INSURANCE LAW

Hokitika Guardian, 17 March 1932, Page 2

INSURANCE LAW

■AN INTERESTING POOT

CAR- BURNED DURING earthquake.

(By Telegraph—Per Press Association)

WELLINGTON, March 16.

Further litigation, caused by the lHawke’s Bay earthquake, is occupying the attention of the Court of Appeal, in an action brought by Wright'Stephenson and Co., Ltd., Allan Dut 5 ;tsn Powdrell, and the Texas Oil Coy. 1 ' v( lust.) Ltd., again sit Harry Holmes, of .London, sued on behalf of himself and other underwriters of a certain- Lloyd’s mojqp-car insurance policy.

Plaintiffs were ffche owners in various interests of a Graham Paige motor car, which they insured a.t Lloyd’s, according to their respective interests? in a sum of £4OO, against (inter alia) damage caused by accidental oxter-' nal means from October 13, 1930 to ■’.Tune 1, 1931. On January 30, 1931, Powdrell was driving 'the car towards NapieT and became involved in a collision with another car on a narrow bridge about ten miles from Clive, whereby tile car became seriously damaged. That evening the car was Itowed to a garage in Napier, and notice' of the accident was immediately given to defendant’s agent, who on February 1, inspected (the car, and gave instructions to the garage propi’i e tors to prepare, a detailed estimate of the damage. ' On' February 3, the garage was damaged by the earthquake, and destroyed by the subsequent fire. The oar *by reason of its damaged condition, could not be removed' and. was also destroyed. Defendant. . having ’ refused to pay anything in respect of the damage to the • car sustained in the accident, plaintiff issued a writ claiming £122 6s 7d, the estimated cost of repairing the damage and costs. Defendants, whilst admitting the facts, denied liability, and a motion for judgment filed by plaintiffs was removed into the Court of Appeal foi argument. The Bench consists of Chief Justice Myers and Justices (Hardman, MacGregor, Blair and Kennedy.

Counsel for plaintiffs said, in opening,' that the poirtt, in a nutshell, .was■this: There was partial damage, covered, by a policy. Then there was .total sub-: sequent destruction, which was not' covered by a policy. The underwriters:i had Te fused to pay for the partial dam- | age. Were .they liable? Adopting the stand they had in this matter, they were driven to contend that, if they issued two separate policies, the present one and one covering damage by earthquake, they would pay only the Walue of .the car at the time of the earthquake, being £4OO, less £122 6s 7d, so that, although c o w* cred every possible risk, they would not be paid the full value of the car before the accident. The policy of insurance gave the underwriters the right either to repair or 'to pay the insured amount, of ,tlie damage. The '.fact that, after, the occurrence of the damage, one of, th* two alternatives, namely that of repair, became impossible, did not relieve the underwriters from the performance of the other alternative, namely, payment. The principle of the law was that, if a person contracted to do one of two things in an alternative, and one subsequently became impossible, it depended on the intention of the parties, whether he was ‘bound to perform the other. When alternative methods of indemnity were contained in a contract of insurance, the intention of the parties plainly was that, if one alternative became impossible, the other must be performed. Counsel for the defendant, however, submitted that the only obligation under the policy was to repair, or to reinstate. That obligation might be ful(filled in one of two- ways, either by the underwriters executing the repaiis themselves, by allowing the insured to repair .himself, and then paying his bill. There was no alternative duty on the part of the underwriters, but they were entitled, if they so desired, to re lieve themselves of their obligation to repair by settling for the damage in money. That they might, but were not obliged to, do. The Court at this stage adjourned till to-morrow.