ESTATE PROTECTED

Taranaki Daily News, 13 July 1935, Page 7

ESTATE PROTECTED

INSURANCE ACT INTERPRETATION. EVEN WHEN POLICY MORTGAGED. By Telegraph—Press Association. Wellington, Last Night. All members of .the Court of Appeal agreed upon the answers which should be given in the case of Wheeler v. the Bank of Australasia, gheard on ’June 20 and 21. They held the protection afforded to policy moneys by sections 65 and 66, of the Life Insurance Act, 1908, as amended, applied in the case of moneys payable under policies mortgaged in the manner in which testator had mortgaged his policies. This protection applies in favour of the widow and children of deceased as and in the manner in which they are entitled to take under the will. The right of election arising under sections 65 and £3 is to be exercised by personal representatives of the deceased insured who are required to make thenelection. within a reasonable time. 7 The Court ’expressed the-opinion that the action of the trustee in bringing the matter before the Court of Appeal was justified, and ordered the costs of all parties to be taxed and paid out of the estate other than the fund in dispute. The questions raised were considered of the greatest importance to insurance companies and , the financing section of the community. The action was brought by John Edward Wheeler and Aubrey Counsel Stephens, Dunedin, against the Bank of l Australasia and Alice May Ainge and others.. Plaintiffs were executors of the will of John Albert Ainge, who died in March, 1932, leaving an estate which showed a deficiency of assets of £9804. Included in the assets were policies of life insurance taken out with the National Mutual Life Association, which the testator on 38 different occasions had mortgaged to the' association to secure advances but which, nevertheless, showed on his death a nett balance of £5726. QUESTIONS FOR COURT. Plaintiffs, in the course of administration being uncertain of the extent of the protection afforded by the Life Insurance Acts, took out an originating summons asking for the decision of the Supreme Court on the following questions: (1) Whether the protection afforded policy moneys against debts arid legacies by section 65 and 66 of the Life Insurance Act of 1908, as amended in 1925, applied in the case of moneys payable under policies mortgaged in this manner? (2) If such protection did exist then in whose favour did it apply, and did it apply against debts owing by the testator under the mortgages? (3) With regard to the right of election arising under these sections who was entitled to exercise the right, and within what period must it be exercised? Tn view of the importance of these questions the summons was moved into the Court of Appeal. Mr. A. C. Stephens appeared for the plaintiffs, Mr. Mowat for the Bank of Australasia, representing the general body of creditors, and Mr. J. M. Paterson for the other people interested under the will.