Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co., (1968) 1 N.B.R.(2d) 213 (CA)

• Judge: Bridges, C.J.N.B., Ritchie and Hughes, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: October 10, 1967
• Jurisdiction: New Brunswick
• Citations: (1968), 1 N.B.R.(2d) 213 (CA)

Wandlyn v. Commerce General Ins. (1968), 1 N.B.R.(2d) 213 (CA);

    1 R.N.-B.(2e) 213

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Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co. et al.

Indexed As: Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co.

Répertorié: Wandlyn Motels Ltd. et al. v. Commerce General Insurance Co.

New Brunswick Court of Appeal

Bridges, C.J.N.B., Ritchie and Hughes, JJ.A.

November 27, 1968.

Summary:

Résumé:

The New Brunswick Court of Appeal dismissed action by insured against defendant/ appellant insurance companies for amount of increase in coverage where loss occurred before local agent's letter was received by defendant/insurers. Defendant/insurer's relationship with the local agent was restricted to a subscription policy requiring the signatures of the defendant/ insurers. The local agent serviced the subscription policy on behalf of the defendant/insurers who assumed 25 per cent of the risk. Other companies which had a continuing relationship with the local agent assumed 75 per cent of the risk. Court held that agency by estoppel was not created in favour of the plaintiffs because the plaintiffs relied entirely on the local agent to provide the insurance coverage.

The New Brunswick Court of Appeal also dismissed action by insured against local agent for breach of warranty of authority and for negligence. Court held that motel which was total fire loss was owned at the time of the fire by the plaintiff, Charles H. Llewellyn, who was also President and principal shareholder of plaintiff, Wandlyn Motels Ltd. Court held that when coverage was increased, the plaintiff, Charles H. Llewellyn, was acting on behalf of Wandlyn Motels Ltd. and not in his own right.

The New Brunswick Court of Appeal held that the claim of the plaintiff, Llewellyn, for breach of warranty of authority must fail because the local agent was dealing with the plaintiff, Wandlyn Motels Ltd.

The New Brunswick Court of Appeal held the plaintiff Llewellyn's claim for negligence against the local agent be dismissed, as it was not the duty of the local agent to make inquiries regarding ownership of property.

The New Brunswick Court of Appeal held that the plaintiff, Wandlyn Motels Ltd., cannot claim against local agent for breach of warranty of authority or for negligence because the plaintiff, Wandlyn Motels Ltd., did not own the property destroyed and suffered no loss.

The New Brunswick Court of Appeal declined to deal with claim for rectification of insurance contract by having the plaintiff Llewellyn added as an insured because "consideration of this question would only be necessary if the local agent had authority to enter into a binding contract on behalf of the defendant/insurers."

Appeal from a judgment of Pichette, J. dated October 10, 1967 arising out of a claim for damages for fire loss pursuant to a subscription insurance policy. [An appeal has been filed to the Supreme Court of Canada from this judgment.]

Agency - Topic 1353

Authority of agent - Implied authority of particular agents - Insurance agents - Breach of warranty of authority to third parties - Whether local agent had implied authority to bind insurance companies to extend coverage under subscription policy where local agent was servicing subscription policy requiring signatures of companies on the policy (New Brunswick Court of Appeal).

Insurance - Topic 506

Agents - Liability of agent - Duty to inquire respecting property insured - Negligence - Duty of insurance agents to make inquiries with respect to title to property being insured (New Brunswick Court of Appeal).

Cases Noticed:

World Marine & General Insurance Co. Ltd. v. Leger, [1952] 2 S.C.R. 3, folld.

Counsel:

J. Edward Murphy, Q.C., and E. Neil McKelvey, Q.C., for the defendant insurance companies;

D.M. Gillis, Q.C., for respondent, Wandlyn Motels Ltd.;

Charles H. Llewellyn, H.A. Hanson, Q.C., and David T. Hashey for respondent, W. Hedley Wilson.

The following opinions were filed:

Bridges, C.J.N.B. - see paragraphs 1-38;

Ritchie, J.A. - see paragraphs 39-59.

HUGHES, J.A., concurred with BRIDGES, C.J.N.B.