Macaura v Northern Assurance Co Ltd

Fact of the case

Macaura (M) was the holder of nearly all (except one) shares of a timber company. He was also a major creditor of the company. M Insured the company’s timber in his own name. The timber was lost in a fire. M claimed insurance compensation.

Judgement

Northern Assurance refused to pay up because the timber was owned by the company, and that because the company was a separate legal entity, it did not need to pay Mr Macaura any money.A member does not even have an insurable interest in the property of the company.

Conclusion

The existence of a company is distinct and separate from that of its members. A company can own property, have bank account, raise loans, incur liabilities and enter into contracts on its own.The shareholders are not the private or joint owners of the company’s property.

 




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