Present: Lord "arker of Waddington, Lord Sumner,Sir Arthur Channell
ADAM.TEE LUKMANJEE v. THE YANCrTSZE INSURANCEASSOCIATION, LTD.C. Colombo, 39,315.Sale to plaintiff of teak logs by company outside Ceylon—Insuranceeffected by seller—Bill of lading in favour of seller—.Logs lostbetween harbour—Action by seller against insurance company.
B company, by their agents at Colombo, sold to plaintiff, who was
at Colombo,“ 200 tons ofteak ShipmentNovember-
December, at the rate of 100 tons monthly. Payment cash againstdocuments.” 144 logs, which constituted the first instalment underthis contract, after being discharged over side ex steamship “ Hild"at Colombo, were lost in a gale while still in raft. A policy ofinsurance was effected at their expense by B' company, “ as wellin his or their own name as for and in the name and names of. alland every person or persons to whom the same doth, may, or shall
»(1006) 9 N. L. B. 98.
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appertain inpart or in all.”Thepolicycovered882log*, of which
only 144 were for plaintiff, and the remainder were for the accountof B company: There was a separate bill of lading made ont tothe order of the shippers (B company) for the . 144 logs, and in itthey were identified by the same marks as in the polioy.Among
the marginal clauses in the policy was one covering the ancillaryrisk between ship and shore. The plaintiff sued the defendant(insurance company) upon the policy to recover the loss in respectof the 144logs. There wasnoassignment ofthepolicy to the
Held, that there was no evidence on which it could be found thatthe policy ofinsurance was effected onbehalf of theplaintiff, or to
cover his interest in the goods,andthatplaintiffcouldnot sue on.
HE facts appear from the judgment.' The judgment of theSupreme Court is reported in 3 Ceylon Weekly Reporter 134.
March 15, 1918. Delivered by Lord Sumner:—
In this ca.se Mr. Adamjee Lukmanjee sued upon a policy ofmarine insurance to recover a loss in respect' of 144 logs of teak.wood, which, after being discharged over side ex steamship “ Hild ”at Colombo, were lost in a gale while still in raft. He succeeded,though on somewhat different grounds, both in the District Courtof Colombo and in the Supreme Court of Ceylon. The insurancecompany now appeals.
The policy was effected at their oyn expense by the Bombay-Burma Trading Corporation, Limited, “ as well in his or theirown name as .for and in the name and names of all and every personor persons to whom the same doth, may, or shall appertain in partor in all,” following the company’s usual form of policy, and underthese words Mr. Lukmanjee claims to have been assured under thepolicy from the beginning, and entitled to sue as a party to it,subject to his having an insurable interest at the time of loss.There is ho question here of any assignment of the policy. In fact,he had such an interest; for the .logs, when lost, were his, so thequestion is, whether he was a party insured under this policy inrespect of that interest, or, in other words, whether .the Bombay-Burma Trading Corporation effected it in • any measure on hisbehalf.'.'•»
The Bombay-Burma Trading Corporation, by its agents atColombo, had sold to Mr. Lukmanjee, who was also at Colombo,“ 200 tons of Indian first class teak squares at 175 rupees per tonex ship. Shipment November-December, at the rate of 100 tons
monthly Payment cash against documents.” The 144
logs constituted the first instalment under this contract, and. it iscommon ground that, when they were discharged ex ship into thewater, they had been paid for, and had become, the property of therespondent.
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Except in so far as it can be inferred from the transaction itselfand the documents by which it was effected and carried out, thereis no evidence to show with what intention the Bombay-BurmaTrading Corporation effected the insurance, nor was there anyevidence of any course of business or of any customary understandingof any of the terms employed. What is significant about the policyitself is that it covered 382 pieces of teak, all particularly marked,of which only 144 were for Mr. Lukmanjee, and the remainderwere for the account of the Bombay-Burma Trading Corporation.There was a separate bill of lading made out to the order of theshippers, the Bombay-Burma Trading Corporation for the 144 logs,and in it they were identified by the same marks as in the policy.Among the marginal clauses in the policy was one covering theancillary risk between ship and shore, viz., “all risk of craft and/orraft from landi to land,” but it was admitted that such .'a clausewould be included almost as a matter of course, and that, although■ it was only under this clause that Mr. Lukmanjee could recover,the fact of its insertion in the policy threw little or no light onthe question whether the policy was effected on his behalf as one ofthe original assured.
The Trial Judge was of opinion that the property in the goodspassed to the buyer before shipment, and that in' shipping themthe sellers had acted as his agents. Hence he inferred that theinsurance was effected for him. The Supreme Court apparentlytreated the contract as if it contained an implied obligation onthe seller’s part to insure the buyer in respect of such contingentinterest in the goods as he might have while they were at sea.Neither view was, or indeed could be, sustained on appeal, nor hadthe attention of either Court been directed to the true question,whether the evidence showed that the insurance was effected onthe buyer’s behalf.
It is clear that the policy itself evidences/ no such intention.The sellers and the sellers alone were throughout interested in themajor part of the cargo. Even as to the 144 logs, until the shiparrived and came to deliver over side, they and they alone had theinterest properly describable by the words, used in the policy, viz.,“ upon gopds.” If the buyer were to fail to pay for the timber inaccordance with the contract, their interest in it would continueafter discharge over side, for it would remain their property. Evenif these logs were paid for against documents, as was the case, theinclusion in .the policy of cover against raft and craft risk wasnecessary as to the residue, and was of no significance in the presentconnection.
Two suggestions were made in argument: one was that “ againstdocuments ” means in the language of commerce against a policyof insurance and sundry other documents; the other, that anobligation, binding the sellers to insure on the buyer’s behalf,
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might be inferred because the effeot of •/; contract was to requirepayment, not merely against goods delivered ex ship in a statecorresponding to the contract description, out also against docu-ments representing the goods, even though, through sea perils,they were no longer in a state corresponding to the contractdescription.
The first point fails because there is no evidence to show thatthe word " documents ” in such a connection includes a policy ofinsurance. A contract of saie, at a price c. f. and i., is so wellunderstood that no proof is needed that one of the documents whichit contemplates is a policy. It may be that, detached from anycontext, the mere expression " shipping documents ” would suggestthat one of them is a policy. When, however, the expression isfound in a contract, and there is nothing but the language of thecontract to determine its meaning, it must be construed aa meaningsuch documents as are appropriate to the contract. In the case ofa sale “ ex ship,” the seller has to cause delivery to be made to thebuyer from a ship which has arrived at the port of delivery, and hasreached a place therein which is usual for; the delivery of goods ofthe kind in question. The seller hasr'therefore, to pay the freight,or otherwise to release the shipowner’s lien, and to furnish the buyerwith an effectual direction to the ship to deliver. Till this is donethe buyer is not bound to pay for the goods. Till this is done hemay have an insurable interest in profits, but none that can correctlybe described as an interest “ upon goods,” nor any interest whichthe seller, as seller, is bound to insure for him. If the seller insures,he does so for his own purposes and of his own motion.
Again, the mere documents do not take the place of the goodsunder such a contract. They are not the subject-matter of the sale.If an endorsed bill of lading is delivered to the buyer, it is given as adelivery order,, and not with any intention of making him a parlyliable upon it, or of vesting him with the,property in the goods bythe mere delivery of the document. As the goods are not at the, ■buyer’s risk during the voyage, there is nothing from which to infer .an obligation on the seller, and, therefore, an intention on bis partto effect an insurance on the buyer’s behalf.
It was said that “ cash against documents,” first of all, impliedsome document other than a delivery order, because of the use ofthe plural, and, secondly, must have reference to the risks of thevoyage, so as to make the contract analogous to a c. f. and i. sale,since if “ documents ” only meant “ delivery of the goods, “ thiswould be implied by law. The answer seems to be, .on the firstpoint, that the plural “ documents ” would be satisfied either bytwo delivery orders, one for each shipment; or by two documents, adelivery order and a receipt for the freight, in the case of, eachshipment. On the second point there is nothing surprising if sucha contract is found to express something which the law would imply,
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and certainly there is nothing in it to compel a Court to give simpleand Well-known words a meaning which does not belong to them,and which does belong to other words or letters .equally well knownthough not so simple. In truth, however, “ cash against documents ’’does carry the matter beyond “cash on delivery/' that is, deliveryof the goods, for it imports a convenient mercantile way of effectingthe same object without the inconvenience of a payment at orcontemporaneous with the discharge over side. It was admittedthat payment could not be demanded even “ against documents “till the ship had arrived with the goods. The provision enablespayment to be made in a counting-house and in the ordinary courseof business, without reference to the precise stage which the processof tumbling the logs into the water may happen to have reached-Their Lordships are, therefore, of opinion that there was noevidence on which it could be found that the policy was effected onbehalf of the respondent, or to cover his interest in the goods,, andthat he could not sue on it. They will, therefore, humbly adviseHis Majesty that the appeal should be allowed, and that bothjudgments should be set aside, with costs here and below.
ADAMJEE LUKMANJEE v. THE YANGTSZE INSURANCE ASSOCIATION , LTD