Crusader Insurance (Nig.) Ltd. v. Ephraim Okoye Anunike (1975)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS, J.S.C.

The plaintiff, a trader, took out a Life Policy (Ex. 2) with the defendant, an insurance company, on 1st June, 1964. The Policy was to mature in 1994 for the assured sum of 2,000 (N4,000) with participation in profits. The agreed premium payable by the plaintiff to the defendant was 74.13.4 annually.

The plaintiff paid the premiums due for three years, that is from 1st June, 1964 to 1st June, 1967. Under Condition 6 of the said Policy, it is provided, as a condition precedent, that the Policy shall be
“Free from all restrictions as to war, foreign residence, occupation or travel, including aviation, except as provided in these conditions, the special provisions as to the Schedule and any endorsement hereon.”

Some time after the 30th May, 1967, the Military Governor of the former Eastern Nigeria announced that the former Eastern Nigeria had seceded from the Federation of Nigeria. Consequently and in order to preserve the corporate existence of the Federation, war broke out on or about the 6th day of July, 1967, between the Government of the Federation of Nigeria and the secessionist regime of Eastern Nigeria.
At the end of the civil war on 12th January, 1970, the plaintiff wrote two letters to the defendant, the first on 14th November, 1970 (Ex.8) and the other on 7th January, 1971 (Ex.4), asking to know the amount due and payable to him as the surrender value of the Policy. To these letters the defendant replied on 20th January, 1971 in their letter (Ex.5) as follows.:

“Dear Sir,
Life Policy No. N/117798

Further to our letter to you of 11th December, 1970 we regret to advise you that your policy lapsed on the 1st of February, 1970. Our lapse notice confirming this will be forwarded to you in due course.

When a policy has been in force for two years, it acquires a surrender value against which unpaid premiums are advanced in accordance with the non-forfeiture regulations of your policy, Condition 2. When the surrender value is exhausted the policy automatically lapses.

Payments made on any date during the period starting on 31st May, 1967, and ending on 12th January, 1970, have not been taken into account in view of the provisions of the Banking Obligations (Eastern States) Decree No. 56 of 1970.

In view of the above, we are sorry that we will be unable to consider your request for the surrender value of your policy.

Yours faithfully,

(Sgd.) R. J. Eagle, Manager
The provisions of Condition 2 referred to in the letter (Ex. 5) read-

“2. NON-FORFEITURE REGULATIONS: When the Policy has a surrender value, if any premium shall not be paid within the days of grace, the amount thereof shall be advanced at compound interest upon security of the Policy, provided the balance of the surrender value, after deducting any amount due to the company, is not less than the amount of the overdue premium, but, should it be less, the Policy will remain in force for a proportionate period until the balance is exhausted.”

On the receipt of the letter (Ex.5), the plaintiff commenced proceedings against the defendant company in which he claimed

“(a) A declaration that the application of Condition 2 of Policy No. N/117798 by the defendant company against the plaintiff/assured is void to the extent that it applies to the plaintiff; that it is harsh, unconscionable and/or inequitable and contrary to the public interest; and