Said and Another v South British Insurance Comapany Ltd (C.C. 85/1931 (Mombasa).) [1932] EACA 46 (1 January 1932)

### ORIGINAL CIVIL.

### Before Dickinson, J.

# SOCIETA COLONIALE ITALIANA and SALIM BIN SAID

## $(Plaintiffs)$

#### ni.

# THE SOUTH BRITISH INSURANCE COMPANY, LTD.

## (Defendants).

## C. C. 85/1931 (Mombasa).

Motor car-Hire-purchase-Joint insurance policy-Fire caused by hirer—Liability of insurers to owners—Extent of liability.

$Held$ (4-11-31):—Under a joint policy taken out by the owner and<br>hirer in a hire-purchase agreement—the insurance company is<br>liable to the owner to the extent of his insurable interest at the<br>time of the fire even though t of the hirer and/or his agents.

Ross for Plaintiffs.

Atkinson for Defendants.

Ross referred to Porter on Insurance (7th Edition) p. 124. Thurtell v. Beaumont, 130 E. R. 136.

Atkinson referred to: $-$

Rhodes v. Union Insurance Co., 2 N. Z. (Sup. Ct.) 106.

Chisholm v. Provincial Insurance Co., 20 U. C. (C. P.) 11, referred to by Court.

The facts are found in the judgment.

JUDGMENT.—This is an action brought by the two plaintiffs, who are respectively the owner and the hirer of a motor car. under a hire-purchase agreement, against the defendant company, who issued to them jointly a policy of insurance in respect of the said car, for the recovery of the sum of £200, being the value of the car at the 23rd of May, 1931, on which date the car was completely destroyed by fire.

The plaintiffs by their plaint allege that the car was overturned and that this accident caused the car to catch on fire.

The defendant company deny this and deny liability to pay stating, in addition, that there was a breach of a condition of the policy, namely, that a conviction of the driver for improper driving was never reported to them.

The principal defence, though not pleaded is that the fire was not accidental, but a wilful and malicious act of the plaintiff No. 2 and his agents.

[His Honour proceeded to deal with the evidence at length.

The judgment then continues: $\cdots$

I find myself compelled to say that the burning of this car. only seems capable of one solution, viz., the deliberate setting fire to it, after it had been soaked in some inflammable substance...

Mr. Ross has argued that before the Court can find in favour of the insurance company setting up a defence of arson the burden is on the company to prove the act of arson against the plaintiff, as strictly as would satisfy a jury in a criminal trial of the guilt of the person assured.

He cites Thurtell v. Beaumont, reported 1 Bingham, English Reports, Vol. 130, p. 136, in support of this argument. This seems to be conclusive and I accept it ...

The second plaintiff was jointly with the first plaintiff entitled to claim on defendant company on a policy made out for Sh. 7,000 and he only owed a matter of some Sh. 2,000 to the first plaintiff. On a total loss he would expect to recover everything paid in excess of $Sh. 2,000$ .

The second plaintiff was in financial difficulties, he had still to find the balance of the purchase price and at the same time was being pressed by Mr. Patel, advocate, for the amount of Sh. 2,000 he owed elsewhere, and he could not find the money.

These facts alone would not entitle me to find a man guilty of arson and there would only be grave suspicion against him, but when he goes out of his way to lie as he has about the tin of petrol having left the scene of the fire in perfect condition this goes a very great deal further, and in my opinion, if a jury convicted him on a charge of conspiracy with Salim Feraj and/or others to destroy the car deliberately by fire I should decline to interfere.

Here I am sitting as a jury and I say that provided the evidence which has been adduced in this case could be adduced. before me in a criminal trial of the second plaintiff and the driver, Salim, on a charge of conspiracy to set fire deliberately and maliciously to that car for the purpose of defrauding the insurance company I should have no hesitation in finding them. both guilty of that offence.

I realize that the greater part of the evidence on which in this case I have come to that decision would not be adducible in such a trial as if the second plaintiff and his witnesses had not opened their mouths from the time of the fire there would be but little evidence against them.

That the second plaintiff cannot recover therefore is well established law, but in respect of the first plaintiff, against whom no imputation of any kind is raised by the defendant company, it appears there is a considerable difference.

The policy is issued to first plaintiff as owners and second plaintiff as hirer, and contains an undertaking to re-imburse the insured for the loss of the car as described in the Schedule caused by Fire or Malicious Act.

It appears to me that a joint policy is really two separate contracts made with each of the insured.

I can find no recorded case where two persons, having different insurable interest in the same property have been issued a joint policy.

It has been held that where a mortgagor assigns his fire policy to his mortgagee and the mortgagor is proved to have committed an offence vitiating the contract neither the mortgagee himself, nor the mortgagor as trustee for the mortgagee can recover from the insurers: Rhodes v. Union Insurance Co., $2N. Z.$ (Sup. Ct.) 106.

But where the mortgagee himself has a definite contract with the insurance company he can recover for loss occasioned by the malicious act of the mortgagor. Chisholm v. Provincial Insurance Co., 20 U. C. (C. P.) 11.

Here there is a definite contract of indemnity between the defendant company and the first plaintiff.

It has always been held that an owner can recover for loss occasioned by the malicious act of another, unless expressly excepted in the policy.

Here it is not expressly excepted and there is no suggestion that the first plaintiff had any cognizance of the malicious act of the second plaintiff and his associates and I can see no reason why they should not be held protected under the policy.

I find in favour of the first plaintiff for the amount due under the hire-purchase agreement, i.e., their insurable interest, and give judgment for them for Sh. 3,190 15c. and the amount of costs found due to them on taxation.

I find for the defendant company in respect of the claim of plaintiff No. 2 with costs.