Laforest v. Factories Insurance Co.

required by article 7034 the Revised Statutes of Quebec, the statutory conditions were printed upon the policy insurance.

The application for the insurance did not refer to them but contained a condition that the insured should not use coal stoves on the premises insured.

At 'the time the premises were destroyed by fire coal was kept and stored there in excess the quantity permitted by clause of the statutory conditions, without written permission the insurance company. The company had given no written notice to the insured pointing out particulars wherein the policy might differ from the application as provided by the second clause of the conditions.

, that the law did not require the statutory conditions to be referred to in applications for insurance; that all applications for insurance to which the Quebec legislation applies must be deemed to be made subject to those conditions, except as varied under articles 7035 and 7036, Revised Statutes Quebec, and that there was no necessity for the insurance company to give notice, as mentioned in the second clause the conditions, calling the attention the insured to the conditions indorsed upon the policy insurance. Per curiam.-Knowledge by an agent soliciting insurance that coal oil, in large quantities, was kept and stored upon the premises to be insured does not constitute notice that fact to the company insuring them, nor does notice that coal oil in such quantities was kept and stored upon the premises prior to the insurance involve knowledge that it would kept there afterwards in violation *PRESENT:-Sir Charles Fitzpatrick C.J. and Idington, Duff, Anglin and Brodeur JJ.

Bench, appeal side, reversing the judgment of Pouliot J., at the trial, in the Superior Court, District of Arthabaska, and dismissing the plaintiff's action with costs.

the close of the argument I was under the impression that the plaintiff, appellant, was fairly entitled to succeed.

But a careful examination of the pleadings and evidence, documentary and oral, leads me irresistibly, if regretfully, to a contrary conclusion.

The action is brought to recover the amount due under a policy of insurance on a stock of goods in a country store in the Province of Quebec.

There is no doubt that the goods covered by the policy were destroyed by fire on the 25th November, 1913. The company sets up by way of defence every objection that the ingenuity of counsel could suggest and the plaintiff is entitled at least to the benefit of my opinion that his claim was made honestly and he fails to succeed on a ground which involves neither moral nor legal turpitude.

The action was maintained in the Superior Court, but on appeal it was held that there was a breach of the condition in the policy which forbade the keeping and storing on the premises of coal oil in quantities exceeding five gallons without the permission in writing of the company and on that ground the action was dismissed.

In my opinion that judgment must be affirmed.

I am satisfied that the insured was in complete ignorance of the statute when he applied for the insurance and it does not appear that his attention was ever drawn to the condition now invoked after the policy came into his possession.

He acted throughout in perfect good faith and frankly disclosed to the officials of the company at the date of his application and when he filed his claim that coal oil was kept on the premises.

Were I dealing with this case in the court of first instance I would have some difficulty in finding that the evidence was sufficiently conclusive as to the quantity of oil in the store at the time of the fire.

The clerk, Lacerte, says that during the evening of the day preceding the fire he brought one "quart" of oil into the store, and that he sold a quantity which he estimates at possibly about twelv'e gallons and I accept this evidence in preference to that given by the witness Demers.

There is no evidence as to the quantity of oil contained in a " quart" and Laforest speaks of a "tonne" containing 45 gallons.

It does not appear that the one measure is deemed to be the equivalent of the other. Technically there is of course a wide difference between the two.

However, I am not satisfied that I have sufficient doubt to rebut the presumption that the decision appealed against is right.

The appellant also urges that the agent of the company, who solicited the risk, visited the premises, and knew that coal oil was kept and stored there at the time he filled in the application.

Although I am of opinion that his knowledge was the knowledge of the company because acquired in the course of his employment (Bawden v. London, Edinburgh and Glasgow Assurance Co.(1);

Wells v. Smith(2) ), I cannot hold that knowledge to be equivalent to a waiver of the condition which requires that, once the policy attaches, coal oil cannot be kept or stored on the premises without the written consent of the company. The appellant relies also on the second statutory condition which creates a presumption that the policy issued conforms to the terms of the application. This point is so fully and satisfactorily covered by my brother Anglin in his notes that it is unnecessary for me to do more than refer to Provident Savings Life Assurance Society v. Mowat(3).

At the argument I was strongly inclined to hold that the appeal must succeed because the parties had subsequently to the fire entered into au agreement which in the language of the Quebec Code is called a "transaction" (1918 C.C.) with respect to this claim and that in the result the plaintiff was entitled to recover $2,800.

I accept the version given by the plaintiff and his wife of the interview during which the compromise was discussed.

But to transact it was necessary for the officials of the company to have (1919 C.C.) and I cannot find in the record sufficient evidence to justify me in holding that Demers and Tanguay had such control.

The principle of the INS"c

Quebec law is:- Peuvent seuls transiger les mandataires et administrateurs du patri- Justice.

moine d'autrui qui ont regu un pouvoir sp6cial h cet effet. King Pinsonault(1).

This appeal must be dismissed with costs. IDINGTON J.-The appellant stored and kept upon his premises within the meaning of one of the statutory conditions of the policy of insurance in question herein, as an identically worded policy was construed, by a minority in this court and by the Judicial Committee of the Privy Council in the case of Thompson v. Equity Fire Ins. Co.(2), and thereby forfeited his right to recover herein.

The application of appellant for the insurance in question herein contained the following obligation on his part:- De plus le requirant s'engage h ne garder ni chaux, ni cendre dans les vaisseaux de bois, dans ou auprbs des b^timents ci-dessus, ne faire aucun usage de poile h p6trole ou gazoline, ni A prendre aucune autre police d'assurance sur les m~mes propridtis dans d'autres compagnies, sans en avertir celle-ci, sous peine de nullit6 de la police qu'il demande.

His counsel now presents the novel argument that inasmuch as in the same set of statutory conditions required by law to be indorsed on every policy of insurance there is the following clause,

After application for insurance, it shall be presumed that any policy sent to the assured is intended to in accordance with the terms the application, unless the company points out in writing, the particulars wherein the policy differs from the application,

(1) L.R. P.C.

A.C. 592. the respondent was bound to point out in writing the first mentioned condition, as a particular wherein the policy differed from the application.

I am unable to assent to this proposition. There is in fact no conflict between the terms of the application and the policy if we have regard to the law (now well known to insured) binding the insurer to print upon its policy the statutory conditions.

It may be that the obligation above quoted from the application would be a new or additional condition which unless also printed in a different coloured ink, as required by the statute, might by such omission become null.

That is the converse of this case and the insured is protected by the statute in that regard.

The obvious purpose of the condition, which is now presented for our consideration, was to meet the not infrequent cases of a variation in or departure from the description of the subject matter insured, as given in the application, or the time to run, or rate (if any) specified therein.

Such like errors sometimes might creep in and the insured was thus protected.

It is suggested that the condition, by virtue of which I hold the appellant fails, is one which an insurer might waive.

It is very suggestive that the contention does not seem to have been set up in the appellant's pleadings. The omission might be overcome if the law and facts sustained the contention, but, if serious, why was it omitted from the pleading? The appellant also sets up that the respondent settled and agreed to pay the sum claimed.

That is met by evidence disputing that of appellant and that in any event the agent had no power to bind respondent in that regard.

Holding these views there is no need to consider other issues raised.

I think the appeal must be. dismissed with costs. J.-The appeal should be dismissed with costs.

J.-The appellant urges three grounds of appeal against the judgment of the Court of King's Bench which held that he cannot recover upon his insurance policy with the defendant company, because, in breach of statutory condition 10 (f), which was indorsed upon the policy as required by article 7034 R.S.Q., when his premises were burned he had upon them for the purpose of sale thirty gallons of coal oil without having obtained the permission in writing of the company. Thompson v. Equity Fire Ins. Co.(1). (1) The appellant maintains that the company through its agents adjusted his loss at $2,800 and agreed to pay him that sum in satisfaction of his claim.

This fact is denied: it has not been found in * favour of the appellant; and the evidence does not warrant such a finding being made.

(2) He contends that, because the application signed by the insured contains conditions, to which he thereby agrees that his policy shall be subject, but neither sets out the statutory conditions nor refers to them, it must, under the second statutory condition, in the absence of written notice from the company to the insured particularly calling the conditions indorsed upon the policy to his attention, be deemed free from all such conditions not covered by those expressed in the application, i.e., it must be deemed such a contract as would be constituted by a bare acceptance of the application of the insured.

By article 7034 R.S.Q. every company is required to print the statutory conditions upon every policy of fire insurance which it issues and is allowed to vary such conditions only by complying with articles 7035 and 7036.

If the conditions are not so printed the policy is nevertheless deemed subject to those of them which contain provisions in the interest of the insured.

If the statute is complied with, the statutory conditions in favour of the company as well as those in favour of the insured create contractual obligations between them. Having regard to this state of the law every application for insurance should, in my opinion, be deemed an application for a policy subject to the statutory conditions, except in so far as they may be varied in conformity with article 7035-that is, for a policy which the company may lawfully issue.

It may well be that the effect of statutory condition No. 2 is to prevent the insurance company binding the insured by any condition inserted in the policy, other than the statutory conditions, by way of variation or otherwise, which differs -from or adds to those expressed in the application.

It may be that the statutory conditions themselves should be deemed modified in so far as they are inconsistent with any term expressed in the application- although, in the absence of a variation noted upon the policy itself as prescribed by article 7035, that view would seem to present some difficulties.

But the legislature did not intend that the statutory conditions should be set forth in the application for insurance; and I am satisfied that, where these conditions have been duly printed upon the policy as required by the statute, J it is subject to them, notwithstanding that they are neither set forth nor expressly referred to in the application.

In so far as anything in the opinion of Osler J.A. in Mitchell v. City of London Assurance Co.(1), at pages 278-9, may conflict with this conclusion I am, with great respect, unable to agree with it. (3) Because, as counsel for the appellant asserted, it is common knowledge that the sale of coal oil is a part of the business of every country general-store, and the agent for the defendant company, when soliciting the plaintiff's insurance, saw coal oil on his premises, he contended that the company should not be heard to set up the condition relied upon; and he cited Mitchell v. City of London Assurance Co.(1), in support of his argument. But the keeping of coal. oil upon the insured premises is not a necessary part of the business in the case of a country general-store as is the carrying of a small quantity of lubricating oil upon a steam tug.

Coal oil might have been kept outside and brought into the shop, if. at all, in the permitted quantity, i.e., not exceeding five gallons.

Notice to a mere soliciting agent-unlike notice to a general agent-is not ,notice to the insurance company; and, if it were, notice that coal oil was kept on the premises before they were insured does not involve knowledge that it will be kept there afterwards in violation of an expressed condition of the policy.

The appeal, in my opinion, fails and should be dismissed with costs.

J. (dissident).-II s'agit d'une r6clamation pour assurance contre le feu.

Plusieurs questions ont t6 soulevies par la d6fenderesse, la compagnie d'assurance, contre la r6clamation du demandeur. Ce INSIANCE dernier a eu gain de cause en Cour Sup6rieure; mais en cour d'appel il a 6 d6cid6 que l'assur6 ne pouvait pas r~clamer la valeur des pertes qu'il avait encourues parce qu'il avait dans son magasin de l'huile de charbon pour une quantit6 plus considerable que celle permise par les conditions de la police.

Le demandeur appelle de ce jugenent devant cette cour et pr6tend entr'autres choses que la condition de la police sur laquelle la cour d'appel s'est bas6e pour renvoyer sa demande ne fait pas partie des obligations contractuelles qui existaient entre lui et la compagnie d'assurance.

Contrairement h la pratique qui est g6n6ralement suivie, me dit-on, depuis que la l6gislature a jug6 a propos de d6terminer les conditions des polices d'assurance, la compagnie intimbe a, dans le cas actuel, fait signer une demande d'assurance par le demandeur. Il s'agit de savoir si, lorsqu'il y a une demande d'assurance de faite, les conditions ins6r6es dans la police qui seraient incompatibles avec cette demande peuvent 6tre invoqu6es par l'assureur.

L'article 7034 des Statuts Refondus de la Province de Qudbec d6clare que les conditions indiquies dans cet article font partie de tout contrat d'assurance A l'encontre de l'assureur.

Parmi ces conditions est le No. 2 qui se lit comme suit:

A Il me semble que cet article est suffisamment explicite par lui-mime pour qu'il ne pr6te pas a ambiguit6.

Il ne consacre, apris tout, que la doctrine qui se trouve dans tout contrat, c'est que du moment J. qu'il y a une proposition de faite et que cette proposition est accept6e, le contrat est cens6 fait suivant les termes de la proposition.

Pour le contrat d'assurance, on stipule donc que s'il y a une demande d'assurance et qu'une police soit 6mise en r6ponse h cette demande, cette police est reput~e conforme aux termes de la demande, A moins que la compagnie n'indique formellement qu'elle est incapable d'accepter la proposition qui lui est faite.

Pourquoi cette l6gislation a-t-elle

6 adoptie? C'est que les compagnies d'assurance avaient I'habitude d'ins6rer en tout petits caractres dans leurs polices multitude de conditions et de clauses qui avaient virtuellement pour effet de faire disparaitre toute source d'obligations de leur part.

Les tribunaux ont A maintes reprises donn6 une interpritation lib~rale A ces clauses extraordinaires.

d'un autre c6td, elles donnaienit lieu A des procks si nombreux que le lgislateur a cru devoir intervenir et stipuler les conditions dans lesquelles ces polices seraient censdes 6tre 4mises, tout en d6clarant, cependant, que ces conditions ne valaient qu'A l'encontre de l'assureur. Le l6gislateur a d6clari cependant en mime temps quelles 6taient les conditions auxquelles l'assurd pourrait se trouver oblig6 et il a pris le soin de r6diger luimeme ces conditions afin d'6viter les surprises, je pourrais peut-6tre mime dire les fraudes, qui taient pratiquies ant~rieurement l'encontre de l'assur6. II a laiss6 aux parties contractantes le soin de d~terminer si, en tant que l'assur6 est concern6, elles feraient partie du contrat ou non.

L'une de ces conditions stipul6es par 1'article 7034 est la condition No. 10 qui comporte que la compagnie n'est pas responsable'des pertes suivantes, savoir (f) De la perte du dommage advenant lorsque du p6trole Co. ou de I'huile de charbon, de la camphine, de la gazoline, un fluide Brodeur J. inflammable, la benzine, du naphte ou tous produits liquides provenant, on toutes parties constituantes d'iceux (sauf de L'huile de charbon clarifi6e pour fin d'6clairage seulement, d'une quantit6 n'exc6dant pas cinq gallons, * * *)

Cette condition que je viens d'indiquer textuellement peut-elle 6tre invoqu6e dans le cas actuel par la compagnie d'assurance?

Je dis que non; et voici pourquoi:

Une demande d'assurance est faite par Laforest, le demandeur.

Cette demande d'assurance diterminait le montant de l'assurance qu'il d~sirait avoir, le taux, la prime, le fonds de magasin A assurer et la bitisse dans laquelle se trouvaient ces marchandises. faisait une description, en rdponse h certaines questions qui lui 6taient pos6es, de la valeur du terrain, des bitiments, des hypothiques qui les grevaient et il d6clarait s'il avait d6jA pass4 au feu, quels etaient les moyens de protection qu'il avait contre le feu, A qui les pertes devraient 6tre payables, et il ajoutait ceci: Le dit requ6rant assure et convient, par les pr6sentes, envers la lite compagnie, que qui pr-eide est la vraie, juste et entibre exposition de tous les faits et circonstances, concernant la condition, situation, valeur et risque de la propri6t6 qui doit 6tre assur6e, en tant qu'il le connait lui-m('me et consent A que telle description avec le plan d'autre part, soit considere comme formant la base de responsabilit6 cotte compagnie, ainsi qu'une partie essentielle de contrat d'assurance.

Et est de plus convenu que si lagent signe reimplit cette formule de demande, sera, en cas, I'agent du re(u6rant et non c2tte compagnie.

De plus requ6rant dans un aupros des batinients ci-dessus, A ne faire aucun usage de p6trole on A gazoline, A prendre aucune autre police d'assurance sur les m6ines proprits dans d'autres compagnies, en avertir celle-ci. sons poine nullit6 de la police qu'il demande. 307, A Voilh les conditions auxquelles il propose a la compagnie d6fenderesse de l'assurer.

La compagnie d6fenderesse, -en r6ponse A cette demande, envoie une police et sur le dos de cette police nous trouvons toutes les conditions de 1'article 7034.

Nous trouvons entr'autres la condition No. 2 que j'ai cit6e plus haut et la condition No. 10.

La condition No. 2 lie n6cessairement la compagnie, car Particle nous dit que.les conditions indiquies dans cet article doivent 6tre consid6rdes A 1'encontre de l'assureur comme garantie de tout contrat d'assurance. Cette condition d~clare formellement que le contrat d'assurance doit 6tre consid~r6, dans ces circonstances, comme 6tant absolument conforme aux termes de la demande, .1 moins que la compagnie n'ait indiqu6 par 6crit les d6tails sur lesquels la police diff~re de la demande.

Or, il n'y a pas de preuve au doissier, il n'a pas t sugg6r6 non plus et il n'a pas 6t plaid6 que la compagnie avait indiqu6 qu'elle - ne pouvait 6mettre une police aux conditions 6num6r6es dans la demande.

La compagnie est done cens6e, suivant moi, avoir voulu assurer le demandeur aux conditions qu'il indiquait dans sa demande; et toutes les autres conditions, par cons6quent, qu'elle peut avoir ins6r6es sur le dos de la police ne sauraient lier l'assur6. L'intim6 invoque en sa faveur le jugement reidu par cette cour dans la cause de Provident Savings Life Assurance Society v. Mowat(1), oi il aurait t d~cid6 que

Je ne crois pas que cette d6cision, qui a t rendue en 1902, puisse 6tre invoqube sous l6gislation post~rieure qui a d6termin6 les conditions dans lesquelles les contrats d'assurance contre le feu se formeraient.

La livraison de la police aurait pu d'abord Her l'assurM, comme l'a d6cid6 la Cour Supr6me dans cette cause de Mowat; mais maintenant je considbre que la l6gislation en d6crtant que la police sera cens6e 6tre conforme aux termes de la demande a mis A n6ant le principe de droit 6nonc dans cette d6cision.

Dans ces circonstances, je suis donc d'opinion que la condition invoquie contre l'assure par la cour d'appel ne le lie pas, ne peut pas 6tre invoqu6e contre lui; et, par cons6quent, le jugement de la Cour Sup6rieure qui a condamn6 la compagnie d'assurance A payer la somme qu'elle s'est engagde de payer est bien fond6.

L'appel devrait tre maintenu avec d6pens de cette cour et de la cour d'appel.

Appeal dismissed with costs.