Western Canada Accident and Guarantee Insurance Co. v. Parrott

Western Canada Accident and Guarantee Insurance Co. v. Parrott

Because the insurer assumed and continued the defence of the employee's action with knowledge that the mangling machine was unguarded, and the insured relied on that conduct to his detriment, the insurer waived the right to rely on the policy exclusion or is estopped from setting it up; therefore the insurer must indemnify the insured and the appeal is dismissed.

Citation
(1921) 61 SCR 595
Parties
Appellant / Defendant in Original Action: Western Canada Accident and Guarantee Insurance Co.; Respondent / Plaintiff in Original Action: S. Parrott
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
11 March 1921
Procedural Posture
Insurance Indemnity Action on Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Saskatchewan
Outcome
Appeal dismissed with costs; judgment of the Court of Appeal for Saskatchewan affirmed
Legal Topics
Assumption of Defence, Waiver of Policy Condition, Estoppel by Conduct, Election to Affirm Contract, Insurer Liability, Indemnity
Source Language
English
Insurance Contract Tort Equity Assumption of Defence Waiver of Policy Condition Estoppel by Conduct Election to Affirm Contract +2 more

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Parties

Western Canada Accident and Guarantee Insurance Co.

Appellant / Defendant in Original Action

S. Parrott

Respondent / Plaintiff in Original Action

Procedural Posture

Insurance Indemnity Action on Appeal / Appeal to the Supreme Court of Canada From the Court of Appeal for Saskatchewan

Legal Issues

  1. 1 Whether insurer waived right to rely on a policy condition forbidding liability for unguarded machinery by assuming and continuing the defence with knowledge of the breach
  2. 2 Whether the insurer is estopped from denying liability where its conduct induced the insured to rely to his detriment
  3. 3 Whether the insurer's agents had authority to bind the company by continuing the defence

Ratio Decidendi

Because the insurer assumed and continued the defence of the employee's action with knowledge that the mangling machine was unguarded, and the insured relied on that conduct to his detriment, the insurer waived the right to rely on the policy exclusion or is estopped from setting it up; therefore the insurer must indemnify the insured and the appeal is dismissed.

Court Disposition

Appeal dismissed with costs; judgment of the Court of Appeal for Saskatchewan affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of the Court of Appeal for Saskatchewan affirmed