tion to the first writer; and if it was of such a nature that it ought to have Misrepresentaput the first underwriter on further inquiry, it will be equally underwriter imputed to the negligence of the subsequent underwriter extends to all. that no such inquiry was made. (z) are not material to the risk, or have put the first under ther inquiry. This rule must be strictly con fined to the underwriter whose name 2. A further limitation of this rule is, that it must be strictly which should confined to the underwriter whose name in fact stands first on the policy. Thus, where a ship was represented as an Ameri- writer on furcan to an underwriter, to whom the policy had been first offered for subscription, and whose name had, in fact, been the first minuted down on the slip, but did not stand first on the policy, where, on the contrary, it was written after the name of the defendant, Lord Ellenborough held, that the representation did not extend to the defendant; and he would not allow the unstamped slip to be offered as evidence, to show that the order in which the names of the underwriters stood on the policy, was not the true order of their subscription. (a) stands first in the policy. Marsden v. Reid, 3 East, 372: 3. The rule is also strictly confined to underwriters on the It is strictly same policy. It has never been extended, nor, indeed, is confined to un the presumption on which it rests at all applicable, to underwriters on a second policy on the same interests and risks; unless, perhaps, it could very clearly be shown that the second policy was fraudulently obtained by the exhibition of the first. (b) 4. A still further limitation of the same rule is, that it only applies where the tendency of the representation is to induce the underwriters to take the risk on lower terms; where the first underwriter was called to prove a representation made to him, the tendency of which would have been to increase the estimate of the risk, Lord Tenterden decided, at Nisi Prius, that this evidence was not admissible as against a subsequent underwriter. (c) derwriters on the same policy. The rule is only applicable where the tendency of the representation is to induce the underwriters to take the risk Even under these limitations, the English courts have Even under (2) Barber v. Fletcher, Dougl. 262. (a) Marsden v. Reid, 3 East, 372. Brine v. Featherstone, 4 Taunt. 870, 871. (b) Duer, 68, 69., and see Sibbald v. Hill, 2 Dow's P. C. 262, (c) Robertson v. Majoribanks, 2 Stark. N. P. 503. Duer, 179. note xvi. these limita Misrepresenta regarded the rule with great strictness, and on many occasions have expressed their dissatisfaction with it. tion to the first underwriter extends to all. not favoured in the English courts. Lord Ellen point. Thus, Mr. Justice Heath on one occasion said, "That the tions the rule is evidence had been admitted rather on precedent than on reason (d);” and Lord Ellenborough said, "Whenever the question comes distinctly before the court, whether a comObservations of munication to the first underwriter is virtually a notice to borough on this all, I shall not scruple to remark, that the proposition is to be received with great qualification; it may depend on the time and circumstances under which the communication was made; but on the mere naked, unaccompanied fact of one name standing first on the policy, I should not hold, that a communication made to him was virtually made to all the subsequent underwriters ;" and his lordship said, that the question was one of such magnitude, that, if it should arise, he should direct it to be put on record for the opinion of all the judges. (e) Where the first underwriter is duck," this Of course, if the subscription of the first underwriter is a mere "decoy obtained under a secret agreement, or understanding, that it is not to be binding, and for the sole purpose of leading others to insure; the exhibition of the policy, thus subscribed, is justly regarded as a fraud on the subsequent underwriters, and on that ground avoids the policy. (ƒ) avoids the contract as to all subsequent underwriters. Semble, that it The first underwriter in such cases is called in England a decoy duck; on the Continent he is termed a dolphin, who leaps from the water that others may follow. (g) In these cases, as the subscription and exhibition of the underwriter's name is an actual fraud, it should seem that the rule will extend to the case of a prior underwriter, though his name may not be first in the policy. (h) It is stated by Mr. Marshall (i) that it is only upon the is only on the first trial that the defendant can avail himself of a mis first trial that a (d) Brine v. Featherstone, 4 Taunt. 891. (e) In Forester v. Pigou, 1 Maule & Sel. 13. (f) Whittingham v. Thornburgh, 2 Vernon, 206. Wilson v. Duckett, 3 Burr. 1361. See also the observations of Lord Kenyon in Sibbald v. Hill, 2 Dow's P. C. 262. (g) Emerigon, chap. ii. sect. 4. vol. i. p. 43. ed. 1827. (h) Duer, 70. (i) 1 Marshall on Ins. 455. tion to the first representation made to the first underwriter; and that after Misrepresentaa verdict has been obtained the court will not set it aside underwriter on an affidavit of the first underwriter, that a material mis- extends to all. representation has been made to him. The case cited in subsequent support of this position is that of Barber v. Fletcher. (j) Mr. Duer, however, observes, that the case cited does not warrant this position as a general and unvarying rule; but proceeds solely on the ground that the defendant, under the circumstances, might have obtained the information before the first trial, and, consequently, that "if the evidence was new, it was his own negligence." "There is nothing," he remarks," in the case to justify the supposition, that when negligence cannot justly be imputed to the defendant, a new trial, founded on the recent discovery of the evidence, may not with propriety be granted." (k) It may, however, fairly be doubted, whether negligence might not justly be imputed to any underwriter who failed to inquire, with a view to his defence on the first trial, whether any material misrepresentation had been made to the underwriter whose name stands first in the policy; and bearing in mind the strong disposition of the English courts to restrict as far as possible the operation of this doctrine, it may be assumed that the position laid down by Mr. Marshall would be acted upon in practice, on this side the Atlantic. (j) Barber v. Fletcher, Dougl 305. (k) Duer on Representations, 180. note xvi. underwriter can resort to the defence of misrepresenta tion made to name stands him whose first on the policy. Definition and general principles. Definition of Concealment. What are material facts. Principles on which conceal ment avoids the policy. Observations of Lord Mansfield in Carter v. Boehm. CHAP. II. OF CONCEALMENT, OR SUPPRESSIO VERI. SECT. I. Definition and general Principles. § 199. CONCEALMENT, in the law of insurance, is the suppression of a material fact within the knowledge of either party, which the other has not the means of knowing, or is not presumed to know; by a material fact is meant, one which, if communicated to the underwriter, would induce him either to refuse the insurance altogether, or not to effect it except at a higher premium. (a) On the plainest principles of equity, a contract which one party has thus been induced to enter upon from his ignorance of the thing concealed, shall not be enforced against him, by the other who has concealed it. Whether such suppression of the truth arise from the fraud of the assured (that is from a wilful intention to deceive for his own benefit), or merely from mistake, negligence, or accident, the consequences will be the same. (b) "Good faith," says Lord Mansfield, "forbids either party, by concealing what he knows, to draw the other into a bargain, from his ignorance of the fact, and his believing the contrary. The facts lie most commonly in the knowledge of the assured only, the underwriter trusts to his representation, and proceeds upon confidence, that he does not keep back any circumstance to mislead him, and induce him to estimate the risk as if it did not exist. The keeping back such circum (a) See Marshall, 463. 1 Phillips, 214., and per Tindal, C. J., in Elton v. Larkins, 5 C. & P. 392. (b) Carter v. Boehm, 3 Burr. 1909. Ratcliffe v. Schoolbred, Marshall on ciples. stance" (if intentional) "is a fraud, and although the sup- Definition and general prinpression should happen through mistake, the policy is void because the risk is different from that understood and intended to be run." (c) The ground, in short, on which the policy is avoided is, that the underwriter has been, in fact, deceived, not that the assured intended to deceive him. Concealment. by an agent of avoids the po a material fact licy, though such fact may be unknown to the principal. Hence it is, that the concealment of a material fact, wholly unknown to the assured by his authorised agent, is just as fatal to the policy as though it were wilfully kept back by the assured himself; for the knowledge of the agent is in these cases impliedly the knowledge of the principal. (d) If an agent in ignorance of a loss that has happened, effect Where a policy an insurance for his principal who knew of the loss at the time the policy was effected, but not in time to countermand it, the policy will not be avoided by the concealment: if, on the other hand, the principal, knowing of the loss, effected the insurance through an agent who was ignorant of it, the non-communication of the fact of loss will, of course, vitiate the policy. (e) Generally speaking, as the facts lie most within the peculiar knowledge of the assured, it is the underwriter who most frequently avails himself of the defence of concealment: there can, however, be no doubt that the underwriter as well as the assured, is bound to disclose all circumstances, peculiarly within his own knowledge, in any degree affecting the risk. Thus, for instance, if it appear that the underwriter, at the time of subscribing the policy, knew that the ship had arrived safe, the contract will be void as to him, and an action will lie against him to recover back the premium. (ƒ) It is the duty of the assured to communicate to the underwriter all the intelligence he has that may affect the mind of (c) Carter v. Boehm, 3 Burr. 1903. 1 W. Bl. 593. (d) Valin, art. 40. vol. ii. pp. 330— 232. ed. 1828. Fitzherbert v. Mather, 1 T. Rep. 12. Gladstone v. King, 1 Maule & Sel. 35. (e) Valin, art. 40 ibid. (f) Per Lord Mansfield in Carter v. Boehm, 1 Bl. 594. 3 Burr. 1909. See also Benecké, System des Assecuranz, chap. x. von den Anzeigen, und Verheimlichungen, vol. iii. pp. 90, 91. ed. 1808. is effected by an agent in ignorance of a material fact, known to the concealment of such fact will principal, the avoid the policy, unless it only became known to the principal too mand the policy. Concealment by the under writer of the ship's arrival, &c. avoids the policy. All intelligence ought to be communicated to the under writer which may affect his judgment, either: 1. as to the point whe |