NOORBHOY v. THE FEDERAL MARINE INSURANCE CO.

NOORBHOY v. THE FEDERAL MARINE
INSURANCE CO.

D. C., Colombo, 17,346.

Marine insurance-Duty of the assured to describe fully the risk-Consequence of failure to do so.

    Insurance is a contract upon speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the insured only.

    The underwriter trusts to his representations and proceeds upon confidence that he does not keep back any circumstances in his knowledge to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risk as if it did not exist. The keeping back such circumstance is a fraud, and therefore the policy is void.

    Although the suppression should happen through mistake without any fraudulent intention, yet still the underwriter is deceived and the policy is void, because the risk run is really different from the risk understood and intended to be run at the time of the agreement.

    IN this case the plaintiff sued the defendant company to recover the sum of Rs. 6,241 68 on a policy of insurance. The following special case, containing the facts admitted by the parties, was submitted to the District Judge for decision:-

    (1) On the 16th day of October, 1901, the plaintiff at Colombo effected" a policy of insurance on 1,720 bags of rice valued at Rs. 17,200, and 249 bags of gram valued at Rs. 3,112, shipped in good order and condition in the ss. " Ileafee " from Karachchi to Colombo with particular average, all risks free of 5 per cent. on series of 500 bags.

    (2) This policy was underwritten by the defendant company for Rs. 20,312.

    (3) On the 16th day of October, 1901, the plaintiff effected a policy on 1,720 bags of rice valued at Rs. 17,200, and 249 bags of gram valued at Rs. 3,112, with marks as per bill of lading in the ss. " Ileafee " from Karachchi to Colombo, free from particular average. This policy was underwritten by the New Zealand Insurance Company for Rs. 20,322.

    (4) On the 15th day of October, 1901, the ss. ' Ileafee" sailed from Karachchi to Colombo with the 3,440 bags of rice and 498 bags of gram which are the subject of this action, the amended bill of lading being issued in connection with the same.

    (5) On the voyage from Karachchi to Colombo the ss. " Ileafee " encountered heavy weather, and shipped a considerable amount of"

 sea water, in consequence of which a large number of the bags April 25. mentioned in paragraph 4 of this statement was wetted and damaged.

    (6) The ss. " Ileafee " arrived at Colombo on the 24th day of October, 1901, and began to discharge cargo.

    (7) On the 29th day of October, 1901, the plaintiff informed the defendant company that some of the bags mentioned in paragraph 4 of this statement were damaged, and requested the defendant company to hold a survey.

    (8) On the 30th day of October, 1901, the master, the mate, and the carpenter of the ss. " Ileafee " appeared before Arthur Alwis, Esq., Notary Public, and entered a protest on the damaged cargo.

    (9) On the 11th day of November, 1901, a survey of the damaged cargo was made by Messrs. C. E. H. Symons and G. W. Suhren, and it was ascertained by them that 489 bags of rice and 46 bags of gram were damaged by salt water and had to be destroyed.

    (10) The plaintiff claims from the defendant company the sum of Rs. 5,465, being the value of the bags of rice and gram so destroyed.

    (11) The plaintiff further claims the sum of Rs. 776.68 as expenses incurred by him in connection with the landing, survey ing, &c., of the damaged cargo.

    (12) In the policy underwritten by the defendant company the bags were not identified by any particular marks, nor was it stated that it formed part of the bags shipped under the said bill of lading mentioned in paragraph 4 of this statement, nor was it stated that the risk s

Click Here to Read the rest of this document