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imperial Pressing Co. Vs. British Crown Assurance Corporation Ltd. - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtKolkata
Decided On
Judge
Reported inAIR1914Cal53,(1914)ILR41Cal581
Appellantimperial Pressing Co.
RespondentBritish Crown Assurance Corporation Ltd.
Cases ReferredKelly v. Hochelaga Fire Insurance Co.
Excerpt:
insurance - warning that premises would be set on fire--insurance in consequence of learning--duty of assured to disclose facts affecting risk and premium--defective declaration under order xxx, rule 2, civil procedure code, its effect. - .....might indicate the motive on the part of the assured for effecting the insurance. in welford's fire insurance (1911) p. 135, a passage occurs that the assured must disclose the fact that threats had been made to destroy his property, or that there was reason to suspect that an attempt to do so would be made. some canadian authorities are cited in support of this statement, which are not available to me. learned counsel for the plaintiff thought that there was a contradiction, or an apparent contradiction in the note in that work dealing with the cases referred to. he argued that the case of kelly v. hochelaga fire insurance co. (1886) 24 l. can. jur. 298 therein cited laid down a principle different from that enunciated in greel v. citizens' insurance co. (1880) tupper's rule (u.c.).....
Judgment:

Chaudhuri, J.

1. This is a suit instituted by the plaintiff company for the recovery of the sum of Rs. 9,833-5-4 for damages to their premises by fire. The proposal for insurance was made on the 17th of February, 1912, and an interim protection note was granted to the plaintiff company by the insurers, the defendants, on that date. The buildings consisted of certain godowns, Nos. 1, 2, and 3, at No. 61, Old Ghusuria Road, Salkia. Two of these godowns were being used by one of the balers of the plaintiff company, a firm of the name of R.U.C. There was a further insurance by the plaintiff company in respect of certain other godowns on the 20th of February, but we are not concerned with it in this suit. A fire took place in the insured premises on the 21st of February; No. 2 godown was considerably damaged and some slight damage was done to godown No. 1. Upon the evidence there is not much doubt that this was an incendiary fire. Some evidence has been given that the fire was probably intentionally caused by some sorters who were employed in the godowns which were used for assorting jute. There is no question that some damage has been done to the premises by the fire. The defendants in their written statement, amongst other things, state that before the plaintiff firm applied to the agent of the defendant corporation for insurance of the premises, the plaintiff firm had been expressly warned that the stock of jute in the said premises would be set on fire, that they had reason to believe or apprehend that such stock would be set on fire, and that the plaintiff firm obtained the issue of the said interim protection note in consequence and by reason, of the said warnings and information received by it; but that the plaintiff firm had not disclosed the information they had received to the defendants or their agents, and that the defendants came to know about the matter after the said fire. They alleged that the plaintiff firm had specific reason for their apprehension that a fire would occur there, and that such fire would be an incendiary fire, and that by the non-disclosure of the information they had at the time, namely, that a fire was likely to take place, when they applied for the issue of the policy, the liabilities of the defendant company, if any, had been discharged. Some other defences were raised, but it is unnecessary to refer to them in detail with the exception of the defence that the declaration made by the plaintiff company as to the constitution of the firm was not correct, but that there were other members of the firm in addition to those mentioned by the plaintiff company, and that in consequence of such non-disclosure of the other partners the suit was bad and could not be proceeded with, and should be dismissed with costs. The plaintiff firm, which consists of different firms, however offered to make a further declaration disclosing the names of all the persons said to be interested in those firms, although they did not admit that those additional persons were really partners of their firm and although they contended that the firms constituting the plaintiff firm were fully represented by the kartas or senior members of the said firms.

2. It is clear that the plaintiff firm has not made a full disclosure of their partners although called upon to do so according to the provisions of the Civil Procedure Code, Order XXX, Rule 2, and that the suit as framed must, therefore, be considered as defective for non-joinder of parties. The present Code, however, provides that no suit shall be dismissed for want of parties. The Court can, in my opinion, allow a party, who has made a defective declaration, to put in a further declaration milking a full disclosure, and thus remedy the defect. The case of Abrahams and Co. v. Dunlop Pneumatic Tyre Co. [1905] 1 K.B. 46 is not an authority against my view, namely, that the defect can be cured. It appears to me rather to support it.

3. Now the firm of balers, which was using these godowns, seems to have rather an unenviable reputation. The plaintiffs admitted that that firm had the reputation of setting fire to their stock. It was urged that this fact, namely that about their reputation, should have been mentioned by the plaintiff company to the defendants at the time they applied for insurance. But there is no obligation on anyone to disclose matters already known to the other side. The defendant company knew the reputation of the balers who were using these godowns. The defendant company also knew that these balers were using the very godowns which the plaintiff firm wanted to insure, the defendant company having effected insurances with these balers in respect of their stock therein. I am unable, therefore, to hold that there was any duty cast upon the plaintiff company to mention these two matters to the defendant company when they applied for insurance.

4. But the serious question of fact in this case is as to whether the assured had any information of the likelihood of a fire, when they applied for insurance. I do not think that there is any doubt whatsoever that they had such information at the time and believed that a fire was likely. There is overwhelming evidence that before the date of their application for insurance their engineer, Mr. Meyer, had been informed by different persons that there was a strong rumour that a fire was going to take place in their godowns. Amongst the persons who gave such information was a responsible police officer who was then employed at Howrah. But the evidence of Mr. Stall, a member of the firm of Messrs. Moll Schutte and Co., is conclusive on the point. He has no interest in this suit. He was working in one of the godowns of the plaintiff company, and had effected insurance with Messrs. Schroder Smidt and Co., amongst others, upon his stock. He received a communication from Messrs. Schroder Smidt and Co. that, they had been informed that there was going to be a fire in the press of the plaintiff company, and that in consequence that firm wanted to cancel the insurance which had been effected with them. Mr. Stall was unwilling to agree to the cancellation, but he said that he would consider his position and if he found that he could safely allow the cancellation of some of the insurances upon his stock, he would allow it. It was the end of the season and as he found that he had ample margin, he eventually consented to have two of the insurance policies cancelled, and wrote a letter to his insurers to that effect on the 9th of February, 1911. When he received this information from Messrs. Schroder Smidt and Co. he telephoned to Mr. Meyer, and asked him to inform the proprietors of the plaintiff company about the information he had received, and Mr. Meyer replied that he would inform his employers and get extra watchmen put on. There is no doubt that this conversation took place on the 8th of February. Mr. Stall fixes the date by reference to the letter of the 9th February which he sent to Messrs. Schroder Smidt and Co. He went to the press house on the 9th and 10th when Mr. Meyer informed him that the plaintiff company had employed extra durwans. Mr. Meyer said that the proprietors had become nervous about the safety of their premises, as they were unprotected by insurance, and added that he had also heard from other quarters that there was a likelihood of an incendiary fire in the godowns. I do not think that there can be any doubt at all that because of the information they had received and believed, they felt it necessary to apply for insurance at the time they did. Although the balers had been working for some considerable time in their godowns, they had not before this, felt any necessity for insuring these premises. The information was such as induced them to incur the expense of an insurance, at the close of the season. I think, under the above circumstances, a duty was cast upon the plaintiff company to inform the insurers of the reason which had led them to apply for insurance. The manager of the plaintiff company, Banshidhar, has been examined. He said that on or about the 4th of February there was a meeting of the senior members of the firm, when they determined to effect insurances in respect of their premises. He produced a minute book purporting to record the resolution arrived at, on that day. But the resolution does not show that any insurance was to be effected so far as the premises were concerned. It is simply a resolution that insurance was to be effected of the stock of the balers. The minute book has not been put in, and I am unable to verify my recollection by reference to it. So far as insurance contracts are concerned, they are based, as has always been said, upon the utmost good faith, 'uberrima fides,' and I do not think there is any doubt that every circumstance which would influence, or be likely to influence, the judgment of a prudent insurer in fixing the premium and in determining whether he would take the risk or not, should be disclosed. There is a duty to disclose to the insurer all facts which bear upon there being a possibility of a fire greater than usual, and which might indicate the motive on the part of the assured for effecting the insurance. In Welford's Fire Insurance (1911) p. 135, a passage occurs that the assured must disclose the fact that threats had been made to destroy his property, or that there was reason to suspect that an attempt to do so would be made. Some Canadian authorities are cited in support of this statement, which are not available to me. Learned Counsel for the plaintiff thought that there was a contradiction, or an apparent contradiction in the note in that work dealing with the cases referred to. He argued that the case of Kelly v. Hochelaga Fire Insurance Co. (1886) 24 L. Can. Jur. 298 therein cited laid down a principle different from that enunciated in Greel v. Citizens' Insurance Co. (1880) Tupper's Rule (U.C.) 596 c. A. But I find that the former case was one in which it was held that it was unnecessary for the assured to disclose the fact, that many months before he had made his proposal, and, during the excitement of an election, a political opponent had threatened to set fire to his property: see page 135. The principle enunciated seems to have been the same in both the above cases, but in the circumstances of Kelly v. Hochelaga Fire Insurance Co. (1886) 24 L. Can Jur. 298 it was considered that the assured could not be held to the obligation, having regard to the lapse of time and the disappearance of the excitement of the election.

5. Some heavy insurances seem to have been effected by the plaintiff company upon the stock of the balers even up to the 21st of February, but it is unnecessary for me to consider why they did so, because the defendant company have not alleged fraud or collusion as against the plaintiff company. They apparently enjoy a very good reputation, and are a very respectable firm, and I do not think it is necessary in this case to deal with the insinuation, if any, based upon this fact.

6. I hold that the non-disclosure of the information, which the plaintiff company had at the time of their application, discharges the insurers' liability in this case. The suit must be dismissed with costs oh scale No. 2.


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