Presented to
library
of tbc
Tllmvereitp of Toronto
bV
Mrs. Mallace IKesbitt
from tbc law library
of tbe
Honourable lUallacc IHcsbitt, l?.c
Crca^urcr of tbc Xa\v Society
of "Upper Canada
THE
<
FIRE INSURANCE
IN CANADA
Entered according to Act of Parliament of Canada in the year one
thousand nine hundred and nine by WILSON & LAFLEUR, of Montreal,
in the office of the Minister of Agriculture at Ottawa.
THE LAW
OF
FIRE INSURANCE
IN
CANADA
WITH A COMPLETE ANALYSIS OF THE JURISPRUDENCE AND
OF THE STATUTE LAW OF THE DOMINION
BY
EDWARD ROBERT CAMERON
ONE OF HIS MAJESTY'S COUNSEL AND REGISTRAR OF THE
SUPREME COURT OF CANADA.
AUTHOR OF : THE PRACTICE OF THE SUPREME COURT, THE
RULES OF THE SUPREME COURT.
ONE OF THE COMMISSIONERS APPOINTED TO REVISE
THE PUBLIC GENERAL STATUTES OF
CANADA.
MONTREAL :
WILSON & LAFLEUR
LAW BOOKSELLERS AND PUBLISHERS
17 AND 19 ST. JAMES ST.
1 '.><'.)
PREFACE
The writer's aim in this work has been to afford some prac-
tical assistance to the Canadian lawyer when called upon to de-
termine the rights of the parties under a fire insurance contract.
I such a case special difficulties confront him. The general
principles of insurance law are, in Canada, modified by local
statutes, and the statute law itself is not uniform, but differs
widely in the various provinces.
Again, in the questions which commonly arises for con-
sideration, little assistance can be obtained from the English
cases, because there are no statutory enactments in England
which interfere with the freedom of contract between the in-
surer and the insured, and the jurisprudence in the United
-3 is so inharmonious, that in many branches of insurance
law, notably in cases in which agency is involved, authority can
be found both ways for most propositions of law which arise.
The writer has only attempted to expound the law of fire in-
surance as determined by the decisions of the Canadian courts,
and has cited English and American cases where they illustrate
or support such decisions.
In Chapter I, the writer has attempted to show the advantage
of a uniform policy of fije insurance for Caruula. After writing
the succeeding chapters of the book, he h;i> IM m still more
strongly impressed with that view. It may be worth \vhil-'
stating a few of the reasons more in detail.
Legislation with respect to the conditions which alone shall
govern fnv insurance contracts, has been adopted in all llio prov-
- of Canada except New Brunswick and Edward
Island, yet in no two provinces are these conditions the same.
VI PKEFACE
The differences are often immaterial, but occasionally they are
very substantial. Where a legal decision of one province is
cited in another, this necessitates a careful consideration and
comparison of the language used by the Legislature in the two
provinces. For example, the provisions by which variations and
additions are permitted in Ontario, and which were under con-
sideration by the Privy Council in the Citizens Ins. Co. v Par-
sons (7 App. Cas. 96), are by no means identical with the cor-
responding articles of the Quebec Insurance Act.
Again, in all the provinces except Manitoba, the statutory
conditions are declared to apply to contracts of fire insurance,
whereas in the latter province it is policies of insurance which
alone are affected, and the Privy Council has held Queen Ins.
Co. v Parsons (7 App. Cas. 122) that this does not include a
provisional insurance by interim receipt, and of course it also
excludes oral contracts of insurance.
In Ontario, Quebec, Manitoba, Alberta, Saskatchewan and
British Columbia, the statutory conditions are expressly made
applicable to mutual insurance companies, but this is not the
case in Nova Scotia. In Manitoba, although the Mutual Com-
panies are governed by the Fire Insurance Policy Act, certain
matters void the policy whether material or not, a provision
quite inconsistent with the first and third statutory conditions.
These and other incongruities and anomalies which could be
pointe'd out, emphasize the desirability of having some uniform
legislative enactment which shall control the relationship be-
tween the insurer and the insured. Fire insurance has become
so universal in the commercial life of to-day that it is almost
as necessary to have the contract fixed and uniform as it is to
have .the law relating to bills and notes codified in the Bills of
Exchange Act.
E. E. CAMERON".
Ottawa. December 1st. 1908.
ADDENDA AND CORRIGENDA
Plage 253. APPLICATION.
Where an. application contains a note that the applicant is
requested to answer the questions fully, and he failed to make
any answer to some of the questions, 'the Court said that it was
impossible to ihold that where the company merely ".requested"
full answers to all questions, they meant to make, and had made,
itihe giving of full answers to all a condition precedent to the
validity of the contract. Rowe vs London & Lancashire Fire
Ins. Co., 12 Gr. 311.
Page 495. VARIATION TO CONDITION 4.
By a variation or addition to statutory condition no. 4, it
was (provided that "When property insured * * or any part
thereof shall be alienated, or in case of any transfer or change
of title to the property insured, or any part thereof, or of any
interest therein, without the consent of this company indorsed
hexeo-n, ox if the property hereby insured shall be levied upon, or
taken into possession or custody under any legal process, or the
title be disputed in any proceeding at law or equity, this policy
shall cease to be binding upon the company."
Hefld, affirming the decision of the Court below (26 Gr. p.
113) that this variation of addition was neither just nor reason-
able, and was not bin-ding upon the assured. iSands vs. Standard
Ins. Co., 27 Gr. 167.
Page 497. VARIATIONS TO CONDITION 16.
In a ipolicy of insurance, it was provided, by way of varia-
tion of statutory condition no. 16 providing for reference under
the Arbitration Act in cose of differences, that if any difference
arose as to the value of the property insured, of .the property
saved, or the amount of the damages or loss, the same should be
submitted to and ascertained by appraisers, one to be appointed
Vlll ADDENDA ! T CORRIGENDA
'by ithe assured and one .by the company, who were to select an
umpire, and that the assured and the company should pay the
appraisers respectively selected by each of them, and that each
should pay one- half the expenses of the umpire:
Held, that the variation was not binding upon the assured,
not -being "just and reasonable to be exacted by the company",
inasmuch as it was more stringent and onerous than the statutory
condition. iCole vs. London Mutual Fire Ins. Oo., 15 O. L. B., 619.
Page 539. EXPERTISE ARBITRATION.
K. S. Q., art. 5324-5330.
I 'Mr Lal.'lx' r*. Equitable Mutual Ins. Co., Q. B. 29, S. C. 274;
Montmagny Miitunl Ins. (\>. r*. Carbonneau, 16 B. L., 275.
ABBREVIATIONS
A. C Law Reports, Appeal Cases.
A - & E Adolphus & Ellis 's Reports.
All Allen, New Brunswick.
Am. R ) .
Am. Rep j Am en can Reports.
A<pp. Cas Law Reports, Appeal Cases.
A. R Ontario Appeal Reports.
Atk A-tkyns '& Reports.
Atl Atlantic Reporter.
B. & Aid. . . . . . . ... Barnewall & Aid-arson.
Barb. Barbour, N. Y.
B. & C Bairnewall & Cresswell.
B. C. Rep British Columbia Reports.
Bing Bingham 's Reports.
Bing. N. C Bingham, N-ew Cases.
B. & P. N. R Bosanquet & Puller, New Reports.
B. & S Best & Smith.
Bro. Parl. Cas Browm 's Parliamentary Cases.
Burr Burrow.
Camp Campbell 's Reports.
Can. S. C. R Canada Supreme Court Repoirts.
C. B. N. S Common Bench Re-ports, New Series.
Ch. D Law Reports, Chancery Division.
C. L. J Canada Law Journal.
C. L. T Canadian Law Times.
C. & P.
Cochran
Com. L. R
Carringfcon & Payne's Reports.
Coohran, Nova Scotia.
Commercial Law Reports.
Cro. Eliz Croke's Reports, temp. Elizabeth.
DoHon^Q* B.' B! '..".! '1 Dpeis5(M1 s do la Cour d'Appel.
Quebec, Qu-een's Bench Reports.
De G. M. & G De Gex, M.-i.-n.-i^litiMi & Gordon's Report*.
Dig. On*. Oaee Law . . . Digest Ontario Case Law.
Dow DOW'B Repor
E. A A Krror & Appo-al Reports, Uppen- Canada.
E. 4B Ellk ^ Bla Mn.rn.
Excb Kxch^qner Report*.
X ABBREVIATIONS
Fed. Rep Federal Reporter.
Gr Grant's Chancery Reports (Ontario).
Han Hannay 'e New Brunswick Reports.
Hare Hare 's Repo-nts, Chancery.
Hil. T Hilary Term, New Brunswick.
H. L. Gas House of Lords Cases.
How Howard, United States Supreme Court.
H. & "W Hurlstojie & Walsmley 'B Exchequer Report*.
Ir. Co*' L^.^TJ 1 ** Co" 1 " 1 ^ *****'
IT. C. L Irish Reports, Common Law Series.
J Lower Canada Jurist.
K. B Law Reports, King 's Bench.
L. C. J Lower Canada Jurist.
L. C. L. J Lower Canada Law Journal.
L. C. R Lower Canada Reports.
L. J. C. P Law Journal, Common Pleas.
L. N Legal News (Quebec).
L. R., C. P Law Reports, Common Pleas.
L. R., Eq Law Reports, Equity.
j R Exeh JLaw Reports, Exchequer.
L. R., H. L Law Reports, House of Lords.
L. R., P. C ., . . Law Reports, Privy Council.
L. T Law Times.
Man. R Manitoba Reports.
Mass Massachusetts Reports.
M. L. R., Q. B Montreal Law Reports, Queen 's Bench.
M. L. R., S. C Montreal Law Reports, Superior Court.
Moo. P. C. (N.S.) .... Moore's Privy Council Oases (New Series).
M. & W Meeson & Welsby.
N. B. Eq New Brunswick Equity Reports.
N. B. Rep New Brunswick Reports.
N. S. Rep No.va Scotia Reports.
Old Oldright, Nova Scotia Reports.
O. L. R Ontario Law Reports.
O. R Ontario Reports.
O. W. R Ontario Weekly Reporter.
P. & B Pugsley & Btirbidge, New Brunswick.
P. R Practice Reports (Ontario).
Pug Pugsley's Reports, New Brunswick.
ABBREVIATIONS
Q. B ............. Queen 'a Bench Reports, Adolphus & Ellis,
New Series.
Q. B. D ........... Law Reports, Queen 's Bench Division.
Q. L. R ........... Quebec Law Reports.
Q. R., K. B ......... Quebec Reports, King 's Bench.
Q. R., Q. B ......... Quebec Reports, Queen 's Bench.
Q. R., S. ......... Quebec Reports, Superior Court.
R. C ............. Revue Critique.
R. & C ........... Russell & Chesley, Nova Scotia.
R. & G ............ Russell & Geldert, Nova Scotia.
R. L ............. Revue Legale (Quebec).
de , J * V ......... 1 Revue de Jurisprudence (Quebec).
de J uir ....... i
Revue de Legislation (Quebec).
R. J. R. Q ......... Rapports Judiciaires Revises de Quebec (Ma-
thieu).
8. C. Gas .......... Cameron 's Supreme Court Cases.
Stevens, N. B. Dig. . . . Stevem 's New Brunswick Digest.
Stuart's Rep. (L. C.) .. Stuart's Lower Canada Reports.
Thorn ............. Thomson's Reports, Nova Scotia.
T. R ............. Term Reports (Durnford & Easit).
U. C. C. P .......... Upper Canada Common Pleas Reports.
U. C. R ........... Upper Canada Queen 's Bench Reports.
U. C. R (O. S.) ...... Upper Canada Queen's Bench Reports (Old
series).
U. S. ............ United States Reporte.
Vesey, sen.
Wall. . ..... Wallace, United State* Supreme Court.
TABLE OF CASES
NAME OF CASE.
Abrahams v. Agricultural Ins. Co..
Acey v. Fernie
Accident Ins. Co. of North America
v. Young
Adams v. National Ins. Co
Agricultural Savings, etc., Co. v.
Liverpool, etc., Ins. Co
Aitchison v. Lohre
Allen v. Merchants Marine Ins. Co.
Allison v. Eobinson
Anchor Marine Ins. Co. v. Allen
Anchor Marine Ins. Co. v. Corbett.
Anderson v. Fitzgerald
Anderson v. Saugeen Mutual Fire
Ins. Co
Archambault v. Lamere
Ardill v. ^Etna Ins. Co f
Ardill v. Citizens Ins. Co \
Armstrong v. Northern Ins. Co. . . .
Armstrong v. Provident Savings
Life Ass. Soc
Armstrong v. Turquand
Ashford v. Victoria Mutual Ins. Co.
Assurance Mutuelle de Joliette v.
Bourgoin
Atlas Ins. Co. v. Brownell
Attorney General v. JEtna Ins. Co..
Attorney General of Ontario v. At-
torney General of the Dominion.
WHERE REPORTED. PAGE.
40 U.C.K. 175 174, 319
7 M. & W. 151 33, 41
20 Can. S.C.E. 280 195, 445
20 N. B. Eep. 569 467
3 O.L.R. 127; 33 Can. S.C.E.
94 95, 97, 110, 160, 374
4 App. Cas. 755 17
M.L.E. 3 Q.B. 293; 16 E.L.
232; 15 Can S.C.E. 488 137
480, 481
2 Pug. 103 24
13 Q.L.E. 4; 16 E.L. 180 480
9 Can S.C.E. 73 186,469
4 H.L. Cas. 483; 1 Ir. Com. L.
Eep. 251 335, 337, 380
18 O.E. 355 Ill
2 B.C. A. 97; 26 J. 236; 5 L.N.
294 120
22 O.E. 529
20 A.E. 605 81
4 L.N. 77 445
2 O.L.E. 771 23
9 Ir. L.E. Common Law 32 138
149, 164
20 U.C.C.P. 434 286
10 Q.L.E. 110 533
29 Can. S.C.B. 537 200, 202
13 P.E. 459; 18 Can. S.C.E.
707 53, 72
(1894) A.C. 189; (1896) A.C.
348 6, 11, 14
XIV TABLE OF CASES
B
NAME OF CASE. WHERE REPORTED. PAGE.
Bachand v. Mutual Fire Ins. Co. . . 14 Eev. de Jur. 117 393
Baillie v. Provincial Ins. Co 21 L.C.J. 274 325
Baker v. Royal Ins. Co 1 O.W.R. 294 451
Ballagh v. Koyal Ins. Co 5 A.R. 87 485, 486, 498, 506
Bank of Toronto v. St. Lawrence
Fire Ins. Co Q.R. 19 S.C. 436 122, 370
Banque Molson v. Compagnie d'As
surance Mutuelle de Joliette 13 R.L. 392 515, 529, 533
Banting v. Niagara District Mutual
Ins. Co 25 U.C.E. 431 448
Barnes v. Dominion Grange Ins. Co. 22 O.K. 68 234
Baxter v. Jones 4 O.L.R. 541 329
Beacon F. & L. Ins. Co. v. Gibb ... 7 L.T. 574; 1 Moo. P.C. (N.S.)
73 75
Beausoleil v. Canadian Mutual Ins.
Co 1 L.N. 4; 14 R.L. 137 413
Beaver & Toronto Mutual Ins. Co.
v. Bradford 30 U.C.C.P. 307 535
Beaver & Toronto Mutual Ins. Co.
v. Champness 30 U.C.C.P. 307 535
Beaver & Toronto Mutual Ins. Co.
v. Spires 30 U.C.C.P. 304 535
Beemer v. Anchor Ins. Co 16 U.C.R. 485 437
Benson v. Ottawa Agricultural Ins.
Co 42 U.C.R. 282 306, 373, 385
Bernier v. Martin Q.R. 9 S.C. 421 46
Biggar v. Rock Life Ass. Co 1902, 1 K.B. 516 301, 303
Billington v. Canada Mutual Ins.
Co 39 U.C.R. 433 321
Billington v. Provincial Ins. Co. ... 24 Gr. 299; 2 A.R. 158; 3 Can.
S.C.R. 182 152, 314
Bishop v. Norwich Union Ins. Co. . . 25 N.S. Rep. 492 402
Bishop of Chatham v. Western Ass.
Co 22 N.B. Rep. 242 26
Black v. National Ins. Co 24 L.C.J. 65; 3 L.N 29.... 115, 440
Blair v. Sovereign Fire Ins. Co. . . 7 R. & G. 372; 7 C.L.T. 410... 481
Blais v. Stanstead Mutual Ins. Co. 15 R.L. 60 525
Bleakley v. Niagara District Mutual
Ins. Co 16 Gr. 198 293, 308
Boardman v. North Waterloo Ins.
Co 31 O.R. 525 403
Borden v. Provincial Ins. Co 2 P. & B. 381 455
TABLE OF CASES XT
NAME OF CASE. WHERE REPORTED. PAGE.
Bowes v. National Ins. Co 20 N.B. Rep. 438 196
Box v. Provincial Ins. Co 18 Gr. 280 84
Brady v. Western Ass. Co 17 U.C.C.P. 597 181
British American Ins. Co. v. Joseph. 9 L.C.R. 448; 7 R.J.R.Q. 312.. 65,70
British American Land Co. v. Mu- 1 L.C.L.J. 95; 18 R.J.R.Q. 168,
tual Fire Ins. Co 525 321, 393
British Empire v. Bergevin Q.R. 5 Q.B. 55 518
Brogan v. Manufacturers Ins. Co... 29 U.C.C.P. 414 291
Bruce v. Gore District Mutual Ins.
Co 20 U.C.C.P. 207 427
Brush v. .Etna Ins. Co 1 Old. 459 97
Buck v. Knowlton 21 Can. S.C.R. 371 28
Bull v. North British Investment 15 A.R. 421; 18 Can. S.C.R.
Co 697; S.C. Gas. 1. . . .109, 208, 405
Burson v. German Union Ins. Co. . . 10 O.L.R. 238 27, 470
Burton v. Gore District Mutual Fire 12 Gr. 156; 14 U.C.R. 342 89
Ins. Co 92, 98, 99, 108, 407, 423, 521
Butler v. Standard Ins. Co 4 A.R. 391 70, 83, 485, 488
Butler v. Waterloo Ins. Co 29 U.C.R. 553 417
C
Caldwell v. Stadacona Ins. Co 11 Can. S.C.R, 212 78, 83, 95
131, 208, 226
Caledonian Ins. Co. v. Gilmour (1893) A.C. 85 469
Calhoun v. Union Mutual Ins. Co... 19 N.B. Rep. 13 23, 46
Cameron v. Canada Fire Ins. Co. . . 6 O.R. 392 347
Cammell v. Beaver & Toronto Mu-
tual Ins. Co 39 U.C.R. 1 451, 452, 454
Campbell v. JStna Ins. Co Cochran, 21 413
Campbell v. Liverpool, etc., Ins. Co. 13 L.C.J. 309; 2 L.C.L.J. 224;
11 L.C.J. 66; 16 R.J.R.Q.
451; 19 R.J.R.Q. 524 397
Campbell v. National Ins. Co 24 U.C.C.P. 133 47, 239, 240
Campbell v. Victoria Ins. Co 45 U.C.R. 412 376
Canada Fire & Marine Ins. Co. v.
Northern ... 2 A.R. 373 380
Canadian Fire Ins. Co. v. Robinson. 31 Can. S.C.R. 488 33, 39
Canada Fire & Marine Ins. Co. \ .
Western Ins. Co 26 Gr. 264; 5 A.R. 244. .19, 21, 243
Canada Landed Credit Co. v. Can-
ada Agricultural ... 17 Gr. 418 151, 173, 174, 402
la Landed Credit Co. v. Canada
Farmers' Mutual Stock Co 17 Gr. 418 151, 173, 174, 402
XVI TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Canada Mutual Ins. Co. v. Donovan. 2 L.N. 229 184, 322
Canadian Pacific Rly. Co. v. Ottawa 9 O.L.R. 493; 11 O.L.B. 465;
Fire Ins. Co 39 Can. S.C.R. 405 25, 69, 568
Canadian Pacific Ry. Co. v. Roy . . . (1902) A.C. 220 120
Canadienne Compagnie, etc., v. Lon-
don Guarantee Q.R. 9 Q.B. 183 361
Canadienne Compagnie d 'Assurance
v. Perrault M.L.R. 5 S.C. 62; 12 L.N. 229. 49
Cann v. Imperial Fire Ins. Co 1 R. & C. 240 461
Cardinal v. Dominion Ins. Co 3 L.N. 367 403
Carr v. London & N. W. Rly. Co. . . L.R. 10 C.P. 307 209
Carter v. Boehm 3 Burr. 1906 363
Carter v. Niagara District Mutual
Ins. Co 19 U.C.C.P. 143 447
Casey v. Goldsmid 3 R.J.R.Q. 144 385
Cashman v. London & Liverpool Ins.
Co 5 All. 246 187, 464
Castellain v. Preston 11 Q.B.D. 380 17, 78, 79, 80
Cedar Shingle Co. v. Rimouski Ass.
Co Q.R. 2 Q.B. 379; 16 L.N. 306. . 123
Chalmers v. Mutual Ins. Co. of
Stanstead & Sherbrooke 3 L.C.J. 2 221, 525
Chaplin v. Provincial Ins. Co 23 U.C.C.P. 278 380
Chapman v. Delaware Mutual Ins.
Co 23 N.B. Rep. 121 22
Chapman v. Gore District Mutual
Ins. Co 26 U.C.C.P. 89 271
Charette v. Mutual Ins. Co Q.R. 16 S.C. 116 513
Chatillon v. Canada Mutual Ins. Co. 27 U.C.C.P. 450 273, 373
Chishom v. Provincial Ins. Co 20 U.C.C.P. 11 95
Cinq-Mars v. Equitable Ins. Co 15 U.C.R. 143, 246 453
Citizens Ins. Co. v. Boisvert 14 R.L. 156 197
Citizens Ins. Co. v. Bourguignon . . . M.L.R. 2 Q.B. 22 49
Citizens Ins. & Invest. Co. v. Lajoie M.L.R. 4 Q.B. 362 73
Citizens Ins. Co. v. Lefrancois Q.R. 2 Q.B. 550 65, 391
Citizens Ins. Co. v. Parsons 43 U.C.R. 261; 4 A.R. 96; 4
Can. S.C.R. 215; 7 App. Cas.
96 5, 7, 353, 354, 356, 358, 487
Citizens Ins. Co. v. Salterio 23 Can. S.C.R. 155 406
Clark v. Scottish Imperial Ins. Co.. 4 Can. S.C.R. 192 79
Clarke v. Union Fire Ins. Co 10 P.R. 313; 6 O.R. 223 470
Cockburn v. British America Ins. Co.
Co 19 O.R. 245.. . 256
TABLE OF CASES
XV11
NAME OF CASE. WHERE REPORTED. PAGE.
Cole v.London Mutual Fire Ins. Co. 15 O.L.R. 619...
Addenda et Corrigenda.
Coleman v. Economical Mutual Ins.
Co 4 O.W.R. 466 422
Coleman 's Depositories, Re 1907, 2 K.B. 798 447
Commercial Union Ins. Co. v. Can- 18 L.C.J. 80; 23 R.J.R.Q. 466,
ada Iron Mining Co 534 66
Commercial Union Ins. Co. v. Mar-
geson 29 Can. S.C.R. 601 203
Commercial Union Ins. Co. v. Tem-
ple 29 Can. S.C.R. 206 408
Compagnie d 'Assurance, etc., v. Fee 14 Q.L.R. 293; 16 R.L. 461; 11
L.N. 406 414
Compagnie d 'Assurance, etc., v.
Grammon 3 L.N. 19; 24 L.C.J. 82 43, 50
Compagnie d 'Assurance, etc., v.
Proteau 6 L.N. 85 532
Compton v. Mercantile Ins. Co 27 Gr. 334 293, 379
Confederation Life v. Miller 14 Can. S.C.R. 330 332
Confederation Life v. O'Donnell ... 10 Can. S.C.R. 92; 13 Can. S.
C.R. 218; S.C. Gas. 154 27
Connecticut Ins. Co. v. Kavanagh. . M.L.R. 5 S.C. 262; 21 R.L.
320; M.L.R. 7 Q.B. 323; 15
L.N. 308; (1892) A.C. 473.. 241
Copp v. Glasgow & London Ins. Co. 30 N.B. Rep. 197 338, 392
Cornell v. Liverpool & London Fire
Ins. Co 14 L.C.J. 256 480
Corse v. British America Ins. Co. . . 1 R.C. 243 117
Coulter v. Equity Ins. Co 7 O.L.R. 180; 9 O.L.R. 35 236
357, 390
Cousineau v. City of London Ins.
Co 15 O.R. 329 130, 482
Croft v. Lumley 5 E. & B. 648; 6 H.L. Gas. 672. 126
Crozier v. Phoenix Ins. Co 2 Han. 200 191
Cunard v. Nova Scotia Marino Ins.
Co 29 N.S. Rep. 409 386
Cashing v. Dupuy 5 App. Cas. 409 9
Date v. Gore District Mutual Ins.
Co.
Davenport v. The Queen
Davidson v. Insurance Co. . . .
.. 15 U.C.OP. 175 393
.. 3 App. Cas. 115 149, 157
.. 2 O.W.R. 621.. . 432
TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Davidson v. Waterloo Ins. Co ...... 9 O.L.R. 394 ......... 281, 390, 435
Davies v. Home Ins; Co ............ 3 E. & A. 269 ............... 83
Davis v. Canada Farmers ' Mutual
Ins. Co ......................... 39 U.C.R. 452 ................ 182
Devlin v. Queen Ins. Co ........... 46 U.C.R. 611 ............. 353, 486
Dickson v. Provincial Ins. Co ..... 24 U.C.C.P. 157 ........... 320, 422
Dill v. Quebec Ins. Co ............. 1 R. de L. 113 ............... 441
Dingee v. Agricultural Ins. Co ..... 3 Pug. 80 ................... 340
Doe v. Birch .................... 1 M. & W. 402 ............... 126
Doe v. Curwood .................. 1 H. & W. 140 .............. 126
Doe v. Eykins ................... 1 C. & P. 154 ................ 127
Doe v. Lewis ..................... 5 A. & E. 277 ................ 127
Doe v. Meux . . .................... 4 B. & C. 606 ................ 126
Doherty v. Millers & Manufacturers
Ins. Co ......................... 4 O.L.R. 303; 6 O.L.R. 78 ...... 40
Dominion Grange v. Bradt ........ 25 Can. S.C.R. 154 ---- 235, 258, 476
485, 513
Duharme v. Mutual Ins. Co. of La-
val ............................ 2 L.N. 115 .................. 195
Duff v. Canadian Mutual Ins. Co. . . 6 A.R. 238 .................. 542
Duffy v. St. Lawrence Ins. Co ..... Q.R. 23 S.C. 181 .............. 183
Dunlop v. Usborne, etc ............ 22 A.R. 364 .................. 405
Dupuis v. North British, etc., Ins.
Co ............................. Q.R. 13 S.C. 443 ............. 471
Dustin v. Hochelaga Mutual Ins. Co. 4 L.N. 295 ................... 525
Eacrett v. Gore District Mutual Ins.
Co 40 C.L.J. 30 494
Eacrett v. Perth Mutual Ins. Co. ... 2 O.W.R. 1011 382
Eckhardt v. Lancashire Ins. Co. ... 27 A.R. 373 494
Edgar v. Newell 24 U.C.R. 215 63
Elliott v. National Ins. Co 21 L.C.J. 242; 1 L.N. 450; 23
L.C.J. 12 123
Ellis v. Beaver Ins. Co 21 U.C.C.P. 84 543, 558
Elson v. North American Life Ins. 9 B.C. Rep. 474; 33 Can. S.C.R.
Co 383 28
Employers Liability v. Taylor 29 Can. S.C.R. 104 203
Equitable Fire, etc., Office v. Ching
Wo Hong (1907) A.C. 96 430
Equitable, etc., Ins. Co. v. Quinn . . 11 L.C.R. 170 51
Evans v. Davis 10 Ch. D. 747 127
Everett v. London Ass. Co. . . 19 C.B.N.S. 126 . 57
TABLE OF CASES
XIX
NAME OF CASE. WHERE REPORTED. PAGE.
Fair v. Niagara District Mutual Ins.
Co 26 U.C.C.P. 398 174, 547
Pawcett v. Liverpool, London &
Globe Ins. Co 27 U.C.R. 225 449
Few v. Perkins L.R, 2 Ex. 92 127
Findley v. Fire Ins. Co. of North
America 25 O.K. 515 356, 365, 376, 487
Fire Ins. Ass. v. Canada Fire &
Marine Ins. Co 2 O.B. 481, 495 113
Fitzgerald v. Gore District Mutual
Ins. Co 30 U.C.R. 97 437
Fonderie de Sorel v. Stadacona Ins. 6 L.N. 277; 27 J. 194; 14 R.L.
Co 137 175
Forgie v. Royal Ins. Co 16 L.C.J. 34 124
Foy v. ^tna Ins. Co 3 All. 29 403
Frank v. Sun Life Ass. Co 20 A.R. 564; 23 Can. S.C.R.
152 44
Frazer v. Gore District Mutual Ins.
Co 2 O.K. 416 45
Freeman v. Cooke 2 Exch. 654 127, 209
Frey v. Mutual Ins. Co. of Welling- 43 U.C.R. 102; 4 A.R. 293; 5
ton Can. S.C.R. 82. .. .62, 64, 199, 350
351, 471, 506
Gale v. Lewis
Ganong v. ^Etna Ins. Co
Garceau v. Niagara Mutual Ins. Co.
Garrett v. Provincial Ins. Co
Gaskin v. Phoenix Ins. Co
Gastonguay v. Sovereign Fire Ins.
Co
Gauthier v. Canadian . Mutual Ins.
Co
Gauthier v. Waterloo Ins. Co
Geraldi v. Provincial Ins. Co
Gilchrist v. Gore District Ins. Co...
Giles v. Brock
Giles v. Giroux
Giles v. Lalumiero .
9 Q.B. 730 ... 170, 176
6 All. 75 456
3 Q.L.R. 337 196
20 U.C.R. 200 333
6 All. 429 82
3 R. & G. 334 461
29 U.C.C.P. 593 398
44 U.C.R. 490; 6 A.R. 231. .155, 427
29 U.C.C.P. 321 34, 350
34 U.C.R. 15 423
5 L.N. 369 H33
13 R.L. 652 50
28 L.C..T. 287 . . 534
XX TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Gill v. Canada Fire & Marine Ins.
Co 1 O.K. 341 79
Gillis v. Canada Fire Ass. Co Q.R. 26 S.C. 166 333, 377
Girard v. Metropolitan Life Ins. Co. Q.K. 20 S.C. 532 24
Goatley v. Paine 2 Camp. 520 127
Goldsmith v. Gore District Mutual
Ins. Co 27 U.C.C.P. 435 448
Goodfellow v. Times & Beacon Ass.
Co 17 U.C.E. 411 474
Goodright v. Davids 2 Cowp. 803 126
Goodwin v. Lancashire Ins. Co 16 J. 298; 18 L.C.J. 1; 22 E.J.
R.Q. 430, 518 196, 387
Goring v. London Mutual Fire Ins.
Co 10 O.E. 236 345, 346
Gorman v. Hand-in-Hand Ins. Co. . . Ir. K. 11 C.L. 224 75
Gould v. British America Ins. Co. . . 27 U.C.E. 473 62, 63, 402
Graham v. London Mutual Ins. Co.. 13 O.E. 132 421
Graham v. Ontario Mutual Ins. Co. 14 O.E. 358 278, 316, 494
Grand Trunk Ely. Co. v. Attorney
General of Canada (1907) A.C. 65 11
Grant v. JEtna. Ins. Co 9 E.J.E.Q. 290 74
Grant v. Equitable Ins. Co 13 E.J.E.Q. 264 73
Grant v. Eeliance Ins. Co 44 U.C.E. 229 475
Greaves v. Niagara District Ins. Co. 25 U.C.E. 127 453
Green v. Beaver & Toronto Mutual
Ins. Co 34 U.C.E. 78 534
Green v. Manitoba Ass. Co 13 Man. E. 395 497
Green 's Case 1 Cro. Eliz. 3; 1 M. & W. 406. . 126
Greet v. Citizens Ins. Co ^5 A.E. 596; 27 Gr. 121... 105, 376
Greet v. Eoyal Ins. Co f 428
Gregory v. Wilson 9 Hare 683 127
Grenier v. Monarch Fire & Life Ins.
Co 3 L.C.J. 100 459
Grey v. Pearson 6 H.L. Cas. 60 140
Guardian v. Connely 20 Can. S.C.E. 208 69, 279
Guerin v. Manchester Ins. Co 29 Can. g.C.E. 139.. 82, 96, 398, 468
Guggisberg v. Waterloo Mutual Ins.
Co 24 Gr. 350 536
II
Hammond v. Citizens Ins. Co 26 N.B. Eep. 371 226
Harris v. London & Lancashire Ins.
Co 10 L.C.J. 268; 16 E.J.E.Q. 13.61, 65
TABLE OF CASES XXI
NAME OF CASE. WHERE REPORTED. PAGE.
Harris v. Waterloo Mutual Ins. Co. 10 O.R. 718 464
Harrison v. Western Ass. Co 35 N.S. Rep. 488; 33 Can. S.C.
R. 473 346
Hartney v. North British Ins. Co. . . 13 O.R. 581 472, 496
Haslem v. Equity Fire Ins. Co 8 O.L.R. 246 105
Hatton v. Beacon Ins. Co 16 U.C.R. 316 187, 425
Hatton v. Provincial Ins. Co 7 U.C.C.P. 555 197, 470, 471
Hawke v. Niagara Mutual Ins. Co.. 23 Gr. 139 260
Hawthorne v. Canadian Casualty, 14 O.L.R. 166; 39 Can. S.C.R.
etc., Ins. Co 558 19, 569
Hazzard v. Canada Agricultural Ins.
Co 39 U.C.R. 419 101, 289, 401
Hendrickson v. Queen Ins. Co 30 U.C.R. 108; 31 U.C.R. 547.. 316
324, 430
Heneker v. British America Ass. Co. 14 U.C.C.P. 57 392
Henry v. Agricultural Ins. Co 11 Gr. 125 254, 257, 483
Herald Co. v. Northern Ass. Co. ... M.L.R. 4 S.C. 254; 12 L.N. 30. 29
197
Herkins v. Provincial Ins. Co 3 R. & C. 176 456
Hervey v. Mutual Ins. Co 11 U.C.C.P. 394 398
Hill v. Merchants & Manufacturers
Ins. Co 28 Gr. 560 542
C 7 O.R. 634; 8 O.R. 343; 11 A.
Hobbs v. Northern Ins. Co I B ?41 12 C{m g c R 631 43(J
Hobbs v. Guardian Ins. Co 579
Hobson v. Wellington Ins. Co ^ 6 U.C.R. 536 407
Hochelaga Mutual Ins. Co. v. Gi-
rouard 7 Q.L.R. 348 533
Hodge v. The Queen 9 App. Cas. 117 10
Home District Mutual Ins. Co. v.
Thompson 7 Q.L.R. 348 533
Home Life Ins. Co. v. Randall 30 Can. S.C.R. 97 208
Hopkins v. Manufacturers Ins. Co.. 43 U.C.R. 254 171
Hopkins v. Provincial Ins. Co 18 U.C.C.P. 74 271, 288
Howard v. Lancashire Ins. Co 5 R. & G. 172; 11 Can. S.C.R.
92 82, 193
Howes v. Dominion Fire & Marine
Ins. Co 2 O.R. 89; 8 A.R. 644 69
Hughes v. London Ass. Co 4 O.R. 293 468
Hunt v. Bishop 8 Exch. 675 LH
Hunt v. Home Ins. Co I: L. 455 84
Hunt v. Remnant . . . 9 Exch. 635 126
Hutchings v. National Life Ass. Co. 37 Can. S.C.R. 124 . . 42
XX11 TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Hutchinson v. Niagara District Mu- 2 Dig. Ont. Case Law, 3356,
tual Ins. Co 3364; 39 U.C.R. 483. .71, 179, 438
Hyde v. Lefaivre 32 Can. S.C.E. 474 205, 482
Hyde v. Watts 12 M. & W. 254 143
Imperial Bank v. Royal Ins. Co. ... 12 O.L.R. 519 413
Imperial Fire Ins. Co. v. Bull 18 Can. S.C.R. 697; S.C. Gas. 1. 109
Insurance Co. v. Chamberlain 132 U.S. 304 303
Insurance Co. v. Mahone 21 Wall. 152 300
Insurance Co. v. Norton 96 U.S. 234 157
Insurance Co. v. Wilkinson 13 Wall. 222 285, 299, 300
Insurance Co. v. Wolff . . 95 U.S. 326 . 159
Jacobs v. Equitable Ins. Co 19 U.C.R. 250 150, 430
Johnson v. Provincial Ins. Co 26 U.C.C.P. 113; 27 U.C.C.P.
464 31, 484
Johnston v. Dominion Grange 23 A.R. 729 399
Johnston v. Western Ass. Co 4 A.R. 281 471
Johnstone v. Niagara District Mu-
tual Ins. Co 13 U.C.C.P. 331 156, 308
Jones v. Taylor, Re Oulton 2 Pug. 391 25
Jordan v. Provincial Provident
Instn. . 28 Can. S.C.R. 554.. . 342
Kanady v. Gore District Ins. Co. .. 44 U.C.R. 261 92, 406, 522
Kane v. Hibernian Mutual Ins. Co. . 20 Am. R. 408 63
Reefer v. Phoenix Ins. Co 31 Can. S.C.R. 144 78, 80, 81
Kelly v. Hoehelaga Ins. Co 2 L.N. 347; 3 L.N. 63; 24 J.
298; 19 R.L. 30 190, 377
Kelly v. Liverpool, etc., Ins. Co. . . . Stevens N.B. Dig. 739 ; Hil. T.
1871 82
Kennedy v. Agricultural Ins. Co. . . 1 R. & C. 433 367
Kerr v. British America Ins. Co. . . 32 U.C.R. 569 455
Kerr v. Hastings Mutual Ins. Co. . . 41 U.C.R. 217 381, 405, 408
King v. Prince Edward County Mu-
tual Ins. Co 19 U.C.C.P. 134 52
Kirk v. Northern Ass. Co 31 N.S. Rep. 325 232
Klein v. Union Ins. Co 3 O.R. 234 254, 371, 377, 416
TABLE OF CASES XX111
NAME OF CASE. WHERE REPORTED. PAGE,
Knights of Maccabees v. Hilliker . . 29 Can. S.C.R. 397 137
Kniseley v. British America Ins. Co. 32 O.K. 376 278
Kreutz v. Niagara District Mutual
Ins. Co. 16 U.C.C.P. 131 . . 162
Labbe v. Equitable Mutual Fire Ins.
Co Q.R. 289 S.C. 274 addenda
Lafarge v. Liverpool, London &
Globe Ins. Co 17 L.C.J. 237 186
Lafleur v. Citizens Ins. Co 22 L.C.J. 247 360, 420
Laidlaw v. Liverpool, etc., Ins. Co.. 13 Gr. 377 254, 287, 288
Lambert v. La Fonciere Compagnie
d 'Assurance Q.R. 25 S.C. 169 f> 1 S
Lamothe v. North American Life Q.R. 16 K.B. 178; 39 Can. S.< .
Ass. Co R. 323 303
Lampkin v. Ontario Marine Ins. Co. 12 U.C.R. 578 179
Lampkin v. Western Ass. Co 13 U.C.R, 237, 361... 135, 180, 454
470
Lancashire Ins. Co. v. Chapman ... 7 R.L. 47; 13 L.C.J. 36 84, 185
Langelier v. Charlebois 34 Can. S.C.R. 1 86
Larocque v. Royal Ins. Co 23 L.C.J. 217 460
Law v. Hand-in-Hand Ins. Co 29 U.C.C.P. 1 154, 222
LeBlanc v. Commercial Union Ins.
Co 35 N.B. Rep. 665 208
Leclaire v. Crapser 2 R.J.R.Q. 342 119
Levy v. Baillie 7 Bing. 349 59
Lindsay v. Lancashire Fire Ins. Co. 34 U.C.R. 440 449
Lingley v. Queen Ins. Co 1 Han. 280 83
Liverpool, London & Globe Ins. Co.
v. Valentine Q.R. 7 Q.B. 400 204
Liverpool, London & Globe Ins. Co.
v. WyM 1 Can. S.C.R. 604 75
Livingstone v. Western Ass. Co. ... 14 Gr. 461; 16 Gr. 9 93, 95
Logan v. Commercial Union Ins. Co. 13 Can. S.C.R. 270 207, 457
London Ass. Corp. v. Great Northern
Transit Co. -'9 Can. S. 7 >
London & Lancashire Ins. Co. v.
ling ... (1897) A. C. 499 33,39,41
London & Western Trust Co. v. Can-
ada Fire Ina. Co. L3 <>.I,i:. 540; 16 O.L.R. 217.. 399
Long v. Phoenix Ins .Co i N.B. Rep. 223 3.:
XXIV TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Lount v. London Mutual Ins. Co. . . 9 O.L.R. 549, 699 486, 489
Lowson v. Canada Farmers' Mutual
Ins. Co 6 A.R. 512; 8 A.R. 613 415, 547
Lucena v. Crawfurd 2 B. & P. N. R. 269 77
Lynch v. Dalzell 3 Bro. Parl. Cas. 431 99
Lyndsay v. Niagara District Mutual
Ins. Co 28 U.C.R. 326 320
Lynn Gas Co. v. Meriden Fire Ins.
Co 158 Mass. 570 54, 68
Lyon v. Stadacona Ins. Co 44 U.C.R. 472 309, 373
Lyons v. Globe Mutual Ins. Co 27 U.C.C.P. 567; 28 U.C.C.P.
62 129, 153, 164, 168, 430
Lyons v. Manufacturers & Mer-
chants Ins. Co 28 U.C.C.P. 13 484
H
Mackay v. Glasgow, etc., Ins. Co. . . M.L.R. 4 S.C. 124 29, 106
Maguire v. Liverpool & London Ins.
Co 7 L.C.K. 343; 5 R.J.R.Q. 279. . 64
Maier v. Fidelity Mutual Ins. Co.. . 78 Fed. Rep. 566 301
Malins v. Freeman 4 Bing. N.C. 395 143
Manchester Ins. Co. v. Guerin Q. R. 5 Q.B. 434; 29 Can. S.C.
R. 139 445
Manitoba Ins. v. Whitla 34 Can. S.C.R. 191 267
Mann v. Western Ass. Co 19 U.C.R. 314 448
Manufacturers Ace. Ins. Co. v. Pud-
sey 27 Can. S.C.R. 374 39
Margeson v. Guardian Fire & Life
Ins. Co 31 N.S. Rep. 359 197
Maritime Bank v. Guardian Ins. Co. 19 N.B. Rep. 297 97
Markle v. Niagara District Mutual
Ins. Co 28 U.C.R. 525 452
Marsden v. City & County Ass. Co.. L.R. 1 C.P. 232 56
Marshall v. Times Fire Ins. Co 4 All. 618 339
Martin v. Home Ins. Co 20 U.C.C.P. 447 374
Mason v. Agricultural Association.. 16 U.C.C.P. 493; 18 U.C.C.P.
19 370, 458, 459
Mason v. Andes Ins. Co 23 U.C.C.P. 37 186, 425, 427, 455
Mason v. Hartford Fire Ins. Co. .. 37 U.C.R. 437 171, 176
Mason v. Harvey 8 Exch. 819 179
Mass6 v. Hochelaga Ins. Co 22 L.C.J. 124 43, 50
Mathewson v. Royal Ins. Co 16 L.C.J. 45 .124
TABLE OF CASES XXV
NAME OF CASE. WHERE REPORTED. PAGE.
Mathewson v. Western Ass. Co. ... 4 L.C.J. 57; 10 L.C.E. 8 121
Matthews v. Northern Ins. Co 3 E.L. 450; 1 B.C. 475; 20 B.J.
B.Q. 44, 509 395
May v. Standard Ins. Co 5 A.E. 605 485
Mechanics' Building, etc., Co. v. 40 U.C.E. 220; 3 A.E. 151.. 89, 99
Gore District Ins. Co 423
Merchants Fire Ins. Co. v. Equity
Fire Ins. Co 9 O.L.E. 241 70, 477, 497
Merritt v. Niagara District Mutual
Ins. Co 18 U.C.E. 529 136, 156
Metcalf v. Phoenix Ins. Co 43 Atl. 541 125
Migner v. St. Lawrence Fire Ins.
Co Q.B. 10 Q.B. 122. 95, 115
Milligan v. Equitable Ins. Co 16 U.C.E. 314 81
Minogue v. Quebec Ins. Co M.L.E. 1 S.C. 417, 478; 8 L.N.
340, 377 387
Mitchell v. City of London Ins. Co. 12 O.B, 706; 15 A.E. 262... 95, 227
436
Moffatt v. Beliance Ins. Co 45 U.C.E. 561 47, 240
Montgomery v. Gore District Mutual
Ins. Co : 10 Gr. 501 539
Montmagny Mutual Fire Ass. Co. v. f Addenda and 16 E.L. 275; 15
Carbonneau \ Q.L.E. 86 435
Montreal Ass. Co. v. McGillivray .. 13 Moo. P.C. 87 19, 21, 218, 253
Montreal Loan, etc., Co. v. Denis. .. Q.E. 14 S.C. 106 120
Moody v. JEtnsi Ins. Co 2 Thorn. 173 456
Mooney v. Imperial Ins. Co M.L.E. 3 S.C. 339; 11 L.N. 92. 400
Moore v. Citizens Ins. Co 14 A.E. 582 382, 416
Morrison v. City of London Ins. Co. 6 Man. E. 225 451
Morrow v. Lancashire Ins. Co 29 O.E, 377; 26 A.E. 173.. 107, 198
228, 471
Mount Eoyal Ins. Co. v. Benoit .... Q.E. 15 K.B. 90 190
Mulvey v. Gore District Mutual Ins.
Co 25 U.C.E. 424 . . .187, 195, 435, 448
Muma v. Niagara District Mutual
Co 22 U.C.E. 214 156
mor \. V, .-iirrloo Mutual Ins.
Co 4 O.L.E. 606 231, 390, 412
Mutual Ins. Co. v. LeMay tyjfc. ] r,i 7
Mutual Fire Ins. Co. v. Mercier Q.E. 14 K.B. 2^7.. ^2, 298
Mutual Ina. Co. of .Toilette v. Du-
P uSs 28 L.C.J. 179 .
XXVI TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE,
Mutual Ins. Co. of Montreal v. Vil- M.L.R. 2 Q.B. 89; 29 L.C.J.
leneuve 163; 9L.N. 146; 4D.C.A.
376 71, 516
McArthur v. Smith 1 A.R. 276 536
McBride v. Gore District Mutual
Ins. Co 30 U.C.R. 451 84, 338, 414
McCann v. Waterloo Mutual Ins. Co. 34 U.C.E. 376 484
McCausland v. Quebec Fire Ins. Co. 25 O.R. 330 432
McCrae v. Waterloo County Mutual
Ins. Co 1 A.B. 218 153, 321, 430
McCulloch v. Gore District Mutual
Ins. Co 32 U.C.R. 610 52
McDonald v. Messier 10 Q.L.R. 329 118
McDonell v. Beacon Ins. Co 7 U.C.C.P. 308 373
McGeachie v. North American Life
Ins. Co 23 Can. S.C.R. 148 37
McGibbon v. Imperial Ins. Co 2 R. & G. 6; 1 C.L.T. 192. .382, 384
MeGibbon v. Queen Ins. Co 10 L.C.J. 227 61, 62
McGugan v. Manufacturers' & Mer-
chants' Ins. Co 29 U.C.C.P. 494 388, 535
Mclnnes v. Western Ass. Co 30 U.C.R. 580 467
Mclntyre v. East Williams Mutual
Ins. Co 18 O.R. 79 53, 128, 129
Mclntyre v. National Ins. Co 44 U.C.R. 501; 5 A.R. 580 351
McKay v. Norwich Union Ins. Co.. 27 O.R. 251 403, 486, 493
McKean v. Commercial Union Ins.
Co 21 N.B. Rep. 583 192
McLachlan v. ^Etna Ins. Co 4 All. 173 27, 328, 428
McLaren v. Commercial Union Ins.
Co 12 A.R. 279 59, 410
McLeod v. Citizens Ins. Co 3 R. & C. 156; 1 R. & G. 21.368,460
McManus v. JEtna, Ins. Co 6 All. 314 194
McMillan v. Gore District Mutual
Ins. Co 21 U.C.C.P. 123 64
McPhillips v. London Mutual Ins.
Co 23 A.R. 524 100, 105
McQueen v. Phoenix Ins. Co 29 U.C.C.P. 511; 4 A.R. 289;
4 Can. S.C.R. 660 20, 96, 266
tf
National Ins. Co. of Ireland v. Har-
ris M.L.R. 5 Q.B. 345; 17 R.L. 230. 115
Naughter v. Ottawa Agricultural
Ins. Co 43 U.C.R. 121 308, 395
TABLE OF CASES
XXV11
NAME OF CASE.
Newcastle Fire Ins. Co. v. MacMor-
ran
New York Ins. Co. v. Fletcher
New York Ins. Co. v. Parent
Niagara District Mutual Ins. Co. v.
Lewis
Nicholson v. Phoenix Ins. Co
Nixon v. Queen Ins. Co
Nolan v. Ocean Accident, etc., Cor-
poration
North British Ins. Co. v. McLellan..
North British, etc., Ins. Co. v. Tour-
ville
North Shore Ely. v. Me Willie
Northern Ass. Co. v. Prevost
Norwich Union Ins. Co. v. LeBell . .
Nova Scotia Ins. Co. v. Stephenson.
Nuth v. Tamplin
WHERE REPORTED.
PAGE.
3 Dow. 255 330
117 U.S. 519 298
3 Q.L.E. 163; 1 L.N. 179.. 124, 340
12 U.C.C.P. 123 191
45 U.C.R. 359 397
23 Can. S.C.R, 26 451
5 O.L.R, 544; 2 Com. L.R. 367.. 466
21 Can. S.C.R. 288 332
25 Can. S.C.R. 177.... 115, 388, 458
17 R.L. 367; M.L.R. 5 Q.B. 122;
34 L.C.J. 55; 17 Can. S.C.R.
511; 13 L.N. 217; 12 L.N.
394; 21 R.L. 192 120
25 L.C.J. 211 333
29 Can. S.C.R. 470.... 313, 335, 383
23 Can. S.C.R. 137 385
8 Q.B.D. 253 552
O
O'Connor v. Commercial Union Ins
Co 3 R. & C. 119 187, 403
O'Connor v. Imperial Ins. Co 14 L.C.J. 219 19, 117, 123
Ogden v. Montreal Ins. Co 3 U.C.C.P. 497 81
Omnium Securities Co. v. Canada
Fire Ins. Co 1 O.R. 494 110
O'Neill v. Ottawa Ins. Co 30 U.C.C.P. 151 338, 383, 401
Osser v. Provincial Ins. Co 12 U.C.C.P. 133 421
Ottawa Agricultural Ins. Co. v.
Sheridan 5 Can. S.C.R. 157 117, 243
Ouellette v. Jacques Cartier Ins. Co Q.R. 31 S.C. 29 .".17
Pacaud v. Monarch Ins. Co 6 R. J.R.Q. 84 414
Pacaud v. Queen Ins. Co
Palmer v. Ocean Marine Ins. Co.
21 L.C. J. Ill
29 N.B. Rep. 501 . .
Paquet v. Citizens Ins. Co 4 Q.L.R. 230
Park v. Phosnix Ins. Co. . . 19 U.C.R. 110
409
328
118
XXV111 TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE,
Parsons v. Citizens Ins. Co 43 U.C.R. 261; 4 A.E. 96; 4
Can. S.C.E. 215; 7 App. Cas.
96 349, 350, 351, 373, 459, 486
Parsons v. Queen Ins. Co 29 U.C.C.P. 188; 2 O.E. 45; 43
U.C.E. 271; 4 A.E. 103; 4
Can. S.C.E. 215; 7 App. Cas.
96 3, 84, 269, 277, 449
Parsons v. Standard Ins. Co 5 Can. S.C.E. 233 415, 416
Parsons v. Victoria Mutual Ins. Co. 29 U.C.C.P. 22 415
Patterson v. Boyal Ins. Co 14 Gr. 169 259
Pawson v. Watson Cowp. Eep. 787 330
Peabody, etc., v. Washington County
Ins. Co 20 Barb. 339 104
Pearson v. Commercial Union Ins.
Co 1 App. Cas. 498 74
Peck v. Agricultural Ins. Co 19 O.E. 494 297, 403, 491
Pellatt v. Boosey 31 L.J.C.P. 281 126
Penley v. Beacon Ins. Co 7 Gr. 130 259, 482
Pense v. Northern Life Ass. Co. ... 15 O.L.E. 131 48
Peoples Life Ins. Co. v. Tatteraall.. 9 O.L.E. 611; 11 O.L.E. 326;
37 Can. S.C.E. 690 188, 239
Peoria Sugar, etc., Co. v. Canada
Fire & Marine Ins. Co 12 A.E. 418 481
Peppit v. North British, etc., Ins.
Co 1 E. & G. 219 165
Perkins v. Equitable Ins. Co 4 All. 562 378, 452
Perry v. Liverpool, London & Globe
Ins. Co 34 N.B. Eep. 380 106, 424
Pettigrew v. Grand Biver, etc., Ins.
Co 28 U.C.C.P. 70 78
Peuchen v. City Mutual Ins. Co. ... 18 A.E. 446 112, 435, 575
Pharand v. Lancashire Ins. Co Q.E. 18 S.C. 35 412
Phillips v. Grand Eiver Mutual Ins.
Co 46 U.C.E. 334 372, 488
Picard v. British American Ins. Co. M.L.E. 2 S.C. 117; 4 E.L. 136,
318; 9 L.N. 134 422
Pickard v. Sears 6 A. & E. 469 127, 209
Piggott v. Employers Liability 31 O.E. 666 253, 327
Pinhey v. Mercantile Fire Ins. Co. . 2 O.L.E. 296 112
Platt v. Gore District Mutual Ins.
Co 9 U.C.C.P. 405 445
Prevost v. Scottish Union, etc., Ins.
Co Q.E. 14 S.C. 203 193, 471
TABLE OF CASES XXIX
NAME OF CASE. WHERE REPORTED. PAGE.
Pritchard v. Standard Life Ass. Co. 7 O.K. 188 470
Provident Savings Life Ass. Soc. v. 27 A.E. 675; 32 Can. S.C.R.
Mowat 147 23,390
Provincial Ins. Co. v. Roy . 10 E.L., 643 221
Queen Ins. Co. v. Justices of Berk-
shire 4 Q.B.D. 469 445
Queen Ins. Co. v. Parsons 43 U.C.E. 271; 4 A.E. 103; 4
Can. S.C.E. 215; 7 App. Gas.
96, 122 20, 353, 354, 357, 358
360, 567
Quinlan v. Union Ins. Co 31 U.C.C.P. 618; 8 A.E. 376... 277
315, 343
Bacine v. Equitable Ins. Co 6 L.C.J. 89 456
Bamsay v. Montreal Street .Ely. Co. 11 L.N. 2; 32 L.C.J. 52 123
Ramsay Woollen Cloth Co. v. Mutual
Ins. Co. of Johnstown 11 U.C.R, 516 426
Reddick v. Saugeen Mutual Ins. Co. 14 O.R, 506; 15 A.R. 363.. 227, 366
459, 489
Bedford v. Mutual Ins. Co 38 U.C.R. 538 226
Bedpath v. Sun Mutual Ins. Co. ... 14 L.C.J. 90 28
Eegina v. Holland 7 B.C. Rep. 281 15
Beid v. Gore District Mutual Ins.
Co 11 U.C.R. 345 395
Riach v. Niagara District Mutual
Ins. Co 21 U.C.C.P. 464 380
Bice v. Provincial Ins. Co 7 U.C.C.P. 548 458, 470
Richardson v. Canada West Far-
mers' Ins. Co 17 U.C.C.P. 341 63
Richardson v. Home Ins. Co 21 U.C.C.P. 291 81
Richelieu & Ontario v. Commercial
Union Ass. Co O.K. 3 Q.B. 410 185
Bichmond Ins. Co. v. Fee 1 I < t >.L.K. : LL.46JL..2G
Robert v. Macdonald 19 L.C.J. 90 Ul
Bobcrts v. Security Co 1S97, 1 Q.B. 111. . .22, 30, 43, 46, 50
Robins v. Victoria Mutual Ins. Co.. ; A.K. li!7 HI. i:r,
Roe v. Harrison . . - T.!;. HT, L26
Holland v. North British Ins. Co. . . 14 L.C.J. 69 .
XXX TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Boss v. Citizens Ins. Co 19 N.B. Bep. 126 379
Boas v. Commercial Union Ass. Co. . 26 U.C.E. 552 462
Bousseau v. Boyal Ins. Co M.L.B. 1 S.C. 395 83, 480
Bowe v. London & Lancashire Ins.
Co 12 Gr. 311. Addenda et corrigenda.
Buss v. Mutual Ins. Co 29 U.C.B. 73 366, 407
Bussell v. The Queen 7 App. Cas. 829 9
Sadlers' Co. v. Badcock 2 Atk. 557 99
Salterio v. City of London Ins. Co.. 23 Can. S.C.B. 32 104
Samo v. Gore District Mutual Ins. 26 U.C.C.P. 405; 1 A.B. 545; 2
Co Can. S.C.B. 411 29, 369, 573
Sands v. Standard Ins. Co 26 Gr. 113; 27 Gr. 167.. 405, 490, 521
Addenda et corrigenda.
Sauvey v. Isolated Bisk 44 U.C.B. 523 425, 472, 497
Savoie v. Compagnie d 'Assurance
Mutuelle d'Hochelaga 26 L.C.J. 166
Scott v. Niagara District Mutual
Ins. Co 25 U.C.B. 119 1 36
Scott v. Phrenix Ins. Co Stuart's Bep. (L.C.) 354 457
Scott v. Quebec Fire Ins. Co 5 Bev. de Leg. 76 '. . . 332
Sears v. Agricultural Ins. Co 32 U.C.C.P. 585 35, 48, 498
Shannon v. Gore District Mutual 37 U.C.B. 380; 40 U.C.B. 188;
Ins. Co 2 A.B. 396. .71, 227, 290, 312, 407
Shannon v. Hastings Mutual Ins. 25 U.C.C.P. 470; 26 U.C.C.P.
Co 380; 2 A.B. 81; 2 Can. S.C.B.
394 223, 227, 273, 274, 276
282, 313, 457, 485, 496
Shaw v. Phomix Ins. Co 20 U.C.C.P. 170 83
Shaw v. Bobbards 6 A. & E. 75 67
Shaw v. St. Lawrence Ins. Co 11 U.C.B. 73 366, 451
Shera v. Ocean Accident Guarantee
Co 32 O.B, 411 445
Simpson v. Caledonian Ins. Co Q.B. 2 Q.B. 209 480
Sinclair v. Canada Mutual Ins. Co. 40 U.C.B. 206 288, 373, 386
Skillings v. Boyal Ins. Co 6 O.L.B. 401 477
Sly v. Ottawa Agricultural Ins. Co. 29 U.C.C.P. 557 344, 382
Smith v. City of London Ins. Co. . . 11 O.B. 38; 14 A.B. 328; 15
Can. S.C.B. 69 228, 230, 466
472, 485, 486, 496
Smith v. Commercial Union Ins. Co. 33 U.C.B. 69 2, 225
TABLE OF CASES XXXI
NAME OF CASE. WHERE REPORTED. PAGE,
Smith v. Mutual Ins. Co 27 U.C.C.P. 441. . .128, 152, 153, 163
Smith v. Niagara District Mutual
Ins. Co 38 U.C.R. 570 92, 366, 423
Smith v. Queen Ins. Co 1 Han. 311 463
Smith v. Royal Ins. Co 27 U.C.R. 54 81
Somers v. Athenieum Ins. Soc 7 E.J.K.Q. 104 277
Sowden v. Standard Ins. Co 44 U.C.K. 95; 5 A.R. 290.. 297, 309
Soupras v. Mutual Fire Ins. Co. ... 1 L.C.J. 197 173, 417
Sovereign Ins. Co. v. Moir 14 Can. S.C.R. 612 334, 401
Sovereign Ins. Co. v. Peters 12 Can. S.C.R. 33 406
Spahr v. North Waterloo Ins. Co. . . 31 O.R. 525 403, 491
Stackhouse v. Barnston 10 Ves. 453 137
St. Amand v. Quebec Ass. Co 9 Q.L.R. 162; 14 R.L. 27. . .124, 195
Stanley v. Western Ass. Co L.R. 3 Exch. 71 58
Stanstead, etc., v. Gooley Q.R. 9 Q.B. 324 114, 117
Stanton v. ./Etna Ins. Co 17 L.C.J. 281 71
Stanton v. Home Ins. Co 24 L.C.J. 38; 21 J. 211; 1 L.N.
, 208; 2 L.N. 238; 17 R.L. 14,
230 ' 119
Steeds v. Steeds 22 Q.B.D. 537 137
Steeves v. Sovereign Fire Ins. Co. . 20 N-.B. Rep. 394 367, 460
Stevens v. Queen Ins. Co 32 N.B. Rep. 387 438
Stevenson v. London & Lancashire
Ins. Co 26 U.C.R. 148 82
Stickney v. Niagara District Mutual
Ins. Co 23 U.C.C.P. 372 173, 366
Stillman v. Agricultural Ins. Co. ... 16 O.R. 145 378
Storms v. Canada West Farmers*
Mutual Ins. Co 22 U.C.C.P. 75 500, 545, 558
Stott v. London & Lancashire Ins.
Co 21 O.R. 312 346
Sweeting v. Pearce 7 C.B.N.S. 449
Tallman v. Mutual Fire Ins. Co. ... 27 U.C.R. 100 482
Taylor v. Merchants Fire Ins. Co. . . 9 How. 390 39
Temple v. Western Ass. Co 35 N.B. Rep. 171 419
Tennant v. Union Bank (1894), A.C. 31 10
Thames Iron Works Co. v. Royal
Mail Steam Packet Co 13 C.B.N.S. 358
Thomas v. Times & Beacon Ins. Co. 3 L.C.J. 162 464
Thompson v. Equity Fire Ins. Co. . . 10 O.W.R. 761
XXX11 TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Thompson v. Montreal Ass. Co 6 U.C.E. 319 59, 409
Thomson v. Weems 9 App. Gas., 671 331
Thuot v. Montmagny Ins. Co Q.R. 10 Q.B. 104 537
Thurtell v. Beaumont 1 Bing. 339 63
Tiernan v. People 's Life Ins. Co. . . 23 A.R. 342 45
Tilley v. Confederation Life Ass. . . 7 B.C. Rep. 144 45
Todd v. Liverpool, etc., Ins. Co. ... 18 U.C.C.P. 192; 20 U.C.C.P.
523 84, 394
Toleman v. Portbury L.R. 6 Q.B. 245; L.R. 7 Q.B.
344 127
Torrop v. Imperial Ins. Co 26 Can. S.C.R, 585 165
Tough v. Provincial Ins. Co 20 L.C.J. 168 476
Trustees of First Unitarian Congre-
gation of Toronto v. Western Ass.
Co 26 U.C.R. 175 432
Turgeon v. Citizens Ins. Co 9 Q.L.R. 78 477
Ulrich v. National Ins. Co 42 U.C.R. 141 350, 351, 374
Union St. Jacques de Montreal v.
Belisle L.R. 6 P.C. 31 9
Universal Non-Tariff Fire Ins. Co. v.
Forbes L.R. 19 Eq. 485 297, 306
VSzina v. Canada Fire Ins. Co 9 Q.L.R. 65 69, 275
Vcnner v. Sun Life Ins. Co 17 Can. S.C.R, 394 342
Victoria, Attorney General of v. Et-
tershank L.R, 6 P.C. 354 127
Victoria-Montreal Ins. Co. v. Home
Ins. Co 35 Can. S.C.R. 208 113
Victoria Mutual Ins. Co. v. Thomp-
son 9 A.R. 620; 32 U.C.C.P. 476. . . 534
Vineberg v. Guardian Ins. Co 19 A.R. 293 466
W
Walker v. Maitland Ins. Co 5 B. & Aid. 171 66
Walker v. Provincial Ins. Co 7 Gr. 137; 8 Gr. 217 32
Walker v. Western Ass. Co 18 U.C.R. 19 189
Walkerville Match Co. v. Scottish
Union Ins. Co. . . 40 C.L.J. 28 . 23
TABLE OF CASES XXX111
NAME OF CA- MiiKRE REPORTED. PAGE.
Wallbridge v. Follett 2 U.C.R. 280 63
Walrond v. Hawkins L.R. 10 C.P. 342 126
Walroth v. St. Lawrence Ins. Co. . . 10 U.C.R. 525 366
Wanless v. Lancashire Ins. Co 23 A.R. 224 495
Ward v. Day 4 B. & S. 337; 5 B. & S. 359. . . 126
Watortown Ins. Co. v. Ansley 14 Q.L.R. 183; 17 R.L. 108. .281. 404
Welsh v. Niagara District Mutual
Ins. Co 27 U.C.C.P. 134 547
Western Ass. Co. v. Atwell 2 L.C.J. 181 177
Western Ass. Co. v. Doull 12* Can. S.C.R. 446 177, 430
Western Ass. Co. v. Garland Q.R. 12 K.B. 530. ,122, 191, 412, 428
<-rn Ass. Co. v. Harrison 35 N.S. Rep. 488; 33 Can. S.C.
R. 473 377
rn Ass. Co. v. Pharand Q.R. 11 Q.B. 144 189
rn Ass. Co. v. Provincial Ass.
Co 5 A.R. 190 23, 33
Westmacott v. Hanley 22 Gr. 382 Ill
Whito v. Agricultural Ins. Co 22 U.C.C.P. 98 281
White v. Lancashire Ins. Co 27 Gr. 61 327
White v. Republic Ins. Co 2 Am. Rep. 22 60
Whitla v. Royal Ins. Co 34 Can. S.C.R. 191 267
AVhitlaw v. Phoenix Ins. Co 28 U.C.C.P. 53 397
Whyte v. Home Ins. Co 14 L.C.J. 301 85
Whyto v. Western Ass. Co 20 R.J.R.Q. 249; 22 L.C.J. 215;
7 R.L. 106 188, 190, 450, 480
Wilder v. Phoenix Ins. Co lR.deJ.S2 75
Willey v. Mutual Fire Ins. Co 2 Dorion Q.B.R. 29 124, 518
Williams v. Canada Farmers' Mu-
tual ins. Co 27 u.r.r.r. 119 :;is
"Williamson v. Commercial Union
Co 2<i r.< .<.!. .-in 383
Williamson v. Gore District Mutual
Ins. Co 26 U.C.i;. 11." 52
Williamson v. Hand-in-Hand Ins.
Co. 26 U.C.C.P. 266 453
Wilson v. Citizens Ins. Co 1U L.C.J, 17. r , 71, 124
Wilson v. Hill O.S.) 56, 57..
Wilson v. Standard Ins. < <> 2f [T.O.C J>. 808 274
Wilson v. States Fire Ins. Co 7 479
De G.M. ] i
Wood v. C'< Ins. Co. 2 N.B. Eq., 217 39
Woolley v. Ins.
'--'*, 535
XXXI V TABLE OF CASES
NAME OF CASE. WHERE REPORTED. PAGE.
Worswick v. Canada Fire & Marine
Ins. Go 3 A.R. 487 334
Wright v. Sun Mutual Ins. Co 29 U.C.C.P. 221 21
Wyld \?. London, Liverpool, etc.,
Ins. Co 33 U.C.R. 284; 21 Gr. 458; 2:\
Gr. 442; 1 Can. S.C.R. 604... 75
Wvmaii v. Imperial Ins. Co 2H2, 266, 307
HI Can. S.C.R. 715 82
. X
X<?nos v. Whickham . . L.R. 2 H.L. 296.. . .^2, 23
THE LAW
OF
FIRE INSURANCE
IN
CANADA
CHAPTER I
(l)
Introduction. Origin of the Statutory Conditions. Federal
and Provincial Legislative Jurisdiction.
Probably in no department of commercial activity has a
more marked development taken place in Canada during recent
years than in that of fire insurance. During the last five years
the amount at risk in Canada by all companies has increased
at the rate of nearly one hundred million dollars per annum
until the total has now reached one thousand five hundred mil-
lion dollars, for which the insured pay in the neighbourhood of
n million dollars per annum. (2)
(1> Xhi chapter contains the substance of an article by the
writer intituled "a Plea for a uniform Contract of Fire Insurance
for Canada" in the C<m. Law Times, vol. 19, p. 105.
(2) Canada Year Book, 1907.
THE LAW OF FIRE INSURANCE IN CANADA
This growth in the volume of business has been accompanied
by new departures in the methods of transacting fire insurance,
and by a greater complexity in the nature and character of the
risks undertaken, while more intricate problems of insurance
are presented to companies for consideration than were dreamed
of twenty-five years ago.
In the early days the utmost freedom prevailed in fire in-
surance as in all other commercial contracts, but in time the
unfairness which some companies displayed in the case of per-
fectly honest losses, led to the interference of the Legislature in
the Province of Ontario. The Courts in a number of instances
previous to the year 1874 called attention to the great hardship
to which the insured was subjected, by the unconscionable nature
of the conditions attached to the contract of insurance. In the
judgment of the Court in the case of Smith vs Commercial
Union Ins. Co., (3) after pointing out the complexity and far-
reaching nature of some of the conditions, Chief Justice Wilson
says:
" This is a degree of inquisitorial power under the penalty of
a forfeiture of the insurance money, which it is vexatious and
difficult to comply with, and which is about equal to the for-
feiture of itself, and almost a perfect immunity to the insurers
against their ever paying the money.
" The conduct of companies when enforcing rigidly such con-
ditions, has often been complained of by the Courts, by reason
of the number and nature, and difficulty of the conditions they
introduce into their policies; and the time perhaps has come
when the Legislature should interfere, to stand between them
and those they insure or pretend to insure, or, in other words,
the public, by limiting them to such conditions which the Courts
shall determine to be reasonable.
" Companies are often imposed upon by wilful fires, and by
very fraudulent conduct on the part of the assured . . .
" At present it is a mere system of attack and defence. The
(3) 33 U. C. R., at p. 90.
INTRODUCTION 3
more fraudulent or felonious the attack, the more numerous,
complicated and guarded the defences are. But that is a war
calculated only for two very special classes of persons. The
honest people are lost sight of, and suflter in tihe conflict."
Adopting the suggestion of the Courts, the Legislature of
Ontario, by 38 Viet., cap. 65, adopted the following legislation :
" A commission is to be issued by the Lieutenant-Governor
addressed to three or more persons holding judicial office in this
Province, for the purpose of determining what conditions of a fin 1
insurance policy are just and reasonable conditions."
To carry out this legislation, the following Judges were
subsequently appointed: The Hon. William Buell Richards,
afterwards Chief Justice of the Supreme Court ; the Hon. John
Godfrey Spragge, afterwards Chief Justice of the Court of
Appeal; the Hon. John Hawkins Hagarty, afterwards Chief
Justice of the Court of Appeal; the Hon. Samuel Henry
Strong, former Chief Justice of the Supreme Court, and the
Hon. Christopher Salmon Patterson, subsequently Puisne Judge
of the Supreme Court. The Commissioners brought in their
recommendations, which are contained in the Act of the follow-
ing year as 39 Viet., cap. 24. This Act, with some few amend-
ments, contains the statutory conditions now in force in the
Province of Ontario.
The original report of the Commissioners has been lost, al-
though a careful search in the provincial archives has been
made for it. We are not, however, left entirely in the dark as
to its contents, as a copy eeems to have been before Chief Jus-
tice Armour when preparing his judgment in Parsons vs The
Queen Ins. Co., (4) whnv, in discussing the statutory condi-
tions he says: "The Commissioners appended to their report the
conditions settled and approved of by them, and stated in their
report that these conditions had been settled after consideration
of the policies of all the companies doing business in the Prov-
ince ; that suggestions had also been received from several prom-
(4) 2 o. i:.. i:..
THE LAW OF FIRE INSURANCE IN CANADA
inent merchants, and the policy suggested by a committee of the
Dominion Board of Trade had allso been made use of ; that the
Board of Fire Underwriters of Toronto were furnished with a
draft of the proposed conditions, and their suggestions and
criticisms were received by the commissioners, and when prac-
ticable admitted, and the commissioners stated that it was to be
hoped, therefore, that these conditions as settled embodied what
was reasonable in the views of the two great classes interested,
insurers and insured."
The eminence of the members of the Royal Commission is a
sufficient guarantee of the value of its report, but the provision
that variations might be introduced, indicates that the commis-
sioners did not think every reasonable condition had been ex-
hausted. It is apparent that the usefulness of a standard form
is impaired by permitting any variation or addition to be made,
ami the ;iim of legislation in the United States has been to give
a set of conditions so full and complete that variations may be
absolutely dispensed with.
In their practical application various deficiencies were found ;
some of these have been corrected by later 'legislation, but others
s|;ill remain, and a time has come when the condition so val-
uable in their day should be revised and made to conform to
modern commercial requirements, and at the same time made
applicable to the whole of Canada.
It must be remembered that every contract of insurance which
is so framed that the company is not fairly and properly pro-
tected from dishonest people, inevitably results in the loss being
borne by the insured who are honest. If companies are com-
pelled to pay unjust claims so as to avoid litigation, the means
is always in their hands to recoup themselves by increasing their
rates of insurance, and no legislation can possibly prevent them
from so doing. During recent years in the Province of Ontario,
vigorous effort has been made to obtain certain amendments
to the statutory conditions, but so far without avail. The move-
ment had not been one coming from the insurance companies,
who are in the business for profit, but from the purely mutual
INTRODUCTION o
companies, who have a practical monopoly of the non-commer-
cial or non-mercantile hazards outside of cities and towns
throughout that province. No feature of fire insurance is more
interesting than the growth of what have been called the Farm-
ers' Mutuals in the Province of Ontario. These are local in-
stitutions officered by the loading farmers from almost every
county in the Province. The companies are eighty-three in
number, a'nd along with a few other mutual companies that
undertake mercantile business, as well as farm risks, they carry
over $230,000,000 of risks in this Province. These mutual com-
panies have organized an association called The Mutual Fire
Underwriters Association of Ontario, which assembles annually
in the city of Toronto for the transaction of business affecting
the general welfare. For a number of years a strong deputation
from the association interviewed the Provincial Government, urg-
ing amendment to the statutory conditions, but in vain, and it
is evident that in asking such legislation the Mutual Companies
.k quite as stro'ngly for the insured as the insurers, and this
affords very cogent proof that the Ontario statutory conditions
are not wholly satisfactory, but require revision and amend-
ment.
FKDKRAL AND PROVINCIAL LEGISLATIVE JURISDICTION.
juestion has been raised whether the Parliament of Can-
ada has jurisdiction to legislate respecting fire insurance con-
tracts.
necessitates a careful consideration of the decisions of
the Privy Council since the passing of the B. N. A. Act. At
first blush one might be inclined to think that the decision in
Citizens Ins. Co. vs Parsons, (5) was opposed to the conten-
tior that any such power exists, but a careful consideration of
oaee itself and the subsequent decisions of the Privy Coun-
cil, where this case has been further considered, do not support
thai vk'w, but on the contrary will, I venture to think, clearly
(r>) 7 App. Cos., 96.
6 THE LAW OF FIRE INSURANCE IN CANADA
establish the jurisdiction of the Parliament of Canada to deal
with this subject. In the Citizens Ins. Co. vs Parsons, the ques-
tion for the Court to determine was the right of the Legislature
of Ontario to adopt the Act to secure uniform conditions in
policies of fire insurance, (39 Viet., cap. 24).
It was contended on behalf of the Federal power that the
jurisdiction could be claimed under the 2nd. sub-sec, of sec. 91,
namely, legislative authority over the regulation of trade and
commerce, and secondly, under the general powers conferred
by sec. 91 "to make laws for the peace, order and good govern-
ment of Canada in relation to all matters not coming within
the classes of subjects which this Act assigned exclusively to the f
Legislatures of the Provinces."
Lord Watson, in the case of Attorney-General for Ontario
vs Attorney-General for the Dominion, (6) says that power to
legislate under the authority of the general powers conferred by
sec. 91 will not extend to any of the sub-sections of sec. 92. He
makes use of the following language :
" But to those matters which are not specified among the
enumerated subjects of ^ legislation, the exception from sec. 92,
which is enacted by the concluding words of sec. 91, has no ap-
plication; and, in legislating with regard to such matters, the
Dominion Parliament has no authority to encroach upon any
class of subjects which is exclusively .assigned to provincial legis-
latures by sec. 92. These enactments appear to their Lordships
to indicate that the exercise of legislative power by the Parlia-
ment of Canada, in regard to all matters not enumerated in
sec. 91, ought to be strictly confined to such matters as are un-
questionably of Canadian interest and importance, and ought
not to trench upon provincial legislation with respect to any
of the classes of subjects enumerated in sec. 92."
In the case of Citizens vs Parsons it was finally held that
legislation -with respect to uniform conditions does fall within
(6) (1896), A. C., at p. 348.
INTRODUCTION
the powers of the provincial legislatures by virtue of sub-sec. 13
of sec. 92, wherein powers to legislate exclusively are given to
the Provinces in matters relating to property and civil rights in
the province.
If, therefore, the only powers to legislate with respect to uni-
form conditions are to be found in the general power to legis-
late in all matters affecting the peace, order and good govern-
ment of Canada, it would appear that by the conjoint effect of
these two decisions, the Parliament of Canada would have no
power to legislate upon this subject.
We have next to consider whether such legislation falls under
the 2nd. sub-sec, of see. 91, namely, the regulation of trade and
commerce, because if it does, it is equally clear from the decision
of the Privy Council in the case above mentioned, that, although
the power to legislate with respect to this subject may be vested
in the local legislature under its authority with respect to prop-
erty and civil rights in the province, yet once the Parliament of
Canada under its powers to regulate trade and commerce has
exercised its authority by enacting legislation dealing with this
subject, such legislation necessarily overrides the provincial
ition. Lord Watson put it this way in the above case:
" It has been frequently recognized by this Board, and it may
now be regarded as settled law, that according to the scheme of
the British North America Act the enactments of the Parlia-
ment of Canada, in so far as these are within its competency,
must override provincial legislation."
Thid general statement that the legislation of the Parliament
of Canada must override provincial legislation when they come
in conflict, is abundantly established by the decisions both of the
Supreme Court and the Privy Council.
In the case of The Citizens Ins. Co. va Parsons in the Supreme
Court, (7) Tafichereau and Qwynne, JJ., who dissented, held
the Parliament of Canada had and the Provincial legislatures
(7) 4 < - . i; 218,
8 THE LAW OF FIRE INSURANCE IN CANADA
had not power to enact laws regulating contracts of fire insur-
ance.
The judgments of the majority of the Court, although they
arrived at the same result in favour of the legislative jurisdic-
tion of the Province, were not on some points entirely in har-
mony. It is, however, important to 'note that Chief Justice Rit-
chie and MT. Justice Fournier agreed in holding that the legisla-
tion was intra vires because the Dominion Parliament, although
having power to legislate on the same subject under sub-see. 2
of sec. 91, yet not having so legislated, and the subject matter
being also one affecting property and civil rights, and therefore
within the jurisdiction of the Provincial legislature, the legisla-
tion was not ultra vires.
Chief Justice Ritchie makes use of the following words:
p. 242.
" No one can dispute the general power of Parliament to legis-
late as to 'trade and commerce', and that where, over matters
with which local legislatures have power to deal, local legislation
conflicts with an Act passed by the Dominion Parliament in the
exercise of any of the general powers confided, to it, the legisla-
tion of the local must yield to the supremacy of the Dominion
Parliament; in other words, that the provincial legislation in
such a case must be subject to such regulations, for instance, as
to trade and commerce of a commercial character, as the Domin-
ion Parliament may prescribe."
Again he says, p. 243 :
" I do not think the local legislatures are to be deprived of
all power to deal with property and civil rights, because Parlia-
ment, in the plenary exercise of its powers to regulate trade and
commerce, may possibly pass laws inconsistent with the exercise
by the local legislatures of their powers, the exercise of tho
powers of the local legislatures being in such a case subject to
such regulations as the Dominion may lawfully prescribe."
Similarly, Mr. Justice Fournier says, p. 258 :
INTRODUCTION 9
" In order to reconcile the exercise of these powers" (relating
to trade and commerce on the one hand, and property and civi]
rights on the other), "I have arrived at the conclusion, in a case
such as the one now under consideration, that the provincial ju-
risdiction is only limited by the exercise by the Federal Parlia-
ment of its power, in so far as the latter is competent to exercise
it, and that the province can still exercise its power over that
portion of the subject matter over which it has jurisdiction
whenever this would not directly conflict with Federal legisla-
tion in a matter within Federal jurisdiction."
In the same case when in the Privy Council, Sir Montague
Smith says: (8)
" Having taken this view of the present case it becomes un-
necessary to consider the question how far the general power
to make regulations of trade and commerce when competently
exercised by the Dominion Parliament, might 'legally modify or
affect property and civil rights in the provinces, or the legisla-
tive power of the provincial legislatures in relation to those sub-
jects ; questions of this kind, it may be observed, arose and were
treated of by this Board in the cases of L'Union St. Jacques de
Montreal vs Belisde ; Gushing vs Dupuy."
In Russell vs The Queen, (9) a case in which the validity of
the Canadian Temperance Act, 1878, was in question, Sir Mon-
tague Smith, delivering the judgment of the Privy Council,
" The general scheme of the British North America Act with
regard to the distribution of legislative powers, and the general
scope and effect of sees. 91 and 92, and their relation to each
other, were fully considered and commented on by this Board in
<-ase of the Citizens Insurance Company vs Parsons. Accord-
ing to the principle of construction there pointed out, the first
(8) 7 App. Cag., 113.
(9) 7 App. Cos., 829.
10 THE LAW OF FIRE INSURANCE IN CANADA
question to be determined is, whether the Act now in question
falls within any of the classes of subjects enumerated in sec. 92,
and assigned exclusively to the Legislatures of the Provinces.
If it does, then the further question would arise, viz. : whether
the subject of the Act does not also fall within one of the enu-
merated classes of subjects in sec. 91, and so does not still belong
to the Dominion Parliament."
In Hodge vs The Queen, (10) the Privy Council in consider-
ing 'the subject matter and legislative character of sees. 4 and
5 of the Liquor License Act, 1877, held that these were merely
police or municipal regulations of a local character, and "as such
they cannot be said to interfere with the general regulation of
trade and commerce which belongs to the Dominion Parliament,
and do not conflict with the provisions of the Canada Tem-
perance Act, which does not appear to have as yet been locally
adopted."
Again, in Tennant vs Union Bank of Canada, (11) Lord
Watson in delivering the judgment of the Privy Council, says :
" The objection taken by the appellant to the provisions of the
Bank Act would be unanswerable if it could be shown that by
the Act of 1867 the Parliament of Canada is absolutely debarred
from trenching to any extent upon the matters assigned to the
provincial legislature by sec. 92. But sec. 91 expressly declares
that 'notwithstanding anything in this Act/ the exclusive legis-
lative authority of the Parliament of Canada shall extend to all
matters coming wi/thin the enumerated classes; which plainly
indicates that the legislation of that Parliament, so long as it
strictly relates to these matters, is to be of paramount author-
ity."
And again :
" But the argument, even if well founded, can afford no test
(10) 9 App. Gas., 117.
(11) (1894), A. C., 31.
INTRODUCTION 11
of the legislative powers of the Parliament of Canada. These
depend upon sec. 91, and the power to legislate conferred by that
clause may be fully exercised, although with the effect of modify-
ing civil rights in the Province."
Again, in the case of the Attorney-General for Ontario vs
Attorney-General for Dominion, (12) in which the question
arose as to the validity of R. S. 0. (1887), cap. 124, sec. 9, af-
fecting preferences to execution creditors, Lord Chancellor
Herschel, says:
" Their Lordships do not doubt that it would ibe open to tin 1
Dominion Parliament to deal with, such matters as part of a
bankruptcy law, and the provincial legislature would doubtless
be then precluded from interfering with this legislation inas-
much as such interference would affect the bankruptcy law of
the Dominion Parliament. But it does not follow that such
subjects, as might properly be treated as ancillary to such a law
and therefore within the powers of the Dominion Parliament,
are excluded from the legislative authority of the provincial
legis^ture when there is no bankruptcy legislation of the Do-
minion Parliament in existence."
More recently the Privy Council said in the Grand Trunk
Railway vs The Attorney-General of Canada: (13)
"Hut a comparison of two cases decided in the year 1894,
\i/., Attorney-General of Ontario vs Attorney-General of Can-
' ada (1894 A. C., 189), and Tennant vs Union Bank of Canada
(1894 A. C., 31), seems to cstahlish those two propositions:
. thai there can be a domain in which provincial and Do-
minion l< M may overlap, in which case neither legislation
will tx* ultra ri-n-s. if tin- field is clear; and, secondly, that if the
field is not clear, and in such a domain the two legislations meet,
then tiie Dominion legislation must prevail."
(12) (1804), A. C., 180.
(1007), A. C., p. 05.
12 THE LAW OF FIRE INSURANCE IN CANADA
These citations abundantly establish the proposition that if
legislation with respect to uniform conditions of fire insurance
contracts falls within the authority conferred upon the Domin-
ion Parliament to pass laws for the regulation of trade and com-
merce, then upon such legislation being adopted it will super-
sede legislation on the same matter which has previously been
adopted by the local legislature with full authority under its
jurisdiction to legislate in matters affecting property and civil
rights.
We have, therefore, only to consider now, what authority
there may be for the contention that the regulations and con-
ditions affecting contracts of insurance fall within the category
of subjects relating to the regulation of trade and commerce
exclusively assigned to the Federal Parliament. This matter
was much considered in the Citizens Ins. Co. vs Parsons case,
above cited, and the opinions of the Judges both of the Supremo
Court and the Judicial Committee of the Privy Council in that
case have an important bearing upon the question. Chief Jus-
tic Ritchie, after discussing at length the propositions as to
whether or not an insurance company is a trading company,
determines the liabilities of the parties without disposing of
this point. He says:
" But in the view I take of this case, I am willing to assume
that insurance companies may be considered trading companies,
and yet, that it by no means follows that the legislation com-
plained of is beyond the powers of the local legislatures."
Mr. Justice Strong delivered no formal judgment, but simply
authorized the Chief Justice to state that he entirely agreed
with the majority of thfe Court. Mr. Justice Fournier held that
although insurance was a commercial transaction, yet the con-
tract of insurance (which was the matter in question in the ac-
tion), formed part of the civil law and therefore fell within the
jurisdiction of the provinces, as coming under the head of "civil
rights."
Mr. Justice Taschereau, after investigating the laws of other
INTRODUCTION 13
countries, including Quebec, Prussia, Belgium, Portugal, Spain,
Holland and Wurtemburg, came to the conclusion that the con-
tract of insurance against fire was a commercial contract, and
that "not a single authority had been cited at the Bar tending
to show that there they are not considered as commercial com-
panies, or that their operations are not considered as commercial
operations."
Again he says :
" If the Federal Parliament has power to create insurance
companies, it has the power to regulate them, that is to say, to
prescribe the rules under which they can carry on their trade,
by which their trade is to be governed."
Mr. Justice Gwynne on this point was in full accord with Mr.
Justice Taschereau. He says:
" Contracts of fire insurance are governed by the same general
principles as marine policies, and the solution of any questio'n
that may arise upon .an insurance against fire will be found by
a careful application of the doctrine of marine insurance; and
the law most reasonably presumed originally that persons who
entered into contracts respecting fire insurance were acquainted
with, and had in their contemplation, the custom of merchants
and legal rules affecting marine insurance, and intended that
those new contracts should be construed and controlled by the
same means. No reason therefore exists for regarding the bus-
iness of marine insurance to be a trade and a branch of com-
merce, and that of fire insurance not to be."
It is true that the judgments of Mr. Justice Taschereau and
Mr. Justice Gwynne are dissenting judgments of the Supreme
Court, but they are entitled to as much weight as the opinions
of the majority of the Court, because the judgment of the Privy
Couiu il ^xpressly refused to determine the case on this ground.
Sir Montague Smith in delivering the judgment of the Court,
says:
question was raised which led to much discussion in the
14 THE LAW OF FIRE INSURANCE IN CANADA
Courts below and this bar, viz. : whether the business of insur-
ing buildings against fire was a trade. . . Whether the business
of fire insurance properly falls within the description of a
'trade' must, in their Lordships' view, depend upon the sense in
which that word is used in the particular statute to be construed ;
but in the present case their Lordships do not find it necessary
to rest their decisions on the narrow ground that the business
of insurance is not a trade."
Lord Watson, however, in the case above cited, AttorneyrGen-
eral for Ontario vs Attorney-Getoeral for Canada, (14) has
something to say upon the Citizens Ins. Co. vs Parsons, which
has a very important bearing upon the matter under discussion.
He says :
" The scope and effect of Nb. 2 of sec. 91 were discussed by
this Board at some length in Citizens Insurance Co. vs Parsons,
where it was decided that, in the absence of legislation upon the
subject by the Canadian Parliament, the Legislature of Ontario
had authority to impose conditions, as being matters of civil
right, upon the business of fire insurance, which was admitted
to be a trade, 80 long as those conditions only affected provincial
trade."
It will be perceived from this that in Lord Watson's opinion
it was only in absence of legislation by the Parliament of Can-
ada, covering the same matter, that the local legislature had
power to deal with contracts of insurance in the province.
It is not to be forgotten that the Parliament of Canada has
dealt with the subject of insurance from the date of the very
earliest exercise of its powers of legislation. There has been
scarcely a session of Parliament in which some legislation oft
this subject has not taken place ; and what is of very great im-
portance to our inquiry, the Parliament of Canada, by the 27th
and 28th sections of the Insurance Act of 1886, being 49 Viet.,
cap. 45, enacted two most important conditions which there-
(14). (1896), A. C., 348.
INTRODUCTION l"i
after should attach to life insurance contracts. These sections
read as follows:
Sec. 27. "No condition, stipulation or proviso modifying or im-
pairing the effect of any policy or certificate of ilife insurance
issued after the first day of January, one thousand eight hun-
dred and eighty-six, by any company doing business within Can-
ada under the authority of the Parliament of Canada, shall be
good or valid unless such condition, stipulation or proviso is set
out in full on the face or back of the policy."
Sec. 28. " No policy or certificate shall contain or have en-
dorsed upon it any condition providing that the said policy or
certificate shall be voided by reason of any statement contained
in the application therefor being untrue, unless 'such condition
is limited to cases in which such statement is material to the
contract."
These clauses have never yet been held ultra vires of the Do-
minion Parliament.
No stipulations more far-reaching, or interfering more serious-
ly with the civil rights of the parties in matters of contract can
well be conceived. If the Parliament of Canada had authority
to deal in this way with contracts of life insurance, it is difficult
to suggest any good reason why the same legislative authority
- not exist with respect to contracts of fire insurance. (14a)
Tin- result of this review of the cases leads to the following
conclusions:
1. Both the Parliament of Canada and the Provincial Legis-
latures have authority to legislate respecting contracts of fire
insurance, the former as dealing with matters of trade and com-
ic latter as affecting property and civil rights.
In the absence of Federal legislation, Provincial legisla-
tion on the subject is i ////>/ rircs and bimlini: upon all insurance
corporations carrying on business with in the Province.
3. rpon the Federal government legislating on the subject
(14a) Vide aluo Rev lolkmd, 7 B. C. Rep., 281.
16 THE LAW OF FIRE INSURANCE IN CANADA
for the whole Dominion, such legislation will supersede the
Provincial legislation when they come in conflict. (15)
(15) In the year 1899 the writer at the instance of the present
Ohief Justice of Canada who at that time was Solicitor General,
held a <num/ber of conferences with the managers of the leading stock
and mutual fire 'insurance companies doing 'bus-mess In Canada and
also had considerable correspondence and finally a personal inter-
view with Mr. Elijali R. Kennedy, the Chairman of the Committee
that prepared (the New York Standard Policy which has since been
introduced by statutory enactment into the leading States of the
Union. As a result of the information so obtained the writer drafted
a Fire Insurance Policy Act which wiflil toe found in the appendix
imfra, p. 537, and which was introduced in the House of Commons
by the Solicitor General in 1900, but the bill was not proceeded with.
It will be perceived that to avoid any question of ultra vires, the
Act Is not made applicable to companies incorporated by the Legis-
lature of any of the Provinces of Canada although the writer is of
opinion as aborf stated that there was jurisdiction to make it ap-
plicable to all fire insurance companies doing business in Canada.
From the writer's former connection with the Ontario Mutual Com-
panies, haying acted as the so'lioitor for their associaton for some
years, he is able, he thinks, to express the opinion of these companies,
that an Act such as this would be of even greater benefit to the
Mutual than to the Stock Companies.
THE CONTRACT 17
CHAPTER II
THE CONTRACT
Definition. Civil Code Quebec. Interim Receipt. Seal.
Completion of Contract. Delivery of Policy. Ultra
Vires. Divisibility. Term of Policy. Premium payable
in cash. Insured property. Locality. Loss and damage.
Insurance has been defined as a contract whereby, for a stip-
ulated consideration, one party undertakes to indemnify the
other against damage or loss on a certain subject by certain
perils. (1)
The Civil Code of the Province of Quebec defines Insurance
as follows: "Insurance is a contract whereby one party, called
the insurer or underwriter, undertakes for a valuable considera-
tion to indemnify the other, called the insured, or his representa-
nnst loss or liability from certain risks or perils to which
the object of the insurance may be exposed, -or from the happen-
ing of a certain event." (2)
Fire insurance may be defined as a contract whereby one
party undertakes for a consideration to indemnify another
party, to the amount stipulated in the contract, for his loss or
damage by fire to the property insured.
The contract is one of indemnity and indemnity only.
principle is thus expressed by Lord Justice Cotton, in
Castellairi P ;on: (3)
i This is the definition given in Phillips, on Insurance, an au-
thority frequently commended in the highest terms. Vide Lord Jiis-
Uce Blackburn In Altehiaon vs Ihre, 4 App. Cas., at p. 708.
Vide art. 2468 C. C. Quel.
(3) 11 Q. B. D., 380, at p. 808.
18 THE LAW OF FIRE INSURANCE IN CANADA
"The policy is really a contract to indemnify the person in-
sured for the loss which he has sustained in consequence of the
peril insured against which has happened, and from that it fol-
lows, of course, that as it is only a contract of indemnity, it is
only to pay that loss which the assured may have sustained by
reason of the fire which has occurred. In order to ascertain
what that loss is, everything must be taken into account which
is received by and comes to the hand of the assured, and which
diminishes that loss. It is only the amount of the loss, when it
is considered as a contract of indemnity, which is to be paid after
taking it into account and estimating those benefits or sums of
money which the assured may have received in diminution of the
loss."
POLICY DKFIM.I).
The contents of a policy of insurance is well expressed iii art.
2569 of the Civil Code, as follows:
"A fire policy contains the name of the party in whose favour
it is made;
"A description or sufficient designation of the object of the
insurance and of the nature iof the interest of the insured ;
"A declaration of the amount covered by the insurance, of the
amount or rate of the premium, and of the nature, commence-
ment and duration of the risk ;
"The subscription of the insurer with its date ;
"Such other announcements and conditions as the parties may
lawfully agree upon."
ORAL CONTRACT.
In Ontario, the statute (4) provides that "contract shall mean
and include any contract or agreement sealed, written or oral,
the subject matter of which is within the intent of the clause
numbered 41 of this section", and ss. 41 contains a definition of
(4) R. S. O. (1897), c. 203, s. 2, ss. 37.
THE CONTRACT 19
insurance which includes insurance against loss or damage by
fire.
The entry ,of the application and acceptance of the risk by the
clerk of the insurance agent, was held sufficient to make a valid
contract, where the agent had power to receive proposals for in-
surance, to fix rates of premium, to receive monies, to counter-
sign, issue and renew and consent to the transfer of policies,
subject to the rules and regulations of the company, and such
instructions as might from time (to time be given to its
officers. (5)
Under instructions from the plaintiffs to obtain from them an
insurance against loss by accidental leakage from their sprinkler
system of fire protection, an insurance broker was informed by
the accountant in charge ;of the head office that such insurance
covered frost damage, which he thereupon applied for. The rate
was subsequently fixed, no mention being made, as was the fact,
of there being an extra rate to cover frost damage. The interim
receipt only insured the plaintiffs against accidental leakage.
It was held that the plaintiffs were entitled to recover on a verbal
contract. (6)
In Quebec, art. 2481 of the Civil Code is as follows : " The
ptance of an application for insurance constitutes a valid
agreement to insure, unless the insurer is required by law to con-
tract in another form exclusively."
Before the Code it was questioned whether a verbal contract
of insurance against fire was good by the law of Quebec. (7)
It was also held that an insurance by simple receipt for the
premium was legal and binding without the issue of a policy. (8)
(5) Canada Fire & Marine Ins. Co. VB Western Aas. Co., 26 Or., 264.
(6) Hawthorne t>* Canadian Casualty, etc., Ins. Co., 14 O. L. K..
166; 39 Can. B.C. R., 558.
(7) Montreal Ins. Co. va McGiHivray, 13 Moo. P. C. f 87.
(8) O'Connor va ImporiaJ Ins. Co., 14 L. C. J., 219.
20 THE LAW OF FIRE INSURANCE IN CANADA
INTERIM RECEIPT.
The receipt given the applicant evidencing his application
and binding the company for a short date insurance, is called
in Canada an interim receipt.
As was pointed out by Chief Justice Wilson, (9) the word
"receipt" is somewhat of a misnomer, as the document not only
acknowledges the receipt of the money but expresses the contract
between the parties. In that case the judge said : "The interim
receipt, as it is called, is not very accurately described by that
name. It may be interim as regards a contract being subse-
quently to be made by the company, that is, it may be a mere
acknowledgment of the receipt of so much money while the ap-
plication or proposal is under consideration, without being a
contract in any form. Or it may be interim as regards some
stipulations which are usually contained in it in this country
and the United States; that is, it may be a present and actual
insurance to the applicant while his proposal is under considera-
tion. In that case the term receipt very inadequately and er-
roneously describes such an instrument which is to all intents
and purposes a veritable contract."
The interim receipts have the name of the manager or general
agent, stamped or lithographed thereon, which after reciting the
application for insurance proceed to say that pending the ac-
ceptance or refusal of the proposal, the property is held insured
by the company. The legal effect of this instrument is thus de-
fined iby the Judicial Committee of the Privy Council, Queen
Ins. Oo. vs Parsons: (10)
"This note is not a policy of insurance in the common unde~-
standing of that word It is expressly a contract
with a view to a policy making interim provision until a policy
is prepared and. delivered. It contains a proposal for insurance
which, if accepted by the company, would result in a policy to
(9) McQueen vs Phoenix Mutual, 29 U. C. C. P., p. 520.
(10) 7 App. Gas., p. 124.
THE CONTRACT 21
be 'based on the terms of the proposal and issued by the com-
pany."
SEAL.
The strict rule requiring that the seal should be affixed to all
contracts of insurance corporations to make them binding \diich
at first prevailed, has long since been relaxed. (11)
The act of incorporation of the defendant Insurance Com-
panies required the contracts to be under seal and signed and
countersigned as the acts directed. The policies in question were
not under seal, but they were signed and countersigned as re-
quired, and the action was defended on this ground.
In giving judgment, Moss, C. J., said: "It is an utter fal-
lacy to suppose that the statute incorporating the Company ex-
pressly prohibited the making of a contract except under seal.
It does indeed declare that the policy signed in a particular way
and sealed, shall be valid, but it does not restrict the Company
from binding itself according to the ordinary rules of law." And
he cites cases ill the Canadian and English Courts to support
that view.
Patterson, J., in the same case, cites the judgment of Chief
Justice Bovill as showing the gradual modification of the law
with respect to the power of corporations to bind themselves, and
that now the rule is established that they may do so without a
seal. He points out that that view had been at any early date
adopted in the Courts of the United States and Canada.
In another case, (12) Patterson, J. A., in citing the Com-
pany's act of incorporation which provided that "All policies
or contracts of insurance shall b n sig'ned by the president, etc.,
and being so signed, etc., shall be valid", said "this did not imply
that the plain tiffs could not be bound in any other way and that
(11) Montreal AJK. Co. vs McGlWivray, 13 Moo. P. C., 87.
irht 99 Son Mm M.I 1. _'<) U. C. C. P., 221.
(12) Canada Fire and Marine vs The Western Assurance Co., 26
Or., 264. 5 A. K., 244.
22 THE LAW OF FIRE INSURANCE IN CANADA
under the general law of this province which in the absence of
evidence to the contrary we must take to prevail also in Mon-
treal, a trading corporation may become bound in respect of those
matters of business which it is incorporated to carry on, by
almost any act which will bind an unincorporated partnership."
Again he says : "The doctrine may therefore be considered to be
well established in this country that the acceptance of a written
proposal for insurance consummates a bargain provided the offer
is standing at the time of the acceptance."
Where the policy requires to be countersigned by the agent,
non-compliance with this condition if the result of neglect,
mistake or inadvertance will not avoid the policy.
A policy of insurance provided that it should not take effect
unless countersigned by the agent. The /latter received the pre-
mium and issued the policy, but neglected to countersign it.
It was hold, that the countersigning of the policy had been
waived. (13)
Although treated as a case of waiver, the reasoning upon
which the judgment is supported is estoppel, the court holding
that it would be "a fraud on the insured and an entire defeating
of justice if an underwriter could take advantage of the omission
of his agent to countersign -the policy (by an oversight probably) ,
when the agent had received the premium and delivered the
policy to the person applying for insurance."
CONTRACT COMPLETED.
A contract of insurance is completed where the policy is
signed and sealed without delivery, and its retention by the
company is not for the purpose of keeping it in escrow until
the happening of some event, (14) but where the company has
executed the policy untruly believing the premium has been
(13) Chapman vs Delaware Mutual Ins. Co., 23 N. B. Rep., 121.
(14) Xenos vs Wictoham, L. R., 2 H. L., 296; Roberts vs Security
Co., 1897, 1 Q. B., 111.
THE CONTRACT 23
paid, or with the condition endorsed on the policy that it shall
not take effect until the premium is paid, the company is not
bound. (15)
The initialing of aft application for insurance by officers of
an insurance company, though indicating acceptance of the
risk, does not without communication of the faot to the appli-
cant constitute any contract with him. (16)
A contract of life insurance is complete on delivery of the
policy to .the insured and payment of the first premium. Where
the insured being able to read, has had ample opportunity to
examine the policy, and not being misled by the company as to
its terms, or induced not to read it, had neglected to do so, he
cannot, after paying the premium, be heard to say that it did not
contain the terms of the contract agreed upon. (17)
A policy contained a stipulation that it should be valid only
when countersigned by the duly authorized agent of the com-
pany. Held, that defendants wore not bound by a policy signed
by the general-manager and countersigned in the name of one
who had been their agent, by one of his clerks, but without any
authorization by him, even though the insured may not have
known of the cessation of the agency. (18)
On February 24th, 1900, plaintiff's husband applied to the de-
fendant company for insurance on his life ; the application con-
taining this stipulation: "The policy asked for, if issued, will
only co:ne info force when the first premium has been actually
i to the company and accepted while the applicant for insur-
ance is alive and in good health." When making the applica-
tion the applicant paid $4 on account of the first premium, and
the medical examination having been satisfactory the company
(15) Western ABB. Co. va Provincial Ins. Co., ."> A. R., 190;
Cnlhoun V8 Union Mutnnl In-. <'.>., T. N. It. K,.p.. 13.
(16) Armstrong va Provident Savings Life A-as. Soc., 2 O. L. R.,
771.
ngs Life Association of New York va Mowat,
82 Can. S. C. U.. 1 17. reversing 27 A. K., G75.
rville Match Co. v$ Scotttoh Union Co., 40 C. L. J., 28.
24 THE LAW OF TIKE INSURANCE IN CANADA
issued the policy at New York, on March 8th, 1900, and mailed
it on the 9th March to its agent at Montreal, who received it in
the daytime on Saturday, March 10th. On March 8th, the ap-
plicant was attacked with congestion of the lungs, from which
he died on March 10th, between 9.30 and 10 o'clock a. m. The
plaintiff afterwards tendered the balance of the premium to the
agent, who refused to deliver up the policy.
Held, that if in principle, the acceptance of the application
constitutes a valid contract of insurance (art. 2481 C. C. supra)
in this case, such acceptance was made subject to the above con-
dition, and that not having been complied with no contract for
insurance existed. Held, also, that in view of the said condition
the deposit of the policy in the .post office at New York did not
constitute a delivery of it to the assured. (19)
A policy of insurance, issued in New York and delivered in
Boston to a broker, by whom it was sent to St. John, to his agent,
aind by him handed to the defendants, who gave in return a pre-
mium note, was held not to have been complete until actually
ddivoivd and the transaction was illegal under Act of Assembly,
19 Viet., cap. 45, which prohibits any foreign insurance com-
pany from -doing business in the province without first filing a
certificate in the Provincial Secretary's office. (20)
A. held himself out as the agent in St. John of the Colum-
bia Insurance Co., whose head office was in New York. His
course of business was to receive applications for insurance
addressed to the company, which he would forward to B., an in-
surance broker in Boston. The latter would send the application
to the company, when, if it was accepted, a policy would be de-
livered to him, and the premium charged against him at the
time. The policy was then forwarded by B. to A., who would
deliver it to the assured, taking the premium note direct to him-
self, and sending to B. his own note for nine-tenths of the
amount (the balance being kept for commissions). Held, that
(10) Girard vs Metropolitan Life Iiis. Co., Q. R. f 20 S. C., 532.
(20) Allison vs Robinson, 2 Pug., 103.
TIIK CONTRACT 25
tli is was an indirect carrying on of insurance business in this
province by the company, contrary to the Act of Assembly, 19
Viet., cap. 45, and that a premium note given to A. could not be
collected; and also that the fact of the note being made to A.
instead of to the company, in no way distinguished this cas*
from Allison v. Robinson. (21)
A company incorporated under the authority of a provincial
legislature may carry on the business of fire insurance and is
capable of entering into a valid contract of insurance relating
to property outside the province. (22)
CONTRACT DEPENDING ON CORRESPONDENCE.
On February 7th, plaintiff wrote W. describing him as agent
of the Xortli British and Mercantile Insurance Company, and
referring to a statement of W's that the company would be
willing to insure the buildings at the same rate for which they
had been insured in the Agricultural company, requested him
to effect insurance on them for $10,000 in favour of one L. a
mortgagee; that it was the same risk which the Canada Agri-
cultural Ins. Co. had for three years at two per ce"nt. ? and that
ili" policy was in the hands of L., from whom J. could get it to
draw the no\v policy. He also stated that he would like to have
a similar amount insured on the buildings in his own favour, at
the same rate ; and he referred to a plan of the town ot' Chatham
for position of the buildings, where they were marked as the
"Convert" an.l the "Cathedral". On the same day W. wrote J.
as follows: "Enclosed find the Bishop's (plaintiff) application
just received 6.30 p.m. He has misunderstood me as to rate.
I told him, as authorized by S., at the rate of one per <
which would be about fair. If the 'North British* and the 'West-
will do it, and plan is sufficient, telegraph me in the morn-
ing. The meaning of application is $5,000 on each, of the blocks
(21) Jones vs Taylor, Re Oulton. _' I'u- . 891
(22) Oanod y. Co. v* Oti Ins. Co..
3. C. R.. 405.
26 THE LAW OF FIRE INSURANCE IN CANADA
that is $10,000 in favour of L. to secure mortgage, and an
additional $10,000 five thousand on each in favour of the
Bishop (plaintiff)." On the next day, the 8th, J. telegraphed
to W. as follows : "S. and I take ten thousand each."
Heild, that this constituted no completed contract of insur-
ance. (23)
CONTRACTS DEEMED TO BE MADE IN ONTARIO.
The Ontario Insurance Act (24) contains the following provi-
sion:
143. "Where the subject matter of any insurance contract is
property, or an insurable interest within the jurisdiction of
Ontario, or is a person domiciled or resident therein, any policy,
certificate, interim receipt or renewal receipt, or writing evidenc-
ing the contract, shall, if signed, countersigned, issued or de-
livered over in Ontario, or committed to the post office or to any
carrier, messenger or agent, to be delivered or handed over to
the assured, his assign or agent in Ontario, be deemed to evi-
dence a contract made therein, and the contract shall be con-
strued according to the law thereof, and all moneys payable un-
der the contract shall be paid at the office of the chief officer
or agent in Ontario of the insuring corporation, in lawful money
of Canada, and this section shall have effect notwithstanding
any agreement, condition or stipulation to the contrary."
The insured residing in Ontario applied through an insurance
broker in Montreal for an insurance policy on property in On-
tario in the defendant company, which was incorporated under
the laws of one of the United States, and had its home office
in that State. The evidence of the insured was that he received
the policy through the mail from the broker the evidence of
the company was that it was delivered to the broker as the as-
sured's agent and who was not an agent of the company which
had no agent or officer in Ontario. No place of payment was
(23) Bishop of Chatham vs Western Ass. Co., 22 N. B. Rep., 242.
(24) R. S. O. (1897), cap. 203. Quebec provision, vide infra Cap.
X.
THE CONTRACT 27
named in the policy. Held, that the plaintiffs had not proved
a cause of action upon which they were entitled to sue the com-
pany in Ontario; a : nd that in the provision as to committing a
policy to the post office the words "to be delivered or handed
over to the assured, his assign or agent in Ontario" in sec. 143
of cap. 203 E. S. 0., 1897, contemplates a committing to the
post office of the policy by the insurer addressed to the insured,
his assign or agent in Ontario ; and the provision, therein, that
in such event the money should be payable at the office ... in
Ontario, shews that the section, was intended to apply to com-
panies having an office or agent in Ontario and not to a company
which has in no way brought itself or its business within the
limits of the province. Held, also, that the company, not having
complied with the Insurance Act, R. S. 0., 1897, cap. 203, in
regard to license of registration, it was precluded by sec. 85 of
that Act from entering into any contract with anyone in On-
tario. (25)
DELIVERY OF POLICY.
Where the policy, duly executed, is mailed to the insured, the
contract of insurance arises, as in other cases, from the time of
delivery to the post office, but questions arise where the policy,
instead of being sent direct, is forwarded to the local agent or
broker through whom the insurance has been effected.
It was held in New Brunswick, (26) where an application
was made to a broker for insurance, that the risk began when
the company received the premium and put the policy in motion
to be sent to the broker.
Where, however, the application for insurance was made to
the local agent of the company, it was held ift the Supreme
Court of Canada, (27) that inasmuch as the policy on its
(25) Buraon V9 German Union Ins. Co., 10 O. L. R., 238, Teet-
r : BM M4 .T.. in MI.' ;.n V8 JEtnn Ins. Co., 4 All., 173.
7) Con,f Am. vs O'Doimoll. in Can. S. C. R., 92;
18 Can. 8. C. R., 218; B.C. <
28 THE LAW OF FIRE INSURANCE IN CANADA
face provided that it should not be valid unless countersigned
by the (local agent, until so countersigned the document was an
escrow and the company was not bound.
Where the application was made to a firm of brokers for a
policy of marine insurance, and they forwarded it to the local
agent of the company, who sent it forward to the head office,
and where the policy issued thereon was sent to the local agent,
but its delivery stopped by telegram, it was held that the proper-
ty in the policy never passed out of the company and it was at
the most only an escrow in the hands of the agent. (29)
It is to be noticed, h<>\\v\vr. in this last case that the deci-
sion is complicated to some cxt'-nt by reason of the fact that the
court also held that the policy issued never was the policy asked
for by the applicant, and the company was, therefore, relieved
from liability.
A life policy contained a condition that the policy should be
void if, without the permission of the company, the insured en-
gaged in employment on a railroad. The policy was dated 27th
September 1894, and by its terras insured the deceased for one
year from the 5th October following, and the renewal receipts
continued the insurance for 12 months from the 5th October in
each year. It was held, following Xenos vs Wickham, supra p.
22, that the policy took effect from the 27th September, and
not from the 5th October, the date of its delivery to the deceased
in British Columbia. (30)
CONTRACT ULTRA VIRES.
A contract of insurance alleged to have been made in Montreal
by an agent there of an insurance company of New York, whose
charter and by-laws provide that it can only contract in Xew
York, and by its president or vice-president, is null and void.
And the statements or admissions of an agent, made after the
contract has been performed, are inadmissable as evidence. (31)
(29) Birck rs Know.lton, 21 Can. S. C. R., 371.
(30) Elsou vs North American Life, 9 B. C. Rep., 474. Affirmed in
the Supreme Court, 33 Can. S. C. R., 383.
(31) Redpath vs Sun Mutual Ins. Co., S. C., 1869, 14 L. C. X, 90.
THE CONTRACT 29
THE CONTRACT OF INSURANCE IS INDIVISIBLE.
\Vhere a policy of insurance covered both buildings and stock
and the application stated that /there were no incumbrances, al-
though there were several mortgages, it was held that the policy
was entire and indivisible and that the misrepresentations as to
incumbrances rendered the policy wholly void. (32)
It will be observed, however, that the statutory conditions
(infra, p. 362), now expressly provide that the misrepresentation
shall only void the policy with respect to the property in regard
to which the misrepresentation is made.
In Quebec, it was held, that where several subjects are covered
by one contract of insurance the contract is indivisible, and
where the insured incurs a forfeiture as to one subject, the
polit-y is wholly void. (33)
But in another case, (34) it was held, that one policy can
cover several distinct insurances, and in that case one of these
insurances might be affected by causes not affecting the other
IbBuranc
! OF POLICY.
Where the insurance runs from one day named in the policy
to another day named therein, "both inclusive", the contract
ii! .\pire until midnight on the last day. This rule could
only be rebutted by evidence of a clearly established and in-
variable custom to the contrary, which, in the present case, was
~li.wn to exist. (35)
ITM.
Cloeely connected with the inquiry regarding the date at
(32) Sanio vs Gore District Mutual Ins. Co., 2 Can. S. C. K -111.
(88) Mockay va Glasgow & London Ins. Co., ISSs. M. T, It., 4 S.
24.
n Richmond Fire In-. Q r... isss. n Q. I. i:
(35) Horald <V -lu-m Assurance Co., 1888, M. I. K .. 4 S.
'
30 THE LAW OF FIBE INSURANCE IN CANADA
which the policy goes into effect, is the question as to how far
the payment of the premium is a condition precedent to the
liability of the company.
Although an acknowledgment of the receipt of money in a
deed is not conclusive evidence between the parties of the facts
so stated, so as to prevent an action being brought to recover
the consideration, nevertheless, in certain cases, where the pay-
ment of money is a condition precedent to the existence of the
contract, it has been held that the party making the acknowledg-
ment cannot defeat the operation of the contract by proving
that the money so admitted to have been paid was not paid. (36)
The non-tpayment of the premium may be considered under
four heads :
1. In the case of an interim receipt;
2. Where the policy contains a condition that the payment
of the premium in cash is a condition precedent to the compa-
ny's liability;
3. Where the policy contains no condition or provision
which requires that the premium should be paid in cash but
acknowledges the payment ; and
4. Where the policy contains no condition or provision
which requires that the premium should be paid in cash and
there is no acknowledgement of its payment.
Firstly. Interim receipt cases. In the case of an interim
receipt, the rule is that, it is not within the scope of an agent's
ostensible authority to take a promissory note or other security
in lieu of cash, and that, the company is not liable upon the
interim contract where the premium has not been paid in cash.
This statement is based upDn the following decisions :
The agent of a Fire Ins. Co. had authority to take notes for
premiums instead of cash in certain cases, and blank forms for
the purpose were placed in his hands by the company. The
(36) Roberts vs Sectirity Co., 1897, 1 Q. B., 111.
THE CONTRACT 31
plaintiff was non-suited by Patterson, J., at the trial on tho
ground that to create a valid insurance the premium must be
paid in cash. This judgment of non-suit was set aside on the
ground that there was no evidence to show that the agent was
exceeding his instructions in taking notes for cash in the case
before the Court. A new trial having been ordered, the
action was heard by Burton, J. A., when the plaintiff was
?gain non-suited. Upon a motion for a new trial before
the same Court of Common Pleas, it was said : " We are
hardly prepared to hold that on the evidence before us
the defendants are necessarily bound by the unauthorized act of
their local agent in taking anything but cash for the premium
on this risk. Every man may be naturally supposed to know
that for an ordinary insurance on a mercantile stock he must
pay the premium in cash. Such is the general rule. He may
know that on a mutual risk a premium note is given.
" It also appears that, on what are called 'farm risks', notes
are taken. But when he takes a receipt as for so much cash, con-
trary, as he knows, to the truth, as he paid no cash, we may with
n hold that the plaintiff must take the risk of the agent
having authority to give him credit on his note." (37)
The owners of a quantity of wheat on board a vessel applied
t<> the agent of an insurance company to insure the same, who
took the risk subject to the approval of the head office. The
insurance was authorized and the agent directed to remit the
amount of the 'premium at once. A clerk in the agent's office
left the receipt at the insured's office and demanded the pre-
mium, but owing to absence of the accountant he was told to call
again. The owners of the wheat, instead of paying the pre-
mium, credited the amount to the agent in their books, and be-
fore any policy was delivered, information was received of the
lues of the vessel and cargo, which had in fact occurred before
the policy for insurance was made. The Company then refused
to iseue a policy and a bill was filed to compel them to do so, or
ne amount of loss.
(37) Johnson vt Provincial Ins. Co., 26 U. C. C. P., 11 3.
32 THE LAW OF FIRE INSURANCE IN CANADA
In delivering the judgment in the Court of Appeal, Sir J. B.
Robinson said: "The evidence did not establish that the agent
of the company had agreed to dispense with the actual payment
of the premium as necessary to complete the contract; although
it is true that he signed a receipt and left it at the house of bus-
iness of the plaintiffs, without actually getting the money. It
seems clear that he left it, relying on the money being promptly
remitted. Under such circumstances it would not be more rea-
sonable to hold the contract complete through the receipt alone,
than to contend that a tradesman's bill was paid, because he ven-
tured to send a receipt by the servant who took home the goods,
which receipt, in a moment of dangerous confidence, the sen-ant
left behind him, without actually getting the money.
" In such a case the receipt could only be looked upon a,s an
acknowledgment in abeyance like a deed delivered as an es-
crow.
" But if tlie agent had consented to wait for the money a cer-
tain time, or to charge it in account with the insurer, upon the
understanding that he would pay his premiums periodically, or
that the charge should stand as an item of general account either
between himself and the assured, or between the company and
the assured, the company would not be bound by any such course
of dealing of their agent, unless it could be shewn that he was
authorized by the company to bind them by insurances effected
in that manner." (38)
The local agent of a fire insurance company was authorized
to effect interim insurances by issuing receipts countersigned by
him on the payment of the premiums in cash. He employed a
canvasser to solicit insurances, who pretended to effect an insur-
ance on behalf of the company by issuing an interim receipt
which he countersigned as agent for the company, taking a prom-
issory note payable in three months to his own order for. the
amount of the premium."
(38) Walker vs Provincial Ins. Co., 7 Gr., 137; affirmed on api>ea:,
8 Gr., 217.
TUK CONTRACT 33
In giving judgmi'iu. Strung. J.. said: "The powers of the
sub-agent cannot exceed those of the principal agent. Smith,
the local agent, himsi-lf. had no power to enter into a contract
in the terms of that which Healy pretended to make as his sub-
agent with d'Amour an. I Charlebois. He could only effect an
interim insurance binding on the company by an interim
ipt countersigned by himself and" on receiving himself
the premium in cash. London and Lancashire Life In-
suraiu-e Co. vs Fleming (1897) A. C. 499; Acey vs Fernie, 7
M. \ \V. 151. These terms were not complied with and, there-
fore, on this last distinct ground, that on which Mr. Justice
llal ! 's dissi-ming judgment proceeds, the respondent must
fail." (39)
The defendants executed policies acknowledging the receipt of
premiums for re-insurances, which their agent at St. John had
accepted and sent them to him for delivery, but refused to de-
liver them when they found the premiums had never been paid.
th" fact being that the agents, by verbal arrangement, without
the knowledge of the principals were accustomed to give credit
to each other for premiums, and to settle at the end of the
month. Burton. J. A., says: "There was no authority in fact
conferred upon the local agent to accept insurances except by
the issue of an interim receipt upon the payment of the pre-
mium. and although the policy acknowledged the receipt of the
liimi. the Company was not bound by that admission.
but it was manifest upon the face of the policy that it was not
; to be a binding instrument until the payment of th<>
premium."
. .' u The hx-al agents ha\v no authority what-
I ni.-aii as respects thesr d<'iVu<lants, to do more than iv-
5ippliV:iiioi)> <n ill,- form furnish'-d by tin- Company, mid
ta up >n iv>ipt of tin- premium." ( 10)
Canadian Fire Ins. Co r* i :,i can. S. C. R., 488.
(40) Western Awmrnnoo Co. r.s Provincial Ass. Co., 5 A. H. l'>'
2
34 THE LAW OF FIRE INSURANCE IN CANADA
Secondly. Where the policy contains a condition that the
payment of premium in cash is a condition precedent to the
company's liability, a provision of this sort is binding upon
the assured.
A declaration upon a policy after the Fire Insurance Policy
Act which contained no statutory conditions, but had a condi-
tion that no insurance, whether original or continued, shall be
considered as binding until the actual payment of the premium
and declared general performance of conditions entitling plain-
tiff to recover, defendant pleaded amongst other things that pre-
mium had not been paid, and by virtue of above condition de-
fenda'nts not (liable. The trial judge held that the policy was
one without conditions and amended pleadings setting up execu-
tion of policy under seal which acknowledged payment of pre-
mium and alleging an unconditional covenant to indemnify, etc.,
and the plea was amended to read as averring simply that the
policy contained a provision that no insurance should be binding
until the actual payment of premium. (41)
G wynne, J., held that effect of the statutory conditions was
1st, to make the contract one having the statutory conditions
only, and that the condition as to the effect of non payment of
premium was not a variation from the statutory condition, "for
the matter relied upon, as a defence under this condition, or
agreement as it may more properly be called, goes to the founda-
tion of the contract, and denies that it ever came into existence
so as to create any liability in the defendants for default of the
plaintiff to pay his premium, payment iof which is the sole con-
sideration for a contract of indemnity against doss."
Wilson, C. J., said: "The condition which provides that no
insurance shall be considered to be binding until the actual pay-
ment of the premium, is not governed by the statute relating to
insurance statutory conditions or variations. That Act relates
to contracts of insurance which have been made. The above
stipulation refers to a precedent act to be done, without which
there is to be no contract.
(41) Geraldi vs Provincial Ins. Co., 29 U. C. C. P., 321.
THE CONTRACT 35
"It is of no consequence where that condition or stipulation
is put. Whether on the face or on the back of the policy, or
whether it is upon it or not, or in writing or not, it is equally
binding, and there is no contract completed until the terms of
the condition have been complied with, or waived or rescinded."
A premium note, dated the 24th May, 1880, given on effecting
an insurance with the defendant company, stated that the in-
sured for value received on policy No. 1, 405, dated the 6th May
1880, promised to pay the company $14.50 on the 24th Decem-
ber 1880, with interest at seven per cent, and contained an
agreement that if the note were not paid at maturity, the whole
airount of the premium should be considered as earned, and the
policy should be null and void so long as the note remained un-
paid. Upon the policy which was dated the 14th May, 1880, and
took effect from the 24th May, 1880, was indorsed a variation
condition that the policy should not be valid or binding until the
premium was actually paid, unless credit was given for it; and
in that case it was a condition of the contract "that if such pre-
mium be not paid, the whole amount of premium shall then be
considered as earned, and the policy shall 1 be null and void, so
long as any part thereof remains unpaid." Held, that the con-
dition was not unreasonable, being in effect the same as that
provided for in the case of mutual insurance companies by R.
S. 0. 1877, c. 161. (42)
A condition in a policy of life insurance provided that if any
premium, or note, etc., given therefor, was not paid when due,
the policy should be void.
The policy of insurance upon the life of Robert McGeachie
was issued by the defendants on the 6th day of December, 1889,
and he died on the 6th day of November following (1890). The
amount of the insurance premium was $31.10 annually. This
amount was not paid to the defendants in cash upon the issuing
heir policy, but by agreement with the plaintiff the defen-
dants accepted instead the promissory taote of Robert McGeac hi< i
(42) Sears t? Agricultural Ins. Co., 32 U. C. C. P., 685.
36 THE LAW OF F1KK INSURANCE IN CANADA
at six months, for $31.10, with interest thereon at seven per cent,
per annum. This note became due on the 7th day of June, 1890.
It was not then paid by the maker, but by agreement between
him and the defendants, a renewal note was taken iiutead, at
thirty days, for the .amount of the first note with interest added,
$32.20, the second" note itself bearing interest also at the rate of
seven per cent, per annum.
At the maturity of the second note (10th July 1890). $10
cash was paid by Robert McGeachie upon account and a third
note at two months given for the balance ($22.40), this third
note also bearing interest at seven per cent, per annum.
The third note fell due on the 13th September 1890, when it
was renewed at one month, by a fourth note, in which the inter-
est was added to the previous amount thus making $22.80.
This fourth note became due on the 16th October, 1890, and
remained in defendants' possession overdue and unpaid up to
the death of Robert McGeachie, three weeks .after the maturity
of the note.
The acceptance of tin- note in the first place, and of the dif-
ferent renewal notes, was in each case a matter of arrangement
.and agreement between the parties. During the currency of the
second note Robert McGeachie wrote (2nd July, 1890) to the
defendants, asking to have the policy cancelled, but was answer-
ed that such a request was unreasonable and could not be enter-
tained.
After maturity >f the last note defendants. <m oth Xovember,
1890, wrote the maker demanding payment of it.
This letter reached St. Catharines on the day on which Robert
McGeachie died and was delivered to his brother on the same
day. The local agent of the company was at once communicated
with and asked if he would accept the money, but refused to do
so. On the following Monday, four days later, the amount was
formally tendered to the defendants at their head office but wa-
refused.
Held, affirming the decision of the Court of Appeal, that
\vhiTo <t note given for a premium under said policy was partly
THE CONTRACT 37
paid when due and renewed, and the renewal was overdue and
unpaid at the death of the assured, the policy was void.
Held, further, that a demand for payment after the maturity
of the renewal was not a waiver of the breach of the condition
so as to keep the policy in force. (43)
One of the conditions indorsed on a policy was that it was
not to take effect unless the premium was paid prior to any ac-
cident on account of which the claim should be made.
Another was that no renewal receipt should be valid unless
printed in office form and signed by the managing director and
countersigned by the agent.
Nothing was stated in the policy or conditions respecting the
paynu'iit of premiums, whether in cash or by premium notes, and
therefore, nothing as to the effect of non-payment of premium
notes at maturity.
Prior to Xovember 1889, the company was in the habit of
taking premium notes, but at that time they informed their
agents by circular that they had resolved to discontinue the
practice, and directed them to conduct the business thereafter
on the cash system, and refused to accept notes for premiums for
accident insurance.
One Paton was at the period in question agent and manager
of the company for the Maritime Provinces. He was also agent
for the Manufacturers Life Insurance Company, a company
having, substantially the same management. Tn the business of
latter company premium notes were continued to be taken.
and the circular referred to pointed to a distinction intended to
be made in the mode of conducting the accident and life business.
Tin- jury found that a sum of money was paid in cash, and
that the note was -riven and taken as payment of the balance of
the premium.
Tin- note nrver was paid, nor waa it delivered up to plaintiff,
but remained in possession of Mr. Paton. The company knew
f it.
(43) McGeacble vs North American Life Ins. Co., 23 Can. 8. C.
!(.. 148.
THE LAW OF FIRE INSURANCE IN CANADA
Upon the findings as above, judgment was entered for the
plaintiff by the Chief Justice of Nova Scotia, before whom the
case was tried, and the judgment was afterwards sustained by
the other judges with exception of Meagher, J., who dissented.
In its judgment the Supreme Court said: "The contention
of the appellants is that Paton did not purport to bind the com-
pany (or in other words to renew the insurance) and that, if he
did, he acted without authority; and further that if there was
any proper evidence of such authority it should have been passed
upon by the jury.
" The question therefore is whether it was within the scope of
Paton's employment to take a premium note as in payment.
" His authority to receive premiums and to give renewal re-
ceiptj, and so to complete the contract is clear. He says that
every renewal receipt comes to him from the head office at
Toronto, and that he renews policies after they have lapsed by
giving renewal receipts.
" The authority of a general agent is, however, restricted to
the range of his employment and to the acts and representations
which a prudent and ordinarily sagacious and experienced per-
son (with no reason to suspect otherwise) might expect him to
do or to be authorized to make in respect of the particular bus-
iness entrusted to him.
" It would not be expected that an insurance agent would be
authorized to receive a chattel in payment of a premium, or to
discharge his own indebtedness to the assured through it, for
this would be travelling out of the usual course of business.
" But there is nothing in the course of business (or in the
nature of the contract) to make it unreasonable to take a note.
" In marine insurance it is very common. In the case of the
Manufacturers Life it is shown to be the practice; and the
evidence further shows that it was the practice of the appellant
company to take premium notes up to November 1889.
" In the United States it has been held that where the agent is
authorized to accept the payment of premiums he may, in his
discretion, accept a note or cheque instead of the money, where
THE CONTRACT 39
the policy is silent in the matter. Tayloe v. Merchants Fire Ins.
Co., 9 How. 390.
" The fair conclusion would therefore seem to be that as this
agent had been employed to complete the contract and had been
entrusted with the renewal receipts, a prudent and ordinarily
sagacious and experienced person might fairly expect that he
was authorized to take a premium note, there being nothing in
the policy to the contrary, and the assured having no knowledge
of any limitation of the agent's authority. If this is so, the re-
sult would be that Mr. Paton was a person held out by the com-
pany as having authority to take a note for the premium and
complete the contract by delivering the renewal receipt." (44)
In the opinion of Gwynne, J., expressed in Canadian Fire In-
surant- /> Robinson, (supra, p. 33) this decision is overruled by
London & Lancashire vs Fleming, 1897, A. C. 499, infra, p. 41.
A condition in a policy of life insurance provided that if any
premium, or note given therefor, was not paid when due, the
policy should be void. A note given, payable with interest, in
payment of a premium, provided that. if it were not paid at
maturity the policy should forthwith become void. On the ma-
turity of the note it was partly paid, and an extension was
granted. The last extension was overdue and balance on note
was unpaid at the death of the assured. A receipt by the com-
pany, given at the time of taking the note, was of the amount of
the premium, but at the bottom of the face of the receipt were
wnnl>: % Taid by note in terms thereof." While thr noli-
was running the policy was assigned for value, with the assent of
thf company, to the plaintiff, to whom the receipt was delivered
by the assured: Held, that no estoppel was created by the re-
ceipt; that there was no duty upon the company to have af-
f on led the plaintiff an opportunity of paying the premium ; and
that the policy was void. (45)
(44) Manufacturers A :' I. nt Ins. Co. va Pudsey, 27 Can. S. C. R.,
174
(46) Wood vs Confederation Life Ins. Co., 2 N. B. Eq., 217.
40 THE LAW OF FIRE INSURANCE IN CANADA
Two policies on the mutual plan provided for insurances for
the original period of one year and "during such further period
or periods for which the assured shall from time to time have
paid in advance the renewal premium or premiums required by
the company, and for which the company shall have issued a
renewal receipt or receipts." The policies were delivered to the
plaintiffs, without prepayment of any cash premium, and with-
out the previous delivery of the premium notes in consideration
of which the policies purported to be issued; but the cash was
paid and the notes delivered soon afterwards. At the termina-
tion of the year the defendants wrote to the plaintiffs enclosing
i - 'ccipt for the amount of the cash premium for the renewal
of both pdicies but which was higher than the preceding year.
The letter was on a printed form, stating that a receipt "renew-
ing" the policies was enclosed, and asking the plaintiffs to remit
the amount of the cash premium. It also asked for new pre-
mium notes, and stated that the old ones were enclosed, as they
were. The plaintiffs demurred to the increased note but retain-
ed the receipts and did not send the money or the notes until
after the fire. *
Held, that no contract of insurance existed between the plain-
tiffs an. I defendants; that if the plaintiffs had unqualifiedly
accepted the renewal terms, the condition providing for pay-
ment in advance of the cash premium would have been waived;
for the intention of the defendants in delivering the receipt,
where the money had not in fact been paid, was to keep the
policy in force and to give the plaintiffs credit for the
amount. (46)
A policy of life insurance contained a provision to the effect
that it phould not be in force till the first premium was paid,
and that if a note should be taken for the first or renewal pre-
mium, and not paid, the policy would be void, at and from de-
fault. The assured gave the Company's agent a promissory note
which the agent discounted with his bankers, and was chanr <!
(46) Doherty et al. vs Millers and Manufacturers Ins. Co., 4 O.
L. R., 303, Street, J., affirmed 6 O. L. R., 78.
THE CONTRACT 41
by the ompany with the premium, although unaware that the
cash had not been paid by the assured. The ground upoln which
the plaintiff sought to recover rested upon the dealings between
the Company and its agent. The Company assuming that the
premium had been actually paid debited him with the amount.
The trial judge gave judgment for the plaintiff. The Court of
Appeal being evenly divided, this judgment stood affirmed but
in the Privy Council this was reversed. It was contended for
the plaintiff that the notes were placed in the hands of the agent
that he might raise money by negotiating them by which the
premium could be paid, and Sir Henry Strong, who gave the
judgment of the Committee, says that this is an assumption
which, in the entire absence of evidence of any arrangement to
that effect, their Lordships could not make, and held finally that
the onus was upon the plaintiff to prove that the premiums were
paid in cash, and that the principle upon which the decision
d in the case of Acey vs Fernie applied. (47)
The facts of the case in Acey vs Fernie, (48) referred to
. were as follows :
The premium payable upon a life policy, became due on the
: of March, but was not paid until the 12th of April, when
the country agent, through whom the insurance had been effect-
ed, gave a receipt for the amount of the premium. The instruc-
tions given by the compaliy to the agent were, that the premium
on every life policy must be renewed within fifteen days from
the time of its becoming due ; if not paid within that time, that
he was to give immediate notice to the office of such fact, and in
the event of his omitting to do so, that his account would be
;cd for the amount, after the fifteeto days had expired. No
notice was given to the company of the non-payment of the pre-
ithin the fifteen days; it was therefore entered in their
books as paid on the 15th of March, and the agent was debited
the amount. Held, first, tliai the mere debiting the agent
(47) London & Lancashire Infl. Oo. vs Fleming, 1897, A. C., 489.
(48) 7M. &W., r.i
42 THE LAW OF FIRE INSURANCE IX CANADA
with the premium could not be considered as a payment to the
company by the assured; secondly, that the agent having no
authority to contract for the company, the fact of his receiving
the money after the expiration of the fifteen days, atad the entry
in the company's books, debiting him with the amount, was no
evidence of a new agreement between the company and the
assured.
The most recent case in the Supreme Court of Canada, is that
of Hutchings vs The National Life. (49)
In this case the facts were much the same as those in the
Manufacturers' Accident vs Pudsey, except that the renewal re-
ceipt was not countersigned nor delivered to the assured. The
policy contained a condition that the premium should be paid
in cash in advance. The only reasons for judgment of the major-
ity of the Court were those of Idington, J., who makes use of
the following language: "This case is clearly distinguishable
from that of the Manufacturers' Accident Ins. Co. vs Pudsey,
upon which appellant relies. There the renewal receipt which
was a badge of authority in the hands of the agent was found by
the jury to have been delivered over to the assured upon his pay-
ment of part of the premium and giving his note for the balance,
and the court held correctly that there was evidence to go to the
jury on that and other points in dispute.
"The failure of the assured here to get the receipt for the pre-
mium or perhaps even to have seen it and the peculiar circum-
stances connected with the retention of it by the agent tell
against the assured having relied upon the agent having author-
ity, or the company by any act of theirs inducing him to rely on
the authority of the agent for doing as he did.
"The principles upon which tlu> decision in the case of London
& Lancashire Life Assurance Co. vs Fleming rests are decisively
against the case of the appellant here.
"I think, therefore, that (the appeal ought to be dismissed with
(49) 37 Can. S. C. R., 124.
THE CONTRACT 43
Thirdly. Where the policy issues with no condition requir-
ing the premium to be paid in cash, but acknowledges its pay-
ment.
In this case, the liability of the company depends on whether
it was the intention of the company that the policy should go
into effect as a valid and binding contract upon its execution,
in which case the company will be estopped from disputing ita
acknowledgment of the receipt of the premium; or, the inten-
tion of the company in executing the policy was that it should
not go into ioperation until the premium was paid..
In both cases, the intention of the company will govern.
In a recent case, Lord Esher, M. R., said: "The question
raised is whether an insurance was effected by the sealing
and signing of the policy or the execution of the policy was
only intended to be conditional. I do not see any evidence of
a conditional delivery or that this document was intended
not to be a policy unless certain conditions were fulfilled.
I a uriivd that the document was still in tli" hands of the com-
pany or of their officers in their behalf. There is no suggestion
that it was delivered to anyone as an escrow. It was said that
the recital was incorrect, and that the premium so stated to
have been paid, never was in fact paid. I do not think the de-
defendants are, for the present purpose, at liberty to show that
in contradiction of the terms of their own deed. They have
treated the premium as paid, and if it has not been paid, I think
have thereby waived the previous payment as a condition
<->f the existence of an insurance." (50)
Fourthly. - - Where the policy issues with no condition re-
quiring the premium to be paid in cash, -- and there is no
acknowledgment of its payment, in such case non payment
of premium voids the policy.
I S^-urity Co.. ls-.7. 1 (). R. 111.
<rAssnr;m<-' <l*s Ciiltivntcurs r.v (Jnmmion. :in<l M:xs<'- r.v
!;n:.i Mutun!. infrn. p. fin.
44 THE LAW OF FIRE INSURANCE IN CANADA
A policy contained no provision .that it was to be void if the
premiums were not paid. The first premium was paid by two
agreements in the form of promissory notes maturing at dif-
ferent dates and each providing that the policy was to be void
if it was not paid at maturity. When the assured died the first
agreement was overdue and unpaid and the >'vmid had not ma-
tured. The court, without reserving judgment dismissed an ap-
peal from the decision of the Court of Appeal, (20 A. II. o64),
hold ing (the pol icy voi d. (51)
OTHER CASES.
A case arose upon the construction of R. S. 0. 18??, c. 161,
s. 34, which provided as follows: "'Any policy which may be
issued for "one year, or any shorter period may be renewed at the
discretion cf the Board of Directors by renewal receipts instead
of policy, on the insured paying the remiiivd premiums, or giv-
ing his premium note or undertaking, and any cash payments
for renewal must be made by the end of the year or other period
for which the ^policy was granted. Otherwise such polk-y shall
be null and void."
It appeare'd that the company's agent, upon making a re-
newal, agreed to take a set of harness as part payment for the
renewal premium. The harness was to have been received in
June, but was not so received until October or November, after
the fire.
Boyd, C., says: "The general rule is well settled that an
agent instructed to receive payment for the principal cannot ac-
cept anything else than money. If payment is made out of the
usual course, it lies on the person who sets up the exceptional
mode of payment to shew the authority of the agent to bind his
principal/' The Chancellor continues: "I cannot put the case
more forcibly than in the language of Byles, J., in Sweeting /->
Pearce, 7 C. B. K S. 485 : "The general rule of law is that an
(51) Frank vs The Sun Life Ass. Co., 23 Can. S. C. R., 152.
THE CONTRACT -4 : >
\
authority to an agent to receive money, implies that he is to
receive it in cash. If the agent receives the money in cash, the
probability is that IK- will hand it over to his principal: but r
if he is to be allowed to receive it by means of a settlement
of accounts between himself and the debtor he might not be
able to pay it over; at all events, it would very much diminish
the chance of the principal ever receiving it, and upon that
principle, it has been held as a general rule that the agent can-
not receive payment in a ny tiling else but cash.' '"
\Yherc a policy of insurance provided that upon payment of
three annual premiums, certain privileges would ari'se in favour
of the insured, it was held that the giving of a promissory note
for the 3rd premium which was not paid at maturity, was not a
payment of the premium, and accord ami satisfaction could not
he invoked to have it treated as such. (53)
Where a policy of life insurance expressly -provides that pay-
ment of the premium in cash to the company is necessary, their
agent has no power to bind the company by giving the policy-
holder a receipt for the amount of a premium as payment for
services alleged to have been rendered by the policy-holder to the
'..mpany. (54)
WAIVKH OF I-AVMKNT UK I'IIKMITM.
An insurance agent cannot waive the condition requiring
payment of premium against the provision of the policy but a
general agent who represents the company may do so.
of insurance expressly provided thai if the amount
of any annual premium or the interest due on any note taken
in paft payment of a former annual premium was not fully paid
on th" d.iv and in the manner provided for. the policy should
Mil! and void and wholly forfeited. And by another condi-
MutiiMl. 2 O. R., 41C.
Tilley v* Confe<l<TMtion Life ins. Co., 7 H <'. Etop., Ml.
46 THE LAW OF FIRE INSURANCE IN CANADA
tion it was provided that no agent of the company, except the
president or secretary, should waive or alter any condition ex-
pressed in the policy, or in any note, cheque or draft giveta. to or
accepted by the company in settlement of any premium. The
premium never was in fact paid, nor was the policy delivered.
The court said : "Admitting it to be true that the plaintiff dil
tender the premium to the agent at St. John, and that he de-
clined to receive it and agreed to give time for the payment of it
till it was demanded, and to hold the policy in the meantime for
the plaintiff, it is also true, as admitted by the pleadings, that
such agent was neither the president nor the secretary of the
company, and therefore, by the express conditions of the policy,
had no authority to waive or alter any of its conditions. If there
was no binding contract the acknowledgement in the policy that
the advance pivmiiim had IMVII paid amounts to toothing. (55)
"The intention of the parties was .that tin- policy should not be
delivered till the premium was paid; hence the acknowledgement
of payment was properly inserted; but it was no admission of
payment so long as the policy remained in the hands of the
agent, awaiting the payment by the .plaintiff to give vitality to
the contract." (56)
And in Quebec it was held that a condition avoiding a policy
for non-payment of the premium cannot be waived by an
agent. (57)
A life policy provided that payment, if made when overdue,
would not be considered as continuing the policy unless the in-
sured was in good health at the time. In this case the payment
was made after the 30 days, and it was proved that it was the
practice in certain cases to accept payment after the day men-
tioned. The declaration averred that the quarterly payment
was not paid on the day it became due, but afterwards the de-
fendants waived the default and accepted payment during in-
(.V>) But vide Roberts vs The Security Company, supra, pp. 22
30, 43.
(56) Cal'honn r* Union Mutual Life Ins. Co., 19 N. B. Rep., 13.
(57) Bernier r* Martin, Q. R., 9 S. C., 421.
THE CONTRACT 47
sured's life. Plea denying the waiver. Under these circum-
stances, Hagarty, J., says : "We are relieved from any difficulty
as to the authority of the agent to waive a forfeiture. The money
was paid to the sub-agent, Dempsey, who had authority to re-
ceive payment of premiums, and the jury found that it was ac-
cepted unconditionally."
It was shown also that the general agents received the pre-
mium from the sub-agent after the 30 days. Gwynne, J.,'says:
"The general agent of a foreign company doing business in this
country must, I think, for the purpose .of receiving premiums,
be regarded in the same light as the company themselves." (58)
J. M. was insured by a life policy of the defendant Company.
S. was the resident secretary in Canada of the defendants, with
powers of a general manager, with whom was associated a local
board of directors. S. arranged with J. M. to take his note for
premiums. One note was overdue and the other current. The
jury found that the notes were taken by S. as cash payments
and that the taking of them was within his authority ; that he
had waived payment upon the dates the premiums were due.
The majority of the Court held that there was evidence upon
which the jury was fully warranted in finding that the agent had
authority to take notes for the premium in lieu of cash pay-
ments. (59)
OF PKK.MUM MAY BE AFFECTED BY SPECIAL
PROVISIONS OF THE POLICY.
By the terms of a life insurance policy it was provided that a
policy in force for three years would entitle the holder to a paid
up policy for $150, or to have the existing policy extended for
one year, and at the end of that year a paid up policy for $47 ;
and a policy in force for five years would entitle the holder to
$66 in cash, or a loan of $85, or a paid up policy of $250, or the
extension of the existing policy for two years, and at the end of
(58) Campbell vs National Life, 24 U. C. C. P., 133.
(59) Moffatt vs Reliance Ins. Co., 45 U. C. R., 561.
fc> 'I 1 UK LAW OF 1'IKK INSURANCE IN CANADA
that lime a paid up policy for $84. Clause 5 of the conditions
of the policy provided that one calendar month would be allowed
for payment of renewal premiums, at the expiration of which
time, if the premium remained unpaid, the policy should cease
to be in force. The trial judge held that it was not necessary
for the holder of the policy to make application in order to have
tin- policy extended, and that the insurers were bound to apply
the money in hand, namely, the $66 shown in the schedule, to-
wards the purchase of the extended insurance, and accordingly
there was no lapse and the policy was in full force when the
insured died.-
.The Court of Appeal reversed the trial judge and held that
on the non-payment of the premium the policy lapsed, and that
nothing was done towards extending or reviving it or obtaining
;in\ of the alt<?rn;iti.\v benefits pointed out in the policy. (60)
<
PAVMJiXT OF PREMIUM AFTER LOSS WILL NOT REVIVE THE
POLICY.
A fire occurred on the 13th September. On the 15th Septem-
ber the plaintiff, through a solicitor, paid the amount of an over-
due insurance premium note to the defendants, who were igno-
rant of the loss. On the 17th September, notice of loss was
given to the defendants, when they immediately returned the
premium to the solicitor. Held, that the payment, having been
made in fraud of the defendants, could not avail the plain-
tiff. (61)
On: EEC CASES.
The following articles of the Civil Code relate to the premium :
Art. 2460 : "The consideration or price which the insured
obliges himself to pay for the insurance, is called the premium.
(GO) Pense vs Northern Life Ass. Co., 15 O. L. R., 131. This case
has been appealed to the Supreme Court and stands for judgment.
(01) Sears vs Agricultural Ins. Co., 32 U. C. C. P., 585.
THE CONTRACT 49
It does not belong to the insurer until the risk begins, whether
as received it or not."
VUQ compagnie d'assurance, qui ne fournit pas, a un appli-
quant, une police d'assurance conforme a ^application, ne pent
se fa ire payer les primes stipulees au contrat.
Dans ce cas, Passure a le droit de discontinuer le paiement
primes d'assurance convenues. (61a)
Art. 2500 C. C.
"The insured is obliged to pay ithe amount or rate of premium
ed upon, according to the terms of the contract, If the time
of payment be not specified, it is payable without delay."
The agent of an insurance company has no authority to accept
an insurance and give a receipt for the premium in exchange for
a receipt for his individual debt to the person insuring, and
>ueh an act on his part will not bind the company. (61b)
Art. 2583 : "When by the terms of the policy a delay is given
for the payment of the renewal premium, the insurance con-
tinues, and if a loss occur within the delay, the insurer is liable,
anu-.unt of the premium due."
Where an insurance company, without any reservation, ac-
tfl a promissory note of the assured for the amount of the
premium, payment whereof is acknowledged by the policy to
been received, failure of the assured to pay the note at
livv does not affect the validity of the insurance. In pro-
ient, Sir A. A. Dorion, C. J., says': "L'appe-
;>\;\}<\i- que, d'a,pres une des conditions de la police, un
oe peut recouvrer la perte qu'il a faite, s"il n'a pay6 sa
prime d'assurance; que Pintime n'a jamais paye sa priin<-
mais que le 11 de decembre 1875 il a donn6 son
(61a) La Cie d' Assurance Oanadieime ur la Vi<> vs Perrault,
M. I. i:.. r. s O, 02; 12 L. N., 220.
(6U>) Citizens' Ins. Co. of Canada va Bourgtiignon, 1880, M. L. R.
a 22.
50 THE LAW OF FIRE INSURANCE IN CANADA
billet a trois mois pour $5.80 pour sa prime, et qu'il n'a jamais
paye ce billet, quoiqu'il en ait etc souvent requis.
"L'admission contenue dans la police, que la prime a etc payee,
indique suffisamment que le billet a ete accepte comme un paie-
ment effectif, qui ne peut plus etre conteste par la compagnie ap-
pelante, dont le seul recours est peut etre .payer <Iu Billet <!'
l'imtim" (62)
One of the conditions of a policy provided that in case any
promissory note for the first payment of -any deposit notv should
remain unpaid for thirty days after it was due, the policy should
be void. An assessment was made upon the deposit note, and
instead of paying it the plaintiff gave his note at 30 days, which
he did not pay, and which remained overdue at the time of the
fire. The policy on its face admitted the payment of the first
premium. The Superior Court held, per Johnston, J., that the
company confessing under its seal that it had received payment,
could not .be allowed to prove this statement to be untrue. (63)
These last two cases would appear to be decided on the same
principle as Uolu-rts rs The Security Co., supra, pp. 22, 30, 43, hi.
SET OFF OF PREMIUM AGAINST LOSS.
Un assure ne peut opposer, en compensation de sa prime d'as-
surance, les dommages qu'il allegue avoir eprouves par un in-
cendie, attendu que la creance de tel assure n'est ni claire ni
liquide, et que le paiement de la prime d'assurance est une con-
dition prealable de la part de Passure a Pexercioe d'aucun droit
el au recouvrement des pertes couvertes par la police d'assurance.
Loranger, J. 1885. (64)
LOSS Oil DAMAGE BY FIRE.
The loss or damage insured against is the actual physical loss
of or damage to the article insured. It does not include the in-
(62) iLa Cie <T Assurance des CiiltiyateuTs vs Grammon, 3 Li. N.,
19 ; 24 iL. C. J.. 82.
(63) Mass4 vs Hochelaga Mutual Ins. Co., 22 L. C. J., 124.
(64) Giles vs Giroux, 13 R. L., 652.
THE CONTRACT 51
direct or consequential loss to the insured, such as loss of profits,
loss of business, &c.
DlUKCT LOSS.
In all policies of fire insurance, the words "loss or damage by
fire" are mentioned in the body of the contract as being the sub-
ject matter of the indemnity which the assured undertakes by the
contract. In some policies these words are preceded by the word
"direct". This is the form used by the Sun Insurance Co., thvj
.st fire insurance company in business to-day, whiie the Lon-
don Assurance Co. policy, an almost equally old company, simply
uses the words "loss or damage by fire". The standard policy
in New York State, and in the other States of the Union which
have adopted the New York policy, contain the word "direct",
while the Massachusetts and New Hampshire standard policies
omit it. The word has no significance or value, and whether
used or not, fire must be the proximate cause of the loss or
damage.
MAKKKT VALUE.
The plaintiff obtained judgment against the insurance com-
pany for 200 being amount insured by them on his stock and
utensils in trade as a general turner; by the policy the appel-
lants agreed to pay or make good to the insured all such loss or
damage as the said insured should suffer by fire. On appeal,
held, that the defendants were liable only for the actual market
value of such stock at the time of the loss and not for the actual
cost tin-re )f, or the sum which it may have cost the party in-
sured, notwithstanding that he had not insured his profits on
the subject of insurance. (64a)
Where a separate insurance is effected on separate properties,
the company only to pay as if they had insured two thirds of the
(64a) Equitable Fire ft Life Ins. Co., va Quiun, Q. B. lsJi. 11 T,
< !:. 170.
52 THE LAW OF F1KK INSURANCE IN CANADA
actual cash value, the insured can recover two thirds only of the
particular property injured. (34b)
Plaintiff insured with defendants for $3,400 of which $1,000
was on his tannery and $500 on the machinery in it, upon an ap-
plication valuing the tannery and fixtures at $1,000, which was
said to be two thirds of the actual value, but the plaintiff agree-
ing that in case of lose defendants should only be liabl- as if
they had insured two thirds of the actual cash value, anything
in the .policy or application notwithstanding. The application
was referred to in the policy as forming part of it, and stated
the promise to be to pay all losses or damages not exceeding the
said sum of $3,400, the said losses or damages to be estimated
according to the true and actual value of the property at the
time the same should happen. The bull-ding and machinery
having l>een destroyed by fire, the jury found the total cash
value of the former to be $1,050 and of the latter $750.
Held, that the plaintiff could recover only two thirds of these
sums. (G4c)
A policy insuring several different subjects of insurance at
separate amounts, and containing a provision that ''the com-
pany shall be liable to pay to the insured two thirds of all such
loss or damage by fire as shall happen to the property, amounting
to no more in the whole than the aggregate of the amounts in-
sured, and to no more on any of the different properties than
two thirds of the actual cash value of each at the time of the
loss, and not exceeding on each the sum it is insured for/' is to
be treated as a separate insurance upon each subject, and the
company is liable only for two thirds of the loss on each, not-
withstanding that on some of the subjects the loss is less than
the amount for which those subjects are insured, and the whole
loss less than the aggregate amount insured. (64d)
(04b) M<-Cul!orti vs Gore District Mutual Fire Ins. Co., 32 U. C. R.
610.
(64o) WiWiamson vs Gore District Mutual Fire Ins. Co., 26 U. C.
R. 145.
(64d) Kin? r* Prince Edward County Mutual Ins. Co., 19 U. C. C.
T. 134.
II1K CON TH ACT )")
Limitation of amount recoverable.
By by-laws printed on the policy the defendants' liability wa>
limited to two-thirds of the actual loss sustained, and the
amounjt to be taken on one risk was restricted to $2,000. The
plaintiffs loss was $2,200, and an other insurance company paid
the full amount of their liability $1.000. Held, that the pkin-
tilf was entitled to recover as damages, two-thirds of the balance
of his loss after deducting the amount of the other insur-
ance. (64e)
Interest.
In an action upon fire insurance policies, a referee was dmvU'd
to inquire, ascertain and report the amount of the loss. Held,
having regard to the provisions of ss. 87 and 103 of R. S. 0.
1887, c. 44, that the referee had authority to allow interest on
tin amount of the loss as ascertained by him. (64f)
In determining whether fire Is the proximate cause of the loss
or damage, a distinction must be drawn between two cases :
First, where the damage or loss is not by actual combustion.
yet the damage has resulted by a direct chain of cause and
effect from a fire which has destroyed other property in the
same premises, all being covered by the policy of insurance.
Second, where there has been no actual combustion by fire of
any of the property covered by the policy.
In the former case it has been held that the company is liable :
in the latter, that the company is not liable.
fiction may be more readily understood by citin
of the leading cases on the subject.
hi tyro r.v F.-M \Vi'.11:im< Mutu.-il Fir.- Ins. Co., 180
i:
(64f) Attorney < ' * ^tna Ins. Co., 13 P. R. 450.
54 THE LAW OF FIRE INSUKANCK IN ( AXADA
In support of .the first proposition may be cited the case of
Lynn Gas & Electric Co. vs Meriden Fire Ins. Co. (65)
At the trial, it appeared that within the period for which the
policies were written a fire occurred in the wire tower, so called,
of the plaintiff's building, through which the wires for electric
lighting were carried from the building, which fire was speedily
extinguished, without contact with other parts of the building
and contents, and with slight damage to the tower or its con-
tents ; that at about the same time, and in a part of the building
remote from the fire and untouched thereby, there occurred a
disruption by centrifugal force of the fly-wheel of the engine
and of certain pulleys connected therewith, by which disruption
the plaintiff's building and machinery were damaged to a large
amou ! nt. The theory of the plaintiff, connecting the disruption
of the machinery with the fire in the tower, as stated by the
presiding judge in his charge to the jury, was as follows:
The plaintiff says the position of the lightning arresters in
the vicinity of the fire was such that by reason of the fire in the
tower a connection was made between them called a short cir-
cuit ; that the short circuit resulted in keeping back or in bring-
ing into the dynamo below an increase of electric current that
made it more difficult for the armature to revolve than before,
and caused a higher power to be exerted upon it, or at least
caused a greater resistance to the machinery ; that this resistance
was transmitted to the pulley by which this armature was run,
through the belt; that that shock destroyed the pulley; that
by the destruction of that pulley, the main shaft was disturbed
a'nd the succeeding pulleys up to the jack-pulley were ruptured ;
that by reason of pieces flying from the jack-^pulley, or from
some other cause, the fly-wheel of the engine was destroyed, the
governor broken, and everything crushed ; in a word, that the
short circuit in the tower by reason of the fire caused an extra
strain upon the belt through the action of electricity, and that
caused the damago. The Court said:
(65) 158 Mass., 570.
THE CONTRACT 55
"The plaintiff contended that the short circuit was produced
by the fire, either by means of heat on the horns of the lightning
arresters, or by a flame acting as a conductor between the two
horns, or in some other way. The jury found that the plaintiffs
theory of the cause of the damage was correct, and the question
is whether the judge was right in ruling that all injury to the
machinery caused in this way was a "loss or damage by fire"
within the meaning of the policy.
"The subject matter of the insurance was (the building, ma-
chinery dynamos, and other electrical fixtures, besides tools, fur-
niture, and supplies used in the business of furnishing electri-
city for electric lighting. The defendants, when they made their
contracts, understood that the building contained a large quan-
tity of electrical machinery, and that electricity would be trans-
mitted from the -dynamos, and would be a powerful force in and
about the building. They must be presumed to have contem-
plated such effects as fire might naturally produce in connection
with machinery used in generating and transmitting strong cur-
rents of electricity.
"The subject involves a consideration of the causes to which an
effect should be ascribed when several conditions, agencies, or
authors contribute to produce an effect. The defendants contend
that the application of the principle which is expressed by the
maxim, In jure non remota causa sed proximo, spectatur, re-
lieves them from (liability in these cases. It has often been
necessary to determine, in trials in court, what is to 'be deemed
the responsible cause which furnishes a foundation for a claim
when several agencies and conditions have a share in causing
damage, and the best rule that can be formulated is often diffi-
cult of application. When it is said that the cause to be sought
is the direct and proximate cause, it is not meant that the cause
or agency which is nearest in time or place to the result is neces-
sarily to be chosen. The active efficient cause that sets in mo-
tion a train of events which brings about a result without the
intervention of any force started and working actively from a
new and independent source is the direct and proximate cause
referred to in the cases.
56 THE LAW OF FIRE INSURANCE IN CANADA
"in the .present case, the electricity was one of the forces of
nature a passive agent working under natural laws, whose
\istence was known when the insurance policies were issued.
Upon the theory adopted by the jury, the fire worked through
agencies ill the building, the atmosphere, the metallic machinery,
electricity, and other things; and working precisely as the de-
fendants would have expected it to work if they had thoroughly
understood the situation and the laws applicable to the existing
conditions, it put a great strain on the machinery and did great
damage. No new cause acting from an independent source in-
tervened. The fire was the direct and proximate cause of the
damage according to the meaning of the words 'direct and prox-
imate cause', as interpreted by the best authorities."
As illustrative of the second proposition, Marsden vs City
& County Assurance Co. (66), may be cited. The following b-
stract from the judgment of Erie, C. J., substantially sets out
the question in issue, and the law thereon:
'The conclusion I have como to is, that this rule should be
>ar<4'l. Tih- action is upon a policy of insurnii'V on |>
glass; and the question is, whether the damage in respect of
which the plaintiff claims compensation is within an exception
contained in the policy. The insurance is against "loss or dam-
'riirinating from any cause whatsoever, except fire, breakage
during removal, alteration, or repair of promises". The defen-
dants contend that this loss originated from fire or from break-
luring removal, and so is within the exception. The circum-
these: The glass insured was plate-glass in the
plaintiff's shop-front. A fire occurring in some premises ad-
joining the plaintiff's and communicating with a distant part
<>f the plaintiff's house, the plaintiff got some of his neighbours
to assist him in removing his furniture and stock-in-trade ; and,
whilst they were thus engaged, the assembled mob feloniously
broke in the windows for the purpose of plunder. Hence, no
<loubt, the remote cause of the damage was fire; but the prox-
(66) L. R., 1 C. P., 232.
THI-:
imate cause was the lawless violence of the mob. I think the
general rule of insurance law, that the proximate and not the
remote cause of the loss is to be regarded, is the rule which must
govern our decision in this case. The assembling of the crowd
was caused by the fire; and but for the fire probably the plain-
tiff's windows would not have been broken. But the breakage
was not caused by the fire; it was the result of the plaintiff's
attempt to save his stock and furniture, coupled with the desire
of the mob to seize what they could lay their hands on. I do not
see how that can be said to be a damage originating in or caused
by fire, so as to bring it within that part of the exception."
The same point was dealt with in the case of Everett vs Lon-
don A>>. Oo. (07) By the iterms of the policy, the premise-
were insured against "such loss or damage as should or might
be occasioned by fire to the property therein mentioned." A
quantity of gun powder had exploded about half a mile from the
plaintiff's premises, whereby the windows and window frames,
and the premises generally were damaged by atmospheric con-
cussion caused by the explosion. The question for the opinion
of the court was whether the damage so caused was a loss or
damage insured against under the policy. The court held that
the defendants were not liable. Willes, J., said: "I am of tin-
same opinion. We are bound to look to the immediate cause of
the loss or damage, and not to some remote or speculative c;
Speaking of this injury, no person would say that it was occa-
sioned by fire. It was occasioned by a concussion or disturbance
of the air caused by fire elsewhere. It would be going into the
causes of causes to say that this was an injury caused by fiiv to
the property insured. The rule "In jure non remota causa, sed
proximo, spectatur", determines this case."
And Byles, J., said: "I am of the same opinion. The expres-
sion in the policy which we have to construe is, 'loss or damage
occasioned by fire/ Those words are to be construed as onlin.iry
people would construe them. They mean loss or damage either
(67) 19 C. B. N. 8., at p. 120.
58 THE LAW OF FIRE INSURANCE IN CANADA
by ignition of the article consumed, or by ignition of ipart of the
premises where ithe article is : in the one case there is a loss, in
the other a damage, occasioned by fire. Loild Bacon, says: (68)
'It were infinite for the law to judge the causes of causes, and
their impulsions one of another; therefore it ccntenteth itself
with the immediate cause, and judgeth of acts by that, without
looking to any further degree.' If that were not so, a ship in the
neighbourhood of Mount Etna or Vesuvius during; an eruption,
and receiving damage from substances projected therafrom,
might >be said to be damaged (by fire. So, a shot falling amongst
crockery-ware might in one case be said to occasion a loss by
fire. But neither of these cases would fall within these words,
which must ibe understood in their plain and ordinary sense."
SALVAGE LOSSES COVERED BY POLICY.
It is not necessary that combustion should have been the sole
cause of the loss or damage, but the policy has been held to cover
the losses which resulted from a bond fide and reasonable attempt
to save the insured property. In Stanley vs Western Ins.
Co., (69) Kelly, C. B., says: "I agree that any loss resulting
from an apparently necessary and bona fide effort to put out a
fire, whether it be by spoiling the goods by water or tr rowing
the articles of furniture out of window, or even the destroying
of a neighbouring house by an explosion for fthe purposes of
checking the progress of itihe flames, in a word, every loss that
clearly and proximately results, whether directly or indirectly,
from the fire, is within the policy."
ONTARIO CASES.
The plaintiff's stork-in4rade was insured against loss by fire
in the defendant company; a fire occurred in an adjoining
building; and the plaintiff's warehouse being in danger of de-
(68) Maxims of the (Law, Reg., Montagu, vol. 13, p. 145, 1 Bacon's
Works, by Basil.
(69) L. R., 3 Exch., 71.
THE CONTRACT 59
struction, he removed his stock which was thereby damaged, and
some of it lost.
The question submitted by the special case was, whether the
plaintiff was entitled to recover the full amount of the policy;
or whether the defendants were discharged as by ratable pay-
ment under the 5th statutory condition, (R. S. 0. (1877), ch.
162), which declares that in case of the removal of the property
to escape conflagration the company will ratably contribute .to
the loss and expenses attending such act of salvage ?
Osier, J. A., held that the plaintiff was entitled to recover the
full amount of the policy, and gave judgment for $1,000 and
interest.
Hagarty, C. J., said: "The weight of opinion and authority
seems to bo in favour of the view taken by my brother Osier,
from whose judgment is this appeal.
"Our own case of Thompson vs Montreal Insurance Co. (70)
is clear in favour of the view that goods lost in course of re-
moval to escape conflagration are considered as lost by fire, as
the proximate cause.
"This seems to be assumed as the law in Levy vs Baillie. (71)
The plaintiff, an upholsterer, swore to a loss over the amount of
the policy : that the loss was sustained as to a small amount for
goods injured in process of removal, and a ilarge amount 'ab-
stracted' by the crowd assembled at -the fire. The defence
was fraud and false swearing on this proof. At the trial
evidence was given of the loss, and the company de-
fended on the ground that such a quantity of goods could not
have been, and were not stolen. The case went to the jury
wholly on that question. They found for the plaintiff, and the
following term a new trial was, after argument, granted on the
weight of evidence. Neither at the trial nor in term was any
'1 M- t< -liability for good/8 eo slnlni <>r lo-i." <
7 IiiiiR.. 349.
M<-l>nren va rnmm,. r<-i ;l ] Tnion TJ A. i:.. L'7'.'.
00 THE LAW OF FIHK INSURANCE IN CANADA
'I'm: AMERICAN DECISIONS ARE NOT UNIFORM.
The rule laid down by the Court in White vs The Repub-
lic, (73) would seem to commend itself: "We think the
liability of the underwriters, in these and similar "cases, depends
vory much upon the imminence of the peril, and the reason-
ableness of the means used to effect the removal. The
necessity for removal is analogous to the necessity that jus-
tifies the sale of a disabled vessel, by the water. It is not to be de-
termined by the result alone, but by all the circumstances exist-
ing at the time <>f the lire. The necessity for removal need not
he actual, that U. tin- building may not have boon actually burn-
ed, since this may have been prevented by -a change in the direc-
tion or force of the wind, the more skilful or efficient manage-
ment of the fire engine-, or the sudden happening of a shower,
or a like unforeseen event. Hut the imminence of the peril must
be apparent, and such as. would prompt a prudent uninsured
person to remove tin* goods ; it must be such as to inspire a con-
viction that to refrain from removing the goods would be the
violation of a manifest moral duty ; the damage and expense of
removal, too, must be such as might reasonably be incurred un-
der the circumstances of the occasion."
QUEBEC CASES.
The liability of the assured for losses other than from com-
bustion is to the same effect under the Civil Code of the Prov-
ince of Quebec. Article 2580 reads as follows:
"The insurer is liable for all losses which are the immediate
< onset jiience of fire or burning for (74) whatever cause it may
arise, including damage to the things insured suffered in their
removal or by the means used for extinguishing the fire, subject
to the special exceptions contained in the policy."
(73) 2 Am. Rep., 22.
(74) The word "for" in the English translation should have been
"from", the French version reading "quelqu'en soit la cause."
THE CONTRACT 61
This article is based upon two decisions of the Court of
Queen's Bench.
In the first case the trial judge had charged the jury that if
they were satisfied that the property was stolen in the removal,
they must come to the conclusion that this was a loss for which
the insarance company were liable. A verdict was found for the
plaintiff for the full amount claimed, and a motion was made to
the full Court for a new trial, on the ground of misdirection by
the trial judge, which was refused. (75)
Similarly in the case of Harris vs London & Lancashire Fire
. Company, (76) the trial judge charged the jury as follows:
"The rule which I think you may follow in tlrs ca-e is that
which was laid riown lately by Mr. Justice Monk, in the case of
McGibbon vs The Queen Insurance Company, and which after-
:-:. rieeived the sanction of the Superior Court of Montreal,
namely: That the value of goods which, without any fault on
tin- part of the insured, are lost or stolen during the confusion
-d by a fire, or whilst being removed from the burning pre-
mises, ou^ht to be borne by the insurers. I feel that in laying
down the rule in this way, I go as far as I can in favour of the
plaintiff, but I doubt whether the laying down of a more strin-
rule would be consistent with justice, conducive to the pub-
lic good, or even for the advantage of insurance companies. If
insurers are to be considered clear the instant the effects insured
are bevond the reach of the flames, whether afterwards unavoid-
ably lost to the party insured or not then the latter might be
osed to say, whilst my effects remain in my house they are at
risk of the insurers, whereas, if put into the street, they will
be at my risk; I therefore will prevent their removal until, at
rate, I can have due precautions for their p reservation out
of doors. Moreover, when a house is found to be on fire, stran-
gen are let in to assist in extinguishing the flames, and in saving
the goods. It is for 1h< interest of the insurers that this should
(75) McGibbon vs The Queen Ins. Co., 10 L. C. J., 227.
(76) 10 I. C I - '-'08.
62 THE LAW OF FIRE INSURANCE IN CANADA
(be done, and losses resulting from a proceeding adopted main.ly
for their benefit, ought not to fall upon the insured."
STOLEN GOODS COVERED.
Under the terms of a contract between insurers and insured,
whereby the insurers insure against loss or damage by fire, the
insurers are iliable for losses to the insured by goods stolen at
a fire. (77)
ARSON.
A plea of arson by the insured, if established, is obviously a
complete defence to an action on the insurance policy. But the
jury must be satisfied that the crime imputed is as fully proved
as would justify them in finding him guilty of a criminal
charge for the same offence. Where such a plea appears on the
record, the rule has been laid down on the subject of new trials,
that in the absence of misdirection, where the jury find in favour
of a party expressly charged with a criminal offence, the Court
will rarely subject him a second time to the finding of a
jury. (78)
In an action on a fire insurance policy, (79) in which the jury
found against the defendants upon the plea of arson and judg-
ment was entered in favour of the plaintiff. Upon an applica-
tion for a new trial, the court said :
" We were much pressed during the argument by counsel for
the defendants to make absolute the rule for a new trial on the
plea of arson.
" After some consideration, we offered to make the rule ab-
solute for a new trial on terms which, after last Michaelmas
term, were communicated to the defendants, but which they are
unable to accept. We must now decide whether we ought to do
(77) Monk, J., 1866, McGi-bbon vs Queen Ins. Co., 10 L. C. J.. '-'-'I ;
16 R. J. R. Q., 1.
(78) Gould vs British American Ins. Co., 27 U. C. R., 473.
(79) Frey vs Mutual Fire Ins. Co., 43 U. C. R., 102.
THE CONTRACT 63
so, on the ground that the verdict is contrary to evidence and
the weight of evidence.
" The charge of arson made against the plaintiff is not only
one involving much moral turpitude, but one which if true may
be followed by serious punitive consequences." "In Thurtell
i\<f Beaumont, (80) which was an action against an insurance
Company to recover a loss iby fire, the defence Ibeing arson, the
Judge dhected the jury that, in order to their finding a verdict
against the plaintiff, they ought to be satisfied that the crime
imputed to him was as fully proved as would justify them in
finding him guilty of the criminal charge for the same offence.
And it was held that the direction was right."
"In Kane vs The Hibernian Mutual Fire Ins. Co., (81) the
Court, after an elaborate review of the authorities, reached a con-
clusion the same as established in England by the old case of
Thurtell vs Beaumont."
"The latter appears to be the rule adopted in this Province:
See Richardson vs Canada West Farmers' Fire Ins. Co., 17 C.
11.*'
"At a very early period in the history of the Province it was
tluit 'when the party charged 'has been acquitted after a
full investigation, the evidence against him should be conclusive
before the Court could properly subject him to answer the charge
n<l t.imr": Wilson rx Hill. ."> I". C. If. (0. S.), 56-57.
"At a Inter but still early period the Court said, 'in cases of
this kind we should with difficulty grant a second chance to the
j such a defence'; Wall bridge et al. vs Follott, 2
I . C. K., 280, 281."
"In the comparatively modern case of Edgar vs Newell, 24 U.
C. I.'.. 815, 818, it was said that 'it is not u-ual to put a plain-
tiff deliberately charged with fraud or felony in a civil action
twice, a- . uj>on his trial.'
*In Gould vs The British America Fire Ins. Co., 27 U. C. R.,
473, 479, it was said, 'We do not mi the whole siv our way to,
(80) 1 Blng., 338.
i:
04 TIN-: LAW OF FII;K [NSUHANCB IN rAX.\n\
as it were, again putting the plaintiff on his trial for this serious
charge/ " (arson).
In McMillan vs The Gore District Mutual Fire Ins. Co., 21
C. P., 123, 125, it is said, 'It is sufficient to say that there is n-
rule on the subject so inflexible as to govern a case like this'
(arson) ;" and a new trial was ordered, costs to abide tl.
"The conclusion to be drawn from the cases is that, while the
Court has the power in the exercise of discretion to grant a new
trial in such a case, the discretion is not one to be exercised, ex-
cept where i IK- evidence so preponderates in favour of the truth
of the charge as to evince, as it were, a determination on the
part of the jury not to give effect to the law."
On appeal to the Court of Appeal this judgment was utYinn-
ed. (s-j) A I'unher a[)^-;il WHB i;ikeii lo the Supreme Court,
when- the j ml 1:11 lent of the Court of Appeal was reversed, but
the question of the plea of arson was not raised in that Court,
the judgment of the court below being reversed solely on the
ground that the Fire Insurance Policy Act did not apply to
imitiiii! i:i-rrunee eompgnies. (83)
BUT AN ACTION OX THE POLICY WILL NOT BE STAYED PENDING
CRIMINAL PROCEEDINGS.
In an action brought to recover upon a policy of insurance,
an exception dilatoirc, in which it is alleged that a true bill has
been found against the plaintiff on a charge of arson, with a view
to defraud the defendant, and that therefore all proceedings in
tin 1 case must be stayed and held in abeyance until he shall have
been tried upon an indictment, must be dismissed and the ex-
istence of a criminal charge against the plaintiff cannot operate
a suspension of proceedings in the action against the defen-
dant. (84)
(82) 4 A. R., 293.
(83) 5 Can. S. C. R., 82.
* (84) Maguire vs Liverpool & London F. & L. Ins. Co.. 7 L. C. R.,
343 ; 5 R. J. R. Q., 279.
THE CONTRACT 65
i:\CESSIVE HEAT WITHOUT IGNITION.
In Quebec, the Code excepts from the liability of the company,
Jos, resulting from excessive heat without ignition.
Art. 2581. "The insurer is not liable for losses caused merely
by excessive heat in a furnace, stove or usual means of commu-
nicating warmth when there is no actual burning or ignition of
the thing insured."
SPONTANEOUS COMBUSTION*.
But the policy will cover spontaneous combustion.
Une assurance contre le feu, effectuee sur une oertaine quan-
tite de charbon, oouvre le charbon qui existait alors et celui ap-
porte depuis, et s'etend aux risques provenant de la combustion
spontanee du charbon. (85)
K VI DEUCE OF LOSS MUST BE SATISFACTORY.
In the absence of satisfactory evidence that certain goods, the
value whereof is claimed under a fire policy, were either actually
destroyed or damaged by fire or stolen, the claim therefor cannot
be recovered. Meredith, C. J., 1866. (86)
But it was held by the Court of Appeal, Quebec, that if the
evidence leaves a certain amount of doubt as to the actual value
of the buildings destroyed, the balance should be turned against
the insurance company rather than against the insured. Insur-
ers should exercise vigilance as to over valuations when they ;uv
taking the risks and accepting the premiums, rather than alt< ;
the loss occurs and they are called upon to discharge their pan
of the obligation. (86a)
.) British American Ins. Co. vs Jowspto, 9 L. C. R., 448; 7 R. J.
R. Q..
(80 II i-ris r* I/Midon & Lanonshiiv Firo Ins. Co., 10 L. C. J.,
268; T: R. J R. <;., n.
(86a) < I us. Co. va Lef nmcois, Q. R. 2, Q. B.
3
66 THE LAW OF FIRE INSURANCE IN CANADA
EXCEPTIONS IN POLICY TO LOSSES FROM BURNING FORESTS.
A policy of insurance contained the following condition en-
dorsed upon it, viz : "The Company will not be answerable for
any loss and damage by fire occasioned by earthquakes or hurri-
canes or by burning of forests; and this policy shall remain
suspended and of no effect in respect of any loss or damage (how-
ever caused) which shall happen or arise during the existence of
any of the contingencies 'aforesaid."
Such a clause is legal and in order to exempt the company
from liability, it is only 'necessary to prove that at the time of the
loss the neighbouring forests were burning. (86b)
GROSS NEGLIGENCE.
Gross 'negligence in some American States has been held in-
consistent with good faith and the assured held not liable. This
also is the law in the Province of Quebec, under the express pro-
visions of the Civil Code, by the following article :
2578. "The insurer is liable for losses caused by the insured
otherwise than by fraud or gross negligence."
Till! JURISPRUDENCE IN FRANCE IS TO THE SAME EFFECT.
L'assureur n'est pas tenu des pertes qui proviefodraient d'un
fait personnel & d'assure"; requite ne permet pas que Pun des
contractants puisse do'nner lui-meme naissance 1'evenement
qui rend 1'autre partie obligee envers lui. Pardessus, n. 590-lo.
NEGLIGENCE.
The policy of insurance covers the negligence of the insured
as well as of his servants. This is the law long established in
cases of marine insurance. In Walker vs Maitland, (87) Ab-
(86b) ConrmeiK'ial Union Ass. Co. vs Canada Iron Mining, etc.,
Co., 18 L. C. J., 80 ; 23 R. J. R. Q., 466, 534.
(87) 5 B. & Aid., 171.
THE CONTRACT 67
bott, C. J., says : "No decision can -be cited where in such a
case the underwriters have been held to be excused in conse-
quence of the loss having been remotely occasioned by the neg-
ligence of the crew." Bayley, J., says: "Here, 'the loss arose
from the sloop with the goods on board having been beat to
pieces 'by the force of the winds and waves; and the question
in this case is, whether the underwriters are exonerated from the
loss, by proving negligence on the part of the crew, although the
damage was occasioned by the perils of the. sea. It is the duty
of the owner to have the ship properly equipped, and for that
purpose, it is necessary that he should provide a competent
master and crew in the first instance ; but having done that, he
has discharged his duty, and is not responsible for their neg-
ligence, as between him and the underwriters." Holroyd, J.,
: "The rule of daw is, that proximo, causa non remold spec-
iatur, and here the proximate cause of the loss was the peril of
the sea. The question is, whether the underwriters are liable
for a loss proceeding directly from a peril of the sea, but re-
motely from the negligence of the crew."
A case directly in point however is Shaw vs Rohbards. (88)
I n tliis case one ground of defence was that the assured had iii'ii-
ligently committed the subject matter of the insurance, to be used
for a more dangerous operation than was contemplated by the
policy.
A& to this plea, Lord Denman, C. J., said: "One ar-
irument more remains to be noticed, viz : that the los*
here arose from the plaintiff's own negligent act, in allowing
the kiln to be used for a purpose to which it was not adapted.
There is no doubt that o'ne of the objects of insurance against
fire is to guard against the negligence of servants and others;
and, therefore, the simple fact of negligence has never been
held to constitute a defence. But it is argued that there is a
distinction between the negligence of servants or strangers and
that of the assured himself. We do not see any ground for such
a distinction; and are of opinion that, in the absence of all
fraud, the proximate cause of the loss only is to be looked to."
(88) o A. A I
68 THE LAW OF FIRE INSURANCE IN CANADA
This is also the law in the United States. In the Lynn Gas &
Electric Co. vs Meriden, above cited, the Court says: "Where
the negligent act of the insured or of anybody else causes a fire,
and so causes damage, although the negligent act is the direct
proximate cause of the damage through the fire which was the
passive agency, the insurer is held liable for a loss caused by the
fire."
IN QUEBEC THE LIABILITY OF THE COMPANY IS EXPRESSLY
COVERED BY THE CODE.
Art. 2579. "The insurer is also liable for losses caused by the
fault of the servants of the insured committed without his know-
lodge or consent."
PROPERTY INSURED.
What may be the subject matter of fire insurance is specially
provided for in some of the provinces of Canada, (infra Cap. IX,
X.) The Ontario Insurance Act, R. S. 0., 1897, c. 203, s. 166,
reads as follows: 166. "Every company licensed and registered
for the transaction of fire insurance may within the limits pre-
>rril>ed by the license and registry, insure or reinsure dwelling
houses, stores, shops and other buildings, household furniture,
merchandise, machinery live stock, farm produce, and other com-
modities, against damage or loss by fire or lightning, whether the
s;iine happens by accident or any other means, except that of
design on the part of the assured or by the invasion of an enemy,
or by insurrection." This section has 'been construed by the
Courts as follows:
The defendants, an insurance company incorporated under
the laws of Ontario, insured the plaintiffs a railway company
having a branch line in the State of Maine, "against loss or dam-
age by fire ... on the property as follows : on all claims for loss
or damage caused by locomotives to property located in the State
of Maine and including that of the assured." By the statute
law of the State of Maine, where "property" is injured by fire
THE CONTRACT 69
communicated by a locomotive engine, the railway company is
made responsible and it is declared to have an insurable interest
in the property along the line for which it is responsible :
Held, that the policy in question was, in consequence of this
statutory provision, a valid policy of fire insurance, and not an
ultra vires policy of indemnity, but that the property in respect
of which the insurance attached was that defined by the enabling
section of the Ontario Insurance Act, (E. S. 0., 1897, c. 203,
s. 166) and that standing timber was not included. (89)
DESCRIPTION OF PROPERTY INSURED.
It is only necessary that the description of the insured prop-
erty should be substantially correct.
The law is thus expressed in the Civil Code of Quebec :
Art. 2572. "It is an imiplied warranty on the part of the in-
sured that his description of the object of the insurance shall
be such as to shew truly under what class of risks it falls accord-
ing to the proposals and conditions of the policy. 7 '
When the application is referred to in the policy as forming
part thereof, it will control the provisions of said policy, where
there is a variance with respect to the description of the premises
insured. (90)
Where the application is made part of the policy by reference,
both will be looked at for the purpose of determining the nature
and subject matter of insurance. (91)
Where the application correctly described the building in
which were contained the goods to be insured, but the plan on
the back of the application, which was referred to in the applica-
tion, incorrectly showed such building, the court held that the
MI falsa demonstratio non nocet applied. (92)
(89) Canadian I'arifu- Railway Co. V8 Ottawa Fire Ins. Co., 9 O.
I. i:.. !:>:.; 11 < i.. i;, 166; ::. Can. S. C. R., p. 406.
(90) Vtttaa va Canada Fire & Marine Ins. Co., S. C., 1883, 9 Q.
L. R., 65.
(91) Howes V8 Dominion Fire & Marine Ina. Co., 2 O. R., 89; 8
\ i:.. on.
(92) Guardian An*. Co. vs Connelly, 20 Can. S. r. R., 208.
70 THE LAW OF FIRE INSURANCE IN CANADA
An insurance against fire effected against a certain quantity
of coals, covers not only those deposited at the time, but those
deposited since, and covers also loss or risk arising from spon-
taneous combustion. (93)
SUBSTITUTED GOODS.
An insurance upon stock in trade includes in addition to
what remains in specie of the original stock at the time the
policy is issued, other goods purchased in the course of business
to replace what has been sold. (94)
Where a policy of insurance against fire was effected by the
owners, wholesale dealers in coffee, etc., on "120 sacks of green
coffee" stored in a specified warehouse, and which policy was a
renewal of a similar insurance in force for some years, held,
that such insurance \\a> not limited to the particular 120 sacks
on hand when the policy was effected, but covered similar stock
to the specified number of sacks in hand at the time of a fire
which subsequently occurred. (95)
QUEBEC JURIOPRUDENCE.
The jurisprudence in Ontario is expressly covered by an
article of the Code in Quebec, as follows :
Art. 2573. "An insurance upon effects indeterminately as
being in a certain place is not limited to the particular effects
which are there at the time of insuring, but attaches to all those
falling within the description contained in the place at the time
of the loss; unless a different intention is indicated in the
policy."
In an action for the recovery of the insurance of goods insured
under a warehouse receipt, it is sufficient to establish that goods
(93) British American Ins. Co. vs Joseph, 9 L. C. R., 448.
(94) Butler vs Standard Ins. Co., 4 A. R., 391.
(95) Merchants Fire Ins. Co. vs Equity Fire Ins. Co., 9 O. L. R.,
241.
THE CONTRACT 71
of the character and brand and of the quantity claimed were ac-
tually in the building where the goods were stored at the time of
the insurance, and at the time the building and its contents were
wholly burnt, without proving the actual identification of the
goods described in the warehouse receipt. (96)
OTHER CASES.
Paper bags for flour not filled, burned, in a mill, would not
be covered by a policy upon the flour. (97)
But a policy on a grist mill covets not only the building, but
also the fixed and moveable machinery in it. (98)
It was held that a fire policy in favour of a party, on coal oil
"his own, in trust, or on consignment," covered his loss on oil
destroyed by fire in Middleton's sheds, warehouse receipts for
which granted by Middleton in favour of one Euston had been
transferred by Ruston to such party, and on which receipts such
party hod made advances to Ruston, who obtained such advances
really for Middleton, without the party advancing, however, be-
ing aware of the fact. (99)
\VlnTe a company insures a house, a summer kitchen and shed
with all the contents "of said house", and where some ,of the
contents, the coals, are such .that their natural place is in the
shed, the insurance covers all the goods in the house, even those
which have been taken into and belong naturally to the summer
kitchen or shed. (100)
"MAIN BUILDING." WHAT IT % INCLUDES.
The London Asylum for the Insane, consisted of one large
building and some twenty smaller buildings, the large building
(96) Wilson v* Citizen's Ins. Co., Q. B., 19 L. C. J., 175.
(97) Hutehinson r* Niagara District Ins. Co., 2 Dig. Ont. Case
Law,
(98) Shannon r* Gore District Mutual Ins. Co., 2 A. R., 396.
(99) Stanton V8 JEtn& Ins. Co., Q. B., 1872, 17 L. C. J. t 281.
(100) Cle d' Assurance Mutueftle centre >le Feu de Montreal t>* Vil-
teueuve, 1886. ML i;., 2 Q. B., 89, confirming 8. C., 29 L. C. J., 163.
72 THE LAW OF FIRE INSURANCE IN CANADA
consisting of a central front section, and an L shaped wing at
each end. Directly in rear of the central portion were a laundry,
kitchen and engine room, consisting of a brick building roofed
with slate and connected with the central building by a passage
or covered way with brick walls 10 feet high, roofed with slate,
and with a tramway to carry food from the kitchen portion to
the central building. This rear structure was destroyed by fire.
The policy described the insured building as follows: "The
Asylum for the Insane, London, main building."
The Court found that the Government intended to insure all
the buildings and this fact was known to those who represented
th insurance company, and that the words "Asylum for the
Insane" included all the buildings used for the housing the in-
sane at London, and that "main buildings" included wings and
extensions, as distinguished from the other surrounding and
detached buildings. (101)
LOCALITY.
A policy of insurance was effected on goods of the insured in
No. 319, and the insurance was afterwards renewed without
variation of its original conditions. Before the renewal, the
insured had extended his premises into No. 315, and the com-
pany's agent visited the establishment and saw the portion of
both buildings occupied by the insured, and the goods contained
therein. A fire destroyed the goods in No. 315, and slightly in-
jured those in 319. In an action on the policy claiming for the
loss, both in No. 319 and in No. 315, the jury found the facts
as above stated, and both parties moved for judgment on the
verdict. Held, that on the facts found by the jury as above, the
judgment should be for the defendants as to the loss in No. 315,
the inspection of the premises by the company's agent, before the
(101) Attorney-General of Ontario vs ^tna Fire Ins. Co., 18 Can.
S. C. R., 707.
THE CONTRACT 73
renewal of the policy, not being sufficient to establish an agree-
ment to vary the terms of the policy in respect of the locality
in which, the goods were represented to be. (102)
An insurance on goods described as being in Nos. 317, 319
St. Paul street, does not cover goods in the premises No. 315, ad-
joining. And a verdict of a jury adverse to this doctrine, al-
though supported by the charge of the judge, will be set
aside. (103)
A provision, in the body of the contract defining the locality
in which alone the insured property must be found, is perfectly
legitimate, and is not open to the objection that it is in effect a
condition to the validity of the policy which requires to be con-
tained in the variations to the statutory conditions.
It was held that the words in a fire policy "on the hull and
joiner work of the steamer Malakoff (now in Tate's Dock, Mon-
treal), navigating the river St. Lawrence between Quebec and
Hamilton, stopping at intermediate ports", describing the sub-
ject matter of the insurance, imported an agreement that the
vessel was navigating and to navigate and that the words must
be considered to be a warranty, and the engagement not having
been performed, the insurer was discharged. (104)
But it was held in Grant vs ^3tna Ins. Company, by the
Privy Council, that where the description was "now lying in
Tate's Dock, Montreal, and intended to navigate the St. Law-
rence and lakes from Hamilton to Quebec, principally as a
freight boat, and to be laid up for the winter in a place to be
approved by this company", these words did not imply a con-
tract to navigate, and that as the assured did not, after the date
of the policy, remove the boat for the purpose of navigation, he
was not bound to cause her "to be laid up for winter in a place
(102) <::/:,. in-. :inl .Invest. Co. V8 Lnjole, M. L. R., < Q.
B., 302.
(100) Holland V8 North British & Mer< -an tile Ins. Co., 14 L. C.
J., 00.
Grant va Equitable Life In. Co., 13 R. J. Q., 204.
74- THE LAW OF FIRE INSURANCE IN CANADA
to be approved of by the company", and that, although the boat
was not laid up for the winter in a place approved of by the
company, the insurers were liable for the loss. (105)
A time policy against fire was effected on a steamship. The
policy described it as then "lying in the Victoria Docks", but
gave it "liberty to go into dry dock, and light the boiler fires
once or twice during the currency of this policy". The only
dry dock into which the ship could go was Lungley's Dock, at
some distance up the river. To go there it was necessary to re-
move the paddle wheels; they were removed in the Victoria
Docks, and the ship was then towed up to Lungley's Dock. The
necessary repairs there having been completed, the ship was
brought out and moored in the river, preparatory to replacing
the paddle-wheels. This operation could have been perfectly
performed in the Victoria Docks, but it was found that in such
case it was customary, as the more economical course, to replace
the paddle-wheels while the ship lay in the river. Before the
wheels had been replaced the ship was burnt :
Held, that the policy covered the ship while in the Victoria
Docks, and while passing from them to the dry dock, and while
directly returning from the dry dock to the Victoria Docks ; but
did not cover the vessel while moored in the river for a collateral
purpose. (106)
A policy issued in 1895 against loss by fire to the hull of the
Steamship Baltic, including engines, etc., "while running on the
inland lakes, rivers and canals during the season of navigation,
to be laid up in place of safety during winter months from any
extra hazardous building."
The Baltic was laid up in 1893 and was never afterwards in
commission. In 1896 she was destroyed by fire. It was held,
reversing the court below, that the policy never attached, that
the steamship was only insured while employed on inland waters
(105) 9 R. J. R. Q., 290.
(106) Pearson vs Commercial Union, 1 App. Cas., 498.
THE CONTRACT 75
during the navigation seaso"n, or laid up in safety during the
winter months, and that the above stipulation was not a condi-
tion but rather a description of the subject matter of the insur-
ance and did not come within sec. 115 of the Ontario Insurance
Act relating to variations from statutory conditions. (107)
A policy described the premises in which the insured property
was situate as No. 272, it was held that reading together the ap-
plication, interim receipt and other documents leading up to the
issue of the policy, the contract of insurance was intended to
cover certain goods situate, in the adjoining premises, No
273. (108)
Amongst other conditions endorsed on the policy was one
"that if more than 20 Ibs. weight of gunpowder should be on
the premises at the time when any loss Happened, such loss
should not be made good."
Held, that the word "premises" though in popular language
applied to buildings, yet in legal language meant the subject
or thing previously expressed, in this case a vessel ; and that the
question ibeing, not what was the intention of the .partie*, but
what is the meaning of the words they have used, the reasonable
construction of the contract was that the vessel should not carry
more than 20 Ibs. weight of gunpowder. P. C., 1862. (109)
In the case of Gorman vs The Hand in Hand Ins. Co., (110)
it was held that when locomotive chattels, such as agricultural
implements, carts, etc., are insured in a certain place, the owner
cannot recover for 'them if they are burnt outside the limits of
the place named.
The rule above stated with respect to the validity of the provi-
sion respecting locality, has not been uniformly adopted in the
, L<MI.]OM Assurance Corporation va Great Northern Transit
Co., 29 Can. 8. C. B., f>77.
(108) Liverpool, London & Globe Ins. Co. va WyJd, 1 Can. S. C.
B., 604. For th- p:mi.Mi!:irs of this case, vide infra, p. 202.
Vide also Wilder i? Phoenix Ins. Co., 1 R. de J., 82.
00) Th. Beacon F. ft L. Ins. Co. va Gibb, 7 L. T., 674; 1 Moo.
P. C. n. P.
I:-. !:. n < I., 224.
76 THE LAW OF FIRE INSURANCE IN CANADA
courts of the United States. With respect to this, Joyce says,
vol. 2, par. 1742:
"As a rule, locality and place are essential, but in determining
how far locality is important in describing the property insured,
reference must be had to the character of the property, to a
consideration of what is the primary object in effecting the in-
surance, and also to the fact to what uses the property insured
would in all reasonable .probability be put. So usage may be a
controlling factor in the matter, as may also be the fact, in the
case of certain kinds of property, whether the removal thereof
is permanent or temporary. Where the policy is upon a class
of property the risk upon which, from its particular character,
depends so much upon the place or location that the same con-
stitutes an essential element of the contract; as in the case of
a stock of goods or furniture 'contained in' a specified building,
then such property will, as a rule, not be covered, if changed or
removed to another place or locality. The insurer for various
reasons in cases of this character might refuse to accept the risk
altogether, or might accept it at an enhanced premium if he had
known that its location was other than that designated, and the
right of the insurer to know exactly what risk he is undertaking
cannot be denied. But if the primary object is to insure the
property described, and the character of the property is such as
to warrant that presumption, then its exact location may be a
subordinate matter of more or less importance."
INSURABLE INTEREST 77
CHAPTER III
INSURABLE INTEREST.
Definition. Civil Code. Vendor and vendee. Mortgagee.
Husband and wife. Indorser. Warehouseman.
In a very old insurance decision of the House of Lords, (1)
insurable interest is thus defined:
" A mail is interested in a thing to whom advantage may arise
or prejudice happen from the circumstances which may attend
it; in quantum mea interfuit i. *e. quantum mihi dbest quantum,
que lucrari potui. Dig. lib. 46, lib. 8, c. 13. And whom it im-
porteth, that its condition as to safety or other quality should
continue; interest does not necessarily imply a right to the
whole, or a part of a thing, nor necessarily and. exclusively that
which may be the subject of privation, but the having some re-
lation to, or concern in the subject of the insurance, which rela-
tion or concern by the happening of the perils insured against
may be so affected as to produce a damage, detriment, or pre-
judice to the person insuring; and where a man is so circum-
stanced with respect to matters exposed to certain risks or dan-
gers, as to have a moral certainty of advantage or benefit, but
for those risks or dangers he may be said to be interested in the
safety of the tiling. To be interested in the preservation of a
tiling, is to be so circumstanced with respect to it as to have
benefit from its existence, prejudice from its destruction. The
(1) Luocna t*t Crawford, 2 B. A P., New Rep., 200.
78 THE LAW OF FIRE INSURANCE IN CANADA
property of a thing and the interest deviseable from it may be
very different; of the first the price is generally the measure,
but by interest in a thing every benefit and advantage arising
out of or depending on such thing, may be considered as being
comprehended."
The Civil Code defines Insurable Interest as follows; art.
2474 : "A person has an insurable interest in the object insured
whenever he may suffer direct and immediate loss by the de-
struction or- injury of it."
INSURED WITH PARTIAL INTEREST ONLY MAY RECOVER THE
WHOLE LOSS.
If the insured has an insurable interest when the policy is
effected as well as when the loss occurs, a misrepresentation
as to the nature of his interest will not invalidate the policy
nor will the amount recoverable be limited to his actual insur-
able interest if his intention was to insure the whole interest
in the property. (2)
But if his intention is to insure only a partial interest, he
can only recover for so much as he intended to insure. (3)
INTEREST IN LAND.
Where the insured conveyed (his ^property <to his father to
avoid a pending claim, upon a verbal agreement that the father
was to .reconvey when the insured wished, it was held that he
had an insurable interest. (4)
ADVANCES UPON A VESSEL.
Advances upon a vessel in course of construction under an
oral agreement that when the vessel should be launched she
(2) Caldwell vs Stadaeona Fire Ins. Co., 11 Can. S. C. R., 212 ;
Keefer m Phc&nlx Ira. Co., 31 Can. S. C. R., 144, infra, p. 80.
(3) Castellain vs Preston, 11 Q. B. D., 380, infra, p. 80.
(4) Pettigrew vs Grand River Fairmers Mutual Ins. Co., 28 U. C.
O. P., 70.
1 N < I' R ABLE INTEREST 7 9
should be placed in the hands of the one advancing the money
for sale, and that out of the proceeds the advances so made
should be paid, is an equitable interest which is insurable. (5)
VENDOR AND VENDEE.
A vendor who has agreed to sell for full value has, pending
the contract of sale, a perfect right to insure the premises
sold. (6)
Tihe insured was an unpaid vendor under an agreement for
sale and claimed to recover the full amount covered by the policy,
although this exceeded the balance due him from the purchaser,
the circumstances of the case being that the plaintiff sold a
piece of land to ,be paid by instalments, verbally agreeing to
keep it insured for the amount of the purchase money. At the
time of the agreement the property was insured under a policy
which was allowed to remain for some time, when a new policy
wa- substituted for it, and nothing was said to the company of
the nature of the change in the insured's interest, although at
this time the purchaser had paid a considerable amount of his
purchase money.
In pronouncing the majority judgment of the Court, Sedge-
wick, J., says : "The question in dispute here is whether an un-
paid vendor can recover not only his beneficial interest, but the
beneficial interest of his vendee as well. I am clearly of the
opinion that he can."
And after expressing approval of the judgment in Caldwell vs
Stadacona, he says: "Some of the learned judges below seem
to have thought the fact that the insurer's interests was not dis-
closed at the time of the insurance vitiated the policy. The
authorities are conclusively the other way. Bowen, L. J., in
Castellain vs. Preston, (11 Q. B. D. 380) says two conditions
only are necessary in order to entitle the assured to recover,
(5) Clark vs Scottish Imperial Ins. Co., 4 Can. S. C. R., 192.
(6) GUI vn Canada Fire & Marine Ins. Co., 1 O. R., 341.
80 THE LAW OF FIRE INSURANCE IN CANADA
'first, the form of his policy must be such as to enable him to
recover the total value ; and secondly, he must intend to insure
the whole value at the time.'
"It is nowhere a condition of his recovering the whole amount
that he must disclose all the parties interested. The law is well
laid down in Wood on Fire Insurance, sec. 151
e< 'Unless the policy requires that the interest of the insure'd
shall be disclosed, a failure to disclose the nature of his interest
or of the existence of a lien or encumbrance thereon, is not a
fraudulent concealment, and the policy is operative if the as-
sured in fact has an insurable interest therein.'" (7)
PERSON WITH LIMITED INTEREST MAY INSURE THE WHOLE.
In Castellain vs Preston, Bo wen, L. J., says: "It is well
known hi marine and in fire insurances that a person who has a
limited interest may insure nevertheless on the total value of
the subject matter of the insurance, and he may recover the
whole value, subject to these two provisions : first of all, the
form of his policy must be such as to enable him to recover the
total value, because the assured may so limit himself by the way
in which he insures as not really to insure the whole value of
the subject-matter; and secondly, he must intend to insure
the whole value at the time. When the insurance is effect-
ed he cc-nnot recover the entire value unless he has intented
to insure the entire value. A person with a limited interest
may insure either for himself and to cover his own in-
terest only, or he may insure so as to cover not merely his own
limited interest, but the interest of all others who are interested
iu the property. It is a question of fact what is his intention
when he obtains the policy. But he can only hold for so much
as he has intended to insure Then to take a case which
perhaps illustrates more exactly the* argument, let us turn to
the case of a mortgagee. If he has the legal ownership, he is en-
titled to insure for the whole value, but even supposing he is not
(7) Keefier vs The Phoenix Ins. Co., 31 Can. S. C. R., 144.
INSUKABLE INTEREST 81
entitled to the legal ownership, he is entitled to insure pi'ima
facie for all. If he intends to cover only his mortgage and is
only ins ".ring his own interest he can only in the_event of a ]oss
hold the amount to which he has been damnified. If he has in-
tended to cover other persons .beside himself, he can hold the
surplus for those whom he has intended to cover."
The vendee under an agreement to purchase has an insurable
interest. (8)
Tin- fact that the owners of an insured building have entered
into an executory contract for the pulling down of the building
in question and for the sale of the materials to the contractors
at a sum very much less than the amount of the insurance is
no bar t> their right to recover the full amount of the insurance
when the building is burnt down before the time fixed by the
contract for the transfer of possession. (9)
MORTGAGEE.
A mortgagee of goods lias an insuraible interest though, the
mortgagor continues in actual possession. (10)
A mortgagee having insured for an amount to cover both his
<>\\n and the mortgagor's interest, but without disclosing the
fact. i~ entitled to recover the full amount of the policy. (11)
\Y!i<-iv the insured has conveyed the property by an. absolute
eyance, although only intended to be as security for an in-
duces, in case of loss he is entitled to recover. (12)
A policy of insurance taken out by a mprtgagor in favour of
tin 1 mortgagee ia not invalidated by reason of the equity of re-
demption being transferred to the mortgagee where the com-
pany have received subsequently the premiums from the mort-
(8) Millfcan t Equitable Ins. Co., 16 U. C. R., 314.
i Ardtll vs Citizens Ins. Co.; Ardlll vs ^Etna Ins. Co., 22 O.
\. [{..( KlVr rx IMiu>nix Ins. Co., supra, p. 80.
Ogden t Montreal Ins. Co., 3 U. C. C. P., 497.
Ulotonrdaon vs Home Ina. Co., 21 D. C. C. P., 201.
(12) Smith V8 Royal In*. Co., 27 U. <C. R., 54.
THE LAW OF FIRE INSURANCE IN CANADA
gagee with knowledge that the mortgagor's interest in the prop-
erty had ceased. (13)
A mortgagee of insured premises to whom payment is to be
made in case of loss "as his interest may appear", cannot recover
on the policy when his mortgage has been assigned and he has
ceased to have any interest therein at the time of the loss. (14)
Plaintiff, being a mortgagor in possession of a mill, conveyed
it away by a deed, absolute on its face, taking an agreement for
a reconveyance on payment of a certain sum which he owed the
grantee. Held, that this was in effect a mortgage, and that the
plaintiff had an insurable interest. (15)
Plaintiff insured his interest in a house as mortgagee ; the
mortgage was afterwards foreclosed, and the property sold un-
der the decree, and purchased by x he plaintiff. Held, that his
mortgage interest was extinguished by the foreclosure and sale,
and that he could not recover for a loss happening after-
wards. (16)
HOUSE.
Where a house is owned by the insured, but the land upon
which it is erected has Ibeen improperly described, he may still
recover in case of loss. (17)
INSURABLE INTEREST AT TIME OF LOSS ONLY.
If the insured has no interest in the property covered by the
policy when it is issued, the fact that he has subsequently ac-
quired an interest will not entitled him to recover. And a re-
newal of the policy is merely a continuance of the original con-
tract. (18)
(13) Wymam vs Imperial Ins. Co., 16 Can. S. C. R., 715.
(14) Guerin vs Manchester Ass. Co., 29 Can. S. C. R., 139.
(15) Kelly vs Liverpool, London & Globe Ins. Co. ; Stevens, N. B.,
dig. 739, (New Bruins.)
(10) Gaskin vs Phcenix Ins. Co., 6 All. 429.
(17) Stevenson vs London & Lancashire Fire Ass. Co., 26 U. O.
R., 148.
(18) Howard vs Lancashire Ins. Co., 11 Can. S. C. R., 92.
IXSL'BABLE INTEREST 83
Hr-SHAXD.
The husband of the owner in fee and tenant by courtesy has
an insurable interest. But a tenant of glebe lands continuing in
possession after the death of the lessor, and after the induction
of his successor, against the latter^ will, has no insurable in-
terest, the successor not being bound by the covenant. (19)
INMORSER OF NOTES.
A party to whom a policy of insurance is assigned with the
assent of the company as security for his indorsement of the
notes of the purchaser of certain chattel property from the as-
signee of the insured, has an insuraible interest. (20)
MARRIED WOMAN.
A married woman being the owner of a stock in trade which is
insured in her name, is not prevented from recovering on the
policy in case of loss by reason of the fact that the business is
carried on in her husband's name with her acquiescence. (21)
A woman common as to property and under coverture cannot
validly insure in her own name the household furniture belong-
ing to the community without the authorization of her hus-
band. (22)
A widow having continued for four years after her husband's
death, in possession of a house built on land of which he was
lessee for years, and paid the ground rent, insured the house
in her own name. No administration was taken out on the
husband's estate. Held, that she had an insuraible interest, 1st
as the presumptive owner of the house ; 2nd as executrix de son
iort; 3rd as the widow under the Statute of Distribution. (23)
(19) 8naw vs Plupnix Ina. Co., 20 U. C. C. P., 170. Vide CaiMiweU
vi Stadaeona Fire ami I/ifv Ins. Co., (infr.-i. j>. 131).
(20) Daviea v* Home Inn. Co., 3 E. & A., 260.
HutVr vt Standard Fire Ins. Co., 4 A. R., 391.
(22) Itmiraeau t?t La Compagnle d' Assurance Roynlo, M. L. R.,
C.. 885.
(23) Llngley vt Toe Queen IM. Co., 1 Han., 280.
84 THE LAW OF FIEE INSURANCE IN CANADA
WAREHOUSEMAN.
A purchaser from a warehouseman, under a warehouse re-
ceipt, of a quantity of wheat which was never separated from
other wheat of the seller, has an insurable interest. (24)
A colourable lease made to an individual for the purpose of
constituting him a warehouseman upon whose receipts the goods
assured would be dealt with does not affect the risk and void the
policy of an insurance upon certain goods assured whether their
own property held on trust or on consignment. (25)
But where the warehouseman is not such within the terms of
the statute and the receipt is ineffective to operate as a ware-
house receipt, the purchaser cannot recover. (.26)
And where a valid condition of the policy requires that the
property must be insured in the name of the owner, if after the
policy has issued the property insured is legally transferred by
warehouse receipt, the insured cannot recover. (27)
In order to recover upon a policy of insurance upon a quan-
tity of wheat held by the insured under a warehouse receipt, it
is not necessary to prove the identity of the wheat destroyed, but
the quantity claimed for must have been in the warehouse under
the warehouseman's control during the whole period between
the insurance and the fire. (28)
CHIROGRAPHARY CREDITOR.
A chirographary creditor has no insurable interest in the stock
which is in the store of his debtor, and therefore cannot valHIy
insure it. (29)
(24) Box vs Provincial Ins. Co., 18 Gr., 280.
(25) Lancashire Ins. Co. vs Chapman, 7 R. L., 47; confirming Q.
B., which reversed S. C., 13 L. C. J., 36.
(26) Todd vs Liverpool, London & Globe Ins. Co., 20 U. C. C. P.,
523.
(27) McBride vs Gore District Mutual Fire Ins. Co., 30 U. C. R.,
451.
(28) Parsons vs Queen Ins. Co., 20 U. C. C. P., 188.
(29) Hunt vs Home Ins. Co., S. C., 3 R. L., 455.
INSURABLE INTEREST 85
MUTUAL COMPANIES. MISREPRESENTATION AS TO
INTEREST.
Legislation making provision for the incorporation of mutual
insurance companies frequently provides that the policy shall
be voided where the true title of the assured or any incumbrance
on the subject matter of insurance be not expressed in the
policy. (30) Decisions based upon such legislation do not af-
fect the general rule above stated.
IN QUEBEC THE NATURE OF THE INTEREST MUST BE
SPECIFIED.
Art. 2571. C. C. "The interest of an insurer against loss by
fire may be that of an owner, or of a creditor, or any other
interest appreciable in money in the thing insured ; but the
nature of the interest must be specified."
It was held nevertheless that a bona fide equitable interest in
property of which the legal title appears to be in another may
be insured, provided there be no false affirmation, representa-
tion or concealment on the part of the assured, who is not
obliged to represent the particular interest he has at the time,
unless inquiry be made by the insurer, and such insurable in-
terest in (property of which the assured is in actual possession
may be proved by parol evidence. (31)
The lessor of real estate insured the leased property "in
trust" and notified the insurers that the lessee, his son, was the
real beneficiary. The lessee paid all the premiums and the
property having been seized in execution of a judgment against
the lessor the lessee purchased at the sheriff's sale and became
owner in fee. He afterwards increased the insurance, the insurer
acknowledging in the second policy, the existence of the first in
his favour. The property having been destroyed by fire, payment
(30) I: 'S, 409.
Wl.ytM r* Homo Ins. Co., 14 L. C. J., 301.
86 THE LAW OF FIRE INSURANCE IN CANADA
of the amount of the first policy to the lessee was opposed by a
judgment creditor of the lessor and the money attached in the
possession of the company.
It was held that the lessee having had an insurable interest
when the first policy issued, and being, when he acquired the
fee and when the loss occurred, the only person having such in-
terest, he was entitled to the payment of the amiount of the
policy insured upon the application of the lessor. (32)
(32) Langelier vs Charlebois, 34 Can. S. C. R., 1.
THE INSURED 87
CHAPTER IV
THE INSURED.
Definition. Loss payable to third party. Assignment of policy.
Subrogation. Mortgagor. Mortgagee, Re-insur-
ance. .
The party to be indemnified under a contract of insurance is
styled the "insured" or "assured."
In the event of loss the amount payable may, however, by
virtue of some transfer by the original insured, with or without
the assent of the insurer, and with or without the transfer of the
property which is the subject matter of the insurance, be made
payable to a third party, and difficult problems are frequently
presented with respect to the liability of the company in such
cases.
CONDITIONS OF TRANSFER.
The conditions under which the transfer or assignment of the
monies payable under the policy arise, are the following :
Class 1. Where the policy on its face contains a clause which
provides that the loss, if any, shall be payable to some third
party;
Class 2. Where, with the consent of the company, there is an
assignment of the policy of insurance to a third party, having
an insurable interest in the property insured, as a collateral
security to a debt due by the assignor to the assignee ;
88 THE LAW OF FIRE INSURANCE IN CANADA
Class 3. Where, with the consent of the company, there is an
absolute assignment of the policy to a third party, who has
also an insurable interest in the property insured, and the
assignor retains no interest in the said property;
Class 4. Where, without the consent of the company, there is
an assignment of the policy to a third party, having an insur-
able interest in the property insured, as collateral security to
a debt;
Class 5. Where, without the consent of the company, there is
an absolute assignment of the policy of insurance to a third
party who also has an insurable interest in the property in-
sured;
Class 6. Where, with the consent of the company, there is an
absolute assignment of the policy to a third party, without
any such insurable interest; and
Class 7. Where, without the consent of the company, there is
an absolute assignment of the policy to a third party, without
any such insurable interest.
Clasies 1 and 2. Where the policy makes the loss payable to
a third party, such third party is liable to have his claim
destroyed by a breach of the conditions on the part of the
original assured.
Although having the authority against it of a decision in 1865
of the old Court of Chancery for Upper Canada, it is submitted
that there is no distinction in principle between the case of an
assignment of a policy of insurance to a mortgagee by his mort-
gagor as collateral security for the mortgage debt, and the case
of a policy on its face made payable to the mortgagee, and in
both cases the "policy will be voided by a breach of a condition
by the mortgagor which, had there been no assignment, would
have voided the policy.
It will facilitate an understanding of the subject to discuss
the first two classes together, ard to deal in the first place with
THE INSUKED 89
the second class, which was considered by the Ontario courts
previous to the first class.
An early and much litigated case, of Burton vs Gore District
Mutual Insurance Co., (1) has frequently been the subject of
discussion in later cases, and although stated by Burton,
J., (2) to be a decision affirmed by the Court of Error and
Appeal, and therefore binding upon the courts in Ontario, there
appears to be no record in the reports, of the case ever being
carried beyond the Court of Chancery. This decision is a
very unsatisfactory authority and one which, in view of later
decisions, it is submitted, would not be approved by a higher
court. The facts and history of the case were as follows : The
insured having mortgaged his property, with the consent of the
insurance company, assigned the policy to the plaintiff and in an
action brought thereon by the mortgagee, the company pleaded
that after the assignment the plaintiff had effected an insurance
ill another company without their consent, whereby the policy
became void.
The case first came before the Court of Queen's Bench. (3)
The defendants' third plea was that the mortgagor before the
loss, insured in another office for 500, which defendants had no
notice of, and never consented to or approved. On demurrer
this plea was held good. Chief Justice Robinson, referring to
the third plea says: "I take the third plea to be a good defence,
for the plaintiffs themselves in their declaration have stated the
assignment made to the plaintiffs by M. to be merely for secur-
ing a debt, and to be subject to an equity of redemption in M.
Now this being so, M. stands still as the person assured, with
only a lien given by him t > the plaintiffs upon his policy
and while he held still all the interest in the policy above the
amount of the mortgage, for that at least he must have held, ac-
iing to the statement in this plea, he effected another insur-
(1) 14 U. c. K MS; r_' (*r.,.l5G.
(2) . Mechanics Building Society vs Gore District Mutual Ins. Co.,
:,i.
t:\) 11 r. C, i:..
90 THE LAW OF FIRE INSURANCE IN CANADA
ance in another office, and without the knowledge of the defen-
dants at the time, and without obtaining their assent and con-
firmation subsequently. Such double assurance in my opinion
avoided the policy, for it was clearly within the mischief intend-
ed to be guarded against by that condition; since if M. could
pay his debt out of the first policy in case of loss, and receive for
himself the residue of the sum insured, and also any other sums
that he might have insured in other offices without the defen-
dants' knowledge, exceeding in all the value of the property, he
would have the temptation to act fraudulently, which this con-
dition in the policy was intended to remove from him."
Burn, J., on page 361 also deals with the effect of the assign-
ment, and says : "The condition is toot in case the person hold-
ing the policy, whether he may be the original insurer or the as-
signee who may effect a subsequent insurance, that the first
policy shall be void, but it is in case of subsequent insurance
without notice that the policy shall be considered void; leaving
the matter to rest upon the footing, that if any interest which
the company had insured might be again insured, the company
should have notice of it."
Again on page 362, he says: "It appears to me that reason
and common sense dictate we should hold that the stipulation or
condition that the policy should be void in case of a subsequent
insurance, did not by the defendants' sanction of the transfer to
the plaintiffs become divisible, and so leave M. to effect another
insurance upon his interest as mortgagor without giving notice."
Again he says : <T do not think the transfer of the policy
altered the nature of it; that is, that because the plaintiffs be-
came mortgagees of the property the policy then became an in-
surance of the debt due them. By the transfer no doubt it
operated in the nature of an additional security to them for
their debt, but it did not alter the nature of the policy itself."
And after reasoning the matter out he further states : "This
shews that the mortgagor and mortgagees were jointly interest-
ed in the policy, and that their interests had not become dis-
tinct so as to absolve the mortgagor from an obligation to the
THE INSURED 01
defendants to give notice of a suibsequent insurance, or to
render the mortgagees so independent of the acts of the mort-
gagor as to -be bound by nothing he might do."
McLean, J., concurred with Burn, J.
The same case came on to be heard in the Court of Chan-
cery, (4) where VanKoughnet, C., says: " Whatever difficulty
a court of law might have felt in dealing with the divisible in-
terests of -mortgagor and mortgagee, no such difficulty exists
here. I think the mortgagor, by the subsequent insurance, only
destroyed his own interest in the policy, leaving that of the mort-
gagee unaffected ; and that if the latter could at law, as alienee,
recover the whole amount of the policy, this court would restrain
him from taking more than his own interest in it, and thus pre-
vent the frauds and the difficulties which the court at law seemed
to apprehend would arise from treating the mortgagee as the
owner there of the policy, as well as its alienee."
The case was reheard before the full court and affirmed
where the Chancellor's view was concurred in by Mowat,
V. C., who held that by virtue of the assignment the as-
signee became thence forward, in equity, if not in law, the
assured. He says : "If the assignee is not the purchaser of the
property insured, he is a creditor merely of the owner, and
taking the assignment as a mortgagee he becomes the assured to
the extent of his debt only. This being in the present case the
mutual relation of the plaintiffs and the company, the question
ifi whether the subsequent insurance by the mortgagor avoided
the contract? To hold in equity that it did would in my opinion
be opposed to the spirit of the whole law of insurance."
Spragge, V. C., on the other hand, dissented, holding that the
mortgagees were simply the assignees of a contingent interest
to tin* same liabilities and <-ont inL r <'nri<>- which attached
to It in the hands of the assignor.
This decision was discussed by Gwynne, J., in Smith vs Nia-
(4) 12 Gr. t 1W.
92 THE LAW OF FIRE INSURANT K IN CANADA
gara District Insurance Co., (5) where he says, p. 576 : "I con-
fess that if it were not for this decision, which, so far as I have
been able to find, is not based upon the authority of any decided
case, I should have thought it beyond doubt that consent to the
assignment of a policy of insurance having legal existence in-
volved in terms a necessity for the continuing existence of the
thing assigned namely, the legal contract although it may
be in whole or in part only for the benefit of the assignee ; and
that, like the assignment of any other chose in action, the as-
signee acquired no greater right to recover thereunder than was
consistent with the terms of the contract, and as could be assert-
ed by or on behalf of the assignor, the only difference between
the position of the assignee at law and in equity being, that in
equity he could sue in his own name, whereas at law he could
only sue in the name of his assignor; but, whether in equity or
at law, he could only recover in right of the assignor. I cannot
understand how a party's consent to the assignment by one
person to another of a legal contract in existence with the former
can operate as the destruction of the thing agreed to be assigned,
and the substitution in its stead of a wholly new contract having
no legal existence, but having a new birth in equity, wholly re-
lieved and discharged from those conditions and safeguards
which, for the protection of the party assenting to its assign-
ment, surrounded its legal existence."
In Kanady vs Gore District Mutual Insurance Co., (6) the
court of Queen's Bench, in the judgment delivered by Gwynne,
J., has this to say with respect to the decision in Burton vs Gore
District : "I have searched in vain to find a case, and I venture
to affirm that none can be found, wherein it has been decided in
any English Court that a mortgagee of property upon which a
policy of insurance had been effected by the owner and mort-
frajror and which policy has been assigned to the mortgagee as
collateral security for his mortgage debt, can, in case of a loss
(5) 38 U. C. R., 570.
(6) 44 U. C. R., 261.
THE INSURED 93
;rring, recover the amount secured by that policy, or any part
thereof, otherwise than in right of the insured mortgagor, and
subject to the conditions contained in the policy. In England
siuli an assignee is regarded the assignee of a chose in action
only, and as such he is entitled to recover only in right of the
insured, and subject to the condition contained in the policy.
This also appears now to be well established law, as the same is
administered in the Supreme Courts of the States of Massachu-
a and Pennsylvania, and in the Supreme Court of the United
States
"However, Burton vs The Gore District Mutual Insurance
Company, could 'not, as it appears to me, irrespective of recent
i at ion, govern in any case except in one precisely similar in
it< circu instances, that is to say, where the premium note of the
original insured is given up and cancelled, and a new premium
note is given by the mortgagee to whom the policy is confirmed
anew l.v the insurers. That was the state of the facts upon which
that ease proceeded, and any authority which it may have if any
it has in view of recent legislation, must be confined to cases in
which the same state of facts appears."
Tin; decision in this case was also discussed in Livingstone vs
The Western Assurance Co., (7) which was a case under class
namely, where instead of an assignment, the loss on the
the policy was made payable to the mortgagee. (8)
Th" only judges who expressed any opinion upon the decision
in Hurt un /> Gore District Mutual were the following:
Draper, C. J., said: "I should add that I have considered
ase of Burton vs Gore Mutual Insurance Co. The fact that
e was an assignment in that case may be sufficient to dis-
: i i <,: i-;i ; i.; (;
(8 ae waa heard by the Court of Error and Ap-
. <-owl4ting of I>r:iiM-r. r. .1.. I; hanls, ('. .1 . V.-mlv.iiffhnet, C.,
C. J. f Spragge, V. C., A. Wlteon, J., Mowat, V. C., and
Gwynne, J., although Mowat, V. C., was absent when judgment was
pronounced.
94 THE LAW OF FIRE INSURANCE IN CANADA
tinguish it, but if not, it would require more consideration than
I have yet given to it before I could follow it to the extent nec-
assary to decide this case in favour of the plaintiff."
Spragge, V. C., (who heard the case in the first instance) said
that in disposing of it originally he had proceeded mainly on
the case of Burton vs Gore District, from which he had found it
impossible to distinguish the case, and subsequent consideration
had failed to convince him that he was wrong.
VanKoughnet, C., who was present at the rehearing in the full
court of Chancery, (9) had found in favour of the defendants,
and said : "It is not like the case of Burton vs The Gore Dis-
trict where the policy was assigned with the assent of the insur-
ance company, so that from that time forward the assignee, as
to a certain interest, became the party assured. Here the rights
of the parties are declared db initio by the contract itself, and no
subsequent arrangement took place between them to alter these
rights."
While Mowat, V. C., says: "I think that the case cannot in
principle be distinguished from Burton vs The Gore District
Mutual, and that the plaintiff being, to the extent of his interest,
the assured, he was not prejudiced by any act of his mortgagor
to which he was no party."
In the result, therefore, it would appear that Robinson, C. J.,
Burn, McLean and Gwynne, JJ., and Spragge, V. C., were of
the opinion that the assignment of the policy as security for the
mortgagee's debt, still left the policy liable to be voided by the
acts of the mortgagor ; while VanKnoughnet, C., and Mowat,
V. C., are authorities for the contrary proposition and Draper,
C. J., expresses doubts as to the judgment of the Court of Chan-
cery. The remaining judges of the Court of Error and Appeal
simply concurred in holding that where the policy on its face
makes the loss payable to the mortgagee, he stands in no better
position than the mortgagor.
(9) 14 Gr., 461.
THE INSURED 95
In addition ws have the fact that Vice-Chancellors Spragge
and Mowat, express the opinion that there is no distinction in
principle between the case where the policy is assigned as col-
lateral security to the mortgagee, and the case where the policy
on its face is made payable to the mortgagee.
Osier, J. A., with respect to the rights of the parties, in Class
1, states the law as follows: (10) "It is well settled .that in a
policy, by the terms of which the mortgagor is the party insured
and with whom the company contract, a clause by which the pol-
icy moneys are made payable to the mortgagee in the event of
loss, does not create an insurance of his interest so as to enable
him to recover upon the policy qua an insurance contract with
him. but is a mere appointment of the mortgagee .to receive any
moneys which may become due from the insurers in the event of
loss, and a direction and authority to the latter to pay him
instead of the mortgagor: (Livingstone vs Western Insurance
Co., in App. 16 Gr. 9).
'The immediate contract of the insurers being with the mort-
gagor, he is the party entitled to sue upon the 'policy, and may
recover the amount if unpaid, notwithstanding the direction or
authority to pay to the mortgagee : (Caldwell vs Stadacona In-
surance Co., 11 S. C. E. 212.)
"The mortgagee's claim is, nevertheless, liable to be defeated
:iie mortgagor's breach of the conditions of the policy : Li-
vingstone vs Western Assurance Co.; (11) Ohishom vs Provin-
cial Insurance Co." (12) The jurisprudence in Quebec is to the
. (12a)
HK.HT OF ACTION IN CASES UNDER CLASS 1.
Ontario cases were reviewed by the Court of Appeal in
icultural Savings & Loan Co. vs Liverpool & London
& Globe, (13) with respect to the mortgagee's right of action.
or i. ..... ion Am <,.. ir, A. K.. _';_'.
11) 16 Or., 0.
(12) 20 U. C. C. P., 11.
Bt Lawrenoe Fire Ins. Co., Q. R., 10 K. B., 122.
B U, i. i: . 127.
96 THE LAW OF FIRE INSURANCK IN CANADA
In that case Armour, C. J. 0., in pronouncing the judgment
of the court, held that a policy of insurance by deed, is a deed
poll, and anyone named or designated in it, with whom a coven-
ant is thereby made, can sue upon it.
A different view was, however, expressed in the Supreme
Court of Canada, in the case of McQueen rx Phnenix Mutual
Insurance Co. (14) There, Gwynne, J., with whom Strong, J.,
concurred, says: "The policy, although having in it the words
'loss if any payable', etc., etc., is granted to the plaintiff. He is
the person named therein as the insured, he is the person with
whom the defendants contract, with whom the defendants
covenant to make good all loss or damage to be sustained by the
peril insured against, and the words 'loss if any payable', etc.,
etc., operate to e>nable the defendants, in fulfilment of that cove-
nant to pay the parties named, and to set up such payment to an
action by the plaintiff against them for breach of this covenant,
but if they do not pay them or any one, then, if loss lias Uvn
incurred within the terms of the policy, a breach of their cove-
nant is committed, and the plaintiff is the person in whom the
right of action for such breach is vested - - he is the proper
person to sue."
And again, in Guerin vs Manchester Fire Insurai ,> ( '.... < i:>)
a case governed by the law of the Province of Quebec, Strong,
C. J., in pronouncing the judgment of the Court, says : "Ac-
cording to the rule of law established in England, a person
not himself a party to a contract, but to whom money is made
payable under a contract entered into by other persons, cannot
maintain an action to recover the money so made payable to
him, and this rule prevails generally in the United States with
the exception of the State of New York, when- the decisions
have established a contrary rule. According to the modern law
of France, however, the adjectus gratia solutionis can maintain
an action in his own name where the payment is intended for his
benefit. Therefore, had the mortgagee retained an interest
(14) 4 Can. S. C. R., 6GO.
(15) 29 Can. S. C. R., 139.
THE INSURED 97
in the mortgages up to the time of the loss, he might have main-
tained an action for the insurance money though it was payable
to him under a contract of insurance between the mortgagor and
the company to which contract he was himself no party, and this
rurht of action he might haive transferred to the apipellant. The
right to maintain an action in the character of a mjere party to
receive payment would, however, depend on a due performance
of the condition of the policy by the assured, who, in the hypo-
thesis now being considered, would be the mortgagor."
When Liverpool, London & Globe vs Agricultural, etc., reached
the Supreme Court, (16) the court refrained from expressing
any opinion upon the question of the right of the mortgagees to
bring an action in their own name, as they held the policy never
attached owing to misrepresentations contained in the appli-
cation.
In the result, therefore, while it may be laid down as finally
settled by authority that in a case where by the policy the loss is
made payable to a third party, such third party's claim never-
theless may be destroyed by a breach of the conditions on the
part of the original insured, yet, until there has been some
authoritative decision on the .point binding upon the provincial
courts of Canada, it cannot be said to be definitely settled that
under such conditions an action is properly brought in the name
of the third party without the intervention of the original in-
sured. (16a)
Classes. Where, with the consent of the company, there is an
absolute assignment of the policy to a third party who has also
an insurable interest in the property insured, but the assignor
retains no interest in the said property.
In this case, where the company consent to the complete
alienation of the subject matter of the insurance, coupled with
an assignment of the policy, the assignee of the policy become
and is not affected by any subsequent acts of the
. II- , 94.
Brnflfc V* /Ktn.i Ins. fV>.. 1 Old., 4GO, and M:iritim.>
Bank r Guardian AM. Co., 19 N. B. Rep., 297.
4
98 THE LAW OF FIRE INSURANCE IN CANADA
assignor. Spragge, V. C., says in Burton vs Gore District
Mutual, (17) "Where there is an alienation within the meaning
of the act, assented to by the company, the company does, I ap-
prehend, accept the alienee in place of the party originally in-
sured; and it would follow that a subsequent insurance in an-
other office by the latter, would not affect the alienee."
Class 4. Where, without the consent of the company, there is
an assignment of the policy, to a third party, having an insur-
able interest in the property insured, as collateral security, to
a debt.
It would appear that the rule governing cases arising under
class 2, also applies to this class.
In Burton vs The Gore District Mutual, it was held by
Spragge, V. C., (18) that in a case of this class, unless the policy
so required,the consent of the company was not necessary, (making
use of the following language : "Does a consent to such a trans-
fer (partial) involve the same consequence? (as in the case of a
total alienation, class 3 above). The reason for requiring con-
sent does not exist in such a case, and looking at the true nature
of the transaction I cannot think that B. and S. (the mort-
gagees) could be looked upon as substituted for M. (the mort-
gagor) (but that M. continued the insured. The consent of the
company was asked. I should say, ex abundanti cautela, and
was given as a matter of course as in a case in which ^here was
nothing requiring any exercise of judgment and in which there
was no idea of making any contract of insurance with B. and S.
(the mortgagees.)"
Class 5. Where, without the consent of the company,
there is an absolute assignment of the policy to a third party
having an insurable interest.
At common law an assignment of this character would not be
valid, but it would be enforceable in equity.
(17) 12 Gr., at p. 161.
(18) 12 Gr., at p. 161.
THE INSURED 99
In Burton vs Gore District, (19) Eobinson, C. J., said: "At
common law clearly no contract of that nature entered into by
one person with another, could be assigned to a third party. Like
bonds and covenants for some other purposes, they have been and
constantly are assigned by arrangements between parties; but
the common law does not recognize such assigtanents as transfer-
ring any legal interest to the assignee that can enable him to sue
in his own name, though it so far recognizes the assignment as
to give facility and protection to the assignee in enforcing the
contract for his own benefit, but in the name of the original
obligee or covenanter In the Sadlers' Company vs Badcock,
(2 Atk. 557) Lord Hardwicke noticed that in Lynch vs Dalzell
(3 Bro. Parl. Gas. 477), Lord King had laid it down that policies
for fire insurance are not in the nature of them assignable, nor
intended to be assigned from one person to another without the
consent of the office (Park on Insurance, 449), by which I take
it undoubtedly to be meant, that without the consent of the in-
surers policies of insurance against fire were not by law allowed
to be in effect transferred (to say nothing of legal negotiability) j
that is, that they could not be enforced for the benefit of a third
party in the name of the person who obtained the policy, and so
were less susceptible of assignment than other special contracts ;
and for this there was no obvious reason."
Class 6. Where, with the assent of the company, there is
an absolute assignment of the policy to a third party, having
no insurable interest.
In Mechanics Building Society vs Gore District Mutual Ins.
Co., (20) Burton, J. A., appeared to think there was
a distinction between the case of the assignment of a policy with
the consent of the company, to a pafty having no i'nsurable in-
terest in the property insured, and as to whom therefore it
might well be held that the policy was liable to be defeated
14 U. C. R., 861.
(20) 3 A K , ir.l
100 THE LAW OF FIRE INSURANCE IN CANADA
by any violation of the conditions on the part of the original
insured, and the case, as in Burton vs Gore District, where the
policy was a transfer to mortgagees whose insurable interest was
unquestionable and with the full concurrence of the company.
Class 7. Where, without the consent of the company, there is
an absolute assignment of the policy, to a third party, without
any such insurable interest.
The Court of Appeal for Ontario has held, (21) that a policy
of insurance on chattels like any other chose in action, may be
absolutely assigned to a party who has not at the time of the as-
signment, nor at the time of the loss, as to part of the chattels,
any interest whatever in the property insured, and that the as-
signee in his own name can recover on the policy to the extent
of the loss sustained by the assignor. In his reasons for judg-
ment the facts are thus stated by Osier, J. A.: "McPhiMips be-
came mortgagee of certain of the chattels insured by the policy,
and so continued up to the time of the fire. The defendants'
contention is that their assent was necessary to the assignment of
the 29th of July, 1893, and that as the plaintiff had no interest
in the chattels at that date, there was a severance between the
ownership and the policy, and so nothing passed by the assign-
ment, and the policy as to the chattels came to an end
"It was no more than an assignment of a chose in action to
which no consent by the insurers was necessary. McNuLty (the
assignor) remained the insured, 'but he provided thereby that tha
loss, if it occurred, should be payable to some one else who was
in fact his own creditor. No case in our law was cited which
forbids that to be done. The assent of the insurers is essential
only where the policy is assigned to accompany a sale of the
property insured, and a r%w contract of insurance is intended
to arise between the purchaser and the insurance company."
In all the reported cases in England and Canada, prior to this
one, where an assignee of a policy of insurance has obtained the
(21) McPhi-Ulps vs I/radon Mutual Ins. Co., 23 A. R., 524.
THE INSURED 101
assistance of the court to recover from the insurance company
the amount due to the assignor, it will be found that the assignee
at the time of the transfer of the policy and at the time of the
loss had an insurable interest in the property insured.
The right of the assignee is thus expressed by Warren on
Choses in Action, p. 73: "Marine insurance policies were as-
signable by the custom of merchants; but, presumely, a policy
of insurance against fire was formerly not even assignable in
equity. It seems to have been considered that fire policies were
personal contracts and contracts of indemnity only, and that the
consent of the insurers was always necessary to the assignment
thereof. And the insurance companies and similar individuals
seem from the earliest times to have been careful to prevent fire
policies from being assigned without express licence by inserting
conditions to that effect in the body of the policy. Yet it is sub-
mitted that, apart from express restrictions to the contrary in the
policy itself, there appears to be no reason why a fire policy
should not be assignable in equity as readily as a marine or life
policv."
Tin' author here is obviously referring to an assignment of the
policy when- jit-compan i('l by a transfer of the insured property,
because he proceeds :
"The policy, if assigned at all before the loss, must be assign-
ed with the property which it covers; such assignment will
operate only <by consent of the insurers, and the insurers will
not consent without proof of the assent of the original assured/'
ie McPhillips case is opposed to an early Ontario decision of
/.ard vs Canada Agricultural Ins. Co., (22) in which it was
held that where a policy of insurance covering buildings and
chattels was assigned absolutely to the m i of the laud
who had no interest in the chattels, but who after loss re-assigned
policy so far as the chattels were concerned to the original
(22) 89 U. C. R., 419.
102 THE LAW OF FIRE INSURANCE IN CANADA
mortgagor who was then and always had been the owner thereof,
the latter could not succeed in an action because he haid no higher
rights than the mortgagees who held the policy at the time of
the loss and who having no insurable interest, could not have
recovered. In this case the insured obtained a policy which
covered his buildings to the extent of $100 and his chattels to
the extend of $700, and assigned the entire policy to a loan
company holding a mortgage on his real estate, with the nominal
consent of the insurers. The insurers paid the Loan Company
the amount insured on the buildings, but refused to pay the loss
on the chattels, and the Loan Company thereupon assigned the
policy to the plaintiff, the original insured. The defendants
pleaded to the action that the Loan Company were not, at the
time of the loss, interested in the chattels. In pronouncing judg-
ment, the court said : ."The subjects of the policy are divisible.
The Loan and Agency Company had nothing to do with the
chattel property, nor with the insurance on it. The general as-
signment was probably made from want of knowledge, or from
inadvertence on the part of those who were concerned in it.
The Loan and Agency Company never had a right to it, and
never claimed any interest in it, but as trustees for the plaintiff.
Still, if they got such portion of the money as trustee for him,
they might have retained the residue of their claim against him
out of it.
"The case is really this : the plaintiff had, although the as-
signment of the policy was absolute in form, the right or equity
of redemption of the policy. The actual nature of the Loan
Association's interest in the policy was not mentioned in the as-
signment, nor, so far as we see, notified to the defendants before
the fire. If it had been, there would have been no difficulty
about it. The plaintiff, I think, has no answer at law, indepen-
dently of the late insurance statute, to the fourth plea . . .
"Can the plaintiff properly reply, under the 38 Vic. ch. 65,
see. 1,0., that there is any reason, from the facts herein mention-
ed, that it would be inequitable that the insurance should be
THE INSURED 103
deemed void merely because he did not notify the defendants
that the interest of the Loan Association was not an absolute
one, but conditional only as security for the payment of the
mortgage, and that it was not for the whole sum of $900 in-
sured, but was upon the building only, and for $100 ; but that
the defendants knew of all these facts soon after the loss by fire,
and never objected to the claim made by the plaintiff under the
policy for that cause; and can he shew the Court or a Judge
that such a replication would be a sufficient answer to the plea?
"After the fire, the defendants' adjuster, forgetting the policy
had been assigned, endeavoured to settle with the plaintiff for
$75 in full. The plaintiff says, as I understand, he thought the
defendants were also to pay the 1 Loan Association $100 on the
building. That settlement, such as it was, fell through, because
the adjuster had it called to his mind that the plaintiff had as-
signed the policy to the Loan Association, and he was not the
person to receive the money. The defendants afterwards pro-
posed to pay the $100 to the Loan Association on the building,
and to hold the plaintiff to the receipt he had given. They never
admitted his claim to anything. I cannot say the Loan Associa-
tion never intended to claim anything beyond the $100 upon the
building. They had the legal right, so far as the plaintiff was
concerned, to do so ; but they were prevented from doing it, be-
cause they were not interested in the chattel property.
> not see anything inequitable in the defendants saying to
the plaintiff that he had no claim on them, because he had no
interest whatever in the policy, having given his whole interest
in it. both at law and in equity, so far as the company knew, to
the Loan Association; nor do I see any! him: in the subsequent
dealings between the diflVivnt parties concerned which make it
Inequitable of the defendants to sot up that condition as a bar
to the act *.n ; n.r <lo I see anythini: inequitable on the part of
'lefendants to entitle tin- plaintiff to relief under the statute.
"I think, upon the fourth plea, the defendants are entitle.! to
retain their verdict, an<l that the plaintiff cannot, under the cir-
i stances, plead any replication to it. umlvr th> statute or
otherwise, which would be in any way serviceable to him."
104: THE LAW OF FIRE INSURANCE IN CANADA
38 V. c. 65, s. 1, (0.), referred to in the judgment above pro-
vides for relieving the insured for non-compliance with the strict
terms of the policy respecting proofs of loss. Infra, p. 441. (23)
UNITED STATES DECISIONS.
It has also been held in the United States that the assignee of
a policy, the assignment of which was not assented to by the
company, could not recover in an action where, at the time of
the fire, he had no interest in the insured property.
In Pea'body and Riggs vs The Washington County Mutual
Ins. Co., (23a) it is said: A policy of insurance is a contract
of indemnity, and without an interest in the subject of insur-
ance, at the time of the fire, the holder of the policy sustains no
loss.
Hence an assignment of a policy as collateral security for the
payment of a sum of money by the assignor, will not enable the
assignee to maintain an action on the policy, in case of Ios3;
where it does not appear from the complaint that he had, at the
time of the fire, any interest in the property insured.
But where the assignor remains the owner of the property,
until the time of the fire, the whole loss is sustained by him. He
continues the owner of the policy, subject to the title of the as-
signee to it for the payment of his debts, and, it not being avail-
able to the assignee, the assignor alone may recover upon it, to
the extent of the loss.
The Court said : "The plaintiff Peabody, according to the al-
legations in the complaint, under assignments of the policy of
insurance, made with the consent of the defendants, and by
virtue of an understanding with the plaintiff Riggs, to whom
the policy was issued all of which took place before the loss
holds the policy as collateral security for the payment to him by
Riggs of $400. But it does not appear by the complaint that he
had at any time any interest in the property insured, and this is
(23) Assignment of policy without Company's assent to party
having insurable interest and against condition.
Vide Salterio vs City of London Ins. Co., 23 Can. S. C. R., 32.
(23a) 20 Barb., 339.
THE INSURED 105
fatal to his right to recover. A policy is a contract of indemnity,
and without an interest in the subject of insurance, at the time
of the fire, t\\c holder of the polu-y sustains no loss."
If the decision in McPhillips vs The London Mutual is good
law, it would appear that policies of fire insurance are capable of
transfer like certificates of -stock, bonds, warehouse receipts, and
the holder thereof may recover in an action brought in his own
name if the original insured could have so recovered.
COVENANT TO INSURE.
It has been held that a covenant to insure for the benefit of
an incumibrancer operates as an equitable assignment of the
policy of insurance when effected. Therefore, where a mort-
gagor enters into such a covenant, it is not necessary, in the in-
terest of the mortgagee, that an assignment of the policy or
interim receipt should be actually made; it is sufficient if the
insurers in case of loss have notice of the fact before settling
with the mortgagor; and if after being notified of the rights of
the mortgagee they pay over the insurance money to the mort-
gagor or a transferee of the receipt or policy, they do so at their
peril; and such payment will be no answer to a suit at the in-
stance of the mortgagee. (23b)
Where a policy of fire insurance, not containing any mortgage
or subrogation clause, nor any direct agreement with the mort-
gagee, is effected by a mortgagor pursuant to a covenant in the
mortgage, and by the policy the loss, if any, is made payable to
the mortgagee as his interest may appear, an appraisement of
the loss under statutory condition 16 of the Insurance Act,
R. S. 0. 1897, c. 203, s. 168, is, in the absence of fraud or collu-
sion, binding on the mortgagee, although he has not been con-
sult. -I in. n>r notified of, the appraisement. (23c)
(23b) Greet vs Citizens Ine. Co., 5 A. R., 506; 27 Or., 121.
:u vs Equity Fiiv Ing. Co., 8 O. L. R., 240.
106 THE LAW OF FIRE INSURANCE IN CANADA
MORTGAGEE'S POWER TO DEFEAT MORTGAGOR'S POLICY.
In New Brunswick, an undiscilosed insurance effected by a
mortgagee without the knowledge of the morgagor will void a
subsequent insurance made by the mortgage.
The plaintiff had given a mortgage on his property in which
he covenanted to insure for the benefit of the mortgagee
and that in the event of his not doing so, the mortgagee had au-
thority to insure the owners' interest, to charge the premiums to
them, and in case of loss pay himself out of the insurance moneys.
At one time the plaintiff had kept up insurance for the benefit of
the mortgagee, but had ceased to do so for some years, and the
mortgagee insured the property in the plaintiff's wife's name,
for his own benefit. Trie plaintiff then applied for and obtained
insurance in the defendant company and the application signed
by him stated that there was no other insurance, and that there
was no mortgage on the property. The jury found that the ap-
plication had been filled out by the company's agent and that he
did not ask the plaintiff as to the mortgage, and that the plain-
tiff honestly be'ii'vrd there was no other insurance upon the
property. In setting aside the verdict entered for the plaintiff,
the court held that the plaintiff knew of the covenant to insure
for the benefit of the mortgagee contained in his mortgage, and
that there was no difference between an insurance effected by the
plaintiff himself and one effected on the same property by his
authority and at his expense, and on the same interest, and that
it was immaterial in such case whether the plaintiff in fact knew
of the insurance effected by the mortgagee or not. (24)
In Ontario, the contrary is the law.
The plaintiff insured his barn in the defendant company for
$2,100, and afterwards mortgaged his farm, including the barn,
to a loan company, for $1,500, assigning the policy to the com-
pany as collateral security. The mortgage purporting to be un-
(24) Perry vs Liverpool & London & Globe Ins. Co., 34 N. B. Rep.,
380.
Vide also Markay vs The Glasgow & London Ins. Co., M. L. R., 4
S. C., 124.
THE INSUBED 107
der the Short Form Act, contained a covenant that the mort-
gagor would insure the buildings, unless already insured, for not
less than $1,000, provided that the mortgagees might themselves
effect such insurance without any further consent of the mort-
gagor. Subsequently, without the knowledge or consent of the
plaintiff, the policy was cancelled, and the mortgagees effected
a new insurance in another company for the sum of $600. The
property having been destroyed by fire the plaintiff notified the
company, when they denied liability on the ground that the
policy had been cancelled, and on the plaintiff afterwards offer-
ing to supply proofs of loss, if required, the company again
denied any liability on the ground of cancellation, saying noth-
ing as to furnishing proofs of loss.
In giving judgment, Boyd, C., said: "I do not see that the
defendants can avail themselves of the unauthorized acts of the
Loan Company as against the plaintiff. That insurance com-
pany must be taken to know that they had not validly cancelled
the contract sued upon by a transaction with the Hamilton Com-
pany, and it is not proved that the plaintiff knew of or sanction-
ed the subsequent insurance with the Phoenix appearing in his
name. There was, therefore, no second or subsequent insurance
put upon the property, for which the plaintiff is responsible
"The plaintiff's interest in the policy he effected is not to be
defeated by the wholly unauthorized act of a stranger effecting
a second insurance in his name without his knowledge." (25)
MORTGAGOR AND MORTGAGEE.
British Columbia, Alberta and Saskatchewan.
The Ik-vised Statutes of British Columbia, c. 82, s. 3, pro-
vide.-: - \Ylu-iv the loss (if any) under any policy has, with
the consent of the company, been made payable to some person
or persons or company other than the assured as mortgagee or
mortgagees, said policy shall not be cancelled, altered or other-
(26) Morrow vs Lin Insurance Co., 20 O. K. 377, 26 A.
173.
108 THE LAW OF FIRE INSURANCE IN CANADA
wise dealt with by the company upon the application of the as-
sured, and in any case not without reasonable notice to the said
mortgagee or mortgagees."
Substantially the same provision is in force in the Provinces
of Alberta and Saskatchewan. (26)
In British Columbia, in 1895, an amendment was also made
to the Fire Insurance Policy Act, to the following effect: "In
cases where the loss under any policy is, with the consent of the
company, made payable to a mortgagee or mortgagees, proof of
loss under any such policy may be made by such mortgagee or
mortgagees."
But this provision was repealed in the following session of the
Legislature. (27)
Subrogation. ONTARIO.
An assurance company which pays the assignee of a policy of
insurance the amount of his loss and claims that as regards the
original insured no liability exists by reason of some breach by
him of the conditions of the policy, is entitled to an assignment
of the securities held by the assignee of the policy upon payment
of the amount due such assignee by the assured.
In Burton vs The Gore District Mutual, (28) the particulars
of which are set out, supra, pp. 89, 92, 98, 99. Van Koughnet, C.,
said: "We are of opinion that the Insurance Company is en-
titled to an assignment and to the benefit of the mortgage held
by the plaintiffs on paying them the insurance money. The mort-
gagor has acted in breach of the conditions on which his insur-
ance was effected, by effecting another insurance on the premises
after his assignment of the policy of the company to the plain-
tiffs. We hold that the plaintiffs ought not to suffer from this act;
(26) Cons. Ordinances of the North West Territories, ch. 113,
see. 3.
(27) 59 Viet (B. C.), ch. 20, sec. 2.
(28) 12 Or., 170.
THE INSURED 109
but neither should the defendants, the company, as against Mont-
gomery, the insurer, if they can make good against him the
money payable by them to the plaintiffs. He could not have re-
covered against them on the policy ; and it is but right that he
should be compelled to make good what they are oibliged to pay
to his innocent assignee. This is not the case of a life policy."
Where it is desired that a third party should be indemnified
against loss by reason of a breach of the conditions of the policy
by the assured, a special contract is usually prepared between the
insurance company and such third party which is attached to the
policy, whereby it is agreed that "the insurance as to the interest
of the third party only therein shall not be invalidated by any
act or neglect of the assured, nor by the occupation of the pre-
mises for purposes more hazardous than are permitted by the
terms of the policy."
The same agreement also provides that if the company shall
pay the third party any loss under the policy and shall claim
that vi< to the assured no liability therefor existed, the company
shall at once and to the extent of such payment, be legally sub-
rogated to all the rights of such third party under any a'nd all
securities held by such party for the payment of said debt.
The question of the liability of the company upon the policy
in contracts of this sort, is usually raised in an action by the
insured to have the amount paid by the insurance company
credited upon the mortgage or other security given to the third
party and assigned to the company.
The rights of the parties are thus clearly stated by Burton,
J. A. (29)
where he says: "As between the insurance company and the
mortgagee the contract became in effect to all intents one of
insurance of the mortgagees' interest, but as between the mort-
gagor and tlu insurance company the contract remained as if no
such agreeni' ted, and tin* rijrht thorofon> of tho in-
(29) Ball w North British Canadian Investment Co., 15 A. R.,
S. C. C., 1, rib nom. Imperial Fire Ins. Co. vs Bull.
110 THE LAW OF FIRE INSURANCE IN CANADA
surance' company to be subrogated to the rights of the mortgagees
must depend upon whether they had or had not a good defence
against the mortgagor, the person in whose name the insurance
was effected. If they had a good defence, the money paid to the
mortgagees would be so paid by reason of the agreement and
that alone, if they had not, the money would necessarily go in
discharge of the mortgage as .the policy was effected for the
mortgagor's benefit and at his expense."
It has been held, however, that a clause such as this applies
only to the acts of the mortgagor after the policy comes into
operation and cannot be invoked in favour of the mortgagees
where there has been fraud or misrepresentation by the mort-
gagor in his application for ^he policy. (30)
Approved in the Liverpool, London & Globe Insurance Co. vs
Agricultural Savings & Loan Co. (31)
PROOFS OF LOSS MUST BE MADE BY THE MORTGAGOR.
A mortgagor insured his mill against fire with the defendants,
the policy being payable on its face, to the extent of one-half, to
the mortgagee.
Attached to the policy was a separate slip called a "mortgagee
clause", by which it was provided that the insurance, as to the
interest of the mortgagee only therein should not be invalidated
by any act or neglect of the mortgagor;, and, also, that when-
ever the company should pay the mortgagee any sum for loss
under the policy, and should claim, that, as to the mortgagor, no
liability existed therefor, it should, to the extent of such pay-
ment, be subrogated to all the rights of the party to whom such
payment should be made.
Proofs of loss were not made by the mortgagor or mortgagee
until within sixty days of the end of the year after a fire had oc-
curred; and within sixty days after the proofs were delivered,
(30) Onmiimi Securities Co. vs Canada Fire Insurance Co., 1 O.
R., 494.
(31) 33 Can. S. C. R. f 94.
THE INSURED 111
an action was commenced by the mortgagor and the representa-
tives of the mortgagee.
Held, (affirming the judgment of Boyd, C., at the trial) that
the mortgagee was not bound as "the assured" under statutory
condition 12, to make proofs of loss, and that here the person
assured, the mortgagor, was the person to make them, under
conditions 12 and 13.
Held, also, that the neglect of the assured to make the proofs
of loss in proper time, so that the sixty days thereafter might
expire before the termination of the year after the loss, within
which an action had to be brought under condition 22, was a
neglect from the consequences of which the mortgagee was re-
lieved by the mortgagee clause, and that, as far as he was con-
cerned, the action was not brought too soon.
I It-Id, also, that the words "shall claim that, as -to the mort-
gagor no liability exists" in the mortgagee clause, meant, "and
as to the mortgagor no liability exists", and that, as the policy
was valid at the time of the fire, and nothing was shown to have
taken place since to render it invalid, there was a liability to the
mortgagor ; that condition 22 barred the remedy and not the
right, and that the defendants were not entitled to subrogation.
1, also, that the mortgagor was bound to make the proofs
in such time, that the sixty days would elapse before the expira-
tion of the year limited for bringing the action and his remedy
as to the other half of the policy was barred. (;>.' )
I n a case where the loss by the policy was made payable to a
mortgagee, it was held that where the insurance company having
a good defence as against the mortgagor voluntarily or under
agreement pays the loss to the mortgagee, a second mortgagee
upon the taking of the accounts in the master's office, is not en-
titled to obtain the lu-iu-fn of the amount so paid the first in-
cumbrancer. (33)
(32) Anderson vs Saugeeu Mm MM! Fire Ira. Co., IS O. R. t 365.
(33) Weatmacott v* Hanley, 22 Or., 382.
112 THE LAW OF FIRE INSURANCE IN CANADA
MORTGAGOR CONVEYING HIS EQUITY OF REDEMPTION TO
MORTGAGEE.
A mortgagor who had made a mortgage, containing a covenant
to insure the mortgaged premises against fire, effected an insur-
ance thereon with defendants, the loss, by the policy, being pay-
able to the plaintiff, the mortgagee, as his interest might appear
under the mortgage. .Subsequently, the mortgagor conveyed his
equity of redemption to the mortgagee without the consent of the
insurance company having been obtained therefor. The premises
having been afterwards destroyed by fire : Held, that the plain-
tiff was not entitled to the insurance moneys, for (1) the fact of
the conveyance irnade !by the mortgagor to the plaintiff, whereby
he ceased to have any interest at the time of the fire, was a good
answer to the claim; and (2) such conveyance constituted a
breach of the fourth statutory condition, which provides against
the insured premises being assigned without the insurance com-
pany's consent. (34)
PARTNERSHIP.
Where the business of a partnership is taken over by a limited,
liability company formed for that purpose, there is such a change
of interest as to invalidate faisurances held by the firm in the
absence of notification of the change to, and assent by, the in-
surance company, though the members of the partnership hold
nearly all the stock in the limited liability company. (35)
RE-INSURANCE.
A contract of re-insurance is not a contract of indemnity for
loss or damage by fire to the insured, but a contract of indemnity
against the liability which the original insurer has undertaken
with respect to a loss or damage by fire to the original insured.
Strictly speaking it is a contract of guaranty, and. not a con-
tract of insurance.
(34) Pinhey vs Mercantile Fire Ins. Co., 2 O. L. R., 296.
(35) Peuohen vs City Mutual Fire Ins. Co., 18 A. R., 446.
THE INSURED 113
In Ontario the expression "insurance" includes re-insur-
ance. (36) In Quebec re-insurance is provided for by the code.
"Art. 2 ITT. The insurer may effect a re-insurance, and the
insured may issue the solvency of the first insurer."
Code de Commerce, "342. L'assureur peut faire re-assurer
par d'autres les effets qu'il a assures. I/assure peut faire assu-
rer le cout de 1'assurance. La prime de reassurance peut etre
moindre on plus forte que celle de Passurance."
The conditions ordinarily attached to a contract of fire in-
surance are not applicable to the contract of re-insurance.
A judgment of the Supreme Court of Canada was re-
d by the Privy Council, and it was held that a contract
of re-insurance evidenced by a policy of insurance containing
the usual conditions of a fire insurance policy, with a rider agree-
ment in the common form used in cases of re-insurance, did not
have the effect of carrying into the contract of re-insurance all
the conditions of an ordinary contract of insurance, but that the
contract of re-insurance in that case was engrafted on an or-
dinary printed form of policy for no other purpose beyond that
of indicating the origin of the direct liability to the original in-
fl on which the indirect liability, the subject of the re-insur-
ancr, would depend, and setting forth the conditions attached
to the original insurance. (37)
Tn the case of a re-insurance of part of its risks with another
;>any, this will not preclude the first company from assent-
ing to any reasonable and proper waiver of conditions of the
policies made in good faith, not shown to influence the loss or
increase the burden of the re-insurers. And the statutory con-
ditions cannot be imported into a policy of re-insurance as they
are in many instances wholly inapplicable to such a con-
' . iv. T. .-IK 2i m. n.
(87) Victoria-Montreal Fire Ina. Co. v Home Ins. Co. of New
York, 85 Can. S. C. R., 208.
(88) Fire Insurance AM. va Canada Fire & Marine Ins. Co., 2 O.
R., 481 and 406.
Hi THE LAW OF FIRE INSURANCE IN CANADA
QUEBEC LAW AND JURISPRUDENCE.
The following articles of the Civil Code of Quebec deal with
the Insured, Insurable Interests, Assignments of insured proper-
ty and of Insurance Policies.
Art. 2482. "Policies of insurance may be transferred by in-
dorsement and delivery, or by delivery alone, subject to the con-
ditions contained in them.
"But marine policies and fire policies can be transferred only
to persons halving an insurable interest in the object of the
policy."
Art. 2483. "In the absence of any consent or privity on the
part of the insurer, the simple transfer of the thing insured does
not transfer the policy.
"The insurance is thereby terminated subject to the provision?
contained in article 2576."
Art. 2576. "The insurance is rendered void by the transfer
of interest in the object of it from the insured to a third person,
unless such transfer is with the consent or privity of the insurer.
"The foregoing rule does not apply in the case of rights ac-
quired by succession, or in that specified in the next following
article.
"The insured has in all cases a right to assign the policy with
the thing insured, subject to the conditions therein contained."
Tha Court of Queens Bench, Quebec, (39) held that the trans-
fer of a policy of fire insurance to a mortgage creditor of the in-
sured, as security for the debt of the latter, has no retroactive
effect, and does not protect the transferee against defects and
nullities in the policy existing prior to its transfer to and accept-
ance by him. So, where the insured had no valid title to the
property insured the transferee cannot recover. 2. The accept-
ance by the insurance company of a transfer of fire insurance,
validates the transfer as a transfer, but does not create a new
contract of insurance with the transferee.
(39) Stanstead vs Gooley, Q. R., 9 Q. B., 324.
THE INSURED 115
In the Supreme Court of Canada, (40) it was distinctly held
that the mortgagee as assignee of a policy of insurance could
not succeed where the mortgagor could not recover owing to the
fraudulent misrepresentation in the application upon which the
policy issued.
In an early case it was held that when a fire policy taken out
by the owner of real pioperty, declares that the loss, if any, is
payable to certain persons named "as mortgagees to the extent
of their claim", such persons become thereby the parties assured
to the extent of their interest as mortgagees and their right and
interests cannot be destroyed or impaired iby any act of the
owner of the Droperty. (41)
And in National Assurance Company of Ireland vs Har-
ris, (42) it was held (-Cross & Doherty, JJ., diss.) following
Black rs National Insurance Co., that where a policy of insur-
ance against fire taken out by the owner of real property, declares
that the loss, if any, is payable to a person named therein
(without specifying tlu> nature of his interest), such person be-
comes thereby the party insured, to the extent of his interest,
and his right cannot be destroyed or impaired by any act of the
owner of the property (e. g. an assignment of the property in-
sured without notice to the company) ; and he may make the
preliminary proofs of loss in his own behalf notwithstanding an
express provision in the policy to the contrary.
But these decisions were over-ruled in Migner vs St. Law-
Durance Co. (43)
In this case the policy of insurance was taken out by one
Lachance and was made on its face payable to the plaintiff
Migner "jusqu'a concurrence de ses inte"rets". A subsequent in-
surance without the knowledge or consent of the company, or of
Migner, was effected by Lachance, and the sole question was
(4O) North British & Mercantile vs Tourville, 25 Can. S. C. R.,
177.
n BlMfe M Nation:.! Ins. Co., 2-4 L < '. -I.. B L \- 20.
IB 1880; M. L i:.. r, Q. B., air,. 17 i: i.., 230.
(48) Q. R., 10 K. B., 122.
116 THE LAW OF FIRE INSURANCE IN CANADA
whether this voided the policy. The insured relied upon the
two previous decisions.
The Court of King's Bench, however, affirming the judgment
of the Court of Eeview, reversed the earlier jurisprudence, and
as to the clause making the loss payable to Migner, the court
said: "Nous trouvons qu'elle constitue une simple indication
de paiement. Vindication par le creancier d'une autre personne
qui doit recevoir a sa place ce qui lui est du ou ce qui pourra lui
etre du, ne cree en faveur de Pindique aucune nouvelle obliga-
tion du debiteur."
"L'indemnite ainsi stipulee payable a Migner est PindemnitS
que la compagnie a consentie en faveur de Lachance en conside-
ration des conventions et conditions acceptees par ce dernier et
pour lui-meme, et pour ses representants et ayant-cause. La
violation par Lachance de 1'une des conditions du contrat devra
aneantir ce contrat quant a lui aussi bien qu'a Pegard de tous
ceux qui pourraient en attendre un benefice." The conrt in con-
clusion, pointing out that: "La jurisprudence en Angleterre et
aux Etats-Unis, apres plusieurs decisions contradictoires, parait
maintenant solidement etablie dans le sens de notre presents
decision."
A policy was granted to one Thompson, on his build-
ing and contents. The insured represented himself as the
owner although lie had previously sold the building to the re-
spondent Sheridan, subject to a right of redemption, which right,
Thompson, at the time of the application, had availed himself
of by paying back to Sheridan a part of the money advanced.
Subsequent to the application, the respective interests of Thomp-
son and Sheridan in the property were fully explained to the
appellants' general agent at Montreal. Thereupon a transfer of
the policy was made to Sheridan by Thompson, and accepted by
the company. The Court held that at the time of the applica-
tion Thompson had an insurable interest, and as the appellants
had accepted the transfer to Sheridan, the latter was entitled to
recover, as to the building, but that Sheridan having no insurable
THE INSURED 117
interest in the chattel property, the transfer made to him by
Thompson was not sufficient to vest in him Thompson's right
under the policy, and he could not recover in view of Art.
-' (4-i)
In a case where the assignee of the policy was also the assignee
of the property covered by the insurance, it was held that an in-
surance, by simple receipt for the premium, is legal and binding
without the issue of a policy, and the interest in the insurance
money may be legally assigned by any simple form of transfer
endorsed on the receipt, and such transfer does not require the
consent or acceptance of the insurance company to make it bind-
ing. (45)
It was held by the Court of Review, in Quebec, (46) that a
policy of insurance cannot be transferred without the consent of
the insurer, and notice of transfer is not of itself sufficient.
The acceptance by the insurance company of a transfer of
fire insurance, validates the transfer a a transfer, but does not
create a new contract of insurance with tihe transferee. (47)
Action for $800, amount of a fire policy. Plea, that the prop-
erty insured was, after the issue of the policy, sold for taxes
under the Municipal Code, and the ownership having become
vested in the purchaser, the insured had lost all insurable interest
therein. Special answer, that the municipal sale never finally
-ted the insured of the ownership; that before the fire, he
had, under the provisions of the Municipal Code, redeemed his
property, and had never ceased to have an insurable interest in
if.
!, that the sale of the property for municipal taxes under
tla Municipal Code, followed as it was by the redemption of the
(44) Ottav .luiral Ins. Co. va Sheridan, 5 Can. S. C. R.,
157.
(46) Per Torranoe, J., O'Connor vs I mi* rial Ins. C., 14 L. C. J.,
219.
Cone vs British American Co., 1 R. C., 243.
Stanatead A Sberbrooke Mutual I in ins. Co. vs Gooley, Q.
Q. B., 324.
118 THE LAW OF FIRE INSURANCE IN CANADA
property in accordance with the said Code, was not such an alien-
ation as would void the policy, either under the conditions en-
dorsed upon it, or under the provisions of article 2576. (48)
McD. avait cede & M. tous ses droits dans une societe com-
merciale qui avait existe entre eux, a la condition que M. lui
paierait $3,000, qu'il acquitterait toutes les dettes de la societe
et meme les dettes personnelles de McD. et que, jusqu'au paie-
ment des $3,000, il tiendrait les marchandises assurees et remet-
trait les polices a McD. Les merchandises etaient lors de la
cession, assurees au nom de McD. seul, a deux assurances mutuel-
les, par trois polices qui devaient expirer quelques mois plus tard,
et que McD. avait renouvelees & leur expiration. McD. et M.
avaient subsequemment regie" le compte et s'6taient reciproque-
ment donne quittance.
Juge : Que la cession des marchandises n'avait pas transports
les polices d'assurance, qui ne couvraient plus, apres leur ces-
sion, les marchandises dans lesquelles McD. n'avait plus d'inte-
ret assurable, et que M. ne devait les contributions, pour pertes
anterieures a 1'expiration des polices, que comme dettes social es
et dettes personnelles de McD. ; mais que celles subsequentes
au renouvellemefct des polices n'etaient dues que par McD. sans
recours centre M. Et que McD. n'avait de recours contre M.
que pour les contributions, pour pertes anterieures a 1'expira-
tion des polices, qui ne lui avaient pas ete declarees avant le
regalement de compte. (49)
Before the Code, the question arose as to the rig'ht of the
vendor who had sold the property insured with the assent of the
vompaiiv. and ;i loss having occurred and the money paid to the
vendor, whether the vendee, who had paid his purchase money,
could obtain the benefit of the insurance money.
In giving judgment, the Superior Court said : "The question
raised in this case was whether the payment of $500 (amount
due under the policy) to the vendor will discharge the purchaser,
(48) Paquet va The Citizens Insurance Co., 4 Q. L. R., 230.
(49) McDonald vs Messier, 10 Q. L. R., 329.
THE INSURED 119
or to whose benefit did the payment enure? The pretentions of
tlu- defendant. WIMV. first, that the interest of the vendor vested
in the purchaser by special convention, and Sly, that if such
convention were not proved, it passed to the purchaser by mere
operation of law. On both points the Court was with the, defen-
dant and considered the convention proved. The buildings were
to be insured and there could be but one insurance under the
circumstances. The object of the vendor was to obtain security
for the balance due him It seemed to be carrying the
principle a great way to say that the rights of the insured passed
to the new purchaser by the effect of the sale, nevertheless, not-
withstanding the anomaly, that seemed to be the rule; as to
marine insurance, it certainly was so, and the rule was extended
to insurances on real property. Quenault, Assurance, nos 214 to
226; Boulay Paty, Cours de droit commercial, p. 309; Aluzet,
Assurance, nos 139 a 144 ; Emerigon, Traite des assurances, ch.
xvi, sect. 3. As to the equity, there could be no doubt where it
lay in the present case. Tavernier could not sell the property,
and recover the value of it, first from the insurance and next
from the purchaser, after notification to the Insurance Company
of the sale to the defendant.
"Judgment : 'Considering that the defendant hath established
by evidence the material allegations of his exception, and that,
by reason of the matters therein contained and set forth, and by
law, the plaintiff ought to be barred from having the conclusions
by him in his action in this behalf taken; maintaining the said
exception, doth dismiss the said action'." (50)
Where the loss under a fire insurance of goods is made payable
to a party other than the person who effects the insurance, and
such third- party becomes owner of the goods by a transfer to
him of the warehouse receipt of such goods, such third party be-
comes thereby the party assured, and can, therefore, legally
-ssary jm'lmiinary proofs of loss. Q. B. 1879. i(51)
V9 Oraps.T. -2 K .! i:. o . ::rj
l ! Home Ins. Co., 24 L. C. J., 88; 21 J., 211;
1 I \.. 208; 2 L. N., 238; 17 R. L., 14, 230.
120 THE LAW OF FIRE INSURANCE IN CANADA
CREDITOR RECEIVING INSURANCE MONIES.
Le creancier qui a fait assurer la propriete cle son debiteur, et
qui a regu le montant de cette assurance, ne peut recouvrer de
son debiteur que la balance de sa creance, apres deduction du
montant regu, moins les primes payees et Tinteret sur ces primes.
C. B. R. 1882. (52)
PROCEDURE. JOINDER OF ACTIONS.
Une compagnie de chemin de fer est responsable des domma-
ges causes par une de ses locomotives, qui, en trainant un de se*
convois, met le feu a des batisses pres de son chemin et une
meme action peut etre intentee pour ces dommages par le pro-
prietaire de ces batisses et par la compagnie d'assurance, qui lui
a etc subrogee pour partie des dommages qu'elle a payee. K. B.
1889. (53)
MORTGAGEE NOT COMPELLED TO SUE ON THE POLICY.
Wlisre buildings on property hypothecated for the security of
a loan are insured by the mortgagee as additional security for
the sum lent, and a loss by fire occurs, the mortgagee is not
obliged to institute proceedings against the insurance company
for the recovery of the amount insured, more especially when,
the only reason given by the connpany for not paying the loss is
one resulting from the acts of the mortgagor. The latter may
ask to be subrogated in the rights of the mortgagee, but only on
tender to him of the amount of the mortgage debt. (54)
(52) Arohambault rs Lamere, 2 D. C. A., 97 ; 26 J., 236 ; 5 L. N.,
294.
(53) North Shore Railway vs McWiilie, 17 R. L., 367; M. L. R.
5 Q. B., 122 ; M L. C. J., 55 ; 17 Can. S. C. R., 511 ; 13 L. N.,
217 ; 12 L. N., 394 ; 21 R. L., 192. TThe first proposition Is no longer
law, vide Canadian Pacific Ry. vs Roy, 1902, A. C., 220, vide R. S. C.
(1906), c. 37, s. 298.
(54) Montreal Loan & Mortgage Co. vs Denis, Q. R. 14, S. C., 106.
THE INSURED 121
EFFECT OF RE-BUILDING UPON MORTGAGEES' RIGHTS UNDER
THE POLICY.
The insurance by a mortgage creditor of the house or building
subject to his mortgage is not an insurance of the building per
se, but only of the creditor's security for the payment of his debt,
and to support an action on the policy there must be a loss exist-
ing at the tune of action brought, and if before action brought,
the premises be re-built, whereby the creditor's security is res-
tored, he cannot recover as for a loss. (55)
In the case of an assignment, with the consent of the mort-
gagor, of a mortgage, which contained a covenant by the assignor
to transfer to the assignee as collateral security a certain policy
of insurance then held by the assignor on the buildings existing
on the property mortgaged, it was held that the failure by the
assignee to secure such transfer and the consequent reception by
the assignor of the insurance money under the policy would not
entitle the mortgagor to claim from the assignee the discharge
of the mortgage. (56)
TRANSFER OF CLAIM AFTER LOSS.
Art. 1570 of the Civil Code provides that "the sale of debts. . .
is perfected between the seller and the buyer by the completion
of the title if authentic, or the delivery of it if under private
signature."
Art. 1571 provides that "the buyer has no possession available
against third persons until signification of the act of sale has
been made and a copy of it delivered to the debtor."
It was held in the Court of King's Bench that "signification"
of an act of sale under the Civil Code must be made by a notary,
and that as this had not been done in the present case, where
the plaintiffs were the transferees of the assured under a policy
of insurance, the action must fail.
() Mathew* - ftatan Am < >, I L <'. .1 . :.7. 10 L. C. R.. 8.
(56) Robert i : !. < ( 00.
122 THE LAW OF FIRE INSURANCE IN CANADA
On appeal to the Privy Council this judgment was reversed
and that of the minority of the Court, expressed by Wurtele, J.,
affirmed, namely, that the intervention of a notary was not re-
quired by the Civil Code.
It was further held that the assignee of the debt could bring
the action to enforce his claim without a'ny signification to the
debtor of the act of sale ; that the institution of the action alone
was a sufficient signification. (57)
It was held that a transfer of a contract of insurance, by a
private writing made in duplicate, signed by the transferer and
transferee in the presence of two witnesses, is good and valid ;
That the admission of the debtor that he received a duplicate
cf such transfer is a sufficient signification (1571 C. C.) ;
That an estimate by the insured in round figures of the value
of the stock, at the time of the application, should not be con-
sidered a ground of nullity, unless it contains such aft exaggera-
tion as creates a suspicion of fraudulent intention. (58)
SUBROGATION. QUEBEC.
Art. 2584 reads as follows : "The insurer on paying the loss is
entitled to a transfer of the rights of the insured against the per-
sons by whose fault the fire or loss was caused/'
Les assureurs contre le feu ont droit, en payant la perte cou-
verte par leur police, d'etre subroges aux droits et actions de Tas-
sure, contre ceux qui ont cause le feu et la perte.
Un marguillier en charge qui a pouvoir de reoevoir des assu-
reurs le montant de Tassurance effectuee sur la propriete de la
Fabrique et d'en donner quittance, peut aussi subroger les assu-
reurs aux droits et actions de la Fabrique contre ceux qui o'nt
cause le feu et la perte, quoiqu'il ne puisse transporter, au moyen
d'une vente, tels droits et actions sans une autorisation speciale.
Les assureurs, subroges, au inoyen du paiement de la perte,
(r>7) Bank of Toronto va St. Lawrence Fire Ins. Co., Q. R., 19 S
, 4r,i ;.
(."S) Western Assurance Co. rx Garland, Q. R. 12 K. B. 530.
THE INSURED 123
aux droits et actions de Passure pour une partie de la perte seu-
lement, ont pour telle partie une action centre ceux qui ont cause
le feu et la perte en question. (59)
OTHER CASES.
Aucune cession des droits de Passur n'ayant ete faite a Pas-
sureur, lors du paiemetat de Passurance, ce dernier ne peut pas
invoquer, contre Pauteur du sinistre, le benefice de Particle 2584
C. C.
L'assureur qui a paye le montant de Passurance a Passure a,
pour se faire rembourser, contre Pauteur du sinistre, le recours
en dommages de Particle 1053. (60)
A loss under a fire policy effected by a ! n official assignee under
the Insolvent Act of 1875, to whom an assignment had been
made under the Act, is recoverable by the assignee subsequently
elected by the creditors, notwithstanding that in the policy the
assured is described simply as "official assignee", the loss being
made payable to the estate. (61)
Although A. is merely the agetat of B. in obtaining from C.
an advance of money on .certain goods, yet if he render himself
liable to C. for any loss which might arise after the sale of the
goods, he has an insurable interest in the goods, and can there-
fore legally insure them in his own name to the full extent of
the loan. (62)
In the case of an insurance of a number of barrels of oil, pur-
chased by the insured, but not actually identified and separated
from other barrels of oil contained in the building in which the
oil was stored, the insured has nevertheless an insurable interest
as -proprietor in the property sold. And a verdict of a jury in
r* Mintr.Ml Stiv.-t Ry. Co., 11 L. N., 2 ; 32 L. C.
(00) Cedar Shingle < nouski Ass. Co., Q. R. 2 Q. B.,
879 ; JOd.
I \ it ion ,1 Ins. Co., 23 L. C. J., 12, 1 L. N., 450, re-
reratogS. ( , L-I I. c. J., 242.
! Ins. ( <,.. i | L. C. J., 219.
124: THE LAW OF FIEE INSURANCE IN CANADA
favour of the insurance company, based on a charge of the judge
that the property in the oil did not, under the circumstances,
pass to the insuTed, will he set aside and a new trial grant-
ed. (63)
Goods held under a duly endorsed warehouse receipt, as colla-
teral security for advances, may be properly and legally insured
as being the property of the holder of such receipt, being the
party who made the advances. (64)
The usufructuary has a sufficient interest to insure a house
of which he has the usufruct, but in case of loss he can otoly
claim the value of his interest in the property. (65)
P. transferred to appellant two insurance policies issued by
respondents. Subsequently, the property insured was destroyed
by fire, but this was only after P. had ceased to have any interest
in such policy. On a claim by appellant to recover the amount
of said policies, Held, 1st. that the assignee of a policy issued
by a Mutual Ins. Co. can otoly exercise such claims as the trans-
ferer could himself have done; 2nd. that, in this case, P. having
ceased to have any title to the property insured, when the fire
occurred, he could not recover the amount insured under the
policies aforesaid and that the appellant was therefore debarred
from such claim, (66)
The sale of property insured does Hot convey to the purchaser
the policy of insurance, without a transfer of the policy and by
mere operation of law. (67)
An assignment of the policy can convey no greater rights un-
der the same than the assured himself had. (68)
(63) Mathewson vs Royal Ins. Co., 10 L. C. J., 45.
(64) Wilson vs Citizens Ins. Co., Q. B., 19 L. C. J., 175.
(65) St. Amand vs Oie d' Assurance de Quebec, S. C., 1883, 9 Q.
L. R., 162, 14 R, iL., 27.
(66) Willey vs Mutual Fire Ins. Co., 2 Dorion, Q. B. R., 29.
(67) Forgie vs Royal Insurance Co., 16 L. C. J., 34.
(08) New York Life Ins. Co. vs Parent, 3 Q. L. R., 163.
WAIVER AND ESTOPPEL 125
CHAPTER V
WAIVER AND ESTOPPEL.
Waiver and estoppel. Expressions used synonymously. Ori-
gin of doctrine: Waiver, express and implied; Void and
voidable; Implied waiver. Waiver before loss of breach
before loss; Waiver after loss of breach before loss; Waiver
after loss of breach after loss; Legislation relieving insured
from breach of condition.
WAIVEB AND ESTOPPEL.
Much of the difficulty which is found in attempting to har-
monizp the decisions of our courts in insurance cases, arises
from a failure of some judges to clearly appreciate the distinc-
ix'tween waiver and estoppel by misrepresentation.
This fact is also pointed out in the most recent American work
on the law of Insurance, (1) where the writer states that the
difference between waiver and estoppel as applied to the law of
insurance is not clearly defined in the decisions of the United
States, and cites with approval, the distinction pointed out in
1 Ins. Co., (2) as follows: "A waiver
arises by the intentional relinquishment of a right by a person
or party, or by his neglect to insist upon his right at the proper
. and does not imply any conduct or dealing with another
Cooley, Brief on th.- \.-.\\\ of Insurance, p. 2460.
(2) 43 Atf., 641.
126 THE LAW OF FIRE INSURANCE IN CANADA
by which that other is induced to act or forbear to act to his
disadvantage; while an estoppel necessarily presupposes some
such conduct or dealing with another."
INTENT.
Intent is an essential element of waiver, and it is from " the
neglect to insist upon his right at the proper time" that the in-
tent to waive is inferred.
On the other hand a party may be estopped by his representa-
tion when he has no intention it should be acted upon.
ORIGIN OF DOCTRINE OF WAIVER.
Waiver of forfeiture in insurance cases has grown out of the
doctrine as applied in the relationship of landlord and tenant.
In holding an act of the landlord to be a waiver of forfeiture,
the court simply construes his act according to his intention.
The principle is thus expressed by Lord Mansfield: (3) "The
case is extremely clear. To construe this acceptance of rent, due
since the condition broken, a waiver of the forfeiture, is to con-
strue it according to the intention of the parties. Upon the
breach of the condition the landlord had a right to enter. He
had full notice of the breach, but does not take advantage of it,
but accepts rent subsequently accrued. That shows he meant
that the lease should continue. Forfeitures are not favoured in
law; and when a forfeiture is once waived, the court will not
assist it."
The same principle has been applied in a great many other
cases between landlord and tenant. (4)
(3) Goodnight vs Davids, 2 Cowp., 803.
(4) Roe vs Harrison, 2 T. R., 425 ; Doe vs Birch, 1. M. & W., 402 ;
Oroft vs Dunxley, 5 E. & B., 648, 6 H. L. Cas. 672; Wailrond vs -law-
kins, L. R., 10 C. P., 342; Hunt vs Bishop, 8 Excth., 675; Hunt vs
Remnant, 9 Id., 635 ; Green's Case, 1 Cro. Bliz. 3, cited in 1 M. & W.,
406 ; Pellatt vs Boosey, 31 L. J. C. P., 281 ; Ward vs Day, 4 B. & S.,
337, 5 Id., 359 ; Doe vs Curwood, 1 H. & W., 140 ; Doe vs Meorx, 4 B.
WAIVER AND ESTOPPEL 127
WAIVER EQUIVALENT TO ELECTION.
\Yaher arises where a party having the right to take one of
two inconsistent positions, elects in favour of one. In such case
he is bound by his election, and this irrespective altogether of
whether or not any other party has relied upon his action and
would be prejudiced by permitting him to withdraw from such
election.
ESTOPPEL BY MISREPRESENTATION.
Although having a more a'ncient origin, it is not necessary to
revort to cases prior to the well known decision of Pickard vs
Sears, in 1837, (5) for a clear statement of the principle of es-
toppel by misrepresentation which is thus enunciated by Lord
Denman, C. J. : "But the rule of law is clear, that, where one
by his words or conduct wilfully causes another to believe the
existefnce of a certain state of things, and induces him to act on
that belief, so as to alter his own previous position, the former
is concluded from averring against the latter a different state
of things as existing at the same time."
In 1848, Baron Parke, in Freeman vs Cooke, (6) while af-
firming Pickard rs Sears, puts a gloss upon the word "wilfully"
in the above rule as follows: "By the term 'wilfully 5 , however,
in that rule, we must Understand, if not that the party represents
that to be true which he knows to be untrue, at least, that he
us his representation to be acted upon, and that it is acted
upon accordingly; and if, whatever a man's real intention may
be, he so conducts himself that a reasonable man would take the
representation to be true, and believe that it was meant that he
ft C., 000; Doe V8 Lewis, 5 A. & E., 277; Goatley va Paine, 2 Camp.,
520: I / Ted-kins, L. R., 2 Ex., 92; Doe t? Kykiix. l C. & P., 154;
A iUoii. '. Iliir.-. 868 : BhTUM M I>:i\K lo Ui. I >. 717 :
Toleman V8 Portbury. L. K . ; Q 1?.. 245, 7 Id., 344; VMoria, A-O of,
98 Etteretwmk, I., i: 8 I'. C., 854.
(5) A. A E., 400.
128 THE LAW OF FIRE INSURANCE IN CANADA
should act upon it, and did act upon it as true, the party making
the representation would be equally precluded from contesting
its truth; and conduct, by negligence or omission, where, there
is a duty cast upon a person, by usage of trade or otherwise, to
disclose the truth, may often have the same effect."
COURT.
It very frequently happens that the facts of the case are suf-
ficient to establish either waiver or estoppel. It is for this rea-
son that the courts so often have used the words "waiver" and
"estoppel" indiscriminately. This is well illustrated by two
cases in Ontario, Smith vs Mutual Ins. Co., (7) and Mclntyre
vs East Williams, (8) where the principle involved was the same.
In the one case the plaintiff succeeded on the ground of waiver,
and in the other on the ground of estoppel.
In an action on a policy of a mutual insurance company the
defendants pleaded that a certain assessment was declared by
the defendants on the plaintiff's premium note of which assess-
ment the plaintiff had due notice, but did not pay the same,
whereby the policy became void. A replication alleged that sub-
sequent to the alleged avoidance and previous to the loss, defen-
dants levied another assessment which the plaintiff was duly
notified of and paid, whereby the defendants waived the alleged
forfeiture. The court said :
" As to the replication, we think it is good. The plea shews
matter involving the forfeiture and avoidance of the policy.
The answer is in effect that subsequent to the alleged avoidance
the company levied another assessment of $7.77 of which the
plaintiff was notified, and duly paid the same, all before loss,
and so the defendants by their acts, etc., waived the alleged for-
feiture and revived the policy, and ought not to be allowed to
plead the said plea.
(7) 27 U. C. C. P., 441.
(8) 18 O. R., 79.
WAIVER AND ESTOPPEL 129
" This seems to shew a clear revival of the policy a payment
to the plaintiff thereon; and that the defendants cannot be al-
lowed to fall back on a previous default, to destroy the plain-
tiff's right."
It is clear that in this case the plaintiff might have equally
well replied to the defendants' plea claiming that by notifying
him of the subsequent assessment and receiving the same, he
had been lulled into inaction, to use the language of the judge
in the next case, and that the defendants were estopped from
setting up the said plea. In fact Gwynne, J., in pronouncing
the judgment of the court in Lyons vs Globe Mutual, (9) ex-
pressly states that this decision was based upon the fact that the
company by its act had led the insured to rely upon the policy
as a subsisting security against the loss which subsequently
happened. He thus invoked the doctrine of estoppel.
In the second case, (10) the defendants, also a mutual insur-
ance company, set up as a defence to the action a subsequent in-
surance, and claimed the benefit of a condition of the policy
which required that notice of subsequent insurance should be
given to the company and indorsed upon the policy. The plain-
tiff replied that he notified the secretary of the company of the
double insurance, and was informed that there was nothing fur-
ther necessary for him to do, and that he was, subsequent to
such notice, assessed on his premium note for an additional
amount which he paid. The court held that the payment and
receipt of the premium with knowledge of the subsequent in-
surance operated as an estoppel upon the company, although of
pinion that the notification to the secretary not having been
indorsed on the policy as provided by one of the conditions, did
not fulfil the requirements of the statute, and that the plaintiff
coiiM obtain no benefit thereby.
In this case also the plaintiff, on the facts, could have set up
that the meaning of the subsequent assessment and the
(9) 28 U. C. C. P., 62.
<> v Bast Williams 18 O. U., 70.
5
130 THE LAW OF FIRE INSURANCE IN CANADA
and receipt of the same operated as a waiver of the forfeiture.
He would no doubt, however, have been met by the rejoinder
that the waiver of the condition of the policy required to be in-
dorsed in writing on the policy and it was necessary that his
replication should be grounded on estoppel and not on waiver.
WAIVER AND ESTOPPEL USED SYNONYMOUSLY BY THE PLEADER.
When the pleading uses the word "waiver", although the facts
justify an answer on the ground of "estoppel", the courts, look-
ing at the facts and not at the express language of the plead-
ings, have given relief. That the distinction, however, clearly
exists is pointed out in the case of Cousineau vs City of London
Fire Ins. Co. (11)
Here by the llth paragraph of the defence, it was stated that
the policy was subject to the condition that the claim should be
barred unless an action thereon was commenced within one year
from the time of the loss or damage, and that the action was
commenced after the expiration of the year. The plaintiff re-
plied by admitting the fact that the action was toot brought
within the year, but relied in answer thereto upon the fact that,
at the request of the defendants, he had furnished additional
proofs of loss after the year had expired, and contended that the
defendants had thereby waived the compliance with the con-
dition as to the action being brought within a year from the loss
or damage. As to this, Street, J., says: "In tlu- absence of any
agreement not to insist upon the condition, the question of
waiver must come down to an enquiry as to whether what has
occurred operates against the defendants as an estoppel ; for the
defendants must be held entitled to insist upon the protection of
the clause in the policy, it being clearly not an unreasonable
one, unless they have either agreed not to set it up, or have so
acted as to entitle the plaintiff to say that they are estopped
from taking advantage of it."
(11) 15 O. R., p. 329.
WAIVER AND ESTOPPEL 131
The Divisional Court consisted of two judges, Armour, C. J.
and Street. J., the latter differing from the Chief Justice, and
holding on the facts of the case that the plaintiff should not suc-
ceed, saying : " I think that the doctrine of estoppel has been
carried extremely far in many of the cases, and that to apply it
here would be to carry it a step farther than it has yet gone."
Armour, C. J., in affirming the judgment below says : "I am
of opinion that the conduct of the defendants in requesting the
plaintiff to procure and furnish additional particulars concern-
ing the claim up to the time mentioned in the case, and thereby
putting him to loss of time, trouble, and expense in procuring
and furnishing the same was a waiver of, and precluded the de-
fendants from setting up the 22nd statutory condition."
It will be perceived that the Chief Justice uses the word
'waiver" in the sense of estoppel, while Street, J., is more pre-
. This case is not an authority for the proposition that ask-
ing for proofs of loss constitutes a waiver, but rather that such
acts may estop the defendants from claiming the benefit of the
rondition which requires the action to be brought within a limit-
ed time.
WAIVER AND ESTOPPEL DISTINGUISHED.
The distinction between waiver and estoppel is well illustrated
in the case of Caldwell vs The Stadacona Fire and Life Ins.
Co. (12) The facts of the case are thus set out in the judgment
of Strong, J.
This was an action in the Supreme Court of Nova Scotia
brought by Samuel Caldwell and his wife against the Stadacona
Assurance Company. The policy of insurance sued upon as
originally issued was for one year, namely, from the 10th Au-
gust, 1875 to 10th August, 1876, but, as is proved by tho rniowal
receipt in evidence, it was subsequently renewed and continue.!
l<uh August, 1877. It was under the seal of the respon-
dent company, and purported to be effected in favour of the ap-
(12) 11 Can. 8. C. B.,
132 THE LAW OF FIRE INSURANCE IN CANADA
pellant, Samuel Caldwell. It contained, however,, a provision
in the following words : "Loss, if any, under this policy, payable
to George E. Anderson, Esq., Halifax, N. S." The policy was
subject to conditions, of which the 9th required particulars and
proofs of loss to be delivered "within five days after such loss
or damage has occurred."
The llth condition provided as follows: "Any action to be
brought on the policy is required to be commenced within the
term of six months next after any loss or damage shall occur."
And the 12th was in these words: "None of the foregoing
conditions or stipulations, either in whole or in part, shall be
deemed to have been waived by or on the part of the company,
unless the waiver be clearly expressed in writing by endorsement
on this policy, signed by the manager of this company for Can-
ada."
The declaration, in addition to a count framed in the usual
manner in covenant for the recovery of the amount of the loss,
contained a count in trover for the policy. Amongst the de-
fences pleaded were, substantially, that the amount of loss was
payable to Anderson ; that there had been a breach of condition
requiring proofs of loss to be delivered within five days.
To the plea of non-delivery of proof according to condition
tlu k plaintiff replied a waiver of the condition in that respect,
to which the defendants rejoined that the waiver was not in
writing, as required by the conditions. Upon the other defences
issue was taken.
The house insured was destroyed by fire on the 4th July, 1877.
Notice of a total loss was promptly given to the general agent
of the company at Halifax, and application was made to him to
deliver up the policy which was in his possession, and for in-
structions as to the proof of loss required. At his suggestion
the putting in of proofs was deferred, to allow him time to com-
municate with his head office regarding the policy, and ultimate-
ly, on the 25th of July, the proofs of loss were furnished by the
appellant's solicitor to the agent, who received them without
objection, and retained them. Accompanying the proof of loss
WAIVEB AND ESTOPPEL 133
was a letter from the appellants' attorney, Mr. Richey, to Mr.
Greer, the respondent's general agent, in which he wrote as fol-
lows : " Herewith I hand you proof of loss in the case of Samuel
Caldwell, prepared with as close conformity to the requirements
of your office as we can attain without the policy, which is now,
I understand, in your custody, and I have thus far been unable
to obtain it. It is, however, not convenient for my client to
longer delay making his claim in this formal manner, and I
shall be obliged by your acquainting me, on receipt of this, whe-
ther any objection exists to either the claim or the form in
which it is prescribed."
Xo objection was ever made, in any particular, to the proofs
of loss furnished, and the only contention ever raised by respon-
dents prior to their pleadings to the action was, that they were
not liable, because the policy had been cancelled.
The refusal of the respondents to give up the policy for the
purpose of preparing the proofs, upon an application being made
to their agents for that purpose, was proved by Mr. Richey, the
plaintiff's attorney, and also by Mr. Anderson, and the fact was
admitted by the respondents' agent, Mr. Greer, acting as he said
under instructions from the general manager.
A non-suit having been moved for on several grounds included
in the numerous list of objections, it was refused by the learned
judge, who thereupon found a verdict for the plaintiff for $4,000
and interest A rule nisi, which was granted to set aside this
verdict, on the general ground that it was against law and evi-
dence, and on the specific points which were urged at the trial
on the motion for non-suit, was, after argument before the
court in bane, made absolute.
judgment of the court below, in grant in i: this new trial,
appears to have been founded exclusively upon the single ground
that, although a waiver of tin- rnjimviin-nts of the Oth condition
as to delivering proofs or particulars of loss within five days.
been sufficiently made mil. if pan. had been admissible,
yet, that th< liring waiver to be expressed
134 THE LAW OF FIRE INSURANCE IN CANADA
in writing, by endorsement on the policy, applied to and exclud-
ed all proof to that effect other than such as was required by the
terms of the condition referred to.
The Supreme Court held that the court below had erred in
disposing of the case solely on the question of waiver, saying,
per Ritchie, .J. (p. 225) : "But defendants contend that none
of the conditions can be waived by reason of the waiver not being
in writing, and they invoke the twelfth condition, which says :
" 'No. 12. None of the foregoing conditions or stipulations,
either in whole or in part, shall be deemed to have been waived
by or on the part of the company, unless the waiver be clearly
expressed in writing, by endorsement upon this policy, signed
by the manager of this company for Canada.' ''
"And the Supreme Court of Nova Scotia rest their judgment
on this, that though they think there was evidence of a waiver,
a conclusion fully justified by the conduct of the company
through their agents, yet they thought a parol dispensation
would not answer to act as a waiver against a written condition
of the policy.
"But if condition No. 12 applied to the conditions, as to proofs
of loss, I think the court erred in treating this as a waiver, but
should have held the defendants estopped by matter in pais from
setting up the non-compliance with the condition."
Strong, J., said (p. 241) : "Upon these facts it is pkin that
the illegal retention of the policy by the respondents, and the
conduct of their agent in reference to it, were the true and only
reasons why the proofs were not furnished in due time. Had
Mr. Richey known the terms of the condition, as he would have
done if the policy of which his client was entitled to the posses-
sion had not been wrongfully withheld, it must be presumed
against the respondents that the proofs would have been furnish-
ed within the prescribed time. Again, had Greer, instead of mis-
leading Mr. Richey, by asking that the proofs should be delayed,
stated to him that the condition required their presentation
within five days, it must be presumed that a similar result would
WAIVER AND ESTOPPEL 135
have followed. This conduct, therefore, constitutes an estoppel,
and disentitles the respondents to the benefit of the 9th condi-
tion, which must, for the purposes of this action, be considered
as struck out of the policy. This is, of course, an entirely dis-
tinct ground from that of waiver under the 12th condition. Had
the appellant had the policy in his possession, or had the facts
regarding the limitation of time been truly stated to his attor-
ney by Greer, the mere request of the latter that the proofs
should be delayed would have been nothing more than a dis-
pensation with the terms of the condition, by agreement, which
would have required endorsement on the policy in the terms of
the condition excluding proof of waiver unless so evidenced.
As it is however, it is apparent that the respondents, by their
unjustifiable conduct, caused the non-compliance with the terms
of the policy, which they now insist on as constituting a defence
to the action. To allow them thus to avail themselves of their
own wrong, would be to assist them to commit a fraud, and
whenever such is the case an estoppel arises."
This case clearly shows the necessity for bearing in mind the
distinction between waiver and estoppel. The facts upon which
the replication of waiver was based were amply sufficient to sup-
port an estoppel by misrepresentation, but could not be used in
the* face of condition 12 of the policy, as equivalent to an accord
and satisfaction, because that condition expressly provided that
\vaiver to be binding must be endorsed upon the policy and
signed by the manager of the company.
It was the use of the word "waiver" in the sense of a delib-
erate intention to dispense with the strict performance of some
term or condition of the fire insurance contract, that was under
consideration in many of the earlier decisions of the courts of
Ontario, where it was held that the agent of the company had
no power to waive the conditions of a policy, under seal. In one of
the earliest reported cases, (13) one of the conditions of the pol-
:'.) Lampkln - \\artern AJW. (V (in 1850), 13 IT. f. R.,
i:.".". : '.;i.
136 THE LAW OF FIRE INSURANCE IN CANADA
icy of insurance in question was that no action should be brought
under it against the company unless within twelve months after
the right accrued. The plaintiff alleged a waiver of this condi-
tion and relied upon an alleged conversation between his agent
and the President of the company. It was held that the condi-
tion could not be so waived, and the evidence was properly re-
jected. The action was a purely common law one, and contained
no replication on equitable grounds.
In Scott vs Niagara District Mutual Ins. Co., (14) to an action
on a policy of insurance, defendants pleaded the non-performance
of the condition requiring the delivery of a particular account
of the plaintiff's loss verified by his oath or affirmation and by
his books of account within thirty days after the loss. Th^ plain-
tiff replied de injurid, and at the trial relied upon a parol waiver
of this condition by the defendants' managing director and secre-
tary. The evidence showed that the plaintiff had delivered an
affidavit containing a statement of his loss in general terms to
the managing director and the secretary of the defendants at
their head office, and that both these officers stated that no other
proof was necessary. In the judgment of the court pronounced
by Draper, C. J., following the then recent decision of the
Thames Iron Works Co. vs Royal Mail Steam Packet Co., 13 C.
B. N. S., 358, it is said : " We see no foundation for admitting
evidence which in effect contradicts the declaration by setting
up a substituted contract. Here the original contract was under
seal. A subsequent parol contract could not be pleaded in bar
of it."
This technical rule of the common law, that a contract con-
tained in a deed under seal could not be rescinded or varied by
an agreement not under seal, was frequently applied in actions
brought upon policies of insurance, and relief was sometimes
refused by the common law courts, even where the record con-
tained a replication on equitable grounds setting up the
waiver. (15)
(14) (1S65), 25 U. C..R., 119.
(15) McTTitt vs Niagara Mutual Ins. Co., 18 U. C. R., at p. 529.
WAIVER AND ESTOPPEL 137
This rule of law was always disregarded in equity, and an in-
junction could be obtained restraining an action brought upon
a deed in breach of the terms of a subsequent agreement or
waiver. Since the fusion of law and equity in England, by the
Supreme Court of Judicature Act, 1873, a valid parol agree-
ment may be pleaded in answer to any proceeding upon the or-
iginal deed; and the rule of the common law that a contract
under seal cannot be varied or discharged by a parol agreement
is thus practically superseded. (16)
WAIVER MUST BE PLEADED. (17)
In a case in which it was contended that the defendants had
waived a provision in a contract of insurance which provided
that the policy should be void unless prosecuted within one year
from the date of the loss, the court said : " The appellant can-
not be admitted to insist on waiver in the state of the record
before us. If it had been intended to rely on this reply, it should
have been set up by a special answer to the exception pleading
the prescription, but this was not done. It is, therefore, out of
the question now, in this second stage of the appeal, to consider
this answer to the defence, even if it were sustained by the clear-
est and strongest evidence." (18)
WAIVER, EXPRESS AND IMPLIED.
Waiver, by some writers, is subdivided into two classes, express
and implied.
Express waiver arises when the person entitled to anything
expressly and in terms gives it up, in which case it nearly re-
sembles a release. (18a) Little difficulty arises in such cases.
. eda t? Steeds, 22 Q. B. D., 537.
(17) Allen va Merchants Marine Ins. Co., 16 Can. S. C. R., 488.
(18) This decision was followed in the Knights of Maccabees t'
HHMiker, 29 Can. 8. C. R., 307.
(18a) Stackhouae vs Ramston, 10 Yes. 463.
138 THE LAW OF FIRE INSURANCE IN CANADA
Where there is a condition that the waiver to be valid must
be endorsed upon the policy, and signed by the company or .its
agent, this provision will be enforced by the courts, but if the
insured has failed to obtain such endorsement owing to the re-
presentation of the company or its agent, it will be a good re-
plication to a plea of waiver to allege this fact as a ground of
estoppel against the company.
Implied waiver arises when the person entitled to anything
does or acquiesces is something else which is inconsistent with
that to which he is so entitled.
There is obviously no place for implied waiver in an action
upon a policy of insurance which expressly provides that no
waiver shall be valid unless endorsed on the policy.
VOID EQUIVALENT TO VOIDABLE.
It is with respect to waiver, differentiated from estoppel, and
equivalent in its significance to election (supra, p. 127), that
the courts have had to construe the word "void" as meaning
"voidable" in insurance contracts.
In provinces where the statutory conditions are in force, one
of which requires that waiver must be in writing to void the
policy, it will be found that where the plaintiff has succeeded
on the ground of waiver by the company of a breach of a condi-
tion, the ground of relief has really been estoppel, and that there
has been a looseness in the use of the expression "waiver" by the
Court, as pointed out above.
The most luminous discussion of this question is to be found
in the well known case of Armstrong vs Turquand, 9 Ir. L. R.
Common Law, p. 32, in the judgment of the majority of the
Court, pronounced by Christian, J., and which has been fre-
quently cited with approval, and which is so apt to the subject
under discussion, and so fully reviews all the earlier decisions,
that it will bear quoting at some length.
To an action brought by the administratrix of a party who
had effected a policy upon his own life in the D. and G. Assur-
WAIVER AND ESTOPPEL 139
ance Co., and which policy contained a proviso that, in case the
said assured had been guilty of fraud in procuring it, etc., the
policy should be void, and all moneys paid in respect of it should
be forfeited to the company, the latter pleaded that the party
assured had, at the time of effecting the policy, in conjunction
with the agent of the company, fraudulently concealed the faet
of his having met with an accident, from the effects of which
he was then suffering paralysis, and had withheld all knowledge
from the company of the uninsurability of his life. The plain-
tiff replied that the company, after they had knowledge of the
facts pleaded, received a second premium from the insured, and
thereby elected to affirm the policy.
Held, upon demurrer to the replication (Monahan, C. J., difl-
sontiente), that the meaning of the proviso was that the policy
should be void in the particular event, in case the company
should elect to treat it so ; and that inasmuch as they had elect-
ed to treat it as subsisting, by the receipt of the subsequent pre-
mium, they were liable for the amount.
The learned judge says : "It will be seen that the nature of the
question is that which is raised by the demurrer. The defence al-
leges, that the first of the events upon the happening of any one
of which it was declared that the policy should be void, did in
fact occur, viz., the assured 'was guilty of fraud in procuring the
policy', and that therefore the policy was utterly void. To this
the replication answers (by way of confession or avoidance)
that the company discovered the fraud, and that, after they had
so discovered it, they not only did not elect to disaffirm or avoid
tin- policy, but, on the contrary, affirmed the same, and elected
to hold it valid; and that accordingly, during the lifetime of
the assured, and after they had become acquainted with the
fraud, they received a premium which became due, subsequently
to such knowledge. The demurrer admits these averments to
be true in fact, but insists that in point of law they do not dis-
place the defence . . .
"The case resolved itself into two propositions, upon which the
140 THE LAW OF FIRE INSURANCE IN CANADA
Counsel for the plaintiff finally rested their case, and which
were these: First, upon the construction of the policy, they
insisted that the words 'shall be void' in the condition, do not
mean .shall be ipso facto irrevocably and irrecoverably void, but
only void if the company shall, after breach, elect so to treat it.
And if this be the true construction, then (they say) that inas-
much as the replication avers that the company, after know-
ledge of the event, not only did not elect to treat the policy as
void, but on the contrary did, for valuable consideration, elect
to treat it as of continuing validity, they cannot now revert to
an election to treat it as void, and, therefore, the replication is
a full answer to the plea. But secondly they insist, that if the
question of construction be against them, and that if once the
facts averred in the plea are brought to the knowledge of the
Court, though the Court must hold that they annul the policy
beyond the reach of confirmation, yet the conduct of the com-
pany, as alleged in the replication, has the effect of an estoppel
upon them against averring those facts, and that consequently
the case must be decided as if they had not been pleaded, or did
not exist.
"Upon the first of these contentions, I am of opinion that the
plaintiff's argument is correct; and, if it can be sustained it
undoubtedly furnishes an easy means of escaping from the
fraudulent injustice which the defendant's construction of the
clause in question would make it and similar clauses in other
policies the means of effecting.
"The principal argument which was pressed upon us in answer
to this view of the plaintiff's case was, that his construction
violates what was called the natural and grammatical significa-
tion of the word Void', making it bear the sense of 'voidable 7 ,
and we were strongly pressed with the rule of construction
which it was said is more closely adhered to in modern times,
and for which we were referred to the so often cited dicta in
Grey vs Pearson (6 H. L. Cas. 106), especially that of Lord
Wensleydale, viz: 'The grammatical and ordinary sense of the
WAIVER AND ESTOPPEL
141
words is to be adhered to, unless that would lead to some ab-
surdity or some repugnance or inconsistency with the rest of the
instrument*; none of which consequences, it was said, would
follow from using the word 'void' in this policy in what was
said to be its grammatical and ordinary sense.
"Now with respect to the rule of construction, I find it laid
down by Lord Cranworth also, in the same case of Grey vs Pear-
eon, in terms which appear to me to be materially different
from, and more accurate than those used by Lord Wensleydale.
In p. 78, he says : 'The rule of construction which, in modern
times particularly, the Courts have always been anxiously in-
clined to follow has been to adhere as rigidly as possible to the
express words that are found, whether in wills or in deeds, and
to give to those words their natural ordinary meaning, unless,
by so doing, it appears from the context that you are using
them in a different sense from that in which the testator or
maker of the deed intended to use them; or, unless by so using
them, you would be doing something which would manifestly
lead to an inconsistency, which could not have been the intention
of the party making the instrument'. That is to say, according
to Lord Wensleydale, grammar must prevail, unless it will lead
to some absurdity, repugnance or inconsistency. According to
Lord Cranworth, grammar must give way, not only when it
leads to such consequences, but also when it appears from the
context that the grammatical or ordinary sense of the words is
not the sense 'in which the testator or maker of the deed in-
tended to use them.'
'In applying this rule of construction to the present case, it
was broadly assumed that the plaintiff's construction of the pol-
icy does violate the natural and ordinary signification of the
word 'void'. Now I do not think that that is so clear. The
real controversy is not, whether the grammatical sense of 'void'
shall be altered, but wh.'tlu-r the intention of tin- parties does
not require that its operation shall be postponed. Does it mean
void eo instattli. <>r void if and when the company shall so elect?
14:2 THE LAW OF FIRE INSURANCE IN CANADA
If the latter be the true meaning, the effect is merely this, that
the word is inoperative until the election is made. When that
occurs, it operates for the first time, and then in its natural
sense of entire nullification. The truth is, that the question is
one of intention and of substance, and not merely of grammar
and of words, and is really this which of two modes of opera-
tion, of either of which the words of this deed are susceptible,
will best effectuate the intention of the maker of it, viz., that
which annuls the contract in invitum, and beyond the control
even of the person for whose benefit the clause was intended, or
that which will make it void only in the event of that person
thinking it for his benefit, so to insist? But be that as it may,
I turn now to the more important consideration, whether the
I motion cannot be elucidated by authority more satisfactory
than the dicta of Judges, laying down abstract canons of con-
struction. We are dealing here with language which is of very
1'ivquent occurrence in legal instruments, and which has been
the subject of discussion and decision in many reported cases.
If it be of that rigid and inflexible character that in this case
it bars the path in which a Court of Law must tread on its way
to justice, we may at least expect to be referred to the cases in
which Courts of Law have already found themselves compelled
to succumb to such an obstacle.
"The plaintiff appeals to a body of authority which touches
this question more nearly. ***** : i allude to the
long train of decisions which have been made upon leases, and
by which, notwithstanding some early cases, it is now clearly
established that, in the case of a lease for years, a proviso de-
claring that, upon breach of covenant, the lease shall be null
and void, shall be construed to mean, no matter how strong and
emphatic the language, void at the election only of the lessor;
so that, although a covenant may be broken, the lease remains
valid until the lessor intimates his intention to take advantage
of the proviso ; and if, before he does so, he by any act, such as
receipt of rent subsequently accruing, recognises the continuance
of the lease, he cannot afterwards rely upon such antecedent
WAIVEK AND ESTOPPEL
143
breach. But the principle of those decisions cannot be confined
to leases; and that it is not so, is shown by the case of Hyde
M Watts (12 M. & W., 254)."
The learned judge then proceeds to discuss in detail the deci-
sions to which he has above referred, and proceeds, on p. 55 :
"Another class of cases which was referred to by the Counsel
for the plaintiff, as instancing the freedom which Courts have
assumed in moulding language of this kind, so as to avoid un-
just and unreasonable consequences, are those which have arisen
upon the English statute of Eliz., relating to ecclesiastical
leases, which will be found referred to by Tindal, C. J., in
Malins vs Freeman (4 Bing. N". C. 395). These statutes had
enacted that all leases by bishops, &c., in any other manner than
as required in the Acts, 'shall be utterly void and of no effect,
to all intents and purposes/ Yet it was held, notwithstanding
this .positive language, that the leases were not void at all as
against the grantors, but only against the successors.
"It now only remains for me to notice one case more, which is,
however, of great importance in the argument, and in its facts
more nearly resembles the present than any other that has been
cited ; I allude to the case of Wing vs Harvey (5 DeGMcN. & G.
265). It was decided iby the Lords Justices Knight Bruce and
Turner; it came before them in the shape of what in the Court
of Chancery in England is termed a claim, by the plaintiff, as
assignee of a policy executed by one Bennett on his own life,
with Uie Xorwich Union Society. On the policy was indorsed a
condition that, 'if the party upon whose life the insurance is
granted shall go beyond the limits of Europe without the license
of the directors, this policy shall become void, the insurance in-
led to be hereby effectt-ii shall m/>r. and tin- money paid to
Society become forfeited to its use.' The material facts
were, that Bennett, after assigning the policy, \\vnt to reside
abroad, without license of the directors. The plaintiff continued
to pay the premiums for a number of years, at a country of 1'u >
he company, 1o tlu-ir \\gv\\\ tlu-rr, who was informed of Ben-
nett's absence, and stated to the plaintiff that the policy was
THE LAW OF FIRE INSURANCE IN CANADA
notwithstanding good, provided the premiums were regularly
paid. There was also some evidence that the head officer, to
whom the premiums were transmitted, had notice of Bennett's
absence; but the case was decided irrespectively of this. After
Bennett's death, the company refused payment, on the ground
that, by the terms of the proviso, the policy ^became void when
Bennett left Europe, without leave of the directors; but they
offered to repay the premiums. The claim was filed for payment
of the insurance money, or, in the alternative, repayment of the
premiums, with interest. The Court, without calling for a
reply, decided that the effect of the receipt of the premiums
with knowledge, was, that the policy continued to be valid and
subsisting, and they decreed payment of the full amount.
"The similarity of this case to the one before us is too obvious
to need comment; and I shall now proceed to consider the
grounds upon which its value as an authority has been impugn-
ed. In the first place, it is said that it was the decision of a
Court of Equity, that it proceeded upon equitable grounds, and
is consequently no authority for the guidance of a Court of
Law. Unless the second branch of this proposition be true, the
first is manifestly of no importance. If the decision did not
proceed upon equitable grounds, but upon such as are common
to Courts of Law and Equity, it is as valid an authority here
as would >be a judgment of the Queen's Bench. Was it then
decided upon grounds peculiar to Courts of Equity ? If EO, they
will be apparent upon the report. There is a decision of two
judges, of the very highest character in eminence, as perfect
masters as any now living of our judicature, more especially as
regards the divergences of Equity from Law; as little likely,
therefore, they are as any to sustain a judgment of Equity by
reasons of Law; yet it will be difficult to point out a single
reason or observation in the judgment of either, which would
not have 'been equally pertinent in an action on the policy in the
name of Bennett's personal representative. A little attention to
the report >will make it very clear that the ground of decision
was simply this, that the effect of the receipt of the premiu is
WAIVER AND ESTOPPEL 145
was, that the original validity of the policy remained, which
could only ibe by holding 'void' to mean void only at the elec-
tion of the company. The argument of the Counsel for the
company distinctly raised the question. It was this: 'The
policies became void by the breach of the condition endorsed
upon them, and could only have been again entered into by the
Association itself, or some -person having authority from them.
Lock wood (the agent) had no authority to grant a policy, in
contravention of the rules of the Society.' Again, /it could
not be presumed that he had authority to vary the contract/
That is to say, the original contract is utterly gone; the plain-
tiff can only succeed as upon a new contract, but the agent had
no authority to bind the company by such. How do the judges
answer this argument (for they dispensed with any answer from
the plaintiffs counsel) ? Is it by holding that a new contract
was created in Equity, if not at Law; or that, upon any other
special ground of equity, admitting that the original contract
one, relief should be given? Nothing of the kind. Lord
Justice K. Brace's answer to the counsel is: TDid not the
plaintiff pay' the premiuims upon the condition that the policies
were to be considered as valid and subsisting ?' and, in his judg-
ment, he puts it expressly as 'a waiver of the forfeiture', and
s validity to the act of the agent, upon the ground that,
though he hail no authority to make new contracts, Tie was
their agent, for the purpose of receiving premiums on subsisting
policies. The premiums in question were paid to him on the
fjiitli of th<> .policies continuing valid and effectual, notwith-
!ni^ Bennett's residence in Canada.' Lord Justice Turner
uses language precisely similar, and concludes his judgment
thus: 'My opinion is, that thsse policies must be considered
to have been continuing policies.' Nor do I, for my part, un-
derstand how these eminent judges could possibly have reasoned
otherwise. How could there be a question of Equity distinct
from the question of Law? The rules of construction are the
some in Equity as in Law. If a Court of Law, construing that
.'.oiiM hol.l that 'void' meant <>o instanti incurably null,
146 THE LAW OF FIRE INSURANCE IN CANADA
a Court of Equity, upon the question of construction, must
manifestly hold the same; and, so holding, I am not aware of
any head of Equity jurisdiction under which the Court would
have jurisdiction to re-impose upon the party the very contr ct,
from which, by construction of its own language, he had become
relieved. Whatever ground there might be for relieving from
the forfeiture of the premiums paid, as to which I say nothing,
I know of none which would justify the re-imposition of the
contract for payment of the insurance money. It is perfectly
cpparent that the decision only could, as in fact it did, proceed
upon the continuance of the original contract, a result which
could by no possibility be arrived at, save by adopting that mode
of construing the policy then in question, which is contended
for by the plaintiff here; and if the plaintiff in that case, instead
of suing in his own name (which, as assignee of a chose in ac-
tion, he could of course only do in Equity), had brought an
action in a Court of Law, in the name of Bennett's personal
representative, the result of that action must have been the same
as the suit of Wing vs Harvey, at least if that case be well de-
cided at all.
"One of the events specified in the clause in the present case is
similar to that which was provided for in the .policy in Wing vs
Harvey ; and if here, as there, it had been the only one, and the
(breach had been of that, the two cases would have been on all-
fours with each other. But a distinction exists between them,
which has been strongly relied uipon, not only as removing the
authority of Wing vs Harvey, but as constituting in itself a
strong substantive ground in support of the defendant's view.
In the principal case, several distinct events are prescribed by
the policy, as those upon the happening of any of which it shall
be void. All, save the first, consist, like that in Wing vs Harvey,
of matter subsequent to the contract. But the first is matter
cotemporaneous with it, and infecting it from its origin, viz.,
'fraud in procuring it' ; and it is insisted that however the case
might be, as to a breach of any of the other conditions, it is im-
possible to give to the word ' void ', as applied to this one, any
but its strictest and most severe interpretation.
WAIVER AND ESTOPPEL 147
'Xow, looking at the case from this point of view, it at once
occurs to ask whether it is possible to give to the same word dif-
ferent meanings, as applied to different branches of the same
sentence? Suppose a case came 'before us to-morrow, of an ac-
tion upon a policy precisely similar to the present, resisted upon
the ground of unlicensed residence abroad, or military or naval
service, to which the plaintiff replies the receipt of premiums
after knowledge of the event, are we prepared to say that we
wquld hold that policy void? Against doing so, Wing vs Harvey
would be an authority in point, the former cases would be
authorities in principle, and justice and common sense would
speak with more authority than either. If then, in a case of a
breach of one of the conditions subsequent, we would be bound
by authority to adopt the plaintiff's construction, can we now do
otherwise than give to the words the same meaning, as regards
the other event of the series, to all of which it is, in one and the
-a me sentence, indiscriminately applied? To do otherwise would,
in my humble judgment, be to violate one of the most element-
ary principles of construction; and that, not from necessity or
for justice, but capriciously, and in furtherance of the grossest
injustice and fraud. The case might be different if there were
anything, in the intrinsic nature of the thing forbidden by this
branch of the clause, which called for a different mode of inter-
pretation. But the reverse is the fact. It is the nature of fraud,
that it vitiates a contract in the absence even of any special sti-
pulation. But it is now well settled that the mieaning of that is
that the contract is not absolutely void, but only void at the elec-
of the party defrauded. Is not the more rational interpre-
>n then that, as to this particular event, the clause is merely
aratory of the law? If, indeed, no event but fraud were
specified, it might plau~il>ly be asked, why insert such a clause
!1, unless something more were meant than the law itself
would imply ? But this argument loses all importance when we
the insertion of the clause naturally accounted for by the
:ession of other causes of avoidance (all which mean, upon
, avoidance at election), as well as by the provision for
148 THE LAW OF FIRE INSURANCE IN CANADA
forfeiture of premiums, which the law would probably not imply,
even in the case of fraud. Taking the whole clause as it stands,
the rational and sensible interpretation of it is, in my mind,
this, that when the insurers stipulate that if there has been
fraud by the assured, or if there shall be default by him in cer-
tain other particulars, the policy f shall be void' the true mean-
ing is that it shall be so in the sense in which the law itself says
that all contracts shall be void for antecedent fraud, and in
which the law has so repeatedly construed contracts, guarding
against subsequent misconduct, that is to say, void if the ag-
grieved party shall so elect; and it is further observable that in
no way can these words of futurity, 'shall be void', have any
effect as applied to the original fraud, save by holding that they
refer to an election to be made by the company, after knowledge
of the fraud.
"If the question in this case were untouched by authority, I
believe I should, as mere matter of construction, come to the
same conclusion as that at which I have arrived; but, fortified
by the authority of Wing vs Harvey, fortified as I consider that
case to be by the previous cases (even though, strangely enough,
they were not cited in it), I have the less hesitation in holding
that the true office and function of clauses of this kind in con-
tracts is merely to serve as a shield for the protection of the
party who inserts them, if he shall think proper so to use them ;
and gross as, upon the averments of this record, must be taken
to have been the fraud of the plaintiff in obtaining this policy, I
cannot but think hat we should be giving effect to a fraud by
this company, far more monstrous, if, after they have, with full
knowledge of the fraud that had been practised upon them,
deliberately, and for pecuniary considerations, overlooked it, and
affirmed the subsistence of the policy, we should suffer them
now, after the consequences to the assured have become irrepa-
rable, to tell his representatives, his family and his credi 1
that (during all the time, while they were putting money in their
pockets, on the faith of the full validity of the policy, it was in
reality utterly null and void.
WAIVER AND ESTOPPEL 149
"F<>r these reasons, I am of opinion that the replication fur-
nishes a sufficient answer to the defence, and that consequently
the demurrer ought to be overruled."
VOID EQUIVALENT TO VOIDABLE. CANADIAN DECISIONS.
As reapects the rule of construction by which "void" is read
as "voidable" in insurance contracts, the weight of authority in
Canada is in line with the decision of Armstrong vs Turquand.
In fact the only exceptions are three early Ontario cases in
which it was held that the rule did not apply to acts of Parlia-
ment, and therefore not to cases where the statute under which
the company was incorporated, expressly provided that non-
disclosure of other insurance, misrepresentation as to encum-
brances, and the like, should void the policy. It has now, Low-
. long been definitely settled that this rule of construction
applies to statutes as well as to contracts (Maxwell on Statutes,
4th ed. p. 321), subject only to this, that the scope and purpose
of the enactment may be so opposed to this rule of construction
that it ought not to prevail (Davenport vs The Queen, 3 App.
Gas. 115). It would appear therefore that even if the stat-
utory conditions obtain some additional sanction by virtue of
their being contained in an act of the Legislature, yet any
language which voids the policy or limits the liability of the
company for breach of a condition must be construed in the same
way as it would in an ordinary insurance contract outside the
statute.
The insured effected a subsequent insurance, which was in
force some 14 days before it was cancelled, and the question was
whether or not this was such an insurance as voided ihe defend-
I 1 policy under a condition that if the property insured should
be insured elsewhere, notice of such other insurance must be
stated in the policy or IM* indorsed on it, otherwise the insurance
should be void. The contention of the plaintiff was that the
subsequent insurance was void ob initio as the policy contained
a provision making it void if there was any other insurance upon
As to this Robinson, C. J., says :
150 THE LAW OF FIRE INSURANCE IN CANADA
"There was an insurance in fact with the Wellington office
for a fortnight, and though it is possible that that company may
have had reason to complain of some condition in it, yet it would
rest with them to take the exception or not as they might think
proper. Prima facie it was not void, but voidable, perhaps, at
their discretion, and until it was cancelled it was a policy which
came within the condition relied upon in the defendants plea,
and of which it was necessary that the defendants should have
had notice, and which it was necessary they should have endors-
ed on the policy, in order to manifest their knowledge and ap-
probation of it."
And Burns, J., says : "The argument on behalf of the plaintiff
to support the verdict is involved in two propositions : 1st. That
the insurance effected -by the plaintiff with the Wellington Mu-
tual Company was in truth no effectual insurance, because it was
void ab initio, and therefore there was no necessity for the plain-
tiff giving notice of it to the defendants or having it endorsed
on the policy sued on
"It is plain the Wellington Mutual Company acted upon the
principle of their policy being a subsisting one for those fourteen
days. The condition embodied in their policy was for their ben-
efit, and they might or not take advantage of it. If the evidence
of the agent of that company be correct, the Wellington Mutual
Company could have been compelled to make the contract per-
fect. The question, however, to be determined here, is not
whether the plaintiff could have legally recovered from the Wel-
lington Mutual in an action upon their policy if a fire had oc-
curred during those fourteen days, but it is whether a double in-
surance de facto existed. This point has several times been con-
sidered in this court, as in other courts, and that is the meaning
which has always been put upon these contracts." (18b)
A policy of insurance provided that in case the premises be-
came vacant the fact should be communicated to the company,
and unless such notice was given and the company consented to
(ISb) Jacobs vs Equitable Ins. C., 19 U. C. R. 250. (1859).
WAIVER AND ESTOPPEL 151
retain the risk, the policy should be void. The house was vacant
for some time before the fire, without the knowledge or consent
of the company, but after the fire, the company, with full know-
ledge of the fact, called upon the plaintiff to furnish proofs of
loss. The court held that by so doing the company had elected
to treat the policy as subsisting, had waived the forfeiture and
were not subsequently at liberty to elect to treat it as forfeit-
ed. (19)
Mowat, V. C., said: (19a)
"The Insurance Company at the hearing insisteed that there
were four grounds of defence to the suit. They contended that
the policy had been forfeited (1) by the assignment, and (2) by
leaving the premises unoccupied. The assignment, or the leav-
ing the house unoccupied, did not ipso facto avoid the policy. In
Turquand vs Armstrong it was expressly held that the policy in
such case was void in case only the Insurance Company, on be-
coming aware of the breach of the condition, elected to treat the
policy as void. The case proceeded on the settled doctrine to the
same effect in regard to leases ; and the well-known rule in case
of leases is, that any act by which the landlord acknowledges the
continued existence of the tenancy is a waiver of any previous
forfeiture. The acceptance of subsequently accrued rent has
that effect. The same result follows from bridging an action
for such rent ; or making a demand of the rent ; or giving a
notice to the tenant to repair the demised premises; whether the
tenant does or does not repair in pursuance of the notice. The
same has been held to be the effect of a conveyance to a stranger
which was expressed to be 'subject to the lease.'
" Vow it is not pretended that, previous to the manager's letter
(19) This decision was not followed by the Common Law Courts
In so f;ir :is it lu-ld that <-:illinK for proofs of Joss was a waiver of
forfeiture before loss of a breach of condition of the policy, infra,
'a) Canada Land* I Credit '<> M OanAdl Airri.-iiltur.il 17 Gr.
10).
152 THE LAW OF FIRE INSURANCE IN CANADA
of the 1st July, the Insurance Company had elected to treat the
policy as forfeited and at an end by reason of the premises hav-
ing been left unoccupied for the three days ; or that then or at
any time before this suit was brought, an election was made
to take advantage of the assignment as a ground of forfeiture.
On the contrary, though they were informed of both facts at the
same time that they were notified of the fire, instead of electing
to hold the policy at an end, they called for, and obtained from
the parties concerned, the proofs of loss, on the footing of the
policy being still in full force. After this election to treat the
policy as subsisting, the Insurance Company was not at liberty
to elect to treat is as forfeited."
In another case llv facts of which are stated supra p. 128,
Hagarty, C. J., says : "As to the replication we think it is good.
The plea shews matter involving the forfeiture and avoidance
of the policy. The answer is in effect that subsequent to the
alleged avoidance the company levied another assessment of
$7.77 of which the plaintiff was notified, and duly paid the same,
all before loss, and so the defendants by their acts, etc., waived
the alleged forfeiture, and revived the policy, and ought not to
be allowed to plead the said plea.
"This seems to shew a clear revival of the policy a payment
to the plaintiff thereon; and that the defendants cannot be al-
lowed to fall back on a previous default, to destroy the plain-
tiff's right." (19b)
Proudfoot, V. C., also discussed the earlier Canadian cases
and makes use of the following language: (19c) "I further
think the defendants have waived their right, if they ever had it,
to avoid this policy for non-compliance with the condition as to
indorsing or otherwise acknowledging in writing the double in-
surance.
"Such conditions have generally been construed as rendering
the policy not absolutely void but voidable at the option of the
(19b) Smith vs Mutual Ins. Co., 27 U. C. C. P., 441.
(19c) Rillington vs Provincial Ins. Co., 24 Gr., 299.
WAIVER AND ESTOPPEL . 153
insurers, and such right may be waived by express agreement
or by the acts of the parties."
This decision was subsequently reversed, (19e) but not on
grounds which would affect the portion cited above of the judg-
ment in the Court of first instance.
In a case in which the facts were similar to those in Smith
vs Mutual, supra, pp. 128, 152, Hagarty, C. J., said: (19f) "I
do not think the objection should prevail.
"The question is whether, whenever the loss happened, the pol-
icy was or was not an existing risk. If the defendants accepted
the payments as alleged, whether before or after the fire, I do
not see how they can be allowed to fall back on an alleged prior
forfeiture in January, 1876. They treat the plaintiff as insured
with them, when they called on him to pay for a period long
after his alleged default.
"I think the decision of Smith vs Mutual Ins. Co., of Clinton,
lately decided in this Court, governs this case."
The word "void" was construed as "voidable" by Moss, C. J.,
using the language following: (19g)
"The primary meaning of the word 'void' is empty. By user
it has grown to mean 'null of no force or effect.' But in Acts
of Parliament, deeds, and other legal documents, it is also often
used as meaning not absolutely void, but voidable at the option
of one of the parties affected. . .
"The rule modifying the construction of the word 'void', ac-
cording to the intention of the parties, is particularly applicable
to policies of insurance, the conditions of which usually declare
th" contract void for acts of omission or commission specially
Jed against by the underwriters."
j A. i:. 108; :: On, s. C. i: , is-j
(IOC) Lyons r* Olobe Mutunl In*. Co.. L'7 r. < . < p
(lOg) M ' : .i r* \Y:it.Tlo <ount> Mutual Fire Ins. Co., 1 A. K..
154 THE LAW OF FIRE INSURANCE IN CANADA
It was held that default in payment of one of the deferred
payments of the first instalment of a premium note given by an
insurer in a mutual fire insurance company, under s. 129 of the
Act R. S. 0., e. 203, (1897), did not ipso facto work a forfeiture,
and that a notice by the company to the insurer treating the
payment as an assessment, and notifying him that in the event
of non payment the policy would be suspended, was not an as-
sessment under s. 130, and non-payment pursuant to the notice
did not suspend the operation of the policy. (19h)
In an action against a Mutual Ins. Co. the defendants set up
an answer that the plaintiff had erected a steam engine on the
insured premises, thereby increasing the risk, without their
knowledge or consent, which voided the policy under the provi-
sions of the Mutual Insurance Company Act, which expressly
provided that if the risk should be increased by any means with-
out the knowledge and consent of the company, the policy should
be void.
Hagarty, C. J., in pronouncing the judgment of the court,
says : "We do not think that the argument should prevail, that
because a statute makes a policy void in certain events, there can
be no revival thereof by clear acts of the directors recognizing
it as still existing, and dealing with the assured and allowing
him to pay money or alter his position on the footing or assump-
tion that he is still insured by them." (20)
Again in paving the judgment of the majority of the court,
Burton, J. A., said : "I find a number of American decisions, in
addition to those cited on the argument, which appear to bear
out the contention of the plaintiff, but they proceed upon a
ground which I think is not tenable, namely that the second in-
surance is absolutely void and never had any legal existence. It
appears to me that in assuming that position they lose sight of
the fact that this stipulation was made for the benefit of the
(19h) Woolley vs Victoria Mutual Fire Ins. Co., 26 A. R., 321.
(20) 'Law vs Hand in Hand Mutual Ins. Co., 29 U. C. C. T. 1.
WAIVER AND ESTOPPEL 155
Mercantile company and that it was competent for that company
to waive it. The policy, by reason of the omission to mention
the previous insurance, was toot ipso facto void but voidable only
at the option of the company." (21)
VOID EQUIVALENT TO VOIDABLE. DECISIONS CONTRA.
There are some decisions which at first blush might be taken
to be to a contrary effect.
In one case, the Mutual Insurance Act (6 William IV.,
c. 18, intituled An Act to authorize the establishment of
a Mutual Insurance Co., etc.) under which the company was
incorporated, expressly provided that if there should be insur-
ance in any other company, the policy should 'be deemed and
become void, unless the double insurance subsisted with the con-
sent of the company, and Robinson, C. J., in delivering judg-
ment uses the following language :
"Xo authority has been cited for holding that where a public
statute says an insurance shall be deemed and become void on
failure of some stipulation inserted in the statute, such provision
can be waived by consent of the parties, notice, consent, or ver-
bal or tacit acquiescence. On principle we take it such a waiver
cannot be relied on any more in a court of equity than of law,
for courts of equity cannot dispense with what a public act of
parliament expressly requires. The King cannot do it, nor his
courts, we take it. These mutual insurances affect great num-
bers. If this condition can be waived, why not others? They are
for the protection of all who insure, and all who insure their
property become members of the company, and liable in respect
of all losses upon other insurances. They have therefore an in-
terest in the protection provided by the Legislature, and though
the directors represent the iin-mln TS, and can bind them in what-
ever they do under the authority of the act, they cannot bind
them by anything done without or contrary to such authority.
(21) <;.-mtl,iT > . , Mutual In*. '... A. i; -.".1.
156 THE LAW OF FIRE INSURANCE IN CANADA
"All who are made members by insuring have an interest in the
statute being enforced, and there is no implied authority in the
directors to waive all or any of the safeguards provided in the
act" (22)
In another case the defendants pleaded a false representation
that the property was unincumbered. The company was incor-
porated under the Mutual Insurance Act which expressly provid-
ed that if the property was incumbered the policy should be void.
The plaintiff replied on equitable grounds that by an agreement
between him and the mortgagee certain services rendered by him
to the mortgagee exceeded the amount due on the mortgage. As
to this defence, McLean, C. J., says : "The policy being actually
void under the statute, and the equitable replication to the first
plea, supposing it to be good, not being in any way supported or
attempted to be supported by evidence, it seems to me quite im-
possible for the plaintiff to sustain this action. The rule to set
aside the nonsuit must therefore be discharged."
Hagarty, J., says : "I do not see how the learned judge at he
trial could have done otherwise than direct a nonsuit. The evi-
dence of Mr. Street clearly proved the plea, and brought the case
within the act of Parliament, and thus avoided the policy alto-
gether." (23)
In another case the defence was that the property was in-
cumbered, thereby voiding the policy. The plaintiff replied on
equitable grounds, setting up the neglect of the defendants'
agent to insert the incumbrance properly in the application, and
other equitable grounds. The judgment of the court, pronounc-
ed by Richards, C. J., after pointing out the provisions of the
statute, followed the decision in Merritt vs Niagara, above men-
tioned. (24)
(22) Merritt vs Niagara Mutual Ins. Co., 18 U. C. R., 529.
(23) Muma vs Niagara District Mutual Ins. Co., 22 U. C. R., 214.
(24) Johnstone vs Niagara District Mutual Ins. Co. 13 U. C. C.
P., 331.
WAIVER AND ESTOPPEL 157
These three cases may perhaps be distinguished upon the
ground that no other construction could be put upon the Mutual
Insurance Act than that the intention of the Legislature was
t<> avoid the policy ab initio for non-disclosure of incumbrances
<-r <f other insurance, and that these cases fall within the excep-
tion stated in Davenport vs The Queen, (25) supra, p. 149,
where the court, p. 129, referring to the general rule that even
in an Act of Parliament the word "void" should be construed as
lable", says :
"There is no doubt that the scope and purpose of an enactment
or contract may be so opposed to this rule of construction that
it ought not to prevail, but the intention to exclude it should be
clearly established."
If not distinguishable on these grounds, these decisions must
In- taken to be overruled by the later cases above cited.
CONDITION A.QAINST WAIVER BY AGENTS MAY BE WAIVED.
Where the policy contains a condition that agents have no
power to waive conditions, this provision is one in favour of the
company which it is not bound to act upon, but may in fact con-
fer sueh authority upon its agents notwithstanding the policy
<!( -ian-s to the contrary. Cases do arise where it is a matter to
be determined upon the evidence whether the company has not
< ised such option and conferred power to waive the condi-
11 pon the agent. A case of this kind was Insurance Co. vs
Norton, :H; ('. S.. 234. This was a life' insurance case.
By indorsement on the policy it was declared that agents of
tin- company are not authorized to make, alter, or abrogate con-
tracts, or waive forfeitures. It appeared at the trial that the
I .um in question was settled partly in cash and partly by
promissory notes, and each note contained a clause declaring
that if it was not paid at maturity, the policy would be void.
The agent extended the time for payment.
( 115.
158 THE LAW OF FIRE INSURANCE IN CANADA
The question here was whether the company had authorized
its agent to grant indulgence as to the time of paying premium
notes, and waive the forfeiture incurred by their non-payment
at maturity.
In pronouncing the judgment the Supreme Court of the
United States, said: "That it did authorize its agents to
take notes, instead of money, for premiums, is perfectly evident,
from its constant practice of receiving such notes when taken
by them. That it authorized them to grant indulgence on these
notes, if the evidence is to be believed, is also apparent from like
practice. It acquiesced in and ratified their acts in this behalf.
For a long period, it allowed them to give an indulgence of nine-
ty days ; after that, of sixty ; then of thirty days. It is in vain
to contend that it gave them no authority to do this, when it
constantly allowed them to exercise such authority, and always
ratified their acts, notwithstanding the language of the written
instruments.
"We think, therefore, that there was no error committed by the
court below in admitting evidence as to the practice of the com-
pany in allowing its agents to extend the time for payment of
premiums and of notes given for premiums, as indicative of the
power given to those agents; nor any error in submitting it to
the jury, upon such evidence, to find whether the defendant had
or had not authorized its agent to make such extensions ; nor in
submitting it to them to say whether, if such authority had been
given, an extension was made in this case."
There is no uniformity in the judgments of the State Courts
in the United States as to whether the company is bound by
waiver of this character, where there is no consideration for it,
and nothing done by the insured pursuant to it, by which he
can invoke the principle of estoppel. Those courts which hold
that the waiver constitutes an election by the company to revive
the policy, logically also hold that having so elected, the insur-
ance company cannot rescind the waiver.
It is to be 'pointed out that it has been held in the Supreme
WAIVER AND ESTOPPEL 159
Court of the United States and by the settled jurisprudence of
many of the States, that there can be no waiver of the conditions
of insurance contracts unless the insured has been misled to his
prejudice by the conduct of the company or its agents ; in other
words, the only implied waiver is that which is synonymous with
estoppel by representation. This is not the law in England or
Canada, as we have above attempted to show,
A policy of insurance contained a condition that if the in-
sured resided in any part of the United States south of the 33rd
degree of north latitude, except in California, between the 1st
July and the 1st November, without the consent of the company
previously given in writing, the policy should be null and void.
And the policy declared that agents of the company were !not
authorized to make alterations or discharge contracts or waive
forfeitures. The insured resided in the prohibited district and
died there, but on the day previous to his death the wife of the
assured, by telegram, had a gentleman in St. Louis go to the
agency of the company in that city and pay the premium which
was then overdue some eleven days. The money was received by
the agent and a renewal receipt given therefor, and on its face
continued the policy in force for another year. When paying
the money nothing was said to the agent, nor were any inquiries
made as to the residence or condition of health of the insured.
The receipt contained a notice that where policies became null
for non-payment, they might be renewed at the home office with-
in a reasonable time upon furnishing satisfactory evidence of
good health, such satisfactory evidence being left to the judg-
ment of the local agent.
Mr. Justice Field speaking for the court, says: (26) "The
doctrine of waiver as asserted against insurance companies o
avoid the strict enforcement of conditions contained in their
policies, is only another name for the doctrine of estoppel, which
only be invoked where the conduct of the companies has
been such as to induce action in reliance upon it, and where it
(26) InBur:m> Co. va Wolff, 95 U. S., 826.
160 THE LAW OF FIRE INSURANCE IN CANADA
would operate as a fraud upon the assured if they were after-
wards allowed to disavow their conduct and enforce the condi-
tions. To a just application of this doctrine it is essential that
the company sought to be estopped from denying the waiver
claimed should be apprised of all the facts; of those which create
the forfeiture, and of those which will necessarily influence its
judgment in consenting to waive it. The holder of the policy
cannot be permitted to conceal from the company an important
fact, like that of the insured being in extremis, and then to
claim a waiver of the forfeiture created by the act which brought
the insured to that condition. To permit such concealment, and
yet to give to the action of the company the same effect as
though no concealment were made, would tend to sanction a
fraud on the part of the policy holder, instead of protecting him
against the commission of one by the company."
This decision might have been based upon the principle of
waiver as expounded in Wing vs Harvey and Armstrong vs Tur-
quand, inasmuch as when the doctrine of implied waiver is ap-
plied, it is necessary that all the facts should be disclosed to the
person against whom waiver is claimed.
Before concluding the discussion of this subject of void and
voidable, it is to be pointed out that in a recent case of Liver-
pool, London & Globe Ins. Co. vs Agricultural Savings & Loan
(27) Co., discussed in another aspect, supra, pp. 95, 97, 110, there
are certain remarks made by Mr. Justice Davies, who gave the
judgment of the majority of the Court which might be construed
as expressing a different conclusion from that at which we have
arrived. In that case the question was what effect the non-dis-
closure of prior insurance had upon an insurance, the term of
which was extended by a renewal receipt, and the Court ]\M
that the renewal was not a new contract of insurance, but was
based upon the original application, and that where the original
policy was void for non-disclosure of prior insurance, the re-
newal was likewise a nullity, though the prior insurance had
ceased to exist in the interval.
(27) 33 Can. S. C. R., 94.
WAIVER AND ESTOPPEL 161
%
In this case it was admitted that the rompany, when it issued
the renewal receipt, had no knowledge of the prior insurance
which created the forfeiture, and there being no facts upon
which the plaintiff could rest a replication of waiver or estoppel,
it is clear that he could not succeed in the action whether the
policy was deemed to be void, ab initio or only voidable.
The report of the case contains no reference to Armstrong vs
Turquand, nor in fact any of the decisions dealing with the con-
struction to be placed upon the word "void", although the point
was taken by counsel in argument, but the question did not ob-
tain the consideration it would undoubtedly have received were
it necessary for the decision of the case.
Where the policy provides that certain things shall be condi-
tions precedent to the company's liability, such as provisions
requiring the action to be brought within a certain time after
the loss, the-e must he strictly complied with. (28)
IMPLIED w.\i\ 1:1;.
Having considered the rule by which "void" will be construed
as "voidable", so as to permit of waiver being set up in answer
to a defence of forfeiture, we have next to consider the circum-
stances under which waiver will be implied.
WAIVER BEFORE LOSS OF BREACH OF CONDITION BEFORE LOSS.
The insured assigned his policy with the consent of the Com-
pany to the plaintiff. In an action iheivmi defendants pleaded
setting up the change in the occupancy of the premises, after the
issue of the policy, from a tavern to that of a store. A replica-
tion on equitable grounds alleged that the change took place be-
the assignment of the policy to the plaintilT; that the de-
fendants were, but the plaintiff was not, aware of such change ;
that the plaintiff was induced hy tin- defendants to pay further
i limns in respect of the insurance which the defendants, with
(28) Ft* .fs of low, Infr
6
162 THE LAW OF FIRE INSURANCE IN CANADA
full knowledge of all the facts accepted from the plaintiff, who
was then and continued to be ignorant thereof until after the
fire occurred. Held, on demurrer the replication good ; that de-
fendants must be held to have waived the alleged cause of for-
feiture, and their statutable ratification of the assignment be
considered binding upon them, notwithstanding the prior breach
of condition by the original assured. (29)
The defendants were a Mutual Ins. Co., doing business
on the assessment plan by which, updn the making of
the contract, the insured gave a note called a premium note, and
was required to pay from time to time such assessment as the
company might make thereon, and the statute applicable to the
company provided that if apy assessment should remain unpaid
and in arrear for 30 days, the policy should be absolutely null
and void. An assessment was made which the plaintiff neglected
to pay, but instead of taking any steps to have the policy declar-
ed void, the company subsequently levied another assessment
of which the plaintiff was Notified, and which he duly paid, and
thereby the plaintiff claimed that the forfeiture was waived and
the policy revived. In giving judgment the court said:
" This seems to shew a clear revival of the policy a payment
to the plaintiff thereon; and that the defendants cannot be
allowed to fall back on a previous default, to destroy the plain-
tiff s right.
" As to the'rejoinder, the defendants assert that no part of the
33 cents first assessed formed patf of the second assessment;
that before the last assessment the policy had been cancelled, etc.,
and the second assessment was not in fact made on the plaintiff's
policy, but the secretary inadvertently notified the plaintiff
thereof ; that afterwards other assessments were made before the
loss, none of which were notified to the plaintiff ; and the def efc-
dants thereby offer to return the money paid to them, as men-
tioned in the replication.
(20) Kreutx. rx Xinpira District Mut. Ins. Co., 16 U. C. C. P., i:M.
WAIVER AND ESTOPPEL 163
"There is no averment that any notice was ever given to the
plaintiff, that she had been notified by mistake, or that her
money had been received by mistake, nor was it ever tendered
or paid back to her.
"On these statements, it appears that the plaintiff, after paying
the required assessment, was allowed to consider herself still in-
sured down to the happening of the loss. She is told for the first
time, in this suit, that, although her money was taken and re-
tained, and her property destroyed, that she has been for all
this time uninsured.
"We hope the law is not so defective as to permit the injus-
tice sought to be perpetrated at the expense of this plain-
tiff." (30)
The defendants' plea was that they were a Mutual Co. and had
made an assessment upon the plaintiff's premium note of which
he was notified, and that he failed to pay the same, which voided
the policy. The plaintiff filed a replication alleging that a fur-
ther and subsequent assessment was made by the company on the
same note, of which the plaintiff was notified, and which he paid,
along with the first assessment. Fire having occurred, the de-
fence was that by non payment of the first assessment within the
30 days provided by the contract, the policy was void. The re-
plication did not state that the payments were made before the
fire, and as to this the court said :
"I do not think the objection should prevail.
'The question is whether, whenever the loss happened, ho
policy was or was not an existing risk. If the defendants ac-
cepted the payments as alleged, whether before or after the fin 1 .
I do not see how they can be allowed to fall back on an alU-g-'l
prior forfeiture in January, 1876. They treat the plaintiff as
insured with them, when they called on him to pay for a period
long after his alleged default.
"I think tlu- <l. vision r.f Smith r.v Mutual Ins. Co. vs Clinton.
lately decided in this Court, governs this case.
(30) Smith r.< Mutual Ins. <',.. L'7 T r. r. I'. 111. , U
164 THE LAW OF FIRE INSURANCE IN CANADA
"The only distinction is, that in the case cited the payment of
the further assessment was made and received, before the loss.
"The judgment will therefore be for the plaintiff/' (31)
It will be noted in this case that Harrison, C. J., in his judg-
ment at the trial holds the replication a good estoppel,, and the
facts would justify this. But in citing Wing rs Harvey in sup-
port of his conclusion, he overlooks the distinction between
waiver and estoppel. Wing vs Harvey was decided on the ground
of waiver and not estoppel, as pointed out in Armstrong vs Tur-
quand, supra, pp. 138, 149.
On appeal, however, the court, it will be observed, expressly
treats the replication as setting up waiver.
Tin 1 Hli om.litioii of a policy was as follow-: "\o insiiraiir.'
proposed to this corporation is to be considered in force until
tin 1 premium be actually paid; and persons desirous of continu-
ing insurances must make the respective payments of the pre-
mium thereon, on or before the commencement of each and
i-vcry succeeding term; otherwise such insurance shall expire.
X" receipts are to be taken for any premiums of insurance or
deposits but siu-h as are printed and issued from the corporation
or their agents."
In the judgment of the court it is stated that the local or sub-
auviits, as they are called, had power to accept risks conditional
on the general agent's approval, but valid until refused by him ;
that ho knew and approved of the usage that the agents should
ive the premiums after the commencement of the risk, they
being responsible to him for the amount, and that the contract
to renew the policy in question was known to and approved of
by the general agent. The renewal premium was not actually
paid until some days after the commencement of the term of in-
surance, but a post card was sent to the plaintiff before the ex-
piry of the old policy, reminding him that it would expire on a
certain 'date and if he wished to renew it to notify the local
(31) Lyons rs G-lobe Mutual Ins. Co., 27 U. C. C. P.. r.r.T.
WAIVER AND ESTOPPEL 165
:it. The plaintiff sent a notice asking renewal and received
a reply that the policy was marked retiewed. A loss having oc-
curred, the company set up as a defence the above mentioned
4th condition, but the court heJd that the condition had been
ed. (32)
An insurance company defended an action on several grounds.
First, that under a condition indorsed on the policy making it
void "if the said property should be sold or conveyed, or the in-
terest of the parties thereon changed, or if the 'policy should be
assigned without the consent of the company obtained in writing
therein", the policy had been forfeited by the insured giving a
bill of sale of the property to a firm of McAllister & Mott, the
local agents of the company at Campbellton, N. B., and after-
wards making an assignment for benefit of his creditors of all
his property, mentioning expressly all policies of insurance.
fSecondly, that the policy had been cancelled before loss by no-
tice to the insured as authorized by a condition therein. Thirdly,
that proofs of loss had not been given to the company within
the time limited therefor by the policy.
In giving judgment the court said : "We are all of opinion
that the judgment pronounced by the Supreme Court of New
Brunswick in this case was quite correct, with one exception.
There is no doubt that the bill of sale to McAllister & Mott was
iiange of interest 5 which avoided the policy under the first
iition. The insured claimed that this forfeiture was waived,
McAllister & Mott, being agents only for the purpose of re-
ng applications and forwarding them to the head office,
no authority to waive it, and Whittak-r, the resident secre-
tary, and the only person whose acts could bind the company,
imiliing of the bill of sale having been given, and could
e said to have elected to treat the policy as in force after
:iro of \\-liidi lie was ignorant." (33)
rth British In*. Co., 1 R. ft G., 219.
Torrop < n. Co., 26 r.m s. C. R., 686.
166 THE LAW OF FIRE INSURANCE IN CANADA
WAIVER AFTER LOSS OF A BREACH OF CONDITION BEFORE LOSS.
The plaintiff neglected to pay an assessment upon his pre-
mium note, as provided for by the contract and by the statute.
In August of the following year a further assessment was made,
and on the 21st September the plaintiff was served with the usual
notice claiming the former unpaid assessment and interest
thereon, and the new assessment, and by the notice the plaintiff
was informed that unless the above sum should be paid within
30 days as required by the terms of the policy, the insurance
should be void. The fire took place on the 17th October, and
the plaintiff did not pay or tender the above amount until long
after the fire a'nd after the 30 days had expired. But in the
January following, the plaintiff tendered the amount due for
assessments, and the "company accepted the same believing them-
selves entitled to do this without waiving the forfeiture of the
policy. As to the rights of the parties, Gwynne, J., in giving
the judgment of the court, said :
"At the time of the fire his position would seem to have been
in so far as relates to the non-payment of the assessment, that
he would be entitled to recover under the policy if he should
pay the assessment within the time pointed out in the Act.
"Whether tin- defendants, the loss having occurred before the
expiration of the time within which the plaintiff could have
paid the assessment so as to preserve the policy in force, were
obliged to look merely to the amount payable to the plaintiff
for payment of the assessment, and so upon the loss occurring
time could no longer run against the plaintiff so as to cause a
forfeiture of his policy, if he should not pay within the prescrib-
ed time, is a point which has not, we believe, heretofore arisen.
The plaintiff does not appear to have acted upon any such belief,
for upon the 27th of January he pays the assessment.
"Now if the loss occurring during the 30 days given to the
plaintiff to pay the assessment after receiving notice, did not
stop the further running of time against the plaintiff then the
policy was avoided for non-payment of the assessment upon
WAIVER AND ESTOPPEL 167
about the 23rd October 1876, and in such case it would seem
under tin- Act the defendants might have sued for such
assessment at any time after the expiration of thirty days from
notice of the assessment having been given, and have recovered
the same with costs of suit without waiving any forfeiture aris-
ing from non-payment of such assessment.
"The revival of a policy upon payment of an overdue assess-
ment mentioned in the 44th section of the Act, would seem to
be a revival before at least a total loss, for upon a total loss oc-
curring the policy can have no continuing vitality by way of
protection against loss, but exists only as affording a cause of
a for aloss incurred. The term 'revival' points rather to
tlie continuance of a policy as a security against loss not yet
-uttered, than to a right of enforcing a policy by suit after loss
idy suffered.
"To hold that the payment after loss of overdue assessments,
th non-payment of which constituted a statutory forfeiture,
should revive a cause of action already lost by the forfeiture
of the policy, would be a decision very different from that in
Smith vs Mutual Ins. Co., of Clinton, 27 C. P., 441.
"I n that case we held that the levying a subsequent assessment
: the insurer's premium note after a forfeiture for non-pay-
ni'-nt of a previous assessment, and the accepting payment of
two assessments In- fore any loss had happened, constituted
a revival of the policy as a continuing security. There the acts
of levying tip Mil>se<juent assessment and of accepting payment
of it and of the previous assessment, default in payment of
h latter constituted the forfeiture relied upon, were incon-
sistent with the forfeiture relied upon. And we held that, the
pany could not get rid of the effect of such acts of their own
by alleging that their officer had K-vied the subsequent assess-
tl and accepted payment of both by mistake, because their
acts had led the insured person naturally to rely upon the policy
as a subsisting security against the loss which subsequently hap-
d. But the acceptance after total loss of a debt due, loss or
168 THE LAW OF FIKE INSURANCE IN CANADA
no loss, is toot inconsistent with a reliance upon a forfeiture oc-
casioned by non-payment of the assessment so received within
the prescribed period limited by statute, and the acceptance of
such a debt after total loss could not in any manner mislead or
injuriously affect the person paying it. So that to our mind it
does not appear that the payment in this case of the assessments
made before loss, upon the 27th of January, 1877, more than
three months after the happening of the loss, can by mere force
of law be treated as a waiver of the forfeiture occasioned by non-
payment of the assessment within the statutory period prescribed
after the insured received notice of the assessments; but we are
clearly of opinion that the receipt of such overdue assessment
cannot be held to operate by force of law as a waiver of a for-
feiture incurred by reason of the plaintiff having effected the
subsequent insurance without notice to and the consent of the
defendants, such a forfeiture having no connection whatever
with the payment or non-payment of assessments made upon the
insured person's premium note." (34)
One of the conditions of an insurance policy provided that if
the insured had at the time of the policy, or should have after-
wards, any other insurance without the consent of defendants
written on the policy, the policy should be void.
The plaintiff relied upon a waiver of this condition by defen-
dants' inspector, whose duty was described as being "to examine
into the circumstances, to adjust the loss, and to settle or report
to the office."
A nonsuit having been ordered upon the ground that the con-
dition could not be waived by the inspector, or in any way except
in writing :
Held, that the nonsuit was right upon the evidence; and the
Court refused to se* it aside.
Per Wilson, J. : "The learned judge nonsuited the plaintiff
because 'the conditions could not be waived by the inspector, or
in any way except in writing.'
(34) Lyons vs G-lobe Mutual Fire Ins. Co., 28 U. C. C. P., 62.
WAIVER AND ESTOPPEL 169
"It was said at the trial 'the duties of the inspector are to ex-
amine into the circumstances, to adjust the loss and to settle or
report to the office/
"That description of the position which Mr. Marr, the inspector
of the defendants, filled in their service, and of the duties that
devolved upon him, and of the powers exercisable by him as such
officer, does not necessarily give him the right to waive condi-
tions favourable to the company, unless the waiver relate dis-
tinctly to some matter in and over which he can exercise such
power.
"It is said the inspector is to adjust the loss that is, to ex-
amine the books of account and vouchers, and to make all due
enquiries of the insured and of his employees as to the value of
the goods insured which have been destroyed or injured, to deter-
mine probably whether the goods claimed for come within the
description of those insured, the extent of the loss sustained,
how much is total and how much partial, the value to be set
upon the different kinds of loss; and generally to do all such
acts as will enable him to arrive at a fair estimate of the damage
sustained.
"\~ow, suppose there was a condition on the policy that in ad-
justing the loss the insured should deliver to the inspector or
agent of the company engaged in the adjustment, an account
or statement in writing of the various matters which the inspec-
tor should require him to furnish, and if he did not do so that
the policy should be void.
"I shou 1 1 say, without hesitation, that if an adjustment were
made by the agent without a statement in writing such as the
condition required being furnished by the insured, and without
the agent requiring any such statement because he was willing
and content to do without it, that the adjustment so made free
from fraud or collusion, of course would be binding on the in-
surers, because that would be an act within the line of duty and
powers of such an agent to deal with.
"But when such a person assumes to dispense with conditions
relating to the keeping of prohibited 'or highly hazardous goods,
170 THE LAW OF FIRE INSURANCE IN CANADA
or largely in excess of the allowable quantities, or to a misdes-
cription of the mode of heating, or the precautions required in.
case of steam 'being used, or with respect to chimneys or stove
pipes, or the deposit of ashes or the proximity of dangerous
places, and the like, a different question is certainly presented.
"In Gale vs Lewis, 9 Q. B., 730, an agent of an insurance om-
pany, who receives 'instructions on behalf of the company for
policies, transmits such instructions to the office, receives and
pays over premiums, settles accounts for losses, (on remittances
from the company) keeps an account current with them, and
pays agency fees' ; does not seem to have been considered as a
person authorized to receive notice which could bind the com-
pany that an insurance effected was not for the benefit of the
insured, but in fact for another, who required the insurance to
be made as security for money lent to the insured, and to whom
it was immediately assigned, and so that the policy was not in
the order and disposition of the insured at the time of his bank-
ruptcy, but belonged to this particular creditor.
"On a second trial the jury expressly found' that the company
had authorized the agent to receive notices of assignment for
them, and had consented that notice so received by him should
be equivalent to a notice served upon the company at their of-
fice.'
"In that case the agent resided at Tiverton, the company's of-
fice was at Exeter, and they had persons acting for them in the
like manner at other places.
"The powers and duties of i lie agent in the case just mentioned
made a sufficient case to go to the jury, whether he had the as-
signment of a policy so as to bind the company, although the
company had not in fact notice of the transaction.
"The case referred to was not one in which there was any such
condition, as in the present policy, that the consent of the com-
pany to any further assurance should be expressed by writing
on the policy, otherwise the policy should be void . . .
"I should have been glad to have the opinion of the jury whe-
ther Marr, the agent, had the power to waive such a condition.
WAIVER AND ESTOPPEL 171
1 t the fact had been found for the defendants the result would
have been more satisfactory; but I am not sure whether we
might not have been obliged to interfere if their finding had
been for the plaintiff upon this point." (35)
This following case was heard on demurrer, the pleas alleging
that the plaintiff had represented that certain stoves and pipes
were in good condition and not in contact with the wood of the
building, and that the plaintiff had warranted the truth of this
statement, whereas the representation was fake and fraudulent
to the knowledge of the plaintiff, whereby the policy became void.
To this the plaintiff replied that the defendants, after they had
full notice and knowledge of the false representation and breach
of warranty, and after the loss by fire sued on, had made a levy
on the plaintiff's premium note payable within 30 days, and no-
tified plaintiff thereof, and that he had -paid the said assessment,
whereby the defendants had waived the voildance of the policy
and renewed and continued the same. In giving judgment, the
(nirtsaid: "I decide against the defendants on the ground that
ilu- company having full knowledge of certain alleged breaches
of warranty as to management of stove pipes, etc., elected, as I
consider they lawfully could, to treat the insurance as existing,
by calling on the plaintiff to pay an assessment for a long period
after acquiring such knowledge, and notified him to pay within
a named time, or that in default of payment his insurance
would become void. This is treating him as still insured. It is
true that the assessment is stated to have been miade after he
loss (it does not say after knowledge of the loss). But on this
pleading we need not consider anything that may come out in
evidence as to the manner in which the defendants accepted and
received the payment from the plaintiff, nor with what know-
ledge or under what circumstances the assessment was placed
on him and notice given to him. On this record the plaintiff
might, I presume, recover for a partial loss. I think the im-
plication answers the ploa." (
(36) Maaon va Hart: ins. Co., 37 U. C. R. 437.
(36) Hopkins v* Manufricturero, etc., Fire Ins. Co., 43 U. C.
17 '2 THE LAW OF FIRE INSURANCE IN CANADA
One Street, having a house in course of erection, applied to
the comfpany's agent for an insurance, and at the same time
negotiated a loan with the plaintiffs, giving in security there-
for, the land covered by the mortgage, and a policy for $700
which he had applied for in the defendant company. The loan
company refusing to advance all the money covered hy the mort-
gage until they received the policy, Street app^io-l to the insur-
ance company's agent, and representing the matter as pressing,
obtained a certificate stating that the property was insured for
$900, and handed it over to the solicitors for the mortgage
company, who paid over the balance of the loan, assuming that
the assignment of this policy would, as in other cases, be sanc-
tioned /by the insurance company in due course. The insurance
company, afterwards executed the policy and sent it to Street.
The plaintiff's solicitor thereupon wrote to the insurance
company about having the policy assigned, and the com-
pany wrote to their agent at Owen Sound enclosing
the letter from the plaintiffs' solicitor and saying that
there was a form of assignment on the back of the policy
and that if this was signed by Street in the presence of a witness
and transmitted to the head office with $1, that the manager
would confirm the assignment, and return the policy to Street,
or forward it to the plaintiffs' solicitor, as might be desired.
The manager stated in his evidence that transfers were not
usually submitted to the Board, and that he had authority to
confirm them! in the usual course of business. Owing to the in-
surance agent having removed from Owen Sound before the
letter from the manager arrived, the matter of assigning the
policy was delayed, but Street executed the assignment, the
plaintiffs' name being inserted as assignees, but neglected to
forward it to the defendant company and left the country on
the 8th -March, leaving the house vacant. On the llth March
the house was destroyed by fire.
The company subsequently wrote to Street's father enclosing
certain affidavits to be filled out in connection with the loss.
and directing that the assured in his affidavit should mention
th-> assignment of the policy to the plaintiffs. These affidavits
WAIVER AND ESTOPPEL 173
at lirsi defective. Further affidavits were called for, but
at length all the requisitions of the insurance company were com-
plied with. After all this had been done, the company notified
the plaintiffs that they would not recognize the assignment of
the policy and that the assured had forfeited his house by leav-
ing it vacant.
Blake, V. C., held (:*7) that having called for and obtained
proofs of loss on the footing of the policy being in full force, the
company had elected to treat the policy as subsisting, and as
not at liberty subsequently to elect to treat it as forfeited.
The last case, however, was not followed by the common law
courts, in the two next following cases.
It was held, that where the proofs of loss were insufficient,
the fact that, the company, after receiving the proofs, did not
notify their objections to the plaintiff, could not be considered
a waiver of such objections. (38)
One of the questions for determination was whether the de-
mand of claim papers and proofs of loss, without reference to
the fact that hy reason of vacancy, the policy was void, could be
construed as a waiver.
In giving judgment, Harrison, C. J., after referring to Can-
Credit Co. vs Canada Agricultural, 17 G-r. 418, in
which it was held that by calling for proofs of loss the company
had waived the condition of the policy as to non occupancy,
says :
"Bur the defence of non-occupation in that case was, according
the rejNH-t. ojx'ii to another answer which was so conclusive
as to render unnecessary Ibis expression of opinion. Besides, as
ited out by IFagariy. C. .J., in Stickney r.<? Tin- Niagara Dis-
Firo Tn*. C P., 372, 382: 'In the report of the
rmn,' of the nuniemns eases in our Common Law Courts
are noticed.' Hence the le,nn <1 Chief Justice said: 'I do not
7) Canada Landed Credit Co. va Canada Apri. ultur.rl Ins. Co.,
418,
(38) y vs Niagara Mutual Ins. Co., 23 U. C. T. R
Vide al*o Soiiprns PI Maiual Fin-, i I . i . 1:17.
THE LAW OF FIRE INSURANCE IN CANADA
feel at liberty to lay down any such rule, and must leave it to
the Court of Error to declare if it be the law.'
"No such rule has ever prevailed in Courts of Common Law in
this Province. In many cases which I remember, and could
name if necessary, there was not only the (defence of insuf-
iicient proof of loss, but a condition making void the policy, and
correspondence about the former without any reference to the
hitler, and no question of waiver ever raised or attempted to be
raised.
"If such a rule as suggested by the learned Vice-Chancellor is
io prevail, it must be enacted by the Legislature or established
l.y the Court of Appeal/' (39) "
One of tin- picas to the declaration was that a by-law of the
defendant company requhv<l that notice of subsequent insurance
should be furnished to the secretary of the company within 10
days, and the consent of the Board obtained thereto, otherwise
tlip policy should be void, and that there had been subsequent
insurance without notice. A replication to this plea was that
the company, after the happening of the loss, and after they had
notice of the additional insurance, waived the benefit of the con-
dition contained in the said by-law by requiring from the assur-
<-d further proofs of loss, and it was contended that the provi-
sions of 38 V., c. 05, relieving the assured who failed to comply
with the provisions with respect to proofs of loss by necessity,
accident or mistake, deprived the defendants of the right to in-
sist that the ,policy was void.
It was held that the equitable replication afforded no answer
to the plea. (40)
The jurisprudence in Quebec, however, appears to be the same
as that expressed by the Court of Chancery, in Canada Landed
Credit Co. vs Canada Agricultural Ins. Co., supra, pp. 151, 173.
By the condition of a policy of fire insurance, the insured was
required, on pain of forfeiture, to notify the company of any
(39) Abrahams r* Agricultural Mutual Assurance Ass., 40 U. C.
R. 175.
(40) Fair vs Niagara District Ins. Co., 26 U. C. C. P., 398.
WAIVER AND ESTOPPEL 175
other insurance effected on the property. The company, after
the fire, and after knowledge that other insurance had been, ef-
fected, supplied forms for making claim, and joined in an arbi-
tration to settle the amtount of damage, and otherwise treated
the contract as binding on the company.
Held, that this was a waiver of all objection based on the con-
dition ret [Hiring notice of other insurance.
TllK \VA1VKK MIST UK MADK BY THE COMPANY ITSELF OR ITS
At THORIZED AGENT.
After effecting the insurance in question, the plaintiff ob-
tained a further in>urame in another company, of which he
notified the defendants' agent, but such other insurance was not
indorsed on the defendants' policy, nor was the company aware
of the same until after the loss. A loss haying occurred, the of-
ficial adjuster or inspector of the defendant company, adjusted
the damage. The insured had several interviews with the agent
of the company, and the inspector, both of whom knew of the
other insurance, but at no time was payment of the loss objected
to on the ground of double insurance. On one occasion the
inspector told the insured that the compan} r would pay, and
that the delay was occasioned by another company with whom
the injured had a policy previous to insuring in the defendant
;>any. The plaintiffs contention was that the company.
through its agent and inspector, had waived a breach of this
.-Miidition. As to this Ritchie, C. J., says:
"Th ; ;ieiit insurance was not ai once notified to the
company in writing, nor was it endorsed on ihe policy in suit
granted 'by tin- company or otherwise acknowledged in writing,
in default whereof the poliey thenceforth ceased and became of
no effect.
'The respondents contend that the appellants waived this oon-
>pped from s'ttin.L r it up. It is not and cannot
tit lYmderiede Son-! r* \.-.\ omp. d'Assur. ! Siaila.-ona. '. I.
:: 21 .1. 194; 11 R. L. 137.
176 THE LAW OF FIRE INSURANCE IN CANADA
be, contended that the company, with knowledge of this insur-
ance waived the condition in respect to it, for previous to the
loss it does not appear to have been called to their notice ; in
fact, the head office had neither notice verbal or written, nor
actual cognizance of such further insurance.
"But it is contended that the condition was waived by their
agent, or inspector, or both, neither of whom, however, in my
opinion, had any authority to dispense with the performance of
this condition, if they really attempted or intended to do so,
which is more than doubtful."
Strong, J., says : "It is not alleged nor is it proved that it
was within the authority of the local agent to receive such a
notice, and decided cases have determined that a condition of
this kind requires that notice should be given to the company
directly through its managing officers at its head office. Gale
vs Lewis (9 Q. B. 730) ; Mason vs Hartford Ins. Co. (37 U. C.
Q. B. 437). Moreover, the terms of the condition show that
>nd givinir notice, the subsequent assurance must be indorsed
on the policy or acknowledged in writing; the words are 'in
default whereof such policy shall thenceforth cease and be of
no effect.' It is neither pleaded nor proved that any notice was
-iven to the company in the manner required, nor that the sub-
sequent policy was endorsed or otherwise acknowledged in writ-
ing, which by the express stipulations of the policy was to be
the only evidence of the appellants' consent to continue the risk
affcr a subsequent policy had been effected
"The question as to the sufficiency of the respondent's answer
to the defence raised upon this sixth condition is therefore re-
duced to one of waiver. It is not shewn that it was within the
scope of Greer's authority as a local agent to waive such a con-
dition; The condition itself does not, either by express words
or by imjplication, recognize such an authority, but the reason
for requiring the notice obviously points to a directly contrary
construction. Moreover, the English case (Gale vs Lewis) al-
ready quoted, which determines that the required notice is to be
<_riven to the company itself and not to the local agent, shows,
WAIVES AND ESTOPPEL 177
a fortiori, that such an agent has in the absence of express
authority no power to waive the condition.
"But the Court of Appeal held otherwise, and determined that
in such a case notice to the agent was not given to the company,
and that the agent neither had authority to waive the condition
nor could by his conduct estop his principals the first insurers.
As regards any direct action of the appellants through their im-
mediate agents, the directors or principal officers of the com-
pany conducting its affairs at the head office, there is no pre-
tence for saying that there is in the present case the slightest
evidence of conduct upon wlr'^h either a defence of waiver of
the condition, or by way of estoppel against insisting upon it,
can be based, and this for the very plain reason that these
directors and officers never had the fact of a subsequent assur-
ance brought to their knowledge; and without proof of such
knowledge neither waiver nor estoppel can be made out
"As regards proofs of loss I should have no difficulty in hold-
ing that the adjuster had authority to waive them, for as the first
step to be taken by him in investigating the loss would have been
to call for the proofs he must have had, by implication, power
to dispense with such proofs, or to accept such proofs short of
those actually required by the conditions, as (might seem to him
sufficient. But as regards breaches of conditions which had
vitiated the policy long before the loss, these he could have had
no more power to waive that he had to waive a defence extra the
terms and conditions of the policy altogether, such as fraud in
the inception of the contract or wa'nt of interest invalidating the
policy ab \n\i\o" (42)
The condition usually endorsed on policies of insurance res-
pecting double insurance, is binding in law and its performance
will not be held to be waived by the company if their agent, on
being notified of such double insurance after the fire, make no
specific o'hj.-ction to the claim of the assured on that
rid. (43)
Western Awur. Co. vs DouflJ, 12 Can. S. C. R. 446.
(48) Western AM. Co. vs AtwHl. 2 L. r. J., 181.
178 THE LAW OF FIRE INSURANCE IN CANADA
WAIVER AFTER LOSS OF BREACH OF CONDITION AFTER LOSS.
Where there was no statutory provision relieving the assured
from complying strictly with the conditions of the policy, the
courts formerly, both in England and in Canada/ held that the
condition as to proof of loss was not to be strictly construed, and
were astute to seize upon any circumstances from which waiver
might reasonably be inferred. This was most equitable because,
however important it might .be to hold the assured closely to the
conditions, a breach of which might seriously affect the risk
which the company undertook, no such reason applied after the
loss occurred, and whore the delay in making proofs could
only be of importance in preventing a prompt adjustment of the
claim. And even if there might be a reason for requiring a
prompt notification of the loss on the ground that delay might
prejudice the company in obtaining evidence as to the honesty
of the claim, it could not be said with equal force that the com-
pany ought to be discharged from liability where there had not
been a perfect compliance with the provision which required
particulars and proofs of loss to be furnished within a fixed
period.
In the recent decisions, however, of the Supreme Court of
Canada, (infra, p. 199) all provisions of this kind have been
treated without any liberality, and where there has not been a
rigid compliance with the provisions of the policy in this regard,
the plaintiff's action has been dismissed.
A condition in a policy of insurance provided that "whenever
any fire shall happen the party insured shall give immediate no-
tice thereof, etc., and within three calendar months deliver, etc.,
accounts exhibiting the full particulars and amount of the loss
sustained."
In pronouncing the judgment of the Court, Pollock, C. B.,
said : "By the contract of the parties, the delivery of the partic-
ulars of loss is made a condition precedent to the right of the
assured to recover. It has been argued that such a construction
WAIVER AND ESTOPPEL 179
would be most unjust, since the plaintiff might be prevented
from recovering at all by the accidental omission of some ar-
ticle. But the condition is not to be construed with such strict-
Its meaning is, that the assured will, within a convenient
time after the loss, produce to the company something which
will enable them to form a judgment as to whether or no he has
sustained a loss." (-44)
The plaintiff effected an insurance on the property
in question, to the amount of $800, viz., on grain,
flour, and fixtures, consisting of working tools. On the llth of
August, the mill in which the property was, was burned, and the
property therein destroyed. On the 25th September, the plain-
tiff sent to the defendants a statement of the loss, sworn to by
th< plaintiff, and verified by the oath of a person who was em-
ployed in the mill. The statement co'ntained a detailed account
of all the property burnt, viz., all property within the terms of
the policy, and other property. The Court said: "It was object-
ed that the statement was not furnished within thirty days. If
re was anything in the objection, I think from the evidence
the delay was occasioned by the agent of the company promising
the plaintiff that a blank form for the statements would be ent
to him for that purpose, which was never sent, and in that way
occurred the delay. The mere fact of the statement being sent
in a few days after the thirty days elapsed, does not under the
i-.inlition void the policy, or defeat the plaintiff's claim. (45)
Similarly in Lampkin vs Ontario Marine Ins. Co., (46) the
n. nice of loss and particulars were not in time, but there was
<spondence between the insured and the company as to bet-
ter particulars. The company had two policies, one on the build-
ings and one on the contents. Subsequently the company paid
loss on the buildings, but resisted the balance of the claim.
(44) MIUMMI PI Il.irvoy, 8 Exch., Hl'..
(46) Hut. hi; ; Mutu.V. l-'m- Ins. Co., 89 U.
(4fi) 1'J I . i: . :,7s
180 THE LAW OF FIRE INSURANCE IN CANADA
As to this the court said: "The result of the cases there" (in
the United States) "is that both the notice of the loss and the
particulars of it may be waived by the insurers expressly or by
their conduct in dealing with the assured. That view seems to
be reasonable and consistent with the law upon other subjects/'
And as to the defective notice : "If it were in time or waived
as regards time of giving it in respect of the buildings, it would
seem strange to hold it not waived as regards the goods in the
same building."
And proceeded : " Taking the facts of the correspondence in
respect to furnishing better evidence of the particulars and not
setting up the want of sufficient notice till the action brought,
and then, after the action is brought, the payment of the amount
insured upon the buildings, into consideration, we think it suf-
ficient to hold that in law the defendants were precluded at the
trial I'roni disputing their liability."
THE COMPANY MAY WAIVK A CONDITION AS TO PRESCRIPTION-.
Tlu 1 policy required that the action should be brought within
six months from the time of the loss and it appeared that an
agreement had been come to between the plaintiff and the Com-
pany's Canadian agent that if the plaintiff would not prosecute
his right at law until the return from England of one Scott,
the defendants would pay the claim, and would take too advan-
tage of the limitation clause.
Chief Justice Wilson, in referring to Lampkin vs Western
Ass. Co., distinguishes it. because in that case the pol-
icy was under seal, and in this case it was not, and that
in the former case the waiver could only have been by deed. He
also says, page 603 : "I see no reason why the statutory defence
by lapse of time might not be expressly agreed to be waived for
forbearance or for any other good consideration, nor why such
waiver might not be replied to a plea setting up the defence, and
I see no reason why it may not equally be relied on against any
conventional perod of limitation. I think then the waiver, if
made b" a competent person to bind the company, valid at law."
WAIVER AND ESTOPPEL 181
And holds, finally, as follows : "I think this agent, the man-
ager for the Company In Upper Canada, had the power to stipu-
late for the indulgence which he gave, and to bind the Company
not to take any advantage of the plaintiff for the indulgence
which hv ravc them." (47)
lOTIATIONS WITH A VIEW TO SETTLEMENT. EFFECT OF.
It was a condition of the policy that no action or suit, either
at law or in equity, should be brought against defendants there-
on after the lapse of one year from the loss, this being a condi-
tion also prescribed by 36 Viet., c. 44, s. 54 (0), relating to
mutual fire insurance companies. The plaintiff, suing on this
policy, after the expiration of the year, declared on equitable
grounds, alleging in one count that defendants prevented the
plaintiff from suing in time by an agreement that if the plain-
tiff would permit and give them time to examine his books, etc.,
they would pay as should thereupon be agreed, provided
the plaintiff would refrain from suing during such examina-
tion, and while negotiations should be pending; and that in con-
sideration thereof defendants would waive the condition. The
second count alleged that defendants prevented plaintiff from
suing, by representing that notwithstanding they had good de-
fences to urge, they would pay what they should find to be really
due on an investigation of the plaintiff's books and accounts,
etc., if the plaintiff would give them sufficient time therefor, and
would not sue during such investigation. It was then averred
that such investigations and negotiations with the plaintiff con-
tinued until after the year, when it was agreed that dcfVmlaiii-
should pay the plaintiff $500 in full, which Ihey had not paid.
lip- took place on the 18th August 1874. The claim papers
sent in on th- loth Soptr-nber. On the 28th October, the
plaintiff was required to produce his books, invoices, and vouch-
ers, ei Ee then placed his claim in th< hands of an attorney.
ami was told that without tho books
' could 1- On th ?<;th February, 1S:.~>. Iho
Hradr \Votem Aw. Co.. 17 U. < . <' P . 1507.
182 THE LAW OF FIRE INSURANCE IN CANADA
plaintiff authorized certain creditors of his to .settle the claim
as they might think proper. These creditors employed other
attorneys, who wrote to defendants on the 10th April threaten-
ing a suit, after which defendants' general manager called on
them and had an interview "without prejudice", in which he
made an offer of $500, which was not then accepted. On the
20th April the attorneys wrote to the manager offering to take
$800, and saying that unless the claim was settled at once they
would sue on the .policy. On the 26th April the board met, when
this offer was declined, and the manager who was called by the
plaintiff, swore that this decision of the board was at once com-
municated to the attorneys. Nothing more took place until the
18th September, when the attorneys wrote accepting the offer of
$500. The defendants took no notice of this, or of a subsequent
letter of the 15th November, and the action was brought on the
9th December. One of the attorneys who was also junior coun-
sel for the plaintiff at the trial, being called as a witness, swore
i hut a few days after the letter of the 20th April the manager
called on them, talked of a settlement, for which he seemed
anxious, and said that if two other companies interested would
-.Deli pay $100 more, defendants would do so as well. One of
the attorneys denied notice of the resolution refusing their offer
of $500 but admitted that the manager told him then that defen-
dants declined it. X^ mention was made of the limitation clause
during the negotiation.
Held, that there was no evidence to go to a jury either of the
agreement alleged to pay $500, or that the defendants prevented
or waived the performance of the condition, or of anything
which could in equity prevent defendants from insisting on the
forfeiture. (48)
SUBMITTING TO ARBITRATION MAY OPERATE AS A WAIVER.
The contract of insurance contained a provision that "le mon-
tant de dommage a la propriete peut etre determine par accord
(48) Davis vs Canada Farmers' Mutual Ins. Co., 39 U. C. R., 452.
WAIVER AND ESTOPPEL 183
mutuel entre la compagnde et Passure", and also the following
provisions :
* L'assure devra, toutes les fois qu'on le lui demandera, pro-
duire pour exaiuen a toute personne ou personnes nominees par
cette compagnie tout ce qu'il reste de la dite propriete endom-
magee ou non endommagee."
I /assure devra, chaque fois qu'il en sera requis, se soumettre
a un ou des examens par toute personne nommee par cette com-
pagnie, et devra signer et assermenter, devant quelque personne
dument autorisee a prendre ces declarations sous serment a cet
egard, les declarations faites dans tel examen, quand elles ont
ete consignees par ecrit."
The company "ne sera pas jugee de s'etre desistee d'aucune
condition, a moins que ce desistement ne soit clairement exprime
par ecrit et signe par un agent de la compagnie."
\o proofs of loss having been furnished, a plea setting up this
as a defence was rejected, the court holding that the com-
pany had waived compliance with this provision in .that the
agent specially sent to adjust the loss, in reply to a suggestion
by the plaintiff as to naming arbitrators, had said "que c'etait
une depense inutile, et il 1'a prie de faire lui-meme, avec un
homme, le compte des pertes, et de le lui envoyer, et que, si tout
etc" satisfaisant il le payerait." (49)
To an action on a policy of insurance, the appellant pleaded
that othor insurances were effected on the property without no-
i< tin- rompany, absence of proper preliminary proof and
fniiulnlriit ovrrv.-ihiation.
'llf court In low h-Id that the company got sufficient lioiir. >
i" oih.-r insurancis and that the objections arising out of
_ r ulnritios in the preliminary proofs had been waived by the
of t he company after the fire. On appeal it was held :
' a oiMipaiiy iv<vivinr pn-liuiinary j>roof and with know-
ledge of all tin- facts, joining in an a rhii ration, without having
! I >ufTy vs St. Lawrence In. Co., Q. R., 28 S. C. t 181.
184 THE LAW OF FIRE INSURANCE IN CANADA
made any objection, waived the right to object and could not
raise the point afterwards. (50)
One Hobbs was the general agent in Canada for the Insurance
Company, and after the loss in question occurred, along with
another company, the London & Lancashire Ins. Co., submitted
to arbitration the amount of the loss, the two arbitrators as "ar-
bitrateurs et amiables compositeurs." The arbitrators appraised
the goods and made an award that half the loss should be paid
by one company and half by the other. Hobbs, dissatisfied with
the award, as it disposed of a matter which he did not intend to
be adjudicated by the arbitrators, namely, as to whether his com-
pany was liable at all for certain of the goods destroyed, called
for information and explanations from the insured, and for the
iirst time became aware of an insurance with a third company,
the Liverpool & London Ass. Co. The arbitrators ordered a
sale, and Hobbs not only assented to the sale, but consented to
the payment over of half of the proceeds to the respondent. Sub-
sequently, Hobbs took objection to his liability on the ground of
the non-disclosure of the policy in the Liverpool & London Ass.
Co. As to this the court held that the want of indorsement upon
ihe Lancashire policy of the insurance in the Liverpool Com-
pany, unless waived, voided it, but held that the circumstances
which afterwards took place amounted to a waiver of that objec-
tion, the waiver being, among other things, by the payment to
the respondent out of the proceeds of the sale above mentioned.
As to the authority of Hobbs, the general agent in Canada,
the court said : " He was a general agent for the English com-
pany in Canada. He was the only agent, as far as appears, the
company hal in ( 'aiuida. He seems to have managed all the insur-
ance business in Canada in all its branches, and in every way. If
it were sought to show that although in general manager and
agent, he had not the necessary authority to make this waiver,
the question of waiver having been agitated from the beginning
of these proceedings, it lay upon the present appellants to estab-
(50) Canadian Mutual Fire Ins. Co. va Donovan, 2 L. N., 229.
WAIVER AND ESTOPPEL 185
lish this limitation of his authority by evidence or other-
wise/' (52)
The plaintiffs (respondents) had insured their ship with the
defendants (appellants) and, a loss having occurred, the matter
was submitted to arbitrators and amidbles compositeurs appoint-
ed. The respondents contended that the following clause :
"It is expressly understood that this appraisement is for the
purpose of ascertaining and fixing the amount of said loss and
damage only, to the property hereafter described, and shall not
determine any other right or rights of either party to this agree-
ment," had not the effect of relieving the plaintiffs from any of
the conditions of the policy.
Held, that whatever the effect of the clause quoted, the fact
that the respondents submitted the matter to arbitration, was an
admission that the fire had taken place and that a loss had been
suffered by the plaintiffs and that this admission supplied the
notice and proof of loss called for by the conditions of the
policy. (53)
A policy of marine insurance contained the following : "In
case the premium, or the note, or other obligation given for Hie*
premium, or any ipart thereof, should be not paid when due, this
insurance shall be void at and from such, default; but the full
amount of premium shall be considered as earned, and shall be
payable, and the insurer shall be entitled to recover for loss or
damage which may have occurred before such default. Should
the person or any of the persons liable to the company for the
premium, or on any note or obligation given therefor, or MIIV
part thereof, fail in business or become bankrupt or in so'
before the time for payment has arrived, this insurance shall at
once become and be void, unless and until before loss ilie pre-
mium be paid or satisfactorily secured to the comipn
(52) Lancashire In. Co. w rii:iinn:m. Judgment of tin- Privy
Council. n-jN.rt"! 7 K !, . 17.
(68) Richelieu & Ontario Xnvi^ition Co. vs Conum -r -i.-il T'nion
Aat'oe Co., Q. I!. .' I'. 410.
186 THE LAW OF FIRE INSURANCE IN CANADA
A promissory note for the premium was not due when the in-
sured became insolvent, and made an assignment, and a guar-
antee was then given and accepted by the company as a satis-
factory security for the premium. When the note became due
it was not paid either by the insured or by the grantor, and re-
mained unpaid at the date of the loss.
Held .per Strong, J., that by reason of the non-payment of
the note at (maturity, the policy became void, but as the companv
had suibmiitted to arbitration and the declaration contained a
count based upon the award, and no objection was made to the
award, the defendants had waived any defence based upon the
default in payment of the premium. (54)
ASKING FOR PROOFS OF LOS- MAY <> 1-1:1; ATI: AS A WAIVER OF
NOTICE OF LOSS.
The plaintiff did not literally give notice in writing of the
fire, but he informed the defendants' agent of it and asked him
to notify the head office, which he did. The resident secretary
got the agent's letter of notification, acknowledged it, and direct-
he agent to get plaintiff's proofs. This was held to be a
waiver of the condition requiring notice of the fire to be given
hy the assured in writing. (55)
KKF.PING SILENT NOT NECESSARILY A WAIVER OF DEFECTIVE
PROOFS OF LOSS.
When giving judgment, the court in one case said (55a) :
"Counsel strongly urged that the defendants had waived all ob-
jections to the sufficiency of the proofs. The only apparent
ground for such an argument was, not that defendants said, or
wrote, or did anything to waive objections, but that having re-
ceived the plaintiff's papers in January, they remained silent for
some months, till the action was brought in August/'
(54) Anchor Marine Ins. Co. vs Corbett, 1) Can. S. C. R. 73.
(55) Lafarge vs Liverpool, London & Globe Ins. Co., 17 L. C.
J.. 237.
(55a) Mason vs Ancles Ins. Co., 23 U. C. C. P., 37.
WAIVBB AND ESTOPPEL 187
"Here the issue is merely whether sufficient proofs had been
sent or not. We do not feel disposed to make a new precedent,
that the mere omission actively to take some step, or do, or say
something to induce a plaintiff to consider his proofs insuf-
ficient, is to be evidence of a waiver of the right to receive proper
proofs.
We follow th3 law as laid down in Mulvey vs Gore District
Mutual Insurance Co., (56) and in Hatton vs Beacon Insurance
Co. (57)
Plaintiff brought his action on a policy of insurance contain-
ing a condition requiring, in the event of loss, a certificate from
the two magistrates most contiguous to the place of the fire. No
such certificate was produced, and plaintiff relied on a waiver of
the condition, the evidence of which consisted of the fact that
when the plaintiff's attorney handed to defendant's agent a let-
ter forwarding a certificate from two other magistrates and ex-
plaining why a certificate from the two nearest had not been
produced, the agent said nothing.
The court held that the silence of defendant's agent, who had
on other occasions expressly insisted < n a compliance with all
the conditions of the policy, was no evidence of waiver. (59)
The mero fact that defendants did not require further pre-
liminary proof, as they might ruder the policy have done, will
not prevent them availing themselves of the objection that there
had been false swearing. (60)
One of the conditions of a policy was that all persons ssur-
ed by the company, and sustaining loss or damage by fire, should
give immediate notice of -the fire, and proofs of loss within 30
days, and in default thereof should forfeit all claim under the
policy. The notice of loss was given, but no proofs of loss
within the 30 days, but after the 30 days had expired, the
(60) 26 U. C. K !_'!.
(87) 16 U. C. K Uft,
(60) O'Connor t < .1 Tnion ins. Co., 3 R. & C.
(60) Caahman vs Lomlon \ LlfqrpOOl rhv Ins. Co., 6 All. 240.
188 THE LAW OF FIRE INSURANCE IN CANADA
tiff sent in a valuation made by two parties not under oath, and
accompanied them with a letter stating that he hoped the proofs
enclosed would be satisfactory. He received no reply. A few
weeks afterwards he wrote again, asking payment and received
a reply that the company was not liable, and declined to pay. On
motion for a new trial it was claimed that there had been mis-
direction on the part of the judge, and that although he had
left it to the jury to say whether there had been any waiver of
-triet compliance with the conditions, yet he had coupled this
with a statement that the court could not see any evidence of
waiver. As to this, the Privy Council held that there could be
no waiver by reason of the company having sent no reply to the
plaintiffs letter, as no proofs of loss had been sent by the insur-
nitil after the 30 days, and the 30 <lay> was a material part
of the condition. The court also said :
Their lordships '<lo not mean to say that there may not be a
waiver after the 30 days are over. It is .possible that if they did
anviliing which misled the assured or puft him to expense, there
j lit foe a waiver after the time was over, but they are clearly
of opinion that not answering this letter after the 30 days can-
not of itself be sufficient." (61)
Hut keeping silent when under an obligation to speak was
held to bind the company by estoppel. (62)
Kl.l \IM\<; INSUFFICIENT PROOFS WITHOUT OBJECTION MAY
OPE K A TV AS A
\Yhere the insurer retained the proofs of loss, without objection
as to its sufficiency, for more than sixty days before action was
taken, the company will l>o considered to have waived the con-
dition which requires a delay of sixty days after filing claim be-
fore the institution of suit ; and the fact that a blank in the
statement was filled in at the request of the company, within the
(Gl) Wliyte vs Western Ins. Co., 7 R. L. 106.
(62) The People's Ijife Ins. Co. vs Tattersal-1, 37 Can. S. C. R..
4390, infra, p. 239.
WAIVES AND ESTOPPEL 189
period ol' sixty days before suit, will not affect the right of
ion.
The condition which requires proof of loss to be furnished
within thirty days after the fire may 'be waived either expressly
or impliedly; and the assured is held to be relieved from, this
condition if the presentation of the claim has been delayed by
the company's investigation of the loss, or if the representations
of the company's authorized agents have led the assured to un-
derstand that compliance with this condition will not be re-
quired.
While adjusters of fire losses are not, as a general rule, agents
of the companies under an authority sufficient to make their
inding upon the companies for whom they act, yet
an adjuster may become a duly authorized agent of the company
he course of procedure in a particular case, e. g. where the
adjuster was the only medium of communication after the fire
between the company and the assured, and was engaged by the
company to look over the proofs, advise as to a settlement,
etc. (63)
KNT AS TO TRIAL MAY OPERATE AS A WAIVER OF
WANT OF NOTICE AND PROOFS OF LOSS.
Defendants before the trial agreed that no objection should
the want of a policy, that the question to be tried
! Id be confined to the cause and manner only of the loss, and
all proceedings should be had in the same manner, and to
<amc effect as if a policy had been duly issued and were pro-
duced. Held, that they were precluded from objecting to the
f notice and proof of loss. (64)
NT'S CONDUCT IN ACCEPTING DEFECTIVE PROOFS OF LOSS
JCAY OPERATE AS A WAIVER.
-vond plea of the company was that the plaintiff had
failed to furnish proofs of his loss to the satisfaction of the com-
(63) Western Ass. Go. vs Phnrnnd. Q. R. 11, Q. B. 144.
(64) Walker vs Western Ass. Co. 18 U. C. R. l&
190 THE LAW OF FIRE INSURANCE IN CANADA
pony on the printed forms in use, and in conformity with an-
other condition of the policy, within 30 days from the occur-
rence of the fire. To this plea the plaintiff answered that he
had given such proofs as the nature of the case admitted of, all
his books and papers having been destroyed, and. that the com-
pany received all the information he had to give without rais-
ing any objection on that score. The evidence showed that the
company's agent, uipon receiving the proofs of loss, stated that
he had all that was required to lay before the board. As to this
the court said :
"The doctrim- with respect to furnishing proofs within a
stipulated tiinr was enforced in the case of Whyte vs The West-
ern Ins. Co." (supra, p. 188) "That doctrine never extended
to saying there could be no waiver ; but merely applied the sti-
pulation where there was nothing to modify it." (65)
THE STATEMENT OF THE COMPANY THAT IT IS INVESTIGATING
THE LOSS MAY OPERATE AS A WAIVER OF NOTICE AND
PROOF OF LOSS.
The condition in a policy of insurance against fire, that notice
and proof of loss must be given within a stated delay, is not one
of liability but of recovery and is imposed in the interest of the
insurer. The assured may therefore be relieved from it either
expressly, or impliedly, e. g., by the insurer putting him off
when applying for a settlement, on the ground that the insurer
is himself investigating the circumstances of the loss. The
finding of the trial judge in such matters as the representations
by the assured as to the value of the property insured and the
extent of ithe loss, will not be interfered with on appeal when the
evidence is contradictory. (66)
IN NEW BRUNSWICK IT WAS HELD THE AGENT MIGHT WAIVE
CONDITION AS TO PROOFS OF LOSS.
The plaintiff's attorney testified that he met defendants' agent
in the street and said he had the proofs ready except the cer-
(65) Kedly vs Hochelaga Mutual Fire Ins. Co., 3 L. N. 63.
(66) Mount Royal Inc. Co. vs Benoit. Q. R. 15, K. B. 90.
WAIVES AND ESTOPPEL 191
tifirate whieh he feared he could not get in the time required by
the policy: the defendants' agent said it made no difference, but
to get the proofs as soon as lie could. Defendants' agent denied
this conversation.
Held, that this was evidence of waiver to go to the jury. (67)
But see McKean vs Commercial Union, infra, p. 192.
l-Yl.-M SUING BLANKS FOR PROOFS OF LOSS AFTER DEFAULT MAY
OPERATE AS A WAIVER.
Thr lime limit for furnishir- statement of loss is waived by
a letter from the company to the insured, dated after the ex-
piration of the delay, and enclosing a blank form of policy in
order that the insuivd m'iirht know exactly what it was necessary
that lu- should do. (08)
IN TIII: FOLLOWING CASES, HOWEVER, IT WAS HELD THAT THE
CONDUCT OF THE COMPANY DID NOT OPERATE AS A WAIVER
OF THE BREACH OF THE CONDITION RESPECTING PROOFS OF
LOfi
Defendants, among other pleas, traversed the delivery of a
: n i nt of loss, verified on oath, within thirty days. It ap-
peared th<- value of the premises destroyed was the only question
the lire, and to settle that an arbitration was proposed, but
did not take place, and the proofs were not sent in till the thirty
: expired. The proposal to refer, however, was apparent-
ly after the thirty days, and after plaintiff had received the sec-
'u<>r stating thai he could waive nothing. Held thai
vae ii" vi lence of waiver of the condition on the policy,
and a verdict for plaintiff was set aside. (69)
(07) PtKBOta his. Co.. -2 Han. 200,
ni Ass. Co. r.v (Inrland. (,?. K. 1'J. K. B. 580.
(69) trfd Mutual l-'iri' In*. Co. V8 LewU. rj 1
192 THE LAW OF FIRE INSURANCE IN CANADA
A LOCAL AGENT AGREEING TO SEND AN INSPECTOR WAS HELD
NOT TO BE A WAIVER OF CONDITION REQUIRING PROOFS OF
LOSS.
One of the conditions of the policy required that preliminary
proofs of loss should be given, and another condition declared
that none of the conditions should be deemed to have been waiv-
ed by the company unless the waiver was indorsed upon the pol-
icy a : nd signed by the agent of the company at St. John.
It was admitted that no preliminary proofs of loss had been
given, but the plaintiff relied upon the fact that he gave notice
to the local agent at Fredericton who agreed to send a person
to examine the premises and make an estimate of the damage :
that the local agent did send such an examiner who made an
estimate of the amount of damage which was cornmunciated to
the assured, who consented to accept it, and also to the local
agent who communicated it to the principal agent at St. John,
but the latter declined to act upon it. The notice of the refusal
was immediately given to the appellant by letter.
Held, King, J., dubitante, that the court below was right in
ordering a non-suit to be entered on the ground that there was
no evidence of a waiver of the preliminary proof. (70)
DEFECTIVE PROOFS OF LOSS AIM: \OT \v\m:i> i-.v TIII: TOMI-ANY"-
ACKXT AGREEING TO INVESTIGATE THE CLAIM.
Plaintiffs, desirous of being secured for a debt owing to them,
were empowered by the debtor to take out a policy of insurance
as a security, but at the time the policy issued they had no mort-
gage or other lien or security upon the debtor's property. The
policy on its face was stated to be an indemnity against loss on
the stock of goods and merchandise contained in a building owli-
r.l and occupied by the debtor, and in the application the assured
was said to be the mortgagee. The proofs of loss were admitted-
ly defective and the plaint iff? relied on a waiver by reason of
(70) McKean vs Commercial Union Ins. Co., 21 N. B. Rep., 583.
WAIVER AND ESTOPPEL 193
certain conversations between them and the defendants' agent
whereby the latter said that he would send up a party to invest-
igate and that there would be no delay in payment when the
proper papers were made out. Upon the defective papers being
received, the agent said that the papers had been sent to Eng-
land, and nothing would be done till their return.
Held, that there was no evidence of waiver.
On appeal to the Supreme Court of Canada, 11 Can. S. C. R.,
92, the judgment below was affirmed on the ground that the
plaintiffs had no insurable interest. (71)
ENTERING INTO BONDS OF APPRAISEMENT is NOT A WAIVER OF
PROOFS OF LOSS.
Where the policy contains a condition to the effect that the
company shall not be held to have waived any provision or con-
dition of the policy, or any forfeiture thereof, by any require-
ment, act or proceeding on its part relating to the appraisal, the
insured or his representatives is not relieved from the obligation
of furnishing proofs of loss as required by the conditions of the
policy, by the fact that the company and the insured entered
into bonds of appraisement after the fire, this being a mere
conservatory proceeding in the interests of both parties, to estab-
lish the amount of the loss at a time most favourable for that
purpose. The pretension that the insured and iis represent-
atives were unable to furnish such proofs in consequence of the
loss of the policies, cannot avail where it is neither alleged nor
*1 that the policies were lost prior to the fire or within sixty
days thereafter the time within which proofs of loss had to be
made. Where a condition of the policy requires that actions
based thereon shall be commenced within twelve months from
:;it- of tlu> fire, an action commenced after that date is pi
cribed. (72)
(71) Howard VA The Lancashire Ins. Co., 5 R. & G., 172.
(72) Prtroet V8 Scottish Union In0. Co., Q. R., 14 8. C, 203.
7
11' i THE LAW OF FIRE INSURANCE IN CANADA
DECLINING TO PAY ON ONE GROUND is NOT A WAIVER OF OTHER
OBJECTIONS.
The mere fact that an insurance company makes no objection
to the preliminary proof given of a loss, at or after the time of
its being received, is no evidence of a waiver by them of objec-
tions to it; but where objections are made on other grounds,
and no objections taken to the sufficiency of the preliminary
proof, it may be evidence of a waiver. (73)
An accident insurance policy provided that in case of death
immediate notice must be given in writing addressed to the man-
ager of the company at Montreal, etc., and that failure to give
such immediate written notice should invalidate all claims under
the policy. The accident happened on the 21st March; the in-
sured died on the 13th April, and notice of the accident and
death was only sent to the company on the 29th April, one month
:m<l eight days after the accident, and sixteen days after the
death. The local agent of the company received written notice
of the accident before the death and was verbally informed of
the death four days after it took place, and thereupon stated that
he would require Ho further notice and that he had advised the
company. The agent also notified the insured's brother that he
had notified the company and expected to receive proper papers
to be filled out. The beneficiary called on the agent three or
four times and was told that the papers had not come, but prom-
ising to forward them as soon as they arrived. On the 26th
April, the agent wrote to the beneficiary saying that the com-
pany had sent some papers but they were not the proper form
for death claims, and that he had written again and hoped to
send them that week. On the 6th July the manager acknowl-
edged the receipt of the proofs of death and stated that this, to-
gether with other documents had been placed under the con-
sideration of the company's medical department. In November
the company wrote to the plaintiff's solicitors refusing to pay
the claim, basing the refusal on the ground that the death had
been due to disease and not to accident.
(73) MoMauus rs The JBtna Ins. Co.. G All 814.
WAIVER AND ESTOPPEL 195
The trial judge held that the company had received sufficient
notice of death to satisfy the requirements of the .policy and
that in any event .they had expressly waived any objections
which they might have urged in this regard, by declining to pay
the claim on other grounds.
This judgment was affirmed by the Court of King's Bench
but was reversed (Fournier and Patterson, JJ., dissenting) by
the Supreme Court on the ground that the company had not re-
ceived sufficient notice of the death to satisfy the requirements
of the policy, and that by declining to pay the claim on other
grounds there had been no waiver of any objection which they
had a ri.irht to urge in this regard. (74)
A company declining to pay a claim in consequence of non-
disclosure of material facts in the application for insurance, is
not a waiver which can be invoked to dispense with the insured
complying with the conditions of the policy that he must fur-
nish proofs of loss within 30 days. (75)
But in Quebec it was held that where an insurance company
had, by resolution of its board, nearly three months after a fire,
objected to a claim, without referring to the delay in filing, that
they had waived the right to set up that as a plea. (76)
Breach of the obligation on the part of the insured, who is not
owner of the property insured, to declare his interest therein,
even where it constitutes a warranty in or condition of the pol-
icy, does not give rise to an absolute nullity but only to a rela-
tive nullity, which can be invoked by the insurer alone. The
latter is presumed to have waived it where having knowledge of
ground of nullity, he does not avail himself of it but ac-
knowledges the obligation arising from the policy. (77)
(74) Accident Inn. Co. of North America vs Young, 20 Can. >
K . 280.
(75) Mulrey vs Gore District Mutual Ins. Co., 25 U. C. R. 424.
lMi!i:iriii- M ML- : Co., of Lav:il. UiMinhly IUM!
:!. _ I.. V. 11-,.
(77) nl r (Mo cTA*nir:ui. . .1. ' Q. L. R., 162.
196 THE LAW OF FIRE INSURANCE IN CANADA
A condition was, "Persons sustaining loss or damage shall
forthwith give notice of such loss to the company, and within
15 days thereafter render a particular account of such loss, etc.,
and until such proofs, declarations a : nd certificates are produced
and examinations and appraisals permitted by the claimant
the loss shall not be payable, nor shall any act of the company,
except their written declaration, operate to waive the require-
ments of such proofs."
Held, that the correspondence between the assured and the
company after the expiration of the 15th days allowed by the
policy for furnishing preliminary proofs and refusing to pay,
not upon any defects in the proofs furnished, but upon another
i/numd, was evidence of waiver. (78)
WHERE THE COMPANY ABSOLUTELY REPUDIATES LIABILITY, THIS
IS A WAIVER OF ALL CONDITIONS REQUIRING PRELIMINARY
PROOFS OF LOSS OR OTHER CONDITIONS PRECEDENT TO AC-
TION.
When a company absolutely repudiates the insurance effected
by the deposit receipt, and when the policy has not issued, the
right of action accrues at once, and there is no necessity of giv-
ing the preliminary notices and conforming to the delay and
other conditions precedent in case of loss endorsed upon the com-
pany's policies. (79)
Une compagnie d'assurance veut se prevaloir de ce que Pas-
sure n'a pas donne avis de Pincendie dans les delais requis par la
police: Juge: Que, si, lorsqu'elle a refuse de payer, la com-
pagnie n'a pas objecte aux informalites contenues dans Pavis,
cela constitue une renonciation (waiver) de sa part a son droit
d'obtenir un avis dans une autre forme ou plus circons-
tancie. (80)
(78) Bowes vs National Ins. Co., 20 N. B. Rep., 438.
(79) Goodwin vs Lancashire Fire and Life Ins. Co., 18 L. C., 1 ;
10 L. C. J., 298.
(80) Garceau vs Niagara Mutual Ins. Co., 3 Q. L. R., 337.
WAIVER AND ESTOPPEL 197
A condition of the policy, requiring Notice of loss to be given,
and a particular statement thereof to be delivered by the insured
within fifteen days after the fire, may be waived and dispensed
with by a distinct denial of liability, and refusal to pay, on the
part of the company. (81)
In its considerants, the Court said :
" Considerants que la dite defenderesse, lors de Institution
de la presente action, avait refuse et refusait de payer a la dite
demanderesse le montant de la police d'assurance en partie reci-
n la declaration en cette clause, et que la dite demanderesso
etait en droit de prendre son action avant Pexpiration des quatre-
vingt-dix jours accordes a la dite defenderesse pour effectuer le
paiement de la somme reclamee en cette cause." (82)
A policy of fire insurance issued by the defendant company
contained a provision that "in the event of disagreement as to
the amount of loss, the same shall, as above provided, be ascer-
tained by two competent appraisers", etc. Held, per Graham,
K. !., McDonald, C. J. and Eitchie, J., concurring, that the com-
pany having repudiated all liability in respect of the claim, they
most distinctly averred that there was no disagreement as to the
mere amount of the loss, and, therefore, no appraisal would be
required, and that the assured, having asked for an appraisal,
and having named two disinterested appraisers, was discharged
from the performance of the condition by the company's
refusal. (83)
The contrary was held in an early case in Ontario.
A declaration by the insurance compa'ny that they intend to
resist payment, cannot be construed as a waiver of the condition
of the policy which provides that the company are not liable un-
til 60 days have expired after all proofs, declarations and certi-
9 have been given. (84)
HT:I]<I Co. V8 Northern Ass'ce Co., 12 L. N., 80.
(82) Citizen* Ins. Co. vs Boievert, 14 R. L., 166.
(83) Margeflon r* Guardian Fin- .MIK! Life Asa. Co., 31 N. S. Rep.,
m,
(M) Hatton r* I'nrvhvinl Ins. Co., 7 T. C\ C. P..
198 THE LAW OF FIEE INSURANCE IN CANADA
But more recently the company was held liable on the ground
of estoppel. (Morrow vs Lancashire, infra, p. 228.)
The following decision to the contrary effect by the Supreme
Court is not satisfactory as the point, according to the report,
only arose on the settlement of the minutes and is not discussed
in the reasons for jugment.
This was a case arising after the Fire Insurance Policy Act,
but when the Ontario Courts had held this act did not apply to
Mutual Companies.
A mutual insurance company, issued in favour of J. F. a pol-
icy of insurance, insuring him against loss by fire on a general
stock of goods in a country store, and under the terms of the
policy the losses were only to be paid within three months, after
due notice given by the insured, according to the provisions of
36 Viet., ch. 44, sec. 52 (0), R. S. 0., 1877, ch. 161, sec. 56,
which provides that, in case of loss or damage the member shall
give notice to the secretary forthwith, and the proofs, declara-
tions, evidences, and examination called for by or under the pol-
icy must be furnished to the company within thirty days after
said loss, and upon receipt of notice and proof of claim as afore-
said the board of directors shall ascertain and determine the
amount of such loss or damage, and such amount shall be pay-
able in three months after receipt by the company of such proofs.
A fire occurred on the 21st May, 1877. On the next morning
J. F. advised the insurance company by telegraph. On the 29th
June, 1877, the secretary of the company wrote to J. F.'s attor-
neys, that if he had any claim he had better send in the papers,
so that they might be submitted to the board. On the 3rd July,
1877, J. F. furnished the company with the claim papers, or
proofs of loss, and on the 13th July he was advised that, after
an examination of the papers at the board meeting, it was re-
solved that the claim should not be paid. On the 23rd August,
1877, J. F. brought this action upon the policy. The appellants
pleaded inter alia that the policy was made and issued subject to
a condition that the loss should not be payable until three
months after the receipt by the defendants of the proofs of such
WAIVER AND ESTOPPEL 199
to be furnished by the plaintiff to the defendants; and
.i \vrred the delivery of the proofs on the 3rd July, 1877, and
that less than three months elapsed before the commencement
of this suit. Held,, .reversing -i3 U. C. R, 102, and 4, A. R.
that the appellant company under the policy in this case
were entitled to three months from the date of the furnishing
of claim papers before being subject to an action, and that there-
fore respondent's action had been prematurely brought. (85)
TllK KKCKNT DECISIONS OF TIIF SUPREME COURT OF CANADA
JIAVE HELD THE INSURED TO A RIGID OBSERVANCE OF THE
iHTIOXS WITH RESPECT TO PROOFS OF LOSS.
One Jarvis, who was a fire insurance agent and also adjuster,
deposed that he was not an officer of the defendant company, but
went at the request of the company to adjust the loss, and said
that he had nothing to do with receiving notice of loss or putting
in the proofs, and that he did not represent himself to the plain-
tiff as ha ving any such authority. The plaintiff deposed that
id told him h? had 30 days in which to deliver proofs of
loss, whereas the condition of the policy required the proofs to
be in within 15 days. All of this was denied by Jarvis.
The material conditions of the policy were the following:
Any person entitled to make a claim under this policy Is
to obeerve the following directions :
"(a) He is forthwith after IOPS to give notice thereof in writ-
ing to the company ; and
"(b) lie is to deliver within 1 "> -lay- after the fire in writing as
ir an account of the loss as the nature of the case
lite.
"6. No condition <>f the policy, either in whole or in part,
hall be deemed to have been waived by the company unless 1he
waiver is clearly expressed in writing signal hy the company's
mp.najrer in
(85) Mutual Fire Ins. Co. of the County of WHim-ton r. r
S. ('. K., X-J.
200 THE LAW OF FIRE INSURANCE IN CANADA
There was no provision that non-compliance with condition 2
should void the policy or any claim thereunder.
And the main question pon the appeal was as to whether the
condition was waived by the company so as -to enable the plain-
tiff to recover. The judgment of the Court was delivered by
Sedgewick, J., who said :
"I am of opinion that whatever Jarvis's authority may have
been, and whether under given circumstances he might not have
had power to extend the time within which the proofs of loss
might be given notwithstanding the fifteen days condition in
the policy, yet inasmuch as fifteen days after the fire the policy
had become absolutely forfeited by reason of failure of delivery
of the proofs nothing that Jarvis could thereafter do without
the express authority of the company could reinstate it and
revive the compan/s liability upon it.
"1 am further of opinion that the evidence does not disclose
any facts from which it can be inferred that the company waived
the condition. Ait the time of the conversation relied on twenty-
seven days after the fire the policy as I have said had already
been forfeited. Nothing within those twenty-seven days that
Jarvis had said or done could have induced the plaintiff to alter
his position in any way, nor so far as I can see was his position
altered in consequence of what he says Jarvis told him, nor does
he even allege that his position was in any way changed/' (86)
Certain conditions of a policy of fire insurance required
proofs, etc., within fourteen days after the loss, and provided
that no claim should be payable for a specified time after the
loss should have been ascertained and proved in accordance with
this condition. There were two subsequent clauses providing
respectively that until such proofs were produced, no money
should 'be payable by the insurer and for forfeiture of all rights
of the insured if the claim should not, for the space of three
months after the occurrence of the fire, be in all respects verified
in the manner aforesaid.
(86) Atlas ASSUT. Co. vs Rrownell, 29 Can. S. C. R., 537.
WAIVER AND ESTOPPEL 201
The plaintiff failed to comply with the above condition as to
proofs of loss and claimed waiver, and in support thereof said
that after the fire he had a conversation with the local agent of
the company as to what was to be done and that the latter said
to keep quiet until the adjusters arrived; that nothing could be
done until they arrived. The adjuster arrived three days after
the loss and set about getting the articles sorted out so as to ex-
pedite the work of appraisal, and before leaving the next day
-delivered the fallowing letter to the plaintiff:
"In confirmation of my verbal instructions of this morning, I
require you to conform to the conditions printed in your policy
with the Commercial Union Assurance Co. When your stock is
;y for appraisement (please notify Mr. Roscoe, agent here at
Kvntville." Sgd. Butcher.
Mr. Justice King says :
"The plaintiff says that after receiving this letter he looked
over the conditions of the policy, and that sometime during the
'v following the fire (which occurred on Monday) he con-
sulted a Mr. Shaffner about making out proofs of loss; and he
further says :
'It was about the time I got Butcher's letter that I wen to
9 : tFner. I could not say whether it was before or after. I did
lake the policy to him. I read the conditions all over at that
e. I knew very little about proofs of loss before reading
i. I knew that they were required. I had a slight idea of
that from the first. I always supposed I would have to prove
the loss. I had a discussion with the adjusters about the ap-
praisement, not about the proof, on their first visit.'
'The following question (amongst others) WM> left to the
jury:
T)id the acts and words of the local agent and adjuster of
the defendant company before the adjusters left Kentville the
first time, reasonably cause the failure of plaintiff to deliver
proofs of loss before March 31, 1897 ? If so, state in detail what
were such acts and words.'
THE LAW OF FIBE INSURANCE IN CANADA
"And the jury answered :
'Yes. The local agent informed plaintiff to keep quiet until
adjuster arrived, that nothing could be done until then. That
plaintiff was told by Butcher that he would make up proofs of
loss on his return.'
"Assuming that Butcher's letter of 26th February primarily
referred to the assorting of the goods, it contains a clear intima-
tion to the insured that he is to look (to his contract and comply
with its conditions. And that he so understood it himself is
clear, for he thereupon read the conditions all over and appears
to have consulted a Mr. Shaffner about making out proofs of
loss. It is idle, therefore, for the plaintiff to say that the reason
he did not make out the proofs of loss was because he thought
that Butcher had come for the purpose of helping to make out
such proofs (supposing that this is a sufficient reason). Again,
and as an alternative answer to the question of his counsel as to
why he did not make out the proofs of loss, he says :
'I did not do so because they (i. e. Butcher and one Jarvis,
the adjuster for another company) had a list of the goods and I
thought the proofs of loss could be made up from the appraise-
ment they were making.'
"This, (if it amounts to anything) clearly relates to a time
after the expiration of the fourteen days prescribed for furnish-
ing the particular statement or account. It consequently ap-
pears that there was no substantial evidence upon which the
jury could reasonably find as they did upon this question, and
the plaintiff is in the position of having omitted to comply with
a condition precedent to his right of recovery The implied
authority of a person acting in Mr. Butcher's capacity was con-
sidered under somewhat similar circumstances in Atlas Ins. Co.
vs Brownell (29 Can. S. C. K. 537) decided this term.
"Were the evidence much stronger than it is, the plaintiff under
the circumstances of this case, would find himself precluded
from availing himself of any waiver on the part of Mr. Butcher
by the full and explicit provisions of the 19th condition stipulat-
ing that:
WAIVEK AND ESTOPPEL 203
" 'No one of the foregoing conditions or stipulations, either in
whole or in part, shall be deemed to have been waived by or on
behalf of the company unless the waiver he clearly expressed in
writing by indorsement u/pon this policy signed by the agent of
the company at Halifax, N. S.' " (87)
A condition in a policy of insurance against accidents requir-
iat in the event of an accident thereunder, written notice
containing the full nam/e and address of the insured with full
particulars of the accident, should ibe given within 30 days of its
occurrence to the 'manager for the United States, or the local
agent. The defendant pleaded among other defences that no
notice was given as required by this condition. To this plea the
plaintiff demurred and her demurrer was sustained by the Su-
preme Court of New Brunswick, which held that the giving of
the notice was not a condition precedent to a right of action on
}K)licy. From that judgment an appeal was taken to the
S >reme Court of Canada. Taschereau, J., who delivered the
judgment of the majority of the court, says :
"The point of law upon this appeal is therefore, whether the
above provision is a condition precedent to any right of action
upon this policy, or an independent and collateral covenant, I
tli ink it is a condition precedent.
it provision cannot be read out of the contract. It forms
part of it, and is a stipulation .that must be given effect to. Now,
to say that it is not a condition precedent is to leave it without
any effect whatsoever. 'Hie intention of the parties, which is the
guide in interpretation of contracts, must necessarily have been
that this notice should be a condition precedent to any right of
>n upon the policy. Otherwise, the stipulation is vain, friv-
olous, means nothing. It was not necessary to say that it was
to be a condition precedent. It is so 'by its nature. It is not a
condition at all if it is not a condition precedent. And we can-
not eo obliterate it from the contract. I would allow the appeal
costs." (88)
(87) Commercial Union AM. Go. vs Margeaon, 20 Can. S. C. It..
(88) Employers' Liability t* Taylor, 29 Can. 8. C. U. 104.
204: THE LAW OF FIRE INSURANCE IN CANADA
The 10th condition of a .policy provided that on the happen-
ing of any loss or damage by fire, the insured shall forthwith give
notice thereof in writing to the company, or its resident secre-
tary at its head office, or at the office of the company's local
agent through whom the insurance was effected, and within 15
days at the latest after the fire, deliver to the company, its
secretary or agent, as accurate and particular an account of his
loss and damage, supported by vouchers, as the nature and cir-
cumstances of the case will admit of.
Held, that this condition must be read with art. 2478, and
reading the two together, the effect was held to be that the as-
sured must conform to the conditions and delays prescribed in
the policy unless it be impossible or be dispensed with by the
insurer formally or impliedly, and a verbal notice to the local
agent given the next day after the fire, who transmitted it at
once in writing to the head office, asking to have an adjuster
sent at once to inspect the loss, was a waiver of the condition.
Held, further, that the adjuster having requested the insured
before filling out his claim paper to procure duplicate invoices,
the originals having been burned, which necessitated a delay
beyond the loth days prescribed, this condition was also
waived. (89)
This case was relied on and followed by the Court of Queen's
Bench in the next following case, but its decision was reversed
by the Supreme Court.
A policy of insurance contained the usual conditions which
required the insured should make proofs of loss within 14 days ;
that the loss should not be payable until 60 days after the proofs
were furnished, and that the company should not be deemed to
have waived any condition or forfeiture by any requirement, act
or proceeding on its part relating to the appraisal or to any ex-
amination required by the conditions. Proofs were not made as
provided by the condition, and insured pleaded waiver by the
company, on the grounds, first, that the adjusters of two other
(89) Liverpool, London & Globe Ins. Co. vs Valentine, Q. R. 7 Q.
B. 400.
WAIVES AND ESTOPPEL 205
companies had reported to the insurers respecting an adjustment
of the loss on the basis of their inspection ; 2ly., that a director
of the company and a member of the liquidating committee
(the insurance company having become insolvent), had recog-
nized this claim and promised to pay, although there was no proof
that they were authorized to do so; and 3ly., that the manager
of the company after voluntary liquidation had sent a circular
to the company's creditors in which he "included this claim
amongst the liabilities of the company. The manager denied
having authority from the Board of directors or the
liquidating committee to send the circular. It was held that none
of these acts constituted a waiver and that the liquidating com-
mittee, which was simply a body appointed by the directors, and
who had never been approved by the creditors, had no legal au-
thority to bind the company. (90)
THE PRODUCTION OF A CERTIFICATE FROM TWO MAGISTRATES
CONTIGUOUS TO THE PLACE OF FIRE, BUT NOT THE MOST
CONTIGUOUS AS REQUIRED BY THE CONDITION, WAS HELD
TO VOID THE POLICY.
A policy of insurance against fire contained the following con-
ditions:
"The assured must procure a certificate under the hands of
two magistrates most contiguous to the place of fire, and not
concerned or directly or indirectly interested in the loss or as-
surance as creditors or otherwise, or related to the assured or
sufferers, that they are acquainted with the character and cir-
cumstances of the assured, and have made diligent inquiry into
the facts set forth in the statement and account of the assured,
and know, or verily believe, that the assured really, by misfor-
1 11 no, and without fraud or evil practice, hath or have sustained
by such fire loss or damage to the amount therein mentioned.
"No one of the foregoing conditions or stipulations, either in
(90) Hyde V8 Lefalvre, 32 Can. S. C. R., 474.
2UG THE LAW OF FIKE INSURANCE IN CANADA
whole or in part, shall be deemed to have been waived by or on
the part of the company, unless the waiver be clearly expressed
in writing by indorsement upon this policy, signed by the agents
of the company at Halifax, N. S."
The insured's premises having been destroyed by fire he ap-
plied to two magistrates contiguous to the place of the fire for
the required certificate, which they refused, and he finally ob-
tained such certificate from two magistrates residing at a dis-
tance from such place. The proofs of loss, accompanied by the
certificate, were sent to the agent, who subsequently made an
offer of payment to compromise the claim, stating that if such
offer was not accepted the claim would be contested. The agent,
on a subsequent occasion, told the assured that he objected to
the claim, as he "did not think it was a square loss."
Held, affirming the judgment of the court below, that tlie non-
production of the certificate, required by the above condition,
prevented the assured from recovering on the policy.
Held, also, that even if such condition could be waived without
indorsement on the policy, the acts of the agent did not amount
to a waiver.
Semble, that the condition could not be so waived.
The plaintiff at the trial deposed that at an interview with
one Crowe, the local agent of the company at Truro, and a sub-
ordinate to Salter who was the general agent at Halifax, the
following conversation took place :
f 'I said he must not delay me, as I had to get a certificate from
the two J. P.'e nearest the fire. He said that was of no con-
sequence, as any two responsible J. P.'s would do."
And he also swore that :
Having gone twice to Halifax to see Salter, the agent of
respondents there, who -granted and signed the policy on the
second occasion and when Salter had had in his hands for some
time the papers furnished by the appellant as proofs of loss, the
following conversation took place :
" I said to Salter, 'How are things progressing in my case' ?
He replied: 'Your papers and everything are quite satisfactory.
WAIVER AND ESTOPPEL 207
There are one or two cases ahead of yours, and when they are
settled yours will be' ".
This conversation was denied -by Salter. who says in his evidence :
" I did not tell him his papers were right."
As to this Strong, J., says: "I am of opinion that, irrespective
altogether of the requirement of the 19th condition requiring
that any waiver should be in writing, there was no evidence
showing that the stipulations as to the magistrate's certificate
required by the 14th condition had been, in fact, waived in such
a way as to bind the respondents, even if a verbal waiver had
not been provided against. Salter, as agent, apart from the
authority expressly conferred on him to waive in writing, had
no power so to bind the respondents, and granting that the plain-
tiff's account of what passed at the interview at Halifax was, as
the jury found, the true one, what was then said could not in
any way have precluded the company from setting up the want
of the certificate as a defence, simply for the reason given that
Salter was exceeding his powers in assuming (even if the plain-
tiff's evidence is to be so construed) to dispense with it. Further,
even if there could have been any doubt of this in the absence
of the 19th condition, that condition clearly excludes any au-
thority in the agent to waive otherwise than according to its
terms. Lastly, there was not the slightest evidence of any waiver
of the 19th condition itself, and moreover it is manifest that
nothing Salter, the agent, might have said, could have had the
effect of enlarging the limited powers to waive which the com-
pany had thought fit to impose upon him. The appeal is there-
fore totally unfounded, and should be dismissed with costs." (91)
A policy of insurance contained a condition requiring the as-
sured, in case of JQSS, to procure a certificate as to the matters
1 in the statement of loss under the hands of two mag-
istrates most contiguous to tlie place of the fire. A further con-
n pmvi'i. <! tlint no condition should be deemed to have been
-s the waiver was expressed in writing indorsed on
policy.
(91) Logan vs Cainni.-r--i:ii n.ion Ins. r<>.. 1:1 Can. S. <
208 THE LAW OF FIBE INSURANCE IN CANADA
Held, per Tuck, C. J., Hanington, Barker and Gregory, JJ.,
that the production of the certificate of the magistrates most
contiguous to the place of fire was a condition precedent to the
assured's right to recover. Per Landry and McLeod, JJ., that
the magistrate most contiguous qualified to act is the most con-
tiguous within the meaning of the condition, though not the
nearest in point of distance to the place of the fire. Per curiam,
that if there could be a waiver under the condition, without in-
dorsement on the policy, the acceptance of the proof of loss by
the company, without objection, was not a waiver. (92)
WAIVER MUST BE PLEADED.
Under the Ontario Judicature Act the performance of condi-
tions precedent to a right of action must still be alleged and
proved by the plaintiff. (93)
LEGISLATION RELIEVING INSURED.
Legislation relieving the insured where there has not been a
strict compliance with the conditions respecting proofs of loss,
will be found, as respects Ontario, infra, p. 441, as respects Que-
bec, infra, p. 440, as respects Nova Scotia, infra p. 442, Mani-
toba infra, p. 442, Alberta and Saskatchewan, infra, p. 442, and
British Columbia, infra, p. 442.
Waiver of proofs of loss, as it affects mortgages. Vide Bull
vs North British Ins. Co., supra, p. 109.
Estoppel. The liability of the principal for the conduct and
representations of his agent, where there is no express authority
conferred, but the acts are within the scope of his ostensible
authority, has been rested by Mr. Ewart upon the doctrine of
estoppel (94). Although controverted by some leading American
writers, this view for the first time affords a logical and scientific
basis for the doctrine of Implied Agency,' and its application in
insurance cases will be elaborated in the next succeeding chapter
which deals with Agency.
(92) LeBlaec vs Commercial Union Ins. Co., 35 N. B. Rep , 665.
(93) Home Life Association vs Randall, 30 Can. S. C. R., 97.
(94) Ewart, on Estoppel, p. 486.
AGENCY 209
CHAPTER VI
AGENCY.
Estoppel by misrepresentation of agent. Doctrine of the Eng-
glish and civil law. Agency in insurance cases. Of-
ficials at head office. General agents. Local general
agents. Local agents. Powers with respect to interim
receipt. Powers after issue of policy and before loss.
Powers after loss. Sub-agents. Brokers. Adjusters.
Inspectors. Application. Interim receipt.
i-PEL BY MISREPRESENTATION.
Estoppel of this character, which by some writers is called
estoppel by conduct, is a subdivision of estoppel in pais (estoppel
in the country) as denned by Lord Coke. (1)
As pointed out by Mr. Ewart, (2) the phrase "estoppel in
pais 19 is of value in marking off estoppel by record and estoppel
by deed from all the heterogeneous cases which are not these.
us never intended to cover cases of estoppel by misrepresenta-
tion ; and such cases have only been assigned to it because they
less allied to either of the other two categories.
We have already given the definition of estoppel by misrepre-
sentation in Pickard vs Sears and Freeman vs Cooke, supra, p.
(1) Coke, on Litt 352a.
(2) Dwart, on Estoppel, p. 1.
210 THE LAW OF FIEE INSURANCE IN CANADA
127, to which may be added the later definition of Brett, L. J.,
in Carr vs London & North Western Ky. Co., (3) as follows:
1st. "If a man, either in express terms or by conduct, makes a
representation to another of the existence of a certain state ">
facts which he intends to be acted upon in a certain way, and it
be acted upon in that way, in the belief of the existence of such
a state of facts, to the damage of him who so believes and acts,
the first is estopped from denying the existence of such a state
of facts."
2nd. "If a man, whatever his real meaning may be, so con-
ducts himself that a reasonable man would take his conduct to
mean a certain representation of facts, and that it was a true re-
presentation, and that the latter was intended to act upon it in a
particular way, and he with such belief does act in that way to
his damage, the first is estopped from denying that the facts
were as represented" . . .
ESTOPPEL BY MISREPRESENTATION OF AGENT.
Insurance companies, like all other incorporated bodies, ex
necessitate rei, can carry on business only by means of officials
to whom certain functions are delegated by the act of incorpora-
tion. These officials are nevertheless only the agents of the
Company, however plenary their authority may be, and when
they exceed their powers the company will not be bound by their
acts, except the circumstances entitle a person dealing with the
company through them to relief on the ground of estoppel.
In addition to these officials the company employs agents with
more or less extensive powers, and it is with respect to the extent
of the powers of such agents that the application of the doctrine
of estoppel by misrepresentation in insurance cases most fre-
quently arises.
In the first place, therefore, it is desirable to consider shortly
the general law of agency, and then the special application of
this law to insurance contracts.
(3) L. R., 10 C. P., 307.
AGENCY 211
In considering the nature and extent of the authority which
may be delegated to an agent, Story says : "Agency is commonly
divided into two parts: lly., a special agency; 21y., a general
agency. A special agency properly exists, when there is a dele-
gation of authority to do a single act; a general agency properly
:s where there is a delegation to do all acts connected with
a particular trade, business, or employment.
"Thus, a person who is authorized by his principal to execute
a particular deed, or to sign a particular contract, or to purchase
a particular parcel of merchandise, is a special agent. But a
person, who is authorized by his principal to execute all deeds,
sign all contracts, or purchase all goods required in a particular
trade, business or employment, is a general agent in that trade,
business or employment.
"\ person is sometimes (although perhaps not with entire ac-
curacy) called a general agent, who is not appointed with powers
so general, as those above mentioned; but who has a general
authority in regard to a particular object or thing; as, for ex-
ample, to buy and sell a particular parcel of goods, or to nego-
tiate a particular note or bill ; his agency not being limited in
tlu> buying or selling such goods, or '"negotiating such note or bill,
to any particular mode of doing it. So an agent, who is appoint-
do a particular thing in a prescribed mode, is often called
a special agent as contradistinguished from a general agent.
"On the other hand (although this is not the ordinary com-
ial sense), a person is sometimes said to be a special agent,
whose authority, although it extends to do acts generally in
particular business or employment, is yet qualified and restrain-
ed by limitations, conditions, and instructions of a special na-
In euch a case the agent is deemed, as to persons dealing
with him in ignorance of such special limitations, conditions
and instructions, to be a general agent; although, ad between
himself and his principal, he may be deemed a special agent. In
abort, the true distinction (as generally recognized) between a
212 THE LAW OF FIRE INSURANCE IN CANADA
general and a special agent (or, as lie is sometimes called, a
particular agent), is this: a general agency does not import an
unqualified authority, but that which is derived from a mul-
titude of instances, or in the general course of an employment
or business ; whereas a special agency is confined to an individual
transaction."
AGENCY IN QUEBEC.
The doctrine of the civil law which prevails in the Province
of Quebec on this subject is defined in certain articles of the
Civil Code. Here the contract of agency is called a mandate,
the principal is called the mandator, and the agent the man-
datary. Art. 1701 is as follows:
"Mandate is a contract by which a person, called the man-
dator, commits a lawful business to the management of another,
called the mandatary, who by his acceptance obliges himself to
perform it.
"The acceptance may be implied from the acts of the man-
datary, and in some cases from his silence."
Art. 1703 reads in part as follows:
"The mandate may be either special, for a particular business,
or general, for all the affairs of the mandator."
This portion of the article is taken from the Code Napoleon,
art. 1987, which reads as follows :
"Le mandat est ou special et pour une affaire ou certaines
affaires seulement, ou general et pour toutes les affaires du man-
dant".
Under the civil law therefore we have the same division of
agents into general and special, as we find recognized under the
English jurisprudence. Baudry-Lacantinerie, art. 514, says:
"Au point de vue de son etendue le mandat peut etre
general ou special. 'II est ou special et pour une affaire ou cer-
taines affaires seulement, ou general et pour toutes les affaires
du mandant', dit Part. 1987."
AGENCY 213
Art. 170-i reads: "The mandatary can do nothing beyond the
authority given or implied by the mandate. He may do all acts
which are incidental to such authority and necessary for the ex-
ecution of the mandate."
This article of the Code is stated by the codifiers as being
based upon art. 1989 of the Code Napoleon, and the authority
of Domat and Troplong. Only the first part of the article is
taken from the French Code, the latter part is based upon the
authorities of the jurisconsults, particularly the following ar-
ticle of Troplong, Du Mandat :
319. "II reste a faire observer que ce n'est pas aller au dela
de la procuration que de faire certains actes qui, quoique non
exprimes, y sont cependant virtuellement compris comme conse-
quents, antecedents et complements. On suppose que le man-
dant n'a pas parle de ces actes parce qu'il Fa juge inutile, ou bien
parce qu'il n'y a pas pense; car, s'il y cut pense, il en eut im-
pose le devoir au mandataire. C'est ce qu'enseigne le president
Favre sur la loi 30 D., Mandali: 'Intclliguntur ea omnia quae
credibile sit mandatorem in mandato expressum fuisse, si de iis
cogitasset/ ''
Art. 1705 reads: "Powers granted to persons of a certain pro-
fession or calling to do anything in the ordinary course of the
business which they follow, need not be specified; they are in-
ferred from the nature of such profession or calling."
This section, according to the codifiers, is based upon Story
on Agency, par. 127 et seq., Paley, on Agency, and the Loui-
siana Code, art. 2969, which reads as follows :
"Powers granted to persons who exercise a profession, or fulfil
certain functions, of doing any business in the ordinary course
of affairs to which they are devoted, need not be specified, but
are inferred from the functions which these mandataries exer-
cise."
<>ry says: (par. 127) : "If a person is held out to third per-
sons, or to the public at large, by the principal, as having a gen-
eral authority to act for and to bind him in a particular business
214: THE LAW OF FIRE INSURANCE IN CANADA
or employment, it would .be the height of injustice, and lead to
the grossest frauds, to allow him to set up his own secret and
private instructions to the agent, limiting that authority; and
thus to defeat his acts and transactions under the agency, when
the party dealing with him had, and could have, no notice of
such instructions. In such cases, good faith requires that the
principal should be held bound by the acts of the agent, within
the scope of his general authority; for he has held him out to
the public as competent to do the acts, and to bind him thereby."
And cites in support of the proposition, the following from
Pothier on Obligations :
"But the contract made by my agent, in my name, would be
obligatory upon me, if he did not exceed the power with which
he was ostensibly invested ; and I could not avail myself of hav-
ing given him any secret instructions, which he had not pursued.
His deviation from these instructions might give me a right of
action against himself, but could not exonerate me in respect of
the third person, with whom he had contracted conformably to
his apparent authority; otherwise no one could be safe in con-
tracting with the agent of an absent person."
The more recent text writers in France are to the same effect.
Baudry-Lacantinerie, on the subject Des Contrats du Mandat,
art. 780, says :
"Par exception le mandant est tenu des actes excedant les pou-
.voirs du mandataire si les tiers ont pu et du croire que ces actes
rentraient dans les pouvoirs du mandataire. Dans ce cas le
mandant a commis une faute en n'eclairant pas suffisamment
les tiers sur la portee du mandat
"Enfin, les tiers ne sont pas coupables de ne pas avoir verifie
les termes du 'mjandat si la nature des fonctions du mandataire
entraine par elle-meme certains pouvoirs, en un mot, si le man-
dant a fourni aux tiers des raisons de croire a un mandat plus
etendu que le mandat veritable."
And also, Guillouard, Traite des Contrats aleatoires et du
Mflndat, art. 186, says:
AGENCY 215
"Mais, vis-a-vis des tiers, il importe pen que le mandataire ait
reellement excede ses pouvoirs, si, en apparence, il a semble s'y
conformer. Les tiers de bonne foi qui traitent avec le manda-
taire ne peuvent juger de Petendue des pouvoirs de celui-ci que
par Papparence de son mandat, et si, grace a la forme de ce man-
dat, le mandataire peut exceder ses pouvoirs sans que les tiers
s'en apergoivent, le 'mandant n'en est tpas moins oblige, comme si
Pacte rentrait dans les pouvoirs qu'il a donnes. II doit en effet
s'imputer de n'avoir pas mieux veille a ce que 1'ordre par lui
donne ne fut pas depasse."
Art. 1709 reads: "The mandatary is obliged to execute the
mandate which he has accepted, and he is liable for damages re-
sulting from his non-execution of it while his authority con-
tinues."
Art. 1710 reads: "The mandatary is bound to exercise, in tho
execution of the mandate, reasonable skill and all the care of a
prudent administrator."
It would appear clear, therefore, that by virtue of these ar-
ticles of the Code, the general principles of estoppel by conduct
of the agent are as well recognized under the civil law as in the
English jurisprudence, and that an insurance company is bound
by the acts of its agent within the scope of his ostensible or ap-
parent authority in contracts made in the Province of Quebec to
the same extent, and in the same manner, as under the English
law which prevails in the other Provinces of Canada, and that
the cases hereinafter cited from the Province of Ontario, turn: ig
upon the doctrine of estoppel, are applicable in cases arising
under the Civil Code in the Province of Quebec.
>CY IN INSURANCE CASES.
The general principles which govern the relation between
principal and agent 'n other transactions are applicable to fire
insurance contracts.
The difficulty in applying general principles arises from the
Mont of agents whose duties and powers differ so widely
in tln-ir scope. It is not always easy to !'trnnine whether under
216 THE LAW OF FIRE INSURANCE IN CANADA
the facts of a particular case, the agent's authority is general or
special. It becomes necessary in the first place to differentiate
the insurance agents into classes.
1. OFFICIALS AT THE HEAD OFFICE OF THE COMPANY.
2. GENERAL AGENTS.
This term is usually, and more properly, applied to the Cana-
dian representatives of foreign companies.
3. LOCAL GENERAL AGENTS.
In addition, however, to general agents properly so called,
there are .general agents who superintend the company's business
for large districts, sometimes an entire province being under
their control, at other times, a city and adjoining territory.
Such agents, although special in that their powers are limited
by instructions of a special nature as between themselves and
their principals, yet, they have so general an authority in regard
to the insurance business entrusted to them that with respect
to persons dealing with them in ignorance of such special lim-
itations, they are treated as general agents. As this constitutes
a very large and important class, they are hereaiter, for con-
venience, designated local general agents.
4. LOCAL AGENTS.
Local agents may be defined as representatives of the company
having authority to solicit applications for insurance and to
bind the company for short term contracts of insurance extend-
ing over usually 30 or 40 -days, and being entrusted by the com-
pany for the purpose with forms of application and printed
forms of interim contracts or receipts, as they are styled. These
interim receipts have the name of the manager or general agent
stamped or lithographed thereon. They recite the application
for insurance and declare that, pending the acceptance or refusal
of the proposal, the 'property is held insured by the company for
a prescribed period.
AGENCY 217
5. SUB-AGENTS.
A sub-agent is an agent to secure applications for the company
and forward them to his principal, the company's agent. In the
Province of Nova Scotia the expression "sub-agent" is used with
the significance of local agent.
6. BROKERS.
A broker properly speaking, is a mere negotiator between the
party wanting insurance and the company. He never acts in his
own name, but in the name of those who employ him.
Broker is thus defined by the Civil Code, Art. 1735 :
"A broker is one who exercises the trade and calling of nego-
tiating between parties the business of buying and selling or any
other lawful transactions.
"He may be the mandatary of both parties and bind both by
his acts in the business for which he is engaged by them."
7. ADJUSTERS.
An adjuster may be defined as an agent of the company em-
powered to ascertain and fix the amount of its loss upon the
property insured. With some companies the adjuster is called
inspector.
POWERS OF AGENTS OF THE COMPANY.
1. OFFICIALS AT HEAD OFFICE OF THE COMPANY.
We have now to consider to what extent there is any limita-
tion upon the general manager or officials having control at the
1 office to deal with the contract of insurance in any manner
they deem fit.
Although even the general manager cannot by estoppel bind
the company to a contract beyond its corporate powers, yet, as
the company can only transact business through its directors and
officers at the head office, these powers are only limited by 1h<'
powers of the company itself.
218
THE LAW OF FIRE INSURANCE IN CANADA
An early Canadian case dealing with tnis question is Montreal
Assce. Co. vs McGillivray. (4) The facts of this case are set out
in the judgment of the Judicial Committee delivered by Sir John
Coleridge, as follows:
"The facts appeared to be, in substance, these : Hays, acting
by the authority of the respondent, having agreed to effect an
insurance for her in her name, repaired to the office of the ap-
pellants, on or about the 18th of February, where he saw Mur-
ray, who then^was, and had been from its formation, the man-
ager of the company; he applied to him in the usual way to ef-
fect the insurance, stating for whom it was to be; and all was
proceeding in the usual way in which policies were effected,
without difficulty, until it appeared that he was not prepared to
pay down the premium, in lieu of which hi- ollVivd his own prom-
issory note, payable on the 1st of March following. This was
at first refused, as contrary to the course of the office, and to
Murray's instructions, but finally accepted, and the particulars
of the intended policy entered in the policy order book in the
usual way. The .policy was to be sent when made out, but it
never was made out. The note was not paid at (maturity, but
dishonoured and protested; the premium was never paid, and a
few days after the maturity of the note, and long before the fire,
the entry in the order book was crossed out by the directions of
Murray.
"Upon these facts the appellants contended, that they had no
power to effect such an insurance without a policy, as the respon-
dent was compelled to rely on, and that if they could, they had
never, constituted Murray their agent for the effecting of such an
assurance, and, consequently, that if such an insurance was in
fact made by him, he had acted without their authority, and
they were not bound by his acts. The learned judge, in his
summing up, disposes of the first point, as a matter of law, in
favour of the respondent, and then, considering only the nature
of the acts done by Murray, assumes that in doing them he was
the agent of the appellants."
(4) 13 Moo. P. C., 87.
AGENCY 219
He says: "Their Lordships do not think it necessary to ex-
press any opinion on the first point; they will assume for the
purpose of their decision, that the learned judge was right in his
view of the law ; nor do they deem it essential or intend to state
whether, in their judgment, Hays was a competent witness. They
assume for the present purpose in favour of the respondent that
he was so. With this remark they proceed to consider the facts
on which the learned judge's direction turns as evidence bearing
on the second point ; the question of agency, in fact. And upon
this they think, the true question for the jury to have been, not
what was the real extent of authority expressly or in fact given
by the appellants to Murray, but what the appellants held him
out to the world, to persons with whom they had dealings, and
who had no notice of any limitation of his powers, as authorized
to do for them. For it cannot be doubted, that an agent may
bind his principal by acts done within the scope of his general
and ostensible authority, although those acts may exceed his ac-
tual authority as between himself and his principal; the private
instructions which limit that authority, and the circumstance
that his acts are in excess of it, being unknown to the person
with whom he is dealing."
The learned judge recites the legislation undvr which the
Company was incorporated and proceeds:
"These are the laws under which the Company came into ex-
istence, from wh ii-li it receives all its powers, and by which they
must be limited; they certainly contain no express power to
make any contracts for fire insurance, except by policy, and in
order as it should seem to secure the solvency of the Company,
the exercise of that power is guarded by specific provisions,
whereas none are made in respect of fire insurance by parol. To
the direction of the learned judge, evidence was neces-
sary th;r ll;mt> had assumed to have the power to make
contracts for fire inaur;mn<- !y parol, and held out Murray as
their agent for making them, without any restriction. The 1m r-
thrn of proof was entirely on the respondent : the provisions of
220 THE LAW OF FIRE INSURANCE IN CANADA
the Ordinance and Act of incorporation clearly raise no pre-
sumption in her favour.
"Now, what are the remaining facts in the case? There is no
evidence of express authority; Murray was the manager for the
company; he held an office recognized in the Ordinance and Act,
importing very large powers and a wide discretion; but then he
was (the manager for a company whose powers, in respect of
policies at least, were subject to limitations, which were public,
and must be taken to have been well-known. He was clearly its
agent for granting policies. The evidence, taken in its fair
result, shows that whether the practice to pay the premium
down, and to issue the policy after such a delay only as the
ordinary necessities of business made inevitable, had been ab-
solutely uniform or not ; yet that to give credit for the premium,
or to take a promissory note for it, payable in futuro, and to
delay the issuing of a policy indefinitely was very rare ; it shows
also, that to insure without any policy eventually issuing, was
entirely without precedent; that Hays, whose knowledge must
be taken to be the knowledge of the respondent, knew all this,
and was not deceived ; that he had undertaken to her to effect a
policy of insurance, not a parol contract of insurance;
that his original application was for an insurance by policy,
and that it was only his own default, in not being pre-
pared to pay the premium, which prevented the policy from is-
suing in the usual way, at the usual time. It was he who pre-
vailed on the agent to do the act which is now relied on as bind-
ing the appellants. Now, Murray was indeed their general agent ;
and had he merely made an unwise contract for them, or had
he been satisfied with answers which ought to have been deemed
unsatisfactory; in these, and many more supposable cases (col-
lusion on the part of the person seeking to be insured being out
of the question), the company would have been clearly bound;
in all such (supposed cases he would have been acting within the
scope of the authority which the coma/pny held him out as pos-
sessing. But if he was, and was known to be, an agent only for
effecting insurances by policy on payment of a premium (and
AGENCY 221
their Lorchhips see no evidence beyond this) then he was not
thtir agent in the act which he really did, and they are not bound
by it."
The crux of this case seems to be that Murray, the general
manager, was known to the assured as having no power to effect
the insurance except by a policy on payment of the premium,
because the judgment itself is a leading authority for the pro-
position that the agent may bind his principal by acts done with-
in the scope of his ostensible authority on the ground of es-
toppel.
The powers of the officers of an insurance company are not
limited by instructions of which the public are ignorant. The
public transact business with the officers and agents, whose
names appear upon the instructions issued by the company, and
who represent it before the public. If the transaction has such
a character as necessarily is included in the general affairs of
the company, and if it is carried on by the officers to whom such
affaire are confided, the company is not permitted to repu-
diate it. (5)
The plaintiff had made alterations and additions to his pre-
mises, including the placing therein of a steam engine, and ap-
plied to the local agent for increased assurance, informing him
of the changes which had been made. The agent wrote the
plaintiff that the company would take the risk at the rate of the
then oxisting insurance, and enclosed a blank form of applica-
tion requesting him to fill in the same and return it. Plaintiff
rted that the rate was too high, and notified the agent that
he would allow the insurance to remain as it was. The evidence
showed that tbe local agent had written to the head office in-
forming them of the change and asking for a rate, and that the
it iff desired to have the present policy cancelled and a new
one issued for an increased amount for the building as it then
1, and enclosing a diagram. The agent received a reply from
the (oinpany mentioning the rate of the increased insurance now
Provincial Ina. Co. t* Roy, 10 R. L. ;i ::.
!e also Chalmers r Mutu.-il L:iv IIH. Co. of Shorbrooke, 3
.r. 2,
222 THE LAW OF FIRE INSURANCE IN CANADA
that steam had been added. Nothing further was done until the
then existing policy was about to expire, when the plaintiff re-
ceived notice from the company of that fact and paid the pre-
mium and got a renewal receipt from the local agent. The same
thing happened in the following year, and within a month of the
granting of the last renewal receipt the fire occurred. The de-
fence was a failure to notify the company and get their consent
to the alterations and increased hazard, and the company set up
the provisions of the statute that the policy should be void if
the risk was increased by any means whatever, and as to this the
court said :
"We do not think that the argument should prevail, that be-
cause a statute makes a policy void in certain events, there can
be no revival thereof by clear acts of the directors recognizing
it as still existing, and dealing with the assured and allowing
him to pay money or alter his position on the footing or assump-
tion that he is still insured by them. . .
"Nothing can be more unjust in our view than to hold that
the defence now urged should prevail, and that for eighteen
months he should be allowed to believe himself insured, and to
pay the defendants two annual premiums on such assumption.
"The head office sent down formal receipts, and the local agent
countersigns them and hands them to the plaintiff, who pays his
money on the faith thereof, his attention never being called to
any doubt or suggestion against his insurance." (6)
A policy of insurance was delivered up at the request of the
company's agent on the ground of misdescription, and a new
one substituted which contained different and more onerous con-
ditions than were contained in the first policy, and the attention
of the insured was not called to the difference. The first policy,
in providing for the proofs of loss, stated that a certificate should
be obtained under the hand of a magistrate or notary public con-
tiguous to the place of fire, while in the second policy the word
" contiguous " read " most contiguous ". The certificate was
from a contiguous magistrate, but not the most contiguous, the
(6) Law vs Hand-rn-IIand Ins. Co., 29 U. C. C. P., 1.
AGENCY 223
excuse offered for not obtaining the magistrate living most con-
tiguous to the insured property, being that one of them was in-
capacitated by drink most of the time, and the other was an en-
emy of the plaintiff. The blank form furnished the plaintiff by
the agi-nt used the words "contiguous magistrate" and not "most
contiguous". In pronouncing judgment, Gait, J., said: (7)
"It is to be observed that the first was the only policy which
had been in possession of the insured at the time of the fire, and
although another policy was delivered to him afterwards, the
conditions are much more rigorous, and the plaintiff might very
properly have refused to accept it.
"If the.re was a mistake made in describing the property insur-
ed in the first policy, it was the mistake of the defendants, not
of th..' plaintiff, and he should, at any rate, have had an oppor-
tunity of objecting, if he thought fit, to the conditions on the
.'id policy. He has, in my opinion (at least in equity) a right
to contend that the only conditions binding on him are those
which were on the only policy which had been delivered before
the fire.
"It may be, and probably was the case, that the second policy
had been prepared before the fire, but not delivered.
"We should then have expected in common honesty and fair
1< :ilin that the defendants, when they discovered that the proofs
furnished were in accordance with the conditions of the first,
hut not of the second, would have called the attention of the
assured to the fact, so that he might have supplied the deficiency
on-tested their right to demand it, in place of lying by in or-
1T to avail themselves of what, under the circumstances, was a
most inequitable defence and deprive the plaintiff of his insur-
In the Court of Appeal, (8) dealing with this point, Burton,
ye:
"I must admit that I am not impressed by the circumstance
Sham,,,,, M Huttings Mutual Fin- Ins. Co., 20 U. C. C. P. 380.
(8) 2 A. R., 81.
224: THE LAW OF FIRE INSURANCE IN CANADA
that the local agent furnished the forms on which the proofs
were made. It was evidently an unauthorized act on his part,
it being in evidence that the company did not furnish forms to
their agents for such a purpose, and it would, in my opinion,
be a violation of all the rules regulating the relations and
responsibilities of principal and agent to hold the company
bound by such an act ; but I think it was the duty of the com-
pany, certainly morally if not legally, on discovering the fact
that they were not in accordance with the exact requirements
of their conditions, bearing in mind the fact that this policy was
not delivered till after the fire, to call their attention to it, and
it required but very slight evidence to warrant a jury in conclud-
ing that any objection to the strict form of these proofs was
waived. The proofs were received on or about the 6th of August.
On the llth of November, the company, not raising then, or
previously, any question as to the sufficiency of these proofs,
write that they have placed the matter in the hands of the Gore
District for adjustment, saving their rights at law. Thus saving
must, I think, be held to refer to any objection to the claim it-
self, and not to the sufficiency or insufficiency of the preliminary
proofs; and having left the matter in that position, they are
estopped from falling back upon any technical objection to these
proofs." (9)
A COMPANY BY PREVENTING COMPLIANCE WITH THE PROVISION
AS TO PROOFS OF LOSS WILL BE ESTOPPED FROM SETTING UP
ABSENCE OF PROOFS OF LOSS AS A DEFENCE TO THE ACTION.
The declaration alleged that the 14th condition of the policy
required that the plaintiff should give a written statement of his
loss within 14 days after the fire, specifying particulars and
verifying it in the manner described in the condition. The
declaration averred that the plaintiff was ready and willing to
give notice within the 14 days as required, but within that time
(9) This decision was reversed on other grounds, 2 Can. S. C. R.,
p. 394.
AGENCY 225
the defendants took possession of the goods which remained and
prevented the plaintiff from giving the required account and
the defendants waived the said condition and discharged the
plaintiff from fulfilling it. To this the defendants, by the 5th
plea, pleaded the condition in the policy which provided that
there could be no waiver except in writing endorsed upon the
policy and signed by the general agent, and by their 8th plea
set out the 3rd condition of the policy requiring notice of change
in the building and averring that there had been such a change
and the plaintiff did not notify defendants of it in writing, nor
was it allowed by endorsement, nor did the defendants waive
such endorsement.
The plaintiff filed a replication by way of estoppel to so much
of the 8th plea as alleged that the alteration was not allowed by
ndorsement, and that the defendants did not waive such non-
Tsement, that the plaintiff gave notice in writing of such
ation and delivered the policy to the defendants to have the
allowance of said alteration endorsed thereon, and also to have
the allowance of a further assurance endorsed thereon, and the
udaiiN anvpted said notice for these purposes and waived
the endorsement of the same on the policy and discharged the
plaintiff from requiring to have the same so endorsed, and after-
wards continued and confirmed the said policy. The defendants
rejoined to this replication the condition already mentioned that
no condition could In- waived except in writing endorsed on the
Tin- plaintiff demurrer to the pleas and to the rejoinder and
cepted to the declaration and demurred to the
on.
the declaration:
1. That tho averment of prevention by defendants was a per-
M for non-rom|.lian<v with ih- llth condition: and
Ilia! th- and diseliarire of ill
\va- -ul'iiriiMi'. (I'M
Smith ' i "M in.;. r,. f ;;', r. < . i:
S
226 THE LAW OF KIKK INSURANCE IN CANADA
When- a policy required thai persons sustaining loss should
forthwith give- notice thereof to the company, and apply for its
blank forms. a ; nd execute and lile the proof of claim, within 15
days after the fire; and the plaintiff gave notice to the insurers'
agent, and applied for blanks within the time, but did not re-
ceive the blanks until after the 15 days had expired: Held, that
the insurers, having by their neglect prevented the plaintiff from,
obtaining the blank forms and completing the claim within the
15 days, could not take advantage of his failure. (11)
WMKRE TIIE OFFICKHS OF THE COMPANY i> in- PARE THE APPUCA-
TION.
Wheiv. the scriviary of the company has. at the time of the
application, full knowledge of the value of the insured property
and himself prepares the application without any previous in-
quiry of the plaintiff in doing so, he acts solely on his own
knowledge acquired in the proper discharge of his duty as such
secretary, and if the plaintiff, honestly believing the representa-
tions, signs the application so prepared by the secretary, the com-
pany is liable. (12)
Xoriri; OK VACANCY <;IVK\ TO GFAI:I;\I. MANAGER.
On the argument of an apjR'al. it was contended, as stated
in the judgment of Osier. .1., that "by the application the plain-
tiff described the building as l>cing <>ccupi<Hl by himself and his
tenants as a dwelling housv, and thereby contracted with the
defendants that it was so occupied, whereas in fact it was at the
time vacant and unoccupied ; that there was thus an entire mis-
description of the subject matter insured, and so the risk never
attached . . .
"To this it was replied in substance that tin- plaintiff made his
(11) Hammond /* Citi/.i-ns Ins. Co., 26 N. B. Rep., 371.
Vide CaMwell vs Stadanma Fire Ins. (V)., supra, pp. 78. 83,
131, 208.
(12) Redford vs Mutual Fire Iiis. Co. of Clinton. :is r. C.
227
application for insurance at the head office of the defendants,
to one Drake, their general manager, and chief executive officer;
that he gave Drake 1 all the information he asked for, and told him
that the dwelling house was unoccupied; that Drake filled up
the application, which plaintiff signed without reading it, and
not aware until after the loss that it contained any incorrect
statement . . .
"It must bow, at all events. he taken upon the finding of the
jury that the defendants' general manager had notice at the
time of the application, and in the course of the transaction,
that the dwelling house was unoccupied, and as the defendants
<1 their drlVmv entirely upon the materiality of the mis-
' iption and 'not upon a warranty of its truthfulness or con-
dition or stipulation that the policy should be avoided if it was
not absolutely cornvt, the question is to he judged of by their
knowledge <>f tin- facts when they accepted the risk and issued
the policy. The knowledge of their manager acquired, under
-urh circumstances was the knowledge of the company. Shannon
tow District Ins. Co., 40 U. C. R., 188; 2 A. R., 396; Shan-
non vs Hastii _ I S. r. !'.. :*!M. 410." (13)
ESTOPPEL BY CONDUCT OF COMPANY IN CONNECTION WITH
PROOFS OF LOSS.
to proof pajRTs and claim cannot prevail where the
mpany wrongfully declinnl the production of the
policy on which they are sued so as to permit of the insured.com-
B th'Tcwith. ( 11 )
WIII.KI. i in. . (.\ii-\\v BBFUDIATBfl [T8 LI ABILITY.
In answiT i,, ; , notice. of loss, the company replied that lh<-
}K)licy had r.\|in-d and they were not liahlr. Three month-
16 plaint ill' otlVn-d ( supily full proofs of Io98 if
,, - v smwMMi Mm ins. <... 1." A. i: .
Mit-iH-i pndoa A- Oa., rj Oi i:. TO<; ; tr, A. i: .
THE LAW OF FIRE INSURANCE IN CANADA
required, but the company, while affirming cancellation of the
policy, was silent on this point. The trial judge held that apart
from the provisions of the statute which gave relief in case of
accident, mistake, etc., "the general principles of law as to
waiver of conditions for the benefit of the company, show that
the attitude of the company was such a repudiation of liability
as relieved the plaintiff from proceeding to make formal proofs
of loss."
Burton, J. A., in the Court of Appeal put the answer on the
ground of estoppel, saying:
" Tlie defendants have estopped themselves by their conduct
before the expiration of the 30 days from insisting upon a strict
compliance, and the making no reply to the plaintiff when he
offered still to supply the proofs if the defendants djesired it,
should I think equally estop them from insisting on "the benefit
of any defence founded on this condition." (15)
In tliis case "waiver" must have been used by the trial judge
in the sense of "estoppel'' as the 20th statutory condition re-
quired tlio waiver to be in writing signed by the agent of the
company.
CALLING FOR PROOFS OF LOSS MAY ESTOP THE COMPANY FROM
CLAIM I M; TILVT THERE NEVER WAS ANY CONTRACT.
The plaintiff in his application, described the building insur-
ed by an illegibly written won! that was intended by him for
"board", but was read 'by the defendants as "brick", and they
issued their policy upon a brk-k building, charging a rate for
that class of construction, and were not aware until after the
fire that the building was a board one. As stated in the judg-
ment of Wilson, C. J.: (16)
"The evidence shews that, about two months after the claim
of loss was sent in by the plaintiff, as on a brick building, and a
(15) Morrow vs Lancashire Ins. Co., 29 O. R., 377; 20 A. R., 173.
(16) 11 O. R., p. 51.
AGENCY 229
few days longer than the two months after they knew the build-
ing was not a brick building, the company wrote to the plaintiff,
Insurance Company, No. 41,659 and that you have been and are
by their solicitors, stating, 'You have not yet completed your
proof of loss under policy of insurance with the City of London
now required to comply with clause V of the 13th statutory con-
dition on the policy.'
"That condition relates to the production of a certificate un-
der the hand of a magistrate, etc., residing in the vicinity, stat-
ing he has examined the circumstances attending the fire, etc.
"Three days later, the plaintiff's solicitor sent to the defen-
dants* solicitors the certificate required."
In giving judgment, the same judge said: "The only acts
which there are here of waiver are the letter of the defendants'
solicitor after the fire, and after action was brought, requiring
th(- plaintiff to furnish the company with the magistrate's cer-
tificate, according to the statutory condition 13e, and the plain-
tiff doing so.
"That does seem like an affirmation of the -policy, and these
acts were done at a time not only with a full knowledge of all
the facts, but with the knowledge of the action pending, and
that tin- plaintiff was insisting on the assertion of his claims for
his loss under the policy, treating the description as a mere mat-
ter of mistake I IIHMV strongly rely upon the fact of the com-
pany's solicitor having upon the 30th of May served a notice
upon the plaintiff that the company had appointed Mr. Blakely
as the arbitrator for the company, 'to whom the differences
h have arisen between you and us respecting the value of
property insnn-.l. tl)e property saved, and tin- amount of loss,
the proportion thereof to be paid by us, are to be submitted
uant to the said condition No. 16,' and requir 
