COMPANY STOCK. HEIR OF MARRIAGE. TRUSTEE IN the transference of the share of a partner kept concealed from the 'world, the partner being allowed to go on with the management.' I may here notice, in order to prevent misunderstanding, the import of this decision as affecting the mode of transferring leases of heritable subjects. The subject assigned was the lease of a marble and slate work, and the general rule of law then was, that the assignation of a lease could not be made effectual without possession following. The rule is the same now, except as to leases entitled to the benefit of the Registration of Leases Act of 1857.1 In Russell's case, possession did not follow in favour of the assignee, and yet the assignation was sustained. The reason is, that the assignation of the lease was in that case an assignation of part of the stock-in-trade of the company. As a lease, it could not have been validly assigned by a mere deed of transference. But, viewed as part of the company's stock, its character was changed, and it became transferable, just as the other stock-in-trade of a company is. Accordingly, in pronouncing judgment, the Court stated that the question as to the mode of transferring a lease did not arise; only that of completing the transfer, by one of the two partners of a company to the only other partner, of his share of the company property. Although, however, there can be no formal intimation in such a case as Russell's, it would seem expedient, in order to obviate the allegation of fraud, to enter the assignation in the books of the company, and do away with the latent character of the transaction as far as possible. 2. We have another case in which there can be no formal intimation, viz., when an heir of entail acquires a debt affecting the entailed estate. His title is completed by delivery of the deed of transfer, there being no one, besides himself, to whom intimation of the transfer can be given. 3. When the debt is due to an unmarried lady, formal intimation of the assignation arising to her husband by law upon her marriage does not require to be given to the debtor; the marriage being a public act, which is held to operate intimation. If, however, the debtor shall in bona fide pay to the wife, in ignorance of the marriage, he will not be liable in second payment to the husband. Moreover, though the marriage is equivalent to intimation, the husband takes, subject to all the burdens attaching to the right in his wife's person. The assignee of the wife, under an assignation granted before her marriage, but not intimated till after, is preferable to the trustee for the husband's creditors.2 4. The trustee on a sequestrated estate has a complete right by force of the Bankrupt Act. The act and warrant of confirmation in his favour ipso jure vests in him, for behoof of the creditors absolutely, inter alia, the moveable estate of the bankrupt, to the same effect as if intimation had been made at the date of the sequestration.3 Effect was given to a similar provision in a former Bankrupt Act, in a case where 120 & 21 Vict. c. 26. 2 Till, 27th July 1763, M. 2858. 3 19 & 20 Vict. c. 79, s. 102. the bankrupt had a sum of money lying in bank in his name at the date of the sequestration. The trustee acquired right to that sum by the act of confirmation in his favour, but never got it transferred to his own name in the bank books. The money remained in the name of the bankrupt, who got his discharge without composition, and therefore was not reinstated in any of his property. He again became bankrupt, when creditors arrested the money in bank, as if belonging to him. In the meantime, the trustee in the first sequestration had granted to third parties a general assignation of the bankrupt's funds, which included the money in bank, but which had not been intimated to the bank. In these circumstances, a competition arose between the assignees under the general assignation, as in right of the trustee in the first sequestration, and the arresting creditors of the bankrupt. The assignees of the trustee were preferred, on the ground that the first sequestration had divested the bankrupt, and given the full right to the trustee, even though the sum of money in question had never been entered in the trustee's name. His assignees were, of course, in as good a position as he. The right of the assignee under an English commission of bankruptcy appears equally good and complete in virtue of the English Bankrupt Act. So also is the right of the assignee under an Irish commission.2 CHAPTER III. LIFE POLICY. I NOW request your attention to certain other subjects which, in addition to debts due by bonds, accounts, etc., can be transferred by simple assignation. The most usual, and one of the most important of these, is the policy of life assurance, being an instrument by a life ASSIGNATION OF assurance company, whereby,-in consideration of a present payment, with or without a sum or premium to be paid to them yearly, or at stated intervals thereafter, during the life of an individual named, or for a specified number of years during such life, and on the understanding that certain specified particulars, connected with the probabilities of that individual's life, have been correctly stated, and that certain relative conditions shall thereafter be observed,-the company become bound to pay to the assured, or to his executors or assignees (according as the assurance is on the life of a third party, or of the assured himself), within a limited time after the death of the individual on whose life the assurance is effected, a specified sum, with or without profits (or bonus additions, as they are technically termed), as may be arranged. 1 12 & 13 Vict. c. 106, s. 141. 2 20 & 21 Vict. c. 60, s. 267. LIFE POLICY. The above are the usual terms of the instrument when granted by a proprietary company, that is, by a company consisting of a number of persons who make up a capital stock towards meeting the engagements of the company. In another class of cases, the instrument, or policy, simply certifies and declares the assured, or his executors or assignees, to be entitled to receive, out of the funds of the association on whose behalf it is granted, a specified sum, with or without bonus additions, as in the other case. Policies of this last-mentioned class are granted by what are called Mutual Offices. In such cases there is no company, and no capital stock, and consequently there are no proprietors. The funds, out of which the assured sum and bonus additions are to be paid, arise from the contributions made by the holders of policies. In a Conveyancing point of view, the two instruments are much the same. Of course, in assigning the one or the other, care must be taken to describe the obligation or certificate accurately, according to its peculiar terms. Act of 1862 is expressly applicable to policies of assurance by any assurance company or association in Scotland; and the forms thereby introduced will, in general, be found very suitable to the assignation of such policies, and ought therefore to be employed. Where, from any special cause, these forms will not suit, the assignation ought to make use of words of direct transfer,—that is, 'I hereby assign, convey, and make over.’ The policy may be narrated, but in general any recital of it will only tend to lengthen the deed unnecessarily. The policy will be described, in the assignation under the Act (unless such assignation be written upon the policy), and likewise in the assignation under the old form, by specifying its date, the name of the association or company, the parties who sign it, -in most cases two or three directors and the manager or some other office-bearer; the class, and number in the class, and then the engagement or declaration in favour of the assured. But the conditions annexed to the assurance should not be recited in the assignation. It is enough. to refer to them as set forth in the policy. When the assignation is written upon the policy, it will simply say, 'the within policy,' or words to the same effect. The assignation, if by a Scotch party, and of a Scotch company's policy, will be executed in the Scotch form. Where the policy is by an English office, in which case the forms authorized by the Act of 1862 are not available, or at least have no statutory effect, I apprehend that the assignation may be validly executed by a Scotchman in the Scotch form. But having regard to the decision in a recent case,2 in reference to a bond in the English form granted by Scotchmen to an English assurance company, the safe and expedient course in such cases appears to be to employ both the English and Scotch forms in authenticating the assignation. The right to an assurance policy requires an assignation for its surance Company, 12th February 1857, 2 Church of England Fire and Life As- 19 D. 414. 125 & 26 Vict. c. 85. transference, and is not passed by mere delivery of the corpus of the policy. The right constituted by the policy is a 'chose in action;' and, as to a Scotch policy, intimation of the assignation is necessary to complete the assignee's right. In Strachan's case, an arrestment of the contents of a policy granted by a Scotch office in favour of a Scotchman, used during the life of the assured, who, however, died before any future premium became payable, was found preferable to an assignation in favour of an English assignee, not intimated, though accompanied by delivery of the policy. The intimation can be given, in the case of a policy by a Scotch office, in either of the modes authorized by the Act of 1862; or in the older form, if the Act of 1862 is unsuitable. The forms of that Act are not available, or at least have no statutory effect, where the policy is by an English office. All the Scotch offices receive notices of assignations, enter them on their books, and give certificates of having done so; some of the English offices refuse to make any similar entry, or to take notice of the intimation of an assignation. In these cases, sometimes a formal paper, somewhat after the style of our schedule of notarial intimation, is served on the company at their head office in England, agreeably to English forms. Sometimes the parties give notice, notarially of course, at the head office. The result I believe to be the same, whichever of these modes is adopted. What is wanted is evidence of the intimation in probative form. In connexion with assurance policies, it is necessary to keep in view that no assurance can be made by any one on the life of another, who has not himself an interest in such life,-by 14 Geo. III. cap. 48,— an Act passed to prevent gambling in assurances. By sect. 3, assurances are restrictable to the amount of the interest when effected in excess thereof. Professor Menzies 2 notices the case of an assurance on the life of William Pitt, effected by a creditor, who, having got payment of his debt from Mr. Pitt's executors, was found not entitled to levy from the assurance company. In transacting with policies on the lives of third parties, the company should be asked to admit the interest of the assured in the life of the party on whose life the assurance is effected, and in all cases to admit the age of that party. On proof shown, the Scotch companies will make markings to the above effect on the policy. If possible, the company should be got to declare the policy indisputable, which some of the Scotch companies will do in ordinary circumstances if the policies are of five years' standing or upwards. ETC. The stock of banks and public companies is generally declared in BANK STOCK, the acts or charters of incorporation, or deeds of constitution, to be transferable only in a particular form, which the bank or company can 1 United Kingdom Life Assurance Company, 7th July 1838, 16 Sh. 1277; Strachan, 19th June 1838, 13 Sh. 954. 2 Menzies, p. 265. BANK STOCK, ETC. LEGACIES AND INTERESTS. require to be observed, in the case of absolute and voluntary transfers inter vivos. In these cases, words of direct transfer are usually, I believe invariably, employed. The Act of 1862 is clearly not intended to apply to assignations and transfers of which the form is regulated as in these cases. But the peculiarities of form prescribed by such acts, charters, or deeds are intended only for the benefit or convenience of the bank or company, which can dispense with them or not as they think fit. These peculiarities are not pleadable by third parties as grounds of objection to transfers in which the peculiarities have not been observed, but which have been accepted by the bank or company. The non-completion of the transfer, in accordance with these forms, affords no ground on which the seller can resile from a sale which he has actually agreed on. And an arrester of company stock is not entitled to plead non-compliance with statutory forms against the sufficiency of a previous assignation in security duly intimated.3 The contract of copartnery of a joint-stock company very often gives the company a right of pre-emption upon the sale of a partner's shares; and, when it does so, the provision to that effect must be fairly implemented; and, if the contract requires a written offer to be made, a verbal communing is not enough to supply its place. But it is for the company to plead this, as well as their own forms, or not, as they think fit.5 And if the company have, in the first place, clearly dispensed with these forms, they cannot afterwards go back on their own act, and say that the transfer is invalid for want of them. 6 The next subject I notice is that of legacies and reversionary REVERSIONARY interests in trust estates, not yet payable or available. The Act of 1862 clearly embraces such rights and interests, and its forms will in general be found very suitable to their transmission. Previously, conveyances had been granted more frequently by the form of constituting procurators, than by words of direct transfer. Whatever form be employed, the legacy, or the interest, or share of interest, will be described in the assignation with reference to the testator, and the deed of bequest, or other deed, under which the right or interest assigned arises. The assignation ought likewise to show at what term, or under what circumstances, the legacy will become payable, or the reversionary interest will be available; and, in general, it will be convenient that the assignation shall specify who are the trustees and executors, or others liable to pay the legacy when due, or to make over the reversionary fund when the proper time comes. The deed, when so drawn, will fully explain its subject-matter, and will show to whom the intimation of the assignation ought to be made, that is, the trustees and executors, or 1 East Lothian Bank, 3d June 1824, 3 2 Weatherly, 3d June 1824, 3 Sh. 92. 4 Craig, 2d Feb. 1848, 10 D. 576. 5 Turnbull, 1st March 1833, 11 Sh. 487. 6 Drummond, 22d May 1834, 12 Sh. 620. |