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Ptesent : Ennis A.C.J. and De Sampayo J.
ESUFALI & CO. v. SAMARANG SEA AND FIREINSURANCE COMPANY.271—D. C., Colombo, 9,771.
Marine insurance—Perth of the sea—Certificate of damage—Conditionprecedent to the right to recover claim.—Evidence of previous claim•*-Ordinance No. 14 of 1S95, *. 15:
Where a policy of marine insurance contained a clause to thefollowing effect:—“In case of damage the agents of the companymust be applied to for a certificate, and no c|aim will be admittedwithout their certificate/'
Heldf that it was a condition precedent to the recovery of aclaim under the policy that such a certificate should be obtained.
Evidence that, on a previous occasion, on a claim preferred by theplaintiff in respect of another consignment of goods said to havebeen damaged by sea water, it wa3 found by Court that the goodshad been wilfully damaged by the plaintiff is admissible.
HIS was an action against an Insurance Company to recovera sum of Rs. 13,477.65 on a policy of insurance relating to
165 bags of cofree shipped by the Liangui Trading Company to theplaintiff from Singapore. The ship arrived on August 23, 1922.The coffee was landed on August 23 and 24, and stored in thewarehouse of the Ceylon Wharfage Company, Ltd. On August 28the plaintiff transferred the coffee to- a Government warehouse fortranshipment. On August 31 the plaintiff, without any notice tothe defendant company or its settling agents in Colombo, causedthe goods to be surveyed by Mr. Howard Smith. On September 4he sent to the settling agents of the defendant company a copy ofthe survey report, and made a- claim for Rs. 12,333.32, being thevalue of two-thirds of the coffee, which, the surveyor was of opinionhad been damaged by salt water. The company declined to paythe claim, as the bill of lading stated that the coffee had beenshipped in apparent good order and condition, and as the boat notesissued by the Wharfage Company, when the goods left the ship'shold, showed that only two bags had stains, the contention beingthat the documents showed that the damage had occurred after thegoods had left the ship’s side, and that under the terms of the policythe company’s liability ceased when the goods left the ship. By itsanswer the defendant company, for the first time, maintainedfurther that the plaintiff could not maintain the claim in the absenceof a certificate in terms of the following clause in the policy :“In
case of damage Messrs. The South British Insurance Company, Ltd.must be applied to for a certificate, and no claim will be admitted
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without their certificate. ” At the trial evidence was led by defendant 1925*company that in connection with another shipment of sugar satfalicovered by a policy with another company, it was found that Oo* v. Same-the plaintiff had caused the cargo to be wilfully damaged by sea-water after it had been landed on shore. The learned District Judge Insurance"gave judgment for the plaintiff, and the defendant company Gwpanyappealed.
Samarawickreme (with him N. K. Choksy), for defendant, appel-lant.—The District Judge should not have admitted the bill of ladingon its mere production as evidence against the defendant company asto the condition of the goods when shipped at Singapore. It couldbe evidence only as between the parties to it, and not against athird party (Arnold's Marine Insurance, EE, 1279 and 1232 ;
Scrutton on Bills of Lading, Article 52).
Ennis A.C.J.—It may be prima facie evidence, although notconclusive.
Samarawickreme.—Assuming that it is so, the boat notes arestronger proof of the condition of the goods when delivered from theship except for two bags. The plaintiff has failed to discharge theonus on him to prove that the damage by salt water was caused bya peril of the sea. There is also clear evidence of the untrustworthycharacter of the plaintiff.
Ennis A.C.J.—How is the evidence of another transactionadmissible ?
Samarawickreme.—-Under sections 11 and 15 of the EAddenceOrdinance, the question here is whether the damage was accidentalor intentional. It is submitted that the .clause in questionconstitutes a condition precedent to the plaintiff's right to make aclaim against the company, and as he had failed to apply to thecompany's agents in Colombo for a survey and obtain theircertificate, he is not entitled to sue the Company.
Cites IVorshy v. Wood, 1 Oldman v. Bewick, 2 Boudedge v. Barrel, *Kekulatvela v. Attorney-General. 3 4
Janies Joseph (with him A. V. Kulasingham), for plaintiff,respondent, relied upon certain letters written by the agents of thedefendant company to the effect that no damage had been causedon the voyage and the acceptance by them in those letters of thestatement in the bill of lading as to the condition of the goods.
No evidence has* been adduced to support the suggestion, basedon suspicion, that the plaintiff had wilfully caused the dastrajfe.The company had not challenged the correctness of the statements
3 1 Blackstone s Rep. 255.
* (1912) 16 N. L. R. 19.
6 Term. Rep. 710.
2 Blackstone*9 Rep. 677.
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JBsufali 4aCo. v. Soma-rang Seaand FireInsuranceCompany
in the survey sent to them on September 4, nor asked for anothersurvey. It is submitted that the condition, quoted above, had beenwaived by the defendant company, as it had not taken the allegednon-compliance by the plaintiff as. its ground of exemption duringthe long period that had elapsed before the institution of the action.The condition was unreasonable and unconscionable.
The legal effect of the clause was that if the certificate wasproduced, the company would be bound to settle at once. It did notmean they are not obliged to pay, if compelled by law.
February 27, 1925. Ennis A.C.J.—
This was a claim against an insurance company for Rs. 18,477.65on a policy of insurance relating to 165 bags of coffee shipped by theLiangui Trading Company from Singapore' to the plaintiff. Thecoffee was shipped on August 16, 1922. It arrived on August 23in Colombo, and was landed and warehoused on August 24. OnAugust 28 it was transferred to another warehouse, and on August31 it was surveyed at the instance of the plaintiff. Notice of claimwas given to the defendant company on September 4. It wasurged in the claim that the goods had been damaged by sea waterduring the voyage. A number of issues were framed on questionsof fact, and one issue of law was raised namely, whether the plaintiffcould maintain the action without obtaining a certificate from theSouth British Insurance Company according to a condition in thepolicy of insurance. The learned Judge found, .that the coffee hadbeen damaged by sea water, and the plaintiff could maintain theaction. He gave judgment for the plaintiff, and the defendantappeals.
For the apellant it was urged that the plaintiff had not establishedthat the goods were damaged by any of the perils insured against.It seems certain from the evidence of Mr. Howard Smith that onAugust 31, some two-thirds of the consignment of coffee ifras in adamaged condition due to the salt 'water. The policy of insurancecontained the following conditions.: “ In case of damage Messrs. TheSouth British Insurance Company, Ltd., Agents for the Companyin Colombo, must be appplied to for a certificate, and no claim willbe admitted without their certificate The case of Worsley v.Wood (supra) laid down the law that where a policy of insuranceprovided that the insured should procure a certificate as a conditionprecedent to his right to recover, no action could be maintained inthe absence of such certificate, and this was stated to have beensettled law from that time onwards in the case of the The LondonGuarantee Company v. Feamlay. 1 It seems to be established beyondquestion that where the parties intended that something should bedone before a claim could be presented, the parties were not atliberty to substitute some other act for the act agreed upon. These
1 5 A. 0. at page 910.
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stipulations appear to be entered in insurance policies to protect 1925.insurance companies against fraudulent claims, a matter upon which j&nnsthe present case throws some light. Here’ the circumstances were A.U.J.such that a doubt might arise as to whether the damage was caused Esufdliaccidentally or intentionally. There was a delay, after the arrival Go-v- Santa-of goods, of nine days before a survey was made. The usual custom ^4 Eireof giving notice to the Wharfage Company, the Shipping Company, Insuranceand the Insurance Company was not followed by the plaintiff. No omPanVapplication was made to the South British Insurance Company fora survey. The bills of lading declare that the goods were shipped in" apparent good order and condition,*' and the boat notes issued bythe Wharfage Company show that two bags only were observedto be stained when the consignment was landed. In circumstancessuch as these the provisions of section 15 of the Evidence^ Ordinancemight well apply, and in fact in this case evidence has been ledto show that the plaintiff had preferred a claim in respect of someother consignment of goods on a previous occasion said to have beendamaged by sea water, and the Insurance Company suspected thatthe goods had been intentionally damaged by the plaintiff, a factwhich was subsequently found by the Court to be true.
In these circumstances the condition agreed upon between theparties and embodied in the policy of insurance no longer has atrivial aspect, because the insurance company, if it had been appliedto for a survey, could have sent a representative to be present atthe survey to examine the goods to see whether there were markswhich would indicate whether the damage had been accidentallyor intentionally caused. On September 4 when the claim wasmade to them, and they were first notified of* the damage, it wastoo late to do this, as the survey at the instance of. the plaintifffour days earlier had destroyed, to some extent at- any rate, thepossible evidentiary value of the stained bags, and also of the coffee.
The only attempt to meet this contention was that the InsuranceCompany by not immediately declaring their line of defence hadwaived the condition. It appears, however, that the defence wasspecially set up in the answer, and cannot, therefore, be deemed tohave been waived. I am, therefore, of opinion that the actioncannot be maintained, as the plaintiff had not complied with thecondition agreed upon between the parties. In the circumstancesI would allow the appeal, with costs.
De Sampayo J.—I agree.
ESUFALI & SAMARANG SEA AND FIRE INSURANCE COMPANY