Scottish Court of Session Decisions

Mary Young, pursuer, brought an action in the Sheriff Court at Kirkcaldy against Mrs Helen Tarrant or Waterson, defender, whereby she craved for an order for payment of the sum of £45 with interest to herself as executrix-dative qua legatee of the deceased David Tarrant, a private in the 1st Battalion, Cameron Highlanders, and a brother of the defender, the sum in question having been paid on his death by the Police Mutual Assurance Association.

The pursuer pleaded—“4. The said sum of £45 being part of the deceased's estate carried by his said holograph will, the pursuer as executrix is entitled to decree therefor with expenses.”

The defender pleaded—“5. The sum in question not being part of the deceased's estate, and in any case not being carried by his will, the pursuer has no claim for the amount sued for, and the action should accordingly be dismissed, with expenses. 6. In any event the female defender is, under the will founded on by pursuer, entitled to one-half of the amount sued for.” The facts of the case are set forth in the Sheriff-Substitute's note as follows:—“The material facts of the present case are simple, and are, I understand, admitted. The late David Tarrant, private in the 1st Battalion of the Cameron Highlanders, was for some time in the Edinburgh Police Force. About the same time as he became a member of the police force (29th April 1913) he also joined the Police Mutual Assurance Association. The rules of the latter, inter alia, provide—‘That every member of every police force in England, Wales, and Scotland, whose age does not exceed thirty years, may be admitted a member of this association on his submitting his name and that of his nominee in writing to the authorised officer of the force to which he belongs.’ On joining the association in Edinburgh the deceased there signed a nomination form in favour of his sister, the female defender. He paid certain weekly contributions, and a sum of £45 was payable on his death, which took place on 29th September 1914 from wounds received in action. David Tarrant left a holograph will, dated 13th August 1914, by which he left his property equally to the pursuer and his sister, the female defender, who in the interval had duly intimated her brother's death and received payment of the £45. The question for decision is—Whether the sum of £45 forms part of David Tarrant's estate to be divided in terms of the will, or is the defender entitled to retain possession of it?”

The rules of the Police Mutual Assurance Association provide, inter alia—“XII. That as early as possible after the death of any member of the association, the chief or authorised officer of the force with which the deceased was connected at the time of his death shall forward to the secretary the succession number, name, rank, certificate of death, length of police service, time the deceased was a member of the association, the name and address of the nominee, and the last nominee form signed by the deceased member. The secretary shall give notice of the death in the next issue of the Police Chronicle, and shall, as early as possible after the death has been duly authenticated to him, send a cheque, with two receipt forms, to the authorised officer of the force with which the deceased was connected for the amount due to the nominee; the amount so forwarded shall be paid to such nominee, who shall give a receipt in duplicate; one of such receipts shall be filed and the other returned to the secretary. The secretary shall, as early as possible, publish his receipt in the Police Chronicle, and this publication shall be a sufficient receipt for the amount so forwarded. ( a) That in case any nominee be insane or dead at the time when the money directed to be paid shall become due, the committee may pay the same to or amongst the relations or friends of the

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deceased member in such manner as they in their absolute discretion may think fit. ( b) That in case any nominee or other person proposed to be benefited by the association be a minor at the time the sum becomes payable, the committee shall be at liberty either to pay over the money to or apply it for the benefit of such minor, or at their discretion the money may be invested in such manner as the committee may think fit for the benefit of such minor, two members of the association to be appointed by the committee to act as trustees of such fund; and the association shall not in any case be liable to any further claim from any person or persons whatsoever on behalf of any relative or friend of such deceased member. ( c) No nominee or other person who may be, or who may become, entitled to benefit under these rules shall assign or charge the same to or in favour of any other person, and the association, its committee and officers, shall not be bound by any notices of assignment, charge, or other similar dealing.”

The instructions to authorised officers annexed to the rules provide, inter alia—“To prevent disputes after death each member should be most particular in seeing that the name of his nominee is correctly entered by the authorised officer on the association list. The nominee can be changed whenever the member pleases; and it should be clearly understood that even if a will is made assigning the subscription to some other person than the nominee, that even then the authorised officer must pay, not under the will, but under our rules, to the nominee.”

On 3rd November 1915 the Sheriff-Substitute ( Armour-Hannay) pronounced this interlocutor—“Finds that the pursuer sues as executrix of the late David Tarrant for the sum of £45 paid to the female defender under the form of nomination: Finds that the said sum of £45 formed part of the estate of David Tarrant on his death on 29th September 1914, and falls under his holograph will dated 13th August 1914: Therefore decerns in favour of the pursuer as executrix foresaid as craved, reserving to the defender to claim against the executry estate for one-half thereof, as provided by No. 7 of process.”

Note.—“I was favoured with an excellent argument by Mr Johnston on behalf of the defender, and was impressed by the authorities cited, particularly the cases of Craigie's Trustees v. Craigie ( 1904, 6 F. 343, 41 S.L.R. 254) and Struthers' Representatives v. Marshall ( 1905, 21 Sh. Ct. Rep. 97). These decisions, however, appear to me to differ in important circumstances from those of the present case, and cannot in my opinion be held as ruling it.… [ After narrating the facts as above set forth].… For the defender it was contended that the £45 did not form part of the deceased's estate; that it was not, and could not, be carried by his will, and that accordingly the defender was entitled to retain possession of it. I am unable to give effect to these contentions.

The Police Mutual Assurance Association is unregistered, and the nomination form has no statutory effect. Its purpose apparently was to facilitate payment by the association without production of a legal title, and the nomination was not intended to and did not in my opinion confer any indefeasible beneficial title upon the nominee in such a case as this where a subsequent will disposes of the deceased's whole property. This I think appears from the rules of the association, a copy of which is produced. Rule XII provides for the cases of a nominee being insane or dead, or a minor when the sum to be paid becomes due, and also declares that no nominee may assign his right in favour of any other person prior to the death of his nominator. In the case of a nominee being insane or dead when the money becomes payable, the committee of the association ‘may pay the same to or amongst the relatives or. friends of the deceased member in such manner as they, in their absolute discretion, may think fit.’ And if the nominee be a minor the committee reserve a similar discretion either to pay the money over or apply it for the benefit of the minor through two members of the association acting as trustees. In the instructions to authorised officers it is also pointed out that the nominee can be changed whenever the member pleases; but that it ‘should be clearly understood that even if a will be made assigning the subscription to some other person than the nominee, that even then the authorised officer must pay, not under the will but under our rules, to the nominee.’ All this is quite consistent with the view that so long as the nominee is not dead or insane or a minor his title to the money payable will yield to a valid will such as that produced here. The association simply take up this position—‘We won't be troubled with questions of title, and will only pay to the nominee, leaving him to make his title good as best he can.’

There is this further serious objection to the defender's claim to retain this £45, that it involves setting up the nomination form as a testamentary writ, which, on the authority of Morton v. French, 1908 S.C. 171, 45 S.L.R. 126, appears to be clearly incompetent.

For the defender an attempt was made to overcome these objections by arguing that the £45 never was part of the deceased's estate, and could not be carried by his will, and the cases of Craigie's Trustees and Struthers' Representatives were strongly founded on. As already said, these decisions do not seem to apply to the circumstances of this case. In the first the question was whether a widow's pension should be brought into account and set off against her claim for her legal rights. The pension was payable out of a fund known as the Bengal Military Fund, and was declared to be inalienable, any attempt to do so being declared as ipso facto forfeiting all right to benefit from the fund. One can quite well see why it was held that the pension was never part of the deceased's husband's estate.

In Struthers' case I admit the circumstances

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at first sight look a good deal like those of the present case. There was, however, no will, and the fund from which the members of the association were paid was raised on a totally different way to that of the Police Mutual Assurance Association. The right of the nominee was simply to call upon the various members of the society on the nominator's death to make certain payments as provided by the rules. It was held that these payments were never part of the nominator's estate.

In this case it appears to me the £45 was equivalent to a policy of insurance paid for by the deceased David Tarrant's yearly contributions, and that its actuarial value was at every moment a part of his estate. Accordingly the £45 not having been made over habili modo to the defender, it was carried by the will, and falls to be dealt with as part of the deceased's estate.”

The defender appealed to the Sheriff ( Fleming), who, on 9th November 1915, recalled the interlocutor of the Sheriff-Substitute, and assoilzied the defender.

Note.—“The facts of this case are fully stated in the Sheriff-Substitute's note.

In my opinion the sum of £45, payable by the association on Tarrant's death, did not then, and never did, form part of his estate.

The contract between Tarrant and the association was that Tarrant should make a weekly contribution, and that on his death the association should pay a certain sum, not to Tarrant or his heirs or representatives, but to an individual nominated by him. This nomination, according to the contract, was made at the time he applied for admission as a member of the association, and was a condition-precedent to his admission. It is true that he had power to recall this nomination, but only by making a new nomination of some other individual. In no circumstances could he make the sum payable to himself or to his heirs generally. It could only be payable to a named individual. Such a contract seems to me to be indistinguishable from the contract by which a man makes periodical contributions to a fund from which a pension to his widow will be paid, or the case of a man insuring his life and making the policy payable to a third party. In neither case is the sum ultimately payable, or even its actuarial value, ever in bonis of the contributor. The creditor in the obligation is the widow or the third party, and if there can be computed any actuarial value, which seems doubtful, what is thus ascertained is the value, of the interest to them, but not to the contributor (see Craigie's Trustees v. Craigie, 6 F. 343, 41 S.L.R. 254).

It was argued, that even if the nomination be held not to have been revoked by the will, the nomination itself did not create any beneficial interest in the nominee, who remained merely a trustee for the member's estate, empowered to grant to the association a good discharge for all concerned. I cannot accept this view. It seems to me that the whole scheme of the rules is formed on the idea that not only should the nominee have power to discharge the association, but that he should be the person entitled to benefit.

The provisions in Rule XII as to the disposal of the moneys in the event of the nominee being dead, or insane, or a minor, seem to me quite inconsistent with the view that the nominee himself, if alive, sane, and sui juris, has no beneficial interest and is merely a trustee. Further, the prohibition of assigning points the same way, and the words in which that prohibition is expressed—‘No nominee or other person who may be entitled to benefit under these rules,’—seem capable of only one interpretation, namely, that the nominee is a person entitled to benefit.

I was referred to the cases of Biggs v. Lewis (1890, 89 L.T. (O.S.) 47) and Hughes v. Parry ( 1892, 93 L.T. (O.S.) 131), in support of the proposition that a subsequent will revokes any existing nomination. These decisions cannot stand with the later decision in Bennett v. Slater ([1899] 1 QB 45). These cases were all concerned with associations registered under the Friendly Societies Acts, whose constitution was therefore regulated by the statutory provisions, and were or should have been decided upon the clause in section 15 (3) of the Act of 1875—‘may from time to time revoke or vary such nomination by a writing under his hand similarly delivered or sent’—and especially the four words at the end of that passage. No plea is taken on this proposition, but if there had been I should have been prepared to repel it on the ground that the will is not a nomination as prescribed by the contract between the contributor and the association. The pursuer's plea No. 3 was supported by reference to the case of Morton v. French ( 1908 S.C. 171, 45 S.L.R. 126). All that that case decides is, that a nomination being testamentary in nature may, if ineffectual as a nomination, be given effect to as a testamentary deed, following, though with a different result, the English case of Baxter ( [1903] P 12).”

The pursuer appealed, and argued—In making the nomination, which was not a testamentary writing, the deceased only complied with the rules of the association to which he belonged. It merely constituted a title to collect the amount, and it did not confer on the nominee an exclusive right to the payment out of the fund. Even if the nomination could be held to be in the nature of a testamentary writing, the subsequent will, dealing as it did with the whole of the deceased's estate, revoked it. Any statutory privileges enjoyed by friendly societies could not apply to this association, as it was not a registered friendly society. Any nomination which was to be admitted as a will ought to comply with the formalities which were necessary for the execution of testamentary writings— Morton v. French, 1908 S.C. 171, 45 S.L.R. 126. Even if the Friendly Society Acts did apply to this case, the payment out of the association's funds to the nominee formed a portion of the deceased's personal estate— Biggs v. Lewis, (1890) 89 L.T. (O.S.) 47. In the case of in re Griffin,

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[1902] 1 Ch 135, it was held that policies effected under the Friendly Societies Acts 1875 and 1896 could be assigned in the customary manner as well as by nomination under the Acts. The case of Baxter, [1903] P.12, decided that an invalid nomination was testamentary and admissible as a will. Hence it followed that the payment out of the funds ought to be administered in terms of the deceased's will. Bennett v. Slater, [1899] 1 QB 45, did not apply to the present case.

The respondent argued—The nomination, having been made according to the deceased's contract with his association, was valid. The nominee was invested with a beneficial interest in the fund, the nomination constituting an inter vivos gift in her favour, and the benefits were payable to her on the nominator's death free of any legal claims by the latter's wife or children.— Campbell v. Campbell, (1917) 1 S.L.T. 339. The defender was entitled both to receive the payment out of the association's fund and also to benefit from any claims she could, in virtue of his will, put forward to the deceased's estate— Craigie's Trustees v. Craigie, (1904) 6 F. 343, 41 S.L.R. 254. A nomination could only be revoked in the mode provided by the Friendly Society Acts and not by will— Bennet v. Slater, [1899] 1 QB 45. The payment out of the fund to which the nominee was entitled did not form a part of the deceased's estate— Ashby v. Costin, (1888) 21 QBD 401. Under rule 5, which here constituted the contract, the money, payable out of the fund at death, was not the property of the member of the association. Revocation not having been made, the defender was entitled to the whole fund.