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Insurance—Fire—Valued policy—Mansion damaged by fire—Notreinstated—Measure of indemnity—Principles of marine insurancelaw—Applicability—Marine Insurance Act, 1906 (6 Edw. 7, c. 41),s. 27, sub-s. 3 ; s. 69, sub-s. 3 ; s. 71, sub-s. 3.
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2K B
KING S BENCH DIVISION.
755
two cases. The result is that the defendant, through his
act of k indness in allowing this la dy to use the coal shed,
is probably now a wiser man, and I may perhaps regret that
the decision in this case may tend to discourage landlords
from acts of kindness to their tena nts . B ut ther e it is : tha t
is the law.
In this particular case we are told that the landlord, since
the hearing before the county court judge, has in fact taken
down the shed. I do not th ink it w ould be right in a case of
this kindrather a trivial sort of quarrelto make a manda-
tor y injunction compelling him to restore this shed. If he
had in fact taken down the shed before the hearing in the
cou nty court, the position might have been very different;
but he succeeded in the county court and he took down the
shed. I t is quite true th a t he did it at his peril, bu t I th ink
that in the circumstances of this case justice will be done by
awarding the plaintiffs the sum of
10I.
by wa y of damages.
SINGLETON
L .J. I agree.
Appeal allowed.
Solicitor for plaintiffs :
H. N. H. Bransom.
Solicitors for defendant : Dale & Newbery, Feltham.
A. W. G.
C. A.
1949
WRIGHT
v.
M A C A D A M .
Tucker, L.J.
ELCOCK AND OTHERS
V.
THOMSON.
Insurance
Fire
Valued policy
Mansion damaged by fire
Not
reinstated
Measure of indemnity
Principles of marine insurance
law
Applicability
Marine Insurance Act,
1906 (6
Edw.
7,
c.
41) ,
s. 27,
sub-s.
3 ; s. 69 ,
sub-s.
3 ; s. 7 1,
sub-s.
3 .
A mansion was insured against fire, and by a schedule to the
policy its value was agreed at 100,000/. (or 106,850/., including
certain offices and adjoining buildings). The mansion was
damaged by fire. Its actual value before the fire was 18,000/.,
and its actual value after the fire was 12,600/. (the depreciation
in value being 5,400/. in 18,000/.). The cost of rein statem ent
would have been some 40,000/., but the mansion was not in fact
reinstated:
1949
May 18, 19,
23. 24 ;
July
1.
Morris J.
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756 K I N G ' S B E N C H D I V I S I O N . [1949]
1949
Held
tha t in orde r to a ssess the amount to which the a ssured
were enti t led under the policy the percentage of ac tual deprecia t ion
ELCOCK result ing f rom th e f ire should be applied to th e agreed value , an d
THOMSON
th at th e assured were therefore enti t led to
5,400
l 8 o o o
X 1 06,850;., or 32,055?.
Quaere(i.) whether, had rein state ment been in fact effected,
underwriters would have been liable to pay the cost of it; or
(ii.) whether, had the cost of reinstatement been less than 32,055/.,
bu t it had no t in fact been effected, underw riters could limit their
liability to the cost of reinstatement.
ACTION.
By a Lloyd's fire policy dated November 22, 1940, property
specified in a schedule attached to the policy was insured
again st loss or dam age by fire or lightning . Ite m (1.)
of the schedule was a mansion at Easthampstead Park,
W okingham , and against it, in a column headed sum insured ,
was set the figure 100,000/. Item s (2.) to (5.) included v arious
offices and adjoining buildings, and against those items (in
the columns headed sum insured ) were set various figures
totalling 6,850/. A t the end of the schedule it was prov ided :
The sum set opposite each item in this specification h as been
accepted by the underwriters and the assured as being
the true value of the pro per ty insured and in the eve nt
of a loss the said pr operty will be assumed to be of such
value and will be assessed accordin gly.
On May 16, 1947, during the currency of the insurance,
the mansion was damaged by fire. The assured claimed
against the underw riters in respect of th at dam age. The
underwriters agreed that the assured were entitled to recover,
but the amount to which they were entitled was disputed.
The mansion was not reinstated.
The present action was a representative action brought
against one of the underwriters.
Scott Cairns K.C. andMendelfor the assured . The principle
of indem nity does not a pply stric tly to valued policies : the
agreed valuation must not be ignored : Lewis v. Rucker (1) ;
Irving
v.
Manning
(2) ;
North of England Iron Steam ship
Insurance Associationv.Arm strong (3); M arine Insurance Act,
(1) (1761) 2 B ur r. 1167. (3) (1870) L . R . 5 Q. B . 244.
(2) (1847) 1 H . L . C. 287 .
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2K B
KING S BENCH DIVISIO N.
757
1906, s. 27, sub-s. 3 (1). City Taylors, Li. v. Evans (2)
is the only reported case regarding a valued policy of fire
insurance. Th at decision shows th at the agreed valuation
must be accepted in fire insurance as well as in marine
insurance.
The actual value of the mansion in the present case must
be tak en to be th e agreed valuatio n, v iz., ioo.oooZ. The loss
to the assured m ust be tak en to be the difference between
that amount and the value of the mansion after the fire,
and the assured are entitled to recover th at difference.
There is no analogy to the present case in marine insurance
law. In
Lewis
v.
Rucker
(3) a verdict of a jury was taken
a s to the rule which ough t to be applied in assessing dam age
to cargo und er a valued policy. The correct approa ch in
the present case is to construe the actual words of the contract
of insurance unhampered by any previous decisions.
Alternatively the reasoning of Lord Mansfield C.J. in
Lewis v. Rucker (3) is applicable to the present case, and the
measure of indem nity stipulated by s. 71 , sub-s. 3, of the
Marine Insurance Act for damage to cargo insured by a valued
1949
ELCOCK
u.
THOMSON.
(1) The M arine Insu rance Act,
1906,
s. 27, sub-s. 1 : A policy
may be either valued or un-
valu ed. Sub-s. 2 : A valued
policy is a policy which specifies
the agreed value of the subject-
m atte r insured. Sub-s. 3 :
Subject to the provisions of this
Act, and in the absence of fraud,
th e value fixed by th e policy is,
as between the insurer and
assured, conclusive of the in-
surable value of the subject
intended to be insured, wh ether
the loss be total or partial.
Section 69 : W here a ship is
damaged, but is not totally
lost, the measure of indem nity,
subject to any express pro-
vision in the policy, is as
follows :
. . . . (3.) W here th e ship
has no t been repaired, and has
no t been sold in her dam aged
sta te during the risk, th e assured
is entitle d to be indemnified for
the reasonable depreciation aris-
ing from the unrepaired damage,
bu t no t exceeding the reasonable
cost of repairing such dam-
age . . . .
Section 71 : W here there is a
partial loss of goods, mer-
chandise,
or other moveables,
the measure of indemnity, sub-
ject to any express provision in
the policy, is as follows:
. . . . (3.) W here th e whole or
any part of the goods or mer-
chandise insured has been de-
livered damaged at its destina-
tion, the measure of indemnity
is such proportion of the sum
fixed by the policy in the case of
a valued policy, or of the in-
surable value in the case of an
unvalued policy, as the differ-
ence between the gross sound
and damaged values at the place
of arrival bears to the gross
sound value.
(2) (1921) 38 T. L. R. 230.
(3) 2 Burr. 1167.
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758 KING 'S BENCH DIVISION. [ 949]
1949 policy ought to be app lied. The ana logy of a building to
goods is closer than the analogy of a building to a ship.
v. Ev en , however, if the analogy to a ship be chosen, s. 69, sub-s. 3,
HOMSON.
0
^ .^g Marine Insurance Act must be construed as being
limited by s. 27, sub-s. 3. Th at sub-section provides, th at the
agreed valua tion m ust be tak en to be conclusive wh ether
the loss be tota l or pa rtia l. [Steamship Balmoral Co.,
Ld.
v.
Marten
(1) and
Pitman
v.
Universal Marine Insurance
Co. (2) were the n referred to.] W hichever analogy is chosen,,
therefore, th e agreed v aluation m ust not be ignored, and , if
marine principles are to be applied at all, the percentage of
actual depreciation resulting from the fire in the present case-
must be applied to the agreed value.
If neither of those methods of calculating the measure of
indemnity are applicable the assured is entitled to the cost
of reinstatement.
Havers K.C.
and
Gahan
for the underw riters. The agreed
valuation should be ignored in the present case. I t on ly
applies in the case of a to ta l loss. The assured are therefore
entitled to the diffeience between the actual value of the-
mansion before the fire and its value after the fire.
The principles of marine insurance law are applicable to
the present case : Castellain v. Preston (3) ; City Taylors Ld.
v. Evans (4). Th e analogy applicable is th a t of a ship. A
building is more like a ship tha n goods. Like a ship it is
usually capable of being repaired. The measure of indem nity
laid down by s. 69, sub-s. 3, of the Marine Insurance Act,.
1906,
m ust therefore be applied. No distinction is drawn
in th a t sub-section, such as the d istinction in s. 71 , sub-s. 3,
between valued and unva lued policies. It m ust therefore
have been the intention of the legislature for s. 69, sub-s. 3,
to apply in the case of a valued policy. Section 27, sub-s . 3,.
begins : Subject to th e provisions of this A ct, and it is
clearly subject, therefore, to s. 69, sub-s. 3.
Alterna tively, if the -agreed value m ust be take n into
consideration, the correct percentage to apply to the agreed
value is the propoition which the cost of reinstatement bears
to the cost of building a new mansion.
Scott Cairns K.C. replied.
Cur. adv. vu lt.
(1) [1902] A . C. 5 11 . (3) (1883) Q- B . D . 38 0.
(2) (1882) 9 Q. B . D . 192. (4) 38 T. L. R . 23 0.
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2 K . B . K I N G ' S B E N C H D I V I S I O N . 759
July 1. M O R R I S J. In orde r to ad jud ica te up on th e 1949
present claim it is necessary to determine what is the sum
E LCOCK
appropriate to be paid under a valued policy of insurance
v.
in respect of damage to a mansion caused by fire. THOMSON.
The cubic content of the whole mansion was 990,260 cubic
feet. The cubic con tent of the portion of the mansion w hich
was burnt out was 209,000 cubic feet, representing just over
21 per cen t, of th e who le. B u t I am satisfied th a t th e mea sure
of the depreciation in value of the mansion wluch was caused
by the fire cannot properly be determined by having regard
merely to the proportion to the whole structure of the part
which was burnt out .
If reinstatement of the damage at a date a few months
after the fire had been possible the cost of such reinstatement
would have been 40,252/. , excluding architects ' and surveyors'
fees, or 43,252^., includ ing such fees. If a new man sion ha d
been erected at about such date similar to the mansion in
question as it stood before the fire, the cost of erection would
have been 205,000/.
(His Lordship then considered the evidence as to the actual
value of the mansion before and after the fire, and continued :)
The result is that in my judgment the actual value of the
m an sio n before the fire wa s i8,oooZ. an d its valu e after th e
fire was 12,600/.
Mr. Scott Cairns presented alternative formulations of
claim on behalf of the assured. He subm itte d (i) th a t t he
assured were entit led to recover the difference between the
amount of 100,000/. and whatever amount was found by
the court to represent the value of the mansion after the fire.
Alternatively he submitted (i i) that the actual value of the
mansion before the fire should be assessed and also the actual
value after the fire, and that the percentage of depreciation
should then be applied to the agreed or conventional value
of 100,000/. so as to produce a resulting figure which would
be th e am ou nt recovera ble. As a further possible alte rna tive
method of claiming he submitted (i i i) that the assured were
entit led to recover a sum representing the cost of reinstatement
of th e ma nsion . M r. Sco tt Cairns did no t, howe ver, pu t th a t
basis forward very strongly.
On behalf of the underwriter, Mr. Havers' main submission
was that the principles which would apply if there were a
claim under a valued policy of marine insurance on a ship
which was damaged were the principles which could and
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7
KING S BENCH DIVISIO N.
[1949]
1949
ELCOCK
T H O M S O N .
Mom's J.
should be applied in adjudicating upon the present claim.
He submitted that the interpretation of s. 69, sub-s. 3, of the
Marine Insurance Act, 1906, was that, if a ship covered by a
valued policy was damaged but not lost, and if it was not
repaired, recovery under the policy should be limited to a sum
representing the actual depreciation in value caused by the
casualty.
As an alternative submission he contended that recovery
should be limited to that percentage of the agreed value of
100,000/. as the cost of reinstatement about the date of the
fire bore to the cost of the construction of a new mansion
at th at da te. Thus he contended th at the cost of reinstatem ent
40,252/., represented 19*635 per cent, of 205,000/., the cost
at about the date of the fire of the construction of a new
mansion similar to the one which existed, and that the sum
to be awarded should therefore be limited to I9 635 per cent,
of 100,000/.
Mr. Scott Cairns submitted that there was no reason for
preferring the analogy of the rules governing a policy on a
ship to that of the rules relating to goods, and he referred
to the reasoning in
Lewis
v.
Rucker
(1). A lterna tively he
submitted that if, contrary to his contention, s. 69, sub-s. 3,
of the Marine Insurance Act could be regarded as directing
the way to the principle applicable in the present case, that
sub-section ought not to be regarded without reference also
to s. 27, sub-s. 3.
I pass now to consider wha t is the basis upon which the claim
should be allowed.
When parties have agreed upon a valuation then, in the
absence of fraud or of circumstances invalidating their
agreement, they have made an arrangement by which for
be tte r or for worse the y are boun d. As Atk in L .J. po inted
out in City Ta ylors, Ld. v . Evans (2) ' I n a va lued po l i cy ,
w hat is valued is the subje ct-m atter of the insurance, and
not the am ount of the loss. He pointed out th at in marine
insurance the position is made clear by the Marine Insurance
Ac t, 1906, s. 27, sub-ss. 2 and 3. It w as common gro und be -
tween the par ties th at the policy in th e present case was properly
to be regard ed as a value d policy. W hen losses occur after
parties to contracts of insurance have agreed upon values
then in some cases advantage may occur to the insured while
in others ad va nta ge may occur to the insurer. (SeeNorth of
(1) 2 B u rr . 1167. (2) 38 T. L . R . 230, 234.
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2K. B.
KING'S BENCH DIVISION. 761
England Iron Steamship Insurance Association
v.
Armstrong
(1).)
In
Irving
v.
Manning
(2) the assistance of the judges was
sought by the House of Lords, and Patteson J., delivering
the opinion of the judges, said in reference to a valued policy
on a ship (3) : By the terms of it, the ship, etc., for so much
as concerns the assured by agreementbetween the assured
and assurers, are and shall be rated and valued at 17,500^.,
and the question turns upon the meaning of these words.
Do they, as contended for by the plaintiff in error, amount
t o an agreement that for all purposes connected with this
voyage, at least for the purpose of ascertaining whether
there is a total loss or not, the ship should be taken to be
of that value, so that when a question arises whether it
would be worth while to repair, it must be assumed that
the vessel would be worth that sum when repaired ? Or
do they mean only, that for the purpose of ascertaining the
amount of compensation to be paid to the assured, when
the loss has happened, the value shall be taken to be the sum
fixed, in order to avoid disputes as to the quantum of the
assured's interest ? We are all of opinion that the latter
is the true meaning ; and this is consistent with the language
' 'of the policy and with every case that has been decided upon
valued policies.
Patteson J. said further (4) : A policy of insurance is
not a perfect contract of indemnity. It must be taken
with this qualification, that the parties may agree beforehand
in estimating the value of the subject assured, by way of
liquidated damages, as indeed they may in any other contract
to indemnify.
Mr. Havers did not dispute that if the mansion had been
entirely destroyed by fire the agreed valuation would have
become the measure of the indemnity to be paid by under-
writers. But he argued that as the mansion was only
damaged the agreed valuation should not enter into the
assessment of the amount payable by underwriters. His
argument was in the main based upon a contention that
under s. 69, sub-s. 3, of the Marine Insurance Act the amount
payable under a policy of marine insurance where a ship
was damaged and had not been repaired, nor sold in her
damaged state, would be the amount of the depreciation.
He submitted that, as there is no express mention of valued
(1) L. R. 5 Q. B. 244. (3)
Ibid
305.
1949
ELCOCK
T H O M S O N .
Morris
J.
(2) 1 H. L. C. 287.
(4) Ibid 307.
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762 K I N G ' S B E N C H D I V I S I O N . [1949]
1949 policies in s. 69, sub -s. 3, th e resu lt should follow th a t, in th e
E L C O C K
case of a pa rtia l loss of a ship, pa ym en t und er a policy of
v. insurance should be m ade w ithout regard to an y agreed
THOMSON.
v a
i
u a
t j
o n
_ J
e
submitted that a fire policy being a contract
.Moms
j
of indemnity closely resembling a marine policy should be
similarly construed, and he relied upon passages in the
judgment in
Castellain
v.
Preston
(1) in support of his
contention that the two types of policy should be similarly
regarded.
In considering these conten tions, as M r. Scott Cairns pointed
out, it is first to be observed that the statutory provisions
of the Marine Insurance Act, 1906, do not apply to the present
case.
B ut , if those provisions are to be looked at in order
to seek guidance on principle, I am not prepared to accept
th e validity of M r. H av ers' contentions. Section 69, sub-s. 3,
of the Act uses the words is entitled to be indemnified
for the reasonable depre ciation. Those words do not fix
the mea sure of such indem nity. The y do no t lay it down
th a t the pa rties' agreed valua tion is to be ignored. Th ey
certainly do not provide that s. 27, sub-s. 3, of .the Act is to
be disregarded . Indem nification for reasonable dep reciation
must in my judgment take into account any agreed valuation.
Such agreed valuation is the corpus out of which depreciation
takes place and by reference to which the depreciation must
be measured. Furthe rm ore, in m y judgm ent, there is nothing
in s. 69, sub-s. 3, which is inconsistent with or which overrides
what was laid down in Pitman v. U niversal Marine Insurance
Co.
(2) and
Steamship Balmoral Co., Ld.
v.
M arten
(3). In
Pitman v. Universal Marine Insurance Co. (2), the view of
Lindley J., an d of the majo rity in the C ourt of Appeal, was th a t
if th e owner of a ship which is injured by perils insured ag ainst
does not repair the ship but sells her during the continuance of
the risk, he can recover from underwriters for the depreciation
in value of the ship, and can arrive at the measure of the
underwriters' liability by applying the proportion of deprecia-
tion caused by the casualty to th e value as agreed in the policy.
Lord Lindley said inSteamship Balmoral Co., Ld.v. Marten
(4): The notion prevalent at one time, and suppo rted by the
high auth ority of M r. Benecke, th at although the valuation
in a policy is conclusive in the case of a to ta l loss, yet th a t
in the case of a partial loss the valuation may be opened,
(1) n Q . B . D . 380 . (3) [1902] A . C. 51 1.
(2) 9 Q. B . D . 192. (4) Ib id . 52 1, 52 2.
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2 K . B . KING'S B E N C H
DIVISION.
763
has long been exploded The re are num erou s decisions 1949
shewing this to be th e case in valued policies on goods an d
~
E L C O C K
freight (the m ost recen t being
The Main
(1), and I am una ble
v.
to discover any reason for applying to ships a doctrine HQMSQN.
repudiated as unsound when applied to goods or freight. Morris
j
At the same time, I have not discovered any direct decision
on this poin t. The principle th a t a valua tion in a policy
on ships is to be rega rded in cases of pa rtia l loss was assum ed
to be correct inPitman v . Universal Marine Insurance C o.(2)
and was no t questioned on appe al. The owners, however,
contend tha t the underw riters have no concern with the
mode in which the am oun ts payab le for losses insured against
are arrived at. The owners say they are fully insured up
to a certain limit, and that if that limit is not exceeded
all losses insured again st m ust be fully pa id. Th is, m y
Lo rds, appears to me to ignore the difference between valued
policies, as und erstoo d in thi s coun try, and open policies,
and to be erroneous according to English law .
There appears to be no decided case which affords conclusive
authority in regard to the issues raised in the present action.
Some guidance in principle can however be derived from
the decisions in cases where insured ships have sustained
pa rtia l loss. In my judgm ent, on the facts of the pre sent
case, the assured are entitled to be indemnified in respect
of the depreciation which was caused by the fire, and in
quantifying such depreciation the insurable value of the
mansion as agreed by the parties cannot be set aside and
disregarded.
I observe that by the words at the end of the schedule
to the policy by which such agreement as to value is expressed
it is stipula ted th a t in the even t of loss th e pro per ty
will be assum ed to be of the value recorded and will be
assessed according ly. In the bod y of the policy the words
used are to insure from loss or da m ag e. I have considered
whether any significance is to be attached to the fact of the
use of th e word loss only at the end of the schedule, an d
whether it could be argued that the agreement as to value
was only to apply in the event of the destruction or loss of
an item as opposed to damage occurring to it. No such point
was however taken or argued, and I cannot imagine that any
significance attac hes to the use on y of th e word loss.
It would be strange and unnatural if an agreed value were
(1) [1894] P . 320. (2) 9 Q 3 . D. 192.
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7
6
4
KING S BENCH DIVISION. [1949]
ELCOCK
T H O MSO N .
1949 only to app ly in the event of com plete destruc tion an d no t
in the event of par tial destruction. The respective words
loss and dam age as used in the policy seem to be
synonym ous. It would not seem to be the case th at the word
Mnsj.
l o s s is only referable to complete destruction. A part
from this however the opening words of the provision, namely
th e words, The sum set opposite each item in this specification
has been accepted by the underwriters and the assured
as being the true value of the pro perty insured, appe ar to
contain agreement as to value irrespective of the meaning,
of th e word loss which is lat er used .
Although in the case of item (1.) in the schedule to the
insurance policy, namely the mansion, the actual value is
shown to have been far less than the agreed value, it must
have been the case that the agreed value of other items were
far below the ir ac tua l values in 1947. Th us, w ithout specifying
any particular item, a house whose agreed valuation was
2,000/. may very well in 1947 have actually been worth 6,oooZ.
If such a house had been totally destroyed underwriters
would only have been liable to pay 2,000/. If damage by
fire had resulted in a depreciation in actual value from 6,000/.
to 2,000/., and if ac tua l repa irs were not effected, un de rw riter s
would, I imagine, have contended that they were only liable
to pa y tw o-thirds of 2,000/., whereas on M r. Ha ve rs' contention
they would have been liable to pay more . If repairs were
actua lly done, and done in a reasonable way, and a t a reasonable
cost, it may be that the underwriters would be liable to pay
the cost of them up to the extent of their liability under the
policy. Fu rth er it may be tha t if repairs were not done,,
but could be done at a figure representing less than under-
writers' liability on the basis of depreciation, underwriters
could limit their liability to the lower figure. Th us if th e
agreed valuation of a house were 2,000/., and its actual value
were 1,000/., and if it were so damaged that its actual value
became 500/., but it could be repaired for 500/., it may be
th a t the underw riters' liability would have been 500/. As
the questions which I have posed do not call for present
determination, I express no final opinion in regard to them,
but I have considered it desirable to have them in mind when
exam ining and testing the submissions m ade to me . It
may well be that if 43,252/. had in fact been expended in
repairing the damage done, underwriters would have been
liable t.o pa y .th at am oun t. It is not, however, necessary
to express any concluded view in regard to that question.
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2K B
KING S BENCH DIVISION .
The result is that, in my judgment, the percentage of
actual depreciation resulting from the fire should be applied
to the agreed values as set out in the policy so as to arrive
at the am oun t recoverable. On m y findings the m ansion
was worth 18,000/. before the fire and 12,600/. after the fire.
There was, therefore, a depreciation of 5,400/. in 18,000/.,
or a depreciation of 3 in 10. By the mansion I mean the
entirety described in items (1.) to (5.) of the schedule which
together had an agreed value of 106,850/. The loss or dam age
which occurred to the assured was therefore three-tenths
of that figure, namely, 32,055/., and the defendant is liable
for his prop ortion of th at sum. There will be judgm en t
accordingly.
Judgm ent accordingly.
Solicitors for assured :
Upton, Britton and Lum b.
Solicitors for underwriters : Cham berlain & Co.
1949
ELCOCK
T H O M S O N .
Morris
J.
R. P . C.
GALLAGHER v. SH 1L C0C K 1949
Mar. 17, 25.
Sale of goods
Rights of unpaid seller Contract for sale of motor-
Finnemore j .
boat Deposit by buyer Buyer's default in completion Re-sale
by seller Wh ether operative as rescission of contractB uyer's
right to return of deposit
Sale of
oods
Act,
1893 (56
&
57
Viet,
c.71),ss.39. 4-
By s. 48, sub-s. 3, of th e Sale of Goods Act, 1893 : . . . . w here
the unpa id seller gives notice to the bu yer of his intention to
re-sell, and th e bu yer does not within a reasonable tim e
pay . . . . the price, the unpaid seller may re-sell the goods
and claim damages.
By sub-s. 4 : Wh ere the seller expressly reserves a right
of re-sale in case the b uyer should make default, and on th e
'.' buy er mak ing de fault, re-sells the goods, the original con trac t
of sale is the reb y rescinded . . . .
Having regard to the express provision for rescission in s. 48,
sub-s.
4, of the Act of 1893, where the righ t of re-sale has been
reserved in the contract of sale, the true construction of sub-s. 3
is tha t, where an unpaid seller, in the absence of such a reservation,
exercises his right of re-sale under sub-s. 3, that exercise does not
V O L .
II . 1949. 3 E 2
Recommended