Story adopts the construction that it was a case of knowledge in the principal, and that such was the probable opinion of the court; and in correspondence with this view, Mr. Millar says (Millar on Insurance, p. 71, note,) that it was a mere question of evidence whether Stewart, the assured, had received intelligence of the loss, and consequently that the decision established no principle whatever. As the case arose in Scotland, the opinion of Mr. Millar, who was himself a Scotch advocate, seems almost conclusive; especially as it is apparent from the terms of his note that he had a personal knowledge of the facts of the case. He gives the name of the agent, which is omitted in the report in Brown.

Whether the omission from fraud or negligence of an agent, whose duty it is to give intelligence, to communicate a loss, is a concealment that will avoid the insurance of his innocent principal, is a very different question from that of the effect of his actual or virtual misrepresentation. The case of Ruggles v. Gen. Int. Ins. Co., decides the first question in favor of the assured; but the learned judge, in giving his opinion, is exceedingly careful to distinguish it from the latter; and it seems to me a necessary inference, from his reasoning, that had the policy in the case before him been founded on a misrepresentation by the master, he would have held it to be void. In commenting on the case of Gladstone v. King, (1 M. & S. 35,) in which it was held by the Court of King's Bench that the underwriters were not liable for a partial loss which the master in a letter to his owner, written after the occurrence of the loss, and shown to the underwriters, had omitted to notice, he says that "the decision was in principle right, and "fell directly within the authority of Fitzherbert v. Mather," which is in effect saying that the letter of the master, like that of the consignor in Fitzherbert v. Mather, was a virtual misrepresentation.

It is stated by Mr. Phillips, (a) that the Supreme Court of the United States, in affirming the judgment of Mr. J. Story, in Ruggles v. Gen. Int. Ins. Co. (Gen. Int. Ins. Co. v. Ruggles, 12 Wheaton, 409,) decided that "the master is "not to be considered the agent of the assured in re"gard to the communication or concealment of facts re"specting the navigation and situation of the ship, and "that his acts, neglect, or fraud in regard to such com"munications were not imputable to the assured, and that "a policy made upon a misrepresentation on concealment "of such facts by the master, is valid." But this laborious and generally faithful writer has mistaken the true import of the decision, and I rejoice to say that the opinion of the Supreme Court, far from warranting the dangerous conclusions he has drawn, will be found upon examination to sanction, by a necessary implication, the opposite doctrine. To show this, it will be necessary to state briefly the facts of the case, and to give some extracts from the opinion of the court.

The insurance was effected on the 9th of February for $3000 on the sloop Harriet, lost or not lost, at and from Newport, Rhode-Island, to, at and from, all ports and places to which she may proceed in the United States during the term of six months, beginning on the 12th of January, 1824. On the 19th of January, twenty days previous to the insurance, the vessel was wrecked on Cape Hatteras and totally lost. It was proved that the master, immediately after the loss, with the design that the owner, not hearing of the loss of the vessel, might effect insurance thereon, expressed his intention not to write to him, and took other measures to prevent the fact of the loss from being known to him, and that in consequence of this conduct of the master, the

(a) 1 Phillips, 231.

piaintiff was in fact ignorant of the loss when the policy was subscribed. The writ of error was brought by the underwriters on the judgment of the court below, in favor of the assured. After stating the case, Mr. J. Thompson, who delivered the opinion of the court, remarked:"Here there is a loss thrown upon one of two innocent 'parties, and the question is, by which is it to be borne. "The determination of this question must depend in a "great measure, if not entirely upon the relation in which "the master stood to the respective parties when this mis"conduct occurred." The learned judge then proceeds to show that from the time the loss occurred, the relation of principal and agent, as between the assured and the master, was wholly dissolved upon two grounds. 1. By the absolute destruction of the subject to which the agency related, and 2. By the legal effect of the abandonment which constituted the master the agent of the underwriters, from the time of the happening of the loss. In reference to the first ground, Mr. J. Thompson observed, "It is a little difficult "to perceive how in any legal sense, the relation of princi"pal and agent could exist at the time when the miscon"duct of the master is alleged to have taken place. So "far, as he was agent for navigating the vessel, it had ter"minated by the absolute destruction of the subject. The

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agency would seem to have ceased from necessity. "There was nothing upon which it could act. Had there "not been a total loss of the vessel, there would have re"mained a duty and legal obligation on the part of the "master to use his best exertions to save what he could "from the wreck. But when the subject matter of the "agency becomes extinct, it is not easy to understand how "in any just sense the agency could be said to survive. "There might be a moral duty resting on the master to "communicate information of the loss to his owner. But "how could there have been any legal obligation binding upon

"him to do it? The information could neither benefit nor "prejudice the owner." (12 Wheat. 413.) As to the second ground, he says: "Suppose the agency of the mas"ter not to have terminated, but that in judgment of law "he was agent of somebody. The question recurs, whose "agent was he? The answer cannot admit of a doubt. "If agent at all, he was by operation of law the agent of "the underwriters. The policy taking the risk on the ves"sel and cargo, lost or not lost, although effected after the "loss happened, related back, and by the abandonment "the underwriters were substituted in place of the assured, "and the master, although the agent of the owner until the "loss occurred, became upon the abandonment, the agent "of the underwriters." (p. 414.)

So far, it is manifest that the reasoning of the court, far from justifying the conclusions of Mr. Phillips, leaves it plainly to be inferred, that if in their judgment the relation of principal and agent had continued to subsist between the assured and the master, so as to render it the legal duty of the latter to give intelligence of the loss, they would have held that his concealment vitiated the policy; A fortiori must such be the effect of his misrepresentation. That such was the meaning of the court, is rendered still more evident by another part of the opinion. After stating the case of Gladstone v. King, it proceeds to say: "The Court "of King's Bench did not, however, decide the policy to "be void, which would seem to have been the necessary

consequence of a material concealment, according to the "principles of insurance law. But they exonerated the "underwriter by the application of what was avowed to "be a new principle, that this antecedent damage should "be considered an implied exception out of the policy; "and this principle, say the court, although new, is adopt"ed as being consistent with justice and convenience."

"It is unnecessary to say, whether, to such a case ari

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sing here, we should think proper to adopt and apply "this new principle. It is enough, for the present, to say, "the principle does not apply to the case now before us. "It may, however, be observed, that the decision in that case, so far, at least, as it went to exonerate the insurer "from the payment of the average loss, may be supported upon well settled rules. Information of the injury was "withheld by the captain whilst he was acting in his ap"propriate character of master, and as such was the exclu "sive agent of the owner, and for whose negligence he alone was "responsible. And from what fell from Lord Ellenborough "upon the trial, it may be presumed his letter was shown "to the underwriter, and if so, it amounted to a repre"sentation that the vessel had sustained no injury at the "date of the letter." I consider these remarks as distinctly affirming that the decision in Gladstone v. King, was consonant to law on one of two grounds; the concealment of the loss by the master, if his letter was not shown to the underwriters; and if it were, his virtual misrepresentation. It is true Mr. J. Thompson adds; "But unless the case of "Gladstone v. King is imperfectly reported, it would be "difficult to sustain it upon principles heretofore under"stood to govern analogous cases." Unless, however, we impute to the learned and eminently cautious judge a direct contradiction, his meaning can only be, that although the case might well be sustained upon the reasons he had just given, yet it was difficult to reconcile it with analogous cases, upon the new principle that the Court of K. B. actually adopted. Had that court decided that the misrepresentation and concealment of the master rendered the policy wholly void, and not merely exonerated the underwriters from the particular loss, the propriety of their decision would in no respect have been questioned. The passages that have been given do not comprise the whole of the elaborate judgment of the Supreme Court; but their