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SIRIMANE v. NEW INDIA ASSURANCE COMPANY
NLR35V413
1934 Present: Garvin S.P.J. and Akbar J.
SIRIMANE v. NEW INDIA ASSURANCE COMPANY,
LIMITED.
111-D. C. Kandy, 42,277.
Jurisdiction-Action to recover money under fire insurance policy-Cause of
action-English law.
In an action to recover money due under a policy of fire insurance the principle
of the English law that the debtor must seek out the creditor applies. In such a
case the cause of action, i.e., the failure to pay, arises where the claimant
resides.
APPEAL from a judgment of the District Judge of Kandy.
This was an action to recover a sum of money due on a policy of fire insurance,
made in Colombo, relating to a property at Kegalla, which was alleged to have
been destroyed by fire. The learned District Judge held that the District Court
of Kandy had no jurisdiction to entertain the action.
N. E. Weerasooria (with him Batuwantudave), for plaintiff, appellant.- This
being an action on a contract of fire insurance, the English law relating to
fire insurance applies. See Ordinance No. 22 of 1866. Therefore, the English law
rule that the debtor must seek out the creditor also applies. Hence the District
Court of Kandy (the district where the assured resides) has jurisdiction.
A. B. Cooray (with him T. S. Fernando), for defendants, respondents.- It may not
be possible in the present state of the law to argue that English law is not
applicable in all matters relating to contracts of fire insurance. But the
English law rule in question applied only in the case of a liquidated debt, and
not in the case of a claim for unliquidated damages. There is no definite sum
actually due. The policy is to make good the damage suffered. A claim for
unliquidated damages is not a claim for a debt. In cases of claims for
unliquidated damages the cause of action arises where the contract was made or
was broken. A contract must be examined to see where it was intended to be
performed-see per Walsh C.J. in Tika Ram v. Daulat Ram 1[46 I. L. R. Allahabad
465. at p. 467.]
A contract of fire insurance is defined as a contract of indemnity against
losses actually sustained-see Welford and Otterbarry on Fire Insurance p. 6. A
contract of debt is defined in Smith's Mercantile Law, at p. 688.
The breach of contract (the refusal to pay) occurred at Colombo. See Halsbury's
Laws of England, Vol. VII., s. 274, p. 194, on "Place of Performance."
A claim for unliquidated damages becomes a claim for a debt only when the debtor
accepts liability or when an arbitrator has fixed the amount.
Counsel also cited Leake on Contracts, re " Mode of Payment," at p. 658.
Weerasooria, in reply.-So long as a premium has to be paid by the assured, it
has to be paid at Colombo. But the assured has to be indemnified in the place
where he resides, i.e., Kandy.
See Morice's English and Roman-Dutch Law, pp. 94 and 95, on Extinction of
Contractual Obligations.
The words, debtor and creditor, in the maxim are to be understood in their
widest possible sense.
Where the place of performance is not specified the place of the promisee is the
place of payment, see Halsbury, Vol. VII., ss. 274-5, p. 194.
Counsel also cited Van Leeuwen's Censura Forensis, Part I, bk IV Ch. 32, s. 14.
Cur. adv. vult.
March 13, 1934. AKBAR J.-
The appeal is from a judgment of the District Judge dismissing plaintiff's
action with costs on the ground that the District Court, Kandy, had no
jurisdiction to try this case. The action was for the recovery of a sum of money
due on a fire insurance policy, made in Colombo, and relating to a property at
Kegalla, which was said to have been completely destroyed by fire.
According to the policy (D 2) the Company consented to pay all loss or damages
to an amount not exceeding Rs. 25,000 if the property or any part of it was
destroyed or damaged by fire or lightning while the policy remained in force.
The plaint in paragraphs 3 and 4 alleged that the property insured was
