SIRIMANE v. NEW INDIA ASSURANCE COMPANY, LIMITED

085-NLR-NLR-V-35-SIRIMANE-v.-NEW-INDIA-ASSURANCE-COMPANY,-LIMITED.pdf


Sirimane v. New India Assurance Company, Limited.413
1934Present: Garvin S.PJ. and Akbar J.
SIRIMANE v. NEW INDIA ASSURANCE COMPANY,LIMITED.
111—D. C. Kandy, 42,277.
Jurisdiction—Action to recover money under fire insurance policy—Cause ofaction—English law.
In an action to recover money due under a policy of fire insurancethe principle of the English law that the debtor must seek out thecreditor applies. In such a case the cause of action, t.e., the failure topay, arises where the claimant resides.
^^PPEAL from a judgment of the District Judge of Kandy.
This was an action to recover a sum of money due on a policy of fireinsurance, made in Colombo, relating to a property at Kegalla, whichwas alleged to have been destroyed by fire. The learned District Judgeheld that the District Court of Kandy had no jurisdiction to entertainthe action.
N. E. Weerasooria (with him Batuwantudave), for plaintiff, appellant.—This being an action on a contract of fire insurance, the English law relatingto fire insurance applies. See Ordinance No. 22 of 1866. Therefore,the English law rule that the debtor must seek out the creditor alsoapplies. Hence the District Court of Kandy (the district where theassured resides) has jurisdiction.
A. B. Cooray (with him T. S. Fernando), for defendants, respondents.—It may not be possible in the present state of the law to argue thatEnglish law is not applicable in all matters relating to contracts of fireinsurance. But the English law rule in question applied only in the caseof a liquidated debt, and not in the case of a claim for unliquidateddamages. There is no definite sum actually due. The policy is to makegood the damage suffered. A claim for unliquidated damages is not anlnim for a debt. In cases of claims for unliquidated damages the causeof action arises where the contract was made or was broken. A contractmust be examined to see where it was intended to be performed—see perWalsh C. J. in Ttica Ram v. Daulat Ram
A contract of fire insurance is defined as a contract of indemnity againstlosses actually sustained—see Welford and Otterbarry on Fire Insurance,p. 6. A contract of debt is defined in Smith’s Mercantile Law, at p. 688.
The breach of contract (the refusal to pay) occurred at Colombo. SeeHalsbury’s Laws of England, Vol. VII., s. 274, p. 194, on “Place ofPerformance. ”
A claim for unliquidated damages becomes a claim for a debt onlywhen the debtor accepts liability or when an arbitrator has fixed theamount.
Counsel also cited Leake on Contracts, re “Mode of Payment,” atp. 658.
> 46 /. L. R. Allahabad 465, at p. 467.
•514 AKBAR J.—Sirimane v. New India Assurance Company, Limited.
Weerasooria, in reply.—So long as a premium has to be paid by the■assured, it has to be paid at Colombo. But the assured has to beindemnified in the place where he resides, i.e., Kandy.
See Morice’s English and Roman-Dutch Law, pp. 94 and 95, onExtinction of Contractual Obligations.
The words, debtor and creditor, in the maxim are to be understood intheir widest possible sense. '
Where the place of performance is not specified the place of the promiseeis the place of payment, see Halsbury, Vol. VII., ss. 274-5, p. 194.
Counsel also cited Van Leeuwen’s Censura F01 msis, Part I., bk. IV.,Ch, 32, s. 14.
Cur. adv. vult.
.March 13, 1934. Akbar J.—
The appeal is from a judgment of the District Judge dismissing plaintiff’saction with costs on the ground that the District Court, Kandy, had nojurisdiction to try this case. The action was for the recovery of a sumof money due on a fire insurance policy, made in Colombo, and relatingto a property at Kegalla,. which was said to, have been completelydestroyed by fire.
According to the policy {D 2) the Company consented to pay all loss ordamages to an amount not exceeding Rs. 25,000 if the property or anypart of it was destroyed or damaged by fire or lightning whi'e the policyremained in force. The plaint in paragraphs 3 and 4 alleged that theproperty insured was completely destroyed by fire and the loss sustainedexceeded the sum of Rs. 25,000, the maximum amount payable under thepolicy, and that the plaintiff had submitted his claim to the defendantCompany and had demanded the sum of Rs. 25,000, and that no paymenthad been made. Various issues were suggested but the case was decided,as stated by me, on the question of jurisdiction.
The learned District Judge, in reviewing the case law on the subject,observed that there was a conflict between my judgment reported inSubatheris v. Singho1 and that of de Sampayo J. in Silva v. Jayatilleka'.
There is no conflict at all between the decisions of this Court on thispoint; all the decisions were( based on the footing that where the Englishlaw was applicable on a, question of the place of payment, the Englishrule was to be followed, and that where the Roman-Dutch law was togovern the question, the Roman-Dutch law rule was to be resorted to.(See in particular Haniffa v. The Ocean Accident & Guarantee Corporation,Ltd.'.) Here there can be no doubt as in fact it was admitted bycounsel that the law applicable on the subject of fire insurance is theEnglish law.
Under Ordinance No. 22 of 1866, all questions arising with respect tothe law relating to fire and life insurance are to be decided according to theEnglish law. Now the English rule is that the debtor must seek out thecreditor and tender payment where the creditor resides. Admittedlythe creditor resides in Kandy, and, if the word “debt” will include-moneys alleged to be due on a fire insurance policy, the Kandy District-will undoubtedly have jurisdiction.
‘32 N. L. R. 360.* 6 C. W. R. 360.
35 N. L. R. S16.
AKBAR J.—Sirimane v. New India Assurance Company, Limited. 415
Mr. Cooray argued that the English rule did not apply to an obligationto pay unliquidated damages and that it only applied to a claim forliquidated damages. He was unable to cite any direct authority on thepoint, and I am unable to accept his view that the English rule should berestricted in the sense urged by him. The English rule has not onlybeen applied to payments of money due on sales of goods (Robey & Co. v.Snaefell Mining Company, Ltd. ’), but also to sums due on a salvage claim %and money due as rent on a lease (Haldane v. Johnson3), and even toan allowance payable by a husband to his wife on a deed of separation(Drexel v. Drexel'). The rule was applied to a case where the defendanthad to tender promissory notes. In Cranley v. Hillary3 the head note is asfollows :—"Where plaintiff, the drawer of a bill- of exchange accepted bydefendant, agreed with him and the rest of his creditors to take a com-position of 8s. in the pound to be secured by promissory notes to be givenby defendant payable on days certain, and that defendant should assignto the creditors certain debts, upon which they should execute a generalrelease; and the assignment was executed, and all the creditors exceptplaintiff received their composition and executed the release, and plaintiffmight have received his promissory notes if he had applied for them, butit did not appear that the defendant had ever tendered them to plaintiff,or that he had ever applied for them; and the plaintiff afterwards, and afterthe days of payment of the promissory notes had expired, sued the defend-ant on the bill of exchange: Held that he was not precluded by theagreement from recovering.”
Lord Ellenborough C.J. said:“ The rule is, that the person to be
discharged is bound to do the act, which is to discharge him, and not theother party. If the defendant had offered the notes at the time of actionbrought, it might have been a ground for staying the proceedings."Dampier J. said “ It is laid down by Littleton that the obligor of abond conditioned for the payment of money at a particular day, is boundto seek the obligee, if he be in England, and at the set day to tender himthe money, otherwise he shall forfeit the bond. So in this case, thedefendant was to give the notes, and therefore to go with them to theplaintiff, and he was not to go to the defendant. Suppose the conditionhad been to pay a sum of money, I apprehend the defendant must havesought out the party in order to pay it.”
In Haldane v. Johnson (ubi supra) Baron Martin said : —“ But two otherauthorities were referred to in the argument, viz., Rowe v. Young, in theHouse of Lords, and the judgments of the Judges there, and Poole v.Tunbridge, which, in our opinion, clearly show the plea to be bad. Thecovenant (as has been already observed) is a covenant to pay a sum ofmoney to the lessor on a particular day : no place is mentioned for thepayment, either expressly of by implication. In such case it is clearlylaid down in both the above cases, that it is the duty of the covenantorto seek, on the appointed day, the person who is to be paid, and pay ortender him the money. And in Poole v. Tunbridge, it is stated by Parke
, as the conclusion from the authorities, “that nothing can discharge
1 SO Q. B. D. 152.3 8 Exchequer Reports, 689.
3 (1893) The Eider Laic Reports* (1916) 1 Chon. Die.' 261.
Pro. Die. 116.5 2 N. .f S. 120.
436 AKBAR J.—Sirimane v. New India Assurance Company, Limited.
a covenant to pay on a certain day but actual payment or tender on thatday, although, if the party afterwards choose to receive the money, suchpayment may be pleaded by way of accord and satisfaction.”
“ This is in exact conformity with the rule of law laid down in Sheppard’sTouchstone, p. 378, that when an obligation is to pay a sum of money,or do any like transitory thing to the obligee on a day certain, but no placeis set down where it shall be done, it must be done to the person of theobligee wheresoever he be, if he be within the four seas.”
” No precedent was cited for such a plea in an action upon a covenant,and we are satisfied that none exists, otherwise it would have been dis-covered in the investigation which was made in reference to the case ofRowe v. Young, above cited.”
“ In Comyns’ Digest, title “ Pleader ” (2 W. 49, p. 402), the plea seemsto be approved of in the action of debt; but nothing of the kind is to befound in regard to the action on the covenant (2 V. 14, p. 360); indeed,on the contrary, there is a passage which shows that even a subsequentlevy by distress is not a good answer to an action of covenant for the rent,for (as is said) this admits the rent not paid on the day.”
“ We are therefore of opinion, that a covenant for the payment of rent,at the time and in manner as reserved, when no particular place of pay-ment is mentioned, is analogous to a covenant to pay a sum of moneyin gross on a day certain, in which case it is incumbent upon the cove-nanter to seek out the person to be paid, and pay or tender him themoney, and for the simple reason, that he has contracted so to do.”
“ Our judgment upon the main question being for the plaintiff, it isunnecessary to refer to an objection to the plea of a mere technicalcharacter, suggested by Mr. Willes.”
Where there is a covenant to pay a sum of money, as in this case, theEnglish rule is definite that the debtor must seek out the creditor. Thefact that there may be a dispute as to the exact amount which may be dueor as to whether it is due at all cannot affect the question at all, to my mind.
The obligation here arises on a contract, that is to say on a definitecovenant to pay. It is interesting to note here that although the Roman-Dutch law is the exact reverse, Van Leeuwen in the Censura Forensisdisagrees. Part I., Book IV., Chapter 32., s. 14, is as follows:—“ Hence arises the question whether a debtor, to get a .discharge from hisdebt, ought to go to the creditor’s house or the creditor ought to exactpayment at the place where the debtor lives, and whether he is bound todemand payment of the debtor; and this appears from arg. 1, 18, ff. deConstit. pecun. Nor is the opinion of the Glossators and the Doctorsplausible, or generally accepted, who make the distinction that as soonas a debtor and creditor are of different jurisdictions, the creditor mustfollow the domicile of the debtor, and should demand payment of him inhis own country; but if they belong to the same forum, the debtor isbound to go to the creditor’s house! This is wrong, because that law saysgenerally that the man who wishes to dear himself of delay, or acquireany rights for himself ought to go to the creditor.”
The appeal is allowed with costs and the case will go back to beconcluded in the ordinary course.
Gaxvin S.P.J.—I agree.Appeal allowed.