituted-may at present or at any future

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time be under to you.—Your obedient servant,

Alex. Robertson.

6d. Stamp.

Mr James Riddell, Agent,

The Clydesdale Bank, Ld.,

Leith Walk, Edinburgh.”

The defender averred—“(Ans. 4) … On 13th December 1900, after being … requested by said Alexander Robertson, the defender intimated to the said Alexander Robertson that he was prepared to allow him to overdraw his account to the extent of £45, on the said Alexander Robertson assigning his two life policies with the Norwich Union Life Insurance Society to him qua agent of the bank in security of the said advances, or any future sum or sums which might be due to the bank, which he agreed to do … The defender accordingly holds the said policies of assurance in trust for the said Clydesdale Bank, Limited. (Ans. 6) … Explained that at 4th February 1910 the said Alexander Robertson was indebted to the defender as agent of the said Clydesdale Bank, Limited, for the sum of £120, 1s. 7d., exclusive of interest.”

The defender pleaded—“(4) The pursuer, as trustee foresaid, taking the estate tanturn et tale as it stood in the said Alexander Robertson, as at 4th February 1910, he has no right to said policies until the debt due to the bank is paid.”

On 6th July 1910 the Sheriff-Substitute ( Orr) allowed a proof.

Note.—“… The documents describe the defender as agent of the Clydesdale Bank at Leith Walk, but they do not disclose that the policies were assigned to him as agent of or in trust for the Clydesdale Bank. Pursuer's case is that the assignation was granted to defender as an individual.

Defender's case, on the other hand, is that the Clydesdale Bank agreed at Robertson's request in December 1900 to allow him to overdraw his account in the Leith Walk branch to the extent of £45 on his assigning the two life policies to defender qua agent of the bank in security of said advances or any future sum or sums which might be due to the bank. Defender states that he ‘accordingly holds the said policies of assurance in trust for the said Clydesdale Bank, Limited.’ He further explains that on 4th February 1910 Robertson was indebted to the defender as agent of the bank in the sum of £120, 1s. 7d. and interest.

Pursuer maintains that the assignation and back letter can alone be looked at in this question; defender asks a proof pro ut de jure of his averments.

No question arises in my opinion under the Act of 1696. This is not an action directed against a person alleged to be a trustee; it is not a question between truster and trustee. It is a case where the defender alleges that an ex facie absolute right in his favour is truly a trust. That, I think, can be proved pro ut de jure—Dickson on Evidence, sec. 582; Murdoch v. Wylie, 1832, 10 S. 445; Hastie v. Steel, 13 R. 843 (opinion of Lord Craighill).

The defender argued a point… to the effect that the assignation in his favour rendered the present action incompetent. But if the assignation of the policies be truly in favour of defender as an individual, the pursuer is entitled, if nothing be due now to the defender, to demand that they be assigned to him as pursuer's trustee.…”

On 19th July 1910 the Sheriff ( Maconochie) adhered.

Note — “The sole question at present before me is whether, looking to the terms of the assignation and a letter which Mr Roberston sent to the defender when he lodged the life policies with him, the defender can prove pro ut de jure that the policies were assigned to him, not as an individual, but as agent for the Clydesdale Bank, Limited, in security of advances made or to be made by the bank to Robertson? The two documents are not happily expressed, as in neither of them is there a clear statement as to the understanding under which the assignation was granted or the advances made. The assignation bears to be granted in favour of Mr Riddell, ‘Agent, Clydesdale Bank, Limited, his executors, administrators, and assignees’ ‘for certain good and onerous causes.’ It was maintained that the words ‘his executors,’ &c., showed distinctly that the assignation was to Mr Riddell as an individual, and that it was incompetent for him to go behind the document. I do not think that that view can be maintained, looking to the decision in Forrester v. Robson's Trustees, 2 R. 755. It was further maintained that the letter (which can hardly properly be termed a ‘back letter,’ seeing that it was written by the debtor) also clearly showed that Robertson was dealing with Mr Riddell as an individual, as it bore that the policies were assigned to him in security for ‘any advances or obligations I .… may at present or at any future time be under to you.’ That letter is addressed to Mr Riddell, ‘Agent, The Clydesdale Bank, Limited.’ I do not think that the pursuer can read anything more in his favour from that document than can be found in the assignation. The ‘advances’ seem to me to refer to the same thing as the ‘good and onerous causes’ mentioned in the assignation, and the two deeds raise in the same way the same question, Can Mr Riddell competently prove as a defence to the action that the assignation to him ‘agent for’ the bank, and the words ‘advances I may be under to you’ mean respectively ‘assignation to him as agent’ and ‘advances made by him as agent.’ I am of opinion that he can, on the authority of the cases cited by the Sheriff-Substitute ( Murdoch v. Wylie, 10 S. 445, and Hastie v. Steel, 13 R. 843, and particularly Lord Craighill's opinion there at page 851).”

The pursuer appealed, and argued — It was not competent to lead parole evidence to contradict or modify a written document, unless the document was ambiguous — Inglis v. Buttery & Company, March 12, 1878, 5 R. (H.L.) 87, 15 S.L.R. 462; Lee v. Alexander, August 3, 1883, 10 R. (H.L.) 91,

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20 S.L.R. 877; M'Leod v. Urquhart, May 25, 1808, Hume 840; Laird & Company v. Laird & Rutherford, December 9, 1884, 12 R. 294, 22 S.L.R. 200; M'Allister v. M'Gallagley, November 2, 1910, reported infra. In the present case there was no ambiguity—it was clear from the terms of the back letter that the assignation was granted to secure advances made by the defender as an individual. The word used was “you,” which necessarily meant the defender personally, and could not be construed as meaning the Clydesdale Bank. The words “Agent, the Clydesdale Bank” were merely descriptive — Graham v. Macfarlane & Company, March 11, 1869, 7 Macph. 640. The cases of Forrester v. Robson's Trustees, June 5, 1875, 2 R. 755, 12 S.L.R. 464, and Hastie v. Steel, March 19, 1886, 13 R. 843, 23 S.L.R. 559, were distinguishable. In Forrester, cit., the question was whether a policy of insurance standing in name of a partner belonged to the partner or to his firm. It might have had some bearing if the present question had arisen between the defender and his bank. Hastie v. Steel, cit., turned on a doctrine of the law of trust and did not touch the present case.

Argued for the defender—It was clear from the terms of the assignation and the back letter that the assignation was granted in favour of the defender qua agent of the bank. If that was not clear then the documents were ambiguous and it was competent to prove by parole any facts which would aid the construction. The defender averred that the advances secured were made by him as agent for his bank. If that were proved, the inference would be irresistible that the assignation was granted to the defender qua agent. Forrester v. Robson's Trustees, cit., and Hastie v. Steel, cit., were in point and ruled the present case in the defender's favour. Even if the assignation were granted in favour of the defender personally he was entitled to retain the policies until all advances made on the faith of the assignation were repaid. It was immaterial whether the advances were made out of his own funds or not.