Case Number

C.A. 118/51

Date Decided

6-4-1953

Decision Type

Appellate

Document Type

Full Opinion

Abstract

The plaintiff, a Haifa merchant, insured with the defendant, a company having its head office apparently in New Zealand and a branch in London, a consignment of 100 watches despatched to him from Paris. The policy, made in Haifa and mentioning the London branch, was in English and contained a "lost-or-not-lost" clause. In fact the watches had been sent from Paris twenty days before the issue of the policy, but this fact was not disclosed to the underwriters. The consignment was stolen while in transit in France, and only seven watches were recovered. It was impossible to determine whether the theft had been committed before or after the date of the policy. The District Court gave judgment against the defendants for the value of 93 watches, holding that the information relating to the prior despatch of the watches had not been withheld by fraud on the plaintiff's part, and that there was no duty on him to volunteer it.

Held, allowing an appeal and remitting the case to the District Court for further consideration:

1. The question what was the law applicable to the contract, being one of conflict of laws to which no local law extended or applied, must be determined in accordance with the English common law by virtue of Article 46 of the Palestine Order in Council, 1922.1)

2. Quaere, whether the English law rule is that in the absence of an agreement to the contrary a contract of marine insurance is governed by the law of the place where the underwriter carries on his business.

Spurrier v. G.F. La Cloche 1902 A.C. 446 and

Greer v. Poole (1879) 5 Q.B.D. 272 considered.

3. There was no evidence before the court to prove either what was the country in which the underwriter carried on business or, assuming it to be England, what the provisions of the English law were. As distinct from a case in which English common law is applicable under Article 46, it is necessary to prove such law by expert evidence when it is to be applied as a foreign law.

4. In the absence of evidence, it must be presumed that the law of the defendant's place of business is identical with the local law.

5. A question of marine insurance is comprehensively answered by the Ottoman Maritime Code, 1863, and there is no occasion to turn to English law under Article 46. On the contrary, the Code must be interpreted in the light of the French law from which it was derived.

6. By Article 193 of the Ottoman Mercantile Code 1) a contract of insurance will be cancelled in the event of the non-disclosure of a fact which, had it been known to him, would have prevented any ordinary, reasonable underwriter from consenting to the conditions included in the policy.

Accordingly:

(a) The question does not depend upon whether the assured knew or did not know of the loss of the watches, or whether he acted fraudulently or not.

(b) The "lost-or-not-lost" clause proved that the mere fact that the watches had already been despatched at the date of policy could not have affected the underwriters' estimate of the risk insured.

(c) The question whether the non-disclosure of the fact that the watches were already in transit for twenty days at the time when the insurance was applied for affected the validity of the contract depended upon whether that period was so long in reference to the circumstances that an ordinary, reasonable underwriter would regard it as increasing the risk he had underwritten. That question should be answered by the District Court.

Case remitted accordingly.

Keywords

Contracts, Insurance, International Law -- Relevance of foreign law in judicial decisions

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