M holds all the shares (except one) in a timber concern and is also its substantial creditor. He gets the company's timber insured in his own name. Unfortunately, the timber is destroyed by fire and M claims to re-imbursement of loss from the insurance company. Is the insurance company liable to reimburse the loss and pay to M?
Answers
Answer:
Macaura v Northern Assurance Co Ltd [1925] AC 619
Company Law, Insurance, House of Lords, claim
Macaura v Northern Assurance Co Ltd [1925] is an important case concerning the insurance policy and the appellant’s claim of the property.
Keywords:
Company law – Insurance police – Fire – Property – Insurance claim failed – House of Lords – Appeal dismissed
Facts:
In the case of Macaura v Northern Assurance Co Ltd [1925], the appellant, Mr Macaura, owned several timber estates in Ireland. He sold them to a company in return for nearly all of the company’s share capital. Afterwards, Mr Macaura insured the timber with the defendant company in his own name. Later on, a fire on the estate destroyed the timber. Mr Macaura brought an insurance claim on the policies. The defendant denied the appellant’s claim and alleged that the timber was no longer his property to insure as it now belonged to the company.
Issue:
Whether the appellant had any claim under the insurance policy?
Held:
The House of Lords dismissed the appeal and held that the appellant had no claim over the goods. The timber was the property of the company and did not belong to him anymore. The fact that the appellant was the company’s major creditor and its beneficial shareholder made no difference. In any case, the timber that was exposed to fire was not his property and he could not raise any claim under the insurance policy.
Approved: Moran Galloway & Co v Uzielli [1905] 2 K.B. 555, [1905] 3 WLUK 86.
Considered: Godsall v Boldero 103 E.R. 500, [1807] 11 WLUK 40.
Read our cases and notes on Company Law to learn more!
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