APPEAL :
Trial court's specific findings of facts; necessity for an appellate court to refrain from coming to a different finding.
•Bala James Ngillari -plaintiff/appellant
•National insurance corporation of Nigeria -Defendant/respondent
Suit at the Supreme court of Nigeria, Abuja on friday, 5th June, 1998 before;
•Salihu Modibbo Alfa Belgore JSC
•Idris Legbo Kutigi JSC
•Michael Ekundayo Ogundare JSC
•Sylvester Umaru Onuh JSC
•Anthony Ikechukwu Iguh JSC
INSURANCE CONTRACT:
A. Contract of non marine insurance; whether a parol contract in latter is valid.
B. Marine insurance and non marine insurance (difference)
C. When a proposal form is duly made; when a valid contract of insurance is made (bindingness of same on parties)
D. Whether time is not of the essence to parties in an insurance
contract.
PLEADINGS
A. Evidence led but not pleaded (its consequence)
B. Insufficient denial or traverse in the pleadings (its consequence)
COUNSEL :
•Charles Obishai Esq for the appellant
•MAO Okulaja Esq for the respondent
ISSUE:
A. Whether the learned justices of the court of appeal were right in setting aside the findings of the trial court on the N2694.30 paid to the respondent as premium and on exhibit 1 (respondents letter to James Ngillari) when there were no grounds of appeal challenging the findings.
B. Was the lower court right in holding that the respondent successfully denied receiving the sum of N2694.30 from the James Ngillari?
C. Considering the pleadings and evidence, was there a valid contract of insurance before the demise of James Ngillari between the parties?
FACTS:
A. The plaintiff is the administrator of the estates of one James Ngillari, who passed on intestate in Maiduguri on 17th of August, 1985. The defendant is a corporate body engaged in insurance businesses with its head office in Lagos with branches all over the country including Maiduguri.
B. On 1st March 1984, the defendants agent in Maiduguri, S.A Onuh, in the course of his duties as such agent approached James Ngillari in the plaintiffs office. In the presence of the plaintiff, the agent advised James Ngillari to take out a combined endowment life insurance policy with the defendant. Both the agent and plaintiff assisted James Ngillari to complete the defendants proposal form which the agent brought along with him. James Ngillari at the request of the agent also submitted a typewritten additional statement which together with the duly complete proposal form were handed over to the agent. He read them over and after satisfying himself as to their contents, he demanded a sum of N499.05 from James Ngillari as premium. James Ngillari was short on funds and it was the plaintiff who issued his personal cheque for the amount in favor of the defendant. James Ngillari was scheduled to attend a course at the college of pharmacy at Yaba, Lagos and had before then arranged with his bankers to have his salary paid to him over there. James Ngillari and the agent therefore both agreed that James Ngillari should make a further payment of N2694.30 being the total premiums payable by James Ngillari up to the end of November 1985 when James Ngillari was expected to have returned to Maiduguri.
On the following day James Ngillari paid this additional sum to the agent. The agent acknowledged receipt on a plain typewritten sheet of paper duly signed by him (exhibit D). The agent undertook to bring an official receipt for all the monies collected from James Ngillari together with the insurance policy certificate in three days time, when according to him the cheque issued by the plaintiff would have been honored or cleared. Neither the official receipt nor the insurance policy certificate was ever received by the defendant or its agent. That James Ngillari at all material times believed the agent to be the defendants agent whose duty was to prospect for clients for the defendant and James Ngillari dealt with the agent as such. That the agent suggested that James Ngillari agreed, that the he should take out of a life insurance policy of 30 years with effect from 1st march 1984. That should James Ngillari pass on before the maturity date of 2014, the defendant would pay his estate the benefit of N50,000 with profit and should he survive to maturity date, the said sum will be paid to him with profits.
C. After payment of premium as stated above to the agent, the plaintiff and James Ngillari did not hear anything again either from the agent or defendant until 29th november 1984 when a letter was addressed to James Ngillari in care of the plaintiffs office putting James Ngillari on notice that the agent SA Onuh was no longer in employment of the defendant and that in future James Ngillari should deal his premium directly to the defendants office in Maiduguri. James Ngillari sent a reply on 15th december 1984 informing the defendant that he had already in fact paid his premium up to and including december 1985 to the agent and that he was still awaiting official receipts and the insurance policy certificate as well.
As stated above James Ngillari passed on intestate on 17th august 1985 and during the currency of the contract of insurance between him and the defendant. The plaintiff notified the defendant. The defendant in a letter dated 21st april 1986 denied any contractual relationships with James Ngillari and have failed to pay the sum of N50,000 or any part thereof accruable to the estate of James Ngillari under the said contract of insurance. The plaintiff therefore went to court claiming some relief. The plaintiff testified for himself while two witnesses testified for and on behalf of the defendant thereafter counsel addressed the court. In a reserved and well considered judgment the learned trial judge Ogunbiyi J held that the plaintiff proved his claims against the defendant:
1. Dissatisfied with the judgment of the high court, the defendant appealed to the court of appeal Jos judicial division. The court of appeal in its own judgment allowed the appeal in part.
2. Aggrieved by the decision of the court of appeal, the plaintiff (appellant) has now appealed to the supreme court.
HELD (unanimously allowing appeal)
A. On when proposal form for an insurance is made:
"On the facts before the court one cannot escape the conclusion that all elements of the valid contract were present in the case. James Ngillari made his proposal when he completed the application form on 1st march 1984. He also gave an additional statement, the respondents agent read them and after satisfying himself demanded payment of the first premium of N499.03 which James Ngillari immediately paid. In addition, on 2nd march 1984 another premium of N2694.30 was paid up to and including december 1985. I must stress here that the contract of insurance like any other contract is created where there has been unqualified acceptance by one arty of an offer made by another as in this case."
B. On evidence led on an unpleaded issue:
There was no indication from the agent that the insurance contract was subject to any approval of the respondent. As this was never pleaded any evidence thereon went to no issue. It should also be remembered that the respondent even after 15th october 1984 still found it necessary to communicate with James Ngillari when on 29th november 1984 it warned James Ngillari not to deal with or pay further premium to their agent who had been dismissed but to deal directly with the respondents office in maiduguri. It knew James Ngillari to be its costumer. Under these circumstances, the learned trial judge must be right.
C. Per Kutigi JSC on time beign of the essence of an insurance contract:
"The respondent received the offer from James Ngillari in his office in Lagos on 21st march 1984 and did not deem it necessary to write exhibit 1 until 15th october, seven months after! I do not think I need any authority to say that the time is the essence of an insurance contract. I clearly find no merit in the defense raised by the respondent."D. On whether there was a valid contract of life insurance in this instant case:
The learned trial judge was certainly right for holding as she did, that there was a valid contract of life insurance between both parties. The learned authors of halsbury's laws of england 4th edition dealing with the general principles of non marine insurance said in these paragraphs;
"A contract of insurance like any other contract is created where there has been an unqualified acceptance of one party of an offer made by the other. So as long as the matter is still under negotiation, there is no contract although it is open to the parties, pending conclusion of the negotiations to enter into an interim contract of a limited nature"
E. Per Kutigi JSC on the prerequisites of a valid contract of life insurance:
"I find no substance in the contention of the respondent that for there to be a valid insurance contract in this case there ought to be a formal letter of acceptance or a formal policy of insurance addressed. I should repeat again that the application or the proposal form which was accepted by the agent without any qualification was sufficient to have completed the insurance contract. Conclusion was even further fortified when the agent demanded payment and accepted premium without qualification either. I must repeat here that it was never the case of the respondents on the pleadings that their agents had no power or authority to accept on his behalf any offer for insurance or premium at all."
F. Per Belgore JSC on the effect of part payment or non payment of premium in a contract of insurance:
"There is no rule of insurance law which makes a contract invalid simply because not all premium is paid or that no premium was paid at all. What is important is that there is a contract of insurance, in cases however where the insurer demands payment of premium before the insurance contract can become operative, there is a valid exception to the general principle explained earlier. In this case James Ngillari insured relied on the respondents agent, filled the form and paid the premium. In life insurance, it is usual for the insurers to intimate that they are not bound till the premium is paid and the insurance policy is used. Once the rate of premium is fixed and the insured has paid the sum after the advice of the insurers agent, a valid contract of insurance has been completed. The agent is presumed to have not only the express authority bestowed upon him by the principal but also implied the further authority to do all things necessary in the ordinary course of selling insurance policy by making sure that he presented correctly the terms and conditions of the insurance before accepting payment from the insured."
G. On the consequence of insufficient denial or traverse in pleading:
On the pleading, it is clear from the respondents statement of defense wherein it has averred that "the defendant is not in position to admit or deny the statement claim" amounts to insufficient denial or insufficient transverse to put the matter thus denied in issue. The court has also decided in a number of cases, thus from the onset the learned trial judge would have been right to dis countenance or to have struck out the pleading in point A. Of the respondents statement of defense.
H. On when an appellate court can intervene to set aside trials courts decision:
On when the totally of the evidence, oral and documented which the trial courts evaluated ( having seen, heard and observed the demeanor of the witnesses) an appeal court can only intervene to set the decision arrived at aside when and only when the trial courts fail to make good use of the advantage it had, particularly in a case where credibility is not involved. In the case in hand, the court of appeal appears clearly not to be on firm ground when on appeal, it held without re hearing the entire case and dispassionately weighing the case of both sides. Thus the court was palpably wrong.
I. On the necessity for an appellate court to refrain form setting aside a trial courts specific findings of fact:
Where a court of trial which saw and heard the witnesses has come to a specific finding of fact on the evidence and issues before it, an appellate court which had no similar opportunity should refrain from coming to different findings unless it can show that the conclusion could not follow from the evidence before it. It is also an established principle that the court of appeal, will not substitute its own findings with those of the trial courts and although evaluation of evidence and findings of fact are matters within the exclusive province of the trial court, an appellate court will only interfere when they are found to be pervasive and misapprehensive of the facts. In the instant case, there appears to be a full comprehensive evaluation on the part of the trial court by none of the court of appeal the re heard the case on appeal, this court sitting on a further appeal will not shirk in its responsibility to set aside the judgment of the court below to standing.
J. On whereas the court of appeal was correct to hold that there was no valid insurance contract in this instant case:
The learned justices of the courts below were therefore clearly wrong to have held that there was no valid insurance contract. In McGllivray & Parkington on insurance law, 6th edition page 86 the learned authors said
"There is no rule of insurance law that there can be no binding contract of insurance until the premium has been actually paid or the policy has been issued. Once the terms of the insurance have been agreed upon by the parties, there is a prima facie binding contract of insurance and the insured is obliged to pay a premium as agreed while the insurers for their part must deliver an insurance policy containing the agreed terms."
In this case, the respondent knew that there was a valid and subsisting contract of insurance between him and the plaintiff.
K. On supreme court holdings in an earlier case regarding the bindingness on the parties of the proposal form in a contract of insurance:
The court held that the proposal form is part of the contractual relationship notwithstanding the fact that the insurer has not issued a policy to be insured. The court below abysmally misconceived the case and its judgment cannot be allowed to stand.
L. On whether there was a valid contract of insurance between the parties before the deceased passed away:
The preponderance of evidence, oral or documented, decides cases as well as circumstances of the instant case points irresistibly to a positive answer. The judge said;
"From the moment the proposal was made, accepted and the demanded premium paid, a valid contract of insurance existed between the plaintiff and the defendant"
M. On whether exhibit F in this instant case terminated the existing contract of insurance:
The circumstances in which the proposal of insurance (exhibit B), duplicate additional statement (exhibit C), type written receipt issued on behalf of respondent (exhibit D) came into being (not withstanding exhibit I- the letter requesting James Ngillari to submit an x-ray and other health forms which appellant denied as having been received by him) the respondent from the pleading or asserting otherwise than that it is disclosed principal of Mr SA Onuh, their agent and that the parties were ad idem on their contractual relationships and obligations. It is immaterial that by exhibit E, a belated letter of termination of the appointment of Mr SA Onuh, which also contained a purported warning given by the respondent that any person dealing with that agent did so at his own risk, did not terminate the contract of insurance with the third party, it having already been made and binding between parties.
N. On the prerequisites of a valid contract of insurance:
There can be no doubt that an ordinary contract of insurance, like any other contract is created where there has been an unqualified acceptance by one party of an offer made by the other party. So long as the matter is still under negotiation, it is beyond argument that there would not have reached any consensus ad idem between the parties to the transaction hence there would have been no concluded contract as at such a stage.
To constitute a contract of insurance, there must be a clear offer by one party by which there must equally be an unqualified acceptance by the other party. A prima facie binding insurance proposal comes into existence the moment an insurance proposal in the normal form is accepted unequivocally without qualification by the insurers. There is no contract as long as the matter is under negotiation. Such proposal form generally sets out the precise terms, upon which the insurers are prepared to contract such terms, once accepted by the proposer and submitted to the insurers are binding on the parties. Thus by completing and returning the proposal form to the insurers, the proposer commits himself to those terms and undertakes to pay whatever the insurers may charge as premium.
O. On the consequence of the acceptance by the insurer of an insurance proposal form:
Where a proposal form containing the material terms upon which the insurers are prepared to contract is accepted unconditionally, the contract is deemed complete and the insurers are bound to issue, and the proposer to accept, a policy of insurance according to the terms stipulated in the insurance proposal form.
P. On the difference between the contract of non marine insurance and a contract of marine insurance:
Whereas in marine insurance contracts such as the one under consideration, the usual practice is for the proposer to complete, sign and return the proposal form to the insurers, there is no legal necessity on his part to complete any proposal form before a valid enforceable contract may arise. It seems that the law is so far as non marine insurance transactions are concerned, is that even an oral contract of such insurance is valid as long as it is reasonably clear that there is a definite intention on the part of the parties to enter into such a contract provided, however, the parties concerned are in consensus ad idem on the fundamental essentials of such insurance contract.
Q. Per Iguh JSC on whether a parol contract of non marine insurance is binding:
"It seems to me that even a parole contract of non marine insurance may be binding and enforceable as long as all the fundamental essentials of such contract are present. Consequently, any document which fully contains the fundamental essentials or terms of an insurance contract may be treated as an insurance policy particularly as there is no requirement of a statutory or formal document to create a contract of insurance. Where, therefore a contract of insurance is created by any binding means that, to all intents and purposes, must be regarded ad the insurance policy. "
R. On the general law in relation to contracts of non marine insurance:
On the general law in relation to contracts of non marine insurance, it has been stated with approval that there is no rule of law stipulating that there can be no valid and enforceable contract of insurance until the premium has been actually paid or the policy has been used.
S. On whether the terms in the proposal form constitute part of the contractual relationship between parties in an insurance contract:
Once the contract of insurance is established, the terms in the proposal form constitutes part of the contractual relationship between the parties and it will make no difference that the insurer has not yet issued an insurance policy to the insured.
T. On whether in this case, a valid and enforceable contract of insurance was entered into between the parties:
There can be no doubt whatever that on the facts of this case, a valid and enforceable contract of insurance was entered into between the late James Ngillari and the respondent. This insurance contract was concluded when the respondent's proposal form with the terms of the insurance contract were unconditionally accepted, signed and returned to the respondent's agent who there upon demanded and collected the first premium of N499.05 and the second installment of N2694.30 to cover the premium from 1st march, 1984 to the end of december, 1985. The court of appeal with profound respect was therefore in grave error.
U. Supreme court holding in this case per Kutigi JSC:
"This appeal is therefore clearly meritorious. I accordingly allow it. The judgment of the court of appeal together with its order for costs are set aside while the judgment of the trial high court Maiduguri, delivered on the 12th of november 1987 is hereby restored. The plaintiff/appellant is awarded costs of this appeal which is assessed at ten thousand naira (N10,000) only."
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