Mountstephen v. Lakeman.

CASES

DETERMINED BY THE

COURT OF COMMON PLEAS,

AND BY THE

COURT OF EXCHEQUER CHAMBER

ON ERROR AND APPEAL FROM THE COURT OF COMMON PLEAS,

IN AND AFTER

MICHAELMAS TERM, XXXV VICTORIA.

Nov. 25, 1871.

*THE NORTH BRITISH AND MERCANTILE INSURANCE COMPANY V. 25] MOFFATT AND ANOTHER.

Law Reports, 7 Common Pleas, 25.

Policy of Fire Insurance - Insurable Interest - -"Merchandise in Trust or ou Commission for which the Assured are responsible ”—Loss.

A policy of fire insurance expressed the insurance to be on "merchandise the assured's own, in trust or on commission for which they are responsible" in or on certain specified warehouses, vaults, wharves, &c. Whilst the policy was in force certain chests of tea, on a wharf included in the policy, were destroyed by fire. These teas had been deposited in bond by the importer with the wharfinger; the assured had purchased them from the importer, and the warrants had been indorsed in blank by him to the assured. Before the fire occurred the assured had resold the teas in specified chests to customers, and had been paid for them; they held, however, the warrants on behalf of the customers, but merely for the convenience of paying, if required, the charges necessary for clearing the teas payable by such customers:—

Held, that the policy applied only to goods belonging to the assured, or for which they were responsible, and the property in the teas having, at the time of the fire, passed to the purchasers, they were then at the purchasers' risk, and were consequently not covered by the policy.

This was an action brought by the plaintiffs to recover from the defendants a sum of 636l. 13s. 7d. which the plaintiffs alleged to have been paid by them to the defendants in excess of the sums due on certain policies of insurance, and which the defendants had agreed to repay to the plaintiffs in the event of that allegation being well founded.

North British Insurance Co. v. Moffatt.

1871

By consent of the parties a case was stated for the opinion of the Court, without pleadings, the substance of which is as follows:

The plaintiffs are an insurance company, and the defendants are wholesale tea merchants, carrying on business in the city of London. In the year 1865 the defendants effected two policies of insurance with the plaintiffs, by which the plaintiffs, in consideration of an annual premium, insured from loss or damage by fire, as from the 29th of September, 1865, subject to conditions in the policies contained, to an amount not exceeding on each policy 3500l., "merchandise (jute, petroleum, and its products excepted) the assured's own, in trust or on commission for which they are responsible, in or on all or any of the warehouses, vaults, cellars, *sheds, crane-houses, wharves, yards, [26 or quays belonging to, and if not under the protection of a marine policy on board any vessel or craft at," certain wharves in the said policies mentioned.

Among these wharves was one called Beal's Wharf, mentioned in both the policies.

On the 30th of October, 1865, and while the policies were in force, a fire occurred at Beal's Wharf, and by that fire certain chests of tea, which had been, and then were warehoused there in manner hereinafter mentioned, were either consumed or damaged. The defendants thereupon made a claim under the policies in respect of those chests of tea. The plaintiffs were not satisfied as to their liability to the whole extent of the claim so made, but paid the whole amount on the defendants entering into the abovementioned agreement to repay any sum which might be found to have been overpaid. The teas damaged or destroyed by the fire were of two classes. In respect of one class the plaintiffs admitted their liability, and did not seek to recover any portion of the sum that had been paid in respect of them.

The second class, in respect of which the repayment of the sum of 6361. 138. 7d. was claimed, consisted of teas which had been warehoused at Beal's Wharf, and which had been sold by the defendants before the time of the fire, and the following were the facts relating thereto :-The teas had been originally deposited in bond with the wharfingers to whom Beal's Wharf belonged, by the importers thereof, to whom the wharfingers

1871

North British Insurance Co. v. Moffatt.

issued warrants in respect thereof. The warrant is a document acknowledging that certain chests of tea therein specified are deliverable to the person named therein or his assigns by indorsement, and the bearer giving a receipt for the same. Upon a warrant indorsed by the person named therein being presented by any one to the wharfingers, and upon the person presenting it signing a receipt for all or any part of the teas contained therein, and upon payment of the duty and rent due thereon, if any, the wharfingers deliver to him the tea for which the receipt is signed. It is not the practice to deliver any of the teas mentioned in the warrant without the production of it. The wharfinger knows nothing of the actual ownership of the teas, but acts upon the production of the warrant duly indorsed. The defendants had purchased the teas from the *importers, 27] who duly indorsed the warrants in blank and delivered them to the defendants.

Before the date of the policies, under which the claim of the defendants was made, the defendants had sold to various customers the whole of the teas included in the said second class. All the sales were of certain specified chests, and were made by sample, and the contracts of sale were verbal and not reduced to writing. The terms of such sales were for three months open credit, or for cash subject to discount. The purchasers had power to pay at any time within the three months, deducting discount for the time not expired of the said credit of three months.

A further term on such sales was that all rent due to the wharfingers in respect of the teas comprised in such sales up to the time of the expiration of the said credit should be borne by the vendors, and all rent becoming due subsequent to that date, and also the custom-house duties, should be borne by the purchasers.

Shortly after each of the said sales by the defendants, and before the expiration of the period of credit, they sent to each purchaser an invoice stating, among other things, the weights, marks, and numbers of the chests bought by him, and the price payable in respect thereof. The period of credit of all the teas of the second class had expired, and the price been paid to the defendants before the fire occurred.

The ordinary course upon sales by the defendants was not to

៩.

North British Insurance Co. v. Moffatt.

1871

deliver the warrants to the purchasers but to retain the said warrants in their own possession on behalf of the purchasers, and to perform for the purchasers as and when required by them whatever was necessary to get the teas cleared and delivered, that is to say, to pay the custom-house duties and rent due in respect of the goods.

This course was pursued with respect to the teas included in the second class, and at the time of the fire all the warrants for the teas then belonging to purchasers remained in manner and for the purposes aforesaid in the hands of the defendants, as the defendants had not then been required by the purchasers to clear or deliver them to or on behalf of such purchasers. The carriage of the goods was paid by the purchasers.

The wharfingers never received any notice of the sale of the teas *to the defendants by the importers, or of the sales by [28 the defendants to the purchasers from them.

There was due to the wharfingers in respect of each of the chests comprised in the said second class a sum of money as rent for warehousing the same after the purchase thereof by the defendants and before the sale thereof by the defendants to their customers, which rent was unpaid at the time of the said sales and said fire, and was a charge upon the said teas to be paid by the person claiming delivery thereof prior to delivery by the said wharfingers.

⚫The defendants previous to the fire had made entries in their own books appropriating to each customer the specific chests of tea bought by him, and had written on each warrant the name of the purchaser of the teas therein comprised.

The defendants had no contract with the purchasers to insure the teas against loss or damage by fire, or to be repaid by the purchasers any premiums in respect of such insurance, nor had the defendants in fact charged the purchasers with any such premiums. The defendants after the fire, voluntarily and without the knowledge of the plaintiffs, paid to the purchasers the value of the teas in various sums, making together the sum of 636l. 13s. 7d. The question for the Court was whether the defendants were entitled under the policies to be paid by the plaintiffs the said sum of 636l. 13s. 7d. in respect of loss or damage caused by the said fire to the said teas included in the second class.