Yadis Nigeria Limited V. Great Nigeria Insurance Company Limited (2000)
LawGlobal-Hub Lead Judgment Report
ADEREMI, J.C.A.
The Appellant who was the plaintiff in the Court below per paragraph 17 of the statement of claim, claimed from the Respondent who was the defendant the following:-
(a) The sum of N3,003,610.00 (three million, three thousand six hundred and ten naira) being the amount due and payable as at 11th January, 1993 to the plaintiffs as a claim due on Fire Policy No. FBP/1012369/L from the defendant on account of fire accident that completely destroyed its insured goods during the night of 10th and 11th January, 1993.
(b) The plaintiff also claims interest on the said sum of N3,003,610.00 at the rate of 30% per annum from 11th January, 1993 until judgment and final liquidation of the whole debt.
Briefly, the Appellant’s case as could be gleaned from its statement of claim, is that by virtue of its being a member of Group of Companies to wit: Messrs Yisa Afolabi and Brothers, it (the appellant) and their Chairman/Managing Director one Chief Yisa Afolabi have been having insurance policies with the defendant since 1983. On 6th October, 1992, by virtue of Fire Policy No.FBP/1012369/L, the Appellant and the Respondent entered into an insurance contract whereby the Appellant’s goods consisting of tyres of various sizes and contained in the sale shop which is an integral part of a business premises situate at 32, Enu Owa Street. Lagos were insured in the sum of N3,500,000.00 (three million five hundred, thousand Naira). Following the invasion in October and November, 1992 of Lagos Island (which embraces 32, Enu Owa Street, Lagos) by vandals, thieves and hooligans, the appellant had to move it’s stock from 32 Enu Owa Street, Lagos to the company’s new warehouse site at Block 3, Ijegun Road. Ikotun Egbe in the Lagos State. The Appellant informed the Respondent, in writing, of the movement. The Appellant’s stock got burnt out completely in fire incident which occurred during the night of 10th and 11th January, 1993. The appellant immediately informed the Respondent of the incident on 11th January, 1993, in writing. The Respondent’s reaction to the Appellant’s letter of notification of the incident was through its letter dated 13th January, 1993 wherein it contended that its investigation conducted through its Surveyor and claims Manager revealed that no fire incident occurred at 32, Enu Owa Street, Lagos and thus there was no loss under the policy. The Respondent through another letter dated 3rd February, 1993 maintained that the policy only covered stock at 32, Enu Owa Street, Lagos and further denied the receipt of the letter notifying it of the change in location. The Appellant replied, in writing, contending that the Respondent received the letter addressed by it notifying the Respondent of the change in location. The total of the balance in stock of the Appellant at 3 Ijegun Road, Ikotun, Egbe at the time of the fire incident was N3,003,610.00.
The defendant/respondent’s case as stated in its statement of defence is that the appellant on 21st September, 1992 made a proposal to the Respondent to take out a fire policy insuring its goods at 32, Enu Owa Street, Lagos. Being satisfied as to the location where the goods were to be warehoused and the goods themselves, the Respondent issued out a fire policy effective from 21st September, 1992 to cover the goods; thus concluding a contract of insurance with the Appellant. Sequel to the sealing of the contract, the Respondent was notified, in writing that there was a fire incident which gutted the goods of the appellant. The respondent promptly caused the insured premises to be inspected by its surveyor. The inspection revealed that there was no fire incident at 32, Enu Owa Street, Lagos, the place insured with the Respondent. This was communicated to the Appellant. The Respondent further averred that it was surprised to receive a letter dated 15th January, 1993 from the Appellant which stated that it (appellant) had changed its business address to Block 3, Ijegun Road, Ikotun Egbe, Lagos contending that it appellant had earlier informed the Respondent of the change of business address by a letter dated 2nd November, 1992. The Respondent further contended that the photocopy of the said letter of 2nd November, 1992 was the first notification to it by the Appellant of the change in the business address. The Respondent refused all entreaties by the appellant to get it to settle the claim. Its refusal was predicated on the fact, as found by it, that there was no fire incident at 32, Enu Owa Street, Lagos. After all efforts to get the defendant/respondent settle the claim failed, the matter proceeded to trial before Obadina, J.(as he then was) who after taking evidence on both sides and the addresses of Counsel on both sides, in a considered judgment, dismissed the plaintiff/appellant’s claim in toto. In the course of the judgment the learned trial Judge held inter alia:-
“From the pleadings, the evidence led by the parties and the addresses of Counsel to the parties, it is common ground that the Fire Policy No. FBP/1012369/L dated 8th October, 1992 – Exhibit C, the parties entered into an insurance contract, whereby the defendant company insured the plaintiff’s stocks and materials in trade consisting of tyres of various sizes stocked at the plaintiff’s shop 32, Enu Owa Street, Lagos.
It is also not in dispute that by a letter dated 11th January, 1993, the plaintiff informed the defendant that fire incident occurred at the plaintiff’s warehouse during the night of 10th and 11th January, 1993…
Since the defendant had made an issue of the receipt of the said document – the original of Exhibit D, I think the plaintiff has a duty to prove that the original existed and it was actually delivered to the defendant. Honestly, I do not think the plaintiff has discharged that duty by merely tendering Exhibit D. I think the cloudy air about the existence and delivery of the alleged original of Exh D could have been cleared by the person who delivered the document to the office of the defendant.
Since the person was not called to give evidence and the delivery hook used by the plaintiff/specifying the particulars of the letter and clearly showing that it was received and by who, I find it very difficult to hold and I am unable to hold that the original of Exhibit ‘D’ was received by the defendant that the plaintiff had removed the insured goods from 32, Enu Owa to Block 3, Ijegun Road, Ikotun Egbe…I do not think that the stamp, print of the defendant’s company on Exhibit D ipse dixit, established that the original Exhibit D was received by the defendant company…
In that regard, it is my view that in so far as the sanction of the defendant in respect of the removal of the insured goods is not endorsed upon the policy – document Exhibit C before the occurrence of the alleged fire incident, the insurance has ceased to attach to the insured goods. Accordingly, the loss or damage is not covered by the policy.
I am perfectly in agreement with the learned counsel that the defendant has failed to prove forgery on the part of the plaintiff with respect to Exh. D – the letter alleged to have been sent to the defendant by the plaintiff…
On the evidence, it is my view that the plaintiff is in breach of the documentary evidence warranty contained in the policy Exh. C.
On the totality of the evidence, it is my view that the loss in this case is not covered by the policy.
Consequently, the plaintiff’s claim fails and it is hereby dismissed.”
Dissatisfied with the judgment the plaintiff/appellant filed an amended notice of appeal that carries six grounds of appeal. Distilled from the said grounds of appeal and set-out in the appellant’s brief of argument are six issues for determination and they are as follows:-
(1) Whether the learned Judge was in error to have held that the stamp print of the defendant/company on Exhibit D did not establish the ipse dixit that the original Exh. D was delivered by the plaintiff/company to the defendant/company?.
(2) Whether the learned trial Judge made a correct approach in law by applying section 91 of the Evidence Act in determining whether or not the original Exh. D was delivered to the Respondent/company and the weight to attach to it?.
(3) Whether the learned trial Judge on the proper evaluation of evidence led in this case erred in holding that the insurance contract ceased to attach as regards the property insured once the property insured is removed to any building or place other than that in which it is in the policy stated to be insured unless the sanction of the defendant/company is obtained?.
(4) Whether the learned trial Judge erred in holding that the original of Exhibit D was not delivered to the defendant/company when the said defendant/company failed to prove that Exh. D was a forgery?.
(5) Whether in the circumstances of this case it was the case of the defendant/respondent at the trial that the plaintiff/appellant breached the documentary evidence of warranty contained in the policy – Exhibit C?.
(6) Whether the learned trial Judge properly discharged his duty of dispassionately evaluating all the evidence adduced in this case and arrived at the correct decision?.
For its part, the defendant/respondent identified two issues for determination: and as set out in its brief they are:-
(1) did the plaintiff discharge the burden of proof on him in the action?.
(2) was it right for the learned trial Judge to dismiss the plaintiff’s action?.
When this appeal came before us on the 25th of September, 2000, for argument Chief Aribisala, learned Counsel for the plaintiff/appellant adopted the appellant’s brief filed on 29th December, 1999 and the reply brief filed on the 27th April, 2000 and urged that the appeal be allowed. Chief Dotun Akinkugbe, learned Counsel for the Respondent also adopted the Respondent’s brief filed on 3rd April, 2000 and urged that the appeal be dismissed.
I have had a very careful study of the issues formulated by the two parties for determination. It is my view that all the issues can be summarized into one cardinal issue or point, that is whether the plaintiff/appellant could be said, on the evidence before the court below, to have notified the defendant/respondent of the relocation of the insured stock from 32, Enu Owa Street, Lagos to 3 Ijegun Road, Ikotun Egbe and obtained the sanction of the defendant/company, the respondent in this appeal, which sanction is signified by endorsement on the policy document by or on behalf of the company, This is very crucial of section 8 (c) of the conditions appartenant to the Policy. Exhibits C and C would not be seen to have been breached. Section 8(c) of the conditions provides:
“Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the insured, before the occurrence of any loss or damage, obtains the sanction of the company signified by the endorsement upon the policy, by or an behalf of the company…if property insured be removed to any building or place other than that in which it is herein stated to be insured.”
The parties, it should be observed from the insurance agreement, the policy, which they signed agreed that the insured property shall be kept at 32, Enu Owa Street, Lagos, I now pause a bit to examine the law on the burden of proof in insurance contract. Judicial authorities are agreeable that ordinarily it is for the underwriter (the insurer) who will stand to benefit from the occurrence of breach of warranty or condition in a policy of insurance to prove the breach of such condition or warranty where it (insurer) is contending that the policy is void on the ground that there has been a breach of condition precedent to the formation of the policy. This principle, in my view, is founded on equity, for a breach of warranty or condition provides the insurer with a solid defence to any claim brought in respect of a time subsequent to the breach. See (1) The Northern Assurance Co. Ltd. v. Wuraola (1969) NMLR 1, (2) Bond Air Services Ltd. v. Hill (1955) 2 All ER 476. However, as was observed by Lord Goddard C.J. (England) in the BOND case, it is always open to the parties to insert express words to shift the burden of proof, but such words must be very clear to alter this established principle of insurance law since the decision by Parke B in Barrett v. Jenny (1849) 3 Ex. 535. Again, I wish to say that once the assured has proved that the loss was caused by the general peril insured against the onus then shifts on the insurer to bring himself within any exception in the policy on which he relies.
However, it has always been a difficult matter of construction to decide whether the insurance agreement affords a limited cover or a general cover subject to exceptions. Where it is very clear that the policy confers only a limited cover it is still for the assured to bring himself within the terms of the policy to enable him pursue his claim successfully. It is in the realisation of those difficulties that Bailhache, J. laid down certain general rules as to the onus of proof in insurance cases in his judgment in Munro Brice & Co. v. War Risks Association Ltd. (1918) 2 KB 78; the rules are as follows:
(1) the assured must prove that the loss or damage was caused by the operation of general risk insured against;
(2) if the general risk is qualified by the exception of specific risks, which but for the exception would fall within the general risk, and some part of the general risks is left unqualified the burden is on the insurer to prove facts which bring the case within the exception relied on;
(3) if there is a qualification of the general risk which covers its whole scope so that there is no unqualified risk left, the burden is on the insured to prove facts which bring the case within the general risk as qualified;
(4) whether a qualification of the general risk is in the nature of an exception or a qualification of the whole risk is in every case a question of construction of the policy as a whole,
(5) in construing a policy it must be borne in mind that a general risk with exceptions can generally be turned by an alteration of phraseology into a general risk with a qualification covering its whole scope.
Rule 3 seems to me to be relevant here. I say this because in my view, condition (c) of the Insurance Policy quoted supra by interpretation provides, in substance, that, in the event of a breach of the warranty, the policy shall be void, and the insurer (defendant)/respondent) shall reserve the right to avoid the policy. This, again, will be so if the subject-matter of the warranty or condition breached by the assured (the plaintiff/appellant) was within his control the (assured) shall not be able to dictate to the insurer whether to exercise the right to avoid the contract or not, rather it is left to the insurer to decide whether to hold itself to be still bound by the contract or not.
In the instant case, the subject-matter of the insurance were within the absolute control of the assured (plaintiff/appellant). Although, the decision of Bailhache J. was upturned on appeal by the Court of Appeal (England) on an inference of fact, the five rules laid down by him on the onus of proof in insurance cases were approved. See Munro, Brice & Co v. Martell (1920) 3 KB 94. Indeed, the rules were followed in Greaves v. Drysdale (1935) 53 Lloyd’s List Law Report 16 and (2) Eagle Star Insurance Co. v. Willey (1956) 1 South African Law Report 330. I have, above, described the effect of the breach of condition 8(c) – the breach is to render the policy void. To obviate this, the plaintiff/appellant has to prove facts which bring the case within the general risk as qualified. In short the plaintiff/appellant has to prove that before the occurrence of the complete destruction, by fire, of his commodities, he had obtained the sanction of the respondent signifying the endorsement on the policy by the defendant/respondent. This then brings me to the issue, whether the appellant served the defendant/respondent with Exhibit D – the letter notifying the defendant/respondent of the removal by the plaintiff/appellant of his insured stock, from 32, Enu Owa Street, Lagos to Block 3, Ijegun Road, Ikotun Egbe. The plaintiff/appellant in its brief submitted that the original of Exhibit D – the letter notifying the insurer of the change in the position or place where the stocks were stored was delivered to the defendant/respondent, the copy which is Exhibit D tendered in the Court below without any objection bears the stamp print of the Respondent. One Olawuyi agreed by both sides to be a member of staff of the defendant, according to the plaintiff/appellant, received the original of Exhibit D, the defendant/respondent denied the assertion. Olawuyi was not called as a witness but the appellant reasoned that it was the duty of the respondent to call Olawuyi as a witness on the issue. The appellant further reasoned that since objection was not taken to the admissibility of the original of Exhibit D, it was no longer necessary to prove the delivery of that original, conclusion which the trial Judge should have reached from the evidence before him, was that the defendant/respondent received the notice of relocation of the insured stock to 3 Ijegun Road, Ikotun Egbe. For the Respondent to now deny the receipt of the original of Exhibit D will tantamount to constructive fraud and a Court of law should not allow that; the case of Trenco (Nig.) Ltd. v. African Real Estates and Investment Ent. Co. Ltd. & Anor. (1978) 4 SC 9; (1978) 11 NSCC 220 at 229, (1978) 4 SC 9 was prayed in aid. And since a limited liability company, the like of the Respondent, acts through human agents, the fraud, negligence or carelessness of the human agents is attributable to the limited liability company, it further contended while citing Aeroftot Soviet Airlines v. UBA Ltd. (1986) 1 NSCC 698, (1986) 3 NWLR (pt.27) 188 and ACB Ltd. v. Agbanyim (1960) 1 NSCC 12, (1960) SCNLR 57. On the other hand, the defendant/respondent contended in its brief of argument that since the plaintiff’s/appellant’s case was that it removed the stocks insured from 32, Enu Owa Street, Lagos which was the location stated in Exhibit C to Block 3, Ijegun Road, Ikotun Egbe, the burden of proving compliance with condition 8(c) of Exhibit C was on the plaintiff. That duty was not discharged it contended. As I have pointed out above, condition 8(c) is a qualification of the general scope such that there is no unqualified risk left once it is seen to have been reached. Again, I have held somewhere in this judgment that the subject-matter (the stock) of the warranty or condition was within the absolute control of the plaintiff/respondent. That absolute control was such that the plaintiff did not have to get permission before it removed the stock from 32, Enu Owa Street, Lagos to Block 3 Ijegun Road, Ikotun Egbe. It is after the movement and to bring itself into compliance with the provisions of the insurance contract to enable it claim compensation that it needed to notify the defendant/respondent. Since the plaintiff/appellant had the absolute control of the stocks, the notification to the defendant of the change in the position of the stocks from the place indicated in the policy Exhibit C – to another place and the receipt of the consent of the defendant/respondent is a sina qua non to making a successful claim for compensation. The absence of notification and the consent of the respondent are fatal to the claim of the appellant for compensation. In civil cases, the like of the present case, the onus of proof always rests on the party who would fail if no evidence at all, or no more evidence, as the case may be, were given on either side. It may shift from plaintiff to defendant and vice versa from time to time as the case progresses. See Nigerian Maritime Services Ltd. v. Afolabi (1978) 2 SC 79. The onus of prove that the notification was served on the defendant/respondent rests squarely on the plaintiff/appellant. This is so particularly having regard to the fact that the subject matter of the policy the stocks – were under the absolute control of the plaintiff/appellant. I reject the contention of the plaintiff/appellant, in its brief of argument that the onus is on the defendant/respondent. The only evidence adduced in proof of the delivery of original of Exhibit D to the defendant/respondent by the plaintiff/appellant is that assertion that Exhibit D the copy of the letter bore the stamp of the defendant/company but it was not signed nor dated by the person who received it. The defendant/respondent being a corporate body is a mere legal fiction that exists only in the eye of the law. It acts through the biological persons who run it. It follows that the signature of a designated official of the defendant/company is of vital importance to prove that the original was received. Again, the credible evidence which can fix the defendant/respondent with the knowledge of the contents of the original is the signature of the designated official of the company. The law remains sacrosanct, that in the absence of fraud, duress or plea of non est factum the signature of a person on a document is evidence of the fact that he is either the author of contents of all that are above his signature or that the contents have been brought to his attention; it does not matter that he did not read the contents of the document before signing it.Merely affixing the stamp of the company on Exhibit D will not be a substitute for the signature. If Exhibit D had been signed by the official of the defendant/respondent that would have sufficed for proof that the original was delivered and the mere fact that the defendant/respondent later failed or refused to sanction the re-location of the stocks by endorsing the policy to that effect will not avail it. Acquiescence of a party who might take advantage of an error obviates the effect of that error. The maxim is, he who does not disapprove approves. I am therefore satisfied with the finding of the court below that, on the evidence before him, the plaintiff/appellant is in breach of the condition of the Insurance Policy, the loss sustained by it is therefore not covered by the policy.
In the final analysis, this appeal is, in my judgment, unmeritorious and it is accordingly dismissed with N5,000.00 cost to the defendant/respondent.
Other Citations: (2000)LCN/0901(CA)