Lalithambal Ammal v. Guardian Of India Insurance Company And Another

GENTLE, J.

On the 11th May, 1935, one V. Sundaresayya effected a policy of insurance No. 1113 with the Guardian of India Insurance Co., upon his life and the schedule to that policy provides that the amount payable upon his death is Rs. 2, 000. Under the heading "For whose benefit and whom payable" are the words "the assured or his wife Mrs. V. Lalithambal if he predeceases her." The assured died on the 7th March 1936 during the currency of the policy. It is conceded that in fact only Rs. 1, 000 is payable under this policy. During his lifetime, namely, two days after effecting the policy the assured by an endorsement on the back of the policy assigned to the Travancore National Bank all the benefits under the policy for valuable consideration. The widow, the petitioner in this petition, claims that upon the effecting of this policy a trust immediately came into existence in her favour and that by the assignment of the benefit of the policy to the Travancore Bank the deceased was trying to do what in fact he had no power to undertake and the claims that the money, the Rs. 1, 000 should be paid to the Official Trustee to hold on her behalf and should not be paid to the Travancore Bank. The insurance company are defendants with the Travancore Bank but they are merely so in order that any order that may be made regarding payment can be effectively carried out. The matter is subject of S. 6 of the Indian Married Womens Property Act, 1874 as amended by Act XIII of 1923. S. 6 of the Act provides

"A policy of insurance effected by any married man on his own behalf and expressed on the face of it to be for the benefit of his wife or of his wife and children or any of them shall enure and be deemed to be a trust for the benefit of his wife or of his wife and children or any of them according to the interest so expressed and shall not, so long as any object of the trust remains, be subject to the control of the husband or to his creditors or form part of his estateWhen the sum secured by the policy becomes payable, it shall unless special trustees are duly appointed to receive and hold the same, be paid to the Official Trustee of the Presidency". This section save in regard to appointment of special trustees or of the Official Trustee of the Presidency is similar in effect, although not identically worded to S. 10 of the Married Womens Property Act, 1820 as amended by S. 11 of the English Married Womens Property Act of 1882. It is important to remember that under this policy it is expressed to be for the benefit of and to be payable to the assured or his wife, that is to say, the petitioner here if the assured predeceases the wife. It is contended on behalf of the petitioner that immediately upon the policy coming into existence a trust arose in her favour and that trust subsists right through all the relevant period. On the other hand, Dr. John on behalf of the Bank contends that a trust never arose but if such a trust arose it arose only upon the happening of the event which would give rise to it namely, the death of the assured and until his death there was no trust in being. I have been referred to several decisions of the English Courts, namely In re Joakimidis Policy Trust, Joakimidis v. Hartcup 1925 (2) Ch 403), In re Fleetwoods Policy 1926 (1) Ch 48], and Cousins v. Sun Life Assurance Society 1933 (1) Ch 126 the policy was effected by the husband upon his own life expressed to be for the benefit of his wife named in the policy and the decision of the court was that in the policy effected in that way the wife took an immediate vested interest. ROMER, L.J., does visualise the position of a policy being effected upon the life of a husband for the benefit of his wife, the wife can obtain an interest only subject to the happening of an event. At p. 139 he says

"Looking at the two policies in this case, I find that they are expressed to be for the benefit of the testators wife Lillian Cousins. That being so, there is a trust created in favour of Lillian Cousins. I can see nothing in the Act that would warrant us coming to the conclusion that the husband cannot, by means of this section, provide a vested interest for his wife and his children during his own lifetime but can only provide interests for them contingent on their surviving him. In the policies themselves I cannot find the remotest indication that the husband intended the wifes interest to be contingent on her surviving him. If he had so wished nothing was easier than for him to have said so in the policies themselves. In my opinion, therefore, there was a trust created in favour of the named wife, Lillian Cousins" *

As I said that policy was effected on his life for the benefit of his wife and for no other persons benefit save that if the wife died, it may be that it would have accrued to the benefit of her estate. In In re Fleetwoods Policy (supra), the insurance was payable to the wife of the assured or in the event of her prior death to the assureds executors. Here again this policy of insurance was for the benefit of the wife and the provision of the payment to the husbands executors in the event of the wifes predeceasing him was a provision which one would expect to find upon the failure of the real object of the insurance. In the third English case of Joakimidis Policy Trust a husband effected a policy upon his own life for a 20 years endowment period and it was expressed to be for the benefit of his wife if the assured died within the 20 years leaving her surviving, otherwise it was the benefit of himself or his estate. ASHTBURY J. at 406 says this :

"In the present case the benefit expressed for the wife was operative only in a specified event, namely in the event of the husband dying before May 1938, leaving her surviving. That in my opinion was a policy effected by the husband on his own life and expressed to be for the benefit of the wife in the event sanctioned. It created statutory trust for the wife in that event only, namely, if the husband died before May 28, 1938, leaving her surviving" *

His view undoubtedly is that when the wifes interest arises only upon the happening of an event there is no vesting of that interest until the event anticipated in fact does arise. Here the payment in the first instance to the assured and the contingency of his predeceasing his wife is the second provision in the relevant schedule of the policy. I have been referred to Dinbai Hormasji Misa Puruwala v. Bamanha Jamasji Shet 58 Bom 513] [LQ/BomHC/1933/101] by learned counsel on behalf of the Travancore Bank. To my mind that case is entirely irrelevant to the point before me because there the policy had been expressed to be for the benefit of the wife and it would appear that when the judgment of DAIVATIA, J. p. 519 was pointed out to Dr. John he accepted the position that the case did not assist him. For the reasons which I have given, in my judgment there was no vested interest of the petitioner in the subject matter of this policy until the happening of the event which the policy contemplates, must happen before she has the interest, namely the death of the husband. It follows therefore that during his life-time he was not uttered by any trust as a trust would only arise upon his death. Therefore when he executed the assignment to the bank he was entitled so to do and that being so, it is of full effect and the petitioner is not entitled to payment by the insurance company of the Rs. 1, 000 which is the amount agreed under the policy to be payable to the person entitled. In my judgment the Travancore Bank are the persons to whom the money is payable and they are entitled to be paid the amount under the provisions of the policy and the effect of the assignment of the 14th May, 193

5. It is however admitted by the learned counsel on behalf of the Travancore Bank that although the wording of the assignment is of an absolute nature nevertheless the Bank desires to be paid only the sum which the deceased was indebted to them during his lifetime and if this indebtedness is less than Rs. 1, 000 the petitioner is entitled to any balance that there may be found after taking an account. The result therefore is that this petition is dismissed with costs of respondents 1 and 2Petition dismissed.