Bala James Ngillari v. National Insurance Corporation of Nigeria

There is no rule of insurance law which makes a contract invalid simply because not all the premium has been paid or that no premium has been paid at all. What is important is that there is a contract of insurance. In cases however whereby the insurer demands payment of premium before the contract can become operative, that is a valid exception to the general principle I explained earlier. In the instant case the deceased insured relied on the respondent’s agent, filled the form and paid the premium. In life insurance it is usual for the insurers to intimate that they are not bound until the premium is paid and the policy is issued. Once the rate of premium is fixed and the insured has paid the sum after the advice of the insurer’s agent. a valid contract of insurance has been completed. The agent is presumed to have not only the express authority bestowed upon him by his principal but also impliedly 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 of premium from the insured. The appellant’s evidence of how the respondent’s agent approached the deceased and convinced him to insure has not been controverted. The notice that the agent no longer represented the respondent obviously did not vitiate all he did before the notice. There subsisted a valid insurance contract between the respondent and the insured deceased on which the appellant as personal representative can sue.
For the foregoing reasons and the fuller reasons in the judgment of my learned brother Kutigi, J.S.C., I also allow

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this appeal as deserving in merit. I set aside the judgment of the Court of Appeal and restore the judgment of the trial High Court of Borno State. I award the same costs as in Kutigi, J.S.C.’s judgment.

I agree entirely with the judgment just delivered by my learned brother, Kutigi JSC. I have nothing more to add. For the reasons given by him in this said judgment I, too allow the appeal and abide by all the consequential orders made by Kutigi J..S.C.

I had a preview of the judgment just delivered by my learned brother Kutigi. J.S.C. before now and I agree with him that his appeal is meritorious and ought therefore to succeed.
The facts of the case have been ably set out in the leading judgment of my learned brother to need any further re-stating. Suffice it to say that being desirous of adding a word or two of mine to the three issues considered therein, I would go about doing so by treating issues I and 2 together and then issue 3 separately, as follows:-
Issues I and 2
These two issues which can and ought to be considered together complain thus:
“1. Whether the learned Justices of the Court of Appeal were right in setting aside the findings of the trial court on the N2,694.30 paid to the respondent as premium and on Exhibit 1 (the respondent’s letter to the deceased) when there were no grounds of appeal challenging these findings.

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2. Was the lower court right in holding that the respondent successfully denied receiving the sum of N2,694.30 from the deceased?”
   Pertinent and of significance to these issues are paragraphs 9-13 of the appellant’s amended statement of claim wherein he averred:
   “9. It was further agreed upon between the deceased and the defendants agent that as the deceased was scheduled to attend a course at the College of Pharmacy, Yaba, Lagos and had already prior to  meeting the defendants agent arranged with his bankers to have his salaries and other emoluments paid to him in Lagos, the deceased will the following day make a further payment of N2,694.30 in cash to cover the total premium payable by the deceased up to December, 1985 when the deceased was expected to complete his course.
   10. The plaintiff pleads that on the 2nd March, 1984, the deceased paid the further sum of N2,694.30 to the defendants agent in cash, which amount the defendants agent acknowledged on a plain type written sheet of paper duly signed by him on the said 2nd to bring an official receipt covering all monies received from the deceased in three days time together with the policy certificate when according to him, the cheques issued by the plaintiff will have been cleared.- The plaintiff avers that to the best of his knowledge, neither the official receipt referred to above nor the policy certificate was ever received from the defendants. The receipt referred to above is hereby pleaded and will be founded upon at the trial of this suit.
   12. The plaintiff avers that neither has the defendants

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returned all the monies received from the deceased as premium or part thereof.
13. The plaintiff avers that at all material times to this action, the deceased believed that Mr. S. A. Onuh was an agent of the defendants acting within the scope of his authority.”
For its defence the respondent pleaded in answer to the above averments in paragraphs 4 and 5 of the statement of defence as follows:-
“4. The defendant denies paragraphs 9 and 10 of the statement of claim and avers that no such payments has been made to the defendant as payment of the deceased premium.
5. The defendant is not in a position to admit or deny paragraphs 11, 12 and 13 of the statement of claim and will put the plaintiff to the strictest proof thereof”
On the pleadings, it is clear from the respondent’s statement of defence wherein it has averred that “The defendant is not in a position to admit or deny paragraphs 11, 12 and 13 of the statement of claim” amounts to insufficient denial or insufficient traverse to put the matter thus denied in issue. This court has so decided in a number of cases. See for instance Lewis & Peat ( N.R.I.) Ltd. v. Akhimien (1976) 7 SC. 157 at 167; Akintola v. Solano (1986) 2 NWLR (Pt. 24) 598 at 621 and Otapo v. Sunmonu (1987) 2 NWLR (Pt. 58) 587 at 622. See also Ajao  v. Alao (1986) 5 NWLR (Pt.45) 802. Thus, from the onset, the learned trial Judge would have been right to discountenance and or to have struck out the pleading in paragraph 5 of the respondent’s statement of defence (ibid). Be that as it may, the  trial court relying on

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decisions of this court such as National Insurance Corporation of Nigeria Power and Industrial Engineering Co. Ltd. (1986) 1 NWLR (Pt. 14) 1 at 20, 26and 27; Mojibola & others v. National Bank of Nigeria Ltd. (1978) 3 SC. 119 at 127; Halsbury’s Laws of England 4th Edition paragraph 339 page 222 and a High Court decision: Esewe v. Asiemo & Ors (1974) 4 University of Ife Law Reports page 225 at 357-358. held inter-alia as follows:-
“It is in no dispute that the deceased, Mr. Jesse James Ngillari (sic) completed a proposal form given him by the defendant’s agent Mr. F S. A. Onuh and also gave an additional statement at the request of the said agent, marked Exhibits Band C respectively, and the same which were made in the presence of the plaintiff.”
The learned trial Judge after comparing and contrasting the facts in the cases set out above as well as the conclusions arrived at therein, continued by observing as follows:-
“In the matter before the court, it is pertinent to determine whether or not there was an intention to create a contract of endowment/life insurance between the deceased and the defendant. This has to be looked not in the light or the facts available and also circumstance of the transaction that took place. This is so because from the available evidence, the said Mr. S. A. Onuh, was an agent of the defendants approached  the deceased, gave him proposal form, which he assisted him to complete, obtained an additional statement and thereafter collected a sum of N449.05 as premium payment. These are all admitted by the defendant in their amended statement of

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defence. A  portion of Exhibit B. the proposal form completed reads as follows:-
‘I agree that this proposal form and declaration together with any other statements in connection  herewith shall be the basis of the contract of this assurance.‘ (ltalics mine for emphasis).
The question to ask at this juncture is this, as at the time of the signing of the document, could it be inferred or read from the circumstances by any reason that the deceased either doubted the  agent or was completing the same subject to a condition? This I would answer in the negative for two reasons:- (1) There is no indication anywhere that such any (sic) condition exists and which had been drawn to the attention of the deceased, (2) i.e. secondly, in the light of paragraph 13 of the plaintiff’s statement of claim which was concluded as deemed admitted by the defendants; where the deceased was said to have believed at all material times that Mr. S. A. Onuh was an agent of the defendants and therefore acting within the scope of his authority. For these reasons, I am in full agreement with the view held by Atake, J. in the authority of Esewe (supra) a High Court authority as it may be and which only serves as persuasive. In other words, the acceptance of the offer in this case was in no doubt demonstrated by the conduct of the parties as well as by the documents that have passed between them as bid down in the case of Mojibola (supra).”
Continuing, the learned trial Judge further held:
“This document Exhibit I, is in my view belated having regard to the conclusion reached as per above to the

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effect that a valid contract came into existence on the 1st March, and a further confirmation was again made on the 2nd March by the payment and acceptance ofN2,694.30 subsequent to Exhibit D was made………….”
After selling out the contents of Exhibits 1, C and D, the learned trial Judge said among other things:
“Furthermore, the plaintiff in his evidence before this court, gave detailed story of the circumstance that necessitated N2.694.30 additional payment. This was corroborated by both Exhibit C and D the additional statement and the temporary receipt respectively,”
In conclusion, the learned trial Judge had this to say on the additional statement and payment of N2,694.30 to the respondent’s agent Mr. S. A. Onuh:
“Following from the above transactions in particular and completion of the proposal forms, payment and receipt of the sum of N449.05, and also the subsequent further payment of N2.694.30, I hold the view them from the totality of all these, coupled with the conduct of the deceased and the said agent on behalf’ of the defendants, a valid contract of Endowment/Life Insurance contract had been taken out. The advance payment or the same had been made up to December, 1985 and which was received by the said agent Mr. Onuh either or deemed to have been made on behalf of the defendants. In other words, the additional statement and payment of the N2,694.30 had confirmed further that valid contract had been taken out.”
I cannot agree more. On the totality of the evidence, oral and documentary which the trial court evaluated (having seen heard and observed the demeanour of  the

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witnesses)an appeal court can only intervene to set the decision arrived at aside when and only when the trial court failed to make good use of the advantage it had, particularly in a case where creditability is not involved. See: Okpaloka v. Umeh (1976) 9-10 SC. 269 at 300; Ebba v. Ogodo (1984)4 SC. 84 at 98:(1984) 1 SCNLR 372 and Arolagbe v. Shorun (1985) 1 NWLR (Pt.2) 360. In the case in hand. The Court of Appeal appears clearly not to be on firm ground when on appeal, it held without rehearing the entire case and dispassionately weighing the cases of both sides (see Mogoji v. Odofin (1978) 4 Sc. 91 and 94) before setting same aside as it did. Thus, the court below was palpably wrong to have held in the face of overwhelming evidence as follows:-
“……. If the proposer accepts the terms contained in the acceptance letter, he indicates by paying the premium after the first deposit paid, it is then that a contract exists. In this case there was no contract because the above process did not take place, in that first, they needed more information from the defendant which they sought and in fact got no reply on the absence of an existing contract between the parties the defendant refused to honour the plaintiffs claim on the deceased’s death.”
Continuing, the court below maintained”
“……. The need for Exhibit ‘C’ arose because the deceased was proceeding to Lagos for a training that will last up to December, 1985 and Exhibit ‘D’ was issued as temporary receipt when the premium payable on the life policy proposal for up to December, 1985 i.e N2,694.30 was allegedly paid by the deceased. This payment was in

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a very quick succession of the payment of the deposit i.e. two days later. One wonders what was the criteria for the latter payment and why a temporary receipt was issued instead of the company’s official receipt, as was issued in respect of payment of the deposit of N449.05. It is amazing that the deceased contended (sic) himself with only a temporary typed receipt after the payment of such huge sum of N2,694.30 when he very well knew that the defendant’s official receipt as was issued to him earlier on existed ….. ”
Where a court of trial which saw and heard the witnesses has come to specific findings 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 conclusions could not follow from the evidence before it. See Odofin v. Ayoola (1984) 11 SC72 at 106; Ebba v.  Ogodo (l984) 4SC 84 at 98: (1984) 1 SCNLR 372 and Babatunde Ajayi v. Texaco (1987) 3 NWLR (Pt.62) 577; (1987) 9-11 SC. 1 at 27. It is also an established principle that the Court of Appeal will not substitute its own findings with those of the trial court 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 where they are found to be perverse and misapprehensive of the facts. See Mogaji v. Odofin (supra) : Iyaro v. The State (1988)1 NWLR (Pt.69) 256; Kare Enterprises Ltd. v.  Daewoo(Nig.) Ltd. (1985) 2 NWLR (Pt. 5) 116 and Awoyale v. Ogunbiyi (No.2) (1986) 2 NWLR (Pt. 24) 626 at 648. Where,  as in the instant case, there appears to be a full and comprehensive

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evaluation on the part of the trial court but none by the Court of Appeal that 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 which ought not to be allowed to stand following the principle enunciated by this court in Kasaduku v. Atolagbe (1973) 5 SC. 195; Ekpenyong & Ors. v. Essien & Ors. (1975) 3 SC 107; Lawal v . Dawodu (1972) 8 and 9 SC. 83 at 115 and Mogaji v. Odofin (supra). The writer of the lead judgment of the court below concurred in by the two other members of her panel, after dwelling at length on what constitutes elementary contract, to wit: offer and acceptance which she argued were lacking in the case in hand, concluded that the constituents of a valid contract of insurance being absent, respondent’s defence must perforce be allowed to subsist. After setting aside the award of N50.000.00 damages to the appellant, in what I think is an erroneous decision, the court below in making a consequential order then commanded that “the sum of N449.05 and N2,694.30 (sic) paid to the appellant’s agent to be refunded to the respondent’. This later order constitutes the background to the two issues deployed to attack the decision which I have no hesitation in answering in the negative. The learned Justices of the court below were therefore clearly wrong to have held that there was no valid contract. See Okubule v. Oyagbola (1990) 4 NWLR (Pt.147) 723. In McGillivray & 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

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actually paid or the policy has been issued. Once the terms of the insurance have been agreed upon by the parties. there is prima facie binding contract of insurance, and the assured is obliged to pay a premium as agreed while the insurer for their part must deliver a policy containing the agreed terms.”
In the instant case, the respondent knew that there was a valid and subsisting contract between it and the deceased. Hence, in its letter informing the latter of the dismissal of its agent (Mr. S. A. Onuh). it stated inter alia:
“Payment of premium by you should be made direct to this office.”
This court had held in Royal Exchange  v. Chukwurah (1976) 11 SC 295 at 30 1- 303 that the terms in a proposal form were binding on the parties. Also in Northern Assurance Co. Ltd. v. Wuraola (1969) All NLR 14, this court held that the proposal form forms part of the contractual relationship notwithstanding the fact that the insurer has not issued a policy to the insured. The court below abysmally misconceived the case and its judgment cannot be allowed to stand.
Issue 3:
This issue asks: was there a valid contract?or fully stated: considering the pleadings and evidence, was there a valid contract of insurance before the death of the deceased between the parties?
The preponderance of evidence, oral and documentary decided cases as well as the circumstances of the instant case, point irresistibly to a positive answer. On the principle laid down in National Insurance Corporation of Nigeria v. Power and Industrial Engineering Co. Ltd.

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(supra) this court quoting with approval from the decision of the trial Judge said:
“At the High Court, the learned trial Judge Belgore. J. dealing with this question in his judgment said:
‘from the moment the proposal was made, accepted and the demanded premium paid, a valid contract was subsisting between the plaintiff  and the defendant.” (Italics mine for emphasis).
The principle laid down above albeit coming as it does from the High Court, is in my view, as solid as rock which I uphold as applicable to the instant case. See Bioku v. Light Machine Industry (Nig.) & Anor. (1986)5 NWLR (Pt.39)42.
The circumstances in which Exhibit B – (the proposal form of insurance), Exhibit C – (the duplicate additional statement) and Exhibit D – (the type written temporary receipt issued on behalf of the respondent) came into being (notwithstanding that Exhibit 1 – letter requesting the deceased to submit an x-ray and other health forms which appellant denied as having been received by him, estop the respondent from pleading or asserting otherwise than that it is the disclosed principal or Mr. S. A. Onuh, their agent and that the parties were ad idem on their contractual relationship and obligations. It is immaterial that by Exhibit ‘E’ – a belated letter of termination of the appointment of Mr. S. A. Onoh, 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 deceased/third party, it having already been made and binding between the parties. See Borstead on

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Agency, page 1, Article 1 and Freeman and Lockyer v. Buckhurst Park Properties Mangal Ltd. (1964)1 All E.R. 630 at 644.
It is for these reasons but particularly the ones contained in the leading judgment of my learned brother Kutigi, J.S.C. that I too allow this appeal and set aside the decision of the court below. I abide by the consequential orders contained in the leading judgment inclusive of the order for costs.

I have had the privilege of reading in draft the leading judgment just delivered by my learned brother Kutigi, J.S.C. and I agree entirely that there is merit in this appeal and that the same ought to be allowed.
The facts that gave rise to this appeal have been adequately set out in the leading judgment and I need not recount them in any detail any more. It suffices to state that the central issue for consideration in this appeal is whether or not there was a concluded valid and enforceable contract of insurance between the deceased, Jesse James Ngillari and the respondent. The learned trial Judge had held that there was a valid contract of insurance between them. This is as against the finding of the court below that no such contract had materialised. The Court of Appeal, in the leading judgment of Mukhtar, J.CA, with which Adio, J.CA., as he then was, and Okezie, J.CA. agreed, had stated as follows –
“Negotiation was commenced, yes, but no valid insurance subsisted as a result of the negotiation. The elements of offer and acceptance by parties, that constitute valid contract are lacking. Consequently, the learned trial

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Judge was in error when she held that there was a valid contract.”
It is not in dispute that one Mr. S. A. Onuh who negotiated the transaction in issue with the deceased Jesse James Ngillari was at all material times an accredited agent of the respondent. The evidence of the appellant, the administrator of the estate of the deceased, was that he was in his office with the deceased on the 1st day of March, 1984 when the said Mr. Onuh called on them. In his presence, Mr. Onuh invited the deceased to take out a life policy with his principal, the respondent company. The deceased agreed and duly completed the respondent’s proposal form. Exhibit B. together with the additional statement, Exhibit C, with the assistance of Mr. Onuh who then demanded payment of N449.05 deposit premium. The appellant duly paid the deposit to the respondent’s agent. A further payment of N2,694.30 was paid the following day by the deceased to the said Mr. Onuh to cover the premium from 1st March, 1984 to the end of December, 1985 as agreed to by the parties.
The appellant went further to state the precise terms and conditions of the contract as agreed upon between the parties as contained in the proposal form, Exhibit B. In effect, the deceased insured his life for 30 years in the sum of N50,000.00 with interest thereon with effect from the 1st day of March, 1984. It was not disputed that the respondent’s agent, Mr. Onuh, was authorised to demand and collect premium from an insured on behalf of the respondent.
The deceased died on the 17th August, 1985 before the official receipts for the premiums paid to the respondent

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and his insurance policy were delivered to him. The respondent failed to pay the agreed sum of N50,000.00 with the accrued interest to the deceased’s estate under the said contract of insurance hence this action.
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 been 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 to which there must equally be an unqualified acceptance by the other party. A prima facie binding insurance contract comes into existence the moment an insurance proposal in the normal form is accepted unequivocally without qualification by the insurers. But so long as the matter is still under negotiation, there is no contract. See Allis-Chalmers Co. v. Maryland Fidelity and Deposit Co. (1916) 114 L.T. 433, H.L. Such proposal form generally sets out the precise terms upon which the insurers are prepared to contract and such terms, once accepted by the proposer and submitted to the insurers, are binding on the parties. Thus, by completing, signing and returning the proposal form to the insurers, the proposer commits himself to those terms and undertakes to pay whatever the insurers may charge by way of premium. See Halsbury’s Laws of England, 4th Edition, Vol. 25, paragraph 398 at page 221.
Where, therefore, a proposal form containing the material

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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 in accordance with the terms stipulated in the said proposal form. See Addie and Sons v. Insurance Corporation Ltd. (1898) 14 T.L.R. 544.
I think it ought to be observed that whereas in non-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 and enforceable contract may arise. It is only in marine insurance transactions that writing is a conditio sine qua non for an enforceable contract to arise. It seems to me that the law, in so far as non-marine insurance transactions are concerned, is that even an oral contract of such insurance is valid so 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. Indeed, as the learned authors of Halsbury’s Laws of England, 4th Edition, Volume 25, paragraph 399 at page 222 put it –
“Indeed, although writing is necessary in marine insurance, in other forms of insurance there is no legal necessity. Any positive act indicative of an intention to create a contract may be sufficient acceptance; for example receipt of the premium without demur or qualification or conduct precluding the insurers from

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disputing receipt of the premium. Even a demand for the premium may be sufficient” (italics supplied).
See too Harrington  v. Pearl Life Assurance Co. Ltd. (1914) 30 T.L.R. 613 C.A., Xenos v. Wickham (1866) L.R. 2 H.L. 296 at 308.
Accordingly, it seems to me that even a parol contract of non-marine insurance may be binding and enforceable, so long as all the fundamental essentials of such contract are present. See Halsbury Laws of England, Ibid. paragraph 405 at page 225. Consequently any document which fully contains the fundamental essentials or terms of an insurance contract may, it seems, 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 as the “policy”.
Finally 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 issued. As the learned authors of Mac Gillivray and Parkington on Insurance Law, 6th Edition, page 86 put it –
“Once the terms of the insurance have been agreed upon by the parties, there is prima facie a binding contract of insurance, and the assured is obliged to pay a premium as agreed, while the insurers for their part must deliver a policy containing the agreed terms.”
Once the contract of insurance is established, the terms in the proposal form constitute part of the contractual

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relationship between the parties, and it will make no difference that the insurer has not yet issued a policy to the insured. See the Northern Assurance Co. Ltd. v. Wuraola (1969) All N.L.R. 14.
Turning once again to the relevant aspects of the facts of the present case, it is not controverted that the appellant is the administrator of the estate of the deceased Jesse James Ngillari. It is also not in dispute that on the 1st March, 1984, the respondent’s agent, one Mr. S. A. Onuh, in the course of his employment, approached the deceased and persuaded him to enter into combined Endowment/Life Insurance Contract with the respondent Consequently, the said agent offered the respondent’s proposal form containing the terms of the contract to the deceased who with the assistance of the respondent’s agent completed and signed the same and submitted it to the said agent for necessary  action.
More importantly, is that fact that on the agent’s request for the necessary premium, the deceased all the same 1st March, 1984 paid the sum of N449.05 as demanded being the first installments thereof. Again, all demand, the deceased, the following day, paid an additional Iump sum of N2,694.30 to the respondent’s agent to cover the whole premium up to December, 1985. A typewritten receipt was  issued by the agent to the deceased with a promise to deliver the official receipt along with the policy certificate in three days’ time. These documents were never issued to the deceased who died on the 17th August, 1985.
Upon a close analysis of the principles of law above enunciated, there can be no doubt whatever that on the

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facts of this case, a valid and enforceable contract of insurance was entered into between the late Jesse James Ngillari and the respondent. This contract was concluded when the respondent’s proposal form with the terms of the contract were unconditionally accepted, signed and returned to the respondent’s agent who thereupon demanded and collected the first premium of N449.05 and the second installment of N2,694.30 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 when it held as follows –
“With the payment of the deposit coupled with the mere completion of Exhibit ‘B’ which merely contained information, I fail to perceive a valid contract existing………….. in so far as the present case is concerned, the only action taken so far was the filling of Exhibit B and payment, and a policy has not even materialised.”
In the light of the foregoing, issue 3 must be resolved in favour of the appellant.
It is for the above and the more detailed reasons contained in the leading judgment of my learned brother, Kutigi, J.S.C. that I too allow this appeal and set aside the decision of the court below and restore the judgment of the trial court. I abide by the consequential orders, including those as to costs, made in the said judgment.

Appeal allowed