A contract for sea-insurance is invalid and unenforceable unless expressed in a sea-policy. This statutory requirement is prohibitory and in the public interest, meaning it can be raised by the court even if not pleaded by the parties in lower courts.

Judgement

Appeal (No. 11 of 1924) from a decree of the High Court in its appellate jurisdiction (April 18, 1923) reversing a decree of Pearson J.

The suit was brought by the appellant in 1919 in the High Court to recover Rs.24,997 as damages for breach of a contract alleged to have been made by the respondents in 1916, to insure jute and hemp to

Law. Rep. 52 Ind. App. 126 ( 1924- 1925)

Surajmull Nargoremull V. Triton Insurance C ompany 223

be exported by the appellant to Europe., The appellant by his plaint alleged that he had had to insure the goods at a higher rate of premium, and he claimed the excess as damages.

The facts appear from the judgment of the Judicial Committee.

The trial judge (Pearson J.) made a decree for the plaintiff, but upon appeal the decree was reversed by Sanderson C.J. and Richardson J. upon the facts and the suit dismissed.

By the Indian Stamp Act (II. of 1899), s. 7, sub-s. 1, "no contract for sea-insurance (other than such insurance as is referred to in s. 506 of the Merchant Shipping Act, 1894) shall be valid unless the same is expressed in a sea-policy."

The above statutory requirement was not pleaded, nor was it referred to in the Courts in India.

1924. Nov. 3, 4. Stuart Bevan K.C. and Kenworthy Brown for the appellants.

Dunne K.C. and Du Parcq for the respondents.

Dec. 2. The judgment of their Lordships was delivered by

LORD SUMNER. The appellants, the plaintiffs below, brought their suit for breach of an alleged contract to "issue policies of insurance covering war risks on goods" shipped or to be shipped by them "at the rate prevailing at the time of the plaintiff firms declaration of the steamer, by which goods, as aforesaid, were to be shipped." As developed in further paragraphs, this was founded on (a) a written quotation by the defendants of their lowest rate on jute per the Constantinos XII. at ½ per cent, and war risk at 5 per cent., less 10 per cent. ; (b) an acceptance of this rate by the plaintiffs; and (c) an arrangement that the plaintiffs should supply the defendant company with a statement of the approximate amount to be covered. Ultimately there was a declaration for an aggregate amount of 10,870 l., for which sum the defendants refused to issue a policy, whereon the plaintiffs insured elsewhere at higher premiums and claimed the excess as their damages in the action. There was no loss of the goods at all.

Pearson J., who tried the case, found the contract and breach proved and gave the plaintiffs decree, but the High Court, holding, the contract to be insufficiently established, set that decree aside.

On being informed that the alleged contract arose on an acceptance by word of mouth of a letter quoting a rate of premium and on a declaration by word of mouth, not of the name of the steamer by which the goods were to be shipped, but of the expected value of the plaintiffs goods to be loaded on board of her, and that the breach alleged was the defendants refusal to issue a policy, their Lordships, struck by the divergence in this case from ordinary underwriting practice as known in this country and by the singularity of an enforceable contract by word of mouth to issue a policy of marine insurance, inquired whether there was no legislation in India corresponding to the Stamp Act, 1891 (54 & 55 Viet. c. 39), s. 93, sub-s. 1. Their attention was then drawn by counsel to the Indian Stamp Act, No. II. of 1899, s. 7 of which provides that (with exceptions not now material) " no contract for sea-insurance shall be valid unless the same is expressed in a sea-policy," a provision which re-enacted the original enactment of 1894.

This section had not been pleaded by the defendants in the suit, for their general plea, No. 10—" Lastly, the defendant company submits that the suit of the plaintiff firm is not maintainable "—cannot be read as raising a specific statutory answer. Their Lordships were informed that the point was not

Law. Rep. 52 Ind. App. 126 ( 1924- 1925) Surajmull Nargoremull V.