Canadian Indemnity Co. v. Andrews & George Co. Ltd.

Canadian Indemnity Co. v. Andrews & George Co. Ltd.

Although the defective glue was an "accident" in fact, the insurer's liability under Endorsement 10 did not extend to loss the insured had assumed under contract; the implied condition of fitness under s.21 Sale of Goods Act is a term of the contract so that the loss was contractual and excluded by Exception A to Endorsement 10; accordingly the insured could not recover under the policy and the trial judgment dismissing the claim was restored.

Citation
[1953] 1 SCR 19
Parties
Appellant (defendant): Canadian Indemnity Company; Respondent (plaintiff): Andrews & George Company Limited
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
7 October 1952
Procedural Posture
Contract (insurance) / Appeal to Supreme Court of Canada From Court of Appeal for British Columbia
Outcome
Appeal allowed; judgment of trial court restored; action dismissed
Legal Topics
Indemnity, Liability Imposed by Law Vs Assumed by Contract, Policy Interpretation, Exclusion Clause, Accident Definition, Implied Condition of Fitness (sale of Goods Act S.21)
Source Language
English
Contract Insurance Sale of Goods Tort Indemnity Liability Imposed by Law Vs Assumed by Contract Policy Interpretation Exclusion Clause +2 more

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Parties

Canadian Indemnity Company

Appellant (defendant)

Andrews & George Company Limited

Respondent (plaintiff)

Procedural Posture

Contract (insurance) / Appeal to Supreme Court of Canada From Court of Appeal for British Columbia

Legal Issues

  1. 1 Whether the defect in glue constituted an "accident" under the policy
  2. 2 Whether the insurer's liability was "imposed by law" or was liability assumed under contract and excluded by Exception A
  3. 3 Whether Endorsement 10 requires the accident to occur after the insured relinquished possession or merely that the damage so arises after possession passed

Ratio Decidendi

Although the defective glue was an "accident" in fact, the insurer's liability under Endorsement 10 did not extend to loss the insured had assumed under contract; the implied condition of fitness under s.21 Sale of Goods Act is a term of the contract so that the loss was contractual and excluded by Exception A to Endorsement 10; accordingly the insured could not recover under the policy and the trial judgment dismissing the claim was restored.

Court Disposition

Appeal allowed; judgment of trial court restored; action dismissed

Orders

  • Appeal allowed with costs in the Court of Appeal and in this Court
  • Judgment of the trial court restored