Springfield Fire and Marine Ins. Co. v. Maxim / Eagle Fire Co. of New York v. Maxim

Springfield Fire and Marine Ins. Co. v. Maxim / Eagle Fire Co. of New York v. Maxim

Where an insurer, having been notified of a transfer of the insured property, endorses the policy to cover the transferee without requiring a new application, the insurer is taken to have entered into a new contract running to the transferee; consequently the insurer cannot rely against the transferee on material misrepresentations made only by the assignor prior to assent, and non-disclosure by the assignor therefore did not defeat the transferee's right to recover.

Citation
[1946] SCR 605
Parties
Defendant/appellant: Springfield Fire and Marine Insurance Co.; Defendant/appellant: Eagle Fire Company of New York; Plaintiff/respondent: Millie Maxim
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 October 1946
Procedural Posture
Appeal (insurance) / Supreme Court of Canada on Appeal From the Appellate Division of the Supreme Court of Alberta; Final Judgment Delivered
Outcome
Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Alberta affirmed in favour of the respondent
Legal Topics
Misrepresentation, Assignment and Novation, Statutory Conditions, Moral Risk, Bona Fide Purchaser, Endorsement Versus Assignment
Source Language
English
Insurance Law Misrepresentation Assignment and Novation Statutory Conditions Moral Risk Bona Fide Purchaser Endorsement Versus Assignment

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Parties

Springfield Fire and Marine Insurance Co.

Defendant/appellant

Eagle Fire Company of New York

Defendant/appellant

Millie Maxim

Plaintiff/respondent

Procedural Posture

Appeal (insurance) / Supreme Court of Canada on Appeal From the Appellate Division of the Supreme Court of Alberta; Final Judgment Delivered

Legal Issues

  1. 1 Whether misrepresentations by the original insured (husband) in applications for fire insurance can be asserted as a defence against a bona fide purchaser transferee who obtained insurer assent by endorsement
  2. 2 Whether the endorsements constituted mere assignments subject to pre-existing defenses or created new contracts running directly to the transferee
  3. 3 Whether statutory Condition No.1 of the Alberta Insurance Act (misrepresentation) applies to the transferee in these circumstances

Ratio Decidendi

Where an insurer, having been notified of a transfer of the insured property, endorses the policy to cover the transferee without requiring a new application, the insurer is taken to have entered into a new contract running to the transferee; consequently the insurer cannot rely against the transferee on material misrepresentations made only by the assignor prior to assent, and non-disclosure by the assignor therefore did not defeat the transferee's right to recover.

Court Disposition

Appeal dismissed; judgment of the Appellate Division of the Supreme Court of Alberta affirmed in favour of the respondent

Orders

  • Appeal dismissed with costs