LAW REPORTS.

Dominion, Volume 7, Issue 1866, 27 September 1913, Page 12

LAW REPORTS.

SUPREME COURT. MRS. MACARTHY & NORWICH UNION. , INSURANCE CASE. THE NORWICH UNION FAILS. His Honour Mr. Justice Chapman delivered his reserved judgment in the Supreme Court yesterday, in the case of Mary Ellon Macarthy v. the Norwich Union Life Insurance Co., a claim for £332 10s., being a year's premium paid on a policy of £10,000. The plaintiff, who is the widow of the late Mr. T. G. Macarthy, had paid this amount to the defendant firm, which had, however, declined the risk, and, in terms of the agreement between the parties, became liable for the return of the premium. The facts of the case, as set out in his Honour's judgment, were as follow: —

About a year ago the plaintiff's husband died, leaving her a very large income, but little else. Perceiving that if she died at an early date she would leave 'nothing to her relations, plaintiff resolved to endeavour to insure her life for £30,000. Her brother-in-law, Horace Graham ltutter, who became her adviser in business matters, undertook to endeavour to arrange some large policies of insurance on her life making up that sum. In the end she was only successful to about lial6 tliat amount. Great Conflict of Evidence. His' Honour stated that the evidence given at tho trial as between Rutter, on the one hand,' and Simrnand Vial, two officers of the firm of Kernot and Co. (attorney in Wellington of the Norwich Union Co.) was' very conflicting. The transaction out of which the dispute arose took place iii October, 1912, Batter stated —no doubt truly—that before ho commenced to negotiate • with the various companies ,he explained to Mrs. Macarthy. that'ho-would probably be able to obtain from the companies a commission such as": companies usually pay to their ordinary agents, and that Mrs. Macarthy expressed, no objection. He, in fact, received such commissions from the two companies which accepted the risk. Butter, according-to'Simm, asked if any rebate-could be-allowed, to. Mrs. Macarthy .on ..the usual premium. Simm - said that-he told Rutter that such an allowance could not be made, as the. company's-regulations explicitly forbade it. After Butter had : pointed out that unless a ; rebate 'was allowed the office would not -get the business, Simm stated-tMt they could no doubt fix the matter by. giving Butter a commission, which. he could hand ovoi to liis principal. Simm evidently had sillficient- authority to' arrange the matter of commission. ' He\fixpd it at ±.2 per cent on the aiuouut of. the liisuiance. He stated that- the' defendants' usual rate of commission was 2 per cent.on tho amount insured; but with a limit of 75 per cent, on the amount'of the first year's premium.

Company's Refusal to Accept the Risk. A proposal was signed and lodged, continued His Honour, a premium ot £332 10s. was paid, and a medical examination held. , There was again a disnnto ns to whut tho "wnuLTstniiding thus lloaehcil luoiint. llultcr s.v\ore tluit lie thought that this concluded' the business. 'ihe defendant/ company, however,' did not,,issue a final policy. It issued a policy covering tlie' plivitvtiff for four months, and referred the question of acceptance to the head office at Norwich, in England. Wine in Svdney, Rutter- received a cable mc«a<'e from Kernot and Co.. stating that the defendant company had declined the risk. He at once cabled to tlie Public Trustee expressing liis surprise at this, and asking liim to take Mr. Skerrett's opinion as to whether tlie com'panv could bo forced to . issue tlie policv. This evidence was objected to. As Rutter was really charged with .fraud, His Honour • admitted this evi-: • donee as' the spontaneous act of a man '■acting on his belief" in the rectitude' of. ; bis position' at- a time when 'the preUent dispute had; not yet arisen. , ' How the Action Arose. The present action arose in this way: It was admitted that upon .the declining of -, risk. Mrs. 'Macarthy would be entitled io recover'' back' the whole premium, but * the defendant alleged that thropgh her agent, •_ Rutter, she • had received £200 . ' ot this Mr. Menteath . (defendant s counsel) properly admitted; and _indeed claimed, that,the onus was, oii him to make, out that a sum of" £200 paid to ilutter was received, by liim with -Mrs. 'MacarthyV express or implied authority, as her agent. Ho further admitted that it was -necessary/for him to show that Rutter had, in obtaining it, committed a fraud upon the defendant company, and that-in'doing so he was acting as her agent in such a; way that she-waß bound '.by his act,.; and must give the company credit for the sum received. -The defendant' company.paid the £132 10s.: into, court. Mr. Vile (an officer of Kernot and .Company) narrated the circumstances relating to the payment, of £200 to Rutter. He Said , lie received tlie pre- ■ mium on 1 October 17, and on the same day Rutter called • for tlie £200, or, as lie put it, "asked for tlie rebate.", Vile said that' lie explained that the matter might still be thrown out by the head office, and Rutter had better wait until it was finally accepted,, which would be in six weeks. According to Vile's evidence Rutter stated that ho would then be in Sydney, an:l ho wanted the £200 for tlie purpose of paying other premium's for Mrs. Macarthy. Vile said, "All right, I'll pay you the money, but it will have to be taken into account if the tiling is thrown out." Rutter said (according to Vile) "that would be all right, as Mrs. Macarthy would liavo the benefit of it." Vile tiieii paid over <the £200, and took a receipt for it. Some Flat Denials. Rutter absolutely denied all this. Ho said that lie went to this company, as he went to several others, and'arranged for a commission which this and other companies. wore perfocth' willing to pay him. He furthor said that when ho called for his commission it was paid without demur. He expressly denied making the several misrepresentations to obtain this cheque, which tlio defence imputed to liim. Whose word to Accept? His Honour said it was (very unfortunate that he should find such absolutely- contradictory evidence given by apparently respectable men, and if he had to decide on which sido the truth lav, ho should find it difficult. Ho did not, however, consider that lie had so to'decide. The onus was upon the defendant company to make out . what was virtually a case. of fntud by preponderant evidence. He could not say that there was such preponderant evidenco .here. The whole of Rutter's actions from first to last were consistent with his story. His Honour could not say the same of the actions of tlie defendants' representatives. [His Honour hero reviewed these.] If the story told by the defendants' witnosses was correct, it was very unfortunate that not a scrap of support in writing had been preserved to corroborate it. Veracity Not the Question. His Honour went on to say that it must be clearly understood that he was

pronouncing no opinion upon the veracity of the-witnesses whose evidence was so unfortunatol.v in conflict; but, having regard to the.onus oi proof, and tho necessity for making out a clear case, and finding that tho documents did not support the defendants' case, but did support that of the plaintiff, ho held that the defence was not proved. Judgment for Mrs, Macarthy. Judgment was entered for Mrs. Macarthy, with costs as per scale, witnesses' expenses and disbursements to bo fixed by the Registrar. The sum of £6 Gs. was allowed for second counsel; interlocutory costs were, allowed to plaintiff; and .ill other questions of costs were reserved. At the hearing Mr. C. P. SkeiTott, K.C., and Mr. 1)1 Jackson appeared for the plaintiff, and Mr. A. A. S. Mcnteath for the defendant company. ■' , MISTY TELEGRAM.,. IN BUSINESS TRANSACTION. The question of tho interpretation of ] an ambiguous telegram was the principal point at issue in an appeal case heard in tho Wellington Supremo Court yesterdav by His Honour Sir Justice Sim, sitting in banco. The appellant was Charles Thomas Duncan, hotelkeeper, of Westport (Mr G. H. Foil), and the respondents were T. and AV. Young, merchants, of Wellington (Mr. T. Young). . . The appeal was from the decision of Mr. AV. O. Riddell, S.M., delivered in tho Wellington Magistrate's Court. T. and AV. Young had sued Duncan for £144 ss. 6d., whidli claim had been admitted by Duncan, who, howe.ver, entered a' counterclaim for-£BS Is. 3d. It was on this counterclaim that the judgment now under review had been delivered. The statement of the counterclaim had set out that on Julv 1, 1910, Duncan purchased an hotel at Westport from ono Edward Thomas Kennedy. At'tho time of-the purchase the property was subject to a mortgage from Kennedy to T. and AV. Young, securing certain moneys-'then owing'by him to the Wellington firm. Previous to paying, over tho purchase money to Kennedy, the appellant Duncan, throngh his agent, . Arthur William Mills, wrote to tho respondent firm, on June 21, 1910, asking them to state to -him the amount accruing due to them from Kennedy as on July 1 following. Uy telegram dated June 29, 1910, in answer to, this inquiry. T. and W. Young stated that tho amount accruing due was £250. On paying over the purchase money to Kennedy, tho appellant accordingly retained, for , payment to T. and W. -Young, for the purpose of" releasing his property from' the mortgage, tho sum of £250. When Duncan applied to scttlo with the re•spondent linn, and release the mortgage, T. and W.. Young'declined to 1 ac-cept-£2-30,. and stated that the amount duo under tho.scc-urity was £335 .Is. 3d. lii tho 'meantime/ Kennedy became bankrupt',. and' to protect his title to the property, Duncan- was-compelled to -pav. to;T. and W. Young over , and abovo tho-. sum ,of £250, a further sum of £85 Is. 3d. Ho therefore asked the court to order that this sum be returned to him.

The case hinged entirely on the interpretation of the telegram sent by T. and AV. Young, in response to .Mills's inquiry as. to tho'amount of Kennedy's liability-under the mortgage'.. The telegram road:—" Agrecablo transfer Duncan. £250 forwarding mortgage, etc." The appeal was dismissed, with costs £5 os.