IMPORTANT JUDGMENT.

Globe, Volume XXII, Issue 2018, 12 August 1880, Page 3

IMPORTANT JUDGMENT.

[FEB PBKSB ASSOCIATIOH SPECIAL WISE. J AUCKLAND, August 11. Mr Justioe Richmond gave judgment today, in Banco, in the ease of the Bank of New South Wales v the Eoyal Insurance Company. The action arose on a policy of insuranoe. The subject of insuranse was a timber mill, desoribed as the property of O. A. Harris, junr., and the sum for which it was insured was £1350. The company, by virtue of its reinstalment clause, elected to rebuild, and after a lapse of time tenders were called for. Subsequently the company preferred to pay the amount of tho policy rather than rebuild. The Bank, at mortgagees, held that the company having made its election, could not depart from it, and in default of the premises being rebuilt, sued for the value of the property insured, which was set down at £2850. Defendants demurred on the following grounds—(l.) That the declaration does not disclose any cause of action in the plaintiffs, inasmuch as it does not allege that at the time of the said election being made, to wit on the 17th day of January, 1880, the plaintiffs had an insurable interest in the property covered by the said insurance, and without such interest the said election could not be held binding on the company. (2.) That the plaintiffs being mortgagees of the pro perty, and the said policy only covering their interests as such mortgagees, the election could not bind the defendants to reinstate without the consent of the mortgagor, and such consent is not averred to ; that the insurance effected by the said policy is not an

insurance of the building per se, but only of the mortgagees' security thereon, and it is not averred that at the time of the said election, or at the commencement of this action, the plaintiffs continued indemnified, and their security unsatisfied. Mr Justice Richmond overruled the demurrer, giving defendants fourteen days' to plead on the payment of costs of demurrer, otherwise judgment would be for plaintiffs.