IN THE CASE OF:
LAW UNION & ROCK INSURANCE OF NIG. LTD Vs LINUS ONUOHA
.jpg)
1)
Did the respondent at any time have an
insurable interest over the car which he insured with the appellant in view of
the trial courts discovery that the car was stolen from where it was parked.
2)
Whether the onus is on the appellant
to prove that the respondent at the time he insured the car with it was aware
that the car was stolen.
FACTS;
Here the respondent/ plaintiff claimed
against the appellant / defendant, the sum of N
40.000 as an indemnity over an insured car. The car was insured but later got destroyed
by fire. The appellant agreed to indemnity the respondent after the
mishap as
he had sold the wreck of the car at
The
appellant was dissatisfied with the judgment and consequently appealed to the
court of appeal. The appeal court in determination of the matter considered the
provision of section 22(1) of SGA 1983 which is a statute of general
application equally applicable in Benue state as follows:-
“Where
goods are sold in market overt according to the usage of the market, the buyer
acquires a good title to the goods provided he buys in good faith without
notice of any defect or want of title on the part of the seller.”
The court, unanimously dismissing the
appeal held that anyone suing on an insurance policy must have can insurable
interest in the subject matter of the policy. It described an insurable interest as the assured pecuniary
interest in the subject matter of the insurance. According to it, a court
called upon to determine whether or not a particular claimant has an insurable interest
in the property concerned will need to consider the issue whether the
destruction or diminution in value of the property will result in any loss to
the claimant. Also a more possession of property was held to be probably enough
to entitle the possessor to an insurable interest in goods.
The
court in citing the authority of Macaura V Northen Assurance Co. Ltd (1925) Ac
619 observed thus … indemnify insurance obviously
required the assured to have an interest in the subject matter of the insurance
other then that created by the contract itself or otherwise, he will incur no loss through the happening of the
event insured against and so if the assured is without a legally recognized
interest, the insurer will have a good defence to any claim under such a contract
if the chooses to raise it’.
The
court read the provision of 22(1) of SGA above as an exception to
the nemo dat quod non habet rule. It
went further to justify the above rule on grounds commercial convenience and expediency.
The count in
buttressing more purport of the above section per Oguntade, JCA at page 589
paragraph B-C observed thus,
Generally speaking, the market system
in major cities in Nigeria
is not very well organized but it seems to me that spots set aside in any of
the Nigeria
towns for sale of specific or particular goods and which are publicly patronized
at regular hours and acknowledged as
such quality to be described as market overt. I think that the mechanic village
at Apir in Benue state where the plaintiff
purchased the scrap of the car, subject
matter of the dispute, qualities to be treated as a market overt. I shall so
treat it”. The court also expounded the meaning of the
phrase market overt to mean an open
market. It applies to an open, public and legally constituted market. On the
meaning of good faith section 62(2) of SGA deems a thing to be done
in good faith within the meaning of the Act if in fact, it is done honestly
whether it be done negligently or not. The court further noted that by virtue of section 74 of the Evidence Act 1990, all courts
are enjoined to take judicial notice of all laws and enactments. The trial
court then gave judgment to the plaintiff by awarding him N39, 000.
The defendant was not satisfied with the judgment and
later appealed on grounds of four issues namely;
A)
The appeal is against the weight of
evidence
B)
The trail judge erred in law after
finding that the car insured by the plaintiff was a stolen one and not with
standing proceeded to give judgment to the plaintiff as if though he has an
insurable interest in the stolen car.
C) The learned trial
judge erroneously placed the burden of proving that the plaintiff was aware
that the car was stolen on the defendant.
D) The learned trial
judge having found that the car insured by the plaintiff with the defendant
belonged to the D.W.2 and that it was wrong to have enforced the contract
insurance thereby implying that the
plaintiff had title to the car.
The appeal court in dismissing the appeal but adopting
the reasoning of the lower count held that the appeal was unmeritorious and
consequently awarded cost against the appellant.
Comment:
The
courts’ ratio decidendi in the above case is premised on the provision of
section 22(1) of the SGA 1990 as presented supra. The effect of the provision
is to entitle a bonafide purchaser for value, who has purchased properly in a
market overt without knowledge of defect in title or absence of title, to still
maintain an action for possessory or ownership right over same.