This appeal arose from a case of indemnity under an insurance policy in respect of which the insured property was destroyed in a fire outbreak.
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The respondent, a Judge of the Borno State High Court was the plaintiff while the appellant his banker was the 1st defendant in the court below. Sometime in 1986, the appellant bank granted to the respondent a credit or overdraft facility of N8, 013 presumably to be repaid instalmentally over a given period. As a collateral, the respondent mortgaged his dwelling house situate opposite Verago Hotel off Mubi Road, Yola to the appellant bank by depositing his title deeds with the bank. As if that was not enough, the respondent was required to and he did insure the mortgaged property with the Leadway Assurance Company Limited (company for short) the 2nd defendant in the court below. The property consisting of a bungalow and its boy's quarters was insured against tornado, fire outbreak etc for the sum of N100, 000 on an insurance policy No. F/84/5829/HQ, which was endorsed with a statement that the appellant has an interest therein. The policy was renewable annually on a premium of N400 under an arrangement whereby the appellant bank was to remit to the company the premium out of the account of the respondent. The premiums were paid for 4 years, that is, from 1986 to 18th March, 1990 within which period the respondent had liquidated the mortgage debt.
On 5th June 1990, the respondent's mortgaged property was completely destroyed by fire together with the household effects therein. The respondent promptly the same day contacted the Assurance Company which denied liability on the ground that the policy had lapsed. Thereafter, the respondent approached the appellant bank which immediately sent to the company a draft for N400 representing the insurance premium for the year 1990/91 but the company declined acceptance on the ground that the risk had been converted to certainty. Thereupon, the respondent, through his counsel wrote to the appellant bank demanding payment of the assured sum of N100, 000 and when the demand was not met he as plaintiff in December 1990 instituted proceedings in the Yola High Court in Suit No. GGSY/35/91 claiming against the appellant and the company as 1st and 2nd defendants respectively indemnity for loss he sustained by the destruction of his building.
Pleadings were ordered, filed and exchanged. The respondent filed a statement of claim dated 25th May, 1992 containing substantially the facts herein before set out with a claim of N100, 000 as special damages for the destruction of his house and the household effects therein. The appellant filed a statement of defence denying liability contending that it had no contract with the respondent requiring it to pay insurance premium on his behalf. On its own part, the Assurance Company also filed a separate statement of defence pleading that the insurance policy of the mortgaged property was not in force at the material time.
At the trial of the case, the respondent testified and called 4 other witnesses. The Appellant bank called one witness while the Assurance Company rested its case on that of the respondent. In a considered judgement delivered on 30th March, 1994, the learned trial Judge Adamu Buba Mubi, J dismissed the claim against the Leadway Assurance Company Limited but entered judgement for the respondent against the appellant bank for the sum of N314,500.00 (three hundred and fourteen thousand five hundred naira).;
