National Benefit Life and Property Assurance Co. v. McCoy, (1918) 57 SCR 29

Supreme Court of Canada

National Benefit Life and Property Assurance Co. v. McCoy, (1918) 57 S.C.R. 29

Date: 1918-06-10

The National Benefit Life and Property Assurance Company (Defendant) Appellant;

and

Maud McCoy (Plaintiff) Respondent.

1918: May 10, 13; 1918: June 10.

Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Anglin and Brodeur JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA.

Insurance—Conditions—Subsequent insurance—Assent—Foreign Company—Liability for acts of its general agent.

One of the conditions indorsed on a policy of insurance was: "The company is not liable for loss * * * if any subsequent insurance is effected in any other company unless and until the company assents thereto."

Held, Anglin J. dissenting, that, when a foreign company, doing business in Canada, appoints a general agent for a province, the actions of the agent are binding upon the company, and in case of loss under the policy the appointment by the agent of an adjuster with authority to make a settlement with the insured, after he was aware of a subsequent insurance constitutes an assent on behalf of the company to such subsequent insurance.

Per Anglin J. dissenting:—Though the general agent of a foreign insurance company has authority, before loss, to assent to co-insurance, such assent given by him after loss would amount to a relinquishment of an unanswerable defence to the claim of the insured and is not within the apparent scope of the authority of an agent, however general it may be.

APPEAL from the decision of the Court of Appeal for British Columbia, which varied the judgment of Macdonald J. at the trial, and maintained the action of the plaintiff for $1,309.10 instead of $581.80.

The material facts of the case are fully stated in the above head-note and in the judgment now reported.

W. L. Scott for the appellant.

A. E. Honeywell, for the respondent.

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THE CHIEF JUSTICE:—It is contended by the appellant that there is no question of waiver in this case; that any liability of the appellant could only arise from the creation of a new liability. I do not think that is so. A similar condition has been before the court in many cases but the exact wording of the condition varies considerably in different cases. In many of them the policy is conditioned to be absolutely void on subsequent insurance without notice. Such is not the case here where it is only provided that the company shall not be liable if any subsequent insurance is effected unless and until the company assent thereto. It is a good defence to an action on the contract so long as the company has not assented but the contract continues and if the company at any time assents the insured can recover under it.

In Kerr on Insurance it is correctly said that

if after knowledge of any default for which it might terminate the contract, or if after all right to recover on the contract has to the knowledge of the insurer become barred by the very terms of the contract itself because of the failure of the insured to perform some condition precedent to his right of recovery, the insurer does any act or enters into any negotiations with the insured, which recognizes the continuing validity of its obligation, or treats it as still in force and effect, the default or forfeiture is waived.

Forfeiture is not favoured either in law or equity, and the provision for it in a contract will be strictly construed, and courts will find a waiver of it upon slight evidence when the justice and equity of the claim is, under the contract, in favour of the insured.

There can be no doubt that if the company is responsible for the acts of its agents in this case these were abundantly sufficient to constitute a waiver of the forfeiture.

The fact that there was subsequent insurance came to the knowledge of the agents the day after the fire, that is, on the 2nd January, 1916. The matter was placed in the hands of the adjusters on behalf of the companies, proofs of loss were duly made and accepted;

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many interviews and correspondence ensued, the matter being complicated by the fact that the city by-laws would not permit of the re-instatement of the premises. On the 31st March, 1916, the adjuster, who had been handling the case since the middle of February, when he was substituted for the first one appointed, wrote to the respondent offering a definite sum which he said:

I am authorized to offer you in full settlement of the claim.

The appellant is an English company. The head office is in England and its general agents in British Columbia are Messrs. Rutherford & Co.; Mr. Charles Rutherford was their attorney for British Columbia under the "Companies Act." The trial judge said:

I consider that where a foreign company is doing business in the province, that the actions of its general agents should be binding upon the company. It is essential to the proper carrying on of insurance business at a distant point from the head office that they should have such general authority, not only to effect insurance, but also to adjust and pay losses.

Mr. Justice Martin says that Mr. Rutherford must be deemed to be for the purposes of this case in the same position as the head office. I am not sure that it is necessary to go quite so far as this; but I certainly think there is much weight in the opinion and that we should consider the authority of agents in such a position to be as extensive as possible.

The knowledge of the company's agents was the knowledge of the company; not that it is necessary to invoke for this any technical rule of law; but, as I have said, the agents had knowledge of the subsequent insurance on the 2nd of January and, of course, the company could have been and presumably was informed of it months before it decided to repudiate liability. Yet, in the interval, so far as appears by this record, it not only gave no instructions to this

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effect to its agents but permitted them to go on taking action which could only be consistent with an intention to accept liability on the policy.

The fact that the company was carrying on business at such a distance from its head office that it might reasonably be expected to give to its agents here a large measure of authority to act on its behalf, coupled with the fact that there was ample time for all necessary correspondence with its agents must, I think, preclude the appellant from repudiating the acts of its agents by which accordingly I hold that they were bound.

It is satisfactory to be able to conclude that the appellant has effectually waived any forfeiture under the insurance contract. Were it not so, the insured would have been unfairly prejudiced by the appellants' course of action. As it is, the respondent has been forced, in order to obtain her rights, to bring this second action, which the company has endeavoured to defeat on doubtful technical grounds, though itself profiting by the subsequent insurance.

The appeal should be dismissed with costs. Judgment for $1,310 which is the amount of the loss incurred by the respondent.

DAVIES J.—This action is one brought on a policy of insurance taken out by the respondent in the appellant company against loss or damage by fire on the plaintiff's houses and buildings on a specified property in Vancouver, B.C., and any loss under the policy was made payable to Carrie M. Jamieson, the mortgagee thereof, as her interest might appear.

Subsequent insurance was placed by the respondent upon the premises in the North Empire Fire Insurance Company for the sum of $3,500 and knowledge of this latter insurance only came to the general

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agent of the appellant for British Columbia on the morning after the fire which partially destroyed the insured premises.

The policy of insurance had the usual statutory conditions, namely

The company is not liable for loss * * * if any subsequent insurance is effected in any other company unless and until the company assents thereto.

The appellant company was an English company with its head office in London, England.

Its general agents in and for British Columbia were Rutherford & Co. Policies in blank signed by the managing director and the fire and accident manager of the company in London were sent to their general agent with a provision that they were not valid until countersigned by their general agents in British Columbia.

It was agreed at the trial by both parties that the value of the building at the time of the fire was $3,750 and that the loss due to the fire was $1,600 and that the building by-law of Vancouver prohibited the reconstruction or repair of the building to a greater extent than 20% of the original value, with the result that the building could not be repaired.

Immediately after the fire adjustment of the loss was placed by both companies in the hands of one McKenzie; but subsequently the adjustment was taken from him and placed in the hands of one Shallcross, another adjuster, who took from respondent a "nonwaiver" agreement providing that any action taken by the company appellant in investigating the cause of the fire or the amount of the loss and damage to the property should not waive or invalidate any of the conditions of the policy.

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The trial judge found that the company was protected by the non-waiver agreement while Shallcross was acting as adjuster and settling the amount of the loss.

It clearly appeared in evidence, however, that outside of his duties as adjuster he was authorized by the general agent, Rutherford, after the latter had full knowledge of the subsequent insurance, to settle with the respondent amicably if possible the amount which they should pay under the policy. After prolonged negotiations and with Rutherford's full knowledge and authority he offered respondent on behalf of both companies to pay her

in full settlement of her claim the National Benefit's proportion of the sum of $1,500.

Apart from the amount payable the question therefore is reduced down to this, whether Rutherford, as general agent for this company in British Columbia, with power to issue, adjust and settle losses in that province on policies issued by him had also power to give the company's assent to the subsequent insurance effected by the respondent?

I have had the question of the extent of the powers of a general agent in Canada of a foreign company under consideration in several cases which have been before this court and have expressed myself as being of the opinion that such general agent must of necessity be held for certain purposes connected with the issuing of the policy, adjustment, proofs and settlement of loss and matters akin thereto to be the company itself.

I do not see how otherwise the business of the company could be carried on if the general agent could not give such an assent to subsequent insurance in another company as the condition in this case calls for. Such assent is not required by the condition to be in writing.

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Cases calling for it must constantly arise. If they have necessarily to be referred to the head office in London for the formal assent of the company, then much valuable time would be lost. It is a question peculiarly for the general agent whose knowledge must govern in any such case to say whether assent should be given or not. As general agent he has policies placed in his hands already signed by the company's officers in London and good only when countersigned by him.

Absolute reliance is and must be placed on his judgment as to the taking of the risk insured. If further insurance in his own company was asked he would have authority to take it and either issue a new policy for the increased amount and cancel the old one or by memorandum on the one already issued increase the amount insured. Surely then a general agent entrusted with such unlimited powers may give the "assent" called for by the condition to a subsequent insurance in another company not required even to be in writing. Of course the company can limit his powers but there is nothing in this case to shew any such limitation was ever made. The inference I draw from the admitted powers he possesses as general agent is that they extend to and embrace the case of giving assent to subsequent insurance effected in any other company.

The condition in question in case of prior insurance requires that the company's assent to it must appear in the policy or be indorsed thereon.

That clearly contemplates to my mind that such indorsement might be made by the general agent when he issues the policy. It further requires that if written notice of an intention or desire to effect subsequent insurance is given and the company does not dissent in writing within two weeks after receiving such notice the company should be held not to have dissented.

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Surely the written notice so required may be given the general agent and if so and he does not dissent the company would be held not to have dissented. The two weeks time within which the company must dissent would not allow time for the company in London to be advised of the notice and to send their dissent in writing. It would seem to me that in all the cases dealt with in this condition the general agent must be held to stand for the company.

The mere appointment of an adjuster to adjust the loss under the policy might not be sufficient to indicate any assent to subsequent insurance but in this case the evidence shewed specific authority given to Shallcross, the adjuster, by Rutherford, the general agent, to pay plaintiff in full settlement of her claim the company's proportion of the sum of $1,500.

This specific authority was given after full knowledge of the subsequent insurance by the general agent and beyond doubt amounted to an assent to such insurance by the general agent if he had the power to give it.

I assume it will not be denied that the principal officers of the company at the head office conducting its affairs there would be held to have authority to waive the conditions invoked without having special authority from the directors and so I hold in like manner the general agent for the company residing and conducting its affairs in British Columbia had such authority.

The case of Western Assurance Company v. Doull^[1], was strongly relied upon by Mr. Scott for the company as a binding authority in this case. It would appear to me from the facts as stated in the judgments of the,

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court in that case that the agent there, Greer, was a local agent merely and not a general agent for the province. He is referred to by several of the judges in their judgments as a local agent and his powers were very limited. In that case the condition of the policy required that in cases of subsequent insurance notice in writing must at once be given to the company and such subsequent insurance indorsed upon the policy. No such written notice or indorsement was required in the present case but simply the "assent" of the company to the subsequent insurance. In the Doull Case^[2], Mr. Justice Strong said, at p. 455, that:

It does not appear very clearly whether he (the adjuster Corey) was instructed directly from the principal officer of the appellants or through Greer. The latter in his evidence said he "had a telegram from defendant company authorizing me to request Corey to adjust the loss and I requested him to do so." In cross—examination he says: "After a loss I notify the head office and I get instructions from them what to do."

Manifestly, therefore, Greer's authority was a limited one and not a general one. He was simply authorized to investigate and adjust the loss. In the case now before us there is no suggestion that the general agent's authority was a limited one. On the contrary, he appeared to have all the powers necessary for the issue of policies and in case of loss, for its adjustment and settlement. In the Doull Case^[3], the plaintiff relied alone upon the adjuster's action in adjusting the loss as amounting to a waiver by the company.

But in the present case the plaintiff relies not upon the mere adjustment of the loss but upon the special authority given to him by the general agent, Rutherford, to settle it if he could and the offer to pay her the company's proportion of the sum of $1,500.

Mr. Scott strenuously contended that under the condition where subsequent insurance was effected

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without the company's approval its liability under the policy ceased and that no agent could create a new liability. But I do not think that is the proper construction of the condition. It says that the company shall not be liable if any subsequent insurance is effected unless the company assents. But if it does assent that assent makes the non-liability provision inapplicable. The liability is one depending on the "assent" and once that is given no question of any new liability arises.

I therefore would dismiss the appeal and as to the amount, while I confess I am not without doubt on this point, I will not dissent from the amount determined on by a majority of the Court of Appeal and of this court, viz., $1,300.

IDINGTON J.—The appellant is an English insurance company which carried on business in British Columbia and insured the respondent's property in Vancouver for the sum of $2,000 for one year from the 14th of April, 1915, subject to the stipulations and conditions indorsed on the policy. One of the said conditions so indorsed was as follows:

The company is not liable for loss if there is any prior insurance in any other company, unless the company's assent thereto appears herein or is indorsed hereon, nor if any subsequent insurance is effected in any other company unless and until the company assents thereto, or unless the company does not dissent in writing within two weeks after receiving written notice of the intention or desire to effect the subsequent insurance, or does not dissent in writing after that time and before the subsequent insurance is effected.

The only question raised herein is whether under the said condition and the circumstances I am about to relate the appellant has been relieved from liability.

The respondent shortly after obtaining said policy of insurance assigned same to her mortgagee. A condition indorsed upon it provided that in the event of the

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property being assigned without a written permission indorsed thereon

by an agent of the company duly authorized for such purpose

the policy should thereby become void.

The person to whom she applied in that event was the same agent who had signed the policy and issued it to her. He duly signed same without raising any question of his authority.

On the heading of the policy is printed in large type the name of the appellant and under same is printed in large type also the words "Head Office, London, England," and under those the words "Agency No. Vancouver, B.C."

And the policy at the foot thereof after the attesting clause has the following:

This policy shall not be valid until countersigned by the duly authorized agents of the company at Vancouver, B.C., and then besides being executed by the managing director and the fire and accident manager is countersigned by Rutherford & Company, general agents.

We are informed by the record that Chalmers Rutherford was in fact the general agent.

It may be necessary to observe all those details in considering the weight to be given the acts of this agent and of those authorized by him upon which respondent relies, and to which I am about to refer, because counsel for appellant contends no authority is shewn for such acts.

The respondent on the 19th July, 1915, obtained by virtue of the policy of insurance of that date, issued to her by the North Empire Fire Insurance Company at Vancouver further insurance for the sum of $3,500 for one year from said date.

That policy provided as follows:—"Further concurrent insurance permitted."

Unfortunately notice had not been given to the

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appellant of this insurance as required by the above quoted condition.

The dwelling house thus insured was partly destroyed by fire on the first of January, 1916.

The said general agent of the appellant says he learned of the last mentioned insurance the morning after the fire.

He, nevertheless, instead of repudiating on behalf of his company all liability to respondent by reason of her failure to give notice of the subsequent insurance, suggested and procured, through his chosen adjuster, proof to be made by her of the loss and when presented to him by the respondent accepted the said proof without objection. Indeed he had previously, unsolicited, as if no question of liability existed, appointed Mr. McKenzie to act as adjuster on behalf of appellant along with the adjuster for the other company.

He acted, doubtless, under the authority of the general agent in meeting respondent and making the many proposals he seems to have made to her for a settlement of her claim under the policy.

He never pretended to claim for a single instant that her rights had been lost by the failure to give notice of the subsequent insurance, but evidently assumed throughout that there was no doubt of her right to claim under the policy. The only question in dispute was the amount she might be entitled to under the very peculiar circumstances to which I will advert presently and certainly raising a question of much difficulty. These negotiations extended over six weeks and involved some fifteen to twenty meetings she swears. It was in the course of these negotiations that he told respondent she should have proof of loss made out and took her to a solicitor to have same pre-

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pared when they were prepared accordingly pursuant to the suggestion of Mr. McKenzie who never made any objection in any way to her actual right to claim.

He offered her $1,150 to be expended by the company in repairs.

If all that done under the authority of the general agent does not constitute an assent to the subsequent insurance I am puzzled to know what would unless an express declaration in writing, which is not required by the terms of the condition now invoked. All that is required thereby is an assent to the subsequent policy which under the circumstances was a very fortunate thing for the appellant by reason of the other company becoming liable to bear a share of the loss which by reason of the amount of its contract constituted it the bearer of the larger part thereof.

These negotiations having failed the general agent says he appointed, in substitution for Mr. McKenzie, Mr. Shallcross who had been appointed as adjuster for the other company.

Rutherford, the general agent of the appellant, was examined for discovery herein on the 22nd Nov., 1916, and explains how and why that came about and relative to what was done thereunder as follows:—

Q.—And Mr. Wilson asked you to employ the same adjuster?

A.—Yes, if I recollect, it was placed first in the hands of Hector McKenzie, and then we took it out of his hands, the reason being our policy was a smaller policy, and where a company has a large interest to decide on a course of action, it is a matter of insurance courtesy to follow the company having the larger interest. It is not obligatory— it is a custom.

Q.—And the actual negotiations towards the adjustment were carried on by Shallcross as your adjuster?

A.—Yes.

Q.—You have authority, I suppose, to appoint, or employ an adjuster?

A.—Yes.

Q.—You do not know personally, I presume, the negotiations that were carried out by Shallcross?

A.—More or less acquainted with them.

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Q.—Did you keep in touch with him?

A.—Yes, more or less, but things like that are generally left in the hands of the adjuster, and we interfere as little as possible.

* * *

Q.—The proof of loss as handed to you apparently was made out to the Mutual Benefit instead of the National Benefit?

A.—Yes.

Q—But you accepted it as a sufficient compliance with the policy?

A.—Yes.

Shallcross following a usual practice of his obtained a non—waiver agreement from the respondent which was signed also by him

on behalf of the above named companies.

That provides

that any action taken by said parties of the second part in investigating the cause of fire or investigating and ascertaining the amount of loss and damage to the property of the party of the first part caused by fire alleged to have occurred on January 1st, 1916, shall not waive or invalidate any of the conditions of the policies of the parties of the second part, held by the party of the first part, and shall not waive or invalidate any rights whatever of either of the parties to this agreement.

That ordinary form used by an adjuster may prevent any inference of waiver, if any further needed, relative to rights under the conditions in question, derivable from the actions taken so far as limited thereby, but does not extend to the fair inference from the act of the manager in making the appointment or to what I am about to refer to, as happening beyond the scope thereof, and. of the investigating duties of an adjuster as such. But Mr. Shallcross by and with the authority of the appellant's general agent went far beyond that. He repeated the offer of doing work to the extent of $1,150 in repair of the buildings.

He wrote her on the 24th July, 1916, a letter pointing out that the premises were being neglected and damage therefrom had arisen which could not form a claim against the insurance companies and that loss

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was being incurred by their exposure to the weather and that these further losses could not form a claim against the company, and notified her of the earnest effort made by the companies through him to agree as to total damages and that responsibility must rest with her for failure to meet such agreement that day. Not a word is said of any doubt as to the validity of her claims to damages for loss.

On the 16th March, 1916, he wrote her solicitor as follows:—

Having failed to arrive at any reasonable settlement with your client as to her claim for loss under Policy No. 39483 in the National Benefit Company and Policy No. 400096 in the North Empire Company, I now on behalf of the two companies interested notify you that they will in accordance with the conditions of the policies proceed to repair the property damaged by fire and that the companies have for that purpose obtained the necessity permit from the Building Inspector of the City of Vancouver.

He went further and got a permit, from the proper city authority, to make the repairs to the amount to which the city by-laws limited repairs.

And here I may observe that the real difficulty in adjusting the loss was that the city by-laws had prohibited repairs beyond 20% of the loss, yet the insurance companies were bound to make good the loss thereby incurred by the proprietor as one of the results of the fire. It would seem that the companies did not take that view, and hence the resort to litigation which decided that point against them. It is not now contended that the view so taken by the courts is erroneous.

The appellant was quite willing to bear the loss on that basis contended for by it and then offered to carry out repairs to that extent of its liability.

On the 23rd March, 1916, the general manager wrote respondent's solicitor as follows:—

I have to-day received proof of loss dated March 18th, made out.

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to Mutual Benefit which I assume is intended for National Benefit and so understand the proof. I cannot accept the valuation or claim sworn to therein. I have requested Mr. P. G. Shallcross to deal with the case.

On the 24th March, 1916, Shallcross wrote the respondent as follows:—

Damage by fire January 1st, 1916, to house situate 639 Alexander Street.

Please note that under the condition of Policy No. 39483 the National Benefit Fire and Property Assurance Company may, should it appear that they are liable under such policy, notify the insured of their intention to repair within fifteen (1'5) days after' the filing of proof of loss. I wish therefore to advise you that failing arriving at a reasonable settlement with you that the company will formally notify you of this intention to repair within the time allowed them for giving such notice.

And again on the 31st March, 1916, he wrote her as follows:—

Re House, 639 Alexander Street, damaged byfire January 1, 1916.

policy No. 39483 issued by the National Benefit Fire & Property Assurance Company for $2,000. Referring to my letter to you dated March 24th, 1916. Subject to the terms and conditions of the policy, including the application of insurance policy issued by the North Empire Fire Insurance Company, I am authorized to offer you in full settlement of the claim the National Benefit Company's proportion of the sum of fifteen hundred dollars ($1,500.00). Failing your immediate acceptance, then on behalf of the National Benefit Company, 1 give you notice of their intention to repair the above described house to the extent permitted by the by-laws and in accordance with the terms and conditions of the policy.

An action was brought by the respondent against the North Empire Life Insurance Company on its policy which was tried before Mr. Justice Murphy, who in May, 1916, decided in respondent's favour, assessed the damages at $3,750, less some salvage which he fixed at $150, and in light of the foregoing facts, and absence of any repudiation by appellant or pretension such as now set up, gave judgment for the proportionate amount of $3,600 for which that company would be liable after taking into account the concurrent insurance which is now in question. Such is the net

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result of the policy of absolute silence on the part of the appellant under so many and divers circumstances requiring it or its officers to be honest and straightforward instead of lulling at every step respondent into feeling assured that whatever might come the condition now relied upon would not be invoked.

I am of opinion that its entire course of conduct including the appointment of Shallcross and his letters as well as what had preceded same as outlined above was evidence of that assent which is all that ever was necessary to put beyond peradventure any doubt as to its continued liability and that it is thereby estopped from denying such assent.

I am reminded by the very peculiar circumstances in question herein, and the unworthy attempt to escape from liability on such ground as set up, of the case of Tattersall v. The People's Life Insurance Company^[4], which was tried before me in Toronto in 1904, wherein the company sued upon a life insurance policy for which the last premium had not been paid, but by the terms of which it might be paid within thirty days after the death. It was not paid within that time. The circumstances which led to this result are detailed in the report of the case.

The parties concerned in making inquiry in order to decide upon the payment of the premiums in default had perhaps no legal right to insist upon making a tender of payment.

The officers of the company who failed to make answer to such inquiries were perhaps as destitute of authority to answer as counsel would wish us to hold the general agent herein was for what he did and permitted and directed, yet the judgment directed at the trial, proceeding upon estoppel, was upheld in the

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Divisional Cour as above cited; in the Court of Appeal for Ontario^[5]; and in this court^[6].

I need not dwell upon the many peculiar facts in that case for they are fully reported in the first citation I have given, but , I cannot help thinking that there was much more to be said for the company in that case than there exists on the facts in this case for appellant.

See also the cases of Royal Guardians v. Clarke^[7]; The Canadian Railway Accident Ins. Co. v. Haines ^[8]; Evangeline Fruit Co. v. Provincial Fire Ins. Co. ^[9]; Mahomed v. Anchor Fire & Marine Ins. Co. ^[10].

It is suggested that the condition herein having been broken the policy was at an end before the fire. The general manager of the company did not think so, for in his examination for discovery he was asked and answered as follows:—

Q.—And the policy was in force on the 1st January 1916?

A.—Yes.

There was an insuperable barrier to anything else being said, for by the terms of the assignment to the mortgagee assented to by the general manager of the appellant it was rendered impossible of invalidation as to the mortgagee by reason of any such condition and hence cannot be said to have become null as suggested.

And had the mortgagee sued upon it appellant could have had no effective answer. And I venture to think that had the appellant in such case under such circumstances as exist in question herein sought after all

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that transpired up to and including the trial and judgment for only a proportionate part of the loss to pay the other part of such assessment and to be subrogated to the mortgagee and enforce the mortgage on its behalf as against the respondent it would have failed. That apportionment of damages was clearly induced by the conduct of the appellant leading all concerned to assume that appellant was making no other contention than in common with the concurrent insurers as to the extent of damages.

Again, whilst in one breath denying that the policy existed after default, in the next it is urged that all that is now relied upon by the respondent answering, by way of estoppel, or as I suggest evidence of assent, was done in relation to the mortgagee's rights. As there never was in all the dealings of the general manager or the adjuster or either of them the slightest attention paid to the mortgagee and indeed her existence or rights were ignored throughout, such a suggestion seems hardly worthy of consideration.

It is because of the misleading dealings with the respondent and her alone that the result was reached of only a proportionate part of the whole loss being allowed by the learned judge that they form an impassable barrier in the appellant's way if justice is to be done.

Again, it is said there is no evidence of authority in the general manager to do or authorise to be done these things which respondent relies upon.

The circumstances I have already adverted to as well as the presumption arising from his admitted position as the general agent of the appellant for British Columbia not only by virtue of the facts in evidence but also the requirements of the British Columbia statute put him in the same legal category

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as those whom this court has in several cases held agents entitled to bind their respective principals.

I may refer to the Royal Guardians, ^[11] Evangeline Fruit Co. ^[12], and the Mahomed Cases ^[13], above cited, and the general law of the subject as set forth in May on Insurance, paragraph 126; Bunyon on Fire Insurance, 233 et seq.; Cameron on Insurance, pages 231, 390, 412, and the several cases cited therein respectively. The case of Mutchmor v. Waterloo Mutual Fire Insurance Co.^[14], in appeal contains a judgment by Mr. Justice Osler in which I agree. He expressly lays down therein that assent before or after the liability has accrued is sufficient. This is not the case of a condition where the policy is declared void. In such case, the consequences might be entirely different. See also the case of Richard v. Springfield Fire and Marine Ins. Co. ^[15]. I think the problem of solving the authority of an agent is well put as follows:—

The authority of an agent must be determined by the nature of his business, and is primâ facie co-extensive with its requirements (1 May on Insurance, 4th ed., sec. 126, p. 231).

I think the appeal should be dismissed with costs.

ANGLIN J. (dissenting):—I understand that on the question of the liability of the defendant company the other members of the court are in favour of upholding the judgment against it. I am, with respect, inclined to take the contrary view for the reasons assigned by Macdonald, C.J.A., and Galliher, J.A.

The existence of co-insurance unassented to when the loss occurred afforded the defendant company an absolute defence to the plaintiff's claim. It would

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probably be necessary to the conduct of the business of a foreign insurance company like the defendant that it should have an agent in British Columbia empowered to assent to co-insurance before loss. Were such assent not readily given the assured might discontinue the policy, claim a refund of a proportion of his premium and insure with another company prepared to assent to co-insurance. The continuation of the risk, mutually advantageous, would afford sufficient consideration to warrant the giving of the assent. But after loss the position is entirely changed. An assent then given would amount to a relinquishment of an unanswerable defence to the claim of the insured and would be tantamount to an assumption of liability which would be purely gratuitous. In my opinion the giving of an assent entailing such consequences would not be within the apparent scope of the authority of any mere agent however general his representation of the company. Nothing short of an express provision conferring such authority could be relied upon to support it. The burden of proving its existence was upon the plaintiff. That burden she did not discharge. I do not find in the evidence enough to warrant a finding of acquiescence on the part of the company itself in what its agent had done.

In Mutchmor v. Waterloo Ins. Co.^[16], relied on by the respondent, there was a finding, warranted by the evidence, that the company itself had express knowledge of the co-insurance when its general manager authorized steps similar to those authorized by the defendant company's agent in this case. Western Assurance Co. v. Doull ^[17], seems to me to be more closely in point. But I am apparently alone in holding these views and

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therefore confine myself to the mere statement of them to which I conceive the appellant is entitled.

There remains for consideration the question of the amount which the plaintiff is entitled to recover. The company's liability rests upon the assumption of an assent binding upon it having been given to the coinsurance. Under the 9th statutory condition, indorsed upon the defendant's policy, when co-insurance has been assented to the company is liable only for "a ratable proportion of such loss or damage," i.e., of the loss or damage insured against. That, according to the terms of the policy, is

all direct loss or damage by fire, except as hereinafter provided.

Re-instatement of the plaintiff's premises in the condition in which they were before the fire admittedly could have been effected for $1,600. That was the amount of "the direct loss or damage by fire." Owing to a municipal by-law, however, re-instatement of the premises as they were before the fire was impossible. Re-building in conformity with the by-law would have cost $3,600. While that may be in one sense the plaintiff's "loss," it is a "loss" due to the fire plus the effect of a municipal by-law. The greater part of it is not "direct loss and damage occasioned by fire," and is loss against liability for which the defendant company expressly stipulated.

By the 18th statutory condition the defendant company instead of making payment under its policy was entitled to repair, rebuild or replace the property damaged or lost. It gave notice of its intention to do so. But the municipal by-law prevented re-instatement. A variation of this condition, properly held to be reasonable in itself and duly endorsed on the policy, provided that:—

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If in consequence of any local or other laws, the company shall in any case be unable to repair or reinstate the property as it was it shall only be liable to pay such sum as would have sufficied to repair or reinstate the same.

The company, therefore, never became liable in respect of a rebuilding on a $3,600 basis. The effect of the variation was, in my opinion, notwithstanding the notice which had been given, clearly to limit liability to the $1,600 which it would have cost to effect reinstatement had the by-law not prevented it. The effect of reinstatement being rendered impossible by the by-law was to deprive the company of that alternative method of satisfying its liability. It remained liable under the policy itself to pay the amount of "the direct loss or damage by fire"—$1,600. I cannot perceive any good reason why it is not entitled to the benefit of the co-insurance condition in respect of that sum. There was concurrent insurance to this extent, but to this extent only.

My attention has been drawn to two Ontario decisions—The Trustees of the First Unitarian Congregation of Toronto v. The Western Assurance Co.^[18], and McCausland v. Quebec Fire Ins. Co.^[19], the latter based upon the former. I think the former is clearly distinguishable from that now before us. Both policies dealt with in that case covered the entire risk. The apportionment provided for by the condition there under consideration was to be made in the proportion which

the amount hereby assured shall bear to the whole amount assured on the said property,

i.e., in the opinion of the court, on any part of the property which the policy covered. In the case at bar the provision is for payment of a ratable proportion of the loss, i.e., of the loss for which the defendant com—

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pany should be liable and for which there should be co-insurance assented to. The McCausland Case, ^[20] except on the question of costs, was the decision of the late Mr. Justice Rose alone. I am, with respect, unable to accept his view that the 9th statutory condition therein dealt with does not differ from the language upon which the decision in the Unitarian Congregation Case ^[21] was based. The condition under which the question of apportionment arises in the case at bar differs essentially in my opinion from those presented in either of the Ontario authorities to which reference has been made. I allude to them merely to indicate that they have not been overlooked.

It may have been—it probably was—unfortunate for the plaintiff, as the learned trial judge points out, that this action was not tried at the same time as the plaintiff's action against the other insurance company. The latter might, in that event, have been required to pay all of the $3,600 for which the present defendant should not be held liable. But for that this defendant is not responsible. It had no control over the other action. It took no part in the trial of it and I find nothing in the record to support the contention that by reason of what then took place it is estopped from claiming the full benefit of the 9th statutory condition. It was for the plaintiff, if she desired to do so, to have taken proper steps to secure the trial of both actions at the same time.

I agree with Mr. Justice McPhillips that the defendant, if liable at all, is entitled to have the plaintiff's recovery limited to its ratable proportion of the sum of $1,600, i.e., $581.80, as found by the learned trial judge, whose judgment should therefore be restored.

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BRODEUR. J.—The most important question in this appeal is whether the subsequent insurance taken by the respondent is a bar to her claim. By the statutory conditions of the Province of British Columbia, it is provided that an insurance company is not liable for loss

if any subsequent insurance is effected in any other company, unless and until the company assents thereto.

It is claimed by the respondent that the company has given, through its attorney and representative in British Columbia, Mr. Rutherford, the necessary assent. The appellant company, which is a company having its head office in London, England, was bound, under the "Companies Act" of British Columbia, to appoint an agent or attorney in that province. We have not before us the deed appointing Mr. Rutherford; but in complying with the provincial statute a company is expected to give all the necessary powers to exercise their rights and obligations with regard to the business they intend to carry on in that province.

In this case, the appellant company or its agent became aware of the existence of a subsequent insurance only the day after the fire took place. However, the attorney, Rutherford, appointed adjusters with authority to settle the loss. Negotiations were carried on for several months without the company, at any time, denying liability or intimating to the respondent that the condition above quoted had put an end to its liability.

There was a clause in the policy that if in consequence of any local loss the company should, in any case, be unable to repair or reinstate the property as it was, then the company should only be liable to pay such sum as would have sufficed to repair it.

Under the provisions of that agreement, the com-

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pany, through its adjusters and agent, offered to rebuild.

It seems to me that all those circumstances shew that the company, through its attorney, elected to consider the policy in force and to be bound by it, though subsequent insurance had been taken.

It is suggested, however, that the negotiations were carried on by the agents because they had in mind the company's liability to the mortgagee, which, under the mortgage clause of the policy, would not be affected by the default of the mortgagor in giving to the appellant notice of the subsequent insurance.

If these negotiations had taken place with that end in view, it seems to me that a reference to that mortgage would have been made during those negotiations or they would have negotiated with the mortgagee. But all negotiations were carried on with the respondent; all offers were made to her and no reference has ever been made to the mortgagee.

It seems to me, in reading over the evidence, that the difference, during all those negotiations, was as to the amount which was to be paid for the loss. Respondent was claiming $6,000.00.

A reference was made to the case decided by this court of Western Assurance Company v. Doull^[22]. It is to be borne in mind that this case of Doull was a different one. In that case, it was provided that the assent had to be indorsed upon the policy. This was not required in the present case. Besides, when the insurance company in the Doull Case^[23] gave instruction to its inspector to adjust the loss, it had no notice of the subsequent insurance.

I would rely on the case decided by the Court of Appeal of Ontario of Mutchmor v. Waterloo Mutual

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Fire Ins. Co.^[24], where it was held that the assent to the subsequent insurance is sufficiently shewn by the insurance company joining in the adjustment of the loss.

The appellant company contended before this court that it should be condemned to pay only $581.80 and not $1,390.00 as decided by the Court of Appeal. The total loss suffered by the plaintiff was $3,600; and she was insured for $5,500, of which $2,000 was in the appellant company and $3,500 in the North Empire Company. If the two insurance companies had the same risk, the proportion could be determined without any difficulty. In such a case the appellant company would be liable for 20-55ths of the sum of $3,600 and the other company 35-55ths of the same sum. In other words, the appellant company would have to pay $1,309.10, and the North Empire $2,290, a total of $3,600.

But the appellant says: I was not liable for the total loss of $3,600. I had a protective clause in my policy which restricted my liability in this case only to $1,600. Then my ratable proportion of the loss should be 20-55ths of $1,600, viz., $581.80, and all the rest of the loss should be supported by the North Empire Company.

That was the amount granted by the trial judge, but the Court of Appeal decided, on the contrary, that the ratable proportion to be paid by the appellant should be 20-55ths of $3,600, viz., $1,309.10.

It seems to me that the proper method of ascertaining the relative amount payable by the companies when the risks are different is to add the amount of all policies together, without reference to the division of the risks and that each company is liable for its relative proportion to the whole amount insured.

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McCausland v. Quebec Fire Ins. Co.^[25]; Trustees of the First Unitarian Congregation v. Western Assurance Co.^[26].

The appeal should be dismissed with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Wilson & Whealler.

Solicitor for the respondent: T. E. Wilson.