Scottish Court of Session Decisions

These were two conjoined actions; the one, at the instance of the North British and Mercantile Insurance Company, claiming repetition of the sum of £1207, 7s. 4d. paid by them to Mr Robert Stewart in respect of a policy of insurance on the life of James Macdonald; the other, at the instance of Robert Stewart, claimed declarator that upon the pursuer's payment of £1316, 8s. 2d. to the Insurance Company, they should deliver up the policy of insurance effected upon said life to him. It appeared that in 1848 a policy of insurance for £999, 19s. was effected on the life of James Macdonald of Dundee by Mrs Miller with the United Kingdom Life Assurance Company. In 1857 this policy was assigned to Stewart, and thereafter the United Kingdom Insurance Company was amalgamated with the North British Insurance Company. Macdonald went to New Zealand, and in 1868 Mr Stewart produced evidence to the Insurance Company which induced them to believe that he was dead, and accordingly they paid over the amount on the policy, with bonus additions, to Mr Stewart. From subsequent information, it appeared that Macdonald was still alive, and also that Mr Stewart had acted in good faith in reporting his death. The question now before the Court was in what way the mistake could be remedied, and the parties restored to their original positions. Stewart claimed on repayment of the sum paid to him by mistake, and all future premiums, to receive another policy for £999, 19s. on the same life, in place of the one which had been discharged. This the Company refused to agree to, and contended that the policy had lapsed.

On 28th July 1870 the Lord Ordinary ( Ormidale) pronounced the following interlocutor:—“The Lord Ordinary having heard counsel for the parties in these conjoined processes, and having considered the argument and whole proceedings, including the proof—Finds that the sum of £1207, 7s. 4d., repetition of which is concluded for in the action at the instance of the Insurance Company, was paid by them and received by Mr Stewart as the amount due on a policy of insurance held by the latter on the life of James M'Donald, with some relative sums, on the 19th of December 1868, when under the mistaken belief that the said James M'Donald was then dead; but that it has been since ascertained, and was admitted by both parties at the debate, that the said James Macdonald is still alive: Finds that, in this state of matters, both parties are entitled to have matters restored as near as may be to the state in which they were before said sum was so paid and received; and appoints the ease to be enrolled, in order that these findings may be applied, and

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judgment pronounced in accordance therewith exhaustive of the cause, and also that parties may be heard on the question of expenses of process.” And thereafter, on 29th October 1871, this interlocutor:—“The Lord Ordinary having heard parties’ procurators with reference to the interlocutor of 28th July last, in the conjoined processes—Finds that upon the sum of £1316, 8s. 2d. sterling, consigned by Robert Stewart (the defender in the original action) with the Royal Bank of Scotland, as specified in his answers 9 and 10 in said action, being made forthcoming, with all bank interest which shall have accrued thereon, to the North British and Mercantile Insurance Company, and on payment being also made to them by the said Robert Stewart of the sum of £19, 16s. 8d. sterling, being the premium mentioned in said action, which fell to be paid on the day of May 1870, with interest on said sum of £19, 16s. 8d. from the said May last, and till payment, at the rate of £5 per centum per annum, the said Insurance Company are bound to grant and deliver to the said Robert Stewart a certificate or policy of insurance, in terms of the second alternative conclusion of the counter action at the instance of the said Robert Stewart against the said Company, and accordingly ordains the said Insurance Company to execute in regular form, and deliver such policy to the said Robert Stewart on payment being made by him to the said Company of the foresaid sum of £19, 16s. 8d. and interest, and on said completed policy being delivered to the said Robert Stewart, grants warrant to, and ordains the Royal Bank of Scotland to make payment of the foresaid consigned sum and interest to the said Insurance Company, and decerns: Finds Robert Stewart entitled to expenses in the conjoined actions, and also previous to the processes being conjoined, but subject to modification, the extent of such modification to be determined after the taxation of the account.”

The Insurance Company reclaimed.

Lee, for them, pleaded—“Standing the discharge of the policy, the pursuer cannot maintain the present action. The conditions and provisions stipulated in the original policy not having been observed and performed by the pursuer, the said policy has lapsed, and the defenders are not bound to restore or revive the same, or to issue a new policy to the same effect.” He contended that the policy had lapsed, in respect that at the time, in 1868, when the sum contained in it was paid, the premiums were half a-year in arrear.

Macdonald in answer.