Insurance Brokers Of Nigeria Vs Atlantic Textiles Manufacturing Company Limited (1996)

LAWGLOBAL HUB Lead Judgment Report

IGUH, JSC.

In the Ikeja Judicial Division of the High Court of Lagos State, the plaintiff instituted an action against the defendant claiming as follows:

“The sum of N243,869.27 (Two hundred and Forty three Thousand, Eight Hundred and Sixty Nine Naira and Twenty-seven Kohn) being outstanding balance of premiums on various insurances effected at the request of the defendant by the plaintiff on defendant’s goods, properties and personnel together with 6% interest per annum on the said sum from the 31st October 1982 until judgment is given in this Suit, which the defendant has refused and/or neglected to pay despite repeated demands.”

Pleadings were ordered in the suit and were duly settled, filed and exchanged.

The pleadings filed by the parties in the cause appear markedly precise and brief. It is pertinent to set out paragraphs 3 to 8 of the Statement of Claim which, in the main, summarized the case for the plaintiff. These aver as follows –

“3. Under an arrangement in 1978 with the plaintiff, the defendant company insured its goods, properties and                 personnel through the brokerage of the plaintiff company.

4. Pursuant to the said arrangement the plaintiff underwrote the various insurances requested by the defendant and duly notified the defendant of the nature of insurance effected, the period covered, policy numbers and the premiums payable.
5. The defendant accepted the premiums established and made sonic payments in part settlement thereof to the plaintiff,
6. The plaintiff debited the account of the defendant for the unpaid balance of premiums and advised the defendant by monthly Statements of Account.
7. The defendant defaulted in the payment of outstanding balance of insurance premiums and have refused and/or neglected to settle the account in full.
8. At the trial the plaintiff will rely on:

(a) The last Statement of Account dated 31/10/82 showing the debit notes numbers, dates covered, insurance policy numbers and balance of premiums outstanding.

(b) Defendant’s letter dated 27/3/79 admitted liability for N270,506.29 as at February 27, 1979, with proposal to liquidate the debt by N50,000.00 monthly.

(c) Copies of memoranda of Insurance effected for the defendant and the premiums debited”

The defendant, while denying “each and every allegation of fact contained in the Statement of Claim” answered in paragraphs 2 to 5 of its Statement of Defence as follows:

2. The defendant avers that in 1978 it agreed with a brokerage house to arrange at the usual premiums insurance           cover for the properties, goods and personnel of the defendant on a credit basis.

3. The defendant avers that its letter of 27th March, 1979; mentioned in paragraph 8(b) of the Statement of Claim, was written to Messrs. C.T. Bowring & Co. (Nigeria) Limited and a total sum of N256,131.79k had been paid by the defendant between March and October, 1979 to the said Messrs. C.T. Bowring & Co. (Nigeria) Limited.
4. The defendant further avers that the plaintiff was not in existence when the contract described in paragraph 2 supra was entered into and the defendant would therefore contend at the trial of this suit that the plaintiff lacks the legal capacity to sue.
5. The defendant would further contend that the claim is frivolous, speculative and a gross abuse of process.”

At the subsequent trial, both parties testified on their own behalf but called no witnesses.

The plaintiff’s case is that it had an arrangement as a brokerage house with the defendant company to secure insurance policy covers on credit basis for the defendant’s motor vehicles, machineries, plants and various other properties. It also secured insurance policies in respect of fire, marine cargo and engineering equipment of the defendant company and covered the defendant’s staff under the Workmen Compensation Act. The plaintiff prepared a Debit Note for each and every item of insurance cover transacted on behalf of the defendant and forwarded the same to the defendant company. Copies of the relevant Debit Notes are Exhibits D – D16. The plaintiff also issued monthly statements of account to the defendant showing all unpaid premiums in respect of the insurance transactions concluded on he half of the defendant. The last monthly statement of account forwarded to the defendants in respect of the said transactions are Exhibits B – B3.

Exhibits B – B3 show N2S3,869.27 as the outstanding balance payable by the defendant company to the plaintiff in respect of various insurance transactions concluded by the plaintiff on behalf of the defendant. The defendant company, by Exhibit C dated the 27th March, 1979, acknowledged owing the plaintiff an outstanding balance of N270,508.29 as at the 27th February, 1979.