INTRODUCTION
Insurable interest is a relationship between the
insured and the subject matter of the insurance contract. It is a valid element
of a binding insurance contract.
The Black Law Dictionary of the 9th
Edition in page 886 defines insurable interest as “a legal interest in another person‘s
life or health or in the protection of property from injury, loss, destruction
or pecuniary damage” To take out an insurance policy, the purchaser or the potential
insurer’s beneficiary must have an insurable interest. If a policy does not
have an insurable interest as its basis it will be usually be considered as a
form of wagering and thus be held unenforceable.
According to the Court in the case
to be reported in this work the definition of insurable interest is elastic and
it is not always coterminous with the ownership, wholly or partially of the particular
goods insured. The mere possession of property is probably sufficient to give
the person in possession an insurable interest in it. This means that ownership
is not the only determinant factor. This is because from the above position of
the Court, mere possession of property is sufficient.
In this work, we shall report the
case of Law Union and Rock Insurance
Company Limited V Livinus Onuoha under this heading.
NAME OF THE CASE
LAW
UNION AND ROCK INSURANCE COMPANY LTD Vs LIVINUS ONUOHA (1998) N.W.L.R. ( PT 555)
PG 576.Court of Appeal (Jos Division)
Appeal NO CA/Y/31/95.
NAME OF JUSTICES
1.
GEORGE ADESOLA
OGUNTADE JCA (as he then was)
presided and
read the leading the judgment.
2.
DENNIS ONYEYIFE
EDOZIE JCA
3.
OKWUCHUKWU OPENE
JCA
ISSUE: Whether the respondent/plaintiff at the material time had an insurable
interest over the car which he insured with the appellant/defendant in view of
the trial court’s finding that the said car was stolen from where D. W. I’ S
wife parked it.
SUMMARY OF THE FACTS
The respondent as plaintiff claimed
against the Appellant/Defendant the sum of #40,000 being indemnity and
estimated value a Peugeot 504 Salon car insured with the Defendant. The
Appellant is an insurance company. While the car so insured it was destroyed by
fire. The respondent duly informed the appellant. The appellant initially
showed signs that it would settle the respondent’s claim. It claimed the wreck
of the car and sold it for #1,000 (one thousand naira) and later refused to
settle. It had discovered that the car insured with it by the respondent was
stolen from the place it was parked. The car belongs to D W I.
At the conclusion of the trial, the
trial Court found in favours of the respondent and awarded #39,000 against the
appellant. Aggrieved with the decision, the appellant appealed to the Court of
Appeal, hence the case under review.
SUMMARY OF THE ARGUMENT FOR THE APPELLANT/ DEFENDANT
The appellant’s counsel argued that
the lower court made a specific finding that the car was stolen and the plaintiff
who insured the car with the defendant could not have an insurable interest in
the said car. He made reference to Harbury’s Law of England 3rd
edition volume 2 page 314 paragraph 633. He further submitted that the title
which the plaintiff had over the car was illegal and uninsurable. He cited
section 21 of the sale of good act 1893.
He finally submitted that the title
in the car continued to reside in the true owner D.W.I. According to the
appellant counsel whatever contract the plaintiff entered into with the seller
of the car was an illegal ore. Once the contract by which the plaintiff
acquired the car was illegal any contract from which he could derive benefit
was null and void. He cited the following cases in support of his argument.
1.
Onyuike v Okeke (1976) N.S.C.C. vol. 10 146 at150.
2.
Ekwunife V Wayne (West Africa) limited (1989) 5 N.W.L.R (pt
122) 422 at 450
SUMMARY OF
THE ARGUMENT FOR THE RESPONDENT / PLAINTIFF
The plaintiff / respondent’s counsel
argued that the vehicle insured belongs to the plaintiff and not Mr. Jubril
Babatude O. Lawal as alleged. This is because the plaintiff bought the car at
Aprir mechanic village Makurdi at the sum of #9,000 only and an agreement which
was signed by the vehicle was done in the presence of many witnesses. All the
said particulars of the car were received by the plaintiff from the defendant
and it had retained same till date. He further argued that it was in a bid to
evade indemnity that the defendant brought police from Lagos to arrest the
plaintiff.
According to the plaintiff’s counsel,
since the said sale agreement to the vehicle was duly executed between the
parties and since the plaintiff bought the said vehicle in a market overt
without any notice of want of title and since he had insured the vehicle with
the defendant appellant, he should be entitled to indemnity.
THE REASON
BEHIND THE COURT’S DECISION
The black law dictionary in page 1376
defined Ratio decidendi as the rule
of law on which a later Court thinks that a previous court funded its decision,
a general rule without which a case must have been decided otherwise. It could
also mean the principle or rule of law on which the decision of a Court of
first instance is founded. It is the ratio decided of a case that is a binding
precedent and not the Obita Dicta
which are statements made by the way.
In relation to the case under review the court arrived
at its decision by a proper analysis of section 22 of the Sale of Goods Act
(1893) which is now in the new edition.
The said section provides that
“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 them in good faith
without notice of any defect or want of title in the part on the part of the
seller.
The lawyer’s question then is what
is a ‘market overt’? The Black Law Dictionary in page 1056 defined market overt
as an open legally regulated public market where buyer’s with some exceptions
acquire good title to product regardless of any defects in the seller’s title.
A place does not become a market overt merely
because the public can resort to it. Therefore shops are not market overt. Only
markets which are “regularly” or “legally” constituted are recognized as market
overt. Obviously a market can be legally constituted in this regard under
statutory powers such as Onitsha market, Ogbete market and of course the Apri
market in the control of several Local Government Councils in Nigeria. To
constitute a market overt, it must be shown that the sale took place within the
premises of the said market during ordinary business day provided it is a sale
of goods of the kind normally sold in the market.
In
Reid V Metropolitan Police Commissioner
(1913) 2 All E. R . pg 97, the Court held that the sale of stolen goods which
took place in a market overt when the sun had not risen and is still only half
light was not done in open and public.
In the instant case, the sale of the said vehicle was
done in mechanic village which constitutes a market overt in this regard. Since
the sale was done in the presence of many witnesses it therefore means that it
was done in open and public within the meaning of section 22(1) of the Sale Good
Act. Also since the purchaser purchased in good faith without notice of any
defect or want of title, the plaintiff or purchaser acquired a valid title to
the vehicle against the true owner not withstanding the docture of Nemo Dat Quod Non Habet.
If however the thief is convicted, restitution order
may be made that is to return the true owner to his status quo ante or the original position he was before the theft.
This is so because a sale in a market overt does not destroy the true owner’s title
unless made openly between sunrise and sunset as in the instant case.
From the foregoing, it is evident that the plaintiff
bought the vehicle in a market overt within business hours and by necessary
implication he acquired a good title to the vehicle which incidentally made him
the owner of the vehicle. Also, since insurable interest is the relationship
between the insured (owner) and the subject matter of the insurance contract,
that he or she will benefit from its continued existence or be prejudiced by
its loss or destruction. The plaintiff had suffered as a result of the subject
matter of the contract which was destroy by fire and therefore should be
indemnified by the insurance company.
It is on this consideration that the
Court of Appeal in this case held on the issue of insurable interest in an
insurance policy in the following worlds. A
person who would foreseeable suffer financial loss form the occurrence of an
event has an insurable interest in the subject matter which it is sought to
insure against the event. The event must either cast upon the assured a legally
binding liability or it must affect a right of the assured which is recognized
and protected by the Court.(emphasis mine) Macura v. Northern Assurance company limited (1925) AC 619.
My Opinion
It is my humble opinion that both the trial Court and
the Court of Appeal were right in their decision event though the trial Court
did specifically relied on Section 22 of the Sale of Goods Act 1893. However
all courts must take judicial notice of all laws, acts and enactment- section
74 of the old Evidence Act which is in pari
materia with section 122(2) the Evidence Act ( as amended ).
REFERENCE
1. Black Law Dictionary 9th
Edition
2. Evidence Act 2011
3. Insurance
Law Lecture Notes by Barr. Edene.
4. Nigeria Commercial Law – M.C. Okany
5. Sale of Goods Act 1893