John Wallis, Kt, C.J.
1. The deceased T. Naga-natha Tawker on 14th May 1913, applied by letter Exhibit II to the Nidhi which is the 1st defendant in the case and requested them to receive payment of Rs. 200 for twelve months on fixed deposit. The application, which was made in a printed form provided by the Nidhi, contained certain particulars to be filled in by the depositor including the following :- ' Name of the person entitled to receive the. deposit, paid by me after me--relationship--profession or occupation'. Against this he entered the names of the present plaintiffs. T. Nana Tawker, elder brother's son, T. Kripasanker Tawker, grandson.' He then received from the Nidhi the fixed deposit receipt in the usual form Ex. I which provided that interest would cease at the end of the twelve months, when the receipt should be sent for renewal of payment bearing a one anna stamp.
2. Article 36 of the Articles of Association of the Nidhi which was registered under the Indian Companies Act may be translated as follows :-' If any accident should happen to one of the signatories in order to transfer the shares, &c;, to which he is entitled he must write giving specific details as to the person to be entitled to receive the money after his death or his heirs may receive it. Should any one desire to alter the name of the said persons it can be done on payment of a fee of annas two. ' It is stated by. the the learned Judge that the depositor was a member or subscriber of the Nidhi, and this has not been questioned before us. Consequently the Articles of Association were binding as between him and the Company. It was also admitted as stated by the learned Judge, that the nomination in Exhibit II mast be taken to have been made pursuant to Article 36.
3. On these facts the learned Judge has held that the right to receive the deposit is in the 2nd defendant the heir of the deceased and not in the plaintiffs, the nominees under Exhibit II.
4. Mr. T.R. Venkatarama Sastri in support of the appellants claim relied on Ashby v. Costin (1892) 8 Ch. 63 and Bennett v. Slater (1899) 1 Q.B. 45 and Fiorina Marties v. Pinto. (1917) 88 M.L.J. 476 Bennett v. Slater (1899) 1 Q.B. 45 was a decision on the construction of Section 15 of the Friendly Societies Act, 1875, and is of no assistance. In Ashby v. Costin (1888) 21 Q.B.D. 401 the action was in respect of the insurance money which had been paid to the defendant by an unregistered Friendly Society to which the deceased belonged. The rules empowered the Society to distribute the insurance money among the relatives specified in such proportions as they should think fit, unless the deceased had otherwise bequeathed it, and if the deceased left no such surviving relations and had not made a will they were only liable for his funeral expenses. Cave J. held on the death of the subscriber the Society by the terms of the contract were entitled to deal with the money in the manner provided in the rules. The decision in Fiorina Marties v. Pinto (1917) 38 M.L.J. 476, was a similar case. In In re Davies (1892) 2 Ch. 63 again the case related to the insurance money payable under a policy entered into with an unregistered Friendly Society. Under these rules the insurance money was payable to the nominee of the policy holder and in default of nomination to his assignee, and in default of assignment to his widow, and, if he left no widow, to his children living at his death in equal shares. This again was treated by North J. as a contract with the Society that the insurance money should be applied on the member's death in this way, and as having authorised them to divide it among his daughters in the event which happened. Both these cases proceeded on the footing that under the contract the insurance money was not the absolute property of the subscriber, North J. observing in the latter case that he had a contingent interest which would have become absolute on the happening of a certain event which however did not happen. It is in my opinion unnecessary to consider these decisions in the present case because here the fixed deposit all along formed part of the subscriber's estate, and was repayable to him at the end of each period of twelve months unless renewed. The case is just the same if the Bank of Madras or any other Bank which takes fixed deposits were to require the applicant, as in this case, to fill in a form containing the name of the person to whom it was to be paid after the depositor's death. In such a case it might be said to be a term of the contract entered into between the parties, that if the fixed deposit became payable after the depositor's death, it should not go under the ordinary law of succession to his legal representative, and as regards the beneficial surplus, to the next of kin or the beneficiaries under his will, but to some one else. The law, however, is that in the absence of a will the next of kin are entitled to succeed and if any one desires that any portion of his estate should go to any one else, his only course is to make a will in the prescribed form. The nomination in the present case cannot be enforced as a will as it is not attested by two witnesses and probate has not been obtained as required by the Hindu Wills Act in the case of wills executed in a Presidency Town. Therefore no effect can be given to it. This view is in accordance with a decision of the Irish Courts in Towers v. Hogan, L.R. Ireland 28 Ch. 53 A nomination of this kind in the language of Lord Cozens Hardy in In re Williams (1917) 1 Ch. 1 ' seems to be, if anything, in the nature of a testamentary instrument,' and must therefore fail for want of due execution. There can be little doubt that there as in the present case, the object was to avoid the trouble and expense of taking out probate or letters of administration, but the method adopted is one which the law cannot recognize. The appeal fails and is dismissed with costs.
5. This is an appeal from the decree of the City Civil Court in C. S. No. 306 of 1918, dismissing the plaintiff's suit. The facts of the case are undisputed. The 1st defendant is a Nidhi or Fund carrying on business in Madras and is registered under the Indian Companies Act. One Naganatha Tawker a shareholder in it deposited a sum of Rs. 200 in the Nidhi in May 1913, as a fixed deposit for a year under receipt Exhibit T. That receipt is in the following terms :-' Received from T. Naganatha Tawker Rs. 200 only as a deposit repayable 12 months after date with interest at the rate of 71/2 per cent. per annum.
6. N.B.:-Interest will cease at the expiration of the above period of 12 months when his receipt must be sent in for payment or renewal endorsed by the depositor.' It also adds 'not transferable'. This is the usual form of fixed deposit receipt that Banks and Funds issue. When making this deposit Naganatha Tawker put in an application to the Fund for the purpose on a printed form as prescribed by the Rules of the Fund:-It is filed as Exhibit II. One column in it was headed ' name of the person entitled to receive the deposit paid by me, after me, his relationship and profession or occupation'; under that heading Naganatha Tawker had filled up the names of the two plaintiffs.
7. Naganatha Tawker died sometime in 1915 without renewing the deposit or withdrawing the money. In this suit plaintiffs claim the money as the nominees in Ex. II against Naganatha Twker's heir-at-law, his daughter the 2nd defendant. The learned City Civil Judge held that the nomination gave the plaintiffs no right to recover the money and dismissed their suit and hence the appeal.
8. It is clear on the facts and it is not denied that the right to the deposit money continued to be in the depositor till his death and that he was entitled to deal with it or to withdraw it as be pleaded. No consent of the fund was necessary to enable him to exercise full dominion over the amount after the period of the fixed deposit was over. It was also open to him under Rule 36 of the Articles of Association of the Fund to change his nominee as he pleased on paying merely a registering fee of 2 annas to the fund ; though he did not do so in the present case. In these circumstances it was conceded by Mr. Venkatarama Sastriar for the appellants that he could not support his clients claim on the basis of an assignment or of a trust. The retention of dominion over the money by Naganatha Tawker is altogether inconsistent with either position. See Warriner v. Roger L.R. 16 Eq. 340 as to Trusts. The arrangement as one intended to take effect after the death of Mr. Tawker is clearly in the nature of a testamentary disposition and could have been well supported as a will if the formalities required by law for a will had been complied with. As Exhibit II was executed in Madras the Hindu Wills Act will apply to it and if it is to be treated as a will, it should have been attested by two witnesses at least but unfortunately for the plaintiffs it is only attested by one. It therefore fails as a will and even as a valid will there is the further difficulty in their way that no probate or letters of administration has been obtained to enable them to maintain a suit on it.
9. Mr. Venkatarama Sastri therefore conceded that he could not support his clients' case on the basis of a will either ; but, as I understood him, he contended that it was a part of the contract of deposit between Naganatha Tawker and the Fund that the latter should repay the money to the plaintiffs in the event of the former's death without having withdrawn it or changed the names of his nominees and as that event has happened the plaintiffs as such nominees became entitled to the money as against the heir-at-law of Naganatha Tawker. For this argument he has first to establish that the Fund had undertaken to pay the nominees as alleged or in other words the payment to the nominees was a part of the contract between Naganatha Tawker and the Fund. I am not satisfied that this has been proved. The receipt Exhibit I which contains the terms under which the deposit was made makes no reference to payment to nominees. In fact it expressly provides for the depositor to endorse and return it for payment or renewal and excludes by the words 'not transferable' any assignees claiming the money. We have not been referred to any rule in the Articles of Association of the Fund requiring the deposit to be repaid to the nominees on the depositor's death. Rule 36 merely deals with the change of names of the nominees or heirs and Rule 37 has reference only to share monies and not to any deposit. Therefore no term can be imported into the contract of deposit as implied by the rules, to repay to the nominees. No doubt the deposit was made in pursuance of the application, Exhibit II, but there is nothing in Exhibit II to show that the Fund was bound to pay or undertook to pay the nominees or that the statement in it was anything more than a mere representation by Naganatha Tawker to the Fund as to who he wished to be treated as the heir to this money on his death, which the Fund may or may not act upon as they choose. Even if it is treated as a direction or mandate to the Fund to pay to the nominees it will still fall short of a contract and the fact that it was open to Naganatha Tawker to change his nominees at any time as he pleased without the concurrence of the Fund and to withdraw the money if he chose is rather in favour of the contention that there was in reality no contract as to payment to the nominees. If the contract is not proved the 1st. plaintiff's argument based on the existence of such a a contract must fail. Treated as a mandate it was of no effect as it became revoked by Naganatha Tawker's death. See In re, Williams : Williams v. Ball. L.R. (1917) 1 Ch. 1
10. But even if we take it that the nomination of the plaintiffs was sufficient in law to make the payment to them of the deposit money on Tawker's death a part of the contract between him and the Fund, I think we should still hold that the plaintiffs who were no parties to that contract obtained thereby no right to the money. To hold otherwise will be, it seems to me to allow a testamentary disposition of property to be made in the form of a contract and thereby enable parties to the formalities of the Hindu Wills Act and the necessity to take out probate or Letters of Administration to the Estate of the deceased and lead practically to a repeal of that Act ; for the agreement to pay to the nominees did not admittedly come into operation till Tawker's death. A somewhat similar attempt was made in the case of Towers v. Hogan L.R. (Ir.) 28 Ch 58 where a person invested monies in a Fund and wrote a letter to another asking him to distribute it to certain persons in a certain manner after his death, this was done statedly for the purpose of saving the trouble and expense of taking out Administration. The learned Judges in the first Irish Court held that the letter had no legal effect to pass the property to those persons and they observe that to hold otherwise will lead to the statute of Wills being practically repealed. In the case of Williams v. Ball L.R. (1917) 1 Ch. 1 already cited where a policy holder made an endorsement on the Policy authorising his housekeeper to draw the Insurance money in case he predeceased her the Court of appeal held that she had no right to the money. Lord Cozens Hardy M. R. says in his judgment, ' It seems to me to be extremely difficult to say that this document, which did not confer on the assignee any power or right during the assignor's lifetime, was an assignment of the Policy or anything else than an attempt to give her an interest at his death in the event of his predeceasing her. If that be so, the assignee's claim cannot be supported on any ground,' the testamentary disposition failing as not being properly carried out. In the case of Cleaver v. Mutual Reserve Fund Life Association (1892) 1 Q.B. 147 it was held that on a Policy taken out by the husband for the benefit of his wife and so stated in the Policy itself the wife obtained no interest in it apart from the Married Woman's Property Act; that case was no doubt complicated by the wife having murdered the husband but that did not affect this part of the case. Lord Esher M. R. says on page 152. ' I think that, apart from the statute, no interest would have passed to the wife by reason merely of being named in the Policy.' Lord Justice Fry observes on page 157, ' Independently of the Married Woman's Property Act, 1882, the effect of this transaction, was, in my opinion to create a contract by the defendants with James Maybrick (the husband) that the defendants would, in the event which has occurred, pay Florence Maybrick (the wife) 2,000 assured ; it would be broken by non-payment to her; but the cause of action resulting from such breach would vest in the executors of the assured and not in the payee. She was, independently of the statute, a stranger to the contract.' This case was cited at length and followed in Oriental Government Security Life Assurance, Ltd., v. Vanteddu Ammiraju I.L.R. (1911) Mad162 in which it was held by this Court that where the assured does not in his life time create any trust in respect of the insurance money under a policy for the benefit of the wife and children they get no interest and that the money forms part of the assured estate and is recoverable by his legal representatives. This case was no doubt overruled by the Full Bench in Balambal v. Krishnayya 5 M.L.J. 65 But only on the question whether Section 6 of the Married Woman's Property Act III of 1874 applied to a Hindu's wife and children or not, the Full Bench holding that it did. This question however does not arise for our consideration in this case. But on the point before us speaking of the case in Balambal v. Krishnayya 25 M.L.J. 65 White, C.J. says on page 506 'If the view taken by the learned Judges as to Married Woman's Property Act was right, I should agree with their conclusion that no cause of action arose to the beneficiaries and that the Policy moneys formed part of the estate of the assured, notwithstanding that under the contract the money was payable to the beneficiaries in default of trustees.
11. A similar view was taken in Bombay in Shanker Vishvanath v. Umabai I.L.R(1913) . 87 Bom. 471 . It was held in that case that though the policy was a contract expressed to be for the benefit of the wife nevertheless she got no interest in the insurance money thereby as she was a stranger to the contract.
12. Mr. Venkatarama Sastriar has however drawn our attention to the ruling in Florine Marties, v. Pinto : AIR1918Mad461 and the cases cited in it as in favour of his argument. But on examining that case it will be found that the decision was based on the ground that there was an agreement for consideration paid between the policy holder and the nominee that the bonus should belong to the latter. This agreement is referred to a second time by the learned Judge in distinguishing the case before him from the insurance policy cases above mentioned which were cited to him. He says, ' 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.'' That is a position that does not exist in the present case ; in fact the nominees here did not know of their nomination by Tawker till sometime after the latter's death. The decision is therefore clearly distinguishable from the present case. But Mr. Venkatarama Sastriar has relied on the dictum of the learned Judge where he says referring to the English cases which I shall presently consider ' 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 1o change the nomination or even to make the fund his own by merely observing the formalities prescribed by the rules.' With all respect to the learned Judge it seems to me that this dictum is not borne out by the cases cited and is inconsistent with the view expressed in the cases I have referred to above and I am unable to follow it. Turning now to the cases cited, it will be seen that in the case of Ashby v. Costin (1888) 21 Q.B.D. 401 Cave, J. based his judgment on the fact that money in question was not the money of the deceased at any time though payable out of a fund to which he and others contributed. He might have made it part of his assets by will but he did not do so. The learned Judge points out that the Society had full discretion in the circumstances that happened to determine which of the relatives of the deceased should get the allowance and in what proportion. It was in these circumstances that the administrator's suit against the sister who had been selected by the fund for payment was dismissed as manifestly he would have no rights in the money paid to her. That case is entirely distinguishable from the case before us inasmuch as here the money belonged to Tawker and continued to be his till his death, and there was no payment by the fund to any one. The next two cases of In re Davies : Davies v. Davies 3 Ch. 63 and Bennet v. Slater (1899) 1 Q.B.45 were, as observed by the learned Judge himself cases of societies registered under the friendly Societies Act. The latter case proceeded purely on a construction of Section 15 of the Act of 1875 and there is no general principle stated in it which is applicable here. In the former case the facts were that the testator Mr. Davies did not deal with the policy money in his will. But under the rules of the society which were incorporated in the policy and formed part of the contract the money was payable to the plaintiffs, his daughters and not to the defendant, his son's widow. North, J. says meeting an argument that the contract with the fund was against public policy as withdrawing the money from his creditors that it was perfectly legal and that ' as against persons who claim under the will, the contract must be effectual.' This has to be read with context and it must be remembered the case was one to which the Friendly Societies Act applied. There is no decision in it that apart from the act the daughters were exclusively entitled to the money and there was no question of any nominees taking, I do not think therefore that these cases in any way support the dictum in Florine Marties v. Pinto : AIR1918Mad461 or are authorities against the view I am inclined to take.
13. Our attention was also drawn to several cases dealing with the genercl question whether a person who is a stranger to a contract can enforce it at all and if so in what circumstances. That is a question on which judicial opinion has differed : See Itti Panku Menon v. Dharman Achan. 4 M.L.J. 193 The general rule is that a stranger to a contract cannot take any rights under it and cannot enforce it. The exceptions are stated by Tyabji, J. in Iswaram Pillai v. Sonnivaru Taragan 20 M.L.J. 157. (F.B.) where the authorities are considered and the question is discussed at length. I do not therefore propose to consider the authorities cited in detail. None of the exceptions stated seems to me to apply to the present case. There is no charge or trust created here and the only possible suggestion that can be made is that the contract was for the benefit of the plaintiffs. That however is not so as the deposit was not made for their benefit but for the depositor himself as he retained the right to draw out the money. As pointed out by Tyabji, J. following the opinion of Bowen, L.J. in Gandy v. Gandy. (1885) 90 Ch.D. 57 ' It is only if the true intent and effect of a contract is to give to third parties a beneficial right under it, that is to say, to give them a riyht to have the covenants in the contract performed-and this can only happen, as pointed out by Sir George Jessel in re Empress Engineering Company (1880) 16 Ch D. 125 ' When the parties have no power of coming to a new agreement the next day, releasing the old one,' then the stranger may be allowed in a Court of Equity to enforce his rights under the contract; but that the whole application of this doctrine depends on its being made out that upon the true construction of the contract such a beneficial right is given.' Lord Justice Cotton says in the same case ' If the contract, although in form it is with A is intended to secure a benefit to B so that B is entitled to say he has a beneficial right as cestui qui trust under that contract then B would in a Court of Equity be allowed to insist upon and enforce the contract.' Accepting the exceptions thus engrafted on this general rule they do not cover the present case.
14. I therefore consider for the reasons above stated that by their nomination plaintiffs obtained no interest in the deposit money and that their suit was rightly dismissed and I agree therefore that the appeal fails and must be dismissed with costs.