LOSS OF CAR.

Press, Volume LXVIII, Issue 20498, 17 March 1932, Page 5

LOSS OF CAR.

INSURANCE FIRM SUED. ARGUMENT IN COURT OF APPEAL (PRESS ASSOCIATION TELEGBVJI) WELLINGTON, March 16. Further litigation caused by the Hawke's J3fiy earthquake occupied the attention at the Court of Appeal in an action brought by Wright," Stephenson, and Co., Ltd., Allan Dutton Powdrell, and the Texas Oil] Company (Aust.), Ltd., apainst Harry Holmes, of London, sued on behalf of .himself and other .underwriters of a certain Lloyd's ?j)Ctor-car insurance policy. Plaintiffs were the owners in various interests of a Graham Paige motorwir, which they insured at Lloyd's, according to their respective interests, in the sum of £4OO against (inter alia) damage caused by accidental external hieaiiS' from October 13th, 1930, to Juno Ist, 1931. On January 30th, 1931, Powdrell was driving the car towards Napier. lie became involved iu a collision.;with another car on a narrow bridge about two miles i'rojii Clive, vvliereo.y the car became seriously damaged. That evening the car was towed to a garage in Napier, and .notice of the"accident was immediately given defendant's agent, who, on February Ist, inspected the car and gave to the garage proprietors to prepare a detailed estimate of the damage. On February 3rd the garage was damaged by earthquake and destroyed by a subsequent fire. The car, by reason of its damaged condition, could not be removed, and was also destroyed. Defendant, having refused to pay anything in respect of the damage to the car sustained in the accident, plaintiffs issued a writ claiming £122 6s 7d, the estimated cost of repairing the damage, and costs. Defendant, whilst admitting the facts, denied liability, and a motion for judgment .filed b.v plaintiffs wns removed into the Court of Appeal for argument.

On the Bench are the Chief Justice (the Rtv Hon. Sir Michael Myers). Mr Justice Herdmnn, Mr Justice MacGregor, Mr Justice Blair, and Mr Justice Kennedy. *

Submissions by Counsel. Counsel for plaintiffs said, in opening, that the point in a nutshell was this —there was partial damage covered . by policy, then there was total subsequent destruction, which was not covered by policy. The underwriters had refused to s>ay for partial damage. Were they iable? Adopting the stand they had in this matter, they were driven to contend that if they issued two separate policies, the present one and the one covering damage by earthquake, they would pay only the value of tho' car at the time of the earthquake, being £4OO, less £122 6s 6d, so that although the insured had covered every possible they would not be paid .the full value pf the car before tli6 accident. The policy of insurance gave't&e underwriters the right either to'repair or pay tho insured the amount of the damage. The fact, that after the occurrence of damage one of the two alternatives, namely, repair, became impossible did not relieve' the underwriters from the performance-, of the other alternative, namely,' payment.. The principle of the law was' that if a person contracted to do One of two things in the alternative, and one subsequently becamo impossible, it depended on the intention

of the parties whether lie was hound to perform the other. When alternative methods of indemnity are in a contract of insurance the intention of the parties plainly was if one alternative became impossible, the other must be performed. Counsel for the defendant, however, submitted that the only obligation under the policy was to repair or reinstate. That obligation might be fulfilled in one of two ways, either by the underwriters executing repairs themselves, or by allowing tho insured to do the repairs himself, and then paying his bill. There was 110 alternative duty on the part of the underwriters, but they were entitled, if they so desired; to relieve themselves of their obligation to repair by settling for the damage in. money. That they might do but were not obliged to. The Court, at this stage, adjourned till to-morrow.