GHANA UNION ASSURANCE CO., LTD. vs. ASSAD FAKHRY AND SONS

The respondents, a firm of general merchants and wholesalers, proposed to insure textiles stock valued at ¢2,500,000 with the appellant insurance company. A long-standing business relationship existed between the parties. The insurance proposal described the insured interest as 'the property of the proposer or held by him in trust or on commission for which he is responsible.' The insurance company initially provisionally covered ¢1,700,000, later extending to the full proposed amount. The policy was issued with a condition excluding coverage for goods held in trust or on commission, contrary to the proposal. A fire destroyed the insured textiles stored in a warehouse. The firm claimed as owners, but the insurer repudiated liability, alleging the firm was not the owner but that ownership belonged to Sally Trading Enterprise. Litigation ensued to determine ownership and insurable interest.

JUDGMENT OF APALOO C.J. He delivered the judgment of the court. The main facts of this case are not in dispute. The respondents (hereinafter called the firm) are general merchants and wholesalers. They so described themselves in a printed “Fire Insurance Proposal Form”’ of the appellant-company (hereinafter called the company). The company, as its name implies, is an insurance company. Both the firm and the company seem to have had a long business association. The firm’s representative put this as “over twenty years.” It would seem that this association generated mutual confidence in each other. Indeed, the company’s representative said although the premises in which the firm stored the textiles which it proposed to insure, was not satisfactory to them, they obliged because “the proposer was an old customer and he claimed the goods belonged to them.” On 6 April 1977, a representative of the firm filled a printed form described as “Proposal for Fire Insurance.”...