London Guarantee and Accident Co. v. City of Halifax

London Guarantee and Accident Co. v. City of Halifax

The Court held that falsified accounts showing the appropriation of specific cheques furnished prima facie proof that embezzlement/theft occurred on the dates those cheques were used and deposited, placing on the insurer the burden to prove any earlier date; the renewal clause extended coverage to acts committed before but discovered during the renewed term; and the insurer was not discharged by the city's neglect of statutory returns absent proof of positive prejudicial act or connivance, therefore judgment for the city under the bond was affirmed.

Citation
[1927] SCR 165
Parties
Defendant/appellant: London Guarantee And Accident Company, Limited; Plaintiff/respondent: City of Halifax
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 February 1927
Procedural Posture
Appeal (per Saltum) to the Supreme Court of Canada / Judgment on Appeal From Supreme Court of Nova Scotia; Appeal Dismissed With Costs; Trial Judgment for Plaintiff Affirmed
Outcome
Appeal dismissed with costs; judgment of Supreme Court of Nova Scotia (Chisholm J.) in favour of City of Halifax affirmed; Anglin C.J.C. dissenting.
Legal Topics
Bond Coverage Period and Limitation, Misappropriation and Time of Offence, Renewal of Guarantee, Notice of Discovery, Onus of Proof, Particulars and Amendment, Employer Statutory Duties and Surety Discharge, Avoidance/notification Clauses
Source Language
English
Guarantee and Suretyship Insurance Criminal Law (theft/embezzlement) Contract Law Municipal Law Bond Coverage Period and Limitation Misappropriation and Time of Offence Renewal of Guarantee +5 more

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Parties

London Guarantee And Accident Company, Limited

Defendant/appellant

City of Halifax

Plaintiff/respondent

Procedural Posture

Appeal (per Saltum) to the Supreme Court of Canada / Judgment on Appeal From Supreme Court of Nova Scotia; Appeal Dismissed With Costs; Trial Judgment for Plaintiff Affirmed

Legal Issues

  1. 1 Whether embezzlement/theft occurred within 12 months prior to notice of discovery under the bond
  2. 2 Whether the deposit of cheques with the city treasurer precluded misappropriation where books were falsified
  3. 3 Whether renewal of the bond covered acts committed before but discovered after renewal

Ratio Decidendi

The Court held that falsified accounts showing the appropriation of specific cheques furnished prima facie proof that embezzlement/theft occurred on the dates those cheques were used and deposited, placing on the insurer the burden to prove any earlier date; the renewal clause extended coverage to acts committed before but discovered during the renewed term; and the insurer was not discharged by the city's neglect of statutory returns absent proof of positive prejudicial act or connivance, therefore judgment for the city under the bond was affirmed.

Court Disposition

Appeal dismissed with costs; judgment of Supreme Court of Nova Scotia (Chisholm J.) in favour of City of Halifax affirmed; Anglin C.J.C. dissenting.

Orders

  • Judgment for plaintiff (City of Halifax) affirmed in amount $10,000 CAD
  • Appeal dismissed with costs to respondent