Sheriff V. British Park Insurance Co. Ltd.,

1934 Present: Macdonell C.J. and Garvin S.P.J.

SHERIFF v. BRITISH PARK INSURANCE CO., LTD.

344-D. C. Kandy, 38,581.

    Insurance-Car insured against loss by fire-Hire-purchase agreement-Joint insurance by owner and hirer-Action by hirer for loss of car destroyed by fire-Measure of loss.

Plaintiff was the hirer of a motor car on a hire-purchase agreement, one of the conditions of which was that the car should be insured and kept insured during the continuance of the agreement and that such insurance should be effected in the joint names of the owner and the hirer.

In accordance with the agreement, the car was insured with the defendant company by the owner and the plaintiff for their respective rights and interests.

The car was destroyed by fire five months after the agreement when a sum of Rs. 1,978.50 was due by way of instalments to the owner.

Plaintiff was relieved from the necessity of paying the instalments by reason of the destruction of the car by fire, which was held to be purely accidental. It was agreed that the value of the car at the time of destruction was Rs. 2,750.

Held (in an action brought by the plaintiff to recover his loss under the policy of insurance), that the measure of his loss was determined by his interest in the car which was ascertained by the value of the car less the amount of the instalments due by him.

APPEAL from a judgment of the District Judge of Kandy.

N. E. Weerasooria (with him Choksy and D. W. Fernando), for defendants, appellant.

H. V. Perera, for plaintiff, respondent.

Cur. adv. vult.

February 26, 1934. MACDONELL C. J.-

In this case the plaintiff-respondent had obtained on a hire-purchase agreement from the United Motor Finance Company a Pontiac car to be used by him for hiring, at a price of Rs. 4,320, on the terms that he was to pay for it by twelve instalments of Rs. 247.50 per month. It was in fact the ordinary hire-purchase contract and the car itself was to remain by the terms of the agreement the property of the company until the last instalment was paid. At the time of the execution of the hire-purchase agreement the car was insured with the defendants-appellant by the plaintiff-respondent and by the United Motor Finance Company from whom he was purchasing the car for Rs. 4,050, " for their respective rights and interests ". One of the risks insured against was loss of the insured vehicle by fire up to the value of the vehicle at the time of the fire or the value stated in the schedule, viz., Rs. 4,050, whichever was less. The plaintiff-respondent took possession of the car and drove it as a hiring car for five months, paying monthly instalments for those five months. At the end of that time the car was destroyed by fire and after litigation on the matter the Supreme Court held that the fire was accidental. It is clear therefore that the defendants-appellant, the insurers, must pay, as they themselves admit, and the only question is, how much.

It is admitted by all parties that the value of the car at the time it was destroyed was Rs. 2,750. This is a lesser sum than that for which it was insured, and this lesser sum Rs. 2,750 is therefore the total amount that can be recovered from the defendants under the policy of insurance. At the time the car was destroyed by fire the plaintiff-respondent had paid a premium on the fire insurance, also a deposit and instalments towards the purchase of the car, in all a sum of Rs. 2,581.50, and at the time of its destruction he owed for instalments a sum of Rs. 1,978.50. (The debris of the car after the fire realized Rs. 200 to the United Motor Finance Company.) The judgment of this Court, which held that the fire which destroyed this car was accidental, also exonerated the plaintiff-respondent from any further payment of instalments to the United Motor Finance Company on his contract to purchase this car. The article, the subject

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