Scottish Court of Session Decisions

Lord Hunter's OPINION.—The fund in medio in this multiplepoinding is the amount due by The English and Scottish Law Life Assurance Association under a policy of assurance upon the life of the late Ian Neil Carmichael. The claimants upon the fund are, on the one hand the father, and on the other the executrix, of the said Ian Carmichael. If the question of title alone were considered I think that the executrix would fall to be preferred. No objection, however, has been taken to the competency of the action, and I think therefore that I ought to determine the question of beneficial right.

On 22nd October 1903 the claimant Hugh Fletcher Carmichael took out a life policy of deferred assurance on the life of his son Ian Neil Carmichael, who was then under nine years of age. In terms of the policy it was provided that the claimant should pay the premiums on the 22nd of October each year up to and including 22nd October 1914. If the life assured should die before 29th October 1915, the claimant was to be repaid by the company all the premiums paid by him but without interest; but, if the life assured lived until 29th October 1915, he or his assigns were to continue to pay the premiums and the company were upon his death to pay his representatives the amount assured. Ian Neil Carmichael attained the age of twenty-one and died on 20th July 1916, leaving a holograph settlement under which he bequeathed his whole means and estate to his aunt, the claimant Miss M'Coll, The policy of assurance was never delivered to his son by the claimant Hugh Fletcher Carmichael, who in fact paid all the premiums. Under the policy the last premium does not appear to have been payable by the father.

I heard a considerable amount of argument upon the question whether by the law of Scotland a father has an insurable interest in the life of his son. It does not appear to me that I need consider this point, as it has no bearing on the present dispute. The plea can only be stated by the Assurance Company (see Worthington, 1 Ch. D. 419, and Hadden v. Bryden, 1 F. 710). If the company are willing to pay the amount assured, the father, although he had no insurable interest, can establish against his son's representatives his own right to the proceeds of the policy.

The executrix can succeed only if she establishes that the policy belonged to the son although it was taken out by the father. She must therefore aver and prove a gift. As the policy was never delivered I do not think that I can hold that the terms of the policy are sufficient to make out a case of donation. A bond of provision by a father in favour of a son may be valid though not delivered, as the father is the natural custodier of the son's writing. Where, however, a father, when lending money belonging to himself, takes and retains a bond acknowledging receipt from him for himself and his son with an obligation to repay to the son, he is preferred to the son's executor (Hill v. Hill, (1755) M. 11,580). It is also well recognised that a destination in a deposit-receipt does not operate as a gift. In the present case the father during the son's minority had the only interest in the policy, and his retention thereof during that period could not be held to be for the son's benefit. Until the son in fact made a payment of a premium I do not think, on the terms of the policy, that it can be maintained that the father was holding for the son. I therefore prefer the claim of Hugh Fletcher Carmichael.

It is said that the amount of the policy was included in the inventory of the estate of Ian Neil Carmichael given up by the executrix. Any expense thereby incurred appears to me to form a fair deduction from the proceeds of the policy.

Lord Justice-Clerk.—I have read the opinion of Lord Dundas and I concur in it.

Lord Dundas.—It is probable that the arguments in this case, as presented to the First Division and to the Court of seven Judges, were more elaborate than those submitted to the Lord Ordinary. But I think his lordship's conclusion was quite right. There has been here no delivery of the policy by the father, nor anything equivalent to delivery; and the argument in favour of a jus quæsitum arising to the son is, in my judgment, ill-founded.

I am unable to distinguish this case in point of principle from the long series of cases to which we were referred. Thus, in Hill's case the side-note bears that “although a father took a bond for money lent, payable to his son, retaining it in his custody; found, that it continued the father's property.” It was argued, inter alia, for the defender (the father) “that as the money lent was admitted to be his, the loan which he made of the same in the name of his son David as a provision to him gave no jus quæsitum to the son while the bond remained in the father's custody.” “The Lords accordingly sustained the defence and assoilzied.” The remainder of the report, which I assume on the authority of Lord President Inglis (cf. Walker's Executor) to be in the words of Lord Kames, states the reasoning of the matter in terms which seem to me almost as apposite to the case before us as they were in that of Hill. Here, I think, as there, delivery would be the “material circumstance to vouch the transference of the right,” because it alone would “import the will” of the transferor “to vest his right in another.” Hill's case was followed by that of Balvaird, where the same principle was applied to a case of heritage. The case of Jarvie's Trustee is one of great importance, decided by a very strong bench. It was held that a policy of assurance taken by a husband in favour of trustees for behoof of his wife and the children of the marriage did not confer a vested right in the beneficiaries without delivery of the policy. The Lord Ordinary (M'Laren) thought that the policy did not require delivery to make it an “irrevocable transfer of funds” in favour of the wife and children. This view was strongly maintained in the Inner House, as appears from the report of the arguments, but Lord President Inglis, in delivering judgment, said (at p. 415), “In that ground of judgment I cannot concur. If such a deed remains undelivered in the hands of the person who causes it to be made in favour of another person, it remains entirely in his power. To hold otherwise would be to go back on a long series of cases of which I will only mention Hill v. Hill, M. 11,580, and Walker's Executor v. Walker, 5 R. 965.” His Lordship proceeded to assimilate the policy of assurance before him to the bonds in the cases of Hill and of Walker, and continued “the circumstance that the deed here in question is a policy of insurance does not bear on the question. The obligation of the insurers is to pay a sum in certain events to a certain person just the same as if they had been debtors in a bond, and in truth a policy of insurance is just a bond by the insurers to pay a certain sum to a person named. … In the cases I have mentioned, the only party who could demand payment was the son or the wife, but still the Court held that the money was the property of the father in the one case, and of the husband in the other, and that on the grounds which I have stated.” Lord Shand also repudiated the Lord Ordinary's view that the payment of the premiums to the society was “an irrevocable transfer of funds into the hands of a third party, for the benefit of the wife and children.” “A complete answer to that,” said Lord Shand (at p. 417), “is that it has been held in the stronger case of money being lent to one person and the obligation taken for repayment by the lender to another, that this alone does not create a right in the third party. The reason is, that so long as the lender retains the custody of the document, it is in his power to alter the destination or have it altered, and therefore there is no ‘irrevocable transfer.’” Lords Mure and Adam delivered opinions to a similar effect. It seems to me that, if Jarvie's case is good law, the argument for the father in this case must prevail. I think the two cases are identical in principle;. nor can I find anything in the nature or the language of the policy before us to take it out of the rule of law on which Jarvie's case proceeded. If the father has not divested himself irrevocably of his right of property there can be no jus quæsitum in favour of the son or his executrix. In the later case of Hadden v. Bryden the policy, which bore to be effected by a lad of eighteen on his own life in favour of his heirs, executors, or assigns, passed at once into the possession of the lad's father, who paid all the premiums, and retained the policy till his death, twenty-five years later. In a competition between the son's daughter and the residuary legatees of the father, it was held by the First Division that the policy was the father's property. Lord President Robertson observed (at p. 716) that “if the policy was truly the father's property, it required an act of donation on the part of the father, expressed by an act of delivery, to deprive him of his right to do with the policy what he pleased.” Lord Adam's opinion was to the same effect; and his Lordship founded on three facts as satisfying him that the policy belonged to the father, viz., that he retained custody of it till his death, paid all the premiums, and in his settlement described it as “belonging to me.” In the case before us, the first and second of these facts are present; and, in lieu of the third, we have the father's evidence as to his intention, which I see no reason at all to disbelieve, and the fact of his claim in this action. Still more recently, the case of Cameron's Trustees was decided by a Court of seven Judges; and the cases of Hill and Balvaird were expressly approved. Lord Kinnear said (at p. 421), “I do not doubt at all that a father may confer a gift on his children by taking a deed in this form, that is to say, in the form of a bond by a debtor, granted to him for behoof of his children, and if he chooses to take a deed in favour of his children he may make an effective gift to them in that way; but to make it effectual the gift must be carried out to completion according to the ordinary rules of law. Now, I take it to be elementary that gratuitous obligations of any kind cannot be made perfect and effectual without delivery. That is the doctrine uniformly applicable to donations of all kinds.”

It would, no doubt, be competent for us, as a Court of seven Judges, to declare that Jarvie's Trustee and Hadden v. Bryden were badly decided, and to overrule them. I am not for so doing. I think the cases were rightly decided. The root of the matter seems to me to be expressed in Lord Kames's words in Hill's case, which I venture to adopt and to apply in this case. “It would be inconvenient if the law were otherways. It is very commodious that parents should have access to appoint certain subjects to go to certain of their children, reserving still their own power of alteration. This could not be done, at least in the present shape, if the [reclaimer] were well founded in his claim.” If the reclaimer's contention be good law, it might, I apprehend, go far to destroy the utility of the modern “thrift” policies of insurance, of which that before us is an example.

It was, however, maintained for the reclaimer that she was entitled to succeed even on the assumption that the train of authority to which I have referred is sound law; because the son had, on attaining majority, a jus quæsitum in the policy. I cannot accede to this argument. Much reliance was placed by the reclaimer's counsel upon the well-known passage in Stair's Institute (I. x. 5), and on certain dicta, especially by Lord Wensleydale, in the case of Finnie. Lord Stair lays it down that “when parties contract, if there be any article in favour of a third party, at any time, est jus quæsitum tertio, which cannot be recalled by either or both of the contractors, but he may compel either of them to exhibit the contract, and thereupon the obliged may be compelled to perform.” The passage is not, I think, expressed with the learned author's customary lucidity; and, if its language is read quite strictly and literally, it certainly seems to be too broadly stated. It is, I think, necessary to interpret Lord Stair's meaning—in some such fashion as was done by Lord Ardmillan in Blumer—as importing that where there is, in a contract between A and B, some article in favour of C so conceived as to be irrevocable by A and B or either of them, then C, although no party to the contract, may assert and enforce a jus quæsitum. If this view is correct, then there is no difficulty in reconciling the doctrine of Lord Stair with the long train of decisions of which Hill and Jarvie are examples. Lord Stair's doctrine is that an article in a contract, irrevocable by the parties, will confer a, jus quæsitum upon him in whose favour the article is conceived, though he is no party to the contract. The cases decide that, where a provision in favour of a tertius is gratuitously made by one of the parties to a contract, delivery is necessary to complete the donation; and, so long as the document remains in the granter's possession or under his control, the gift cannot operate in favour of the tertius, and he has no jus quæsitum. Both the legal propositions thus formulated are sound in law, and there is no inconsistency or discrepancy between them. If it were otherwise, it would seem strange indeed that Lord Stair's doctrine of jus quæsitum tertio was not pressed (and with effect) in the cases to which I have referred; and that it should not have been discovered, until this case arose, that so formidable an argument had been overlooked by bar and bench during the preceding centuries.

In the present case it seems to me that, the document remaining under the father's control, there was no completed gift to the son, and no question of jus quæsitum can arise. I think the policy was a gratuitous provision by the father for his son, and that, until there was delivery of it to the son, or some equivalent to delivery, no right could vest in him, even on his attainment of majority. It was urged for the son's executrix that if, after that date, the son had paid a premium to the Assurance Company, he would thus have acquired a vested right or jus quæsitum in the policy. It may well be that, if a premium had been so paid by the son, with the knowledge and consent of the father, this would have been equivalent to delivery of the policy. But the event did not in fact happen. If, again, the father had made formal intimation to the son of the policy he had taken out, his act might have been held equivalent to delivery; but he did not in fact so intimate it; the son only came to know of the existence of the policy by some accidental, or at least informal, means of information. If the son, after attaining majority, had called upon his father to deliver the policy to him, the same question would have arisen which we are now to decide; and, for the reasons stated, I think the father would have been entitled to prevail. But it seems to me to be idle to pursue hypothetical cases, which might have arisen but did not. Looking to the terms of the policy, and in the circumstances which have arisen, I am of opinion that the father's claim should be sustained.

The question whether or not a father has, according to the law of Scotland, an insurable interest in his son's life does not, as the Lord Ordinary observes, here arise, as no point is taken by the Assurance Company. But,

as the matter was mooted before the Court of seven Judges, I may say that, as at present advised, I see no reason to doubt that he has such an interest. By our law a parent has right to claim aliment from his children, and this seems to me sufficient to give the parent an insurable interest in the child's life.

On the whole matter, I am for adhering to the interlocutor reclaimed against.

Lord Salvesen.—The question in this case is: Who is entitled to receive the proceeds of a policy of assurance which became payable on the death of Ian Neil Carmichael who died after he had attained his twenty-first year? The claimants are his father, who took out the policy on his son's life and paid all the premiums before his son attained his twenty-first year, and the executrix of the deceased under a will in her favour. If a decision in favour of the latter involved a reconsideration of the cases of Hill and Jarvie's Trustee, I should be very slow to become a party to overruling these decisions, even if I thought them wrong. As, however, I see no possible ground for reaching such a conclusion, the success of the executrix depends, in my opinion, on her being able to distinguish the circumstances of this case from those which were present in the earlier cases.

In the case of Jarvie the policy of assurance was taken by the husband in favour of trustees for behoof of his wife and children; and the position of matters was precisely the same as if it had been originally taken in favour of his own executors, and Mr Jarvie had thereafter executed an assignation in favour of his wife which he had left in his own repositories and had not intimated to the assurance company. Such an assignation, while indicative of an intention to donate, could never operate as a completed gift; and the property in the policy would remain in the policyholder who by paying the premiums had created its value.

The contract of assurance, however, in the present case is of a very different kind. It was not taken out on the life of the policyholder but on the life of his son, and very careful provision was made as to the respective interests of each. The policy proceeds on the narrative that Mr Carmichael had paid to the Association the first premium for the year terminating on 21st October 1904, and had agreed to pay the premium every year thereafter up to and inclusive of 22nd October 1915—for I think it is obvious that the date 1914 is a clerical error for 1915, this date immediately preceding the son's attainment of the age of twenty-one. The policy then provides that, if the life assured should die before 29th October 1915, then the father was to receive back from the Association without interest the whole premiums which he had paid. If, however, the son survived majority, it was expressly stipulated that he was entitled to keep the policy in force by continuing to pay the same premium annually, and on his death the Association undertook to pay the sum of £1000 to his executors, administrators, or assigns.

Now, if I had been able to hold that it was a matter of no concern to the Assurance Company whether the payment of the sum assured were made to the father or the son's executors, I should have been unable to distinguish this case from that of Jarvie; but a careful study of the prospectus, which forms part of the proposal form, and of the policy itself has led me to a different conclusion. The object of what is called a deferred assurance on the life of children is declared to be to encourage thrift in the young by giving the child on attaining majority an inducement to continue the assurance at a low rate of premium, and on the footing that there would be no liability to extra premium “on account of family history or personal delicacy or on the ground of his being engaged in some hazardous occupation or residing in some unhealthy climate.” In other words it is apparent that this young man, if he had wished to insure his own life at twenty-one, could not have done so at the same low rate of premium as had been secured by his father paying the premiums during the twelve years of his minority. He would therefore have every inducement, if he contemplated marrying, of continuing the policy for his own benefit; and I think the contract between his father and the Assurance Company necessarily involved that the father should not deprive him of this right by continuing to pay the premiums himself and securing such pecuniary advantage as would result from the son's early death.

The Lord Ordinary has held that the question whether a father has an insurable interest in his son's life has no bearing on the question we are called on to decide. It has been held in England that no such insurable interest exists; and although the matter has not been made matter of decision in Scotland, I think the form that the contract took was mainly governed by this consideration. The Assurance Company deprived themselves of any right that they might otherwise have had to refuse payment of the sum assured to the father on the death of his son by stipulating that, whenever the son became of age, the benefits were to pass to the son; and their prospect of recouping themselves in the average case for the liability which they undertook depended on the policy being maintained after his majority. It is against public policy that people should gamble on the lives of their children, if indeed this is not illegal. The case is therefore entirely distinguishable from that of Jarvie, where the assurance was effected on Mr Jarvie's own life, and where it was a matter of indifference to the assurance company whether he desired that it should be made payable to his executors or to trustees for behoof of his wife and children.

Such being my opinion as to the conception and effect of the contract entered into between the claimant Mr Carmichael and the Assurance Company, I think that this is a case in which the well-known doctrine of jus quæsitum tertio falls to be applied. The rule is most concisely stated in a passage from the opinion of Lord Wensleydale in the case of Finnie which is in these terms: “Where there is an express stipulation in a contract in favour of any one, it is in effect an agreement between those parties that the stipulation shall be performed with him, and though the person in whose favour it is made is not a party to the agreement nor at the time assenting to it, he may afterwards adopt the agreement in his favour, and sue upon it. … By a stipulation in favour of a third party I understand an agreement that something is to be done or permitted for the benefit of a third person clearly ascertained, who though not a party to the contract, may afterwards come in and insist upon its performance, and in the meantime the actual parties cannot revoke it.” There is here a stipulation in favour of a third party, to wit, the son, on whose life and for whose benefit the assurance was effected. Although, therefore, he was not a party to the contract he had a title to insist on its performance while alive, and his executrix as coming in his place can now do so. I hesitate, notwithstanding the high authority of Lord Wensleydale, to adopt the last clause of the passage which I have quoted, that the original parties cannot revoke the contract. I cannot understand on what principle of law or equity this view proceeds. Take a simple illustration where the doctrine would apply. A contracts with B that in consideration of a present payment by A to B, B shall assign a bond for a definite sum of money in favour of C on the latter attaining majority. It afterwards turns out that C is not worthy of the provision which, by the contract, it was intended to secure to him. Why should not A and B be free to revoke the contract to which alone they were parties so long as no intimation has been made to C of the benefit that they proposed to confer upon him. As A and B were free to contract, so it seems to me that they are free to alter any contract that they had made. But this point is not material in the present case. The Insurance Company do not propose to revoke the contract, and they have done nothing in this process which can reasonably be construed as having that effect. They have merely expressed their willingness to pay the proceeds of the policy to the person that the Court shall decide to have right thereto. The position therefore seems to me to be the same as in the case I have figured, where the person who has given the consideration in respect of which the other contracting party has undertaken an obligation to a third party desires to enforce the contract according to its terms, or stands aside in order that the third party who alone has the interest may do so for himself. The cases in which the doctrine jus quæsitum tertio has been applied in Scotland are rare; but the doctrine itself is well established in our law, and the present seems to me to be a typical case for its application.

I am therefore of opinion, differing from the Lord Ordinary, that we ought to sustain the claim of the executrix of Ian Carmichael and give judgment accordingly.

Lord Mackenzie.—The question in this multiplepoinding is as to the beneficial right in a policy of assurance voluntarily and gratuitously effected by a father on the life of his son. According to its terms the Assurance Company became bound to pay the sum assured to the executors, administrators, and assigns of the son, should he die after attaining majority. The father paid all the premiums. The policy was never delivered to the son. The son was killed after attaining majority, leaving a will in favour of an aunt. The sum assured is claimed by his executrix and by his father. The Company are prepared to pay the sum assured, waiving any plea they might have stated under the Act 14 Geo. III. cap. 48, sec. 1, that the father had no insurable interest in the life of his son. No question in this case arises on the provisions of this Act, nor was any serious doubt cast in argument upon the legal principle by which, according to the law of Scotland, a father has an insurable interest in the life of his son.

The question raised is a general one, and is, in my opinion, concluded by authority. The nature of the obligation by the Assurance Company is clearly defined by the Lord President (Inglis) in Jarvie's Trustee: “The obligation of the insurers is to pay a sum in certain events to a certain person just the same as if they had been debtors in a bond, and in truth a policy of insurance is just a bond by the insurers to pay a certain sum to a person named.” If it had been possible in the present case to say that there was an element of contract on the terms of this particular policy which made it different from the policy in Jarvie's case, then it might have been possible to maintain that the principle above quoted does not apply. It is, however, clear that the father, whose funds created the interest, was entirely free, as in a question with the Assurance Company, to say on what terms he was prepared to accept a policy. The Assurance Company had no interest to say who was to be their creditor. The fact that the policy was expressly made assignable establishes this. The law applicable to a bond is applicable, in my opinion, to this policy of assurance. The obligation undertaken by the Assurance Company is vouched by a unilateral document. There is under it no obligation on the father to pay the premiums. Unless it was delivered, unless something was done to remove from the father's control the policy which came in place of the money he had invested, it remained his property. As the Lord President (Inglis) says in Walker's Executor: “This is in accordance with legal principle and a long train of decisions, but the rule of law is so well stated by Lord Kames in the case of Hill v. Hill, which was quoted to us, that it is worth while to quote a few sentences from the report.” The case of Hill was decided in 1755, and is reported in M. 11,580, and the passage quoted by the Lord President is as follows: “Delivery is in one case only a material circumstance to vouch the establishment or transference of a right, namely, when the person who delivers has the disposal of the subject; for, in that case solely, the delivery must import his will to vest his right in another. Hence it is that when a man lends a sum and takes the bond in name of a child in familia, delivery of the bond to the father has not naturally any other signification than that the bond, which comes in place of the money, is to be under his power as the money formerly was. It cannot import a delivery for behoof of the child, because the debtor who delivers the bond has no vote in the matter, but must deliver the bond to the father, from whom he got the money.” What is here laid down is directly applicable to the present case; for the policy, which was purchased by the father, throughout remained in his repositories and subject to his control. As he says in his evidence, he took the policy for his own benefit in the event of his son predeceasing him, and in the event of his own death for the benefit of his son. When he did so he took advantage of a principle of the law of Scotland which Lord Kames describes in Hill's case as “very commodious,” viz., “that parents should have access to appoint certain subjects to go to certain of their children, reserving still their own power of alteration.” From the report of Hill's case it will be seen that the obligation of the debtor was, ab initio, to pay to the son. Here the obligation was only to pay on or after a deferred date. Unless the half be greater than the whole, the decision in Hill directly rules the present case. In Balvaird v. Latimer, the same principle was recognised and given effect to. The necessity for delivery in order to make a perfected donation was emphasised in the case of Cameron's Trustees. The Lord President (Dunedin) said (at p. 412): “Such delivery is not effected by the mere fact that the donor himself grants a written title to the subject of the gift, or that where he himself is getting the subject of the gift from someone else, he orders the written title from that someone else in terms which convey to the donee.” The decision in that case went a long way, for it was held by a majority in a Court of seven Judges (diss. Lord Kyllachy), that a bond and disposition in security for money lent from funds held by a father in trust for his daughter, in favour of the father as trustee for his daughter nominatim, recorded in the Register of Sasines but retained by the father, did not operate delivery. In Hadden v. Bryden, the policy which bore to be effected by a lad of eighteen in favour of his heirs, executors, or assigns, was held by his father, who paid all the premiums till his death twenty-five years afterwards. There was a proof, and it was held that the policy belonged to the father and not to the son. The right of the son's representatives in consequence of the terms in which the policy was taken was thus negatived. It is no doubt true that here the son knew of the existence of the policy, probably through his aunt, and wanted to make it his own. He made inquiry about air risks. The father never communicated the terms of the policy directly to the son. There is evidence that on one occasion the son transmitted a cheque to the company, but this was at an early age, and does not affect the question.

The Lord Ordinary has held that, until the son in fact made payment of a premium of insurance under the policy, it could not, under the terms of the policy, be successfully maintained that the father was holding the policy as custodier for his son. In that view I concur. The insertion by the father of his son's name is evidence of his intention to make a donation, but this was not perfected by delivery.

It was contended that Jarvie and Hadden were bad decisions and should be overruled. I see no sufficient ground for doing so.

The argument of the executrix is founded on the passage in Stair, I. x. 5: “It is likewise the opinion of Molina, and it quadrates with our customs, that when parties contract, if there be any article in favour of a third party, at any time, est jus quæsitum tertio, which cannot be recalled by either or both of the contractors, but he may compel either of them to exhibit the contract, and thereupon the obliged may be compelled to perform.” Now, the cases cited by Lord Stair are four in number, viz., Nimmo, Renton v. Aiton, Ogilvie v. Ker, Irving v. Forbes . None of them affords any warrant for extending the dictum of Lord Stair to a case such as the present.

In Nimmo, a purchaser was taken bound to pay part of the price to creditors of the seller, and the creditors were held entitled to use inhibition. In Renton, it was held that a clause in a contract in favour of a third party, albeit not of his knowledge, cannot be discharged, if registered in the Books of Council and Session, for that is as good as delivery. Irving was a case on the law of evidence, in which it was held that the bond was to be presumed to be delivered unless the contrary could be proved. The circumstances in Ogilvie were the same as those in Nimmo's case. It was held that there was delegation not mandate, and that there could be no revocation. It is as much a truism to say that there is a jus quæsitum tertio under a contract if the clause in favour of the tertius is irrevocable, as to say that if the clause is irrevocable then there is a jus quæsitum. The question always must be, can the article in favour of the third party be recalled or not? We were referred to the opinion of Lord Ardmillan in Blumer & Co. v. Scott & Sons, where, in my opinion, the passage from Lord Stair above quoted is correctly interpreted. It is only by the transposition of words suggested by Lord Ardmillan that the true meaning of the passage is reached: “According to Lord Stair it is only where there is in a contract some ‘article in favour of a third party’ which cannot be recalled by one or both of the contractors that there is jus quæsitum tertio, and this doctrine is specially recognised and approved of by Lord Cranworth and Lord Wensleydale.” The passage in Lord Wensleydale's opinion is in Finnie's case, where, after quoting Lord Stair, his Lordship concludes: “By a stipulation in favour of a third party, I understand an agreement that something is to be done or permitted for the benefit of a third person clearly ascertained, who though not a party to the contract, may afterwards come in and insist upon its performance, and in the meantime the actual parties cannot revoke it. The instances quoted by Lord Stair are of this character.” In my opinion the dictum of Lord Stair, if construed in the sense contended for by the reclaimer in the present case, would be inconsistent with the decisions in the train of cases commencing with Hill. In the present case, so long as the father did not deliver the document constituting the right there was no irrevocable donation. Until the policy was delivered to him, the son could not exercise any of the rights provided in it, and the father was not divested.

For these reasons, I think the judgment reclaimed against is right.

Lord Guthrie.—I think the Lord Ordinary has come to the right conclusion.

As I read the case of Hill and subsequent cases, they settled that, by the law of Scotland, if A enters into an unqualified contract with B, for the pecuniary benefit of C, C has no right to enforce the obligation in his favour unless and until A has parted with the control of the fund which is the subject of the obligation, either by delivering to C, for C's benefit, the deed containing the obligation, or by transacting with C on the footing that he has a vested right in the fund. In the latter case delivery will not be necessary; A will thereafter hold the deed for C.

But this rule will not necessarily apply to contracts so conceived that, either from their date or from some subsequent date, control of the fund shall pass from A to C for C's personal benefit, nor to contracts under which B is constituted a trustee for C.

Jarvie's case, if well decided, as I think it was, makes it impossible in this matter to distinguish an assurance policy from any other contract, and I am unable to distinguish the policy in the present case from the policy in Jarvie, so far as the present question is concerned. But it is said that the rule of Hill's case only applies where, although there is in terms a provision in favour of C, this was not truly intended, either absolutely or contingently, as a provision in his favour. In the series of cases it was held that the person originating the apparent benefit to C had not at the date of the contract finally resolved to benefit him. But, as I read these cases, it was assumed in all of them that C's name was introduced not as a matter of form, but in expectation of C's ultimately benefiting, should it turn out suitable that he should do so, in view of such circumstances as his conduct and his own means and A's ultimate means and legal and moral obligation.

The question of difficulty in the case seems to me to be, whether, on a sound construction of the policy of insurance with relative documents, A did not covenant with B that, on C attaining twenty-one, he (A) should part with control in favour of C of the fund which the policy created. The existence of this difficulty depends largely on whether the prospectus or form conferring options on C forms part of the contract on which he can found. I think it does not. But, suppose it does, it must then be maintained that, on C attaining twenty-one, B the assurance company were bound to intimate to C the existence of the several options open to him. If this is a sound construction of the contract (and there is much to be said for it, looking to the facts that the options could only be exercised by C, and that only at the time when he attained twenty-one) then I should be of opinion that, by the terms of the contract, A had then parted with control in favour of C, with the effect of vesting C with a right to enforce the contract and to insist on delivery of the policy to him. I do not, however, think that the contract will bear this construction, which it would have been easy to express in words if this had been intended. It was not suggested in the proof that there was any practice for assurance companies to intimate options to the persons assured under thrift policies, or that they failed in their duty in not so intimating.

I do not proceed on the oral evidence of the father in this case, that he intended to retain the policy and the ultimate application of the fund in his own hand. But I may add that there is nothing improbable in a father, when a child is of tender years, desiring to arrange for a future assurance on that child's life on exceptionally favourable terms, with the intention, however, after the assurance has come into existence, of preserving control over the policy and the fund assured until he ultimately ascertains whether it is desirable in his own interests, in his son's interests, and in the interests of other dependants, to vest the son in the policy. Nor do I think there is anything against public policy in such a contingent arrangement. On the contrary, it seems to me a valuable method for making intelligent family provisions suitable to the circumstances of a family, as these ultimately appear to the person most competent to judge. I think it would be unfortunate if, in such a case, the father's discretion could be upset, and the child could avoid the intended contingency and establish an absolute right in his favour, should he, as in this case, accidentally learn of the existence of the deed in his favour.

Lord Skerrington.—The whole difficulty in the present case seems to me to arise from a failure to appreciate the fundamental distinction between two different groups of legal authorities, each of which applies to a different set of circumstances, and each of which depends upon and illustrates a distinct and separate principle. In the one group there is a contract such as Stair had in mind in a classical passage (I. x. 5) and such as the Lord Chancellor (Cranworth) and Lord Wensleydale described in their speeches in the case of Finnie v. Glasgow and South-Western Railway Co., a contract containing a stipulation which, when properly construed, evidences an intention on the part of the contractors that something shall be done or permitted to be done for the benefit of a third person, so that, though not a party to the contract, he may afterwards come in and insist upon its performance with the same rights in every respect as if he had actually been a party to it. Of course, if the stipulation either expressly or by necessary implication makes the benefit revocable at the pleasure of either or both of the contracting parties, there is no contract in favour of the third person, but only a proposal that he shall receive a benefit, and consequently there is no jus quæsitum. In cases which fall within this first group the third party may compel exhibition of the contract, and his right does not require delivery for its completion. In the other group there is no such contract as I have figured, but a different, though superficially similar, contract, by which a person (generally a lender, a purchaser, or a seller) acquires the right to property or money, and merely stipulates or directs that the conveyance or payment shall be made to a third party or a trustee for his behoof—the acquirer of the right, however, retaining the title or obligatory writing in his own possession. Cases of this kind have arisen under a great variety of circumstances, as appears from a series of decisions beginning with the case of Hill v. Hill and ending with that of Cameron's Trustees v. Cameron .

As I have already indicated, the two groups of cases bear a superficial resemblance to each other in this respect that in each there are two persons who contracted with each other, and a third person whose name appears in the transaction though he took no part in it. The two groups are also similar in respect that in cases falling under either category the ultimate question which has to be answered is the same, viz.: Was it according to the intention of the parties to the transaction to confer a benefit upon a third party which should not be revocable at the pleasure of either or both of the contracting parties, and if so, has that intention been manifested in a way which makes it legally effectual? In cases falling within the first of the two categories which I have tried to describe and differentiate, the answer to both branches of the question is in the affirmative. In cases falling under the second category the answer is generally in the negative, unless some further evidence over and above the mere form of the title or obligation to pay can be adduced. The distinction between the two categories will become apparent, if it is kept in view that the first postulates as an essential condition the existence of a contract which legally evidences an unequivocal and final intention to confer a benefit on a third party, whereas in the second class the acquirer of a right has (no doubt through the medium of a contract) done something which is essentially ambiguous—something which common sense and legal authority alike reject as unequivocal evidence of any such intention as I have desiderated. One may acquire a right and take the conveyance or obligation in name of a third party without any intention of benefiting the latter, but merely because one proposes to make him one's agent or to constitute him a trustee for certain purposes by afterwards delivering the title to him in exchange for a back-letter of trust. Moreover, even where the wish to confer a benefit of some kind upon the third party is matter of admission, the contemplated benefit may be one which the acquirer of the right does not wish to come into immediate operation, but desires to keep within his own control in the meantime. For example, there may be a future marriage-settlement in view, or a proposal to give security or satisfaction to a creditor, or again an inchoate but incomplete intention to make a gift to the person in whose favour the title has been taken. I know of only one case in which the mere taking of a title (in which I include an obligation) in the name of a third party necessarily and finally vests the right in his person, viz.: where the acquirer of the right lay under an antecedent duty to acquire it and to take the title in that particular form. With that single exception it is, I think, elementary and fundamental in our law that, if a person acquires a right and takes the title in name of a third party, the form of the title is not by itself conclusive as to the beneficial right. The series of cases from that of Hill onwards, to which I have referred, all related to alleged donations, but the principle would have been the same, though its practical application might have been different, if the purpose in view had been to give security or satisfaction for a debt, but the litigants had been in dispute as to whether the transfer was intended to be immediate and certain, or only future and revocable, so far as regarded the creditor. In such a case as I have figured the Court could not have accepted the terms of the title as final and conclusive in favour of the creditor, but must have allowed some inquiry into the purchaser's intention in so taking the title; unless indeed it chose to apply to a claim at the instance of a creditor the same hard and fast rule which, in these decisions, it actually did apply to a claim at the instance of a person alleging himself to be a donee, viz., that nothing short of delivery of the title to the third party, or something equivalent thereto, should be accepted as evidence of a final and concluded intention on the part of the purchaser to place the property beyond his own power and to vest it irrevocably in another.

If I rightly understand the case of Worthington v. Curtis, the law of England in regard to the effect of a title taken by a purchaser (in the wide sense) in the name of a third party is exactly the same as the law of Scotland, viz., that such a title is not in itself conclusive so long as it remains in the hands of the purchaser. The practical application of the principle is, however, different in the two countries. The litigation referred to a policy of assurance taken out by a father on the life and in the name of his son, and the question argued was whether the father had taken out the policy as an “advancement” (which I understand to mean an irrevocable benefit) to his son or for his (the father's) own benefit. Mellish, L.J., and Bag-gallay, J.A., stated that the presumption of law was that the father intended the policy to be for the benefit of his son, but that the father had rebutted this presumption by the testimony of himself and of his wife. If this case had arisen in Scotland the Court would have been compelled by the authority of the case of Hill and similar decisions to shut its eyes to the crucial question, viz., Did the father take out the policy for the benefit of his son as an irrevocable provision, or did he take it out solely for his own benefit, or at any rate for his own benefit in the first instance, though also as a revocable and testamentary provision for his son? A Scottish Court would have been forced by authority to concentrate its attention upon a mere question of evidence, viz., Did the father ever manifest an intention to hold the policy for and on behalf of his son? While I prefer the English method of dealing with a question of fact, the important thing to notice is that so far as general principle is concerned there appears to be a complete agreement between the laws of the two countries to the effect that a title taken in name of a third party is not by itself conclusive evidence of the creation of any right in his person, so long as the title remains in the possession of the purchaser.

I now revert to the kind of case which Stair, Lord Cranworth, and Lord Wensleydale had in view, viz., where a contract has been made in language which indicates an intention to benefit a third party, and not merely an intention that the title to a property or a debt should be taken in his name. At this point one comes upon a difference of principle between the law of Scotland and that of England. According to English law it appears now to be settled that a contract between A and B that one of them should do something for the benefit of C does not give C a right of action on the contract, unless its effect was to subject property to a trust for the benefit of C. In Scotland this technicality is rejected, and a third party is held to have a good title to enforce a contract which was made for his benefit, and for that purpose he may compel exhibition of the document. In order to ascertain as matter of construction whether a contract was intended to confer a benefit upon a third person and not merely the hope of a benefit, evidence of surrounding circumstances may be competent, but evidence for the purpose of adding to or contradicting the contract is, of course, incompetent. On the other hand, if a contract merely stipulates that property shall be conveyed or money paid to a third person or to a trustee for his behoof, extrinsic evidence as to the purpose and object of such an arrangement is competent, or even necessary, unless it is excluded in any particular case by some positive rule of law, such as was laid down in Hill's case with reference to a claim at the instance of an alleged donee.

For the reasons which I have now fully explained, I am of opinion that the decision which we ought to pronounce depends upon whether the documents and the circumstances bring the present case within the principle explained by Lord Stair or within the principle applied by the Court in the cases of Hill and Cameron. I assume in favour of the claimant Mr Carmichael that he was in no way indebted to his son when he took out the policy, and that the benefit (whether irrevocable or merely revocable) which he intended to confer upon him was purely gratuitous.

Upon 21st October 1903 Mr Carmichael signed and forwarded to the Glasgow office of the English and Scottish Law Life Assurance Association a form of proposal for an assurance of £1000 without profits on the life of his son Ian, then a boy within a week of his ninth birthday, the assurance to commence on the latter's attaining the age of twenty-one years and the sum assured to be payable at death. Appended to the proposal was a declaration that the statements in the proposal were true and should be “the basis of the proposed contract of assurance.” The proposal bears the heading “Deferred Assurance for Children,” and is not self-explanatory or intelligible unless one reads along with it the printed prospectus of this particular assurance scheme which is prefixed to the proposal. From the terms of the prospectus it clearly appears that the thing which the Association offered to sell and which Mr Carmichael offered to buy was not a policy of any kind upon the life of a child, but a policy which should also be “for” that child, i.e., for its benefit. The particular benefit in view was stated to be that if the child lived until majority and the policy was then in force, the child would, on attaining that age, “have the benefit of assurance at the original low premium, and free from any liability to extra premium on account of family history or personal delicacy, or on account of his being engaged in some hazardous occupation or residing in an unhealthy climate.” Along with his proposal Mr Carmichael must have sent £9, 10s., the amount of the first yearly premium (according to the tables in the prospectus), because on 23rd October 1903 the secretary in Glasgow for the Association wrote to Mrs Carmichael enclosing a formal acceptance of Mr Carmichael's proposal and a receipt for the first premium, and promising to send the policy in a few days. On 30th October he wrote to her enclosing the policy, which is dated 22nd October 1903. It was retained by Mr Carmichael as the thing which he was entitled to receive.

As I read it, the policy gives effect very precisely to the preliminary contract between Mr Carmichael and the Association. I do not see how, according to the ordinary principles of contract law, Mr Carmichael could have rejected this policy when it was tendered to him and could have demanded as of right that the Association should issue to him a policy making the sum of £1000 payable to his own executors, administrators, and assigns. The Association had an absolute right to stand upon its contract without stating any reason for declining to alter it. For all that we know, the policies issued under this scheme may be at a specially low rate of premium just because the Association wishes to secure to itself the goodwill of the rising generation. I mention this merely as illustrating the fact that the parties were in the region of contract, and that Mr Carmichael was not in the position figured by Lord Kames in Hill's case, and by Lord President Inglis in Stewart v. Rae, viz., of being entitled to demand the issue to him of a new title conceived expressly in his own favour. It is true that, according to the express language of the policy which Mr Carmichael accepted, the stipulations in his favour and also those in favour of his son were assignable by them respectively. None the less the Association was not bound to recognise as the creditor in either set of stipulations anyone except Mr Carmichael or his assigns in the one case and Ian or his assigns in the other.

The policy begins by referring to Mr Carmichael's proposal and declaration, and states that he had thereby agreed that these should be “the basis of the contract between the Grantee (Mr Carmichael) and the Life Assured (Ian Carmichael) on the one part, and the said Association on the other part.” This gloss goes beyond the words but not beyond the plain meaning of the proposal, which contemplated that there should be a contract between Mr Carmichael and the Association, to which his son Ian should not be made a party by his father and guardian, but which contract should none the less establish contractual relations both between Mr Carmichael and the Association, and also between Ian Carmichael and the Association, and should be as effectual to Ian as if his father and guardian had executed it in his name as his administrator-in-law. The policy further recites that Mr Carmichael had paid the first annual premium of £9, 10s., and had agreed to pay the like premium on every 22nd day of October up to and inclusive of the 22nd October 1914. When one reads the stipulations in favour of Mr Carmichael, his executors, administrators, or assigns, one sees that they were of a transitory and comparatively unimportant character. They were intended to protect him and his representatives against losing the cash which they might spend in paying premiums, if the main object of the transaction should prove abortive in consequence of Ian's death during minority, or because Mr Carmichael, finding it inconvenient to pay further premiums, preferred to surrender the policy in return for “any surrender value allowed for this policy prior to the said 29th day of October 1915”—in other words, during Ian's minority. The intention, no doubt, was that Mr Carmichael should be entitled during his son's minority to surrender the policy in return for the “liberal surrender value” mentioned in the prospectus as being allowed “under this scheme.” These stipulations in favour of Mr Carmichael did not constitute a contract of life assurance in the usual sense of that phrase, or in the sense of the proposal which stated that the assurance was to commence when Ian should reach the age of twenty-one; but they fell within the definition of a “policy of life insurance” in the Stamp Act, 1891 (54 and 55 Vict. cap. 39), sec. 98, in respect that the payments to Mr Carmichael related to or depended on Ian's life. When one now turns to the stipulations in favour of Ian Carmichael which Mr Carmichael demanded and which the Association conceded, one finds that these conferred upon Ian as from the date of the policy a right which, though postponed as to its enjoyment, was yet valuable and beneficial; a right which would become absolute if he should attain majority and if the policy should be then in force, but which, so long as he was a minor, was liable to be defeated (a) by his death, (b) by the lapse of the policy in consequence of Mr Carmichael's failure to pay the annual premiums, and (c) by the surrender of the policy in pursuance of the express power conferred upon Mr Carmichael to that effect. A defeasible right is, of course, less valuable than one which, though postponed as to enjoyment, is from the beginning absolute and unconditional, but a defeasible right none the less is a proper subject for a legal obligation—differing in this respect from a right which is revocable at the pleasure of its creator or creators. While Mr Carmichael was quite entitled to allow the policy to lapse or to surrender it during his son's minority, he would, as a prudent man, regard either course as wasteful and to be avoided if possible. On the other hand, he had no right, either express or implied, to revoke the benefit which the contract of assurance conferred upon Ian, and to substitute himself as the creditor in the obligations conceived in favour of his son. It is, therefore, perfectly accurate to say that, subject to the contingencies of Ian's death and of the lapse or surrender of the policy while he was in minority, the delivery of the policy to Mr Carmichael secured to Ian, at the moment of his attaining majority, exactly the same rights as if he had contracted with the Association in his own person and in the ordinary way. If authority is required for the proposition that a contractual obligation in favour of a third person may confer a jus quæsitum upon that person, notwithstanding that it is defeasible in certain events, reference may be made to the case of Love v. Amalgamated Society of Lithographic Printers of Great Britain and Ireland .

I have stated my opinion as to the true meaning and intention both of the preliminary and also of the final contract entered into between Mr Carmichael and the Association, and I have all the more confidence in its correctness because Mr Carmichael's counsel, though invited to do so, pointedly declined to offer any argument to the contrary, except the single argument that, upon a just construction of the policy, it was not intended that Ian should acquire any right under it unless he both attained majority and also paid a premium to the Association. This view of the meaning of the policy is plainly unsound. It is, however, significant that the able counsel who represented Mr Carmichael did not try, and were obviously unable, to answer the argument adduced by counsel for Ian Carmichael's executor to the effect that the policy, though unilateral in form, was, in the first place, expressive of a bilateral contract between Mr Carmichael and the Association, and, in the second place, contained a stipulation conceived for the benefit of Ian and intended to be enforceable by him. They contented themselves with the mere assertion that there was no real distinction between the policy in the present case and the bond in Hill's case, or the conveyances or other titles of property or debt in the other similar cases. They also founded strongly upon a dictum of the Lord President (Inglis) in Jarvie's Trustee v. Jarvie's Trustees, which does not seem to me to assist them in any way, unless they attribute to that eminent Judge the opinion that a policy of life assurance can never in any circumstances express a mutual contract in favour of a tertius within the meaning of Lord Stair's rule, but that every policy, however expressed, must necessarily have the same legal effect as the policy upon which he then had to adjudicate. The policy taken out by Mr Jarvie exhibited no indications of being a contract for the benefit of his wife and children, except the fact that the sum payable on his death was made payable to trustees for their behoof. Accordingly, it is not surprising that the counsel engaged in Jarvie's case did not mention or argue about a legal principle which was obviously inapplicable to their case. Nor is it surprising that the Lord President assimilated the policy in Jarvie's case to the bond in Hill's case. Mr Carmichael's counsel also founded upon the decision in the case of Hadden v. Bryden, which, though it related to a policy of life assurance, did not and could not possibly raise any question as to a tertius acquiring a jus quæsitum by means of a contract containing stipulations in his favour and for his benefit. Considerable confusion was caused by the assumption that a stranger to a transaction can acquire a jus quæsitum under it in only one way, viz., in virtue of a contract of the kind contemplated by Lord Stair. The truth is that he may acquire such a right in a variety of different ways, but not, generally speaking, by the mere fact that a title has been taken in his name, though, in the one exceptional case which I have already noted, the title does by itself create a jus quæsitum. It was gravely argued that, because the Judges in Cameron's case denied that a certain form of title followed by registration in the Register of Sasines created a jus quæsitum, their decision implied that a contract such as was made by Mr Carmichael could not create such a right.

It has been suggested that a stipulation requiring a conveyance to be granted or a payment to be made to a third person can, under no circumstances, be construed as intended to benefit him so as to create a

jus quæsitum in his favour, unless each of the contractors had at the time of the contract an interest that the stipulation should be performed according to its terms. I know of neither principle nor authority for any such arbitrary rule of construction. If the contract read as a whole and properly construed shows that the stipulation was intended to be revocable by the joint consent of the contractors, it could not confer a jus quæsitum upon a third person, even though it was apparent that both the contractors felt kindly towards him, and wished to benefit him, if their intentions should happen to remain unchanged. On the other hand, if the stipulation was intended, according to its just construction, to confer an absolute benefit upon a third person, then it is irrelevant to inquire how and why it came about that such a stipulation was made part of the contract. No doubt, in construing a stipulation of doubtful import with the view of deciding whether it did or did not confer a benefit upon a third person, the relation of each of the contractors towards that third person might be relevant matter for consideration and argument. If it appeared that he was the factor for one or both of the contractors, it might be legitimate to construe an ambiguous stipulation as importing no more than a revocable mandate granted by one or both of them in regard to the disposal of his or their property. The fallacy which underlies the argument of Mr Carmichael's counsel is the assumption that, if it is proved or admitted that the third person gave no value to either or both of the contractors, a stipulation clearly intended for his benefit may, or rather must, contrary to every rule of construction, be interpreted as a revocable mandate intended primarily to serve the interests and purposes of one or both of the contractors.

We heard some argument as to the effect of the Act 14 Geo. III. cap. 48. As at present advised, I am not prepared to hold that Mr Carmichael had no insurable interest in the life of his son, and accordingly I consider section 1 to have no application. If there had been any doubt as to the true meaning and intent of Mr Carmichael's contract with the Association, it might perhaps have been considered material that any construction of the policy except the natural one would involve a contravention of section 2 of the statute by introducing into Ian's part of the policy a creditor not named therein. In truth, however, there was not, and could not be, any argument as to the true intent and meaning of the policy. The intention of the parties to create for the benefit of Ian Carmichael a right which he should be entitled to enforce is not doubtful and was not disputed. The sole question argued was one of law, viz., whether this intention must fail because the policy was never delivered to Ian Carmichael. The argument before the seven Judges proceeded on the assumption that the proof did not establish that Mr Carmichael had so acted as to show that he held the policy for behoof of his son. On the other hand, the proof did establish (if evidence to that effect was necessary) that, immediately on attaining the age of twenty-one years, Ian Carmichael by his communications with the Association made it clear to them that he accepted the benefit secured to him by the policy and intended to keep up the policy. I attach no importance to the fact that Mr Carmichael (whether bound to do so or not) sent to the Association from Hong Kong a remittance for the premium due on 22nd October 1915, with the result that his son, who attained majority a week afterwards, was not asked by the Association's officials to pay a premium which otherwise they would certainly have demanded from him.

For the foregoing reasons I think that the Lord Ordinary's interlocutor should be recalled, and that the claim for the executor of Ian Carmichael should be sustained.

Lord Cullen.—I agree with the Lord Ordinary in the view that this case is ruled by that of Hill. The principle of Hill's case is well established in our law, and has been applied to different species of transactions. In particular it has been applied to policies of life assurance in the cases of Jarvie's Trustee v. Jarvie's Trustees and Hadden v. Bryden, and I see no reason to doubt the application of it there made.

I am unable to see any distinction material to the question at issue between the present policy of assurance and the policies dealt with in Jarvie and Hadden. There are certain differences in the scheme or form of the assurance transaction. Assurance companies, in their quest for business, offer to investors a liberal choice of schemes to suit varying requirements. Thus the operation of the present policy as an effective assurance did not begin at its issue, but was deferred until the son attained majority; the amount of the annual premium required to keep it up thereafter was lessened in respect of the payments of premium made by the father in the interval prior to the son's majority, and provision was made for a return of these premiums in the event of the son dying under age. These features of the transaction, however, all go merely to its form. It remains, in respect of substance, that, when the son did attain majority and died, there was an existing policy of assurance on his life which the father had effected at his own hand and had paid for out of his own pocket. And this policy remained in the father's custody without any delivery, actual or constructive, having been made to the son. The father might have procured a policy effective at his son's death by availing himself of some other scheme offered by the Company than that which he adopted. He might, for example, by one or more payments have procured a policy paid up as at his son's majority.

A good deal of the argument for the reclaimer was devoted to emphasising the terms of the policy by which the interest under it, after it became effective as an assurance, was clearly conceived as being in the son, while the father's interest in the transaction was conceived as limited to the period prior to majority in respect of the matters of surrender or return of premiums. This in itself, however, is beside the point. In cases where the rule of Hill is applicable, it is the very fact of the title or document being conceived in favour of a merely intended donee, to the exclusion of the intending donor who procures it, that makes it necessary to invoke the rule. Thus in Hadden, the father had no interest of any kind by the terms of the policy, which was conceived as wholly in favour of the son from the first. The reclaimer, however, goes further, and maintains that, under the policy, a jus quæsitum in favour of the son was created, although the argument did not make it clear to my mind whether such jus quæsitum was regarded as coming into existence on the execution of the policy or on the son's attainment of majority, or whether it was regarded as being only immune from revocation by the separate act of the father, or as also immune from revocation by the joint act of the father and the Company.

The policy of assurance is not a bilateral contract. It is unilateral in form and in obligation. There was no obligation to pay premiums. Payment of the premiums was the condition of the bond or obligation given by the Company for payment of the sum assured on the occurrence of the son's death. Now, it seems clear that the reclaimer's theory of jus quæsitum does not hold good as regards all policies taken out and paid for by one person but made payable to another. If it did, it would have been open in the cases of Jarvie and Hadden. If it finds place here, that result must flow from there being some material distinction between the nature of the present policy and the nature of the policies in the two cases mentioned. Now, I understand the view of this matter underlying these cases to be that, from the point of view of the Assurance Company granting the conditional obligation for payment in the policy, there was no real delectus personœ as regards the payee named in the policy—any more than in Hill's case was there delectus personœ on the part of the borrower who granted the bond—all the patrimonial interests of the Company standing the same, whether the payee was one person or another, so that the Company had no interest moving it to reject the nominee of the person offering it business, but rather, instead, an interest to accommodate him.

I confess that I am unable to see any good reasons why a different view should be taken of the policy here under consideration. The reasons advanced by the reclaimer's counsel—not emanating in any way from the Assurance Company, which stands aloof and silent—seem to me to be unsubstantial and fanciful, rather than to reflect the practical views on which assurance business is actually done. The policy, like policies in general, was assignable. The Company thus had no interest whatever in the question who the recipient of the assurance money, when it fell due, should be. Their supposed delectus personœ must therefore have been strictly limited to the original payee named in the policy. I am, however, unable to see that they had any real interest in that matter—that is to say, any such patrimonial or business interest as would have actuated them to refuse the father's nomination of himself as payee, if he had chosen to propose it.

The Act 14 Geo. III. cap. 48 was referred to at the discussion, but we heard no real argument regarding it. The pleadings contain no averments or pleas directed to it. In the absence of averments, pleas, and argument, I am not prepared to hold that the father had no insurable interest in his son's life. As regards section 2 of the Act, if the effect of it were to make the policy null in an absolute sense, that result would not advance the reclaimer's claim to be in right of the fund in medio. The Assurance Company, however, are not pleading the Act. The Company did not lodge defences, and they are willing to pay over the fund in medio to whichever of the two claimants has the better right inter se. It has been held, both in England and in Scotland, that these provisions of the Act are pleadable only by the assurers. In the absence of pleadings and argument directed to the matter, I am not prepared to question the soundness of this view.

I am accordingly of opinion that we should adhere to the Lord Ordinary's interlocutor.