BOOK REVIEWS
LIVRES NOUVEAUX
War in Life Insurance Contracts: Judicial Interpretation of Its Meaning,
by Dorothy Schaffter, New York: New York Exposition Press, 1976. Pp.159
($10.00).
The use of the word “war” in insurance contracts has posed a
significant problem of interpretation. With the United States in-
volvement in a myriad of wars throughout its history, American
courts have been required to interpret life insurance policies which
expressly deny recovery to the benefactor if the insured dies during
a war or while engaged in war. In such cases the success of the
benefactor’s claim will depend in a large measure upon the defini-
tion of war adopted by the courts. The benefactor will recover if the
judge determines that the hostility resulting in death falls short of
actual war. In contrast, a determination that an actual state of war
existed at the time of death will deny the benefactor’s right of
recovery.
Dorothy Schaffter, a past professor of political science at Vassar
College and a specialist in American Government and Public Admini-
stration, reveals through detailed case analyses
that American
courts have given the contractual expression “war” a range of
legalistic and practical interpretations, in each case leading to
distinctly different results. Thus, war has been construed as amount-
ing to a strict Congressional declaration of warfare against an
enemy, or at least, a declaration by an appropriate department of
government to that effect. Only such de lure warfare will constitute
“war” in terms of this approach. Alternatively, war has been
construed broadly as consisting of a de facto state of hostility,
whether declared or undeclared, in which the insured happens to
be killed.
Dr Schaffter’s careful interpretation of war provisions in life
insurance policies in the light of World War II, the Korean Conflict
and the Southeast Asian affair, reveals the varied, even inconsistent,
approaches adopted by the American judiciary, including the United
States Supreme Court. The Supreme Court upheld the legalistic
definition of war in Beley v. Pennsylvania Mutual Life Insurance,’
and in Harding v. Pennsylvania Mutual Life Insurance.2 In contrast,
190 A. 2d 597 (1952), 95 A. 2d 202 (1953).
2 90 A. 2d 589 (1952), 95 A. 2d 221 (1953).
1978]
BOOK REVIEWS – LIVRES NOUVEAUX
351
that same court took a practical or common-understanding view of
war in New York Life Insurance v. Bennion3 and in Western Reserve
Life Insurance v. Meadows.4 These variations in the judicial treat-
ment of war are attributable both to factual differences between
these militaristic confrontations as well as to differences in ideology
existing among the judges themselves.
From the factual point of view the judges generally take into
account the fact that World War II involved a formal declaration
of warfare; whereas the Korean Conflict evolved as a regional
hostility without a formal Congressional declaration of war. War
may, therefore, warrant a different interpretation in the cohtext of
World War II than that of conflicts such as existed in Korea.
Ideologically, judges have also differed in preference between
literal and constructive methods of interpreting war exemption
clauses, thereby resulting in contradictory judgments. From the
literal perspective, war can be given narrow parameters, restricting
its ambit to formal manifestations of warfare. Inherent in this
approach is the predisposition of the judge in favour of certainty,
clarity and the predictability associated with “Analytical Positiv-
ism”?
From the realists’ perspective, war can be given wide parameters
on the grounds that large scale death and destruction may occur as
a result of hostilities not emanating from formal declarations of
warfare. Indeed, many major conflicts have developed out of minor
incidents, evolving out of religious, economic, cultural and political
differences. Such situations may stimulate the judge to follow the
leadership of eminent jurists such as Holmes, Cardozo, Pound and
Llewellyn, who contended that judges should consider all the cir-
cumstances surrounding the contract and not merely the express
literal implications which might flow, for example, from such
phraseology as “war”.0
3 158 1F. 2d 260 (1946).
4256 S.W. 2d 674 (1953), 261 S.W. 2d 554 (1953).
5 On the “Positivist” or “Analytical Jurisprudential” approach towards the
interpretation of law, see Austin, The Province of Jurisprudence Determined
(1954); Hart, Positivism and the Separation of Law and Morals (1958) 71
Harv.L.Rev. 593; Fuller, Positivism and Fidelity to Law – A Reply to Pro-
fessor Hart (1958) 71 Harv.L.Rev. 630; Summers, The New Analytical Jurists
(1966) 41 N.Y.U.L. Rev. 861.
0 On Realism and its influence upon the judicial process, see Holmes, The
Path of the Law (1897) 10 Harv.L.Rev. 457; Frank, Cardozo and the Upper-
Court Myth (1948) 13 L. & Contemp. Prob. 369; Frank, Courts on Trial (1949);
Llewellyn, Some Realism about Realism-Responding to Dean Pound (1931) 44
Harv.L.Rev. 1222. For studies on the influence of sociology upon methods of
McGILL LAW JOURNAL
[Vol. 24
Dr Schaffter makes no attempt to analyse the conflicting ap-
proaches adopted by common law jurists in relation to war clauses
in life insurance policies. Instead, she relies on her readers’ ability
to synthesize the many extracts which she selects from pertinent
judgments and articles on the subject. For the non-lawyer, there-
fore, this book constitutes an interesting study of the difficulties
faced by insurance companies and their clients who contract to
purchase life insurance within an environment marred by warfare
of varying intensity and effect.
Yet, to the perceptive lawyer, this book offers a great deal more
information about the functioning of contractual and legal regimes
within a complex world environment. The case law presented
reveals the varied ways in which contracts can be construed, differ-
ing in construction according to each judge’s jurisprudential inclina-
tion.
The book also contains suggestions for contractual draftsmen.
The quoted judgments and appended clauses show how life insur-
ance contracts can be devised so as to avoid conflicts over inter-
pretation of language. Thus, the single phrase “war”, standing alone,
can be redrafted to refer to “war, declared or undeclared”, if the
design of the contract is to exclude the insurer’s liability in the event
of both de jure and de facto warfare. In contrast, a reference to
“declared war” in the contract will purposefully encompass only
situations of de jure warfare. Finally, the draftsman can express
himself by deliberately enumerating in detail all war-related contin-
gencies which fall within the realms of the word “war”. Included
within the enumeration are such words as hostilities, riots, rebell-
ions, civil war, civil commotions, and other instances of armed
conflict. The extent of the enumeration can therefore respond to
the demands of each situation, that is, according to the nature of
prevailing warfare, to the risks associated with different types of
warfare, and to the relationship existing between the parties.
Schaffter’s book
that
implicitly suggests
the problem of
ambiguity can be overcome by careful draftsmanship, based both
on language usage and on the environment surrounding the contract.
The insured will be clearly appraised at the date of contracting, of
the extent of his insurance protection. It is hoped that the insurance
company will be able to limit the application of such judicial rules
of construction as the contra proferentem rule, whereby ambiguous
legal construction, see Ehrlich, Fundamental Principles of the Sociology of
Law (1936); Weber, On Law in Economy and Society (1954); round, An
Introduction to the Philosophy of Law (1954).
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BOOK REVIEWS – LIVRES NOUVEAUX
language is construed against the draftsman, namely, against the
insurer himself.
Dr Schaffter has provided a very useful compendium of informa-
tion concerning two forces: first, warfare as a diverse force which
continually takes human life; and second, the right of insurance
companies to exclude their liability in the event of certain types of
warfare, provided that such exclusion from liability is expressed
unambiguously in the contract itself.
Leon E. Trakrnan*
* Faculty of Law, Dalhousie University.
McGILL LAW JOURNAL
[Vol. 24
Governmental and Intergovernmental Immunity in Australia and Canada,
by Colin H.H. McNairn, Toronto: University of Toronto Press, 1977. Pp.xiv,
205.
A nagging question for all Canadian lawyers these days should
be that of the appropriate role of the legal profession in the great
constitutional debate which lies ahead. Should the concern be with
the major issues of national unity –
linguistic and cultural rights,
entrenched human rights, control of immigration and communica-
tions and regional disparities –
or should lawyers act only as
technicians skilled in implementing the political -compromises ar-
rived at by others?
The answer must encompass aspects of both, although there
may be wide differences of opinion as to how much emphasis should
be placed on each role. Indeed, it will be particularly interesting
in this context to assess the nature of the recommendations of the
Constitution Committee of the Canadian Bar Association. This Com-
mittee, established in November 1977, is due to make a report to
the Association’s annual meeting in the fall of 1978. While it has
reported that “reaction in government circles indicated room for a
legal contribution to the unity debate”, the range of topics to be
dealt with, including “the courts, regional disparities and language
rights” indicates the ambitious breadth of the proposed “legal
contribution”. Such problems as the Association’s branch presi-
dents’ concern that they be consulted as well as the lack of agree-
ment as to how the Committee’s budget of almost a quarter of a
million dollars will be raised, would seem to indicate that the
profession remains somewhat ambivalent as to its support for the
Committee’s plans “to define the attributes of federalism and to
come up with concrete proposals…”.’
For anyone who espouses the belief that lawyers should play
only a relatively modest role
in constitution making, Colin
McNairn’s book is a timely reminder of the type of detailed work
which will have to be undertaken if there is to be any workable
change. The book does not address itself to any of the provocative
issues of constitutional reform but rather to the vital question of
the interaction between different levels of government in a federa-
tion and the resolution of the disputes which must invariably
accompany that process. Whatever the outcome of the “great
“Branch Presidents’ meeting: Access, funding key issues”, The Canadian
Bar Association National, vol.5, no. 1, Jan. 1978, 3.
1978]
BOOK REVIEWS – LIVRES NOUVEAUX
debate” (even if it ends in some form of “sovereignty association”)
it will be essential for lawyers and others to address the issues
involved in intergovernmental immunity. It is to be hoped that
practical matters will not be forgotten in the ensuing unity debate.
Certainly the legal profession will need to keep its head in these
euphoric times.
Writing some ten years ago, Dale Gibson, after surveying the
disparate group of inconsistent Privy Council and Supreme Court
of Canada cases which make up the law of intergovernmental
immunity in Canada, concluded:
[M]ost of the decisions appear to have been reached in isolation and
without a full consideration of either the legal issues or policy ramifica-
tions involved. One reason for this may be the fact that interjurisdictional
immunity has received very little academic attention in the past. Let us
hope that this oversight will be remedied before the Supreme Court of
Canada renders such study entirely academic with a terminal decision. 2
Governmental and Intergovernmental Immunity in Australia and
Canada goes far to meet Gibson’s lament for the lack of academic
attention but the thrust of McNairn’s analysis favours legislative
action to rationalize the law in this area. While he points to no
particular “terminal decision” of the Supreme Court of Canada,
McNairn is of the view that reform must come from the legislatures;
a perspective of the utmost significance in this time of constitutional
re-thinking, when it should be possible to consider wholesale
legislative reform rather than piecemeal adjudicative adjustment,
hence the particular timeliness of the book.
McNairn’s commendably succinct text examines the limits of
two related forms of state immunity – Crown or governmental
immunity as opposed to statute and intergovernmental immunity.
The former is derived from the rule of statutory construction that
the Crown, representing the executive government, is not bound by
legislation except by express words or necessary implication. The
latter type is of a constitutional order providing each level of
authority in a federal system with independence from the laws of
the other levels.
The text is divided into six chapters. The first two, “Govern-
mental Immunity from Statute” and “Governmental and Intergo-
vernmental Immunity in a Federal System” provide an overview and
introduction to the subject. The emphasis shifts in the following
four chapters to “Statute Law in Tort Proceedings by or against the
Crown”, “Statutes Affecting the Criminal and Contractual Liability
2Gibson, Interjurisdictional Immunity in Canadian Federalism (1969) 47
Can.Bar Rev. 40, 61.
McGILL LAW JOURNAL
(Vol. 24
of the Crown”, “The Effect of Statutes on the Crown as Creditor”,
and “The Crown as Taxpayer” respectively.
Most commendably, the author has ended each chapter with his
specific suggestions for reform. For instance, he is of the view that
governmental
immunity from statutes should be abolished as
British Columbia has already done in that province’s 1974 Inter-
pretation Act.3 There, the general rule is that, unless specifically
provided to the contrary, all provincial acts are binding on Her
Majesty. Thus the Crown in right of British Columbia is in the same
position as its subjects, in that it is embraced by the general words
of statutes –
even though that may be to its prejudice. If the Crown
is to be excluded from the scope of a statute, the onus will rest with
the legislature to so provide in specific terms:
increase
in the opportunities for governmental
This seems to be the more appropriate presumption, given the range
of activities in which the crown and its agents are now engaged, the
proliferation of regulation by statute and subordinate legislation, and the
resultant
immunity
working to the prejudice of subjects. It leaves open the possibility of
the legislature giving special protection to the crown in particular cir-
cumstances as the situation might dictate. But the crown will have no
privileged position, in the face of legislation, by default as it were.
Indeed, we are probably quite justified in assuming that the merit of
applying a given statute to the crown frequently receives little or no
consiaeration. If that is so then the failure to mention the crown ought
not to be attributed to any conscious decision that the crown should be
free of the burdens of a statute. (p.22.)
Similarly, McNairn advocates that the liability of the federal
Crown in tort should be determinable in accordance with any
provincial statute governing the liability of a subject in a compa-
rable situation (pp.77-80). This accords with the original philo-
sophy of Crown liability legislation by placing the Crown in the
same position as a private person for the purposes of tort law.
Recognizing that this might well lead to discrepancies in the extent
of federal Crown liability in tort from province to province, McNairn
concludes that it would be better to bring such liability into line with
that of private individuals despite the possibility that this might
accentuate already existing differences between jurisdictions in a
federation.
While the author favours this type of clear-cut solution for
matters such as immunity from statute and tort liability, he quite
rightly realizes that such an all or nothing approach cannot be
employed when it comes to the taxation of the federal Crown. Here
any extension of taxes has to be “rather finely tuned” and must
3 Interpretation Act, S.B.C. 1974, c.42.
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BOOK REVIEWS – LIVRES NOUVEAUX
take into account the nature of the tax, the Crown enterprises or
entities involved and whether, in the event of immunity, one level
of government would be required to subsidize another level of
government without any offsetting benefit:
The case for subjecting the crown to the burden of a particular tax is
perhaps strongest when it is engaged in a commercial type of under-
taking in competition with entities
in the private sector. We might
expect a public enterprise of this kind to survive in the market place
without the benefit of hidden subsidies such as those afforded by a tax
holiday. That is not to suggest, however, that there would be any general
consensus that a particular crown enterprise operating in this environ-
ment should be subject to any and every form of taxation. The public
purpose behind the undertaking might suggest, for instance, that it ought
not to be treated as generating profits subject to reduction through
income tax though there might be agreement that it should be subject
to other forms of tax. (p.163.)
While this reviewer finds most of the author’s proposals to be
eminently sensible, the value of the book does not depend on
whether or not one agrees with his reasoning. The true value lies
in its ability to bring into sharp focus matters which in the past
have been notoriously fuzzy. This, in turn, should greatly improve
the quality of thinking in an area of law which has never been
subject to systematic study and analysis.
As its title indicates, the book is essentially a comparative study
of Australian and Canadian law and, in this reviewer’s opinion, it
serves as an example of the appropriateness of comparative study.
All too often “comparative” studies attempt to deal with subject
matters which have too little in common. Here the legal and constitu-
tional systems chosen are sufficiently alike to make comparisons
genuinely helpful and not merely exotic counterpoints of dubious
comparative value.
In all, this is a most welcome publication. The Social Science
Research Council for Canada and the Law Foundation of Ontario
are to be congratulated for supporting the publication of a law
book, the importance of which will not be measured by the number
of copies sold but by the commitment to reform of those who read
it. The publisher’s blurb, one is pleased to report, is quite accurate:
“This incisive analysis of a crucial area of the law will be of interest
to all who are concerned with governmental accountability as well
as to jurists, judges and lawyers.”
H. N. Janisch*
* Faculty of Law, University of Toronto.
