CLAIM FOR INSURANCE

Southland Times, Issue 19332, 26 August 1924, Page 8

CLAIM FOR INSURANCE

SUPREME COURT ACTION. CASE DISMISSED. CAUSTIC COMMENT BY THE JUDGE. At the Supreme Court, Invercargill, yesterday His Honour Sir William Sim was occupied with the case in which Annie Prendeville proceeded against the Australasian Provincial Assurance Company Ltd., on a claim of £250 alleged to be due under an oral contract for insurance on furniture in a house in High street, Nightcaps, which was destroyed by fire. Mr V. Raines appeared for the plantiff and Mr Eustace Russell for the defendant. Application was made to have the statement of claim altered so as to' give the name of the plaintiff as Annie Reggett, as she had married since the claim was made. The application was granted. Plaintiff gave evidence that she had made a proposal and had paid the premium and thinking that she was covered had dismissed the matter from her mind. Some time before Christmas she went to Riverton. Before she went all the furniture was in the house in Nightcaps. Her son was living in the house. She remained in Riverton about three months, but on being informed that her house had been destroyed by fire she returned to Nightcaps. Later she went out to see Wilson at Ohai. Wilson told her that everything was quite all right. She came into town and saw Mr Compton, the agent, and asked him for a proof of loss to fill in. Compton said that Wilson was not his agent and told her that he would give her back her 19/6. He did not give her the papers to fill in. She returned to see Wilson at Ohai and he informed her that he was Compton’s agent. She eventually obtained a proof of loss from D. Cuthbertson, who wrote it out from what she told him. That proof of loss was correct so far as she knew at the time she gave it. She estimated her loss at £3OO. Wilson inspected the furniture about a week after she saw him at Ohai and she paid the premium in November. She received no communication from the company about the insurance before the fire occurred. She had never previously approached Wilson in regard to insurance and he informed her that he had been instructed not to accept a risk from her.

To Mr Russell: She told Wilson that she wanted to insure the furniture for £3OO. She never asked him to insure her house as she already had a cover on it. The house was insured through the Building Society. She had written to the Commercial Union Insurance Company in respect of a claim of £125 for the house. She told Mr Grant, the agent for the Commercial Union Company at Nightcaps, that she had already £2OO on the house. Before WiLson inspected the furniture he did not tell her that the rate would be 8/8 per £lOO, if the house was detached from another building by 40 feet. She had bought a lot of additional furniture since she had it insured the previous year with the Standard Office. So far as she knew nothing was removed from the house before the fire. She visited the house about a fortnight before the fire occurred. John Ross, miner residing at Ohai, stated that he knew both the plantiff and Wilson. The plantiff was at his house about the middle of November looking after his children. He could not remember any conversation taking place at his house between Wilson and the plantiff in regard to insurance.

Rosina Manson, daughter of the plaintiff, stated that she resided at Nightcaps. Almost every night before the fire she went to her mother’s house in High street to make up her brother’s bed. She was in the house on the same night as the fire occurred. The house was fully furnished and the back room contained a number of boxes in which various articles had been packed. William Boyle, constable, stationed at Nightcaps, stated that he was present at the fire. Nothing was saved. The fire started about 11 p.m. In November he had filled in a fire insurance proposal form for the plaintiff. To Mr Russell: So far as he knew the question on the proposal form asking whether the applicant for insurance had had any claims against other companies in respect of fire was answered by the plaintiff in the negative. With Mr Cuthbertson he had inspected the ruins, which were in the same order as imemdiately after the fire. Mr Cuthbertson kept a record of what was found. They did not see any knives and forks scattered about and he thought they had found the remains of all the furniture.

Herbert Hay, secretary of the Building Society stated that the Society held two mortgages in respect of houses owned by the plaintiff in Nightcaps. The Society held insurance in respect of both. John Henry Gilbertson, chief agent for Southland for the Phoenix Insurance Company, stated that insurance was occasionally carried out by word of mouth. He had had experience of people asking him to keep them covered, and he always regarded them as covered from the time he received such communication. He appointed the cQuntry agents for his company. They were authorised to give a provisional cover note on inspection and from that on until the company notified otherwise. That cover was recognised. Evidence of a similar nature in regard to the temporary acceptance of an oral cover was also given by David Hood Thomson, manager of the New Zealand Insurance company at Invercargill, and Gordon Brown, chief agent for Southland for the Insurance Office of Australia. CASE FOR THE DEFENCE. This closed the case Tor the plaintiff and Mr Russell indicated that the defence would be a denial of the contract in that until the uisk was accepted or rejected by the company, no cover could be issued by the agent and also that the plaintiff had made a mis-statement in the proposal, which would have rendered the contract null and void. The plaintiff had also put in an exaggerted proof of loss which would make the contract null and void.

William Gilbert Compton stated that he had had about 30 years’ experience of insurance business. The Ohai agent for his company was James Wilson. Country agents had no authority to bind his company in any form whatever.

His Honour: Then why do you give the agent a cover form.

Witness: It is not a cover form, but is merely a receipt for money received. His Honour: Do you mean to say that any person receiving it would not believe that he or she had a cover ? Witness: It might lead them to think that.

His Honour: Why do you issue a receipt which is calculated to deceive any ordinary person ? Why do you not show clearly that it does not bind the company? Witness replied that he did not make up the form of the receipt issued. His Honour: Well, the sooner you get your company to alter it the better. It seems a very dishonest way of doing business. Continuing his evidence, witness said that no proposal had been received in respect of the plaintiff. The first he had heard of it was after the fire, when the plaintiff called at his office about the end of January. He told her that he knew nothing about it and that he had instructed his agent early in November not on any account to accept a risk from her. He had been surprised when he found that the agent had given her a receipt. He did not tell the plaintiff that Wilson was not the company’s agent. The proper amount of the premium would have been 16/8 per £lOO. On the premium of 19/6 she would be entitled to approximately £ll7. The general amount accepted was 75 per cent, of the value.

To Mr Raines: He did not offer to return the premium to the plaintiff. No other premium or proposal had gone astray. The sum of 8/8 was the rate for fully detached country buildings. James Wilson, carpenter, Ohai, stated that in November last he was the local agent for the defendant company'. The plaintiff saw him early in November in

regard to insurance. On November 18 at Ross’s house she asked him to inspect the furniture for insurance, and said that she valued the furniture at £4OO and wanted to insure it for £3OO. She said that the furniture was not insured with any other office. He inspected the furniture on the following day, and valued it about £275. There was a fair amount of crockery, vases, and four beds in the house. He next saw the plaintiff about four or five days later. He drove her to Nightcaps where she paid him 19/6. On the same day he gave her two proposal forms. The receipt was issued three days later when she said that she would call and see him at Ohai. She saw him about November 28, when she brought back a proposal form which had not been completed. He filled in another proposal form. The question as to whether she had ever had a claim on another office in respect of a fire was answered in the negative by the plaintiff. It was then that he gave her a receipt. He put the proposal and a copy of the receipt in one of the company’s envelopes for posting, but it went missing. He retained the premium. He told the plaintiff that she would get a cover note and an interim receipt from the company as he had no authority to state whether the company would accept it or not. He saw the plaintiff at the store at Ohai on the Monday after the fire. She showed him a notice from the Commercial Union calling for payment of a premium. She also asked whether her proposal had been forwarded on to the company. He told her that he had heard nothing and that she would have to see the agent in Invercargill. Later on the plaintiff showed him a letter from Russell, Son and Meredith and told, him that Compton had said that he was not the district agent, and that he was receiving the money under false pretences. He said that Compton was hardly likely to do that. He did not issue cover notices. To Mr Raines: He received no written instructions as to how his business should be conducted.

To His Honour: He really believed at the time he issued the receipt that the plaintiff would be covered until she heard from the head office.

Denniston Cuthbertson, fire insurance adjustor, said that he arrived at Nightcaps on January 29 and early next morning with Constable Boyle made an examination of the ruins, which, so far as he could see, had not been disturbed. On the night he arrived he made all inquiries he could, but the evidence did not appear to be altogether satisfactory. Their search was a thorough one and they went over the ground with a rake. Subsequently he obtained a proof of loss form from the defendant company which he filled in. Evidence was found of three iron beds, but if there had been other beds of a similar nature in the house, they could not have failed to have traces of them. They came across very few traces of crockery. There were four cups and not more than a dozen plates and saucers all told. He found no trace of bedroom ware. From what he saw he would place the value of the crockery at £l. He came across traces of a hanging lamp, but not of a table lamp or a clock. He found the remains of five knives, ten forks, three spoons and a breadknife. Had there been £5 worth of cutlery in the house, he would have been certain to have found evidence of it. The quantity of towels and bedding contained in the plaintiff’s statement of claim - appeared to be unusually large. He could not form any estimate of what pictures and glass may have been in the house. To Mr Raines: He took down the articles contained in the proof of loss as the plaintiff gave them to him from her memory. The total amount in the proof of loss was 402, but there could not have been anything like that amount of furniture in the house at the time of the fire.

John Grant, carrier, Nightcaps stated that on November 11 he shifted Mrs Taylor’s furniture down to where Mrs Prendeville was living and Mrs Prendeville’s furniture in to Mrs Taylor’s house. The whole of the furniture removed would not be worth £240 all told. To Mr Raines: He did not go into the house when he did the carting. Some time before that he had removed some furniture to Mrs Taylor’s, but could not say whether Mrs Prendeville had loaned it to her or not.

Reginald Binney, local representative of the Commercial Union Insurance Company, said that he had inspected the plaintiff’s house in November in respect of a proposed policy on the building. He did not go into the house, but looked through the windows. He did not pay close attention to the furniture, but from what he saw, he considered that from £5O to £75 would have been sufficient to cover it. Mr Russell, on behalf of the defendant company, stated that after hearing the evidence it had been decided to withdraw one of the grounds of defence as it was clear that the agent considered t&at on accepting payment of the premium, the property was covered. He submitted, however, that the company was not liable because of a mis-statement made by the plaintiff in connection with the proposal for insurance, which formed the basis of the policy. Constable Boyle had stated that he believed that the plaintiff had answered the question as to whether she had a claim on any other company in respect of fire, in the negative, while Wilson had stated definitely that she had done so. It was one of the most important questions in the proposal from the company’s point of view and on it acceptance of cover very largely depended. Another ground of defence was that the plaintiff by making a false declaration of loss had made the contract null and void. It must have been perfectly apparent front the evidence that the furniture in the house at the time of the fire was worth considerably less than the amount for which it was insured. Mr Raines submitted that the evidence relating to the question in the proposal form had been far from satisfactory. The constable had said that he was not sure whether the plaintiff had answered in the negative, while the evidence given by Wilson had been unreliable. The plaintiff stated that she had answered the question in the affirmative. The company had not produced the proposal, but should do so in support of its allegation of fraud. His Honour: The only conclusion that could be come to was that the plaintiff answered “No” to that question. If she had answered “Yes” Constable Boyle would have remembered it as he would have to ask for further particulars.

His Honour, in giving judgment for the defendant company, said that the defence originally relied on was that Wilson had no authority to bind the company. That defence had now been abandoned. It seemed desirable to observe that the methods of business carried out by the company were very objectionable. All that Wilson received from the company was a receipt book which was in such a form that it led to the belief that insurance had been effected on furniture and the conclusion that the plaintiff had stated that she had not had any elaim against another company in respect of fire, whereas -she had made a claim in 1912 against the Royal Insurance Company. Her untrue statement was an answer to her claim and' she was not entitled to recover. Judgment was for the defendant, with costs according to scale. Mr Russell, on behalf of the defendant company, stated that the company’s methods of conducting business were altered and that steps would be taken that the insurer was immediately indemnified from loss, whereas such was not the case. If the company only gave a receipt it ought to make it perfectly clear that the agent had no authority to bind the company. If it did not alter its methods of carrying on business in a dishonest way it might lead to the allegation that it was getting money on false pretences. It was clear that what Wilson purported to do was to effect an insurance of £250. The basis of the contract was the proposal signed by the plaintiff.