GHANA UNION ASSURANCE CO., LTD. vs. ASSAD FAKHRY AND SONS [1980]DLSC1583

Date	1980-03-24
Suit No.
Citation No.	[1980]DLSC1583

APALOO C.J

SOWAH JSC

ARCHER JSC

CHARLES CRABBE JSC

ADADE J.S.C

E. D. KOM (WITH HIM GBEHO) FOR THE APPELLANTS

TSATSU TSIKATA FOR THE RESPONDENTS.

[1980]DLSC1583
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													<main id="main" class="content" style="min-height: 60rem" >GHANA UNION ASSURANCE CO., LTD. <o:p></o:p>vs. <o:p></o:p>ASSAD FAKHRY AND SONS<o:p></o:p>[SUPREME COURT, ACCRA] <o:p></o:p>[1980] GLR 634<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

DATE:
24
MARCH 1982<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

E. D. KOM (WITH HIM GBEHO) FOR THE APPELLANTS.<o:p></o:p>

TSATSU TSIKATA FOR THE RESPONDENTS.<o:p></o:p>

</div>CORAM:
<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

APALOO C.J., SOWAH, ARCHER, CHARLES
CRABBE AND ADADE JJ.S.C.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF APALOO C.J.<o:p></o:p>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.”<o:p></o:p><o:p>&nbsp;</o:p>On 6
April 1977, a representative of the firm filled a printed form described as
“Proposal for Fire Insurance.” The merchandise he proposed to insure were
textiles and the insured value was ¢2,500,000. Apparently, the interests which
the firm were prepared to insure were described in the form in these words: “.
. . the property of the proposer or held by him in trust or on commission for
which he is responsible.” It is plain that the firm were then not required to
state either the nature or extent of their interest. The company were only then
concerned with the “stock or materials in trade.”<o:p></o:p>On the
very next day, that is 7 April, the company informed the firm in writing that
they hold the stock of textiles provisionally covered in the sum of ¢1,700,000.
On 27 April, they then felt able to extend the cover to the amount proposed by
the firm, namely, ¢2,500,000 and so informed the latter by exhibit B1. They
then requested the payment of the premium. This request was duly met. The
contract which the parties concluded seems clearly to be that the company in
consideration of the premium paid to them by the firm, undertook to insure the
textiles for a period of one year from 6 April 1977, provided the
stock-in-trade was the property of the firm or held by it in trust or on
commission. As is common practice, the policy itself was not issued to evidence
the contract until 1 June 1977. The firm was entitled to assume that faith
would be kept and that the policy would conform with the anterior agreement.
Indeed, in the Schedule to the policy of insurance, it is expressly stated
that, “The property insured is in accordance with the proposal dated 6 April
1977 and lodged with the company.”<o:p></o:p><o:p>&nbsp;</o:p>This,
however, was not the case. In the seventh condition of the policy, it is stated
that, “Unless otherwise expressly stated in the policy, this insurance does not
cover ‘Goods held in trust or on commission’.” Whether the firm noticed this
material discrepancy between the proposal and this contract condition, it is
impossible to say. Its subsequent conduct suggests that it did not. There is no
reason for it to suppose that it was being insured for a lesser interest than
it proposed and which proposal was expressly accepted by the company.<o:p></o:p><o:p>&nbsp;</o:p>On 25
August 1977, during the currency of the policy, fire broke out in the warehouse
of the Ghana Rubber Products’ premises where, to the knowledge of the company,
the textiles insured were being kept. That fire almost wholly destroyed the
goods insured under the policy. What was salvaged was negligible. As was,to be
expected, the firm purported to claim from the company, the value of the goods
at the time of their destruction. It seems that, to do this, it had to fill a
printed “claim for loss by fire” form of the company. For the first time, it
was asked to state the nature of its interest in the property. The printed
request, exhibit D1 was in these words, “Here state nature of your interest,
whether sole owner or holding the property in trust or on commission or
otherwise.” (The emphasis is ours.) In answer thereto, the firm declared that,
“We are the owners.” <o:p></o:p><o:p>&nbsp;</o:p>