Citizens' and The Queen Insurance Cos. v. Parsons

Citizens' and The Queen Insurance Cos. v. Parsons
Collection
Supreme Court Judgments
Date
1880-06-21
Report
(1880) 4 SCR 215
Judges
Ritchie, William Johnstone; Fournier, Télesphore; Henry, William Alexander; Taschereau, Henri-Elzéar; Gwynne, John Wellington; Strong, Samuel Henry
On appeal from
Ontario
Subjects
Insurance
Decision Content
Supreme Court of Canada
Citizens' and The Queen Ins. Cos. v. Parsons; Western Ins. Co. v. Johnston,
(1880) 4 S.C.R. 215
Date: 1880-06-21
The Citizens’ Insurance Co. Appellants;
and
William Parsons Respondent.
The Queen Insurance Co. Appellants;
and
William Parsons Respondent. _
The Western Assurance Co. Appellants;
and
Ellen Johnston Respondent.
1979: November 17, 18; 1880: April 9; 1880: June 21.
Present: Ritchie, C.J., and Fournier, Henry, Taschereau and Gwynne, J.J. Strong, J., was present when The Citizens’ Insurance Co. v. Parsons and The Queen Insurance Co. v. Parsons were argued, but not when The Western Insurance Co. v. Johnston was argued, nor when judgment was delivered in the three cases.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Insurance—Jurisdiction of Local Legislature over subject matter of Insurance—British North America Act, 1867, secs. 91 and 92—Statutory conditions—R.S.O. ch.162—What conditions applicable when statutory conditions not printed on the policy.
The Citizens’ Insurance Company, a Canadian Company, incorporated by an Act of the parliament of Canada, since the passing of R.S.O., ch. 162, issued in favor of P., a policy against fire which had not endorsed upon it the statutory conditions (R.S.O., ch. 162,) but had conditions of its own, which were not printed as variations in the mode indicated by the Act.
The Queen Insurance Company, an English Company carrying on business under an Imperial Act, issued in favor of P., after the passing of R.S.O., ch. 162, an interim receipt for insurance against fire subject to the conditions of the Company.
The Western Assurance Company, a Canadian Company, incorporated by the parliament of Canada before Confederation, issued a policy of insurance against fire in favor of J., the conditions of the policy, which were different from those contained in R.S.O., ch. 162, not being added in the manner required by the statute.
The three companies were authorized to do Fire Insurance business throughout Canada by virtue of a license granted to them by the Minister of Finance under the Acts of the Dominion of Canada relating to Fire Insurance Companies.
The properties insured by these companies were all situated within the province of Ontario, and being subsequently destroyed by fire, actions were brought against the companies.
The Supreme Court of Canada, after hearing the arguments in the three cases, delivered but one judgment, and it was—
Held,—That “The Fire Insurance Policy Act,” R.S.O., ch. 162, was not ultra vires and is applicable to Insurance Companies (whether foreign or incorporated by the Dominion) licensed to carry on insurance business throughout Canada, and taking risks on property situate within the province of Ontario,
2. That the legislation in question, prescribing conditions incidental to insurance contracts passed in Ontario relating to property situate in Ontario, was not a regulation of Trade and Commerce within the meaning of these words in sub-sec. 2, sec. 91, B.N.A. Act.
3. That an insurer in Ontario, who has not complied with the law in question and has not printed on his policy or contract of insurance the statutory conditions in the manner indicated in the statute, cannot set up against the insured his own conditions or the statutory conditions, the insured alone, in such a case, is entitled to avail himself of any statutory condition.
[Taschereau and Gwynne, J.J., dissenting]
Per Taschereau and Gwynne, J.J.:—That the power to legislate upon the subject-matter of insurance is vested exclusively in the Dominion parliament by virtue of its power to pass laws for the regulation of Trade and Commerce under the 91st sec. of the B.N.A. Act
APPEALS from judgments of the Court of Appeal for Ontario, which maintained three actions brought by the respondents upon policies of insurance against the appellants.
In the case of Parsons v. The Citizens’ Insurance Company, the action was brought upon a policy of insurance, dated the 4th of May, 1877, issued by the defendants, who are a corporation incorporated by Act of the Dominion of Canada, insuring a building of the plaintiff in the town of Orangeville, Ontario, in the sum of $2,500. The building was destroyed by fire on the 3rd of August, 1877. The action was tried by Patterson, J.A., with a jury at the Guelph Assizes in the spring of 1878. The jury answered certain questions put to them by the judge (not material to the appeal), who thereupon entered a verdict for the plaintiff for $2,575. It Was proved that at the time of the issuing of the policy by the defendants, the plaintiff had another policy for $1,000 on the building in the Western Assurance Company, which was not disclosed to the defendants. This it was submitted was a clear breach of the Company’s conditions printed on the policy, and also of the eighth condition of the “Fire Insurance Policy Act,” Revised Statutes of Ontario, ch. 162. The company’s conditions were printed on the policy, but not in coloured ink as directed by that Act, nor were the statutory conditions printed on the policy. The judge reserved all questions of law for the court in banc. A rule was taken out to enter a non-suit pursuant to leave reserved or for a new trial, which was afterwards discharged. The defendants then appealed to the Court of Appeal for Ontario. The defendants were incorporated by the late province of Canada, 19 and 20 Vic., ch. 124, (1856), and by 27 and 28 Vic., ch. 98 (1864) their powers were enlarged, and by Dominion statute 39 Vic., ch. 55 (1876), these Acts were amended and their name changed to its present name.
The policy of insurance on plaintiffs building, occupied as a general hardware store, was issued to the plaintiff after the passing of the provincial Act of Ontario, 39 Vic., ch. 24, and did not contain the conditions made necessary by that statute. The Court of Queen’s Bench held in accordance with a previous decision of that court, in Ulrich v. The National Insurance Company[1], “that insurance companies incorporated by the Dominion of Canada are, as regards insurance effected by them in the province of Ontario, bound by the provincial statute, subject to all the consequences of non-compliance with its provisions;” and also in accordance with another previous decision of that court, in Frey v. The Mutual Fire Insurance Co. of the County of Wellington[2]: “That a policy of insurance issued after the passing of the Act, but not in compliance with its provisions, is to be deemed as against the assurer as a policy without conditions.” From this decision, the defendants appealed to the Court of Appeal for Ontario.
The reasons of appeal were to the following effect:
1. That the Policy sued upon is not to be deemed, as against the assured or otherwise, to be a policy without any conditions; that it was clearly not the intention of either party, plaintiff or defendants, to enter into an absolute unconditional contract of Insurance; that the said policy must be treated either as subject to the conditions therein endorsed, or as subject to the statutory conditions, in which case defendants were entitled to succeed upon the issue joined upon the pleas alleging that respondent had effected other or prior insurances on the same property, without having notified the company of such insurance, and having had the same endorsed on the policy, or otherwise acknowledged by the company. The defendants refer to Ulrich v. The National Insurance Company[3]; Frey v. The Mutual Fire Insurance Company of the County of Wellington[4].
2. That the Revised Statutes of Ontario, ch. 162, “An Act to secure uniform conditions in Policies of Fire insurance,” is ultra vires of the legislative assembly of the province of Ontario, so far as regards the defendants, a company incorporated by the parliament of the Dominion of Canada, and that it is inoperative therefore to affect the said policy or the conditions thereon endorsed.
The principal reasons against the appeal were:
“1. The plaintiff contends that the defendants, having wholly omitted the statutory conditions from their said policy, and having adopted a variation thereof, or a new condition instead thereof, without complying with the requirement of the Fire Insurance Policy Act, cannot set up the statutory conditions which they have not printed in their policy, or the variations or new conditions not in accordance with the Act. The condition relied upon is therefore not legal or binding on the plaintiff.
“2. The plaintiff submits that the Revised Statute of Ontario, ch. 162, is not ultra vires of the legislature of the province of Ontario as regards the defendants.”
The Court of Appeal held the plaintiff’s contention well founded and dismissed the appeal with costs. Spragge, C., in delivering judgment said: “I incline to agree, contrary, I confess, to my first impression, that the policy in this case must be regarded as a policy without any express condition.”
In Parsons v. The Queen Insurance Company:
This action was brought upon an interim receipt alleged to have been issued by an agent of the defendants, on the 3rd August, 1877, insuring against loss by fire to the extent of $2,000, a general stock of hardware paints, oils, varnishes, window glass, stoves, tinware, castings, hollow ware, plated and fancy goods, lamps, lamp glasses, and general house furnishing goods. The interim receipt was as follows:—
“Fire Department. Interim Protection Note.
QUEEN FIRE AND LIFE INSURANCE COMPANY,
Chief Office, Canada Head Office,
Queen Insurance 191 St. James St., Montreal.
Buildings, Liverpool, The Queen Insurance Co.,
No. 33. Orangeville Agency, 3rd Aug., 1877.
“Mr. William Parsons, having this day proposed to effect on insurance against fire, subject to all the usual terms and conditions of this Company, for $2,000, on the following property, in the town of Orangeville, for twelve months, namely: on general stock of hardware, paints, oils, varnishes, window glass, stoves, tinware, castings, hollow-ware, plated fancy goods, lamps, lamp glasses and general house-furnishing goods, and having also paid the sum of forty dollars as the premium on the same, it is hereby held assured under these conditions until the policy is delivered, or notice given that the proposal is declined by the Company, when this interim note will be thereby cancelled and of no effect.
“(Signed), A.M. KIRKLAND,
“Agent to the Company.
“N.B.—The deposit will be returned, less the pro- portion for the period, on application to the agent signing this note, in the event of the proposal being declined by the company. If accepted, a policy will be prepared and delivered within thirty days. If a holder does not receive a policy during the specified time he should apply to the head office in Montreal.”
The case was tried at the Spring Assizes, 1878, at Guelphy before Macdonald, Judge of the County Court of the County of Wellington, sitting at the request of Mr. Justice Patterson.
The only question submitted by His Honor to the jury was whether there were more than 25 lbs. of gunpowder on the premises containing the property assured at the time of the fire.
The jury found in favour of the plaintiff; and a verdict was thereupon entered for $2,070, the learned Judge holding the defendants’ conditions not to be part of the contract.
In Easter term, 41 Victoria, a rule nisi was granted by the Court of Queen’s Bench, calling upon the plaintiff to shew cause why the verdict should not be set aside, and anew trial granted, for mis-direction of the learned judge, there being further insurances on the property insured; a greater quantity of gunpowder was contained in the premises containing the insured goods than permitted by, and contrary to, the terms of the defendants’ contract with the plaintiff; and the proof of loss required by the contract was not filed in due time, and which said mis-direction, was in telling the jury there was no question for them except the quantity of gunpowder on the premises.
The Court of Queen’s Bench, not being able to discover any ground either upon the law or evidence for setting aside the verdict, discharged the rule. Defendants appealed from this judgment to the Court of Appeal for Ontario.
The reasons of appeal raising the points in this case different from those in Parsons v. The Citizens’ Insurance Company were:
“4. The Ontario Revised Statute, ch. 162, does not apply to this contract, because this action is brought upon an interim receipt, and no policy of insurance had been entered into or was in force between the appellants and the respondent. The conditions to be taken as part of the contract are the appellants’ ordinary conditions; and it being admitted by the respondent that he had more than 10 pounds of gunpowder on the premises containing the subject insured, at the time of the fire, the appellants are entitled to succeed on the 8th plea, and a verdict should have been entered in their favor thereon.
“5. The Ontario Act cannot affect the contract of an English Company doing business under an Imperial Charter, as is the case of the present appellants[5].
The Court of Appeal dismissed the appeal, with costs.
In the case of Johnston v. The Western Assurance Company, the action was also brought upon a policy of insurance against fire. The only point raised on this appeal different from those raised in Parsons v. The Citizens’ Insurance Company was that the Act 39 Vic., ch. 24, Ont., was ultra vires, because it was not within the power of the provincial legislature to legislate regarding’ an Insurance Company incorporated before Confederation by a charter granted to it by the parliament of the old province of Canada, and since amended by the Dominion parliament.
In the case of Parsons v. The Citizens’ Insurance Company, Mr. Robinson, Q.C., and Mr. Bethune were heard for appellants, and Mr. Dalton McCarthy, Q.C., for respondent.
In the case of Parsons v. The Queen Insurance Company, Mr. Robinson, Q.C., (and Mr. J.T. Small with him) appeared on behalf of the appellants, and Mr. Dalton McCarthy, Q.C., on behalf of the respondent.
In the case of Johnston v. The Western Assurance Co., Mr. Bethune was heard for appellants, Mr. Mowat, Q.C., Attorney General of Ontario, was heard on the question of the jurisdiction of the provincial legislature, and Mr. Dalton McCarthy, Q.C., for respondent.
The arguments of Counsel and the authorities relied upon were as follows:—
For appellants:
The Ontario legislature had no power to deal with the general law of insurance; the power to pass such enactments was within the legislative authority of the Dominion parliament, under sec. 91, sub-sec. 3, B.N.A. Act, “The regulation of trade and commerce.”
Insurance is a trade or business which may be and is in some of its branches carried on by individuals, and such persons are deemed to be traders in consequence of their following such trade or business. The hundreds of millions of insurances now effected, the usage of insurance which obtains, and the importance, or rather necessity of insurance to the conduct of other branches of trade, business and commerce, (in which insurance is now treated as part of the cost of merchandise, besides being a means of credit) all bring it within the definition of trade or commerce; and it has been so declared and recognized by the parliament of Canada, in the numerous private acts authorizing companies to carry on the trade or business, in the public acts controlling the business and providing for its being conducted under license, and in the Insolvent Act of 1875, which provides that it shall apply amongst others to * * * trading companies * * * “except incorporated insurance companies,” and in the Act of 1878, applying to insurance companies the provisions of the Insolvent Act.
The British North America Act expressly reserves for the Dominion exclusively certain matters, and all matters, in fact, not especially named and assigned by section 92 to the province: L’Union St. Jacques v. Belisle[6]; Dow v. Clarke[7]; Attorney General v. Queen’s Insurance Company[8]; Hansard[9].
The Dominion, powers are exclusive, from their nature, without any express prohibition of the exercise of the same powers by the provincial legislatures.
The words “property and civil rights” used in the ninety-second section British North America Act when granting their respective powers to the provincial legislatures, are evidently used in that Act with a much more restricted meaning than in the provincial Act 32 Geo. III., Con. Stat. U.C., ch, 9; for the British North America Act divides into numerous sub-divisions the powers, which were held to pass under these, words in the Act of 32 & Geo. III. See Anderson v. Todd[10],
Upon the view taken in the court below of the powers of the legislature, of Ontario, it would be competent for that legislature to enact regulations, in effect, prohibitory of their business, as lawfully authorized by the Canadian parliament, a consideration fatal to that view.
The decision in Paul v. Virginia[11], so much relied on by the Court of Appeal, is not an authority here, and the appellants submit that the reasoning is not applicable to this case. The relative positions of the parliament of the Dominion of Canada and the legislatures of the various provinces are so entirely different from those of Congress and the legislature of the several States that no analogy can safely be drawn from a decision of the United States courts. The powers vested in Congress to “regulate commerce with foreign and among the several States” is a very different thing from the general powers to legislate with respect to “trade and commerce,” which words are used without limitation or restriction in the British North America Act, thus giving to the parliament of the Dominion exclusive jurisdiction over all matters of trade and commerce, domestic as well as foreign, not only among the provinces, but in them. The difference alluded to is plainly shewn by the language of the Supreme Court, at p. 183: “Such contracts are not interstate transactions, though the parties may be domiciled in different states.” * * * “They do not constitute a part of the commerce between States any more than a contract for the purchase and sale of goods in Virginia by a citizen in New York, whilst in Virginia, would constitute a portion of such commerce” See also Severn v. The Queen[12].
The counsel for appellants in the case of Parsons v. The Queen Insurance Company contended further, that the Ontario statute was ultra vires of the legislature with respect to an English Company doing business under an Imperial charter, as is the case of the present appellants. Imp. Stat. 7 & 8 Vic., ch. 110 (Chitty’s Stat. vol. I, 649), and “The Company’s Act,” 1862 (Chitty’s Stat. vol. I, 725.) The British North America Act was not intended to abrogate or diminish the powers already granted to English corporations doing business in Canada, under Imperial Acts. Smiles v. Belford[13]; Rutledge v. Low[14]. That the statute did not apply to a case in which a policy had not been actually delivered. The directions contained therein, with respect to printing, show that it never was intended to apply to the contract entered into by an interim receipt, such as is known to the public and insurers. The ordinary statutory conditions printed on such a document would be practically illegible from the smallness of the type necessarily employed. And, moreover, the language of the statute is explicit, the word “policy” alone being employed. As regards the temporary insurance by means of an interim receipt, the parties are at liberty to make such conditions as they may choose. McQueen v. Phœnix Mutual Insurance Company[15].
In any event the appellants are entitled to the benefit of the conditions against further insurance, whether their own conditions or the statutory makes no difference, as both are practically the same, Geraldi v. The Provincial Insurance Company[16].
In the case of Parsons v. The Citizens’ Insurance Company of Canada, the counsel relied also on the fact that appellants company were incorporated by the late province of Canada and authorized to make contracts of insurance throughout the late province of Canada, and also on the fact that the respondent had effected a further insurance, which was contrary to the statutory conditions as well as to the appellants’ ordinary conditions.
In the case of Johnston v. The Western Assurance. Company, it was also contended that the appellants, having been incorporated by the parliament of the old province of Canada, and their charter having since been varied and amended by the Dominion parliament—the Company in fact being a creature of the parliament of Canada—the legislature of the province of Ontario cannot curtail or limit or put any restriction on the power of the. Company to do business in any province of Canada. It never was intended, under the British North America Act, that the provincial legislature should alter, vary or restrict corporate powers already possessed by companies doing business at the time of the passing of the Act.
For respondents:
The first question involves the constitutionality of the Act of Ontario, 39 Vic., ch. 24, respecting uniform conditions on policies of Insurance. This Act is constitutional and within the powers of the Ontario legislature: B.N.A. Act, sections 91, and 92, sub-secs. 11, 13 and 16; Billington v. Provincial Insurance Company[17]; Dear v. The Western Insurance Company[18]; Ulrich v. The National Insurance Company[19]; Parsons v. Citizens’ Insurance Company[20]; Frey v. The Mutual Fire Insurance Company of the County of Wellington[21]; Parsons v. The Queen’s Insurance Company[22].
The making of a policy of Insurance is not a transaction of commerce within sec. 91 (sub‑sec. 2) of the B:N.A. Act, but is a contract of indemnity. Paul v. Virginia[23]; Nathan v. Louisiana[24]. The matter in question here comes within sub-secs. 11, 13 and 16, or one of them, of sec. 92 B.N.A. Act. Sub-sec. 2 of sec. 91, giving power to the parliament of Canada to regulate trade and commerce, refers to general legislation applicable to the Dominion, and does not withdraw from the provinces the right to legislate respecting private property and contracts within the province.
Contracts of insurance are matters relating to property and civil rights within sec. 92 (sub-sec. 13), B.N.A. Act, and are matters of a merely local or private nature in the province within sub-sec. 16, sec. 92.
These contracts are peculiarly local in their nature, inasmuch as they relate exclusively to the protection and security of property within the province. They are as clearly within the power of the local legislature as the many other classes of contracts admittedly within such power, and in respect of which the legislature of Ontario has always legislated without question as to its power to do so; such as the forms and solemnities of the instruments of title and conveyance of property; statutes requiring certain promises to be in writing; statutes of limitations by which titles and contracts are extinguished; statutes relating to married women and their dealings with such property; these and all other statutes of a similar character, are binding upon all persons and corporations, both foreign and domestic, contracting in Ontario.
So far as relates to the interpretation of the B.N.A. Act, that Act must be interpreted in the light of the established principles of public law. By that law, as held both in England and America, contracts are local matters; as to their nature, validity and obligation, they are governed by the law of the place where made and where they are to be executed. They are treated as matters of domestic legislation. See Story on Con. of U.S.[25]; 2 Kent’s Com.[26]; Robinson and Bland[27]; Wlieaton Int. Law[28]; Wesllake Private Int. Law[29]
The appellants are a private corporation. It is merely a company of private persona with corporate powers; the business is carried on solely for the private benefit and profit of the individuals composing it; it has no connection with government; it is not an instrument of Government created for its own purposes, such as national banks in the U.S.
There is no analogy here to the case of a province taking national property, or salaries paid by government, or other acts, the effect of which might impede or hamper the operations of Government. See Story on Con. of U.S.[30]
There is no express provision in any of the statutes relating to the appellants company exempting them from the jurisdiction of Ontario to regulate insurance contracts and prescribe their forms and conditions, and such exemption cannot be implied: Pomeroy Con. Law 380; and the above principle applies even in the U.S., the constitution of which contains a provision that “no State shall pass any law impairing the obligation of contracts,” to which no similar enactment is found in the B.N.A. Act. The provincial legislatures are not in any accurate sense subordinate to the parliament of Canada: Each body is independent and supreme within the limits of its own jurisdiction: so that even if contracts are considered a kind of commerce, they are still governed by sec. 92, the powers in which should be read as exceptions to those conferred upon parliament by sec. 91, B.N.A. Act. Severn v. The Queen[31]; Re Slavin and Orillia[32]; Reg. v. Boardman[33]; Reg. v. Longee[34]; L’Union St. Jacques de Montreal v. Belisle[35].
If the local legislature has jurisdiction respecting the subject-matter of insurance contracts at all, it has the most full and ample jurisdiction—plenum imperium—it has sovereign power within its own limits. This principle requires that the legislature of a province has power to prescribe or limit the conditions of insurance contracts made within the province, respecting property situate within its limits, whether such contracts are made by citizens of the province or provincial corporations, or by foreigners or foreign corporations. The provincial legislature has power to incorporate insurance companies; these are bound by local laws, but the argument of the appellants would enable the foreign corporation to claim immunity from provincial laws while enjoying the protection of these laws; to be “a law unto itself,” while reaping the benefit of local business; thus, giving it a position more favourable than its local rival: a most curious and startling anomaly, and, it is submitted, contrary to all principle and authority.
The fact that certain powers have been assumed by parliament hitherto prove little, for the provinces have not power to disallow these Acts, and can only look to the courts for defence against the encroachments of the Federal power, whereas Acts passed by the local legislatures might be disallowed by the Dominion parliament. As to the contention of the appellants that the Ontario Act in question does not extend to them, there is nothing in the Act shewing or implying that the appellants are exempt from its provisions; and the authorities quoted above, and the reasons already given, shew that the Act extends to all policies of insurance made within the province, respecting property within the province.
Next, as to the construction of the statute in question—39 Vic., ch. 24, Ont. The object of the Act was to protect the insured, not to benefit the insurer. The stand point of the legislature was this: the ends of justice were often defeated, and the insured defrauded by the multitude of conditions, many of them obscure and unfair. The intention was to confine the insurers to fair and reasonable conditions by placing them under legislative or judicial control; and this object was to be attained as follows: As to certain specified conditions the legislature decided a priori that they are fair and reasonable and authorize the insurer to use them if he choses, these are called the statutory conditions, and he is directed to print them on the policy; further or different conditions may be used, provided they are printed in the manner directed, and provided they are fair and reasonable in the opinion of the proper tribunal upon the trial of any case. So far the object is to limit the insurer to fair conditions, but not to ordain that these conditions are to be part of every insurance contract. But still further in pursuance of the object of the Act to protect the insured, who, in many cases, would know nothing of the statute, the insurer is required to print the conditions on the policy if he desires the benefit of them, and to prevent him benefiting by his own omission it is ordained that, as to him, these conditions shall apply, whether printed or not. Notwithstanding the words of section 1 as to printing the conditions, the appellants contend that they may print them on the policy or omit them at their option, and that the effect is the same in either case: it is submitted such a construction is untenable, and that the true construction is that the conditions are not binding on the insured unless printed in compliance with the Act.
As to the construction of sec. 2: The legislature is there dealing with variations, it there assumes that the statutory conditions are printed as directed, because otherwise there could be no variation; then the statutory conditions being on the policy, and the variations not being made in the manner directed, it is provided that, as against the insurer, the variations are void and the policy subject to the statutory conditions only. By the above construction of the Act, both sections are made to harmonize and to effectuate the legislative intent, and this construction has been adopted by the various courts in Ontario. Ulrich v. The National Insurance Company[36]; Dear v. The Western[37]; Parsons v. The Citizens Insurance Company[38]; Parsons v. The Queen’s Insurance Company[39]; Frey v. The Wellington Mutual[40].
The question as to the constitutionality of the Ontario statute 39 Vic., ch. 24, having been raised in each case, the following judgments were delivered applicable to the three appeals.
Ritchie, C.J.:
There never, probably, was an Act, the validity of which was questioned, that came before a Court so strongly supported by judicial and legislative authority as this Act. It was legislation suggested as necessary by the Court of Queen’s Bench of Ontario, in the case of Smith v. Commercial Union Insurance Co.[41]
The legislature of Ontario, adopting the suggestion, passed, 38 Vic., ch. 65, authorizing the issue of a commission to three or more persons holding judicial office in the province, and by section 2, enacted in these words, that:
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 fire insurance policy are just and reasonable conditions, and the commissioners may take evidence, and are to hear such parties interested as they shall think necessary; and a copy of the conditions settled, approved of and signed by the Commissioners, or a majority of them, shall be
Present: Ritchie, C.J., and Fournier, Henry, Taschereau and Gwynne, J.J. deposited in the office of the Provincial Secretary; and in case, after the Lieutenant‑Governor, by proclamation published in the Ontario Gazette, assent to the said conditions, any policy is entered into or renewed, containing or including any conditions other than or different from the conditions so previously approved of and deposited; and if the said conditions, so not contained or included, is held by the Court or Judge before whom a question relating thereto is tried, not to be just and reasonable, such conditions shall be null and void.
This Act was not disallowed, and a commission by the Government of Ontario was duly issued in accordance therewith to learned judges, who reported what they deemed just and reasonable conditions, whereupon the Ontario legislature passed the 39 Vic., ch. 24: “An Act to secure uniform conditions in Policies of Fire Insurance,” which is the Act now questioned, and which, after reciting that under the provisions of the Act, 38 Vic., ch. 65., the Lieutenant‑Governor issued a commission to consider and report what conditions are just and reasonable conditions to be inserted in fire insurance policies, on real or personal property in this province (Ontario), and, after reciting that a majority of the Commission had settled and approved of the conditions set forth in the schedule of the Act, and that it was advisable that the same should be expressly adopted by the legislature as the statutory conditions to be contained in the policies of fire insurance entered into, or in force in this province, the first sections enact:—
The conditions set forth in the schedule to this Act shall, as against the insurers, be deemed to be part of every policy of fire insurance hereinafter entered into or renewed, or otherwise in force in Ontario, with respect to any property therein, and shall be printed on every policy with the heading “Statutory Conditions;” and if a company (or other insurer) desire to vary the said conditions, or to omit any of them, or to add new conditions, there shall be added, in conspicuous type, and in ink of different color, words to the following effect: “Variations in conditions.”
This policy is issued on the above statutory conditions, with the following variations and conditions:—These variations (or as the case may be) are, by virtue of the Ontario statute in that behalf, in force so far as, by the Court or Judge before whom a question is tried relating thereto, they shall be held to be just and reasonable to be exacted by the Company.
2. Unless the same is distinctly indicated and set forth in the manner or to the effect aforesaid, no such variation, addition or omission shall be legal and binding on the insured, and no question shall be considered as to whether any such variation, addition or omission is, under the circumstances, just and reasonable, and, on the contrary, the policy shall, as against the insurers, be subject to the statutory conditions only, unless variations, additions or omissions, are distinctly indicated and set forth in the manner or to the effect aforesaid.
This Act was never disallowed, but has since its passage been acted on; and the Ontario reports show that questions as to its construction have been before the Courts of Ontario, without its validity having been impugned by either Bench or Bar, and, when the point was raised, its validity was affirmed by the unanimous opinion of the Court, to whom the question was first submitted; it was so held and acquiesced in in two cases unappealed from, and, when again raised in the present cases, the Court of Queen’s Bench unanimously reaffirmed its former decision, and, on appeal, the Appeal Court of Ontario unanimously affirmed that decision. But this is not all; we have the Dominion parliament recognizing, by expressed statutory terms, the right of the local legislature to incorporate insurance companies and deal with insurance matter.
So far back as the 31 Vic., ch. 48 (1868), when the intention of the parliament of Great Britain, in enacting the British North America Act, must have been fresh in the minds of the leading men who first sat in the Dominion parliament, and who had taken the most prominent part in discussing and agreeing on the terms of Confederation and the provisions of the British North America Act, and who, we historically know, watched its passage through the parliament of Great Britain, we find the Dominion parliament in that year (1868) passing “An Act respecting Insurance Companies,” and in that Act, by section 4, thus clearly affirming the right of the local legislature to incorporate insurance companies, after fixing the amount to be deposited by Life, Fire, Inland Marine, Guarantee or Accident Insurance Companies, certain companies are excepted in these words:—
Except only in the case of companies incorporated before the passing of this Act by Act of the parliament of Canada, or of the legislature of any of the late provinces of Canada, or Lower Canada or Upper Canada, or of Nova Scotia or New Brunswick, or which may have been or may hereafter be incorporated by the parliament of Canada, or by the legislature of any province of the Dominion, and carrying on the business of Life or Fire Insurance.
And, as if to place this beyond all doubt, and to show that companies, which might be so incorporated by the local legislature, were local incorporations and its business should be confined within the province incorporating them, we find it enacted in section 25:—
That the provisions of this Act as to deposit and issue of license shall not apply to any insurance company incorporated by any Act of the legislature of the late province of Canada, or incorporated, or to be incorporated, under any Act of any one of the provinces of Ontario, Quebec, Nova Scotia, or New Brunswick, so long as it shall not carry on business in the Dominion beyond the limits of that province by the legislature or government of which it was incorporated, but it shall be lawful for any such company to avail itself of the provisions of this Act.
Could words or provisions in recognition and affirmance of the powers of the local legislatures be stronger? And in 38 Vic., ch. 20 (1875), “An Act to amend and consolidate the several Acts respecting insurance, in so far as regards Fire and Inland Marine business,” we find, by section 2, a distinct recognition of companies incorporated under any Act of the legislature of any province of the Dominion of Canada:
Section 2.—This Act shall apply only to companies heretofore incorporated by any Act of the legislature of the late province of Canada, or by any Act of the legislature of any of the provinces of Canada, and which, upon the day of the passing of this Act, were also licensed, under Act of the parliament of Canada, to transact business of insurance in Canada, and also to any Company heretofore or which may hereafter be incorporated by Act of parliament of Canada, and to any foreign insurance company as hereinbefore defined; and it shall not be lawful for the Minister of Finance to license any other company than those in this section above mentioned; and no other company than those above mentioned, shall do any business of fire or inland marine insurance throughout the Dominion of Canada; but nothing herein contained shall prevent any insurance company incorporated by, or under, any Act of the legislature of the late province of Canada, or of any province of the Dominion of Canada, from carrying on any business of insurance within the limits of the late province of Canada or of such Province only, according to the powers granted to such insurance company within such limits as aforesaid, without such license as hereinafter mentioned.
But the Dominion statutory recognition of the rights of the local legislation, strong as it is, does not rest here. As late as 1877, by the 40 Vic., ch. 42, “An Act to amend and consolidate certain Acts respecting insurance,” we find it thus enacted by section 28:
This Act shall not apply to any company within the exclusive legislative control of any one of the provinces of Canada unless such company so desires, and it shall be lawful for any such company to avail itself of the provisions of this Act, and if it do so avail itself such company shall have the power of transacting its business of insurance throughout Canada.
So again, in the year 1878, the Dominion parliament distinctly recognized the incorporation by the Ontario legislature of the Ontario Mutual Life Assurance Company, incorporated and carrying on business in the province of Ontario, under the Act, ch. 17 of the statutes of said province, passed in the 32 Vic., and incorporated the said company to enable it to carry on business of life assurance on the mutual principle, and doing all things appertaining thereto or connected therewith, as well in the said province of Ontario as in the other provinces of the Dominion.
We find, then, legislation In the direction carried out by this Act recommended in a solemn judgment of the Queen’s Bench of Ontario; we find the matter referred to a commission of judges who reported to the Government of Ontario the conditions and provisions which, in their opinion, should be enacted by the legislature of that province, and form, as against the insured, the statutory conditions of a policy of insurance in force in Ontario with respect to any property therein, and the means necessary to be adopted by the insured if he desire to omit or vary any of such conditions. Here, then, we have the legislature of Ontario assuming the right to deal with insurance companies and insurance business, their legislative action not disallowed. We find this particular Act in several cases acted upon by the bar and bench of Ontario without its validity being questioned by either, and when at last questioned, we find its validity sustained by all courts and judges of original jurisdiction who have been called on to adjudicate on this point, and, finally, by the unanimous opinion of the Court of Appeal; and last, but not least, we have the express legislation of the parliament of Canada, expressly recognizing that the local legislatures have power to deal with matters of insurance.
I do not put forward these considerations as conclusive of the questions in this Court of Appeal, because, if we were clearly of opinion that under the B.N.A. Act the legislature of Ontario had not the power to pass the law, we would be bound to say so and to overrule the decisions of the courts below and disregard the legislation of the Dominion parliament, for, if not within the B.N.A. Act, neither the affirmance of the power by the local legislature nor the legislative recognition of it by the Dominion parliament could confer it. Still I am individually well pleased that I am enabled satisfactorily to arrive at a conclusion which relieves me from the necessity of overriding the Acts and decisions of so many learned Judges, and the legislative actions of the legislature of Ontario and the repeated statutory declarations of the parliament of Canada.
But this does not relieve me from the duty of showing immediately to the parties interested, and through them to the parliament of Canada and the legislatures of the provinces, by what process of reasoning I have arrived at that conclusion.
Is, then, such legislation as this with respect to the contract of insurance beyond the power of local legislation? I think at the outset I may affirm with confidence that the B.N.A. Act recognizes in the Dominion constitution and in the provincial constitutions a legislative sovereignty, if that is a proper expression to use, as independent and as exclusive in the one as in the other over the matters respectively confided to them, and the power of each must be equally respected by the other, or ultra vires legislation will necessarily be the result.
It is contended that the local legislature not only cannot incorporate a local insurance company, but cannot pass any Act in reference to insurance, inasmuch as it is contended such legislation belongs exclusively to the Dominion parliament, under the power given that parliament to legislate in relation to “the regulation of trade and commerce.”
As to the incorporation of insurance companies, this point is not directly, though it is perhaps indirectly, involved in the questions raised in these cases. It may be remarked that, in the enumeration of the powers of parliament, the only express reference to the power of incorporation is under No. 15, “Incorporation of Banks,” though it cannot be doubted that, under its general power of legislation, it has the power to incorporate companies with Dominion objects.
But it is said that insurance companies are trading or commercial companies, and therefore within the terms “trade and commerce;” but we have matters connected with trade and commerce, such as navigation and shipping, banking incorporations, weights and measures, and insolvency, “and such classes of subjects as are expressly excepted in the enumeration of the classes of subjects by the Act assigned exclusively to the legislatures of the provinces,” and these and the other enumerated “classes of subjects shall not be deemed to come within the class of matters of a local or private nature, comprised in the enumeration of the classes of the subjects by this Act assigned exclusively to the legislatures of the provinces.”
This shows inferentially that there may be matters of a local and private nature with which the local legislatures may deal, and which, but for the exclusive power conferred on the local legislatures, might be comprised under some of the general heads set forth in section 91, as belonging to the Dominion parliament. This is made very apparent in respect to navigation and shipping.
By section 91 the exclusive legislative authority of the parliament of Canada is declared to extend to all matters coming within the classes of subjects next thereinafter enumerated, of which “navigation and shipping” is one. When we turn to the enumeration of the exclusive powers of the provincial legislatures, we find “local works and undertakings, other than such as are of the following classes: (a) Lines of steamers and other ships, railways, canals, telegraphs and other works and undertakings” connecting the province with any other or others of the provinces, or extending beyond the limits of the province, (b) Lines of steamships between the provinces and any British or foreign country, (c) Such works, as although wholly situate within the province, are, before or after their execution, declared by the parliament of Canada to be for the general advantage of Canada, or for the advantage of two or more of the provinces”—and then follows the incorporation of companies with provincial objects.
Here, then, are matters immediately connected with navigation and shipping, trade and commerce.
If the power to legislate on navigation and shipping and trade and commerce, vested in the Dominion parliament, necessarily excluded from local legislatures all legislation in connection with the same matters, and that nothing in relation thereto could be held to come under local works and undertakings, or property or civil rights, or generally all matters of a merely local or private nature in the province, or the incorporation of companies with provincial objects, what possible necessity could there be for inserting the exception “other than such as are of the following classes as above” (a, b, c). On the contrary, does not this exception show beyond all doubt, by irresistible inference, that there are matters connected with navigation and shipping, and with trade and commerce, that the local legislatures may deal with, and not encroach on the general powers belonging to the Dominion parliament for the regulation of trade and commerce, and navigation and shipping, as well as railways, canals and telegraphs? Can it be successfully contended that this is not a clear intimation that the local legislatures were to have, and have, power to legislate in reference to lines of steamers and other ships, railways, canals, and other works and undertakings wholly within the province, subject, no doubt, to the general powers of parliament over shipping and trade and commerce, and the Dominion laws enacted tinder such powers, as, for instance, the 31st Vic., ch. 65 (1868), “An Act respecting the inspection of steamboats,: and for the greater safety of passengers by them,” or the Act 36 Vic., ch. 128, “An Act relating to shipping?” With reference to insurance companies, and the business of insurance in general, it is contended that insurance companies are trading companies, and therefore the business they transact is purely matter of trade and commerce, and therefore local legislatures cannot in any way legislate either in reference to insurance companies or insurance business.
As to such a company being a trading company, Jessel, M.R., in the case of in re Griffith[42], did not seem to think the question so abundantly clear as is supposed; he says:—
I come now to the next point, which is, what is this company? Is it a trading or other public company? * * *
So that we have it that it must be a public company, whether it is a trading or other company; therefore it seems immaterial to consider whether a particular company is or is not a trading company, and I am glad of it, because, though I think an insurance company might be called a trading company, many people might take the opposite view of the word “trade.” I take the larger view, and think it would be called a trading company, but it is immaterial. If it is a public company at all, and not a trading company, it comes under the term “other public company[43].”
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 complained of is beyond the powers of the local legislatures.
With reference to section 91, and the classes of subjects therein enumerated, Lord Selborne, in L’Union St. Jacques de Montreal and Belisle[44], says:
Their Lordships observe that the scheme of enumeration in that section is to mention various categories of general subjects which may be dealt with by legislation. There is no indication in any in stance of anything being contemplated, except what may properly be described as general legislation.
It may be difficult to draw the exact line between the powers of the Dominion parliament to regulate trade and commerce and the powers of the local legislatures over “local works and undertakings,” “property and civil rights in the province,” and “generally all matters of a merely local or private nature in the province.”
No one can dispute the general power of parliament to legislate 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 legislation 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 Dominion parliament may prescribe. I adhere to what I said in Valin v. Langlois[45], that the property and civil rights referred to, were not all property and all civil rights, but that the terms “property and civil rights” must necessarily be read in a restricted and limited sense, because many matters involving property and civil rights are expressly reserved to the Dominion parliament, and that the power of the local legislatures was to be subject to the general and special legislative powers of the Dominion parliament, and to what I, there added; “But while the legislative rights of the local legislatures are in this sense subordinate to the right of the Dominion parliament, I think such latter right must be exercised, so far as may be, consistently with the right of the local legislatures; and, therefore, the Dominion parliament would only have the right to interfere with property and civil rights in so far as such interference may be necessary for the purpose of legislating generally and effectually in relation to matters confided to the parliament of Canada.”
I think the power of the Dominion parliament to regulate trade and commerce ought not to be held to be necessarily inconsistent with those of the local legislatures to regulate property and civil rights in respect to all matters of a merely local and private nature, such as matters connected with the enjoyment and preservation of property in the province, or matters of contract between parties in relation to their property or dealings, although the exercise by the local legislatures of such powers may be said remotely to affect matters connected with trade and commerce, unless, indeed, the laws of the provincial legislatures should conflict with those of the Dominion parliament passed for the general regulation of trade and commerce. I do not think the local legislatures are to be deprived of all power to deal with property and civil rights, because parliament, in the plenary exercise of its power to regulate trade and commerce, may possibly pass laws inconsistent with the exercise by the local legislatures of their powers—the exercise of the powers of the local legislatures being in such a case subject to such regulations as the Dominion may lawfully prescribe.
The Act now under consideration is not, in my opinion, a regulation of trade and commerce; it deals with the contract of fire insurance, as between the insurer and the insured. That contract is simply a contract of indemnity against loss or damage by fire, whereby one party, in consideration of an immediate fixed payment, undertakes to pay or make good to the other any loss or damage by fire, which may happen during a fixed period to specified property, not exceeding the sum named as the limit of insurance. In Dalby v. The India & London Life Insurance Co.[46], Parke, B., delivering the judgment of the court, says:
The contract commonly called “life insurance,” when properly considered, is a mere contract to pay a certain sum of money upon the death of a person, in consideration of the due payment of a certain annuity for his life, the amount of the annuity being calculated, in the first instance, according to the probable duration of the life, and when once fixed is constant and invariable. This species of insurance in no way resembles a contract of indemnity.
How this, as between the parties to the contract, can be called a matter of trade and commerce, I must confess my inability to comprehend; but the process of reasoning, as I understand it, by which we are asked to say that fire insurance is a matter of trade and commerce, would make life assurance equally so.
In this same case, Parke, B., says:—
Policies of assurance against fire and against marine risks are both properly contracts of indemnity, the insurer engaging to make good, within certain limited amounts, the losses sustained by the assured in their buildings, ships and effects. Policies on maritime risks were afterwards used improperly, and made mere wagers on the happening of those perils. This practice was limited by the 19 Geo. 2 ch. 37, and put an end to in all except a few cases. But at common law, before this statute with respect to maritime risks, and the 14 Geo. 3 ch. 48, as to insurance on lives, it is perfectly clear that all contracts for wager policies, and wagers which were not contrary to the policy of the law, were legal contracts, and so it is stated by the Court in the case of Causens v. Nantes[47], to have been solemnly determined in Lucena v. Craufurd[48], without even a difference of opinion among all the Judges. To the like effect was the decision of the Court of Error in Ireland, before all the Judges except three, in the British Insurance Co. v. Magee[49], that the insurance was legal at common law[50].
I do not understand that by the Act now assailed any supreme sovereign legislative power to regulate and control the business of insurance in Ontario is claimed, As I read the Act, it deals only with this contract of indemnity; it does not profess to deal with trade or commerce, or to make any regulation in reference thereto. In my opinion, this Act has no reference to trade and commerce in the sense in which these words are used in the British North America Act. It is simply an exercise of the power of the local legislature for the protection of property in Ontario, and the civil rights of the proprietors thereof in connection therewith, by securing a reasonable and just contract in favor of parties insuring property, real or personal, in Ontario, and deals therefore only with a matter of a local and private nature. The scope and object of the Act is to secure to parties insuring a just and reasonable contract, to prevent the exaction of unjust and unreasonable conditions, and to protect parties from being imposed upon by the insertion of conditions and stipulations in such a way as not to be brought to the immediate notice of the insured, or capable of being easily Understood, or by the insertion of conditions calculated practically in many cases to deprive the parties paying the premiums of indemnity, though justly entitled to it, and, if the statutory conditions are omitted or varied, to compel the terms of the contract to be so plainly and prominently put on the contract that the attention of the assured may be called to them, and so that he may not be misled, judicial experience having proved that the rights of the insured, and legitimate indemnity in return for the money paid demanded that the insured should be thus protected.
As the case of Smith v. Commercial Union Insurance Company[51] proves that the judicial tribunals found that legislative protection was required in Ontario against unreasonable and unjust conditions imposed on the assured by the assurers; should experience show that over-insurance was of frequent occurrence, and led to fraudulent burning, whereby not only fraud was encouraged, but the neighbouring properties of innocent parties, wholly unconnected with the insurance, were jeopardized, can it be said that it would be ultra vires for the legislature of a province, with a view to stop such practises, to enact that in every case of over insurance, whether intentional or unintentional, the policy should be void, or to make any other provisions in reference to the contract of insurance as to value as would, in the opinion of the local legislature, prevent frauds and protect property? Could such legislation be held to be ultra vires, as being an interference with trade and commerce, because it dealt with the subject of insurance? Or for preventing frauds and perjuries, would it be ultra vires for the local legislature to enact that, as to all contracts of insurance entered into in Ontario, no insurance on any building or property in Ontario should be binding, or valid in law or equity, unless in writing? Or, take the first section of the 38 Vic., ch. 45, can it be that the local legislature cannot make provision to provide against a failure of justice and right by enacting, as the first section of that Act did, that:
Where, by reason of necessity, accident or mistake, the conditions of any contract of fire insurance on property in this province as to the proof to be given to the Insurance Company after the occurrence of a fire have not been strictly complied with; or where, after a statement or proof of loss has been given in good faith by or on behalf of the insured in pursuance of any proviso or condition of such contract, the Company, through its agent or otherwise, objects to the loss upon other grounds than imperfect compliance with such conditions, or does not, within a reasonable time after receiving such statement or proof, notify the insured in writing that such statement or proof is objected to, and what are the particulars in which the same is alleged to be defective, and so from time to time or where, from any other reason, the Court or Judge before whom a question relating to such insurance is tried or inquired into, considers it inequitable that the insurance should be deemed void or forfeited by reason of imperfect compliance with such conditions; no objection to the sufficiency of such statement or proof, or amended or supplemented statement or proof (as the case may be) shall, in any of such cases, be allowed as a discharge of the liability of the Company on such contract of insurance whenever entered into; but this section shall not apply where the fire has taken place before the passing of this Act.
How can this be said to be an interference with the general regulation of trade and commerce? Yet it deals as effectually with the matter or contract of insurance in these particulars as this Act does in reference to the matters with which it deals. If the legislative power of the provincial legislatures is to be restricted and limited, as it is claimed it should be, and the doctrine contended for in this case, as I understand it, is carried to its legitimate logical conclusion, the idea of the power of the local legislature to deal with the local works and undertakings, property and civil rights, and matters of a merely local and private nature in the province is, I humbly think, to a very great extent, illusory.
I scarcely know how one could better illustrate the exercise of the power of the local legislatures to legislate with reference to property and civil rights, and matters of a merely local and private nature, than by a local Act of incorporation, whereby a right to hold or deal with real or personal property in a province is granted, and whereby the civil right to contract and sue and to be sued as an individual in reference thereto is also granted. If a legislature possesses this power, as a necessary sequence, it must have the right to limit and control the manner in which the property may be so dealt with, and as to the contracts in reference thereto, the terms and conditions on which they may be entered into, whether they may be verbal, or shall be in writ- ing, whether they shall contain conditions for the pro tection or security of one or other or both the parties, or that they may be free to deal as may be agreed on by the contracting parties without limit or restriction.
Inasmuch, then, as this Act relates to property in Ontario, and the subject-matter dealt with is therefore local, and as the contract between the parties is of a strictly private nature, and as the matters thus dealt with are therefore, in the words of the British North America Act, “of a merely local and private nature in the province,” and as contracts are matters of civil rights and breaches thereof are civil wrongs, and as the property and civil rights in the province only are dealt with by the Act, and as “property and civil rights in the provinces” are in the enumeration of the “exclusive powers of provincial legislatures,” I am of opinion that the legislature of Ontario, in dealing with these matters in the Act in question, did not exceed their legislative powers.
I am happy to say I can foresee, and I fear, no evil effects whatever, as has been suggested, as likely to result to the Dominion from this view of the case. On the contrary, I believe that while this decision “recognizes and sustains the legislative control of the Dominion parliament over all matters confided to its legislative jurisdiction, it, at the same time, preserves to the local legislatures those rights and powers conferred on them by the B.N.A. Act, and which a contrary decision would, in my opinion, in effect, substantially, or, to a very large extent, sweep away.
I carefully and advisedly abstain from expressing any opinion as to the validity or invalidity of any Act of the Dominion of Canada, or of the province of Ontario, save only as to the Act now immediately under consideration. It will be time enough to discuss and decide on the validity of other statutes, whether Do- minion or provincial, when properly brought before us for judicial decision. To do so now, or to express any opinion as to the effect of this decision on other legislation not before us, and without argument or judicial investigation and consideration, would be, in my opinion, extra‑judicial.
As to the construction which my brother Gwynne has put on section 3rd of the Act, in the case of Giraldi and Provincial Insurance Company[52], though the arguments used by him in that case, and the judgment he is about to deliver, which he has kindly afforded me the opportunity of reading, and which I have most attentively considered, are very cogent and plausible, yet I have been unable to arrive at the same conclusion that he has. I think the history and phraseology of the Act shows it was passed for the protection and benefit of the insured, and “as against the insurer,” that the insured may insure without conditions if he pleases, except those conditions which the law implies, but that in such a case, as against the insurer, the insured may claim the benefit of these conditions. But if the insurer wishes to avail himself of the statute and the statutory conditions, he must pursue the course pointed out by the statute; he cannot, in my opinion, disregard the requirements of the statute, and at the same time claim its benefits; and if he desires other conditions than the statutory conditions, he can only have them by varying the statutory conditions, or add to them in the manner pointed out by the statute. I can add nothing to what C.J. Moss and Judge Burton have said in their judgments on this point.
It is urged that the provisions of this statute do not apply to an insurance by what is called an interim receipt. When that contains an agreement to insure, it is, in my opinion, a policy within the meaning of the Act. A policy of insurance is a written instrument containing the contract. Whether it be contained in what is usually called an interim receipt, or a more formal document, it is equally the instrument containing the contract, and so the statutory definition of the term policy, in 33 and 34 Vic., ch. 97 Imp., is:—”Every writing whereby any contract of insurance is made, or agreed to be made, is evidence.”
As at present advised, I think the interim receipt should be treated as the policy. It would be an entire evasion of the statute if companies could insure by a document not in the usual form of a policy, and by calling it by another name impose their own conditions and escape from the provisions of the statute for the protection of the insured, but it is not necessary to discuss or finally decide this point, as in this case of Parsons v. The Queen Insurance Company, both the court of first instance and the Court of Appeal treated the case in the way most favorable for the defendants, and they have nothing to complain of.
As to the contention that the statute of Ontario can only apply to local companies and not to foreign companies, or companies incorporated by the Dominion of Canada, in my opinion any company, whether foreign, or incorporated by the Dominion legislature to carry on the business of fire insurance in any part of the Dominion of Canada, must do so subject always to the laws of the province in which the business is done, in the same way that a merchant carries on his trade or commerce within a province; but because he is a merchant or trader he is not exempt from an obligation to obey the laws of the province in which he carries on his business, if he enters into a contract within the province, and the law of the province prescribes the form of the contract under its power to legislate as to property and civil rights; neither corporations nor traders can set themselves above that law and contract as they please independent of it. Suppose no statute of frauds was in force in a province, and the legislature enacted that no agreement for the sale of goods over $20 should be valid unless the contract of sale was evidenced by a writing signed by the parties, or in fact enacted a statute of frauds similar to the statute of Charles; or with reference to the statute of limitations, passed an Act limiting the validity of the contract as well as the remedy, or altered the existing limitations, and reduced or extended the time limited for bringing an action, could a corporation, merchants or traders, successfully claim to be exempt from the operation of such law on the ground that they interfered with trade and commerce, or that they were foreign corporations or foreigners engaged in trade, and therefore bound by no local laws?
If an insurance company is a trader, and the business it carries on is commercial, why should the local legislature, having legislative power over property and civil rights, and matters of a private and local character, not be enabled to say to such a company: “If you do business in the province of Ontario, and insure property situate here, we have legislative control over property and over the civil rights in the province, and will, under such power, for the protection of that property and the rights of the insured, define the conditions on which you shall deal with such property,” it being possibly wholly unconnected with trade and commerce, as a private dwelling or farming establishment, and the person insured having possibly no connection with trade or commerce?
How can it be said that such property and such civil rights or contract shall be outside of all local legislation, and so outside of all local legislative protection? If the business of insurance is connected with trade and commerce, the legislation we are now considering does not attempt to prohibit the carrying on of the business of insurance, but having the property and the civil rights of the people of the province confided to them this legislation, in relation thereto, is simply the protection of such property and of such rights. In Palleson v. Mills[53], Lord Lyndhurst says:—
And here another question arises—supposing the Act does not extend to Scotland, still it is said to be a bar to this action, because it is founded on a policy by an English company. The company is certainly an English one, but it is to be considered where the original contract was made. The policy was executed in London, but the action is not on the policy, but on the agreement; the original contract is made in Scotland, and if I, residing in England, send down my agent to Scotland, and he makes contracts for me there, it is the same as if I myself went there and made them.
In Copin v. Adamson[54], Kelly, C.B., cites the marginal note in Bank of Australasia v Harding[55], which he adopts as a correct proposition of law:
The members resident in England, of a company formed for the purpose of carrying on business in a place out of England, are bound, in respect of the transactions of that company, by the law of the country in which the business is carried on.
I am, therefore, of opinion that this Act applies to all insurance companies that insure property in the Province of Ontario, whether local, dominion or foreign.
STRONG, J., who was present at the argument in the cases of The Queen Insurance Company v. Parsons, and Citizens’ Insurance Company v. Parsons, did not deliver a formal judgment, but authorized the Chief Justice to state that he entirely agreed with the majority of the court in their conclusions, both as to the constitutionality of the Ontario statute, ch. 162 R.S., Ont., and the Construction to be put Upon the provisions of that statute. FOURNIER, J.:
La principale question à décider est celle de la constitutional de l’acte d’Ontario, 39 Vict., ch. 24, maintenant le ch. 162 des statuts revises, pour assurer l’uniformité des conditions de police d’assurance. La constitutionalité est mise en question sur le principe que le pouvoir de législater au sujet des assurances appartient au parlement fédéral, comme conséquence de son pouvoir exclusif de réglementer le traffic et le commerce.
Afin de s’assurer s’il y a conflit de pouvoirs, la première chose à faire est sans doute d’examiner la nature de la loi dont il s’agit. Comme l’indique son titre, elle a pour but d’assurer des conditions uniformes dans les polices d’assurance contre le feu.
La 2me section déclare que l’exécution imparfaite des conditions de l’assurance, quant à la preuve de l’incendie ne sera pas une raison suffisante pour annuler le contrat: 1o. lorsque par raison de nécessité, erreur ou accident, ces conditions n’ont pu être remplies; 2o. lorsque après que cette preuve a été fournie conformément aux conditions du contrat, la compagnie fait objection pour d’autres motifs que le défaut d’accomplissement de ces conditions; 3o. lorsqu’après avoir reçu cette preuve elle ne donne pas, dans un temps raisonnable, avis par écrit à l’assuré, des raisons pour lesquelles elle considère cette preuve défectueuse; 4o. lorsque la cour ou le juge, pour aucune autre raison, considère qu’il serait injuste de déclarer l’assurance nulle pour cause d’exécution imparfaite de ces conditions.
La 3me déclare que les conditions mentionnées dans la cédule feront, contre l’assureur (as against the insurer), partie de toute police d’assurance contre le feu sur des propriétés situées dans la province d’Ontario. Ces con- ditions doivent de plus être imprimées sur la police d’assurance avec le titre “Statutory conditions.”
La 4me section indique la manière de modifier les conditions et le mode à suivre pour leur impression.
La 5me section déclare qu’aucune variation de ces conditions ne sera obligatoire pour l’assuré, à moins qu’elle n’ait été faite conformément à la sec. 4; dans le cas contraire la police demeure, quant aux assureurs (as against insurers) soumise aux conditions imposées par le statut.
Par la sec. 6, il est déclaré que si d’autres conditions que celles voulues par le statut sont insérées dans une police—et que le juge ou la cour décide qu’elles ne sont ni justes ni raisonnables—elles sont dans ce cas déclarées nulles et sans effet,
La 7me donne un appel des causes jugées en vertu de cet acte.
Ce précis de la loi fait voir qu’elle se borne à établir des règles au sujet de la preuve à faire dans certains cas, ainsi qu’à déclarer quelles seront, dans la province d’Ontario, les conditions obligatoires de tout contrat d’assurance. Ces dispositions, entièrement de droit civil, ne comportent aucune prohibition du commerce de l’assureur, ni la nullité des polices qu’il émet. Les conditions imposées sont justes et raisonnables, et en réalité fort peu différentes de celles adoptées par la plupart des compagnies.
En quoi cette législation trouve-t-elle au pouvoir de réglementer le commerce et le trafic? Le sujet auquel elle s’applique, le contrat d’assurance, n’appartient-il pas au droit civil et ne fait-il pas partie de la juridiction attribuée aux provinces par le paragraphe 13 de la section 92 de l’Acte de l’Amérique Britannique du Nord au sujet de la propriété et des droits civils?
Sans doute que le contrat d’assurance est d’un usage immense dans le commerce, aussi bien que par les non commerçants. Mais l’objet auquel s’applique un contrat n’en change pas la nature; quel que soit son objet le contrat d’assurance n’est toujours qu’un contrat d’indemnité, qui tient de la nature du cautionnement, et comme tel il appartient au droit civil. Le commerce ne fait-il pas aussi constamment usage des contrats de vente, d’échange, de louage, etc.? S’en suit-il pour cela que la législation à leur sujet doit être considérée comme faisant partie de la réglementation du commerce? S’il en était ainsi, si tout ce que peut atteindre le commerce devait, pour cette raison, faire partie du pouvoir exclusif du parlement fédéral, la plupart des pouvoirs des provinces se trouveraient ainsi anéantis, car le commerce dans son acception la plus étendue touche à tout,—c’est, dit une définition de ce mot par un auteur français, “cet échange de produits et de services. C’est en dernière analyse le fonds même de la société.”
Il est clair que dans notre acte constitutionnel—le mot ne peut avoir une signification aussi étendue.
Pour déterminer la portée du paragraphe 2 de la sec. 91, on ne doit pas le considérer isolément; il faut au contraire le comparer avec l’ensemble des dispositions de l’acte constitutionnel, afin d’arriver à une conclusion qui soit conforme à son esprit, et de manière à donner effet à toutes ses dispositions. Le but du législateur en divisant les pouvoirs législatifs par les sec. 91 et 92 entre le gouvernement fédéral et les provinces était, autant que compatible avec le nouvel ordre de choses, de conserver à ces derniers, leur autonomie, sous le rapport des droits civils particuliers à chacune d’elles. On arriverait cependant à un résultat tout différent, si l’on donnait au paragraphe 2 la signification étendue que pout comporter son sens littéral. Mais il est évident que ce ne serait pas l’interpréter correctement, puisque les paragraphes suivants de la même section lui donnent un sens limité. En effet si c’eût été l’in- tention de donner à ces expressions “réglementaires du trafic et du commerce” une signification absolue; pourquoi la loi aurait-elle énuméré certains sujets de législation qui sont certainement compris dans le pou voir de réglementer le commerce, comme e.g. la navi gation et les bâtiments ou navires, les banques, les lettres de change et les billets promissoires, la faillite et la banqueroute—tous sujets qui sans cette enumeration spéciale se trouveraient compris dans le pouvoir de réglementer le commerce. Il me semble que l’on doit conclure de là que si les expressions générales de ces paragraphes ne comprennent pas d’après l’acte lui-même tout ce qui fait certainement partie du commerce, elles doivent encore moins comprendre ce qui ne s’y rapporte qu’indirectement.
Dans la cause de Severn vs. La Reine[56] je me suis appuyé sur la définition donnée par le célèbre juge en chef Marshall des mots regulations of commerce dans la constitution des Etats-Unis. Elle est ainsi: “It is the power to regulate, that is the power to prescribe the rule by which commerce is to be governed. This power, like all others vested in congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no “limitations other than are prescribed by the constitu tion. Je crois encore à l’exactitude de cette définition. Pourvu qu’on la prenne en entier, elle peut s’appliquer à la question sous considération et nous aider à en trouver la solution. Il faut surtout ne pas perdre de vue les derniers mots and acknowledges no limitations other than are prescribed by the constitution.” Cette restriction nous indique que c’est dans la constitution seulement que doit se trouver la limite du pouvoir de réglementer le commerce. Après avoir donné ce pouvoir au parlement fédéral, paragraphe 2, section 91, elle donne aux provinces la juridiction sur la propriété, les droits civils et les affaires purement locales, etc., etc. Ces pouvoirs particuliers, exclusivement attribués aux provinces ne peuvent pas, d’après les termes mêmes de l’acte constitutionnel, être considérés comme pouvant tomber sous le pouvoir de réglementer le commerce. Réglementation du commerce et du trafic doit nécessairement signifier autre chose que législation sur la propriété et les droits civils, puisqu’ils sont des attributs exclusifs de chaque gouvernement. Dans l’exercice de sa juridiction, le parlement fédéral a sans doute le pouvoir de toucher incidemment à des matières qui sont de la juridiction des provinces,—mais ce pouvoir ne s’étend pas au-delà de ce qui est raisonnable et nécessaire à une législation pour les fins du commerce seulement. Le parlement fédéral ne pourrait donc sous ce prétexte de commerce contrôler entièrement un sujet qui est de la juridiction des provinces. Sa législation comme réglementation du commerce doit être complète, sans cependant anéantir la juridiction des provinces sur cette partie du sujet qui n’a pas été affectée par cette législation. S’il n’en était ainsi, chaque fois que le parlement fédéral, en exerçant son pouvoir