Eckardt v. Lancashire Insurance Co.

:-Taschereau, Gwynne, Sedgewick, King and Girouard JJ.

(3) 14 Ont. App. R. 328; 15 Can.

S. C. R. 69.

J.-The respondent, being a fire insurance company, doing business in the Province of ()ntario, has two forms of printed policies in use, both framed in the form prescribed by the Ontario Insurance Act, (ch 167, R. 0. 1887) the one being for insurance with the clause known as the " co.insurance" clause and the other not having such clause.

The premium charged in the case of insurance effected on a policy having the clause is twenty per cent less than that charged on insurance in the other form.

Parties insuring may select in which form a policy shall be entered into with them. Now in section 114 of the above Act, it is enacted that :

Upon the second of January, 1896, the respondent entered into a policy with the plaintiffs which contained the co-insurance clause under the heading ( variations in conaitions" as prescribed by the Act and in every particular in the precise manner prescribed by the sections 115 and 116.

Upon this clause being so introduced into the policy it became part of the contract of insurance contained in the policy to the same extent precisely as the statutory conditions indorsed on the policy would have been if no alteration had been made therein. It is quite unimportant whether the alteration so introduced into the contract was of the character of a variation in any particular statutory condition or an addition to the statutory conditions, and the clause, having been introduced into the contract of insurance in the precise manner prescribed by the Act, became TE part of the contract, unless it should be pronounced to be unjust and unreasonable by the court or judge before whom a question should be tried relating ~thereto.

The clause then being so introduced into the policy, if it should be pronounced to be unjust and unreasonable, the effect would be that either the policy contained no contract or, as the appellants contend, one subject to the statutory conditions oply, and so the plaintiffs, the now appellants, could recover a sum largely in excess of the amount upon which they had paid a premium upon a policy which they had held for sixteen months without objection.

The clause objected to has been in use in fire insurance companies in several countries on the continent of Europe, in England and in the United States for upwards of fifty years and is daily coming more into use and we can see no substantial reason or suggestion why it should be pronounced to be unjust or unreasonable.

There is no foundation for the contention that every variation from a statutory condition or addition thereto should be, primd facie, held to be unjust and unreasonable.

In fine, with the reasoning of the learned Chief Justice Meredith, who tried the case, we entirely The appeal must be dismissed with costs.

Appeal dismissed with costs.