Brophy v. North American Life Assurance Co.

Brophy v. North American Life Assurance Co.

The policy was a wagering contract void under the statute because Brophy had no insurable interest and the insured procured it for Brophy's benefit; the statute covers endowment policies; an insurer suing to cancel a wagering policy that it did not procure fraudulently is not obliged to return premiums as a condition of obtaining cancellation, so the trial judge's decree cancelling the policy is restored and the order for repayment of premiums is set aside.

Citation
(1902) 32 SCR 261
Parties
Appellant / Defendant / Assignee of Insured: George Brophy; Respondent / Plaintiff: The North American Life Assurance Company
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
6 May 1902
Procedural Posture
Insurance Appeal Concerning Cancellation of Life/endowment Policy / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario; Final Judgment on Appeal and Cross Appeal
Outcome
Appeal dismissed; cross-appeal allowed; judgment of trial judge restored in favor of insurer on cancellation and against repayment of premiums
Legal Topics
Wagering Policy, Endowment Policy, Insurable Interest, Cancellation of Policy, Return of Premiums, Forfeiture Clause, Procedural Tender/deposit
Source Language
English
Insurance Contract Law Equity Public Policy Statutory Interpretation Wagering Policy Endowment Policy Insurable Interest +4 more

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Parties

George Brophy

Appellant / Defendant / Assignee of Insured

The North American Life Assurance Company

Respondent / Plaintiff

Procedural Posture

Insurance Appeal Concerning Cancellation of Life/endowment Policy / Appeal to the Supreme Court of Canada From the Court of Appeal for Ontario; Final Judgment on Appeal and Cross Appeal

Legal Issues

  1. 1 Whether the policy was a wagering policy void under 14 Geo. 3 c.48 s.1 (Imp.) because beneficiary had no insurable interest and insured acted for another's benefit
  2. 2 Whether the statute prohibiting wagering policies applies to endowment as well as whole life policies
  3. 3 Whether an insurer seeking cancellation of a wagering policy must return premiums as a condition of relief

Ratio Decidendi

The policy was a wagering contract void under the statute because Brophy had no insurable interest and the insured procured it for Brophy's benefit; the statute covers endowment policies; an insurer suing to cancel a wagering policy that it did not procure fraudulently is not obliged to return premiums as a condition of obtaining cancellation, so the trial judge's decree cancelling the policy is restored and the order for repayment of premiums is set aside.

Court Disposition

Appeal dismissed; cross-appeal allowed; judgment of trial judge restored in favor of insurer on cancellation and against repayment of premiums

Orders

  • Policy declared void and ordered delivered up to be cancelled
  • Defendant's counter-claim for payment of the policy and for repayment of premiums dismissed