tions as distin

guished from

If, however, the information so communicated by the Representaassured to the underwriter proceeds from an agent of the assured, whose duty it was to give the intelligence, the assured is just as responsible for the truth of the information as he would be for the truth of a positive representation made by himself of the same facts.

The principle here is, that what is known to the agent is impliedly known to the principal. (w)

The following case illustrates this principle.

warranties ground on which misavoids the

representation

policy.

Where the asmunicated to

sured has com

writers wrong

derived from

his agent, and thereby been unintentionally the means of misleading

terial point,

One Thomas, a corn-factor at Hartland (in Devonshire), in pursuance of orders received to that effect, shipped a cargo of oats, on the 16th of September, to a consignee at Ports- the undermouth, on account of the assured. The same day he wrote information, to an agent of the assured at Portsmouth, stating that he had that morning shipped the oats; that the ship had sailed immediately; but that he was afraid the wind was coming from the westward, and would force her back: he also, the same them in a maday, wrote to the same effect to another agent of the assured this will avoid in London, directing him to effect an insurance, and adding the policy. these words: "I wish the whole were safe to hand. The weather appears stormy." These letters, though written on the 16th, did not by course of post leave Hartland till 1 P. M. on the 17th; early on the morning of which day Thomas knew of the loss of the ship, which had been driven back by the wind and wrecked on the night of the 16th off Hartland pier.

He did not, however, send any further information to the London agent, who, having on the morning of the 26th received the letter which left Hartland on the 17th, and also an order from the assured to procure an insurance, submitted these letters to the underwriters as his instructions, and upon them procured a policy to be effected on the oats, "lost or not lost, from Hartland to Portsmouth."

It was contended, on the part of the underwriters, that this policy was void "on the ground of misrepresentation;" and the court held that it was so, on the principle, that though

(w) Gladstone v. King, 1 Maule & Sel. 37.

L L

Fitzherbert v.
Mather, 1 T.
Rep. 12.

Representations as distinguished from

warranties ground on which mis

representation

avoids the policy.

Remarks of

Lord Mansfield in this case.

So misrepresentations contained in the letters of

a foreign cor.

the misrepre

the assured himself was innocent, yet as he had built his information on that of his agent (Thomas), and the agent had been guilty of misrepresentation, the assured himself ought to suffer for it. (x)

The nature of the misrepresentation itself is thus stated by Lord Mansfield: "This policy was effected by misrepre sentation, because the underwriter was warranted on the information of the agent (i. e. Thomas) to take for granted that on the 17th of September, at 1 o'clock” (the post-time at Hartland), "the ship was safe; for the agent gave an account of the ship being loaded, but said nothing at all of what had happened to her." Then there was strong ground "to believe, on this letter, that she was safe when the post came away." (y)

So where merchants, residing in this country, had received from their correspondents abroad several letters relating to a risk, on which they wished to effect an insurance, in one of respondent are which it was stated positively, but as it turned out falsely, that the ship "will sail" on a given day, and the underwriters effected the insurance after inspecting all these letters, which were communicated to them by the merchants as their instructions, it was held that the assured, though innocent themselves, were responsible for this misrepresentation of their correspondents. (z)

sentations of the assured bimself, if he

shows them to

the under

writers as in

structions to insure.

Any misrepresentation or concealment by the master, as such, will, if it be laid before the under

As long as the master is acting as agent for the owner in his general capacity as master, so long it is his legal duty to communicate and truly represent all material facts connected with the ship; and his fraud or neglect in the discharge writers by the of this his duty, if it have operated, in fact, to mislead the underwriter, will avoid the contract as much as a concealment or misrepresentation by the assured himself. (a)

owners, and

operate to mis-
lead them,
avoid the
policy.

(x) Fitzherbert v. Mather, 1 T. Rep. 12. See the judgment of Buller, J., ibid. 16.

(y) Ibid. 15.

v. General Interest Ins., 12 Wheaton's Sup. C. Rep. 409. as contrà ; but Mr. Duer satisfactorily shows that no such doctrine can be deduced from the case

(2) Dennistoun v. Lillie, 3 Bligh's cited, but that the law in the United P. C. 202.

(a) Gladstone v. King, 1 Maule & Sel. 35. Mr. Phillips (vol. i. p. 341.) cites the American case of † Ruggles

States as to this point is as stated in the text. Duer on Representations, 208-313. note xxvi.

SECT. III. What Representations are material.

sentations are

be deemed ma

§ 194. As we have already seen, when no actual fraud can What reprebe imputed, a representation, although false, will not avoid material. the policy unless it be material. It becomes important, therefore, to inquire what it is that makes a representation material. The answer is, that every representation is to be deemed material which there is just reason to believe determined the underwriter to insure, or influenced his estimate of the mium. (b)

pre

The test of materiality is the probable influence of the statement made on the mind of the underwriter. It is not absolutely necessary that the fact represented should have any direct bearing on the state or condition of the subject of the proposed insurance: it is sufficient that it either in fact did exert, or may reasonably be presumed to have exerted, an influence over the mind of the underwriter in determining him to assume a responsibility he would not otherwise have undertaken.

Every representation is to terial which there is reason

to believe determined the underwriter to insure, or influ

enced his estipremium.

mate of the

can be shown to have deter

mined the mind writer to take

of the under

the risk, it

representation

of any material fact respecting the condition of the ship, or

Thus, where a London merchant induced an underwriter at If, in fact, it Leith to effect insurances on two of his ships engaged in the whale fishery, at eight guineas per cent., by representing that such was the highest premium which he had given for insurances on the same risk in London, and it turned out that the premium need not necesin fact paid by him to the underwriters in London had been sarily be a misfifteen, eighteen, and twenty-five guineas per cent., and the Leith underwriter, on this ground, refused to pay the loss; the Court of Session in Scotland decided against him, on the ground that "the statement as to the premium was not a misrepresentation as to any of the circumstances attending the situation or condition of the ship, or nature of the voyage, which could affect the nature of the risk:" but the House of Lords, on the motion of Lord Eldon, reversed the judgment on the general principle, "that every misrepresentation is fatal to a

(b) See 1 Marsh, 450. 1 Phillips, 221. Duer on Representations, 71.

the nature of

the voyage. Hill, 2 Dow's

Sibbald v.

P. C. 263.

What representations are material.

On the other hand, even

contract, which is made under such circumstances and in such a way, as to gain the confidence of the other party, and induce him to act when otherwise he would not." (c)

So, where the first underwriter is merely a "decoy duck," the exhibition of the policy with his signature has always been held a virtual misrepresentation, which avoids the contract on the ground of fraud, although it does not at all relate to the situation or condition of the subject insured. (d) So entirely does the materiality of a representation depend where the mis- on the effect it produces on the mind of the underwriter, that even where it states facts materially affecting the nature of the risks, yet if it satisfactorily appears that it had, in all probability, no influence on the judgment of the underwriter, its falsity will be held not to avoid the policy. Thus, where judgment of the the fact stated was "that the vessel would only take in fifty

representation

is of material

facts, yet, if it

satisfactorily appears that it

could not have influenced the

underwriter,

it will not avoid or sixty tons of rock salt, which would be no more than balthe policy.

lam, 9 B. & Cr. 693.

Flinn v. Head- last trim," the materiality of the fact thus stated was admitted on all hands; but as it appeared that a certificate of the ship's fitness to proceed on her voyage with a cargo of rock salt was shown to the underwriters at the time the statement was made, Lord Tenterden told the jury to consider whether the underwriter was guided by the certificate or the representation; and the jury, under this direction, having found for the assured, saying they thought the representation, under the circumstances, not material, his lordship, on motion for a new trial, refused to disturb the verdict.

Planché v.
Fletcher,
Dougl. 251.

This case conclusively shows that though the facts represented may be material, yet the representation itself will not be so, unless it appears in fact to have influenced the judgment of the underwriter. (e)

The following case seems to afford an illustration of the same principle. A ship, insured "at and from London and Ramsgate to Nantes, with liberty to call at Ostend,” cleared out for Ostend only; but meant to sail, and, in fact, did sail direct for Nantes, with fictitious bills of lading, purporting to

(c) Sibbald v. Hill, 2 Dow's P. C. 263.

(d) Per Lord Eldon, ibid. 267.

(e) Flinn v. Headlam, 9 B. & Cr. 690.

be made out at Ostend, and expressing that the goods were shipped there. It was held that the ship's sailing direct for Nantes (though contrary to the implied representation arising from the terms of the policy, coupled with the clearances and bills of lading), yet did not avoid the policy; 1., because the direct voyage to Nantes was within the terms of the policy; 2., because this manner of making out the clearances and bills of lading, from which the implied representation arose, was not made with the intent to deceive, but was merely a mode well known and generally practised at that time in the French trade, of evading the French revenue laws, by getting English goods into France at Ostend duties, and also of saving the light-house dues in going down Channel. (ƒ)

The case, in fact, merely shows that the falsification of an implied representation, even though material in its nature, will not avoid the policy if it appears that the underwriter placed no reliance in its truth, and therefore was not, in fact, misled by it every representation, whether express or implied, that has no influence on the terms of the contract, being justly regarded as immaterial. (g)

. When, however, the facts stated are such as plainly to have a direct bearing on the estimate of the risk, they are said to be material; and a misrepresentation of such facts will, in all cases, avoid the policy, unless the assured can show, to the satisfaction of the jury, that the judgment of the underwriter was not, under the circumstances, influenced by the misrepresentation.

Thus, positive representations of the day on which the ship has sailed, or will sail (h), or on which she was last seen in safety (i), of the kind of armament she is to be fitted

(f) Planché v. Fletcher, Dougl.

251.

(9) Mr. Marshall, indeed (see Marshall on Ins. 461.), ranges this case under a different principle; but the observations of Mr. Duer seem conclusive to show that he is in error. Duer, 169, 170, 171. note xiv.

out

not influenced thereby.

What are material facts.