Scottish Court of Session Decisions

Elizabeth Reid Ferguson, children's superintendent, Aberdeen Poorhouse, Oldmill, Aberdeen, pursuer, brought an action against the Parish Council of the City Parish of Aberdeen, defenders, for payment of the sum of £128, 5s. 3d., being the value of personal belongings of the pursuer destroyed by fire at the poorhouse, averred to have been recovered by the defenders under a policy of insurance against fire effected by them over these belongings.

The policy in column No. 2, in the schedule giving the specification of subjects covered, which column dealt with the contents of the Children's Block, read—“2. On

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office and all other furniture, fixtures, other than landlord's fixtures, fittings and utensils, table and bed linen, and wearing apparel, telephones, pictures, printed books and unused stationery, medical and surgical appliances, provisions, and all other stores, the property of the insured, or held by them in trust, for which they are responsible; also on the personal property of every description belonging to any of the insured's servants or inmates, and on other contents, excluding what is named in columns 1, 3, 4, and 5— Three Hundred Pounds.”

The pursuer averred—“(Cond. 2) As part of her emoluments pursuer is entitled to board and lodging at the said poorhouse, and the sitting-room and bedroom set apart for her use were, at the date of the fire hereafter condescended on, situated in the children's block, which was a building separated from the main buildings of the poorhouse, and which consisted of the schoolroom, two playrooms, two large and two small dormitories, a kitchen, and the said sitting-room and bedroom. (Cond. 3.) On the evening of 11th December 1914 a fire occurred in the schoolroom of the said children's block, as a result of which the whole block was completely destroyed. The whole personal belongings of the pursuer, consisting chiefly of articles of wearing apparel, at the time stored in her sitting-room and bedroom, were destroyed in the said fire. (Cond. 9) It was the duty of the defenders, in terms of the rules and regulations, to see that all the furnishings, &c., of the poorhouse were insured against damage by fire for a sum sufficient to cover any probable loss. The pursuer believes and avers that in the policy of insurance taken out by the defenders to provide against loss for damage by fire to the buildings and furnishings at said poorhouse there was also included the personal property of every description belonging to any of their servants or inmates, and the defenders are called upon to produce said policy. After the fire took place the Convener of the House Committee of said poorhouse requested the pursuer, with the view of including the pursuer's loss in the claim against the insurance company under the policy, to hand her claim for the loss of her personal belongings in consequence of the said fire to the Governor of the Poorhouse, and whose orders she is bound to obey, and this she did on 16th December 1914. The pursuer further believes and avers that the amount for which the said furnishings and personal property of the inmates and servants was insured against loss for damage by fire was £300, and that the defenders claimed and recovered payment under said policy for the full amount thereof. They are bound to account and pay to the pursuer, out of the sum recovered, the amount of the pursuer's loss, or at least a rateable proportion.”

The pursuer pleaded, inter alia—“3. The pursuer's property having been insured by the defenders against loss for damage by fire, and they having claimed and recovered under the policy of insurance, are bound to apply the sum recovered towards satisfaction of her loss.”

The defenders pleaded, inter alia—“5. Esto that the fire was caused through the fault and negligence of any of the defenders' servants as condescended upon, the pursuer's averments are irrelevant to support the conclusions of her action against the defenders, and the same should be dismissed, with expenses. 6. The averments in article 9 of the condescendence are irrelevant, and should not be remitted to probation. 7. The defenders not having claimed or recovered anything under their policy of insurance on account of the pursuer's property, they are under no liability to account to her in respect of any sum received by them from the insurance company.”

On 7th December 1915 the Sheriff-Substitute ( Laing) sustained the fifth plea-in-law for the defenders, and allowed a proof before answer.

The pursuer having appealed for an allowance of proof on this question the defenders intimated that they would ask the Court to dismiss the action on the ground that the pursuer had set forth no relevant claim to the insurance money.

Argued for the pursuers—The employers had in fact insured the property of the pursuer even though they had no insurable interest, and when that was so it could not be presumed that the pursuer took the risk of fire. Where the insurance company had actually paid the money the cestui que trust had a right to recover even though there was no express contract between her and the insurance company. If the money was paid under the policy in respect of certain articles the payment was appropriated to the loss of these articles— Cochran & Son v. Leckie's Trustee, 1906, 8 F. 975, 43 S.L.R. 715. The pursuer was therefore entitled to recover the value or a rateable proportion thereof.

Argued for the defenders—No right attached to a person whose goods were insured by another if in point of fact that person neither authorised the taking out of the policy nor subsequently ratified it. Where the servant did not know that the master had insured her risk she could have no right to recover—MacGillivray on Insurance, p. 151. She could not ratify the contract after the loss had occurred— Grover & Grover, Limited v. Matthews, [1910] 2 KB 401. In any event there was no surplus here, and that being so the pursuer could not claim— Dalgleish v. Buchanan, 1854, 16 D. 332, at pp. 335, 337, and 338. The defenders were in no sense trustees of her property for the pursuer, so that she had no claim on that ground— North British and Mercantile Insurance Company v. Moffat, 1871, L.R., 7 C.P. 25. Neither did the defenders claim the insurance money as agents for the pursuer.