Florina Marties vs M.L. Pinto and Another

Srinivasa Aiyangar, J.—The question raised in this appeal is whether a sum of money paid into court by the 2nd defendant the Roman

Catholic Provident Fund, Mangalore belongs to the plaintiff or the 1st defendant. The Roman Catholic Provident Fund is an unregistered voluntary

association in the nature of a club managed by a committee. Its object is to make provision for the family of the deceased members out of the funds

of the society in accordance with its rules which are subject to alteration. One Lucia Fernandez joined the society as a member and according to

the rules of the society obtained what is called a '' policy '' by which the society undertook to pay a certain sum called ''bonus'' to the person

named in her latest nominee list and in the absence of such a person to those who are declared to be legal heirs by evidence approved of by the

directors. According to the rules of the society the policy was not assignable and a member can only nominate a member of his or her family-the

family for this purpose is the wife or husband as the case may be and children-unless the managing committee expressly permits the nomination of

any other person. The nomination list may be changed by a new nomination, but the change must be sanctioned by the committee before it

becomes operative and in any case the revoked nomination list of which the member retains a duplicate must in all cases be surrendered to the

Fund and sent along with the new nominee List. The duplicate nomination list is looked upon as something like a debenture. Lucia Fernandez first

nominated her husband, and on his death in 1904 with the sanction of the Committee nominated the 1st defendant Florina Marties the wife of her

younger son. The 1st defendant says that the nomination was really an assignment to her of the bonus in consideration of the sum of Rs. 300 due to

her from Lucia Fernandez. Whether Es. 300 was owing to her or not there can be no question that Lucia and the 1st defendant agreed that the

bonus should belong to the latter, for the policy and the duplicate of the new nomination list were delivered to the 1st defendant; thereafter she paid

the subscriptions or calls due by her mother-in-law. The mother-in-law as between herself and the 1st defendant ceased to have any interest in the

bonus or any liability for the calls. In 1908 Lucia Fernandez apparently quarrelled with the 1st defendant and attempted to revoke the nomination

and substitute the plaintiff her elder son as beneficiary. She was unable to return the previous nomination List and the Committee after enquiry

declined to sanction the new nomination as they were entitled to do. She did nothing thereafter to get the Fund to accept the plaintiff as the

nominee. But on the 6th May 1910 a few days before her death she purported to bequeath the bonus to the plaintiff. The plaintiff has also-

obtained probate of the will and is the representative of Lucia Fernandez. The question is to whom does the '' bonus'' belong, the plaintiff or the 1st

defendant.

There is now no question of who is entitled to bring an action against the Fund to recover the amount due on the policy, for the money has been

paid into Court; the question is as to the beneficial ownership of the money. The first Court held that the policy amount was the property of the

deceased Lucia Fernandez, that the nomination did not pass any interest whatsoever to the nominee and that the plaintiff as the legatee was entitled

to it subject to the repayment of the subscriptions paid by the 1st defendant to keep up the policy, and the sum of Rs. 300 due to her as debt. On

appeal, the District Judge held that the plaintiff as legatee was not entitled to the amount but that he became the latest nominee of Lucia Fernandez

though his nomination was not accepted or sanctioned by the Fund. This is obviously wrong; for the nomination can be changed only in conformity

with the rules and they seem to have been framed with a view to prevent a fraudulent or improper change of nomination by insisting on the

production of the previous nomination list and requiring the sanction of the Committee. The object of the Fund requires that the members should

not have an unrestricted right of disposal over the bonus and the rules therefore give only a limited power of appointment. It is not said that the

Committee were actuated by any improper motives in declining to accept the nomination and Lucia Fernandez herself apparently gave up the idea

of nominating the plaintiff under the rules. It has not been contended that the will itself operated as a nomination of the plaintiff. In fact the learned

pleader for the respondent practically conceded that the plaintiff cannot claim as a nominee. He supported the view taken by the trial Judge viz.,

that the policy amount was the money of the testatrix and passed to her representative and contended that if the 1st defendant had any claim

against the estate as a creditor or otherwise she must enforce it by other proceedings. He strongly relied on the decision of this Court in Oriental

Government Security Life Assurance Co. v. Vanteddu Ammiraju ILR (1911) M. 162 and on Shankar Vishvanath v. Umabai ILR (1913) B. 471

and Ishani Dasi v. Gopal Chandra (1914) 20 C.L.J. 44 in Bombay and Calcutta. It appears to me that these cases do not touch the present

question. Whatever may be the meaning of the words '' for the benefit of wife and children'' in an ordinary Life Insurance Policy taken out by a

person without any understanding or agreement with them,-he may even be unmarried, in a case like this where the nominee by agreement with the

nominator was entitled to the money, there can be no question that as between the estate of the nominator and the nominee the latter is entitled to

it. The power of revocation and renomination which the member possesses under the rules which are incorporated in the contract between the

member and the Fund, may enable the Fund to discharge its liability under the contract by paying to the latest nominee without concerning itself

with the rights of other persons to the bonus against the member or her nominee. It may also be that if the nominee is not a party directly or

indirectly to the contract between the member and the Fund, the only person who can enforce the contract is the legal personal representative of

the deceased member, but on recovering the money the representative must hold it for the benefit of the person who as against the estate of the

deceased member is entitled to it. As said by Holmes, L.J., "" There is no inconsistency between a right of action being under the complete control

of a litigant and the fruits of the action being held by him for the benefit of a third party "". Kenney v. Employers Liability Assurance Corporation

(1901) 1 Ir. Rep. 301, C.A. In Ashby v. Costin (1888) 21 Q.B.D. 401, the rules of an unregistered Friendly Society provided for the payment of

certain allowance to the relatives of a deceased member in such proportions as the Committee should determine unless the member bequeathed it

by will. A member died leaving a sister, but without making a will. The society paid the death allowance to the sister, and the plaintiff the

administrator of the deceased brought the action to recover the money from the sister on the ground that the stipulated allowance was a part of the

assets of the deceased and the sister was not entitled to it. The action was dismissed, the Court holding that the money was not the money of the

deceased, but could have become his only by his exercising the power given to him by the rules by making a will in which case it would become his

assets. This decision was followed in In re Davies : Davies v. Davies (1892) 3 Ch. 63 and cited with approval in Bennet v. Slater (1899) 1 Q.B.

45, these being cases of registered societies, registered under the Friendly Society''s Acts. That I think makes no difference for the present

purposes and in all these cases the principle adopted was that if under the contract between the member and the Society, the Society undertakes

to pay a particular person, that person is entitled to the money, though the member may have the power to select any person he chooses and

though the nomination may be ambulatory in character so as to enable the member at his entire discretion to change the nomination or even to

make the Fund his own by merely observing the formalities prescribed by the rules. The present is a much stronger case, for in my opinion the

nomination paper signed by Lucia amounts to an assignment of the bonus and was intended to operate as such. It is however unnecessary to go so

far. The 1st defendant then is entitled to the whole of the bonus paid by the 2nd defendant. The plaintiff''s suit must be dismissed with costs

throughout and the money in court should be paid to the 1st defendant.

Abdur Rahim, J.

I agree.