Commercial Union Assurance Company, Ltd, and Others v Niger Company, Ltd, et è Contra
| Jurisdiction | England & Wales |
| Judge | Lord Buckmaster,Lord Atkinson,Lord Sumner,Lord Wrenbury |
| Judgment Date | 03 November 1922 |
| Judgment citation (vLex) | [1922] UKHL J1103-2 |
| Court | House of Lords |
| Date | 03 November 1922 |
[1922] UKHL J1103-2
House of Lords
Lord Buckmaster.
Lord Atkinson.
Lord Sumner.
Lord Wrenbury.
After hearing Counsel, as well on Thursday the 6th, Friday the 7th and Monday the 10th, days of July last, upon the Petition and Appeal of the Commercial Union Assurance Company, Limited, of 1–2, Royal Exchange Buildings, The Ocean Marine Insurance Company, Limited, of 2, Old Broad Street, and A. L. Sturge, of Lloyd's on behalf of himself and all other Lloyd's Underwriters, all of the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 18th of February 1921, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet (which said Appeal was, by an Order of this House of the 26th of October, 1921, amended by adding the Guardian Assurance Company, Limited, and the Yorkshire Insurance Company, Limited, as Respondents thereto); as also upon the Petition and Cross Appeal of the Niger Company, Limited, of Surrey House, Victoria Embankment, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, the said Order of His Majesty's Court of Appeal, of the 18th of February 1921, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioners might have the relief prayed for in the Cross Appeal or such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the Petition and Cross Appeal of the said Niger Company, Limited, of Surrey House, Victoria Embankment, in the County of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, the said Order of His Majesty's Court of Appeal of the 18th of February 1921, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioners might have the relief prayed for in the Cross Appeal or such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Cases of the Niger Company, Limited, and also upon the printed Case of the Guardian Assurance Company, Limited, and of the Yorkshire Insurance Company, Limited, lodged in the said Original and Cross Appeals; and due consideration had this day of what was offered on either side in these Appeals:
It is Ordered and Adjudged, in the name of the House of Lords, by the Lords of Appeal sitting in the House of Lords during the Dissolution of Parliament, by virtue of a Writing by His Majesty the King under His Sign Manual, dated the 26th day of October 1922 pursuant to the provisions of the Appellate Jurisdiction Act, 1876, That the said Order of His Majesty's Court of Appeal, of the 18th day of February 1921, complained of in the said Original and Cross Appeals, be, and the same is hereby, Affirmed, and that the said Petition and Original Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the said Petitions and Cross Appeals be and the same are hereby, dismissed this House: And it is also further Ordered, That the said Appellants in the Original Appeal do pay, or cause to be paid, to the said Niger Company, Limited, the Costs incurred by them in respect of the said Original Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The history of this litigation has been sufficiently detailed in the judgments already given, and a further repetition is unnecessary. The Appellants are two Companies who undertake marine insurance, and A. L. Sturge on behalf of himself and all other Lloyd's underwriters, the real question lies between them and the Niger Company, Limited, the first Respondents on the Record, and in the main depends upon the true construction that is to be placed upon a cover note of insurance given to the Niger Company and contained in two documents signed or initialled by or on behalf of the Appellants.
In order to understand the documents it is necessary to consider the circumstances in which the parties were placed. The Niger Company are a large trading company having a number of stations scattered throughout Nigeria. To these stations native produce is brought by the inhabitants, is acquired on behalf of the Company, is sent down the river Niger to Burutu, and is there collected for export from the canoes, small vessels, and other means of transport by which it has been brought from the up-country stations. Burutu is the shipping depôt for the Company's river trade of Nigeria, and the receiving station for goods from the United Kingdom. There are small trading stations belonging to the Company fed from Burutu, and produce so dealt with had reached its destination at Burutu; the rest of the goods were for export, but until allocated to special ships it was impossible to assign their actual destination. There was a large warehouse at Burutu, and as the collection of the goods is seasonal (from August to November there is plenty of water, from November to February the water is fair, and then the river becomes low), it consequently happens that at the end of the season the accumulation of goods awaiting shipment is at its maximum, and during the war, owing to the shortage and uncertainty of shipping accommodation, this congestion of goods was increased. The value of the produce so handled may be ascertained from the fact that in 1913 the amount covered by policies issued on behalf of the Appellants, pursuant to the covering note was 1,240,000 l.; during 1914, 1915, and 1917 it was in each year in the neighbourhood of 1,400,000 l., and in 1916 1,600,000 l. On the 15th January, 1918, a fire occurred at the warehouse at Burutu and goods—the produce of the Niger Company—were destroyed or damaged to the value of over 1,000,000 l. The Appellants say they are not on the true construction of the contract, liable for this loss, and that the policy which they were bound to issue pursuant to the covering note was, in truth, a policy extended only so as to cover risks incurred on specified goods during the actual process of transportation, and did not relate to goods that had arrived at Burutu with no assigned place of destination and were being warehoused while awaiting shipment. The words of the slip are these:—
"Steamer and/or steamers and conveyances Africa to the United Kingdom and/or Continent. Produce goods To cover all shipments,"
and then different rates were fixed for river risk only, for river and coast, and it concluded by providing that the risk included the risk from the factory, office, or warehouse to the port of shipment while awaiting shipment, and until finally discharged. The endorsed conditions also provided that the risks included risks of loading and all risks in steamer or steamers, and/or shed or sheds, and quay or quays, and whilst in transit and until shipped, and all risks while on quays, in sheds, or stores, or warehouse or craft whilst awaiting transhipment.
Now it is plain from the terms of this note that it is of a much more extended character than any ordinary marine insurance. It is framed with special reference to the circumstances that I have already stated, and which were known to the insurers. It contemplates the collection of the goods, and insures against risk to them as they come down the river. Knowledge of the nature of the shipment down the river must, I think, also be imputed to the insurers, and it is plain from the evidence that they knew that there must be a collecting station at Burutu, and that it was not reasonably probable that any goods could be earmarked for their ultimate destination at the moment, when they were collected from the natives at the station up-country. Nor can the contract be construed as providing only for two disconnected portions of the journey, for the river risk is expressly included and special rates fixed for this alone, while there is an inclusive premium for the whole transit. The risk in warehouses whilst awaiting shipment cannot, therefore, upon the admitted facts, be construed in such a manner as to exclude risk at Burutu, and it is unreasonable so to construe the policy as only to include such risk in the case of goods whose ultimate destination was assigned at the collecting station. So to read the slip would be completely to ignore the essential conditions of the business in relation to which the contract had been made. But if it be once conceded that in the course of collection it was contemplated that there should be some aggregation of goods at Burutu, the specific destination of which could not be assigned until they had reached that spot, then the actual words of the policy cover the risk that ultimately materialises. It was then urged that the only transit referred to was to the United Kingdom and the continent of Europe or America, and that it is impossible to specify whether these goods were destined for any such place; but the answer to that is to be found in the form of the judgment appealed from, which only renders the company liable for such of the goods as the Plaintiffs intended to export from Burutu to any place or places covered by the policy, or which were en route to other places in Africa. So that in truth the judgment is strictly confined to the actual specified risk. It was then urged that there had been unreasonable delay in forwarding the goods, evidenced by the amount of the...
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