3PLR – INTERNATIONAL BANK FOR WEST AFRICA LTD. V CRUSADER INSURANCE COMPANY (NIG.) LTD.
POLICY, PRACTICE & PUBLISHING LAW REPORTS, 3PLR
INTERNATIONAL BANK FOR WEST AFRICA LTD.
V
CRUSADER INSURANCE COMPANY (NIG.) LTD.
HIGH COURT OF RIVERS STATE (PORT HARCOURT)
SUIT NO. PHC/97/75
13TH MAY 1976
3PLR/1976/65 (HC)
BEFORE:
MANUEL J.
REPRESENTATION
ASSISSI BELL-GAM – for plaintiff
BALOGUN – for defendant
MAIN ISSUES
INSURANCE AND RE-INSURANCE LAW:- Assurance policy – Nature of the right to receive any payment under an insurance policy as a chose-in-action – Assignment of the right to payment to third payment – Conditions that must be satisfied to make same valid – Effect of failure thereto
INSURANCE AND REINSURANCE LAW:- Insurance policy – Assignment of – When assignee entitled to sue in own name
INSURANCE AND REINSURANCE LAW:- Equitable assignment of insurance policy – How effected – Nature of right created – Form of words required to create same – When confers right to sue in assignee’s name – Whether it must be absolute and not purporting to be by way of charge only and notice thereof must be given to the debtor or person against whom the assignment is to be enforced in order to obtain the benefit of the Act
INSURANCE AND REINSURANCE LAW:- Insurance policy – Nature of as a legal choses in action – Assignment of – Conditions precedent – Need to strictly comply herewith – Unstamped deed of assignment of a policy of life assurance – Validity of
INSURANCE AND REINSURANCE LAW:- Life Insurance policy – When deemed to have lapsed – Revival of lapsed policy – Rule that a policy which has lapsed may be revived either by agreement between the parties or by some conduct of the insurers as to estop them from denying that the policy is subsisting – Need to satisfy stipulated conditions precedents – Nature of qualifying conduct that can ground estoppel
REAL ESTATE AND PROPERTY LAW:- Chose in action – Nature of property therein –Assignment of – Common-law – Effect of statute thereto – Valid assignment of chose-in-action – How determined – Legal and equitable chose-in-action – Distinction between – How each created – Nature of rights conferred – Implication for whether assignee can sue in his own name
COMMERCIAL LAW – AGENCY:- Rule that in the absence of fraud, an agent, acting in the course of his duty and within the scope of his employment, binds his principal on his transaction over the business of his employers and it is not the duty of the third parties to prove that the agent has no such authority- Oral assurances by an agent – Onus of proof – On whom lies
CONSTITUTIONAL LAW:- Applicable law – Lacunae in State law – Where there exist a federal law on the same point – Whether open to court to invoke an English law contrary to the federal law – How treated
PRACTICE AND PROCEDURE – ACTION – EVIDENCE – PLEADING:- Onus of proving an averment in a pleading – On whom rests – Where defendant fails to call evidence in rebuttal of plaintiff’s case by way of pleading – Legal implication – Whether can only rely on legal or equitable grounds as defences
PRACTICE AND PROCEDURE – ACTION – EVIDENCE – PLEADING:- Defendant who failed to plead facts or evidence in support of case – Nature of legal or equitable grounds that can be pleaded as defence – Whether extends to capacity of plaintiff to bring suit at all or in their name – Relevant considerations
MAIN JUDGEMENT
MANUEL, J:
In their amended Statement of Claim, the plaintiffs are claiming the sum of N41,000.00 being amount insured with the defendant company plus profits. They also claim interest at the rate of 10% with monthly rents until judgment and thereafter interests at the rate of 5% with monthly rents until the judgment debt and costs are fully satisfied.
Their case is that their customer, one Thomas Passadie Egba, insured his life with the defendant company on 15th December 1972 for N40,000.00 with participation in profits. The Life Assurance Policy is marked Exhibit “B”.
Subsequently, by a document marked Exhibit “C2”, the assured assigned the Policy to them. After this assignment, the plaintiffs wrote Exhibit “C” to the defendants enclosing Exhibit “C2”. Uncompleted Notice Forms marked Exhibits “C1” and “C3” were also enclosed in the letter which was a reply to the defendants’ letter marked Exhibit “E1” calling for the “policy assignment letter.” By the plaintiffs’ case, the assured called at their bank on the 14th May 1974 to withdraw some money. He was informed that the premium on the life policy was in arrears of two quarters namely 1st January, 1974 to 30th June, 1974 and that he should obtain a confirmation from the defendants’ resident Inspector in Port Harcourt that it would be in order if the arrears were paid by the plaintiff company. He returned later the same day with the resident Inspector on whose assurances the late premium of N1,189.06 was paid. Exhibit “D” is the receipt for the payment and carries at its back the following condition: “This receipt is given for a payment made on account of a proposal or application for revival of a policy being made to the company and does not place the company on risk until such proposal or application for revival has been accepted by the company.” The receipt issued at Port Harcourt is dated 14th May 1974.
Another receipt dated 16th May 1974 from the defendants’ headquarters in Lagos marked Exhibit “D1” was later received for the same amount. Exhibit “D2” is another receipt for money paid under similar circumstances on behalf of the same assured but the resident Inspector was not called to testify in proof of the assurances alleged made by him in relation to Exhibit “D”. The assured died on 15th May 1974 as evidenced by the death certificate marked Exhibit “A”.
At the close of the plaintiffs’ case, learned Counsel for the defendants elected not to call any witness but to rest his case on that for the plaintiff,
Opening the addresses learned Counsel for the plaintiffs submits that the plaintiffs have sufficiently proved their case and the defendants not having led any evidence, cannot challenge the existence or validity of an assignment of the Assurance Policy which they granted. No such challenge was pleaded.
Counsel refers to the cases of: Chief Ategba Atiri v. Eden Ekenyong (1963) 7 E.N.L.R. 21; Abimbola George v. Dominion Flour Mills (1963) 1 All N.L.R. 71; North Western Salt Coy. Ltd v. Eletrolite Alkali Co. Ltd. (1914) A.C. 461; Adenuga v. L.T.C. 13 W.A.C.A. 125.
He contends further that the issue of privity of contract should have been raised before pleadings were ordered and that not having done so, the defendants cannot seek to do so by cross-examination. He cites the case of Nnamani v. Agbo (1972) 2 E.C.S.L.R. 35. He submits also that there has been an automatic revival of the life policy by the late payment of the premium due and which payment was made on the assurances of an accredited representative of the defendant company and there being no evidence to show that the representative had no powers to do what he has done, it must be accepted that he was acting within the scope of his authority. Counsel contends that the plaintiff is entitled to succeed if he can show that other considerations have been brought about by the conduct of the parties as to constitute a waiver of the stipulated condition for the revival of a lapsed policy and by the issue of Exhibit “D l” the defendants have ratified the conduct of their agent and are estopped from denying his authority which he exercised at paragraph 3 of his letter marked Exhibit “E”. In this regard, the case of Murfiu v. Royal Insurance Co. Ltd. (1922) 38 L.T.R. 76 is referred to. Counsel submits that because of the ratification there had been no request to the plaintiffs to comply with the conditions for a revival and that the discretion in paragraph 7(1) of the Statement of Defence has been delegated to the agent while payment of the premium, though late, was within a year from its being due.
Replying, leamed Counsel for the defendants refers to Bullen and Leake on Pleadings page 81 of the 12th Edition and to the case of Independent Automatic Sales Ltd. v. Knowles & Foster [1962] 3 All E.R 27 and submits that a point of law though not pleaded, can be raised at the trial. In furtherance of this submission he contends that the specific policy—Exhibit “B”—the proposal for which was made on 5th January 1973, has no connection with the averments in paragraphs 1 and 2 of the Statement of Claim. He refers to s.86(1) of the Stamp Duties Act and submits that the assignment, not having been stamped, has no validity and therefore confers no right on the assignee to sue for the policy money or to give a valid discharge.
Counsel further contends that there has been no waiver of the conditions of the policy and that waiver being a kind of estoppel must be pleaded, refers to the case of Charles Rickards Ltd. v. Oppenheim [1950] 1 K.B. 616. Counsel urges the Court to enter a judgment of dismissal and not of a Non-Suit in consideration of the decisions in Ferdinand George v. The United Bank for Africa Ltd. (1972) 9 S.C. 264.
Considering the arguments which have somehow been extensive, I find that the real issues of law involved are (a) whether the plaintiffs can sue on the assignment in their own name (b) the validity of the Life Assurance Policy as at 14th May 1974 and (c) the nature and validity of the assignment made under it.
The defendants elected to call no evidence to disprove any facts but rested on the case for the plaintiff. Indeed the onus of proving any material averments rests on the plaintiffs and the effect of calling no evidence in rebuttal in trial by pleadings is that the defendants are bound by the facts the plaintiffs have proved and can only rely on legal or equitable grounds as defences and the Court can proceed to judgment. Such grounds are not, as a rule, pleaded but can be raised at the close of plaintiffs’ case. The capacity of the plaintiffs to sue in their own name is one of those grounds so raised. In order to decide this issue one has first to consider the nature of the assignment on which the action is brought. The right to receive payment under an insurance policy is a chose-in-action and to entitle the transferee to payment, there must be a valid assignment of the chose-in-action. The strictness of the common law rule against the assignment of choses-in-action has been relaxed by various statutes one of which is the Supreme Court of Judicature Act, 1875 which is an Act of general application and therefore applicable to this State by virtue of s.15 of the High Court Law. Under this Act, a legal assignment, that is, an assignment enforceable by action at law, must be in writing and signed by the assignee; it must be absolute and not purporting to be by way of charge only and notice thereof must be given to the debtor or person against whom the assignment is to be enforced in order to obtain the benefit of the Act. By such an assignment, the assignee can sue in his own name. An equitable assignment, on the other hand, is one which is effective to pass an equitable though not a legal right to have the chose-in-action; it is founded in contract directing payment to a third person and may be by way of charge only.
Unlike a legal assignment, no form of words is required for an equitable assignment provided the meaning is plain and shows a clear intention that the assignee is to have the benefit of the chose-in-action. Whether an equitable assignee of a chose-in-action can sue in his own name depends on the nature of the chose-in-action. If the chose-in-action is equitable and the assignment absolute, an equitable assignment of it passes to the assignee the right to sue for the recovery and he can do so in his own name. Where, however, the chose-in-action is legal as in a claim on a policy of insurance, the assignor or, his legal personal representative must be joined to the action either as plaintiff or defendant. Under the Act a claim on a policy of insurance is regarded as a legal chose-in-action because it is recoverable or enforceable at law—See Article 996 page 479 3rd Edition Volume 4 Halsbury’s Laws of England. Exhibit “C2” is the assignment in question in this action. It is in writing and directs the payment of any claims due under the policy to the plaintiff bank. It is therefore, in my view, not within the Act but rather an equitable assignment of a legal chose-in-action and even though it is stated to be irrevocable, the assignee cannot sue in his own name—see Article 1054 page 511 Volume 4 3rd Edition of Halsbury’s Laws of England. It follows therefore that the plaintiffs suing on the strength of this assignment cannot do so in their own name.
In the case of Okwo Nnamani & Ors. v. Chief Gabriel Agbo & Ors. (1972) 2 E.C.S.L.R. 35 cited by learned Counsel for the plaintiffs, the issue was on the time an application by way of motion challenging the authority of the plaintiffs to sue in a representative capacity could be made. It is unlike the present action where the issue is whether the plaintiffs, as assignees, can sue the debtors in their own name. The validity of an assignment whether legal or equitable depends, besides other considerations, on notice to the debtor. Exhibits “C1” and “C3” are the documents tendered in evidence by the plaintiffs as the notices. They are blank forms on which the date 18th December, 1972 is stamped and were forwarded to the defendant company for completion and return under cover of a letter dated 18th December, 1972 and marked Exhibit “C”. These forms remain uncompleted and unsigned and cannot therefore be binding on the defendants as notice to them of any assignment. Even though the purport of notice is to confer priority over claims in which notice has not been given, it is pertinent to observe that while the purported notices-Exhibits “C1” and “C3” bear the date 18th December, 1972, the policy marked Exhibit “B” was not in force until the 1st January, 1973. This would mean that the notices were sought to be given even before the commencement of the policy from which the notices can derive their force.
The assignment itself since it is in writing must contain particulars of the policy to which it relates. It speaks of the “above mentioned Policy” but leaves blank the column provided for the description of the policy. Besides, the assignment must be stamped as a conveyance because by s.86(1) of the Stamp Duties Act of the Federation of Nigeria, an unstamped assignment confers no right on the assignee or his personal representatives to sue for the policy money. The section reads as follows:
“No assignment of a policy of life assurance shall confer on the assignee therein named, his executors, administrators or assigns, any right to sue for the money assured or secured thereby or to give any valid discharge for the same or any part thereof unless the assignment is duly stamped and no payment shall be made to any person claiming under any such assignment unless the same is duly stamped.”
Learned Counsel for the plaintiff endeavoured to counteract this point by contending that the federal Stamp Duties Act 1958 is not applicable to Eastern Nigeria and refers to the case of Ofu Itumo v. Anyim (1960) 4 E.N. L.R. 48 and The Stamp Duties Law of Eastern Nigeria, to buttress his argument.
That was a case where a number of persons jointly and severally claimed special and general damages for the burning of 78 houses without claiming any joint interest in any of the houses involved. Each plaintiff had therefore a separate cause of action and the defendants pleaded misjomder of persons and causes of action. Order 4 Rule 2 of the High Court (Civil Procedure) Rules, 1955 did not cover this point and the question was whether the Court could resort to Order 16 rule 1 of the English Supreme Court Rules 1883, which covered the point as provided under s.15 of the High Court Law.
It is my view that the jurisdiction vested in the Court under s.15 of the High Court Law is exercisable only in matters of practice and procedure and not of substantive law and even then, only when there is default in the local Rules regarding the point in issue. In other words, where the local Rules provide for a particular matter, it becomes unnecessary to resort to English Rules. It is correct that the Stamp Duties Law of Eastern Nigeria makes no provision similar to s.86 (1) of the Stamp Duties Act of the Federation of Nigeria but this cannot be a reason to resort to any English Act to upset the federal Act. It is rather a reason to adopt and apply the mandatory provision of the federal Act. I therefore hold that the assignment is ineffective for want of stamping.
Exhibit “B” is the Life Assurance Policy under which the claim for payment is brought. It was proposed on 5th January 1973 and issued on 29th May 1973. The date of its commencement is the 1st January, 1973. Premium of it is to be paid quarterly in the months of January, April, July and October each year. Exhibit “D” is a receipt dated 14th May, 1974 in respect of premium due for the period 1st January, 1974 to 30th June, 1974. This receipt was given by the defendants’ agent in Port Harcourt and it is averred in the Statement of Claim that payment, though late, was made by the plaintiff bank on the assurance of the agent that the policy would be revived despite the breach of a stipulated condition in it.
That condition reads as follows:
“A lapsed policy may be revived within one year from the day upon which the unpaid premium becomes due on proof satisfactory to the Directors being given of the continued good health and eligibility for Assurance of the Life Assured and on payment of the arrears of premium with compound interest.”
At the back of the receipt Exhibit “D” is the following condition:
“This receipt is given for a payment made on account of a proposal or application for revival of a policy being made to the company and does not place the company on risk until such proposal or application for revival has been accepted by the company.”
It is without doubt that on the date payment was made on Exhibit “D”, the policy had lapsed by reason of the non-payment of the premium which had become due for the period 1st January to 31st March, 1974. In Handler v. Mutual Reserve Fund Life Assurance (1904) 90 L.T. 192, it was held that “a policy which has lapsed may be revived either by agreement between the parties or by some conduct of the insurers as to estop them from denying that the policy is subsisting. The conduct must be such as to lead the assured to believe that the contract is being treated by the insurers as valid notwithstanding the breach as where they accept a renewal premium.” The lapsed policy in the present action can therefore be revived either by compliance with condition No. 3 in its schedule or by some conduct on the part of the defendants as to amount to an estoppel on them. The stipulated condition was not and could not have been complied with because the assured died on the day following the payment of Exhibit “D”. Even if he was alive, the question of payment of compound interest, which is not reflected in Exhibit “D”, was also a condition precedent to the revival of the policy under the stipulated condition. There is also nothing to show that the defendants, by issuing Exhibit “Dl” had accepted a proposal or application for the revival of the policy in accordance with the condition at the back of Exhibit “D”.
Indeed, by their letter dated 30th October, 1974 and marked Exhibit “E6” they say that the sum paid on Exhibit “D” is being held on a suspense account and this was after they had become aware of the death of the assured. As there has been no revival under the conditions of the policy one has to determine whether the defendants have by their conduct led the plaintiffs to believe that a revival would be effected if the late premium was paid. In this regard I have to state that in the absence of fraud, an agent, acting in the course of his duty and within the scope of his employment, binds his principal on his transaction over the business of his employers and it is not the duty of the third parties to prove that the agent has no such authority.
The agent of the defendants in the present action did not testify and therefore the oral assurances alleged made by him to the plaintiffs remain unproved. However, Exhibit “E” is a letter written to the plaintiffs by the agent. It is dated 14th May 1973 and its paragraphs 3 and 4 are as follows:
“An outstanding amount of N 1,088.03 as premium due from 1/4/73 to 1/9/73 inclusive should be paid immediately as to keep the policy in force for the risk involved. As soon as we receive this amount from you, the Policy becomes in force…”
From the date of this letter which is 14th May, 1973 the premium for 1st January to 31st March, 1974 which now renders the policy invalid could not have become due and payable. Besides the sum of N 1,088.03 represented the premium due from 1st April, 1973 to 1st September, 1973 whereas the period paid for on the purported assurances of the agent was 1st April, 1974 to 30th June, 1974 with the sum of N1,189.60. It is therefore quite clear that Exhibit “E” is in no way related to the present action and constitutes no estoppel on the defendants with respect to the revival of the lapsed policy. It is a misconception for the plaintiffs to rely on it.
The conclusion is that there are no proved oral assurances by the defendants to the plaintiffs to make them believe that the payment Exhibit “D” would revive the lapsed policy. Neither is it conclusive that the issue of Exhibit “D1” alone amounts to an acceptance of the conditions for revival as stipulated in condition 3 of the schedule to the policy. The policy, not therefore having been revived, cannot form the basis of a claim under it and Exhibit “E” on which the plaintiffs rely, cannot for reasons of irrelevance, afford them any protection.
I therefore hold that the Life Assurance Policy which forms the foundation of this action had lapsed at the date of death of the assured and had not been revived before action. The assignment made to the plaintiffs under it, is itself invalid for want of stamping and therefore no payment can be made to a person claiming under it. The assignment also being an equitable assignment of a legal chose-in-action does not permit the assignees to sue in their own name.
The claim therefore fails and is dismissed.
