INTERESTING POINT

Grey River Argus, 17 March 1932, Page 5

INTERESTING POINT

INSURANCE LAW Damaged Car IS BURNED AT EARTHQUAKE. WELLINGTON, March 16. Further litigation, caused by tho Hawke’s Bay earthquake, is occupying the attention of the Court of Ap peal, in an action brought by Wrigh" Stephenson and Co., Ltd., Allan Dut ton Powdrell, and the Texas Oil Coy. (Aust.) Lid., against Harry Holmes, of London, sued on behalf of himself and ‘thcr underwriters of a certain Lloyd’s motor-car insurance poliev. Plaintiffs were the owners in various interests of a Graham Paige motor > ar. which they insured at Lloyd’s, according to their respective interests, in a sum of £4OO, against (inter alia) damage caused by accidental exter ■nal means from October 13, 1930 to ‘June 1, 1931. On January 30, 1981, IPowdrell was driving the car towards Napier and became invovled In a col lision with another car on a narrow bridge about ten miles from Clive, whereby the car became seriously damaged. That evning the car was I totved to a garage in Napier, and nojtic© of the accident was immediately given to defendant’s agent, who on February 1, inspected the car, and give instructions to the garage proprietors tn prepare a detailed estimate of the I damage. On February 3, the garage •was damaged by the earthquake, and ; destroyed by the subsequent fire. Th* i car by reason of its damaged condiition, could not be removed, and wa’ also destroyed. Defendant having refused to pay anything in respect of U-ft damage to the car sustained in the accident, plaintiff issued a writ claiming £122/6/7, the estimated cost of repairing the damage and costs. Defendants, whilst admitting the facts, denied liability, and a motion for judgment filed by plaintiffs waf removed into the Court of Appeal for argument. The Bench consists ut Chief Justice Myers and Justices Herdman, MacGregor, Blair and Kei» »»edy. The hearing is proceeding. LATER. In the Court of Appeal in the case of Wright Stephenson and Co., Ltd. and others v. Holmes, counsel for plaintiffs said, in opening, that the point, in a nutshell, was this: There was partial damage covered by a poll icy. Then there was total subsequent destfifction. which was not covered by a policy. The underwriters had refused to pay for the partial damage. Were they liable? Adopting the stand they had in this matter, they were driven to contend that, if they issued two

separate policies, the present one and one covering damage by earthquake, they would pay only the value of the ear at the time of the earthquake, be-

ing £4OO, less £122 6s 7d; so that, although the insured had covered every possible risk, they would not be paid the full value of the car before the accident. The policy of insurance gav the underwriters the right either to repair or to pay the insured amount of the damage. The fact that, after the occurence of the damage. o ne of the two alternatives, namely that of 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 an alternative, and one subsequently become impossible, it depended on the intention of the parties whether he was bound to perform the other. When alternative methods of indemnity were contained in a contract of insurance, the intention of the parties plainly was that, 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 to reinstate. That obligation might be fulfilled in one of two ways, either by the underwriters executing the repairs themselves, by allowing the insured to repair himself, and lhe n paying his hill. There was no 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, but were not obliged to, do. The Court at this stage adjourned til] to-morrow. WELLINGTON. March 14. The Court of Appeal began hearing an appeal against the judgment of Mr Justice Blair in awarding damages against Samuel T. Silver, structural engineer, of Wellington, in an action brought against him for alleged and breach of duty by Alexander Stev.art Mitchell, of Wellington, architect.

In July. 1939. proceedings were taken by the N.Z. Trawling and Fish Supply Company, against Mitehell, alleging that by providing in a specification of a building to be erected for the company the sum of £1164 for re inforcing steel, when the same could have been purchased for £682, he was guilty of negligence and a breach ot duty arising out of his contract of employment fi s an architect Mitebeß confessed judgment for the sum of £526. inclusive oT - costs. He had sued Silver for this sum and £250 general damages on the ground that ho employed Silver as an expert in steel construction work, and that Silver, ir. recommending him to direct the purchase of steel from a named supplier for £1164 had been guilty of deceit as well as a breach of duty. Judg meat for £323 damages, being the sum cf £526 claimed, less a reasonable fee for professional services was given in favour of the plaintiff, Mitchell. Silvr now appeals from this judgment.