SUPREME COURT—IN BANCO.

New Zealand Times, Volume XXXII, Issue 5010, 14 April 1877, Page 3

SUPREME COURT—IN BANCO.

Friday, April 13

(Before his Honor the Chief Justice and Mr. Justice Richmond.) HAMMOND V. THE PUBLIC TRUSTEE.

This was a case stated without pleadings, the writ having been issued by virtue of an order of Mr. Justice Richmond, and the following are the facts agreed to by the parties;— Robert Sparke Lowe, before his decease effected a policy of insurance upon his own life with the Victoria Life Assurance Company in Melbourne, and at the time of his death this had endured for more than five years. Upon his decease the defendant, an administrator to the estate, received the amount assured. Mr. Lowe left a widow and five children, who are now living. The only property left by the deceased, besides the amount received by the defendant under the policy, was £l2O 17s. 4d., of which £42 14s. 2d., was expended in payment of his funeral and testamentary expenses. At the time of his decease Mr. Lowe had several creditors (of whom the plaintiff is one), and owed £2133 9s. 3d. The plaintiff in the action now seeks to recover the amount due to him. It is contended by the defendant that under the provision of section 46 of the Life Assurance Companies Act, 1873, the money received under the policy is divisible between his wife and children, to the exclusion of the creditors. On the. other hand, the plaintiff contends that the money received under the policy is assets in the hands of the defendant, applicable in the ordinary course of administration, and that the creditors of the deceased are entitled to be paid out of it as far as it will extend. The question for the opinion of the Court is whether the contention of the plaintiff or the defendant is correct.

Mr. Travers), who appeared for the plaintiff, said the matter at issue really was the construction of the 46th clause of the Act, which ran as follows :—“ The property and interest of every person who has effected or may hereafter effect any policy or contract for an assurance bona fide upon the life of himself, or for any future endowment for the wife or any child of such person, or for an annuity for the wife or any child of such person, and the property and interest of the personal representative of such wife or child in such policy or contract, or in the moneys payable thereunder or in respect thereof, shall be exempt from any law now or hereafter in force relating to bankruptcy or insolvency, and shall not be levied upon, by, or under the process of any Court whatever.” To this clause there were four provisos—the first providing that such a policy or contract shall not be so protected till it has endured -two years, then to the extent of £2OO till tiff, years have endured, then to the extent 0 f £SOO, &c. The second proviso did not bear on the point at issue ; but the third ran as follows : vided further that the protection hereby afforded shall .... in the case of a life assurance” accrue “ for the benefit only of the personal representative of the assured; and in no case for any assignee of the assured.” The last proviso withdrew the protection in the case of the insurer surrendering his policy. Xu this case, continued the learned counsel, the policy had been in existence upwards of five years at the death of intestate, and as the sum assured was but £IOO, the whole would havo been protected under that clause during the life of assured, and at the time of his death. Now the question to be considered was whether

the monies receivable under a life insurance policy, under the clause referred to, did not pass on the death of the assured to the hands of the trustee, and become in his hands assets available for the payment of the debts of the intestate, or whether the words used in the proviso, “ for the benefit only of the personal representative of the assured,” must be construed “ for the benefit of the next of kin.” He contended that “personal representative” must be taken in its ordinary legal signification, and that it must be held that the intention, as well as the literal provisions of the statute, was only to protect such transactions during the lifetime of the assured—protect it as against his bankruptcy, and as against any execution creditor during his lifetime —and that the moment he died the money, the interest in the policy, passed to his personal representative as assets for the ordinary purposes of administration. The Legislature may not have intended to use the words “personal representative”.in that sense, but nevertheless it had been done.

Mr. Hart, after a reference to Mr. Justice Johnston’s dictum on the of statutes, suggested that there was a clerical error in the sixth line of the clause above quoted, and that “personal representative of such wife or child,” &c., should read “ personal representative or such wife or child,” &c. The clause was insensible in its present reading. He then proceeded to combat Mr. Travers’ construction of the clause. He pointed out that if an assured surrendered his policy, assigned it, or in any way dealt with it during his lifetime, the protection was withdrawn; then to what was protection afforded or given if the policy were liable for debts at his decease ? The whole scope and object of the Act was to protect policies of insurance; but, according to the contention of his friend,_ there was no protection whatever. During his lifetime a man could deal with the policy, and at his death his creditors could seize upon it. Again, supposing no law on this subject had been passed, the money would have fallen to the hands of the trustee as ordinary personal property, and would have been amenable to such claims ; but if the plaintiff’s contention were correct, this Act was a superfluity—the Legislature had passed an Act expressly directing to be done that which would have been done in ordinary course of law without such an Act. The statute must have been intended to effect something; and if it had been intended merely to apply dining the lifetime of an assured, nothing would have been said about pessonal representatives. The object of the Act was to change the law and to encourage life assurance; but if the plaintiff were correct, the Act would simply discourage life assurance, as a man would be paying away money year after year to create a fund for his creditors at his death.

Mr. Travers having replied, the Court reserved judgment.

JONES V. THE PUBLIC TRUSTEE. This was an application for a decree of administration in the ordinary form. Mr. Travers applied for the decree, to which Mr. Hart on the other side consented. This concluded the business.