Canadian Pacific Ry. Co. v. Ottawa Fire Insurance Co.

Canadian Pacific Ry. Co. v. Ottawa Fire Insurance Co.

The policy did not cover standing timber because the insurer’s provincial charter did not authorize insurance of that subject-matter; however the policy remained effective as to other property in which the insured had an insurable interest, so the insurer was not liable for the timber loss and the appellant was not entitled to recover premiums. On the constitutional question the majority held a provincially incorporated fire insurer is not inherently incapable of entering into valid extra-provincial insurance contracts, while a strong dissent held s.92(11) imposes a territorial limitation and federal licence cannot cure that defect.

Citation
(1907) 39 SCR 405
Parties
Plaintiff/appellant: Canadian Pacific Railway Company; Defendant/respondent: Ottawa Fire Insurance Company
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
13 December 1907
Procedural Posture
Civil Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario (re Argument Before Supreme Court)
Outcome
Appeal dismissed; judgment of Court of Appeal for Ontario affirmed
Legal Topics
Provincial Incorporation Limits, Extra Provincial Business of Provincial Companies, Ultra Vires, Insurable Interest, Return of Premiums, Comity of Nations
Source Language
English
Constitutional Law Insurance Law Corporate Law Private International Law Provincial Incorporation Limits Extra Provincial Business of Provincial Companies Ultra Vires Insurable Interest +2 more

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Parties

Canadian Pacific Railway Company

Plaintiff/appellant

Ottawa Fire Insurance Company

Defendant/respondent

Procedural Posture

Civil Appeal / On Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario (re Argument Before Supreme Court)

Legal Issues

  1. 1 Whether a company incorporated under provincial authority may validly contract to insure property located outside the province of incorporation
  2. 2 Whether a provincial insurance company can insure standing timber outside the province when its charter does not permit insuring standing timber
  3. 3 Whether a Dominion licence under the federal Insurance Act can validate extra-provincial powers of a provincial company

Ratio Decidendi

The policy did not cover standing timber because the insurer’s provincial charter did not authorize insurance of that subject-matter; however the policy remained effective as to other property in which the insured had an insurable interest, so the insurer was not liable for the timber loss and the appellant was not entitled to recover premiums. On the constitutional question the majority held a provincially incorporated fire insurer is not inherently incapable of entering into valid extra-provincial insurance contracts, while a strong dissent held s.92(11) imposes a territorial limitation and federal licence cannot cure that defect.

Court Disposition

Appeal dismissed; judgment of Court of Appeal for Ontario affirmed

Orders

  • Appeal dismissed with costs
  • Judgment of Court of Appeal for Ontario (affirming trial verdict) upheld