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§ 185. “Other than State Insurance.”

These are words of exception, reserving to a State the control over insurance business organized and conducted-by the government of the State. (See rule for construing exceptions, supra, § 180, “Other than State Banking.”)

OVERLAPPING POWERS.—The extent to which the law relating to insurance may, for a time, be considered as a divisible power, partly exercised by the Federal Parliament and partly exercised by the State legislatures, is illustrated by one of the leading Canadian cases. (Citizens' Insurance Co. v. Parsons, 7 App. Cas. 96. [1881].) As an insurance case, the Citizens' Insurance Co. v. Parsons is appropriately mentioned in connection with this sub-section, but it is a remarkably apt exemplification of the competing and overlapping operation of powers in a Federal Constitution, and of the manner in which one subject may be governed by two sets of laws. Thus a power to make laws with respect to insurance is apparently a wide power. But does it include the power to regulate the manner in which contracts relating to insurance must be made? Suppose the Federal Parliament should pass a Federal Insurance Act, providing for the incorporation of insurance companies and defining their legal rights, privileges, duties, and responsibilities: Could such a law remove insurance companies, and the subject of insurance, absolutely from the domain of State legislation? The case of the Citizens' Insurance Co. v. Parsons throws some light on this problem, though it is necessary to bear in mind the caution already given that the Canadian Constitution, with its two areas of exclusive powers, is unlike the Constitution of the Commonwealth.

In that case the question raised was as to the constitutionality of the Ontario Act, 39 Vic. c. 24, to secure uniform conditions in policies of fire insurance, and whether such an act was ultra vires as being in excess of provincial authority. This company was incorporated under an Act passed by the Dominion Parliament, which claimed jurisdiction to deal with insurance, not by virtue of a specific grant of power (as in the Constitution of the Commonwealth), but by virtue of its exclusive power to regulate


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trade and commerce and its residuary power to legislate for the peace, order, and good government of Canada in respect of all matters not exclusively assigned to the Provinces. A general insurance law, 38 Vic. c. 20, was passed by the Dominion Parliament, which, among other things, required all insurance companies, whether incorporated by foreign, Dominion, or provincial authority, to obtain licenses from the Minister of Finance as a condition of their carrying on business within the Dominion. Such licenses could only be granted upon compliance with the conditions of the Act. The legislature of Ontario passed the Act 39 Vic. c. 24, providing that certain conditions set forth in the schedule thereto should be deemed to be part of every policy of fire insurance, thereafter entered into in Ontario, with respect to any property therein; that such conditions should be printed on every policy with the heading “statutory conditions;” that if a company or insurer desired to vary such conditions, or to omit any of them, or to add new conditions, these variations should be added in conspicuous type. This Act was passed by the legislature of Ontario under the exclusive power of the Provinces to pass laws in relation to “property and civil rights in the Province.” (British North America Act, sec. 92, subs. 13.)

The Act was impeached by the Citizens' Insurance Co. as an excess of legislative power, and as an encroachment on the jurisdiction assigned to the Dominion Parliament. The Privy Council upheld the Act on the ground that it related to property and civil rights within tho Province. In delivering the judgment of the Board, Sir Montague E. Smith said that “property and civil rights” were sufficiently large to embrace, in their fair and ordinary meaning, rights arising from contracts, and such rights were not included in any of the enumerated classes of subjects exclusively assigned to the Parliament of the Dominion by sec. 91 of the British North America Act. In looking at section 91, it would be found not only that there is no class including, generally, contracts and the rights arising from them, but that one class of contracts is mentioned, namely, “bills of exchange and promissory notes” (sub-sec. 18) which it would have been unnecessary to specify, if authority over all contracts and the rights arising from them had belonged to the Dominion Parliament.

The difference between the Canadian Constitution and that of the Commonwealth in respect to insurance is:—(1) That the Parliament of the Dominion is not specifically assigned jurisdiction in reference to that subject; its jurisdiction is based on its general and residuary power; whereas the Parliament of the Commonwealth is explicitly empowered to make laws in respect to insurance; (2) that the Provinces of Canada are assigned exclusive authority to make laws with respect to “property and civil rights,” whereas the States of the Commonwealth are given no such exclusive power, their authority over “property and civil rights” being part of their general and residuary power. By virtue of the power reserved to the State Parliaments, under sec. 107 of this Constitution, they would be able to pass laws determining the manner in which contracts should be made and the conditions and incidents presumed to be annexed thereto, in the absence of express agreement to the contrary. And such laws would be binding on companies incorporated by Federal law, until they became inconsistent with the law of the Commonwealth. Whether the Federal Parliament could pass laws determining the manner in which Federal corporations should enter into contracts is a question for judicial determination when the case arises.

51. (xv.) Weights and measures186:

HISTORICAL NOTE.—The Constitution of the United States empowers Congress “to fix the standard of weights and measures.” (Art. I. sec. 8, sub-s. 5.) “Weights and measures” are specified in the British North America Act (sec. 91, sub-s. 17). Earl Grey's Committee in 1849 proposed to give the General Assembly legislative power as to the regulation of weights and measures (p. 85, supra). This subject was also included in Wentworth's Memorial in 1857 (p. 94, supra) in the Federal Council of Australasia


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Act, 1885 (p. 112, supra), and in the Commonwealth Bill of 1891. It appeared in the Adelaide draft of 1897, and was adopted without debate.

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