PROTECTED POLICIES.

New Zealand Times, Volume XXXVI, Issue 8179, 22 July 1912, Page 1

PROTECTED POLICIES.

v EFFECT OP LEGAL PROVISIONS

DECIDED.

' A question os to Whether & certain. life insurance policy was a protected policy within the meaning of sections 65 and 66 of the Life Insurance Act was decided in the Supremo Court by his Honor Mr Justice Cooper <m Saturday, when he delivered judgment in a Wanganui action. . 1

The policy in question was on the life of Horace Blythe, who died in 1910, and bequeathed to his mother (the defend* ant in the case) the moneys payable under it. This money, *£3s®, was duly paid by the insurance company. ‘At the time of Blythe’s death he owed the plaintiff, H. H. Thompson, 4218 8« 9d, but his will did not contain any provision for payment of his debt* out of the policy monej*. Section 65 of the Act provWtod that “where a policy-holder dies leaving a will, the policy moneys shall not be applied in payment of his debts or of any legacies payable under his will unless" in and by his will he has by express words specially referring to such moneys declared that the same shall bo so applied.” The protection under this clause, said his Honor, was limited to policies tho terms of which were “dependent on the contingencies of the life of the _ policy holder himself." These words did not limit tho protection to policies payableonly at the death of tho deceased. A reasonable meaning must be given to the word ‘‘contingencies," _ and this would be ignored if it were limited to the certain event of death by construing it as meaning only the contingency or, uncertainty of the period at which death should take place. After discussing the effect of various amendments in the law on the subject his Honor held that the policy was protected under the Act. It had been, suggested in tho course of argument that the possibility of fraud being perpetrated by a person desiring to evade payment of debts arose if_ the construction he bad placed upon section 66 was adopted. The Legislature had endeavoured to guard against this, by enacting in subsection 6 of section 66 that the protection of section 66 should not avail to ■protect any policy from passing to a • trustee in bankruptcy if it was proved to the satisfaction of a judge of the Supreme Court that such policy was taken out by the insured with intent to defraud his creditors. ■ Judgment was given for defendant with costs on the lower scale.