(1) Bowden v. Vaughan, that if it had been represented that the ship would not sail within a month, insurance could not have been effected, as the French army was expected at Lisbon. The ship did not sail until the 29th of November, and was the next day stopped in the Tagus by the French. Lord Ellenborough said, The owner of the goods could speak of the sailing of the vessel only from probable expectation, and if such representation was made bona fide it should not conclude him.' The other judges were of the same opinion.(1) Mr. At the time of effecting a policy on a ship at and from Mes10 East, 415. sina to England, the broker had represented that the ship' was then at or near Messina, or on her homeward voyage.' Justice Gibbs, said, ' It was only a conclusion which he drew, and if there was reason to doubt the truth of the conclusion, the underwriter should have inquired into the ground of that expectation.'(2) Brine v. Featherstone, To constitute a representation,' says Chief Justice Marshall, 4 Taunt. 869.there should be an affirmation or denial of some fact, or an allegation which would plainly lead the mind to the same conclusion. If the expressions are ambiguous, the insurer ought to ask an explanation; and such was the opinion of a majority of the judges, though some of them seemed to be inclined to the opiCranch, 535, nion that an ambiguity ought to be construed against the assured.(3) (3) Living ston v. Mar. Ins. Co. 7 & 536. first underwriter extends to the others. (4) Barber v. Fletcher, See also Paw It has been determined in a variety of cases,' says Lord A representation to the Mansfield, that a representation to the first underwriter extends to all the others."(4) The reason of the rule is, that they may have subscribed upon their confidence in his judgment and knowledge of the risk, of which they would not have the advantage, unless they could avail themselves of all the conditions upon which he subscribed. This reason applies exclusively to representations in favour of the risk, and which might induce the first underwriter to subscribe. A representation unfavourable to the risk, and which would have a tendency to prevent the first underwriter from subscribing, does not come within the reason of the rule; though the subsequent underwriters may be allowed to subscribe upon their confidence in the opinion of the first, without thereby putting themselves in a worse situation than that of the first, yet it seems to be going very far, to suppose, absolutely, and in all cases, that they do so subscribe; and unless this supposition is made, a representation of a fact, the suppression c" which would avoid the policy on the ground of concealment, ought to be brought home to the knowledge of each individual insurer. son v. Watson, Cowp. 785; Stackpool v. Simon, Park, 648; Marsh. 772, Feise v. Parkinson, 4 Taunt. 640. (5) Marsden v. Reid, 3 East, 572. for But it has been held that a representation to the underwriter who first agreed to take the risk, and whose name stood first on the slip but not on the policy, did not extend to the other underwriters. One reason given was that the slip, not being stamped, could not in England be produced in evidence to show that the person who appeared, by the policy, to be the first underwriter, was not so.(5) But this case seems to be within the reason for extending to all the underwriters a representation made to the first. underwriters. There seems to be the same reason for giving subsequent un- A represen derwriters all the advantage of a representation made to an in- tation to intermediate one; since they may be induced to subscribe by their termediate confidence in the judgment of either of the prior underwriters. But Lord Ellenborough said, in a Nisi Prius case, 'What passed between the intermediate underwriters is to be considered merely as res inter alios acta. It is difficult to see on what principle of law a representation to the first underwriter is considered as made to all who afterwards underwrite the policy. That rule being established I will abide by it; but I will by no means allow it to be extended. You must show the representation to be made to the first underwriter on the policy, or to the defendant himself."(1) (1) Bell v. The same judge said in another case, 'The proposition that a Carstairs, 2 communication to the first underwriter is virtually a notice to all, is to be received with great qualification. It may depend on the time and circumstances under which the communication is made. On the mere naked unaccompanied fact of one name standing first upon the policy, I should not hold that a communication made to him was virtually made to all the subsequent underwriters."(2) (2) Forrester Other judges have expressed the same opinion. Heath, J. v. Pigou, 1 M. said, Evidence of representations made to the first underwriter & S. 13. had been admitted, but rather on precedent than on reason;' and Mansfield, C. J. it had never been extended to underwriters subsequent to the first; the reason why it was admitted as to the first was, that the others were apt to pin their faith upon his judgment, which reason did not extend to representations made to the latter subscribers.' Gibbs, J. said, 'I have looked into all the cases and none of them carry it further than a representation to the first underwriter.'(3) A representation to an underwriter on one policy, has been Featherstone, held not to be such to an underwriter on a subsequent policy on the same property and against the same risks.(4) Section 2. What facts must be disclosed. Misrepresentation. The assured is not required to represent facts of general notoriety, or which are presumed to be known to those conver sant with the trade; but he is required to state fairly and fully other facts within his knowledge that are material to the risk. 'If a knowledge of the circumstances suppressed would have induced the insurer to demand a higher premium or to refuse to underwrite, it will invalidate the policy.'(5) (3) Brine r. 4 Taunt. 871. (4) Elting v. Scott, 2 Johns. 157. 491; N. York (5) Murga'Good faith,' says Lord Mansfield, 'forbids either party, by troyde. Crawconcealing what he knows, to draw the other into a bargain, ford, 3 Dal. from his ignorance of that fact, and his believing the con- Firem. Ins. trary. The facts lie most commonly in the knowledge of the Co.v. Walden, assured only, the underwriter trusts to his representation, and 12 Johns. 517; proceeds upon confidence that he does not keep back any circumstance to mislead the underwriter, and induce him to estimate Per Kent the risk as if it did not exist. The keeping back such circumstance is a fraud, and although the suppression should happen through mistake, the policy is void because the risk is different from that understood and intended to be run. He need not mention what the underwriter knows, what way soever he came by that knowledge, or what he ought to know, or takes upon himself the knowledge of, or waives being informed of, or what lessens the risk agreed and understood to be run, or general topics of speculation, or every cause which may occasion natural perils, as the difficulty of the voyage, kind of seasons, probability of hurricanes, earthquakes, &c. or every cause which may occasion political perils, from the rupture of states, from war, and the various operations of it, upon the probability of safety from the continuance or return of peace, or the imbecility of the enemy. If the insurance be on a private ship of war, from port to port, the underwriter needs not to be told of the secret enterprises it is destined upon. From the nature of the contract he waives this information. If he insures for three years, he needs not to be told any circumstance to show it may be over in two, or if he insures a voyage with liberty of deviation, he needs not to be told what tends to show there will be no deviation. Men argue differently from natural phenomena, and the means of information and judging are open to both; each professes to act on his own skill and sagacity. The rule is adapted to facts which are privately known to one party, and which the other is (1) Carter v. ignorant of, or has no reason to suspect.'(1) Boehm, 3 Burr. 1905; 1 Bl. 593. Property at Fort Marlborough, in Sumatra, belonging to Carter, the governor, was insured against loss by capture, for one year from the 16th Oct. 1759. The place was taken by the French under Count D'Estaigne within the year. At the time of effecting the policy in London, in May 1760, the agent of Governor Carter knew of a letter from him, dated at Fort Marlborough the 16th Sept. 1759, notifying to the East India company that the French had the preceding year a design of attacking the settlement, which they might probably revive, and that the fort was badly supplied, and could not be maintained against a European enemy. The agent had also received a letter from the Governor, dated four days afterwards, of the same import, and requesting him to get insurance. Neither of these letters were disclosed to the underwriter. Lord Mansfield said, 'The underwriter at London, in May, could judge much better of the probability of the fort being attacked than Governor Carter could at Sumatra, the September before, because he might have obtained all the information that the governor had at that time, and he had a knowledge of the subsequent political events in Europe besides, and also what forces had been sent out to India by the French and English. If there had been an enterprise on foot, to the knowledge of the Governor, when he sent to have insurance made, it would have varied the risk understood by the underwriter; but he had no knowledge of any such design; it was formed on a sudden, just before it was executed. The underwriter knew the governor must be acquainted with the state of the place, and could not disclose it consistent with his duty, and that by insuring he at least apprehended the possibility of an attack. With this knowledge, without asking a question, he underwrote. By so doing he took the knowledge of the state of the place upon himself. It was a matter of which he might have been informed various ways; it was not within the private knowledge of the Governor. If the probability of an attack by a European force was in the contemplation of the parties, and not the sufficiency of the fort to resist it, then the assured's not stating that the fort could not resist such an attack, was no concealment; as to the design of the French to attack the fort the year before, that was no part of the facts upon which the insurance was made. It was doubtful whether there had been any such design, and if there had, the inferences to be made from it were matters of mere speculation. If a man insured a ship, knowing that two privateers were lying in her way, without mentioning that fact, it would be fraud; but if he knew that two privateers had been there the year before, it would be no fraud not to mention that circumstance."(1) (1) ib. See also Thompson v. Buchanan, 4 Brown's 482. Mil. 79.. Parl. Cas. It is sufficient if the assured discloses the condition of the ship at the date of his last intelligence, without giving an account of previous events. The assured had received intelligence that the natives on the coast of Africa had attacked the vessel, and killed the captain, and several of the crew, whereby, and in consequence of disease, the crew had been reduced from twenty, to five; he afterwards received intelligence of the subsequent condition of the ship, and that there were nine men on board. He disclosed only the last intelligence to the insurers. Lord Ellenborough said, 'you are not obliged to inform the underwriters of all by-gone calamities. If the underwriters were truly informed of all the circumstances known to the assured on his latest information, it is sufficient.(2) So the court in New York, (2) Freeland speaking of a risk at and from Guadaloupe, to commence on the Esp. 14; 7 28th of July, said, 'it cannot be material where the ship was East, 457. prior to that day.'(3) 6 (3) Kemble v. Browne, 1 A ship insured at and from London, lost or not lost,' had sailed before the policy was made; which circumstance was not disclosed to the insurer, who for this reason objected to the policy. The court said, 'if the underwriter wanted to know (4) Fort v. Lee, 3 Taunt. whether the ship had sailed, he ought to have inquired.'(4) 381. Where the trade is prohibited by the standing and uniform regulations of a foreign country, it is not necessary to represent (5) Pollock v. this fact.(5) A policy was made on goods, warranted American, Babcock, 6 from Havana to Carthagena, and such a voyage was generally Mass. Rep. known to be prohibited by permanent regulations of trade. A (6) Calbraith disclosure of this fact was held not to be requisite.(6) Nor is v. Gracie, it necessary to state in such case that the vessel will carry simulated papers, and that the property will be disguised.(7) In the case of a vessel engaged in a smuggling trade with the Spaniards on the Mississippi, Lord Mansfield said, if the insurer had, with a full knowledge that it was a smuggling trade with 234. Condy's Mar shall, 388. n. Ins. Co. 7 (1) Lever v. Fletcher, Park. 360. (2) Hoyt v. Gilman, 8 Mass. Rep. 336. (3) Blagge v. N. York Ins. Co. 1 Caines, 549. the trade need not be stated. Spain, made the insurance, then it might be a fair contract between the parties.(1) If the assured has early intelligence of a new regulation, by which the property is exposed to seizure, it has been held that he is bound to disclose it. An order having been given for insurance in London on a vessel bound to Varel on the Jade, a policy could not be effected, on account of information of a recent decree of the French emperor ordering all vessels entering the Jade to be confiscated. The vessel was insured in the United States, without any disclosure by the assured of a letter informing him of the reason why a policy could not be effected in London. The court said, The letter contained information very material in estimating the risk. The withholding it from the underwriter must be considered fraudulent, and the insurance was therefore void.'(2) If the trade is sometimes prohibited and sometimes permitted, it has been held that the underwriter is not bound to take notice of its being prohibited at the time of effecting the policy. The existing prohibition, and the necessity of using false papers, must be disclosed.(3) The underwriter is presumed to know the particular usages The usages of of the trade and the local situation and circumstances of the ports comprehended within the voyage. An insurance was made from New York to port Sisal,' and other ports. There is no harbour at Sisal, and vessels lie at anchor in an open roadstead while loading and unloading. The trade was recent at the time of making the insurance, and the fact, that there was no harbour, was not disclosed to the underwriters. Kent, C. J. said, the assured was not bound to communicate to the underwriters his knowledge of Sisal. This was a matter of general notoriety, equally open to the knowledge of both parties, and (4) Delongue- which both must be presumed equally to know.'(4) mere v. N. Y. Firem. Ins. Co. 10 Johns. 120. (5) Kingston v. Knibbs, 1 Camp. 508. n. In the case of an insurance on a ship from Oporto to London, a part of the cargo being taken on board within the bar of Oporto, the ship was removed over the bar to take in the remainder, as was usual in regard to ships of like burthen, whence she was driven out to sea by a gale of wind, and captured. The insurers insisted that they should have been informed that a part of the cargo was to be taken in outside of the bar, but Lord Ellenborough held that they were bound of themselves to take notice of the usage.'(5) The same opinion, in effect, was given respecting a policy upon goods to a port in Jamaica 'till landed;' and it was usual at the port of destination in Jamaica, to land the cargo in shallops from ships of the size of that which carried the goods insured. The court said, 'the underwriter should inquire what is the usual mode of landing the goods. Here it seems to have (6) Stewart v. been the usage to transship the goods into shallops."(6) Bell, 5 B. & Where it is usual for vessels, on the voyage insured, to make an intermediate voyage, such intermediate voyage may be made without apprizing the insurers that it is intended. Such was formerly the practice in India voyages; the East India Com |