Macaura v Northern Assurance Ltd [1925] AC 619

Court: House of Lords

Facts: Macaura, a shareholder, transferred timber to his company and took out an insurance policy in his name. When the timber was destroyed, the insurance claim was denied because Macaura had no insurable interest in the company's property.

Issue: Can a shareholder claim insurance on property owned by the company, given that the property has been transferred to the company’s name?

Held: The House of Lords ruled that Macaura could not claim insurance for the timber. Once property is transferred to a company, it becomes the company's property, separate from that of its shareholders.

Key Judicial Statement: Lord Sumner emphasized that "no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein."

💡Leveluplaw: Shareholders cannot claim insurance for property owned by the company, as the company’s assets are legally distinct from those of its shareholders.