Judgment of the Court
SEDGEWICK J.-On the 5th September, 1896, the steamer Baltic owned by The Great Northern Transit Company, Limited, the present respondents, was burned while in dock at Collingwood, Georgian Bay. At the time of the fire she was insured against fire to the amount of $11,000 in seven companies, all of them except the Alliance Assurance Company being the present appellants.
The companies having disputed their liability actions were brought and one of these cases was tried before Armour C.J., with a jury at Toronto in September, 1897.
Judgment was there given in favour of the plaintiffs, which judgment was sustained upon appeal by an equally divided court, Maclennan and Moss JJ. being of opinion that the judgment should stand, the Chief Justice and Osler J. dissenting. The appeal is from that judgment to this court.
It is an admitted fact that the last trip of the Baltic was made in the season of 1893.
In September of
' 1893 she was laid up at Collingwood and from that date she never again went to sea. It also appeared that during 1894, 1895 and 1896 she never obtained a certificate of inspection provided by the Dominion Act without which she -could not have been run; that her planking, her frames and her engine bed were in such a condition that it would have been impossible Sedgewick J. for her to have been moved from her position by her own motive power; that her electric light plant and
,certain portions of her furniture had been removed, and that she was in such a condition that she could not in any sense be described as a running boat.
Only two questions are raised; first, as to whether at the time of the fire the vessel insured came within the risk described in the policy; and secondly, as to whether the provisions of the Ontario Fire Insurance
Act in regard to conditions had been or should have been complied with.
The wording of the description of the risk in each of the policies is identical and is as follows:
. On the hull of the S. S. Baltic, including engines, boilers and appurtenances thereto, anchors, chains, masts, spars, rigging, sails, cabin and office furniture, beds, bedding, linen, silverware and platedware, cutlery, china, glassware and earthenware, looking glasses, mirrors, wheelbarrows, trucks, clocks and apparel on board said steamer whilst running on the inland lakes, rivers and canals during the season of navigation.
To be laid up in a place of safety during winter months from any extra hazardous building.
Ordinary outfit to be allowed in winter and spring.
It is understood and agreed that the steamer insured under this policy has permission to carry merchandise, hazardous and nonhazardous, as freight from port to port with one barrel of coal oil for steamer's use.
And the controversy mainly turns upon the interpretation to be given to the words " whilst running on the inland lakes, rivers and canals during the season of navigation."
Three contentions have been put forward:
The first (and it is that upon which the judgment of the trial judge is based and is followed by Mr. Justice Maclennan in the Court of Appeal) is that the clause was intended to confine the risk to fire whilst the vessel was inland, whether on the lakes, rivers or J. canals during the season of navigation, and not upon the ocean, the emphatic word being nland as distinguished from ocean. In other words, that the clause might read " whilst being (whether running or laid up) in the inland lakes, rivers and canals during the season of navigation, but not on the ocean or in any ocean port."
Another interpretation is that the phrase "whilst running," applies to and qualifies not the S. Baltic itself but only some of the property and articles intended tobe included in the risk. The third interpretation is that by the words in question the companies undertook to insure not a vessel laid up during the season of navigation but a vessel actively engaged or employed during that period upon the inland lakes, rivers or canals-that during the season of navigation she must be a vessel in use or as they say "in commission," (a term only applicable to national ships of war)-with the necessary ship's papers and properly provided with master, crew and everything requisite for the ordinary prosecution of the business of a merchant vessel.
I am not able to agree with the view of the learned Chief Justice of the Queen's Bench Division. It is true that the word " inland " is an emphatic word confining the risk so far as locality is concerned to inland lakes, rivers and canals, so that if a loss should occur while the vessel happened to be, say at Halifax or any other Atlantic port or on the high seas, she would not be covered
But there are, it seems to me, other equally emphatic words and one of these words is
"running."
The learned Chief Justice's interpretation gives no effect to it. But not only that; it necessarily introduces into the clause an idea which is opposed to the idea conveyed by the word " running," namely, the idea that whether the ship was "running." that is, in active employment or use, or whether she was laid up either at anchor or in dock or upon J. dry land, she was still within the words of the policy.
This, I think, is not interpreting the contract but enlarging it, making a contract not contemplated by the parties.
I have not been able to appreciate the second interpretation given to this clause to which I have referred.
It is a clause qualifying either the word
" Baltic," or the word "steamer."
It contemplates not engines, anchors, office furniture, etc., running, but a steamer running, nothing more, nothing less.
The third interpretation is, I think, the correct one.
It is an element of importance that this is a fire policy, not a marine policy. Two elements much more important in a fire policy than in a marine policy are those of locality and mode of use. The risk of a thing being burned depends not so much upon the thing itself as upon its location and the uses to which it is put. A wooden building used for the manufacture of dynamite in a crowded city surrounded by factories continually emitting sparks from their chimneys or smokestacks may be absolutely uninsurable. The same structure removed for farming purposes to the open prairie might be insured at almost a nominal sum. Now this is not a "time"
policy.
A time policy is a phrase used only in marine insurance to distinguish it from a voyage policy. It in no material respect differs from a policy upon a building or upon anything else capable of insurance against fire. Neither is it a policy insuring the subject matter from one definite period to another. It is rather insuring during within two defined points of time as she may happen to V. acome within the description and terms of the risk. In the present case she is insured, first, whilst running upon the inland lakes, rivers and canals during the season of navigation, and secondly, whilst she is laid up in a place of safety during winter months (removed) from any extra-hazardous building. There may be within the year many periods, longer or shorter, in which she is not covered at all.
She may during the season of navigation be running on the high seas.
Whilst so occupied she is not insured. So likewise during the winter months she may be running either on the high seas or upon the unfrozen waters of the inland lakes, or as at the City of Quebec engaged as a ferry boat from one side of the St. Lawrence to the other. Still she is not insured. I do not know and it is not material to determine to what extent the element of locality influenced the insurance companies in making these policies. I do not know whether navigation upon salt water is carried on at a greater risk than on fresh water or why the operations of this steamer were confined to the latter, but admitting that the parties in limiting the operations of the vessel to inland waters had in view the prohibition of navigation in ocean waters, it is perfectly clear that they had also in contemplation two distinct classes of risk, namely, the risk of fire whilst she was in actual use during the season navigation and likewise the risk of fire whilst she was not in use but laid up in a place of safety during the winter months.
The mode of use in both cases was material to the risk.
In the summer months no special provision was made for her safety
Then she would be running.
She would have her master and crew;
she would have her life saving and fire saving apparatus; she would be under constant supervision and the danger of fire would be reduced to a minimum.
In the winter months, however, she must be laid up. She may be laid up anywhere, whether in an inland port or an ocean port, but wherever laid up it must be in a place of safety and removed from an extra hazardous building. Looking at the whole clause it seems tome that the words " running during the season of navigation" are mainly used in contrast with the words
"laid up during the winter months."
She is only covered by the clause whilst during the season navigation she is running and whilst during the winter months she is laid up in a place of safety.
This, it seems to me, is the true construction of the clause.
It gives a natural and reasonable meaning to each of its words and it does not necessitate as the first interpretation does the insertion of the additional stipulation to which have referred in order to give effect it.
If the view I take is incorrect and the first interpretation is the right one; if it is not necessary that during the season of navigation the vessel should be in actual use; if all that was contemplated by the parties was that during that season the vessel should exist in situ whether running or laid up, then she might be laid up anywhere, whether in a place of safety or not; she might be anchored or even let run adrift upon the open lakes; she might be moored or hauled up high and dry in immediate proximity to any factory or building no matter how dangerous such proximity might be. Surely, as I view it, this consideration alone shews the untenable character of the ground upon which the judgment below is based.
One other point remains.
It is contended that the stipulation contained in the words " whilst running,"
is a condition within the meaning of the Ontario Insurance Act, and inasmuch as it varies from or is in addition to the conditions by that Act made statutory, the policy should comply with section of the Act which provides that such variations or additions should be printed in conspicuous type and in ink different colour.
So far as this point is concerned I entirely agree with the view taken by the learned J. Chief Justice of the Court of Appeal and Mr. Justice Osler. The stipulation in question is in no sense a condition but rather a description of the subject matter insured.
It is descriptive of and has reference solely to the risk covered by the policy and not to the happening of an event which by the statutory conditions would render the policy void. The statute, therefore, does not apply.
On the whole I am of opinion that the appeal should be allowed and the action dismissed; all costs to follow in the usual course.
Appeal allowed with costs.