Scottish Court of Session Decisions

Miss Sarah Pirie and others, the surviving daughters of the late Mrs Margaret Robertson or Pirie, the first wife of the late Alexander Pirie, hotelkeeper, Brechin, and the sole next-of-kin of the late George Pirie, son of Mrs Margaret Robertson or Pirie, first parties, and Mrs Mary Flett or Stuart or Pirie, widow of the late Alexander Pirie, second party, brought a Special Case for the opinion and judgment of the Court with regard to their rights in the proceeds of a policy of assurance on Alexander Pirie's life.

Alexander Pirie died on 11th April 1920. He was twice married. The said Mrs Margaret Robertson or Pirie, to whom he was married in 1861, died intestate on 27th July 1873. He married his second wife in 1877. George Pirie, the son of the first marriage, died intestate in 1901.

The Case stated, inter alia— “2. The said Alexander Pirie effected a whole life policy of assurance on his life with the Rock Life Assurance Company for the sum of £350, which was to become payable with profits at his death. The policy was dated 31st December 1858 and is numbered 10,310. Mr Pirie regularly paid the premiums of insurance due on said policy until his death. The amount payable under said policy of assurance, with the profits accrued thereon is £686, 6s., which has been paid by the insurance company on a discharge by all the parties to this case under reservation of all their legal rights and pleas. This sum has by arrangement between the parties been consigned in bank in the joint names of the agents of the parties pending a decision under this Special Case. 3. In 1866 the said Alexander Pirie executed and delivered to his then wife Mrs Margaret Robertson or Pirie an assignation of the said policy in the following terms, viz.—‘… I, Alexander Pirie sometime of Market Street, Aberdeen, now of the Commercial Inn, Brechin, hotelkeeper, for sundry onerous causes and considerations, do hereby assign to Mrs Margaret Robertson or Pirie, my spouse, for her own separate use and exclusive of my jus mariti and right of administration, the certificate or policy of assurance granted by the Rock Life Assurance Company number Ten thousand three hundred and ten, dated the thirty-first day of December Eighteen hundred and fifty-eight … by which certificate or policy it is provided that … the funds and property of the said company should be liable … to pay and satisfy within three calendar months after satisfactory proof shall have been received at the office of the said company of my death and the cause thereof unto my executors, administrators, or assigns the sum of Three hundred and fifty pounds, and such further sum or sums as should under the regulations of the said company be appropriated as a bonus to the said policy—together with said sum of Three hundred and fifty pounds and all vested additions or bonuses already declared or accruing or that may be declared or accrue thereon, and the whole claims, advantages, and benefits which may arise from said certificate or policy—with full power to my said spouse to receive and discharge all sums due or that may become due thereunder—and I bind myself to obey the whole conditions of said policy and to pay the yearly premiums necessary for keeping up the same in full force and effect and I grant warrandice from my own fact and deed only and I consent to the registration hereof for preservation and execution.…’ The said assignation was duly intimated to the insurance company. 4. No evidence is available at this date as to whether any, and if so, what consideration was given by the said Mrs Margaret Robertson or Pirie for the said assignation other than the statement which appears ex facie of the deed. Nor is any evidence available as to whether at the date of the assignation being granted the said Mrs Margaret Robertson or Pirie was possessed of any separate estate. No antenuptial contract of marriage had been entered into between the spouses. 5. In 1911 the said Alexander Pirie executed and delivered to his second wife Mrs Mary Flett or Stuart or Pirie an assignation of the said policy in the following terms, viz.—[With the exception of the wife's name the terms of this assignation were the same as those of the one quoted supra.] The said assignation was duly intimated to the insurance company. Mr Pirie paid the premiums on the policy during his lifetime, and both assignations thereof and the policy remained

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throughout in the possession of Mr Pirie's law agent. No antenuptial contract of marriage had been entered into between Mr Pirie and the second party. 6. Questions have arisen between the parties to this Special Case as to their rights to the said sum of £686, 6s. which forms the proceeds of the said insurance policy.”

The first parties maintained that the assignation in favour of the said Mrs Margaret Robertson or Pirie divested the said Alexander Pirie of all right to the said policy, and vested the same absolutely in the said Mrs Margaret Robertson or Pirie, and that upon her death intestate the right to the same vested in them and their deceased brother George Pirie.

The second party maintained that if the said Alexander Pirie intended to make a provision for his then wife under the assignation, dated 17th March 1866, the provision fell by her predecease of her said husband, and, alternatively, if the said assignation of said policy was intended as a gift to his first wife by the said Alexander Pirie it was validly revoked by the assignation granted by him in favour of the second party to this case, dated 27th October 1911, and she accordingly claimed the said sum of £686, 6s., being the whole proceeds of the said policy of assurance.

The questions of law were—“1. Whether in virtue of the assignation by the said Alexander Pirie in her favour the proceeds of said policy form intestate moveable estate of the deceased Mrs Margaret Robertson or Pirie? Or 2. Is the second party entitled to the proceeds of said policy under the assignation of said policy granted by the said Alexander Pirie in her favour?”

Argued for the first parties—The assignation to the first wife was an onerous transaction by which the policy became part of her estate. After delivery of the assignation she could have claimed delivery of the policy and dealt with it as her own property. The phrase “onerous causes and considerations” in its ordinary meaning meant more than the obligation to provide for a wife. It created a presumption that a legal obligation was satisfied—Fraser, Husband and Wife, p. 925; Ersk. Inst. i, 6, 30—which was not displaced by any of the facts in this case. If it did not mean that the transaction was properly onerous, then there was a presumption in favour of donation and not of provision—Walton, Husband and Wife, p. 134; Halliburton v. Porteous, 1664, M. 6136, 1 Brown's Sup. 499; Gray v. Scott, 1703, M. 12,602. The case of Galloway v. Craig, 1861, 4 Macq. 267, did not apply. It proceeded on the assumption that there was no consideration, and the question was between donation and provision.

Argued for the second party—The assignation to the first wife was no more than a postnuptial marriage provision. The policy therefore reverted to the husband on the first wife's death. The question was not one of donation but of marriage provision or onerous transaction in the sense of the fulfilment of a legal obligation. “Onerous causes and considerations” meant no more than the moral duty to provide for the wife. The absence of an antenuptial marriage-contract, the solvency of the husband at the time of granting, the fact that the assignation was not to take effect until the dissolution of the marriage, the retention of the deed in the possession of the husband and his continuing to pay the premiums, all indicated that the transaction was nothing more than a postnuptial provision. The case was ruled by the decisions in Galloway v. Craig, 1861, 4 Macq. 267, and in Anderson v. Anderson, 1903, 5 F. 323, 40 S.L.R. 291.