McQueen v. Phoenix Mutual Fire Insurance Co.

McQueen v. Phoenix Mutual Fire Insurance Co.

Because the insurer’s local agent had notice of and assented to the trust assignment and the company thereafter issued the policy with knowledge of that assignment and dealt with the claim, the insurer is bound; the assignment for benefit of creditors did not eliminate McQueen’s insurable interest and the policy condition against assignments was inapplicable to an assignment made before issuance of the policy, so the insured may recover and sue in his own name.

Citation
(1880) 4 SCR 660
Parties
Appellant/plaintiff: James McQueen; Respondent/defendant: The Phœnix Mutual Fire Insurance Company
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 March 1880
Procedural Posture
Insurance Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Judgment on Reserved Verdict From Court of Common Pleas
Outcome
Appeal allowed; judgment of the Court of Appeal for Ontario reversed; judgment of the Court of Common Pleas affirmed (with modification removing condition requiring releases).
Legal Topics
Assignment for Benefit of Creditors, Insurable Interest at Time of Loss, Notice to Insurer Via Local Agent, Policy Condition Against Assignment, Interim Receipt Vs. Issued Policy, Waiver by Insurer Conduct, Payable to Creditors Clause and Right to Sue
Source Language
English
Insurance Law Contract Law Trusts and Assignments Agency Law Assignment for Benefit of Creditors Insurable Interest at Time of Loss Notice to Insurer Via Local Agent Policy Condition Against Assignment +3 more

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Parties

James McQueen

Appellant/plaintiff

The Phœnix Mutual Fire Insurance Company

Respondent/defendant

Procedural Posture

Insurance Appeal to Supreme Court of Canada / On Appeal From the Court of Appeal for Ontario; Judgment on Reserved Verdict From Court of Common Pleas

Legal Issues

  1. 1 Whether a trust assignment for benefit of creditors voids an insurance policy under a policy condition requiring written permission for assignments
  2. 2 Whether notice to and conduct by the insurer’s local agent constituted sufficient notice and assent to the assignment
  3. 3 Whether the condition against assignment applied to an assignment made before issuance of the formal policy (interim receipt period)

Ratio Decidendi

Because the insurer’s local agent had notice of and assented to the trust assignment and the company thereafter issued the policy with knowledge of that assignment and dealt with the claim, the insurer is bound; the assignment for benefit of creditors did not eliminate McQueen’s insurable interest and the policy condition against assignments was inapplicable to an assignment made before issuance of the policy, so the insured may recover and sue in his own name.

Court Disposition

Appeal allowed; judgment of the Court of Appeal for Ontario reversed; judgment of the Court of Common Pleas affirmed (with modification removing condition requiring releases).

Orders

  • Appeal allowed with costs in this Court and Court of Appeal
  • Judgment of the Court of Common Pleas affirmed to award plaintiff $2,050 subject to omission of condition requiring production of releases