X. But although the common law has been fo filent upon the CHA P. fubject, as not to lay down any general rule; and although in all the cates flated, the premium, was reftored; yet if the fraud is notorious, palpable, and grofs in its nature, the court may order, and has ordered the underwriter to retain the pre mium. Sittings at Thus where an action was brought by the infured to re- Tyler v.Horne, cover 150/. being the amount of the defendant's fubfcription; Guildhall after the ground of refufal was, that the insurance was fraudu- Hil. T. 1785. lent; and that the plaintiff knew of the lofs of the ship at the time of effecting the policy The counfel for the plaintiff were under the neceflity of admitting that their client had made fome fraudulent infurances upon this very fhip, fubfequent to the one now in difpute; but contended that news of the lofs of the fhip had not arrived, till after this particular one was effected. The evidence, however, was fo ftrong as eaûly to convince the jury, that the plaintiff had received information of the lofs before the order for making the infurance was given to the broker; and they found a verdict for the defendant. Lord Mansfield faid, The fraud was fo grof, that the premium fhould not be recovered from the underwriter... others, Af At last this great question came to be exprefsly decided, Chapman and where the agent of the affured only had been the guilty per- figures of Kenfon; and the whole Court of King's Bench were of opinjon, that in all cafes of actual fraud on the part of the affured or his agent, the underwriter might retain the pro mium. It is proper alfo here to obferve, that it has been laid down as clear law, that if the underwriter has been guilty of fraud, an action lies against him, at the fuit of the infured, to re cover the premium. Thus it was faid by lord Mansfield, in net, v. Frafer, B. R. Trin. 33 Geo. III. the cafe of Carter v. Boehm, which has already been quoted 3 Burr. 1909. at large in this chapter: "the policy would be void against the "underwriter, if he concealed any thing; as, if he infur"ed a fhip on her voyage, which he privately knew to be ar"rived; and an action would lie to recover the premium." By feveral of the foreign ordinances, the punishment of Ord.of Amfterfraud, in matters of infurance, is exceedingly fevere. By dam, art. 56. thofe 2 Mag. 146. X. CHAP. thofe of Amfterdam it is declared, "that as contracts of infurance are contracts of good faith, wherein no fraud or deceit ought to take place, in cafe it be found, that the infured 66 or infurers, captains, fhippers, pilots, or others ufed fraud, "deceit or craft, they fhall not only forfeit by their deceit "and craft, but fhall alfo be liable to the lofs and damage "occafioned thereby, and be corporally punished for a terror and example to others; even with death, as pirates and "manifeft thieves, if it be found that they have used noto[219] "rious malverfation or craft." The ordinances of Middleburg contain a provifion exactly in the fame words. At StockArt. 30.2 Mag. holm alfo, it has been declared, that fuch an offender, befides 76.2 Mag. 288. restitution to the party injured, fhall, according to the cir cumstances of every particular affair, be punished in his estate, honour, and life, y Ann. ft. 2. a 9.1.4. Frauds in contracts of infurance have not as yet had any punishment affixed to them by the laws of England, that I' have been able to learn: but there are one or two cafes which have been declared to be felonies by pofitive ftatutes, where the ac committed has been to the prejudice of the underwriters. By a ftatute in the reign of queen Anne, it was enacted, that if any captain, master, mariner, or other officer, belonging to any fhip, fhall wilfully caft away, burn, or otherwise destroy, the ship, unto which he belongeth, or procure the fame to be done, to the prejudice of the owner or owners thereof, or of any merchant or merchants that shall load goods thereon, (or by a subsequent statute, to the prejudice Geo. I. c. 12. of any perfon or perfons that shall underwrite any policy or policies of infurance thereon) shall fuffer death as a felon; and the benefit of clergy is taken away from this offence by 11 Geo. I, ch. 29. 1. 3. Thefe are the only provifions, which the legislature of this country has, as yet, thought proper to make for the prevention of crimes of this enormity: but as the records of our courts of justice evidently prove that frauds are too frequent in policies of infurance, greater severity than merely annulling the contract seems neceffary, in order to put a stop to fuch offences. CHAPTER the ELEVENTH. Of Sea-Worthinefs, HAVING, in the preceding chapter, treated very fully CHA P. of the influence which fraud has upon the contract of infurance; we proceed to fhew, that other circumftances, in which no fraud whatever can be difcovered, or even fufpected, will alfo vitiate and annul the policy. Of this nature is the doctrine of Sea-Worthinefs. Upon this point it has been determined, that every ship insured must, at the time of the infurance, be able to perform the voyage, unless fome external accident fhould happen; and if the have a latent defect wholly unknown to the partics, that will vacate the contract, and the infurers are discharged. This doctrine is founded upon that general principle of insurance law, that the infurers fhall not be refponsible for any lofs, arifing from the infufficient or defective quality or condition of the thing infured. There is in the contract of furance a tacit and implied. agreement that every thing fhall be in that ftate and condition, in which it ought to be: and therefore it is not fufficient for the infured to fay, that he did not know that the ship was not fea-worthy; for he ought to know that she was fo, at the time he made the infurance. The fhip is the fubftratum of the contract between the parties; a fhip not capable of performing the voyage, is the fame as if there were no fhip at all; and although the defect may not be known to the person infured, yet the very foundation of the contract being gone, the law is clearly in favour of the underwriter; because fuch a defect is not the confequence of any external misfortune, or any unavoidable accident, arising from the perils of the fea, or any other risk, against which the underwriter engages to indemnify the perfon infured. To fupport a contrary doctrine would introduce a variety of frauds, as it would probably fubject the underwriter to account for the lofs, diminution, or wafte, which may happen from XI. the XI. CHAP. the neceffary and ordinary ufe of the thing infured; or the wear and tear of the ship in the common course of the voyage and all of these are rifks, to which the infurer has never been confidered as expofed. From what has been laid, it appears, that the ground of decifion in this cafe is perfectly diftinct from any principle of fraud: that it depends merely upon this, that the insured is prefumed to be better acquaint ed with the state and condition of his fhip than any other man; and that he has tacitly undertaken, that she is in a condition to perform the deftined voyage. But although the infured ought to know whether his fhip was fea-worthy or not at the time fhe fet out upon her voyage; yet he may 3 Burr. 2804. not be able to know the condition the may be in, after fhe is out a twelvemonth: and therefore, whenever it can be made appear, that the decay, to which the lofs is attributable, did not commence till a period fubfequent to the infurance, as he was fea-worthy at the time, the underwriter, it is prefumed, would be liable. Indeed, in a very late cafe upon another point, but where the fame principle was much relied upon, Lord Mansfield faid, "By an implied warranty every "fhip infured muft be tight, ftaunch, and ftrong; but it is. "fufficient if the be fo at the time of her failing. She may "ceafe to be fo in twenty-four hours after departure, and yet "the underwriter will continue liable."* Every cafe of this kind, it is true, muft depend upon its own circumstances; but when they are once afcertained, the rule of law is clear and decifive. The only material cafe upon this fubject in the law of England is that of the Mills Frigate, which underwent a variety of difcuffion in feveral courts, and was finally determined in favour of the infurers. I have ufed my utmost endeavours to procure a copy of the opinions of the judges upon that cafe, but they have been ineffectual: therefore the reader must be fatisfied with a full statement of the cir cumftances, as they appeared upon the demurrer to the evidence, Eden v. Par kinton, Doug 708. But if a fhip fail upon a voyage, and in a day or two becomes leaky, and founders, or is obliged to return to port, without any florm, or visible or adequate caufe to produce fuch an effect, the prefumption is, that the was not fea-worthy when the failed; and the jury, upon the plaintiff's own cafe, may draw fuch a conclufion. Munro and another v. Vandam Sittings at Guildhall before Lord Kenyon after Michaelmas Term, 1794. dence, and with the judgment given upon that demurrer, as C'H A P. it is recorded. XI. Before the proceedings in this cafe are stated, it will be neceflary to mention, that an action had been brought in the court of Common Pleas on the fame policy against one of the underwriters; and Lord Camden, who tried that caufe, directed the jury to find a verdict for the plaintiff but up- [222] on a motion for a new trial, his Lordship declared, that he had changed his opinion; and the whole court of Common Pleas laid down the principles above stated, and directed a new trial. Upon the fecond trial, Lord Camden stated to the jury the opinion he had formed upon the fubject, and a verdict was accordingly given for the defendant, which, upon a fubfequent application, the court of Common Pleas refused to fet aside. The plaintiffs then commenced a new action in the court of Exchequer against another of the underwriters, and which is now the subject of our attention. "That buck. In the This was an action on a policy of insurance, loft or not Mills and anJoft, at and from the Leeward Iflands to London, warranted other v. Roc to fail on or before the 26th of July, upon any kind of Excheq. goods, wares, and merchandizes; and also upon the body, tackle, of and in the good ship or veffel called the Mills Frigate, beginning the adventure on the goods from the leading thereof on board the faid fhip at St. Kitts, and upon the ship from her arrival at the Leeward Islands. The defendant undertakes to indemnify against the usual risks, for a premium of 21. 10s. per cent. The lofs was defcribed in the first count of the declaration in thefe words: "the said ship, after her departure from Nevis on her voyage, and during her faid voyage, failing and proceeding on the high feas by and through the force of winds and "tempeftuous weather, and by and through the mere perils "and dangers of the feas, fprung divers leaks, and became "very leaky, crippled, bulged, disjointed, fplit, and wholly "loft." In the fecond count the lofs is alleged thus: "by and through the mere perils and dangers of the "feas, and by the starting and loofening of one or more plank or planks of the faid fhip, and by accidentally springing one or more leak or leaks, the said ship became "very leaky, crippled, &c. and totally unable to proceed on, "or perform the faid voyage." There were two other 66 counts |