REPORT OF THE SUPERINTENDENT.   xlix

Arpin v. the Queen (14 Can., S.('.B. 736) ; Schwerseuski v. Vineberg (19 Can., S.C. R. 243) ; and City of Montreal r. Lemoine (23 Can., S.C.R. 390), distinguished.

(December 9th, 1595.-Tourvelle e... North British & Mercantile Ins. Co., 25 Canada Supreme Court Reports, p. 177.)

(r.) The defendants insured seven houses belonging to the plaintiff and which had been mortgaged by him to a loan company and which were described in the policy as "a two story frame, rough east, felt roofed block, * * containing seven dwellings, six of which are occupied by tenants, and one by assured." In the application, filled up by defendants' agent, the question, as to how litany tenants, was answered " six tenants and applicant," the agent informing defendants that "the largest house of the lot the applicant will occupy himself." A variation of the statutory conditions was printed on the policy in these words : " This policy will not cover vacant or unoccupied buildings (unless insured as such), and if the premises shalt become vacant or unoccupied,

* * * This policy shall cease and be void unless the company shall by endorsement *

allow the insurance to be continued." A fire occurred by which the houses were destroyed, and defendants paid the loan company the amount of their mortgage, under a prior general agreement with them by which the policy was to be treated between the parties to the agreement as unconditional except as to the mortgagor, and whereby the defendants were entitled, upon payment to the loan company under the policy or otherwise of any loss as to which they claimed to have a defence against the mortgagor, to he subrogated to the loan company's rights and to have the mortgage assigned to them. For some months prior to the fire several of the houses became and remained vacant, of which the plaintiff was aware, but of which he did not notify defendants. In an action by plaintiff upon the policy :

Held, that the actual facts as to the occupancy being before them at the time of the application, the defendants were liable, nor were they relieved by their variation of the statutory conditions that the policy would not cover vacant or unoccupied houses :

Held, also, that the variation as to the premises becoming vacant or unoccupied where, as here, the houses were of a class likely to be occupied by tenants for short periods was unreasonable, and the reasonableness of the variation was to be tested with relation to the circumstances at the time the policy was issued.

Snnith v. The City of London Ie u,'aure Company, 14 A.R. 328, and I3ellaph v. The Royal Mutual Fir Insurance Company, 5 A.R. 87, specially referred to

Held, however, that the fact that several of the houses were vacant to plaintiff's knowledge for some, months before the fire, was, under the third statutory condition, a change material to the risk, which was thereby increased, and the failure to notify the defendants avoided the policy " as to the part affected," which in this case was the whole block :

Hard, also that the meaning of the word "risk" in the third statutory condition is not distinguishable from the same word in the first statutory condition, and that subsequent mortgages executed by plaintiff were matters relating to title, and were not covered.

Reddish v. 'the Saugeeu Mutual Fire In... Co., 14 O.R. 506, followed:

Held, lastly, that although defendants had paid the mortgages and taken an assignment of the mortgage, they could not hold it against the plaintiff.

Imperial Fire lee. Co. v. Bell, 18 S.C.B. 697, followed.

Judgment of Falconhridge, J., affirmed.

(December 31st, 1895--Queen's Bench Division ; McKay e. The Norwich Union Fire Insurance ('ontpauy, 27 Ontario Reports, p. 251.)

(d.) Promissory notes for the purchase money of goods were secured by a chattel mortgage given on behalf of the purchasers containing a covenant to insure for the benefit of the mortgagee, who discotuuted the notes with the plaintiffs and assigned the chattel mortgage, but did not transfer the insurance to them, the loss under which was payable to himself. The policy was afterwards renewed by the purchasers' firm, but it did not appear that the renewal was assigned to the mortgagee, or the loss made payable to him. Subsequently a fire occurred and the purchasers' firm- assigned the insurance money to the plaintiffs, with whom they kept an account, as security for their general indebtedness, and the plaintiffs received and applied it on the notes above mentioned, hut afterwards sought to apply it in payment of other indebteahtess of the purchasers :

Held, that the plaintiffs were bound to apply the insurance money, for the benefit of the mortgagee, who was the equitable assignee of the policy under which the money was paid, and entitled to have it applied iu payment of the notes to pay which as between him and the purchasers it was primarily applicable, and the plaintiffs took the money subject to the equitable rights of the mortgagee of which they had notice.

(January 11th, 1896—('onunon }'leas Division; Western Bank v. Courtemanche, 27 Ontario Reports, p. 213.)

6—ACCIDENT INSURANCE.

The defendants entered into a contract with the plaintiffs to pay Sl,000 within 9(1 days after sufficient proof that the assured, one of their members, " shall have sustained bodily injuries effected through external violent and accidental means, and that such injuries alone shall have caused death within 90 days from the happening thereof ; " and the policy contained these further provisoes : "that the insurance shall not extend to death or disability caused by an injury of which there shall be no external and visible signs * * * * * nor to any case except when some injury effected as aforesaid is the proximate and sole cause of the disability or death ; and no claim shall be made