Macaura v. Northern Assurance Co. Ltd. (1925): Shareholder vs Company Property
Introduction Macaura v. Northern Assurance Co. Ltd. (1925) is an important Company Law case that explains a key rule: a shareholder does not own the property of the company . This case is closely connected with the principle of separate legal entity laid down in Salomon v. Salomon & Co. Ltd. (1897) . Background of the Case Mr. Macaura owned a large quantity of timber. Later, he formed a company and transferred all the timber to that company. Mr. Macaura became the majority shareholder He was also a creditor of the company The timber legally belonged to the company However, Mr. Macaura insured the timber in his own personal name instead of the company’s name. Facts of the Case After some time, the timber was destroyed by fire. Mr. Macaura claimed compensation from the insurance company. The insurance company refused to pay, stating that Mr. Macaura had no insurable interest in the timber. Main Legal Issue The main issue before the court was: ...