#6834 - North British And Mercantile Insurance Company V. London Liverpool And Globe Insurance Company - Restitution of Unjust Enrichment BCL

North British and Mercantile Insurance Company v. London, Liverpool and Globe Insurance Company

Facts

By floating policies of insurance effected by Barnett & Co., wharfingers, they insured against loss or damage by fire, in the sums named, grain and seed, the assured’s own or on commission, for which they were responsible, subject to conditions of average, and to this condition, that “if at the time of any loss or damage by fire happening to any property hereby insured, there be any other subsisting insurance or insurances, whether effected by the insured or by any other person, covering the same property, the company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage.” While these policies were subsisting a fire destroyed a quantity of grain stored with Barnett & Co., part of which belonged to Rodonachi & Co., who had also effected policies, called merchants' policies, on the grain thus destroyed, including also grain stored elsewhere, which policies contained the like conditions as the wharfingers' policies. Barnett & Co. were paid in full by the several insurance companies.

The bill, which was filed by the North British and Mercantile Insurance Company as grantors of one of the merchants' policies, alleged that they were under no liability in respect of such policy on the ground that Barnett & Co. must be taken to have indemnified Rodocanachi & Co. in full for the loss of their grain; and that, even if they were bound to pay to Rodocanachi & Co. in the first instance the amount of their loss, they would become entitled to the benefit of all rights of action against Barnett & Co. in respect of such loss, and thus to recover from Barnett & Co. all that they might pay to Rodocanachi & Co.

Issue

Whether, a fire having occurred, and a great loss having been sustained, the companies who are liable on the merchants' policies are liable to contribute anything to the amount of that loss, which the wharfingers' policies alone would be more than sufficient to cover.

Holding

James LJ

Under these circumstances, it seems to me utterly impossible to say that there could have been any contribution. Contribution exists where the thing is done by the same person against the same loss, and to prevent a man first of all from recovering more than the whole loss, or if he recovers the whole loss from one which he could have recovered from the other, then to make the parties contribute rateably. But that only applies where there is the same person insuring the same interest with more than one office.

So here, Rodocanachi and his insurance office were one, and Barnett and his insurance office were also one, and the rights are to be determined as between Rodocanachi and his office on the one side, and Barnett and his office on the other side.

Barnett being liable to make good the loss to Rodocanachi, and if the insurance office pays Rodocanachi, being liable through Rodocanachi's contract to make it good to the insurance office, it is utterly impossible to say that the language of the contract between Barnett and his insurance office can deprive Rodocanachi's insurance office of the right which they acquired, or make them liable to contribute anything which they were not otherwise liable as between themselves and Rodocanachi and Barnett.

Mellish LJ

I think if the same person in respect of the same right insures in two offices, there is no reason why they should not contribute in equal proportions in respect of a fire policy as they would in the case of a marine policy. The rule is perfectly established in the case of a marine policy that contribution only applies where it is an insurance by the same person having the same rights, and does not apply where different person insure in respect of different rights.

But then there may be cases where, although two different persons insured in respect of different rights, each of them can recover the whole, as in the case of a mortgagor and mortgagee. But wherever that is the case it will necessarily follow that one of these two has a remedy over against the other, because the same property cannot in value belong at...