Bala James Ngillari V. National Insurance Corporation Of Nigeria (1998)
LAWGLOBAL HUB Lead Judgment Report
KUTIGI, J.S.C.
The plaintiff is the administrator of the estate of one Jesse James Ngillari, deceased, who died intestate in Maiduguri on 17/8/85. The defendant is a corporate body engaged in insurance business with its head office in Lagos and branches all over the country including Maiduguri.
On 1/3/84, the defendant’s agent in Maiduguri, one S. A. Onuh, in the course of his duties as such agent, approached the deceased in the plaintiff’s office. In the presence of the plaintiff, the agent advised the deceased to take out a combined Endowment/Life Insurance Policy with the defendant. Both the agent and the plaintiff assisted the deceased to complete the defendant’s proposal form which the agent brought along with him. The deceased at the request of the agent also submitted a typewritten additional statement which together with the duly completed proposal form were handed over to the agent. He read them over and after satisfying himself as to their contents, demanded the sum of N449.05 from the deceased as premium. The deceased was short of funds and it was the plaintiff who issued his personal cheque for the amount in favour of the defendant. The deceased was scheduled to attend a course at the College of Pharmacy, Yaba, Lagos and had before then arranged with his bankers to have his salary paid to him over there. The deceased and the agent therefore both agreed that the deceased should make a further payment of N2,694.30 being the total premium payable by the deceased up to the end of December, 1985 when the deceased was expected to have returned to Maiduguri. On the following day which was 2/3/84, the deceased paid this additional sum in cash to the agent. The agent acknowledged receipt on a plain typewritten sheet of paper duly signed by him (see Exhibit D). The agent undertook to bring an official receipt for all the monies collected from the deceased together with the policy certificate in three days’ time, when according to him, the cheque issued by the plaintiff would have been honoured or cleared. Neither the official receipt nor the policy certificate was ever received from the defendant or its agent That the deceased at all materials times believed the agent to be defendant’s agent, whose duty it was to prospect for clients for the defendant and that the deceased dealt with the agent as such. That the agent suggested and the deceased agreed, that the deceased should takeout a life policy for 30 years with effect from 1/3/84. That should the deceased die before the maturity date of 2014 A.D., the defendant would pay his estate the benefit of N50,000.00 with profit and should the deceased survive to maturity date, the said sum would be paid to him with profits.
After payment of premium as stated above to the agent, the plaintiff and the deceased did not hear anything again either from the agent or defendant until 29/11/84 when a letter (see Exhibit E.) was addressed to the deceased in care of plaintiffs office putting the deceased on notice that the agent S.A. Onuh was no longer in the employment of the defendant and that in future, the deceased should deal or pay his premium directly to the defendant’s office in Maiduguri. The deceased sent a reply on 15/12/84 informing the defendant that he had already in fact paid his premium up to and including December, 1985 to the agent and that he was still awaiting the official receipts and the policy certificate as well.
As stated above, the deceased died intestate on 17/8/85 and during the currency of the contract of insurance between him and the defendant. The plaintiff notified the defendant. The defendant in a letter 2/4/86 denied any contractual relationship with the deceased and have failed to pay the sum of N50,000.00 or any part thereof accruable to the estate of the deceased under the said contract of Insurance.
The plaintiff therefore went to court claiming the following reliefs as per paragraph 18 of his statement of claim:-
“a. N50,000.00 being the agreed sum payable as death benefit under the contract of insurance between the deceased and the defendant.
b. N5,000.00 as 10% interest payable on the agreed sum of N50,000.00 covering the period 21st April, 1986 to 21st April, 1997.
c. Payment of a further interest at the court’s rate of 10% per annum on the above total sum of N55,000.00 with effect from the date of judgment until final liquidation.”
The case for the defendant on the other hand is that on 21/3/84 at its head office in Lagos it actually received from its Maiduguri agent S.A. Onuh, the proposal form duly completed by the deceased, a medical report on the life of the deceased as well as his statutory declaration of age. It also admitted receiving payment of N49,05 being first installment of premium paid by the deceased. It however, denied any payment of N2,694.30 being made to it. That on 15/10/84 it mailed a letter (see Exhibit”1″) to the deceased from Lagos asking him to under-go a chest x-ray lest and to further complete Financial Questionnaire Form to enable the defendant assess deceased’s financial position in view of the magnitude of the sum assured, and that no reply was received from the deceased. The plaintiff denied receipt of the letter by the deceased. That there was no contract of insurance in this case because there was neither a policy document issued nor a letter of acceptance by the defendant, particularly when it sought without success for more information from the deceased to enable it accept or reject the proposal as the case may be.
At the trial, pleadings were filed and exchanged, The plaintiff testified for himself while two witnesses testified for and on behalf of the defendant. Thereafter counsel addressed the court. In a reserved and well considered judgment, the learned trial Judge. Ogunbiyi, J., held that the plaintiff proved his claims against the defendant when she concluded her judgment thus:-
“Accordingly, and in the final result all the plaintiffs claims in paragraph 18 succeed and in respect of which I make the following orders:-
(1) That the plaintiff as the administrator of the estate of the deceased, Mr. Jesse James Ngillari is entitled to the claims against the defendants as per paragraph 18 of his statement of claim as follows:-
(a) N50,000 being the agreed sum payable as death benefit under the contract of insurance between the deceased and the defendants.
(b) N5,000 as 10% interest payable on agreed sum of N50,000 covering the period 21st April, 1985 to 21st April, 1987.
(c) Payment of a further interest at the court’s rate of I0% per annum on the above total sums of N55,000 with effect from the date of judgment, being today the 12th day of December, 1987 until final liquidation.
(d) I shall also award costs in this suit in favour of the plaintiff and which I would assess at N300.00.”
Dissatisfied with the judgment of the High Court, the defendant appealed to the Court of Appeal, Jos Judicial Division. The Court of Appeal in its judgment allowed the appeal in part. The lead judgment of Mukhtar, J.C.A., and with the other Justices agreed, on page 141 concluded thus:-
“In the final analysis the appeal before this court succeeds in part. The judgment of Ogunbiyi, J. Bornu State High Court is set aside. Costs is awarded al N300.00. in favour of the appellant in this appeal. This court orders that the N50,000 damages (sic) already paid to the respondent shall be refunded to the appellant as urged by learned counsel for the appellant at the hearing of this appeal. The sums of N449.05 and N2,694.30 paid to the appellant’s agent to be refunded to the respondent.”
Aggrieved by the decision of the Court of Appeal, the plaintiff (hereinafter called the appellant) has now appealed to this court. The defendant will also henceforth be called the respondent. The parties filed and exchanged briefs of argument as provided by the rules of court. These were adopted at the hearing by counsel and a few additional oral submissions were made. In the appellant’s brief, three issues have been submitted for determination as follows:-
“(1) Whether the learned Justices of the Court of Appeal were right in setting aside the findings of the trial court on the N2,694.30 paid to the respondent as premium and on Exhibit I (respondent’s letter to the deceased) when there were no grounds of appeal challenging these findings.
(2) Was the lower court right in holding that the respondent successfully denied receiving the sum of N2, 694. 30 from the deceased
(3) Considering the pleadings and evidence, was there a valid contract of insurance before the death of the deceased between the parties”
My first observation is that I fail to see what issues (1) and (2) above are intended to achieve in the light of the order made by the Court of Appeal above to the effect that the N2, 694. 30 as well as N449.05 paid to the respondent’s agent be refunded to the appellant. Be that as it may, I think counsel for the respondent was correct when he said that the central issue in this appeal is whether or not there was a valid contract of insurance between the deceased and the respondent at all material times. This is in fact appellant’s issue (3) above. And it would appear that issues (1) and (2) will also be taken care of in the process.
Now, I have already tried to summarise the facts of the case above. The appellant filed a statement of claim of 18 paragraphs. The respondent in its amended statement of defence admitted paragraphs 1,2,3,4,5,6,7,8, and 15 of the statement of claim which read thus:-
(1) The plaintiff is a legal practitioner and the administrator of the estate of Jesse James Ngillari deceased, who died intestate on the 17th August, 1987 at Maiduguri. On the 17th March, 1987 letters of administration of the said deceased’s estate were duty granted to the plaintiff as such administrator by the Probate Registry of the High Court of Justice Borno State. The said letter of administration is hereby pleaded and will be founded upon at the trial of the suit. The plaintiff resides in Maiduguri within the jurisdiction of this honourable court.
2) The defendants are a corporate body established by Decree No.22 of 1969 capable of suing and being sued. The defendants are engaged in the business of insurance. The defendants have their head office in Lagos and branch offices all over Nigeria with one in Maiduguri.
(3) The plaintiff states that on the 18th March, 1987, he duly served on the defendants Managing Director by registered post one month notice of his intention to commence legal proceedings against the said defendants in the manner provided by S.28(2) of Decree No.22 of 1969. The original of the said notice dated 18th March, 1987 is in the defendant’s possession and the same is hereby pleaded.
(4) That in or about 1st March, 1984, Mr. S. A. Onuh, one of the defendants’ agents in Maiduguri approached the deceased in the plaintiff’s office in Maiduguri advising the deceased to take out a combined endowment/life insurance with the defendants.
(5) That on the said date aforesaid in the presence of the plaintiff herein, the deceased with the assistance of the defendants’ said agent duly completed the defendants’ proposal form which the said agent had brought along with him. The deceased at the request of the defendants’ agent also submitted a typewritten ‘additional statement’ which together with the defendants proposal form were duly handed over to the defendants’ agent. The plaintiff avers that before parting with the original proposal form, the deceased caused a photocopy of same to be and kept with him for his records. The originals of the defendants’ proposal form dated 1st March, 1984, signed by the deceased as well as the additional statement also dated 1st March 1984, are hereby pleaded and will be founded upon at the trial of this suit.
(6) The plaintiff avers that upon the receipt of both the proposal form and the additional statement from the deceased, the defendants’ said agent read both documents and after satisfying himself as to its contents demanded the sum of N449.05k from the deceased as premium.
(7) That the deceased was short of funds at the time; the plaintiff who is also a junior brother to the deceased at the request of the deceased drew out a cheque on his account with the First Bank of Nigeria Limited, Maiduguri for the sum or N440.05k in favour of the defendants in settlement of the premium as demanded by the defendants’ agent.
(8) The plaintiff avers that the proceeds covered by the aforesaid cheque amounting to N449.05 has since been received by the defendants. The plaintiff will at the trial of this suit tender and found upon the cheque in question and the same is hereby pleaded.
(15) By a letter dated 29th November, 1984, the defendants notified the deceased that their said agent Mr. S.A. Onuh was no longer in their employment, warning the deceased not to further transact any business with the said agent. The plaintiff pleads that following the death of the deceased, the plaintiff searched all the deceased’s properties in Lagos and Maiduguri for the where about of the said letter but could not locate same. Copy of the said letter of the 29th November, 1984 in the plaintiff’s possession is hereby pleaded and will be founded upon at the trial of this suit.”
In addition to the admissions above by the respondent, the appellant also gave evidence in line with his statement of claim which the learned trial Judge believed and accepted. From the pleadings and evidence therefore the following facts were undisputed and consequently established:-
(a) That at all material times one Mr. S. A. Onuh was the agent of the respondent. The respondent pleaded nothing nor adduced any evidence to show any limitations of the agent’s power or authority.
(b) That on 1/3/84 the agent in the appellant’s office advised the deceased to take a Life Insurance Policy for 30 years with effect from 1/3/84 with the respondent. The agent produced the application form which the deceased duly completed with an additional statement.
(c) The agent read over the completed application form (now proposal form) and was satisfied. He there and then demanded payment of first premium of N449.05 from the deceased. This sum was paid to the agent.
(d) The agent demanded a further payment of N2,694.30 being total premium up to and including December, 1985, when the deceased disclosed that he would be away on course in Lagos and that his salaries would henceforth be paid to him in Lagos.
(e) On 2/3/84 the sum of N2,694.30 being premium was accordingly paid to the gent by the deceased. The agent promised to bring the receipt for the premium as well as the policy of insurance itself in three days time. It was never to be until the deceased died on 17/8/85 as stated above.
(f) On 2//3/84 at its head office in Lagos the respondent received the deceased’s proposal form together with his medical report and declaration of age. It also received the first premium of N449.05 paid by the deceased.
(g) On 29/11/84 the respondent in Lagos addressed a letter to the deceased warning him not to deal with or pay his premium to the agent who had ceased to be their employee but to pay directly to the office in Maiduguri.
I am clearly of the view therefore that on the facts before the court, one cannot escape the conclusion that all elements of a valid contract were present in the case. The deceased made his proposal when he completed the application form (now proposal form) on the fateful day. 1/3/84. He also gave additional statement. The respondent’s agent read them and after satisfying himself demanded payment of the first premium ofN449.05 which the deceased immediately paid. In addition on 2/3/84 another premium of N2.694.30 was paid up to and including December, 1985. I must stress here that a contract of insurance like any other contract is created where there has been an unqualified acceptance by one party of an offer made by the other, as in this case.
The only defence pleaded by the respondent is as contained in paragraph
2(b) of the amended statement of defence thus:-
“In further reply to paragraph 5, the defendant wrote and mailed to the deceased/plaintiff (the proposer) on the 15th October, 1984 directly from its head office in Lagos asking the plaintiff to undergo X-ray test and to further complete financial questionnaire form to enable the defendant assess his financial position in view of the magnitude of the amount to be assured. The defendant avers that to the best of his knowledge no reply was received from the plaintiff. The letter referred to above is hereby pleaded and will be founded upon at the trial of this suit.”
The letter was admitted in evidence as Exhibit 1. Needless to say that the appellant denied receipt of this letter by the deceased. The appellant, however, at the trial stated categorically that:-
“At the time the proposal form was filed, there was no indication that any other information other than what was filled in the proposal from coupled with the additional statement is required.”
I must add also that there was no indication from the agent that the contract was subject to any approval of the respondent. As this was never pleaded any evidence led thereon went to no issue (see for example Emegokwe v. Okadigbo (1973) 4 SC 113). It should also be remembered as shown above that the respondent even after 15/10/84 (Exhibit 1) still found it necessary to communicate with the deceased when on 29/11/84 it warned the deceased not to deal with or pay further premium to their agent who had been dismissed but to deal direct with the respondent’s office in Maiduguri. It knew the deceased to be its customer. I think under these circumstances the learned trial Judge must be right when she said in her judgment:-
“This document Exhibit 1, is in my view belated having regard to the conclusion reached as per above to the effect that a valid contract came into existence on the 1st day of March and a further confirmation was again made on the 2nd of March by the payment and acceptance of N2,694.30 subsequent to which Exhibit D was made.”
The Court of Appeal was wrong to have held a contrary view. It was also in evidence which was never denied that the respondent received the offer from the deceased in its office in Lagos on 21/3/84 and did not deem it necessary to write Exhibit I until 15/10/84 seven months after’ I do not think I need any authority to say that time is of the essence of an insurance contract. I clearly find no merit in the defence raised by the respondent. The Court of Appeal was therefore wrong when it held (per Mukhtar. J.C.A., who read the lead judgment) that:-
“I am of the view that all the foregoing reasonings put together does (sic) not qualify whatever that transpired between the deceased Jesse Ngillari and the appellant insurance company to be a valid contract of insurance. Negotiation was commenced, yes, but no valid insurance subsisted as a result of the negotiation. The elements of offer and acceptance by the parties, that constitute valid contract are lacking. Consequently, the learned trial Judge was in error when she held that there was a valid contract.”
The learned trial Judge was certainly right for holding as she did, that there was a valid contract of life insurance between the deceased and the respondent. The learned authors of Halsbury’s Laws of England, Fourth Edition, Volume 25, dealing with the general principles of non-marine insurance (as in this case) said in these paragraphs as follows:-
“398. Necessity for offer and acceptance
A contract of insurance, like any other contract, is created where there has been an unqualified acceptance by one party of an offer made by the other, So long as the matter is still under negotiation, there is no contract, although it is open to the parties, pending conclusion of the negotiations, to enter into an interim contract of a limited nature………………”
“399. Acceptance of the offer. Where a proposal in the normal form is accepted without qualification, the contract is complete and the insurers are bound to issue, and the proposer to accept, a policy in accordance with the stipulations of the proposal (Addie & Sons v. Insurance Corp. Ltd. (1898) 14 TLR 544). Indeed, although writing is necessary in marine insurance, in other forms of insurance there is no legal necessity (Murfit v. Royal Insurance Co. Ltd. (1922) 38 TLR 334). Any positive act indicative of an intention to create a contract may be sufficient acceptance; for example receipt of the premium without demur or qualification or conduct precluding the insurers from disputing receipt of the premium. (Harrington v. Pearly Life Assurance Co. Ltd. (1913) 30 TLR 24; Re Economic Fire Office (1896) 12 TLR 142; Xenos v. Wickham (1866) LR 2 HL 296 at 308). Even a demand for the premium may be sufficient.”
“405. The policy. In relation to contracts on non-marine insurance there are no statutory requirements comparable with those contained in the Marine Insurance Act 1906 prescribing the form of document to be used or the minimum particulars to be contained in it; indeed even a parol contract of lion-marine insurance appear to be valid. Therefore, any document which contains the terms of the contract may be treated as, or even called, a policy, (Re Profits and Income Insurance Co. (1929) 1 Ch 262 at 269; Forsikringsakr ieselskaber National (of Copenhagen) v. A-G (1925) A.C. 639 at 642)”
“460. Payment of premium. The premium may be paid by the assured to the insurers or to an insurance agent acting on behalf of the insurers, If the agent has authority to receive it the payment binds the insurers. (Acey v. Fernie (1840) 7 W & M 151). The authority need to be an express authority: it may be implied from circumstances. (Montreal Assurance Co. v. M’Gillivray (l859) 13 Moo PCC 87)”
(Italics is supplied by me for emphasis only).
The irresistible conclusion I have arrived at in this case is therefore that applying the law above to the facts and circumstances of this case, there was no doubt that there was a valid concluded contract of life insurance between the deceased and the respondent at all material times as found by the trial High Court.
The Court of Appeal again clearly erred in law when Mukhtar, LC.A., held thus:-
“With the payment of the deposit coupled with the mere completion of Exhibit B, which merely contained information I fail to perceive a valid contract existing…………. In so far as the present case is concerned the only action taken so far was the filling of Exhibit B and payment, and a policy has not even materialised.”
I find no substance in the contention of the respondent that for there to be a valid contract in this case there ought to have been either a formal letter of acceptance or a formal policy of insurance addressed to the deceased. I should probably repeat again that the application or proposal form which was accepted by the agent without any qualification was sufficient to have completed the contract. And that conclusion was even further fortified when the agent demanded payment and accepted from the deceased, premium, without any qualification either. I must repeat here again that it was never the case of the respondent on the pleadings that their agent had no power or authority to accept on its behalf any offer for insurance or accept premium at all.
This appeal is therefore clearly meritorious. I accordingly allow it. The judgment of the Court of Appeal together with its order for costs are set aside while the judgment of the trial High Court, Maiduguri, delivered on 12th day of November, 1987 is hereby restored.
The plaintiff/appellant is awarded costs of this appeal which is assessed at Ten thousand naira (N10,0000.00)only.
SC.72/1992