Phoenix Insurance Company v De Monchy Rzn
| Jurisdiction | England & Wales |
| Judgment Date | 05 March 1928 |
| Date | 05 March 1928 |
| Court | Court of Appeal |
Court of Appeal
Scrutton and Sankey, L.JJ. and Russell, J.
De Monchy and others v. Phnix Insurance Company of Hartford and others
Graham Brothers v. St. Paul's Insurance Company 1 American Maritime Cases, 836
Koskas v. Standard Marine Insurance Company LimitedDID=ASPM 17 Asp. Mar. Law Cas. 240 137 L. T. Rep. 165
Donald H. Scott and Co. Limited v. Barclays Bank LimitedELR 129 L. T. Rep. 108 (1923) 2 K. B. 1
Insurance Policy Construction
Decision of Mackinnon, J. affirmed.
440 ASPINALL'S MARITIME LAW CASES. APP] DE MONCHY AND OTHERS v. PH - NIX INSURANCE CO. OF HARTFORD AND OTHERS. [APP. Feb. 28 and March 5, 1928. (Before SCRUTTON and Sankey, L.J.I, and Russell., J.) DE. .MONCHY AND OTHERS V. PHOENIX INSURANCE COMPANY OF HARTFORDAND OTHERS. (a) ON APPEAL FROM THE KIND'S BENCH DIVISION. Insurance- Policy -Construction - Liability of underwriters -Limitation of time for bringing action-Limitation clause in policy So limit in certificate -Certificate to take the place of policy-Action under certificate. On the 27th duly 1923 sellers in America sold to the plaintiff's in Rotterdam 1(10 barrels of turpentine at a c.i.f. price in Dutch guilders, for sixteen gallons net, shipping weight " one gallon out per barrel,"' American net weight to be reduced at one gallon equals 3.25 kilos ; payment by draft at sight "with bill of lading and insurance policy attached, and for certificate of insurance ; insurance documents to include risk of leakage in excess of one per cent, upon the basis of the above reduction in weights. Turpentine was a very volatile substance, expanding and evaporating under heat, and American turpentine teas sold for export in barrels by gallons. A complicated system of gauging the barrels was adopted, which included a system of filling a barrel to one gallon short of its capacity to allow for expansion. The practice in the trade was not to weigh, but to measure, the amount of turpentine, shipped in America, and to weigh, not to measure, the amount delivered in Europe, and a conventional measure to turn gallons into 'weight was used in the trade to see whether -what -was shipped was delivered, and it was taken in the trade that the normal loss on a voyage by evaporation 'was one per cent. There was a system of insurance of Leakage from any cause over the normal one per cent. On the 23rd Aug. 100 barrels of turpentine were gauged at Jacksonville in Florida and, allowing for the one gallon per barrel, a shipment of 5107 gallons was certified. The steamer on which the turpentine was shipped remained on the coast of Florida from the 23rd Aug. to the 19th Sept. before sailing for Rotterdam and there "was considerable, evaporation. The sellers, to carry out their contract of insurance, obtained an American certificate of insurance issued under what were stated to be policies of insurance issued by the defendants, covering risks of " leakage from any cause in excess of one per cent, on each invoice . . . conversion, of kilograms to be made into American gallons shall be made on the basis of :i.'3.25 kilograms to the gallon." In the alleged policies there was a condition that no claim under the policies could be maintained unless brought within a year after the happening of a loss, Out the certificate, of insurance had no such limitation of time. When the turpentine "Was discharged in Europe in October, the -weight was short, as compared with the weight calculated from the number of gallons shipped in Florida in August. The (a) Reported by T. W. Morgan, Esq., Barrister-at-I.aw. ASPINALL'S MARITIME LAW CASES. 441 APP] DE MONCHY AND OTHERS v. PH - NIX INSURANCE CO. OF HARTFORD AND OTHERS. [APP. plaintiffs claimed against the defendants for the loss in excess of one per cent, but the defendants declined to pay in the absence of injury to the barrels or some clear sign of leakage. As the action was not brought within one year of the. loss the defendants also relied on the condition in the policies limiting the time for bringing an action to within one year. Held, (1) that the defendants were liable to pay for loss of weight or bulk, in excess of one per cent., even if such loss was caused by change of temperature, and (2) as the. condition limiting the time, for bringing the action was not in the certificate, nor was any notice of it green to the consignees, the defendants could not rely on it. The plaintiffs -were entitled to succeed on both points. Decision of MacKinnon, J. affirmed. Appeal- from the judgment of MacKinnon, J. The plaintiffs claimed under a certifieate of insurance in respect of a loss of turpentine by leakage on a voyage from Florida to Rotterdam. The plaintiffs were the owners of a quantity of turpentine which had been shipped in barrels from Florida, having purchased 100 barrels from sellers in America for shipment to Rotter-dam. The sellers, under their contract of insurance, had insured the turpentine with the defendants, two insurance companies, for the voyage. The perils insured against included leakage, and the plaintiffs claimed for loss alleged to have been caused by leakage. The plaintiffs were interested in a certificate of insurance dated the 17th Aug. 1923issued under an alleged policy of insurance subscribed by the first defendant company, and another alleged policy subscribed by the second defendant company. Each of the defendant companies insured respectivity for 50 per cent, of 14,025 florins on 100 barrels of turpentine shipped from Jacksonville, Florida, to Rotterdam, on a steamship, the Cape. Town Maru. The alleged policies contained, inter alia, a clause " to pay leakage from any cause in excess of one per cent, on each invoice . . . conversion of kilograms into American gallons shall be made on the basis of .'1.25 kilograms to the gallon." The practice inthe trade was not to weigh, but to measure, the amount of turpentine shipped, and to weigh, not measure, the amount of turpentine delivered. On the 25th Aug. 1923the plaintiffs shipped on the Cape Town Maru, at Jacksonville, 100 barrels of turpentine for carriage to Rotterdam. During the voyage the steamer met with heavy weather, and when the turpentine was discharged at Rotterdam it was alleged that .'J72.75 kilograms out of a total of 16,597.75 kilograms shipped had disappeared. Turpentine was a volatile substance which expanded when heated, and the weight of a gallon would depend on the actual temperature at the moment, and a conventional weight per gallon was, therefore, agreed on. Up to a loss of 1 per cent, no claim could be made, but where there was a greater loss the underwriters had been in the habit of paying on the basis of the conventional weight, taking the difference between the weight -shipped and the weight delivered as the amount of the loss. In this case the underwriters took the point that the insurance was only against leakage, and though, if the temperature fell, the contents of a barrel might occupy less space without any of the contents being lost, for such loss of bulk the underwriters would not he liable. They contended that " leakage" must be construed strictly, and that the word was applicable only where something which had been in a receptacle had accidentally got out of it and had been lost. Another point taken by the defence was that the insurance was subject to a condition that no claim under it could be maintained unless brought within a year after the happening of the loss. The action had not been brought within a year. The condition referred to was in the original policies, but not in the certificate under which the plaintiffs were suing. The certificate stated that it represented and took the place of the policy. MacKinnon, J. held that the contract was to pay for loss of weight or bulk even if that loss of weight or bulk was caused by change of temperature and not by loss of some of the con-tents of the barrels, and that, as the alleged policies were not contracts of insurance at all, but the certificate was the actual insurance, and as, in the circumstances, the clause with regard to the limitation of time for making a claim could not be read into it, the plaintiffs were entitled to recover. The defendants appealed. W. A. Jewitt, K.C., and van den Berg for the appellants. Porter, K.C., and McNair for the respondents. Scrutton, L.J.-This appeal against a judgment of MacKinnon, J. raises two questions, the first, as to the construction of a clause insuring against the leakage of turpentine ; the second, whether a term requiring an action to be brought within one year of the loss...
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