Anglo-American Fire Ins. Co. v. Hendry

DAVIES J.-These appeals from the judgments of

.the Appellate Division of the Supreme Court for Ontario were heard together, there being one appeal book only and the defence of both companies appellants to the actions against them being the same.

Three principal grounds of objection to the judgment appealed from were stated and argued at not unreasonable length.

The first ground was the alleged fraudulent valuation of the goods destroyed by the fire; the second, the reasonableness of the variation of statutory condition 22 as to the time allowed for bringing suit against the company for the recovery of claims under the poli- J. cies; and the third the avoidance of the policy in each company by an alleged misrepresentation in the applications for insurance.

As to the first ground, the fraudulent over-valuation of the goods destroyed by the fire, I agree fully with the findings of the learned trial judge, who had the advantage of hearing the case tried before him twice, confirmed by the Appellate Division, that the charge of over-valuation is unfounded.

There had been a stock-taking by Jeffrey, the insured and owner of the goods, in the month of August preceding the December fire.

The evidence shewed clearly that -this stock-taking was participated in by all of the employees of the insured, as well as. by Jeffrey himself, that the quantities and values of the goods were taken down at first upon sheets of paper which were handed in by each of the employees to Jeffrey and then by him and one of his assistants copied into three stock books. Before, however, it was so transcribed into these books these stock sheets were seen 'by the companies' own agent, Gillespie, who took the applications for the policies sued upon; and he states that the amount of stock as shewn by these original stock sheets was $24,000, or thereabouts. There were, it is true, some conflicting estimates made from general observation of the stock by commercial travellers of the value of the goods upon the shelves and in the store as they "sized them up," to use the expression of one of them, after the August stocktaking and before the fire in December. Some of these estimates agreed substantially with the result of the stock-taking while others were much below it.

I have, as requested by Mr. DuVernet in his argument, gone carefully through all the evidence called to our attention by him on this material question and read much not specially referred to; and the result is that I agree with the findings of the trial judge concurred in by the Appellate Division that "the stocktaking in August, 1910, was well and accurately done and its results carried honestly and carefully into the three books constituting Exhibit 6," and further, that

"at the time of the fire there was in the store approximately $25,000 worth of goods, estimated at cost prices."

These two findings concurred in by the Appellate

Division, and upon the correctness of which I cannot find evidence sufficient to cast reasonable doubt, dispose at once of the whole charge of fraudulent overvaluation.

If the stock-taking in August was an honest one, as I hold it was, there cannot be any reasonable doubt under the evidence as to the daily sales between then and the date of the fire and the purchases of goods between these dates that the value of the stock at the time of the fire was substantially in excess of $21,000, the total amount of insurance.

As to compliance by the assured with the conditions of the policies relating to furnishing proofs of loss, I need only say that I fully agree with the findings of the trial judge concurred in by the Appellate

Division that these conditions were fully complied with when on the 17th March, 1911, Jeffrey delivered to the companies, in accordance with their request, copies of the stock-taking in August with duplicate copies of the invoices of all goods purchased between such stock-taking and the date of the fire. I do not think the further demands of the companies for other invoices of purchases before the stock-taking were rea- . sonable and I agree that complete proofs of loss were delivered on that date, 17th March, 1911.

In 60 days afterwards the claims became payable. The actions 'brought before that date were premature, but those brought on December 20th, 1911, were in time, on my conclusion with respect to the variation clause as to time.

Then comes the question of the reasonableness of the variation of the statutory condition absolutely barring every action, suit or proceeding, for the recovery of any claim under the policy "unfess commenced within six months after the loss or damage shall have occurred."

I concur in the conclusions of law reached by the Appellate Division on this point which is in accordance with the judgment of this court in Eckhardt & Co. v. The Lancashire Ins. Co. (1), that the justice and reasonableness of a variation or addition must be determined upon the circumstances of the case in which it is sought to be applied. Applying that test to the case before us, I have no difficulty in concurring with the trial judge and the Appellate Division that the variation reducing to months from the happening of the loss the twelve months allowed by the statutory conditions for bringing the action is not reasonable or just.

The fire happened on the 25th December, 1910.

The original proofs of loss were delivered shortly afterwards. In my opinion, the companies were entitled to demand further proofs of the loss and I think those supplied to them on the 17th March, 1911, com- Iss. plied with the demand to the full extent of the insured's duty and that the still further proofs demanded of all invoices of goods purchased by him before his stock-taking in August, 1910, from the time he began business, or of duplicates thereof, were not such proofs as he was bound to furnish. If it was held that he was bound to comply with all the companies' demands in this regard, it is at least doubtful whether he could have satisfactorily furnished them in time to have brought his action within the six months of the variation clause and goes to shew how unreasonable the limitation is.

The first action was commenced on the 26th April,

1911, and in my view was, therefore, prematurely brought.

The second action was begun on the 20th

December, 1911, and was in time if the statutory condition 22 is applicable, but too late if the variation was held reasonable.

As I hold the variation clause unreasonable the second action was in time.

There remains the question whether the policies were avoided by the negative answer given to the question in the applications for insurance, "Have you ever had any property destroyed by fire?"

The fact that the applicant signed the application in blank requesting the agent to fill it up and that the agent did so in accordance with a similar answer in another application to another company given to him by Jeffrey does not enable the applicant to escape the effect of his answer. The answer must be taken to be his own. Nor do I give much weight to Mr. Rowell's argument rather faintly pressed that although, as a fact, the applicant Jeffrey had suffered a previous fire the loss had been occasioned by smoke from the fire and not by actual contact with the flames or beat. I prefer to base ay judgment on the ground that the question of the materiality of the answer made 'by Jeffrey to the question, though technically and literally inaccurate, was -one of fact for the jury, or for the court, if there is no jury, to -determine. Would the literal facts, if given truly in the answer, have increased in the judgment of the companies the moral risk and influenced them to refuse the risk? The trial judge decided that under the circumstances the answer was not material. The previous fire, if it could be dignified with that name, was a very small affair and took place years previously not on the premises where the fire in question in this action took place, but amongst some rubbish in the cellar of a building occupied by Jeffrey in another town in which he then carried on his business. There was a good deal of smoke which damaged some goods.

The company which had insurance on the goods damaged investigated the facts, paid some $350 for damages and continued on their insurance. The learned 'trial judge goes fully into the facts and reasons for the conclusion reached by him and the Appellate Division concurs with him. I am not able to say that both courts were wrong.

There was a cross appeal by the respondent as to the disposition made of the costs; but in view of the conclusion I have reached as to the first action having been prematurely brought I see no reason to interfere with the disposition made of the costs.

The appeal and cross-appeal should both be dismissed, each with costs in this court.

J.-I agree that the impeached variation from the statutory conditions was not just and reasonable within the meaning of the Act. That is the only point to which it is necessary to refer specifically.

I think the appeal should be dismissed with costs.

and JJ. concurred with Davies J.

Appeal dismis8sed with costs.

Shaver.

Montgomery.