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 Cornell University Law Library 
 
 The Moak Collection 
 
 PURCHASED FOR 
 
 The School of Law of Cornell University 
 
 And Presented February 14, 1893 
 
 IN HEHORY OF 
 JUDGE DOUGLASS BOARDMAN 
 
 FIRST DEAN OF THE SCHOOL 
 
 By his Wife and Daughter 
 A. M. BOARDMAN and ELLEN D. WILLIAMS 
 
Cornell University Library 
 KD 1864.A52C13 1872 
 
 Albert arbitration. Lord Cairn's decision 
 
 3 1924 017 859 244 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924017859244 
 
1 
 
ALBERT ARBITRATION. 
 
 LORD CAIRNS'S DECISIONS. 
 
 LEE'S CASE. 
 
 List of Contributories. 
 
 Where a person whose name stood in the share register book of a company 
 in liquidation applied to have his name removed from the list of contribu- 
 tories, on the ground that on an amalgamation the amount paid on his shares 
 had been paid back to him by the transferee company, and his share certi- 
 ficates had been delivered over to that company, the payment purporting, 
 under the amalgamation agreement, to be by way of satisfaction and in 
 extinction of his shares : 
 
 Held, that, notwithstanding what had been done on the amalgamation, his 
 name must remain on the list. 
 
 1 HIS was an application (which had been pending in the Court 
 of Chancp y on an adjourned summons) for removal of Mr. Lee's 
 name from the list of contributories of the Family Endowment. 
 
 At the date of the amalgamation of the Family Endowment with 
 the Albert Mr. Lee held, and was entered in the share register book 
 as holding, 200 shares in the Family Endowment, £4 a share being 
 paid thereon, as on all the other shares in the society. He had 
 executed the deed of settlement as one of the original shareholders. 
 The amalgamation agreement stipulated that the Albert should 
 pay to each shareholder in the Family Endowment £4 a snare by 
 way of satisfaction and in extinction of his shares. Mr. Lee re- 
 ceived the £4 a share for his shares, and gave up his share certifi- 
 cates to the Albert. The books of the Family Endowment, including 
 the minute book and share register book, were, previously to the 
 payment of the £4 per share, delivered over to and were thence- 
 forth retained by, the Albert. No alteration was made in the 
 
 B 
 
ALBEBT ABBITEATION. 
 
 Lee's Case, share register book in consequence of the amalgamation. Mr. Lee 
 ~~~ was settled on the list of contributories for 200 shares. 
 
 Mr. Kekewieh was for Mr. Lee. 
 
 Mr. Eddis, Q.O., (Mr. Rodwett with him) was for the Family 
 Endowment. 
 
 Mr. Kekewieh : — It is not contended by Mr. Lee that there has 
 been a dissolution of the Family Endowment within the deed. The 
 Court of Chancery has decided the contrary, and ordered the 
 winding-up. Nor does he say that a deed of transfer has been 
 executed by him, or that a deed of acceptance has been executed 
 by any transferee from him, in the respective form required by 
 the deed, or in any similar form. But, as he could not, after this 
 transaction, haye claimed any benefit from the Family Endowment, 
 so, he contends, that society cannot now say that he is bound to 
 contribute for payment of their debts. If any deed or any entry 
 in the books was necessary, it was the duty of the Albert directors 
 to see it made. 
 
 Loed Cairns : — In the case of the Family Endowment, suppose 
 a person whose name was on the register of shareholders had 
 agreed to sell his shares to a purchaser, and suppose no change 
 made in the register, no deed of transfer executed, no deed of 
 acceptance executed, but a binding contract to sell and to buy : 
 in that state of things, without more, would or would not the 
 person remaining on the register have been liable at law to the 
 debts of the society ? 
 
 Mr. Kekewieh: — He would. 
 
 Loed Cairns : — Then, apart from any question about dissolu- 
 tion, does the case differ from what it would have been if, instead 
 of dealing with the Albert, Mr. Lee had dealt with some person in 
 the market ? 
 
 Mr. Kekewieh : — Yes ; on the ground that the Albert really put 
 themselves in the place of the Family Endowment, taking the 
 business, taking the certificates. 
 
LOKD CAIENS'S DECISIONS. < 
 
 Loed Cairns : — It may be that the Albert were also liable. Lee's Case. 
 Would that absolve a person who was on the register from his 
 pre-existing liability ? 
 
 Mr. Kekewich : — I am submitting that is so — that the Albert, 
 having all the means of doing that which Mr. Lee could not do, 
 and having paid him off, were bound to place themselves in his 
 position. 
 
 Lord Cairns : — That may be, and he may have a remedy 
 against them for not performing that which was their duty ; but 
 that is quite consistent with his remaining on the list of con- 
 tributories. 
 
 Mr. Kekewich :■ — The Albert should be made primarily liable, if 
 only to work out the rights of the parties without circuity. Mr. 
 Lee is a contributory only after the Albert contributories are ex- 
 hausted, and after it has been ascertained that they are not able 
 to perform the contract of the Albert to indemnify the share- 
 holders of the Family Endowment. He mentioned 
 
 Oakes v. Turquand, L. B,. 2 H. L. 325 ; 
 and referred to clauses 104 to 107, 122, 163 to 169, 173, 174 of 
 the Family Endowment deed. 
 
 Mr. Eddis was not called on. 
 
 Lord Cairns: — The case has been argued with great force 
 and ability by Mr. Kekewich, but it is too clear to admit of any 
 doubt, and in my opinion Mr. Lee must remain on the list of 
 contributories. His case may be looked at in two ways. 
 
 First, he may claim not to be on the list on the ground that 
 there has been what is termed in one of the resolutions an extinc- 
 tion of his shares. That could only be brought about by an 
 accurate pursuit of the provisions in the deed. But those provi- 
 sions contemplated that which was equivalent to an extinction of 
 the shares, namely, a dissolution of the society, only on the 
 hypothesis that provision had been made for all claims that might 
 be made on the society. And until that was done, till the claims 
 were paid, or something was done equivalent to payment of the 
 
 b 2 
 
1 ALBEKT AKBITEATION. 
 
 Lee's Case, claims, the time for extinction of the shares and dissolution of the 
 society would not arrive. In that view of the case, therefore, 
 his claim to be removed from the list of contributories has 
 failed. 
 
 The only other light in which he could assert his claim is that 
 in equity the shares have become the property of the Alhert, and 
 have ceased to be his ; and that certain duties devolved on the 
 Albert to complete the documents that would have removed his 
 name from the list and substituted another name for his. It 
 appears to me that his case cannot be put higher in that point of 
 view, than if he had sold his shares in the market to a purchaser ; 
 the result of which contract would have been that in equity he 
 would have been merely a trustee of the shares for the purchaser, 
 and the purchaser would in equity have been the owner of the 
 shares, and Mr. Lee could no longer have claimed, for his own 
 benefit, any interest in the profits or trading of the society. But 
 in that case, until the time arrived when Mr. Lee's name was 
 removed from the list of shareholders, he would, both by the words 
 of section 200 of the Companies Aei, 1862, and by the provisions 
 of the Family Endowment deed itself, remain the person answerable 
 for the shares. It is possible that he may have rights over 
 against the purchaser ; but those rights, whatever they may be, 
 are perfectly consistent- with his remaining liable in the first 
 instance to whatever claim may properly be made against the 
 society. 
 
 My opinion therefore is that Mr. Lee's name must remain on the 
 list of contributories. 
 
 Solicitors for Mr. Lee : Messrs. Freshfield. 
 
 Solicitors for Family Endowment : Messrs. Marhby & Tarry. 
 
LOED CAIENS'S DECISIONS. 
 
 KENNEDY'S CASE. i 87 i 
 
 Policy — Novation. r June 1, 15. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against a policy-holder, who, having on the amalgamation received from his 
 assuring company, the transferors, a circular holding out to their policy- 
 holders advantages to be derived by them from acceptance of the liability of 
 the transferee company, thenceforth paid his premiums to the transferee com- 
 pany, and took receipts of that company, he not shewing that the premiums 
 were paid to and received by that company as agents of his assuring 
 company. 
 
 Observations on novation. 
 
 Observations on character of contract of life assurance. 
 
 1 HIS was a claim by Mr. Kennedy (which had been pending in 
 the Court of Chancery on an adjourned summons) to prove against 
 the Family Endowment on a policy issued to him by that society 
 on his own life, for £600, dated 12 September, 1844. 
 
 The Family Endowment policy had not been exchanged for an 
 Albert policy, nor had it been indorsed with an admission of the 
 liability of the Albert 
 
 Mr. Westlake was for Mr. Kennedy. June i. 
 
 Mr. Eddis, Q.C., (Mr. Bodwell with him) was for the Family 
 Endowment. 
 
 Mr. Westlake contended that in the circumstances there was 
 no novation. He mentioned 
 
 Bartlett's Case, L. E. 5 Ch. 640 ; 
 Griffith's Case, L. E. 6 Ch. 374. 
 
 Lord Caikns : — In Griffith's Case there were two special cir- 
 cumstances. One was that the policy-holder declined expressly to 
 sign an admission of the transfer of liability when it was proffered 
 to him ; the other was that the deed of amalgamation, or transfer, 
 or whatever it may be, between the Albert and the Medical con- 
 tained an express clause authorizing the Albert to go on receiving 
 premiums as agents for the Medical where any one was unwilling 
 to accept a substituted policy in the Albert. Then suppose the 
 
Case, 
 
 ALBERT ARBITRATION. 
 
 Kennedy's proper question to be considered is, in what sense did the policy- 
 holder pay, and in what sense did the Albert- receive, the renewal 
 premiums : with regard to the sense in which the policy-holder 
 paid, the circumstance that he refused to sign the admission is 
 material ; with regard to the sense in which the Albert received, 
 the circumstance that the Albert were authorized to receive as 
 agents for the assuring company is material. 
 
 Mr. Westlahe also mentioned 
 
 King v. Accumulative Company, 3 0. B., N". S., 151 ; 
 Pott's Case, L. E. 5 Oh. 118. 
 
 Loed Cairns : — Pott's Case was the case of an annuitant, which 
 is widely different from the case of a policy-holder. 
 
 Mr. Westlahe : — The words of the circular are the same as re- 
 gards both annuitants and policy-holders. 
 
 Loed Cairns : — As to an annuitant, it is little matter what 
 such a document says, because, unless he consents by some ^,ct as 
 high as his original contract, his right is untouched. 
 
 Mr. Westlahe : — I submit that, as between the annuitant and the 
 policy-holder, there is no difference with respect to the form of 
 novation. 
 
 Loed Cairns : — With regard to a policy-holder is it a case of 
 novation at all ? Is that a proper term to use ? I do not object 
 to a word if we understand the same thing ; but is the case of a 
 policy-holder the case of a novation ? The case of a novation is 
 the case of an existing contract with A., a proposal to change that 
 contract before it is broken and make it a contract with B., and 
 then by a tripartite arrangement between A. and B. and the 
 contract-holder an agreement to that effect come to. But is not 
 the case of a policy-holder, who comes to prove, a case of this sort ? 
 'The first step in his case is to show that he has paid to the proper 
 party the premium which is to be the condition of the continuance 
 of the policy. He comes forward and produces a receipt not from 
 the party named in the policy, but from somebody else, somebody 
 quite different. It may very well be that that person may 
 turn out to be the agent of the person to whom the premiums 
 
LOED CAIRNS'S DECISIONS. \ 
 
 ought to be paid ; but does it not lie on the person who produces Kennedy's 
 a receipt from a different person to show that he paid to the different 0a8E " 
 person as the agent, and that the different person received as the 
 agent, of the person or of the company to whom the payment was 
 to be made? In other words, is it not a question whether you 
 show that as to the old company your contract is in existence at 
 all ; whether you have done the thing that would have kept it in 
 existence ? 
 
 Mr. Eddis was not called on. 
 
 Judgment reserved. 
 
 Lord Cairns : — In this case the contract is in the usual form. Jane 15 - 
 The policy witnesses that in consideration of the sum of £17 9s. 
 now paid by Mr. Kennedy to the directors of the society, and 
 in case Mr. Kennedy shall on 6 September in every succeeding 
 year during his life pay to the directors of the society for the 
 time being the premium of £17 9s., the funds of the society 
 shall be liable, according to the provisions of the deed of settle- 
 ment of the society, to the payment of the sum of £600 to the 
 executors, administrators, or assigns, of Mr. Kennedy, oh his death, 
 and so forth. 
 
 The character of the contract of life assurance is somewhat 
 peculiar. The premium having been paid on a policy of this kind 
 for one year, during the course of that year nothing more remains to 
 be done, on the side either of the assurer or of the assured. The 
 assured may remain quiescent during the year. If he dies during 
 the year, the liability of the assuring company, without more, arises ; 
 and the sum assured must be paid by the company to his executors. 
 But after that year is at an end the state of things is altered. It 
 is entirely optional to the assured whether or not he will pay 
 any further premium. He may if he pleases let the policy drop, 
 and the company have no means of compelling him to pay the 
 premium. On the other hand, he may renew or continue the 
 assurance ; but in order to do this he must perform that which is 
 pointed out in the policy as the condition precedent, namely, — he 
 must pay to the directors of the society for the time being the 
 premium mentioned on the face of his policy. 
 
ALBERT ARBITRATION. 
 
 Kennedy's In this case the premiums were paid by Mr. Kennedy to the 
 
 _T directors of the Family Endowment up to 1861. In February 
 
 and March, 1861, the Family Endowment and the Albert made a 
 contract of amalgamation. I use the term amalgamation, because 
 it has been so frequently used in these cases, without pledging 
 myself to the correctness of the expression, or saying that it de- 
 scribes in the most felicitous way the nature of the contract ; but 
 every one knows what is intended by it in these cases. On 16 
 March, 1861, the Family Endowment sent to Mr. Kennedy the 
 circular announcing the fact of the amalgamation. 
 
 It appears to me that nothing can be clearer than the mean- 
 ing of this circular ; no person of ordinary understanding could fail 
 to apprehend exactly what it proposes. It proposes to give policy- 
 holders in the Family Endowment advantages greater than those 
 which they already possessed, consequential on their becoming 
 insured in the Albert. They will have the chance of a better 
 bonus ; they will have the security of a larger capital ; the business 
 of the two companies will be managed more economically. If they 
 wish, their policies will be indorsed or new policies will be given ; 
 that is a mere matter of form. They are told the consequence 
 will be the same if they remain with their policies undisturbed ; 
 they will in all respects be treated as if the policies had been 
 issued originally by the Albert on the day they bear date. But 
 this promise that the Albert would undertake the liability, and 
 that these benefits would accrue, is made conditional on this, — on 
 payment to the Albert of the premiums payable under the policies 
 of or contracts with the Family Endowment. 
 
 That was a clear and intelligible offer to the policy-holders in 
 the Family Endowment. They were not obliged to accept it, they 
 might have taken steps (as in Wood's Case, before me) to maintain 
 their position as persons insured in the Family Endowment, and to 
 repudiate any proposal of a change such as was made to them by 
 this circular. Mr. Kennedy in no respect repudiated the offer 
 made. He paid his premiums afterwards becoming due, not to 
 the Family Endowment, but to the Albert. 
 
 The difference in the form of the receipts is remarkable. The 
 form of receipt on 7 September, 1860, next before the amalgamation, 
 was that of an ordinary receipt delivered out by the Family Endow- 
 
LOED CAIBNS'S DECISIONS. -c 
 
 merit, headed by their name, and signed by two of their directors. Kennedy's 
 On 12 September, 1861, on the first payment of premium after _t!f' 
 the receipt of the circular, the receipt taken by Mr. Kennedy is 
 headed The Albert Medical and Family Endowment Life Assurance 
 Company, at a different office, Waterloo Place, in place of New 
 Bridge Street, and is thus : 
 
 Received the sum of £17 9s., being the yearly premium from the 6th day of 
 September, 1861, for an insurance of £600 under policy No. 964, issued on the 
 life of Thomas Kennedy. 
 
 It is signed by two directors of the Albert, and countersigned by the 
 cashier, with this statement, that no receipt is valid unless signed 
 by two of the directors and countersigned by the company's 
 cashier, or by an agent, the company being the only company 
 spoken of, namely, the Albert. In 1862 the receipt is a little 
 different in form. In the body of the receipt it is stated that the 
 premium is received for renewal of the policy mentioned in the 
 margin thereof, the amount of which premium, and the period for 
 which it is received, are also (it is stated) mentioned in the 
 margin. It is signed by two directors and countersigned by the 
 accountant of the Albert, and bears in the margin 'Life receipt 
 F. E. Policy No. 964 ', sum assured so much, premium so much. 
 The subsequent receipts are of the same kind ; those given in and 
 after 1864 being headed Albert Life Assurance Company, simply. 
 These receipts are clearly, receipts of the Albert; they offer the 
 discharge as coming from the Albert ; they refer to the policy by its 
 original number, and in order to identify it, they add the letters 
 F. E., to shew that it was originally a Family Endowment policy. 
 
 If these receipts stood alone, it would be open to the person 
 producing them to show that, although they profess to be receipts 
 of the Albert, the money was paid to the Albert on some footing 
 that would make the Albert the agents of the Family Endowment 
 for the purpose of receiving premiums, so as to continue the liability 
 of the Family Endowment. But it appears to me that the burden of 
 explaining the apparent irregularity of the receipts, the apparent 
 \ariance, the open variance, between the payments stated in the 
 receipts and the payments contemplated by the policy, lies on the 
 person who produces these receipts. Far from offering any expla- 
 nation, Mr. Kennedy is obliged to confess that there passed before 
 
10 ALBERT ARBITRATION. 
 
 Kennedy's the payments, which are evidenced by these receipts, that trans- 
 
 1' action to which I have referred, namely, the sending to him and 
 
 the receipt by him of this circular. It appears to me that, this 
 circular containing an offer, and on the face of it stating that pay- 
 ment of premiums to the, Albert would be proofs (as it were) of, 
 the acceptance of the offer, the moment a premium was paid in 
 the manner invited by the circular, the contract became complete 
 between Mr. Kennedy and the Albert on the one hand, and the 
 termination on the other hand of the liability of the Family En- 
 dowment became complete for want of any payment of premium 
 to them. 
 
 In these circumstances it appears to me that the liability of the 
 Family Endowment is at an end. The policy is absolutely un- 
 renewed with the Family Endowment, and an equitable contract 
 for a new policy on the same terms arises with the Albert, which 
 subsequently received the premiums. 
 
 I think, therefore, that Mr. Kennedy's claim as against the 
 Family Endowment fails ; he must rank as a policy-holder in the 
 Albert. 
 
 As his case has been chosen as a representative case, his costs 
 will be provided for. 
 
 Solicitors for Mr. Kennedy : Messrs. Kennedy & Kempson. 
 Solicitors for Family Endowment : Messrs. Marhby & Tarry. 
 
LOED CAIBNS'S DECISIONS. 11 
 
 DALE'S CASE. mi 
 
 Annuity — Novation. j me 2, 15. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against an annuitant, who, having on the amalgamation received from his 
 assuring company, the transferors, a circular describing the amalgamation 
 arrangement, had his annuity contract indorsed by the transferee company 
 with a certificate of the liability of that company to pay the annuity under 
 the contract, and received the subsequent payments of his annuity from 
 that company. 
 
 Potfs Case distinguished. 
 
 -L HIS was an application (which had been pending in the Court 
 of Chancery on an adjourned summons) by Mr. Dale to be admitted 
 as a creditor of the Metropolitan Comities on an annuity contract. 
 
 Mr. C. E. Lewis (solicitor) was for Mr. Dale. June 2. 
 
 Mr. Siggins was for the Metropolitan Counties. 
 
 Mr. C. E. Lewis mentioned 
 
 Potfs Case, L. E. 5 Ch. 118. 
 
 Mr. Siggins contended there was a novation by the claimant 
 
 with the Albert. 
 
 Judgment reserved. 
 
 Lord Cairns : — This case arises on a claim against the Metro- June 15. 
 politan Counties on an annuity contract. 
 
 The contract was issued to Mr. Dale, who is described as a 
 
 house servant, by the St. George Company, in consideration of a 
 
 single payment. The St. George Company amalgamated with the 
 
 Metropolitan Counties in October, 1861, and at that time there 
 
 was a printed indorsement put on the annuity contract in these 
 
 words : 
 
 In consideration of the within-named assured having agreed to the transfer of 
 the within-written policy to the Metropolitan Counties [&c.J, and to pay to the 
 said society all future premiums on the same policy as they become due, and to 
 observe and perform all the stipulations contained in the said policy on the part 
 of the said assured, the said society doth hereby agree to observe and perform all 
 the stipulations contained in the same policy on the part of the St. George [&c.J, 
 and in the stead of the said St. George [&c.].. 
 
12 ALBERT ARBITRATION. 
 
 ^ase' 8 '^ e annu] ty contract seems to have been sent in by Mr. Dale to 
 
 the Metropolitan Counties, and this printed indorsement seems to 
 
 have been pasted on the back of the contract by the directors of 
 the Metropolitan Counties. The claimant therefore comes here 
 admitting that, as between the St. George and the Metropolitan 
 Comities, by force of this indorsement, the liability of the St. George 
 terminated, and that he accepted in lieu of it the liability 
 of the Metropolitan Counties at the time this indorsement was 
 made. 
 
 The Metropolitan Counties amalgamated with the Western in 
 1862, and the Western with the Albert in June, 1865. No question 
 arises here as to the liability of the Western, the intermediate 
 company. The question is as between the liability of the Metro- 
 politan Counties and the liability of the Albert. 
 
 On the amalgamation with the Albert a manuscript indorsement 
 was made on the annuity contract ; it is as follows, headed, Albert 
 Life Assurance Company, signed by three directors of the Albert, 
 and dated 27 December, 1865 : 
 
 It is hereby certified that, subject to the within-named Joseph Dale abiding 
 by and observing and performing - the conditions and stipulations contained in 
 the within contract on the part of the said Joseph Dale, the capital stock and 
 funds of the Albert [&c] shall, according and subject to the provisions of the deed 
 of settlement of the same company, and also subject to prior claims, be liable to 
 pay the within-mentioned 1 annuity, as and when the same shall become payable 
 under or by virtue of such contract. 
 
 The annuity contract is produced by Mr. Dale ; and he admits that 
 the contract, in whatever circumstances, was, in fact, sent in to the 
 Albert by him, and that he received it back with this manuscript 
 indorsement ; that he has retained it ever since; and he now pro- 
 duces it, with (whatever be the legal consequences) this indorse- 
 ment on it. 
 
 The first thing that strikes the mind on reading this indorse- 
 ment is that, beyond all doubt, it makes the capital stock and 
 funds of the Albert liable ; it professes to do so, and gives Mr. Dale 
 whatever benefit there may be in that. There is nothing whatever 
 to show that the funds of the Albert are to be liable by way of 
 additional security, as distinguished from a substituted security ; 
 and there is no rational principle on which it should be taken that 
 any person intended that the Albert funds should be voluntarily 
 
LOED CAIENS'S DECISIONS. [ 13 
 
 offered to Mr. Bale as an additional security for an annuity, the Dale's 
 
 original security for which he had never in any way heen dis- " 
 
 contented with. However, we have some further explanation of 
 the matter ; there is no direct and distinct evidence of what it 
 was which put Mr. Bale in motion and led him to send in his 
 contract to the Albert. But there is indirect evidence. Mr. Bale 
 has made an affidavit, in which [(speaking of this and four other 
 contracts held by him, the circumstances as to which others are 
 identical with those relating to the contract I have been dealing 
 with) he says : 
 
 Some short time after the amalgamation of the St. George [&c.J referred to in 
 the said annuity grants with the above-named Metropolitan Counties [&c] I did, 
 as I believe, and, as far as my recollection serves me, in pursuance of a request 
 made to me by one or other of the said companies, send in each of the said 
 annuity grants to the above-named Metropolitan Counties [&c] for indorsement ; 
 and the same were respectively indorsed by three directors and the manager of 
 the said Metropolitan Counties [&c.J, as appears thereon respectively. Some few 
 years afterwards I was informed, so far as I recollect, by circular, the contents of 
 which I have now no means of knowing or remembering, of the Albert [&c.J 
 having become in some way liable in connection with the said annuity grants, 
 • and I did, as requested, leave the said annuity grants at the said Albert [&c] for 
 indorsement; and the same were respectively indorsed, as therein appears, by 
 three directors and the secretary of the said last-named company. 
 
 Now, although the claimant is in humble life, and not to be 
 expected to understand clearly the bearing of legal matters, he 
 does appear to have had a] just appreciation of the meaning of 
 a transaction of this kind. He had had the experience of the 
 amalgamation of the St. George; he knew perfectly well the 
 meaning of sending in a contract to be indorsed ; he knew that 
 the Metropolitan Counties were, in consequence of the first in- 
 dorsement, the company he was looking to. Then, being informed 
 in some way, as far as he recollects by circular, the contents of 
 which he says he has now no means of knowing, of the Albert 
 having become in some way liable in connection with the annuity 
 grants, he sends them in the contract for indorsement. Now it 
 has been very properly admitted (without any admission as to 
 what reached Mr. Dale, as to which he can say nothing more than 
 he has said,) that there was a circular issued by the Western on 
 the occasion of the amalgamation of the Western and Albert, 
 and only one circular. Therefore we know very clearly what the 
 
14 ALBEET ARBITRATION. 
 
 Dale's circular must be which reached Mr. Dale, namely, that of 14 July, 
 
 , 1865, signed by Mr. Eiblert, Mr. Bieknell, and Mr. Scratehley. 
 
 This circular gives him information that the capital of the new 
 company, or the united company, whichever it is to be termed, is 
 that to which the persons insured, by way either of policy or of 
 annuity, were for the future to look. At this stage it was open 
 to a creditor, especially to an annuitant creditor, to repudiate 
 any such arrangement: but I do not think a creditor was at 
 liberty, having been distinctly told that this was the footing on 
 which it was proposed that future payments should be made to 
 him, to send in his policy or contract j to accept on the back of it an 
 acknowledgment of the liability of an entirely different capital and 
 fund for payment of the annuity ; to receive the future payments 
 of his annuity from that new company out of that fund ; and then 
 afterwards to turn round and say that he never entered into any 
 contract or engagement to relinquish the security of the original 
 company granting his annuity, and that he has not accepted the 
 security of the new company. 
 
 Not only would that be the view I should entertain, if the case 
 rested there, but it is satisfactory to find, especially in dealing with 
 a person in humble life, from the letters that passed subsequently, 
 that Mr. Dale must perfectly well have understood the effect of 
 what he was doing. On 20 June, 1866, he writes this letter, 
 without address, but admitted to be written to Mr. Seratchley, who 
 had been the actuary of the Western, from which, up to the 
 amalgamation, Mr. Dale had been receiving his annuity : 
 
 I wrote to Mr. Easum 13th, last week, for my half-year's annuity, being due 
 on the 12th, and the form of receipt filled up, but I have not received the cheque 
 for it or any answer. I will thank you to send me an answer by the return of 
 post, for when I have written to you before at the Western and Metropolitan Life 
 Assurance, I have received an answer in two or three days. 
 
 Mr. Easum was the secretary of the Albert. Mr. Dale draws the 
 contrast, therefore, between the different offices, and he falls back 
 on the "gentleman to whom he had been in tne habit of writing at 
 the Western or the Metropolitan Counties. 
 
 Then we have the letter to Mr. Easum : 
 
 I have sent the receipt for- my half-year's annuity, being £24 0s. 9d, due 
 on June 12th, 1866. If you will send me a cheque for the annuity, you will 
 oblige. 
 
LQED CAIKNS'S DECISIONS. 15 
 
 And on the 21st he writes again to Mr. Easum: Dale's 
 
 Case. 
 the cheque came safe to hand, for which I am obliged. I am sorry to have 
 
 troubled Mr. Scratchley with a letter, but being rather longer than from the 
 
 Western office, thought the letter might not have gone right. 
 
 He draws the contrast, therefore, between the state of things 
 when he was looking to the Western and now when he looks to the 
 Albert. 
 
 Further, in order to obtain payment of the annuity, it appears 
 to have been the habit of Mr. Bale, in accordance with the re- 
 quisitions of the office, to send in a certificate of a clergyman, to 
 the effect that the annuitant was still alive. The certificate is 
 addressed, to the directors of the Albert, and, as given in June, 
 1866, runs thus : 
 
 I hereby certify that Mr. Joseph Dale, described in an annuity grant of the ' 
 Albert Life Assurance Company, as of Turibridge Wells, and whose signature is 
 affixed below, is now living at Turibridge Wells. 
 
 And then the annuitant's receipt subjoined on the same paper is : 
 
 Eeceived of the directors of the Albert Life Assurance Company the sum of 
 £24 Qs. 9d. being half-year's annuity on the life of Joseph Dale, due on the 12th 
 day of June, 1866, under the company's annuity contract. 
 
 I think, therefore, although I recognise entirely the principles 
 laid down in Pott's Case, and in a similar case should be prepared 
 to follow those principles, this is a case altogether different. I 
 think there is a deliberate acceptance here of the liability of the 
 Albert and of a pledge by the directors of the assets of the Albert 
 in substitution of the liability of the Metropolitan Coimties. 
 
 I ought to add, as a proof how very loosely people bring them- 
 selves to think of these things when the crisis comes, how easily 
 they persuade themselves as to what they intended to do in past 
 time, that Mr. Bale says in his affidavit this : 
 
 I am wholly unacquainted with law and business matters ; and I never con- 
 sidered what was the legal effect of either of the said transactions ; but of this I 
 am positive, that I never intended to release either of the said companies which had 
 become bound to me under the circumstances aforesaid on the said annuity 
 contracts : 
 
 although, at this moment, his claim is based on a policy issued by 
 one of those companies, namely, the St. George, and his applica- 
 tion for payment is against a different company, namely, the 
 Metropolitan Counties. 
 
16 ALBERT ARBITRATION. 
 
 nt^' s * think, therefore, Mr. Dale must rank as an annuity creditor 
 
 against the Albert, and not against the Metropolitan Counties. 
 
 It was understood that it was a representative case, and the costs 
 will be paid accordingly. 
 
 Solicitors for Mr. Dale : Messrs. Lewis, Mwins, & Longden. 
 Solicitor for Metropolitan Counties ; Mr. Rowland Miller. 
 
LORD CAIENS'S DECISIONS. 17 
 
 INDEMNITY CASE. 1871 
 
 Amalgamation — Marshalling. June 3, 10, 15. 
 
 On the construction of the several amalgamation agreements between the 
 Albert oh the one hand, and the Banh of London, Medical, Family Endow- 
 ment, Kent Mutual, and Western, respectively, on the other hand ; Held — 
 
 (1) That the respective transferor companies were entitled to indemnity 
 from the Albert against liability on policies of assurance and annuity contracts, 
 whereon claims should be established against the respective transferor com- 
 pany ; but that this indemnity was limited to the amount of the share capital 
 and other assets of the Albert : 
 
 (2) That the indemnity did not extend to the expenses of the liquidations 
 of the several transferor companies. 
 
 Amalgamation by directors, ultra vires, maintainable on ground of 
 acquiescence of shareholders. 
 Observations on marshalling. 
 
 _L HIS was an application for a decision on the question of the 
 effect of the indemnities given by the Albert to the Bank of London, 
 Medical, Family Endowment, Kent Mutual, and Western, respec- 
 tively, under the amalgamation agreements with them. 
 
 Sir Eoundell Palmer, Q.C., (Mr. Waller with him) was for a 
 committee of shareholders in the Albert. 
 
 Mr. Biggins was. for the Albert. 
 
 Mr. JEddis, Q.O., (Mr. Bodwett with him) was for the Bank of 
 London and for the Family Endowment. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. W. H. Herbert (solicitor) was for the Kent Mutual. 
 
 Mr. Eddis, Q.C., (Mr. Oracknall with him) was for the Western. 
 
 Sir B. Palmer: — The liability of the Albert to indemnify is June 3. 
 limited as on their own policies and annuities ; for (1) it was ultra 
 vires for the Albert directors to contract except for indemnity so 
 limited ; (2) according to the true construction of the amalgama- 
 tion agreements the contract of indemnity was so limited. 
 
 There is a subsidiary question as to the liability of the Albert to 
 
 C 
 
18 ALBERT ARBITRATION. 
 
 Ihdemnity indemnify the other companies against the costs of their own 
 ASE ' liquidations. The Albert deny their liability. 
 
 The Albert deed contained no provisions for amalgamation. In 
 1860 resolutions were passed at general meetings of the Albert 
 purporting to give power to the directors to enter into amalgama- 
 tion agreements. The amalgamation with the Bank of London 
 was in 1858, before those resolutions. All the others were after. 
 In that respect the case of the Bank of London is distinguishable. 
 But it was not competent to general meetings to give, and they 
 did not, in fact, give, amalgamating powers authorizing the creation 
 of unlimited liability. 
 
 The business of the Albert is defined in the first witnessing part 
 of the deed, and there would be no power by any resolutions to alter 
 that definition. Clauses 21, 30 of the deed relate, to powers of 
 alteration of the deed. The proviso in clause 30 puts an absolute 
 restriction on the power of alteration, so that it does not extend to 
 an alteration of the fundamental principle of the constitution of the 
 company, namely, the limitation of the individual responsibility of 
 each proprietor to the amount of his share in the capital. 
 
 The amalgamations were all effected by the directors of the Albert. 
 General meetings of the Albert were never called on to sanction 
 any one of them. The directors could not go beyond the deed in 
 any point which it provided for, unless its provisions were com- 
 petently altered by a special general meeting, and then they could 
 not go beyond the deed as so altered. 
 
 The clauses relating to policies and annuities are 65, 70, 79. 
 They necessarily cover every contract which is in substance an 
 assurance, whether it is a re-assurance in favour of another com- 
 pany primarily liable on a risk, or an original assurance. If the 
 substance of a transaction is the assurance of another company 
 against its risk on a life, that can only be effected, whether in the 
 shape of a formal policy or otherwise, on the terms of these 
 clauses. 
 
 Then there are two important series of clauses, (1) those relating 
 to indemnities inter se to members and trustees, and (2) those 
 relating to transfer of shares. 
 
 The second series are most important, because all the amalga- 
 mation agreements are unequivocally, on their face, not contracts 
 
LOKD CAIRNS'S DECISIONS. 19 
 
 with particular, present or future, shareholders, but contracts with Indemnity 
 the company, involving distinctly reference to the constitution of ASE ' 
 the company. If, therefore, there are stipulations by the members 
 inter se for transfer of shares and change and flux of membership, 
 with most rigid provisions for limited liability, it is manifest that 
 any one contracting with the company intends to take his resort 
 against members for the time being, by virtue of their mutual 
 contract inter se, and on the terms of that contract, and not other- 
 wise (clauses 196, 206 to 211). 
 
 The first indemnity clause is in the part of the deed preceding 
 the numbered regulations, and then there are clauses 69, 103, 135, 
 150, 180, 216, which is the cardinal clause, and which applies to all 
 debts and other demands of or upon the company, and 217 to 223, 
 followed by the penultimate witnessing part of the deed. 
 
 These indemnity clauses, taken in connection with the scheme of 
 transfer, have for their object and effect that the limit of liability 
 to the amount of the shares shall be secured, as far as by mutual 
 contract it can be done. 
 
 The effect of such provisions has been considered in 
 Gillan v. Morrison, 1 De G & S. 421 ; 
 Worcester Com Exchange Case, 3 De G-. M. & G. 180 ; 
 Norwich Yarn Case, 22 Beav. 143. 
 
 Then as to the amalgamation agreements. The agreement with 
 the Bank of London is plainly ultra vires of the Albert directors in 
 some respects ; for instance, respecting the fire insurance business 
 of the Bank of London. As regards the other business, the policies, 
 endowments, and other contracts being within the scope -of the 
 Albert business, an arrangement to take-over a great number of 
 policies, and so forth, might be within the power of the Albert 
 directors, whether those contracts were to be taken by way of 
 counter-insurance, or by way of novation, or otherwise. 
 
 Lord Cairns : — Suppose that in place of the agreement being in 
 general terms, it was to this effect : Whereas the Bank of London 
 have granted the annuities mentioned in Schedule I., and the 
 policies mentioned in Schedule II., now the Albert hereby under- 
 take, for the considerations mentioned, to pay and satisfy those 
 annuities and policies in the same way as if they had been granted 
 
 C 2 
 
20 ALBERT ARBITRATION. 
 
 Indemnity by the Albert themselves, or in case the Bank of London are called 
 on to pay thi 
 pay thereon. 
 
 ' on to pay them, then to repay to the Bank of London what they 
 
 Sir B. Palmer : — That would bring the thing to a clear point, 
 and would show that the actual construction and intent of those 
 clauses is that the annuities and policies shall be transferred, by 
 way of novation if the necessary parties agree, and if not, then 
 by way of counter-insurance or re-insurance ; the operation in both 
 cases being the same as if they had been policies granted by the 
 Albert on the day on which they respectively bear date, in which 
 case they would be policies granted under clause 70 of the Albert 
 deed, and limited as to liability to the assets and funds of the 
 Albert : 
 
 Anglo-Australian Case, 4 De Gr. F. & J. 341. 
 
 Then after the amalgamation with the Bank of London came 
 the resolutions of 1860, purporting to give to the directors amal- 
 gamation powers. These resolutions must be subject to the sub- 
 sisting clauses of the original Albert deed, especially 70 and 216. 
 - In the Medical there were two agreements, a preliminary and a 
 complete deed. The preliminary one is general, but the complete 
 one carefully keeps within the due limit of liability. The covenants 
 are expressly entered into in order to bind the assets of the com- 
 pany, but not further or otherwise. 
 
 In the case of the Family Endowment, clause 74 of the deed of 
 that society contains an extreme power of extending the business 
 to any other objects whatever besides assurance. It would clearly 
 be ultra vires for the Albert to take over any such contracts. As- 
 suming that not done, then the amalgamation agreement, clause 5, 
 provides that all engagements are to be borne, paid, and satisfied 
 by and out of the funds of the Albert. That is emphatically ex- 
 clusive. 
 
 In the case of the Kent Mutual, the amalgamation agreements 
 are plain and unequivocal as to the limited nature of the contract. 
 
 The amalgamation agreement in the case of the Western is not 
 so clear, but in substance it is the same. 
 
 With respect to the claim for the costs of the liquidations, some 
 of the agreements provide that the costs of carrying the agreements 
 
LOKD CAIENS'S DECISIONS. 21 
 
 into effect are to be paid by the purchasing company, but the Indemnity 
 winding-up of their own company is a different thing. It might — '. 
 as well be argued that the costs of a suit for administering the 
 estate of a deceased person, instituted at any distance of time, were 
 to be borne by some person agreeing with the executors to pay all 
 the debts, which might or might not be a competent agreement. 
 
 Mr. Hi g gins: — There can be no B list here. Any person in the 
 position of one of these five companies can only have resort against 
 the present Albert shareholders through the Albert deed. There is 
 no common law liability on subsequent shareholders, and no 
 statutory liability ; the whole liability is founded on the deed of 
 settlement exclusively ; and that deed contains a scheme of clauses 
 showing the unalterable constitutional principle of the Albert to be 
 the limitation of the liability of the shareholders. Further, the 
 special resolutions of 1860 did not purport to alter the deed except 
 by the repeal of clauses 138, 144, which have nothing to do with 
 this question. The attention of the shareholders was not called to 
 the possible effect of such' an interpretation as that now attempted 
 to be put on the declaratory part of those resolutions. 
 
 Mr. Eddis, in the cases of the Bank of London and Family 
 Endowment : — At common law every member of the Albert was 
 primarily liable to the last farthing. That unlimited liability may 
 be modified, to any extent, as among the members, but not as 
 against third parties : 
 
 Greenwood's Case, 3 De G. M. & G-. 459. 
 
 Clause 216 of the Albert deed, which is referred to as the cardinal 
 clause, is limited so as to have no operation except as among the 
 members. 
 
 The series of transfer clauses contemplate that cases may arise 
 in which there may be ' a liability, even as among the members, 
 beyond the nominal amount of their shares. They are to be liable 
 not to the extent of, but in proportion to, their shares. 
 
 As regards the validity of the amalgamation, the Bank of 
 London had a clear power to sell ; clause 111 of their deed. Then 
 the Albert undertake to pay and meet all claims and demands 
 against the Bank of London, and to indemnify them, without 
 limitation expressed. 
 
22 ALBEKT AEBITEATION. 
 
 Indemnity Loed Caiens : — Whatever might have been said the day after 
 ASE ' the amalgamation, must not the transaction be regarded at this 
 distance of time as a contract only to transfer policies and annui- 
 ties, and an engagement to indemnify in respect thereof only ? 
 
 Mr. Eddis : — Still it was a purchase, the Albert taking not only 
 the policies and annuities, but also the fund out of which the 
 Bank of London had contracted to pay them, and that is what 
 makes the indemnity reasonable. Can the Albert now, after 
 eleven years, say they have taken all the assets, have failed to 
 meet the liabilities, and yet are not bound by the engagement to 
 indemnify ? 
 
 Era Case, 1 De G-. J. & S. 29 ; 
 Pare v. Olegg, 29 Beav. 589 ; 
 Phoenix Case, 2 J. & H. 441. 
 
 The Albert shareholders had express notice of the transfer by the 
 Bank of London, in the directors' report of 30 June, 1859. It 
 was held out to them as a great advantage. They have acquiesced 
 in it ever since. They cannot now repudiate it as invalid. 
 
 In the case of the Family Endowment the amalgamation agree- 
 ment was after the resolutions empowering the Albert directors to 
 amalgamate with other companies, without restriction as to terms. 
 
 With respect to the costs of the winding-up, it is not contended 
 that they are to be paid as costs of the winding-up. They are 
 asked as costs consequent on the enforcement of the benefit of 
 the covenant to indemnify. If the Albert had performed their 
 covenant the Bank of London would have had no debts to pay 
 and there would have been no winding-up. 
 
 Loed Caiens :— A creditor of the Bank of London, who has 
 not abandoned the liability of the Bank of London, sues them; 
 they ha?e no defence ; ought they not to pay, and then come 
 to recover the sum paid and the costs ? Can they recover costs 
 which they have occasioned by difficulties which they have put in 
 the way of the creditor, by obliging him, in other words, to wind 
 them up ? 
 
 Mr. Eddis .-—The contract of the Albert was that the Bank of 
 London were to have no creditors. 
 
LOED CAIRNS'S DECISIONS. 23 
 
 Loed Cairns : — Is it not like the ordinary case of principal Indemnity 
 
 and surety ? If the surety fights an action to which he has no ' 
 
 defence, he cannot recover from his principal the costs of the 
 action, although the principal is bound to indemnify him. 
 
 Mr. W. H. Herbert, in the case of the Kent Mutual, submitted 
 that if the liability of the Albert was held to be in respect of that 
 company limited, and in respect of the four other companies un- 
 limited, then those four companies should be compelled to resort 
 to that unlimited liability and leave the assets and capital stock of 
 the Alberfr to answer the claims of the Kent Mutual and of other 
 creditors in like position. 
 
 Sir B. Palmer mentioned 
 
 Professional Case, L. E. 3 Eq. 668. 
 
 Loed Cairns : — Yes ; on the question of marshalling I had 
 that case in mind. 
 
 Mr. O. 0. Morgan, in the case of the Medical : — The words relied June 10 
 on in the covenant in the amalgamation deed, namely, in order to 
 bind the assets of the Albert but not further or otherwise, are not 
 meant to limit the liability to the subscribed capital, but are 
 merely protective of the directors against personal obligation, as 
 where the covenant of executors is limited to the estate of the testa- 
 tor. The assets of a company are not only the subscribed capital, , 
 but also everything that can be recovered from the company. 
 
 Mr. Eddis, in the case of the Western : — The Albert shareholders 
 had notice of the amalgamation from the directors' report for 
 1864. The Albert have had all the Western assets irrecoverably : 
 Western Case, L. E. 11 Eq. 164. 
 
 A reply was not called for. 
 
 Judgment reserved. 
 
 Loed Cairns : — These are claims for indemnity by five com- j une 15. 
 panies, the Bank of London, the Medical, the Family Endowment, 
 the Kent Mutual, and the Western, arising out of the amalgama- 
 tions of 'those companies with the Albert. 
 
24 ALBERT ARBITRATION. 
 
 Indemnity I repeat that I use the term amalgamation in the popular com- 
 
 'l pendious sense, as used to describe arrangements between insurance 
 
 companies on occasions when one takes to the business of the other, 
 which vary very much in their character, and without vouching 
 for the propriety of the term to describe those arrangements. 
 
 The question argued before me is not whether there has not 
 been a contract of indemnity of some kind made in each case, for 
 that there clearly was, and is not disputed, but whether that con- 
 tract is a contract binding the Albert without any qualification as 
 to the assets out of which it is to be satisfied, and therefore a con- 
 tract binding the shareholders in the Albert without limitation as 
 to the amount of the capital uncalled on their shares. 
 
 I may state, also, that the only question now arising is as to the 
 indemnity in respect of the policies and annuities of the companies 
 absorbed by the Albert, and the costs connected with their liquida- 
 tions. It is not a question of indemnity in respect of any other 
 claims. 
 
 I may further say, with regard to the cases of all the companies, 
 it is to be borne in mind that on none of the amalgamations do the 
 terms of amalgamation, including the form of the contract to 
 indemnify, appear to have been submitted to or approved by any 
 general meeting of the Albert ; nor can any case be made against 
 the Albert of acquiescence in a contract of indemnity, in the sense 
 in which that contract of indemnity is pressed by the absorbed 
 companies ; that is to say, it cannot be proved that the Albert as 
 a company acquiesced in any unlimited engagement to indemnify 
 the absorbed companies. No report issued to the shareholders in 
 the Albert took notice of any such contract, or gave any informa- 
 tion from which a contract to indemnify without limit could be 
 inferred or imagined by the shareholders in the Albert. The 
 validity of an unlimited contract to indemnify must therefore 
 depend on the power of the directors of the Albert to enter into 
 such a contract. 
 
 I ought further to observe that this is a case in which we have 
 not to deal with the claim of what has been termed an outside 
 creditor, in respect of a contract made by the executive of an 
 insurance company in the ordinary course of carrying on their 
 business, an<l in respect of a subject necessary for the ordinary 
 
LOED CAIKNS'S DECISIONS. 25 
 
 carrying on of their business ; but what we have to deal with is the Indemnity 
 
 case of two companies coming together, professing to act on the '. 
 
 powers contained in their respective deeds, examining and reflect- 
 ing on the extent of those powers, and entering into a contract 
 avowedly intended to be warranted by those powers, and not a 
 contract at variance with or in excess of those powers. That these 
 absorbed companies and the Albert contracted on this footing is 
 manifest from the history of the amalgamations, from the manner 
 in which the amalgamations were brought about, from the terms 
 of the various instruments which were executed, from the mode in . 
 which resolutions were passed where the deeds of settlement re- 
 quired meetings, in order that the deeds might be strictly acted 
 on, and from the recitals in one or more of the instruments which 
 profess to refer to the powers possessed under the deeds of settle- 
 ment of the contracting parties. 
 
 It is further to be borne in mind that a power to enter into 
 a contract of amalgamation is most clearly no part of the general 
 powers which the law would imply in directors of an insurance 
 company ; it was no part of the powers committed to the directors 
 of the Albert by the deed of settlement of the Albert. The power 
 to insure lives, and the power to grant annuities on lives, com- 
 mitted to the directors of an insurance company, implying as it 
 does skill and care on their part in selecting lives, could not be 
 contended to authorize the taking over in mass by the executive of 
 one insurance company of all the insured lives and all the annuity 
 contracts of another company, selected and entered into by the 
 executive, not of the first company, but of the other company. 
 
 That being so, in order to maintain a contract of amalgamation, 
 or any rights of indemnity arising out of a contract of amalgama- 
 tion, the power to amalgamate must be shown, and that power 
 must be strictly pursued ; and general principles of law which 
 would show that in the ordinary details of business, in obtaining 
 necessary articles and entering into contracts for them, the directors 
 would have power to bind their shareholders, whether their share- 
 holders had or had not stipulated for particular limits of liability in 
 the deed, cannot be appealed to in order to support an amalga- 
 mation, or an undertaking to indemnify, as part of a contract of 
 amalgamation. 
 
26 ALBEET AEBITEATION. 
 
 Indemnity The general objects of the Albert, as stated in the deed, were the 
 
 _; . granting of life insurances and annuities. Clause 30 of the deed 
 
 provided that two special general meetings might amend the deed 
 and make new rules, but not so as — 
 
 to repeal or alter the principle established and settled by these presents that the 
 individual responsibility of each proprietor shall, as between himself or herself and 
 his and her co-proprietors, be confined to the amount of his or her share or shares 
 in the capital thereof for the time being. 
 
 I pause for the,purpose of observing on those words ' as between 
 himself or. herself and his or her co-proprietors.' It was argued 
 that although the deed did not provide for the case of amalgama- 
 tion, and did not give authority to enter into a contract of in- 
 demnity on amalgamation, yet still such a provision might be 
 found in some deed amending the constitution of the company ; 
 and that even if the contract were a contract to indemnify without 
 limit, an alteration in the deed authorizing such a contract would 
 not be at variance with the fundamental principle of the company, 
 because the fundamental principle is only stated to be that the 
 individual responsibility of each proprietor shall, as between him- 
 self or herself and his or her co-proprietors, be confined to the 
 amount of his or her share or shares in the capital ; and it was 
 said that the liability might be limited as between the share- 
 holders, but yet be unlimited as regards third parties. . In my 
 opinion, that distinction is not a sound one. Suppose, for example, 
 that unlimited liabilities to the extent of £100,000, ultra the 
 capital of the Albert, were attempted to be thrown on the Albert 
 through the medium of a covenant to indemnify on an amalgama- 
 tion. It is quite clear that, if this be a valid covenant, the 
 responsibility of each proprietor, as between himself and the other 
 proprietors, would not be confined to the amount of his share in 
 the capital, but he would have to provide for his aliquot and pro- 
 portional share of this £100,000, ultra his proportion of the 
 original capital. It seems to me, therefore, that the true con- 
 struction of the fundamental rule of the company is, that, as 
 regards changes in the deed, those changes must observe that 
 fundamental rule in this sense, that the changes must not autho- 
 rize the directors to enter into any contract which would bring on 
 any shareholder any greater liability than the unpaid amount of 
 
LOED CAIENS'S DECISIONS. 27 
 
 his capital. There may be contracts necessary to the carrying on Indemnity 
 
 of the business, the validity of which will not depend on special '. 
 
 authority to be delegated to the directors through the medium of 
 changes made in the deed. As to those contracts, there may be a 
 liability of the shareholders without any limit ; but with those 
 contracts we have not here to deal. 
 
 Then clause 65 provides that the directors shall have power 
 to grant assurances on such terms as they think proper ; clause 70 
 requires that they shall cause it to be stated in all policies and 
 grants of annuities, that the subscribed capital, and other the 
 stocks, funds, and securities and property of the company, at the 
 time of any claim in respect of a policy or annuity, shall alone 
 be liable to make good the claim ; and clause 79 provides that 
 the directors may effect re-insurances in any other office, on such 
 terms as they think fit. 
 
 In this state of things, we have first to deal with the agreement 
 between the Albert and the Bank of London. At the time this 
 agreement was entered into, there was no power in the Albert 
 directors to amalgamate. The deed, made between the Bank of 
 London and the Albert directors, is dated 7 October, 1858. The 
 first clause provides that the business of the Bank of London, ex- 
 cept the fire insurances, which were dealt with specially, and the 
 goodwill, shall on and from 6 September, 1858, be transferred 
 and assigned, or be deemed to have been transferred or assigned, 
 to the Albert, and shall thenceforward belong to, arfd be carried on 
 and conducted by, the Albert ; and the Bank of London and the 
 board of directors thereof shall on and from that day cease to 
 carry on such business, except for the benefit of, and in trust for, 
 the Albert. The second clause provides that all property of the 
 Bank of London shall become, or be deemed to have become, the 
 property of the Albert. And the third provides that — 
 
 All the debts, engagements, liabilities, and risks of the [Bank of London] associa- 
 tion existing or in force and all claims and demands against the 
 
 association or the trustees thereof, in respect of any act, transaction, or 
 
 omission of the association or of the board of directors thereof, whether now known 
 or communicated to the [Albert] company or not, and whether first made before the 
 said 6th day of September or not, and although the same may have arisen from 
 
 some mistake shall be paid, performed, borne, undertaken, and met 
 
 by the [Albert] company ; and the [Albert] company shall at all times save 
 
28 ALBERT ARBITRATION. 
 
 Indemnity harmless and keep indemnified the \Ba/rik of London] association and all trustees 
 
 Case., thereof, and the board of directors, and all other proprietors thereof, from and 
 
 against the same, and from and against all actions, suits, and proceedings in 
 
 respect thereof, and all costs and charges connected therewith, but always excepting 
 
 fraudulent default. 
 
 Now, I have said there was no authority for the directors to 
 enter into a contract of amalgamation of this kind, for the taking 
 over of insurances and annuities in mass. It appears to me, how- 
 ever, that this contract for amalgamation can be maintained, from 
 the circumstances which subsequently happened ; because it was 
 clearly brought home to the Albert shareholders by their reports 
 and by the accounts of their business that these policies and 
 annuities had been taken over. But the utmost deduction that 
 can be drawn from tha£ is, that the Albert are bound retrospec- 
 tively to approve of these contracts of insurance and grants of 
 annuities in the same way as if they had been issued severally 
 and singly in the first instance by themselves. That extent of 
 approval and ^acquiescence must be imputed to the Albert retro- 
 spectively, but nothing beyond that. The Albert shareholders do 
 not appear to have been made aware, and still less do they appear 
 to have approved, of any contract of indemnity connected with these 
 policies and annuities binding the shareholders in the Albert beyond 
 the amount of their shares. It would be in the strongest degree 
 improbable that the Albert shareholders, who have carefully stipu- 
 lated that, in every grant of annuity, and every policy of insurance 
 of their own, care should be taken on the face of the instrument 
 that no further liability is to be attached to them than as respects 
 their capital, should be willing to take over the very large business 
 of another company, consisting exactly of the same sort of engage- 
 ments by way of annuity, and by way of insurance, and to take 
 them over on a wholly different footing, making themselves liable 
 without any regard to the amount of their unpaid capital. I think, 
 therefore, that if the earlier part of this deed, the first, second, and 
 third clauses, were to imply an unlimited contract to indemnify, 
 the contract would be entirely ultra vires and invalid. I do 
 not think it is necessary to put that construction of unlimited 
 liability on it, and I think one may infer from clauses 5 and 6 
 that it was not even intended by those who entered into this 
 deed. On the face of the deed, the idea of those who entered 
 
LOEDCAIENS'S DECISIONS. 29 
 
 into.it seems to have been this, that to the extent of the liability Indemnity 
 
 on the policies and annuities undertaken by the Albert, and ', 
 
 coincident with that liability, they were to protect the Bank of 
 London, who were throwing that liability on them ; but the ex- 
 tent of the liability in respect of the policies and annuities taken 
 over was to be measured by the standard of the right of policy- 
 holders and annuitants whose contracts had been granted by 
 the Albert originally, and that would have been a right limited 
 to the amount of the Albert unpaid capital. Clause 6 authorizes 
 the Albert to issue fresh policies of their own in lieu of the original 
 policies of the Bank of London. 
 
 Dealing, therefore, with the claim of the Bank of London, I am 
 clearly of opinion that the Albert directors had no power to make 
 an unlimited contract to indemnify ; if the contract to indemnify 
 is to be so construed, which I question,! am also clearly of opinion 
 it is a contract ultra vires. 
 
 Before the next amalgamation, an additional power was given to 
 the Albert directors. I repeat that, according to my construction 
 of the Albert deed, it was not in the power of the Albert to alter 
 the fundamental principle of their original deed by giving to their 
 directors any further special or new authority to cast on the share- 
 holders in the Albert a liability greater than that which would arise 
 from the amount subscribed on their original shares. The power, 
 however, that was professed to be given by the general meeting 
 to the directors was — 
 
 to acquire, by purchase or otherwise, the business, goodwill, and assets, or any 
 part of the business, goodwill, or assets, of any other life assurance company or 
 
 - society or to amalgamate or unite the business of any such company 
 
 or society with the business of the said Albert upon such terms and 
 
 conditions as they shall think expedient ; and especially that the said directors 
 
 shall have power to enter into contracts, to be binding on the said Albert 
 
 to pay and satisfy claims on and engagements of such other company or society, 
 
 and to grant compensations and for the purposes aforesaid, or any of 
 
 them, to make any arrangements, and to enter into and rescind or modify any 
 contracts or agreements, in the name of the Albert. 
 
 That does not profess on the face of it in any way to alter the 
 fundamental rule of the Albert, It is not a resolution professing 
 to alter that part of the deed. Every word of the power here 
 given to the directors may be satisfied by authorizing them to 
 
30 ALBERT ARBITRATION. 
 
 Indemnity make amalgamations, maintaining intact the fundamental principle 
 Case " of the Albert deed ; and in my opinion, if these resolutions went 
 further, they were resolutions ultra vires of the general meeting. 
 
 That might relieve me from the necessity of entering into the 
 details of the agreements that«were made; because, as I have 
 said, there is no question of acquiescence here as to the contracts 
 to indemnify ; and if the agreements on the face of them go 
 beyond what I hold to be the power of the directors, the agree- 
 ments, not having been ratified in any way by general meetings, 
 can have no force in as far as they exceed the powers of the 
 directors. However, I may refer shortly to the agreements 
 themselves. 
 
 I take first the agreements in the case of the Medical. With 
 regard to them it certainly is satisfactory to find that there was 
 no attempt whatever to outstep what I, hold to be the limit of 
 the powers of the directors of the Albert. There were two instru- 
 ments — first, a preliminary agreement for amalgamation; then 
 that expanded into a complete deed. It is to the expanded agree- 
 ment that we must look if there is any variance between the 
 two. The preliminary agreement states the resolutions of the 
 Albert board of directors. Eesolution 5 is : 
 
 That policy-holders in the Medical [&c] shall be invited to substitute for 
 their subsisting policies other policies to be issued by this [the Albert] company, 
 which substituted polictes shall be deemed and considered to be of the dates of the 
 original policies, and shall be of the same amount, and subject to the like annual 
 and other periodical payments, as those policies for which they shall be sub- 
 stituted, and which substituted policies this company shall grant to all persons 
 willing to accept the same : 
 
 an engagement which clearly would not throw on the Albert 
 any liability beyond the capital and assets. Then resolution 9 is : 
 
 • This [the Albert] company shall discharge all claims upon the Medical [&c], 
 and indemnify the same society against all obligations of every kind into which 
 it may have entered, except immediate claims and' demands arising as aforesaid, 
 and which are to be paid by the Medical [&c.]. 
 
 Then the final deed, which is made between the Albert directors 
 of the first part, the former directors and other representatives of 
 the Medical of the second part, and certain trustees of the third 
 part, witnesses : 
 
 In further performance of the said contract, and in consideration of [&c] they, 
 
LOED CAIENS'S DECISIONS. 31 
 
 the said several persons parties hereto of the first part, do hereby as the directors Indemnity 
 of the said Albert [&c], and in order to bind the assets of the said company, but Case. 
 not further or otherwise, or for any other purpose, for themselves, their heirs 
 [&c], covenant with the said parties hereto of the second part, and also with the 
 parties hereto of the third part, and each and every [&c], that the Albert [&c], 
 shall and will duly pay and satisfy all claims on policies issued by the Medical 
 [&c], occurring by death after four o'clock on the 21st day of September, 1860 ; 
 and also pay, satisfy, and discharge all other claims and demands against, and all 
 other engagements, liabilities, and obligations of the Medical [&c], except such 
 claims, demands, and liabilities as are hereinafter otherwise provided for, and shall 
 and will from time to time, and at all times, well and sufficiently save, defend, and 
 keep harmless and indemnified the said parties hereto of the second part, and all 
 other the shareholders of the said dissolved company, and also all and every the 
 officers of the said dissolved company duly employed in the business thereof, their 
 estates and effects, from and against all actions, suits, costs, charges, damages, 
 expenses, and consequences whatsoever, whether in respect of any policy issued 
 by the said dissolved company, or of any other contract, liability, obligation, or 
 engagement of the said company, or of any act done on behalf of the said com- 
 pany, or of any matter or thing in anywise relating thereto, or connected there- 
 with respectively ; provided always that the covenant hereinbefore contained shall 
 not extend, or be construed to extend, to any act or acts done by the said officers, 
 or any of them, without the authority of the said dissolved company. 
 
 It is as clear as anything can be that that obligation is an obli- 
 gation entered into merely to bind the assets and the capital of 
 the Albert, and not for any further or other purpose. 
 
 In the Family Endowment agreement, the material clauses are 
 
 I to 6. Clause 5 is — 
 
 All premiums and other sums of money, after the said 1st day of January, 
 1861, paid or payable upon or in respect of policies of assurance, or upon or in 
 respect of endowments, grants, or engagements of the [Family Endowment] 
 society in force on that day, shall belong to and be the property of the [Albert] 
 company ; and all risks, engagements, and liabilities upon or in respect of all such 
 policies, endowments, grants, or engagements, and also all charges and expenses 
 connected therewith, shall be borne and paid and satisfied by and out of the funds 
 of the [Albert] company. 
 
 Now, this is an engagement entered into by the Albert, not for 
 the benefit of the Albert, but for the benefit of the Family Endow- 
 ment. Therefore the Family Endowment contract with the 
 Albert : You shall pay and satisfy all our engagements by and out 
 of the funds of your company. But if the meaning was : You shall 
 promise us that your company and the shareholders therein shall, 
 without reference to your funds or capital, pay and satisfy all these 
 engagements: this clause that I have read would be perfectly 
 
32 ALBERT ARBITRATION. 
 
 Ikdemnitt unmeaning. Therefore, I should hold, if necessary, that even on 
 
 ' the agreement itself, without the consideration antecedently of what 
 
 would be the power of the directors of the Albert, it would appear 
 there was no engagement entered into which was intended to do 
 more than bind the funds and assets of the Albert. 
 
 In the Kent Mutual there were two deeds. Clause 13 of the first 
 deed is thus : 
 
 That the subscribed capital and other the funds and property of the said Albert 
 Company, their successors and assigns, shall (subject to all prior claims) alone be 
 liable to answer claims under or by virtue of these presents or of anything herein 
 contained ; and that no director or proprietor of the said Albert Company, or other 
 person interested therein, shall be in anywise personally or individually liable to 
 answer or contribute towards answering any claim by virtue of these presents or 
 of anything herein contained, beyond the amount of the unpaid portion of his or 
 her share or shares in the subscribed capital of the said Albert Company. 
 
 Again, clause 16 is thus : 
 
 That immediately from and after the said dissolution shall have taken place, 
 and thenceforth and for ever, every member of the said Kent Society, his and her 
 estates and effects, shall, out of the funds of the property of the said Albert Com- 
 pany, their successors and assigns, be saved harmless and kept indemnified against 
 all actions and suits : » 
 
 and so on ; and in tbe second deed the covenants are to the same 
 effect. The limitation is clear. 
 
 In the last case, that of the Western, the agreement recites that 
 the boards of directors of the Western and Albert had resolved 
 that an amalgamation should take place, and that a provisional 
 agreement for amalgamation should be entered into for the pur- 
 pose of determining the terms on whicb the Western should transfer 
 their business and liabilities and assets to the Albert, if it is found 
 that they have power to carry into effect the amalgamation, or can 
 obtain such power without having recourse to Parliament. It is 
 satisfactory to find an acknowledgment on the face of the instru- 
 ment that they did not affect to do anything beyond what their 
 legitimate powers would warrant them in doing. Clause 2 provides 
 thus : 
 
 In consideration of the transfer of funds and property to be made to them as 
 next hereinafter is provided, the said [Albert] company shall pay and satisfy all 
 claims and demands upon the- said society arising from assurances, annuities, and 
 other contracts and agreements, when and as the times for the payment and 
 
LOED CAIENS'S DECISIONS. 33 
 
 satisfaction of the same successively arrive, and shall take upon itself all other the Indemnity 
 liabilities of every description of the said [ Western] society. Case. 
 
 And clause 4 says : 
 
 The said [Albert] company shall give to all policy-holders in the said [Western] 
 society whose policies are in existence at the period of its dissolution, the same 
 present and future facilities, privileges, and benefits, in every respect as if they 
 had been effected with the said company. . . . 
 
 And, further, as regards policies in the Western on the partici- 
 pating scale, clause 5 provides thus : 
 
 At the next and all future divisions of profit by the [Albert] company the policy- 
 holders in the said [Western] society on the participating scale shall participate 
 rateably in the same manner as if their policies had been originally taken out in 
 the said company. 
 
 It seems, therefore, throughout to be the idea that the policy- 
 holders would all go over, and they would then be, or were intended 
 to be, in the same position as if they held policies originally issued 
 by the Albert, in which case there would be limited liability. And 
 I am not prepared to say, having regard to the recital I have 
 stated, that the Albert directors intended to do more than in- 
 demnify on that footing and to that extent ; but if they did intend 
 to do more, then I am prepared to hold that that was beyond the 
 powers they possessed. 
 
 I arrive, therefore, at the conclusion, with regard to all these five 
 companies, that while they are entitled to an indemnity against 
 the Albert in respect of any policies and annuities, the claims on 
 which ought to be satisfied by the Albert, that indemnity is limited 
 to the amount of the assets of the Albert, and they must take their 
 place as claimants against those assets with other creditors. 
 
 K'. Then I have to deal with the question of costs. These com- 
 panies not only claim their costs of coming into the Albert liqui- 
 dation, and establishing their case on an indemnity, as far as they 
 are entitled to an indemnity, against the Albert assets, but they 
 claim further to have paid by the Albert the costs of the liquida- 
 tions of these absorbed companies. They say : You, the Albert, 
 ought to have satisfied these claims; it was because you did 
 not satisfy these claims that the claims have fallen back upon 
 us ; it is that that has driven us into liquidation, and you have, 
 therefore, occasioned the costs of our liquidations. Now, I can- 
 
 D 
 
34 ALBERT ARBITRATION. 
 
 Indemnity not accept that argument. The Albert were bound to have paid 
 
 the claims ; there is no doubt about that. But when the Albert 
 
 did not pay the claims, there being no dispute about the claims, 
 and the claims were presented by those who had a right to present 
 them to one or other of the absorbed companies, those companies 
 had the power of paying and satisfying, if they had been pre- 
 pared to pay and satisfy, the claims. What was the precise ground 
 that, technically, was the foundation of the winding-up order in 
 each case I do not at this moment know, and it is not necessary 
 for my purpose that I should inquire. It either was because they 
 ceased to carry on business, or because there was a claim which 
 they had not satisfied, or for one of the other reasons mentioned in 
 the Act. But, whatever the statutory ground was which made 
 the Court wind up one or another of these companies, the real 
 reason for the application for a winding-up was the reason of 
 their not paying a debt presented to them for payment. If from 
 any circumstances they were unable to make the payment, or 
 did not choose, that is what has led to the winding-up in each 
 case. That winding-up will settle a great many other things 
 with which the Albert may have nothing to do. It will settle 
 the rights of the contributories among themselves if there should 
 be any assets to return ; it will settle the principle on which 
 they should be returned; it will finally dissolve all these com- 
 panies; all that work will be done in the winding-up of the 
 particular companies, and with all that work the Albert has 
 nothing to do. It is the same case in substance as that which 
 frequently occurs when a person, liable only in a secondary degree, 
 is called on to pay a debt ; he ought to pay it if there is no defence 
 to it ; and if he makes a difficulty, and renders it necessary to incur 
 costs in order to obtain payment of the debt, such of the costs as 
 fall on him he cannot charge against the person primarily liable, 
 Therefore these absorbed companies cannot charge the costs of 
 their liquidations against the Albert ; but they are entitled to their 
 costs, as any other creditors would be, of establishing their claim 
 against the Albert. 
 
 Mr. CracJmall: — The costs are paid, in the first instance, out of 
 the assets of the company. 
 
LOED CAIENS'S DECISIONS. 35 
 
 Lord Cairns : — Whatever is the rule will be abided by. I do Indemnity 
 
 not make any new rule. 
 
 Mr. Craeknall: — The question may arise by-and-by which is 
 not touched on to-day, whether there will be any marshalling. 
 
 Lord Cairns : — That has been mentioned once or twice. I 
 look on it as concluded. As I understand, a rule has been adopted, 
 and I see no ground for departing from it. There is no marshalling 
 in this sense ; the costs of the winding-up, whatever that includes, 
 are paid as a wholly separate matter. The assets of the company 
 are taken as they can be found, or as they can be got in, including 
 the unpaid capital. All creditors of all kinds get a dividend out 
 of those assets. Those assets must not be exhausted in paying 
 any part of the costs of the winding-up if they are deficient. The 
 shareholders must provide the costs of the winding-up ultra those 
 assets. I do not mean to encourage the raising of the question, 
 nor am I prepared to say that it cannot be raised, but I understand 
 that to be the present rule of the Court of Chancery. 
 
 Case. 
 
 Solicitors for Committee of Shareholders in Albert: Messrs, 
 TiUeard & Co. 
 Solicitors for Albert : Messrs. Lewis, Mimns, & Longden. 
 Solicitors for Bank of London : Messrs. Paine & Layton. 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 Solicitors for Family Endowment : Messrs. Markby dt Tarry. 
 Solicitor for Kent Mutual : Mr. W. E. Herbert. 
 Solicitor for Western : Mr. Manning. 
 
 E 
 
36 ' ALBERT ARBITRATION. 
 
 1871 DEIVER'S CASE. 
 
 J une 5. List of Contributories. 
 
 It being doubtful, on the construction of an amalgamation agreement, 
 whether or not the taking of shares in the capital of the transferee company 
 was intended to be left optional with the shareholders of the transferor 
 company : 
 
 Held, that, if on the true construction it was not left optional, the obliga- 
 tion to fate shares could not be enforced against a person who had not come 
 in and actively assented. 
 
 Where a person registered as a shareholder in the transferor company was 
 dead at the time of the amalgamation, various acts done by his executors 
 held, in the circumstances, insufficient to bind his assets with respect to the 
 taking of shares in the transferee company. 
 
 1 HIS was an application (which had been pending in the Court 
 of Chancery on an adjourned summons) on behalf of the Western 
 to put on the list of contributories of the Western four persons as 
 executors of Samuel Driver in respect of 216 shares. 
 
 Samuel Driver was a shareholder in the Metropolitan Counties, 
 holding 100 shares. He died in May, 1857. The Metropolitan 
 Counties amalgamated with the Western in August, 1862. The 
 name of Samuel Driver was then entered on the register of share- 
 holders of the Western as a holder of 216 shares. Afterwards his 
 executors, or some of them, had various dealings with the Western. 
 
 Mr. Eddis, Q.C., (Mr. CrachnaU with him) was for the Western. 
 
 Mr. A. G. Marten was for three of the executors, who had proved ; 
 Mr. Methold was for the fourth executor. 
 
 Mr. Eddis mentioned 
 
 Bagrshaw's Case, L. E. 4 Eq. 341 ; 
 and referred to clauses 48, 58, 151 to 160 of the Metropolitan 
 Counties deed. 
 
 Mr. Marten and Mr. Methold were not called on. 
 
 Lord Cairns : — I think these executors cannot be fixed on the 
 list of the Western. 
 
 Their testator was a shareholder in the Metropolitan Counties; 
 
LOED CAIENS'S DECISIONS. 37 
 
 he was dead at the time of the agreement for amalgamation. In Dmveb's 
 
 order to constitute them, in their representative character, share- ' 
 
 holders in the Western, it would have to he shewn, either that the 
 amalgamation agreement was such that it bound the assets of the 
 testator, in that part of it which proposed to make the share- 
 holders in the Metropolitan Counties shareholders in the Western, 
 or that, if it did not .proprio vigore bind the shareholders in the 
 Metropolitan Counties, yet, as against the assets of the testator, 
 it became binding by reason of. something done by his executors 
 within the scope of their power as executors. 
 
 First, was the agreement binding on the assets of the testator 
 as an agreement forcing shares in the Western on his assets ? In 
 my opinion it was not. I do not say a word imputing invalidity to 
 the agreement, or suggesting that it was beyond the powers of the 
 two companies, as an agreement for amalgamation. But the power 
 mainly rested on as authorizing amalgamation is the power given 
 to certain extraordinary general meetings by clause 58 of the 
 Metropolitan Counties deed. That clause contains a very ample 
 power of dealing with the rules and regulations and. constitution 
 of the society, but always subject to the proviso, which I read 
 as laying down the cardinal rule of the constitution of the society, 
 and the cardinal point to be attended to in any acting on the 
 powers given by this clause, that nothing must be done to alter 
 the position of a shareholder in the society, as a person who is 
 bound only to the extent of his interest in the capital of the 
 society and his liability to pay up that capital. Now, if in an 
 agreement for amalgamation under this clause, there should be 
 found to be contained a provision making a shareholder in the 
 society a proprietor in another company, and imposing on him 
 liabilities with reference to the capital of that other company, it 
 appears to me that that term in the agreement would be invalid 
 against any shareholder in the society who either was in his grave 
 and could not assent, or, being alive, did not actively assent, to the 
 amalgamation. 
 
 I think it may be doubtful, on reading the terms of amalga- 
 mation, whether there was an actual and absolute obligation 
 professed to be imposed on the shareholders in the Metropolitan 
 Counties to become shareholders in the Western ; I do not desire 
 
 E 2 
 
38 ALBERT ARBITRATION. 
 
 Driver's to decide that point. I think the document may be fairly read as 
 AM | saying that the Western were to become the purchasers of the 
 business and assets of the Metropolitan Counties, and in place of 
 giving, in return, a certain number of thousands of pounds in 
 money, they were to give, in return, as the price of the purchase, 
 17,000 shares in the Western, with £1 paid up on each share. 
 That was to be the form, and the price. If it stopped there it 
 would be optional with any particular shareholder to take his 
 share of the price or to leave it. . It might be that the terms of 
 amalgamation were such that in other respects the agreement 
 would stand, leaving only to each shareholder in the society an 
 option to take or refuse his aliquot proportion of the price of the 
 amalgamation. But if that is not the construction, and if the 
 . proper construction is that it was obligatory on each shareholder to 
 take the shares, then I am of opinion that that is a stipulation which 
 could not be enforced against a shareholder in the society unless 
 he came in, and actively assented to take them. Therefore the 
 result will be, that, as against the assets of Mr. Driver, who was 
 then dead, the agreement will not proprio vigore be binding, to 
 make him liable on the footing of his being a shareholder in the 
 Western. 
 
 Then what has been done by his executors ? I have looked at 
 the will, and it appears to me that the executors had not power, 
 in their representative capacity, to bind his assets by taking shares 
 in the Western. If they had had that power, it would have been 
 a question whether what they had done had been a sufficient 
 acceptance by them of the shares in the Western. I do not think 
 it necessary to say what I should have thought on that question, 
 because I do not find that they had the power. One has executed 
 the deed of acceptance of shares in the Western and of adhe- 
 sion, which was stipulated for in the amalgamation agreement. 
 Even that would not bind the others, or bind the assets ; and 
 although there is that act, equivocal until explained, of one exe- 
 cutor, appearing to act for all, accepting and taking dividends on 
 receipts specifying the dividends as being in respect of Western 
 shares, still even if that had been done advisedly it would not 
 have bound the assets. It is explained that it was done under a 
 mistake. 
 
LOED CAIRNS'S DECISIONS. 39 
 
 The result is, that I think the executors are not to be put on Driver's 
 the list. * 
 
 The money received by them for dividends in the Western must 
 be restored. 
 
 The executors have acted in such a way as not to entitle them 
 to costs. 
 
 Solicitor for Western : Mr. Manning. 
 
 Solicitors for the Executors : Messrs. Thomas & Hollams, and 
 Mr. 8. N. Driver. 
 
40 ALBEET ARBITRATION. 
 
 1871 NICHOLS'S CASE. 
 
 June 5. List of Gontributories. 
 
 Where a shareholder (deceased) in the Western had, in contemplation of 
 the amalgamation with the Albert, sold his shares to the Albert, received the 
 consideration money, and delivered to the Albert his share certificates, with 
 a deed of transfer, but no alteration had been made in the Western share 
 register : 
 
 Held, that, notwithstanding what had been done on the amalgamation, 
 his executors must be put on the list of contributories of the Western. 
 
 -LHIS was an application on behalf of the Western to put the 
 executors of Dr. Nichols on the list of contributories of the Western. 
 At the time of the amalgamation of the Western and Albert, in 
 1865, Dr. Nichols was a shareholder in the Western, holding 1000 
 shares. It was arranged, in contemplation of the amalgamation, 
 that the Albert should purchase his shares in the Western by paying 
 to him £525 three months after the amalgamation, and allowing 
 him in addition 4s. 6d. a share, to be paid by three instalments at 
 the same dates as the same sum was agreed to be paid to the other 
 Western shareholders, with interest at 5 per cent, till payment, it 
 being understood that he was to do nothing to impede the amalga- 
 mation. His share certificates were delivered to the Albert, with a 
 deed of transfer, and the consideration money was paid to him. 
 His name, however, remained on the Western share register. He 
 died in 1870. 
 
 Mr. Eddis, Q.C., (Mr. Cracknall with him) was for the Western. 
 Mr. Pawle (solicitor) was for the executors. 
 Mr. Eddis and Mr. Pawle were heard. 
 A reply was not called for. 
 
 Loed Cairns : — This is a very hard case ; but I am unable to 
 relieve the executors from their liability. There was shameful 
 neglect on the part of the Albert executive. They ought to have 
 
LOED OAIENS'S DECISIONS. 41 
 
 removed Dr. Nichols's name from the Western register ; but as Niohom's 
 
 that has not been done, his estate remains bound. The question ' 
 
 of any counter-claim against the Albert as purchasers from him 
 by way of indemnity will be open. I shall not express any opinion 
 on that question until the claim is made ; but that will be open 
 to the executors. It is a clear case for putting them on the list. 
 
 Solicitor for Western : Mr. Manning. 
 
 Solicitors for the Executors : Messrs. Pawle & Fearon. 
 
42 ALBEET ABBITRATION. 
 
 1871 WYATT'S CASE. 
 
 June 6* Annuity — Application of Trust Fund. 
 
 On an amalgamation a fund was vested in trustees on trust in the first 
 place to pay and satisfy all immediate claims and demands to which the 
 transferor company was liahle at a specified past moment of time, and which 
 were at the date of the declaration of trust unpaid and unsatisfied. A person 
 who was at the time of the amalgamation entitled to receive an annuity from 
 the transferor company claimed to be paid the capital value of the annuity 
 as an immediate claim or demand within this trust : 
 
 Held, that the claim was not maintainable. 
 
 J_ HIS was a claim (which had been pending in the Court of 
 Chancery on an adjourned summons) by an annuitant in the 
 Medical to preferential payment out of the Medical English Trust 
 Fund of the capital value of the annuity. 
 
 In 1850 the Medical issued an annuity contract securing to 
 Elizabeth Wyatt an annuity of £90 for her life in the event of her 
 surviving Thomas Wyatt, in consideration of an annual payment 
 during the joint lives. In 1857 the annuity began to be pay- 
 able. In 1860 the Medical amalgamated with the Albert. As 
 part of the amalgamation arrangements the fund known as the 
 Medical English Trust Fund was set apart, and the trustees 
 thereof were by deed of 14 March, 1861, directed to hold the same 
 on the following trusts : 
 
 Upon trust in the first place thereout to pay and satisfy all and every the 
 immediate claims and demands (if any) to which the funds and property of 
 the Medical were , liable before the hour of 4 o'clock p.m., on the 21st day of 
 September, 1860, and which may at the date of these presents remain unpaid and 
 unsatisfied. And secondly, thereout to pay and satisfy the costs of these presents, 
 and all such costs, charges, and expenses as the said trustees or trustee may from 
 time to time pay or incur in the execution of the trusts of these presents or other- 
 wise. And, thirdly, thereout to raise and pay all and every such sums or sum of 
 money as may be required to pay and satisfy every (if any) claim or demand on 
 account of any policy issued by the Medical, or any other liability or obligation of 
 such last-mentioned company which the Albert shall not pay or satisfy, and all 
 costs, charges, or expenses . . 
 
 Mr. Bomer was for the claimant. 
 
LORD CAIRNS'S DECISIONS. 43 
 
 Mr. G. 0. Morgan, Q. C, (Mr. Lemon with him) was for the Wtatt's 
 Medical. ^!!' 
 
 Mr. Bomer contended that the capital value of the annuity was 
 an immediate claim or demand under the first head of the trust. 
 He mentioned 
 
 Hunt's Case, 1 H. & M. 79. 
 
 Mr. Morgan was not called on. 
 
 Lord Caiens : — It is clear that this was not an immediate claim 
 or demand. An immediate claim or demand within the meaning 
 of the deed is a claim or demand which had so matured that 
 immediate payment could have been demanded and an immediate 
 action at law brought, or other immediate steps taken, to obtain 
 payment of a sum of money. Nothing could here have been 
 demanded except one instalment of the annuity, if any had been 
 then due. But I understand that all instalments were paid until 
 a period which would be subsequent to the amalgamation. There- 
 fore there was no immediate claim or demand belonging to this 
 claimant at the time contemplated by the deed of trust, namely, 
 four o'clock in the afternoon of 21 September, 1860. Therefore 
 there is not any claim under the first head of the trust. 
 
 Solicitor for Claimant : Mr. Judge. 
 
 Solicitors for Medical: Messrs. Walker, Kendall, & Walker. 
 
44 ALBEET AEBITKATION. 
 
 iwi BOURNE'S CASE. 
 
 Jttne6 - Loan on Policy with Charge on Land— SeUoff-— Indemnity for Depreciation 
 
 of Policy. 
 
 A borrower from an assurance company on the security of a mortgage of 
 a policy of the company and of a charge on land held, on the winding-up of 
 the company, liable to be sued by assignees of the debt and securities for 
 the amount of the loan, without his having a right of set-off in respect of 
 the value of the policy, or a right to indemnity in respect of subsequent 
 depreciation of the policy, the assignees being prepared to restore to him the 
 securities on payment of the mortgage debt. 
 
 1 HIS was an application (which had been pending in the Court 
 of Chancery on an adjourned summons) relative to the getting 
 in of outstanding securities forming part of the Medical English 
 Trust Fund. 
 
 In November, 1852, Mr. Bourne effected a policy on his life 
 with the Medical for £2100, and borrowed from them £1900 on 
 the security of a mortgage of the policy and of a charge on lands. 
 On the amalgamation of the Medical with the Albert the mortgage 
 debt and security were assigned to trustees as part of the Medical 
 English Trust Fund. 
 
 On payment of the mortgage debt being demanded by the 
 trustees of the fund, Mr. Botvrne alleged a right to set off the 
 amount of his claim on the policy, or to be indemnified in 
 respect of the alteration of circumstances connected with the 
 policy. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. Cecil RusseU was for Mr. Bourne. 
 
 Mr. G. 0. Morgan: — It is admitted there is no claim against 
 the Medical Trust Fund ; a debt alleged to be due to the mort- 
 gagor by the Medical cannot be set off against a debt due by him 
 to the trustees of the fund : 
 
 Parity's Case, W. N. 1871, 13, 64, 66. 
 
 Moreover, the claim is for an unliquidated sum-, which cannot be 
 
LORD CAIRNS'S DECISIONS. 45 
 
 set off against a liquidated sum. Further, there is no set-off in Bouene's 
 winding-up cases. There is none given by statute, as in bankruptcy, ° ASE " 
 and there can be none otherwise. The object is equal division. If 
 a set-off is allowed, Mr. Bourne will be paid in full, while other 
 policy-holders may only get a small dividend, and this merely 
 because he happens to have borrowed money from the company ; 
 which is absurd. 
 
 Mr. Russell: — The assignment to the trustees of the Medical 
 Trust Fund was made without Mr. Bourne's assent or knowledge. 
 The assignee cannot be in a better position than the assignor : 
 Waller v. Jones, L. E. 1 P. C. 50. 
 
 Lord Cairns : — That is merely an instance of the ordinary 
 rule that the assignee of a chose in action takes subject to all 
 equities which exist ; but in this case there was no equity of set-off 
 in existence at the time of the assignment. The right of set-off, 
 if it existed at all (I do not say that it would exist in this case), 
 would only arise when you came to prove and to put some- right 
 in suit. It is a right given by statute, or by equity, as a defence 
 to an action, or rather to prevent circuity of action. 
 
 Mr. Russell : — I do not put it as a dry question of set-off, but I 
 say the mortgagees are coming actively to enforce the security ; 
 part of that which they are bound to re-assign is the policy ; 
 the policy and the loan are all one transaction. By their own 
 act they have made that policy other than it was when it was 
 assigned ; it is the same piece of paper, but it only gives a right 
 to claim against other persons. The right under the policy is the 
 right to receive out of the funds of the Medieal the amount 
 due on the policy at Mr. Bourne's death. By their own act the 
 Medieal have debarred themselves from receiving further pre- 
 miums. They may not have destroyed, but they have lessened, 
 the fund from which his executors are to receive the amount 
 of the policy. Having so entirely altered the security, they 
 cannot now come here and enforce it without offering something 
 by way of indemnity. The indemnity can best be met by way 
 of set-off. 
 
 Lord Cairns: — Your contention being, in effect, that the 
 
46 ALBERT ARBITRATION. 
 
 Bocbne's mortgage debt and the charge on the land cannot be dealt witl 
 
 ° ASE ' as absolute items of property, but are subject in equity to a 
 
 liability to secure to Mr. Bourne the fruits of the policy which he 
 
 mortgaged along with the land ; is not that making his mortgage 
 
 a security to him for the payment of his policy ? 
 
 Mr. Russell : — Suppose the Medical had in some way aliened a 
 portion of Mr. Bourne's land, they could not have enforced the 
 security ; for instance, they could not have brought an action at 
 law on the covenant : 
 
 Palmer v. Hendrie, 27 Beav. 349. 
 
 That is a parallel case. If both demands had been legal, 
 there would have been a set-off; where one is the subject of 
 equitable jurisdiction the legal demand can be set off against the 
 equitable : 
 
 Throckmorton v, Crowley, L. E. 3 Bq. 196. 
 
 Lord Cairns: — Mr. Russell has argued this case with great 
 ability, and has said, I think, everything that could be said for 
 Mr. Bourne; but I do not think the case admits of any doubt. 
 
 The rule of law is clear. A mortgagee, on payment of his debt, 
 is bound to restore all the securities for the debt ; and if he has so 
 dealt with the securities that they are destroyed, or non-existing, 
 that may be a ground for preventing him from enforcing any of 
 his legal remedies against the mortgagor. An assignee from the 
 mortgagee will be in the same position. 
 
 But in this case the mortgagee originally was the Medieal. The 
 Medical assigned the mortgage securities to the trustees of the 
 fund created on the amalgamation of the Medical and Albert. It 
 is those trustees who now propose to sue the mortgagor, Mr. Bourne, 
 for the recovery of the debt. The securities in their hands are a 
 charge on some property of Mr. Bourne, and the policy of insur- 
 ance effected by him with the Medical. The trustees of the fund, 
 who hold these securities, are perfectly prepared to restore them 
 to Mr. Bourne if he pays his debt. There is no difficulty in their 
 doing so. The securities, as far as they affect his property, will be 
 re-assigned or re-conveyed to him. The policy will also be re- 
 assigned ; and if it is a policy of the Medical, it will continue to be 
 
LOED CAIRNS'S DECISIONS. 47 
 
 a policy of the Medical. It may be the case, that from events Bourne's 
 
 which have happened in recent years, the policy is not so valuable ' 
 
 as it was at one time supposed to be, but that is a circumstance 
 which is inherent in the nature of a contract of this kind, and with 
 which the trustees of this fund certainly have nothing whatever 
 to do. The assignees were not concerned with the pecuniary cir- 
 cumstances of the Medical, and I certainly am not prepared to 
 hold that the Medical trustees, in assigning the policy, along with 
 the other securities, were under a liability to guarantee the solvency 
 of the Medical, and that the validity of the assignment depends 
 on that solvency. I therefore think, whether it is called a set-off 
 or it is called an indemnity, there is no such right as is contended 
 for by Mr. Bourne. 
 
 That makes it unnecessary for me to express an opinion in this 
 case on the general question of set-off in winding-up. 
 
 Solicitor for Mr. Bourne: Mr. E. M. Eore. 
 
 Solicitors for Medical: Messrs. Walker, Kendall, & Walker. 
 
48 ALBERT ARBITRATION. 
 
 1871 PAKLBY'S CASE. 
 
 Jme 6 - Loan on Policy— Legal Debt— Set-off. 
 
 A policy-holder having obtained a loan from his assuring company on a 
 deposit of his policy, with a memorandum, Held — 
 
 (1) On the construction of the memorandum, that he was liable to be sued 
 at law for the amount of the loan during the currency of the policy : 
 
 (2) That he had no right in the liquidation of the company to set off 
 the value of the policy against the amount of the loan. 
 
 J-HIS was a proceeding (which had been pending in the Court of 
 Chancery on an adjourned summons, and in an action at law) 
 against General Parity for recovery of a loan on a policy without 
 set-off of the value of the policy. 
 
 General Parity was the holder of a policy in the Albert, dated in 
 1839, on his own life, for £600. In 1858 he borrowed £250 from 
 the Albert, and by way of security deposited with them the policy, 
 with the following memorandum : 
 
 Whereas by a policy of assurance under the hands of three directors of the 
 Albert, dated the 2nd day of April, 1839, and numbered 136, the sum of £1000 
 (now reduced to £600) is assured to be paid to me the undersigned Brook Bridges 
 Parlby, my executors, administrators, or assigns, after my decease, together 
 with such sums as may be added thereto by way of bonus or addition : 
 
 And whereas I have received the sum of £250 by way- of loan from the Albert, 
 which is to bear interest at the rate of £5 per centum per annum from the date 
 hereof, and have deposited the said policy with the said company as a security 
 for such sum and the interest thereof : 
 
 Now I do hereby, in consideration of such loan, subject and charge the said 
 policy with, and do declare that the same is deposited with the said Albert 
 as a security for, the repayment to the said company of the said sum of £250, and 
 interest thereon at the rate of £5 per centum per annum from the date hereof : 
 
 And do hereby agree that such sum, together with all interest which may 
 accrue due in respect thereof, unless previously discharged by me, shall and may 
 be deducted and retained by the said company out of the amount assured by the 
 said policy and bonuses thereon : 
 
 And I do hereby further agree to pay interest upon the said sum of £250 from 
 the date hereof at the rate of £5 per centum per annum, until the same sum 
 shall be discharged by me or deducted as aforesaid, such interest being hereby 
 intended to be made payable together with and in addition to and at the same 
 time as the premiums payable upon the said policy : 
 
 It being hereby expressly agreed by me that the said company shall not be 
 obliged to receive the premiums for the time being payable in respect of the said 
 policy unless the interest for the time being due upon the said sum of £250 shall 
 be also paid therewith, and that the said policy shall be in all respects construed 
 
LOED CAIENS'S DECISIONS. 49 
 
 as if such interest had been originally reserved or made payable by the said policy Paklby's 
 as part of and in addition to the premium thereby reserved, and shall become ab- Case. 
 solutely void if such interest be not paid on the day whereon the premium is 
 directed by the said policy to be paid, or if I shall assign or otherwise dispose of 
 the said policy or any right or interest under the same without previously dis- 
 charging the said sum of £250 and all interest due thereon. 
 Dated this 10th day of July, 1858. 
 
 B. B. Parlby. 
 Witness, 
 
 Henry W. Smith, 11, Waterloo Place. 
 
 Mr. Bomjpas was for the Albert. 
 
 Mr. Day (Mr. Bevir with him) was for General Parlby. 
 
 Mr. Bompas stated the case, but was stopped by the Arbitrator. 
 
 Mr. Day : — (1.) The sum advanced was not recoverable at law. 
 It is not a loan repayable on demand. There is no promise to pay 
 the principal, though there is an undertaking to pay interest. The 
 loan is not payable at any time prior to the time when the policy 
 becomes payable. Although it is a loan in form it is only payable 
 out of a particular fund. (2.) There is a right of set-off here. It 
 is like the case of the bankruptcy of an individual ; as soon as 
 proof is admissible the creditor is entitled to the benefit of set-off. 
 
 Lord Cairns : — The danger of arguing this case by reference to 
 what would be the course in bankruptcy is, that there are enact- 
 ments of a very stringent and peculiar kind as to set-off in bank- 
 ruptcy, which we have not here. 
 
 Mr. Day : — That point is dealt with in 
 
 Anderson's Case, L. E. 3 Eq. 337 ; 
 where it was held that, although there is a winding-up, the parties 
 are left to their ordinary rights, except where there is an express 
 enactment to the contrary. At the moment of the making of the 
 winding-up order there was, in effect, a refusal by the company to 
 carry their contract into effect, and that gave General Parlby a 
 right of action, at least on his tendering his premium. 
 
 Lord Cairns : — The difficulty you have in maintaining that the 
 company have refused to carry the contract into effect is, that the 
 
59 ALBERT ARBITRATION. 
 
 Pablbt's company have done nothing and are quiescent, but the Legislature 
 ' intervene and provide that possession shall be taken of 'the com- 
 pany and their affairs at a time when their contracts are in opera- 
 tion ; that the company shall do no further acts ; that an estimate 
 shall be put on all their unbroken contracts ; and that no person 
 who has not a right of set-off at that moment shall bring an action. 
 If it were not for section 158 providing for the valuation of a claim 
 of this kind, the whole of the assets would be taken by the liqui- 
 dators, and divided among persons who had matured claims. 
 
 Mr. Bay : — Independently of the express words of the statute, 
 General Parlby must have a right to have his claim assessed. It 
 is true that he could not bring an action after the winding-up, but 
 the right of action is created, that is, the legal right, the legal cause 
 of complaint, as distinguished from the mere power of issuing a writ. 
 The right of action accrues, and the grievance is committed, the 
 moment after the company are placed in such a position that they 
 are obliged to refuse to carry their contracts into effect : 
 Hoehster v. Be la Tow, 2B.&B. 678. 
 
 (3.) Section 11 of the Arbitration Act enables the Arbitrator to 
 decide not only in accordance with the legal or equitable rights of 
 the parties, but in such manner as he in his discretion thinks fit, 
 equitable, and expedient. Even if there is no legal defence to an 
 action, still, in such circumstances as the present, it is inequitable 
 and inexpedient that a person who has a claim to the extent of 
 £600 against the company should be compelled to pay to them a 
 debt of £250 due from him. 
 
 Loed Caikns : — I must say that I am unable to introduce any 
 better principle, or any more equitable principle, in dealing with 
 this case than that which the rules of law and equity already 
 supply me with. Therefore I do not propose to introduce any 
 abstract ideas of my own in addition to those rules. I think those 
 rules will be found to deal with this case in an effectual and proper 
 way. 
 
 With regard to the first point, as to there being a debt due at 
 law, I have no doubt at all that there is a debt due. The contract 
 
LOED CAIRNS'S DECISIONS. 51 
 
 is clearly a contract of loan. The result of that contract of loan, Parlb?'s 
 
 unless- limited, and unless the operation of it were suspended in " 
 
 some way, would be, that there would be a right on the part of the 
 lender to sue for the repayment of the money. I need not enter 
 into the question about the first year, because that is some time 
 past; but certainly, at the present moment, there is a right to 
 recover this sum, unless there are words in this document suspend- 
 ing the right, and making the sum payable, not at the present 
 time, but at some future time not yet arrived. I cannot find any 
 words for that purpose. I find a recognition, in the most absolute 
 terms, that the money has been advanced by way of loan, and 1 
 find that all the subsequent terms are terms in favour of the com- 
 pany, and not in favour of the borrower of the money. For ex- 
 ample, the borrower of the money is made to agree that the 
 principal sum, 
 
 together with all interest which may accrue in respect thereof, unless previously 
 discharged by me, shall and may he deducted and retained by the company out 
 of the amount assured by the said policy and bonuses thereon. 
 
 It appears to me that this is a right given to the company for 
 their benefit, to repay themselves out of the amount secured by 
 the policy, if they found that the most convenient way of repaying 
 themselves. Then the next clause is an agreement to pay inte- 
 rest on the sum at a particular rate and at particular dates, ' until 
 the same sum shall be discharged by me or deducted as aforesaid,' 
 contemplating the two modes of termination of the loan. That, 
 again, is a stipulation which is for the benefit of .the office ; for 
 the law would not imply a contract to pay interest, much less a 
 contract to pay interest at a particular rate, or on particular days. 
 Then there is a further stipulation, that the interest shall be paid 
 along with the premiums, and the policy treated as becoming void 
 if the interest is not so paid. That again is not a stipulation 
 suspending the operation of the loan as regards the borrower, but 
 is a stipulation in favour of the lender, giving the lender higher 
 rights. I therefore think there could be no defence at law to an 
 action for repayment of the money as an ordinary loan. 
 
 Then is there any right of set-off? I do not think the case 
 stands in the way in which it would have stood if the company had 
 
 .P 
 
52 ALBERT ARBITRATION. 
 
 Tarlby's continued to carry on business, and the life had dropped, and 
 Case ' thereupon there had accrued the right to receive from the company 
 the sum of money assured, and then in that state of things the 
 company, or any one representing the company, had attempted to 
 sue the borrower for the amount of the loan. I suppose there is 
 no doubt that in that case there would have been a right of set-off. 
 But the position of things here is very different. The company is 
 wound up at a period of time when there is no breach of the policy, 
 and no right of action. The company is wound up on those con- 
 siderations mentioned in the Act, which make it expedient that 
 the business of the company should, under certain circumstances, 
 be stopped, its assets be taken possession of by the Court, its 
 liabilities be ascertained, and its assets be divided for the purpose 
 of meeting those liabilities. There would be a good deal of 
 difficulty, if there had not been a special enactment made on the 
 subject, in saying how, in that state of things, a policy current at 
 the time of the winding-up could be looked on as a claim or a 
 liability at all. There would be no broken contract ; there would 
 be no right of action ; there would be nothing in the shape of an 
 absolute debt. The Act, however, has not left the thing in doubt, 
 because it has provided for a case of the kind expressly by section 
 158. That provides, in substance, that claims against a company, 
 present or future (which I understand to be claims which either 
 have ripened into debt at the moment of winding up, or have not 
 ripened into debt by reason of there being no contract broken at 
 that instant), shall be proved in this way, — that a just estimate 
 shall be made,- as far as possible, of the value of each claim if for 
 any reason it does not of itself bear a certain clear value. Then 
 the General Order points out that, as far as possible, that estimate 
 shall be made as at the date of the order to wind up the company. 
 What General Parlby, therefore, as against the company, is entitled 
 to here, is, not a liquidated sum due from the company as a matter 
 of right at the time of the winding-up, — not damages due from the 
 company, unliquidated in the first instance, but to be liquidated by 
 an action, — but to apply to the Court to put a just estimate, as at 
 the date of the winding-up order, as far as possible, on that claim 
 which has not matured, but which, at some future time, he may 
 have against the company. How that value is to be put is not a 
 
LORD CAIRNS'S DECISIONS. 53 
 
 matter which I have now to dispose of, but that is what General Parley's 
 Parlby is entitled to. AFB ' 
 
 Then can that sum, which is to be produced in that way, be set 
 off against an absolute, clear, liquidated debt, due from General 
 Parlby to the company ? I am not at all prepared to say that it 
 might not have been a very fit thing for the Legislature to have 
 considered whether they would not make a general enactment 
 applying to all eases, carrying section 158 further, and declaring 
 that once a proof was made on an estimate arrived at, as pointed 
 out by that section, the proof so made might be set off against any 
 sum due from the company to the person who had made that 
 proof. But the Legislature have not thought fit to do so, and I do 
 not think it would be for me, under the general powers given to 
 me by the Arbitration Act, to introduce — not on any ground 
 peculiar to the case between General Parlby and the company — a 
 provision into the Companies Act which the Legislature have not 
 thought fit to introduce there. I tbink I should be going very far 
 beyond my province if I were to do so. 
 
 Therefore I must decide that there is a right at law to recover 
 the debt, and that there is no right of set-off, either at law or in 
 equity, of the estimate to be made of the value of General Paribus 
 claim against the company. 
 
 Solicitors for Albert : Messrs. Bischoff, Bompas, & Bischoff. 
 Solicitors for General Parlby : Messrs. South & Stacey. 
 
 F 2 
 
54 ALBERT ARBITRATION. 
 
 1871 WOOD'S CASE. 
 
 June 14. Effect of Amalgamation on Non-assenting Policy-holders — Novation — 
 
 Protest. 
 
 An amalgamation purporting to effect the dissolution of a company held 
 not binding on non-assenting policy-holders where the terms of the company's 
 deed of settlement relating to dissolution were not strictly fulfilled. 
 
 Novation consequent on amalgamation not established, in the circum- 
 stances, against a policy-holder who had formally protested in writing against 
 the amalgamation, and declared by the protest that his future premiums 
 would be paid only subject to and on the footing of the protest, and to pre- 
 vent any question of lapse. 
 
 A HIS was an application by Mr. Joseph Carter Wood to be 
 admitted as a creditor of the Western on several policies granted 
 by that company. 
 
 At the time of the amalgamation of the Western and Albert in 
 1865, Mr. Wood was a policy-holder in the Western. He received 
 the amalgamation circular of 14 July, 1865. His solicitors ap- 
 plied to the Albert and Western for information respecting the 
 financial position of the Albert, and the terms of amalgamation. 
 Pending the communications on this subject, the time came for 
 payment by him of premiums on two of his policies, namely, 
 4 December, 1865. Thereupon he paid the premiums to the 
 Albert, delivering at the same time the following protest to the 
 Western and to the Albert : 
 
 To the Western Life Assurance Society and its directors, 
 trustees, and officers, and to the Albert Life Assurance 
 Company, and all others whom it may concern. 
 
 For and on behalf of Joseph Carter Wood, Esq., of the holder 
 
 and owner of the several policies of assurance mentioned in the schedule hereto, 
 we hereby formally object to and protest against the transfer of the assets and the 
 alleged or attempted transfer of the liabilities of the Western Life Assurance 
 Society to the Albert Life Assurance Company, and the so-called incorporation of ' 
 the said society with the said company, which have been intimated to the policy- 
 holders of the said society ; and previously to and as a necessary condition of his 
 assent thereto respectively (so far as he is concerned) as such policy-holder, we 
 shall and do hereby require it to be shewn what are the provisions of the deed of 
 settlement of the Western which are relied upon as authorizing on the part 
 of the said society the said transfer and alleged transfer or incorporation, and 
 
LOKD CAIENS'S DECISIONS. 55 
 
 that the same are sufficient in this behalf and have been complied with duly and Wood's 
 in good faith, and also that the provisions of the Albert deed of settlement Case. 
 authorize the said company to accept the transfer of and undertake the liabilities 
 of the said society and to incorporate the same ; and in particular we require it to 
 be shewn that the said society has transferred to some of the trustees of the said 
 company so much of the funds or property of the said society as is or will be 
 sufficient with the premiums that may become payable in respect of all of the 
 then existing policies of the society to enable the company, and that the company 
 is thereby enabled, to satisfy the accruing claims and demands on the society when- 
 and as the time for payment and satisfaction of the same shall successively arrive : 
 
 And we further require it to be shewn what in the respective events of the 
 said Mr. Wood accepting a guarantee from the said company for payment of the 
 said policies when they shall accrue due, or of his accepting the policies of the 
 said company in exchange for his said existing policies, will be his security for 
 the due payment of the said existing or exchanged policies (as the case may be) 
 when they accrue due. And for this purpose we shall and do hereby require an 
 inspection of the deed of settlement of the Albert ; 
 
 And in the meantime and until the requisitions hereinbefore specified are 
 complied with, or in the event of a refusal on the part of the said society and 
 company, or either of them, to comply with such requisitions, or any of them, 
 we hereby give you nolice that the premiums on the said several policies men- 
 tioned in the schedule hereto when and as they become due will be offered and 
 paid only subject to and upon the footing of this protest, and for the purpose of 
 preventing any question of lapse in respect of such policies : 
 
 And in tendering you or such of you as may be entitled to receive (as on his 
 behalf we do herewith) the premiums on Nos. 1 and 2 of the same policies .... 
 the said Mr. Wood insists upon the foregoing requisitions, and expressly reserves 
 to himself the right to insist upon the same, and to take such proceedings at law 
 or in equity against the said society and company respectively and their respec- 
 tive trustees, directors, and other officers as he may be advised ; and in making 
 such tender and payment he desires to be understood as not thereby or otherwise 
 in any respect or particular whatsoever waiving any right which he now has in 
 respect of, or any objection which he may now be entitled to make to, the said 
 transfer, incorporation, or arrangement of or between the said society and 
 company : 
 
 And we are also authorized for and on behalf of other policy-holders of the 
 said society to make, and for and on their behalf we do hereby make, the like 
 requisitions and protest. 
 
 (Signed) Kempson, Trollope, & Winckworth, the Solicitors of Joseph 
 Carter Wood, Esq., of ... . and other holders and 
 owners of policies issued by the Western. 
 
 SCHEDULE. 
 The following are the policies referred to above as beirg held and owned by the 
 said Mr. Joseph Carter Wood 
 
 In January, 1866, a final refusal to supply to Mr. Wood the 
 information he asked for was received by him. He continued to. 
 
56 ALBEET AKBITKATION. 
 
 Wood's pay his premiums to the Albert until the winding-up, on the usual 
 " Albert receipts. 
 
 Mr. Phear was for Mr. Wood. 
 
 Mr. Eddis, Q.O., (Mr. Cracknall with him) was for the Western. 
 
 Mr. Phear contended that Mr. Wood never accepted the liability 
 of the Albert, but paid his premiums on the footing of the protest. 
 He mentioned 
 
 Griffith's Case, L. E. 6 Ch. 374 ; 
 and referred to clauses 145 and 146 of the Western deed. 
 
 Loed Cairns: — Mr. Wood's case is a very short one. His 
 case is, that having got the notice of the amalgamation, he 
 serves a counter-notice, saying before he makes up his mind as 
 to accepting the proposal to transfer the liability information 
 must be given to him", and until that is given the premiums which 
 he will pay to keep the policy on foot will be paid provisionally 
 only and without committing him to accept the Albert liability. 
 He says the information has not been given to him by the corre- 
 spondence that passed, but, on the contrary, it was by the last 
 lett,er declined to be given. 
 
 Mr. Phear : — That is his case ; with this, that he has performed 
 his part of the contract by the payment at the Albert office. 
 
 Loed Caiens : — He says his protest was given not only to the 
 Albert, but also to the Western, who were thereby made aware of 
 the footing on which he was going to act. 
 
 Mr. Eddis: — (1.) The Western deed permitted 'the transfer of 
 liability to be made without the policy-holders being consulted, and 
 bound Mr. Wood by the amalgamation arrangement. (2.) What- 
 ever right he might have under that arrangement to have a fund 
 set apart to meet the liability, as in 
 
 Kearns v. Leaf, 1 H. & M. 681 ; 
 he was bound to take proper steps for that purpose. The mere 
 protest could in no sense be continuing, except to enable him to take 
 
LOED CAIENS'S DECISIONS. 57 
 
 such steps. He allowed the matter to go on from time to time . Wood's 
 he made successive payments of premiums ; and having dealt in _l!f - 
 that way with the Albert, it is too late for him to say he never 
 accepted the Albert as his creditors, and assert a right to fall back 
 on the Western. He also mentioned 
 
 Be Harrison, 10 Beav. 57 ; 
 
 Be Browne, 15 Beav. 61. 
 
 A reply was not called for. 
 
 Lord Cairns: — This case has features of peculiarity which 
 distinguish it from other cases that have come before me. 
 
 The Western and the Albert amalgamated in July, 1865. There 
 was a circular addressed to the policy-holders in the Western dated 
 14 July, 1865. That circular very fairly, as it seems to me, in- 
 formed the policy-holders of what had been done, invited and 
 encouraged them to accept the Albert as their insurers for the 
 future in place of the Western, and gave reasons with reference to 
 the capital and business of the Albert which might induce the 
 policy-holders to take that step. 
 
 The first argument which has to be considered is, that in that 
 state of things the policy-holder in the Western had no choice, but 
 that by virtue of the deed of settlement of his own company, to 
 which his policy referred, he was bound, without more, by the 
 arrangement, and obliged to rank against the Albert, in place of 
 against the company in which up to that time he had been insured. 
 That depends on the construction of clause 145 of the Western deed. 
 That clause contemplates the dissolution of the company, and the 
 making of an arrangement which, if made according to the terms of 
 the clause, would possibly bind the policy-holders independently of 
 any assent on their part. But the clause contemplates as one term 
 on which the liberation of the Western from the claims of the 
 policy-holders was to depend, that the Western should not only pay 
 and satisfy all claims immediately payable, but also, with regard to 
 claims not immediately payable, including those on current policies, 
 should cause to be transferred to the trustees of the company with 
 which the Western were amalgamating the funds which the two 
 companies should consider sufficient, along with premiums payable 
 
58 ALBEET ARBITRATION. 
 
 Wood's in respect of then existing policies, to enable the company with 
 
 ' which the Western were amalgamating to fulfil their undertaking 
 
 to indemnify the Western against those claims. Now, if the 
 Western take their stand on this clause, and say that by virtue of 
 this clause, without more, without any act or assent on the part of 
 the policy-holder, the amalgamation is binding on him, and he no 
 longer has any claim against the Western, they must shew that the 
 clause has been literally fulfilled. The clause contemplates that 
 this fund should be ear-marked and appropriated in some way 
 when the amount should have been ascertained, so that there 
 might be added to it the premiums on the policies transferred, and 
 so that it might be ascertained that the fund transferred and the 
 accruing premiums would be sufficient to pay the policies, the 
 liability on which was transferred. That is a rational arrange- 
 ment; and without an arrangement of that kind nothing could 
 be more unfair than that the policy-holders should be handed 
 over as regards their claims to another company of which they 
 might know nothing. The essence, therefore, of the arrangement 
 would be the fund being appropriated and not mixed with the 
 other assets of the Albert ; for it is obvious that if not so appro- 
 priated, all the ceremony gone through of ascertaining whether 
 the fund was a sufficient fund or not would be of no avail ; for 
 the moment it became mixed in the Albert general fund it might 
 be all consumed in paying, not claims of Western creditors, but 
 claims of Albert creditors. It is sufficient to say that, that has not 
 been done here. I arrive at the conclusion that clause 145 has 
 not been strictly pursued. Therefore the policy-holder is not by 
 force of that clause alone thrown on the Albert. 
 
 Then I have to consider whether Mr. Wood's own acts or conduct 
 after the receipt of that circular have thrown him on the Albert and 
 liberated the Western. In the midst of the correspondence with 
 the office, and while the information which the policy-holder was 
 asking for was withheld, the time arrived for him to pay the pre- 
 miums on two of his policies. He paid those premiums, and he 
 paid them accompanied with a protest, which seems to me to have 
 been as clear and as distinct and as carefully prepared as anything 
 I ever read. I only wish that on occasions of these amalgamations 
 policy-holders would generally adopt the course taken by this 
 
LOKD CAIRNS'S DECISIONS. 59 
 
 policy-holder, and furnish the companies with which they are Wood's 
 dealing with a notice as clear and as distinct as that of Mr. Wood. — ' 
 The protest was addressed to the Western as well as to the Albert, 
 and it is admitted that it was served on the Western. The protest 
 required those to whom it was addressed to furnish Mr. Wood with 
 information on points which were most material to his interests. 
 He required to be informed whether funds had been transferred to 
 the Albert to meet the liabilities of the Western, what the amount 
 of those funds was, and whether they would be sufficient to meet 
 the liabilities. He required to be informed of the powers of both 
 companies under their deeds to effect the amalgamation. He 
 required it to be shewn to him what his position would be if he 
 accepted the liability of the Albert, and what funds he would then 
 have belonging to the Albert for his security, and, as incidental to 
 that, what other claims there would be against those funds. And 
 then his solicitors, speaking for him, went on to say : 
 
 And in the meantime, and until the requisitions hereinbefore specified are com- 
 plied with, or in the event of a refusal on the part of the said society and com- 
 pany, or either of them, to comply with such requisitions, or any of them, we 
 hereby give you notice that the premiums on the said several policies mentioned 
 in the schedule hereto, when and as they become due, will be offered and paid 
 only subject to and upon the footing of this protest, and for the purpose of pre- 
 venting any question of lapse respecting such policies. 
 
 Looking at this protest, at the time it was given, at the time the 
 premiums were paid, it appears to me that that was a course entirely 
 proper for Mr. Wood to take, and perfectly open to him to take. 
 It appears to me that under the contract for amalgamation between 
 the Western and the Albert the Western could not say that pay- 
 ment of a premium to the Albert, it' paid on the footing on which 
 Mr. Wood avowedly proposed to pay it, was other than a pay- 
 ment of a premium on the old policy, which would be binding 
 on and would continue the obligation of the Western, because by 
 the third clause of the deed of amalgamation they had made over 
 the right to receive the premiums in respect of their existing poli- 
 cies to the Albert. The Albert's, therefore, unquestionably was the 
 hand to receive the premium. The only question was quo animo 
 it was paid, and quo animo it must be taken to have been received. 
 Looking then to the date of 4 December, and to the payment of 
 these premiums, there could be no doubt as to what the intention 
 
60 ALBEET AEBTTEATION. 
 
 Wood's of the party paying was ; and according to the effect of that inten- 
 ' tion, clearly expressed, the party receiving must receive the pre- 
 miums. That is a protest which applies not only to the premiums 
 then paid, but also to premiums afterwards to be paid, until the 
 information which was asked for should be given. 
 
 The correspondence went on after the protest was delivered; 
 and notwithstanding the refusals at first to give the information 
 required, it was afterwards stated that the united office were ready 
 and willing to answer any questions which Messrs. Kempson, in 
 the name of the policy-holder, desired to address. Accordingly, 
 very pertinent and proper questions are addressed, their general 
 character being the same as that of the requisitions inserted in 
 the protest. No answer of a satisfactory kind is given, and the 
 correspondence closes on 18 January, .1866, with a letter from 
 Mr. Scratchley, saying on behalf of the united office : 
 
 We are not able to recognise a right to further information on the part of 
 policy-holders, and you must excuse me therefore for declining to supply you with 
 the figures you wish for. 
 
 In that state the matter is left. Premiums are paid in 1866, 
 1867, and 1868, and I assume in part of 1869. 
 
 It was said by Mr. Eddis that Mr. Wood did not do enough, 
 that he ought not to have stopped there, that he ought to have 
 taken proceedings ; and that if the Albert had been a prosperous 
 company, if in place of being wound up the Albert had been sol- 
 vent and the Western insolvent, Mr. Wood might have come forward 
 and have claimed to rank against the Albert, might have contended 
 that he had abandoned the security of the Western and taken to 
 that of the Albert. I am not prepared to say that the matter 
 was not to some extent left ambiguous when it broke off on 
 18 January, 1866, because it certainly was open to Mr. Wood at that 
 time either to have maintained the attitude he had taken up on 
 4 December, or to have abandoned that attitude and come in 
 and ranked against the Albert; he might have taken either 
 course, he had not put it out of his power to take either course. 
 But he had delivered his written protest which, as I have said, 
 was expressed to be a protest the force of which would continue 
 until the information he asked for was given, or if the infor- 
 mation he asked for was refused. It appears to me in that state 
 
LORD CAIENS'S DECISIONS. 61 
 
 of things, the Western having that protest delivered to them, and Wood's 
 
 being informed that the payment of premiums would be considered ' 
 
 to be made on the footing of that protest, it was for them to 
 clear up any ambiguity in the matter. It was for the Western to 
 have come forward and to have said to Mr. Wood, in some form of 
 communication : You know now what has been done between our 
 two companies ; you know now that the Albert consider that you 
 are not entitled to the details of the information you ask, and have 
 refused to give it ; you must now bring to a point the question 
 you left in some sort of suspense by your protest of 4 December 
 last ; we cannot allow you to continue paying these premiums on 
 the footing of that protest, and we cannot allow them to be 
 received on the footing of that protest ; either they must, for the 
 future, be received as premiums payable to the Albert on the foot- 
 ing of your being insured in the Albert, or we must call upon you 
 to bring the matter to issue if you insist that we are still liable. 
 The Western remained perfectly silent, and the Albert remained 
 perfectly silent. In that state of things it appears to me that the 
 balance is entirely in Mr. Wood's favour, and that he is entitled to 
 say that the ambiguity, if any, not having been cleared up, he has 
 rested and continued to rest on his protest, and that the payment 
 of the subsequent premiums was made on the footing on which 
 the payment of the premiums on 4 December was made. 
 
 His claim, therefore, is against the Western ; and he must have 
 the costs in the winding-up of the steps he has taken to enforce 
 the claim. 
 
 Solicitors for Mr. Wood: Messrs. Kemjoson, Trollope, & Winch- 
 worth. 
 
 Solicitor for Western : Mr. Manning. 
 
62 ALBEET AEBITEATION. 
 
 1871 WHITEHAVEN BANK CASE. 
 
 Ju^el, 15. Policy— Novation. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against a policy-holder, who, having on the amalgamation received from his 
 assuring company, the transferors, a circular offering, in effect, the liability 
 of the assets of the transferee company in substitution for those of the trans- 
 feror company, did not repudiate or refuse the proposals in the circular, and 
 thenceforth paid his premiums to the transferee company, and took receipts 
 of that company. 
 
 X HIS was an application (which had been pending in the Court 
 of Chancery on an adjourned summons) by the Whitehaven Joint 
 Stock Bank, to be admitted as creditors of the Western in respect 
 of a policy of the Western dated 10 December, 1849, assuring 
 £999 10s., with profits, on the life of James Nicholson. 
 
 The bank had received the circular issued on behalf of the 
 Western on their amalgamation with the Albert, and sent no answer 
 to it, but thenceforth paid the premiums to the Albert. 
 
 June 5. Mr. Everitt was for the bank. 
 
 Mr. Eddis, Q.C., (Mr. CracknaU with him) was for the Western. 
 
 Mr. Everitt : — There is no novation here. By the amalgamation 
 agreement between the Albert and the Western the bank had notice 
 that the Western had assigned to the Albert the right to have the 
 premiums payable on the bank's policy. The Albert having got 
 the Western to assign the right to receive those premiums, it was 
 incumbent on the bank to perform the direction of the party witli 
 whom they had contracted, and to pay the premiums to the Albert 
 in pursuance of the agreement entitling the Albert to receive 
 them. Though the bank had not actual notice of the amalgama- 
 tion agreement, yet they had notice by the circular that the 
 Western had entered into an arrangement for transferring the busi- 
 ness, and that the Western assets had been transferred to the Albert ; 
 thus the bank were put on inquiry, and in effect had notice of the 
 amalgamation agreement. Therefore, in equity, if the bank had 
 
LORD CAIRNS'S DECISIONS. 63 
 
 paid the premiums to the Western after that time, it would have Whitehaven 
 been at their own risk, as in the case of any debtor who has notice AilK 
 that his creditor has assigned the debt. 
 
 Lord Cairns : — There was no debt ; the Western had no right 
 to insist on receiving anything. It was entirely optional with the 
 bank whether they would pay the premiums or not, or to whom 
 they would pay them. If it had been a debt which the bank had 
 been bound to render, the Western might, no doubt, have said : 
 We require you to render it to A. B. 
 
 Mr. Everitt : — A contract of life assurance is peculiar ; it is one 
 entire contract to pay, in consideration of a series of annual 
 payments. 
 
 Lord Cairns : — There is no contract by the assured to pay the 
 premiums. The circular is clear notice that the footing on which 
 the Western wanted the bank to act was their becoming insured in 
 the Albert, and having the great benefits and advantages which 
 they describe as resulting from that arrangement. Suppose 
 events had turned out differently ; that the Albert had been pros- 
 perous, with large bonuses ; would not the case of the bank have 
 been in equity complete ? They might have said : We received 
 the circular ; we paid our premiums to the Albert ; and now we 
 require the Albert to fulfil their contract with us, as stated in the 
 circular. 
 
 Mr. Everitt : — The Albert might have answered to the bank : 
 Shew that you accepted those terms. The bank were entitled to 
 construe the circular as a mere notice of a fact telling them that 
 the business was being carried on, but that notice did not put the 
 bank under any obligation till they had acceded to it by dealing 
 with the Albert in some way, as, for instance, by accepting an Albert 
 bonus. 
 
 Lord Cairns : — You treat the question rather as one of law ; 
 is it not really a question of fact ? You produce a receipt from 
 what I will call, for brevity, the wrong company, not the company 
 which assured you. That may be explained. You may have paid 
 
64 ALBERT ARBITRATION. 
 
 Whitehaven the premium to that wrong company either by way of accepting 
 
 ' that company as your future insurers, or in the capacity of agents 
 
 of the original company. The question, then, is a question of fact 
 — with what intention did you pay, with what intention did the 
 Albert receive, the premium ? The only explanation you give of 
 your paying the premium to the Albert is that you received the 
 circular. Now, the circular tells you that the business has been 
 incorporated, and that in future the policy-holders will have cer- 
 tain rights which are described as being highly advantageous with 
 reference to the capital of the Albert. That is the result of the 
 explanation you give of the circumstances under which you went 
 to pay the premiums to the Albert. If you wanted to put some 
 other complexion on the transaction, it would have been necessary 
 for you to say this : It is true we come to you, the Albert, to pay 
 the premium, but do not suppose we come on any recognition of 
 that circular ; if you give us a receipt signed by you as agents for 
 the Western, we will pay the premium to you. 
 
 Mr. JSveritt : — Something more than a mere notice such as is 
 given by this circular is necessary. The bank were told the busi- 
 ness was incorporated, not sold and transferred in the ordinary 
 sense ; so that it was in effect the Western subsisting under the 
 name of the Albert, but with the business of the Western combined 
 with the other businesses carried on by the Albert. There was not 
 sufficient notice, as regards an outside creditor, of an intention to 
 put an end to the liability. The party who seeks to discharge 
 himself from the liability is the party on whom the onus lies to 
 shew novation. 
 
 Loed Cairns : — Is it a case of that kind ? The bank have got 
 a contract, with a condition precedent, which is, that they pay the 
 premium to a particular company. They come to shew that they 
 have discharged that condition, and kept their contract on foot. 
 If it had been during the year that the first payment covered, and 
 it had been attempted to make out a substitution of liability against 
 the bank, that would have been a case of novation, because there 
 would have been a contract as to which each side would have only 
 to wait for its maturing. An insurance contract is one of great 
 singularity. It is a contract as to which at the beginning of every 
 
LORD CAIENS'S DECISIONS. 65 
 
 year there is a condition precedent, on the performance of which Whitehaven 
 it starts into fresh life. BakOam. 
 
 Mr. Everitt mentioned 
 
 Heron's Case, L. E. 5 Ch. 632. 
 Spencer's Case, L. K. 6 Ch. 362. 
 Griffith's Case, L. R. 6 Ch. 374. 
 Bartlett's Case, L. E. 5 Ch. 640. 
 
 Lord Cairns: — In Bartlett's Case there was no circular; at 
 least none was proved. The case stood on receipts alone. There 
 *may be reason to suspect that, if the assured had been alive, he 
 might have admitted that he had got a circular, as in this case. 
 Then what the Lord Chancellor says is : ' 
 
 It was possible that all the accounts were kept separate — separate one from 
 another — and he might be able to take a receipt from one or the other, and one 
 company might regard the other as agents for giving the receipt. 
 
 Do you think, looking at the circular here, it is possible to say it 
 conveyed the intimation that they were going to keep separate 
 accounts for the two companies ? 
 
 Mr. Everitt : — The basis of our argument is, that the onus is on 
 the other side. If the question of novation is to be treated as a 
 question of fact, the case of an annuitant entitled to payment in 
 frsesenti may be a stronger case for inferring novation than where 
 the person is making payments : 
 
 Potfe Case, L. E. 5 Ch. 118. 
 If the person chooses to accept payments from the transferee com- 
 pany, and takes the benefit of the increased assets of that company, 
 that is a distinct act done, referable to the contract, and is an 
 election to take the benefit of the arrangement, if it is a beneficial 
 one ; and he is estopped in equity from complaining. The ques- 
 tion of novation is simply a question whether there has been some 
 act done assenting to the proposed arrangement, in connection 
 with which inducements to persons to alter their position have 
 been held out. 
 
 Mr. Eddis was not called on. 
 
 Judgment reserved. 
 
66 ALBEET ARBITRATION. 
 
 Whitehaven Lord Cairns : — This is a claim against the Western on a profit 
 KK SE ' policy dated 10 December, 1849, on the life of one Nicholson, who 
 June 15. | g still living, the policy being for £999 10s., and no bonus having 
 been declared or paid, and the policy-holder being the Whitehaven 
 Joint Stock Bank. The bank had notice that the Western incor- 
 porated the Manchester in February, 1862. Then the circular of 
 14 July, 1865, was issued to and received by the bank relative to 
 the amalgamation of the Western with the Albert. This is a plain 
 and clear circular, offering the bank the liability of the assets of 
 the Albert in substitution for the assets of the Western. There was 
 no repudiation or refusal by the bank of the proposals in that cir- 
 cular. They thenceforth paid the premiums to the Albert. The 
 first receipt after this date is on 13 December, 1865. It is thus : 
 
 Receipt No. 10,440, policy No. 895, sum assured £999 10s., life of J. Nicholson. 
 Received this 13th day of December, 1865, the yearly premium payable on the 
 9th of December, 1865, under the above policy of assurance. 
 
 This is headed ' Western, Manchester, and London Life Assur- 
 ance Society, established 1842, Chief Offices, 3, Parliament Street, 
 London, and 77, King Street, Manchester.' Then in blue ink there 
 is stamped on it, ' Incorporated with the Albert Life Assurance Com- 
 pany, 7, Waterloo Place, London.' In the following year, Decem- 
 ber, 1866, the receipt is the receipt of the Albert, headed ' Albert 
 Life Assurance Company, Waterloo Place, London,' stating the pre- 
 mium received for the policy mentioned in the margiD, and in the 
 margin is ' W. policy ' (meaning Western policy) ' No. 895,' to 
 identify the policy merely, and not at all varying or qualifying 
 the body of the receipt. The receipts for 1867 and 1868 are 
 similar. I find, therefore, the policy-holder accepting that which 
 was a new contract offered, terminating the payment of premiums 
 to the old company, and making that payment on the footing, as 
 I must hold, of this circular, to the new company. 
 
 I am of opinion, therefore, that the Whitehaven Bank cannot 
 rank against the Western, but must rank against the Albert. 
 
 Solicitors for Whitehaven Bank : Messrs. Clarke, Son, & Bawlins. 
 Solicitor for Western : Mr. Manning. 
 
LOED OAIRNS'S DECISIONS. 07 
 
 KIEBY'S CASE. ioti 
 
 List of Contributories — Joint Holders of Shares — Executors. June ^> ■'"• 
 
 Shares in the Albert were standing in the joint names of two persons, 
 without beneficial ownership ; one of them was dead ; his executors were 
 put on the list of contributories jointly with the surviving holder, but only 
 in respect of the liabilities up to the time of the testator's death. 
 
 X HIS was an application (which had been, pending in the Court 
 of Chancery on an adjourned summons) on behalf of the Albert, 
 to put on the list of contributories of the Albert, for eighty shares, 
 the executors of Mr. G. G. Kirby, in their representative capacity, 
 jointly with Mr. Anderton, who had been already settled in respect 
 of those shares. 
 
 Mr. Higgins was for the Albert. June 7. 
 
 Mr. W. W. Cooper was for Mr. Kirby s executors. 
 
 Mr. Higgins : — We rely on the Albert deed, especially clauses 
 126, 188 to 192, 197. It is well settled that if there are three or 
 four persons registered in respect of the same shares, they can all 
 be settled and made jointly and severally liable for calls. The 
 clauses of the deed making notice to the first-named holder good, 
 and making the receipt of any one of the holders a good discharge, 
 shew that the notion was that several persons might become jointly 
 and severally interested in shares, ar^these provisions were neces- 
 sary to enable the company to deal with such owners ; otherwise a 
 separate notice would be necessary for each one. 
 
 Mr. Cooper : — These persons were joint tenants of the shares. 
 On the death of Mr. Kirby, the whole legal interest passed to the 
 survivor. The executors have not taken any step under the deed 
 to have themselves put on the register as shareholders. The com- 
 pany have treated the survivor as the sole proprietor, and the 
 executors of the other cannot be put on jointly with him. 
 
 Lord Caiens : — The testator has virtually covenanted to pay 
 
 the calls, if necessary. 
 
 Q 
 
Case. 
 
 f58 ALBEET ARBITRATION. 
 
 Kikby's Mr. Cooper: — The covenant is to abide by the terms of the 
 
 deed, therefore it must be seen how far the deed makes the exe- 
 cutors liable in respect of calls. The governing clauses of the 
 deed are 192 and 197, and they do not go to that length. This 
 was a trust account ; the whole interest devolved to the surviving 
 joint tenant. 
 
 Loed Cairns : — Did the liability leave the testator at the same 
 time as the interest ? Where there are two names on the share 
 register in respect of a share, the company do not know or care 
 whether the Holders are joint tenants, or are tenants in common. 
 They treat them as joint proprietors, and take a covenant from 
 each to pay the calls. When one dies, his mere death does not 
 discharge the covenant. It is a continuing covenant. It may be 
 that by arrangements inter se the interest in the property goes 
 over, as by survivorship, to the other. Does that alter the obli- 
 gation of the covenant ? Another question is, would the company 
 transfer the shares without the assent of the executors ? 
 
 [Mr. Biggins : — Certainly not.J 
 
 Mr. Cooper : — The company after and with notice of the death 
 of Mr. Kirby, treated the surviving shareholder as the owner of 
 the shares. The whole interest devolves on him, and, therefore, 
 the primary liability. There may be a secondary liability on the 
 executors as such, but they cannot be put on jointly with the 
 survivor. They can only be put on in a secondary character, as 
 representatives, and not until it is shewn that Mr. Anderton cannot 
 pay. 
 
 Mr. Eiggins, in reply : — They ought to be put on, with the like 
 primary liability as others ; but it will answer all purposes if they 
 are put on with a secondary liability. 
 
 Loed Cairns : — What authority is there for that, except in the 
 case of a transfer of shares ? 
 
 Mr. Eiggins : — There is power to adjust the rights of all contri- 
 butories, and to settle the list in such a way as to shew what are 
 the liabilities inter se. This company being wound up under 
 Part VIII. of the Companies Act, 1862, a contributory is defined 
 
LOED CAIENS'S DECISIONS. 69 
 
 by section 200, which is different from the general definition; Kibby's 
 and the Court may settle the list in any way the Court thinks ° ASE ' 
 proper. 
 
 Loed Caiens : — I will consider the case. If Counsel on either 
 side finds any authority, I should like to be informed. 
 
 Mr. Cooper : — I have diligently searched, and can find no case 
 in which executors have been so put on. 
 
 Judgment reserved. 
 
 Loed Caiens : — This is an application to put on the Albert list j U ne 15. 
 of contributories for eighty shares the executors of Mr. Kirby, 
 along with Mr. Anderton, who is on the list. Mr. Kirby died on 
 15 April, 1868 ; his name is on the register of shareholders. The 
 company being unregistered is to be wound up (under section 200 
 of the Act of 1862) on the principle of every person being deemed 
 to be a contributory — 
 
 who is liable at law or in equity to pay or contribute to the payment of any 
 debt or liability of the company, or to pay or contribute to the payment of 
 any sum for the adjustment of the rights of the members amongst themselves, or 
 to pay or contribute to the payment of the costs, charges, and expenses of winding 
 up the company. 
 
 Mr. Kirby had executed the deed either for these shares, or for 
 other shares ; clearly, therefore, at his death, he was liable both at 
 law and in equity in respect of the engagements of the company. 
 In addition, — apart from any liability that may have existed as 
 between him and outside creditors, — he was by his covenant- 
 liable inter socios to make the payments mentioned in the deed ; 
 and it is to be observed that in the deed of the Albert the 
 covenanting parties covenant not merely jointly, but also each 
 separately. Therefore if there were more persons than one owning 
 a share in the company, — and the deed assumes that there might 
 be more owners than one of a share, — each one of those owners 
 would be a person who in the terms of the deed, so far as related 
 to the deeds and acts of himself, his heirs, executors, and ad- 
 ministrators, did thereby, for himself, his heirs, and so forth, 
 covenant with the several persons, parties to the deed, in the 
 
 G 2 
 
70 ALBEKT ABBITEATION. 
 
 Kirby's manner mentioned in the deed. Mr. Kirby therefore must be 
 '. looked on as a person who in his own name had separately cove- 
 nanted to perform all the engagements and obligations attaching 
 to any shares held by him in the company, either in his own name 
 or in the name of himself and other parties. There is nothing 
 to terminate that liability at his death, as far as liability had 
 accrued up to that time. There is nothing in the circumstance of 
 a person dying that should get rid of his liability. The only 
 question that could arise would be as to liability accruing after 
 death. It is not necessary for me to decide more than the par- 
 ticular point which comes before me. If it had been proved 
 or suggested that Mr. Kirby was beneficially interested in these 
 shares, that is to say, that although he and Mr. Anderton were 
 on the register, they were there ' not as joint tenants but as 
 tenants in common, the question might have arisen as to whether 
 there would not after his death be a continuing liability. But if 
 it is the case, as has been assumed, that the shares were standing 
 in these joint names without beneficial ownership, that is, that 
 they were joint tenants with the interest accruing to the survivor, 
 then, it seems to me, there would be no liability in respect of con- 
 tracts after the death of Mr. Kirby, but there would be liability for 
 every contract that had been entered into before his death. In my 
 opinion, therefore, his liability ended at his death, and his execu- 
 tors must be put on the list jointly with Mr. Anderton, but in that 
 way, — in respect of the liabilities of the company up to the time 
 of his death. 
 
 "Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 Solicitors for the Executors : Messrs. Walker, Twyford, & 
 Belward. 
 
LOED CAIRNSS DECISIONS. 71 
 
 SLATOB'S CASE. 1871 
 
 Valuation of Policies. June2. 
 
 Observations on mode of valuation of policies for purposes of proof in 
 liquidation, with reference especially (in connection with Bell's Case) to a case 
 where a policy was held by one on the life of another, who was in a remote 
 part of the world, and not under the controul of the policy-holder. 
 
 i-HIS was an application (which had been pending on an ad- 
 journed summons in the Court of Chancery) on the part of James 
 Slator, as follows : 
 
 That he may be admitted to prove against the estate and assets of the [Albert] 
 
 on the footing of his claim .... which has been sent in and which 
 
 represents the case of a holder of a policy without participation in profits, who, 
 having an insurable interest, has effected a whole-life policy on the life of 
 another, the person on whose life the assurance is effected having with the per- 
 mission of the [Albert] gone to reside, and still continuing to reside, in North 
 America, and thereby rendering it impossible for the said James Slator to 
 negotiate with another office for the re-assurance of such life 
 
 The claim referred to was as follows : 
 
 The following are the particulars of the claim of James Slator of .... in 
 respect of a policy bearing date the 14th day of August, 1868, effected by him on 
 the life of Catherine Slator, in the Albert, and numbered 27,277. 
 
 The said James Slator claims to be entitled to rank against the estate and 
 assets of the [Albert] as a creditor for the sum of £96 15s., being the total amount 
 of premia paid by him in respect of such policy, together with interest at the 
 rate of £5 per cent, per annum calculated from the respective dates upon which 
 the various sums have been paid by him as and by way of current premia. 
 
 The said James Slator also claims to be entitled to rank against the estate and 
 assets of the [Albert] for such further sum as and by way of damages for breach 
 of contract as this honourable Court may award. 
 
 The claimant had filed in the Court of Chancery an affidavit 
 
 containing the following passages : 
 
 8. Early in the month of September, 1864, the said Catherine Slator was 
 desirous of proceeding to North America, whereupon I applied to Mr. George 
 Fowler, the agent in Dublin of the Albert, for the necessary permission for her 
 to do so, and I was informed by the said George Fowler that upon payment 
 of the sum of £2 10s. as an extra premium to cover the risk of sea voyage 
 from Ireland to America, that permission would be granted, whereupon on the 
 13th September, 1864, 1 paid the said sum of £2 10s., and, at the request of the 
 said George Fowler, I forwarded my said policy to him, and it was eventually 
 
72 ALBEET AEBITEATION. 
 
 Slatob's returned to me with the indorsement dated the 6th January, 1865, that now 
 Case. appears written thereon. 
 
 9. I am able from the perusal of a letter lately received from the said Catherine 
 Slator by a member of her own family, and also from information given to me, to 
 state that the said Catherine Slator is residing at Cincinnati, in the United 
 States of America, and that at that place she is engaged in business, and to the 
 best of my knowledge and belief it is very improbable that she will return to 
 Ireland or any other part of the United Kingdom. 
 
 10. And, lastly, I say that I am not now on friendly terms with the said 
 Catherine Slator, and I have no power to compel her to effect another insurance, 
 nor have I any knowledge of American insurance offices, nor have I any agent in 
 America, and I verily believe that the said Catherine Slator would, if applied to, 
 refuse to give me a policy in any other office in lieu of the said policy. 
 
 Mr. J. D. Bell was for the claimant. 
 
 Mr. Higgins was for the Albert. 
 
 Mr. Bell : — The question is, what is to be the amount of proof 
 where the life is gone abroad, and cannot be reached. This is not 
 the ordinary case of an uninsurable life. The policy-holder, in 
 these circumstances, is entitled to either (1) payment of the 
 amount insured minus the actuarial value of the future premiums ; 
 or (2) a return of the premiums paid, with interest (the objection 
 to that being that there has not been a total failure of considera- 
 tion, inasmuch as the policy-holder has had the benefit of the sub- 
 sistence of the insurance for the past time) j or (3) the surrender 
 value fairly ascertained. 
 
 Lobd Cairns : — The principle of a surrender value would give 
 you everything that you are entitled to, and still may give you 
 more tban the office can pay. With a solvent office' it would be 
 natural that each claimant should endeavour to shew the utmost 
 damage he had sustained ; but where the assets are clearly insuffi- 
 cient, if the assets are rateably divided among the different 
 insurants, and there is a proper estimate of their relative claims, 
 whether the actual claim of each is for the utmost does not seem 
 material. 
 
 Mr. Bell : — We prefer the first of the three methods, which is 
 consistent in principle with 
 
 Stevenson v. Snow, 3 Burr. 1237. 
 
LOED CAIRNS'S DECISIONS. 73 
 
 Though it is not the case of a broken contract the company have Slatok's 
 put it out of their power to go on, and therefore we are entitled to ASE ' 
 damages : 
 
 IneJibald v. Western Neilgherry Company, 5 N. R. 52. 
 
 Mr. Higgins : — The principle of 
 
 Bell's Case, L. E. 9 Eq. 706, 
 is that the claimant is entitled to have what may be shortly called 
 the reinstatement value, that is, the amount which a similar office 
 would charge for taking over the contract. 
 
 Lord Cairns : — Suppose the case of a policy-holder whose pre- 
 mium expired in October, 1869, and who now came to make his 
 claim, how could any office tell what they would have thought of 
 his life if it had been presented to them for insurance in October, 
 1869 ? I can understand an office saying : We think now it is a 
 hazardous life, and will charge such and such an additional pre- 
 mium over our ordinary rates, before we will insure. But how ' 
 • can a physician, speaking of a life presented to him to-day, say 
 what was the state of that life, as regards insurability, in October, 
 1869? 
 
 Mr. Higgins : — That point was not suggested in the Court of 
 Chancery. 
 
 One objection to the first method proposed on the other side 
 is, that in the case of policies of recent date the policy-holder 
 would get nothing. The second method was considered in 
 Warner's Case, W. N. 1870, pp. 104, 192, 210. 
 
 It is the best method, a deduction being made in consideration 
 of the past risk which has been covered. There is no ground for 
 distinction between the present case and the ordinary case. Affi- 
 davits have been filed stating the various actuarial views taken of 
 the question. 
 
 Lord Cairns: — I will read them. 
 
 [Mr. C. E. Lewis (solicitor) was heard to state what had been 
 done in the working out in the Court of Chancery of the decision 
 in Bell's Case. He suggested that a notice should be given that 
 every life would be deemed to be insurable at the ordinary rate, 
 unless the policy-holder shewed the contrary. 
 
74 ALBERT ARBITRATION. 
 
 Slator's Lord Cairns : — How would the case of a man in India be dealt 
 
 ' with, in the solution of this problem? Suppose he said: My 
 
 health is not as good as it was ; I cannot say I am as vigourous 
 as I was when the policy was taken out. How would the pro- 
 blem be solved, whether an office in London would insure his life 
 or not ? 
 
 Mr. Lewis : — There are offices that have agents and medical 
 advisers in India, and information may be obtained there. 
 
 Lord Cairns: — Suppose he gave evidence that he had offered 
 in India to insure his life and had been rejected ; must whoever has 
 charge of the liquidation enter into the question of whether or not 
 he presented himself under fair terms, looking as healthy as he 
 might have done, presenting his life in the most favourable way to 
 a fastidious office, if there is a fastidious office ? 
 
 Mr. Lewis : — It would be impossible to go into such questions ; 
 bona fides must be assumed. 
 
 Lord Cairns : — I am afraid the world is not quite accustomed 
 to act so that one can assume bona fides. Suppose a gentleman in 
 India wanted to get off the continuance of his insurance ; suppose 
 he was under an onerous covenant in a marriage settlement, or for 
 some other reason he wanted to get as large a sum of money as he 
 could, and wished to make out, pro hoe vice only, that his life 
 was not insurable ; how could one guard against the improprieties 
 that might be committed in that way ? * 
 
 Mr. Lewis : — It is a question of investigation, that is, time and 
 expense. 
 
 Mr. Bell : — I may mention a peculiar case arising with respect 
 to India. A man wanted to insure there, and he was refused, 
 unless he proceeded to Ewrope for a year ; that is an uninsurable 
 life. 
 
 Mr. Biggins: — There is another subdivision of cases I may 
 mention, namely, where the life has improved, that is, where a 
 large extra premium was charged at the time when the insurance 
 
LORD CAIRNS'S DECISIONS. 75 
 
 was entered into, and the life would now be insurable at a smaller Slatobs 
 premium.] ° ASE - 
 
 A reply was not called for. 
 
 Judgment reserved. 
 
 The case was ultimately treated as governed by Lancaster's 
 Case. ■ 
 
 Solicitor for Claimant : Mr. Lattey. 
 
 Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 
76 ALBERT ARBITRATION. 
 
 1871 LANCASTEES CASE. 
 
 June 19; Valuation of Annuities and Policies. 
 
 July2\. J 
 
 For the purposes of proof in the liquidation, annuities and policies were 
 directed to be valued as follows : 
 
 (a) The valuation to be made in every case as at the date of the winding- 
 up order : 
 
 (b) Annuities to be valued according to the tables of the company granting 
 them, and where those tables could not be ascertained, then according to the 
 Government Annuitants' Experience Tables, the rate of interest taken being 
 four per cent. : 
 
 (c) Policies to be valued according to the Seventeen Offices' Experience 
 Tables, the rate of interest taken being four per cent. ; the value of the policy 
 being the difference between the present value of the sum 'assured and tlie 
 present value of the future premiums, taken as pure premiums ; additional 
 premiums payable on profit policies and on policies for India being also left 
 out of consideration. 
 
 BelVs Case not followed. 
 
 J. HIS was an application for a decision on the question of the 
 mode of valuation in the liquidation of annuities and policies. 
 
 Nothing turned on the terms of the policy selected for raising 
 the question, or on any matters of fact connected with it. 
 
 Notice was given that all parties interested, with reference to 
 the decisions of the Court of Chancery, in the determination of 
 the question might intervene in the argument. 
 
 June 19. Mr. Milward, Q.C., (Mr. Bowcliffe with him) was for Mr. Lan- 
 caster. 
 
 Mr. Higgins was for the Albert. 
 
 Mr. Milward : — The question has been considered in 
 Bell's Case, L. E. 9 Eq. 706. 
 It arises on section 158 of the Act of 1862. This is a claim 
 sounding in damages within that section, and admissible to proof 
 as such. There is a policy issued by the company, the effect of 
 which is that the company contract that they will pay a certain 
 sum if the death happens in the first year, and contract that, if the 
 assured continues to pay, de anno in annum, the same premium 
 
LOED CAIENS'S DECISIONS. 77 
 
 during his life, they (the company) will pay the sum assured at Lancaster's 
 
 the end of the life. There is thus a contract optional on the part * 
 
 of the assured to continue the premiums, but compulsory on the 
 company to receive the premiums if tendered, and if they receive 
 them to pay the sum assured. If without insolvency the company 
 had declined to carry on business, and had declared that they 
 would break the contract to receive the premiums, and that at the 
 end of the time they would not pay on the policy, what would be 
 the remedy of the insured ? It would be by action on the implied 
 contract. 
 
 Loed Cairns : — Would there be a right of action ? Suppose 
 when the insured went the second year and tendered his premium 
 the company refused to receive it, and so in every successive year, 
 would it not be for him to rest on his tender, each year, and wait 
 till the death came, and then for his representatives to shew that 
 he had tendered the premiums regularly, and sue for the policy- 
 money ? Could the insured raise the question immediately by an 
 action ? 
 
 Mr. Milward : — Yes ; the implied contract on the policy is to 
 receive the money. Tender would require preservation of evi- 
 dence. 
 
 Lokd Cairns : — No doubt it would be extremely inconvenient. 
 
 Mr. Milward : — The insured would have another remedy ; it 
 would be in his option, the company having broken the contract, 
 and he being ready to go on, to say that he must be restored by 
 them to the position he would have been in if there had never 
 been a contract, that is, to have back his premiums paid with 
 interest. 
 
 Lord Cairns : — Having had the benefit of being insured for a 
 certain time, could he recover back as on a total failure of con- 
 sideration ? 
 
 Mr. Milward: — Yes; it is the company who decline to go on 
 with the contract. If it was a mutual declining, the insured could 
 not ask for that. It would be optional for him to wait and sue at 
 the time of the breaking of the contract. 
 
78 ALBERT ARBITRATION. 
 
 Lancaster's Lord Caiens : — It is dangerous to argue from the case of a 
 ' company going on with business and breaking . an individual con- 
 tract. We have to construe the Act. It can hardly be assumed 
 that the company have been a voluntary agent as regards the 
 liquidation. They are taken possession of- by the Court of Chan- 
 cery ; the Court requires the company to do no more business, to 
 stop ; and then the Act which gives the Court that power enacts 
 that there shall be admitted in proof against the company all claims 
 against them, present or future, certain or contingent. That 
 prima facie would appear to point to claims which, as far as they 
 are future or contingent at the moment of winding-up, are so for 
 one of two reasons, either because the time for payment has not 
 come, or because it remains to be seen whether a contingency will 
 happen or not, such as to give a right to payment. 
 
 Mr. Milward : — The Court has to determine some mode in 
 which the assets are to be distributed. The question is, what is 
 the interest which the policy-holder has in the share of the assets 
 of the company. He has been paying in so much, and he has by 
 his payments created an existing liability. 
 
 Loed Caiens : — He has created a species of property. 
 
 Mr. Milward : — Yes, and to that property he has contributed so 
 much, and his discontinuance of contribution being the act of the 
 law, ought he not in justice to have back from the fund a sum 
 equivalent to the sum he has contributed ? 
 
 Loed Caiens : — He never had that claim against the company. 
 Does this claim come within the category of claims sounding in 
 damages, at all ? If the event had occurred, the sum would be 
 certain. A.n action might be necessary, but there would be no 
 doubt about the sum which the jury must award. When an Act 
 of Parliament speaks of a claim sounding in damages, does it not 
 mean damages for a broken contract where no specific sum is 
 fixed ? And it must not be assumed that the fact of a winding-up 
 order being made is tantamount to a refusal, by anticipation, to 
 receive any more premiums ; it is ambiguous ; it, therefore, must 
 not be assumed that the claim is to be valued as a claim on a 
 
LOED OAIENS'S DECISIONS. 79 
 
 broken contract. It may be a claim to be valued on the footing Lancaster's 
 
 of a contract which was not broken at the date of the winding-up ' 
 
 order. 
 
 Mr. Milward : — But which was certain to be broken, and after- 
 wards is broken, and the breach of which, therefore, relates back 
 to the moment of the winding-up, light being thrown on the 
 transaction from what afterwards takes place. 
 
 Lokd Cairns : — Yon have observed the General Order of the 
 Court under the Companies Act, 1862 ? 
 
 Mr. Milward : — Yes ; that does not vary the principle. The 
 true way of looking at it is as a matter of damages. The insured 
 had a right to go on paying, the company agreed that he might 
 go on paying, and that they would take his money ; then the time 
 comes when they break that bargain. It is like the case of an 
 underwriter at Lloyd's saying to the insured : I declare off the 
 risk; I give you notice that I will not, if there is a loss, be 
 responsible for it ; and more than that, there is no use in your 
 suing me by-and-by, because if there is a loss I shall not be able 
 to pay ; I therefore put an end to the existing arrangement 
 between us, and you had better take care of yourself and make 
 the best arrangement you can, so as to suffer as little damage as 
 possible. There the damage is not necessarily the sum which the 
 next underwriter in Lloyd's room, if he were solvent, would require 
 for that risk, but the amount of that sum is an ingredient in the 
 estimation of the damage to be arrived at. The question comes 
 to be a question of damages, on the principle of reinstating the 
 insured in the same place, as far as the calculation of money paid 
 down at the time will enable him to be reinstated. 
 
 Lord Cairns : — Suppose you have the life of another person in- 
 sured for £5000 ; he is in the backwoods of America ; he is known to 
 be alive ; he is perfectly willing to come back to be re-examined 
 in this country ; but he says : I cannot come back at my own 
 expense ; you must pay my expenses home and out again ; if you 
 do so, then I will come. His expenses home and back again 
 would be, suppose, £100, and you, being the person who wants to 
 
80 ALBERT ARBITRATION. 
 
 Lancaster's reinsure, cannot effect the reinsurance without paying the £100 ; 
 
 J on what principle, the assets being insufficient, could the other 
 
 persons, who have an interest in the assets, be called on to pay the 
 expenses that you would incur in bringing your life back ? 
 
 Mr. Milward: — On the ground that they, being mutual con- 
 tractors, are contractors with us for the performance of the policy. 
 We look to the fund. A portion of the £100 would come out of 
 the fund which we contribute to. If we suffer an additional 
 pecuniary loss as a consequence of the common misfortune, should 
 not that be dealt with as part of the common misfortune? It 
 would be hard on an individual policy-holder who has his life in 
 America, to have to suffer £100 more loss than another policy- 
 holder who has his life nearer the office. 
 
 Loed Cairns : — He would not suffer at all, as regards nearness 
 to the office, if all the- claims were valued on the other principle, 
 that of ascertaining the value of each as a species of property. * 
 
 Mr. Milward : — As among themselves that may be so, but is it 
 just to us ? Is that the contract between the company and us ? 
 We have got our contract, and it is pecuniarily valuable to us. 
 The matter is not to be looked at only from the point of view of 
 the company ; it is to be looked at from the point of view of the 
 insured. An estimate of value being required, is it the value to 
 the claimant, or is it the value to the company ? The Act does 
 • not say. Is not the insured entitled to prove for the amount 
 he has lost ? 
 
 Lord Cairns : — It is the value of the thing itself — the value of 
 the claim. If you find, in point of fact, a claim by way of 
 insurance can be ascertained on principles which are well known 
 to persons conversant with insurance business, is it not natural to 
 assume that that is the value within the Act ? 
 
 Mr. Milward : — Bell's Case adopts the principle for which we 
 are contending. It treats the matter as a question of damages. 
 What damages would a jury give to each individual? They 
 would give the amount of loss he had suffered. It would be an 
 element in the estimate of damages, what he could go to another 
 
LOKD CAIRNS'S DECISIONS. 81 
 
 office and have a similar policy for, but that may not be the only Lancaster's 
 guide i because it is clear he is not bound to reinsure at all ; he ASE ' 
 
 may take the sum and keep it. It is a question of money had and 
 received, though there is that great difficulty that we have had 
 during the time a certain consideration for it. That perhaps 
 would have to be valued and deducted. The other principle does 
 not give to the individual policy-holder a compensation for his 
 individual rights ; although, from the point of view of the com- 
 pany, and for their convenience, it might be fair. 
 
 Mr. Mackenzie (solicitor) stated that he had acted in 
 Bleackley's Case, L. R. 9 Eq. 709 ; 
 which was the case of a profit policy. He submitted that if the 
 insured's damages were to be ascertained, that must be done with 
 reference to the amount of premiums he had paid, and he should 
 not be mulcted in the additional amount paid for participation. A 
 further point was this : for an insurance now a sum in excess of 
 what w 7 as paid to the Albert would have to be paid ; that was to be 
 capitalized ; the liquidators proposed to deduct from that capi- 
 talized sum the two years' premiums not paid pending the winding- 
 up ; that deduction was not fair, for it was by no fault of the 
 insured that he had not paid the two years' premiums. 
 
 Mr. Walford said he appeared for policy-holders in Germany, 
 who desired the contention to be presented to the Arbitrator that 
 no part of the contract had been performed by the company ; 
 the risk insured against was the contingency of death ; the con- 
 tingency had not happened ; and therefore they should not be 
 charged with any proportion of the premiums which they had 
 paid, by reason of the possibility that the contingency might have 
 happened. They said that the contract had been determined by 
 circumstances beyond their controul, and that they ought to be 
 treated as the company would have treated them if they had ceased 
 to pay their premiums, that is, they would have lost every shilling 
 of the premiums they had paid ; therefore they said they were 
 entitled to the return of the premiums. 
 
82 ALBERT ARBITRATION. 
 
 Lanoastek's Lord Cairns : — No breach of the contract on the part of the 
 — ! company would have entitled the insured, if the company had 
 continued solvent, to sue at law for a return of premiums ; they 
 might be entitled to damages ; the damages might be assessed on 
 various conceivable footings ; but they could never have recovered 
 the premiums entire. 
 
 Mr. Caldeoott said he had appeared in 
 
 Griffith's Case, L. E. 6 Ob. 374. 
 The life was uninsurable at the time of the winding-up, and 
 though it was still existing, the amount of premiums paid was in 
 excess of the sum assured. He had no objection to the applica- 
 tion of Bell's Case if it was held that, the life being uninsurable, the 
 sum to be proved should be the whole amount payable under the 
 policy, that being the amount that would have to be paid for a 
 new insurance on the same terms. Another view was, that the 
 insured should have a return of the premiums paid because they 
 exceeded in amount the sum insured. There were difficulties in 
 viewing the question as one of damages. It was a question of the 
 distribution of assets. It was the case of persons contributing 
 yearly to the establishment of a fund to be distributed among them 
 according to the amount insured for. Therefore they should have 
 repaid to them the amount of their respective contributions to the 
 fund, thatis, the premiums. However much difficulty might arise, 
 an estimate must be made in each case according to the condition 
 of the life at the date of the winding-up order. 
 
 Lord Cairns : — We are now in 1871 ; how are we to ascertain 
 what was the condition of the life at the date of the winding-up 
 order in 1869 ? 
 
 Mr. Caldeeott admitted there would be great difficulty ; but 
 those who, as General Griffith, had been diligent enough to obtain 
 evidence of the condition of the life at the time, would be in a good 
 position. The Court, however, was not to be frightened by the 
 difficulties of the case, but was bound to do its utmost, and put the 
 matter in course of inquiry to ascertain, as far as it could be done 
 by evidence, the value of each policy according to the condition of 
 each life at the date of the winding-up order. 
 
LORD CAIRNS'S DECISIONS. 83 
 
 Lord Cairns : — Still, is it not a proper way to test the validity Lancaster's 
 of any scheme that is proposed, to consider how far the scheme is _!!!.' 
 practicable ? 
 
 Mr. Lattey (solicitor) stated that he had acted in Bell's Case, 
 and that it was there decided, with regard to Indian policies, that 
 Mr. Bell would be entitled to have a policy permitting him to go 
 to India as his original policy permitted (there being classes of 
 policies which, bearing a higher rate of premium, gave a right to 
 come to England and return to India) ; and he submitted that 
 that part of the decision should be adhered to. 
 
 Mr, Burton (solicitor) stated that he had acted in 
 Craig's Case, L. E. 9 Eq. 711. 
 At the date of the winding-up order Mr. Craig was ill, and his 
 life was uninsurable ; he had since died. The line must be drawn 
 at the date of the winding-up order. Then it would have to be 
 determined what was the value at that date of a policy on the life 
 of a man who was then mortally ill. 
 
 Lord Cairns : — Is not that the ordinary case of a life uninsurable 
 at the date of the winding-up order ? Can a life be worse than un- 
 insurable ? 
 
 Mr. Burton : — The value of the claim would be the full amount 
 of the policy, deferred only for the two months between the pre- 
 sentation of the petition and the order, and subject to no payment 
 of premium. 
 
 Mr. Kennedy (solicitor) seated that he held a policy on his own 
 life, and that he was in the position of having evidence to prove 
 that his life was uninsurable at the date of the winding-up order, 
 and continued uninsurable, and submitted that he was entitled to 
 the full amount of the policy, subject to deduction of the number 
 of premiums he might have been liable to pay. 
 
 Mr. Higgins : — The question in Craig's Case has been a source 
 
 II 
 
84 ALBEET AEBITBATION. 
 
 Lancaster's of great difficulty in many liquidations. The Vice-Chancellor, in 
 
 ! Craig's Case, laid down, having had a discussion on the point 
 
 before him, that the time for the valuing of the claim in each case 
 was not the date of the commencement of the winding-up, nor the 
 date of the order to wind up, nor the date of the adjudication 
 on the claim, nor the date of the happening of the event, but the 
 date of the bringing in of the claim. That would give rise to this 
 very inconvenient result, that in all such cases, in every winding- 
 up, persons might postpone their claims. 
 
 Lord Cairns : — All that a policy-holder would then have to do 
 would be to watch the proceedings in the winding-up, and, -if the 
 life dropped before the conclusion of the proceedings, practically 
 he would be insured for the whole time. 
 
 Mr. Higgins : — That decision seems to require re-consideration. 
 
 I submit, on behalf of the capital of the fund, that is, the general 
 body of policy-holders, that there ought to be one uniform rule, 
 that the rights of every claimant should be determined- as at the 
 date of the order to wind up ; that is the date fixed by rule 25 of 
 the General Order, as distinguished from the date of presentation 
 of the petition, from which, under the Act, the- winding-up com- 
 mences. 
 
 Lord Cairns : — The Act carries back the date in order to over- 
 reach anything improperly done in the meantime. It does not 
 suspend the action of the company as regards proper transactions. 
 All proper transactions are protected. 
 
 Mr. Higgins : — That is, no doubt, a very good reason for having 
 two dates. 
 
 With respect to Mr. Mackenzie's suggestion of injustice in the 
 question of the two years' premiums, the answer is, that if the 
 liquidators pay the reinstatement value, that will be greater by 
 reason of the delay, and therefore they should have the two years' 
 premiums. 
 
 Lord Caiens : — These complications all arise from the wrong 
 date being taken. If the date of the order to wind up is taken, 
 this question does not arise. 
 
LOED CAIRNS'S DECISIONS. 85 
 
 Mr. Eiggins : — It is plain that we must have the two years' pre- Lancaster's 
 
 miums, or else the proof must be as at the date of the order to 
 wind up, and, not as at a date subsequent by two years. 
 
 With respect to section 158 generally, the difficulty of arriving 
 at a just estimate lies in determining whether or not there should 
 be one general rule applicable to all cases, or a general rule 
 subject to exceptions, and then what those exceptions should be. 
 The solution might be to lay down a general rule, and to say that 
 every person should come within it, unless he could shew special 
 circumstances ; thus leaving it open to any person whose life can be 
 shewn to be uninsurable at the date of the winding-up order to 
 come in and prove the fact, the burden of proof being put on any 
 one claiming to be in an exceptional position. ~ a 
 
 Lord Caikns : — What has the question of the uninsurability of 
 the life to do with the Act ? We know as a fact there are other 
 insurance offices ; we may know, as a matter of fact, whether a 
 particular life tendered to another office would be accepted or not ; 
 but suppose there were no other insurance offices. Must you not 
 consider the case against the particular company under the Act, 
 without reference to the existence or non-existence of surrounding 
 companies, or what they may do or not do ? There is another view 
 which may affect you as representing the company at large ; that 
 is, whether, unless one is positively driven to it by the wording 
 of the statute, there must be an internal investigation as to 
 the value of each particular life in the case of a company that is 
 insolvent ; whether that would not be a cruelty to every person 
 concerned. The solution of such a question might cost a great 
 deal more than the assets of the company. 
 
 Mr. Riggins: — There is another element to be taken into 
 account, the probability of lapses. A person claiming on a ten 
 years' policy is assumed to have a claim on the footing of a con- 
 tinuing policy, whereas he might have allowed it to drop the very 
 next year. Statistics shew that policies of considerable standing 
 lapse. This is an instance of a vast number of questions that 
 might be suggested, which cannot possibly be solved. 
 
 Lord Caikns : — The real point is as between the two general 
 
 H 2 
 
 Cahe. 
 
86 ALBERT ARBITRATION. 
 
 Lancaster's principles, the principle of damages, regard being bad to the par- 
 
 " ticular circumstances of each particular case, on the one hand, and 
 
 the principle of a uniform valuation of the claims on the other 
 hand. 
 
 Mr. Biggins :— On behall ol the general body, it is submitted 
 that it is not a claim for damages. If, while a company are a 
 going concern, the fund is not sufficient to pay a claim that has 
 actually arisen by the falling in of a policy, then, according to 
 King v. Accumulative Company, 3 C. B., N.S., 151, 
 an action for damages would not lie. It would be a good answer 
 to such an action to say there is no fund. This is illustrated by 
 section 21 of the Act of 1870 relating to life assurance companies. 
 If the directors of a company after a policy had fallen due were to 
 say : Having regard to our contingent and prospective liabilities 
 (to use the words of that section) we are insolvent, and therefore 
 ought not to pay this claim, — there would be no right of action on 
 the part of the policy-holder against the company, and no breach 
 of contract, because the contract is in respect of a fund. The only 
 question would be whether that fund was sufficient to answer all 
 the obligations of the company. Therefore it simply comes to a 
 question of administration. The operations of the company cannot 
 be continued ; there is a fund out of which the engagements of the 
 company ought to be answered ; there is no right to claim on the 
 footing of damages; therefore, the value of the claim is to be 
 estimated according to the policy, or the contract with the com- 
 pany, and not by reference to intervening circumstances, or to any 
 alteration in the condition of the life one way or the other. These 
 principles are illustrated by 
 
 Mclver's Case, L. R. 5 Ch. 424. 
 
 Evans v. Coventry, 5 De G. M. & G. 835. 
 
 A reply was not called for. 
 
 Judgment reserved. 
 
 'July 21. Lord Cairns :— This case was brought before me for the purpose 
 
 of determining the mode of ascertaining the amount of proof upon 
 policies and annuities. 
 
LORD CAIRNS'S DECISIONS. 87 
 
 This is a question of considerable difficulty. I should have been Lancaster's 
 very glad if I had found that any principle had been adopted by _^!!.' 
 the Court of Chancery in the course of the winding-up which 
 would have been applicable, on satisfactory grounds, both to 
 policies and to annuities, and which therefore I could have followed 
 without any further examination. I have been unable, however, 
 to satisfy myself that any principle has been adopted by the Court 
 of Chancery which will apply on sound and clear grounds to the 
 cases of policies and of annuities, and which would, in my opinion, 
 be consistent with the enactments of the Act of 1862. 
 
 In considering the question I have to deal with the case, and 
 only with the case, of those life policies and annuities which were 
 actually current at the date of the winding-up. Where instal- 
 ments of an annuity had actually become payable, or where a life 
 policy had actually become payable, before the date of the winding- 
 up, there no question as to valuation arises. The claim would be 
 admitted for the actual sum that ought to have been paid before the 
 winding-up. I have to deal with those cases only where the policy 
 or the annuity contract was eurrent at the date of the winding-up. 
 
 There are in some or all of the companies other contracts of a 
 more special kind — for instance, endowments and contracts of sur- 
 vivorship — but the general observations will apply, with an altera- 
 tion of detail only, to those cases. 
 
 I take first the case of an annuity contract. The contract in that 
 case is of the most simple kind ; it is a contract to pay half-yearly or 
 yearly an annuity to the annuitant so long as the annuitant lives. 
 In the case I have supposed there is no breach of contract at the 
 date of the winding-up, and there being no debt at the date of 
 the winding-up, the case falls within section 158 of the Act of 1862. 
 Coupled with that there is to be taken the 25th rule of the General 
 Orders issued under the authority of the statute. In this case 
 we have, therefore, to deal with what may be termed a debt solven- 
 dum infutwro, to be paid year by year so long as the annuitant 
 Kves. There is no uncertainty in the amount that will have to be 
 paid. There is no question of damages. There is nothing directed 
 by the Act to be taken into account with regard to any peculiar 
 damage to any particular individual by reason of the non-payment 
 of his annuity, although the non-payment of an annuity to one 
 
88 ALBERT ARBITRATION. 
 
 Laxcastee's person may be a much more serious and inconvenient thing than 
 the non-payment of it to another. What the Act directs to be 
 ascertained is, the value of the annuity as the thing of itself 
 capable of valuation, without any reference whatever to the circum- 
 stances of the person who is to receive the annuity. The only 
 question, therefore, is as to the scale and manner of valuation. I 
 find, with regard to annuities, that in some of the companies 
 absorbed by the Albert valuations have already been made by the 
 Court of Chancery, founded on the tables of the company granting 
 the annuity. These valuations have, however, not been made, as 
 at the date of the winding-up order, according to the General 
 Order, but have been made at a date subsequent, either on the 
 bringing in of the claim or on somej other day subsequent to the 
 winding-up order. In my opinion, so far as regards the mode of 
 valuation and the scale of valuation, this principle is correct, but 
 the time at which the valuation is made is, in my opinion, wrong. 
 It is obviously a fair and proper mode of valuation when you can 
 find the tables of the company which has granted the annuity to 
 take those tables as the basis of valuation. It is a right thing, if 
 a person is to be reimbursed, as it were, the value of his annuity, 
 that the value should be ascertained on the same scale on which 
 the annuity was originally granted and paid for. The result, there- 
 fore, with regard to annuities is that, in my opinion, in every case 
 a valuation of the annuity must be made as at the date of the 
 winding-up order/ according to the tables of the company originally 
 , granting the annuity, and where those tables cannot be ascertained 
 (which possibly may be the case in some of the minor companies), 
 then according to the tables, which after consideration I have 
 thought the best one to adopt, the tables called the Government 
 Annuitants' Experience Tables, taking four per cent, as the rate 
 of interest. 
 
 I now come to the case of policies of insurance. I take at 
 present whole-life policies. I may repeat shortly what I have 
 often had occasion to say here. What is the nature of the contract 
 of insurance ? It is a contract by which the insured is under no 
 obligation to pay the premiums, by which the company insuring 
 are under no obligation to continue their business, but by which the 
 
LOKD OAIENS'S DECISIONS. 89 
 
 company undertake that if the person insured will pay the fixed Lancaster's 
 
 premiums from year to year, the funds of the company for the '. 
 
 time being, including the unpaid capital, shall be answerable in 
 proper order to pay the sum insured, on the falling of the life and 
 on proper proof of that event being given to the company. 
 
 That being the nature of the contract, it is to be observed in the 
 first place, that at the date of the commencement of the winding- 
 up, taking it distinctly as at that moment of time, there is no 
 breach of the contract. I have said that where the life has dropped 
 before the winding-up, a policy of that kind stands in a different 
 position ; it is an actual claim for the whole amount. It is also 
 to be observed that we have here to deal not with the case of a 
 going company being sued for a breach of contract. Indeed, it 
 is very' difficult to see in a case of a policy of insurance, how there 
 can be any breach of contract short of a refusal to pay on the 
 falling of the life. I know it has been suggested that a refusal to 
 receive the premiums from year to year would be a breach of the 
 contract, and that thereupon an action might be brought. I do 
 not desire to express any opinion on that point, but it is somewhat 
 difficult to see how such an action could be maintained, and cer- 
 tainly, as far as I know, no such action has ever been maintained. 
 But all that may be set aside here, because, whether an action 
 could or could not be maintained for a refusal to receive the 
 premium, I repeat that at the date of the commencement of the 
 winding-up, even in that sense, there was no refusal to receive the 
 premium, and therefore, no breach of contract. If, however, a 
 going company were sued for a real breach of the contract, that is 
 to say, for non-payment of the sum insured, there again it is diffi- 
 cult to imagine how there could be any damages other than the 
 amount which was covered by the policy, which ought to have 
 been paid. In the case with which I have to deal it is only, as it 
 seems to me, under the operation of section 158 and the 25th rule 
 that policies current at the date of the winding-up can be provided 
 for, and claims in respect of them entertained under the winding- 
 up, at all. I should have thought but for an authority in the Court 
 of Chancery, which I shall presently refer to in detail, namely, 
 Bell's Case, the course pointed out by this section and this rule was 
 clear. It is well known what putting an estimate on the value of 
 
90 ALBEKT AKBITRATION. 
 
 Lancaster's a policy of insurance means. Persons may differ as to the tables 
 
 , 1' by which the valuation is to be made, or as to the rate of interest 
 
 to be taken, but the way in which the value of an insurance is to 
 be estimated is a thing perfectly well known, and the thing is 
 attempted and succeeded in every day ; and I should have thought, 
 but for the decision to which I have referred, the course under 
 section 158 and the 25th rule was a clear one, and as simple as any 
 somewhat difficult problem of arithmetic could be mad,e. 
 
 The effect of the decision in Bell's Case, however, as I understand 
 it, is this. The Court there held that this mode might be adopted 
 of valuing a policy. You might select another company with 
 premiums the same as the Albert, with capital and guarantee pro- 
 prietary fund as nearly as possible the same as the Albert had, or 
 at all events professed to have. You might then go to that com- 
 pany and find for what premium that company would now insure 
 the life of a person insured in the Albert, after examining if neces- 
 sary the state of health, and then, when you had found the 
 premium which the person insured would have to pay to this new 
 company at the present time, and had compared that with the 
 premium he before paid for the same amount to the Albert, and 
 had taken the difference between the two premiums, and had capi- 
 talized that difference, having regard to the expectancy of life, you 
 would then have the amount which ought to be paid to the person 
 insured to put him in as good a position as he would have been in 
 if the Albert had not been wound up. Now, so far as that sum 
 arises from the mere difference of age, introducing no other ingre- 
 dient into the case, but taking, for instance, a person who was 
 insured in the Albert at the age of 25, and who is to be re- 
 insured in this supposed company at the age of 50, not look- 
 ing at any difference in the state of health at one time and another, 
 but merely looking at the difference of premium for a man of 
 25 and a man of 50, — so far as the decision was founded on those 
 elements, the decision would have supplied not an inaccurate 
 mode, although a somewhat rough mode, of arriving at an 
 estimate of the value of the policy. If there was nothing more, 
 then, I should have been willing to have followed that principle. 
 But the difficulty I feel is in following the decision so far as it 
 introduces into the case other elements, namely, the re examination 
 
LORD CAIRNS'S DECISIONS. 91 
 
 and the consequences of the re-examination, or the non-examina- lancasteb's 
 
 tion, of the lives to he insured by the new company. Because the ' 
 
 decision goes to this, that if the particular person whose life is 
 proposed for re-insurance has in the meantime passed into a state 
 of health which either makes him non-insurable or makes him 
 insurable only on more disadvantageous terms than formerly, or 
 if the life to be re-insured cannot be produced for re-examination, 
 in all those cases the person insured is under some peculiar and 
 special damage arising in his own particular case> a special and 
 peculiar damage, separate from the question of the value of his 
 policy ; and, practically, provision is to be made out of the assets 
 of the company for that peculiar and special damage. 
 
 I have considered Bdl's Case with great anxiety, as the decision 
 of a judge for whose opinion I have the highest possible respect, 
 and who appears in that particular case to have taken very great 
 pains to give weight to all the arguments which were addressed to 
 him in support of the different views that were then proposed to 
 the Court. I will state shortly the reasons which make me unable 
 to follow the part of the decision which I have last adverted to. 
 
 In the first place, I find (judging from the report) that neither 
 in the arguments before the Court nor in the judgment of the 
 learned Judge, was any reference whatever made to the section of 
 the Act which I have mentioned, or. to the 25th rule. In point of 
 fact, the date of the winding-up order mentioned in the 25th rule 
 was not taken at all as the date for valuation, but a period altoge- 
 ther different, namely, a period at the close of the time covered by 
 the last premium that was paid. I cannot help thinking that if the 
 section and the rule had been prominently brought before the 
 Court, the Vice-Chancellor would scarcely have arrived at the 
 conclusion he did in Bell's Case. 
 
 In the next place, in my opinion, the problem to be solved under 
 the Act being the finding of a just estimate of the value of the 
 policy, the special damage sustained by a particular individual has 
 nothing whatever to do with the value of the policy. In the course 
 of the argument I put a case that will illustrate sufficiently my 
 meaning. Take the case of A. effecting an insurance on the life of 
 B. B. is abroad. The object is that A. should be re-insured in a 
 new company. The new company will say : You must produce 
 
92 ALBEET ARBITRATION. 
 
 Lancaster's the life, so that we may examine him. He, being abroad, will not 
 
 . . come at all ; or, being at a great distance from England, says : I 
 
 will come home if you pay my expenses home, to be re-examined, 
 and back again, which will cost £200. The question that occnrs 
 to my mind is, what possible equity can there be, in the distribu- 
 tion of assets, to make the other policy-holders pay tin's £200 
 (because it must be paid out of their money), in order to indemnify 
 the particular policy-holder A. for the expense of bringing to this 
 country the life that is to be inspected for re-insurance? In 
 point of fact, special damage seems to me to be a thing relating 
 entirely to a different class of ideas from the class of ideas entering 
 into the question of the valuation of a policy for the purpose of 
 paying its value out of assets. Special damage would apply to the 
 case I supposed some time ago, of an action brought against a 
 going company for a breach of contract, in which case a jury might 
 be directed to take into account the special damage done to the 
 particular individual. 
 
 The next point in regard to BelVs Case which I have to observe 
 on is this : the mode of valuation there adopted involves the 
 question of what another company would think of the health of 
 the person formerly insured in the company being wound up. 
 Now, in the first place, that raises the inquiry not merely of what 
 the state of health of the person now is, but retrospectively what 
 the state of health of the person now to be examined was at a 
 period nearly two years past and gone, as to which the state of 
 health of anv person must be merely a matter of speculation and 
 conjecture. Further than that, it introduces not merely opinion 
 evidence as to the state of health, which is never satisfactory, 
 but opinio evidence of the worst possible kind, because it is to be 
 the opinion evidence of another company, or of the officers of 
 another company, who are not going actually, or may not be 
 going, to insure the life ; for there is to be no obligation after all 
 upon the other company to insure the life, and no obligation upon 
 the person making the claim to insure himself in the other com- 
 pany. It is opinion evidence, then, which you have no means of 
 checking, because the inquiry proposed by the Court is what would 
 another company do if they were asked to insure the life. The only 
 answer to that can be from the other company, that they would 
 
LORD CAIENS'S DECISIONS. 93 
 
 either insure the life or not, or would insure it for such an addi- Lancaster s 
 
 tional sum, and from the very nature of the case that is evidence ' 
 
 which cannot be controverted, because it is not evidence of a fact, 
 but evidence of a merely speculative opinion. 
 
 Further, the test proposed in Bell's Case substitutes a solvent for 
 an insolvent company, and under the guise of attempting to put 
 the person insured in as good a position as he was hi before, 
 the mode adopted would put him in a very much better posi- 
 tion. 
 
 Then, this alone would be to my mind an insuperable difficulty 
 in adopting the principle in Bell's Case: the principle of that case 
 is not homogeneous with the mode of valuing annuities adopted by 
 the Court of Chancery in this winding-up. Annuities are pro- 
 posed to be valued precisely on the principle of taking the value 
 of the annuity as a piece of property, and not on any question 
 of special damage sustained by the annuitant. Therefore in deal- 
 ing with assets, of which there must be a distribution between 
 annuitants and policy-holders, and which ought to be distributed 
 on homogeneous principles as between those two classes of 
 claimants, the Court would be dealing with one class of claimants 
 in one way and with the other in a perfectly different way, and 
 instead of dividing the assets equitably would be dividing them 
 inequitably. 
 
 I am therefore unable to follow the mode of valuation suggested 
 in Bell's Case ; and after the best consideration which I am able to 
 give to the subject, and after fortifying myself with the best advice 
 which I could procure from the best authorities, I have, come to 
 the conclusion that there must be what is termed and well known 
 as a pure-premium valuation, as at the date of the winding-up 
 order, the rate of interest assumed being 4 per cent., and the tables 
 being the Seventeen Offices' Experience Tables. The principle will 
 be adopted in this way. There must be determined on the one 
 hand the present value of the reversion in the sum assured at the 
 decease of the life, and on the other, the present value of the 
 future annual premiums. The difference between these two sums 
 represents the value of the policy. But the annual premium pay- 
 able is divisible into two parts : first, the part which it is calculated 
 will provide for the risk, called the pure prf-mium ; and secondly, 
 
94 ALBEKT ARBITRATION. 
 
 Lancaster's the addition for office expenses and other charges, which is some- 
 
 ' times called the loading. The pure premium only is to be taken 
 
 into account. The value of the policy therefore will be the differ- 
 ence between the value of the reversion in the sum assured, 
 and the value of a life annuity of an amount equal to the pure 
 premium. 
 
 The Indian policies will be valued on the same principles as the 
 European. On Indian policies an extra premium is payable so 
 long as the lives insured are in India, which is remitted on their 
 return to Europe. This temporary extra premium is the equivalent 
 for the increased mortality of the tropical climate, and will not be 
 taken into account id the valuation. 
 
 The observations I have made have put out of the case alto- 
 gether the question of any peculiar mode of valuation of profit 
 policies. That I consider to have been properly dealt with by 
 the Court of Chancery. ' The portion of the premium attributable 
 to the sharing of the profits is altogether out of the case. 
 
 Solicitors for Mr. Lancaster: Messrs. Gregory, Roweliffes, & 
 Bawle. 
 
 Solicitors for Albert : Messrs. Lewis; Munns, & Longden. 
 
LORD CAIENS'S DECISIONS. 95 
 
 LANCASTER'S CASE. (No. 2.) 1871 
 
 Policy — Novation. June 1, 15. 
 
 Novation consequent on amalgamation established against a policy-holder, 
 in the following circumstances : After the amalgamation he continued to 
 pay his premiums to the agents through whom he had effected the policy, 
 who were also his solicitors ; for the first payment he was given a receipt 
 of the transferee company in a form which stated that the liability of his 
 assuring company, the transferors, had been taken by the transferee company, 
 subject to the payment to them of all premiums payable under the policy 
 for keeping the same in force ; and on inquiring (through the agents, acting 
 as his solicitors) from the transferee company in what circumstances the 
 policy had- been so taken, he was informed by the transferee company that 
 the business of his assuring company had been transferred to them, in conse- 
 quence whereof, they stated, they (the transferee company) were liable for the 
 sum assured by the policy ; and for the subsequent payments he was given 
 and accepted receipts of the transferee company simply. 
 
 1 HIS was a claim by Mr. Lancaster (which, had been pending in 
 the Court of Chancery on an adjourned summons) to prove against 
 the Bank of London on a policy,, dated 9 April, 1858, issued to him 
 by that association on his own life, for £5000. 
 
 Mr. Milward, Q.C., (Mr. Bowelife with him) was for Mr. Junel. 
 Lancaster. 
 
 Mr. Eddis, Q.C., (Mr. Rodwett with him) was for the Bank of 
 London. 
 
 Mr. Milward contended that in the circumstances there was no 
 novation. He mentioned 
 
 Potts' Case, L. E. 5 Ch. 118 ; 
 Fleming's Case, L. E. 9 Eq. 306 ; 
 Bartlett's Case, L. E. 5 Ch. 640 ; 
 NunneUy's Case, L. E. 5 Ch. 381 ; 
 Challis's Case, L. E. 6 Ch. 266 ; 
 Griffith's Case, L. E. 6 Ch. 374 ; 
 Spencer's Case, L. E. 6 Ch. 362. 
 
 Mr. Eddis was not called on. 
 
 Judgment reserved. 
 
June 15. 
 
 96 ALBERT ARBITRATION. 
 
 Lancaster's Loed Cairns : — This is a claim by Mr. Lancaster against the 
 (No. 2.) Bank of London on a policy dated 9 April, 1858, on the life of the 
 claimant. The policy was effected through Messrs. Woodcock & Co., 
 solicitors, of Wigan, the solicitors of Mr. Lancaster. They appear 
 also to have been the agents in Wigan of the Bank of London, 
 and, as I gather, the agents there of some other insurance companies. 
 They x effected for Mr. Lancaster, as I understand the evidence, 
 about the same time, three policies in different offices, one being 
 the policy with the Bank of London on which this claim arises. 
 
 The Bank of London and the Albert amalgamated in October, 
 1858. No circular is proved to have been sent to Mr. Lancaster 
 on the subject of the amalgamation, nor is it proved to my satis- 
 faction whether any or what circular was sent to Messrs. Wood- 
 cock & Co. There is reason to suspect, from what afterwards 
 happened, that either Mr. Lancaster or Messrs. Woodcock & Co., as 
 his solicitors, had a circular on the subject, but in point of evidence 
 it is not proved. 
 
 The receipt for the premium paid in 1859, the first premium 
 payable after the amalgamation, namely, in April, 1859, is not 
 produced by Mr. Lancaster. The history of the transaction attend- 
 ing the payment of this premium; and of the subsequent premiums, 
 I must take from the evidence in the case. Mr. Scott, son of a part- 
 ner in the house of Messrs. Woodcock & Co., says in his affidavit : 
 
 A letter of credit for £333 13s. 8d. by Messrs. Thomas Woodcock & Sons, 
 bankers, Wigan, on Messrs. Barclay, Bevan, & Co., in favour of the Bank of 
 London Association was sent to the said association by the said firm of Wood- 
 cock, Part, & Scott, in payment of the renewal premium on the said policy of 
 £5000 on the life of the said John Lancaster for the year 1859, and' of another 
 policy in the same association on the life of Sir Bobert Tower Gerard, and on the 
 22nd of April, 1859, the said firm of Woodcock, Part, & Scott received the follow- 
 ing letter from the secretary of the said association : — 
 
 Albbbt Life Assurance and Guarantee Company. . 
 
 7, Waterloo Place, London, 
 21 April, 1859. 
 Sirs, — I beg to acknowledge the receipt of your remittance, value £333 13s. 8'/., 
 and in return have the pleasure to enclose the official receipts for premiums on life 
 policies Nos. 6638 and 6887. I am, &c. 
 
 Henry W. Smith, Actuary and Secretary. 
 
 That is Mr. Scott's evidence of the letter that was sent by the 
 company. The letter states that the writer inclosed the official 
 
LOKD CAIRNS'S DECISIONS. .97 
 
 receipts for the premiums on the two policies. Those official Lancaster's 
 receipts would therefore properly come from the possession of (No. 2.) 
 Messrs. Woodcock & Co., or of Mr. Lancaster ; they are fixed with 
 the official receipt, whatever was the form of it at the time ; but 
 as I said, without imputing blame to any person, the official re- 
 ceipt is not produced by Mr. Lancaster or Messrs. Woodcock & Co. 
 Then Mr. Smith takes up the narrative in his affidavit : 
 
 3. The Albert for the first twelve months after the transfer thereto of the 
 business of the Bank of London issued receipts on payment of the renewal pre- 
 miums on policies effected with the said association in the form of that now pro- 
 duced and shewn to me marked 10. 
 
 The official receipt, the form of which is thus spoken to by Mr. 
 
 Smith, is this : 
 
 Albert Life Assurance Company. 
 
 Received the day of the sum of pounds, being the premium 
 
 for the renewal of policy number , in the Bank of London, on the life 
 
 of , for twelve months from , 1859, the liability of the Bank of London, 
 
 by reason of the death of the said , in respect of the sum of assured 
 
 by such policy having been taken by the Albert, subject to the payment to them 
 of all premiums and moneys now or hereafter to become due and payable under 
 the same policy for keeping the same in force. 
 
 In my opinion, Mr. Lancaster or Messrs. Woodcock & Co. not 
 being able to produce any other official receipt inclosed in that 
 letter, this is evidence which ought to satisfy me that the official 
 receipt in the form I have read was inclosed in that letter. Mr. 
 Smith continues : 
 
 4. I find from the press copy letter book of the Albert from the 28th of 
 March to the 23rd of April, 1859, that on the 21st of April, 1859, I signed a 
 circular letter to Messrs. Woodcock, Part, & Scott, of Wigan, enclosing two re- 
 ceipts for premiums on policies, one of which policies was numbered 6638 and 
 the other 6887 ; and I also find from the postage-book of the Albert for the 
 corresponding period, that that letter is entered as having been posted on the day 
 it bears date 
 
 6. The renewal receipt on the policy numbered 6638, enclosed in the said letter 
 to Messrs. Woodcock, Part, & Scott, was in the same form as the said receipt 
 marked 10. It was torn from the counterfoil now produced, and shewn to me 
 marked A., and was the next receipt to that marked 10 as aforesaid. I cannot at 
 this distance of time say that I recollect the form of receipt enclosed in this par- 
 ticular letter, but, as stated in the third paragraph of this affidavit, I know that 
 at that time the Albert issued receipts in that form, and as the said counterfoil 
 appears in its proper place, I have no doubt whatever of the fact. 
 
98 ALBERT ARBITRATION. 
 
 Lancaster's Nor have I any doubt at all on that evidence. Then Mr. Lan- 
 (No. 2.) caster is cross-examined, and he says in his cross-examination : 
 
 I cannot account Tor my not being able to produce the receipt for 1859. I am 
 sure that I paid the premium to Messrs. Woodcock. I should pay it by cheque. 
 My practice was to send a cheque by~letter. — (Question.) When do- you recollect 
 first hearing of an arrangement between the Bank of London and the Albert 
 Insurance Company ? — (Answer.) I do not recollect, but I recollect a change in 
 the form of the receipt, and I asked one of the house of Woodcock & Co. the 
 meaning of it ; he was not able to answer the question, but said that he would 
 write and get information, and I have a recollection of hearing the correspondence 
 read over, but I do not recollect the purport of the correspondence. 
 
 I think this is material, not merely for the purpose of making it 
 extremely clear that a receipt in an altered form was sent, but also 
 for the purpose of shewing that the attention of Mr. Lancaster was 
 called to it, and that any act done by him afterwards was not an 
 act done per ineuriam, but was an intelligent act done by him on 
 full deliberation and with the best advice, namely, the advice of 
 his solicitors. Mr. Smith continues the narrative, and he gives 
 the correspondence to which in general terms Mr. Lancaster had 
 referred. He says : 
 
 7. On or about the 27th of April, 1859, 1 received from the said Messrs. Wood- 
 cock, Part, & Scott, a letter in the words and figures following : 
 
 Wigan, 26th April, 1859. 
 
 Sir, — Life policies, No. 6638, on life of John Lancaster; No. 6887 on life of 
 Sir Robert Gerard. These policies were granted by the Bank of London. We 
 observe that the receipts for the last premiums state that the policies have been 
 taken by the Albert. Oblige by informing us, for the satisfaction of the assured, 
 why and for what reason or under what circumstances same policies have been so 
 taken by the lastly above-named company 
 
 On the 28th of April, 1859, 1, in reply to the said letter, wrote and sent to the 
 said Messrs. Woodcock, Part, & Scott, a letter in the words and figures following : 
 
 28th April, 1859. 
 Messrs. Woodcock, Part, & Scott, Wigan, 
 
 Gentlemen, — I beg to inform you in reply to your letter of the 26th instant, that 
 by virtue of a resolution carried nem. con. at a meeting of the proprietors of the. 
 Bank of London, held in October last, the business of such association was 
 transferred to this company, in consequence of which the Albert is liable for the 
 sums assured by policies 6638 and 6887 granted by the Bank of London office 
 on the respective lives of John Lancaster, Esq., and Sir Robert T. Cerard, Bart. 
 I have the satisfaction of adding that, prior to such transfer, Sir Robert held a 
 policy of the Albert Company, so that we may anticipate his acquiescence in the 
 change. We shall be happy to indorse the policies in question with a certificate 
 of our liability, or exchange them, as may be preferred. . . . 
 
LORD CAIRNS'S DECISIONS. 99 
 
 Now, nothing could be clearer than this, so far as the Albert were Lancaster's 
 concerned, that they had intimated to Mr. Lancaster, through his (Na 2.) 
 solicitors, that they were proceeding to act on the' assumption that 
 they were liable on these policies, not by way of auxiliary or 
 cumulative liability, but as the company who were insuring on 
 the policies, and that they were receiving and giving a receipt 
 for the premium on that footing. No remonstrance, no repudia- 
 tion, was made on the part of Mr. Lancaster, or his solicitors. 
 The premiums continued to be paid regularly from that time on 
 the policies ; and the form of the next receipt, that for 1860, was 
 this: 
 
 Albert Life Assurance and Guarantee Company. Policy No. 6638. Received the 
 11th of April, 1860, the sum of £151 17s. Gd. for one year's premium on £5000 
 assured on the life of Mr. Lancaster, from the 9th day of April, 1860, to the 8th 
 day of April, 1861, both inclusive, according to the tenour of the policy. 
 
 Woodcock, Part, & Scott, Agents. 
 
 And in 1861, and subsequent years, the receipts are somewhat 
 different in form ; but they are receipts given by the Albert, with 
 a note in the margin of the number of the policy, and other par- 
 ticulars. 
 
 The question then arises on what footing were these subsequent 
 premiums paid to the Albert. The circumstances in this case differ 
 from the circumstances in Kennedy's Case, but the principle I have 
 applied there appears to me to apply to the case I have now to 
 deal with. It was optional with Mr. Lancaster to embrace or to 
 refuse the arrangement proposed to him. But he could not play 
 both fast and loose ; he could not go on paying the premiums 
 which he was told were being received on the footing of the Albert 
 being the office that insured him, and afterwards when the Albert 
 got into difficulties turn round and say that he all the while 
 was acting on the supposition that he was insured by an entirely 
 different office, an office to which he was not paying premiums. 
 
 The only peculiar circumstance in the case to be noticed, which 
 was referred to in the argument, is the attempt of Mr. Lancaster 
 in his examination to shew that he retained in his own mind the 
 liability of the Banh of London. And he states his view in this way ; 
 after saying, ' I have a recollection of hearing the correspondence 
 read over, but I do not recollect the purport of the correspon- 
 
100 ALBERT ARBITRATION. 
 
 Lancaster's dence,' — that is, the correspondence between Messrs. Woodcooh & 
 (No. 2.) Go. and the insurance office in London, he says, — ' but I remember 
 asking the question ' (that is, of his own solicitors) ' if that ' (that is 
 to say, if the correspondence) 'would release the original people who 
 granted the policy.' The question is extremely material, because it 
 shews that Mr. Lancaster s mind was alive at all events to the possi- 
 bility of what was going on releasing the original insurance office, 
 and the answer was, he says, ' Oh, no.' Now it seems to me, if Mr. 
 Lancaster's recollection is correct, that this is simply a statement 
 of opinion coming from a solicitor to his own client. The solicitor, 
 Mr. Scott, of the firm of Messrs. Woodcock & Co., or whichever 
 partner it was, had no right to make this statement merely because 
 they had been agents of the insurance company to effect policies 
 or receive premiums in Wigan. The footing on which this new 
 arrangement was proposed it did not lie in the mouth of Messrs. 
 Woodcock & Co. to communicate. They had in writing from Lon- 
 don from the head office the terms, and the only terms, on which 
 it was proposed to receive the premiums ; it was not for Messrs* 
 Woodcock & Co. to qualify them by any explanation they might put 
 on them at Wigan. But I do not understand that was the footing 
 on which these gentlemen were proceeding. Whatever they said to 
 Mr. Lancaster, whether rightly or wrongly, they said as his solicitors, 
 and he acted on that. Therefore I have the clearest case of per- 
 sons, with their minds alive to the importance of the step that was 
 being taken, taking that step deliberately. This I hold was in 
 law an abandonment of the liability of the original insurer, and 
 an acceptance of the offer to be insured in the new company. 
 
 Mr. Lancaster's claim fails against the Bank of London, and he 
 must rank against the Albert. 
 
 This case had been brought into the Court of Chancery by 
 arrangement ; therefore I treat it as a representative case, for the 
 purpose of settling in the Bank of London this question. 
 
 Solicitors for Mr. Lancaster: Messrs. Gregory, Bowcliffes, & 
 Bawle. 
 
 Solicitors for Bank of London : Messrs. Paine & Layton. 
 
LORD CAIRNS'S DECISIONS. 101 
 
 WERNINCK'S CASE. wi 
 
 Policy — Novation — Bonus — Mortgage. ___ ' 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against a policy-holder, who, besides being in a position like that of the policy- 
 holder in Kennedy's Case, received from the transferee company a notice 
 of a declaration of bonus by that company informing him how the share of 
 the profits pertaining to his policy might be applied, and acknowledged, 
 without more, the receipt of the notice, the effect being that, in pursuance 
 of the notice, the bonus was added to the amount assured when payable. 
 
 Position of mortgagee of policy with respect to novation. 
 
 A HIS was a claim by Mr. Weminok to prove against the Medical 
 on a profit policy, dated 26 July, 1850, issued to him by that 
 society, for £200, on his own life. 
 
 Mr. Werninch received the circular relative to the amalgama- 
 tion of the Medical with the Albert, and did not answer it, but 
 thenceforth paid his premiums to the Albert. 
 
 On 23 July, 1863, Mr. Werninch received the Albert bonus 
 circular of 1863, and by letter dated 21 August, 1863, he acknow- 
 ledged the receipt of it, without more, and the sum stated in the 
 circular (£4 19s.) was thereupon added to the amount assured on 
 his policy as a reversionary bonus. 
 
 The policy had been shortly after its date deposited with 
 E. Morison as a security for a debt, and remained so down to the 
 date of the winding-up. 
 
 Mr. J. W. Chitty was for Mr. Werninch. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. Chitty contended that in the circumstances there was no 
 novation. He mentioned 
 
 Griffith's Case, L. E. 6 Ch. 374; 
 Spencers Case, L. R. 6 Oh. 632 ; 
 Challis's Case, L. R. 6 Ch. 266. 
 
 I 2 
 
102 ALBERT ARBITRATION. 
 
 Webninck's He contended also that there was nothing to shew that the 
 ' mortgagee assented to the change of office, and it was a ques- 
 tion whether the mortgagor could assent so as to bind the 
 mortgagee. 
 
 Mr. Morgan was not called on. 
 
 Loed Oaibns : — It ought to be understood that a mortgagee has 
 no separate rights in a case of this kind. He leaves the mortgagor 
 to pay the premiums and keep up the policy, and if the mortgagor 
 pays the premiums to the proper persons the policy is kept up. 
 If, on the other hand, the mortgagor pays the premiums not to 
 the proper hand but to another hand, and makes a new contract, the 
 mortgagee is, of course, bound. 
 
 With respect to the claimant himself this case is clearer than 
 those I have already decided. According to the principle of the 
 cases I have decided, the receipt of the amalgamation circular by 
 Mr. Werninek and his acting on the offers then made by paying 
 premiums to the Albert, there being no protest against the arrange- 
 ment proposed with him, would have entitled him, if the Albert 
 had been in a prosperous condition, to have come forward and said 
 he had accepted the offer made to him, and had testified his accept- 
 ance by paying premiums to the Albert. The case goes further 
 here, and it is a case in which Mr. Werninek really can hardly 
 make the contest he does consistently with good faith. Because 
 not only did he get the circular 1 , and pay the premiums to the 
 Albert subsequently, but further he is communicated with on the 
 footing of his being a policy-holder in the Albert, entitled to 
 profits out of the Albert. He is told they have been set apart 
 for him ; he is told that any one of four courses may be taken, 
 though one only is open to him, if he is a mortgagor, with- 
 out the consent of the mortgagee. It is admitted that he acknow- 
 ledged that communication, made no protest, did not tell the Albert 
 that they" were under a delusion in supposing that he had an 
 interest in their assets ; but by acknowledging it, and not being 
 able or not choosing to point out any mode but the first of the 
 modes* proposed, he assented to the bonus being added to his 
 
LOED CAIRNS'S DECISIONS. 103 
 
 policy. It does not make the slightest difference whether he did Wbbninok's 
 
 that, or whether he took the. bonus and put it into his own pocket, ' 
 
 The case is clearer by many degrees than those I have already 
 decided ; and Mr. Weminek cannot rank as • a claimant against 
 the Medical, but must now only rank against the Albert. 
 
 It appears there was an arrangement in Chancery to treat this 
 as a representative case. The costs will therefore be provided in 
 the winding-up. 
 
 Solicitor for Mr. Weminek : Mr. Boberts. 
 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 
104 ALBERT ARBITRATION. 
 
 1872 EIVAZ'S CASE. 
 
 Feb. 28. - Policy — Novation — Protest. 
 
 Novation consequent on amalgamation established against a policy-holder, 
 in circumstances similar to those in the Whitehaven Bank Case, notwith- 
 standing objections to the amalgamation made by the policy-holder in conver- 
 sation 'with an agent of his assuring company. 
 
 J. HIS was a claim by Mr. Rivaz to prove against the Western on 
 a policy, dated 11 August, 1860, issued by that society on his own 
 life, for £2000, with profits. 
 
 An affidavit was made by Mr. Rivaz, in which, after describing 
 himself as of the city of Manchester, local secretary to a fire, life 
 and marine insurance company, and stating the details of the 
 policy, he proceeded as follows : 
 
 2. I was induced to effect this insurance in consequence of my knowledge of 
 some of the directors and shareholders of the said company [the Western], and 
 the confidence I had in their responsibility. 
 
 3. Some time about the latter end of 1865, or the beginning of 1866, 1 received 
 notice that the business of the Western Insurance Office had been transferred to 
 the Albert Life Office. I was much annoyed to hear this, inasmuch as I had 
 private means of knowing, from my position as an insurance agent, and from in- 
 formation from my uncle, who was a director in a large life office in London, that 
 the Albert Office was in a very unsound condition. I went at once to the branch 
 office of the Western Company in Manchester, and saw the representative of the 
 Western Company. I informed him that I refused to recognise the transfer so far 
 as I was concerned as a policy-holder, and that I should only recognise the Western 
 Life Office, and I protested as strongly as I could against the said transfer. I 
 remember making use of the expression that it was impossible that the office 
 could have the power to hand the policy-holders over to another office like a 
 flock of sheep. I was, however, told by the representative of the said Western 
 Company that I could do nothing, as the Western Office had power by their deed 
 of settlement to effect the amalgamation, and that this did not get rid: of their 
 responsibility to their own policy-holders. This statement, however, did not 
 alter my opinion, and I told him that I recognised the Western Office only, and 
 held them responsible, and would have nothing to do with the Albert Office. I 
 subsequently saw Mr. Bidder, the manager of the Albert Company, in Man- 
 chester, and stated to him that I declined to recognise the Albert Office. 
 
 He however paid the premiums and took receipts as in the 
 Whitehaven Bank Case. 
 
 Mr. North was for Mr. Rivaz. 
 
LORD CAIENS'S DECISIONS. 105 
 
 Mr. Cracknall was for the Western. Rivaz's 
 
 Case. 
 
 Mr. North contended that in the circumstances there was no 
 novation. He mentioned 
 
 Bartlett's Case, L. E. 5 Oh. 640. 
 
 Mr. CracJcnall was not called on. 
 
 Loed Cairns : — Consistently with what has been decided 
 throughout, I cannot allow this policy to rank except against the 
 Albert. 
 
 The position of this gentleman is this : he is the secretary to an 
 insurance company himself; at all events a man of business, and 
 he receives a letter, the circular so often referred to, in 1865. It 
 is undoubtedly a circular which proposes to the policy-holders in 
 the Western to become policy-holders in the Albert, and it enume- 
 rates to them the advantages which it is supposed will be derived 
 from their taking that course. It is signed by the chairman of 
 the Western, the deputy chairman, and the actuary. It attracts 
 the attention of Mr. Bivaz ; it does not pass unnoticed ; he admits 
 that it seemed to him to be a thing that required some step to be 
 taken on his part. I should have thought the obvious course, in- 
 deed the only course, to be taken by him, if he had not intended 
 to accept the transference of the policy, and if he had intended to 
 make it clear that, after receiving tbat letter, although he might 
 pay the premiums to the Albert, he would do it merely to keep alive 
 the policy in the Western, his obvious course would have been to 
 have answered the circular, — to have addressed to the London office, 
 or the chairman, or the deputy chairman, or the actuary, or the 
 secretary, at the London office, his protest, in whatever form it 
 might be made, so that it might come before the persons who had 
 communicated with him, and who were acting on the subject of 
 the amalgamation. In place of that, his own statement is that he 
 had a conversation with the representative of the Western in Man- 
 chester. He does not give the name, nor does he examine the 
 gentleman ; and I do not think, if it became a question, I could 
 attach much weight to that. I am willing to take it on his own 
 statement. He went to this gentleman, as he says, and had a 
 conversation .with him ; he says that he protested against having 
 
106 ALBERT ARBITRATION. 
 
 Eivaz's anything to do with the Albert. But that was a frame of mind from 
 
 " which he might have departed at any moment during the course 
 
 of years which elapsed before the winding-up. I put out of the 
 case his conversation with Mr. Bidder, because Mr. Bidder repre- 
 sented not the Western but the Albert. After that he pays the pre- 
 miums to the Albert. He takes receipts similar to those in the 
 cases I have had before me. The first receipt takes notice that the 
 Western had been incorporated with the Albert ; and then there 
 are regular Albert receipts, with a memorandum in the margin or 
 counterfoil, identifying the policy with the Western policy. It 
 appears to me that, there being nothing more in the case than that, 
 it clearly ranges itself under the other cases I have decided, the 
 claimant not having adopted any course which was an approach to 
 a protest of the same solemnity as the letter by which he had been 
 addressed, a protest against paying premiums to the Albert on the 
 footing of becoming a policy-holder iu the Albert. 
 
 With respect to the last observation of Mr. North, in the forcible 
 argument that he addressed to me, that if the Albert had been a 
 prosperous company, and the Western an unsuccessful company, 
 there would have been a case on the part of the Albert liquidator 
 to repudiate Mr. Rivaz's claim against the Albert, I do not think 
 there would. I think his case against the Albert would have been 
 clear. I think he might have said : Here is your offer which I 
 received ; it was an offer that enabled me at any time to become a 
 policy-holder in the Albert; it is true you have found out that 
 I had a conversation at Manchester, in which I said I would have 
 nothing to say to the Albert, with the representative of your office 
 there ; but I never answered your letter, I never repudiated it, 
 and that left it open to me at any time to come in under the 
 Albert ; I went on paying my premiums to the Albert, and took 
 their receipts ; and the last payment I made, without any qualifi- 
 cation, to the Albert, at their office in Manchester. 
 
 Mr. Bivaz must rank against the Albert. I do not think I 
 can make him pay costs. There was something to be argued in 
 the case. 
 
 Solicitors for Mr. Bivaz : Messrs. Bower & Cotton. 
 Solicitor for Western : Mr. Manning. 
 
LORD CAIRNS'S DECISIONS. !Q7 
 
 ANDKEWS CASE. 1872 
 
 Policy — Marriage Settlement — Trustees. 
 
 A policy-holder on his marriage assigned his policy to trustees ; he con- 
 tinued to pay the premiums ; he received a circular stating the amalgama- 
 tion of his assuring company with another company, and holding out henefits 
 to such policy-holders as should accept the liability of the transferee com- 
 pany ; he thenceforth paid the premiums to the transferee company and took 
 their receipts ; the trustees claimed to prove against the transferor company : 
 
 Held, that the claim was not maintainable. 
 
 J HIS was a claim by Mr. Robert Andrew and two others, to prove 
 against the Western on a policy dated 20 April, 1852, issued by 
 the Western to Mr. Frederick Andrew, on his own life, for £2000, 
 with profits. 
 
 Mr. Frederick Andrew, on his marriage, by deed dated 21 
 August, 1852, assigned the policy to Mr. Robert Andrew and two 
 others on trusts for the benefit of his intended wife and of the 
 children of the marriage. Notice of the settlement was given to 
 the Western. 
 
 The circumstances relative to amalgamation circular, payment 
 of premiums, and receipts, were generally similar to those in the 
 Whitehaven Bank Case. 
 
 Mr. Horsey was for the claimants, the trustees of the settlement. 
 
 Mr. CraeknaU was for the Western. 
 
 Mr. Horsey : — The form of the settlement is peculiar. It is 
 simply an assignment to the trustees of the policy and policy 
 money ; it does not contain any covenant. Therefore, there is no 
 obligation on the assured or on the trustees to keep up the policy. 
 Notice of the settlement having been given to the Western, the 
 names of the trustees must be in the books of the Western as the 
 holders of the policy. The trustees make an affidavit. They say 
 they executed the settlement, but beyond doing that and giving 
 notice to the Western they never in any way acted under the 
 settlement, and they had no notice or knowledge of the amalgama- 
 tion. There is also an affidavit of Mr. Frederick Andrew, who says 
 
 Feb. 28. 
 
108 ALBERT ARBITRATION 
 
 Andrew's he paid the premiums with his own money. In these circumstances 
 
 " the trustees were trustees of the policy simply. They had no duty 
 
 to perform in respect of it. Novation must be a matter of con- 
 tract, express or implied, and as it is denied that any notice of 
 the amalgamation was given to the trustees, and as it is admitted 
 that the bonus notices in the Western were sent to Mr. Frederick 
 Andrew alone, there can be no implication of a contract between 
 the trustees and the company for a change of office. Next, as the 
 trustees have had no communication with the settlor respecting the 
 policy since the settlement, there was no relation of principal and 
 agent between them. The company had notice that the person 
 paying the premiums was an entire stranger to the policy. Know- 
 ing that, they accept the premiums. How can it be held that they 
 have made a contract of novation unless they shew that the person 
 paying the premiums was in some measure the agent of the holders, 
 or had power to bind them ? 
 
 Mr. Orachndl was not called on. 
 
 Lord Cairns : — This was a policy effected in the Western, and 
 it was assigned by the policy-holder Mr. Andrew on the occasion of 
 his marriage, and notice was given to the directors of the Western 
 of the settlement, stating that it was a settlement by Mr. Andrew 
 on trusts therein mentioned-. Mr. Horsey says, that in the pay- 
 ments of premium, Mr. Andrew was not the agent of the trustees. 
 I do not think he was. That is the difficulty of their case. To keep 
 up this as a policy in the Western it was necessary to pay the 
 premiums to the Western. The trustees clearly did not do that ; 
 they come here admitting that they have never paid the Western 
 anything. I do not say a word about their being liable for not 
 keeping up the policy with the Western; that depends on the 
 trusts of the marriage settlement, with which I have nothing to 
 do ; if they are liable for any breach of duty by not paying the 
 premiums to the Western, that is an affair between them and the 
 beneficiaries. If they are not liable, that must be from the cir- 
 cumstance that the policy was one with regard to which it was 
 intended, on the occasion of the marriage, that it should be in the 
 option of the husband whether he kept it up or not, or where. 
 
LORD CAIENS'S DECISIONS. 109 
 
 In that state of things, the trustees having paid nothing to the Andrew's 
 
 Western, either by themselves, or by their agent, and not being in ' 
 
 a position to come and say they kept up this policy from time to 
 time ; the settlor, the original policy-holder, receives the circular 
 from the Western, telling him of the amalgamation, and of the 
 benefits which policy-holders will have by insuring with the Albert. 
 He seems to have been persuaded by that circular; he ceases 
 making the payments which would keep up the Western policy, 
 and he makes the payments which will enable him to say that he 
 is insured by the Albert. He makes them in the usual way, as in 
 the other cases. It appears to me, that he has succeeded in getting 
 a policy in the Albert, and that the trustees have no pretence for 
 saying that he has kept up any policy in the Western. It will be 
 for the trustees and beneficiaries to insist that the policy which he 
 has substituted, as it were, with the Albert, is subject to the trusts 
 of the settlement, and that any benefit coming from it they are 
 entitled to. 
 
 I cannot say that the trustees were not justified in takiEg my 
 opinion about it. I will not order them to pay costs. 
 
 Solicitors for the Trustees : Messrs. Dangerfield & Fraser. 
 Solicitor for Western : Mr. Manning/. 
 
110 ALBERT ARBITRATION. 
 
 1872 HOLMES'S CASE. 
 
 •"*■ 28. Policy — Novation — Bonus — Protest. 
 
 In circumstances generally similar to those in the Wliitehaven Bank Case, 
 with the further circumstance that the policy-holder in correspondence with the 
 transferee company appeared to have treated himself as a policy-holder of that 
 company by inquiring respecting a declaration of bonus, novation established 
 against the policy-holder, notwithstanding an endeavour to shew a protest 
 by him against the amalgamation. 
 
 JL HIS was a claim by Mr. Holmes to prove against the Western 
 on a policy dated 20 September, 1844, issued by the Western to 
 , him on his own life for £800, with profits. 
 
 Mr. Holmes had made an affidavit containing the following state- 
 ments : 
 
 2. Some time in the month of August, or September, 1865, 1 received a printed 
 circular, bearing date the 14th day of July, 1S65, from the chairman, deputy- 
 chairman, and actuary of the said society, therein styled the Western, informing 
 me that the directors of the said society had, under the powers conferred by the 
 deed of settlement, and with the unanimous concurrence of the shareholders, 
 incorporated the business of the Western with that of the Albert. 
 
 3. On or about the 16th day of October, 1865, 1 wrote a letter addressed to the 
 said society at their offices, 3, Parliament Street, Weitminster, inclosing my 
 cheque for £32 5s. Ad., in favour of Arthur Scratchley, Esquire, the then secre- 
 tary of the Western, being the aggregate of the two sums of £27 5s. 4d., the 
 year's premium then due on the said policy, and £5 for the interest on the sum of 
 JSIOO I had borrowed from the society on security of a deposit of my policy with 
 the society. I did not keep a copy of that letter, but I well remember that in said 
 letter, ' I protested against being handed over to another company that I had no 
 knowledge of/ and said ' that I had not heard of the amalgamation with the 
 Albert until I had received the printed circular of the 14th day of July, 1865, 
 and that I bad not given my consent to it, and would not do so.' I got no reply 
 to this letter, but received back from the said society a certain receipt for such 
 premium and interest, bearing date the 17th day of October, 1865. 
 
 4. In the month of October, in each of the successive years, 1866, 1867, and 
 1868, 1 remitted the annual premium due to the said society on the said policy, 
 and in each of my letters remitting a cheque for the same, I stated it was my 
 policy iu the Western. 
 
 The receipts were like those in the Whitehaven Bank Case. 
 
 Mr. Everitt was for Mr. Holmes. 
 
LORD CAIRNS'S DECISIONS. Ill 
 
 Mr. Crachnall was for the Western. Holmes's 
 
 Case. 
 
 Mr. Everitt relied on the affidavit, as shewing a protest on 
 receipt of the amalgamation circular. 
 
 Mr. Cracknall was not called on. 
 
 Loed Cairns : — I do not think this gentleman has kept alive his 
 right against the Western. 
 
 I should be very slow in any case to act on a statement now 
 made, after all this question has arisen and been dealt with for the 
 last three years, a statement made from memory of the contents of 
 a letter not forthcoming, written in 1865. I doubt very much the 
 memory of any person being sufficiently good for him to be able 
 to set forth in a minute way, by words, the contents of a letter 
 written so long ago, of whicli there is no copy. But I find this 
 gentleman's memory is treacherous to a very great degree in these 
 very matters; because in the next sentence in his affidavit he 
 makes a statement, made at a time when he was not aware that the 
 letter to which he refers was preserved, but which when the letter 
 is produced appears to be erroneous. He says : 
 
 In the month of October in each of the successive years 1866, 1867, 1868, I 
 remitted the annual premium due to the said society on the said policy ; and, in 
 each of my letters remitting a cheque for the same, I stated it was my policy in 
 the Western. 
 
 We have the letters here for the years 1866, 1867, and 1868, 
 and there is no statement of that kind in them. They are letters 
 written to Mr. Easum, the officer of the Albert, as if it was a matter 
 of course to write to him, that of 1867, for instance, inclosing to 
 him a cheque for 
 
 £32 5s. 4d, being the amount of premium on life policy and loan, receipts for 
 which you will please forward in course, 
 
 not adding a word of any kind to indicate that this was anything 
 other than the ordinary payment to the Albert, on a policy the 
 premium on which became payable in clue course in that company. 
 Therefore, in the face of that great mistake in the affidavit, I can- 
 not accept the recollection of this gentleman as to the contents of 
 his former letter. 
 
112 ALBERT ARBITRATION. 
 
 Holmes's In addition to that, I must say I look with a good deal of doubt 
 '. on the second paragraph in the letter of 1867 : 
 
 Will you please at the same time inform me the amount of bonuses on said 
 policy which have been declared on it up to the present, and when the next will 
 take place. 
 
 This gentleman had received the circular of 1865. That circular 
 said that, on the occasion of the amalgamation, it had been decided 
 by the directors of the Western to make no division of profits, to 
 declare no bonus, up to 1864, for which time it appears that other- 
 wise there would or might have been one, but to wait for the 
 bonus at the time it would be declared in the Albert after 1867, they 
 promising certain benefits at that time to persons who became 
 insured in the Albert. It looks very much as if that had been in 
 the mind of the writer when he used this expression ; and it is 
 strange, if he thought he was a policy-holder in the Western, that 
 he should have rested satisfied with the cessation on the part of 
 the Western to declare any bonus after the writing of that circular. 
 
 I think his claim fails agafbst the Western and he must rank 
 against the Albert. 
 
 Solicitor for Mr. Holmes : Mr. Saceton. 
 Solicitor for Western : Mr. Manning/. 
 
LOED CAIENS'S DECISIONS. 113 
 
 WAKNE'S CASE. 1872 
 
 Policy — Novation— Protest— Days of Grace. Feb - 2 8, 
 
 In circumstances generally similar to those in the Whitehaven Banh Case, 
 novation established against a policy-holder, notwithstanding that he had 
 on more occasions than one successfully insisted on being allowed by the 
 transferee company the number of days of grace allowed by his assuring 
 company, the transferors, being a larger number than that allowed by the 
 rules of the transferee company. 
 
 J. HIS was a claim by Mr. Warne to prove against the Metropoli- 
 tan Counties, and, that failing, then against the Western, on a 
 policy dated 10 February, 1854, issued by the Metropolitan Counties 
 to him, on his own life, for £600, with profits. 
 
 Mr. Warne had made an affidavit containing the following 
 statements : 
 
 8. Prior to the amalgamation of the Western with the Albert I received notice 
 from the directors of the Western of the proposed amalgamation, but I took no 
 notice of the circular. I have never taken any bonus declared either by the 
 Western or the Albert, and I have not recognised either of those offices in any 
 manner, except as agents of the Metropolitan, and I have always protested that 
 such amalgamations were utterly ineffectual to affect or prejudice my original 
 rights as a policy-holder against the Metropolitan. In confirmation of this I state 
 the following circumstances. 
 
 9. In the month of February, 1866, I received a notice from the Albert that 
 the premium on the £600 policy would become due on the 10th February, and 
 that one calendar month was allowed for payment. As I have before stated, by 
 the rules of the Metropolitan thirty days and not one calendar month was the 
 time allowed for payment of the premium. The calendar month for payment of 
 the premium on the £600 policy, according to the rules of the Albert, had expired 
 on 10 March, 1866; but I, relying on the rules of the Metropolitan, which gave 
 thirty days' grace, on 12 March, 1866, posted a cheque, dated the same day, for 
 £22 12s. 3d., being the amount of the original Metropolitan premiums on the two 
 policies addressed to the secretary of the Albert, in return for which I received 
 two receipts for the premiums, dated respectively 13 March, 1866, without any 
 comment. 
 
 10. The usual Albert notices of renewal on the two policies for the year 1867 
 were sent to me. On 11 March, 1867, I presented myself at the Albert with a 
 cheque for £14 16s., to pay the premium on the £600 policy, when I was informed 
 bj* the receiving clerk that it was tco late, and that being beyond the date the 
 office refused to take it. I, however, insisted that 1 had nothing to do with the 
 rules of the Albert, my policy bom? a Metropolitan policy, and that the payment 
 was within the rules of the Metropolitan and the terms of such policy. A cloik at 
 
114 ALBERT ARBITRATION. 
 
 Wabne's the counter then took the cheque into the secretary's office, and on his comin;r out 
 Case- accepted my cheque and gave me the receipt, which was dated 11 March, 1867. 
 
 11. The same refusal was made in 1869, when I tendered my cheque for 
 £14 16s., the premium for the same policy, on 11 March, which was refused as 
 being beyond date, and thereupon I cashed the cheque and tendered the amount in 
 cash, which was, after reference to the secretary, then accepted, and the receipt 
 given to me bears date 11 March. 
 
 Mr. Edmund James was for Mr. Wame. 
 
 Mr. Cracknall was for the Western. 
 
 Mr. James contended that in the circumstances there was no 
 novation. He referred to 
 
 Spencer's Case, L. E. 6 Ch. 362 ; 
 where Lord Justice Mellish said : 
 
 Mr. Spencer did not answer that circular ; and I agree that he could not be 
 deemed, from simply not answering the circular, to have assented to it. 
 
 Lord Cairns : — I quite agree with that view, that a person's not 
 answering a circular is not to be deemed an assent. It is a different 
 thing if he goes on and acts on the circular. 
 
 Mr. CracknaE was not called on. 
 
 Lord Caiens: — I do not think there is the least ground to 
 distinguish this from the cases that have been decided. 
 
 I do not find this gentleman protesting in the sense in which the 
 term ought to be used. He received the circular, took no notice 
 of it in this sense, that he did not answer it, but acting on it, and 
 relying on the promises in it, he paid his premiums from that time 
 on to the Albert. On the occasion of the first payment nothing 
 took place ; it was simply a payment to the Albert in the ordinary 
 way, and accepted by them. In 1867 and 1869 he was within the 
 days of grace taken at thirty days, beyond the days of grace taken 
 at a calendar month. Thirty days were the days of grace of the 
 Metropolitan Counties. Then, having more favourable terms in his 
 original company, he went to the Albert, and when they refused 
 his cheque for his premium, he said : My policy is a Metropolitan 
 
LOED CAIBNS'S DECISIONS. 115 
 
 Counties policy. But I cannot allow him to put on these words the Wabms's 
 
 construction that he would have nothing to do with the Albert, or that ' 
 
 this was meant for the first time as a protest against being supposed 
 to be insured in the Albert, or having their liability. I take it to 
 have been an observation made for the purpose in view, namely, 
 insisting that they had not a right to refuse his cheque on the ground 
 that the days of grace had expired. They clearly had not. The 
 Albert were bound by their amalgamation agreement with the 
 Western, and by that of the Western with the Metropolitan Counties, 
 to give as favourable terms as the original company. I cannot 
 look on it as a protest. 
 
 As there were no points in this case to be argued, I cannot do 
 otherwise than refuse the application with costs. 
 
 Solicitors for Mr. Warne : Messrs. Allen & Son. 
 Solicitor for Western : Mr. Manning. 
 
 K 
 
116 ALBEKT AEBITBATION. 
 
 1872 HOWELL'S CASE. 
 
 Feb. 28. Policy — Novation — Protest. 
 
 In circumstances generally similar to those in the Wldtehaven Bank Case, 
 novation established against a policy-holder, notwithstanding an endeavour 
 to shew a protest by him against the amalgamation ; it appearing that on 
 his going to the office of the transferee company and making objections to the 
 amalgamation, it had been stated to him by officers of the transferee com- 
 pany that he had no alternative but to pay his premiums to that company, 
 unless he chose to let his policy lapse, and that By this statement his conduct 
 was in effect determined, although he may have continued to be dissatisfied 
 with the amalgamation. 
 
 J_ HIS was a claim by Mr. Howell to prove against the Western on 
 a policy dated 20 December, 1842, issued by the Western to him 
 on his own life, for £300, with profits. 
 
 Mr. Howell had made an affidavit containing the following state- 
 ments : 
 
 A few days after the receipt of such circular letter [that is, the amalgamation 
 circular of 14 July, 1865], I called at the offices of the Western, but found 
 them closed. Whereupon I proceeded to the offices of the Albert, where I saw 
 a clerk whom I recognised as having been a clerk in the offices of the Western, 
 and whose name I did not then know, but I have since ascertained that it is 
 Cabell. I said to Mr. Cabell, ' I caunot understand this, that I am to be turned 
 over from the Western office to the Albert office without being in any way con- 
 sulted upon the subject, and without any notice.' [The rest of the paragraph is 
 stated in the judgment.] 
 
 The payment of premiums and receipts were as in the White- 
 haven Bank Case. 
 
 Mr. J. 1). Bell was for Mr. Howell. 
 
 Mr. Crachnall was for the Western. 
 
 Mr. Bell contended that in the circumstances there was no nova- 
 tion ; and that the case was distinguished from Rivaz's Case because 
 Mr. Howell went to the principal office to protest. 
 
 Mr. CraoJcnall was not called on. 
 
 Lobd Caiens : — I have throughout these cases, which differ in 
 certaii shades from each other, been anxious always to find out a 
 
LOED CAIKNS'S DECISIONS. 117 
 
 case where a person insured, when he got notice of one of these Howell's 
 
 intended or attempted amalgamations, clearly made up his mind ' 
 
 what he wanted, and then acted throughout in a way that did not 
 enable him to play fast and loose. Because, unfortunately, it is 
 too commonly the way of the world, to which we are all more or 
 less subject, not to take a great deal of trouble, sometimes even 
 in our own business, but to leave it in a loose form, without clearly 
 knowing ourselves, or putting before those with whom we have 
 to deal, the precise aim we want to accomplish. It is a thing 
 which every one is subject to. More especially, one can easily 
 imagine such a state of mind when the responsibility of two 
 companies is proposed to a man as his insurers, and he has to 
 make an election on a subject which after all he does not perhaps 
 know much about, the relative solvency of the two companies. 
 There is in all these cases a tendency to stave off the necessity of 
 making a clear and distinct election if it can be done, to keep the 
 thing in suspense if it can be done, to hold to both if it can be 
 done ; if it cannot, then to wait and see what the event is before 
 a determination is made. 
 
 If I had found that this gentleman on receiving this circular 
 clearly had determined in his own mind not to deal with the 
 Albert as the company to be liable to him, and had continued to 
 deal with the Western as the only one liable to him, and that, 
 having thus determined, he had acted in a manner consistent with 
 that determination, I should have been glad to find it so, as he 
 would have been a creditor of a company which could pay him 
 more money than the Albert. But I do not find that to be the 
 case. I take every word of the conversation stated in his affidavit 
 to be true, and it seems to me that the conversation is against 
 him. He says he went to the Western office and found it was 
 closed. He then went to the Albert office ; he saw Mr. Cabell, an 
 officer whom he had known in the Western. B is statement to him 
 was, he objected to being turned over from the Western to the 
 Albert. He therefore knew what was being attempted. He says : 
 
 Mr. Cabell replied, 'You cannot help yourself; there is no claim on the policy 
 until after death. ■ You can, of course, let your policy lapse, but then you will 
 get nothing,' or words to the like effect. . 
 
 Whether Mr. Cabell was right or wrong, nothing can be more 
 
 K 2 
 
118 ALBERT ARBITRATION. 
 
 Howell's clear than the statement made to the claimant : This thing has 
 
 " been done ; you are turned over to the Albert, and you cannot help 
 
 yourself ; you have to pay the Albert, or your policy lapses. The 
 question now is, not whether that was a right view, but what it 
 was that passed between Mr. Cabell and this gentleman, and what 
 were the ideas that were conveyed to his mind by Mr. Cabell. He 
 goes on : 
 
 I replied that I had insured my life in the Western office after due inquiry and 
 consideration, and that I could not understand how one office could transfer or 
 sell its policy-holders to another office like a flock of sheep, and I told Mr. Cabell 
 that I should expect some further and more satisfactory explanation. Where- 
 upon Mr. Cabell went away, and immediately afterwards brought forward some 
 other gentleman, whose name I do not know, but who appeared to be some one 
 in authority at the Albert office. Mr. Cabell explained to this gentleman what I 
 had called aboiit, and I also told him that I protested against my policy being 
 transferred from an office, the directors of which I knew and had faith in, to 
 another office, of which and its officers I knew nothing. The gentleman in reply 
 stated, ' We Lave bought this business,' whereupon I repeated that I protested 
 against the transfer being made without my consent, on which the gentleman 
 observed that I had no alternative but to pay the Albert office, as there was no 
 claim whatever on the policy until after death, but that I could, of course, if I 
 wished, let the policy lapse. 
 
 Therefore, what he was told was this : You must pay the Albert, 
 and paying them you will get the benefit of having a policy ; if 
 you do not, inasmuch as the Albert have bought the business, 
 unless you pay the premiums your policy will lapse. Nothing 
 can be plainer than that. That was the view that would be 
 taken of the fact of his paying the premiums. I do not think 
 that was a right view of the law, because by protesting in the 
 proper form, as was done in some of the cases before me, and 
 by paying the premiums on the footing, and the only footing 
 declared at the time, with the view, that is, of keeping alive the 
 Western policy, this gentleman would have thrown the burthen 
 on the Albert of receiving the premiums in that character, or 
 being obliged to refuse them altogether. But the question is not 
 whether Mr. Cabell's theory was right in law or not ; the question 
 is, what was the idea which it carried to the mind of the person 
 to whom he was speaking. And Mr. Howell says clearly : That was 
 what was told to me ; that was the view/ of those with whom I 
 was dealing. In that state of things he takes no further step; 
 
LORD OAIENS'S DECISIONS. 119 
 
 he goes on for that year and the remaining years paying his Howell's 
 
 premiums to the Albert and taking their receipts in the ordinary 
 way. Doing that, and being told at the time that was the only 
 alternative he had, and that it was forced on him because the 
 Albert had bought the business, and he had been transferred as a 
 policy-holder to the Albert, I do not think he can go back on that 
 after having submitted to it. 
 
 It is very hard on the question of costs to distinguish between 
 making the claimant pay costs and saying nothing about them ; 
 but as in so many cases to-day I have held that there was a shade 
 to argue about, I must do the same with this, and say nothing 
 about costs. 
 
 Solicitor for Mr. Howell: Mr. W. J. Scott. 
 Solicitor for Western : Mr. Manning. 
 
 Case. 
 
120 ALBERT ARBITRATION. 
 
 1872 BUDDEN'S CASE. 
 
 MarchVS. Policy— Novation— Death Claim. 
 
 Novation consequent on amalgamation established against policy-holders, 
 in the following circumstances : They took receipts like those in the White- 
 haven Bank Case ; before the liquidation, on the dropping of the life, they 
 made a claim on the policy, supported by documentary proofs, against the 
 transferee company, which admitted the claim. 
 
 If an indorsement on the policy, stating that the transferee company, in 
 consideration of having received the premium to induce them to renew what 
 was originally a policy of the transferor company, agreed to renew the same 
 for one year, would have created a liability in the transferee company alone ; 
 then the effect of a receipt for the premium on separate paper seems to be the 
 same. 
 
 1HIS was a claim by Messrs Budden to prove against the 
 Western on a policy dated 7 April, 1865, issued by the Western 
 to A. W. Ord on his own life, for £2000, with profits. 
 
 Mr. Ord, by letter of 11 April, 1865, in consideration of an 
 advance of money, assigned the policy as security to Messrs. 
 Budden, of which assignment notice was given to the Western. 
 Immediately afterwards Mr. Ord went to India, and he continued 
 out of England until his death on 13 March, 1869. 
 
 The claimants made an affidavit containing the following state- 
 ments : 
 
 10. We did not, nor did either of us, ever receive a copy of the said circular 
 [that of 14 July, 1865], and we never heard, nor did either of us ever hear, from 
 the said Augustus William Ord that he had received a copy of the circular j and 
 we did not, nor did either of us, ever hear of the circular until after the company 
 ceased to carry on business ; and except from, the receipts given to us, we did 
 not know, nor did either of us ever know, anything whatever of any amalgama- 
 tion having taken place between the Western and the Albert, or of the said society 
 and company having become incorporated, or of the terms and conditions on 
 which such amalgamation or incorporation was made, and we first became aware 
 of the fact of such amalgamation or incorporation, and the terms and conditions 
 thereof shortly after the Albert ceased to carry on business. 
 
 The payments and receipts were as in the Whitehaven Bank 
 Case. 
 
 In the course of the hearing it was stated on behalf of the 
 Western, and not denied, that before the liquidation a claim on 
 
LOED CAIENS'S DECISIONS. 121 
 
 the policy on the dropping of the life had been made by Messrs. Btoden's 
 
 Bvdden against the Albert, and had been admitted ; and the docu- ' 
 
 ments were produced. 
 
 Mr. Bristowe, Q.C., (Mr. Lawson with him) was for the claimants. 
 
 Mr. CraoknaU was for the Western. 
 
 Mr. Bristowe : — The first receipt after the amalgamation would 
 be a receipt of the Western, if it were not for the words 'incor- 
 porated with ' and so on, appearing on it. 
 
 Loed Cairns : — It is the same in effect as if the words stamped 
 on in blue ink had been part of the original print in the body of 
 the receipt. 
 
 Mr. Bristowe : — The evidence is that the claimants did not re- 
 ceive the amalgamation circular. The authorities in the Court of 
 Chancery and in this Arbitration shew that if the case rests merely 
 on the receipts there is not enough to create a case of novation : 
 Bartlett's Case, L. E. 5 Ch. 640 ; 
 Pott's Case, L. R. 5 Ch. 118. 
 Pott's Case being an annuity case is more strongly in favour 
 of this claim ; because there the claimant had gone on receiving 
 from the Albert, giving receipts to the Albert for money. A man 
 would perhaps look more closely to a receipt he was giving than 
 to a receipt he was taking. 
 
 Griffith's Case, L- E- 6 Ch. 374, 
 was a case of novation on a policy. 
 
 Lord Cairns: — It is somewhat unfortunate, as I have had 
 occasion to observe before, that the term novation has been used 
 in cases on policies of assurance. The term may be proper enough 
 in the case of the grant of an annuity. The term is borrowed from 
 the Roman law, and rather implies a condition of things which 
 springs out of the person who has got one contract and has a right 
 to insist on it, without more, undertaking or agreeing to substitute 
 for it another contract which is a new contract as regards the 
 persons who are bound by it. All that may apply to the case of 
 
122 ALBERT ARBITRATION. 
 
 BuDDBN'fl an annuity contract. In the case of a contract by policy of assur- 
 
 ! ance you have got the preliminary, the most important thing, to 
 
 consider — the act that is to be done by the person who holds the 
 policy, namely, the paying the premiums. His contract, as an 
 absolute contract, is only for the year, or the half year, covered by 
 the premium he has paid. With respect to everything beyond 
 that, the contract is conditional, and the sole foundation of his 
 right is his paying the premium and paying it to the proper 
 person. It is not a question of novation ; it is a question of fact, 
 did he pay the premium to the right person ? 
 
 Mr. Bristowe: — One uses the term novation here rather because 
 it has crept in. 
 
 Loed Oaiens : — I do not object to it as a short expression, if we 
 understand what it means. 
 
 Mr. Bristowe : — The important point is to see whether there was- 
 anything that came to Messrs. Budden's knowledge to shew that 
 the payment of the premium was the inception of a new contract. 
 If so, they must have been informed specifically of the fact, and 
 the onus of informing them of that will be on the company. Then 
 as between them and the Western, non constat the Western may not 
 have constituted the Albert their agents for the purpose of giving 
 these receipts. 
 
 In all the cases in the Court of Chancery in which it has been 
 held that there was novation there has been some specific circum- 
 stance enough to shew that there was a new contract : 
 Blood's Case, L. R. 9 Eq. 316 ; 
 Layeock's Case, L. E. 9 Eq. 694 ; 
 Heron's Case, L. K. 5 Ch. 632. 
 
 There might be distinct accounts kept in the two offices shewing 
 that our contract was a continuing contract, and that the Albert 
 were bound by the amalgamation agreement to keep the two 
 accounts separate and distinct, and that as between the two com- 
 panies the assets of the Western were alone liable. 
 
 Lord Cairns : — Be facto the premium was paid to the Albert. 
 There is no doubt the Albert took the money, and intended to take 
 
LOED CAIRNS'S DECISIONS. 123 
 
 it for their own benefit, not as agents for the Western. I am not Budden's 
 
 speaking of what Messrs. Budden thought, or ought to have thought, ' 
 
 but what was the fact. Beyond all doubt, the money was not paid 
 to any agent of the Western, but to the Albert, and received by 
 them in their own right. Your claim, therefore, against the Western 
 must be of this character, that they misled you into paying to the 
 wrong hand; that by representations, or otherwise, they led you 
 to think that you were paying the Western, whereas you were 
 paying some other body ; and that although the Western have 
 not had your premiums they ought to be held liable to you for 
 the effect of their misleading you into paying somebody else. 
 
 Mr. Bristowe : — It goes somewhat further than that ; because 
 the original contract with the Western is, that as long as we in 
 each year pay so much, they will at the death of the party pay 
 so much. 
 
 Lobtj Cairns : — As long as you continue to pay them so much. 
 
 Mr. Bristowe : — -We have continuously paid them the premiums, 
 when we have done that which they themselves have told us to 
 do by paying them through a third person. The receipts amount 
 to a direction on their part that the Albert should receive the 
 premiums and that they should recognise the Western. 
 
 Lord Cairns : — They told you only that the Western had be- 
 come incorporated with the Albert. When company A. is incor- 
 porated with company B., is not that a representation, whether 
 it be right or wrong, that company A. is absorbed into company B. ? 
 What is the meaning of incorporation ? You have paid a dif- 
 ferent person, tbat is quite clear. 
 
 Mr. Bristowe: — When that different person incorporates the 
 other, it cannot be said strictly to be a different person ; it may be 
 more than the original person, but on the principle that the 
 greater includes the less, the less would be part of the greater. 
 
 As in the Court of Chancery, so in this Arbitration, in every 
 case there has been something more than the mere fact of receipts. 
 In the Whitehaven Bank Case there was a circular, so in Dale's 
 
124 ALBERT ARBITRATION. 
 
 Bdddkn'8 Case; and so in Kennedy's Case. In Lancaster's Case (No. 2.) 
 
 I there was a correspondence, equivalent to a circular. 
 
 There is a further consideration relating to the indemnity, as 
 affecting the validity of the amalgamation as against those who 
 had contracts with the Western at the time. 
 
 Lord Cairns : — I do not see how you can be concerned with 
 the contract of indemnity between the Albert and the Western. 
 You have a claim either against the Western or against the Albert. 
 If it is against the Western you have nothing to do with the indem- 
 nity. If it is against the Albert, it must be on the footing of your 
 having an Albert policy. 
 
 Mr. Cracknall was not called on. 
 
 Lobd Cairns : — I do not regret that this case has been so fully 
 argued, because the facts are slightly different from those that 
 have occurred in the previous cases that have been before me. 
 But it appears to me that there is nothing in the facts to take 
 the case out of the class of claims against the Albert, and make it 
 a claim against the Western. 
 
 If the case were launched simply on the documents produced 
 towards the end of the discussion, it would be free from doubt. 
 Here are gentlemen, Messrs. Budden, who claim to be entitled 
 to a policy by assignment, and they commence their proceed- 
 ings after the death happens by transmitting to the Albert the 
 last receipt for the premium. That is a receipt from the Albert 
 Life Assurance Company, 7, Waterloo Place, -Pall Mall, acknow- 
 ledging that there has been received for the renewal of a policy 
 for six months a certain amount of premium, and signed by the 
 manager of the Albert, in Manchester, by procuration. It is quite 
 true that in the margin where the policy comes to be identified, 
 the number is given, and it is calletTW. policy (which, of course, 
 means Western policy), No. 10,527. That was quite a proper 
 and natural way of identifying it, and was necessary to the trans- 
 action of business, regard being had to the fact that in point of 
 form a Western policy never had been given up, and an Albert 
 policy substituted. It was necessary to identify it in that way, 
 
LOED CAIRNS'S DECISIONS, 125 
 
 because the policy number would, prima facie, have meant the Budden's 
 
 number of a policy in the Albert. Messrs. Budden send in that ! 
 
 receipt with the formal proof of death to the Albert and with this 
 letter : 
 
 In reply to your communication of 25th March, respecting policy No. 10,527 
 on the life of A. W. Ord, under the peculiar circumstances of his death we are 
 unable to fill the special form apparently required by your company, being simply 
 holders by assignment of the policy. We, however, hand you the enclosed docu- 
 ments, "namely: 1. Receipt for last payment of premium. 2. Certificate of 
 baptism. 3. A document received from the Peninsular and Oriental Steam, 
 Navigation Company, embodying the captain's certificate of death, surgeon's 
 certificate of disease and cause of death, and usual certificate of burial at sea. We 
 trust that these will be sufficient for you to admit the claim and advise us to 
 that effect after your next hoard meeting. 
 
 Any person reading these documents would say that is the 
 simplest possible transaction : it is a claim against the Albert, 
 referring merely for identification to the original number of the 
 policy ; not noticing the W. which identifies the policy as a Western 
 policy ; and dealing with the Albert apparently in their own right 
 as to whether they would or would not be satisfied with the 
 evidence of death. On those materials the claim was admitted by 
 the Albert. All this occurred before the liquidation, and the right 
 of action was perfectly clear and distinct in favour of Messrs. 
 Budden, when the technical time had expired on 30 August, 
 which would have been before the liquidation, for them to bring 
 their action against the Albert. There would not have been a 
 single word of defence. The Albert^ could not have justified in 
 that action and have said: It is not the Albert assets that are 
 liable, but the Western assets ; this is an old Western policy ; the 
 Western assets are different ; our assets as Albert assets are not 
 liable ; we defend the action on the ground that the Western have 
 not got money to pay. The action would have been an unde- 
 fended one as against the Albert. 
 
 It is not necessary to carry the case further, but I think it 
 also right to say, after Mr. Bristowes most able argument, that, 
 finding the amount of knowledge which clearly existed in this case, 
 an amount of knowledge communicated by the first receipt itself, 
 that there had been the incorporation of the Western into the 
 Albert, the Albert being the incorporating company and the Western 
 
126 ALBEET ARBITBATION. 
 
 Budden's being the incorporated company, finding these receipts through a 
 
 ' series of years, when all reference to the Western disappears, except 
 
 for identification of the number and description of the policy, and 
 the Albert give the receipt, I am unable to see how it is possible to 
 put the case in a different form from that which it would have 
 assumed if the same information, the same facts stated in that 
 receipt, had been indorsed on the policy. If, as I suggested to 
 Mr. Bristowe, the Albert had put an indorsement on the policy, 
 saying : We, the Albert, in consideration of having received the 
 premium of so many pounds to induce us to renew what was 
 originally a policy in the Western, agree to renew it for a year : it 
 would appear to me to be clearly a liability of the Albert, I 
 cannot see what difference it makes that the statement which I 
 have supposed is made not on the back of the policy, but on a 
 separate form of receipt. 
 
 I think, therefore, on both grounds, the first of which alone 
 would be sufficient, that this is a claim against the Albert, and 
 must remain a claim against the Albert. 
 
 I cannot help looking at it as an attempt to shift the claim from 
 the quarter where it was originally made to the other company, 
 and therefore I must disallow the claim with costs. 
 
 Solicitors for Messrs. Budden : Messrs. Bedpath & Holdsworth. 
 Solicitor for Western : Mr. Manning. 
 
LOED CAIRNS'S DECISIONS. 127 
 
 ALLEN'S CASE. 
 
 Policy — Novation — Bonus. 
 
 Novation consequent on amalgamation established against a policy-holder, 
 in the following circumstances : He did not receive notice of the amalgama- 
 tion ; he paid his premiums through an agent, by whom the receipts were 
 sent to him, the later receipts being receipts of the transferee company 
 simply ; he received a bonus circular of the transferee company, and did not 
 answer it, the effect being, as notified in the circular, that the share of profit 
 of the transferee company pertaining to his policy was added to the amount 
 assured as a reversionary bonus. 
 
 1 HIS was a claim by Mr. Allen to prove against the Medical on 
 a policy, dated 19 September, 1851, issued by the Medical, at 
 Calcutta, to him, on his own life, for £5000, with profits. 
 Mr. Allen had filed an affidavit, as follows : 
 
 I, Charles Allen, of ... . formerly a member of the Council of the Governor 
 General of India, make oath and say as follows : 
 
 1. I am the claimant in respect of the policy for 50,000 rupees issued by the 
 Indian Branch of the Medical dated the 19th of September, 1851, and numbered 2. 
 
 2. I never saw nor heard of any circular or advertisement as to an amalgama- 
 tion between the Medical and the Albert, and I was up to the time of the winding- 
 up order made in the matter of the said company in total ignorance that such a 
 circular had been issued, or that any amalgamation between the said society 
 and company had taken place. 
 
 3. I had observed changes in the form of the receipts for the premiums on the 
 policy on my life, to which since the winding-up order my attention has been 
 drawn particularly, but I never believed that these changes referred to any alter- 
 ation in the position of the Medical to myself, and frequently after the time at 
 which the first of such receipts bears date, I had interviews with Mr. Tait, who 
 had founded the Medical branch in Calcutta, and who told me that he was 
 managing the Indian business in this country (which I believed to mean the 
 Indian business of the Medical), and on my asking when there was likely to be 
 a second bonus, he told me that the society was flourishing, and that a second 
 bonus would soon be paid, and it never occurred to me that there had been an 
 amalgamation between the before mentioned society and company, so that my 
 position as a policy-holder in the Medical had in anywise been affected, and Mr. 
 Tait in no way ever mentioned to me that there had been any change in the 
 state of the last mentioned society. 
 
 4. When I received the bonus circular referred to in the printed Case presented 
 in the above matters and relating to my said claim [the Albert bonus circular 
 of 1863], and which circular was headed Indian Medical Policy, No. 2, 1 believed 
 that it referred to the second bonus which Mr. Tait had mentioned, and which 
 
 1872 
 March 13. 
 
128 ALBERT ARBITRATION. 
 
 Allen's the Medical had been expected long before to declare, and it did not in any way 
 
 '■ occur to me that it was a bonus out of profits made by the Albert ; but that it 
 
 was out of the Medical profits. 
 
 5. 1 have never done, nor have I ever been privy to anything, with the inten- 
 tion of transferring my claim on the said policy against the Medical to the 
 Albert, or of altering my position as it existed between myself and the Medical 
 previous to its connection with the Albert. 
 
 He had also filed the following affidavit : 
 
 I have never in any way consented to alter my position as a policy-holder in 
 the Medical, and I never was informed, nor knew until the time mentioned in my 
 said affidavit, that the said Medical had been amalgamated with, or formed a co- 
 partnership with the Albert. I, by my agent, the Oriental Bank, paid the 
 premiums to the Albert, in the belief that the Albert was in reality the Medical 
 society under another name, and I never had up to the time of the order for 
 winding up the Albert, any idea that the Albert was a distinct company with 
 different rules, different shareholders, and different assets from the Medical, in 
 which I took out the said policy. 
 
 Mr. A. G. Marten was for Mr. Allen. 
 Mr. Lemon was for the Medical. 
 
 Mr. Marten contended that in the circumstances there was no 
 novation. Mr. Allen did not acknowledge the receipt of the bonus 
 circular. He simply took no notice of it. It had been held that 
 where there was merely a circular sent, and not noticed, that was 
 not binding. 
 
 Lord Cairns: — It depends on what the circular is. If a 
 circular requires an answer, and is not answered, you may found 
 an argument on that; but if a circular goes to a man who is 
 expecting a bonus, and it says : There are different ways of apply- 
 ing your bonus ; if we do not hear from you that you like to have 
 it in a particular way, we shall apply it in such and such a way : 
 if he does not answer that, he must take the consequences. 
 
 Mr. Marten: — As regards the onus being thrown on Mr. AUen 
 by the change in the receipts to shew that the payment was 
 properly made, this amalgamation is distinguished by this, that 
 the agreement provides that the Albert should be the agents of 
 
LORD CAIENS'S DECISIONS. 129 
 
 the Medical for the receipt of premiums where the change of Allen's 
 
 liability was not accepted by the policy-holder. '. 
 
 Mr. Lemon was not called on. 
 
 Lord Cairns : — This gentleman admits that he received the cir- 
 cular with regard to the bonus. He does not suggest that he did not 
 read it ; he rather implies that he did. He does not suggest that 
 he repudiated it ; he rather implies that he accepted the bonus. But 
 he puts this construction on it, that he thought it was a bonus 
 coming from the Medical and not from the Albert. In point of 
 fact he did not answer the circular. But that was one- of the 
 events that was contemplated on the face of the circular, namely, 
 that it might not be answered, and the person to whom it is 
 addressed is told that if it is not answered by a particular date the 
 amount of the bonus will be added to the sum ultimately payable 
 on his policy. He not answering that circular, which he was per- 
 fectly at liberty not to do, that course which he was informed 
 would be taken was taken, and the sum mentioned in the letter 
 was added to his policy, and has become permanently attached to 
 his policy. Therefore, he is just in the same position as if he 
 had received a certain sum of money out of the assets of the 
 Albert; because the assets of the Albert have been made liable 
 to pay to him the sum mentioned in the circular, and the circum- 
 stance that they would be so liable was stated in the circular, 
 and the Albert would of course be unable to repudiate that, or to 
 refuse, if they were solvent, to pay 20s. in the pound on the bonus 
 so added to the policy. 
 
 Then how is the bonus, or the receipt of or dealing with the 
 bonus, attempted to be got rid of by the claimant ? He says this : 
 When he received the bonus circular, he believed it referred to the 
 second bonus, which he states Mr. Taii had mentioned, and which 
 the Medical had been expected long before to declare ; and it did 
 not in any way occur to him^ that it was a bonus out of profits 
 made by the Albert; he thought it was out of the Medical 
 profits. But can a gentleman be heard to say: I read over a 
 letter, and I put just the opposite construction on that letter from 
 that which it bears according to its plain expression ? If a state- 
 
130 ALBERT ARBITRATION. 
 
 Allen's meut of that kind now made on affidavit, after the difficulty has 
 
 arisen, when there is every motive to rank against the Medical, is 
 
 to be accepted, Mr. Allen's claim must succeed ; but I cannot deal 
 with his statement in that way. I must look at the paper itself, 
 and if it conveys fair and reasonable information to any one 
 of what was being done, I must hold it to be sufficient. 
 
 This gentleman says he had observed changes in the form of 
 receipts for the premiums on the policy on his life, to which since 
 the winding-up order he says his attention has been drawn parti- 
 cularly. He had seen them before. The changes were extremely 
 remarkable, because beginning with receipts in the proper form in 
 the Medical, the next thing we find is that a change is made on the 
 face of the printed form of the Medical, and made by pen and 
 ink in a way to attract attention, putting ' Albert and ' before 
 ' Medical^ striking out the address of the Medical and putting 
 7, Waterloo Place, Pall Mall, and then in place of saying that the 
 premium was paid ' according to the tenour of policy above- 
 enumerated and issued on the life of Charles Allen,' which was the 
 old f^orm, there is this by interlineation, ' according to the tenour of 
 policy above-enumerated issued by the Medical, Invalid, and General 
 Life Office.' Then after two half-yearly payments, comes the 
 printed receipt of the Albert Medical and Family Endowment Life 
 Assurance Company, stating that the policy had been originally 
 issued by the Medical, Invalid, and General Life Assurance Society. 
 And then, after some more receipts in that form, there is another 
 variation, and it is, ' Albert Life Assurance Company,' where they 
 drop the name of the- Medical, and so it finally becomes the 
 ' Albert Life Assurance Company, 7, Waterloo Place, Pall Mall, 
 London. Received per cheque for the renewal of policy mentioned 
 in the margin,' and in the margin there is M. policy No. 2, with 
 the sum assured. 
 
 At a time before the adoption of that final form of receipt, 
 and when the penultimate form was in use, he having, as he 
 says, observed those changes, gets the bonus circular. What is 
 written in ink at the head mentions the policy in a way to con- 
 vey to the mind of any one that it was mentioned for the sake 
 of identification only. It is a circular from the Albert Medical and 
 Family Endowment Life Assurance Company. It begins by saying 
 
Case. 
 
 LORD CAIRNS'S DECISIONS. 131 
 
 that there is a report annexed ; it is not merely annexed, but it is Allen's 
 printed on the same paper in the most specific way, a regular 
 report of the proceedings of a meeting of the Albert coupled with 
 an advertisement of all the advantages of the Albert Medical and 
 Family Endowment Life Assurance Company. The meeting goes 
 into the question of the assets, leading up to the declaration of the 
 bonus, showing how the bonus was to be applied ; and the circular 
 is in accordance, asking the holder of the policy how he would like 
 to have this bonus, which no person can doubt, on reading over 
 the letter, is to be paid out of the assets of the Albert, applied. 
 He knew it was the declaration of a bonus, but he chose to think 
 it was a bonus out of the assets of the Medical. There would 
 be an end to all safety in dealings between man and man if a 
 person getting a plain and intelligible letter were afterwards to 
 be at liberty to say: I thought it meant something perfectly dif- 
 ferent from what it obviously does mean. If the position of things 
 had been reversed, and the Albert had been the prosperous and the 
 Medical the non-prosperous company, the Albert would not have 
 had a word to say in opposition to this claim. 
 
 I therefore refuse the application, and I must refuse it with 
 costs. 
 
 Solicitors for Mr. Allen : Messrs. Norris, Aliens, & Carter. 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 
132 ALBERT ARBITRATION. 
 
 1872 KNOX'S CASE. 
 
 Mareh20. Policy— Novation— Bonus. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against a policy-holder, who, having paid his premiums to the transferee 
 company and taken receipts of that company, on receiving a bonus circular 
 of the transferee company answered it, and out of various alternative modes 
 of application of the share of profit pertaining to his policy selected present 
 payment, the bonus being paid to him accordingly. 
 
 1 HIS was a claim by Mr. Knox to prove against the Anchor on a 
 policy dated 11 July, 1848, issued to him by the Anchor, No. 1130, 
 on his own life, for £1000. The policy was treated by the Albert 
 as a profit policy. 
 
 In September, 1857, came the amalgamation of the Anchor 
 with the Bank of London, and in September, 1858, that of the 
 Bank of London with the Alberf. The Case agreed on stated that 
 no notice of either amalgamation was given to Mr. Knox; and 
 that he considered he paid the Albert solely as agents for the 
 Anchor, acting on the principle that payment to B. by direction of 
 A. was payment to A. ; . and by such payments he considered he 
 was paying the renewal premiums of his policy in pursuance of 
 his contract with the Anchor as set forth in his policy ; and he 
 submitted that the contract could not be varied and another con- 
 tract substituted by his remaining neutral and paying his pre- 
 miums (in order to preserve his policy) as directed to do by the 
 parties originally entitled to receive them. 
 
 The following was the form of receipt given to Mr. Knox by the 
 Albert Company : 
 
 Albert Life Assurance and Guarantee Company, 
 
 7, Waterloo Place, Pall Mall, London, S.W. 
 Established 1838. 
 Received this thirteenth day of August, 1860, the pre- 
 mium for the renewal of policy mentioned in the margin 
 hereof, the amount of which premium and the period for 
 which it is received are also mentioned in the margin. 
 Robert Whitworth \ 
 George Raymond S Dire <*ors. 
 
 Receipt No. 
 
 An. Policy No. 1130 
 
 on the life of 
 
 Charles G. Knox. 
 
 Premium £23 5s. Od. 
 
 Interest 
 
 For 12 months 
 
 From 11th July, 1860. 
 
LORD GAIENS'S DECISIONS. 133 
 
 The Case stated that the body of the receipt referred to the Knox's Case. 
 margin as to the policy to which it related, and the margin thus, 
 by the number of the policy and the An. annexed, led Mr. Knox 
 to suppose that the Albert were acting only as agents for the 
 Anchor. The only bonus ever received on the policy was paid in 
 September, 1863, through the Albert. Mr. Knox then and still 
 believed that the bonus was paid out of the profits made by the 
 Anchor policies. The bonus was received by him in pursuance of 
 a circular sent to him by the Albert (the bonus circular of 1863) 
 headed ' Policy No. 1130, on the life of C. G. Knox.' Mr. Knox 
 filled up the blanks in the form inclosed, so that it read as follows : 
 
 I prefer the second mode stated in your circular of applying the share of profit 
 pertaining to my Anchor Policy No. 1130. — £12 Is. 3d. 
 
 and returned the form to the Albert office, and the sum was accord- 
 ingly paid to him. 
 
 Mr. Steward (solicitor) was for Mr. Knox. 
 Mr. Mercer (solicitor) was for the Anchor. 
 
 Mr. Steward contended that in the circumstances there was no 
 novation. 
 
 Mr. Mercer was not called on. 
 
 Lobd Caiens : — There really is nothing in this case to distinguish 
 it from those that have been already decided. 
 
 The claimant, Mr. Knox, before the receipt of the circular with 
 regard to the bonus, had been paying his premiums to and taking 
 receipts from the Albert, receipts headed by the title of the Albert, 
 and making the Albert the recipients of the premium ; and although 
 there was a reference to the policy as an Anchor policy, by the 
 letters An. in the margin, still that was a reference merely for 
 identification, and not at all derogating from the force of the re- 
 ceipt as an Albert receipt. 
 
 Then a circular is sent to Mr. Knox from the Albert office, speak- 
 ing of the bonus about to be declared or paid, and speaking of it 
 in the clearest terms as a bonus derived from the profits and 
 
 L 2 
 
134 ALBEET AKBITKATION. 
 
 Knox's Case, trade of the Albert, giving Mr. Knox the usual option as to the 
 mode in which that bonus might be applied for his benefit. He 
 seems to have understood the letter, and he replied by selecting 
 one of the various modes, namely, the mode of actual payment 
 of the hard money to himself. The bonus was accordingly paid 
 in the month of September of the year in which the circular was 
 issued. 
 
 It appears to me that he clearly is in the position of a person 
 who has received, with his eyes open, a bonus expressly stated to 
 be out of the profits of the Albert ; that, therefore, he has elected 
 to be a policy-holder of the Albert, and has done nothing whatever 
 that could keep alive his claim against the Anchor, against which 
 he now wishes to claim, and that his claim therefore must be re- 
 fused with costs. 
 
 Solicitors for Mr. Knox : Messrs. Clowes, Eickley, & Steward. 
 Solicitors for Anchor : Messrs. Mercer & Mercer. 
 
LORD OAIENS'S DECISIONS. 
 
 135 
 
 GLAZEBROOK'S CASE. 
 
 Policy — Novation — Bonus. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against a policy-holder, who, besides taking receipts in the same form as in 
 Lancaster's Case (Nb. 2.), on receiving the bonus circular of the transferee 
 company mentioned in Knox's Case did not answer it, the effect being, as 
 notified in the circular, that the share of profit pertaining to the policy was 
 added to the amount assured as a reversionary bonus. 
 
 JL HIS was a claim by Mr. Glazebrook to prove against the Bank 
 
 of London on a policy dated 27 April, 1848, issued by the Bank of 
 
 London, to him, on his own life, for £558 lis., with profits. 
 
 In 1858 came the amalgamation of the Bank of London with the 
 
 Albert. The first two receipts thereafter given to Mr. Glazebrook 
 
 were as follows : 
 
 Albert Life Assurance and Guarantee Company, 
 7, Waterloo Place, Pall Mall, London, 8.W. 
 Established 1838. 
 Eeceived the 13th day of May, 1859, the pre- 
 mium for the renewal of policy in the Bank of 
 London and National Provincial Insurance Asso- 
 ciation (the number of the policy and the amount 
 of the premium and the period for which it is re- 
 ceived being mentioned in the margin hereof) the 
 liability of the Bank of London and National Pro- 
 vincial Insurance Association by reason of the 
 death of the assured under such policy having been 
 taken by the Albert Life Assurance and Guarantee 
 Company, subject to the payment to them of all 
 premiums and moneys now or hereafter to become 
 due and payable under the same policy for. keeping 
 the same in force. 
 
 1872 
 
 Receipt No. 254. 
 Policy No. 6674. 
 Sum assured, £558 lis. Od. 
 On the life of 
 W. Qlazebrooh. 
 Premium £18 Os. Od. 
 For 12 months, 
 From 5th May, 1859, 
 To 4th May, 1860. 
 
 J. Croudace, \ 
 Geo. Raymond,S 
 
 Directors. 
 
 Eeceipt No. 
 
 Policy No. 6674, B. & N. 
 
 Sum assured £558 lis. Od. 
 
 On the life of 
 
 William Glazebrook. 
 
 Premium £18 0s. Od. 
 
 Interest, £ 
 
 For 12 months, 
 
 From 5th May, 1860. 
 
 Albert Life Assurance and Guarantee Company, 
 
 7, Waterloo Place, Pall Mall, London, S. W. 
 Established 1838. 
 Eeceived this 21st day of May, 1860, the pre- 
 mium for the renewal of policy mentioned in the 
 margin hereof, the amount of which premium and 
 the period for which it is received are also men- 
 tioned in the margin. 
 
 J. Croudace, 
 
 Wm. King. 
 
 >Directors. 
 
 March 20. 
 
136 ALBEET ARBITRATION. 
 
 Glazebbook's Mr. <7. Chester was for Mr. Glazebrook. 
 Case. 
 
 ~ Mr. Rodwett was for the Bank of London. 
 
 Mr. Chester contended that in the circumstances there was no 
 novation. 
 
 Mr. Rodwett was not called on. 
 
 Lord Cairns : — I am somewhat surprised at Knox's Case and 
 this case being brought before me, because they are entirely 
 covered by several of the decisions that have already been given. 
 
 Here is a policy-holder who, the year after the amalgamation of 
 the Albert and the Bank of London, has the most distinct notice 
 from the receipt which is given to him, and which remains in his 
 possession, of what had taken place between the two companies. 
 That receipt states that the premium has been paid by him to the 
 Albert, that it has been paid to the Albert for the renewal of a 
 policy in the Bank of London, the number and date and amount 
 of which are mentioned in the margin. But it does not stop there ; 
 it does not leave it open to suggestion that this money has been 
 paid to the Albert for the renewal of this policy, because the Albert 
 were the agents of the Bank of London to receive the renewal pre- 
 mium, but it states that the premium is paid to the Albert for this 
 reason : because the liability of the Bank of London, by reason of 
 the death of the assured, under the policy, had been taken by the 
 Albert, subject to the payment to them of all premiums and moneys 
 then or thereafter to become due and payable under the same 
 policy, for keeping the same in force. I do not think any words 
 could more distinctly state to the person paying the money the 
 footing upon which the Albert were going to receive it. No person 
 with the most moderate knowledge of the English language and of 
 business affairs could doubt after reading this, that the money was 
 paid to the Albert as principals and not as agents ; that it was paid 
 to them to keep alive that policy ; but paid to them because they 
 had taken the liability off the shoulders of the Bank of London, 
 and put it on their own. It was quite open to this gentleman, 
 when he saw that, to say : That is not what I want ; that is not 
 what I assent to ; I am not going to surrender my right against 
 the Bank of London of having a continuing policy of theirs, on 
 
LOED CAIRNS'S DECISIONS. 137 
 
 paying the premium to them for a fresh year ; I will not pay the Glazebeook's 
 
 Albert on this footing, and I withdraw my cheque or my money. ' " 
 
 He does not do anything of the kind ; he appears to be perfectly 
 satisfied ; and in the next year he receives a receipt pure and simple 
 from the Albert, for the renewal premium of the policy mentioned 
 in the margin, giving the particulars of the policy in question, with 
 B. & N. to identify it as a Bank of London and National Provin- 
 cial policy. 
 
 Then, it does not rest there. That would be a strong case, and, 
 perhaps, a sufficient case, for the Bank of London, if it had rested 
 there. But, in process of time, a circular is sent to this gentle- 
 man, telling him in the plainest way, that a bonus in respect of 
 this policy had been declared out of the assets of the Albert ; that 
 there were four ways in which it might be applied ; and that if 
 he did not select one of those particular ways by a particular date, 
 the- Albert would understand that he desired it to be applied in 
 the first way. Silence would be treated by them as an assent 
 to its application in the first way ; he was silent ; and in the first 
 way they did accordingly apply it. He, therefore, is just in the 
 same position as if he had actually answered the letter, and had taken 
 the bonus in money into his hands out of the assets of the Albert. 
 
 His claim, therefore, must be refused with costs. 
 
 Solicitors for Mr. Glazebrook : Messrs. E. W. & B. 0. Mote. 
 Solicitors for Bank of London : Messrs. Paine &'Layton. 
 
138 ALBEET AKBITKATION. 
 
 1872 HAWTEEY'S CASE. 
 
 A pril z i. Endowment Contract — Novation. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against the holder of an endowment contract who had received the amalga- 
 mation circular holding out advantages to be derived by him from the amal- 
 gamation, and had brought in his contract to the transferee company, and had 
 it indorsed by them with a certificate of their liability to pay the sum assured 
 by the contract. 
 
 1 HIS was a claim by Mr. Hawtrey to prove against the Family 
 Endowment on an endowment contract dated 2 March, 1843, 
 entered into with him by the Family Endowment. It declared that 
 in consideration of £15 14s. lQd. then paid by him, and in case 
 he, his executors, administrators, or assigns should, on 1 March in 
 every succeeding year until and including 1857, pay to the direc- 
 tors of the Family Endowment £15 14s. lQd., the funds of the 
 Family Endowment should be liable, according to their deed of 
 settlement, to the payment of £100 (together with an aliquot share 
 of such further sum or sums, if any, as should be assigned to that 
 contract pursuant to the rules of the Family Endowment by way of 
 bonus or addition to the endowment thereby made) for every 
 child of Mr. Hawtrey and his wife therein named thereafter to be 
 born, who should live to attain the age of fourteen years. The 
 endowments were made payable to Mr. Hawtrey, his executors or 
 administrators, or such persons as he should authorize to receive 
 the same, each to be paid within three months after proof of a child 
 becoming entitled. 
 
 Mr. Hawtrey paid all the annual premiums required by the con- 
 tract. 
 
 Mr. Hawtrey received the amalgamation circular of the Family 
 Endowment with the postscript. He brought in his contract to the 
 Albert and had an indorsement (stated in the judgment) put on it. 
 
 Payments in respect of children of the marriage attaining the 
 age of fourteen were made by the Albert down to the time of the 
 winding-up of the Albert. Other children of the marriage had since 
 attained the age of fourteen. Mr. Hawtrey claimed under the con. 
 tract to be entitled to prov eagainst the Family Endowment for the 
 
LOED CAIRNS'S DECISIONS. 139 
 
 sums which had become payable thereunder in respect of the last- hawtbey's 
 mentioned children, and of the several sums which might become ASE ' 
 payable thereunder in respect of any other children or child of 
 the marriage. 
 
 Mr. Hawtrey appeared in person. 
 
 Mr. Bodwell was for the Family Endowment. 
 
 Mr. Hawtrey contended, that his part of the contract having 
 been discharged on 1 March, 1857 ; after that the directors and 
 members of the Family Endowment were bound to do their part. 
 The whole onus of keeping him harmless as against themselves, 
 and providing for the payment of his claims, rested with them ; 
 so that, if for any ease, advantage, or convenience to themselves, 
 it should at any time suit them to retire from their business, they 
 were bound to make an arrangement with some other party to act 
 for them in paying him those claims ; and if that party, acting as 
 their agent, should at any time fail to pay them, then the obli- 
 gation to pay them reverted to themselves. He ought to have 
 been made to understand that he had nothing to fear, and that, 
 whatever might happen to the intermediate party, the Family 
 Endowment were his acknowledged debtors, and he was safe. 
 Further, if it suited their purpose that he should become the 
 creditor of an intermediate party, instead of continuing to be 
 their creditor, he ought to have been told expressly, in plain and 
 unmistakeable language, on what terms, and under what arrange- 
 ments, the obligation to pay his claims was to pass from the one 
 party to the other, and that the option of remaining the creditor 
 of the one, or becoming the creditor of the other, rested with 
 himself. But the amalgamation circular was misleading. For 
 the pretended contract embodied in the indorsement there was no 
 consideration passing from him to the Albert. The Family Endow- 
 ment made him do, and blindfolded him for the purpose of making 
 him do, that which they now cited against him as an evidence of 
 novation. Novation was said to be a doctrine of Eoman law; 
 this question should be considered under the light of the precept 
 of. Eoman law which directed an estimate to be formed of the 
 
140 ALBERT ARBITRATION. 
 
 Hawtebt's character, intention, and legal bearing of a fact by the inquiry cut 
 
 ' bonofuerit, for whose advantage it was that the thing should be 
 
 done. What advantage could it be to him to lose his hold on the 
 Family Endowment and to accept for his debtor a strange company, 
 which was bound to him by no obligation, to which he had paid 
 nothing, and to which, for aught he knew, nothing had been paid 
 by any one, for the large sums they would have to pay to him 
 should his children live? To the Family Endowment, on the 
 contrary, it would be a great advantage if he were led to accept 
 another company for his debtor instead of them. There were on 
 the part of the F'amily Endowment and its officers a reticence, an 
 ambiguity, a concealment of facts, a duplicity of language, which 
 were inexcusable, and which, if he were not allowed a claim against 
 the Family Endowment, put them into the position of profiting by 
 their own wrong. He had acted under a false impression, of which 
 they were the cause. He had no intention of taking the Albert for 
 his debtor instead of them, but felt thoroughly abandoned and 
 deserted by them. He hoped, therefore, his claim against them 
 would be allowed now that they had again been brought into 
 substantial and responsible existence. 
 
 Mr. Bodwell was not called on. 
 
 Loed Cairns: — I feel very much for a gentleman who has' 
 expended a considerable sum of good money, as Mr. Hawtrey has, 
 and who has got very little in return for it, I am afraid. At the 
 same time I think the documents in the case are too strong for him 
 to get over. 
 
 When the Albert took the business of the Family Endowment the 
 Family Endowment issued a circular which is admitted to have 
 been received by Mr. Hawtrey. 
 
 Mr. Hawtrey was not a policy-holder or the holder of a contract 
 on which any premiums were any longer payable. He had paid 
 the price for the endowment which he expected to receive ; he was 
 in the position therefore in which an annuity creditor places him- 
 self by paying the price in the first instance, and merely contract- 
 ing to receive his annuity. If the case rested there, if Mr. Hawtrey 
 
LOED CAJENS'S DECISIONS. 141 
 
 had done nothing more, his right against the Family Endowment Hawtrbt's 
 
 would clearly have continued. No statement made to him in this '. 
 
 circular would in the slightest degree have prejudiced that right ; 
 and the question which has arisen in many cases with respect to 
 the effect of paying premiums to the Albert would not have arisen 
 in his case, because he would hare had no more to pay. 
 
 But what Mr. Hawtrey has said in the agreed Case, and in his 
 statement to-day he confirms it, as to what took place, is this : 
 
 The said Montague Hawtrey inferred from the circular that the Family Endow- 
 ment had placed him under the necessity of relying for payment of his claims 
 upon the Albert ; and, being in London at the end of the year 1861, he called 
 at the office of the Albert and inquired whether he was not to have some voucher 
 from them that they would pay him his claims when they became due. 
 
 Now I cannot attach any meaning to these words but this, that by 
 reading the circular it had come to be the impression on Mr. Haw- 
 treys mind that the persons upon whom for the future he was 
 called on — I will not put it higher than that — to rely for payment 
 of his annuity were the Albert, and that being called on or in- 
 vited to rely upon them for that payment he goes to the Albert 
 office and asks them whether he is not to have a voucher from them 
 that they would pay him his claims when they became due. That 
 I understand' to mean a voucher binding the Albert to pay those 
 claims. The Case goes on : 
 
 It was replied that they could put an indorsement on his contract ; and he was 
 asked if he wished it, to which he answered that he did ; but he made no inquiry, 
 and received no information, as to what the purport of the indorsement would be ; 
 and accordingly the" said Montague Hawtrey forwarded the contract of the 2nd of 
 March, 1843, to the Secretary of the Albert for the purpose of having the indorse- 
 ment made thereon of the liability of the Albert thereunder ; and accordingly 
 the Albert caused to be indorsed thereon and signed by three of their directors 
 a memorandum as follows. 
 
 The original policy is not under seal, it is signed by three directors ; 
 
 and the indorsement also is not under seal, but is signed by three 
 
 directors of the Albert. The indorsement is this : 
 
 It is hereby certified that subject to the within-named Montague Hawtrey 
 abiding by and observing and performing the conditions contained in the within 
 contract on the part of the said Montague Hawtrey, the capital, stock, and funds 
 of the Albert Medical and Family Endowment Life Assurance Company shall, 
 according and subject to the provisions of the deed of settlement of the same com- 
 pany, be liable to pay the sum assured by the within contract, whenever the same 
 shall become payable under and by virtue of the conditions of such contract. 
 
142 ALBEET AEB1TBATI0N. 
 
 Hawtbbys Now the observation is a just one (as far as I at this moment 
 
 ' see) that there were no conditions to be actively performed by 
 
 Mr. Sawtrey in the contract. But that would not interfere with 
 the effect of the indorsement in other respects. It is a contract 
 which subjects the funds of the Albert, which otherwise were not in 
 any way subject to Mr. Sawtrey's claim, to the payment of his 
 claim when it became due. There is, therefore, of course, full con- 
 sideration as between the parties for a new contract on this subject. 
 There is the consideration passing to Mr. Sawtrey, of receiving as 
 his security the funds of the Albert, which in the result might have 
 been much more valuable than the funds of the Family Endow- 
 ment: That indorsement was put on it, and I must say I think it 
 is an indorsement which any person who reads it could understand. 
 That is sent back to Mr. Sawtrey, and is accepted by him without 
 any kind of remonstrance on his part ; and then subsequently one 
 of the payments becoming due to Mr. Sawtrey he writes this letter 
 to the Albert : 
 
 The sum of £100 payable to me by the Albert Medical and Family Endowment 
 Life, Assurance Company, on account of my contract B. 781 with the Family 
 Endowmtnt Society is now payable, and I should be obliged to you to pay it into 
 the hands of my bankers, Messrs. Hoare, Fleet Street, as I cannot myself attend 
 at the office in London for the purpose of receiving it. As the printed instructions 
 contained in the second half of your letter of the 23rd December do not apply to 
 this case, I suppose there will be nothing more for me to do than to give an order 
 on you for the money to Messrs. Hoare, but I wait for your answer before 
 sending it. 
 
 That sum was paid, and a receipt given to the directors of the 
 Albert for the money. 
 
 I entirely adhere to the principles upon which I have acted 
 hitherto, and upon which the Court of Chancery had acted before, 
 that in the ordinary case of an annuity creditor who had paid his 
 consideration-money, and had nothing more to do, there could be 
 no cesser of the liability of the company with which he originally 
 contracted, merely from the circumstance that that company had 
 aliened its business to another company. But here I have the case 
 of a gentleman who, although he has paid all his premiums, is 
 distinctly informed of the dissolution of the old company, and the 
 assumption of the business by the new. He is told that the assets 
 of the new company will be liable to bis claims, and upon that 
 
LORD CAIENS'S DECISIONS. 143 
 
 footing he takes in his contract for indorsement, and the indorse- Hawtbet's 
 ment I have read is put on it. If events had turned out differently 
 from what they have ; if the Family Endowment had been a com- 
 pany whose assets were deficient, and the Albert had been solvent ; 
 the Albert would not have had a word to say by way of defence on 
 this state of facts to Mr. Hawtrey's claim against them. There was 
 a complete new contract with the Albert, and that is the contract 
 which — I regret to say it, because I am afraid it will be a much 
 less valuable one to him — Mr. Hawtrey must abide by. 
 I do not order him to pay costs. 
 
 Solicitors for Family Endowment : Messrs. Markby & Tarry. 
 
144 ALBEET AEBITBATION. 
 
 1872 DOENING'S CASE, 
 
 A P ril 24 - Policy— Novation— Protest. 
 
 Novation consequent on amalgamation not established, m the circum- 
 stances, against a policy-holder, who paid hi* premiums to the transferee 
 company under protest that he so paid in order to keep alive his claim 
 against his assuring company, the transferors, the amalgamation agreement 
 having provided in effect that the transferee company were to receive 
 premiums on behalf of the transferor company in respect of policies which 
 the holders did not consent to change for policies of the transferee company. 
 
 1 HIS was a claim by Mr. Doming to prove against the Medical 
 on a policy dated 30 December, 1850, issued to Mr. Doming on 
 the life of M. Whittaher, for £800. 
 
 The Case filed on behalf of Mr. Doming stated that he regu- 
 larly paid the premiums to the Medical through Mr. Pennington 
 and Mr. Knight, their successive agents in Manchester, until 27 
 July, 1860. Between that time and December, 1860, when the 
 next half-yearly premium became" due, Mr. Knight called on 
 Mr. Doming, and told him, as the fact was, that the Medical had 
 transferred their business to the Albert ; and all premiums due in 
 respect of the policy after December, 1860, were paid to Mr. Knight 
 up to and ^including that which became "due on 27 July, 1869. 
 Mr. Doming alleged that he had persistently on all occasions 
 refused to recognise as his debtors any other parties than the 
 Medical, who issued the policy ; and in the events which had hap- 
 pened, and under the circumstances set forth in the affidavits, he 
 claimed to be entitled to prove against the Medical, and not 
 against the Albert, for the value of the policy. 
 
 Mr. Doming filed three affidavits in support of his Case. The 
 first was his own, in which, after stating the payments to the 
 agents down to 27 July, 1860, inclusive, as in the Case, he pro- 
 ceeded as follows : 
 
 3. Between such last-mentioned date and the month of December, 1860, when 
 the next half-yearly premium became due, the said George Jepson Knight called 
 upon me and told me that the Medical had transferred their business to the 
 Albert, and that he was their continuing agent ; and at the same time he asked 
 me to let him have the policy I have above mentioned, that he might forward the 
 same to London, either to be exchanged for a new policy, or indorsed by the 
 
LOED CAIRNS'S DECISIONS. 145 
 
 Albert. This I positively refused to give him for any such purpose; at the same Dobning's 
 time most emphatically stating that I would hold to the Medical and their pro- Case. 
 prietary to the end, as security for my insurance, and that as he was to be the 
 continuing agent he must distinctly understand, and let his principals know, 
 that every future premium I might pay in respect of such policy would be paid 
 for the Medical only, and that I would never leave them, nor would I admit that 
 they had any right to transfer their obligations to me in respect of the said policy 
 to any other parties without my consent, and that consent I never would give. 
 
 4. When the next premium became due, namely, in January, 1861, the said 
 G. J. Knight called upon me for such premium, and again requested me to hand 
 him my policy for exchange or indorsement, I refused again to do so ; but in July, 
 1861, I consented to hand over to him my policy for the purpose of his forward- 
 ing the same to his principals' head office for examination ; but I stated to him 
 most distinctly that the policy must neither be exchanged or indorsed, and on the 
 20th July, 1861, I sent the said policy to the said 0. J. Knight, by my then 
 clerk John Paterson, and received back from the said G. J. Knight a receipt in 
 the words following, namely : 
 
 Manchester, July 20, 1861. 
 
 Received from K Doming, Esq., his policy in the Medical, Invalid, and 
 General Life Assurance Company, No. 2895, on the life of M. Whittaker [to be 
 exchanged] for [one in] indm'sement by the Albert and Medical Society on same 
 terms and conditions. 
 
 Geo. J. Knight, 
 Agent. 
 
 5. On reading the receipt, I at once sent my clerk back to G. J. Knight to say 
 I would not have the policy exchanged, and he then altered the receipt for in- 
 dorsement as it appears.* I again sent the receipt back, and said I would not 
 have it indorsed ; and his reply was that he would forward my instructions to 
 the office as requested, but that it was no use altering the receipt again ; it would 
 do to shew who had got the policy. The receipt is now produced to me marked 
 with the letter B. 
 
 6. I afterwards received a document in the words and figures following, namely : 
 
 1899. Albert and Medical Life Assurance Company, 
 
 23 July, 1861. 
 I hereby certify that Mr. Geo. J. Knight has this day deposited with me 
 policy No. 2895, on the life of M. Whittaker for £800, issued by the Medical, 
 Invalid, and General Life Assurance Society for indorsement by the Albert and 
 Medical Life Assurance Company. 
 
 C. Douglas Singee, 
 Sec. 
 The said document is now produced, and shewn to me marked C. 
 
 7. The said O. Douglas Singer had been the secretary of the Medical, and was 
 then the secretary of the Albert. 
 
 8. I did not trouble myself about the policy until the next following premiums 
 became due respectively between that time and the 8th June, 1863, beyond 
 
 * The meaning is, that the words in brackets [ ] were struck out, and the words 
 indorsement by inserted. 
 
146 ALBERT ARBITRATION. 
 
 Dobntng's stating last time I paid such respective premiums that I paid to the original 
 Case. proprietary and not to the Albert, and objecting to the form of receipt, and 
 inquiring why my policy had not been returned. 
 
 9. On the 8th June, 1863, I wrote to Mr. Singer in the words and figures 
 following, omitting formal parts : 
 
 Mr. Douglas Singer, 
 
 Albert and Medical Life Insurance Co., London. 
 Sir, 
 
 Policy No.. 2895, issued by the Medical, Invalid, and General Assurance 
 Society. 
 
 Can you explain to me the reason why you do not return this policy, which you 
 have had for examination since July, 1861 ? 
 And I received from him the following reply, omitting formal parts : 
 
 Elias Doming, Esq., 
 Deak Sib, 
 
 2895 Med. Inv. 
 With reference to your letter of yesterday, I herewith return the above 
 policy, the receipt of which you will please acknowledge, 
 
 Yours faithfully, 
 
 Prank Eastjm, 
 
 Secretary. 
 
 10. The policy was inclosed in the letter, and is now produced to me, marked 
 A. There is no indorsement upon it. 
 
 11. In the month of May, 1865, 1 received a letter, of which the following is a 
 copy: 
 
 Albert Life Assurance Company, 
 
 7, Waterloo Place, Pall Mall, London, S.W. 
 25 May, 1865. 
 Sib, 
 
 Medical Policy, 2895. E. Doming. 
 
 As the above policy issued by the Medical Invalid Society, which trans- 
 ferred its business to this office in 1860, has not yet been sent in either for 
 exchange, or for the purpose of being indorsed with an admission of this com- 
 pany's liability, I shall be much obliged if you will kindly forward it to me at 
 your early convenience, to assist us in getting the outstanding policies properly 
 indorsed or exchanged, as may be preferred, by the holders. 
 
 I am, Sir, 
 
 Your obedient servant, 
 • Frank Easum, 
 
 E. Doming, Esq. Secretary. 
 
 12. On receipt of the said letter, I at once took the same to G. J. Knight, and 
 shewed it to him: and stated again that I would neither have the policy indorsed 
 or exchanged. The letter is now produced, and shewn to me, marked E. 
 
 13. Prom the 8th day of June, 1863, up to and including the 27th day of July 
 1869, 1 continued to pay the half-yearly premiums in respect of the policy, to G. J. 
 Knight, and, at the time of each payment I stated in reference to the form of 
 receipt being on the receipt forms of the Albert, that it must be clearly understood 
 it was not to bind me to the Albert, nor to be considered as a waiver of my claim 
 
LOED CAIRNS'S DECISIONS. 147 
 
 against the proprietary of the Medical, and that I should alone hold them respon- Dorwraa's 
 sible. The before-mentioned receipts for my several half-yearly premiums are Case. 
 now produced to me, and are numbered consecutively 1 to 36, both inclusive. 
 
 14. When the half-yearly premium for December, 1869, became due, I handed 
 my cheque for the amount to my solicitors, Messieurs Sale & Company of Man- 
 chester, with instructions for the same to be tendered in payment of such half- 
 yearly premium in respect of the policy to the original proprietary of the Medical. 
 I have not received the cheque back. From that time to the present the matter 
 has been in dispute. 
 
 The next affidavit was that of Mr. G. J. Knight, which contained 
 the following passages : 
 
 3. I collected the half-yearly premiums in respect of the said policy from Elias 
 Doming from the time of my appointment to the 27th July, 1860, inclusive. •; 
 
 4. Shortly after such last-mentioned date I received information from the head 
 office of the society in London that the directors of the Medical had transferred 
 the whole of their business and liabilities to the Albert, together with instructions 
 to obtain the various policies of the respective insurers in the Medical, that such 
 policies might be exchanged for new policies in the said Albert, or be indorsed by 
 the last-mentioned company, admitting their liability; and I was at the same 
 time appointed the continuing agent of the Albert. 
 
 5. I accordingly called upon Elias Doming and informed him of such change. 
 I requested him to hand me the policy he held for such exchange or indorsement, 
 but he at once declined to do so. 
 
 6. I afterwards repeatedly applied to Elias Doming to hand me the policy for 
 exchange or indorsement, but he declined to do so, and said his policy should stop 
 as it was. I have, however, some recollection that he did at one time subse- 
 quently hand me his policy, hut still refused to have it exchanged. I have seen 
 a receipt in my handwriting marked B, referred to in his affidavit, and my recol- 
 lection of it is that he still refused to have his policy exchanged ; but I pressed 
 him to have it indorsed, so that he might have the security of the two offices 
 instead of the one. 
 
 7. Elias Doming, however, never exchanged the policy to my knowledge, but 
 always objected to do so. 
 
 The third affidavit was that of Mr. Paterson, which was as 
 follows : 
 
 1. I was in the employ of Mr. Elias Doming for upwards of twenty years, 
 ending about in June, 1869. 
 
 2. I remember Elias Doming having a policy of insurance for £800 on the 
 life of M. Whittaher on a half-yearly premium of £27 12s. 8d., which I was 
 frequently in the habit of paying for him both to the late Mr. Charles Bennington 
 and to Mr. (?. J. Knight. 
 
 3. I remember Mr. Knight coming to see Mr. Doming several times respecting 
 the transfer of the business of the Medical' to 4 the Albert, and Mr. Knight fre- 
 quently asked Mr. Doming to let him get his policy exchanged for a new policy 
 in the Albert, which the latter always refused to do. _ ■, 
 
 M 
 
148 ALBERT AB-BITEATION. 
 
 Dobmino's 4. I at one time took the policy to Mr. Knight. I received his receipt for it, 
 Case. an( j j ] m0 w that Mr. Doming objected to the terms of the receipt, and said he 
 would not have the policy exchanged, and that so long as I was in his employ I 
 continued to attend to the payment of the half-yearly premiums, and Mr. Doming 
 continued to object to such exchange, and he frequently, during that time, told 
 Mr. Knight that he should always consider the Medical responsible. 
 
 Mr. H. A. Oiffard was for Mr. Doming. 
 
 Mr. Lemon was for the Medical. 
 
 Lord Cairns called on Mr. Lemon to state whether he had any 
 evidence to meet the affidavits filed by Mr. Doming. 
 
 Mr. Lemon admitted that he had not. The books had been 
 searched, but the correspondence could not be found. There were,, 
 however, he submitted, discrepancies in the evidence; If the 
 result of the evidence was that the policy was sent to London for 
 indorsement in 1861, and was retained there till 1863, the Medical 
 were during that time relieved of liability, the policy-holder having 
 consented, during that time, to accept the indorsement, and that 
 liability could not be put on again without the consent of the 
 Medical. Otherwise, he admitted the case was governed by 
 
 Griffith's Case, L. E. 6 Ch. 374; 
 from which case, however, it differed in the particular point, that 
 here there had been no withdrawal of the consent. The policy was 
 sent in and allowed to remain for indorsement, and it was simply 
 returned without indorsement. 
 
 Mr. Giffard was not called on. 
 
 Lord Cairns : — I have no doubt that this policy-holder has not 
 lost his right of proving against the Medical. I have, in cases that 
 are now very numerous, held that, where persons have allowed 
 themselves to drift into dealing with the amalgamated company, to 
 enter into relations with that new company, and to pay premiums, 
 and to make no protest with regard to the footing upon which they 
 are paying those premiums, they lose the security of the old com- 
 pany and become creditors of the new. But I must say that this 
 
LOR© CAIRNS'S DECISIONS. 149 
 
 gentleman seems to have had his eyes quite open to the conse- Donunre's 
 
 quences of what he was asked to do, and to have taken every care 
 
 that a reasonable man could take not to let himself do it. He does 
 not seem to have had any legal adviser; but, from his own good 
 sense, he resisted every approach that was made to him for the 
 purpose of having his policy indorsed or exchanged. There being 
 no contradiction to his evidence, and his evidence being distinct 
 and clear, and I must say credible, as it seems to me, and sup- 
 ported by the written documents, namely, receipts altered from 
 time to time, and supported also to a great extent by the evidence 
 of Mr. Knight and his own clerk, I must take it that his claim 
 is substantially proved. He paid his premiums to the Albert 
 under a distinct protest that he was so paying in order to keep 
 alive his claim in the Medical. His case is the stronger because, in 
 the deed between the Albert and the Medical, the Albert were to 
 receive premiums as agents for the Medical in respect of those 
 policies where the holders did not consent to change them for 
 Albert policies. 
 
 Solicitors for Mr. Doming : Messrs. Phelps & Sidgwick. 
 Solicitors for Medical: Messrs. Walker, Kendall, & Walker. 
 
 K 
 
150 ALBERT ARBITRATION. 
 
 1871 RECONSTRUCTION CASE 
 
 UaylG 
 te 19, 2 
 July 21 
 
 May 26 ; Continuance of Business — Mutual Insurance Fund. 
 
 June 19, 23 ; 
 
 Consideration of suggested modes of continuance of existing business of 
 Albert, instead of liquidation. 
 
 J. HIS was an application to the Arbitrator for his approval of some 
 scheme of reconstruction of the Albert. 
 
 Two schemes were presented ; one by the Reconstruction Com- 
 mittee, mentioned in section 26 of the Arbitration Act, the other by 
 Mr. C. E. Lewis, as a policy-holder in the Saint George Assurance 
 Company, one of the companies scheduled to the Act. 
 
 The scheme of the Reconstruction Committee began with the 
 following statements : 
 
 On the stoppage of the company on 14th August, 1869, a plan of reconstruc- 
 tion was proposed by the provisional liquidators with the sanction of the 
 Court, but it was rejected by the policy-holders, at a meeting held in London, 
 on 9th September, 1869, as being too favourable to the shareholders of the 
 company. 
 
 The Reconstruction Committee was formed in December, 1869, to promote 
 a scheme of reconstruction, in order to avoid the ruinous consequences of liquida- 
 tion. 
 
 By the plan of reconstruction first proposed by the committee, it was provided 
 that the Albert Company and the associated Companies should together contri- 
 bute the amount requisite to enable the former company to provide for all its 
 contract liabilities in full. 
 
 Before, however, this plan could be carried out, the result of the decisions of 
 the Court of Chancery, as to novation, had very much reduced the amount of 
 the liabilities entitled to rank against the associated Companies, and, in a cor- 
 responding degree, had lessened the inducement to the shareholders in those 
 companies to provide their proportion of the required contributions. The plan of 
 the committee was accordingly modified, by providing that the associated Com- 
 panies should contribute a less amount than was originally intended, and that the 
 policyholders should surrender a portion of their full claims. ' 
 
 This was the plan ultimately submitted to the Court of Chancery. 
 
 (The petition for the sanction of the Court was heard before the 
 Lord Justice James in the first instance, by permission, and it was 
 held that the Court had no jurisdiction to sanction the scheme : 
 L. R. 6 Ch. 381). 
 
LOED CAlKNS'S DECISIONS. 151 
 
 The scheme proceeded thus . Reconstruc- 
 
 tion Case. 
 
 The lapse of time since the stoppage of the company, and the accumulation of 
 
 death claims, now necessitate important modifications in the plan originally 
 proposed by the committee. 
 
 The same causes have, doubtless, diminished the value of the goodwill of the 
 business to a considerable extent ; but from what passed at the several meetings 
 of policy-holders, and the large payments on account of premiums voluntarily 
 made to the committee, both in this country and in India, in anticipation of 
 reconstruction, it is believed that a large proportion of the policy-holders are still 
 willing to continue their policies if a sound plan of reconstruction can be 
 devised ; and many of the policy-holders, who, by reason of the lapse of time, 
 have re-insured in other offices, have intimated their readiness, and even desire, 
 to continue their old policies in the Albert Company if it should be recon- 
 structed. 
 
 The only way of preserving the goodwill for the benefit of the parties interested 
 appears to be a reconstruction, and by no other mode can the Arbitrator deal so 
 effectually with the claims in classes, and so avoid the necessity for dealing with 
 individual cases. 
 
 ******* 
 In drawing up this proposal, the leading principles of the former plan of the 
 committee have been kept in view, as far as possible, that having been very 
 generally adopted by the shareholders and creditors. 
 
 Also the principle sanctioned by the Legislature in the last session (The Life 
 Assurance Companies Act, 1870, 33 & 34 Vict. c. 61), that where an insurance 
 company is unable to meet its engagements, the best mode of dealing with its 
 business is to provide for a rateable reduction of its liabilities. 
 
 It seems that the basis of any arrangement of the affairs of the Albert Com- 
 pany and the associated Companies should be — 
 
 1. That the Albert assets of all kinds should be apportioned, pro rata, 
 over all engagements, on the books at the date of the stoppage on the 14th 
 August, 1869. 
 
 2. That those creditors who have a better debtor in any of the associated 
 Companies should look to such company for a supplemental dividend. 
 
 ******* 
 
 It will first be necessary to construct such a table of premiums as the Albert 
 
 Company, having regard to the fact that there will be no commission, dividends, 
 
 stamps, or other expenses, save those of collection and investment, could now 
 
 afford to accept. 
 
 The policy of each assured, continuing payment of premiums, to be reduced to 
 
 such a sum as the payments hitherto made would, at the present age, according 
 
 to the new table, assure. The dividends from time to time payable from the 
 
 estate being converted into equivalent reversions added to the sum assured. 
 ******* 
 
 The extent of the liability of the respective associated companies must depend 
 
 mainly upon the application of the doctrine of novation to each case, and although 
 
 that question has been the subject of decision in some of the companies as to cer^ 
 
 tain classes of claims, the application of those decisions to each individual case 
 
 would be extremely difficult ; but it is believed that generally the shareholders in 
 
 N 2 
 
152 ALBEET ARBITRATION. 
 
 Rbconstbuo- those companies would still be willing to adhere to what they were formerly pre- 
 tion Case, pared to do, especially if they can be secured individually an immediate release as 
 proposed in the original plan of the committee, on the basis of which many share- 
 holders were willing to contribute in excess of their strict legal liability. 
 
 Having regard to all the circumstances affecting the respective companies, it is 
 therefore suggested whether the contributions which by the committee's former 
 scheme the several companies were to make may not still form a fair basis of 
 compromise. 
 
 *.*»**■» 
 
 The right of the annuitant and endowment creditors to rank against the 
 associated Companies appears to have been well established, and it would be 
 necessary, therefore, in any event, to provide for payment of those claims. 
 
 The balance, if any, of the contributions of any company would be applicable 
 
 * to augmenting the sums assured on policies originally granted by that company ; 
 
 and the question would then be whether it should be apportioned amongst all 
 
 the policies in the particular company, or be limited to those cases where there 
 
 has not been novation. 
 
 There are as yet very few cases in which the question of novation has been 
 decided in favour of the claimants as to policy claims, and having regard to all 
 the difficulties of that question, it is submitted that any contributions from the 
 associated Companies applicable to policy claims (other than those, if any, in 
 which there has been beyond question mo novation) should be divided pro raid, 
 amongst the policyholders in the respective companies, 
 
 * * * ' * * * * 
 
 It is proposed that a new company should be established (and one with that 
 object has already been registered) for the purpose of carrying out the proposed 
 reconstruction in all its details. 
 
 This company will be based upon a subscription of new capital, and will pro- 
 vide certain contingent advantages to the shareholders of the Albert and its 
 associated Companies. 
 
 It is not intended, however, that the new company should guarantee the 
 calculations, but that it should provide the requisite machinery for working out 
 the reconstruction arrangements. 
 
 The capital and funds of the new company will be entirely distinct from the 
 assets of the old companies. So much of the latter as are applicable to provide 
 for the assurance risks on the existing policies, will constitute an assurance fund, 
 to be invested in the names of trustees to be appointed by the policy-holders. 
 This assurance fund will consist of the following : — 
 
 1st. The dividends on the claims A [current policies] and B [policies in 
 respect of which no premiums are now payable] above mentioned. 
 
 2nd. The contributions of the associated companies, or so much thereof 
 as may not be required to provide for the preference claims of annuity 
 and endowment creditors. 
 
 3rd. The premiums on existing policies. 
 Periodical valuations would have to be made, and the policies increased or 
 reduced accordingly. 
 
 This would, in effect, constitute this fund a mutual assurance fund for the 
 existing policies. 
 
LORD CAIRNS'S DECISIONS. 153 
 
 The management of the company, if reconstructed, is proposed to be entrusted Reconstbbo 
 to a board of directors formed from amongst the shareholders and policy-holders TI0N Case. 
 of the various companies. 
 
 In submitting the foregoing proposal as the basis of a plan of reconstruction, it 
 is hardly necessary to point out, in conclusion, the difficulties of framing any 
 complete plan until some of the leading principles which lie at the root of the 
 whole matter have been dealt with by the arbitrator. A more complete plan 
 could only proceed on the footing of anticipating those decisions. 
 
 In pursuance of leave given by the Arbitrator, objections to 
 the schemes were filed. 
 
 Mr. Fry, Q.C. (Mr. Webster, Q.C., with him), appeared for the May 26; 
 Keconstruction Committee in support of their scheme. —^ ' 
 
 Mr. O. E. Lewis (solicitor) appeared in support of the scheme 
 filed by him and in opposition to that of the Reconstruction 
 Committee. 
 
 Other solicitors appeared in support of objections filed. 
 
 Judgment reserved. 
 
 Lokd Caikns : — Having regard to section 5 of the Arbitration July 21. 
 Act, I was of opinion at the commencement of this Arbitration 
 that the duty imposed on me by the Act was, in the first instance, 
 to ascertain, if possible, how far any scheme for reconstruction or 
 reconstitution of the Albert, or for the continuance or conduct of 
 its business, could properly be adopted by me. I found, also, in 
 section 26 of the Act, a reference to the body called the Recon- 
 struction Committee. Therefore, finding the duty I have described 
 imposed on me by the Act, and finding this reference to the 
 Reconstruction Committee, I invited, in the first instance, from 
 that committee any scheme for the reconstruction or reorganiza- 
 tion of the company which they might desire to propose ; and at 
 the same time I gave opportunities for any objections being 
 lodged to that scheme or to any other scheme that might be pro- 
 posed. 
 
 The consideration of the schemes and objections came before 
 me on 26 May, the day after the Act received the Royal assent. 
 
154 ALBERT ARBITEATION. 
 
 Rbookstkco- I found, when the argument had proceeded some way on the 
 
 * scheme of the Eeconstruction Committee that it involved or 
 
 assumed certain payments and contributions by the companies, 
 which I may term the absorbed companies; and that it would, 
 in my opinion, be impossible for me either to ask for, or to recom- 
 mend, or to sanction, payments of that kind, until some data were 
 laid down as to the liabilities of the various bodies, — the various 
 absorbed companies, and the Albert, the absorbing company, — 
 which would properly mark out the character and the extent of 
 those contributions. I therefore determined to suspend further 
 proceedings, and to abstain from forming any opinion on the 
 subject of this scheme, until, in the first place, the body of the 
 questions which had been raised, or which might be raised, with 
 regard to the various liabilities connected with the different com- 
 panies should have come before me and have been disposed of. I 
 proceeded accordingly to hear the various cases which had been 
 begun in the Court of Chancery, or which it was desired to raise 
 before me. On 19 and 23 June, the argument on the question; of 
 reconstruction was resumed, and was ended. 
 
 In the course of the time that has elapsed, and in the course of 
 this argument, many points which presented some difficulty in the 
 first instance have been cleared away, and may now be put out 
 of the question. 
 
 In the first place I have to observe, that it has not been proposed 
 to me, and 1 certainly never entertained the idea, that there could 
 be any reconstruction of the Albert in the form of a company to 
 engage in and carry on new business. That would have been a 
 matter purely of speculation ; and it would have been quite out of 
 my province to encourage or recommend reconstruction involving 
 difficulties and responsibilities of the kind which a proceeding of 
 that sort would involve. In the next place it was clearly admitted, 
 and could not be disputed, that in every view of the case, whether 
 there was to be reconstruction in any form, or whether there was 
 not, the whole of the Albert capital would have to be got in, 
 and. the assets of the Albert would have to be realized with greater 
 or less promptitude. 
 
 The proposal of the Reconstruction Committee, as it ultimately 
 eame to be insisted on before me, amounted to this: the debts x)f 
 
LORD CAIENS'S DECISIONS. 155 
 
 and claims against the Albert were to be proved and valued ; the Reconstbuo- 
 j. ., , , . , , ,„ ,, i tion Case. 
 dmaena which the assets of the Albert would pay was to be 
 
 ascertained ; all creditors, except policy-holders, were to be paid 
 
 their dividends at once; a mutual insurance fund was to be formed 
 
 for as many policy-holders as would come in, insuring each, without 
 
 any fresh examination, for such a sum as his old premium at his 
 
 present age would cover, according to proper tables moderately 
 
 loaded ; the business of this mutual insurance was to be managed 
 
 either by a new executive chosen for the purpose, or through some 
 
 existing insurance company as agents ; there was to be handed 
 
 over to the managers of this mutual insurance that portion of the 
 
 assets of the Albert which represented the dividend due to the 
 
 policy-holders; and every existing policy-holder was to receive 
 
 as it were a free policy for a reversionary sum payable at death 
 
 equal in value to his present dividend. 
 
 Now, on this scheme some observations obviously occurred at 
 the outset, and I came to the conclusion very early in the 
 argument, that the mode proposed of dealing with the Albert 
 assets was clearly open to objection. 
 
 In the first place, it was proposed that the creditors, as I have 
 said, other than policy-holders, — that is to say,, the annuitants and 
 general creditors, — were to be paid immediately ; but in order to 
 make this payment, a very considerable amount of money would 
 be required, and, therefore, for the purpose of making the payment, 
 the best and most convertible assets of the company would require 
 to have been taken ; whereas for the deferred dividends the less 
 convertible and more speculative assets would be set apart, and the 
 result might possibly be that one class of creditors would be paid 
 in good money, and the other class of creditors might find, when 
 the time of payment for them came, that the calculation of the 
 value of the speculative assets was erroneous. 
 
 The next objection was this : the proposal was to impound, as 
 it were, the dividend of a policy-holder who did not come in 
 to the scheme of mutual insurance, and pay that dividend, or 
 rather a reversionary sum founded upon that dividend, at death. 
 It was said this, after all, was his contract of insurance, which 
 provided for a sum payable at death only. The answer to 
 that appeared to me to be conclusive: no doubt the contract 
 
156 ALBERT ARBITBATION. 
 
 Rbconstruc- of insurance was for a sum payable at death, and if the policy 
 
 _: ' of insurance had continued, and the company had continued, and 
 
 there were a capital and a guarantee fund continuing behind, that 
 contract might well have been maintained, and the right of 
 the policy-holder to any immediate payment might have been dis- 
 puted; but, when everything vanished, except dividend, when 
 there was no longer any capital behind, or any continued insur- 
 ance fund, it seemed to me to be impossible to insist on that part 
 of the contract that would defer payment till death, when the 
 only payment to be made was a dividend on the value of the 
 claim. 
 
 A further objection was this : the assets representing the divi- 
 dend, when handed over, must either be kept separate by the 
 mutual insurance executive, or else be mixed with their general 
 funds. If they were to be kept separate the transaction would 
 have been quite useless ; it would have been of no assistance to 
 the project of mutual insurance. If, on the other hand, the assets 
 were to be mixed, it might lead to very unfair results, because 
 if the mutual insurance scheme did not succeed, the assets re- 
 presenting the dividend of those persons who had not come in 
 might be imperiled and lost, for the benefit of those who had 
 come in. 
 
 Then another objection was insisted on, a very obvious one, 
 to the whole scheme, namely, that a mutual insurance scheme 
 of this kind might have a tendency to attract the taiuted lives 
 only. The lives formerly insured in the Albert which were strong 
 and healthy lives might have insured themselves, or might be able 
 to insure themselves, on very good terms with other good com- 
 panies ; whereas the tainted lives might be those, in the process of 
 natural selection, which would come in first, or almost exclusively, 
 and join the mutual insurance scheme. 
 
 Then, beyond that, the scheme of mutual insurance, if feasible 
 at all, would obviously depend very much on the skill, fidelity, and 
 experience of the executive body appointed to manage the scheme ; 
 and if that executive body were to be chosen by the policy-holders 
 who came in and joined, there would be a twofold difficulty, in 
 the first place, you could not get your executive until you knew 
 
LOKD CAIRNS'S DECISIONS. 157 
 
 what policy-holders would come in and join ; and, in the next Reconstbuc- 
 
 place, a body of policy-holders scattered all over this country and 
 
 other countries, without any cohesion, or any common mode of 
 action, would be perhaps the worst possible constituency for choos- 
 ing a skilful executive. 
 
 These considerations, occurring on the proposals made to me, 
 narrowed very much the course I thought I ought to take. It 
 appeared to me the course I was bound to take was, in these cir- 
 cumstances, to endeavour to ascertain whether there was any exist- 
 ing office of good repute and credit, that would undertake to 
 re-insure, without any fresh examination, the lives which were 
 insured in the Albert, for such a sum as those lives at their present 
 age might properly be insured for, on the old premiums, or that 
 would undertake as agents to manage a mutual insurance scheme, 
 if a mutual insurance scheme was adopted. There were certain 
 inducements that might lead an existing office to adopt the first of 
 those alternatives, — namely, to re-insure the lives for such a sum 
 as the former premiums might properly cover. There would be 
 no agency expenses involved in the transaction ; there would be a 
 considerable amount of business obtained ; there would be no ad- 
 vertisements, no commissions; and so far the company adopting 
 the lives would save the money which they would otherwise have 
 to spend in acquiring the same amount of business. Against this 
 would have to be put the circumstance that they would be 
 taking lives without examination, which many companies might 
 object to. 
 
 I issued a circular, which I sent to twenty-nine companies ; and 
 I will read the proposal which I made, and the list of the com- 
 panies to which it was sent. The companies are : The AUiance, 
 British and Foreign, the Atlas, the Commercial Union, the Eagle, 
 the Economic, the English and Scottish Law, the Equitable, the 
 Equity and Law, the Guardian, the Imperial, the Law, the Legal 
 and General, the Liverpool and London and Globe, the London 
 Assurance Corporation, the London and Provincial Law, the North 
 British and Mercantile, the Northern, the Norwich Union, the Peli- 
 can, the Provident,, the Bock, the Boyal, the Boyal Exchange, the 
 Scottish Widows' Fund, the Standard, the Sun y the Universal, the 
 
158 ALBERT ARBITRATION. 
 
 Reconstruo- University, and the West of England — twenty-nine in all. The 
 
 ' circular (which was signed by the secretary of the Arbitration) ran 
 
 in this form, after the preliminary part of it : 
 
 3. — The arbitrator is given to understand that it is not unlikely that an exist- 
 ing company would be found willing to accept such a transfer as is authorized by 
 that section [that is, section 5 of the Arbitration Act] of part of the business late 
 of the Albert Company not otherwise provided for, namely, that relating to life 
 assurance proper. 4. — He is desirous of being informed whether your company 
 would be disposed to accept such a transfer, and if so, on what terms. Two 
 modes have been suggested in which such a transfer might be effected, and with 
 respect to each of them (in case your company would be disposed to enter into 
 any negotiation on the subject), I am to invite a statement of the views of your 
 company. 5. — One mode suggested is that the company accepting the transfer 
 should keep the business relating to the transferred policies and the funds arising 
 from the premiums on those policies separate and distinct from the ordinary 
 business and funds of their own office, and should manage the transferred business 
 as agents of or trustees for the holders of the transferred policies in consideration 
 of a stipulated remuneration in the form of a commission or in the form of a fixed 
 annual payment. In this mode of arrangement the arbitrator would settle the 
 amounts of policies and premiums ; the policy-holders would in effect constitute 
 the members of a mutual insurance company, the government of which would 
 rest with the office accepting the transfer, and to that office no responsibility 
 except for good management would attach. 6. — The other mode suggested is that 
 the company accepting the transfer should assume the responsibility of meeting 
 claims on the transferred policies as they arise in like manner in all respects as if 
 the policies had been originally issued by themselves (the accepting company). 
 In this mode of arrangement it would be necessary for the arbitrator to settle 
 with the accepting company the terms on which the transferred policies should be 
 taken over. The arbitrator would make it part of this arrangement ; (first), on 
 the one hand, that there should be no further medical examination of the insured ; 
 (secondly), on the other hand, that there should be a considerable number of 
 policies (as, for example, not fewer than one thousand) brought in to the accepting 
 company within a short time, to be limited, and that, in default of the minimum 
 number fixed being brought in within that time, the arrangement should be at an 
 end ; and (thirdly), that the accepting company should bind themselves to take 
 over on the same terms all such other policies of the Albert Company or of the other 
 companies scheduled to the Act as should be brought in, either within a limited 
 time, or at any time without limit, as should be arranged between the arbitrator 
 and the company. It will rest with any company disposed to treat for such a 
 transfer on the general conditions indicated to state in the first instance to the 
 arbitrator in answer to this invitation what amount they would insure at the 
 present age of an insured, in -consideration of a continued payment of the 
 premium formerly payable to the Albert or other insuring company, or on the 
 other hand what premium they would require in order to continue the insurance 
 of the amount formerly insured. It will depend on the answer given by your 
 company on this point, whether the arbitrator would seek to continue negotiations 
 with them. 
 
LORD CAIENS'S DECISIONS. 15a 
 
 Paragraph 7 inquired whether the company would accept such Reconstbuc- 
 
 of the assets of the Albert as could be better realized by a slow 
 
 process of realization, as purchasers, and pay a sum that might 
 be properly equivalent for them, or undertake the collection and 
 realization of them, as agents : and then in paragraph 8 there 
 was a stipulation that if any company were disposed to enter into 
 any part of the arrangement described, it would be necessary for 
 them to satisfy me that they had legal power to enter into the 
 arrangement. 
 
 I requested an answer from the companies to which that circular 
 was addressed by the 15th of this month ; that is to say, last 
 Saturday. The circular was, as I have said, sent to 29 companies. 
 I have received answers from"21. I assume, the time having past, 
 the other companies do not desire to answer the circular. Of the 
 21 answers I have received, 17 refuse or decline to enter into 
 negotiations on any of the bases proposed. All of the companies 
 that have answered decline to negotiate on the footing of taking' 
 over and making themselves responsible for the policies, even by 
 way of reduction of the amount insured. They decline to nego- 
 tiate on that footing at all ; to take over the policies without a 
 fresh examination of the lives. I ought to qualify that, however, 
 in this way; one company say that if the proposal is restricted 
 to English policies, and cuts off Indian policies and Continental 
 policies, they would be willing to enter into negotiations. Four 
 of the companies express a willingness to negotiate for the agency, 
 if I may so term it, of a mutual insurance scheme, if one 
 should be formed, — that is to say, they profess a willingness to 
 manage a scheme of that kind for a remuneration, either by com- 
 mission or for a fixed sum, without any responsibility whatever 
 on their part for the insurances. That is the result of the com- 
 munications with the 29 companies. 
 
 I look upon these answers as putting out of the question the 
 possibility of inducing any existing company to take a transfer of 
 the policies for any amount, without examination of the lives. 
 
 I have then to satisfy myself that a mutual insurance scheme 
 would be a scheme safe as a commercial speculation, and one 
 which I could properly and conscientiously hold out to the policy- 
 holders as a scheme which I could recommend them to adopt, 
 
160 ALBERT ARBITRATION. 
 
 Reoonsthuo- and to which I could endeavour to induce them to accede. If the 
 
 ' scheme is not one of this kind I should be doing very considerable 
 
 injustice. If, through any recommendation of mine, a scheme of 
 that kind was set on foot, and was not ultimately a safe commer- 
 cial scheme, the consequence might be this : premiums would be 
 paid by those who came into it, the insurances on the lives which 
 dropped first might be paid, the funds might be sufficient to pay 
 them ; but if the scheme at bottom was not a sound scheme, the 
 lives which subsequently dropped might drop when the assets 
 had diminished, and there might be no assets to satisfy the claims 
 arising at a more remote time. I was anxious to test such a 
 scheme in the best possible way, and to obtain the opinion of 
 insurance offices on the subject. It appeared to me that there 
 could be no better or more practical way of ascertaining their 
 opinion, than to propose to a considerable number of offices, as 
 I did to these 29, that they themselves should undertake as a 
 commercial scheme for their own benefit the re-insuring of the 
 lives, without any fresh examination, for such a sum as might be 
 properly covered by the existing premiums. If I had found that 
 these companies, or any considerable number of them, had been 
 willing to undertake a scheme of this kind for their own benefit, I 
 should have accepted that as a very good practical proof that the 
 scheme was a commercially sound one, and I should then have felt 
 myself at liberty to consider whether it would be better to hand 
 it over to one of these companies for their own benefit to conduct 
 it, or to form a mutual insurance company, the results of which I 
 should in that case have had confidence in, from the fact that these 
 experienced companies were willing to undertake for themselves a 
 business of that kind. I can but look at the refusal of the com- 
 panies to undertake a re-insurance for their own benefit as the 
 strongest practical proof, that the scheme as a commercial under- 
 taking would not be a safe one, and would not be one which I could 
 properly or safely recommend to the policy-holders of this company 
 to adopt. I confess very reluctantly, after the best consideration 
 I can give to the case, I am very clearly of opinion that I cannot 
 undertake the formation of the only scheme which I could have 
 adopted for the re-construction or re-constitution of this business, 
 namely, a mutual insurance scheme for all the lives, or for those 
 
LOED OAIRNS'S DECISIONS. 161 
 
 of the lives that might choose to come in, without any fresh ex- Eeconstetjc- 
 
 , . HON OaBE. 
 
 animation. 
 
 The result, therefore, of the whole of this investigation I have 
 made, — which in one point of view I do not regret, because I think 
 it is more satisfactory that the matter should have been fully 
 argued and considered, and tested in the way I have tested it, — 
 is that I must put aside altogether any idea of reconstruction 
 or reconstitution. 
 
 Solicitors for Eeconstruction Committee : Messrs. Ashwrst, Morris, 
 &Co. 
 
 Solicitors for Mr. C. E. Lewis : Messrs. Lewis, Munns, Nunn, & 
 Longden. 
 
162 ALBERT ARBITRATION. 
 
 1871 TAIT'S CASE. 
 
 Junel, lo. Officer — Discontinuance of Services — Agreement 
 
 The order for the winding-up of a company held not to operate as a dis- 
 continuance by the company of the employment of an officer, within the 
 terms of the agreement for his services, the winding-up being the act of the 
 Court. 
 
 A HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim by Mr. P. If. Tait against 
 the Albert, for £5000, in respect of his services in the capacity 
 of Indian Manager. 
 
 Mr. Tait had filed an affidavit detailing his arrangements with 
 the Albert and previously with the Medical. 
 
 June 1. Mr. CracknaU was for Mr. Tait. 
 
 Mr. Eiggins was for the Albert. 
 
 Mr. CrachnaU referred to 
 
 Yelland's Case, L. E. 4 Eq. 350 ; 
 Clark's Case, L. R. 7 Eq. 550 ; 
 Logan's Case, L. R. 9 Eq. 149 ; 
 
 and clauses 55, 60, 61, 137 of the Albert deed, and the supple- 
 mental deed. He also mentioned, in reply, 
 
 Bidgway v. Hungerford Market Company, 3 A. & E. 
 171. 
 
 The case was adjourned on a question of fact. 
 
 June 15. Loed Caiens : — This case was fully argued, but at the close of 
 the argument a suggestion was made against Mr. Tait that pay- 
 ments had been made to him which might have a bearing on his 
 claim. I stated that if it was suggested to be material, there must 
 be evidence on the point. Mr. Tait then elected to be examined 
 
LOKD CAIRNS'S DECISIONS. 163 
 
 at a fatare day. On reflection, I have arrived at the conclusion Tait's Cask: 
 that nothing coming from that examination could bear on the 
 point I have to decide. Therefore, it is not necessary to have the 
 examination, and I will now dispose of the case. 
 
 The claim is made by Mr. Tait against the Albert for the sum 
 of £5000. Mr. Tait was the manager in Calcutta of the Medical. 
 The Medical joined the Albert in 1860. Mr. Tait was then in 
 England. 
 
 The Albert directors wished to retain him as their agent, and 
 therefore a contract was made, the terms of which are evidenced 
 by a letter of 27 June, I860, by a board resolution of the same 
 date, and by two board resolutions of 8 and 22 August, 1860. 
 
 The letter of 27 June, 1860, signed by three directors, and 
 addressed to Mr. Tait, is as follows : 
 
 1 On the amalgamation of the Albert and Medical ... businesses, we, the 
 undersigned, Lord George Paulet, George Raymond, and George Goldsmith 
 Kirby, being three of the directors of the Albert ... for and on behalf of the 
 Albert . . . undertake to maintain all existing agreements touching remunera- 
 tion between the said Medical . . . and yourself, and your colleague W, F. F., 
 and that you shall be under no obligation to reside in India after such amal- 
 gamation ; it being understood that in lieu thereof you are to give your time 
 and attention to the chief office of the Albert ... to the conduct of the Indian 
 business of the Albert . . . under the name or style of a director of the India 
 Board or business ; your remuneration hereby secured to you never to fall below 
 the annual allowance drawn by you under your agreements with the Medical . . . 
 on the average of the five years ending 30th June, 1859, that is to say, £1000 
 sterling per annum, provided the annual premiums in respect of the Indian 
 "business amount to the sum of £30,000. . . . 
 
 There is nothing in that as to the £5000. The resolution of 27 
 June, 1860, the same date, states that this letter had been read 
 and approved by the board. 
 
 That letter was not altogether satisfactory to Mr. Tait. He 
 states in his affidavit that he had some communications with Mr. 
 Kirby, the manager of the Albert ; and ultimately Mr. Kirby writes 
 to him on 23 August : 
 
 I have the pleasure of handing you the subjoined copy resolutions passed at our 
 board meetings on the 8th and 22nd instant respectively. 
 
 The resolution of 8 August, 1860, is this : 
 
 That £5000 be paid to Mr. P. M. Tait if the company discontinue to employ 
 him from any cause other than misconduct 
 
164 ALBERT ARBITRATION. 
 
 Tait's Case. On 22 August, 1860, a further resolution was come to/ namely : 
 
 That the words ' from any cause other than misconduct ' be and are hereby 
 erased from the resolution passed on the 8th instant in reference to Mr. Tait. 
 
 The result therefore is that the resolution stands thus : That 
 £5000 be paid to Mr. Tait if the company discontinue to employ 
 him. I will assume that this, coming in the circumstances that 
 attended it, formed part of the contract. and engagement with Mr. 
 Tait. I will assume, although I should not wish to decide it, that 
 it was intra' vires of the directors to make a contract of this kind. 
 I will assume further that the contract could not be impeached, 
 even although, on the face of it, it might imply that Mr. Tait could 
 not be discontinued in his employment, even for misconduct, with- 
 out the company paying him this £5000. I will assume all that 
 in his favour. 
 
 The question, however, arises, and the question which I have to 
 decide is, has the company discontinued to employ Mr. Taitl 
 Now what has happened is this : the company has been ordered to 
 be wound up ; the Court of Chancery, under the authority of the 
 Legislature, has interposed, and, on the ground of the insolvency 
 of the company, has laid its hands on the company, arrested it in 
 the carrying on of its business, taken possession of its assets with a 
 view to divide them and satisfy the claims' that were existing at 
 the time of winding up, and with a view to dissolve and extinguish 
 the company, and in a civil sense to annihilate the corporation: 
 Then does this vis major, operating on the company in this way, 
 amount, in the language of the contract, to a discontinuing on the 
 part of the company to employ Mr. Tait? In my opinion it does 
 not. In my opinion, in order to bring the assets of the company 
 under a b'ability on this contract, there must be a voluntary, 
 active, intelligent discontinuance by the company of the employ- 
 ment of Mr. Tait as their agent, at a time and in circumstances 
 when it was optional with them either to continue or discon- 
 tinue it. That, in my opinion, is what is pointed at by the 
 contract entered into, and that, in my opinion, is not what has 
 happened. 
 
 I was referred to three authorities; but they do not bear out Mr. 
 Tait's proposition. Yelland"s Case and Clark's Case were both cases 
 where the claimant had a contract for five years certain with the 
 
LOED CAIBNS'S DECISIONS. 165 
 
 company. Of course he was entitled, at least the Court thought Taw's Case. 
 him entitled, to the value of that certain income which was secured 
 to him for five years, and • the Court valued his claim on that 
 footing. The case which at first sight appears to have a closer 
 bearing is Logan's Case. But when the terms of the contract 
 there are looked at, they seem to me to bring into clear con- 
 trast the difference of the two cases. The words there were : 
 
 In the event of the said W. H. Logan being at any time deprived of or removed 
 from his office for any other cause than gross misconduct, the directors shall pay 
 him a sum equal to three years' salary 
 
 All therefore that it was necessary for the officer to predicate of his 
 position was that de facto he was deprived of or removed from his 
 office, which he clearly was, by the winding-up, both deprived of 
 and removed from. It would be in the power of Mr. Tait to pre- 
 dicate that of his position. But that is not what he has to do ; he' 
 must predicate of his position that the company have discontinued 
 to employ him, which they have not done. Therefore, his claim 
 must fail. 
 
 Solicitors for Mr. Tait : Messrs. F. Biehardson <& Sadler. 
 Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 
166 ALBERT ARBITRATION. 
 
 I871 KOBEKTS'S CASE. 
 
 June 17. Officer — Six Months' Notice — Commission to Agents on Premiums. 
 
 Where an officer of the Albert was entitled under his agreement to six 
 months' notice to terminate the engagement, and after the winding-atp he 
 was continued by the liquidators in their service, without any new agree- 
 ment, he was held entitled to six months' salary in lieu of notice, as from the 
 day when the liquidators ceased to employ him. 
 
 Observations on the duty of liquidators to have in such cases explicit 
 arrangements in writing of a provident character. 
 
 Observations on the allowance to agents of the Albert, after the winding- 
 up order, of commission on renewal premiums received by them under the 
 authority of the Court, on the terms of being returnable in full on demand. 
 
 JL HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim of Mr. R. P. Roberts against 
 the Albert. 
 
 Mr. Roberts was acting as district manager of the Albert at New- 
 castle at the commencement of the winding-up. One of the terms 
 of his engagement was that six months' notice in writing should be 
 required on either side to terminate the agreement. After the 
 commencement of the winding-up Mr. Roberts, among others, was 
 retained in the service of the liquidators until 31 December, 1869, 
 on the same terms (it was admitted) as previously existed, but no 
 written agreement was entered into. Mr. Roberts claimed six 
 months' salary from 31 December, 1869. 
 
 He also claimed a sum for commission on premiums received by 
 him under the order of the Court of Chancery of 14 August, 1869, 
 authorizing the payment of premiums on the terms of their being 
 returned in full on demand. 
 
 Mr. A. E. Ryan (solicitor) was for Mr. Roberts. 
 
 Mr. Biggins was for the Albert. 
 
 Mr. Ryan referred to 
 
 Harding's Case, L. E. 3 Eq. 341. 
 
LORD CAIENS'S DECISIONS. 167 
 
 Mr. Siggins referred to Roberts's 
 
 Case. 
 Chapman's Case, L. R. 1 Eq. 346. 
 
 A reply was not called for. 
 
 Lord Cairns : — I have no doubt that Mr. Roberts is entitled 
 to his six months' salary in lieu of notice, as from 31 December, 
 1869. 1 look upon his original contract with the company as 
 terminated by the winding-up, and if nothing more had been 
 done he would be entitled to salary for six months from that date ; 
 but what was done was, that in the winding-up, and for the pur- 
 pose of it, he was continued, and continued, as admitted by the 
 liquidators, till 31 December, 1869, on the same terms as pre- 
 viously existed with the company. 
 
 I must express, formally, my great disapprobation of the mode 
 in which this arrangement was made. It ought to have been 
 made in writing ; the writing ought to have stated explicitly what 
 was the nature of the engagement; it ought not to have been 
 left to an oral arrangement or an understanding; and if it had 
 been reduced to writing, one can only hope that it would have 
 struck the minds of those who were acting for the winding-up, that 
 it was a clearly improvident bargain, that (however desirable it 
 might be to continue this gentleman's services) he should be 
 entitled to six months' notice or six months' salary when his ser- 
 vices in the winding-up should come to an end. Obviously that 
 was a matter different from his continuance- as a servant of the 
 company as a going concern, and his right to remuneration ought 
 to have been made to cease when the business of the winding-up 
 in which he was engaged should cease. 
 
 However, the agreement has been made, it is admitted by the 
 liquidators now, and I cannot break faith with him, however much 
 I may disapprove of the improvidence of the agreement. 
 
 With regard to the commission, it is asserted, and the 
 claimant's solicitor is not prepared to dispute it, that the amount 
 claimed has been actually paid or deducted. I must say again it 
 
 o 2 
 
168 ALBEET ARBITRATION. 
 
 Eobbbts's is an extraordinary arrangement, one which one regrets, that there 
 — '. should have been any promise held out, regard being had to the 
 nature of the order of 14 August, 1869, that a commission of one 
 per cent, would be allowed for the receipt of the renewal premiums 
 under that order. It was an order not compelling any person to 
 pay premiums ; the Court could not have compelled any person to 
 pay premiums. It was not an order assuming that those premiums 
 would be retained and used. It was entirely an option given to 
 the persons insured to continue to pay their premiums in the hope 
 of, or with a view to, the possible reconstruction of the company. 
 That being for the benefit of the persons insured, their option 
 should have been exercised by paying in their premiums free of 
 all expense to the liquidator, taking any expense that might be 
 created upon themselves. The consequence of what has been done 
 is, that here are premiums to be returned, payable on demand, 
 some of which have been demanded, and expense has been in- 
 curred, and yet commission is to be deducted, deducted in Tespect 
 of money which has to be returned in full; which commission 
 therefore must fall really on the costs of the winding-up. How- 
 ever, if the money has been allowed, it must so remain, I cannot 
 alter the arrangement that has been made. 
 
 Mr. Roberts must have his costs of establishing his claim. 
 
 Mr. Higgins : — The liquidators wish that your Lordship should 
 be informed as to the deduction of the commission, that it was done 
 under the direction of the Vice-Chancellor, with this view and this 
 view solely : at the time the order was made which enabled the 
 premiums to be received on that footing, the Court was desirous to 
 keep the concern as a going concern, and to retain all the agents, 
 and there appeared to be no other way of doing it but by the 
 means which have turned out unfortunate, adopting the allowance 
 of commission to the agents, in the hope that the business and 
 the goodwill might be preserved. 
 
 Loed Caiens : — If the liquidators had the sanction of the Court, 
 that removes any observation I have made upon it. 
 
LORD CAIKNS'S DECISIONS. 169 
 
 Mr. 0. E. Lewis (Solicitor) : — And the amount of the commis- Kobertb's 
 
 sion was transferred from time to time from the general account * 
 
 to the renewal premium account, so that the policy-holders might 
 have their deposit for premium returned in full. 
 
 Solicitor for Mr. Bdberts : Mr. A. E. Ryan. 
 
 Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 
170 ALBEET ARBITRATION. 
 
 1871 EASUM'S CASE. 
 
 June 17. Trustee of Shares for Company — Contributory — Indemnity. 
 
 Shares having 136611 transferred to the secretary of the Albert as trustee 
 for the company, he was held liable to be put on the list of contributorits, 
 but entitled to prove for indemnity out of the assets. 
 
 XHIS was an application to the Arbitrator, on a Case stated 
 by agreement, to determine whether Mr. JEasum, the late secre- 
 tary of the Albert, was liable to be settled on the list of con- 
 tributories in respect of forty-one shares standing in his name, 
 and, if so,' whether he was entitled to indemnity out of the 
 
 Mr. Easum and the liquidators had filed affidavits in the Court 
 of Chancery. Mr. Easum's affidavit stated that, while he was 
 secretary, he was induced to allow the directors to place shares in 
 his name in the books, until they could be transferred into the 
 names of other persons ; that the forty-one shares in question 
 formed a residue of such shares ; that he was informed by the 
 directors that there was a clause in the deed of settlement em- 
 powering them to appoint a trustee to hold shares for them, and 
 that the matter was a mere form, and no responsibility would 
 attach to him ; that no pecuniary consideration was paid to or 
 received by him ; and that he never received any dividend or 
 derived any benefit from the shares. The liquidators' affidavit 
 confirmed this statement, and said that the dividend account had 
 never been charged with dividend on the shares ; that no warrants 
 had been prepared for the dividend thereon ; and that in one of 
 the pages of the share ledger the account of Mr. Easum was stated 
 to be his account as trustee for the company. Mr. Easwm also filed 
 an affidavit in the Arbitration, stating that on amalgamations the 
 directors of the Albert, in order to have a larger number of Albert 
 shares to give to new shareholders coming in, arranged with some 
 of the Albert shareholders to reduce the number of the shares held 
 by them, treating those retained by them as fully paid up, the 
 
LORD CAIRNS'S DECISIONS. 171 
 
 shareholders transferring the residue of the shares to the company, Easum's 
 
 and the directors putting them provisionally into the name of the. ' 
 
 secretary. 
 
 Mr. Stock was for Mr. Easum. 
 Mr. Higgins was for the Albert. 
 
 Mr. Stock referred to clauses 101, 102, 103, of the Albert deed, 
 
 and to 
 
 Oriental Commercial Bank Case, L. K. 3 Ch. 791 ; 
 
 Saunders's Case, 2 De G. J. & S. 101 ; 
 
 Chapman's Case, L. K. 3 Eq. 361. 
 
 Mr. Higgins stated Mr. Easum had executed transfers to him- 
 self, and referred to clause 210 of the deed. 
 
 Mr. Stock in reply. 
 
 Loud Cairns : — I do not think there is any doubt about this 
 case, although it may present some features of hardship with 
 respect to Mr. Easum. 
 
 Mr. Easum has forty-one shares assigned to him in the Albert ; 
 he executes a deed of transfer to him, and by that deed he covenants 
 under his seal with three trustees on behalf of the company that 
 he shall and will at all times thereafter observe, keep and perform 
 the several covenants, clauses, provisoes, stipulations, and agree- 
 ments, contained in the deed of settlement of the company or any 
 deed supplemental thereto. He has, therefore, covenanted among 
 other things to pay all the unpaid calls on these shares. The 
 consequence of that is that his name is inserted in the books of the 
 company, sometimes without any qualification, at other times with 
 the qualification of trustee, which, of course, would not diminish 
 his responsibility to creditors. In that state of things the company 
 is being wound up, and the Act of Parliament lays down that in an 
 unregistered company of this kind every person shall be deemed 
 
172 ALBERT ARBITRATION. 
 
 Basdm's to be a contributory who is liable at law or in equity to pay or 
 
 ' contribute to the payment of any debt or liability of the com" 
 
 pany. It appears to me, beyond doubt, that Mr. Easum, as 
 regards creditors, is liable to contribute to the payment of the 
 debts of the company, and that he therefore must be on the list 
 of contributories. 
 
 The circumstance that he was placed on the books as a trustee 
 for the company will, if all was properly done, give him rights over 
 against the company : but the very clause (103) of the deed which 
 contemplates that he shall have rights against the company con- 
 templates also and implies that the rights over are rights of 
 indemnity against liabilities which he will incur by accepting such 
 a transfer as he has accepted. The deed itself supposes that he 
 will incur the liability of being a contributory. 
 
 Now, it is on this point that it might be material to consider 
 whether that which was done with reference to these shares by the 
 directors was intra vires or ultra vires. In case it was intra vires 
 he would be entitled to the indemnity ; if it was, to his knowledge, 
 ultra vires, a question might arise whether he would be entitled to 
 indemnity. Looking to the position of the secretary, I should not 
 expect him or hold him bound to scan or criticize very narrowly 
 that which was done by the directors, for the purpose of seeing 
 whether it was to the letter warranted by the deed. I should be 
 unwilling to take that course ; but even if I were willing, I am 
 not prepared to say that what the directors here did was not in 
 substance warranted by the deed. Because, in substance, what 
 it is suggested they did was this: they had a shareholder, for 
 example, who wanted to have a certain number of his shares 
 treated as paid-up shares, and in place of paying the amount un- 
 paid on them, he gave over to the directors some of his other 
 shares, which the directors then treated as equivalent to so much 
 money, and in place of money passing they wrote up the shares 
 as paid in full. There is very little difference between that and 
 paying money for shares which they buy, and then receiving it 
 back from the vendor to pay up in full his other shares. There- 
 fore, I think, Mr. Easum has a right to be indemnified on the 
 ground of this being a transaction that is in substance within 
 
LOKD CAIENS'S DECISIONS. 173 
 
 the meaning of clause 103, and he must be put on the list of Easum's 
 
 contributories for the forty-one shares, and will have a right to — .' 
 enter a claim, and prove for indemnity out of the assets of the 
 company. 
 
 Solicitors for Mr. Easwm : Messrs. Brady & Ward. 
 Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 
174 ALBEET ARBITRATION. 
 
 lg 7i LEWINE'S CASE, 
 
 T'ttiif 1 T 
 Agent — Commission on Premiums — Ultra vires. 
 
 Agreements by directors with an agent CI) for continuance to him in 
 case of his retirement from the agency of a commission on premiums on 
 policies effected through him and in force at his retirement, there being no 
 stipulation that he should continue in the agency for any definite time, or 
 that the commission should cease if the premiums ceased to be paid ; (2) for 
 allowance of commission on premiums to his wife and children after his 
 death in the agency ; held unreasonable, and ultra vires, and not binding on 
 the company. 
 
 1 HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim against the Albert of Mr. 
 George Lewine, of Berlin, a former agent. 
 
 Mr. Lewine was manager of the German branch of the Albert 
 from 1857 until the winding-up in 1869. His emoluments had 
 varied ; at the winding-up they were a salary of £300 a year (out 
 of which rents and salaries of clerics were paid) and a commission 
 of 10 per cent, on renewal premiums in his branch, with a procura- 
 tion fee on sums assured by new policies effected through his 
 agency. 
 
 It was alleged by him that, in 1857, an unwritten arrangement 
 had been made between him and the manager of the Albert, that 
 in case he (Mr. Lewine) should retire from the agency, the Albert 
 should continue to pay him a commission of 5 per cent, per annum 
 on renewal premiums on policies effected through his agency and 
 in force at his retirement. 
 
 In November, 1861, a further arrangement was made with him, 
 as appeared by the following board minute of that date : 
 
 The question of allowing part of G. Lewine's commission to his widow and 
 children after his death was considered; and 2£ per cent, commission on renewal 
 premiums was agreed to be allowed to his widow after his death. 
 
 Again, in May, 1862, the following resolution was passed by the 
 directors : 
 
 Whereas it was resolved at a board meeting, held on the 13th November, 1861, 
 
LOKD CAIRNS'S DECISIONS. 175 
 
 that £2 10s. per cent, upon the amount of the renewal premiums of assurance re- Lewine's 
 ceived at or through the Berlin agency should be paid to Jane Lewine, wife of Case. 
 Mr. G. Lewine (agent-general of this company at Berlin) after his decease, for the 
 remainder of her life, if the same renewal premiums so long continue receivable : 
 
 Resolved, — That in, case of the death of the said G. Lewine and Jane his wife 
 within the term of 15 years from this day, the said £2 10s. per cent, be paid 
 during the remainder of the said term of fifteen years, unto or in trust for the 
 children of the said G. Lewine and Jane his wife, living for the time being, for 
 the benefit of such children in equal shares, and that such payment be made to 
 the lawful guardian or guardians of such children for the time being, whose 
 receipt shall be a sufficient discharge : Provided always that the said £2 10s. per 
 cent, is not to be paid or payable to the said Jane Lewine or to the children . . . 
 if the said G. Lewine shall not be in the company's service at the time of his 
 death, or if he shall not from time to time duly account, to the company. . . . 
 
 Mr. Lewine owed the company, on the balance of the general 
 account with him as agent, £2768. Against this he claimed 
 £6037 for loss of commission. 
 
 The questions for the Arbitrator were : (1) Whether Mr. Lewine 
 should not be ordered forthwith to pay to the company the sum of 
 £2768. (2) Whether, in the circumstances, he had any and what 
 claim against the company. 
 
 Mr. Holl was for Mr. Lewine. 
 
 Mr. Higgins was for the Albert. 
 
 !Mr. Holl distinguished , 
 
 Maclure's Case, L. R. 5 Ch. 737. 
 
 Mr. Higgins was not called on. 
 
 Lord Caiens : — With regard to what are termed the supple- 
 mentary agreements, as they are alleged, in favour of the wife and 
 children of Mr. Lewine, it appears to me they may be at once put 
 out of the question. There was no consideration for those agree- 
 ments on the face of them. Whatever contract had been made 
 
176 ALBERT AEBITEA.TION. 
 
 Lhwine's between the company and Mr. Lewine was completed long before 
 — '. that time. There was no further inducement or benefit offered on 
 the face of those agreements to the company, in return for the 
 benefit that was proposed to the wife and family. It seems to me 
 that in law those agreements could have no validity against the 
 company or the directors. 
 
 With respect to the first agreement which is alleged, it is in the 
 first place to be observed that there is no writing or minute sup- 
 porting it ; nor do the subsequent minutes with regard to the wife 
 and the family or Mr. Lewine refer to this prior one, although 
 there may be some surmise from the character of the later 
 minutes that there had been something of this kind stipulated 
 for on a former occasion. But there is, in point of fact, no 
 writing or minute to support it. 
 
 ■A more serious objection, however, is this : If an agreement 
 was made by the directors of the company in the terms al- 
 leged by Mr. Lewine, in my opinion it was entirely ultra vires; 
 the directors, as regards the terms of it, providing for the pay- 
 ment of commission on renewal premiums in case of the re- 
 tirement of Mr. Lewine from the agency. In the first place, 
 there is no stipulation on the part of Mr. Lewine to continue 
 the agent of the company for any definite length of time. He is 
 left entirely the master of the position, to retire when he pleases 
 and as he pleases. It is not therefore an agreement binding or 
 professing to bind the company to pay Mr. Lewine something in 
 case they desire to get rid of him, to turn him off from caprice 
 or without sufficient cause. It is exactly the opposite. It is an 
 agreement professing to bind the company to pay Mr. Lewine a 
 future payment during the rest of his life, in case he chooses to 
 retire from the business of the company; an agreement, there- 
 fore, — as to which, perhaps, you may not be able to say technically 
 there is not consideration for it, as part of the whole contract of 
 agency, — but so unreasonable and so contrary to what obviously is 
 the duty of directors in a case of this kind, that it appears to me 
 it could not possibly bind the company. But, still further, when 
 we come to look at the nature of the agreement, and the specific 
 powers that are given to the directors, it seems to me that this 
 
LOED CAIBNS'S DECISIONS. 177 
 
 was not an agreement within the powers of the directors, or within Lewine's 
 clauses 61 and 62 of the deed of settlement. ' 
 
 Those clauses give a very considerable latitude to the directors 
 to bind the company by the salaries which they may allot to the 
 agents and managers of the company in different places, or by any 
 allowances which they may make to those persons by way of com- 
 mission. But both the salary and the commission must be for 
 services rendered, and not for services not rendered. It seems to 
 me that it would not be intra vires of the directors to stipulate that 
 if any agent of theirs chose to retire from their service they would 
 allot him a salary for the remainder of his life. It seems to me 
 that that would be an improper agreement ; and just in the same 
 way it is an improper and unwarrantable agreement to say, that if 
 an agent chooses to retire they will allot a commission to him for 
 the remainder of his life, in respect of the premiums payable on 
 the policies subsisting at the time of his retirement. 
 
 Then, further than this, it is to be observed, that the commission 
 is on premiums ; and commission drawn -from that source is, and 
 must be from the nature of it, dependent on the existence of 
 premiums. Now it is impossible for an agent to make a claim on 
 the footing of there being an established certainty that premiums 
 will be payable for the future, in respect of which he ought now 
 to be allowed damages or compensation because he will not receive 
 his commission on them. Non constat that the business, if there 
 had been no winding-up, would have been carried on ; non constat 
 that the persons insured might not have done, as has often been 
 done, take the security of another office, transfer their insurances 
 to another office, and cease to pay any premiums to the Albert; non 
 constat that the policies might not have been dropped, as appears 
 to be admitted by Mr. Lemne ; who, feeling the force of that view 
 of the case, although he says he would be entitled to claim some 
 £12,000, is willing, as he says, to meet the chance of policies 
 dropping, to take some £6000 in satisfaction of his claim. In 
 point of fact, as things have turned out, looking on the winding-up 
 as it has occurred, and treating it as a vis major, as regards the 
 whole proceedings of the company, I consider there is at this 
 moment every probability that no premiums will be received ; any 
 
178 ALBERT ARBITRATION. 
 
 Lewine's temporary receipt is on the footing of an order of the Court of 
 
 ' Chancery merely provisional. 
 
 For all these reasons I am of opinion that Mr. Lewine's claim 
 is one which cannot be supported. All I can do is to make an 
 order for the payment by him of the £2768 admitted in the Case 
 to be due from him. 
 
 Solicitors for Mr. Lewine : Messrs. Kimber & Ellis. 
 Solicitors for Albert : Messrs. Lewis, Munns, & Longden. 
 
LOED CAIRNS'S DECISIONS. 179 
 
 FAGAN'S CASE. im 
 
 June 24. 
 Policy — Novation. 
 
 Novation consequent on amalgamation established against the holder of a 
 policy issued by a branch of the Medical in India in the following circum- 
 stances : He received on the amalgamation a circular intimating that the 
 income and funds of the two companies were thenceforth combined, and 
 that the funds of the branch would be put in trust as an additional security 
 to policy-holders in India, all claims occurring after a day fixed I)eing paid 
 from the funds of the new association ; he thenceforth paid his premiums 
 at the office of the transferee company, and took receipts of that company's 
 Indian branch. 
 
 JL HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on the claim of Mr. G. S. Fagan to 
 prove against the Medical, on a policy without profits dated 
 30 November, 1856, issued to him by the Medical in India, for 
 Ks.20,000, on his own life. 
 
 In 1851 a branch office of the Medical was established in Cal- 
 cutta. Directors were appointed, who there issued policies on 
 behalf of the Medical, and conducted the general business of the 
 Medical under instructions from the directors in London. 
 
 In November, 1860, the following circular was addressed to the 
 policy-holders of the Medical in India. It was admitted in the 
 Case that Mr. Fagan either received a copy of it or had notice of 
 its contents : 
 
 Medical Invalid and General Life Assurance Society, 
 Calcutta, 28th November, 1860. 
 
 Sir, — I take the liberty of directing your attention to a notice printed on the 
 back hereof which is now appearing in most of the Indian and Ceylon papers. 
 
 In the event of your electing to take out a fresh policy in the Albert and 
 Medical Assurance Company please fill up and return to me the subjoined form 
 marked A., surrendering your existing Medical policy at the same time, when a, 
 new policy will be issued immediately thereafter. 
 
 The most convenient time for this operation will be when the next premium on 
 your existing policy becomes due. 
 
 The subjoined notice gives certain details of the arrangement which has been 
 made in establishing the new office ; I beg to add the following particulars. 
 
180 ALBERT ARBITRATION. 
 
 Fagan's The capital of the Albert and Medical is £447,180, subscribed by 414 pro- 
 
 Case. prietors, £137,792 being paid up; this is exclusive of the Medical shareholders, 
 who are about 150 in number, with a subscribed capital £500,000, and £28,000 
 paid up, and a large proportion of whom join the new concern. 
 
 The funds exceed £500,000 sterling, the annual revenue premium £220,000, 
 which is increasing at the rate of £25,000 per annum. 
 
 There are several important additional advantages offered by the Albert and 
 Medical under their policies. For instance, the profits are equal to five-sixths 
 divisible every three years, instead of two-thirds divisible every five years, as in 
 the Medical. Policies lapsing from non-payment of premium may be renewed 
 within six months, instead of three months as before, and in cases of persons 
 assured dying during the currency of the days of grace the policies remain valid 
 and effectual, the premium due being deducted from the sum assured. Persons 
 proceeding to Europe or other climate equally healthy, whether for temporary or 
 permanent residence, are placed on English rates from the date of arrival, and not 
 one year after that date as before. 
 
 The new prospectuses containing full particulars are in the press. 
 
 The rates of premium for India remain unaltered. , 
 
 The directors here and in England recommend the acceptance of policies in the 
 Albert and Medical in lieu of those in the Medical office. The business of the, 
 two companies can be conducted in one establishment and by one staff, without 
 any material enlargement of the latter, and thus the expenses of management are 
 materially reduced. 
 
 The funds here at the date of amalgamation are put up in trust as an additional 
 security to Medical policy-holders in India. 
 
 I shall be glad to afford you any further information which may be required, 
 and to facilitate your views in any way touching your policies in the Medical 
 office, 
 
 And remain, Sir, 
 Your very obedient Servant, 
 
 P. M. Tait, 
 
 Secretary. 
 
 The notice referred to in the foregoing circular (as printed on 
 
 the back thereof) was as follows : 
 
 Albert and Medical Life Assurance Company, 
 Head Office, Pall Mall, London. 
 Established 1838-41. (Indian Branch.) • 
 Preliminary Notice. 
 The directors beg to announce that the business of the Medical Society has 
 been amalgamated with that of the Albert Life Assurance, and that henceforth 
 the operations of both companies will be carried on under the above name or 
 style. 
 
 [Then followed the passages stated in the judgment.] 
 
 Under the deed of settlement the Medical profits are not divisible until 1863, 
 but under that of this company profits are divisible in 1861, and future estimates 
 of profits will be made triennially thereafter, a proportion equal to five-sixths of the 
 
LORD CAIRNS'S DECISIONS. 181 
 
 profits being, at the option of the assured, paid in cash, added to the policy, or Fagan's 
 applied in diminution of future premiums. By the combination of the two com- Case. 
 panies a very considerable saving to the expenses of management will be secured, 
 which must materially increase the bonus-giving power of the amalgamated com- 
 pany, and thus afford improved pros(iects to the assured. At two numerously 
 attended meetings of the proprietors of the Medical Society (many of whom are 
 large policy-holders) it was imaniwous'y considered that the arrangements were 
 advantageous to the assured, both as regards security and future expectation of 
 benefit ; and the board of directors in London, acting under the advice of Dr. Farr 
 and their consulting actuary, recommend the acceptance of policies in the amal- 
 gamated company. 
 
 The whole terms and conditions of assurance applicable to India have been 
 revised, and several important additional facilities and advantages to assurers 
 offered, whereof particulars will be duly announced. Policy-holders in the Medical 
 will be specially addressed by circular on the subject of this amalgamation. 
 
 Mr. Walls has been appointed deputy secretary. 
 
 By order. (Signed) P. M. Tait, Secretarv. 
 
 W. B. Walls, Deputy Secretary. 
 
 Calcutta, 26th November, 1860. 
 
 Mr. Fagan alleged that lie had never applied to the Albert to 
 exchange his original policy, and had never had any indorse- 
 ment made thereon, admitting the liability of the Albert. 
 
 The following were admitted to be forms of reciepte for pre- 
 miums taken by Mr. Fagan : 
 
 Medical Invalid and General Life Assurance Society's Office. 
 No. 624. Calcutta, Jan., 1861. 
 
 Policy No. 
 
 Received from the sum of company's rupees for the assur- 
 
 ance of company's rupees on the life of for the six months ending 
 
 the nineteenth day of July, 1861, subject to the terms and conditions of the said 
 Policy No. 
 
 (Signed by two Directors and Secretary.) 
 
 Albert Medical and Family Endowment Life Assurance Company's 
 
 Office. 
 
 No. 3337. Calcutta, 20th July, 1861. 
 
 Policy No. 
 
 Received from the sum of company's rupees for the assur- 
 
 ance of company's rupees on the life of for the six months ending 
 
 the nineteenth day of January, 1862, subject to the terms and conditions of the 
 said policy No. 
 
 (Signed by two Directors and Secretary.) 
 
182 
 
 ALBEET AEBITEATION. 
 
 Faoan's 
 
 Case. 
 
 1. 
 
 83 b 
 
 « i 
 
 s a 
 
 Life Receipt, No. 
 Policy No. 
 Sum Assured Bs. 
 Life 
 
 Premium Es. 
 For six months. 
 From 19th July, 1864. 
 
 03 
 
 
 O 
 
 
 Pi 
 
 
 3 
 
 
 j-. 
 
 
 pt 
 
 
 en 
 
 OS 
 
 b 
 
 <i 
 
 | 
 
 03 
 
 Ph 
 
 05 
 
 a 
 
 3 
 
 o 
 
 jj 
 
 O 
 
 S3 
 
 
 ^Q 
 
 
 51 
 
 
 Albert Life Assurance Company, 
 Indian Branch. 
 
 Received this 19th day of July, 1864, 
 for the renewal of policy mentioned in 
 the margin hereof, the amount of which 
 premium and the period for which it is 
 received being also mentioned in the 
 margin. 
 
 (Signed by two Directors and 
 Manager.) 
 
 Mr. J. D. Bell was for Mr. Fagan. 
 
 Mr. O. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. Bell contended that there must be mutuality, and that 
 acceptance of the offer made by the circular, which was not 
 admitted, was necessary ,to constitute a contract under which the 
 Albert could have been sued on the policy. There was a fund 
 censtituted to secure that class of persons who did not intend to 
 come in under the offer. It was like the case of an application 
 for shares. He referred to 
 
 Griffith's Case, L. E. 6 Ch. 374. 
 
 Loed Oaiens : — It is not necessary for me to attempt to add 
 to the high authority of that case ; but I may say that I should 
 have arrived at the same conclusion as the Lords Justices in that 
 case. 
 
 Mr. Bell : — There being peculiar elements in this circular, it will 
 be consistent with other decisions to hold that the payment of 
 premiums under it does not amount to a taking over of the Albert, 
 He referred to 
 
 Spencer's Case, L; E. 6 Ch. 362. 
 
 Mr. Morgan : — Mr. Fagan, having done what he has done and 
 paid his premiums without objection, would be entitled, if the 
 
LORD CAIRNS'S DECISIONS. 183 
 
 Lord Cairns : — There is no doubt that after the amalgamation 
 of the Medical with the Albert it would have been entirely in the 
 power of any policy-holder to have said to the Albert on the occa- 
 sion of paying a premium : You must understand that this premium 
 is not paid to you with a view of it being mixed in your assets, or on 
 the footing of my considering myself as now insured by you ; but it 
 is paid to you simply because I understand that you are carrying 
 on at your office the business of the Medical, in which company I 
 am insured, and to which alone I look. The policy-holder might 
 have done that. And if he had done that, in consequence of the 
 provisions of the deed of amalgamation between the Albert and 
 the Medical, the Albert would have had a right to say : We quite 
 understand what you mean ; we are entitled to receive the pre- 
 mium ; you are entitled to pay it in the sense in which you say 
 you pay it ; here is the deed which says, that, if you decline to take 
 our insurance, still the premium paid here will keep alive your 
 remedy against the Medical. That is all, as it seems to me, that can 
 be said as to the deed of amalgamation. It is a deed which would 
 have had that effect in such a case as I suppose. But that deed 
 
 p 2 
 
 Albert were prosperous, to sue them for the amount of his policy, Fagan's 
 
 and the Albert would have no answer. He referred to 
 
 Times Case, L. E. 5 Ch. 381, 
 as shewing the effect of payment of premiums. 
 
 Lord Cairns: — I have acted in all the cases on the principle 
 that payment of premiums is a material element, but not conclu- 
 sive, — an equivocal act, which has to be explained, either for or 
 against the transfer of liability, by all the circumstances which 
 preceded the payment of premiums. 
 
 Mr. Morgan : — It throws on the party denying novation the 
 burden of shewing that his case is an exception to the general 
 rule. He referred to 
 
 Manchester and London Case, L. E. 5 Ch. 640. 
 
 Mr. Bell, in reply. 
 
184 ALBEET ARBITEATION. 
 
 Faqan's cannot have any operation in altering whatever might be the legal 
 
 Case. 
 
 consequences of the acts of a policy-holder who does not act in the 
 way I have supposed, but acts in a way entirely different. 
 
 The way in which Mr. Fagan acted was this : He got a circular 
 which gave him this information, among other things, that the 
 business of the Medieal had been amalgamated with that of the 
 Albert, and that thenceforth the operations of both companies would 
 be carried on under the style of the Albert and Medieal. It said : 
 
 The combined office, which is now one of the largest Life Assurance institutions' 
 in the world, has an annual income from premiums of 22 lakhs of rupees ; its 
 accumulated fund exceeds 50 lakhs ; while the new business from premiums is 
 progressing at the rate of 2£ lakhs per annum. 
 
 Stopping there, no one could doubt that the representation in 
 this circular was : We intend to proceed on the footing of putting 
 all our premiums together, putting all our insurance funds together, 
 and we are now advertising ourselves to the world as two com- 
 panies, which have in that way combined their funds, without keep- 
 ing alive any longer any separate claim on each, but on the con- 
 trary, offering to all the policy-holders in both the united security 
 of the premiums and insurance fund of both. Then it goes on to 
 say;— 
 
 The Indian branch will continue under the same administration as heretofore; 
 A secretary is on his way to Madras to act with the board there, while a board 
 of directors and secretary are also about to be appointed for Bombay. 
 
 The funds of the branch will be put up in trust as an additional security to 
 policy-holders in this country, all claims occurring after the 21st of September last, 
 the date of the amalgamation, being paid from the funds of the new association. 
 
 Now what is the meaning of saying that the funds of the branch 
 will be put in trust as an additional security to policy-holders in 
 this country, the policy-holders in the Medical? A security 
 additional to what ? It could not mean in addition to the security 
 they already had, because these funds that were to be put in trust 
 were the very security they already had. It must mean in addi- 
 tion to something dehors this fund, dehors the Medical fund, and there 
 is nothing else to which it could relate but the security that they 
 would get by becoming insured in the new company. The offer is as 
 intelligible as possible : You will have the security of all the funds 
 that the two companies can put together for the purpose of their 
 
LOKD CAIENS'S DECISIONS. 185 
 
 new business, their amalgamated business ; but, over and above JFagan's 
 
 that, you will have the additional security which is to be created , ' 
 
 for the Indian policy-holders of the Medical, through the medium 
 of a trust to be declared of the Medical fund for those policy- 
 holders. And then all the while you have that additional security, 
 all claims occurring, that is, in the Medical, after the 21st Sep- 
 tember last, the date of the amalgamation, will be paid from the 
 funds of the new association, which explains what the additional 
 security was. You have first the promise, the engagement, that 
 if your claim should become due after 21 September last it will 
 be met by the funds of the new association ; if that is not suf- 
 ficient, you will have the additional security of the trust fund 
 created for the Medical policy-holders out of the Indian fund. If 
 that was all, and if premiums were paid on the footing of that 
 offer, it was simply an act done by way of acceptance of the offer. 
 No other construction can be put on the payment of the premiums. 
 But the circular goes on to say : 
 
 .Policies in this company will be issued free from expense in exchange for those 
 in the Medical Society, without any alteration in the terms and conditions 
 of the latter, and if any policy-holder should have assigned his policy by any 
 legal instrument in settlement, mortgage, or otherwise, so as to render substitution 
 difficult, an endorsement will be made on the policy, securing the responsibility 
 and guarantee of this company for the fulfilment of the existing contract. 
 
 The directors in this branch would recommend policy-holders in the Medical to 
 convert their policies into policies of this company, or to have them indorsed as 
 above suggested. 
 
 Now, the words are very peculiar there : the directors in this 
 branch would recommend policy-holders to convert; that does 
 not mean : We will endeavour to persuade you to enter into this 
 contract which we offer you. That must stand on the earlier part of 
 the document ; this refers to the mere mode and form in which the 
 new arrangement was to be carried out. We recommend you to 
 do that in one of two ways, either exchange your policy, or get it 
 indorsed ; that does not mean to say : If you take our offer, if you 
 pay the premiums on the footing of the offer, you must remember 
 the new company and its funds will not be subject to your claim 
 unless you exchange your policy or have it indorsed. It is : We 
 recommend you either to exchange your policy or to get it in- 
 dorsed, as the best form, but we leave our offer to be governed by 
 
186 ALBEET ABBITKATION. 
 
 Faoan's whatever may be the rules of law applicable to it, even if you do 
 
 1 not adopt that form which we consider the best. 
 
 It appears to me, after this, that Mr. Fagan, without remon- 
 strance or protest, having simply paid his premiums, and taken 
 Albert receipts, having embraced the offer made by the proposal, 
 must rank as against the Albert, without prejudice to any benefit 
 to which he may be entitled under the trusts of the Indian Trust 
 Fund. 
 
 The questions which arise in this case, although governed by the 
 principle of former cases, are somewhat different, and the case 
 may fairly be submitted as a representative case ; and that having 
 been so arranged, I will assent to the costs being provided for in 
 the winding-up. 
 
 Solicitor for Mr. Fagan : Mr. Lattey. 
 
 Solicitors for Medical: Messrs. Walker, Kendall, & Walker. 
 
Mr. Whitehome was for the executors. 
 
 Mr. Lemon was for the Medical. 
 
 Mr. Whitehome referred to 
 
 Clegg v. Rowland, L. E. 3 Eq. 368, 
 
 and contended that the Act as construed in that case did away 
 with the liability of the executors. 
 
 Lokd Oaiens: — The protection of proceedings under Lord 
 St. Leonards' Act is merely by way of discharge. When there is 
 an attempt to make you liable by proceeding in equity, they give 
 you a perfect discharge as regards all the assets you have paid 
 away. Under the previous law it would be no discharge while 
 debts are unpaid, to say that you have paid beneficiaries. Under 
 that Act when all its terms are complied with, you would be 
 
 LOKD CAIRNS'S DECISIONS. 187 
 
 RUSSELL'S CASE. mi 
 
 List of Contributories — Executors — Lord St. Leonards' Act. wn 
 
 Form of entry in list of con tributaries adopted where executors settled as 
 such claimed the benefit of statutory advertisements for creditors. 
 
 1 HIS was an application (which had been pending in the Court 
 of Chancery on an adjourned summons) for removal from the list 
 of contributories in the Medical of Mr. Oxenham and others, execu- 
 tors of Mr. Q. C. Russell, deceased, they having . been settled as 
 executors. 
 
 Mr. Russell died in 1864, being a shareholder in the Medical, 
 and having appointed four persons executors, three of whom 
 proved. In November, 1864, they published advertisements 
 under Lord St. Leonards' Act (22 & 23 Vict. c. 35, s. 29). No 
 claims were sent in, and thereupon they distributed the estate. 
 They alleged that they were ignorant of their testator being a 
 shareholder in the Medical. 
 
188 ALBEET AEBITEATION. 
 
 Eussell's allowed in discharge all you had paid away, and you would be 
 ' under no liability in regard to that. 
 
 Mr. Whitehorne :— The discharge by the Act extends to the 
 liability to be sued. They are here made liable qua executors ; it 
 is a declaration that qua executors they are liable. The words of 
 the Act are contrary to that. It is a declaration that they shall 
 not be liable as executors at all. To put them on the list as exe-i 
 cutors,. is to contravene pro tanto the Act of Parliament. 
 
 Mr. Lemon was not called on. 
 
 Lord Cairns : — I shall not attempt to contravene the Act of 
 Parliament, but I think this is not the stage, this is not the parti- 
 cular point of the transaction, to which that would apply. The 
 time when the Act of Parliament can be prayed in aid by the 
 executors will be on accounts being taken. I have no objection to 
 this entry in the list, — The executors allege that theyJiave distri- 
 buted, under the provisions of 22 & 23 Vict. c. 35, s. 29, the assets 
 of the testator come to their hands. 
 
 Solicitors for the Executors : Messrs. Hume & Bird. 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 
LOED CAIENS'S DECISIONS. 18J 
 
 GEEMAN LIFE ASSURANCE COMPANY'S CASE. iffri 
 
 Policy — Novation — Bonus — Indorsement. ~, m ' ~„' 
 
 3 Dec. 18. 
 
 Novation consequent on amalgamation established, in the circumstances, on 
 two re-insurance policies, against the holder, an insurance company, which, 
 notwithstanding repeated protests reserving rights against the transferor com- 
 pany, afterwards, as regards one of the policies, accepted a bonus from the 
 transferee company, and, as regards the other policy, had it indorsed by the 
 transferee company, with memorandums altering the policy from one with 
 profits into one without profits, and changing the premium from a yearly to 
 a half-yearly one. 
 
 JL HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim of the German Life Assur- 
 ance Company of Luheck, to prove against the Medical on two re- 
 insurance policies issued by the Medical, one dated 13 June, 1851, 
 on the life of Herr Bernhardt Bichter, and the other dated 30- 
 May, 1855, on the life of Herr Carl E. G. Bitter, both with profits. 
 
 Sir Boundell Palmer, Q.C., (Mr. C. Walford with him) was for Nov. 25. 
 the German. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 The following cases were referred to : 
 
 Family Endowment Case, L. R. 5 Ch. 118 ; 
 Spencer's Case, L. R. 6 Ch. 362 ; 
 Manchester and London Case, L. R. 5 Ch. 640 ; 
 Griffith's Case, L. R. 6 Ch. 374 ; 
 Anchor Case, L. R. 5 Ch. 632. 
 
 Sir BoundeU Palmer was heard in reply. 
 
 Judgment reserved. 
 
 Lord Cairns: — This is a case on a claim of the German Dec. 18. 
 Life Assurance Company of Lubeck against the Medical. It arises 
 
190 ALBEET ARBITRATION. 
 
 German Life on two policies in the names of Bichter and Bitter respectively ; 
 Company's these are only sample policies; several others were effected by 
 E " the German Company with the Medical on general contracts, by 
 which the German agreed to re-insure with the Medical any 
 lives that they (the German) required to re-insure ; and the 
 re-insurances thus effected were insurances with participation of 
 profits. 
 
 The question whether the German are entitled to claim in 
 respect of these re-insurances against the Medical, or only against 
 the Albert, with which the Medical is amalgamated, is not a 
 question involving any principle of law different from the principles 
 involved in the cases which have already come before me. The 
 only thing to be considered is the application of those principles of 
 law, which, for the purpose of this arbitration, must be taken as 
 settled, to the facts of this particular case. 
 
 In 1860, the Medical amalgamated with the Albert, and a com- 
 munication on the subjeet was made from the Medical office to the 
 German office at LubecJe. 
 
 It runs thus, as translated : 
 
 Medical Invalid and General Life Assurance Society, 
 
 25, Pall Mall, London, October, 1860. 
 
 We beg hereby to inform you that our managing council, on the ground of the 
 powers vested in them by the statutes of the company, especially §§ 127, 128, 
 as well as in the carrying out of the resolutions which were come to by 
 the shareholders in two general meetings held on the 29th August and 21st 
 September last, have concluded an agreement with the Albert Life Insurance 
 Company, in accordance with which the business of both companies will be 
 carried on henceforth under the name, Albert and Medical Life Asswance 
 Company. 
 
 These united companies enter for the future into all the rights and obligations 
 of the Medical Invalid and General Life Assurance. 
 
 According to the agreement, the accumulated funds of our society are to be 
 invested separately and securely to meet its own liabilities, and the policy-holders 
 will be offered a greatly additional security in the combined income of the 
 united societies of more than £220,000 (fl. 2,640,000) and the responsibility of 
 a numerous and respectable proprietary. 
 
 The Albert Company has agreed to exchange the policies of our society for new 
 policies of the Albert and Medical Life Assurance Company, at the same pre- 
 miums as hitherto paid, and without any alteration in the dates of payment or 
 conditions of the now-existing policies. 
 
 In those cases where a policy shall have been transferred as security in mort- 
 
LOED CAIKNS'S DECISIONS. 191 
 
 gage or otherwise by legal deed of assignment, so that the exchange would be German Lite 
 difficult, an endorsement can be made on the policy for securing the full respon- Asstoanoe 
 sibility of the Albert and Medical Life Assurance Company for the fulfilment of Case 
 existing obligations. 
 
 The Albert Society was founded in 1838, since when four divisions of profits 
 have taken place, which amounted to from 25 per cent, to 50 per cent, of the 
 premiums paid in. The next estimate of dividend will be made at the end of 
 1861, and future ones will be made triennially from that time. All Medical 
 Invalid and General Life Assurance Society with-profit policies will consequently 
 partake of the dividend of 1861, while, according to the statutes of this society, 
 the next dividend would not be declared until two years later. 
 
 By the combination of the businesses of the two companies, a very considerable 
 saving in the expenses of management will be secured, which must materially 
 increase the bonus-giving power of the amalgamated company, and offer so much 
 the more improved prospects to the assured. 
 
 At the two very numerously attended meetings of the shareholders of the 
 society, many of whom are large policy-holders, it was unanimously considered 
 that the agreement made is highly advantageous for the assured, partly in con- 
 sideration of their undoubted security, arid partly because of the favourable 
 prospects afforded of future dividends. The council of management is likewise 
 of the same opinion, and confidently trusts that by the acceptance of policies of 
 the united companies the interests of policy-holders will be materially im- 
 proved. . . . 
 
 This circular appears to me to have stated very clearly to the 
 German the conditions of the amalgamation, and to have offered 
 them terms which they might have refused or accepted as they 
 pleased ; and it held out particularly as an inducement to them the 
 prospect of their receiving a bonus or dividend at an earlier period, 
 if they became insured in the Albert, than the time when they would, 
 receive one if they remained insured in the Medical. 
 
 Before adverting to the course of the correspondence from this 
 time forward, I ought to observe once for all that it appears to me 
 to be not unimportant to remember that the letters to which I am 
 about to refer passed not between an insurance company and a 
 member of what I may term the outside public, but between two 
 insurance companies, — between, as it were, two experts in the 
 art and details of insurance, both of whom were perfectly con- 
 versant with all the particulars of their own trade, and with the 
 language in which the statements in the correspondence were 
 expressed. 
 
 We find, on 23 November, 1860, the German acknowledging the 
 
192 ALBERT ARBITRATION. 
 
 German Life communication of October, 1860, putting certain questions as to the 
 Company's funds, and as to the statements made in the circular concerning 
 A8B ' the application of those funds, and then adding this : 
 
 We beg one other question. To whom shall we pay the amounts of premiums 
 due on 1 December, in case we cannot resolve by then to acknowledge the new- 
 formed company as our contractor ? Lastly, we beg of you, for the maintenance 
 of the pretensions and claims which are due to us as regards the Medical, arising 
 from the re-insurance contracts agreed to between ourselves and this company, 
 to present before the proper quarter our formal protest against the substitution of 
 another debtor, which we herewith formally pronounce. 
 
 That letter, it is sufficient to observe, shews in the clearest way 
 the appreciation by the German of what was proposed. It shews 
 their knowledge of what their rights were, and it shews their in- 
 tention not to relinquish those rights without being completely 
 satisfied. Lastly, the letter is-one which does not profess to be a 
 final election to have no business connections with the new or 
 amalgamated company, but merely purports to be a reservation of 
 their rights, — a protest against the present relinquishment of their 
 rights, — until they should have the information which they ask for 
 in the other parts of the letter. 
 
 I refer next to the more formal protest before a notary public 
 made by the German on 7 December, 1860. In that formal pro- 
 test, the German declare that they reserve all rights, accruing to 
 them under their re-insurance contracts, against the amalgama- 
 tion entered into between the Medical and the Albert, and the 
 transformation of the first, that is the Medical, into an Albert and 
 Medical; that they (that is, the German) do not acknowledge 
 this last-mentioned company (that is, the new Albert and Medical) 
 as their contracting party, the more so as they consider their con- 
 tracting party, the Medical, to be dissolved and in liquidation, in 
 accordance with the decision of the general meeting of the com- 
 pany of 21 September, 1860, and articles 127 and 128 of the 
 statutes of the Medical ; and that therefore only provisionally, and 
 until the determination of such liquidation, the German there- 
 with pay and will pay the premiums falling due in the meantime 
 to the general agent of the Medical, Mr. Varrentrapp, of Franfa 
 fort. Here again I may observe, in passing, that the form of this 
 
LORD CAIRNS'S DECISIONS. 193 
 
 protest shews, in the first place, that the reservation of rights was German Lima 
 
 * • i 1J ASSUBANCE 
 
 only a provisional reservation, until the protesting party should. Company's 
 come to a final determination as to what they would do ; and '" 
 
 further, that the protesting party take notice that in their opinion 
 the Medical were dissolved and in liquidation, in accordance with 
 . the resolutions come to at their meetings. 
 
 Then, we have a letter of 11 December, 1860, from the Medical 
 chief agent in Germany, to the German, and an inclosure profess- 
 ing to give certain answers to the demands made for information 
 as to what had been done with the life assurance fund and the 
 other funds of the Medical. On 21 December, 1860, the German 
 write again to the Medical agent, stating that a certain prospectus 
 had not been inclosed, which had been referred to in one of the 
 last letters. They say : 
 
 We regret this the more, because, perhaps, we might have been enabled to 
 obtain from it a satisfactory elucidation of certain points which is wanting in what 
 particulars are before us, but which is absolutely necessary before we can resolve 
 Upon entering into regular business connections with the new company. 
 
 And then they repeat their demand for certain further information. 
 On 27 December, 1860, the Medical agent writes that the prospectus 
 which had been overlooked had been sent by book post. And then 
 we have another letter of the same date from the Medical agent to the 
 German. That letter professes to give certain further information 
 with regard to the funds of the new company, and it contains this 
 paragraph : 
 
 The alteration (exchange) of the policies is indeed optional with the assured. 
 They are not compelled thereto. However, the transfer of the assurances, in 
 spite of the assured, is allowed by clauses 127, 128 of the statutes of the Medical. 
 
 Then on 10 January, 1861, the agent of the Medical writes to 
 the German, using these words : 
 
 As you in your last letter to me, varying the style, address me as general agent 
 6f the Life Assurance Company for Healthy and Invalids, I beg to remark that 
 the Medical Invalid and General Life Assurance Company no more exists, but 
 I am general agent of the Albert and Medical Life Assurance Company, which 
 likewise is an insurance company for healthy and invalid lives. 
 
 On 25 January, 1861, the German write to say that the informa- 
 
194 ALBERT ARBITRATION. 
 
 Geeman Life tion, which I have thus shortly referred to, contained in these 
 Assurance . , 
 Company's previous letters — 
 Case. 
 Has not only not removed, but much strengthened, our manifold scruples with 
 
 reference to the recognition of this act [the act of amalgamation] since we gather 
 therefrom that the direction of, the new company is reluctant to give those in- 
 terested the elucidation wished for, and to permit a complete insight into their 
 circumstances. 
 
 Then they revert to the points on which they had asked for 
 information before, and declare that they maintain their original 
 rights. 
 
 I come next to a letter of 4 June, 1861, to the German from 
 the Medical agent, apologizing for not having sent the information 
 required, which he had asked the secretary in London for, but had 
 not yet received. Then I pass on to October, 1861, when Mr. 
 Lewine of Berlin was substituted for Mr. Varrentrapp as the general 
 agent in Germany for the Albert and Medical. I do not think 
 anything very material turns on that. Then on 8 November, 
 1861, the German write to Mr. Lewine, and they say, taking note 
 of the change of agency : 
 
 Before, however, we enter into this connection, we find ourselves prompted to 
 repeat positively the protest of 7 December, 1860, delivered to the representative 
 at this place of your company, Herr H. C. Koch, as proxy of Herr J. A. Varren- 
 trapp. In conformity to the same, we cannot agree to give up a single one of the 
 rights acquired to us according to the [re-insurance] contracts . . . . ; especially 
 not, when thereby the course of business becomes essentially more difficult. 
 This would undoubtedly be the case if the exchange of claim-money and pre- 
 miums against policy and receipts, and the comparison of the original documents 
 with the copies sent in, take place no longer here through your agent, but must 
 be performed in Berlin. 
 
 Matters remained in that state until the year 1863, and if in 
 that state of matters the question had come before me for decision, 
 I should have been of opinion that there had been no election on 
 the part of the German to accept the Albert as their debtor in 
 place of the Medical. I should have considered that even the 
 lapse of two or three years, and the payment of premiums during 
 that time to the agent of the Medical, the matter having been left 
 in ambiguo by the protest which required information, were not 
 sufficient to have changed the position of the German from credi- 
 
LORD CAIRNSS DECISIONS. 195 
 
 tors of the Medical into creditors of the Albert. But in 1863, this German Life 
 
 , . ASSUBAKOB 
 
 further state of things arose. On 1 May, 1863, the local agent company's 
 at Lvbeck of the Albert and Medical wrote to the German, saying : ASE ' 
 
 Enclosed I hand you thirteen acquitted receipts of the Albert and Medical Life ■ 
 Assurance Company: 
 
 and then comes an enumeration of receipts for the premiums • 
 on certain policies, the total amount being between 700 and 800 
 thalers ; and then the letter goes on : 
 
 which amount, finding correct, please hand me. Further, you receive herewith, 
 according to your wish, eighty-one circulars concerning the division of profits. 
 Requesting to do the needful herein, yours, &c, E. C. Koch. 
 
 The circular, of which eighty-one copies were thus stated to be 
 inclosed is headed and begins thus : 
 
 Berlin, April, 1863. Policy No. , on the life of . Albert Life 
 
 Insurance Company, 7, Waterloo Place, Pall Mall. Referring to the contents of 
 my circular of February last, I have the honour to inform you that the appro- 
 priation of the dividend is completed, and it depends on your choice whether you 
 prefer a cash payment of your share, or will leave the same in the hands of the 
 company, and thereby increase the sum insured coming to you at some future 
 time. 
 
 I pause there to say that although this professes to refer to the 
 contents of a circular of February, that circular is not forthcoming 
 either from the papers of the Albert or from the papers of the 
 German. I am not, therefore, entitled to assume as matter of 
 certainty that such a circular was sent. But in the letter of 1 May, 
 1863, addressed to the German, there was this statement made to 
 them, which was not in any way repudiated by them : 
 
 You receive herewith, according to your wish, eighty-one circulars concerning 
 the division of profits. 
 
 What does that mean ? Can it mean anything but this, that 
 in some way the attention of the German had been called ante- 
 cedently to the fact that there was a division of profits pending, 
 and that they had requested that these circulars which were sent 
 should be sent to them, circulars professing to deal with the bonus 
 which had been declared or was about to be declared. It must 
 therefore be assumed against the German that in some way or 
 
196 ALBERT ARBITRATION. 
 
 German Life other they were aware that there was a bonus about to be declared; 
 Company s an d that they requested these circulars to be sent to them. 
 ° ASK The circular of April, 1863, after pointing out the different ways 
 
 in which the bonus might be appropriated, either by addition to 
 the sum insured or by cash payment, continues thus : 
 
 , At the same time I inform you that according to the calculations of Professor 
 de Morgan the partition of a sum of nearly £100,000 sterling might have taken 
 place, but that the directorate out of prudence reserved the half until the next 
 time of division. Since the last balance-sheet an important widening of the 
 insurance circle has taken place, and the most satisfactory results allow us to hope 
 for more favourable dividends. With the conscientiousness of the management 
 so well known to you, you can understand from the issuing in one year of 2235 
 policies for a sum insured of Th. 5,637,840, and a yearly premium of Th. 228,007, 
 the common sympathy which the company everywhere enjoys. 
 
 It appears to me that this transaction is the turning point of 
 the case, and I think Sir Roundell Palmer must have felt it to be 
 so, because he endeavoured to shew that the German might have 
 misunderstood the meaning of this letter, and might have supposed 
 that it was nothing more than a statement that out of the old fund 
 of the Medical, kept apart and isolated and reserved for the original 
 Medieal policy-holders, some profit had been made, and that. this 
 was being divided as a Medieal profit among the old Medieal policy- 
 holders. Now, the receipts given by the German for this bonus 
 were in this form, signed by their agent : 
 
 Albert Life Assurance Company, London. 
 
 7, Waterloo Place, Pall Mall. 
 
 I have duly received in cash from the Albert Life Assurance Company, 
 London, through their head office, 61a, Jagerstrasse, Berlin, 62 thalers, Prussian 
 currency, which amount has accrued as dividend for the period up to the end of 
 December, 1861, on policy No. 3187, for 5000 thalers, taken out on the life of 
 Herr B. Bichter. 
 
 Berlin, 18 May, 1863. 
 
 Then, coupling that receipt with the circular of April, which I 
 have read, — coupling the circular with the fact that it (being a 
 circular relating to appropriation of bonus) had been sent in pur- 
 suance of a wish expressed on the part of the German, — coupling 
 the receipt and the circular with the original notice of October, 
 1860, which said that there would be a division of profits for the 
 
LOED CAIENS'S DECISIONS. 197 
 
 period ending in 1861, a period earlier than that at which there Gbkman Life 
 
 i ,...<• n t t i 3 Assurance 
 
 would have been any division of profits in the Medical alone, — and Company's 
 
 coupling the whole with the fact on which I have already observed, A 
 that this was not a transaction between an insurance office and a 
 member of the public, who might be ignorant of insurance matters, 
 but was a transaction between two insurance companies, — I have 
 not the slightest hesitation in saying that I read the documents as 
 the clearest and most perfect communication to the German that a 
 bonus was being declared out of the profits of the Albert. Further, 
 I think it impossible to suppose that the German could have 
 imagined that it was Medical profits, or profits of any part of the 
 Medical funds, which were being divided, because they themselves 
 in their notarial protest had said, in effect : We understand that 
 the Medical office is dead and gone; it is at an end; it is in 
 liquidation merely ; it has ceased to carry on business. Therefore 
 they could not have imagined that this circular, speaking of so 
 many policies, between 2000 and 3000 new policies, issued in the 
 year, could have meant policies issued by the Medical, They must 
 have known that it meant policies issued by the company sending 
 the circular, and that the same company were dividing their own 
 profits. I, therefore, without dwelling further on it, read this 
 circular just in the same way as if it had said clearly and distinctly : 
 We give you notice that the Albert are making a division of their 
 profits ; we give you notice, treating you as policy-holders in the 
 Albert, that so much of those profits will accrue to your policies ; 
 and we now ask you to tell us how you will have those bonuses, 
 whether in the shape of accretions to your policies or of payment 
 in cash. 
 
 That being, in my opinion, the proper construction of the docu- 
 ments, and the construction which must have been put on them 
 by the German, let us see what the German do in answer to 
 these communications. On 2 May, 1863, they write to the 
 agent of the Albert and Medical, and first noticing a claim in 
 the case of a man called Berliner, the life in one of their policies, 
 they say : 
 
 The dividend certificate on this policy under the last division is wanting, and 
 we beg for the delivery thereof : 
 
 Q 
 
198 albert Arbitration. 
 
 German Life and they conclude thus : 
 
 Assurance 
 
 •Company's Reserving our remarks as to the dividend certificates received in your favour of 
 ° ASE - yesterday. 
 
 Then, on 9 May, they write : 
 
 Referring to our last of the 2nd instant, according to which we reserved our' 
 remarks on the eighty-one dividend certificates contained in your favour of 1st, 
 we now return to the subject. Besides the dividend certificates for Berliner, 
 No. 8006, 2276, meanwhile deceased, for the delivery of which we have already 
 asked, we still want the certificate for the dividends in the following, some of 
 them still existing, policies. 
 
 And they point out several in respect of which the dividend 
 certificates had not been sent to them, and they add this : 
 
 Of the two ways of applying the dividend put to the assured, we have decided 
 for the second, and hand you the eighty-one corresponding declarations accord- 
 ingly, with the request that you will desire Herr George Lewine to pay the total 
 amount of Ct. Th. 3341. 6. 6. for our account to F, Mart Magnus of Berlin. 
 
 Therefore nothing can be clearer than this, that they accepted 
 the bonuses ; they chose to have them paid in cash ; and in my 
 opinion they did this with their eyes open, and knowing from what 
 source the bonuses came. Now, if it had stopped" there, it appears 
 to me that it would have been the clear case of a bonus accepted, 
 with full knowledge, out of the Albert funds. But something is 
 said to have happened afterwards, qualifying the effect of this 
 reception of the bonus. 
 
 On 7 May, 1863, Mr. Lewine writes a letter to the German, saying 
 that the Albert had decided that the old style, Albert Life Assur- 
 ance Company, was to be restored ; and that if, in spite of that, for 
 some time to come, the German received receipts under the head- 
 ing Albert and Medical, it was only because they were using up the 
 old forms ; and, further, saying : 
 
 I think now, under your management, the appropriate time has arrived ; and 
 as I may well assume that the Albert Company, by promptly taking up the busi- 
 ness of your place, has won your confidence, I beg you to give it assurances as 
 you did formerly to the Medical. 
 
 In answer to that, the German (by Mr. Wiehmann) write on 
 23 May, 1863, and say : 
 
 I confirm the receipt of yours of 7th inst., from which I observe the new style 
 of your company, and in which you request new re-insurance proposals. In which 
 
LORD CAIRNS'S DECISIONS. 199 
 
 respect I regret I can hold out little hopes, since the [German] company latterly Gebman Life 
 only seeks re-insurance in cases of very great necessity, and as a rule does not Assurance 
 accept a larger sum than it is allowed to bear itself. AgB 
 
 I take that as noting the change in the title, making no objec- 
 tion to that, and not saying with regard to the solicitation for re- 
 insurances : We have nothing to say to you, the Albert, the only 
 persons we contract with are the Medical, and we do not choose to 
 enter into any new relations, — but making a courteous statement 
 that there was not much probability of re-insurances, not because 
 they had not confidence in the Albert, but because there were 
 very few re-insurances to be given. At this time the bonus on 
 the eighty-one policies had not been paid. The payment, how-, 
 ever, took place before 29 May, 1863, on all but three policies, and 
 those three bonuses were, afterwards paid in July, 1863, and in 
 April, 1864. 
 
 Next, in a letter of 1 August, 1863, Mr. Lewine sends, in a cir- 
 cular dated 5 June, 1863, formal notice of the change of name, 
 which' he had in a less formal way announced on 7 May. Then, 
 in answer to this, on 3 August, 1863, a letter was written by the 
 German, the concluding paragraph of which was relied on on their 
 behalf. By this time the bonuses had all been paid, with the 
 exception of the one which was not paid till April, 1864; and then 
 at the end of this letter, the earlier part of which is itself taken up 
 with an adjustment of the amounts of the bonuses, there is thrown 
 in this paragraph : 
 
 We have, under repeated reference to our declarations of 7 December, 1860, and 
 8 November, 1861, taken note of the circular received. 
 
 The declarations of December, 1860, and November, 1861, were 
 the protests I read. And it was said this was a repetition of the 
 protests, and that the German were thereby rehabilitated and put 
 in as good a condition as they were when those protests were 
 issued. I am not of that opinion. I think it was too late to pro- . 
 test any longer. They had done an act which was inconsistent 
 with protests. They had accepted their aliquot share of the profits 
 of the Albert as persons insured in the Albert. It was too late 
 after doing that to go back on protests which were merely reserving 
 their rights, and to say : We will take all the benefits and advan- 
 
 Q 2 
 
200 ALBERT AKBITKATTON. 
 
 German Life tages offered to those insured in the Albert, and we will renew the 
 
 ASSOBAKOK ' , , 
 
 Company's protests alter taking the money, and continue the reservation of 
 ASE ' rights as against the Medical. It was impossible to do that. They 
 might have refused the bonus, and might have stood on their 
 protests. But it never was offered to them, both to take the 
 bonus and to stand on their rights against the Medical. They 
 were offered one or the other, and they having accepted the one 
 it was too late to fall back on the other. 
 
 But I ought to say that this is the only fragment of evidence I 
 find of any desire to maintain their original protests. From this 
 time forward I find none. This was in August, 1863. Six years 
 elapsed before the failure of the Albert, and not a single recurrence 
 was made to these protests from this time forward. On the con- ' 
 trary, in the first place, as I have said already, in April, 1864, a 
 bonus which had not been paid in 1863 was paid in respect of one 
 policy ; a bonus which completed the whole of the payments. In 
 the next place, in 1865, one of the policies, the policy of Bitter, ' 
 was changed from a policy with profits into a policy without profits ; 
 and beyond all doubt that new policy was a policy effected with 
 the Albert. But further than that, in February, 1865, 1 find the 
 German writing thus : 
 
 After [according to] section 7 of the [re-insurance] contract of 7 February, 
 1849, between the General, Medical, and Invalid Society and us, in which you ' 
 have now entered into the position of the former society, the said society bound 
 itself .... 
 
 and so forth. 
 
 What does that mean? It surely means, if words have any 
 meaning : You, the Albert, have taken the place of the Medical ; 
 in our general re-insurance contract you have become the con- 
 tractors with us in place of the Medical. And again, on 21 April, 
 1865, the agent of the German wrote with respect to the same 
 contract of 7 February, 1849 : 
 
 According to section 7 of this contract the same rights are due to our company 
 with respect to its co-contractor [contractor], into whose position the Albert has 
 now entered .... 
 
 and so on. 
 
 I think, therefore, that if it had stopped at the acceptance of the 
 
LOED CAIKNS'S DECISIONS. 201 
 
 bonus in 1863 there would clearly be a case, in wbich, on all prin- Gebman Life 
 
 J ilijl. ASSUKANOIS 
 
 ciple and on all authority, the German must be held to have company's 
 
 accepted the Albert as their debtors in the place of the Medical. I 
 
 think if we look to what passed after 1863, the receipt of the bonus 
 in 1864, the new insurance in the case of Bitter, and the express 
 statement that the Albert had succeeded the Medical in the re- 
 insurance contracts, there is the strongest confirmation of that 
 which if it stopped at the year 1863 would alone have been suf- 
 ficient. 
 
 On the second policy, to which the present case relates — that 
 on the life of Bitter — I have not entertained a doubt. It bears 
 two indorsements by the Albert Company, one converting the policy 
 into a non-participating policy, and the other substituting a half- 
 yearly for a yearly payment of premiums. The indorsements, as 
 translated, read thus : 
 
 Memorandum. — Since on the ground of a proposal with the German Life In- 
 surance Company in Lubeck, this last have converted the herewith insurance 
 contract . . . into one . . . without participation in profits ; the future yearly 
 premium due on every 2nd day of March amounts to 21 thalers 7 silver groschens 
 . . . and the assured renounces a corresponding consideration as surrender. 
 Done in London, September 11, 1861. 
 
 W. Page Phillips, \ 
 W. Johns, \ Directors. 
 
 G. G. Kikbt, J 
 
 Memorandum. — It is hereby fixed, that on the ground of a proposal of Herr 
 C. E.' O. Bitter, the premium of 21 thalers 7 silver groschens hitherto paid 
 yearly on this policy, from henceforward will be paid half yearly, on 2nd March 
 and 2nd September each year, with 10 thalers and 22 silver groschens. 
 
 London, Feb. 22, 1865. Fbank Easum, Secretary. 
 
 Before the first indorsement the agent of the German had 
 written to the agent of the Albert and Medical thus : 
 
 LubecJc, 25th May, 1861. 
 Herr Carl E. Q. Bitter, of Wennerden, insured with us under No. 10,014, has 
 lately proposed to have the policy in question changed, so that it may be ruled 
 by the statutes of the revision of the year 1857. In accordance with which, the 
 same will be insured henceforth without claims on dividends, under renunciation 
 of a corresponding surrender value ; but the calculation of the future premiums 
 to be made on the ground, not of his present, but of his former age of 27 years, 
 when he would have to pay fl. 1.55 three per cent, per annum of premium for 
 his insurance, or fl. 77.10, instead of, as formerly, fl. 100, Since, on the said 
 
202 ALBERT ARBITRATION. 
 
 Gbbman Lite policy, th. 1100 have been undertaken in re-insurance by your company No. 
 
 Cmifa""* 8 800 *' G " 227 *' we beg t0 ask you whetner tlle said alteration is agreeable to 
 •Cabs. y ou? • • • 
 
 To which the answer was : 
 
 Referring to mine of the 30th ulto., I do not fail to advise you that, in reply 
 to your inquiry of the 25th ulto., the Albert and Medical has declared itself ready 
 to follow you with regard to the policy No. 8004, Gr. 2274, Sitter, and do that 
 which you yourselves shall do in this insurance. 
 
 You will, therefore, inform me of any alteration you may effect in the Bitter 
 insurance, and send me in the Medical policy, in order that a corresponding in- 
 . dorsement may be made thereon, which will be best carried out if you send me 
 the wording of the alteration of your policy as precisely as possible. 
 
 So, before the second indorsement, the agent of the German 
 wrote thus to the agent of the Albert : 
 
 Lubeck, 7th February, 1865. 
 Having, on the proposal of C. E. G. Bitter, re-insured with the Albert Life As- 
 surance Society under policy 8004, Gr. 2274, substituted from 2 March inst. a half- 
 yearly premium for the hitherto yearly one, and having indorsed the (original) 
 policy accordingly, we hand you the said policy 8004, Gr. 2274 with the request 
 that you will indorse it likewise for half-yearly payments, after which from 2nd 
 March, 1865, forward, on each 2 March and 2 September, for first time on 2nd 
 March next, a premium of Ct. Th. 10.22 will have to be paid by us on the said 
 policy . . . 
 
 And this was the answer : 
 
 Replying to your favour of 7th inst., policy No. 8004, Gr. 2274, O. E. G. Bitter, 
 is returned you herewith, furnished with the desired alterations. 
 
 This is clearly a substituted contract with the Albert* 
 I am, therefore, obliged to hold that, on all the claims, the Ger- 
 man must rank against the Albert, and not against the Medical. 
 
 It is a case in which it was necessary to inyestigate the claims. 
 Therefore I do not propose to make the claimants pay costs. 
 
 Solicitor for German : Mr. A. BeddaU. 
 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 
LOKD CAIKNS'S DECISIONS. 203 
 
 BUTLER'S CASE. wi 
 
 Policy — Novation — Payment of Premiums — Bonus — Indorsement. 
 
 Novation consequent on amalgamation established, in the circumstances, 
 against an insurance company, which, holding re-insurance policies, and 
 having received on the amalgamation a circular setting forth advantages to 
 be derived by policy-holders from the amalgamation, (1) paid premiums to 
 the transferee company and took receipts of the transferee company ; and 
 (2) as regards policies with profits, had them indorsed by the transferee com- 
 pany with a memorandum embodying an agreement for the refunding to the 
 re-insuring company of sums representing the differences between premiums 
 on the with-profit and the without-profit scales, in consideration of the re- 
 insuring company having surrendered all claim to share in the profits of the 
 transferee company. 
 
 JL HIS was an application for the decision of the Arbitrator on 
 the claim (which had been pending in the Court of Chancery) of 
 Mr. Butter, representing the East of England, Mutual Life As- 
 surance Society, to prove against the Medical on five re-insurance 
 policies. 
 
 Mr. Fry, Q.C., was for Mr. Butter. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. Fry referred to 
 
 Times Case, L. E. 5 Ch. 381. 
 riffith's Case, L. R. 6 Ch. 374. 
 
 Mr. Morgan was not called on. 
 
 Loed Caibns : — 'Several cases have come before me on the 
 question of the substitution of the liability of the Albert for that of 
 one of the companies absorbed by it, presenting features of some 
 difficulty, and very proper for argument, but I must say that no 
 
204 ALBERT ARBITRATION. 
 
 Butlbr's case has come before me in which a claim has been made against 
 A8E l an absorbed company presenting the features which this claim does. 
 Mr. Butler, representing an insurance company, not acting as an 
 individual, had re-insured with the Medical five lives that had been 
 insured in his own office. He received, or his company received, 
 the circular of October, 1860. The purport of the whole circular 
 was clearly to inform Mr. Butler or his company that the amalga- 
 mation had taken place between the Albert and the Medical ; that 
 there was to be one fund for the future ; and that great advantages, 
 as was supposed, would arise to those interested in the Medical 
 from the amalgamation of that company with the Albert. The 
 circular further stated : 
 
 The Albert Company has agreed to issue policies in exchange for those of this 
 society at the same rate of premium as that now payable on the policies effected 
 in this office, without any alteration of the terms or conditions of the present 
 policies; and if any policy-holder should have assigned his policy by any legal in- 
 strument in settlement, mortgage, or otherwise, so as to render substitution diffi- 
 cult, an endorsement can be made on the policy securing the full responsibility 
 and guarantee of the Albert and Medical Life Assurance Company for the 
 fulfilment of the existing contract. 
 
 In that state of things, and putting aside for the moment the 
 correspondence, I have next to observe that Mr. Butler, acting for 
 his company, paid the premiums on these policies from time to 
 time, as they became due, to the Albert. The form of the receipt 
 ultimately taken was simply an Albert receipt, as on an Albert 
 insurance, in the name of the Albert, and signed by the officers 
 of the Albert, without qualification of any kind. The earlier 
 receipts had specified this, that the sum received was the premium 
 'according to the tenour of the policy above enumerated, and 
 issued by the Medical . . on the life of so and so. But it was 
 an Albert receipt and signed by the Albert officers. The refer- 
 ence to the tenour of the policy issued by the Medical would be 
 quite consistent with the circular ; for what the Albert by that 
 circular offered to give was an insurance, without alteration of the 
 terms or conditions of the present policies, that is, of the Medical 
 policies. Therefore it was quite consistent with that offer to give 
 a receipt according to the tenour of the original policy, there 
 having been at that time no Albert policy in point of form substi- 
 tuted for the original one. If the matter rested there, it appears to 
 
LOED CAIENS'S DECISIONS, 205 
 
 me that the case would be covered by decision. It would be the Butler's 
 
 simple case of an offer made to a Medical policy-holder by the ' 
 
 circular, and accepted by him, as testified by his subsequent action, 
 namely, by his coming to the Albert, and, without remonstrance or 
 explanation, paying from time to time the premiums due on his 
 policies, taking Albert receipts. 
 
 But the matter does not rest there. Four of these policies were 
 policies participating in profits. The time arrived at which the 
 Albert made an estimate of their profits; declared, as they sup- 
 posed, out of the profits, a bonus to all the policy-holders insured 
 in the company, including the Medical policy-holders, whose in- 
 surances the Albert had taken over. The fact of that bonus was 
 communicated to the participating policy-holders, and among the 
 rest to the company of Mr. Butler. Thereupon a correspondence 
 ensued. In substance it was a remonstrance by the company of 
 Mr. Butler, founded on this, that while they were paying a bonus 
 on a particular scale on the lives that had been primarily insured 
 by them, they were being 6ffered by the Albert bonuses which 
 they considered disproportionate to the bonuses which they them- 
 selves were paying, and that the transaction was not to them the 
 species of practical re-insurance which they had looked for and 
 hoped for. Ultimately an arrangement was proposed which was 
 assented to; under which the company of Mr. Butler were not 
 to take the bonuses in that form, but the policies were to be 
 changed from participating to non-participating policies, and cer- 
 tain alterations, the details of which" are immaterial, were to be 
 made with reference to the premiums and certain payments as to 
 the past. On 27 June, 1864* the correspondence in substance 
 ended in this way : Mr. Butler, writing as secretary of his com- 
 pany to Mr. Easvm, the secretary of the Albert, says : 
 
 I also send policies on Wilkinson, Baker, Basire, and Algar [the four partici- 
 pating policies here] for endorsement, according to the new arrangement, together 
 with a statement of account, shewing the difference of premium to be refunded 
 by you. Please also have endorsed upon these policies the bonuses that have been 
 allotted to each by the Medical Invalid Life Office and yourselves, and return 
 them to me as soon as convenient. 
 
 The policies are returned with indorsements, which are received 
 
206 ALBERT ARBITRATION, 
 
 Butlhe's without any remonstrance by Mr. Butler, and of which this is a 
 Case. , 
 sample : 
 
 Albert Life Assurance Company. 
 
 Memorandum. 30th June, 1864. The sum of £6 Is. 3d. is hereby agreed 
 to be refunded to the within-named East of Etujland Mutual Life Assurance 
 Society, in consideration of the said society having surrendered all claim to share 
 in the profits of this company, in respect of the within assurance, from and after 
 the 31st December, 1861, and it is hereby declared that the annual premium pay- 
 able in respect of the within assurance is reduced to the without-profit rate of 
 £28 3s. id., in lieu of the with-profit rate of £30 3s.. id. within mentioned. 
 
 (Signed) Frank Eastjm, Secretary. 
 
 Now, I asked the question, what does this mean ? what is the 
 ; meaning of the East of England Mutual Life Assurance Society 
 surrendering for a money consideration, which is paid to them, 
 ,whieh they receive and put into their coffers, all claim to share 
 in the profits of the Albert in respect of this assurance, and now 
 .coming forward and saying they have not and never had any- 
 thing to say to the Albert, and that their claim is against the 
 Medical? It seems to me that as regards those four policies it is 
 under-stating the thing very much to say that no question could 
 arise. 
 
 I am, therefore, of opinion that Mr. Butler has no claim against 
 the Medical, that his claim is against the Albert only, and that 
 his application must be dismissed with costs. 
 
 Solicitors for Mr. Butler : Messrs. Eooke & Street. 
 Solicitors for Medical: Messrs. Walker, Kendall, & Walker. 
 
LOED CAIENS'S DECISIONS. 207 
 
 BALFOUK'S CASE. iwi 
 
 Dee. 18. 
 Polio/ — Novation — Indorsement — Marriage Settlement — Trustees. — : — 
 
 A policy was effected in the Barnes of three trustees in contemplation of 
 marriage ; the husband covenanted by the marriage settlement to keep on 
 foot the policy, or some other policy or policies to the like amount, in some 
 well-reputed office ; the husband and one of the trustees were partners in 
 business ; the policy was kept by the trustee in a safe used for the business, 
 to which both partners had access, and which contained also papers belong- 
 ing to the partners individually ; after the amalgamation of the assuring com- 
 pany with the Albert, an indorsement was put on the policy by the Albert, 
 accepting the liability under the policy ; the husband and one of the trustees 
 were dead ; the surviving trustees claimed to prove on the policy against the 
 assuring company : 
 
 Held, that the claim was not maintainable, the trustees being, in the 
 circumstances, bound by the indorsement. 
 
 J. HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on the claim of Mr. M. Balfour and 
 Mr. J. H. Bdbinson to prove against the Family Endowment on a 
 policy. 
 
 The policy was dated 4 January, 1861, No. 2780, and was 
 issued by the Family Endowment, Indian Branch, for 30,000 rupees 
 on the life of Mr. L. Balfour, in favour of Major E. Sissmore and 
 the claimants. 
 
 The policy bore the following indorsement : , 
 
 , [Albert Medical and Family Endowment Life Assubance Company. 
 
 • Calcutta, 7 March, 1863. 
 No. 70. 
 
 The within contract accepted by this company. 
 
 By order of the directors, 
 
 Gordon Stuart & Co., Secretaries. 
 
 The policy had been effected with a view to a settlement on the 
 marriage of Mr. L. Balfour. A marriage settlement was accord- 
 ingly executed, dated 22 January, 1861, between Mr. L. Balfour 
 of the first part, his intended wife of the second part, and the 
 
208 ALBERT ARBITRATION. 
 
 Balfoub's three persons assured, as trustees, of the third part. The material 
 " substance of the settlement was as follows : 
 
 Recital of an agreement that L. Balfour should settle a sum of 40,000 rupees 
 as therein mentioned, and that, for collaterally securing the payment thereof, he 
 should execute a bond as therein mentioned, and effect an insurance on his life 
 for 30,000 rupees in the names of the persons parties of the third part, to be held 
 by them on the trusts thereinafter declared. 
 
 Recital that he had taken out a policy on his life in the Family Endowment 
 for 30,000 rupees, dated 4 Jan. 1861, No. 2780, in the names of the three persons 
 parties of the third part as trustees of the marriage settlement. 
 
 Covenants by L. Balfour with the trustees that he would pay to them 40,000 
 rupees on the trusts ; » 
 
 That he would, as long as that sum remained wholly unpaid, duly pay all 
 premiums for keeping on foot the said policy or some other policy or policies 
 on his life to the aggregate amount of 30,000 rupees at the least, in some well 
 reputed office. 
 
 Proviso, that it should not be incumbent on the trustees to see that the policy 
 was kept on foot, and that they should not be answerable in case it should lapse. 
 
 Mr. L. Balfour and Major Sissmore were dead. The surviving 
 trustees, the claimants, made an affidavit, which, after denying 
 notice of the amalgamation of the Family Endowment, proceeded 
 as follows : 
 
 4. We never, expressly or impliedly, or in any manner, authorized L. Balfour 
 or any other person to surrender the said policy, or to procure or allow such 
 endorsement to be made thereon, or to substitute the liability of the Albert Life 
 Assurance Company for the liability of the Family Endowment Society thereon ; 
 and we are unable to state positively how the indorsement came to be made 
 thereon. 
 
 5. I, J. H. Bobinson, for myself say, that from 1859 to 1866 I was engaged in 
 business in Calcutta in co-partnership with L. Balfour. The said policy, with 
 the said settlement and other papers and documents relating to the trust by the 
 said settlement imposed, were kept by me in a fire-proof safe used by us inthe 
 course of such business. L. Balfour, as my partner, was entitled to the use of 
 and had a key and access to such safe, which, in addition to the securities and 
 papers of the partnership, contained some papers and documents belonging to 
 L. Balfour and myself personally respectively. 
 
 6. I am entirely unable to account in what manner the indorsement came to be 
 placed upon the policy, unless L. Balfour, unknown to me and in consequence 
 of such access to the said safe as aforesaid, obtained possession of the policy and 
 procured or allowed such indorsement to be made thereon. His doing so was, in 
 fact, unauthorized by me. 
 
 An affidavit was filed on behalf of the liquidators of the Family 
 Endowment, made by Mr. Tait, formerly Manager of the Indian 
 
LORD CAIRNS'S DECISIONS. 209 
 
 Branch of the Albert Medical and Family Endowment Life Assw- Balfour's 
 ance Company, proving a notice of the amalgamation of the _^ — 
 Family Endowment with the Albert and Medical, sent out by 
 him in June, 1861, to each policy-holder, and inserted in all the 
 principal newspapers in India. 
 
 Mr. E. M. Jackson was for the claimants. 
 
 Mr. Rodwett was for the Family Endowment. 
 
 Mr. Jackson admitted that the indorsement would be conclusive 
 if Mr. L. Balfour himself had been the holder of the policy ; but 
 submitted that the inference from the known facts was, that the 
 act which led to the indorsement was that of Mr. L. Balfour 
 alone, and that it was not binding on the trustees, by whom it was 
 not authorized. 
 
 Mr. BodweU was not called on. 
 
 Lord Cairns : — I do not think there is any pretence for this 
 claim. 
 
 Here was a policy effected in the names of three persons, who 
 were trustees. The policy was kept by one of those trustees in a 
 strong box, used, as he says, in the course of his partnership 
 business, to which he had access and to which his partner, Mr. L. 
 Balfour, the life assured, also had access. If in that state of 
 things Mr. L. Balfour took the policy out of the strong box, 
 and presented himself with it at the office of the Albert, and 
 they put this indorsement upon it, and then it was restored to 
 the strong box, I should have been of opinion that even then, if 
 there were nothing more in the case, the trustee who was also a 
 partner would be bound by that which was on the policy. It was 
 in his custody, and, therefore, he ought to have seen what was on 
 the policy, if he had used proper care with regard to it. 
 
 But it is not necessary to consider that, because the case goes 
 further. The covenant in the settlement was that Mr. L. Balfour 
 
210 ALBEET ARBITRATION. 
 
 Bm-fotjb's would pay all such premiums as might become payable for keep* 
 
 ' ing on, foot the said policy of insurance, or some other policy or 
 
 policies of insurance, on his life, to the aggregate amount of 
 30,000 rupees, at the least, in some welkreputed office.- That 
 was the only covenant. Therefore, it was quite optional to him, 
 if he insured in an office of good repute at the time, to fulfil 
 his covenant in that way. But that is not all, because the settle- 
 ment provided that it should not be incumbent on the trustees 
 to see that the policy was kept on foot, and that they should not 
 be answerable in case it should lapse. Mr. L. Balfour was the 
 perfect dommus of the question whether he would keep it up or 
 not. The trustees were not bound to see that the premiums were. 
 paid. His only covenant was a personal one, which they might 
 or might not enforce, and it was only a covenant to insure in 
 some office of repute. Therefore, he might, if he had chosen, 
 have cancelled this policy altogether, and effected a new one with 
 some office which was well reputed at the time, which the Albert 
 clearly was. 
 
 I do not think the claim ought to have been made. I cannot do 
 otherwise than order the claimants to pay the costs. 
 
 Solicitors for the Claimants : Messrs. Upton & Co. 
 Solicitors for Family Endowment : Messrs. Markby & Tarry. 
 
LORD CAIRNS'S DECISIONS. 211 
 
 FREEE'S AND OTHERS' CASES. 1872 
 
 Amalgamation — Indemnity — Creditor of transferor Company taking Shares in ' 
 
 transferee Company — Marriage Settlement — Trustees. 
 
 On an amalgamation of two insurance companies, the transferee company 
 covenanted with the transferor company to indemnify the transferor com- 
 pany against all claims arising from annuities, policies, and other contracts ; 
 some holders of contracts of the transferor company, who were also share- 
 holders in that company, on the amalgamation, took by way of exchange for 
 those shares an equivalent number of shares in the transferee company : 
 
 Held, that they were not thereby precluded from claiming against the 
 transferor company on the contracts. 
 
 Fleming's Case not followed. 
 
 x EESE were applications for the decision of the Arbitrator on 
 three claims against the Western, the first by Mr. G. Frere, the 
 second by Mr. J. Shayler, and the third by Mr. W. Stuart, Mr. 
 T. S. Cocks, and Mr. C. L. Cochs. 
 
 Mr. Frere claimed to be admitted a creditor of the Western 
 for the value of an annuity granted to him, during the life of 
 A. Neale, by the Metropolitan Counties, by a contract dated 2 March, 
 1860. On the amalgamation of the Metropolitan Counties with 
 the Western, there had been indorsed on the contract a memoran- 
 dum declaring that the funds and property of the Western should 
 be liable for the due payment of the annuity, but there was no 
 Albert indorsement. Mr. Frere was a shareholder in the Western 
 at the time of the amalgamation of the Western with the Albert, 
 and, by way of exchange for his Western shares, took an equiva- 
 lent number of Albert shares. He received dividends on these 
 Albert shares ; but before the order to wind up the Albert, namely, 
 in April, 1867, he sold and transferred them ; and he had not 
 since been a shareholder in the Albert. 
 
 Mr. Shayler was admitted in the Court of Chancery as a credi- 
 tor of the Western, for the value of an annuity granted to him 
 by the Western by a contract dated 29 September, 1864. The 
 liquidators of the Western had given him notice of their inten- 
 tion to apply that his claim might be expunged. The contract 
 
212 ALBERT ARBITRATION. 
 
 Fkere's bore no Albert indorsement. He was a shareholder in the Western 
 
 Others' at the time of the amalgamation of the Western with the Albert, 
 
 Cases. an( j ^ ^en, jjy wa y f exchange for his Western shares, took an 
 
 equivalent number of Albert shares. He received dividends on 
 
 these Albert shares, and remained an Albert shareholder in respect 
 
 of them. 
 
 Mr. Stuart, Mr. T. 8. Gochs, and Mr. C. L. Cocks, claimed to be 
 admitted creditors of the Western in respect of a policy issued by 
 the Western, dated 6 May, 1844, assuring £2550 to Mr. B. T. 
 Cocks, on his own life, in consideration of £1000 paid by him at 
 the time of his effecting the policy. The policy bore no Albert 
 indorsement. In 1845, Mr. B. T. Cocks married, and the policy 
 was put in settlement. The claimants were the three surviving 
 trustees. In 1861 Mr. B. T. Cocks was registered as a Western 
 shareholder, and he continued a Western shareholder until the 
 amalgamation of the Western with the Albert. Mr. T. S. Cocks 
 was a director of and shareholder in the Western at the dates of 
 the marriage settlement and amalgamation. On the amalgama- 
 tion Mr. B. T. Cocks and Mr. T. 8. Cocks, by way of exchange for 
 their Western shares, took an equivalent number of Albert shares. 
 They received dividends on these Albert shares. Except as far as 
 there may have been constructive notice arising from the fact that 
 Mr. T. 8. Cocks was a director of the Western, no notice of the 
 settlement was given to the Western until after the order to 
 wind up the Western. No notice respecting the amalgamation 
 was issued by or on behalf of the Western to Mr. W. Stuart or 
 Mr. C. L. Cocks. 
 
 Mr. Cookson was for Mr. Frere. 
 
 Mr. Eiggins, Q.C., was for the other claimants. 
 
 Mr. Cracknall was for the Western. 
 
 Mr. Cookson : — It is suggested for the Western that Mr. Frere 
 having been a Western shareholder, and having become an Albert 
 shareholder, and there being an agreement between the Western 
 and the Albert, whereby the Albert undertook to indemnify the 
 
LORD CAIRNS'S DECISIONS. 213 
 
 Western against all claims on the Western arising from annuities, Frere's 
 policies, and other contracts, and took on themselves all other Others' 
 Western liabilities of every description, Mr. Frere has undertaken Oases. 
 to indemnify himself against his own debt ; and 
 
 Fleming's Case, L. K. 6 Ch. 393, 
 is relied on. But, with great deference, that decision proceeds on a 
 comparison, erroneous for this purpose, between a joint stock com- 
 pany and an ordinary partnership. The indemnity here merely 
 amounts to this, that the joint stock of the Albert shall in- 
 demnify the joint stock of the Western. One legal entity, a joint 
 stock, indemnifies another. The joint stock, which constitutes 
 the indemnity fund, cannot be increased beyond the amount which 
 the shareholders liable to contribute to that fund can be called on 
 to pay. If the joint stock were such that it could be indefinitely 
 increased by an unlimited call, that might amount to a complete 
 indemnity for all purposes, but there is only a limited liability on 
 the Albert shareholders ; consequently there is only a circumscribed 
 stock devoted to the indemnification of the Western joint stock. 
 The case of a partnership is different, because there is unlimited 
 liability on behalf of each partner. Mr. Frere, even if he had not 
 parted with his shares, would only be bound to contribute to the 
 Albert to a limited extent, the liability of the Western remaining 
 to the extent to which the indemnity did not go. But he had 
 parted with his shares before the winding-up of the Albert, and all 
 his liability had ceased, at least in respect of the policy-holders, 
 who had notice of the deed. 
 
 Mr. Siggins : — As regards the claim on Mr. CocJcs's policy, the 
 only question is, whether or not the case is governed by Fleming's 
 Case. The claimants are trustees. By accident one of them, Mr. 
 T. 8. Cooks, was a shareholder in and a director of the Western, and 
 he became an Albert shareholder. Also the original policy-holder, 
 Mr. B. T. Cocks, became, after the date of the policy, a shareholder 
 in the Western, and took Albert shares. Not only is the claim by 
 trustees, two of whom are not shareholders, and who had no 
 notice of any proceedings in respect of the policy, but also the 
 persons beneficially interested had nothing to do with the amal- 
 gamation, and had no notice thereof. 
 
 K 
 
214 ALBERT ARBITRATION. 
 
 Frere's In Shayler's Case the question again is whether the claim is 
 Othees' precluded by the principle of Fleming's Case. The doctrine of 
 Cases. ^at cage cann0 |; b e maintained, and ought not to be applied in 
 this case. Mr. Shayler did not become a member of a common 
 law partnership in any ordinary sense of the word. The contract 
 was not a contract that the Albert would, without any limitation 
 or qualification, indemnify the Western against all liabilities, as a ^ 
 common law partnership would. The Albert contracted with the 
 'Western only in respect of the Albert funds. The liability of the 
 Albert was limited to the assets of the Albert ; the liability of each 
 Albert shareholder was limited by the contribution he would have 
 to make to the funds of the Albert. It cannot be that Mr. Shayler, 
 having a claim of the value of upwards of a thousand pounds as 
 against the Western, and being liable to contribute to the assets of 
 the Albert some thirty pounds in respect of three shares, is for 
 that reason to be held to have given up his claim against the 
 Western. The principle of Fleming's Case would apply to the 
 case of a man effecting a policy with an office in which he was a 
 shareholder. But, even if the Albert were an ordinary common 
 law partnership, the principle of Fleming's Case could not be 
 safely applied. The rights as between two common law partner- 
 ships would be worked out, each would be wound up on its own 
 footing, and all the rights between the parties to each partnership 
 would be ascertained and declared as between the partnerships 
 .themselves. 
 
 Mr. Craelmall: — Except in the case of Mr. Coehs's trustees, the 
 question is really determined by Fleming's Case. 
 
 Lord Caiens : — It does not seem to have been argued there,* 
 whether the contract to indemnify was limited or unlimited. It is 
 possible, if it had been argued, the Court might not have agreed 
 with the view I took in the Indemnity Case. The Lord Justice 
 James is reported, in Fleming's Case, to have said : 
 
 The creditor of a joint stock company becomes a member of a new partner- 
 ship, which takes all the assets of the old partnership or company. 
 
 That, perhaps, is hardly accurate* because they merely took the 
 
LORD CAIKNS'S DECISIONS. 
 
 assets in hand. They did not take the unpaid capital. The 
 judgment goes on : 
 
 with an undertaking, express or implied, to discharge all the debts of that 
 company, including his. 
 
 If that was a common law covenant, an unlimited covenant by 
 the company binding on the shareholders in solido, to the utmost 
 of their means, I should have thought it would be a clear case. 
 
 Mr. Graeknall : — If Fleming's Case is right, it is plain that the 
 effect of the transaction is, that no person who became an Albert 
 shareholder could claim against the Western in respect of the 
 liability against which he, as an Albert shareholder, was bound 
 more or less to indemnify the Western. 
 
 Lord Cairns : — It would be a strange result if, because a man 
 virtually covenants as to ten pounds a share on three shares, he is 
 to be taken to have annihilated a right to have a thousand pounds 
 paid to him. 
 
 Mr. Craclcnall: — Partners, who are themselves creditors of the 
 concern, cannot resort to the assets till all other creditors are, paid. 
 As regards the sale by Mr. Frere of his shares, if Fleming's Case 
 is right, that would not affect the question; the right to claim 
 would not revive on the sale. 
 
 A reply was not called for. 
 
 215 
 
 Feeeb's 
 
 AND 
 
 Others' 
 
 Cases. 
 
 Lord Cairns : — With regard to the case of Mr. CocMs trustees 
 there seems to be no doubt. I am bound to look at the trustees 
 as persons who in reality are the owners of the policy, and as 
 against them there is no case at all to allege why they should not 
 be paid the sum due to them on the policy. 
 
 With regard to the other two cases, I feel myself certainly placed 
 in a position of difficulty, by reason of the decision in Fleming's 
 Case. That seems to have proceeded on the principle, that, by 
 virtue of a covenant to indemnify, a creditor of the old partner- 
 ship, who became a shareholder in the new partnership, that is, the 
 
 r 2 
 
216 
 
 ALBERT ARBITRATION. 
 
 Fbebe's 
 
 AND 
 
 Others' 
 
 Cases. 
 
 amalgamated company, had really contracted to pay out and out 
 all the debts of the old partnership including his own. If that 
 were so, there would be an end to, and an extinguishment of, hia 
 own debt, that is, he never could claim payment of his own debt. 
 But I am unable to hold that that is the true position of the case, 
 consistently with the decision I have already given on the subject of 
 these covenants to indemnify. I have decided that these covenants 
 to indemnify are not covenants unlimited in their scope, but that 
 they do nothing more than bind and affect the paid and unpaid 
 capital of the indemnifying company. Therefore, a shareholder in 
 the indemnifying company is not a person who has covenanted to 
 indemnify, without limit of liability, in respect of the debts of the 
 old company ; he is a person who has done nothing more than 
 this : he has agreed that the paid and unpaid capital of his own 
 company, including the unpaid portion of his own share capital, 
 shall be available to indemnify the old company in respect of the 
 old debts. That seems to me not to be a merger or an extinguish- 
 ment of his own claim against the old company, supposing that 
 otherwise his debt against the old company would subsist. It is 
 only a dedication, as it were, of his own portion of the capital which 
 must be paid up, to indemnify the old company. It is not an 
 extinguishment of the debt. 
 
 I therefore must hold that the right of Mr. Frere and Mr. 
 Shayler to claim against the Western still exists. 
 
 There will be the obligation against Mr. Shayler, who still holds 
 his shares in the Albert, to pay up the whole of his shares in full. 
 Mr. Frere parted with his shares before the winding-up. 
 
 The costs must be paid in the liquidation of the Western. 
 
 Solicitors for Mr. Frere : Messrs. Frere, Choltneley, & Co* 
 Solicitors for Mr. Shayler: Messrs. Evans & Co. 
 Solicitors for Mr. Cocks's Trustees : Messrs. Still & Son. 
 Solicitor for Western : Mr. Manning. 
 
LOBD CAIRNS'S DECISIONS. 217 
 
 CLAEKE'S CASE. 1872 
 
 Policy — Novation — Protest — Bonus. y ' 
 
 Novation consequent on amalgamation not established against a policy- 
 holder, in the following circumstances : He had paid his premiums to the 
 transferee company ; the amalgamation agreement, ^however, provided in 
 effect that such of the policy-holders of his assuring company, the trans- 
 ferors, as declined to accept substituted policies of the transferee company, 
 should be entitled to keep on foot their policies by paying their premiums to 
 the transferee company ; when applied to by the agent of the transferee com- 
 pany, to accept a substituted policy, he refused ; and on being informed by the 
 agent that a bonus had been declared on his policy, and that there were 
 papers for him, he refused to take them. 
 
 JL HIS was an application to the Arbitrator for a decision on the 
 claim of Mr. John Clarke, of Newport, to prove against the Medical 
 on two policies dated in 1853, issued by the Medical to him, on his 
 own life, for an aggregate sum of £599 19s., with profits. 
 
 Mr. Clarke had made two affidavits. One, after describing his 
 two policies in the Medical, proceeded as follows : 
 
 2. I paid the yearly premiums on the two said policies to the Medical, up to 
 and inclusive of the premiums falling due in the year 1860. 
 
 3. In or about the year I860, the business of the Medical was transferred to the 
 Albert. 
 
 4. Previous to such transfer being so made, I was not as such policy-holder in 
 any way consulted as to such transfer, nor did I in any way consent nor assent to 
 such transfer. 
 
 ' 5. After such transfer, I was called upon by Samuel Cooper Grimes, of this town, 
 who was formerly agent in this district for the Medical and afterwards for the 
 Albert, and solicited by him to have my said two policies in the Medical ex- 
 changed for two like policies in the Albert, or to have my two old policies in the 
 Medical indorsed with a memorandum discharging the Medical from all liability 
 with respect to the said policies, but by which memorandum the Albert would 
 have acknowledged a liability on their part with respect to the said two policies ; 
 but I at that time expressly and distinctly stated to the said 8. O. Grimes, as 
 such agent of both of the said companies, that I would not exchange my said two 
 policies in the Medical for two policies in the Albert, and, further, that I would 
 not submit to have any indorsements made on my said two policies discharging 
 the Medical from all liability thereunder, and at the same time expressing to the 
 said S. C. Grimes, as such {agent as aforesaid, that I was perfectly satisfied with 
 the security of the Medical, and that I should hold the Medical liable thereon. 
 6. Since the said transfer, I have continued to pay the premiums upon my two 
 
218 ALBEET ARBITRATION. 
 
 Clarke's said policies in the Medical, until orders were made for the winding up of the said 
 
 Case. two companies, to the Albert, as agents for the Medical, but without in any way 
 
 ~ recognising the Albert as liable to me on my said policies, and I am advised and 
 
 believe that I have not, nor never had, any legal claim with respect to my two 
 
 said policies against the Albert, nor against any company or society other than 
 
 the Medical. 
 
 7. I did not at the time of the said transfer, nor have I at any time since, in 
 any way whatever, sanctioned the said transfer of my said two policies from the 
 Medical to the Albert, nor have I knowingly done or committed any act, matter, 
 or thing, whereby or by reason or means whereof I have released the Medical 
 from their liability to me with respect to the said policies. 
 
 ' The other affidavit related to what passed on the declaration 
 of the Albert bonus in 1863. 
 
 An affidavit was also filed on behalf of Mr. Clarke, made by Mr. 
 8. C. Grimes, who said : 
 
 1. Before and during part of the year 1860, 1 was agent at Newport for the 1 
 Medical, and was agent in Newport for the Albert after the transfer of the business 
 of the Medical to the Albert. 
 
 2. I was in the habit of collecting the premiums due from the many policy- 
 holders in Newport, and amongst other premiums from John Clarke of Newport, 
 corn merchant, with respect to two policies in the Medical. . . . 
 
 [The rest of the affidavit is stated in the judgment.] 
 
 The receipts were in the usual forms. 
 
 Mr. Higgms, Q.G., was for Mr. Clarke. 
 
 Mr. Lemon was for the Medical. 
 
 Mr. Biggins contended that in the circumstances there was no 
 novation. 
 
 Mr. Lemon: — The communications with the agent appear to 
 have been immediately after the notice of the amalgamation. 
 The protest, therefore, was not a continuing protest, but merely 
 one made at the time. In the affidavit relating to the bonus, 
 Mr. Clarke has not fully explained. He does not say he declared 
 he would not have anything to do with the bonus. He only 
 says he declared he would have nothing to do with the Albert. 
 But he had already been paying his premiums to Mr. Grimes as 
 agent not for the Medical, but for the Albert. He does not say he 
 
LOED CAIENS'S DECISIONS. 219 
 
 would not accept the bonus. It is to the papers he refers, and he Clarke's 
 
 does not say that he did not accept, only that he told the agent he ' 
 
 would not accept. This is in 1863 ; yet after this he goes on 
 paying his premiums to the Albert. The bonus circular was 
 explained to him, and he knew that it offered him the bonus not 
 from the funds of the Medical, but from the funds of the Albert. 
 He knew that if he allowed the time to elapse the Albert would 
 add to the sum assured the reversionary bonus, and that they 
 would consider no answer to be in fact an acceptance of the 
 bonus. 
 
 A reply was not called for. 
 
 Lobd Cairns : — I will take the undisputed facts first. By undis- 
 puted facts I mean those facts which do not rest on the testimony 
 of Mr. Clarice, who had been called up for cross-examination, and 
 whose cross-examination cannot be taken, in consequence of circum- 
 stances for which neither he nor any other person is responsible, 
 but who may be supposed to have given testimony which is open 
 to more or less criticism. 
 
 The undisputed facts are these. On the amalgamation of the 
 Medical with the Albert it was provided that the policy-holders in 
 the Medical should be invited to substitute for their subsisting 
 policies other policies to be issued by the Albert. The local agent 
 at Newport of the Medical was Mr. Grimes, Mr. Grimes has made 
 an affidavit; it has not been proposed to cross-examine him — I 
 have no doubt a very proper resolution on the part of those who 
 conduct the case of the Medical. I only observe on it as shewing 
 that I must take Mr. Grimes's evidence as evidence not in any way 
 impeached. What he says is this : 
 
 3. After the transfer of business from the Medical to the Albert I was in- 
 structed by the secretary of the Albert to call upon the holders of policies in the 
 Medical, who resided in Newport, and to solicit and to endeavour to persuade 
 them to accept new policies in the Albert in lieu of their policies in the Medical, 
 or to have a memorandum indorsed on their policies, transferring the liability of 
 the Medical on the policies to the Albert. 
 
 That was just what one might have expected, and was in accord- 
 
220 ALBERT ARBITRATION. 
 
 Clahke's ance with the deed of amalgamation, and the instructions which 
 
 '. were given to Mr. Grimes were the instructions which one would 
 
 have anticipated from the contents of that deed. Then, Mr. 
 Grimes continues : 
 
 4. I distinctly recollect calling on the policy-holders, and, amongst others, on 
 John, Clcvrke, and," in accordance with instructions as aforesaid, endeavouring to 
 persuade him to consent to accept such new policies in the Albert in lieu of his 
 two policies in the Medical, or to have the memorandum referred to in the 3rd 
 paragraph of this my affidavit indorsed on them, which would have thereby dis- 
 charged the liability of the Medical. 
 
 5. John Clarice refused to have or accept such new policies in the Albert in lieu 
 of his two policies in the Medical, or to have the memorandum indorsed thereon, 
 asserting that he was perfectly content with the security of the Medical, and that 
 he declined and refused to relieve the Medical from its liability on his two 
 policies. 
 
 6. I thereupon informed the secretary of the Albert that John Clarke had so 
 refused to accept the liability of the Albert in lieu of the liability of the Medical. 
 
 So far as Mr. Grimes is concerned, therefore, his evidence is un- 
 equivocal and complete. He applied to Mr. Clarke to induce him 
 to substitute the liability of the Albert. Mr. Clarke refused to 
 consent to the substitution of the liability of the Albert. He, 
 Mr. Grimes, informed the secretary of the Albert that Mr. Clarke 
 had so refused. The secretary of the Albert is not called to 
 impeach this statement ; and the information having been by 
 letter, there is no evidence that there was not a letter, and there 
 is no letter produced which on the face of it would bear a different 
 interpretation from what Mr. Grimes puts on the letter which he 
 sent. I am bound, therefore, to take it as uncontradicted and 
 unchallenged evidence in the case. 
 
 That being so, what the deed of amalgamation says is, that the 
 policy-holders in the Medical who decline to accept substituted 
 policies shall be entitled to keep on foot their Medical policies by 
 paying the premiums to the Albert, which shall undertake the 
 liabilities of the Medical (that is, as between themselves and the 
 Medical) in respect of those policies. 
 
 The state of things, therefore, which we get to at this point is 
 this: the amalgamation; a stipulation that the policy-holders 
 should be asked to substitute liability; a request made to Mr. 
 Clarke to substitute liability ; a refusal by Mr. Clarke to consent 
 to the substitution ; a provision in the deed of amalgamation that 
 
LORD CAIRNS'S DECISIONS. ~ 221 
 
 if any one bo refuses he might pay his premium to the Albert, but Clarke's 
 
 that the effect of that would be to keep alive his right against the ' 
 
 Medical. Nothing can be more complete than that chain. 
 
 That brought about a state of things which might afterwards 
 have been altered ; but the onus is on the Medical to shew that it 
 was afterwards altered, and that a new status was arrived at. The 
 official liquidator endeavoured in Chancery to do that, and that is 
 the only way in which it seems to me the question about the bonus 
 is material. There was a bonus declared on all profit policies, and 
 amongst the rest on these policies, by the Albert. A circular was 
 sent to all the policy-holders to tell them of it. There is a column 
 in the Albert books to shew the case in which the bonus was 
 specially dealt with by cash payment or by reduction of premiums, 
 and where not so specially dealt with, according to the circular, it 
 would be added to the reversionary amount of the policy. If it 
 could be brought home to Mr. Clarke that he had assented to that 
 bonus, and received it, or agreed or allowed it to be added to his 
 policy without observation, the case might have been brought 
 nearer some of those that have been decided. 
 
 Here it is that Mr. Clarke's evidence may fairly be referred to. 
 It appears from the course of business, that the bonus circular 
 would be sent, and it was sent, to Mr. Grimes as the local agent, to 
 be handed to the different policy-holders at Nevrport. Now, what 
 Mr. Clarke says in his affidavit is this : 
 
 I remember that in the year 1863 1 was informed by Mr. Samuel Cooper Grimes, 
 who had formerly acted as agent for the Medical, and who was at that time 
 acting as agent for the Albert, that a bonus had been declared upon my two 
 policies by the Albert, and that he had some papers with respect to such bonus 
 for me at his office ; and that I then told him as such agent that he need not 
 trouble himself about any such papers, as I had nothing to do with the Albert, and 
 that I would not accept any such papers from the Albert, as I did not recognise 
 them in any way ; and, as I had told him before, I then again informed him 
 that I was not satisfied with the transfer of my policies from the Medical to the 
 Albert, and that I had not recognised such transfer, and that I still held and 
 would continue toehold the Medical liable upon the policies. 
 
 The onus, then, having been thrown on the Medical to shew that 
 the status that was brought about on the former meeting of Mr. 
 Grimes and Mr. Clarke was changed, the only way that they do 
 that being by shewing that a bonus circular was sent for Mr. Clarke, 
 
222 ALBERT ARBITRATION. 
 
 CLAEKE'a I am obliged to take Mr. Clarke's statement of what passed on the 
 
 occasion of his hearing of that bonus circular. It seems to me 
 
 that he has prevented that counter-case having any effect as 
 against him. He has by evidence, which here I must give weight 
 to, shewn that when he was informed of the bonus circular, he said 
 the paper need not be given to him, that he could not recognise 
 the Albert, and that he continued to hold to the Medical. 
 
 Therefore, I am of opinion he is entitled to say he is one of 
 those persons who have declined to accept a substituted policy, 
 and that he has kept on foot his original policy as against the 
 Medical, by the payment of premiums to the Albert according to 
 the terms of the amalgamation deed. 
 
 The reversionary bonus which was added by the Albert and 
 which has been included in the valuation of the policy must be 
 taken off. 
 
 Mr. Higgins : — 'The order will be without prejudice to any claim 
 Mr. Clarke may be advised to make. He may have a right to 
 bring in a separate claim for damages, or a claim on some other 
 ground, as against the Medical, for having given him a worse 
 policy than he was entitled to. They contracted to give him a 
 bonus, and have not done so ; they contracted to last for a thousand 
 years and to carry on business. He ought to be entitled to claim 
 in respect of any loss he has suffered. 
 
 Lord Cairns : — I will say nothing about it. He will do as he 
 may be advised. 
 
 Solicitors for Mr. Clarke : Messrs. Johnson & Weatherall. 
 Solicitors for Medical; Messrs. Walker, Kendall & Walker. 
 
LORD CAIRNS'S DECISIONS. 223 
 
 CLAEKE'S EXEOUTOE'S CASE. 1872 
 
 Feb. 3. 
 List of Gontributories — Liability of Past Shareholders. 
 
 A shareholder in the Albert died in 1867 ; his executors transferred his 
 shares in accordance with the Albert deed of settlement ; in 1869 the Albert 
 went into liquidation ; there were then existing unpaid debts of the Albert, 
 both on specialty and on simple contract, which had been due at the time of 
 the transfer by the executors, and which the shareholders on the register at 
 the commencement of the liquidation were unable to pay ; these debts were 
 of three classes, namely, (a) debts on policies and annuity contracts con- 
 tracted subject to the provisions of the Albert deed ; (6) debts in respect of 
 indemnities given by the Albert on taking over the businesses of other com- 
 panies ; (c) general debts ; one of the executors was dead ; Held — 
 
 (1) As regards the first two classes of debts, in respect of both of which 
 the liability of shareholders was limited to their shares in the capital, there 
 was no ground for putting the surviving executor on the list of contribu- 
 tories : 
 
 (2) As regards the third class of debts, if the estate of the outgoing share- 
 holder continued liable for such of the debts of this class as had accrued 
 before the transfer of the shares, yet the liability would be that of a surety 
 only, and the incoming shareholder, as principal, would be bound, without 
 limit of liability, to make good anything that the surety would have to pay ; 
 it would therefore be useless to put the executor on the list in respect of the 
 suretyship ; moreover, it appeared that there was no appreciable amount of 
 debt of this class remaining to be paid in the liquidation; therefore, the 
 executor should not be put on the list : 
 
 (3) As regards the costs of the liquidation, the executor, not being put on 
 the list in respect of some debt, could not be put on for contribution to the 
 costs : 
 
 Consequently, on the whole matter, the executor was not put on the list. 
 
 A HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on the liability of past shareholders in 
 the Albert. 
 
 On the amalgamation of the Bank of London with the Albert in 
 1858, Mr. George Clarke, in writing, requested the directors of the 
 Albert to allot to him 340 shares in the Albert, and undertook to 
 accept the same, and to execute the deed of settlement, of the 
 Albert, when required. In pursuance of his request, 340 shares 
 were allotted to him ; aud his name was entered on the register of 
 
224 ALBERT ARBITRATION. 
 
 Clarke's members of the Albert in respect thereof. He never, in fact, exe- 
 Casb. cuted the Albert deed, but he acted as a member of the Albert, in 
 respect of those shares, and received the dividends thereon until 
 his death in November, 1865. His will was proved by Mr, B. G. 
 Clarke and Mr. John Worley, the executors therein named. On 
 24 September, 1867, the executors transferred 40 of the testator's 
 shares to Mr. J. N. Lawton by deed, executed by all parties, the 
 substance whereof was as follows : 
 
 We, R. C. Clarke and J. Worley, executors of O. Clarke, in consideration of 
 £15 paid to us by J. N. Lawton, do hereby bargain, sell, assign, and transfer to 
 J. N. Lawton 40 shares, numbered 12,293 to 12,332 of the undertaking called 
 the Albert Company, to hold unto him his executors, administrators, and assigns, 
 subject to the several conditions on which we held the same immediately before 
 the execution hereof ; and I, the said J. N. Lawton, do hereby agree to accept 
 and take the said shares, subject to the conditions aforesaid. 
 
 On 27 September, 1867, the executors transferred the remaining 
 300 shares to Mr. J. Pargeter, by deed executed by all parties, the 
 ' substance whereof was as follows : 
 
 Know all men by these presents that R. C. Clarke and J. Worley, executors of 
 O. Clarke, in consideration of £75 to them paid by J. Pargeter (who hath been 
 approved of by a board of directors of the Albert Company as a fit and proper 
 person to be admitted into the company in the room of R. C. Clarke and J. Wor- 
 ley) hereby assign unto J. Pargeter all those three hundred shares of them num- 
 bered 11,993 to 12,292 in the capital stock or funds of the company, and also all 
 dividends, interest, and proceeds thereof now due, or which hereafter shall be- 
 come due, in respect thereof, to hold the same unto the said J. Pargeter, his 
 executors, administrators, and assigns, subject to the same rules and regulations, 
 and on the same conditions as R. C. Clarke and J. Worley held the same imme- 
 diately before the execution hereof; and J. Pargeter, for himself, his heirs, exe- 
 cutors, and administrators, doth hereby covenant with W. B., and J. N., and 
 W. P. T. P. (three directors on behalf of the company), their executors and 
 administrators, that he, his executors and administrators, shall and will at all 
 times hereafter observe, keep, and perform the several covenants, clauses, pro- 
 visoes, stipulations, and agreements contained in the deed of settlement of the 
 company, and any deed which may have subsequently been, or which may here- 
 after be made and entered into . . . [with covenants by R. C. Clarke and J. 
 Worley for right to assign, and for further assurance]. 
 
 Mr. Lawton and Mr. Pargeter, the transferees, were approved 
 by the directors and registered as proprietors of the Albert, in re- 
 spect of 40 shares and 300 shares respectively, and they received 
 
LOED CAIRNS'S DECISIONS. 225 
 
 dividends, but Mr. Lawton did not execute any deed of covenant Clarke's 
 with the company, nor did Mr. Pargeter execute any such deed <j ASE . 
 other than the deed of transfer of 27 September, 1867. The 
 course adopted in respect of transfers of shares in the Albert 
 was this : the transferor, with the executed transfer deed, handed 
 over to the transferee the certificates for the shares transferred ; 
 the transferee then lodged with the company the certificates and 
 transfer deed ; and, on the deed being registered, the company 
 issued new certificates for the same shares to the transferee, and 
 retained the old certificates. This course was followed on the 
 occasion of each of the transfers to Mr. Lawton and Mr. Pargeter. 
 
 In 1868 Mr. B. C. Clarke died. 
 
 For the purposes of the Case it was admitted that the existing 
 members of the Albert were unable to pay the debts of the Albert, 
 and further, that there were debts of the Albert still unpaid, which 
 consisted of — 
 
 (1.) Debts due in respect of policies and annuity contracts of 
 the Albert, contracted and entered into on the expressed 
 terms of their being subject to the provisions of the 
 deed of settlement. 
 
 (2.) Debts and liabilities since matured into claims, in re- 
 spect of contracts for guarantees and indemnities on 
 assuming and taking over the businesses of other com- 
 panies. 
 
 (3.) General debts. 
 
 It was also admitted that debts and liabilities of each of these 
 classes, both on specialty and on simple contract, due at the 
 respective dates of the said transfers were still unpaid. 
 
 The questions stated in the Case were : 
 
 (I.) Whether Mr. Worley, as surviving executor of Mr. G. 
 Clarke, was liable to be settled on the list of contribu- 
 tories of the Albert for the 340 shares, or any and which 
 of them. 
 
 (2.) And if so, to what extent, and in respect of what debts 
 or liabilities, calls ought to be made upon him as such 
 contributory ; and whether he was liable to contribute 
 to the costs of the winding-up. 
 
226 ALBERT ARBITRATION. 
 
 Clabkb's Mr. H. M. Jackson was for the Albert. 
 Execctoe'b 
 
 Case. 
 
 Mr. B. Eorton Smith was for Mr. Worley. 
 
 Mr. Jackson: — The point is, whether past members of the 
 Albert can be fixed as contributories, that is to say, whether the 
 terms of the deed entitling them to retire exonerate them from 
 liability to calls to pay debts incurred while they were members j 
 and then, as a supplemental question, whether they are liable to 
 contribute to the costs of the winding-up. The question arises on 
 sect. 200 of The Companies Act, 1862, and clauses 210 and 211 of the 
 Albert deed. It depends on the ordinary legal principle applicable 
 to a partnership, not incorporated, merely working under the pro- 
 visions of a deed. Prima facie every partner would be liable for 
 all debts, within the scope of the partnership business, contracted 
 during the time he was a member of the partnership, subject tq 
 his liability being determined by the effect of statutes of limita- 
 tions, or payment, or release. As regards outside and general 
 debts, a creditor, not contracting with the company in such a way 
 as, either expressly or by implication, to shew that he contracted 
 on the terms of the company's deed, would be entitled, in due 
 course of administration, to have his debt paid by any person 
 whom he could find liable to him for it. Therefore, if there is 
 a debt now payable which was an obligation of the company 
 at the time when Mr. Clarice ceased to be a member of the com- 
 pany, his estate would, as to that creditor, be liable, having or not 
 having a right of indemnity over against the other members, or 
 against the general estate of the company. The amount so 
 involved would not, however, be material, and the question would 
 not be worth raising except for the purpose of determining the 
 subsidiary question, whether the shareholder in this position is 
 not also liable to the costs of the winding-up. As regards the 
 bulk of the Albert liabilities incurred under special contracts for 
 annuities, or on policies, or on indemnities given on amalgamations, 
 there is no unlimited liability subsisting, so as to bind even 
 present members. Therefore, past members would stand in the 
 same position as present members, in respect of liabilities so 
 incurred. Clause 210 of the Albert deed relates only to members, 
 
LOED CAIRNS'S DECISIONS. 227 
 
 as among themselves ; that is to say, it does no more than give Clarke's 
 
 „ , .... „ . , , . . Executor's 
 
 transferring members something in the nature ot a right to in- case. 
 
 demnity, or a right to have the continuing members exhausted 
 
 first. A creditor may say, although he is bound by all the terms 
 
 of the deed, that does not, as against him, release a transferring 
 
 member who has once contracted to contribute to the funds. The 
 
 words would be satisfied by holding, that from the time he ceased 
 
 to be a member nothing to be done should in any way affect him. 
 
 Otherwise clause 211 would be unnecessary. The release and 
 
 acquittance given by clause 210 is to be from all further liabilities 
 
 and obligations in respect of the shares. 
 
 Loed Caiens : — He is to be acquitted and discharged from two 
 things ; first, from all liabilities and obligations in respect of the 
 shares ; that points to the time at which the transfer is made ; and 
 secondly, from all further claims and demands on account of the 
 same. He is not acquitted and discharged if he has to pay money 
 afterwards. Suppose the deed had said : he is discharged from all 
 existing and future claims. Then clause 211 provides that he is 
 not to claim any profits. By clause 210 he is to lose the liabilities ; 
 by clause 211 he is to lose the advantages. Then, with regard to 
 the third class, called outside creditors, retiring shareholders would, 
 from the scheme of the deed, be, with respect to them, in the 
 position of sureties only, not of principals. There would be no 
 limited liability. Then, even if you had the sureties on the list, 
 and got them to pay those debts, the continuing shareholders 
 would be bound to indemnify the outgoing shareholders, without 
 limit of liability ; and there may be continuing shareholders now 
 able to pay in full debts of that kind. 
 
 Mr. Jackson: — The liquidators would be bound, in the first 
 instance, to get in any of the assets they could, from whatever' 
 source. 
 
 Loed Caiens: — That is not the modus operandi. First, the 
 whole of the capital of the Albert is called up, and as much as 
 can be is got from it. Then, if there are outside creditors who 
 are not bound by limit of liability, it is necessary to go on and 
 make an unlimited call on any one who can pay it, to satisfy those 
 
228 ALBERT ARBITRATION. 
 
 Clause's debts. Then, if a retiring shareholder is put on the list in respect 
 Case. of those debts too, it would be only as a surety, and he would 
 " have to be recouped by the other set of shareholders. Therefore, 
 if it is reduced to a question of the third class of creditors, it is 
 an idle thing. It is admitted the amount is very small ; so there 
 would be all the cumbrous process of putting both the surety 
 and the principal on the list, although the liquidators would be 
 bound to make the principal pay. 
 
 Mr. Jackson: — For the purpose, of argument, I have not dis- 
 puted that the relation is that of principal and surety, but, under 
 the Companies Act, it is settled that, as to past members, there is 
 not that relation in any way. 
 
 Lord Cairns : — That is from the technicality of the wording 
 of the Act. But in an ordinary partnership, with a covenant to 
 indemnify, the outgoing partner is surety and the continuing part- 
 ners are principals. There was a case a good many years ago in 
 the House of Lords, 
 
 Oakeley v. PasheUer, 4 C. & F. 207, 
 in which that was much considered. 
 
 Mr. Jachson : — Then it comes to the question of the liability to 
 contribute to the costs of the winding-up. If the surviving executor 
 is liable to contribute any sum, however small, to the payment of 
 the debts and liabilities of the company contracted before his 
 testator ceased to be a member, it follows that he is a contribu- 
 tory, and it follows further that he is liable to contribute to the 
 costs of the winding-up. 
 
 Lord Cairns : — Section 200 of the Act of 1862 does not say 
 on what principle a contributory is to be liable. Then, does not 
 this liability stand or fall with the other ? If, for the reasons I 
 have suggested, I cannot put a retiring shareholder on the list, 
 how could I put him on merely to contribute to costs ? Whom 
 would he be contributing to ? To the incoming and continuing 
 shareholders, who, by the hypothesis, are bound to keep him 
 harmless. As far as the liquidators represent creditors, they have 
 nothing to say to the costs of winding up. 
 
LORD CAIENS'S DECISIONS. 229 
 
 Mr. Morton Smith was not called on. Olakkb's 
 
 Executors 
 Casz. 
 
 Loed Caiens: — It seems to me clear that this gentleman 
 cannot be put on the list as a contributory in respect of the first or 
 of the second class of debt, that is to say, debts on policies where 
 under the deed the liability is limited, and where under the deed 
 the outgoing shareholder on transfer and registration ceases to be 
 liable on the shares. It seems .to me that on the construction of 
 the deed, and especially clause 210, the engagement between the 
 outgoing and the incoming shareholder is this, that the liability of 
 the outgoing shareholder shall determine, both as to debts then 
 present and as to debts afterwards to be incurred, and that the 
 whole liability shall be the liability of the new shareholder in re- 
 spect of the shares. In this case it seems to me further that in 
 substance everything was done, as between the outgoing and the 
 incoming shareholder, to which clause 210 can apply. Therefore, 
 I repeat, that, as regards the first two classes of debts, my opinion 
 is that there is no ground at all for putting the retiring shareholder 
 on the list. 
 
 A question might arise as to the third class of debts, the 
 
 liability in point of amount being unlimited and not confined 
 
 to the capital, whether, in respect of so much of that class of 
 
 debts as had accrued before the transfer, the outgoing shareholder 
 
 would not continue to be liable. But if he were liable (as I have 
 
 said in the course of Mr. Jackson s argument) the liability would 
 
 be that of a surety, and the other shareholder in the company who 
 
 had come into and was in possession of the shares of the outgoing 
 
 shareholder would be the principal debtor, and would be bound 
 
 without limit of liability to make good anything that the surety 
 
 would have to pay. That alone would raise a great difficulty as to 
 
 my sanctioning so useless an operation as putting him on the list 
 
 in respect of his suretyship. Then there is a further difficulty, if 
 
 he is only to be put on the list in respect of those debts. Before 
 
 putting him on, I should require the liquidators to shew me what 
 
 the debts of this class were which had accrued before the transfer, 
 
 in order to see whether there was any considerable amount in 
 
 8 
 
230 ALBERT ARBITRATION. 
 
 Olabkb's respect of which the transferring shareholder could be put on the 
 
 TjXEPTJTOR S 
 
 Case. list. But the liquidators inform me, in answer to my question, 
 that it would be found that there is no appreciable amount of 
 debts of that class at this time. 
 
 Then can I put the retiring shareholder on the list in respect 
 of the costs of the winding-up ? It seems to me certainly not ; 
 because, in order to create a liability for the costs of the winding- 
 up, there must be good reason for putting the retiring shareholder 
 on the list, in order that he may make some payment in respect of 
 debt. It is only because he is found on the list as a person liable to 
 pay some of the debts, that a jurisdiction to make him contribute 
 to the costs would arise. 
 
 For these reasons, I am of opinion that I am not able to put the 
 retiring shareholder, or, in this case, the executor of the retiring 
 shareholder, on the list of contributories. 
 
 Solicitors for Albert : Messrs. Lewis, Mvnns, & Longden. 
 Solicitor for Mr. Worley : Mr. Stmt. 
 
LORD CAIRNS'S DECISIONS. 231 
 
 SOVEREIGN LIFE ASSURANCE COMPANY'S CASE. ™ 
 
 June 5 ; 
 
 BOWRING'S CASE. jvi y c. 
 
 Amalgamation — Exchange of Policy — Satisfaction of Claim. 
 
 IN these cases the policy-holders had, on the amalgamation of the 
 Medical with the Albert, accepted Albert policies in exchange for 
 Medical policies. 
 
 Lobd Caiems held it to be clear (1) that the policy-holders had 
 no claim on the original Medical policies against the Medical assets 
 generally ; (2) that they had no claim against the Medical trust 
 fund, which was held on trust to pay and satisfy such claims on 
 policies issued by the Medical as the Albert should not pay or 
 satisfy, inasmuch as the Albert had satisfied the claims on these 
 Medical policies by the issue of Albert policies in exchange. 
 
 Mr. Locock Webb was for the Sovereign ; Mr. Galland (Solicitor) 
 for Sir John Bowring ; Mr. Lemon for the Medical. 
 
 Solicitors for Sovereign : Messrs. Davies, Campbell, & Beeves. 
 
 Solicitor for Sir John Bowring : Mr. Galland. 
 
 Solicitors for Medical : Messrs. Walker, Kendall & Walker. 
 
 s 2 
 
232 ALBERT ARBITRATION. 
 
 1872 POWER'S CASE. 
 
 Ma y l - Policy— Novation. 
 
 Novation consequent on amalgamation not established against a policy- 
 holder, in the following circumstances : The policy-holder, being entitled to 
 a rent-charge on land payable by a receiver in the Court of Chancery, had 
 mortgaged the rent-charge and policy to the insuring company (the trans- 
 ferors) ; an order of the Court had been thereupon made by consent, direct- 
 ing the receiver, out of the rent-charge, to pay the premiums and interest to 
 the agents of the insuring company ; on the amalgamation, the mortgage debt 
 was assigned to trustees as part of a fund created to meet claims on the trans- 
 feror company ; after the amalgamation, by direction of the trustees of the 
 fund, and without any fresh order of the Court, the premiums were remitted 
 to the transferee company ; the policy-holder knew nothing of the amalga- 
 mation. 
 
 JL HIS was an application for the decision of the Arbitrator on the 
 claim of Mrs. Maria Power to prove against the Medical on two 
 policies, one for £1600, the other for £400, effected by her with 
 the Medical, dated 14 August, 1857. 
 
 On 15 July, 1859, an order was made, in a minor matter, in the 
 Court of Chancery in Ireland, directing the receiver who had been 
 appointed in that matter by the Court over lands in the county 
 of Kilkenny, charged with a rent-charge of £400 a year in favour 
 of Mrs. Power, to pay to her the rent-charge. In July, 1860, she 
 borrowed from the Medical £1200. By a deed of 21 July, 1860, 
 she assigned the rent-charge and policies to the trustees ot the 
 Medical to secure the loan. By an order of 22 August, 1860, in 
 the same matter, on the petition of Mr. O. Hopkmson and others 
 as trustees of the Medical, the Court ordered that a consent of 21 
 July, 1860, therein mentioned, signed by Mrs. Power, should be 
 made a rule of Court, and that the receiver should, during her 
 life, or until further order, out of the rent-charge, pay half-yearly 
 to Messrs. Lewis & Howe, the Dublin agents of the Medical, the 
 several sums therein mentioned, in pursuance of the consent. 
 These sums were the premiums on the policies and the interest 
 on the loan. 
 
LOKD CAIENS'S DECISIONS. 233 
 
 la 1860 the Medical was amalgamated with the Albert, and Poweb's 
 
 by deed of 14 March, 1861, the life assurance fund of the ' 
 
 Medical, which included Mrs.' Power's mortgage debt, was as- 
 signed to trustees. Down to 1862 the receiver made the payments 
 as directed by the order ; afterwards the premiums were paid to 
 the Albert, but no fresh order was obtained from the Court autho- 
 rizing the receiver to make payments otherwise than to the 
 Medical. The renewal notices for the policies were sent to the 
 receiver or his solicitor or agent in Dublin ; the receipts for the 
 premiums and for the interest due to the trustees were also so 
 sent. 
 
 Mrs. Power alleged that she had not accepted, and that no ap- 
 plication was ever made by the Medical to her to accept, the 
 liability of the Albert in lieu of that of the Medical, and that the 
 fact of the amalgamation was not known to her until March, 1871. 
 She submitted that the receiver was the officer of the Court, and 
 was not her agent, or authorized on her behalf to enter into any 
 new contract with the Albert or to release the Medical. 
 
 Mr. Shapter, Q.C., (Mr. Bawlinson with him) was for Mrs. Power. 
 Mr. Lemon was for the Medical. 
 A reply was not called for. 
 
 Lord Caiens : — I must say this is an unusually clear case. I 
 do not thiDk there is a fragment of evidence to justify me in 
 holding that this lady has lost her right against the Medical, and 
 has taken in substitution the liability of the Albert. 
 
 The policies were policies in the Medical; they were mortgaged 
 to the trustees of the Medical. I do not stop to inquire what, if 
 there had been nothing more done, would have been the rights of 
 those trustees with regard to surrenderiDg the policies, letting 
 them drop, and taking out policies in another company. But 
 what was done with reference to them was this : the lady had a 
 
234 - ALBEET ABBITKATION. 
 
 Po-web's jointure rent-charge of £400 a year payable to her by a receiver 
 
 _ A . 6 f ' under an order, of the Court of Chancery in Dublin. That jointure 
 
 was part of the security of the Medical; and out of it were to be 
 
 paid, under the mortgage, the interest on the money borrowed 
 
 from the Medipal, and the premiums on the policies. A consent 
 
 order was made on the application of the trustees of the Medical 
 
 by the Court,, the parties to which were Mrs. Power on the one 
 
 side, and the, trustees of the Medical on the other. That consent 
 
 order provided that the receiver should pay not only the interest 
 
 on the money-borrowed, but also the premiums on the two policies ; 
 
 that be should pay those premiums to the Dublin agents of the 
 
 Medical. Erom that time the receiver became (as it were) the 
 
 agent of the Medical, and was bound to make the payment of the 
 
 premiums to that company's Dublin agents ; and, if he had failed 
 
 at any time to make those payments, the Medical would have 
 
 had a right to step in and insist, if he had funds, on his making 
 
 the payment. Then came the amalgamation of the Medical with 
 
 the Albert. Mrs. Power knew nothing about it. By the terms of 
 
 the amalgamation her mortgage security became part of the 
 
 Medical trust fund. I will assume that the Albert, as between 
 
 themselves and the Medical, became charged with the liability on 
 
 the policies. But until Mrs. Power did something, she was a 
 
 person who had made an arrangement by which the Medical was 
 
 to continue to be paid the premiums on the policies. From that 
 
 time the receiver must have done one of two things ; either he 
 
 must have paid the wrong person under the order, that is, paid a 
 
 person who was not authorized to receive under the order, which 
 
 is not suggested ; or he must have paid the trustees of the Medical 
 
 fund, or the Albert by order of the trustees of the Medical fund. 
 
 And that no doubt is the true explanation. The trustees of the 
 
 Medical fund directed their Dublin agents to remit the money 
 
 received from the receiver to the Albert, in consequence of the 
 
 arrangement between the Medical and the Albert. The result of 
 
 that is that the only persons who have paid premiums to the Albert 
 
 are the trustees of the Medical fund. That cannot affect Mrs. 
 
 Power. It may have been a fit thing to be done in consequence 
 
 of the arrangement between the Albert and the Medical; but, at all 
 
LOED CAIENS'S DECISIONS. 235 
 
 events, a payment of the premiums has from time to time been Poweb's 
 
 regularly made by Mrs. Power, through the medium of the receiver. " 
 
 into the hands of the agents of the trustees of the Medical fund, 
 and the policies have been duly kept up. I do not see the least 
 ground for saying that there is any infirmity in the claim of 
 Mrs. Power against the Medical. She must have the costs of her 
 application. 
 
 Solicitors for Mrs. Power : Messrs. Bannister & Fache. 
 Solicitors for Medical : Messrs. Walker, Kendall, & Walker. 
 
236 ALBERT ARBITRATION. 
 
 1872 DUPEE'S EXECUTOE'S CASE. 
 
 June 12. Endowment Contract — Novation. 
 
 Novation consequent on amalgamation not established, in the circum- 
 stances, against the executor of an endowment-contract holder, a premium 
 (the last) falling due after the amalgamation having been paid to the trans- 
 feree company by the bankers of the contract-holder's widow, but without 
 the executor's authority. 
 
 1 HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on the claim of Mr. Thomas Baring, as 
 surviving executor of the Eev. W. M. Dupre, to prove against the 
 Family Endowment on an endowment contract. 
 
 The contract, dated 9 July, 1840, declared that, in con- 
 sideration of £15 5s. 8d. paid by Mr. Dwpre, and in case he, his 
 executors, administrators, or assigns, should, on 1 July in every 
 year until and including 1861, pay to the directors of the Family 
 Endowment £15 5s. 8c?., the funds of the Family Endowment 
 should be liable, according to the provisions of the deed of settle- 
 ment of the Family Endowment, to the payment of £200 (with 
 bonus) for every child of Mr. Dwpre and Emily Dwpre his wife 
 thereafter born who should attain twenty-one. 
 
 Mr. Dwpre died 16 October, 1855, leaving his said wife surviving, 
 and having appointed three executors, of whom Mr. Thomas Baring 
 was the survivor. 
 
 Early in 1861 the Family Endowment was amalgamated with 
 the Albert, and in March, 1861, a circular was sent from the Family 
 Endowment to contract-holders notifying the amalgamation and 
 inclosing a prospectus of the Albert Medical and Family Endow- 
 ment, but Mrs. Dupre alleged that it did not reach her. 
 
 Mr. Dupre, and, after his decease, his executors, or his widow on 
 their behalf, duly paid to the Family Endowment the premiums 
 on the contract, up to and inclusive of the premium which became 
 payable in July, 1860. For this premium the Family Endowment 
 gave a receipt in a printed form as follows : 
 
LORD CAIRNS'S DECISIONS. 237 
 
 A. No. 1908. Ddpke's 
 
 Execctok's 
 The Family Endowment Life Assurance and Annuity Society, Case. 
 
 12, Chatham Place, Blackfriars, London, E.G. 
 
 Received the sum of Fifteen pounds five shillings and eight pence, being the 
 yearly premium from the first day of July, 1860, for an assurance of £200 under 
 Policy No. 505, issued on the lives of children of the Rev. W. M. Dupre. 
 
 (Signed by two directors.) 
 £15 5s. Sd. 
 
 Afterwards, in August, 1860, Mrs. Dupre directed her bankers, 
 Messrs. Williams, Deacon, & Co., to pay the premium annually. The 
 last of the premiums on the contract became payable on 1 July, 
 1861, and was in that month paid by Messrs. Williams, Deacon, 
 & Co. at the office of the Albert and Family Endowment, and a 
 receipt for it was given in their altered printed form as follows : 
 
 No. A. 4370. '2nd day of July, 1861. 
 
 The Albert Medical and Family Endowment Life Assurance Company, 
 
 Chief Office, 7, Waterloo Place, Pall Mall, London, S.W. 
 
 Received the sum of Fifteen pounds five shillings and eight pence, being the 
 yearly premium, from the 1st day of July, 1861, for an assurance of £200 under 
 Policy No. 505, issued on the lives of children of the Rev. W. M. Dupre. 
 
 (Signed by two directors.) 
 £15 5s. 8d. 
 
 Mr. Baring claimed to prove against the Family Endowment on 
 the contract in respect of two sums which had become payable 
 thereunder on the coming of age of the two younger children of 
 the marriage. 
 
 An affidavit was filed on behalf of the liquidators of the Family 
 Endowment made by Mr. Galsworthy, who had been actuary of the 
 Family Endowment, for some time before the amalgamation, and 
 who, after the amalgamation, was in the office of the Albert. It 
 contained the following statement : 
 
 On or about 19 March, 1861, a printed notice was sent out from the Albert 
 office (in the form produced) to all the contract or endowment policy-holders of 
 the Family Endowment whose names and addresses at that time were set forth 
 in the renewal premium register of the Family Endowment to the addresses then 
 appearing in such register, informing them of the amalgamation, accompanied by 
 a printed prospectus of the Albert (in the form produced), inclosed in an envelope 
 (in the form produced) ; and from an inspection of the said renewal premium 
 
238 ALBERT ARBITRATION. 
 
 Case. 
 
 Dopke's register I have no doubt whatever that the aforesaid notice, prospectus, and 
 Exectjtob's envelope were, on or about 19 March, 1861, sent to Mrs. Dupre, through the 
 post-office, addressed to her at 1, Okeshcm Place, Perceval Terrace, Bast Cliff, 
 Brighton. 
 
 Mr. Maynard (solicitor) was for the claimant. 
 
 Mr. Bodwdl was for the Family Endowment. 
 
 Mr. Maynard contended that there was no novation. 
 
 Mr. Bodwdl: — The acts done by Mrs. Dupre were done by her 
 as agent of the executors. The practice of insurances offices is to 
 look to the parties who pay premiums. Dealings with the offices 
 could hardly go on if, in each case of a circular or notice, there must 
 be an investigation on the part of the office with regard to the 
 persons paying premiums as to whether they are the duly con- 
 stituted agents of the policy-holders. 
 
 Lord Cairns : — They are agents to make payments, not agents 
 to change policies. Could the office have negotiated with Mrs. 
 Dupre for a formal instrument, in writing, to change the liability 
 on a policy which belonged to the executors ? This is not like 
 Balfour's Case, before me ; where the husband had power to drop 
 the settled policy, and to change from one office to another. There 
 is double agency here ; Mrs. Dupre is the agent of the executors, 
 the bankers are the agents of Mrs. Dupre. She is agent of the 
 executors to pay premiums as the contract stood. Her bankers 
 are her agents to pay by her authority to the Family Endowment. 
 
 Mr. BodweM: — The whole course of dealing shews that Mrs. 
 Dupre acquiesced in the substitution of the Albert. 
 
 A reply was not called for. 
 
 Lord Cairns : — I do not think this case is at all like any of 
 those that have been decided. If Mrs. Dupre had been the actual 
 and complete owner of the endowment contract or policy, and if 
 
LORD CAIENS'S DECISIONS. 239 
 
 it had been proved, as I do not think it is, satisfactorily, that the Dupre"s 
 letter giving the details of the amalgamation had reached her and case. 
 had been read by her, and if after that she had in her own person, 
 or by an authority given after receiving the letter, paid the pre- 
 mium which became due in 1861, even then I should have doubted 
 very much whether the case was governed by those cases which 
 have decided that the liability of the Family Endowment, under 
 certaiu circumstances, came to an end, and the liability became 
 that of the Albert. It certainly would be, at all events, coming 
 very close to the confines of the different classes of decisions to 
 hold that the making of the final payment which completed the 
 chain of payments at that time, under those circumstances, when 
 the companies were almost in the midst of their amalgamation, and 
 the taking of a receipt of the kind proved, would have been a 
 termination of the liability of the Family Endowment, and. the 
 assumption of it by the Albert. But I repeat that is not the case 
 I have to decide, and I do not desire to express any opinion as to 
 what ought to be done if that had been the case. The case I have 
 to deal with is altogether different. 
 
 Mrs. Dujore was not the owner of the policy. The legal owners 
 were the executors of Mr. Dupre, of whom she was not one. The 
 executors were entered in the books of the Family Endowment as 
 the owners of the policy. In the Kenewal Premium Book, a book 
 relating to the payment of premiums only, an entry is found that 
 the person to whom notices were to be sent was Mrs. Dv/pre. ^ That 
 is a different matter. That merely means that Mrs. Dupre was 
 the person who conveniently might receive those notices which 
 were connected with the payment of the premiums, that is, the 
 premiums payable to the Family Endowment, because hers was the 
 hand which was authorized, I will assume, by the executors, to 
 make those payments to the Family Endowment. Mrs. Dupre, 
 therefore, being in this position was, in my judgment, the agent of 
 the executors, with the limited authority, at the utmost, of con- 
 tinuing to make the payments which ought to be made to keep that 
 policy in the Family Endowment alive. 
 
 Then, what does she do? In the latter part of 1860, before 
 the time arrives for the final payment, before any premium had 
 
240 ALBEET AEBITEATION. 
 
 Doprk's been paid otherwise than to the Family Endowment, Mrs. Bwpre 
 
 Cask. gives an order to her bankers to continue to pay the premiums 
 
 to the Family Endowment, according to the tenour of the receipt 
 
 which had been given by the Family Endowment in 1860. Her 
 
 letter was in these words' : 
 
 Gentlemen, — 27 August, 1860. 
 
 I beg that you will be good enough to pay annually on my account, 
 unless otherwise instructed, £15 5s. 8d., on the 1st July of each year, to the , 
 Family Endowment Life Assurance and Annuity Society, of which I enclose 
 this year's receipt. 
 
 Mrs. Dupre being, as I hold, only a limited agent herself, gives 
 to her bankers again only a limited authority to act as her agent, 
 that authority being to continue to make those payments to the 
 Family Endowment. 
 
 Now, it must be remembered we are here on a question of 
 intention, not on any abstract rule of law, but on a question of 
 what the real intention of the parties was. Was it her intention, 
 with an intelligent mind, to put an end to the liability of the 
 Family Endowment, and to take that of the Albert ? It appears to 
 be impossible to suppose that Mrs. Bupre, under the circumstances, 
 had herself any such intention, or that the executors, the legal 
 holders of the policy, had any such intention. It being a question 
 of intention, the case comes to what I put in the course of the 
 argument : Suppose even that you had one of these agents, with a 
 limited authority, entering into a positive contract with the Albert 
 to substitute the liability on the policy, would that positive con- 
 tract have any effect ? Then it is an a fortiori case when one asks 
 was there any intention on the part of the limited agents to enter 
 into that contract, and I am obliged to say that I see no proof of 
 such intention. Therefore, I think the claim must rank against 
 the Family Endowment. 
 
 The claimant is entitled to costs. 
 
 Solicitor for Mr. Baring : Mr. Maynard. 
 
 Solicitors for Family Endowment : Messrs. Marhby & Tarry. 
 
LORD CAIRNS'S DECISIONS. 241 
 
 MOONEY'S CASE. 1872 
 
 Policy — Novation — Mortgagor and Mortgagee — Account. 
 
 Novation consequent on amalgamation established against a policy-holder, 
 in the following circumstances : He had mortgaged to the trustees of the 
 insuring company his policy and an annuity payable to him by a third party, 
 ■with a covenant by him to pay the premiums on the policy, and with a pro- 
 vision that the trustees might, if they thought fit, use a sufficient portion of 
 the annuity to pay the premiums, but should not be bound to do so ; on the 
 amalgamation, the mortgage was transferred to the transferee company ; they 
 received the annuity and paid thereout the premiums to themselves, as on a 
 substituted policy. 
 
 Mortgagor of policy and annuity held bound, in account between himself 
 and mortgagee, by payment of premiums out of the annuity, made, with his 
 assent, by mortgagee. 
 
 1 HIS was an application for the decision of the Arbitrator on a 
 claim of Mr. L. B. Mooney to prove against the Family Endowment, 
 on a policy on his life, dated 6 December, 1858, issued by the 
 Family Endowment, for £1500. 
 
 By a mortgage deed of 6 December, 1858, made between Mr. 
 Mooney and Mr. C. H. Latouche, with two others, therein called the 
 mortgagees, being in fact the trustees of the Family Endowment, 
 in consideration of £1300, lent as therein mentioned to Mr. 
 Mooney by the mortgagees, a bond of the Lord Mayor, Aldermen, 
 and Burgesses of the City of Dublin, dated 3 May, 1856, and all 
 money due and to become due in respect of the annuity of £150 
 for the life of Mr. Mooney secured by that bond, and the policy, 
 were assigned to the mortgagees by way of mortgage for securing 
 the repayment to them of £1300, with interest. 
 
 The subsequent correspondence and transactions in connexion 
 with the mortgage between Mr. Mooney and the Family Endow- 
 ment and Albert were numerous. 
 
 Mr. Shapter, Q.C., (Mr. Rawlinson with him) was for Mr. Mooney. 
 Mr. Bodwell was for the Family Endowment. 
 
 June 12. 
 
242 ALBEKT ARBITRATION. 
 
 Moonet's Mr. Shatter contended that in the circumstances there was no 
 
 ' substitution of the liability of the Albert for that of the Family 
 
 Endowment. 
 
 Mr. Eodwell was not called on. 
 
 Lord Caibns : — Mr. Mooney mortgaged to the trustees of the 
 Family Endowment an annuity to which he was entitled from the 
 Corporation of Dublin, and also, a policy effected on his life in the 
 Family Endowment. He covenanted with the trustees of the 
 Family Endowment, that he would himself pay the premiums due 
 on that policy from time to time, and there was a provision in 
 the deed that the trustees of the Family Endowment, if they 
 thought fit, might use a sufficient portion of the annuity mort- 
 gaged to them to pay the premiums on the policy, but that it 
 was not to be obligatory on them to do so. In process of time, 
 in 1861, the Family Endowment transferred all their assets and 
 all their liabilities to the Albert. They transferred by a general 
 transfer, among other assets, the mortgage in question, with all 
 its rights and liabilities, and from that time onwards the Family 
 Endowment ceased to do any business ; and in short, probably the 
 best expression for ordinary purposes is that which is used again 
 and again by Mr. Mooney in his letters and notices, — the Family 
 Endowment ceased to exist.' 
 
 There is no doubt that de facto the policy, as a policy in the 
 Family Endowment, never was kept up ; that is to say, there is no 
 doubt that de facto no premiums for the purpose of keeping up 
 the policy ever reached, or ever were intended to reach, the Family 
 Endowment after the transfer to the Albert ; because, as I have 
 said, the Family Endowment were not having or holding any 
 funds, or receiving any premiums. 
 
 In that state of things, it appeared to me in the first place, that 
 the first, if not the only, question — I rather thought the only 
 question — to be decided to-day was the claim which Mr. Mooney 
 makes to be entitled to rank as a policy-holder against the Family 
 Endowment. On that point, the case seems to me to be free from 
 
LOED CAIKNS'S DECISIONS. 243 
 
 any kind of doubt. That policy, de facto, has not been kept up. Moonby's 
 
 No premiums were paid to the Family Endowment after 1861. 
 
 No premiums were intended to be paid to the Family Endowment 
 after 1861. Mr. Mooney, who was under a covenant to pay pre- 
 miums, never did so. The trustees of the Family Endowment, 
 who were the mortgagees, were under no obligation to apply the 
 annuity in keeping up that policy, and in point of fact they did 
 not apply the annuity or any part of it in keeping up that policy. 
 If, therefore, that were the whole of the case, it would be a 
 simple case, and Mr. Mooney would have failed to establish any 
 claim against the Family Endowment. 
 
 But then it appeared to me that it might become a question, 
 under the documents on which Mr. Mooney relies, although the 
 Family Endowment policy was not kept up, yet, inasmuch as the 
 Albert do appear to have used, and do admit that they used, a 
 part of the annuity received by them as assignees of the mortgage 
 from time to time in paying premiums to the Albert, treating the 
 Family Endowment policy as a policy handed over to the Albert, 
 and kept up by the Albert as one of its own policies, whether, in an 
 account between Mr. Mooney, as mortgagor, and the Albert, as now 
 mortgagees, that is, assignees of the mortgage, he would not have 
 a right to contend that he never had authorized any deduction 
 out of his annuity to be made for the purpose of paying premiums 
 to the Albert to keep up an Albert insurance. That seemed to me. 
 to be a matter open to doubt. I thought this would not have 
 been the most convenient time to dispose of it; but having gone 
 fully into the case, I can, satisfactorily to myself, dispose of that 
 question also. 
 
 It appears to me, on looking at the documents, that it is quite 
 out of Mr. Mooney's power to contend that he did not perfectly 
 know and perfectly assent to the keeping up as an Albert policy 
 of that which had been a Family Endowment policy, and to the 
 deduction out of his annuity from time to time of the proper 
 sums to pay the premiums, in those circumstances, to the Albert. 
 
 Here is a gentleman perfectly able to understand business, who, 
 with his eyes open, during five or six years, admits in letter after 
 letter that, on the one hand, the Family Endowment, with which 
 company he had had dealings, had ceased to exist, and that, on 
 
244 ALBEET ARBITRATION. 
 
 Mooney's the other hand, the company with which he had then to deal was 
 
 " the Albert, that company being plainly admitted by him to have 
 
 the right to deduct out of the sums coming to him the premiums 
 paid to the Albert. 
 
 I am clearly of opinion, on the one hand, that he has no claim 
 against the Family Endowment, and on the other hand, that, with 
 his assent, the Family Endowment policy has been kept up out of 
 his annuity as a policy in the Albert. 
 
 Solicitors for Mr. Mooney : Messrs. Bannister & Fache. 
 Solicitors for Family Endowment : Messrs. Markby & Tarry. 
 
LOED CAIRNS'S DECISIONS. 245 
 
 HOW'S EXECUTOES' CASE. 1872 
 
 Policy — Novation — Protest — Bonus. , 
 
 Novation consequent on amalgamation not established against the execu- 
 tors of a policy-holder, in the following circumstances: The policy-holder 
 was a member of a partnership of solicitors, who were agents of the insuring 
 company; on the amalgamation, the partnership received the amalgamation 
 ' circular to policy-holders and a circular to agents, iuquiring whether they 
 desired to continue to be ageuts of the combined company; to those 
 circulars the partnership answered that, after careful inquiries, their duty to 
 their clients required them to decline to recognise the amalgamation, and to 
 rely exclusively on the liability of the insuring company ; that they declined 
 the position of agents, but apprehended that they would be entitled to com- 
 mission on premiums which they might pay on the existing policy and 
 another ; after remonstrance on behalf of the amalgamated company, they 
 declared they saw no reason for altering their view ; the policy-holder and 
 his executors continued to pay premiums to the transferee company, and 
 took receipts of that company. 
 Evidence held to disprove receipt of bonus circular. 
 
 JL HIS was an application, on a Case stated by agreement, for the 
 decision of the arbitrator on the claim of the Eev. Wm. Walsham 
 How and Mr. T. M. How, as executors of Mr. Wm. Wybergh How, 
 to prove against the Family Endowment on a policy for £300, 
 with profits, No. 6007, dated 11 October, 1858, issued to Mr. Wm. 
 Wybergh How by the Family Endowment, on the life of Wm. 
 Story. 
 
 Mr. Wm. Wybergh How was a solicitor at Shrewsbury, practising 
 in partnership with Mr. T. M. How, one of the executors, under 
 the firm of How & Son. Messrs. How & Son acted as agents at 
 Shrewsbury for the Family Endowment. In March, 1861, Messrs. 
 How & Son, as agents, received a circular from the Family Endow- 
 ment informing them of the amalgamation with the Albert, and 
 inquiring whether they desired to continue to be agents to the 
 combined company. At the same time they received the amalga- 
 mation circular issued to policy-holders of the 'Family Endow~ 
 ment, with the prospectus of the Albert. In consequence of these 
 circulars, Mr. T. M. How, on behalf of Messrs. How & Son, and 
 of Mr. Wm. Wybergh How, made inquiries personally, and through 
 
 T 
 
246 ALBEET AEBITBATION. 
 
 How's his agents in London, Messrs. West f& King, solicitors, respecting 
 
 ExEdCTOi's' 
 
 Cash the Albert. These inquiries resulted in the following letter from 
 Messrs. How & Son to Mr. Galsworthy, who had been actuary and 
 secretary of the Family Endowment, and had gone into the office 
 of the Albert : 
 
 Shrewsbury, 5 April, 1861. 
 
 Dear Sir, — We could not reply to your circular of the 16th ult. immediately, 
 as we felt it necessary to make very careful inquiries on behalf of our clients, 
 ■who are policy or annuity-contract holders of the Family. Endowment Society, 
 before doing so. 
 
 As you have seen our agent, Mr. King, on the subject, you will not be, sur- 
 prised at our adding that we have very unwillingly come to the conclusion that 
 our duty to our clients requires us to decline to recognise the combination with 
 the Albert and Medical Office, and to rely exclusively upon the liability o,f the 
 Family Endowment Society. 
 
 This being the case, we, of course, have to decline the position of agents to the 
 combined company which you are good enough to offer us; but we apprehend 
 that we shall be entitled to the usual commission upon all renewal premiums 
 which we may pay upon the existing policies on Captain Jenkins' and Mr. 
 Story's lives. 
 
 We are, &c, 
 
 E. H. Galsworthy, Esq. How & Son. 
 
 In answer, Messrs. How & Son received the following letter 
 from Mr. Galsworthy: 
 
 Albert Medical and Family Endowment Life Assurance Company. 
 42, New Bridge Street, London, E. O. (corner of Ludgate Bill), 
 
 6th April, 1861. ' 
 Dear Sirs, — The contents of your letter of yesterday surprise me much. I 
 certainly thought that your agent left me satisfied of what is a fact, namely, that 
 the change'has been earned out for the express benefit of the policy-holders of 
 j the Family Endowment Society, inasmuch as it confers upon them much greater 
 
 security and far better prospects of profits. I explained this, and the reason 
 why, to your agent, who, I regret to find, must have misunderstood me, notwith- 
 standing that he appeared to admit the force of my explanations. 
 
 I hope you will yet change your mind and accept an agency to this company. 
 If you are yourselves coming to town, 1 should be most happy to explain to you 
 what I endeavoured to explain to your agent, who is the' only gentleman but of a 
 great many who have called upon me, who, as I gather from your letter, failed 
 to see the advantages conferred upon assurers of the Family Endowment Society. 
 by the change effected for their benefit, after much labour and anxiety on our 
 parts. 
 
 I am, &c, 
 Messrs. How & Son, Shrewsbury. Edwin H. Galsworthy. 
 
LOED CAIRNS'S DECISIONS. 
 
 Messrs. How & Son replied as follows : 
 
 Shrewsbury, 8th April, 1861. 
 Dear Sir, — We are quite ready to believe that you and all those acting for the 
 Family Endowment Society have done what you considered best for the interest 
 of the policy-holders, and it is quite possible that your view may be sounder 
 than ours ; but ours has been arrived at after due inquiry and much anxious 
 consideration, and we see no reason for altering it. We sincerely wish we could 
 come to a different conclusion. 
 
 We are, &c, 
 E. H. Galsworthy, Esq. How & Son. 
 
 Messrs. How & Son did not alter their determination, and never 
 acted as agents of the Albert. 
 
 On 25 October, 1861, Messrs. How & Son, on behalf of Mr. 
 Wm. Wybergh How, as the assured, and of Captain JR. Jenkins, a 
 client of theirs, who was also assured in the Family Endowment, 
 wrote and sent to Mr. Galsworthy the following letter : 
 
 247 
 
 How's 
 Executors' 
 
 Case. 
 
 
 £ s. d. 
 
 ro. 6007 Mr. W. Story 
 
 19 3 3 
 
 ., 6015 Capt. B. Jenkins 
 
 42 
 
 61 3 3 
 
 Commission 3 11 
 
 £58 2 2 
 
 Dear Sir, — We have directed payment of the above by your drawing on 
 Messrs. Olyn & Co. as usual. 
 
 We are, &c, 
 Shrewsbury, 25 Oct., 1861. How & Sour. 
 
 E. E. Galsworthy, Esq. 
 
 In answer, Messrs. How & Son received the following letter : 
 
 [Albert Medical and] Family Endowment Life Assurance Company, 
 
 7, Waterloo Place, Pall Mall, London, S. W. 
 28th Oct. 1861. 
 Dear Sirs, — Your favour of the 25th instant came duly to hand, and to-day we 
 have received from Messrs. Glyn & Co. the cash balance of your account, for 
 which we are obliged. 
 
 Yours faithfully, 
 
 Edwin H Galsworthy, 
 Messrs. How & Son, Solicitors, Shrewsbury. Act. and Sec. Ind. Dep. 
 
 In the printed heading to this letter as produced, the words 
 Albert Medical and appeared struck out with pen and ink, and the 
 
 t 2 
 
248 ALBERT ARBITRATION. 
 
 How's > claimants alleged that the words were so struck out before the 
 Case. letter was sent to Messrs. How & Son. 
 
 Mr. Wm. Wybergh How died in November, 1862. 
 
 It was alleged on behalf of the Family Endowment that in 1863 
 a bonus was assigned by the Albert in respect of the policy in 
 question, and that on 23 October, 1863, a bonus notice was sent 
 to the executors, and that, they not having answered the notice, a 
 sum of £7 lis. was added to the sum assured by the policy, as a 
 reversionary bonus. The executors did not admit that a bonus 
 was so assigned ; denied that notice thereof was forwarded to or 
 received by them'; alleged that they did not at any time know 
 that any bonus had been assigned in respect of the policy ; and did 
 not admit that any sum had been in fact added to the policy, as a 
 reversionary bonus, or otherwise. < 
 
 Mr. Wm. Wybergh How and his executors paid the premiums 
 payable on the policy down to and inclusive of 1868. The receipts, 
 after becoming Albert Medical and Family Endowment receipts, 
 were, in and after October, 1863, Albert receipts, the last being as 
 follows : 
 
 Receipt. 
 
 No. A. 15229. 
 
 P. B. Policy No. 6007 
 
 Sum assured £300 
 
 Life W. Story. 
 
 Premium £19 3s. 3d 
 
 . Interest on £ 
 
 For 12 months 
 From 11 Oct. 1868, 
 Agent, 
 
 Albert Life Assurance Company, 
 7, Waterloo Place, Pall Mall, London, S.W. 
 Established 1838. 
 Received this 2nd of November, 1868, the pre- 
 mium for the renewal of policy mentioned in the 
 margin hereof, the amount of which premium and 
 the period for which it is received are also men- 
 tioned in the margin. 
 
 0. Lebon, 
 
 for James MoLauchlan, 
 
 Midland Branch. j Manager. 
 
 Mr. T. M. How made the following affidavit : 
 
 1. I have read the copy of the affidavit of H. W. Smith. 
 
 2, I say most positively that I never received the bonus notice and form, which 
 in such affidavit is alleged to have been sent to me, or any other notice whatever 
 of the bonus referred to in such affidavit. I have carefully preserved every 
 circular or letter which I ever received in relation to the policy No. 6007 in the 
 Family Endowment from 1861 to the present time, and copies of every letter 
 written by me or by my order in reference thereto during the same period, and 
 the same are now in my possession, and there is no such bonus notice among 
 them, or any reference of any kind thereto, and after diligent and careful search 
 
LOED CAIENS'S DECISIONS. 249 
 
 through my papers I have been unable to find the said alleged or any other notice How's 
 whatever of the said bonus ; and as it is my practice immediately on receipt of 'Exeodtobs' 
 every bonus notice relating to any policy in my possession, whether held for ' ASE ' 
 myself or for my clients, to place it with such policy, I am satisfied that I never 
 received any such notice as alleged. I speak with the more confidence on this 
 point, because, when in 1861 I was making inquiries, and through my London 
 agents was causing inquiries to be made, respecting the Albert, with a view to 
 enable me to determine whether or not it would be expedient to adopt the amal- 
 gamated company as the insurers in lieu of the said society, my attention was 
 expressly directed to the fact that if I should determine (as I did) to decline to 
 recognise the amalgamation, and to rely exclusively on the liability of the Family 
 Endowment, I should thereby forego any claim whatever to bonuses (if any) sub- 
 sequently declared by the amalgamated company ; and I feel convinced that 
 under these circumstances, if I had received in October, 1863, as alleged, any 
 notice of a bonus on the said policy, I should at once have written to repudiate 
 it, and to refer to my letters written in 1861 to Mr. Galsworthy. 
 
 3. On or about the 29th day of October, 1861, 1 received from Mr. Galsworthy 
 the letter dated 28th October, 1861 (now produced). That letter is in precisely 
 the same state now as when I received it at the date aforesaid, and the words 
 Albert Medical and in the printed heading thereof had been then struck through 
 with the pen, as the same now appear therein. 
 
 Mr. Speed was for the claimants. 
 
 Mr. Bodwell was for the Family Endowment. 
 
 Mr. Speed contended that there was a repudiation of the Albert 
 on the amalgamation, and that there was no evidence that the 
 bonus notice was ever sent, and its receipt was denied. 
 
 Mr. Rodwell: — Much stress need not be laid on the bonus notice, 
 and there is a conflict of evidence respecting it. But the protest 
 was insufficient : Wood's Case and Bivaz's Case in this Arbitration. 
 
 A reply was not called for. 
 
 Lobd Omens : — I must say that Mr. How's statement is satis- 
 factory. He is a gentleman accustomed to business. He states 
 that he has kept every paper connected with. this policy together ; 
 he positively denies that he ever received the notice relating 
 to the bonus; and he assigns an intelligible reason for being 
 
250 ALBEET AKBITKATION. 
 
 How's distinct in his recollection about it, namely, that he had held out 
 Case. *° h™ when making inquiries in London the inducements that 
 might lead him to change from one company to the other, con- 
 nected with the bonus that the Albert was likely to declare. He 
 says he was not influenced by those inducements, but he is sure 
 that the circumstance that they had been held out to him would 
 have made him remark any letter connected with the bonus in 
 the Albert that might have been sent to him. Therefore, I must 
 take it that the notice never reached Mr. How.. 
 
 Putting out of consideration for the moment the cases that have 
 been referred to, the matter stands thus. The circulars with regard 
 to the amalgamation were sent to Messrs. How & Son, and they 
 were to answer two purposes, to obtain the consent of the clients 
 of the firm of How & Son to change their policies from the one 
 company to the other, and to induce the firm to act as agents of 
 the amalgamated company, the Albert. In answer, Messrs. How 
 & Son say they had felt it necessary to make very careful in- 
 quiries on behalf of their clients, and that they had very un- 
 willingly come to the conclusion that their duty to their clients 
 required them to decline to recognise the combination with the 
 Albert and Medical, and to rely exclusively on the liability of the 
 Family Endowment. Then, after receiving a letter remonstrating 
 with them on the determination which they had come to, they 
 again write : 
 
 We are quite ready to believe that you and all those acting for the Family 
 Endowment have done what, you considered best for the interests of the policy- 
 holders, and it is quite possible that your view may be sounder than ours ; but 
 ours has been arrived at after due inquiry and much anxious consideration, and 
 we see no reason for altering it. 
 
 The determination thus adhered to was a determination to rely 
 exclusively on the liability of the Family Endowment. And they 
 couple that with the statement that they decline the agency 
 offered, and that they would go on paying the premiums, and 
 would expect (as to that, whether they were right or wrong, I 
 have nothing to say) to receive a commission on premiums which 
 they continued to pay. I cannot understand these steps as 
 meaning anything but this : We pay our premiums to keep alive 
 the policy, but we give notice that we do so, relying exclusively 
 
LOED CAIENS'S DECISIONS. 251 
 
 on the liability of the Family Endowment. And it is, perhaps, not How's 
 unimportant to observe, that on 28 October, 1861, in acknow- case. 
 ledging some of the premiums so paid, Mr. Galsworthy writes a 
 letter striking out of the heading Albert Medical and, making it a 
 letter from the Family Endowment alone. It seems to me that, in 
 that state of things, the onus was entirely thrown on the persons 
 acting on this occasion either for the Family Endowment or for 
 the Albert, to displace the position that Mr. Sow had taken up. I 
 do not say they might not have displaced that position, but until 
 they did something to displace it, he was in the position of a 
 person who said that he would make his payments, relying on the 
 liability of the Family Endowment. 
 
 Two cases have been referred to which have been decided by 
 me. I wish it was in my power to lay down a general formula 
 which would decide all cases connected with the different branches 
 of the inquiry which come before me, but I can only deal with 
 each ease as it occurs. 
 
 In Wood's Case it appeared to me beyond all doubt, that every 
 precaution a man could take had been taken by Mr. Wood in 
 order to prevent a shifting of liability from one company to the 
 other. I went through the enumeration of those precautions, but 
 I did not mean to say that nothing short of what he had done 
 would protect a policy-bolder. 
 
 The other case, Rivaz's Case, is exactly an illustration of what 
 might have been found in this case, but is not found in it. Mr. 
 Rivaz had got the circular from the head office of the company. 
 One thing I adverted to was the fact that he had not communi- 
 cated with those from whom the circular emanated, but had gone 
 and had a gossiping conversation with the subordinate agent of 
 the company in Manchester. I said the proper thing to have 
 done when he received from the head office the circular to which 
 he objected, was to have written to that head office stating his 
 objection. That is what Mr. Sow has done in this case, which 
 Mr. Rivaz omitted to do. That was not all ; Mr. Rivaz went to 
 the office in Manchester ; and he said : I do not want to be trans- 
 ferred to the Albert, I object to being transferred. The person to 
 whom he said that did not answer : Well, I understand that is 
 your position ; but he said : You cannot do that, you must pay 
 
252 ALBERT ARBITRATION. 
 
 How's your premium or your policy is gone. Mr. Bivaz miglit have 
 
 Executor s* 
 
 Case. challenged that and said: That is bad law; but he did not, he 
 paid his premiums. I say again, if that had happened in this 
 case, if after Mr. How's letter Mr. Galsworthy had written back 
 and said : I hope you will not let that state of things continue ; 
 we will not let the premiums be paid in that loose way ; you must 
 choose in a more definite way, and say on what footing you are 
 going to pay: he might have thrown back the onus upon Mr. How 
 and have altered the position that Mr. How took up. But he did 
 not, he remained quiescent, and therefore Mr. How's construction 
 of the footing on which he was going to pay the premiums 
 remains. 
 
 It seems to me that Mr. How's claim is against the Family 
 Endowment. 
 
 Solicitors for the Claimants : Messrs. West & King. 
 
 Solicitors for the Family Endowment : Messrs. Markby & Tarry. 
 
Receipt No. 
 
 Med. Policy No. 2598 
 
 Sum assured £ 
 
 Life 
 
 Premium £ 
 
 Interest on £ 
 
 for months 
 
 From 186 . 
 
 Eeceived this day of , 186 , the 
 
 premium for the renewal of policy mentioned in the 
 margin hereof, the amount of which premium and 
 the period for which it is received are also men- 
 tioned in the margin. 
 
 (Signed by two directors ) 
 
 LORD CAIRNS'S DECISIONS. 253 
 
 COUNT D'ALTE'S CASE. 1873 
 
 m. 12. 
 
 Policy — Novation. 
 
 Novation consequent on amalgamation not established against a policy- 
 holder, in the following circumstances : On going abroad, he directed his 
 solicitors to pay the premiums on his policy ; the amalgamation took effect 
 during his absence abroad, which lasted for some years ; after the amalgama- 
 tion, his solicitors paid the premiums at the office of the transferee company, 
 taking receipts of that company ; on his return, he received no notice or pro- 
 posal respecting the amalgamation ; he continued to pay the premiums to 
 and took receipts of the transferee company ; he also inquired in writing of 
 the transferee company what was the then value of his policy, and what 
 would be the increase of value every half-year. 
 
 1 HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim of Count D'AUe to prove 
 against the Medical, on a policy issued by the Medical, on his life, 
 for £3000, without profits, No. 2598, dated 14 May, 1850. 
 
 In 1855 Count D'AUe, who had been resident here, left England 
 on being appointed Portuguese Minister in Italy. He directed 
 his solicitors, Messrs. Fladgate & Co., to pay the premiums in 
 his absence. In 1860 the Medical was amalgamated with the 
 Albert. After the amalgamation Messrs. Fladgate & Co. paid the 
 premiums at the Albert office, and took receipts first of the Albert 
 and Medical and then of the Albert Medical and Family Endowment. 
 At the beginning of 1863 Count D'AUe returned to England. 
 Thenceforth he or his then solicitors, Messrs. JBeachcroft & Thompson, 
 paid the premiums at the Albert office, taking first Albert Medical 
 and Family Endowment receipts, and in and after 1866 Albert 
 
 receipts, which were in the following form : 
 
 Albert Life Assurance Company, 
 7, Waterloo Place, Pall Mall, London, S. W. 
 Established 1838., 
 
254 ALBERT ARBITRATION. 
 
 Count An affidavit made by the clerk of Messrs. Fladgate & Co., who 
 
 Case. attended to the business, was filed denying (according to recol- 
 lection) receipt of any notice or circular regarding the assent or 
 non-assent of Count D'Alte to the amalgamation, and stating his 
 having carefully searched among the papers and letter-books 
 without finding any such notice or circular, or any communication 
 on the subject. 
 
 Count D'Alte had made an affidavit, in which (among other 
 things) he denied that any circular or other letter with reference 
 to the amalgamation ever reached him. 
 
 An affidavit had been filed on behalf of the liquidators, stating 
 that on search among the papers of the Albert with reference to 
 the claim a paper had been found, which was as follows : 
 
 Life insured in £3000. 
 Age when insured Age now 
 
 40. 55. 
 
 Premium paid Premium that would 
 
 annually, he paid now annually, 
 
 £87 £159 7 6 
 
 Amount of premiums paid in the fifteen years, 
 £1305 
 
 Wish to know what is the value of the policy now, and what will be the 
 increase of value every half-year. 
 
 [Indorsed] 
 Viscount D'Alte, 
 
 12, Gloucester Place, 
 
 Portman Square. 
 
 This was admitted to be in Count D'Alte s writing. It appeared 
 to have been written towards the end of 1864. 
 
 Mr. Cecil Russell was for Count DAlte. 
 
 Mr. Q. O. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
 Mr. C. Russell submitted that the payments were made to the 
 Albert as agents of the Medical. The position of the claimant was 
 peculiar. He was a foreigner, abroad at the time of the am alga- 
 
LOED CAIKNS'S DECISIONS. 255 
 
 mation. His solicitors, who were his agents for the purpose oi' Count 
 
 ■ j. ^ i^i D' Alms's 
 
 paying premiums, continued to pay them at the only office where case. 
 
 payment could be made. Then he returned and paid them himself 
 at the same office, following the practice he found. His policy 
 was without profits, and therefore no motive could be suggested 
 why, having effected a policy with a company with which he was 
 satisfied, he should have accepted the security of the Albert with- 
 out any further advantage. 
 
 Mr. Morgan: — This is similar to the Whitehaven Bank Case 
 and others, where the policy-holder having drifted into relations 
 with a new company, must be taken to have adopted the security 
 of the new company instead of the old. The paper found amohg 
 the Albert papers is evidence of a dealing, more than a year after 
 Count D'Alte returned to England, with the Albert, on the footing 
 of their being the company liable on the policy. 
 
 A reply was not called for. 
 
 Loed Cairns : — In disposing of this case, I do not think it will 
 be necessary to refer to the numerous decisions in this Arbitration 
 on the subject of transfer of liability. I see no reason to be dis- 
 satisfied with any of those decisions. But this case seems to me 
 to stand upon ground which removes it from all doubt, and 
 affords no basis on which to hold that a transfer of liability has 
 taken place. 
 
 When Count D'Alte left this country he made his solicitors his 
 agents to do one particular thing, that is to say, to pay the pre- 
 miums on a policy of insurance effected in the Medical. They 
 had no authority to do anything more than that ; and if they had 
 assented in any way to any alteration of the liability, I should 
 have been obliged, as far as the materials before me go, to hold 
 that they had exceeded their powers. But even they say they 
 have no recollection of receiving any communication from the 
 Medical, indicating a proposal to alter the liability from the 
 Medical to the Albert; and I cannot assume, in the absence of evi- 
 
256 ALBERT ARBITRATION. 
 
 Count dence, that any such communication was made to them. I repeat^ 
 Case. even ^ sucn a communication had been made to them, I should 
 have held they had no authority of themselves, as far as I can see, 
 to assent to a transfer of liability, and I should not have held that 
 notice of the contents of a circular to them was constructive 
 notice to their principal. There must be a direct and precise 
 communication in these cases with the person who is to be affected. 
 When Count D'Alte returned to this country there is no evi- 
 dence whatever of any communication made to him, or of any 
 proposal addressed to him, or of any invitation held out to him. 
 The step which the amalgamation deed between the Medioal and 
 the Albert specified as a step which was to be taken, namely, that 
 the policy-holders in the Medical should be invited to substitute 
 for their subsisting policies other policies to be issued by the 
 Albert, does not appear to have been taken, as far as the evidence 
 goes, with reference to Count D'Alte. He says — and I see no 
 reason to doubt the evidence — that, coming home to this country, 
 he found that the office at which the premiums on the policy were 
 being paid was the office of the Albert; accordingly, he went 
 there and paid the premiums ; and the receipts given to him 
 are receipts by the Albert for certain sums according to the tenour 
 of the policy described and issued by the Medical, as they are for 
 some time expressed, the form being afterwards altered, and not 
 referring to the Medical policy in the body of the receipt. That is a 
 proceeding entirely consistent with the amalgamation deed, which 
 provided, with regard to policy-holders who should decline to 
 accept substituted policies, that they should be entitled to keep 
 their policies on foot by paying the] premiums to the Albert. It' a 
 communication had been made to Count D'Alte, inviting him to 
 consent to a substitution, and he had acted on it without returning 
 any answer, it might have been different ; but there is no evidence 
 that any communication was made to him whatever, and he was 
 merely doing what the deed contemplated, paying the premiums 
 to the hand entitled to receive them, until the time that some 
 substitution of liability should take place. 
 
 The only other ingredient introduced into the case is that it 
 appears that, in the state of things which I have described, Count 
 D'Alte hands in, I will assume to the office of the Albert, although 
 
LOED CAIENS'S DECISIONS. 257 
 
 the paper itself does not say so, a paper of inquiry, stating the Count 
 amount insured, the age, the premium, the amount of premiums case. 
 paid, and adding this : 
 
 Wish to know what is the value of the policy now, and what will be the in- 
 crease of value every half-year. 
 
 This does not appear to me to be either a dealing or a negocia- 
 tion ; it is simply a question asked, not shewing a fixed desire or 
 definite intention on the part of the person asking it to enter 
 into a treaty or negotiation. On the contrary, he asks for infor- 
 mation which would be entirely consistent with his keeping up the 
 policy for any number of half-years longer, waiting for the in- 
 creased Talue which he assumes will take place. It appears to me 
 to be only idem per idem. If, before this time, I had found that 
 Count B'Alte had accepted the liability of the Albert, then I 
 should have thought this was an inquiry put to the Albert con- 
 sistently with that transfer of liability. But if, on the other 
 hand, I am to draw the inference from what happened that 
 he was paying his premiums to the Albert as the agents of the 
 Medical, then I should regard this as an inquiry put to the Albert 
 in the same character, that is, as the persons who were receiving the 
 premiums for the original Medical. I do not think it carries the 
 case any further ; it leaves it where it was ; and leaving it where 
 it was, there is nothing upon which I can hold there is any 
 liability in the Albert, and therefore he will rank against the 
 Medical. 
 
 His claim has been resisted, and he must have his costs. 
 
 Solicitors for Count D'Alte : Messrs. Beachcroft & Thompson. 
 Solicitors for Medical: Messrs. Kendall & Congreve. 
 
258 ALBERT ARBITRATION. 
 
 155 BUCHNEE'S CASE. 
 
 April 21. 
 Policy — Novation — Protest, 
 
 Novation consequent on amalgamation not established against a policy- 
 holder, who, notwithstanding the inducements held out by an amalgamation 
 circular, and by an agent, refused to have his policy exchanged or indorsed, 
 and, though paying his premiums to the transferee company, did so for the 
 purpose, as shewn by the facts proved, of keeping alive his claim against his 
 insuring company. 
 
 1 HIS was an application, on a Case stated by agreement, for the 
 decision of the Arbitrator on a claim of Mr. Lud/wig G. C. M. 
 Buchner, of Franhfort-on-ihe-Maine, to prove against the Medical 
 on a policy issued to him by the Medical, on his own life, without 
 profits, for 5000 florins, dated 14 August, 1846. 
 
 At the date of the policy, and up to 10 January, 1861, Mr. J. A. 
 Varrentrapp, of Frankfort, was the agent in Germany of the 
 Medical. In connexion with the amalgamation of the Medical 
 with the Albert a circular, dated October, 1860, was sent by Mr. 
 Varrentrapp to the German policy-holders, including Mr. Buchner, 
 which is the circular mentioned in the German Life Assurance 
 Company's Case above. 
 
 The last receipt for premium before the winding-up of the 
 Albert was as follows (as translated) : 
 
 Albert Life Assurance Company, 
 
 7, Waterloo Place, Pall Mall, London, 
 Pounded 1838. 
 General Agency, Berlin, 61a, Jdgerstrasse. 
 Premium Receipt, No. 26,161, on Policy No. 953,'G. 14. 
 The undersigned company hereby certifies that it has received the sum of 
 fi.167, 30kr. as the yearly premium on the above-named policy, on the life of 
 Herr L. O. C. M. Buchner, and declares the said policy to be renewed until the 
 first hour of 14 August, 1870, according to the conditions contained therein. 
 
 London and Berlin, 14th Aiigust, 1869. 
 Premium fi.167.30. Albert Life Assurance Company, 
 
 and in its name, 
 George Lewlne, \ W. Page Phillips, Director. 
 
 General Attorney. J Q. Paulet, Director. 
 
 Mr. Buchner had made an affidavit, which, after stating the 
 
LOED CAIENS'S DECISIONS. 259 
 
 receipt by him of the circular of October, 1860, proceeded as Buchkbh's 
 follows : 
 
 2. f absolutely refused, to send in my policy to be exchanged for a policy in the 
 Albert, or to be indorsed in accordance with the terms of the said circular, and I, 
 either in writing or verbally, objected to have anything to do with the Albert, and 
 insisted upon retaining my policy in and my rights against the Medical. I do 
 not recollect whether I sent in any written protest, but if I did I kept no copy 
 thereof. 
 
 3. I was then informed of the resolutions which the Medical had passed, by 
 which policy-holders in that society had the right to keep up their policy as against 
 such society by paying their premiums to the Albert, and I accordingly did avail 
 myself of that right. 
 
 4. J. A. Varrentrapp endeavoured by circulars and otherwise to induce me 
 to exchange my policy for one in the Albert, or to have an indorsement put 
 thereon at once, but I absolutely declined to recognise the Albert except as the 
 agent of the Medical for the purpose of receiving premiums in accordance with 
 the terms of the said resolutions. 
 
 Mr. Varrentrapp had made affidavits, and had been cross- 
 examined on interrogatories. Part of his deposition was as 
 follows : 
 
 Mr. Buchner refused to have his policy exchanged against one of the Albert 
 and Medical. He did so in' 1860 ; he did so afterwards. These refusals were 
 made to me orally. I do not believe that refusal was made in writing, but I can- 
 not state now, after twelve years, whether he may not have written. It is possible 
 that a note or a notice by myself, or by my clerks, may be found in or on the 
 cover containing the papers relating to this insurance case, which were delivered 
 by me to Mr. Levrine by order of the Albert. I know that he stated that he 
 could not be forced to accept the Albert (which called itself then the Albert and 
 Medical) instead of the Medical. He said the whole proceeding was illegal. I 
 can add that he was very excited about the transfer. Certain resolutions taken 
 at meetings of the Medical, and of which I annex the copy marked A, which was 
 sent to me, and which is signed by Mr. Singer, the secretary of the Medical, were 
 communicated to him. They were communicated orally, and in a translation of 
 which I can give the exact wording. These resolutions, or the translation 
 thereof, may have been read to him by one of my clerks or by myself. A copy. 
 of the resolutions, or of the translation thereof, may have been handed to him, 
 but I am not at all certain about this. As far as I can remember, no circular was 
 issued setting forth these resolutions. 
 
 Mr. BeddaU (Solicitor) was for the claimant. 
 
 Mr. G. 0. Morgan, Q.C., (Mr. Lemon with him) was for the 
 Medical. 
 
260 ALBERT ARBITRATION. 
 
 Buchneb's Lord Cairns : — The decision of this case must ultimately 
 
 ' turn upon what is the correct view to take of the facts. In order 
 
 to estimate the value of the parol evidence, it is necessary to bear 
 in mind some of the circumstances connected with the written 
 documents. 
 
 The position of the Medical, with regard to the Albert and to the 
 contract for amalgamation generally, was somewhat different from 
 those of the other companies which amalgamated with the Albert. 
 In the case of the Medical, resolutions were entered into, the fifth 
 of which said that policy-holders in the Medical should be invited 
 to substitute for their subsisting policies other policies to be issued 
 by the Albert. Then the sixth said that the persons entitled to 
 participate in the profits, who should accept such substituted 
 policies, or who should otherwise accept engagements by the 
 Albert, instead of preserving the rights that would belong to 
 them as policy-holders in the Medical, should be entitled to share 
 in subsequent bonuses, and so on. And then the seventh resolu- 
 tion said: 
 
 • The policy-holders in the Medical who shall decline to accept such substituted 
 policies shall be entitled to keep on foot their present policies by paying the 
 premiums thereon to this company [the Albert], who shall undertake the liabili- 
 ties of the Medical in respect of such policies. 
 
 On the construction of those resolutions, and especially the 
 seventh, I have no doubt ; and it is the construction I have always, 
 either in terms or in substance, put on them. I have no doubt 
 that the seventh resolution is a provision for keeping alive claims 
 as against the Medical on policies the holders of which should 
 decline to accept Albert policies. I cannot adopt the construction 
 which Mr. Morgan desired to put on it, that the effect was that, 
 , after declining to accept such substituted policies, the persons who 
 
 so declined should pay their premiums to the Albert, and thereby 
 do nothing more, and get nothing more, than drive the Albert to 
 undertake the liabilities of the Medical. The premiums are to be 
 paid to the Albert, and it is given as an explanation, that they 
 undertake the liabilities of the Medical. The premiums are to be 
 paid to them for that reason ; but the persons who pay the 
 premiums, having declined to accept Albert policies, are by so 
 paying to keep alive their right, without more, against the Medical. 
 
LORD CAIRNS'S DECISIONS. 261 
 
 Accordingly, I find the German circular, after speaking of the Buchnbb's 
 
 resolutions, and stating that the business of both companies was ' 
 
 to be carried on under the name of the Albert and Medical, 
 states : 
 
 These united companies enter for the future into all the rights and obligations 
 of the Medical Invalid and General Life Assurance. According to the agree- 
 ment, the accumulated funds of our society are to be invested separately and 
 securely to meet its own liabilities, and the policy-holders will be offered a great 
 additional security in the combined income of the united societies. 
 
 That I understand to be a statement that the accumulated 
 funds of the Medical would be invested separately and securely to 
 meet its own liabilities, that is to say, such of its liabilities as con- 
 tinued to be its own, not to meet liabilities which would, by 
 acceptance of substituted policies or by indorsement, become lia- 
 bilities of the Albert, but to meet those liabilities of its own which 
 would continue to be its own. We know that in point of fact that- 
 was done, and that the Medical fund was created in the way indi- 
 cated by this circular. 
 
 That being the contract between the Albert and the Medical, 
 and that being the circular issued to the German policy-holders, 
 it appears that it was a great object with the companies in London, 
 both the Albert and the Medical, to induce the German policy- 
 holders, among others, to comply with the invitation to substitute 
 for their subsisting policies in the Medical other policies to be 
 issued by the Albert. And in order to effect that, a very judicious 
 course was taken. Mr. Singer, by letter of 25 October, 1860, to 
 Mr. Varrentrapp, after stating the different particulars about the 
 circulars to be issued to policy-holders, says : 
 
 The necessary expense of exchanging the policies will be borne by the 
 company [the Albert] ; and as there will be considerably increased labour in 
 carrying this exchange into effect, it is proposed that you shall deduct a further 
 commission of 2J per cent, on the next annual premiums of all exchanged 
 policies. 
 
 Therefore we start with this, that this was an exchange of 
 policies contemplated and desired by the original resolutions ; and 
 the policy-holders were not left to drift, either at their own option 
 or by chance, into exchanging or not exchanging, as the accident 
 might be; but Mr. Varrentrapp, the head of the business in 
 
 v 
 
262 ALBEET ARBITRATION. 
 
 Boohner's Germany, himself acquainted personally, more or less, with all 
 
 ' the policy-holders, is supplied with a strong inducement to have 
 
 the business done which ought to be done, to have exchanges 
 actually made ; he is to have a further commission of 2 £ per cent. 
 on the next premiums of all exchanged policies. We have, then, 
 this motive supplied to Mr. Varrentrapp to get the exchanges, 
 made, and we have Mr. Varrentrapp put in a position which makes 
 it natural that he will have a distinct recollection of his efforts to 
 obtain the exchanges, how far those efforts were successful, and 
 how far they were unsuccessful. That they were successful to a 
 considerable extent is evident. Mr. Varrentrapp himself exchanged' 
 three policies in the Medieal for policies in the Albert. Up to 
 that point the matter stands entirely free from doubt or conflict 
 of evidence. 
 
 But the written evidence does not terminate there, because we 
 find that in the letters which are in evidence there was clearly 
 some demur on the part of the German policy-holders to exchange. 
 Mr. Varrentrapp appears to have anticipated even more than ! 
 actually occurred, and to have written some letters, in which he 
 took a gloomy view, to Mr; Singer. Mr. Singer writes to him on 
 18 December, 1860 : 
 
 I am glad to perceive that you do not anticipate much trouble with the 
 majority of your policy-holders in the matter of exchange. A few importunate 
 and crotchety individuals will naturally arise among so many, and for their 
 information in general, and that of the Lubeek Society in particular, I inclose 
 you extracts from the minutes of the special meetings of shareholders, by which 
 they can perceive what liberal and ample provisions have been made for the 
 policy-holders, who, so far as their interests are concerned, have nothing what- 
 ever to complain of. By exchanging their policies they have, in addition to the 
 minor benefit of being allowed to go within thirty-three degrees of the equator 
 without extra premium, a declaration of bonus in 1861, 
 
 and so on. At this time it was anticipated in England, in conse- 
 quence of the general remarks of Mr. Varrentrapp, that there 
 i would be some persons who would make difficulties, who are called 
 
 importunate and crotchety individuals. Lower down Mr. Singer 
 
 There is not any absolute necessity, as you will perceive on reference to the 
 abstract of resolutions sent you, that all the policy-holders should exchange' 
 their policies ; this is only suggested and pressed upon, them for their benefit ; if 
 
LOED CAIENS'S DECISIONS. 263 
 
 they do not ohoose to do so, they are at liberty to keep their old policies in force ; Btjohneb's 
 but in no instance can any holder expect to have the return of the premiums Case. 
 paid by them, as the contracts entered into will be punctually and faithfully ful- 
 filled. The amalgamation' of the business of this society with the Albert has 
 been effected in strict accordance with our deed of settlement, and under the 
 advice of some of the best legal authorities in the land, so that everything has 
 been done in a strictly legal and straightforward manner. 
 
 He appeals, therefore, in justification of the proceedipg, to the 
 deed, and says that if persons did not choose to corne into the 
 arrangement and exchange their policies, they might keep their 
 old policies in force, and in those cases the engagements would be 
 met in a straightforward and honourable manner. I dwell upon 
 tins, because these matters are high and dry above all risk of 
 controversy about parol evidence. We have, therefore, this im- 
 portant fact, that there were German policy-holders giving trouble 
 and refusing to exchange ; and it was considered an object to have 
 the exchange made as largely as possible. It was contemplated 
 that some persons might persist in their refusal and retain their 
 old policies, and that was looked upon as one of the events 
 contemplated on the amalgamation of the two companies. 
 
 In that state of things I have to deal with Mr. Buchner's case. 
 So far as he is concerned, his testimony is this, that he got the 
 circular informing him of the arrangement, but that he absolutely 
 refused to send in his policy to be exchanged or to be indorsed, 
 and that he objected to have anything to do with the Albert, and 
 insisted on retaining his policy in and his rights against the 
 Medical. It was not considered desirable to cross-examine Mr. 
 Buchner, and his testimony, as I read it, states, subject to anything 
 that may throw light upon it, that which would establish the 
 matter of fact, as he wishes to establish it, that he actually refused 
 to have either an exchange of the policy or an indorsement. There 
 are admitted facts, which corroborate what Mr. Buchner says. 
 He was well known to Mr. Varrentrapp ; he was a townsman of 
 Mr. Varrentrapp, at Frankfort. This matter was well known and 
 canvassed among those who were resident in Frankfort, who took 
 an interest in these companies. It is not suggested that Mr. 
 Varrentrapp and Mr. Buchner had not communications on the 
 subject ; it is almost impossible to conceive that they could have 
 failed to have had communications on the subject. It was Mr. 
 
264 ALBERT ARBITRATION. 
 
 Buchnbs'b Varrentrapp's interest, and by what he did in other cases it ap- 
 
 ' pears that he knew and appreciated his interest, to get Mr. Buehner 
 
 to exchange his policy, because he would get his further com- 
 mission on the premium. They had communications. The 
 result of the communications must have been either that Mr. 
 Buehner professed himself willing or that he professed himself 
 unwilling. If he professed himself willing, why did not an ex- 
 change take place ? It took place in other cases. It is incredible 
 to suppose if he was willing to exchange that the exchange should 
 not have taken place. I should say that, stopping there, there is . 
 a strong presumption that, the exchange not having taken place 
 de facto, it was because Mr. Buehner was unwilling that the ex- 
 change should take place at all, and he could have been so unwill- 
 ing for one reason only, namely, that he did not desire to be a 
 policy-holder in the Albert. 
 
 Therefore, resting on the facts in the case which are beyond 
 controversy, and the affidavit of Mr. Buehner, I should say the 
 evidence went a long way to shew that Mr. Buchner's statement 
 is correct. Then I come to Mr. Varrentrapp. I do not know 
 that Mr. Varrentrapp has any interest in stating the case other- 
 wise than as it actually occurred. I cannot find any suggestion 
 against his integrity. I have read the interrogatories and the 
 answers. I have no doubt that an equity draftsman might except 
 to the answers as insufficient, but I cannot say that I see any trace 
 of a desire on the part of Mr. Varrentrapp to shrink from answer- 
 ing the questions as far as they were understood. I do not know 
 that the answers carry the matter very much further than the 
 affidavits did. Upon the affidavits, it is clear, unless you attribute 
 wilful falsehood to Mr. Varrentrapp, that the definite impression 
 on his mind, which he asserts under the sanction of an oath as a 
 witness in the case, is that Mr. Buehner not only did not exchange, 
 but on being asked declined positively and absolutely to do so, 
 and that he was made aware of the resolution to which I have 
 referred, which enabled him and any other policy-holders who so 
 declined to exchange, to preserve their rights against the Medical. 
 I take that to be the result of Mr. Varrentrapp' s cross-examination 
 as well as of his affidavits, and I do not see why I should discredit 
 it. I have said I thought the case was carried a long way before 
 
LORD CAIBNS'S DECISIONS. 265 
 
 I came to Mr. Varrentrapp's testimony, and I think that his testi- Buohneb'b 
 
 mony is therefore corroborated greatly by other parts of the ' 
 
 evidence in the case. 
 
 I am, therefore, haying to form a judgment on the question of 
 fact, bound to come to the conclusion that Mr. Buchner is a policy- 
 holder in the Medical, who did decline to accept a substituted 
 policy in the Albert, and who kept alive his claim in the Medical, 
 knowingly and purposely paying for that end his premiums to the 
 Albert. I therefore think he must rank against the Medical. 
 
 Solicitor for Mr. Buchner : Mr. Beddall. 
 
 Solicitors for Medical : Messrs. Kendall & Oongreve. 
 
266 ALBERT ARBITRATION. 
 
 1873 CLEGG'S CASE. 
 
 July 12. 
 Policy — Novation — Inability to read. 
 
 Novation consequent on amalgamation not established against a policy- 
 holder, in the following circumstances : She did not receive an amalgama- 
 tion circular; she paid the premiums through the same agent before and 
 after the amalgamation ; being illiterate, she was unable to read the receipts, 
 and they were not read to her by the agent ; she denied all knowledge of a 
 change in her insuring company. 
 
 1 HIS was an application for the decision of the Arbitrator on 
 a claim of Mrs. K. Clegg, widow, to prove against the Western 
 on a policy issued to her by the Western, dated 7 October, 
 1856, No. 1989, on the life of Joseph EUl, for £400, without 
 profits. 
 
 Mrs. Clegg lived in Oldham. She had a son, Mr. Charles Clegg, 
 a solicitor in practice there, and agent there for the Western. The 
 policy was effected through him as such agent. The renewal 
 notices were sent to him as such agent. He received the pre- 
 miums from his mother, and remitted them to the Western, 
 deducting his commission. 
 
 In 1865 the Western was amalgamated with the Albert. The 
 amalgamation circular of 14 July, 1865, was sent by the Western 
 to Mr. Clegg, but no notice of the amalgamation was given to his 
 mother. The first premium receipt after the amalgamation was 
 a Western receipt, with the following words stamped on it : 
 
 Incorporated with the 
 
 Albert Life Assurance Company, 
 Waterloo Place, London. 
 
 After the amalgamation, Mr. Clegg remitted the premiums in 
 pursuance of the directions in the renewal notices, which continued 
 to come to him, to the manager of the Manchester branch of the 
 Albert. In 1866, and subsequently, the forms of receipts were as 
 follows : 
 
Receipt, No. 
 W. Policy, No. 1989. 
 Sum assured, £100 
 Life, J. Bill. 
 Premium £1 2s. lid. 
 Interest on £ 
 For 3 months 
 Prom 17 Oct. 1866 
 Manchester 
 Branch Agent. 
 
 LORD CAIRNS'S DECISIONS. 267 
 
 f 
 
 Albert Life Assurance Company, Clegg's Case. 
 
 7, Waterloo Place, Pall Mall, 
 
 London, S.W. 
 Established 1838. 
 Received this 14th day of November, 1866, the 
 premium for the renewal of policy mentioned in the 
 margin hereof, the amount of which premium and 
 the period for which it is received are also mentioned 
 in the margin. 
 
 S. P. Bidder, 
 
 Manager, 
 Per J. Barlow. 
 
 All the receipts were handed by Mr. Clegg to his mother, and 
 were produced from her custody, but it was proved that she was 
 illiterate and a markswoman, and unable to read the receipts, and 
 that they were not read to her by Mr. Clegg, she being merely 
 told by him that they were the receipts for her premiums. 
 
 Mr. Clegg and his mother were examined before the Arbitrator. 
 Mr. Clegg proved that she could not read ; that he did not com- 
 municate to her the amalgamation circular ; that he never pointed 
 out to her any difference in the receipts ; and that he never told 
 her there was a change in the office before the winding-up of the 
 Albert. Mrs. Clegg said she could not read at all. She knew the 
 Western was the name of the office. She never heard anything of 
 the Albert until her son asked her for the receipts and the papers. 
 She had the policy locked up in her box. She never heard of the 
 change in the company till then. 
 
 Mr. Clegg (Solicitor) was for the claimant. 
 
 Mr. Cracknall was for the Western. 
 
 Mr. Clegg submitted that there was no novation. 
 
 Mr. Craeknall: — The case is governed by Lancaster's Case 
 (No. 2) above. Knowledge of the change shewn on the face of 
 the documents must be imputed. Mr. Clegg must be taken to have 
 been his mother's agent. She does not profess to have acted for 
 
268 ALBERT ARBITRATION. 
 
 Clegg's Case, herself. The difficulty is, that she denies that she could read the 
 documents which she had kept. It is a question of fact whether 
 her inability to read exempts her from the consequences of what 
 she had done. 
 
 A reply was not called for. 
 
 Lord Caiens : — I do not think I can impute to this claimant 
 the intention of abandoning the security of the Western and 
 accepting that of the Albert. The evidence is sufficient to bring me 
 to the conclusion that she had not the slightest knowledge of the 
 amalgamation. There is nothing to shew that the amalgamation 
 circular came either to her or to any one acting for her as her 
 agent, in the ordinary sense of the term. The liquidators, if they 
 rely on the receipts, must in the first place shew that she, or some 
 agent competent to act for her and bind her, had a knowledge of 
 the circumstances. 
 
 Her claim must rank against the Western, and she must have 
 her costs. 
 
 Solicitor for claimant : Mr. Clegg. 
 Solicitor for Western : Mr. Manning. 
 
APPENDIX. 
 
 A. 
 
 ALBERT ARBITRATION ACT, 1871. 
 
 34 & 35 Vict. c. xxxi. 
 
 An Act to effect a Settlement of the Affairs of The Albert Life 
 Assurance Company by Arbitration ; and for other Purposes. 
 
 [25th May, 1871. J 
 
 Whereas the Albert Life Assurance Company, in this Act called the Albert 
 Company, has a nominal capital of £500,000, divided into 25,000 shares of £20 
 each, on which sums varying from £3 to £20 per share have been paid up : 
 
 And whereas, by an order of His Honour the Vice-Chancellor James, made on 
 the 17th day of September, 1869, the Albert Company was ordered to be wound 
 up by the Court of Chancery : 
 
 And whereas the Albert Company, which was originally established on the 
 1st day of July, 1839, under the title of the Freemasons' and General Life 
 Assurance Company, at divers times purchased on divers terms the assets and 
 businesses (subject to the liabilities on policies, annuities, endowments, and other- 
 wise) of the following companies ; that is to say, 
 
 1. The Western Life Assurance Society, in this Act called the Western 
 
 Company ; 
 
 2. The Bank of London and National Provincial Insurance Association, in 
 
 this Act called the Bank of London Company ; 
 
 3. The Family Endowment Life Assurance and Annuity Society, in this 
 
 Act called the Family Endowment Society ; 
 
 4. The Medical, Invalid, and General Life Assurance Society, in this Act 
 
 called the Medical and Invalid Company ; 
 
 5. The National Guardian Assurance Society, in this Act called the National 
 
 Guardian Company ; 
 
 6. The Times Life Assurance and Guarantee Company, in this Act called the 
 
 Times Company ; 
 
 7. The Beacon Life and Fire Assurance Company, in this Act called the 
 
 Beacon Company ; 
 
 B 
 
ii APPENDIX A. 
 
 8. The Kent Mutual Assurance Society, in this Act called the Kent Com- 
 
 pany ; and 
 
 9. The Indian Laudable Mutual Life Assurance Society, in this Act called 
 
 the Indian Laudable Company ; 
 To each of which said selling companies the Albert Company, as one of the said 
 terms gave a general indemnity against claims on policies, annuities, and endow- 
 ments current at the time of the purchase : 
 
 And whereas the said Western Company had previous to the sale of its assets 
 and business to the Albert Company purchased the business and assets, subject to 
 the liabilities and with similar indemnities as aforesaid, of the following insurance 
 companies ; that is to say, the Metropolitan Counties and General Life Assurance, 
 Annuity, Loan, and Investment Society (which included the St. George Assurance 
 Company and the London and Continental Assurance Company) and the Man- 
 chester and London Life Assurance Association : 
 
 And whereas the said Bant of London Company had previous to the sale of its 
 assets and business to the Albert Company purchased the business and assets, 
 subject to the liabilities and with similar indemnities as aforesaid, of the following 
 insurance companies; that is to say, the National Provincial Life Assurance 
 Society, the Falcon Life Assurance Society, and Merchants' and Tradesman's 
 Mutual Life Assurance Society, and the Anchor Assurance Company : 
 
 And whereas the Family Endowment Company had previous to the sale of its 
 assets and liabilities to the Albert Company purchased the assets and business, 
 subject to the liabilities and with a similar indemnity as aforesaid, of the Empire 
 Assurance Company : 
 
 And whereas the said Medical and Invalid Company had previous to the sale of 
 its assets and business to the Albert Company purchased the business and assets, 
 subject to the liabilities and with a similar indemnity as aforesaid, of the New 
 Oriental Life Assurance Company : 
 
 And whereas the result of the said sales was that the Albert Company at the 
 date of its winding-up was and still is liable upon a large number of policies, 
 annuities, and endowments, a portion of which had been originally issued or con- 
 tracted for by each of the said selling insurance companies above named, and that 
 each of the said selling insurance companies was and may be liable upon some 
 portion of the said policies, annuities, and endowments : 
 
 And whereas all the said companies hereinbefore mentioned are in process of 
 liquidation by the Court of Chancery, except the National Guardian Company, 
 the Times Company, the Beacon Company, the Indian Laudable Company, the 
 St. George Assurance Company, the London and Continental Assurance Company, 
 the Merchant's and Tradesman's Mutual Life Assurance Society, the Empire 
 Assurance Company, and the New Oriental Life Assurance Company : 
 
 And whereas the said Albert Company is wholly insolvent, and of the said 
 other companies some are believed to be solvent and some insolvent, and some 
 portion of the said claims on policies, annuities, and endowments may fall upon 
 each of the said selling insurance companies : 
 
 And whereas, by reason of the indemnities aforesaid, such claims falling on the 
 said selling companies respectively will give rise to claims over by the said selling 
 companies respectively against the Albert Company : 
 
 And whereas, in these circumstances, divers disputes and questions have arisen 
 
ALBERT ARBITRATION ACT. iii 
 
 between the Albert Company and the said other companies and the holders of the 
 said policies,- annuities, and endowments : 
 
 And whereas no call has yet been made in the said several liquidations, except 
 a call of £1 per share in the liquidation of the Western Life Assurance Company : 
 
 And whereas the policyholders, annuitants, endowment holders, and other 
 creditors of the Albert and said other companies, except such of them as have 
 claims on such of the said companies as are solvent, are in danger of losing a 
 large portion of their claims on account of the insolvency of the Albert Company 
 and of such of the said other companies as are insolvent, and the risks and costs 
 of the liquidation of the Albert Company and of the said other companies : 
 
 And whereas it may be expedient that the liabilities of the Albert Company 
 and of the said other companies, or some of them, on policies, annuities, and 
 endowments, should not be disposed of as immediate claims in the ordinary course 
 of liquidation, but should be met, subject to any necessary deductions, at maturity, 
 and for this purpose that the insurance business of the Albert Company pending 
 at the date of its liquidation should be carried on to its natural termination : 
 
 And whereas in the ordinary course of liquidation it would be impossible to 
 obtain the assent of the creditors of the said several companies to any scheme of 
 reconstruction or arrangement unless all the said companies were in liquidation, 
 and all the creditors thereof respectively had finally proved their debts : 
 
 And whereas it is indispensable for the purpose of settling the aforesaid affairs 
 and reconstructing the Albert Company, or arranging or finally winding up its 
 affairs, that discretion should be placed in an arbitrator specially constituted for 
 the purpose, to determine the rights and settle the affairs of the said companies 
 and their creditors, and it is expedient to give power to such arbitrator, if he 
 shall think fit, to settle a scheme for the reconstruction of the Albert Company, 
 and to provide so far as possible for the satisfaction of its pending insurance 
 liabilities in the natural course of maturing, and for the settlement of all matters 
 ami questions relating to the affairs of the said companies respectively, as fully 
 and effectually as could be done by Act of Parliament : 
 
 And whereas the several purposes aforesaid cannot be effected without the 
 authority of Parliament : 
 
 May it therefore please your Majesty that it may be enacted, and be it enacted 
 by the Queen's most excellent Majesty, by and with the advice and consent of the 
 Lords Spiritual and Temporal and Commons in this present Parliament assembled, 
 and by the authority of the same as follows ; (that is to say,) 
 
 1. This Act may be cited for all purposes as The Albert Life Assurance 
 Company Arbitration Act, 1871. 
 
 2. In this Act — 
 
 "The Albert Company " means the Albert Life Assurance Company : 
 "The scheduled companies" means the several companies, associations, 
 
 societies, or partnerships named in the schedule to this Act, whether 
 
 legally constituted companies or not : 
 " The absorbed companies " means the several companies (if any) which 
 
 have from time to time been directly or indirectly absorbed into or 
 
 amalgamated or united with any of the scheduled companies : 
 "Creditor" includes policyholder, annuitant, or endowment holder, anl a, 
 
 B 2 
 
iv APPENDIX A. 
 
 person claiming or alleged to be a creditor as a policyholder, annuitant, 
 endowment holder, or otherwise : 
 
 " Shareholder " includes member, proprietor, or partner, and a person claim- 
 ing or alleged to be a shareholder, member, proprietor, or partner of or 
 in a company, association, society, or partnership : 
 
 " Contributory " includes a person claiming or alleged to be a contributory : 
 
 " Creditor," " debtor," " shareholder," and " contributory " respectively in- 
 clude the heirs, executors, administrators, successors, and assigns of a 
 creditor, debtor, shareholder, or contributory : 
 
 " Person " includes corporation or body : 
 
 " Liability " includes policy, annuity, or endowment, and any liability, present, 
 future, liquidated, contingent, or other, on or in respect of a policy, 
 annuity, or endowment. 
 
 3. For the purpose of determining the matters by this Act referred to arbitra- 
 tion, the Eight Honourable Hugh MacCalmont Baron Cairns is hereby appointed 
 the arbitrator. 
 
 4. The matters by this Act referred to arbitration are the following : 
 
 (a.) The relative rights, liabilities, and interests of the several scheduled and 
 absorbed companies on the one hand, and of their respective creditors, 
 debtors, shareholders, and contributories on the other hand : 
 
 (6.) The relative rights, liabilities, and interests of the several scheduled and 
 absorbed companies as between each other : 
 
 (c.) The claims of the several scheduled and absorbed companies, or their 
 respective creditors, shareholders, and contributories, against any person, 
 and of any person against those several companies in respect of any 
 payment made or anything done or omitted by or on behalf of any of 
 those companies, or by any person in relation to the affairs of any of 
 those companies : 
 
 (d.) All matters in question as between all parties, in all liquidations of any 
 of the several scheduled and absorbed companies, and in all suits, actions, 
 and proceedings relating to the affairs of those several companies, and 
 every such liquidation, suit, action, and proceeding : 
 
 (e.) Any claims and matters in question between any present or former share- 
 holder of any of the several scheduled and absorbed companies, and any 
 trustees, directors, or officers of such companies respectively, in respect 
 of any misfeasance, nonfeasance, misappropriation, or otherwise : 
 
 (/.) Generally the winding-up and final settlement of the affairs of the several 
 scheduled and absorbed companies., 
 
 5. The arbitrator may, if he thinks fit, settle and award a scheme or schemes 
 for the arrangement, compromise, and final settlement of all or any part or parts 
 of the affairs of the several scheduled and absorbed companies, or any or either of 
 them, and of all or any of the matters by this Act referred to arbitration, and any 
 such scheme or schemes may provide for the matters aforesaid, or any of thein, in 
 either of the forms following : 
 
 (as.) In the form of a reconstruction or reconstitution of the Albert Company, 
 with or without modification, or the incorporation, by registration or 
 
ALBERT ARBITRATION ACT. v 
 
 otherwise, of that company, or the constitution of another company, 
 with, in either of those cases, provisions for the continuance and conduct 
 of all or any branch or part of the insurance and other business of the 
 Albert Company, current at the commencement of its liquidation, to 
 the natural termination of that business, or otherwise ; 
 (6.) In the form of a transfer, total or partial, of that business to another 
 company or other companies existing or to be constituted under the 
 directions of any scheme or schemes, or otherwise ; 
 or in any such other form or manner as the arbitrator, in his absolute and 
 unfettered discretion, thinks expedient, and any of such forms adopted may be 
 with or without the payment of surrender values, in all cases in which the arbi- 
 trator thinks the same equitable or expedient. 
 
 6. The arbitrator shall have power for the purposes of any scheme, or any other 
 purpose of the arbitration, to do all or any of the following things ; namely, 
 
 (1.) To value and estimate any liabilities or claims, whether present, future, 
 
 liquidated, contingent, or other : 
 (2.) To direct the windiDg-up of any of the scheduled or absorbed companies 
 
 not in liquidation, in any case in which the Court of Chancery might, in 
 
 the opinion of the arbitrator, order the same, or in any such case to deal 
 
 with them, or any of them, as if they were in liquidation : 
 (3.) To direct such contributions and payments to be made, and in such manner 
 
 and by such persons or classes of persons and companies as he may think 
 
 equitable and expedient : 
 (4.) To make such deductions, present or future, fixed or contingent, from 
 
 liabilities or claims, and establish such funds, securities, guarantees, 
 
 trusts, and powers, as appear to him expedient and equitable : 
 (5.) To take the advice and opinion of actuaries, surveyors, and other experts, 
 
 and to adopt and act on any such advice or opinion, if and so far as he 
 
 may think fit. 
 
 7. All trustees, executors, and administrators, trustees and assignees in bank- 
 ruptcy, trustees and inspectors under deeds of arrangement or composition, 
 liquidators and corporations holding or being entitled to or interested in (on any 
 trust or otherwise) any policy, annuity, or endowment granted by any of the 
 scheduled or absorbed companies, and all guardians and committees of infants and 
 lunatics holding or being entitled to or interested in any such policy, annuity, or 
 endowment, may, for the purposes of any scheme and any other purpose of the 
 arbitration, exercise all powers of consenting, voting, appointing proxies, accepting 
 substituted policies, annuities, and endowments, and submitting to the reduction 
 of the amount of policies, annuities, and endowments, and generally all powers 
 and discretions that would have been exercisable by them for the purposes of any 
 scheme or any other purpose of the arbitration if they had been individuals en- 
 titled in their own right and not under disability, and they shall be by virtue of 
 this Act indemnified in respect thereof; and every substituted or reduced policy, 
 annuity, or endowment shall be by virtue of this Act subject and liable to the 
 same trusts and charges as affect the policy, annuity, or endowment for or from 
 which the same is substituted or reduced, and the same shall by virtue of this 
 Act vest and pass so as to give effect to and not revoke any settlement or testa- 
 
vi APPENDIX A. 
 
 mentary or other disposition of or affecting the policy, annuity, or endowment for or 
 from which the same is substituted or reduced ; and the arbitrator may give such 
 directions as he thinks just and expedient for the better execution of this section. 
 
 8. All trustees, executors, and administrators, trustees and assignees in bank- 
 ruptcy, trustees and inspectors under deeds of arrangement or composition, liqui- 
 dators and corporations holding or being entitled to or interested in any share or 
 interest in the capital of the Albert Company, and all guardians and committees 
 of infants and lunatics holding or being entitled to or interested in any such share 
 or interest, shall accept any share or interest allotted to them in lieu thereof under 
 any scheme under this Act, or otherwise by direction of the arbitrator ; and any 
 share or interest so allotted shall, by virtue of this Act, vest and pass so as to 
 give effect to and not revoke any settlement or testamentary or other disposition 
 of or affecting the share or interest in lieu of which it is allotted ; and the arbitra- 
 tor may give such directions as he thinks just and expedient for the better execu- 
 tion of this section. 
 
 9. The arbitrator shall have power for the purposes of any scheme, or any other 
 purpose of the arbitration, to get in, or direct the getting in, and to apply or dis- 
 tribute, or direct the application or distribution of, or to otherwise deal with all 
 or any part of the assets of any of the several scheduled or absorbed companies, 
 including, if he shall think the same to be just, any guarantee fund, indemnity 
 fund, or other special fund belonging to, held in trust for, or established for any 
 purpose of or relating to any of those companies ; and all matters in question as 
 between all parties to any suit pending at the passing of this Act relating to any 
 such fund as aforesaid, and every such suit, shall be comprised among the matters 
 by this Act referred to arbitration. 
 
 10. With respect to the authority and jurisdiction of the arbitrator generally, 
 the following provisions shall have effect ; (namely,) 
 
 (1.) The arbitrator, in addition to the powers and authorities which an arbitra- 
 tor appointed by consent of parties, or by order of a Court or of a Judge, 
 has at common law or by statute or otherwise, and in addition to the 
 powers and authorities expressly given to him by this Act, shall have 
 all the powers, authorities, and jurisdiction vested in or exercisable by 
 the Court of Chancery, or a Judge thereof in Court or at Chambers, in 
 the liquidations of any of the scheduled companies pending at the pass- 
 ing of this Act, and all such powers, authorities, and jurisdiction as 
 would have been vested in or exercisable by the Court of Chancery, or a 
 Judge thereof in Court or at Chambers, if all the scheduled and absorbed 
 companies had been in liquidation in the Court of Chancery at the 
 passing of this Act : 
 
 (2.) The arbitrator may make all such orders and do all such acts and things 
 as the Court of Chancery, or a Judge thereof in Court or at Chambers, 
 might have made or done in any such liquidation as aforesaid : 
 
 (3.) Every order, act, and thing so made and done by the arbitrator shall have 
 to all intents the like effect as if it had been made or done by the Court 
 of Chancery, or a Judge thereof in Court or at Chambers, and shall be 
 executed and enforced by all sheriffs and other officers and persons 
 accordingly : 
 
ALBERT ARBITRATION ACT. vii 
 
 (4.) The arbitrator shall have the like power of appointing an official liquidator 
 or official liquidators for the purposes of any such liquidation as afore- 
 said as the Court of Chancery has or would have; and an official 
 liquidator appointed by the arbitrator shall have the like powers and 
 authorities, subject to the like restrictions, as an official liquidator 
 appointed by the Court of Chancery : 
 
 (5.) For the purposes of this Act, Parts IV. and IX. of the Companies Act, 
 1862 (relating respectively to winding up and to unregistered com- 
 panies), and all provisions of that Act relative thereto, and all enact- 
 ments amending those parts and provisions, shall have effect as if 
 throughout those parts, provisions, and enactments the arbitrator were 
 mentioned instead of the Court of Chancery or a Judge thereof: 
 
 (6.) The jurisdiction of the arbitrator shall extend to India, and all other parts 
 
 of Her Majesty's dominions, and the arbitrator shall have all the powers, 
 
 , authorities, and jurisdiction vested in or exercisable by any Court in 
 
 India, or in any other part of Her Majesty's dominions, in respect of 
 
 the affairs of any of the scheduled and absorbed companies, or of any of 
 
 the matters by this Act referred to arbitration ; 
 
 and nothing in this Act shall be construed as restricting the generality of this 
 
 section. 
 
 11. The arbitrator may settle and determine the matters by this Act referred 
 to arbitration, not only in accordance with the legal or equitable rights of the 
 parties as recognised in the Courts of Law or Equity, but upon such terms and in 
 such manner in all respects as he in his absolute and unfettered discretion may 
 think most fit, equitable, and expedient, and as fully and effectually as could be 
 done by Act of Parliament. 
 
 12. Any liquidation, suit, action, or proceeding which at the passing of this 
 Act is pending in or under appeal from any Court of Law or Equity in respect of 
 any of the matters by this Act referred to arbitration shall not be carried on after 
 the passing of this Act otherwise than before the arbitrator, except with the 
 leave of the arbitrator, and subject to such terms and conditions as he may 
 impose. 
 
 13. No suit, action, or proceeding shall, after the passing of this Act, and 
 pending the arbitration, be instituted, brought, or taken in respect of any of the 
 matters by this Act referred to arbitration, except by the direction of the arbi- 
 trator, and subject to such terms and conditions as he may impose. 
 
 14. All money and securities under the control of the Court of Chancery in 
 any of the liquidations of any of the scheduled companies pending at the pass- 
 ing of this Act, or of any of the liquidators therein, and all books, papers, and 
 documents relating to any of those liquidations in the possession, custody, or 
 control of any of the liquidators therein, shall on the passing of this Act be paid 
 and delivered up to the arbitrator, or as he directs. 
 
 15. The liquidators of such of the several scheduled companies as are in liqui- 
 dation shall take such steps and proceedings and do all such things, in the Court 
 of Chancery or elsewhere, with reference to the matters by this Act referred to 
 arbitration, as the arbitrator directs. 
 
viii APPENDIX A. 
 
 16. The arbitrator may allow or direct any proceeding pending at the passing 
 of this Act to proceed to judgment or such other stage as he may think fit, and 
 may direct any new proceeding to be taken and to proceed to judgment or such 
 other stage as he may think fit. 
 
 17. The arbitrator may in Ms discretion adopt any judgment, verdict, decree, 
 order, or certificate made in any proceeding pending at the passing of this Act, or 
 directed or allowed by him to be taken, and may adopt and avail himself of any 
 such proceeding, and of any evidence taken therein, as he may think fit, and 
 may make any award or order in pursuance either wholly or partially of any 
 such judgment, verdict, decree, order, certificate, or proceeding, or may award or 
 order that any proceeding be carried on as if this Act had not been passed, and 
 may make his final award without awaiting the termination of the proceeding. 
 
 18. The arbitrator may make and vary such general rules, regulations, and 
 orders as he may from time to time think fit as to parties, mode of procedure, 
 notices, evidence, or costs. 
 
 19. The arbitrator may from time to time make any certificate, award, order, 
 or other instrument touching any one or more of the questions, matters, or things 
 before him, and may by any subsequent certificate, award, order, or other in- 
 strument supplement or vary any previous certificate, award, order, or other 
 instrument, and shall, within one year after the passing of this Act, or within 
 such extended period as he shall by writing under his hand from time to time 
 appoint for that purpose, make a final award for the settlement of all matters by 
 this Act referred to arbitration. 
 
 20. All awards, orders, certificates, or other instruments made by or proceed- 
 ing from the arbitrator shall be sufficiently authenticated if under his hand, and 
 may be in writing or print, or partly in writing and partly in print, and all Courts 
 shall take judicial notice of his signature ; and any notice issued by the arbi- 
 trator, or any award, order, certificate, or other instrument made by or proceeding 
 from him, shall, if he so directs, be published in the London Gazette or in any 
 other official gazette or like publication published in any part of Her Majesty's 
 dominions. 
 
 21. All awards, orders, certificates, or other instruments made by or proceeding 
 from the arbitrator shall be binding and conclusive on all parties to all intents 
 and purposes whatsoever, and shall not be removed or removable by certiorari, or 
 by other writ or process into any of Her Majesty's Courts of Law or Equity, and 
 the proceedings or acts of the arbitrator shall not be liable to be interfered with 
 by any Court of Law or Equity by way of mandamus, prohibition, injunction, or 
 
 'otherwise, and no such award, order, certificate, or other instrument shall be set 
 aside for any irregularity or informality, or by reason of any matter referred 
 being left undecided, and no such award, order, certificate, or other instrument 
 shall be subject to review or appeal, or be liable to be questioned on any ground 
 before or after the making of the final award in any Court of- Law or Equity, or 
 elsewhere, by any proceeding against any of the scheduled or absorbed companies, 
 or against the arbitrator or otherwise. 
 
 22. Applications to the arbitrator shall be made in such manner and form, and 
 shall be heard and disposed of on the attendance of or notice to such parties or 
 
ALBEET AEBITEATION ACT. ix 
 
 persons chosen as representatives of such parties on such written or other state- 
 ments and on such evidence, as the arbitrator, by general regulations or other- 
 wise, may from time to time direct, and the costs of any such applications, and 
 of all proceedings before the arbitrator, or under his authority or otherwise, under 
 this Act, shall be in the discretion of the arbitrator, who may direct to or by 
 whom or out of what fund the same shall be paid, and the opinion or decision of 
 the arbitrator on any such application or with respect to the costs thereof, or on 
 any matter or thing within his jurisdiction, shall not be subject to review or 
 appeal, and the amount of such costs "may be ascertained by the arbitrator, or by 
 taxation in the Court of Chancery, or otherwise, as he directs. 
 
 23. All awards made in pursuance of this Act shall be enrolled in the High 
 Court of Chancery within three months after the execution thereof; and a copy 
 of any such award certified by the proper officer of the enrolment office of the 
 Court, or a copy of any such award printed by the Queen's printers, shall be evi- 
 dence of the contents of the award, and that it was duly made, and that all the 
 requisitions of this Act in relation thereto were complied with, and notice of the 
 making of every such award shall be given in the London Gazette. 
 
 24. All awards made by the arbitrator shall from the date thereof respectively 
 be effectual to all intents and purposes, and binding upon all corporations and 
 persons whomsoever without appeal, and shall have the like effect as if the same 
 had been enacted by Parliament.- . 
 
 25. The arbitrator may appoint and employ any assessor, examiner, secretary, 
 and clerks, and other officers, for the purposes of this Act, and fix their remune- 
 ration, and determine and direct out of what funds the same shall be paid. 
 
 26. The arbitrator may direct the ascertainment and payment in such manner 
 and to such extent as he thinks fit of all or any part of the expenses incurred by 
 or on behalf of the committee of policyholders, shareholders, and annuitants of 
 the Albert Company, and four other scheduled companies, in or in relation to the 
 discharge and exercise of the duties and powers of that committee. 
 
 27. The arbitrator may refer for taxation to one of the taxing masters of the 
 Court of Chancery all bills of costs and accounts of allowances and remuneration 
 and other charges of solicitors, liquidators, and others claimed against any of the 
 scheduled companies, or any of their shareholders or contributories, in respect of 
 the liquidation of any of those companies, or otherwise in respect of any matter 
 pending at the passing of this Act in relation to those companies, or any of them, 
 and the taxing master to whom the same are referred shall (subject to any direc- 
 tions of the arbitrator) tax those bills and accounts as if they had been referred 
 for taxation by the Court of Chancery, and shall report on the same to the arbi- 
 trator, if so required by him. 
 
 28. The expenses of the arbitration (including a sum of not less than two 
 thousand pounds to the arbitrator for his personal trouble) shall be determined by 
 the arbitrator, and paid in such manner as he shall direct. 
 
 29. If the arbitrator dies, resigns, or from any cause becomes incapable of 
 acting or unwilling to act, an arbitrator shall be appointed in his place by the 
 
x APPENDIX A. 
 
 Lord High Chancellor of England for the time being, such last-mentioned arbi- 
 trator being a person who shall fill or have filled the office of a Judge of one of 
 the superior Courts of Law or Equity in the United Kingdom, or is a member of 
 the Judicial Committee of the Privy Council, and the provisions of this Act 
 relating to the arbitrator shall extend to any person so appointed, and this section 
 shall be put in force from time to time as occasion may require. 
 
 30. All costs, charges, and expenses preliminary to and of and incident to the 
 preparing of, applying for, obtaining, and passing of this Act shall be paid out 
 of such funds, at such times, and in such manner as the arbitrator shall direct. 
 
 The SCHEDULE before referred to. 
 
 The Albert Life Assurance Company. 
 
 The Western Life Assurance Society. » 
 
 The Bank of London and National Provincial Insurance Association. 
 
 The Family Endowment Life Assurance and Annuity Society. 
 
 The Medical, Invalid, and General Life Assurance Society. 
 
 The National Guardian Assurance Society. 
 
 The Times Life Assurance and Guarantee Company. -» 
 
 The Beacon Life and Fire Assurance Company. 
 
 The Kent Mutual Assurance Society. 
 
 The Indian Laudable Mutual Life Assurance Society. 
 
 The Metropolitan Counties and General Life Assurance, Annuity, Loan, and 
 
 Investment Society. 
 The St. George Assurance Company. 
 The London and Continental Assurance Company. 
 The Manchester and London Life Assurance Association. 
 The National Provincial Life Assurance Society. 
 The Merchant's and Tradesman's Mutual Life Assurance Society. 
 The Anchor Assurance Company. 
 The Falcon Life Assurance Society. 
 The Empire Assurance Company. 
 The Now Oriental Life Assurance Company. 
 
B. 
 
 ALBEKT DEED OE SETTLEMENT. 
 
 This Indenture made the 1st day of July in the year of our Lord 1839 between 
 
 Swynfen Jervis of . . . Henry Urmston Thomson of . . . and Ralph Fenwick 
 
 of ... of the 1st part the said Swynfen Jervis William Day of . . . Frederick 
 
 Christopher Dodsworth of . . . the said Ealph Fenwick Joseph Holl of . . . 
 
 James Jephson of . . . William King of . . . George Goldsmith Kirby of . . . 
 
 Lawrence Kortright of . . . Richard Alexander Price of . . . and Charles Roberts 
 
 of ... of the 2nd part and the several other persons whose names are hereunto 
 
 subscribed and seals affixed of the 3rd part : 
 
 Whereas the several persons parties to these presents have agreed to form 
 
 themselves into a company or co-partnership in order to effect the objects and 
 
 transact the business hereinafter expressed and for such purposes to raise a capital 
 
 of £500000 divided into 25000 shares of £20 each : 
 
 * * * * # # $ 
 
 Now this Indenture witnesseth that for the purpose of more effectually 
 establishing the said company each and every of the said several persons parties 
 to these presents of the 2nd and 3rd parts respectively (so far as relates to the acts 
 and deeds of himself and herself respectively and his and her respective heirs exe- 
 cutors and administrators but not further or otherwise) Doth hereby for himself and 
 herself respectively and for his and her respective heirs executors and administrators 
 covenant with the several persons parties to these presents of the 1st part jointly 
 their executors and administrators and with each and every of them severally and 
 respectively and their several and respective executors and administrators And 
 each and every of the said several persons parties to these presents of the 1st part 
 (so far as relates to the acts and deeds of himself his heirs executors and adminis- 
 trators but not further or otherwise) Doth hereby for himself his heirs executors 
 and administrators covenant with the several persons parties to these presents of 
 the 2nd part their executors and administrators and with each and every of 
 them severally and respectively and their several and respective executors and 
 administrators in the manner following (that is to say) : 
 
 That the several persons parties to these presents (all of whom are hereinafter 
 distinguished by the title of proprietors) and the several other \persons who shall 
 become proprietors as hereinafter is mentioned shall while holding shares in the 
 capital of the company be and continue (until dissolved under the provisions 
 hereinafter in that behalf contained) a company or co-partnership under the style 
 of The Freemasons and General Life Assurance Loan Annuity and Reversionary 
 Interest Company : 
 
 That the objects and business of the company shall be to effect assurances on 
 the life or lives of any person or persons whomsoever and on any survivorship or 
 survivorships and to make effect or grant all such other assurances connected 
 with life as may be effected according to law and to grant and sell and purchase 
 annuities either for lives or years and on survivorships and either immediate 
 
xii APPENDIX B. 
 
 deferred reversionary or contingent and to sell or provide endowments for widows 
 children and other persons and to grant sell and purchase life interests either in 
 possession or reversion and also reversions remainders expectancies and other 
 interests not in possession whether vested or contingent absolute or defeasible and 
 whether the same or any of them are to take effect or come into possession upon 
 the determination or dropping of any one or more life or lives or on the expiration 
 of any term or number of years or on any other event whatever and whether such 
 reversionary or other interests be in freehold copyhold customary or leasehold 
 estates or property or in personal property of any description and generally to 
 transact and, negotiate all other business whatever which may be in any way 
 connected with or depending on the contingencies of human life or usually trans- 
 acted or negotiated by life assurance offices or by offices established for the 
 purchase of reversionary or other interests And also to purchase and re-sell 
 freehold property of any description whether corporeal or incorporeal And also 
 copyhold and leasehold property And also other personal property whether of 
 the nature of realty or otherwise : 
 
 That the capital of the company shall consist of the sum of Five hundred 
 thousand pounds divided into 25000 shares of Twenty pounds each and of such 
 further sums as shall from time to time be raised by the creation and sale of new 
 
 shares under the power for that purpose hereinafter contained : 
 
 ********* 
 
 That all policies granted or agreed for previously hereto and all contracts 
 engagements and agreements heretofore entered into by the said parties hereto of 
 the 1st and 2nd parts or any or either of them with any person or persons whom- 
 soever for or on the behalf of or for the purpose of furthering the objects of the 
 company shall as between the said parties hereto of the 1st and 2nd parts and 
 the several other persons parties hereto be as binding and conclusive upon all the 
 proprietors of the company in all respects and to all intents and purposes as if the 
 same had been signed by each and every proprietor and the said parties hereto of 
 the 1st and 2nd parts their executors and administrators shall be indemnified out 
 
 of the funds and property of the company from all liabilities in respect thereof : 
 
 ********* 
 
 That the affairs of the company shall be conducted and managed under and 
 
 subject to the several rules and regulations hereinafter contained (that is to say) — 
 ********* 
 
 21. That a majority of two-thirds of the proprietors present at any special 
 general meeting or if a poll shall be demanded a majority of two-thirds of the 
 number of votes given at such poll shall be requisite to decide any question relat- 
 ing to the reduction of the amount and addition to the number of shares in the 
 capital of the company or to the increase of the capital of the company by the 
 creation and issue of new or additional shares or to the removal from his office of 
 any director or auditor of the company or to the increasing or diminishing the 
 number of directors or to the amending altering or repealing any of the clauses or 
 provisions of this deed or any of the existing laws and provisions of the company 
 or to the dissolution of the company : 
 
 Provided always that if such question shall relate to the dissolution of the 
 company. .... 
 
 22. That as to all questions relating to any other business or matter to be trans- 
 
ALBERT DEED OP SETTLEMENT. xiii 
 
 acted at any annual or special general meeting a mere majority of the proprietors 
 present at such meeting and qualified to vote or if a poll shall be demanded of 
 the number of votes given at such poll shall be sufficient to decide the same. 
 
 30. That it shall be lawful for a special general meeting called for the purpose 
 from time to time to amend alter or repeal either wholly or in part all or any of 
 the clauses or provisions of this deed or of the existing laws rules and regulations 
 or provisions of the company and to make any new or other laws rules and regu- 
 lations or provisions in lieu thereof or in addition thereto and such new laws rules 
 and regulations or provisions and such amendments alterations or repeal if con- 
 firmed by a subsequent special general meeting to be convened for the purpose at 
 the distance of not less than two weeks nor greater than four weeks from such 
 preceding general meeting shall in such case but not till then be binding and con- 
 clusive upon the proprietors : 
 
 Provided always that such new amended or altered laws rules and regulations 
 or provisions do not at any time or under any circumstances extend to repeal or 
 alter the principle established and settled by these presents that the individual 
 responsibility of each proprietor shall as between himself or herself and his and her 
 co-proprietors be confined to the amount of his or her share or shares in the 
 capital thereof for the time being or to repeal or alter the provision hereinafter 
 contained relative to the dissolution of the company or to repeal or alter the 
 appointment hereby made of the first directors of the said company or their re- 
 muneration or the appointment hereby made of the first managing director of the 
 said company or his remuneration and privileges. 
 
 54. That the said George Goldsmith Kirby the original projector of the said 
 company shall be the first managing director of the said company and shall be 
 and is hereby constituted such for the term of his natural life for .all the purposes 
 of the said company and not for any local district or place merely and shall re- 
 ceive from time to time out of the funds of the said company the annual sum of 
 £400 and also the sum of £5 per cent, upon all the premiums which shall during 
 the time he shall continue such managing director be received by the said com- 
 pany on assurances effected with the said company and shall also be permitted by 
 the said company to use and occupy as the private residence of himself and family 
 and as offices for the carrying on of his private professional business such part of 
 the messuage and premises in Waterloo Place aforesaid with the appurtenances 
 wherein the business of the said company is now carried on as shall not be re- 
 quired for the purposes of the said company rent free and without contributing 
 towards the expense of taxes or repairs and shall also be fully indemnified by the 
 said company from and against all actions suits costs losses damages or expenses 
 in respect of the rent or the covenants and- conditions respectively reserved and 
 contained in the indenture of lease under which the same premises are now held 
 and shall also he permitted by the said company to carry on and conduct so long 
 as. he may think proper the business or profession now carried on by him on his 
 own account and for his own emolument and shall during the time he shall con- 
 tinue managing director as aforesaid have the conduct and management of all the 
 legal business of the said company and be allowed all professional charges for his 
 time and trouble in or about such business which he not being such managing 
 director as aforesaid would be entitled to make if employed by the said company 
 therein. 
 
xiv APPENDIX B. 
 
 55. That (subject and without prejudice to the appointment lastly hereinbefore 
 contained of the first managing director of the" said eompany and his remunera- 
 tion and privileges) it shall be lawful for the board of directors at any time or 
 from time to time to nominate and appoint a managing director or managing 
 directors and to delegate to, such managing director or directors or to any person 
 by any other name or title all and every or any such powers and authorities 
 (except as hereinafter mentioned) as the board of directors shall in their discretion 
 think fit and from time to time or at any time to rescind suspend or curtail all 
 and every or any of the powers which may he so delegated and to allow him or 
 them out of the funds or property of the company such compensation for his or 
 their time and trouble as the board of directors shall think fit. 
 
 60. That the board of directors may also from time to time appoint remove and 
 again appoint the bankers of the company and likewise al) medical officers one or 
 more secretaiy or secretaries and likewise an actuary and may likewise appoint 
 such and so many clerks cashiers bookkeepers messengers and other officers and 
 servants (not hereinbefore provided for) and impose on them such duties as 
 the board may think proper and all such officers clerks and servants respec- 
 tively to be appointed under this power shall be removable at the pleasure of 
 the board. 
 
 61. That it shall be lawful for the board of directors to allow all such officers 
 clerks and servants of the company such salaries and other emoluments and at 
 their pleasure to dispense with any security or to require them to give to some 
 one or more of the trustees or directors of the company such security for their 
 good conduct while in the employ of the company as the board shall think fit. 
 
 62. That it shall be lawful for the board of directors from time to time to 
 appoint agents for the company in such places and with such salaries or commis- 
 sion as the board shall think proper and to remove such agents at pleasure and to 
 appoint others in their room and to empower such agents to receive monies and to 
 transact business on behalf of the company under such regulations and restrictions 
 as shall be determined upon by the board. 
 
 63. That the board of directors shall be at liberty to allow such commission as 
 they may think proper to attorneys solicitors and others whether proprietors or 
 not on their effecting assurances with or paying premiums to the company. 
 
 64. That it shall be wholly left to the discretion of the board of directors or to 
 such committees or to such persons as they may appoint for that purpose to accept 
 or refuse proposals for assurance to be effected with and for annuities to be granted 
 by the company. 
 
 65. That all assurances which shall be effected with and all annuities which 
 shall be granted by or to the company shall be effected and granted at such rates 
 and upon such terms and conditions as the board of directors may think proper. 
 
 66. That it shall be lawful for the board of directors to effect assurances upon 
 the lives of persons wherever resident and to grant permission to persons upon 
 whose lives assurances may have been effected by the company to go to return 
 from or reside in any part of the world upon such terms and conditions and upon 
 the payment of such premiums as the board shall think proper and also to insure 
 the lives of persons below the ordinary standard of health at such terms and upon 
 the payment of such premiums as the directors may determine. 
 
 67. That it shall be lawful fdr the board of directors to make assurances at a 
 
ALBEBT DEED OF SETTLEMENT. xv 
 
 reduced rate of premium in cases where the parties assured shall agree to waive 
 their right to participate in the profits of the company. 
 
 68. That the limit of the sum to he assured on any one life either for the 
 whole continuance thereof or for any less period or against any other life or 
 lives or any other event shall he wholly left to the discretion of the hoard of 
 directors. 
 
 69. That the hoard of directors shall cause every policy by which an assurance 
 shall be effected with the company and every deed by which an annuity shall be 
 granted by the company to be executed by three of the directors or by such officer 
 of the company as they may think proper by a vote of the board to authorize and 
 the directors or other persons executing the policy or instruments granting the 
 annuities shall be indemnified out of the funds cr property of the company from 
 all liabilities or consequences thereof. 
 
 70. That the board of directors shall cause it to he stated in every policy by 
 which an assurance may be effected with the company and in every deed by which 
 an annuity may be granted by the company that the subscribed capital of 
 £500000 sterling and other the stock funds and securities and property of the 
 company which at the time of any claims or demands made in respect of such 
 policy or annuity shall remain unapplied and undisposed of in pursuance of the 
 trusts powers and authorities contained in these presents shall alone be liable to 
 make good all claims and demands upon the company in respect of such policy 
 or annuity. 
 
 71. That the premiums payable in respect of assurances effected with or engage- 
 ments entered into by the company may at the discretion of the board of directors 
 he paid either yearly half-yearly or quarterly or at any other periods either greater 
 or less than a year or in a single payment or by "equal annual payments for a limited 
 number of years or by decreasing or increasing payments. 
 
 72. That it shall be lawful for the board of directors if they shall think proper 
 so to do but not otherwise upon the application of any person proposing to effect 
 or entitled to the benefit of an assurance effected with or engagement entered into 
 by the company to vary and change the times and manner at or in which the 
 premiums in respect of such assurance or engagements may be payable and to 
 allow a portion or portions not exceeding one moiety of the premium or premiums 
 for all or any of the first five years of any assurance or assurances effected or to be 
 effected with the said company to remain at interest in the hands of the person or 
 persons for the time being entitled to the benefit of such assurance on the security 
 of the policy or policies of assurance or to defer or suspend the payment of any 
 such portion or portions for such period and on such terms as the board of directors 
 shall think reasonable. 
 
 73. That it shall be lawful for the board of directors if they shall think proper 
 so to do but not otherwise to revive any policy of assurance that may from any 
 cause whatsoever have been forfeited or become void upon the payment of such 
 fines and upon such terms and conditions and within such period not exceeding 
 twelve calendar months from the time of its having been forfeited or become void 
 as they shall think proper. 
 
 74. That if any person entitled to the benefit of any insurance effected with the 
 company shall he desirous of surrendering his or her policy or of disposing of his 
 or her interest therein or of the additions which may have been made thereto it 
 
xvi APPENDIX B. 
 
 shall be lawful for the board of directors to purchase the same at such value as 
 they may think fair and reasonable. 
 
 75. That in case any person entitled to the benefit of any assurance effected 
 with the company shall be desirous of discontinuing the payment of the premium 
 in respect thereof it shall be lawful for the board of directors on the surrender of 
 the policy by which such assurance was effected to grant a new policy free from the 
 payment of any further premium for a sum to be agreed upon payable at the 
 dropping of the life assured or the happening of the contingency or as the case may 
 be for the payment of an annuity of a diminished amount and the person to whom 
 such new policy shall be granted shall not (unless otherwise agreed) be precluded 
 from participating in the profits of the company if the former policy shall have 
 entitled him to participate therein. 
 
 76. That when and so often as any person entitled to the benefit of any assur- 
 ance effected with the company and who shall have paid a sum equal to three 
 years' annual premium in respect thereof shall be desirous of raising money on 
 his or her policy it shall be lawful for the board of directors if they in their dis- 
 cretion think fit so to do but not otherwise to advance to such person on the 
 security of his or her policy either by the way of loan generally or in payment or 
 satisfaction specifically of any premium or premiums due or to become due in 
 respect of such policy and upon such terms and conditions as the board of direc- 
 tors shall from time to time think proper any sum or sums of money not exceed- 
 ing in the whole the value of the policy upon which the same shall be secured 
 such value to be determined by or under the authority of the board of directors. 
 
 77. That it shall be lawful for the board of directors to redeem or repurchase 
 any annuity-granted by the company upon such terms as to the board of directors 
 shall seem, reasonable. 
 
 79. That it shall be lawful for the said board of directors if they shall at any 
 time think it advisable so to do to effect an insurance or insurances in any other 
 office or offices upon any life or lives in which the company may happen to have 
 an" insurable interest upon such terms and conditions as may be agreed upon 
 between the said board of directors and such office or offices. 
 
 81. That the board of directors shall form four several funds to be called The 
 Proprietors' Fund The First Assurance Fund The Second Assurance Fund and 
 The Masonic Benevolent Fund and shall keep separate and distinct accounts of 
 the said several funds and of the additions and disbursements which shall from 
 time to time be made to and out of the same funds respectively : 
 
 And The Proprietors' Fund shall be composed of the sums paid by the pro- 
 prietors as instalments upon or in respect of the shares taken or held by them in 
 the capital of the company and of the additions to be made to such funds from 
 time to time as hereinafter mentioned and of the increase thereof respectively from 
 time to time by accumulation or otherwise : 
 
 And The First Assurance Fund shall be composed of the premiums and other ; 
 the sums received and to be received for or on account of such assurances effected 
 and to be effected with the company as shall not entitle the assured to participate 
 in the profits of the company and of the premiums and other the sums received 
 and to be received in respect of endowments effected with the company for widows 
 or children or other persons and also of the sums received and to be received in 
 respect of the sale of annuities granted by the company and of all fines, and other 
 
ALBEET DEED OF SETTLEMENT. xvii 
 
 sums paid for non-appearance in respect of or for the renewal of any policy not 
 conferring a right to participate in the profits of the company and of the increase 
 thereof respectively from time to time by accumulations or otherwise : 
 
 And The Second Assurance Fund shall be composed of the premiums and other 
 the sums received and to be received for or on account of such assurances effected 
 and to be effected with the company as shall entitle the assured to participate in 
 the profits of ihe company and of all fines and other sums paid for non-appearance 
 in respect of or for the renewal of any policy conferring a right to participate in 
 the profits of the company and of the increase of such premiums and other sums 
 respectively from time to time by accumulation or otherwise : 
 
 And The Masonic Benevolent Fund shall be composed of such tenth or other 
 share of the profits arising from the two funds called The First Assurance Fund 
 and The Second Assurance Fund as in pursuance of the directions hereinafter 
 contained shall be set aside and appropriated in order to form or increase such 
 fund. 
 
 97. That if at any time any sum or sums of money shall be wanted for the 
 purposes of the company it shall be lawful for the directors if they shall think it 
 expedient so to do instead of raising the same by calling for any further instalment 
 to borrow and take up the same at interest either from the proprietors in which 
 case each proprietor shall be entitled to contribute in proportion to the number of 
 his shares in the capital of the company or from any person or persons who may 
 be willing to lend or advance the same and to give security for the payment 
 thereof by mortgage of the freehold or leasehold or other property of the 
 company : 
 
 Provided always that the directors in case they shall think it expedient to 
 borrow such sum or sums in the name and on the behalf of the company in any 
 other manner than from the proprietors thereof shall at the next general meeting 
 if the same shall be held within the space of four calendar months next thereafter 
 and if not then at a special general meeting to be called for such purpose within 
 the space of four calendar months report to such meeting the sum or sums which 
 shall be so borrowed and the nature of the security which shall have been given 
 for the same and the reasons which actuated the directors to pursue such a 
 course : 
 
 Provided further that the sum or sums of money which may be borrowed and 
 taken up at interest by the directors in the name or on behalf or for the purposes 
 of the company under the authority of this provision in any other manner than 
 from the proprietors of the said company shall not including any money which 
 may have been previously borrowed and which shall be then unpaid exceed in the 
 whole at any one time the sum of £20000. 
 
 98. That as to the money and property constituting The Proprietors' Fund 
 and as to so much and such part of the monies and property constituting The 
 First Assurance Fund and The Second Assurance Fund as shall not be required 
 to satisfy immediate claims upon the company or upon the said funds respectively, 
 the board of directors shall accumulate the same respectively at compound interest 
 and shall for that purpose lay out and invest the same in or upon any of the parlia- 
 mentary stocks or public funds or any government securities of the United Kingdom 
 or in bank stock South sea stock East India stock or India bonds or on real securities 
 in the United Kingdom or elsewhere whether freehold copyhold customaryhold or 
 
 a 
 
xviii APPENDIX B. 
 
 leasehold or upon any securities under the seal of any corporate body or chartered 
 company or upon the security of any docks canals navigations waterworks bridges 
 turnpikes roads railroads or parochial or other rates made chargeable by any Act 
 of Parliament or in the purchase of annuities for one or more life or lives or of any 
 other description or in the purchase of life interests or present future or rever- 
 sionary interests in any property real or personal or in the purchase of any freehold 
 copyhold customaryhold or leasehold property or on the security by way of mort- 
 gage of any policy of assurance effected with the company or with any other com- 
 pany or society for the whole period of life either with or without any collateral 
 or other security whatever so that the sum or the amount of the sums to be lent 
 on the security of any such policy do not exceed the value thereof according to 
 the tables of the company or the said directors may if they shall think proper 
 place such sum or sums of money at interest with any banker broker or other 
 person or company upon such security and at such rate as they may think right 
 and the board of directors may when and as they shall think proper so to do cause 
 any of the funds which may be so laid out and invested or any other property of 
 the company to be disposed of called in or otherwise converted into money and 
 the money arising thereby to be again laid out and invested in any of the ways 
 hereinbefore mentioned and so from time to time as occasion may require : 
 
 Provided nevertheless that in every investment care shall be taken so to dispose 
 of the funds or property of the company as that sufficient money may at all times 
 be raised without difficulty whenever the same shall be required to satisfy the 
 current claims upon and the expenses of the company. 
 
 102. That whenever the bolder for the time being of any share or shares in the 
 capital of the company whether such holder shall be a proprietor or the husband 
 of a female proprietor or the executor or administrator of a deceased proprietor 
 or the assignee of a bankrupt or insolvent proprietor shall be desirous of selling or 
 disposing of any one or more of such share or shares and shall apply to the direc- 
 tors to purchase the same it shall be lawful for the directors if they shall think 
 proper so to do but not otherwise with or out of The Proprietors' Fund to purchase 
 at such price as they shall deem fair and reasouable the share or all or any of the 
 shares which the holder making application shall be desirous of selling. 
 
 103. That all such shares as shall at any time hereafter be purchased by the 
 directors under the power or authority hereinbefore contained (and which power 
 and authority has been confided to them not for the purpose of enabling them to 
 speculate in shares but to be exercised solely for the benefit of the individual pro- 
 prietors or their representatives desirous of disposing of their shares in the said 
 company and who may not readily find suitable and proper persons willing to 
 purchase the same at a fair and reasonable rate) shall be transferred into the name 
 of the secretary or chief clerk of the company or of such other person or persons 
 as the directors shall think fit in trust for the company and such person or persons 
 shall be indemnified out of the funds or property of the company from all liabilities 
 which he or they may incur in accepting the transfer. 
 
 104. That the directors shall as soon as they can conveniently and advan- 
 tageously do so sell at such price or prices and upon such terms as they shall 
 think proper all the shares which shall have been from time to time purchased by 
 them and also all the shares which under the provisions hereinafter in that behalf 
 contained shall be forfeited to the company by persons neglecting or refusing to 
 
ALBERT DEED OF SETTLEMENT. xix 
 
 execute these presents within the time hereinafter prescribed or from any other 
 cause than that of non-payment of any instalment to any person or persons who 
 shall be approved of by the directors as fit to become a proprietor or proprietors 
 in respect thereof and shall appropriate the sum or sums for which such share or 
 shares shall be sold and the dividends which may have been declared thereon in 
 the interval between the purchase or forfeiture and the sale thereof to The Pro- 
 prietors' Fund. 
 
 118. That whenever such notice as hereinafter is mentioned by any husband 
 executor or administrator desirous of becoming a proprietor in respect of all or any 
 of the shares held by him or her in that capacity or by the assignees of a bankrupt 
 or insolvent proprietor of their having procured some person to become a proprietor 
 in respect of all or any of the shares held by him or her in the capital of the 
 company or by any person desirous of taking or purchasing any share or shares 
 from the directors shall have been left at the office of the company the directors 
 shall proceed without delay to take such notice into consideration and shall under 
 the hands of two of the directors or under the hand of the secretary certify in 
 writing their approbation or disapprobation of the person proposed in such notice 
 to be the new proprietor of such share or shares. 
 
 122. That the directors shall cause the name and place of residence of every 
 present and future proprietor and the number of shares belonging to every pro- 
 prietor and the proper number of each share to be entered in a book to be kept for 
 that purpose to be called The Share Register Book and shall once in every year 
 cause the names in alphabetical order with the proper additions and the respective 
 places of abode of the several persons who shall be then proprietors of the company 
 and the number of shares held by such proprietors to be fairly entered in such 
 book or in some other book to be kept for the purpose in such manner as that 
 each proprietor may see at one view the manner in which the shares of the com- 
 pany are divided and the persons by whom the same are held and the directors 
 shall on receiving at the office of the company notice in writing of a proprietor 
 having changed his or her place of residence cause the new place of residence to be 
 entered in such book as aforesaid and be substituted for the former place of 
 residence. 
 
 126. That upon any person ceasing to be a proprietor in respect of all or any of 
 the shares held by him or her and on any person becoming a proprietor of any 
 share or shares in the capital of the company the directors shall cause all such 
 entries to be made in the share register book as shall be necessary in order that 
 the same book may at all times show who are the proprietors for the time beiDg 
 of the company and their respective places of residence and the number of shares 
 held by each proprietor and the proper number of each share held by each of the 
 proprietors for the time being. 
 
 127. Then when and so often as any proprietor shall under the regulations 
 hereinafter contained sell or dispose of any share or shares in the capital of the 
 company to the directors or shall procure any other person or persons to become 
 a proprietor or proprietors in respect of any share or shares held by him or her in 
 the capital of the company -and such person or persons shall have been duly 
 admitted a proprietor or proprietors in respect of such share or shares and shall have 
 executed such deed of covenant as hereinafter is mentioned the directors shall (if 
 all the instalments and calls which may have become due or been previously called 
 
 • 2 
 
xx APPENDIX B. 
 
 for on such share or shares shall have been duly paid) at any time thereafter when 
 requested so to do by the proprietor of such share or shares his or her executors or 
 administrators at his her or their expense and on the payment of such fee as the 
 board may think proper cause to be delivered to such proprietor his or her execu- 
 tors or administrators a certificate signed by three directors or by the secretary 
 certifying that such last proprietor is no longer the proprietor of such share or 
 shares and mentioning the time when he or she ceased to be a proprietor of the 
 same share or shares. 
 
 129. That the directors shall cause proper books to be kept and entries to be 
 made therein of all such matters transactions and things as are usually written 
 and entered in books of account kept by assurance companies and societies formed 
 for the purpose of purchasing reversionary interests which books and also the 
 share register book and all minute and other books belonging to the company shall 
 be under the exclusive control of the directors and shall be considered as in their 
 custody and shall be kept in such manner as they shall direct and together with 
 reports which in pursuance of the directions hereinafter contained are to be 
 produced by the directors and also these presents and the accounts of the receipts 
 and expenditure of the company and all other documents and writings concerning 
 the company shall at all reasonable times be open to the inspection of any proprietor 
 upon the request in that behalf of any ten or more of the proprietors holding in 
 their own right in the aggregate not less than 400 shares in the capital of the 
 company and such proprietor shall be at liberty to take copies or extracts from 
 the same minute and other books accounts and papers of any of them and to 
 examine and compare such copies or extracts with the originals. 
 
 130. That the directors shall so far as the same shall be practicable cause to be 
 prepared previously to and to be produced at the annual general meeting to be 
 held in the year 1844 an account signed by the auditors of the company of the 
 receipts and disbursements of the company from the commencement thereof up 
 to that time and the particulars and amount of the funds and property of the 
 company with such observations thereon as such auditors or any of them may 
 think proper to make upon auditing the said accounts and also a report of the 
 state and condition of the company and of the prospects thereof and shall also as 
 far as the same shall be practicable cause to be prepared previously to and to be 
 produced at every annual general meeting to be held after the annual general 
 meeting in the year 1844 an account signed by the auditors of the company of 
 such of the receipts and disbursements of the company up to that time as shall 
 not have been included in any preceding account and the particulars and amount 
 of the funds and property of the company with such observations thereon as 
 such auditors or any of them may think proper to make and also a report of the 
 state and condition of the company and of the prospects thereof. 
 
 135. That when and so often as any person or persons shall break or refuse or 
 neglect to perform or comply with any or either of the covenants conditions and 
 stipulations contained in these presents and which on his and their part ought to 
 be performed and complied with and when and as the default or misconduct of 
 any person or persons who in pursuance of the directions hereinbefore in that 
 behalf contained may either solely or with sureties have given security to any one 
 or more of the trustees or directors shall render any action suit or other proceed- 
 ing necessary upon such covenant condition stipulation or security it shall be 
 
ALBERT DEED OF SETTLEMENT. xxi 
 
 lawful for the directors immediately to direct an action suit or other proceeding 
 to he brought commenced carried on and prosecuted upon the same respectively 
 and it shall also be lawful for the said directors when and so often as they shall 
 see occasion so to do to order or direct any action or other proceeding to be brought 
 commenced prosecuted or defended for or on account or in respect of any of the 
 funds or property of the company or for or in respect of any covenant or engage- 
 ment entered into for or on behalf of the company or for or on account of any 
 other matter or thing concerning the rights or interests of the company and it 
 shall be lawful for the directors if they shall see fit so to do to cause any action 
 suit or other proceeding which shall be brought commenced prosecuted or de- 
 fended by their order or direction as aforesaid to be stayed compromised or com- 
 pounded and also to cause all disputes and differences upon which there may be 
 cause for any such action suit or other proceeding to be referred to arbitration 
 either before or after the commencement of such action suit or other proceeding 
 and also to order or direct the necessary party or parties to such action suit or 
 other proceeding to commence carry on prosecute or defend the same and to order 
 or direct such necessary party or parties to refer any dispute or difference to arbi- 
 tration either before or after the commencement of any action suit or other pro- 
 ceeding and such necessary party or parties to any such action suit or other 
 proceeding shall not determine release or become nonsuit in such action suit or 
 other proceeding without the consent of the directors and such party or parties 
 shall be indemnified out of the funds and property of the company against all 
 expenses and losses which he or they may incur or sustain in consequence of 
 such action or other proceeding or any such arbitration as aforesaid and the sum 
 or sums of money which may be recovered or received in consequence of any such 
 action or other proceeding shall form part of the funds or property of the company 
 and shall be appropriated by the directors to whichever of the funds called The 
 Proprietors' Fund The First Life Assurance Fund or The Second Life Assurance 
 Fund the board shall think the same ought to belong. 
 
 136. That whenever any such notice as hereinafter mentioned shall have been 
 given to the directors or to some one or more of them or to the secretary or chief 
 clerk or other officer or servant of the company by any proprietor or the husband 
 of any female proprietor or the executor or administrator of any deceased proprietor 
 or the assignees of any bankrupt or insolvent proprietor of any claim or demand 
 having been made or of any action or suit or other proceeding having been com- 
 menced or instituted upon or against him her or them by any creditor or other 
 person having or supposing himself herself or themselves to have any claim or 
 demand upon the company the directors shall proceed without delay to take such 
 notice into consideration and shall signify in writing to the proprietor or other 
 person giving the notice their intention to take the said debt claim or demand 
 upon themselves and either to pay the same or to defend such action suit or other 
 proceeding at the expense of the company and the proprietor or other person or 
 persons upon or against whom any such claim or demand may be made or such 
 action suit or other proceeding may be instituted shall be indemnified out of the 
 funds or property of the company from all liability in consequence thereof. 
 
 137. That subject and without prejudice to the powers hereinbefore given to 
 the annual or special general meetings the directors shall have the entire manage- 
 ment and control over the affairs and concerns of the company and shall in all 
 
xxii APPENDIX B. 
 
 cases provided for by these presents or hereafter to be provided for by the annual 
 or special general meetings act in strict conformity to the laws and regulations 
 hereby established or hereafter to be established by such annual or special general 
 meetings but in all cases for the time being unprovided for by these presents or by 
 the annual or special general meetings it shall be lawful for the directors to act in 
 such manner as shall appear to them best calculated to promote the welfare of the 
 company, and for the better guidance of the directors in their management of and 
 superintendence over the affairs and concerns of the company it shall be lawful 
 for them to make whatever rules and regulations they shall think proper provided 
 the same be not inconsistent with or repugnant to the fundamental principles or 
 constitution of the company as established and settled by these presents or as 
 altered or changed by virtue of the powers hereinbefore given to the special general 
 meetings for that purpose and at any time to alter or rescind all or any of the 
 rules or regulations which may be so made. 
 
 150. That the directors for the time being of the company shall be indemnified 
 and saved harmless out of the funds and property of the company from and against 
 any costs charges and expenses 
 
 180. That the trustees for the time being of the company and their respective 
 heirs executors and administrators shall be indemnified and saved harmless out of 
 the proceeds or property of the company from and against all costs charges damages 
 and expenses 
 
 185. That the share register'book shall for all the purposes of the company be 
 considered as containing a correct list of the proprietors and their respective resi- 
 dences and the number of shares which they are respectively entitled to and it 
 shall be incumbent on each proprietor to ascertain that his name and residence 
 and the number of shares to which he is entitled and the proper number of each 
 of such shares are correctly entered therein. 
 
 186. That every letter relating to any matter concerning the company which 
 shall be sent to the proprietor by the post from -the office of the company and 
 shall be addressed to such proprietor at the place of his or her residence and by 
 his or her name as entered respectively in the share register book shall be consi- 
 dered to have reached such proprietor and every such proprietor shall be deemed 
 to have actual notice of the contents of such letter and shall be bound and con- 
 cluded thereby and the husband of every female proprietor who shall have married 
 and the executor or administrator of every deceased proprietor and the assignees 
 of every bankrupt or insolvent proprietor shall be bound and concluded by such 
 notice until information of the marriage death bankruptcy or insolvency of such 
 proprietor shall have been given at the office of the company and the names' and 
 residences of such husband executors administrators and assigns shall have been 
 duly left at the office of the company. 
 
 187. That every letter relating to any matter concerning the company which 
 shall be sent by the post to any husband executor administrator or assignees of 
 any person who at the time of her marriage or of his or her death bankruptcy or 
 insolvency as the case may be shall have been entitled to any share or shares in 
 the capital of the company and shall be addressed to such husband executor ad- 
 ministrator or assignee at the place of his or her residence and by his or her name 
 as entered in the share register book shall be considered to have reached such 
 husband executor administrator or assignee and every such husband executor 
 
ALBERT DEED OF SETTLEMENT. xxiii 
 
 administrator or assignee shall be deemed to have sufficient notice of the contents 
 of such letter and shall be bound and concluded thereby. 
 
 188. That whenever two or more persons shall be jointly possessed of or entitled 
 to any share or shares in the capital of the company the person whose name shall 
 stand first in the books of the company as one of the joint proprietors of such 
 share or shares shall be the only person to whom it shall be incumbent on the 
 part of the company to send any notice in respect of such share or shares and 
 every letter which shall be addressed to such first-named proprietor by his or her 
 name and place of residence as entered in the share register book whether giving 
 notice of any instalment which may have become due or been called for or of any 
 dividends which may have been declared in respect of such share or shares shall 
 be considered to have reached such first-named proprietors and every oue of the 
 joint proprietors of such share or shares shall be deemed to have sufficient notice 
 of the contents of such letter and shall be bound and concluded thereby. 
 
 189. That in all cases where any share or shares shall be held by any person or 
 persons in trust for any other 'person or persons the person or persons in whose 
 name or names such share or shares shall stand in the books of the company shall 
 for all the purposes of these presents be deemed the sole and absolute owners and 
 proprietors of such share or shares respectively and the receipt of such person or 
 persons shall notwithstanding any equitable claim or demand of any person or 
 persons beneficially entitled to such share or shares be a sufficient discharge for the 
 money which may have become payable from the company upon or in respect of 
 such share or shares and shall discharge the company and other proprietors thereof 
 from the obligation of seeing to the application or from being accountable for the 
 misapplication or nonapplication of such money. 
 
 190. That whenever two or more persons shall be joint proprietors of any share 
 or shares in the capital of the company the receipt of any one of the persons in 
 whose names such share or shares shall stand in the books of the company shall 
 be an effectual discharge for all dividends and other moneys which may become 
 payable from the company upon or in respect of such share or shares. 
 
 191. That the legatees or next of kin of deceased proprietors shall not be en- 
 titled to hold in either of those capacities any share or shares in the capital of the 
 company but in all cases where legatees or next of kin of deceased proprietors 
 shall become entitled to any share or shares the executors or administrators of 
 such deceased proprietors shall as between themselves and the company be con- 
 sidered as the only persons who shall be entitled to become proprietors and it shall 
 be lawful for such executors or administrators to transfer the same to such legatees 
 or next of kin who shall be admitted as proprietors in respect of such shares on 
 signing the proprietors' deed or to procure some other person to become proprietor 
 thereof or to sell the same to the board of directors. 
 
 192. That the husband of any female proprietor or the executor or administrator 
 of any deceased proprietor shall not be a proprietor in respect of any shares held 
 by him in the capital of the company in that capacity but may in the manner and 
 upon the terms hereinafter mentioned either become a proprietor or procure some 
 other person to become a proprietor in respect of any share held by him or sell the 
 same to the directors. 
 
 193. That before any husband executor or administrator can either become a 
 proprietor or procure some other person to become a proprietor in respect of any 
 
xxiv APPENDIX B. 
 
 share held by him in that capacity or can sell the same to the directors he shall 
 leave or cause to be left at the office of the company for the space of forty-eight 
 hours the certificate of the marriage or as the case may be the probate of the will 
 or the letters of administration under which he claims to be entitled to such share 
 or shares or otherwise an official extract or copy of such will or letters of adminis- 
 tration in order that a minute or extract of such certificate will or administration 
 respectively may be inserted in the share register book. 
 
 194. That the assignees of any bankrupt or insolvent proprietors shall not be 
 proprietors in respect of any share held by them in the capital of the company in 
 that capacity but may in the manner and upon the terms hereinafter mentioned 
 procure some person to become a proprietor in respect of any share so held by them 
 or sell the same to the directors. 
 
 195. That before the assignees of any bankrupt or insolvent proprietor in respect 
 of any share held by them in that capacity shall procure any person to become a 
 proprietor in respect of such or sell the same to the board of directors they shall 
 leave at the office of the company for the space of forty-eight hours the certificate 
 of theft appointment as assignees or as the case may be the deed by which the 
 effects of the insolvent proprietors were assigned to them or an attested copy of 
 such deed in order that a minute or extract thereof may be inserted in the share 
 register book. 
 
 196. That any proprietor of the company may procure some other person 
 approved by the directors to become proprietor in respect of all or any of the shares 
 held by him or her in the capital of the company or may sell the same to the 
 directors. 
 
 197. That the husband of any female proprietor and any executor or adminis- 
 trator of a deceased proprietor who shall be desirous of becoming a proprietor in 
 respect of all or any of the shares held by him in that capacity and also every 
 other person who shall be desirous of taking or purchasing any share or shares 
 from the directors shall give notice in writing at the office of the company of such 
 his desire and shall describe in such notice his name and place and residence and 
 (except in case of purchasing from the directors) the number of the. share or each 
 of the shares in respect of which he is desirous of becoming a proprietor. 
 
 198. That the holder of any share or shares in the capital of the company 
 whether any such holder shall be a proprietor or the husband of any female pro- 
 prietor or the executor or administrator of a deceased proprietor or the assignee of 
 any bankrupt or insolvent proprietor who shall have procured any person or 
 persons to become a proprietor or proprietors in respect of all or any of his or her 
 shares in the capital of the company shall give notice in writing at the office of 
 the company of his or her having procured such person or persons to become a 
 proprietor or proprietors and shall describe in such notice the name and place of 
 residence of the proposed proprietor or of each proprietor and the number of the 
 share or each of the shares in respect of which he or she shall have procured such 
 person or persons to become a proprietor or proprietors. 
 
 199. That whenever the directors shall in the manner hereinbefore required 
 have certified that any person who may have been procured to become a proprietor 
 of any share or shares in the capital of the company is fit to be a proprietor or pro- 
 prietors of such share or shares the proprietor or the husband of the female pro- 
 prietor or the assignee of the bankrupt or insolvent proprietor or the executors or 
 
ALBEET DEED OF SETTLEMENT. xxv 
 
 administrators of the deceased proprietor shall be at liberty to transfer the same 
 without delay. 
 
 200. That every transfer of any share or shares in the capital of the company 
 shall be made at the office of the company or at such other place as the directors 
 shall require and in such manner and form as they shall prescribe for vesting such 
 share or shares in the proposed new proprietor. 
 
 201. That the deed or instrument by which any share or shares shall be trans- 
 ferred shall when executed be deposited and left at the office of the company and 
 an extract or minute thereof shall be entered in the share register book. 
 
 202. That every husband and every executor and administrator who shall be 
 desirous of becoming a proprietor in respect of all or any of the shares held by 
 him in that capacity and every person who may propose to take or purchase any 
 share from the directors and who shall be approved of by the directors in the 
 manner hereinbefore required to be a proprietor in respect of a share or shares 
 and who shall not at the time of such approval be a proprietor shall within one 
 calendar month after such approval shall have been certified to him by the 
 directors execute at the office of the company or at such other place as the com- 
 pany shall require either in person or by attorney a deed of covenant in a form 
 to be prescribed by the directors to abide by the rules and regulations of the 
 company. 
 
 203. That every person who may have been approved by the directors as fit to 
 become a proprietor in respect of any share or shares in the capital of the com- 
 pany and to whom a transfer of such share or shares shall have been made and who 
 shall not at the time of such transfer being made be a proprietor of the company 
 shall within one calendar month after such transfer shall have been made execute 
 at the office of the company or at such other place as the directors shall require 
 either in person or by attorney a deed of covenant to abide by the rules and 
 regulations of the company. 
 
 204. That the expense of preparing and executing the deed of covenant which 
 under the provisions hereinbefore contained is to be entered into by any person 
 becoming a proprietor of the company shall be borne and paid by the person or 
 persons executing the same and entering into the covenant therein contained and 
 the expenses of preparing and executing every deed of transfer shall (unless other- 
 wise arranged between the parties) be borne and paid by the party to whom the 
 transfer is made. 
 
 205. That no dividend interest or profit which may be declared or appropriated 
 in respect of or upon any share of any female or deceased bankrupt or insolvent 
 proprietor in the interval between the time of her marriage or his or her death or 
 bankruptcy or having had his or her estate or effects assigned over to any person 
 or persons pursuant to or for the purpose of taking the benefit of any Act for the 
 relief of insolvent debtors and of some person becoming a proprietor of such 
 share shall be received by any person or persons nor shall the rights or privileges 
 attending such share be exercised during such interval by any person or persons 
 whomsoever but the same respectively shall remain in suspense and so soon as 
 any person shall have become a proprietor of such share the husband of such 
 female proprietor or the executors or administrators of such deceased proprietor 
 or the assignees of such bankrupt or insolvent proprietor shall on payment of all 
 instalments which may have become due or been previously called for and may 
 
xxvi APPENDIX B. 
 
 then remain unpaid on such share be entitled to receive the dividends interest and 
 other profits which might have been so suspended. 
 
 206. That every husband and every executor and administrator who may have 
 been approved of by the directors in manner hereinbefore mentioned as a fit 
 person to become a proprietor of any share held by him in that capacity and 
 every person who may have been approved of by the directors as a fit person to 
 become a proprietor of any shares which he may purchase from the^lirectorsand 
 who at the time of such approval shall be proprietor of the company in respect 
 of any other share or shares shall as to the share in respect of which he may have 
 been so approved as aforesaid as fit to become a proprietor be from the time of 
 such approval considered a proprietor of the company and subject to the payment 
 of all the instalments which may have been or may be thereafter called for on 
 such share and to all other duties claims and demands in respect of the same and 
 in the case of a husband or executor or administrator shall then be entitled to 
 receive the dividends and other profits if any which may have remained in 
 suspense in respect of such share. 
 
 207. • That every person who may have been approved by the directors as fit to 
 become a proprietor of any share in the capital of the company held by him in 
 the capacity of husband of a female proprietor or the executor or administrator 
 of a deceased proprietor or who may have been approved of as a fit person to 
 become a proprietor of any share which he may be desirous of taking or purchas- 
 ing from the directors and wheat the time of such approval shall not be a pro- 
 prietor of the company shall from the time of his executing the deed of covenant 
 hereinbefore required be considered a proprietor and in the case of a husband or 
 executor or administrator shall then be entitled to receive the dividends and 
 other profits (if any) which may have remained in suspense in respect of such 
 share. 
 
 208. That every person who may have been approved by the directors as fit to 
 become a proprietor in respect of any share in the capital of the company and to 
 whom a transfer shall have been made of such share and who on the day of the 
 date of such deed of transfer shall be a proprietor of the company in respect of 
 any other share or shares shall as to the share which may have been so transferred 
 to him become a proprietor of the company and shall thenceforth be subject to the 
 payment of all the instalments which may thereafter be called for on such share 
 and to all other duties claims and demands in respect of the same. 
 
 209. That every person who may have been approved of by the directors as fit 
 to become a proprietor in respect of any share in the capital of the company and 
 to whom a transfer shall have been made of such share and who on the day of the 
 date of such deed of transfer shall not be a proprietor of the company shall from 
 the time of his or her executing the deed of covenant hereinbefore mentioned be 
 considered a proprietor of the company. 
 
 210. That when and so often as any person not a purchaser from the directors 
 shall in the manner hereinbefore required have become a proprietor of any share 
 or shares in the capital of the company and shall have executed a deed of covenant 
 to observe the covenants agreements and provisions contained in these presents 
 the last proprietor of such share or shares and all persons claiming by from or 
 under him (except the new proprietor) shall from the time of such new proprietor 
 becoming a proprietor in respect of such share or shares and the payment of all 
 
ALBERT DEED OF SETTLEMENT. xxvii 
 
 instalments which may have become due or been previously called for on such 
 share or shares be for ever acquitted and discharged from all liabilities and obli- 
 gations in respect of such share or shares and from all further claims and demands 
 on account of the same and the certificate to be given by the directors hereinbefore 
 mentioned of such person having ceased to be a proprietor in respect of such share 
 or shares shall at all times be final and conclusive evidence to all intents and 
 purposes of such acquittance or discharge as aforesaid in respect of such share or 
 shares. 
 
 211. That when and so often as any person not a purchaser from the directors 
 shall in manner hereinbefore required have become a proprietor of any share or 
 shares in the capital of the company the last proprietor of such share or shares 
 and all persons claiming by from or under him or her (except the new proprietor) 
 shall from the time of such new proprietor becoming a proprietor have no claim 
 or demand whatsoever either at law or in equity either upon or against the com- 
 pany or any one or more proprietors thereof for the time being for or on account 
 or in any wise relating to such share or shares except in respect of the dividends 
 and other profits which may have been declared previously to the time of such 
 new proprietor becoming a proprietor and shall have been unreceived. 
 
 213. That the account of the receipts and disbursements of the company which 
 in pursuance of the directions hereinbefore contained is to be produced by the 
 directors at every annual general meeting shall after the same shall have been 
 read at the meeting and approved of be signed by the person in the chair at such 
 general meeting in testimony of such approval and having been so signed shall be 
 binding and conclusive on all the proprietors of the company and shall not on any 
 pretence whatever be afterwards opened unless some manifest error to the amount 
 of £50 or upwards be discovered therein by any one of the proprietors before the 
 annual general meeting then next following after such approval in which case the 
 account shall be opened so far only as may be necessary to rectify the error. 
 
 216. That no proprietor his or her executors administrators or assigns as between 
 him her or them and all or any of the other proprietors of the company or their 
 respective heirs executors administrators or assigns shall in any case or event be 
 answerable in respect of the calls debts and other demands of or upon the com- 
 pany beyond the amount of his or her share or interest for the time being in the 
 capital of the said company nor shall any person his or her executors administra- 
 tors or assigns as between him her or them and all or any of the other proprietors 
 of the company or their respective heirs executors administrators or assigns in any 
 case be answerable or accountable for or in respect of any such calls debts or 
 demands in any manner or to any extent or for any cause whatsoever after such 
 person shall have ceased to be a proprietor by the transfer of his or her share or 
 shares in the capital of the said company in the manner and upon the terms here- 
 inbefore declared. 
 
 217. That in case any action suit or other proceeding either at law or in equity 
 shall be brought commenced or instituted by any creditors or other person having 
 or supposing himself or herself to have any claim or demand upon the said com- 
 pany or upon the proprietors thereof for or in respect of any money or debt due or 
 owing by the said company or of any judgment or decree which shall he had in 
 any action suit or proceeding at law or in equity against the said company or any 
 of the directors trustees or other officers for the time being of the company or for 
 
xxviii APPENDIX B. 
 
 goods supplied to the said company or for work or labour done to or for the said 
 company or for any loss damage or injury sustained or for any other cause matter 
 or thing whatsoever relating thereto against any proprietor or the husband of any 
 female proprietor or the executors' or administrators of any deceased proprietor or 
 the assignees of any bankrupt or insolvent proprietor and the proprietor or pro- 
 prietors or other person or persons against whom any such action suit or other 
 proceeding shall or may be brought or instituted shall be compelled or ad- 
 judged or required to pay the debts or sum so claimed or demanded or any 
 part or portion thereof or any sum or sums of money in consequence thereof 
 or shall sustain or incur any loss costs charges damages and expenses in defend- 
 ing or resisting any such claim or demand or any such action suit or other pro- 
 ceeding then and in every such case the debt claim or demand (or the sum or 
 sums of money which shall have been so decreed or adjudged to be paid) and the 
 loss costs charges damages or expenses which shall have been so sustained or 
 incurred shall be considered as debts due and owing by the company to the pro- 
 prietor or proprietors or the person or persons by whom the same shall be decreed 
 or adjudged to be paid or who shall so pay incur or sustain the same and shall 
 be borne and paid by the several proprietors for the time being of the company 
 in proportion to their respective shares or interests therein. 
 
 218. That when and so soon as the amount of the costs to which any proprietors 
 or the husband of any female proprietor or the executors or administrators of any 
 deceased proprietor or the assignees of any bankrupt or insolvent proprietor shall 
 be subject or liable in consequence of any such claim or demand action suit or 
 other proceeding as aforesaid shall have been ascertained and settled by the taxa- 
 tion thereof by the proper officer of the Court in which such action suit or other 
 proceeding shall have been instituted in which taxation the costs shall be allowed 
 not only as between attorney and client but so and in such manner as that the 
 party sustaining the same may be fully reimbursed all such reasonable expenses 
 as he may have incurred or been put unto in consequence of such claim or demand 
 having been made upon him then and in such case and immediately thereupon the 
 debt claim or demand or the sum or sums of money which shall have been so decreed 
 or adjudged to be paid and the amount of such costs after the same shall have been 
 so ascertained and taxed as aforesaid shall be paid on demand by the directors or 
 trustees for the time being of the company or any of them out of any of the funds 
 or property of the company in their hands to the proprietor or proprietors or other 
 person or persons who shall have been so decreed or adjudged to pay and have 
 sustained or incurred the same respectively and the receipt or receipts of such pro- 
 prietor or proprietors or of such person or persons his her or their executors ad- 
 ministrators or assigns shall at all times be a sufficient voucher or indemnity to 
 the said directors or trustees for the,payment thereof and the same shall be allowed 
 in their accounts as a payment made on account of the company in the same man- 
 ner in all respects as if the same had been ordered to be made by a resolution of 
 the said directors. 
 
 219. That if the directors or trustees for the time being of the company shall 
 neglect or refuse or shall not have in their hands sufficient funds belonging to the 
 company to enable them to pay within the space of fourteen days next after such 
 demand as aforesaid shall have been made upon them the whole or any part of 
 such debt and costs then and in such case such debt and costs or so much thereof 
 
ALBEET DEED OF SETTLEMENT. xxix 
 
 as shall not have been paid by the directors or trustees shall be divided by the 
 proprietor or proprietors or other person or persons by whom the same shall have 
 been decreed or adjudged to be paid and who shall be subject to pay the same into 
 25000 equal parts or shares or into as many equal parts or shares as the capital of 
 the said company shall at that time be considei'ed as divided into and every pro- 
 prietor for the time being of the said company shall in proportion to the extent of 
 his or her share or interest therein pay one or more of such parts or shares upon 
 demand to the proprietor or proprietors or other person or persons who shall have 
 paid or shall be liable to pay such debt and costs. 
 
 220. That if under the authority of any Act of Parliament or letters patent 
 which may be passed or issued for the purpose of enabling the company to sue 
 and to be sued in the name or names of any one or more of the officers or indi- 
 vidual members thereof an execution shall be issued against any proprietor of the 
 company upon any judgment obtained against the nominal plaintiff or defendant 
 or plaintiffs or defendants in an action brought in pursuance of such act or letters 
 patent and the proprietor against whom such execution shall be issued shall not 
 within the space of fourteen days after the issuing thereof be reimbursed out of 
 the funds or property of the company all such moneys costs and charges as he 
 shall have paid or be put unto or become chargeable with in consequence of such 
 execution having been issued against him it shall be lawful for such proprietor to 
 divide such costs and charges or so much thereof as he shall not within the time 
 aforesaid have been so reimbursed as aforesaid into 25000 equal parts or shares or 
 into as many equal parts or shares as the capital of the company shall at that time 
 be considered divided into and each and every proprietor for the time being of the 
 said company shall in proportion to the extent of his share or interest therein pay 
 one of such parts or shares upon demand to the proprietor against whom such, 
 execution shall have been issued or to his or her executor or administrator. 
 
 221. That upon the neglect or refusal of any proprietor or of the husband of 
 any female proprietor or of any person or persons who may at any time hereafter 
 become proprietor or proprietors of any share or shares in the capital of the said 
 company or of the executors or administrators of any deceased proprietor or of the 
 assignees of any bankrupt or insolvent proprietor to pay upon demand his fair or 
 their due and fair proportion (such proportion having been so ascertained and 
 fixed as hereinbefore is mentioned) of such debt and costs as aforesaid or of such 
 moneys and costs as may have been paid and incurred by any proprietor by 
 reason or in consequence of execution having been issued against him under the 
 authority of any such Act of Parliament or letters patent as aforesaid then and in 
 every such case it shall be lawful for the person or persons to whom the same 
 ought to have been paid to sue for and recover the same in or by action suit or 
 plaint against the proprietor or proprietors or other person or persons who shall so 
 neglect or refuse as aforesaid in any of Her Majesty's Courts of Eecord at West- 
 minster or in any other Court of Eecord or in any Court of Request for the 
 recovery of debts or demands. 
 
 222. That no proprietor or any other person or persons who shall have been so 
 decreed or adjudged to pay any such debt claim or demand as aforesaid or who 
 shall have paid sustained or incurred any such costs as aforesaid shall be at liberty 
 to commence or institute any action suit or plaint against any other proprietor or 
 the husband of any female proprietor or the executors or administrators of any 
 
xxx APPENDIX B. 
 
 deceased proprietor or the assignees of any bankrupt or insolvent proprietor for the 
 recovery of any share or proportion of such debt or costs under the powers herein- 
 before contained unless he she or they shall have given notice in writing under 
 his her or their hands to the directors by leaving such notice at the office of the 
 company addressed to the directors or to the secretary or chief clerk of the com- 
 pany of the claim or demand which shall have been made upon him her or them 
 thereby requiring the directors either to pay the same or to take such claim or 
 demand upon themselves and to defend the same at the expense of the company-. 
 
 223. That no proprietor or husband of any female proprietor or executor or 
 administrator of any deceased proprietor or assignee of any bankrupt or insolvent 
 proprietor against whom any such action suit or other proceeding as aforesaid 
 either at law or in equity may be brought or instituted by any creditor or other 
 person having or supposing himself or herself to have any claim or demand upon 
 the said company or upon the holders of shares in the capital thereof shall be 
 at liberty to call upon the directors to pay the debt or sum demanded or to 
 defend any such action suit or other proceeding or shall have any claim or demand 
 upon any other of the proprietors of the said company under these provisions in 
 respect of any such debt or costs as aforesaid if such proprietor husband executors 
 administrators or assignee or his wife testator intestate or insolvent shall at the 
 time of such action being brought be in arrear to the company for any instalment 
 or instalments which may be then due or for any calls which may have been 
 made upon the proprietors of the said company or for any interest due thereon 
 unless he or she shall immediately upon such action suit or proceeding being 
 commenced or instituted against him or her and upon the filing or delivery 
 of any declaration thereon pay up to the said company the whole of the sum for 
 which he or she shall be in arreaf and which shall be then due and owing by 
 him or her to the company together with interest thereon after the rate of £5 per 
 cent, per annum from the~time or respective times when the same ought to have 
 been paid : 
 
 Provided always nevertheless that if the sum for which any such action suit or , 
 other proceeding may be commenced or instituted shall exceed the sum which 
 shall or may be due from such proprietor husband executors administrators or 
 assignee or his wife testator or intestate or insolvent it shall be lawful for the 
 directors if they think proper so to do but not otherwise at any time thereafter to 
 pay to such proprietor husband executors administrators or assignee the difference 
 between the sum which shall be so recovered against him or her and the sum 
 which may be due from him or her to the company but the costs and expenses of 
 any such action suit or other proceeding shall not in such case be reimbursed him 
 or her by the company but shall be borne and paid by him or her out of his or 
 her own proper moneys. 
 
 And this Indenture also witnesseth that each and every of the said parties 
 to these presents of the 2nd and 3rd parts respectively for himself or herself and 
 his and her heirs executors and administrators doth hereby severally covenant 
 with the said persons parties to these presents of the 1st part jointly their executors 
 and administrators and with each and every of them separately and with their 
 respective executors and administrators and each and every of them the said 
 several persons parties to these presents of the 1st part for himself his heirs 
 
ALBEET DEED OF SETTLEMENT. xxxi 
 
 executors and administrators doth hereby severally covenant with the said persons 
 parties to these presents of the 2nd part jointly their executors and administrators 
 and with each and every of them separately and with their respective executors 
 and administrators 
 
 That he or she the party so covenanting his or her executors or administrators 
 shall and will well and truly pay or cause to be paid unto the trustees for the 
 time being of the said company the sum of £5 for each ancl every share taken or 
 held by him or her in the capital of the said company in manner appointed for 
 payment thereof and also shall and will well and truly pay or cause to be paid all 
 such further instalments sum and sums of money upon each and any of the shares 
 for the time being held by him or her in the capital of the said company as shall 
 from time to time and at any time become due or be called for by the directors or 
 by any general meeting in pursuance of the powers hereinbefore vested in them 
 respectively for that purpose and all such other sum or sums of money as shall in 
 pursuance of the provisions hereinbefore contained be due and owing by him or 
 her and shall and will make all and every such last-mentioned payments at the 
 time and place and in the manner directed by the directors without any deduction 
 or abatement whatsoever and according to the true intent and meaning of these 
 presents. 
 
 And this Indenture further witnesseth that each and every of the said 
 several persons parties to these presents of the 2nd and 3rd parts respectively for 
 himself and herself and his and her heirs executors and administrators doth 
 hereby severally further covenant with the said persons parties to these presents 
 of the 1st part jointly their executors and administrators and with each and every 
 of them separately and with their respective executors and administrators and 
 each and every of the said several persons parties hereto of the 1st part for him- 
 self his heirs executors and administrators doth hereby severally covenant with 
 the said persons parties hereto of the 2nd part jointly their executors and adminis- 
 trators and with each and every of them separately and with their respective 
 executors and administrators 
 
 That in case any action or suit shall be commenced or prosecuted against the 
 party so covenanted by the direction of any general meeting or of the directors or 
 by any one or more of the trustees for the time being of the company he or she 
 the party so covenanting his or her executors or administrators shall not plead 
 this deed of settlement or any clause matter or thing herein contained or the non- 
 joinder of any proprietor or proprietors as plaintiff or plaintiffs or defendant or 
 defendants in abatement or in bar to any such action or suit or in any other 
 manner resist or defend any such action or suit on any such ground. 
 
 And this Indenture further witnesseth that for the purpose of still further 
 facilitating the remedy of the said several proprietors against each other in the 
 event of any claim or demand being made upon any one or more of them for any 
 debt due or owing by the company or by the whole of the proprietors collectively 
 or for any loss damage or injury caused or occasioned by the company and of 
 more effectually indemnifying the person or persons upon whom any such claim 
 or demand may be made against all such loss costs charges damages and expenses 
 as they he or she may sustain in consequence thereof each and every of the 
 several persons parties hereto so far as relates to the acts and deeds of himself and 
 herself and of his and her heirs executors and administrators doth hereby for 
 
xxxii APPENDIX B. 
 
 himself and herself and his and her heirs executors and administrators and so as 
 to charge him or her in damages in proportion to the extent of his or her interest 
 in the capital of the said company for the time heing such interest to he ascer- 
 tained and determined by the number of shares which he or she may hold therein 
 as shewn hy the books of the' company but not further or otherwise severally 
 covenant with the others of them the said parties hereto and with any two or 
 three or more of them their heirs executors and administrators and with each 
 and every of them separately and with their respective heirs executors and admi- 
 nistrators in manner following (that is to say) : 
 
 That in case any action suit or other proceeding either at law or in equity shall 
 be brought or instituted by any creditor or other person having or supposing 
 himself or herself to have any claim or demand upon the said company or upon 
 the proprietors thereof for or in respect of any moneys or debt due and owing by 
 the said company or of any judgment or decree which shall be had or recovered in 
 any action or suit or other proceeding at law or in equity against the said 
 company or any director or trustee thereof or for goods supplied to the said 
 company or for work and labour done to or for the said company or for any loss 
 damage or injury sustained or for any other cause matter or thing whatsoever 
 relating thereto against any others or other of the said parties hereto his her or 
 their executors or administrators or against any proprietor or proprietors for the 
 time being of the said company and the person or persons against whom any such 
 action or suit or other proceeding shall or may he brought or instituted shall be 
 compelled or adjudged or decreed to pay the debt or sum so claimed or demanded 
 or any part or proportion thereof or any sum or sums of money in consequence 
 thereof or shall sustain or incur any loss costs charges damages or expenses in 
 defending or resisting any such debt claim or demand or any such action suit or 
 proceeding then and in every such case and so often as the same shall happen he 
 or she the party so hereby covenanting shall and will when and so soon as the 
 person or persons so decreed or adjudged to pay any such debt claim or demand or 
 any part thereof as aforesaid or who shall have sustained or incurred any such 
 costs as aforesaid shall have caused such costs to be taxed in the manner herein- 
 before directed and have divided such debt and costs when so taxed or either of 
 them as the case may require into 25000 equal parts or shares or into as many 
 equal parts or shares as the capital of the said company shall be then considered 
 as divided into well and truly pay or cause to be paid upon demand one or more 
 of such parts or shares in proportion and according to the extent of his or her 
 interest in the capital of the company (such interest to be determined by the 
 number of shares he or she shall hold therein as shown by the books of the 
 company) unto the person or persons who shall have paid or who shall be liable 
 to pay such debt and costs or either of them without any deduction or abatement 
 whatsoever and according to the true intent and meaning of these presents : 
 
 And moreover that he or she the party so covenanting shall and will in pro- 
 portion to the amount of his or her interest in the capital of the said company to 
 be ascertained and determined as aforesaid from time to time and at all times 
 hereafter well and effectually save defend keep harmless and indemnified his or 
 her co-proprietors and each and every of them and their and each and every 
 of their respective heirs executors and administrators' goods chattels and effects 
 from and against all costs and charges damages losses and expenses which they or 
 
ALBEET DEED OP SETTLEMENT. xxxiii 
 
 any or either of them or their or any or either of their heirs executors or adminis- 
 trators shall or may pay incur or sustain by reason or in consequence of any 
 claim or demand being made upon them or any or either of them for any debt 
 due or owing by the said company or by the whole of the proprietors collectively 
 or for any loss damage or injury caused or occasioned by the company to any 
 person or persons whomsoever and which shall or may not be prosecuted or 
 brought to trial or upon which no decree or judgment shall or may be made or 
 given. 
 
 And this Indenture lastly witnessbth that each and every of them the 
 said parties hereto of the first part but so far only as concerns his own acts and 
 deeds for himself his heirs executors and administrators doth hereby severally 
 covenant with the said parties hereto of the second part jointly their executors 
 and administrators and with each and every of them separately and their respec- 
 tive executors and administrators in manner following (that is to say) : 
 
 That they the said parties hereto of the first part shall and will from time to 
 time permit and suffer their or any of their names to be made use of by the direc- 
 tors for the time being in all or any actions suits and other proceedings which 
 shall or may at any time hereafter be commenced instituted or prosecuted by or 
 by the order of the directors against any one or more of the several other persons 
 parties hereto or any other the proprietor or proprietors for the time being of the 
 said company or any other person or persons or any or either of their heirs execu- 
 tors or administrators for breach non-performance or non-observance of any of the 
 covenants provisoes and agreements herein contained : 
 
 And further that they the said parties hereto of the first part shall not nor will 
 nor shall or will any or either of them at any time release any such action or suit 
 nor willingly nor wilfully do or cause to be done or be party or privy to any act 
 deed matter or thing whatsoever whereby or by reason or means whereof the said 
 directors shall or may be prevented or hindered from recovering or obtaining a 
 verdict or judgment in any such action or suit or whereby any such action or suit 
 shall or may be in anywise delayed or defeated without the consent of the directors 
 first obtained for that purpose : 
 
 And also that the said parties Tiereto of the first part respectively and their 
 respective executors and administrators shall and will stand be possessed of and 
 interested in all and every sum and sums of money which shall or may be recovered 
 by them any or either of them or their or any or either of their executors or 
 administrators in any action or suit which may be brought or instituted in their 
 or any of their names for breach non-performance or non-observance of any of 
 the covenants provisoes stipulations or agreements herein contained in trust for 
 the company and to apply and dispose of the same in such manner for the benefit 
 of the company as the directors shall from time to time order or direct. 
 In witness &c. 
 
 D 
 
APPENDIX C. 
 
 c. 
 
 ALBEET SUPPLEMENTAL DEED. 
 
 This Indenture made the 31st day of March 1858 between William Beattie of 
 
 the Honourable Swynfen Thomas Carnegie James Croudace 
 
 of Swynfen Jervis of William King of George 
 
 Goldsmith Kirby of James Nichols of the Eight Honourable 
 
 Lord George Paulet Thomas Porter of and George Eaymond. 
 
 of the directors of the hereinafter mentioned company of the first part 
 
 the said Swynfen Jervis William Beattie and George Raymond the trustees of the 
 said company of the second part and the several other persons whose names are 
 hereto subscribed and seals affixed of the third part : 
 
 Whereas by a certain Indenture of Settlement bearing date the 1st day of July 
 1839 a company was constituted and established by \he style or name of The 
 Freemasons and General Life Assurance Loan Annuity and Beversionary Interest 
 Company for the objects hereinafter mentioned or referred to : 
 
 And whereas by a resolution of the said company passed at a special general 
 meeting of the shareholders thereof on the 31st day of December 1849 and con- 
 firmed at a special general meeting of the shareholders of the said company on the 
 16th day of January 1850 the name of the said company was changed to that of 
 The Albert Life Assurance Company : 
 
 * * * * * * * 
 
 And whereas of the 2500,0 shares of £20 each originally proposed to be issued 
 by the said company only 8240 of such shares have been actually issued on each 
 of which the sum of £3 has been called up and paid and on some of which further 
 sums have from time to time been paid in anticipation of calls so that the total 
 paid up capital of the said company now amounts to the sum of £67199 : 
 
 And whereas at a special general meeting of the proprietors of the said com- 
 pany held on the 20th day of May 1856 in conformity with the provisions of the 
 said indenture of settlement certain resolutions were passed to the following effect 
 that is to say — 
 
 1st. That the directors should thereby be authorized to make a further issue 
 at par of any number of shares of the company not exceeding 5000 
 and to set apart and apply the proceeds of such issue exclusively in 
 the purchase of reversionary interests and the transaction of such other 
 business of a like nature as is hereinbefore particularly mentioned or 
 referred to including therein the purchase and sale of policies of life 
 assurance granted by the said or any other life assurance company ; 
 2nd. That it should be left to the absolute discretion of the directors to make 
 such issue of shares as aforesaid on such terms and conditions and 
 subject to such stipulations and regulations as they should consider 
 reasonable and best calculated to promote the general interests of the 
 company ; 
 
ALBERT SUPPLEMENTAL DEED. xxxv 
 
 3rd. That the directors were thereby authorized so to arrange with the sub- 
 scribers for the said additional shares that calls might be made for the 
 full amount payable thereon irrespectively of the other shares of the 
 company and the calls made or to be made thereon ; 
 
 4th. That the said additional shares should in the first instance be offered by 
 the directors to the holders of the then existing shares in the company 
 in manner therein mentioned ; 
 
 5th. That the new business so to be transacted as aforesaid should be 
 managed and conducted by the directors of the company in such 
 manner as they should see fit but subject to the regulations to the 
 deed of settlement and that two separate auditors should he appointed 
 in respect of such new business in the same manner as the other 
 auditors of the company are appointed ; 
 
 6th. That the powers of investment on mortgage or otherwise contained in 
 the said indenture of settlement should be applicable to the moneys to 
 be raised by such issue of new shares as aforesaid : 
 And whereas at a special general meeting of the said company held on the 10th 
 day of June 1856 the said resolutions were duly confirmed : 
 
 ♦ ****# 
 
 And whereas the said directors in further pursuance of the said power so given 
 to them as aforesaid by the said resolution of the 20th day of May 1856 and also 
 for the purpose of more fully carrying into effect the said resolution of the directors 
 of the 25th day of June 1856 have further resolved that such new shares as afore- 
 said shall be issued pnly to such persons as should execute an indenture containing 
 such provisions rules and regulations as are hereinafter contained the same having 
 been approved at a meeting of the said directors held on the 17th day of March 
 1858 : 
 
 And whereas the said several persons parties hereto of the third part have 
 respectively agreed to purchase the number of shares set after their respective 
 names as the same respectively are affixed to these presents on the terms and 
 conditions and subject to the restrictions hereinafter contained : 
 
 Now this Indenture witnesseth that for the purpose of carrying out the said 
 agreement and in consideration of the premises each of them the said several per- 
 sons parties hereto of the third part doth hereby for himself or herself his or her 
 own heirs executors administrators' acts and deeds but not further or otherwise or 
 the one for the others or any other of them or for the heirs executors or adminis- 
 trators of the others or any other of them covenant and agree with the said parties 
 hereto of the first part as such directors as aforesaid their executors administrators 
 and assigns and also by way of separate covenant with the said Swynfen Jervis 
 William Beattie and George Eaymond jointly as such trustees as aforesaid their 
 executors administrators and assigns and with each and every of them separately 
 and the executors administrators and assigns of each and every of them — 
 
 That they the said parties hereto of the third part respectively and their respec- 
 tive executors or administrators shall and will accept take and purchase the num- 
 ber of shares in the capital of the said company so set after their respective names 
 as aforesaid and shall and will in all respects perform observe and comply with the 
 rules and regulations for the time being of the said company as established by or 
 under the said indenture of settlement subject only to such alterations therein or 
 
xxxvi APPENDIX C. 
 
 additions thereto as are authorized made or required by these presents and shall 
 and will well and truly pay or cause to he paid unto the trustees or trustee for the 
 time being of the said company all such instalments or sums of money on each 
 and every of the shares held by him or her the party hereby covenanting in the 
 capital of the company as have not yet been paid thereon on the respective days 
 appointed for payment thereof in the hereinbefore mentioned resolution of the 
 directors of the 25th day of June 1856 with interest thereon respectively after the 
 rate of £5 per cent, per annum from such respective days in case any default shall 
 be made in any such payment as aforesaid and shall and will in all respects sub- 
 mit to and be bound by the restrictions and perform observe and comply with the 
 rules and regulations hereinafter particularly mentioned and contained each of the 
 said last named parties hereby giving his or her full sanction to the directors of 
 the company to impose and carry out the same in the following manner that is to 
 say— 
 
 1. The shares to be issued under the authority of the said resolution of the 
 20th day of May 1856 so made and confirmed as aforesaid shall be known and 
 called by the name or title of new shares 
 
 3. That a new fund shall he formed which shall be called the New Proprietors' 
 Fund to distinguish it from the hereinbefore mentioned Proprietors' Fund which 
 is hereinafter mentioned or referred to as the Original Proprietors' Fund and such 
 New Proprietors' Fund shall be composed of the sums paid by the proprietors of 
 such new shares as aforesaid as instalments or calls on or in respect thereof and of 
 one half of the premiums (if any) to be paid on the purchase of any such new 
 shares as aforesaid and also of the additions to be made to such last-mentioned 
 fund as hereinafter mentioned, and of the increase thereof from time to time by 
 accumulation or otherwise and the other half of such premiums as lastly aforesaid 
 shall be applied and disposed of in the same manner as -in the said indenture of 
 settlement is directed with respect to the premiums on the original shares in the 
 capital of the company. 
 
 4. That such part of the said New Proprietors' Fund as shall arise from the pay- 
 ment of such deposit or instalments or calls and also of such other half part of the 
 said premiums as aforesaid shall be reserved exclusively for the purchase of such 
 reversions remainders and expectancies and other reversionary or contingent inte- 
 rests as are in the said indenture of settlement and hereinbefore particularly men- 
 tioned or referred to including the purchase of policies of assurance on any life or 
 lives or survivorship or on any contingency dependent upon the duration of human 
 life and whether issued by the said company or any other life assurance company 
 and that during such time as any part of the said New Proprietors' Fund shall not 
 be invested in any such purchase as aforesaid the same shall be invested at 
 interest in such manner and on such securities as in the said indenture are men- 
 tioned with respect to the general funds of the company but subject and without 
 prejudice to the right of the directors to keep such balance at their bankers as 
 they shall from time to time think proper. 
 
 In witness, &c. 
 
xxxvu 
 
 D. 
 
 ALBERT SPECIAL RESOLUTIONS. 
 
 Passed at Special General Meetings of Shareholders, 17 July and 
 3 August 1860. 
 
 Whereas by the 138th clause or provision of the Deed of Settlement of the 
 Albert Life Assurance Company formerly called the Freemasons and General Life 
 Assurance Loan Annuity and Eeversionary Interest Company it is declared that 
 the directors including the chairman and deputy chairman should consist of not 
 more than twelve and not less than six members unless the numbers should by 
 the appointment of additional directors under the power thereinafter contained 
 (being a power to increase the number of directors by the appointment of addi- 
 tional directors at any time prior to the general meeting in 1844 and which power 
 was not exercised) be increased or unless a general meeting should think fit to 
 reduce the number either permanently or for a limited period or should abstain at 
 any time from. filling up the vacancies which might occur at any annual day of 
 election but the number of directors should not in any case be less than five : 
 - And whereas by the 144th clause or provision of the said Deed of Settlement it 
 is declared that (subject and without prejudice to the appointment thereinbefore 
 contained of the first directors of the said company) the directors (other than the 
 managing director) should at and after the annual meeting in the year 1846 be 
 elected by the proprietors : 
 
 And whereas by a resolution passed at a special general meeting of proprietors 
 held on the 31st day of December 1849 and confirmed at a special meeting held on 
 the 16th day of January 1850 it was resolved that the directors for the time being 
 of the company might at any time in the interval between the annual general 
 meetings if they should think it expedient so to do elect any additional director or 
 directors or fill up any vacancy in the office of director provided that the number 
 of directors for the time being were not increased to more than twelve by the 
 exercise of the power conferred by the resolution now in recital and provided that 
 no person should be capable of being so elected a director of the company unless 
 at the time of his election he should be" a holder of 50 shares at least in his own 
 right in the capital of the company and should have been a proprietor of the 
 company at least six calendar months and the director or directors so elected to go 
 out of office at the annual general meeting next after his or their election : 
 
 And whereas in consequence of the great increase of late years in the business 
 of the company and with a view to facilitate the obtaining of additional business 
 by the acquisition by purchase or otherwise or by the amalgamation with the 
 business of the company of the business of other life assurance companies it has 
 been deemed expedient to authorize an increase in the number of directors and to 
 extend the power of appointing directors otherwise than by election by the 
 proprietors subject to the restrictions hereinafter expressed : 
 
 E 
 
xxxviii APPENDIX D. 
 
 And whereas in order to carry out the ohjects aforesaid it is proposed to repeal 
 the said 138th and 144th clauses or provisions of the said Deed of Settlement 
 respectively and to rescind the said recited resolution and to make such other 
 rules and regulations in lieu thereof respectively as are hereinafter expressed and 
 contained : 
 
 And whereas doubts have been entertained whether under the existing rules and 
 regulations of the company the directors thereof for the time being have power or 
 authority for or on behalf of the company to acquire by purchase or otherwise or 
 to amalgamate with the business of the company the business of other life assur- 
 ance companies and in order to obviate such doubts it has been deemed expedient 
 that such power or authority should be expressly given to them : 
 
 Now it is nBKBBY RESOLVED and determined that the 138th and 144th clauses 
 or provisions of the said Deed of Settlement shall be and they are hereby respec- 
 tively repealed wholly and that the said recited resolution shall be and the same is 
 hereby rescinded : 
 
 And it is hereby further resolved and determined that in lieu thereof the 
 clauses or provisions hereinafter set forth and respectively numbered 1, 2, 3, 4, 5 
 &n& 6 shall henceforth form and be part of the rules and regulations of the 
 company : 
 
 1. That the directors including the chairman and deputy-chairman shall consist 
 of not more than twenty-four nor less than six unless a general meeting shall 
 think fit to reduce the number either permanently or for a limited period or shall 
 abstain for any time from filling the vacancies which may occur at any annual 
 day of election but the number of directors shall not in any case be less than five. 
 
 2. That the present directors and the directors for the time being of the com- 
 pany shall be at liberty if they shall think it expedient so to do to appoint as 
 directors of the same company any one or more of the directors of any other 
 company or society the business of which shall have been acquired by purchase 
 or otherwise or which shall have been amalgamated or united with the business 
 of the Albert Life Assurance Company under the power hereinafter contained 
 provided that such director so appointed be a holder in his own right of 50 
 shares at leas s t in the capital of the Albert Life Assurance Company and provided 
 also that the number of directors so appointed shall not together with the then 
 existing directors exceed the number of twenty-four. 
 
 3. That every director of the company appointed under the power or authority 
 given in and by the last preceding clause or provision shall henceforth have all the 
 like rights privileges and powers and be subject to the like rules regulations and 
 provisions and be and be deemed considered and treated in all respects as a director 
 elected by the proprietors. 
 
 4. That the directors for the time being of the company may at any time in 
 the interval between the annual general meetings if they shall think it expedient 
 so to do elect any additional director or directors not being a director or directors 
 of any such other company or society as aforesaid or fill up any vacancy in the 
 office of director provided that the number of directors for the time being be not 
 increased to more than twenty-four by the exercise of this power and provided 
 that no person shall be capable of being so elected a director of this company unless 
 at the time of his election he shall be a holder of 50 shares at least in his own 
 right in the capital of the company and shall have been a proprietor of the company 
 
ALBERT SPECIAL RESOLUTIONS. xxxix 
 
 for at least six calendar months and the director or directors so to go out of office 
 at the annual general meeting next after his or their election. 
 
 5. That (subject and without prejudice to the appointment of any director or 
 directors of the company under the respective powers or authorities hereinbefore 
 given) the directors (other than the managing director) shall be elected by the 
 proprietors. 
 
 6. And it is hereby further resolved and determined that the present directors 
 and the directors of the company for the time being shall have full power and 
 authority from time to time to acquire by purchase or otherwise the business 
 goodwill and assets or any part of the business goodwill or assets of any other life 
 assurance company or society or of any company or society for effecting assurances 
 on lives or survivorships and for granting endowments and for purchasing or 
 granting annuities life, reversionary and other estates and interests real and 
 personal and for advancing moneys on mortgage or other security or for any of 
 those purposes or to amalgamate or unite the business of any such company or 
 society with the business of the said Albert Life Assurance Company upon such 
 terms and conditions as they shall think expedient and especially that the said 
 directors shall have power to enter into contracts to be binding on the said Albert 
 Life Assurance Company to pay and satisfy claims on and engagements of such 
 other company or society and to grant compensations or employment to the 
 officers and servants of such company or society and for the purposes aforesaid or 
 any of them to make any arrangements and to enter into and rescind or modify 
 auy contracts or agreements in the name of the Albert Life Assurance Company 
 and of the shareholders thereof. 
 
 F 
 
xl APPENDIX E. 
 
 E. 
 
 ALBERT ARBITRATION ACT, 1874. 
 
 37 & 38 Vict. c. lviii. 
 
 An Act for making further provision for the settlement of the 
 Affairs of The Albert Life Assurance Company by Arbitration, 
 and for other purposes. 
 
 [Royal Assent, 30th June, 1874.] 
 
 Whereas by The Albert Life Assurance Company Arbitration Act, 1871 (in 
 this Act called the Arbitration Act of 1871), it was recited (amongst other things) 
 to the effect that it was indispensable for the purpose of settling the affairs therein 
 described, and arranging or finally winding up the affairs of the Albert Company, 
 that discretion should be placed in an Arbitrator specially constituted for the pur- 
 pose, to determine the rights and settle the affairs of the companies therein 
 named, and their creditors : 
 
 And whereas by the Arbitration Act of 1871, for the purpose of determining 
 the matters thereby referred to arbitration, the Eight Honourable Hugh 
 McCalmont Baron Cairns was appointed the Arbitrator : 
 
 And whereas the Arbitrator appointed by the Arbitration Act of 1871 has pro- 
 ceeded in the reference, and has (among other things) caused notices to be pub- 
 lished calling on all persons to bring in their claims against any of the companies 
 subject to the Arbitration Act of 1871, and has directed the payment in full or in 
 part of the amounts allowed to creditors establishing their claims against any of 
 those companies, and has made calls on contributories of some of those companies, 
 and has got in their assets or the greater part thereof : 
 
 And whereas in respect of some of the outstanding contracts of some of those 
 companies claims have not been made, or the title of the claimants has not been 
 proved, and various sums of money ordered in the liquidations of some of those 
 companies to be distributed or to be returned as dividend, premium, or otherwise, 
 remain unclaimed : 
 
 And whereas it is expedient that the closing of the several liquidations and the 
 dissolution of those companies be expedited and facilitated, and that for that 
 purpose provision be made for the absolute barring of claims and the final disposal 
 of assets : 
 
 And whereas the objects aforesaid cannot be effected without the authority of 
 Parliament, and the Arbitrator appointed by the Arbitration Act of 1871 has 
 approved of the Bill for this Act : 
 
 May it therefore please your Majesty that it may be enacted and be it enacted 
 by the Queen's most excellent Majesty, by and with the advice and consent of the 
 Lords Spiritual and Temporal and Commons in this present Parliament assembled, 
 and by the authority of the same as follows ; (that is to say,) 
 
ALBERT ARBITRATION ACT, 1874. xli 
 
 1. This Act may be cited as The Albert Life Assurance Company Arbitration 
 Act, 1874. 
 
 2. This Act as far as may be shall be read and have effect with the Arbitra- 
 tion Act of 1871 as one Act. 
 
 3. In this Act — 
 
 " The Arbitrator" means the Arbitrator for the time being appointed by or 
 
 under the Arbitration Act of 1871 : 
 " The liquidators " means the joint official liquidator of the several compa- 
 nies in liquidation, appointed by and acting under.direction of the Arbi- 
 trator : 
 " Assets " includes reversionary interests, loans on policies, and other 
 securities, sums' proved or claimed against estates distributable in any 
 Court, or otherwise, arrears of calls, and other money, and all other pro- 
 perty of any kind belonging to, or claimed by, or on behalf of, any of 
 any of those companies : 
 " Balances " includes — 
 
 (a.) Dividends allotted and directed to be paid to creditors of any of 
 
 those companies, but not taken by them ; 
 (b.) Premiums received in the Court of Chancery on the term of being 
 
 returned in certain events, but not taken in the Arbitration ; 
 (c.) Sums received from contributories for calls, and directed to be 
 
 returned to them, but not taken by them ; 
 (d.) Sums received from contributories for calls, and not required for 
 discharge of claims, but too small in aggregate amount to be 
 divided among and returned to the contributories ; 
 (e.) Assets remaining unapplied. 
 
 4. The Arbitrator may, if he thinks fit, by order, appoint a day on which all 
 claims arising on policies or otherwise, not brought in and proved, shall be barred, 
 and the same shall, by virtue of that order and of this Act, be absolutely barred 
 accordingly. 
 
 5. The Arbitrator may, if he thinks fit, direct the liquidators to dispose at 
 prices and on terms approved by him of assets not got in, and any assignee 
 thereof may sue for and recover the same in his own name, and hold the same for 
 his own benefit, and as regards assets being legal debts or things in action, sub- 
 section six, of section twenty-five of The Supreme Court of Judicature Act, 
 1873, shall have effect, the liquidators being deemed the assignors for the purpose 
 of that enactment. 
 
 6. The Arbitrator may direct the liquidators to pay into the Court of Chancery 
 such balances not claimed by a day appointed hy the Arbitrator, as he thinks fit. 
 
 The liquidators shall file in the Court a list, shewing the several component 
 sums making up those balances, and the names, addresses, and descriptions of the 
 several persons entitled thereto, as far as the same have been ascertained in the 
 liquidation. 
 
 The list shall be conclusive evidence of the title of those persons to those 
 several component sums. 
 
 F 2 
 
xlii APPENDIX.E. 
 
 The Court shall, from time to time, on application at Chambers, cause those 
 several component sums (subject to payment of any proper costs or expenses), to 
 be paid out to the persons entitled thereto, according to the list, or to their respec- 
 tive representatives or assigns. 
 
 7. The Arbitrator may direct the liquidators to pay .to the respective Adminis- 
 trator-General of Bengal, Madras, and Bombay, such balances not claimed by a 
 a day appointed by the Arbitrator, as are payable in India, and as he thinks fit. 
 
 Each Administrator-General shall receive those balances, and shall hold and 
 apply them for the purposes and according to the directions of this Act. 
 
 The liquidators shall deliver to each Administrator-General a list shewing the 
 several component sums making up the balances paid to him, and the names, 
 addresses, and descriptions of the persons entitled thereto, as far as the same have 
 been ascertained in the liquidation. 
 
 The list shall be conclusive evidence of the title of those persons to those several 
 component sums. 
 
 Each Administrator- General shall, from time to time, on demand, pay the several 
 component sums making up the balances paid to him to the persons entitled thereto, 
 according to the list, or to their representatives or assigns, subject to payment of 
 any proper costs or expenses. 
 
 Each Administrator-General shall be entitled to receive and deduct a commis- 
 sion, at the rate of five per centum on and out of each of the component sums 
 making up the balances paid to him. 
 
 Subject to the provisions of this Act, each Administrator-General shall hold and 
 dispose of the balances paid to him as nearly as may be, in all respects, as if the 
 same were assets collected and distributable by him under the Act of the Legisla- 
 ture of India, relating to his office, and that Act (including the provisions thereof 
 respecting assets having been in official custody for a certain period, without any 
 claim thereto having been made and allowed), shall apply to the balances paid to 
 him under this Act accordingly. 
 
 8. If and as far as the provisions of this Act authorizing payment into the 
 Court of Chancery, or to an Administrator-General, are not applicable, or are for 
 any reason not applied, the Arbitrator may deal with and dispose of the balances 
 in such manner as he in his discretion thinks most fit, equitable, and expedient. 
 
 9. All costs, charges, and expenses preliminary to, and of, and incidental to, 
 the preparing of, applying for, obtaining, and passing of this Act, shall be paid 
 out of such money, subject to the Arbitration Act of 1871 , as the Arbitrator directs. 
 
xliii 
 
 F. 
 
 ALBERT: BONUS NOTICE OF 1863. 
 
 [B. N] Policy No. , on the life of 
 
 Circular to Persons interested in Life Policies effected in London or 
 
 through an agent. 
 
 Albert Medical and Family Endowment Life Assurance Company, 
 
 7, Waterloo Place, Pall Mall, London, 8. W. 
 March, 1863. 
 
 Sir, — I have the pleasure to send you, by desire of the Board, a Report of the 
 proceedings at the Annual Meeting of the proprietors of this company, held on the 
 24th December last, by which you will perceive that a further allotment of the 
 surplus profits of the company has been made to the assured. 
 
 The share pertaining to the above-mentioned policy may be applied in either of 
 the following ways : — 
 
 lstly. In adding to the amount assured, when payable, the sum of £ s. d. 
 2ndly.*" In the present payment of .. .. .. .. £ s. d. 
 
 3rdly.* In reducing the premiums payable during the three years subsequent 
 to this year ; or 
 
 4thly.* In reducing all premiums payable subsequent to this year. 
 
 I shall be obliged by your informing me which of the above modes you select, 
 and a form is enclosed for that purpose. I may state, for your guidance in making 
 your selection, that the reduction of premium under No. 3 would be somewhat 
 more than one-third of the amount named under No. 2. The reduction under 
 No. 4 would, of course, be much smaller, and shall be determined if you wish it. 
 
 Should I not hear from you before the 30th June next, it will be assumed that 
 you adopt the first of the preceding modes, and the sum named under No. 1 will 
 accordingly be added to the sum assured. 
 
 In conclusion, I desire to call your attention to the gratifying fact that the new 
 business of the company (which, as per annexed report, recently reached in one 
 year the unprecedented amount of 2,235 policies, assuring £845,622, and yielding 
 in annual premiums £34,290) is still progressing very satisfactorily, and at a rate 
 which must materially augment the future profits of the company. 
 
 I am, Sir, 
 
 Your obedient Servant, 
 
 Frank Easum, 
 
 To Secretary. 
 
 (Or the present holder of the policy.) 
 
 * Not any of these options can be exercised in the case of a mortgaged policy without the concurrence 
 of the mortgagee or mortgagees. 
 
 I Form inclosed. 
 
xliv APPENDIX F. 
 
 [Form inclosed.'] 
 
 I prefer the * mode stated in your circular of applying the share 
 
 of profit pertaining to my Policy No. 
 
 Your obedient Servant, 
 
 i Signature of the original 
 I policy-holder. 
 
 . Address. 
 
 * Please to insert the word 'first,' 'second,' third,' or 'fourth,' as the case may 
 be ; aDd observe that should you select any other than the first mode, it will be 
 necessary, if the assurance were not granted to you originally, to establish your 
 title to it ; or, if you have mortgaged it, that the mortgagee or mortgagees should 
 sign the following memorandum : 
 
 I assent to this arrangement, and authorize its completion without further 
 reference to myself. 
 
 i Signature of mortgagee in case 
 the policy has been mortgaged, 
 
 Address. 
 
 [The circular was printed on the first page of a sheet of paper; on the second 
 page was a prospectus of the Albert, Medical, and Family Endowment Company ; 
 on the third page was the report of the proceedings of the meeting of that Company 
 referred to in the circular.'] 
 
xlv 
 
 G. 
 
 ALBERT : REPORTS OF DIRECTORS. 
 30 June, 1859. 
 
 At the Annual General Meeting of Proprietors holding ten shares and upwards, 
 convened for 12 for 1 o'clock this day, for the purpose of receiving the directors' 
 and auditors' reports on the accounts and business of the company to the end of 
 
 1858, and of electing 
 
 The secretary having read the circular convening the meeting, the managing 
 director proceeded with the report as follows : 
 
 Ebpoet of the Board of Directors for the Year 1858. 
 
 In making their report for the year ending the 31st of December, 1858, the 
 directors congratulate the shareholders upon the result of the operations since the 
 last periodical meeting, which include the acquisition of the extensive life business 
 of the Bank of London and National Provincial Insurance Association, and they 
 have the pleasure of calling the attention of the shareholders to the statements 
 drawn up as required by the company's deed of settlement, consisting of — 
 1st. The receipts and disbursements for the year 1858 exclusively. 
 2nd. Particulars of the company's funds and property on the 31st December, 
 
 1858. 
 
 • * * * * * * * 
 
 The amount of life assurances subsisting with the company on the 31st of 
 December last (including the business transferred by the Bank of London and 
 National Provincial Assurance Association), was as follows ; — 
 
 £ s. d. 
 
 First or non-participating fund .. .. 626,347 
 
 Second or participating fund .. .. 2,578,472 
 
 Total .. .. £3,204,819 
 
 The directors have now to bring under the notice of the shareholders the 
 accession to the company's business by the transfer thereto of that of the Bank of 
 London and National Provincial Insurance Association, the premiums derivable 
 from which have added about £60,000 a year to the income of the company. 
 
 The transfer in question took place in October, and, amongst the many advan- 
 tages already secured, the agency staff of the company has been augmented by 
 about 1000 representatives, the benefit of whose exertions is evinced by the in- 
 creasing business of the office, which at the present time is increasing at the rate 
 of from £15,000 to £20,000 a year. 
 
 By the agreement entered into between the two companies, the shareholders of 
 
xlvi APPENDIX G. 
 
 the Bank of London and National Provincial Insurance Association were secured 
 the privilege of taking Albert shares in exchange for their Bank of London and 
 National Provincial shares, and up to this date 260 proprietors have availed 
 themselves of that privilege, making an addition to the company's subscribed 
 capital of £225,460. 
 
 Eeversionary Department. 
 
 The balance sheet of this department shows a profit appertaining thereto of 
 
 £3,308 7s. Id., which is equivalent to £22 13s. id. per cent, upon the capital. 
 ******* 
 
 In concluding their report, the directors feel assured that it only requires 
 
 a continuance of zeal and activity on the part of all connected with the company 
 
 to secure its permanent prosperity. 
 
 The audited accounts of the company were then read. 
 
 It was then moved by the chairman, and carried unanimously — 
 
 That the reports of the auditors and directors, upon the accounts and 
 
 business of the company to the end of 1858, be received and adopted. 
 
 20 December, 1860. 
 
 At the Annual General Meeting of Proprietors holding ten shares and upwards, 
 
 convened for 12 for 1 o'clock this day, for the purpose of receiving the directors' 
 
 and auditors' reports on the accounts and business of the company to the end of 
 
 1859, and of electing 
 
 ********* 
 
 The secretary having read the circular convening the meeting, the managing 
 
 director proceeded with the report, as follows : 
 
 Report of the Board of Directors for the Tear 1859. 
 
 The directors of the Albert and Medical Life Assurance Company in meeting the 
 shareholders, at their annual general meeting in 1860, experienced much satisfac- 
 tion at their being again able to refer to the successful result of the previous years' 
 business. 
 
 The accounts have been prepared in compliance with the deed of settlement, 
 and consist of : 
 
 1st. The receipts and disbursements for the year 1859. 
 
 2nd. The receipts and disbursements from the establishment of the company 
 
 to the 31st of December, 1859, inclusive of the sums written off at the 
 
 respective periods of the division of profits and at the end of the year 
 
 1858 ; and 
 3rd. Of the funds and investments of the company, on the 31st December, 
 
 1859. 
 
ALBERT : REPORTS OF DIRECTORS. xlvii 
 
 In conclusion the directors report to the shareholders that they have recently 
 acquired the business of the Medical, Invalid, and General Life Assurance Society, 
 by which the premium income of the Albert is raised to £220,000 a year. 
 
 This valuable acquisition has advanced the company to a prominent place 
 among the leading life assurance institutions, and introduced many active and 
 energetic agents, besides placing the company by the large transfer of the large 
 Indian business of the Medical Society at almost the head of offices transacting 
 assurance business in our East Indian possessions. 
 
 The terms of the agreement entered into with the Medical, Invalid, and General 
 Life Assurance Society having provided that the Albert shall be distinguished 
 by a new name or title, that of the Albert and Medical Life Assurance Company 
 has been adopted, and the total funds and property of the company consist of the 
 following : 
 
 Government and bank stock 
 
 Mortgages on real property .. 
 
 Bonds and other investments 
 
 Cash at branch banks, agents' balances, current interest, 
 
 premiums due, but paid after 31st December, freehold 
 
 property, and other assets .. 
 Life interests and reversions . 
 Value of policies with other offices .. 
 Cash at bankers (on deposit and current accounts) 
 
 The audited accounts referred to in the report having been then read — 
 It was moved by the Chairman, seconded by Mr. Clennell, and carried unani- 
 mously : 
 
 That the reports of the auditors and directors upon the accounts and business 
 of the company to the end of 1859 be received and adopted. 
 
 £ s. 
 
 d. 
 
 100,962 4 
 
 1 
 
 124,290 
 
 
 
 105,818 19 
 
 
 
 77,044 9 
 
 11 
 
 38,984 7 
 
 3 
 
 13,418 17 
 
 7 
 
 14,614 16 
 
 10 
 
 £475,133 14 
 
 8 
 
 28 November, 1861. 
 
 The directors beg to inform the proprietors that the business of the Family 
 Endowment and Kent Mutual Life Assurance Societies have been acquired in 
 the present year (1861), and, with a view of better identifying the company with 
 the policy-holders, agents, and other connections of the Family Endowment 
 Society, their names have been added to the company's former title of Albert and 
 Medical. In procuring the business of the Family Endowment Society, the com- 
 pany has obtained that society's Indian business and influence, a most important 
 addition to the Indian business and influence of the Medical and Invalid Society 
 previously transferred to the company, and, in reference to the company's Indian 
 
xlviii APPENDIX G. 
 
 business, the directors are happy to inform the proprietors that it is proceeding 
 very satisfactory. 
 
 By the acquisition of the above-mentioned businesses, the income of the 
 office, derived from premiums only, is now upwards of £250,000 a year, and 
 the assets of the company beyond £700,000, the particulars of which are as 
 follows : 
 
 Government bank stock and East Indian Com- £ s. d. 
 
 pany's paper 188,107 17 6 
 
 Mortgages 171,029 19 7 
 
 Bonds and other investments .. .. .. 155,993 8 9 
 
 Cash at branch banks, agents' balances, cur- 
 rent interest, premiums due but paid after 
 31st December, freehold property and other 
 
 assets 103,242 7 6 
 
 Life interest and reversions .. .. .. 59,809 18 6 
 
 Value of policies with other offices .. .. 14,040 18 6 
 
 Cash at bankers on deposit and current ac- 
 counts .. ' .. 26,424 8 
 
 £718,647 13 
 
 The audited accounts referred to in the report having been read, 
 . It was moved by the Chairman, seconded by Mr. Clennell, and carried unani- 
 mously : 
 
 That the reports of the auditors and directors upon the accounts and 
 business of the company, to the end of 1860, be received and adopted. 
 
 24 December, 1862. 
 
 The directors are desirous of calling the attention of the proprietors to the very 
 large amount of the company's new business, greater even than they themselves 
 anticipated, whereby the advantage of the transfers which have taken place of 
 other businesses to this company is made apparent. 
 
 With regard to the Indian business, the transfer from the Medical, Invalid, and 
 General and Family Endowment Societies, has been effected without difficulty, 
 and the fresh business done since the new arrangements came in force proves 
 that the public in India feel the same confidence in the present Association as has 
 been evinced so remarkably in the extent of business hitherto done by the Medical, 
 Invalid, and General and Family Endowment. 
 
 The directors see no reason to expect other than a continuance of the progress 
 of the company in India, and they look forward to an increasing business from 
 that country. 
 
ALBEET : EEPOETS OP DIEECTOES. xlix 
 
 1865. 
 
 The directors beg leave to submit to the proprietors a report of the business 
 transacted by the company during the year 1864. 
 
 In compliance with the requirement of the deed of settlement the accounts have 
 been prepared and audited,- and are as follows: 
 
 1st. The general balance sheet as on the 31st December, 1864. 
 
 2nd. The income account of receipts and payments for the year 1864. 
 ******* 
 
 It is gratifying to the directors to be able to add, that during the last six 
 
 months of the present year the new premiums have been gradually increasing. 
 
 The businesses of the Western Assurance Society and the Indian Laudable and 
 
 Kent Mutual Assurance Society have been recently acquired by this company : 
 
 an additional income has accrued thereby of £80,000 per annum, making our 
 
 present premium income nearly £353,000 a year. 
 
 ^t ))< ♦ sp ♦ 3(t ;fc 
 
 The audited accounts referred to in the report having been read : 
 It was moved by the Chairman, seconded by W. Church, Esq., and carried 
 unanimously : 
 
 That the reports of the auditors and directors upon the accounts and 
 business of the company to the end of 1864, be received and adopted. 
 
APPENDIX H. 
 
 H. 
 
 BANK OF LONDON : AGREEMENT FOR AMALGAMATION. 
 
 An Agreement made the 7th day of October in the year of our Lord 1858 
 
 between Sir Henry Muggeridge of John Cumberland of and 
 
 William Anthony Purnell of three of the directors of the Bank of 
 
 London and National Provincial Insurance Association (hereinafter called the 
 association) contracting on behalf of the said association under the authority and 
 
 direction of the board of directors of the one part and William Beattie of 
 
 James Croudace of and George Raymond of three of the 
 
 directors of the Albert Life Assurance Company (hereinafter called the company) 
 contracting on behalf of the said company under the authority and direction of 
 the board of directors of the said company of the other part : 
 
 Whereas a proposal was made and entertained for the transfer of the business 
 of the association to the company and thereupon a full investigation has been 
 made by or on behalf of the company into the affairs and position of the associa- 
 tion and the company being satisfied upon such investigation an agreement has 
 been come to between the board of directors of the association and the company 
 respectively subject to the approval and confirmation of a general meeting of 
 the association as hereinafter mentioned that the association shall sell transfer 
 and dispose of all their business property rights and liabilities that the company 
 shall purchase and take the same except so much of the business property rights 
 and liabilities as relates exclusively to insurance against loss or damage by fire 
 and shall make arrangements for the taking and disposal of the portion so 
 excepted in the manner and upon the terms and conditions herein expressed and 
 that the consideration or price shall be the full amount of the paid-up capital of the 
 association to be paid by the company in money or shares in the manner, and at 
 the times hereinafter mentioned' : 
 
 And whereas the board of directors of the association have by a minute or 
 resolution duly made by them authorized and empowered the said Sir Henry 
 Muggeridge John Cumberland and William Anthony Purnell to execute these 
 presents on behalf of the said board and the board of directors of the company 
 have by a minute or resolution duly made by them authorized and empowered 
 the said William Beattie James Croudace and George Eaymond to execute these 
 presents on behalf of the said last-mentioned board : 
 
 Now therefore it is agreed between the parties hereto on behalf of such asso- 
 ciation and company respectively as follows — 
 
 1. The business of the association (except so far as the same relates to in- 
 surance against loss or damage by fire or the risk of such loss or damage) and all 
 the goodwill benefit and advantage of such business except as aforesaid shall on 
 and from the 6th day of September 1858 be transferred and assigned or be 
 deemed to have been transferred and assigned to the company and shall thence- 
 forward belong to and be carried on and conducted by the company and the 
 association and the board of directors thereof shall on and from that day cease to 
 
BANK OF LONDON: AGEEEMENT FOE AMALGAMATION li 
 
 carry on such business except for the benefit of and in trust for the company in 
 the manner hereinafter mentioned. 
 
 2. All the moneys including debts or balances due or coming to the association 
 from agents or otherwise and all other property credits securities claims rights 
 and effects of the association (except those immediately connected with the said 
 business of insurance against loss or damage by fire) shall on and from the same 
 6th day of September 1858 become or be deemed to have become the property of 
 the company but notwithstanding this change of property the same shall until the 
 approval and confirmation of this agreement as hereinafter mentioned remain in 
 the possession of the association for the purposes and upon the conditions herein- 
 after mentioned and after such approval and confirmation the same shall except 
 as hereinafter mentioned be transferred and assigned to and pass into the hands 
 or possession of the trustees hereinafter mentioned and shall be retained by them 
 for the purposes and upon the conditions hereinafter expressed until the due per- 
 formance by the company of this agreement as hereinafter mentioned. 
 
 3. AH the debts engagements liabilities and risks of the association or of the 
 present or any other trustees of the association or any of them as such trustees 
 or trustee or of the board of directors of the association or of any officers thereof 
 on behalf of the association existing or in force up to or at the 6th day of Sep- 
 tember 1858 or thereafter arising or resulting from or out of any act or transac- 
 tion of the association or of such trustees trustee or board of directors on account 
 thereof and all claims and demands against the association or the trustees thereof 
 or any of them as such trustees or trustee or against any director or proprietor of 
 the association in respect of any act transaction or omission of the association or 
 of the board of directors thereof whether now known or communicated to the 
 company or not and whether first made before the said 6th day of September or 
 not and although the same may have arisen from some mistake inaccuracy 
 defalcation of agents or other default not being a fraud of the association their 
 directors or officers except such debts engagements liabilities risks claims and 
 demands as relate solely to the business of insurance against loss or damage by 
 fire (for which provision is hereinafter made) shall be paid performed borne 
 undertaken and met by the company and the company shall at all times save 
 harmless and keep indemnified the association and all trustees thereof and the 
 board of directors and all other proprietors thereof from and against the same and 
 
 ' from and against all actions suits and proceedings in respect thereof and all costs 
 and charges connected therewith hut always excepting fraudulent default. 
 
 4. In particular all the benefit and advantage of and all rights power claims 
 and demands of the association or of the then or present board of directors or 
 trustees of the association from or under the three several agreements mentioned 
 in the first schedule hereto 
 
 5. AH premiums and other sums of money after the said 6th day of Septem- 
 ber 1858 paid or payable upon or in respect of policies of assurance (except those 
 relating to insurance against loss or damage by fire) or upon or in respect of 
 endowments grants or engagements of the association in force on that day shall 
 subject to the confirmation of this agreement by the shareholders of the associa- 
 tion as hereinafter mentioned be received by and be the property of the company 
 and all risks engagement and liabilities upon or in respect of all such policies 
 endowments grants or engagements and all charges and expenses connected there- 
 
lii APPENDIX H. 
 
 with shall be borne and paid by the company and the holders of all such policies 
 shall be entitled to the same bonuses rights and privileges in all respects as if they 
 had been policies granted by the company on the day on which they respectively 
 bear date. 
 
 6. The association and the company shall respectively use their best endeavours 
 to procure the several persons holding or entitled to policies endowments grants 
 deeds of covenant or other engagements of the association or of any of the com- 
 panies or associations with whom the several agreements in the first schedule 
 
 were made to accept in exchange or in renewal policies endowments 
 
 grants deeds of covenant or engagements of the company and the company will 
 at their own expense on the application of persons interested therein grant execute 
 and deliver such substituted or renewed policies endowments grants deeds of 
 covenant or engagements to the several persons willing to accept the same. 
 
 [7. Delivery of books and papers.] 
 
 8. The association and their board of directors and officers will afford all 
 reasonable and proper information and aid to the company ...... 
 
 9. The company shall within three calendar months after the date of this 
 agreement find and procure some good and substantial company or association 
 carrying on the business of insurance against loss or damage by fire which will 
 take upon themselves and to which shall be transferred and assigned so much of 
 the business of the association as relates to insurance against loss or damage by 
 fire or the risk of such loss or damage 
 
 [10, 11. Fire. 12. Offices.] 
 
 13. After the approval and confirmation of this agreement each proprietor of 
 and in the association shall be entitled either to be paid in money at the times 
 hereinafter mentioned the full amount without any abatement or deduction of all 
 sums which may have been paid up or advanced upon the shares of which he is 
 the proprietor before the said 6th day of September 1858 (of which amount and 
 of the number of shares held by him the register of proprietors shall be evidence) 
 or at his option but subject to the approbation of the company to have allotted 
 and issued to him in lieu of all or any part of such amount so many shares in 
 the company of £20 each and upon each of which £3 shall be credited and taken 
 as having been paid as that the amount so credited as paid thereon shall be equal 
 in the aggregate to the sum in lieu whereof he has accepted such shares Provided 
 that the option of taking shares shall not (except by consent of the board of 
 directors of the company) be exercised after the 31st day of December 1858 
 Provided also that such option shall not be exercised as to any fractional part of 
 Three pounds. 
 
 14. The company shall and will on the 1st day of January 1860 pay to each 
 proprietor in the association or his representatives holding 20 shares only or a 
 less number than 20 shares in the association the amount in cash to which he 
 may be entitled under the preceding article and shall and will pay to each pro- 
 prietor in the association holding more than 20 shares the amount in cash to 
 which he may be in like manner entitled by three equal instalments payable 
 respectively on the 1st day of January 1860 the 1st day of January 1861 and the 
 1st day of January 1862 and shall and will also pay to each proprietor or his 
 representatives half-yearly on the 1st day of January and the 1st day of July in 
 each year interest at the rate of £5 per cent, per annum (free from income tax) 
 
BANK OF LONDON : AGEEEMENT FOR AMALGAMATION, liii 
 
 upon so much of the whole amount in money to which he may he entitled as may 
 for the time heing he outstanding or unpaid the first of such half-yearly payments 
 heing made on the 1st day of January 1859 and heing for half a year's interest 
 from the 30th day of June last and shall and will make all such payments at the 
 office of the company in Moorgate Street or some other place to be notified through 
 the post hy the company to each proprietor seven days at least hefore any day 
 for payment of an instalment and shall and will bear all the costs and expenses 
 of and attendant upon such payment and distrihution of such principal and 
 interest moneys respectively And shall also pay all the costs of and attending 
 the keeping up the requisite office for registering the transfer and transmission of 
 shares in the association until the whole of the said principal moneys and interest 
 are fully paid Provided that no further interest shall run or accrue upon any 
 part of such amount after it shall have become payahle to any proprietor or his 
 representatives unless the same shall remain unpaid hy the fault of the company. 
 
 15. The company shall and will subject to the provisoes above mentioned in 
 that hehalf cause every proprietor exercising the option of taking shares and of 
 whom they may so approve to he entered on the register of proprietors of the 
 company as the holder of the shares to which he may he entitled and as having 
 paid £3 upon each of them and every proprietor so registered shall in lieu of the 
 interest which he would have been entitled to from the 24th day of June last be 
 entitled to participate in and receive all dividends and profits of the company as 
 if he had been and been registered as a proprietor of the company on and from 
 the 30th day of June last and every notice to a proprietor shall he according to 
 his residence or address as apparent from such register. 
 
 16. Upon the approval and confirmation of this agreement the then manager 
 sub-manager and actuary of the association shall he continued in their employ- 
 ments hy or employed as officers of the company at an annual salary or rate of 
 remuneration equal or as nearly as the circumstances of the case will admit 
 equivalent to the present annual value or proceeds of the appointments now held 
 hy them respectively in the association it being in the option of the party on 
 either side to determine any such appointment or employment at any time by 
 giving notice to the party on the other side and the company in that case being 
 bound to make and pay to such officer a fair and reasonable compensation for the 
 loss by him of such appointment and the solicitor the medical officer and the 
 other officers of the association (except the manager sub-manager and actuary) or 
 such of them as shall not receive from the company appointments upon the staff 
 of the company upon the same or equivalent terms as those they respectively held 
 in the association shall be entitled to and shall receive one year's salary from the 
 time at which the company shall give them respectively notice of not requiring 
 their services. 
 
 17. The company shall forthwith on the execution hereof deposit at the branch 
 office of the London and Westminster Bank in St, James's Square in the names 
 of the trustees hereinafter mentioned the several securities mentioned in the 
 second schedule hereto or other equivalent securities to he approved by the asso- 
 ciation and representing in the whole the value of £50,000 and such securities 
 shall remain in deposit hy way of security or guarantee, for the due performance 
 hy the company of this agreement and be held and retained by the trustees either 
 until this agreement shall have been rejected by a general meeting of the asso- 
 
liv APPENDIX H. 
 
 ciation as hereinafter mentioned or until such time as the company shall have 
 fully paid and satisfied all principal money and interest and issued and entered on 
 the register all shares to which the proprietors in the association are respectively 
 entitled under this agreement when such securities shall be returned and handed 
 back by the trustees to the company provided that such securities or any of them 
 may at any time he inspected and copies thereof taken by any person on behalf 
 of the company and that the company may at any time remove or take away any 
 such securities on their first depositing the value of principal money represented 
 by such security either in cash or by an equivalent security to be approved by 
 the trustee^ according to clause No. 20 of this agreement. 
 
 18. All the freehold and leasehold property of the association and all their 
 securities for the payment of money consisting of mortgages bonds life interests 
 and reversions loans to policy holders on half credit premiums and all policies 
 connected with or forming part of such securities and all other deeds and instru- 
 ments of the like kind and the monies thereby secured or recoverable by means 
 thereof and all rights claims and demands upon or in respect of the same and 
 also all the cash at the bankers of the association and other, money in their pos- 
 session or power except debts or balances due or coming to the association from 
 agents or otherwise shall after the approval and confirmation of this agreement 
 as hereinafter mentioned be duly transferred assigned and made over by all 
 such deeds and assurances as may be necessary or proper in that behalf to the 
 trustees hereinafter mentioned to be held and retained by them by way of 
 security or guarantee until such time as the company shall have fully paid and 
 satisfied all principal money and interest and issued and entered in the register 
 all shares to which the proprietors of the association respectively may be entitled 
 under this agreement and such trustees shall on behalf of the association retain 
 and keep ...... 
 
 [19 — 25. Powers and duties and appointment of trustees. 
 
 26. Arbitration. 
 
 27. Confirmation by general meeting. 
 
 28. Provisional continuance of business. 
 
 29. Costs.] 
 
 In witness, &c. 
 
 Schedule I. states parties to agreements referred to — 
 
 3rd September 1857. Anchor Assurance Company and the Association. 
 2nd November 1857. Durham and Northumberland Life Fire Mariners 
 
 and General Provident Association and the Association. 
 25th February 1858. Merchants and Tradesman's Mutual Life Assurance 
 Society and the Association. 
 
 Schedule II. contains a list of securities referred to. 
 
Iv 
 
 I. 
 
 BANK OF LONDON: CIECULAE TO AGENTS ON AMALGA- 
 MATION. 
 
 Albert Life Assurance and Guarantee Company, 
 t 7, Waterloo Place, Pall Mall, London, 
 
 10th November, 1858. 
 Sir, — Referring to the annexed communication from the Bant of London and 
 National Provincial Insurance Association, I have the pleasure of apprising you 
 of your having been appointed to the agency of the Albert Company. 
 
 The amalgamation must be advantageous to your friends, the assured, as well 
 as to yourself, and I will, as speedily as possible, send you fresh papers, but until 
 you receive the new forms, be pleased to use those on hand. 
 Anticipating an early transmission of proposals, 
 
 I am, Sir, 
 
 Your obedient servant, 
 
 Henry William Smith, 
 Secretary. 
 
 Bank of London and National Provincial Insurance Association. 
 
 Threadneedle Street, 
 
 10th November, 1858. 
 Dear Sir, — I beg to inform you that by virtue of a resolution unanimously 
 passed at an extraordinary general meeting of the shareholders, held on the 20th 
 ult., the business of the Bank of London and National Provincial Insurance 
 Association is now amalgamated with the Albert Life Assurance and Guarantee 
 Company. The shareholders present personally and by proxy at that meeting 
 represented upwards of three-fourths of the entire capital of the association. 
 
 In accordance with the resolution above mentioned, the united life business will 
 for the future be carried on by the Albert Life Assurance and Guarantee Com- 
 pany, at No. 7, Waterloo Place, Pall Mall, and I have to request that you 
 will, on and after the 1st of January, 1859, correspond with and account to 
 Henry William Smith, Esq., their secretary, for all agency transactions then due 
 or accruing due, it being the intention to remove the business of our association to 
 Waterloo Place at about that date. 
 
 I have arranged for securing the continuance of your agency, and you will 
 shortly be called upon by a representative of the Albert Company, 
 The fire business will be transferred by the Albert, with the concurrence of 
 
 & 
 
lvi APPENDIX I. 
 
 this association, to an established office, and I may add that arrangements for 
 that purpose are now in active progress, of the result of which you will be 
 advised in due course. Your agency in this department will also be continued 
 by the absorbing fire office. 
 
 It will no doubt create surprise that the directors of our association should 
 have deemed it necessary to transfer so flourishing a business, but in order that 
 no misapprehension may exist as to the cause, and that you maybe satisfied that 
 the interests of the policy-holders have been considered, I beg to refer you to the 
 subjoined extracts from circulars addressed to the shareholders. 
 
 The agreement entered into with the Albert Company provides that the 
 policy-holders of our association shall be entitled to participate in the bonus of 
 that company becoming due at the close of the present year. 
 
 A renewal premium receipt has been specially prepared, and will be adopted in 
 future, by which the Albert Company will cover the risk, under the existing 
 policies of the Bank of London and National Provincial Insurance Association ; 
 but whenever required such policies may be exchanged for those of the Albert 
 Company. The Albert Company was established in 1838. 
 
 I am, dear Sir, 
 
 Yours faithfully, 
 
 Edmund Clench, 
 
 Manager and Secretary. 
 
 Extract from Circular addressed by the Directors to the Proprietors, dated 
 October 9, 1858 :— 
 
 " It will be in the recollection of the proprietors that at the adjourned general 
 meeting, held on the 29th May last, it was referred to a committee of shareholders 
 to ' confer and advise with the directors, with all power to make all necessary in- 
 quiries as to the past and future direction and management of the company, with 
 instructions to report to the shareholders at a special meeting to be called for that 
 purpose.' The committee then constituted have since devoted themselves un- 
 remittingly to the object of their appointment, but with little probability that 
 their efforts would lead to unanimity in the management, or even to that har- 
 monious action which is indispensable to the satisfactory working of the associa- 
 tion, and without which no undertaking, whatever may be its position or 
 prospects, can hope to prosper. 
 
 " Under these circumstances, the directors have taken into their serious con- 
 sideration a proposal which has been submitted to them by the Albert Life 
 Assurance Company, for the transfer of the business to that company, upon their 
 undertaking to repay the shareholders of the association at par, and it has been 
 determined, after mature deliberation, that it will be more conducive to the 
 interests of all parties to transfer the business of the association to another 
 company, than to carry it on in the prospect of divided and unharmonious 
 councils." 
 
 [Extract 
 
BANK OF LONDON: CIRCULAR ON AMALGAMATION. lvii 
 
 Extract from Circular addressed by the Committee of Shareholders to the 
 Proprietors, dated October 8, 1858 : — 
 
 " We have looked carefully at this offer made by the Albert Company, which 
 our directors accepted, but which was entertained by us only on condition that 
 the terms of the agreement should be such as we could fully approve. 
 
 " Before therefore giving our full assent, and always subject to your approval, 
 we required every stipulation that was thought important for the protection of 
 your interests to be embodied in the agreement ; and as we feel assured you 
 would consider that it is not merely your personal interests that should be 
 regarded, but that you are placed under a moral obligation also to see that the 
 future interests, of the policy-holders be amply secured, we have caused an exam- 
 ination to be made, by a well-known accountant, of the books of the Albert 
 .Company, together with the last balance-sheet ; the last actuarial valuation of 
 the company has also been examined by us, that we might be assured of their 
 ability to fulfil the terms of such agreement. 
 
 " That agreement . will be exhibited for your approval ; it affords the best 
 security we can obtain for effecting the object intended, and we think sufficient 
 protection for your interests, as well as the interests of the policy-holders, to 
 induce us to recommend you to confirm the same." 
 
 a 2 
 
lvhi APPENDIX K. 
 
 MEDICAL : AGEEEMENT FOE AMALGAMATION. 
 
 Articles of Agreement made and entered into the 21st day of September 1860 
 'between Benjamin Phillips of Edward Doubleday of Lieu- 
 tenant Colonel Henry Doveton of George Gun Hay of 
 
 George Gordon Macpherson of ..... . Sir Thomas Phillips of 
 
 Thomas Stevenson of Charles Grenville Mansel of and 
 
 James Whishaw of directors of the Medical Invalid and General Life 
 
 Assurance Society of the one part and William Beattie of Esquire M.D. 
 
 the Honorable Swynfen Thomas Carnegie of James Croudace of 
 
 Swynfen Jervis of William King of George Goldsmith 
 
 Kirby of James Nichols of The Eight Honourable Lord 
 
 George Paulet of George Eaymond of aDd Robert Whitworth 
 
 of directors of the Albert Life Assurance and Guarantee Company of 
 
 the other part : 
 
 Whereas at a board meeting of the directors of the said Albert Life Assurance 
 and Guarantee Company held on the 11th day of July 1860 resolutions were 
 passed in the words and figures following (that is to say) Resolved that this com- 
 pany do and they hereby offer the Medical Invalid and General Life Assurance 
 Society to take upon themselves the claims and engagements of the Medical 
 Invalid and General Life Assurance Society and to pay off the shareholders of the 
 same society upon the terms and conditions following (that is to say) : — 
 
 1. That from and after the day upon which this company shall acquire the 
 
 business of the Medical Invalid and General Life Assurance Society all 
 premiums and other moneys paid or payable upon or in respect of policies 
 theretofore issued by the Medical Invalid and General Life Assurance 
 Society shall belong to this company ; 
 
 2. That the shareholders in the Medical Invalid and General Life Assuranc-3 
 
 Society shall receive a present payment in cash of £5 for each of their 
 shares (namely) £2 16s. per share from the said Society and £2 is. per 
 share from this company or the same shareholders shall to the extent of 
 the shares held by them have the option of taking five shares in this 
 company on which £3 each share shall be considered to have been paid 
 for every three shares in the said society ; 
 
 3. The Life Assurance Fund of the Medical Invalid and General Life Assur- 
 
 ance Society taken at the sum at which the same may stand in their 
 books at the time the said company shall acquire the business of the 
 Medical Invalid and General Life Assurance Society including all pre- 
 miums interest and debts then due to the same society and unpaid 
 except the part thereof hereinafter mentioned after paying and satisfy- 
 ing all immediate claims and demands arising from assurances annuities 
 
MEDICAL : AGEEEMENT FOE AMALGAMATION. lix 
 
 endowments or other contracts or engagements shall be transferred to 
 six trustees resident in England (each company appointing three) upon 
 and for the trusts and purposes thereinafter mentioned and such part 
 of the said Life Assurance Fund as shall consist of investments or monies 
 in India shall be transferred to three trustees resident there and approved 
 of by ^x>th companies ; 
 
 4. That all claims in respect of policies in the Medical Invalid and General 
 
 Life Assurance Society occurring by deaths after four o'clock p.m. upon 
 the day on which the Albert Company shall acquire the business of the 
 Medical Invalid and General Life Assurance Society shall be discharged 
 by this company ; 
 
 5. That policy-holders in the, Medical Invalid and General Life Assurance 
 
 Society shall be invited to substitute for their subsisting policies other 
 policies to be issued by this company and which substituted policies 
 shall be deemed and considered to be of the dates of the original policies 
 and shall be of the same amount and subject to the like annual or other 
 periodical payments as those policies for which they shall be substituted 
 and which substituted policies this company shall grant to all persons 
 willing to accept the same ; 
 
 6. That the persons entitled to participate in profits and who shall accept 
 
 such substituted policies or who shall otherwise accept engagements by 
 this company instead of preserving the rights that shall belong to them 
 as policy-holders in the Medical Invalid and General Life Assurance 
 Society shall be entitled to share in the next and in all subsequent 
 bonuses to be declared by this company in the same manner as if their 
 policies had been originally issued by this company ; 
 
 7. That the policy-holders in the Medical Invalid and General Life Assur- 
 
 ance Society who shall decline to accept such substituted policies shall 
 be entitled to keep on foot their present policies by paying the premiums 
 thereon to this company who shall undertake the liabilities of the said 
 Medical Invalid and General Life Assurance Society in respect of such 
 policies ; 
 
 8. That the said Life Assurance Fund shall be held by the said trustees 
 
 upon trust for the term of ten years from the date hereof for securing 
 the obligations of the Medical Invalid and General Life Assurance 
 Society in respect of policies granted by them but a proportion of the 
 said trust funds shall be transferred from time to time to this company 
 as such obligations cease either by the substitution of new policies 
 or by other means and at the expiration of the said ten years the 
 remainder (if any) of such funds shall be transferred to this company 
 and whether any of the same obligations shall be. then subsisting or 
 not ; 
 
 9. That this company shall discharge all claims upon the Medical Invalid 
 
 and General Life Assurance Society and indemnify the same society 
 against all obligations of every kind into which it may have entered 
 except immediate claims and demands arising as aforesaid and which 
 are to be paid by the Medical Invalid and General Life Assurance 
 Society ; 
 
lx APPENDIX K. 
 
 10. The compensation (if any) to be received in respect of the losses of the 
 
 Medical Invalid and General Life Assurance Society occasioned by the 
 Mutiny in India shall belong to the Medical Invalid and General Life 
 Assurance Society and be divisible in the following manner (that is to 
 say) one-third part shall belong to the shareholders and the remaining 
 two-third parts to the existing policy-holders who would have been 
 entitled to a bonus in 1858 had any been then declared Provided 
 nevertheless that if such two-third parts exceed the bonus declared in 
 1853 such excess shall belong to this company ; 
 
 11. That the directors of the Medical Invalid and General Life Assurance 
 
 Society shall be entitled to be directors of the company That the 
 medical officers of the said society including Dr. Parr shall be entitled 
 to be medical officers of this company That the auditors shall be 
 employed at their present rate of remuneration or be compensated That 
 the bankers of the said society (Messrs. Hopkinson and Company) shall 
 be one of the bankers of this company And the solicitor of the said 
 society (R R Sadler esquire) shall be one of the solicitors of 
 
 this company That the secretaries and staff of the chief office and 
 Indian Branch shall be employed by this company at their present 
 salaries or at the option of this company be compensated should' their 
 services not be required ; 
 
 12. That a committee of the directors of the Medical Invalid and General 
 
 Life Assurance Society to be at liberty to investigate the character of 
 the securities on which the funds of this company are invested ; 
 
 13. That this company shall be distinguished by a new name or style to be 
 
 approved of by both companies. 
 And a second set of resolutions were passed in the words and figures following 
 that is to say — 
 
 1. That such of the directors of the Medical Invalid and General Life Assur- 
 
 ance Society as may be unwilling to become directors of this company 
 shall receive compensation from this company at the following rate 
 (videlicet) £1500 the chairman and £1100 each of the other directors 
 and that the directors of the said society who shall become directors of 
 this company shall in case of retiring from the board of directors of this 
 company at any time within three years from the date of the amalga- 
 mation receive from this company a similar compensation or in the 
 event of their death within such period of three years their legal repre- 
 sentatives shall be entitled to receive from this company the same 
 amount of compensation ; 
 
 2. That the medical officers of the said society who shall not be willing to 
 
 become medical officers of this company shall receive from this com- 
 pany a compensation of £1000 each and that the medical officers of the 
 said society who shall become medical officers of this company shall in 
 case of retiring from the medical staff of this company at any time 
 within the said term Of three years receive from this company a similar 
 compensation or in the event of their death within the said term of 
 three years their legal representatives shall be entitled to receive from 
 this company the same amount of compensation ; 
 
MEDICAL : AGEEEMENT FOB AMALGAMATION. Ixi 
 
 3. That the four auditors of the said society shall in case they shall not be 
 
 employed by this company be entitled to receive from this company a 
 compensation of £3Q0 each ; 
 
 4. That Dr. Farr shall receive from this company a compensation of £1000 
 
 in respect of one moiety of his full salary of £200 per annum and be 
 employed by this company and receive a salary of £100 per annum ; 
 
 5. That the accountant (Mr. W S A Cooper) shall be 
 
 employed by this company as one of its accountants at a salary of £300 
 per annum and if his services should be dispensed with within three 
 years for any other cause than misconduct he shall be entitled to receive 
 from this company a compensation equal to two years' salary ; 
 
 6. That the clerks and servants of the chief office and Indian branch of the 
 
 said society shall be employed by this company at the same salary as 
 each of them is or may be entitled to receive under existing arrange- 
 ments with the said society and if within three years the services of all 
 or any of them shall be dispensed with for any other cause than miscon- 
 duct the person whose services shall be so dispensed with shall be enti- 
 tled to compensation. upon the following scale (videlicet) Such of them 
 as shall not have been five years in the service of both companies 
 together (that is to say) reckoning the period of service in each company 
 to be paid one year's salary as compensation Such as shall have been 
 more than five years and less than seven years to be paid one and 
 a-half year's salary as compensation And such of them as shall have 
 been more than seven years to be paid two years' salary as compen- 
 sation : 
 And whereas at a special general meeting of the proprietors of the said Medical 
 Invalid and General Life Assurance Society held on the 29th day of August 1860 
 after the hereinbefore recited resolutions passed by the directors of the said Albert 
 Life Assurance and Guarantee Company at the said hoard meeting held on the 
 11th day of July 1860 and also the following addition to paragraph 8 of the first 
 set of the said hereinbefore recited resolutions namely " The Life Assurance Fund 
 is to include ajl interest and dividends arising therefrom during the continuance 
 thereof and the costs and expenses of the trustees are to be borne by the fund 
 The portion of the trust funds to be from time to time transferred to the company 
 shall be settled by an actuary to be appointed by the trustees " had been respec- 
 tively read it was resolved that upon the dissolution of the said society the pro- 
 posals contained in the said several resolutions of the said Albert Company then 
 read with the aforesaid addition to the said eighth paragraph of the first set 
 thereof should be accepted and it was at the same special meeting of. the pro- 
 prietors of the said Medical Invalid and General Life Assurance Society further 
 resolved that pursuant to the terms of their deed of settlement the said society 
 should he dissolved : 
 
 And whereas at a board meeting of the directors of the said Albert Life Assur- 
 ance and Guarantee Company held on the 19th day of September 1860 it was 
 resolved that the said addition to the eighth clause of the said first set of resolu- 
 tions should be and the same was thereby adopted and confirmed : 
 
 And whereas at a board meeting of the directors- of the said company held on 
 the 19th day of September 1860 a draft of these presents was read and approved 
 
Ixii APPENDIX K. 
 
 and it was resolved that the engrossment of these presents should be executed by 
 the directors of the said company : 
 
 And whereas at a board meeting of the directors of the said Medical Invalid 
 and General Life Assurance Society a draft of these presents was read and 
 approved and it was resolved that the engrossment of these presents should be 
 executed by the directors of the said Society : 
 
 Now these presents witness that it is hereby mutually and reciprocally agreed 
 between and by the parties hereto that all and singular the stipulations acts and 
 things agreed to by the hereinbefore recited resolutions shall be well and truly 
 fulfilled performed and done : 
 
 i And particularly it is hereby agreed that the business of the said Medical 
 Invalid and General Life Assurance Society shall be deemed and become and be 
 the business of the said Albert Life Assurance and Guarantee Company on the 
 21st day of September 1860 being the day on which the second special general 
 meeting of the proprietors of the said Medical Invalid and General Life Assurance 
 Society is appointed to be held for the purpose of confirming the hereinbefore recited 
 resolution for dissolving the same Society or in case such meeting shall be adjourned 
 then on the day of such adjournment And that the payment to the shareholders 
 in the said Medical Invalid and General Life Assurance Society of £5 for each of 
 their shares mentioned in the second paragraph of the said first set of the said recited 
 resolutions passed at the said board meeting of the directors of the said Albert Life 
 Assurance and Guarantee Company shall become due on the said 21st day of Sep- 
 tember 1860 or in case such meeting shall be adjourned then on the day of such 
 adjournment together with interest at the same rate and upon the same sum as 
 has hitherto been paid by the said Medical Invalid and General Life Assurance 
 Society from the last payment of interest and be paid with interest upon the said 
 £5 for each share at the rate of £5 per cent, per annum to be computed from the 
 said 21st day of September 1860 or in case the said meeting shall be adjourned 
 then from the day of such adjournment to the day of actual payment or the day 
 to be appointed by the said Albert Life Assurance and Guarantee Company for 
 such payment (such last-mentioned day being within four months from the day 
 of the date hereof whichever shall first happen) such last-mentioned interest to be 
 paid exclusively by the said Albert Life Assurance and Guarantee Company 
 Provided nevertheless that nothing hereinbefore contained shall in any way pre- 
 vent the shareholders from being entitled to demand payment of the said £5 per 
 share and interest immediately after the said 21st day of September and that a 
 further formal deed shall be entered into and executed for completely and minutely 
 effecting the several purposes agreed to by the said resolutions and these presents 
 Provided always and it is hereby declared that if the aforesaid resolu- 
 tion for dissolving the said Medical Invalid and General Life Assurance Society 
 passed at the said special general meeting of the proprietors of the same Society 
 held on the 29th day of August 1860 shall not be confirmed at the second 
 special general meeting appointed to be held on the 21st day of September 1860 
 for the purpose of confirming or rescinding the same or in case the said meeting 
 shall he adjourned then on the day of such adjournment then these presents and 
 everything herein contained shall be absolutely void anything hereinbefore 
 contained to the contrary notwithstanding : 
 In witness &c. 
 
ixiii 
 
 L. 
 
 MEDICAL : CIECULAE ON AMALGAMATION. 
 
 Medical Invalid and General Life Assubance Society. 
 
 25, Fall Mall, London, S.W. 
 1st October, 1860. 
 
 Sib, — I beg to inform you that in pursuance of the power of the deed of settle- 
 ment of this society and of resolutions passed at two special meetings of proprietors, 
 the directors have entered into an arrangement with the Albert Life Assurance 
 Company, in accordance with which the affairs of both companies are intended 
 to be conducted by the continuing company under the style of the Albert and 
 Medical Life Assurance Company, by whom all the engagements of this society 
 will be satisfied. 
 
 Under this arrangement the accumulated funds of this society will be invested 
 to meet its liabilities, whilst its policy-holders will enjoy the additional security 
 afforded by the combined income arising from the amalgamated business of both 
 companies, amounting to more than £220,000 annually, and the further guarantee 
 of a numerous proprietary of undoubted respectability. 
 
 The Albert Company has agreed to issue policies in exchange for those of this 
 society at the same rate of premium as that now payable on the policies effected 
 in this office, without any alteration of the terms or conditions of the present 
 policies ; and if any policy-holder should have assigned his policy by any legal 
 instrument in settlement, mortgage, or otherwise, so as to render substitution 
 difficult, an indorsement can be made on the policy securing the full responsi- 
 bility and guarantee of the Albert and Medical Life Assurance Company for the 
 fulfilment of the existing contract. 
 
 The business of the Albert Company began in 1838. Four bonuses have been 
 declared varying from 25 to 50 per cent, on the premium paid. The next 
 estimate of profits will take place at the end of 1861, and future estimates every 
 succeeding three years after that time ; and all Medical bonus policies will be 
 entitled to participate in the bonus of 1861, being two years earlier than a bonus 
 could have been declared by the Medical Society under its deed of settlement. 
 
 By the combination of the business of the two companies a very considerable 
 saving in the expenses of management will be secured, which must materially 
 increase the bonus-giving power of the amalgamated company, and thus afford 
 improved prospects to the assured. 
 
 At two numerously attended meetings of the proprietors of this society (many 
 of whom are large policy-holders) it was unanimously considered that the 
 arrangements were advantageous to the assured both as regards security and 
 future expectation of benefit; and the directors believe that the acceptance of 
 policies in the amalgamated company will substantially promote the interests of 
 the policy-holders. 
 
 It may be satisfactory to add that Dr. Farr, who is a policy-holder to a large 
 amount, and who has been consulted, and has advised upon the amalgamation, 
 
 fully concurs in this opinion. 
 
 I am, Sir, 
 
 Your obedient servant, 
 
 C. Douglas Singeb, 
 
 Secretary. 
 
Ixir APPENDIX M. 
 
 M. 
 
 FAMILY ENDOWMENT: AGREEMENT FOE AMALGA- 
 MATION. 
 
 Articles op Agreement made the 5th day of February 1861 between John 
 
 Puller of Joseph Walker Jasper Oiiseley of and Jasper 
 
 Wilson Johns of three of the directors of the Family Endowment 
 
 Society (hereinafter called the society) and acting on behalf of the said Society 
 
 of the one part and William Beattie of James Croudace of 
 
 and George Raymond of three of the directors of the Albert and 
 
 Medical Life Assurance Company (hereinafter called the company) and acting on 
 behalf of the said company of the other part : 
 
 Whereas the said society and company respectively carry on the business of 
 life assurance in the United Kingdom and have also respectively agencies in 
 various parts of the East Indies ; 
 
 And whereas the company lately made a proposal to the society that the said 
 society should dissolve and consequent on such dissolution should transfer to the 
 company upon the terms and in manner hereinafter expressed all the assets and 
 liabilities of the society : 
 
 And whereas such proposal was considered by the directors of the society 
 And it was resolved that the question of the dissolution of the society and of the 
 acceptance in that event of the proposal of the company should be submitted to 
 the consideration of the proprietors in the society at extraordinary general meet- 
 ings to be for that purpose convened in accordance with the provisions of the deed 
 of settlement of the society : 
 
 And whereas as regards the society these presents are intended to be pro- 
 visional and to take effect only in the event of the said dissolution being resolved 
 on in manner by the deed of settlement of the society provided and of the said 
 arrangement being adopted by the said proprietors : 
 
 And whereas by resolutions of their respective boards of directors the respec- 
 tive parties hereto have been authorized on behalf of the society and company to 
 execute these presents And it is intended and hath been resolved by the board 
 of directors of the society that extraordinary general meetings of the said pro- 
 prietors shall be forthwith convened for the purpose of considering the expediency 
 of dissolution and (if such dissolution be resolved upon) of adopting the preseiit 
 agreement : 
 
 Now therefore it is agreed between the parties hereto as follows : — 
 
 1. The business of the society shall as from the 1st day of January 1861 be 
 and be deemed to have been transferred to and vested in the company. 
 
 2. All the moneys (including debts or balances due or coming to the society 
 from agents or otherwise) and all other property credits securities and effects of 
 the society shall as from the said 1st day of January 1861 become and be deemed 
 
FAMILY ENDOWMENT : AGREEMENT FOR AMALGAMATION, lxv 
 
 to have become the property of the company and as soon as conveniently can 
 be and circumstances will permit shall be transferred to and be vested in the 
 company or their trustees. 
 
 3. All the debts engagements liabilities and risks of the society or of the pre- 
 sent or any other trustees of the society or any of them as such trustees or 
 trustee or of the board of directors of the society or of any officers thereof on 
 behalf of the society existing or in force up to or on the said 1st day of January 
 1861 or thereafter arising or resulting from or out of any act of the society or of 
 such trustees trustee or board of directors on account thereof and all claims 
 and demands against the society or the trustees thereof or any of them as such 
 trustees or trustee or against any director of or shareholder in the society in 
 respect of any act transaction or omission of the society or of the board of direc- 
 tors thereof whether now known or communicated to the company or not and 
 from whatever cause the same may arise (except wilful fraud on the part of the 
 society their directors or officers) shall be wholly paid performed undertaken and 
 met by the company and the company shall at all times save harmless and keep 
 indemnified the society and the trustees and directors and shareholders from and 
 against the same and from and against all actions suits and proceedings in respect 
 thereof and all costs and charges connected therewith. 
 
 [4. Agreement with Empire Company.] 
 
 5. All premiums and other sums of money after the said 1st day of January 
 1861 paid or payable upon or in respect of policies of assurance or upon or in 
 ■respect of endowments grants or engagements of the society in force on that day 
 shall belong to and be the property of the company and all risks engagements 
 and liabilities upon or in respect of all such policies endowments grants or 
 engagements and also all charges and expenses connected therewith shall be borne 
 and paid and satisfied by and out of the funds of the company. 
 
 6. The society and the company shall respectively use their best endeavours 
 to procure the several persons holding or entitled to policies endowments grants 
 deeds of covenant or other engagements of the society or of the said Empire 
 Assurance Company to accept in exchange or in renewal policies endowments 
 grants deeds of covenant or engagements of the company and the company will 
 at their own expense on the application of the persons interested therein respec- 
 tively grant execute and deliver such substituted or renewed policies endowments 
 grants deeds of covenant or engagements to the several persons willing to accept 
 the same. 
 
 7. The holders of all such policies of assurance in the society as would be 
 entitled to participate in the profits of the society (and who shall accept in 
 exchange policies of the company or otherwise coDcur in accepting the engage- 
 ments of the company) shall be entitled to participate in the profits of the com- 
 pany at the valuation and division of profits of the company to take place 
 immediately after this current year and in every succeeding division of profits 
 upon the same scale and at the same rate as if such substituted policies respec- 
 tively had been policies granted by the company on the day on which they 
 respectively bear date. 
 
 8. All the books papers and documents of the society shall as from the said 
 1st day of January 1861 become the property of the company and shall be 
 delivered over to the company accordingly. 
 
Lxvi APPENDIX M. 
 
 9. The society their board of directors and officers will afford all reasonable 
 
 and proper information and aid to the company. 
 
 [10. Office.] 
 
 11. The company shall at the expiration of six calendar months from the 
 day on which the second special general meeting of the proprietors of the society 
 shall be held for the purpose of confirming the present agreement or in case such 
 meeting shall be adjourned then from the day of such adjourned meeting pay to 
 «ach of the shareholders in the society by way of satisfaction and in extinction of 
 his share or shares in the capital of the society the sum of £4 for every share to 
 which he is entitled according to the register of shareholders of the society (being 
 the amount per share which has been paid up by such shareholders) together with 
 interest at five per cent, per annum payable in manner following (that is to say) 
 one-half year's interest to be paid on the 1st day of July now next ensuing and 
 interest for the number of days which shall elapse between the said 1st day of 
 July and the day of the expiration of the said six calendar months to be paid on 
 that day and such payment shall be made at the office of the company in 
 Waterloo Place or elsewhere in London as the company shall appoint and the 
 company shall send by post to each shareholder according to his address in the 
 said register not less than seven days' previous notice in writing of the place and 
 time of such payments. 
 
 12. That the actuary and secretary of the society shall go over to and continue 
 with the company as the actuary and secretary of the Indian Branch of the 
 business of the company upon the present terms and at the present rate of re- 
 muneration but in the event of his services not being required by the company 
 he shall be compensated by the company. 
 
 13. That such two of the directors of the society as the board of directors shall 
 in that behalf nominate shall when duly qualified for that purpose according to 
 the company's deed of settlement become directors of the company. 
 
 14. That such of the clerks at the head office of the society as the company 
 may require shall go over to and continue with the company at their respective 
 present salaries. 
 
 15. That the company shall compensate and indemnify the existing officers of 
 the society in respect of the determination of their respective offices and appoint- 
 ments under the society in manner following that is to say they shall pay to each 
 director (except the directors who shall become directors of the company) the 
 sum of £250 and to the chairman of the board of directors an additional sum of 
 £100 and to the deputy chairman an additional sum of £50 To each of the three 
 ordinary members of the Indian Committee the sum of £100 and to the chairman 
 thereof the sum of £500 or as he shall elect an annuity of £100 for his life payable 
 half-yearly. To each of the three members of the finance committee the sum of 
 £50. To each clerk (except such as shall be required by the company to go over 
 to and continue with the company) if on the said 1st day of January 1861 he 
 had been in the service of the society for less than five years one year's salary but if 
 for more than five but less than seven years one and a half year's salary if for more 
 than seven but less than ten years two years' salary and if more than ten years then 
 in addition to such two years' salary such further amount as the board of directors 
 of the company shall think fair and proper. To the chief medical adviser the 
 sum of £250 and to each of the two West End medical referees the sum of £50 
 
FAMILY ENDOWMENT : AGREEMENT EOR AMALGAMATION, lxvii 
 
 To each of the two auditors the sum of £25 and to the late superintendent of 
 agents the sum of £100 and to the society's messenger the amount of one year's 
 wages and with respect to the solicitor of the society he shall continue to act as 
 such in relation to the said transfer to the company of all the at present subsist- 
 ing investments of the society and also for the purpose of winding-up the affairs 
 of the society and the company shall employ him as their solicitor in relation to 
 all the at present subsisting investments of the society after the same shall be 
 transferred to the company and that in all business to be hereafter introduced by 
 him direct to the company he shall act as their solicitor And further that he 
 shall be paid the sum of £3000 as compensation for such loss as he may sustain in 
 respect of the proposed transfer of the business of the society to the company and 
 the company shall as to all and every the principal sums of money to become 
 payable by them by way of compensation or, indemnity as aforesaid pay and 
 make good the same respectively at the expiration of six calendar months from the 
 day on which the said second special general meeting of the proprietors of the 
 society shall be held for the purpose of confirming the present agreement or in 
 case such meeting shall be adjourned then from the day of such adjourned 
 meeting. 
 [16. India. 
 
 17. Arbitration. 
 
 18. Meeting for confirmation. 
 
 19. Provisional conduct of business. 
 
 20. Costs.] 
 
 In witness &c. 
 
APPENDIX N. 
 
 N. 
 FAMILY ENDOWMENT : CIBCULAE ON AMALGAMATION. 
 
 Family Endowment Life Assurance and Annuity Society, 
 
 42, New Bridge Street, London, E. 0. 
 March 16th, 1861. 
 
 Sir, — I am instructed by the directors of this society to inform you that 
 special general meetings, duly convened in accordance with the society's deed of 
 settlement, and numerously attended, having, pursuant to the power contained 
 therein, resolved unanimously to dissolve this society, and having further re- 
 solved unanimously to combine the business with that of the Albert and Medical 
 Life Assurance Company, the affairs of the two will henceforth be carried on 
 under the title of the Albert Medical and Family Endowment Life Assurance 
 Company, a prospectus of which I herewith enclose. 
 
 In making this announcement, it is right to inform you of the reasons which 
 have led to the course adopted and the advantages thereby conferred upon the 
 policy and contract holders of the society. Although many of the reasons will be 
 evident upon consideration of the advantages obtained, and hereafter referred to, 
 it may be here stated that the leading or chief cause of the arrangement made has 
 been the claims arising through the mutiny in India, which claims (not having 
 been compensated by the Government as was expected, for reasons which need 
 not, however, be alluded to here, would, at least to some extent, have been done), 
 have, notwithstanding the suspension of the Family Endowment Society's bonuses 
 on their account in and from 1858, rendered it impossible to consider that a fair 
 and legitimate bonus could be granted by the society at the end of the year, as 
 expected by policy-holders, and doubtful whether one could be declared for some 
 time to come. This being the case, the directors, alive to the position of the ' 
 society, and bearing in mind the expectations of assurers in regard to profits, 
 became fully impressed with the importance and advantages of such a course as 
 that which has been adopted ; and, after anxious consideration and negotiation, 
 succeeded in perfecting the arrangements made under which they have secured 
 the following important advantages for the policy and contract holders of the 
 Family Endowment Society. 
 
 First. The Albert Medical and Family Endowment Life Assurance Company 
 have agreed, upon payment to them of the premiums payable under the 
 policies or contracts of the Family Endowment Society, to undertake the 
 liabilities and engagements of those contracts. 
 
 Second. The future security of the policy-holders will be that of a highly 
 respectable and powerful company, whose position, income, and progress 
 are such as to render it proof against fluctuations which might seriously 
 affect a less important institution. 
 
FAMILY ENDOWMENT: CIRCULAR ON AMALGAMATION, Ixix 
 
 The position, income, and progress of the Albert Medical and Family Endow- 
 ment Life Assurance Company are as follow : — 
 
 The accumulated assets exceed £650,000 
 
 The subscribed capital 500,000 
 
 The paid-up capital 145,000 
 
 The annual income from life premiums alone exceeds . 250,000 
 The policy claims and bonuses paid amount to about . 1,000,000 
 And the new business is progressing at the rate per 
 
 annum of about 30,000 
 
 Third. The capital of £500,000, referred to in the preceding, is practically 
 rendered secure by being subscribed for by responsible and influential 
 shareholders six to seven times as numerous as those of the Family 
 Endowment Society. 
 
 Fourth. In consideration of the great saving of expenses and other advan- 
 tages likely to arise out of the combination of the businesses of the two 
 societies it has been agreed and arranged that the with-proflt life assur- 
 ance policy-holders of the Family Endowment Society shall participate 
 in the profits of the combined company " upon the same scale " as if 
 their policies had been policies granted by the combined company " on 
 the day on which they respectively bear date." In regard to the above 
 excellent arrangement for policy-holders, it may be stated that it is pro- 
 posed to declare the next bonus after the expiration of the current year, 
 at, in fact, the exact period which but for non-compensated losses occa- 
 sioned' by the mutiny, a bonus would, in all probability, have been 
 declared by the Family Endowment Society ; and it must not be over- 
 looked that the participating policies are to rank as though they had been 
 original policies. 
 
 It may be further stated that the Albert and Medical Company, esta- 
 blished in 1838, has declared several bonuses which will compare well 
 with those declared- by other offices, and varying from 25 to 50 per cent, 
 on the premiums paid. 
 
 Fifth. — The material part of the expenses of management of the Family En- 
 dowment Society which, as intimated in the preceding paragraph, will 
 be saved, must increase the future profits of the combined company, and 
 thereby afford improved bonuses to the assured. 
 
 In conclusion, I may add that it will not be necessary in any way to disturb the 
 existing policies and contracts of the Family Endowment Society, but should any 
 policy or contracHiolder particularly desire it, an endorsement of the admission of 
 the liability of the Albert Medical and Family Endowment Life Assurance Com- 
 pany can be put upon the policy ; or, a new policy issued in exchange upon the 
 terms and conditions of the old policy. Policies sent to me at this office to be so 
 indorsed or exchanged will be acknowledged, and will be duly attended to as soon 
 
 as circumstances will allow. 
 
 I am, Sir, 
 
 Your obedient servant, 
 
 Edwin H. Galsworthy, 
 
 Actuary and Secretary. 
 
lxx. APPENDIX N. 
 
 In the case of annuity contract-holders the following was added : 
 P.S. — As an annuity contract-holder of the Family Endowment Society, I have 
 to call your attention to advantages you derive under the paragraphs on the pre- 
 ceding page commencing first, second, and third. I have also to call your atten- 
 tion to the concluding paragraph, and to inform you that annuities payable under 
 contracts issued by the Family Endowment Society will henceforth be payable and 
 paid by the Albert Medical and Family Endowment Life Assurance Company, at, 
 until further notice, this office, 42, New Bridge Street, as hitherto. 
 
 E. H. G. 
 
lxxi 
 
 o. 
 
 WESTERN : AGREEMENT FOR AMALGAMATION. 
 
 An Agreement made and entered into this 14th day of June 1865 between 
 
 Peter Hood Edward VansittaTt Neale and Henry Edgeworth 
 
 Bicknell three of the directors of the Western .Manchester and Lon- 
 don Life Assurance Society a society established by deed of settlement dated the 
 1st of July 1842 and supplemental deeds thereto (hereinafter called the said 
 Society) of the one part and William Page Thomas Phillips and Robert Whit- 
 worth and George Goldsmith Kirby three of the directors 
 
 of the Albert Life Assurance Company a company established by deed of settle- 
 ment dated the and supplemental deeds thereto (hereinafter called 
 the said company) of the other part : 
 
 Whereas the board of directors of the said society and company respectively 
 have resolved that an amalgamation of the said society with and transfer of its 
 business and liabilities and assets to the said company is desirable and it has 
 been deemed expedient that a provisional agreement for such amalgamation and 
 transfer should be entered into for the purpose of determining the terms upon 
 which the said society shall transfer its business and liabilities and assets to the 
 said company if it be found that the said society and company have power to 
 carry into effect such amalgamation and transfer or can obtain such power without 
 having recourse to parliament : 
 
 And whereas the directors of the said society in extraordinary board assembled 
 by a resolution dated the 13th day of June 1865 have recommended the disso- 
 lution of the said society in order to carry into effect such amalgamation and 
 transfer in accordance with the deed of settlement of the said society : 
 
 Now it is hereby agreed and declared between the parties hereto on behalf 
 of the said society and company respectively : 
 
 1. The directors of the said society shall as soon as practicable after the exe- 
 cution of this agreement convene two extraordinary general meetings of the 
 society in conformity with the provisions of the deed of settlement thereof for 
 the purpose of dissolving the said society. 
 
 2. Upon the confirmation by such second extraordinary general meeting of a 
 resolution for dissolving the said society and in consideration of the transfer of 
 funds and property to be made to them as next hereinafter is provided the said 
 company shall pay and satisfy all claims and demands upon the said society 
 arising from assurances annuities and other contracts anot engagements when and 
 as the times for the payment and satisfaction of the same successively arrive and 
 shall take upon itself all other the liabilities of every description of the said 
 society. 
 
 3. In consideration of such undertaking as last aforesaid and of the provisions 
 hereinafter contained respecting the policies of the said society and the several 
 other conditions herein contained the said society shall as soon as is practicable 
 
 E 
 
lxxii APPENDIX 0. 
 
 after the passing of such second resolution transfer to the said company all the 
 funds and property of the said society of whatever kind they may be good bad 
 or doubtful together with the right to receive all premiums that may become 
 payable in respect of all the then existing policies either issued by the said 
 society or the liabilities under which have been undertaken by the said society 
 and all other amounts due and payable or to become due and payable to the 
 said society it being agreed that the said company shall take upon itself all risk 
 and loss attending the realization of the assets of the said society such assets 
 having been examined and approved previous to the execution of this agreement 
 by the accountant of the said com pany on its behalf. 
 
 4. The said company shall give to all policy-holders in the said society whose 
 policies are in existence at the period of its dissolution the same present and 
 future facilities privileges and benefits in every respect as if they had been 
 effected with the said company and shall in every case where the said society has 
 entered into any special contract with the holder of any such policy observe the 
 same in like manner as the said society would be bound to do if such dissolution 
 had not taken place except as to future bonus in respect of policies becoming 
 claims before the 31st day of December 1866. 
 
 5. On policies in the said society on the participating scale which become 
 claims before the next valuation of the profits of the said company as at the 
 31st day of December 1866 the claimants shall be entitled to a bonus of ten per 
 cent, on the premiums which have been paid during the last five years ending the 
 31st day of December 1864 in addition to the sum assured and to all bonuses 
 previously added to such policies by the said society At the next and all future 
 divisions of profit by the said company the policy-holders in the said society on 
 the participating scale shall participate rateably in the same manner as if their 
 policies had been originally taken out in the said company. 
 
 6. The books accounts papers vouchers and documents of the said society shall 
 be handed over to the said company who shall hold the same for the purpose of 
 carrying on the business but the same shall at all convenient times duriDg the 
 winding-up of the said society be open to the inspection of the managers of the 
 winding-up referred to in Article 10. 
 
 7. The agencies connections and goodwill of the said society shall become the 
 property of the said company and in consideration thereof the said company shall 
 grant to every holder of shares in the said society (such shares amounting in the 
 aggregate to 34519 or thereabouts) one share of £20 in the said company upon 
 which £10 shall be deemed to have been paid for every ten shares held by him 
 in the said society and shall also pay to every shareholder therein the sum of 
 *4s. 6d. for every share held by him in the said society by three equal half-yearly 
 instalments secured by acknowledgments in writing from the said company with 
 interest at five per cent, per annum the first thereof to become due and be paid on 
 the 1st day of July 1866 Where any shareholder in the said society holds any 
 number of shares not divisible by ten without leaving a remainder then the 
 fractional number left over shall be dealt with as the board of the company in 
 each case determine. 
 
 8. The shares of the said company issued to shareholders in the said society 
 shall bear interest by way of dividend at the rate of five per cent, per annum so long 
 as the other shares in the said company bear a dividend or bonus of not less than 
 
WESTERN: AGREEMENT EOB AMALGAMATION. lxxiii 
 
 five per cent, and not exceeding six and a-half per cent, per annum. And in case in 
 any year the rate per cent, of dividend or bonus declared on the present shares in 
 the~ said company other than those issued to shareholders in the said society in 
 pursuance of this agreement is increased beyond six and a-half per cent, the divi- 
 dend paid on the shares so issued shall be equally increased beyond the five per 
 cent, aforesaid. 
 
 9. Within three weeks after such confirmation as aforesaid of the resolution for 
 dissolving the said society the board of directors of the said company shall nomi- 
 nate four of the directors of the said society to be appointed directors of the said 
 company and four others of the directors of "the said society to be elected trustees 
 of the said company and within three months after such date shall cause such 
 appointments and elections to be completed and if any person so appointed a 
 director holds less than 500 shares in the said society the sum paid upon the shares 
 allotted to him may be diminished as he directs so that he hold such qualifica- 
 tion as is required by the deed of the said company. 
 
 10. The persons so nominated as directors shall act as managers of the winding- 
 up of the said society under the direction of the board of the said company such 
 four directors receiving the same fees from the date of the dissolution as if they 
 were directors of the said company from that time until they shall be elected or 
 appointed directors of the said company. 
 
 11. The persons so elected as trustees shall receive while holding office fees of 
 fifty guineas a year each payable at the end of each year counted from the date of 
 the dissolution subject to their holding and continuing to hold the shares in the 
 said company to be allotted to them as shareholders in the said society under this 
 agreement. 
 
 12. The directors of the said society who shall retire not exceeding six in 
 number shall be entitled to receive from the said company at the end of six 
 months from the date of the dissolution three years' fees at the rate of one hundred 
 guineas each per annum. 
 
 13. George Henry Drew esquire one of the directors of the said society shall 
 be appointed one of the solicitors of the said company. 
 
 14. Messrs. Cocks Biddulph & Co. the bankers of the said society shall be 
 appointed one of the bankers to the said company. 
 
 15. Messrs. Lethbridge and Mackrell solicitors to the said society shall receive 
 three hundred and sixty pounds on their resigning such office and entering into 
 an undertaking with the said company not only rot to act for any other life 
 assurance society for twelve months but to give their friendly assistance in 
 perfecting the amalgamation and in keeping up the policies of their clients. 
 
 16. Dr. Basham medical officer of the said society in London and Mr. Leigh 
 at Manchester shall be retained as medical officers of the said company at their 
 present salaries. 
 
 17. Such compensation as the united board may determine shall be given to 
 the clerks and officials of the head and Manchester branch of the said society 
 unless they are retained and their salaries shall be paid by the said company 
 until their appointments are terminated by the united board. 
 
 18. The board of directors of the said society will at the request and cost of 
 the said company execute all deeds and do all acts that may be necessary or that 
 counsel may advise (except applying for a special Act of Parliament) for more 
 
lxxiv , APPENDIX 0. 
 
 effectually vesting in the said company or its trustees all the funds and property 
 connections agencies and goodwill of the said society and the said company will 
 at the request of the directors of the said society but at its own cost execute all 
 deeds and do all acts that may be necessary or that counsel may advise (except 
 applying for a special Act of Parliament) for more effectually undertaking the 
 liabilities of the said society and releasing the said society therefrom. 
 
 19. In case of any question or difference arising between the company and the 
 society as to this agreement or any matter connected therewith it. shall be 
 referred to arbitration in the usual way and the provisions of the Common Law 
 Procedure Acts as to references arbitrations and awards shall extend and apply to 
 any such reference in the same manner as if those provisions had been repeated 
 in this agreement. 
 
 20. This agreement shall be null and void if the proprietors of the said society 
 do not confirm the resolution for its dissolution within three months from the 
 date hereof. 
 
 In witness &c. 
 
1XXY 
 
 P. 
 
 WESTERN: CIRCULAR ON AMALGAMATION. 
 
 Western, Manchester, and London Life Assurance Society, 
 
 3, Parliament Street, S.W., London, 
 14-th July, 1865. 
 Dear Sik,— I beg to inform you that the directors of this society, acting under 
 the powers conferred by the deed of settlement, and with the unanimous concur- 
 rence of the shareholders, have incorporated the business of the Western, Man- 
 chester, and London Life Assurance Society with that of the Albeit Life 
 Assurance Company, established 1838. 
 
 This step has been taken under the advice of Professor Sylvester, F.H.S. (for- 
 merly actuary to J the Equity and Law Life Assurance and Law Reversionary 
 Interest Societies), in which the actuary of the society, Mr. Scratchley, has 
 concurred. 
 
 The objects of the directors have been 
 
 First. To increase the protection of policy-holders from aberrations in the 
 law of mortality, which unavoidably attend the operations of compara- 
 tively small assurance societies. 
 
 Second. To increase the funds available for divisions of profit by diminish- 
 ing the relative expenditure necessary for the conduct of the offices 
 separately. 
 
 The annual premium income"of the united society is over £300,000, exclusive 
 of the new business, which is being transacted at the rate of £30,000 a year. A 
 large portion of the business is of very recent origin, policies producing over 
 £130,000 in new annual premiums having been issued during the last three 
 years. 
 
 The proprietary capital is large, and is subscribed by nearly 600 shareholders. 
 The directors have decided to declare no bonus in connection with the valuation 
 of the] liabilities and assets of this society to the 31st December, 1864 ; but it 
 has been arranged, 
 
 First. That at the next division of profits of the Albert Company (a valua- 
 tion for which will take place in 1867), and at all future divisions, the 
 "Western profit policy-holders shall participate rateably, in the same 
 manner as if their policies had been originally taken out in the Albert. 
 (At the division of profits of the Albert Company in 1862 a bonus 
 of £50,000 was authorized by Professor De Morgan as available for 
 allotment.) 
 
 Second. That in the event of any Western profit policy becoming a claim 
 previously to the valuation in 1867, a guaranteed bonus of 10 per cent, 
 on the premiums paid on the policy during the last five years shall be 
 
 I 
 
lxxvi APPENDIX P. 
 
 added to the amount of the policy, and paid in addition to all bonuses 
 previously declared thereon. 
 
 Third. That the Albert shall give to all existing Western policy-holders the 
 same present and future facilities, privileges, and benefits in every 
 respect as if their policies had been effected with the Albert. 
 
 Bight of the directors of the Western will take part in the management of the 
 united society, four as trustees and four as directors. Mr. Scratchley will become 
 the actuary of the united society. 
 
 Should you desire to increase your policy, or should any of your friends be 
 contemplating effecting assurances, the actuary will be happy to give you every 
 information and supply you with the necessary forms. 
 We are, dear Sir, 
 
 Yours faithfully, , 
 
 JOHN TOMLINSON HIBBEET, Chairman. 
 HENRY EDGEWORTH BICKNELL, Deputy-Chairmak. 
 ARTHUR SCRATCHLEY, M.A., Actuary. 
 
' 
 
 1 1 
 
 J