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proved, the materiality of the misstatement need not be discussed." In law, whether a particular representation. be material or not is in each case a question of fact.

The subject of misrepresentation has been discussed at great length and with great learning by many writers: by none more exhaustively and learnedly than Judge Duer in his Lecture on the Law of Representations (New York, 1844), afterwards incorporated in his monumental work on Marine Insurance (2 vols., New York, 1845-6). The difficulty felt by the lawyers has been to decide whether the effect of misrepresentation should be stated as proceeding from the presence of fraud in the statement made, or from something in the nature of the contract of insurance which is subverted or violated by the mere misrepresenting of any matter connected with it. This is hardly the place to attempt any examination of this difficult point of legal theory. But it is of importance to see how the matter looks in practice. When a merchant, shipowner, or broker offers a risk for insurance, his object, shown by the very fact of his making the offer, is to transfer from himself to the underwriter, in return for a premium to be paid and received, the risk in question. In making the offer he gives certain details, which may be classed under three categories—the unfavourable, the customary, the favourable. The unfavourable, as will be found in the next paragraph, he is bound to disclose; the customary he is entitled to pass over, as the underwriter is considered bound to know them; only the favourable remain. An underwriter is therefore entitled to assume that a would-be assured tells him the unfavourable facts because he dare not conceal them without imperilling his insurance, passes over the customary because he need not detail them, and expounds the favourable because he desires to do so. If that is true of the information volunteered by the intending assured, it is doubly true of the content of replies made by him to questions put by the underwriter. The mere fact that questions are put on any special point must indicate that that point is one which the underwriter, rightly or wrongly, considers of some importance in regard to the risk.

The

questions may appear frivolous, so might the conclusions drawn by the underwriter appear if he were confident enough or careless enough to express them. Indeed from one single representation made in identical terms to two underwriters they may form entirely different opinions regarding a risk. But to each of them the representation may have been of actual weight in inducing him to arrive at his particular conclusion. It seems, therefore, enough for general practical purposes to say that (so long as it is borne in mind that a representation is fulfilled by substantial compliance) misrepresentation occurs in any information volunteered or given in reply to inquiry, whenever any statement made is not substantially correct, provided it might fairly be held to affect an underwriter's opinion of a risk or of the proper premium for it. A man is entitled to say he has no information if he really has none: it will then be open to the other side to ask him to get the information required; but a man is not entitled to invent information if he has it not, or to colour, improve, or adorn what he has. He may, however, before conclusion of the insurance withdraw or correct any representation he has made.

(2) Concealment. The intending assured is fully entitled to say he has no information if he really has none; but the case is altered if he has it and is not willing to communicate it voluntarily or in reply to the underwriter's questions. What then? He is not permitted to "disremember," he is not entitled to remember to forget any material fact, he is under the necessity of disclosing it. But in this prohibition of suppression of material facts the obligation is mutual; it is as binding on the underwriter as on the assured. There must be no concealment or nondisclosure of any material fact lying exclusively within the knowledge of either party. The penalty for such concealment is, that the contract is thereby made voidable within reasonable time at the option of the party against whom the concealment was made (Morrison v. Universal Marine, 1872-3). The mutuality of the obligation to

1 L. R. 8 Ex. 40.

disclose was most weightily laid down by Lord Mansfield in Carter v. Boehm, 17761. Good faith is the foundation on which he built up that judgment: he stated a long list of things which the intending assured need not communicate,

"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. . . . The rule is adapted to facts which are privately known to one party and which the other is ignorant of, or has no reason to suspect."

The same difficulty arises over the materiality or immateriality of a concealment which was found to prevail with respect to representation. In law, the question whether any one undisclosed circumstance be material or not is in each case a matter of fact. But there is this special point of difference between misrepresentation and concealment misrepresentation, being conveyed in an actual statement, may be of various shades, tints, or grades of intensity as well as of various degrees of blame; concealment being merely negative, a simple failure to inform, is of only one degree of intensity, though it may be of various degrees of blame. Consequently it is much easier to conceive the misrepresentation of an immaterial fact than its conceal

ment.

There is an interesting pair of cases arising out of one risk respecting concealment as it affects insurances done through brokers, Blackburn v. Vigors, 1887,2 and Blackburn v. Haslam, 1888.3 In the former the plaintiff instructed an insurance broker to effect on his account a reinsurance

on an overdue ship. Whilst the broker was trying to place the risk he came across information tending to show that the vessel was wrecked. He did not communicate this information to his principal, but merely returned the order, saying he could not complete it. The plaintiff thereupon gave the order to another broker, who succeeded in placing 1 3 Burr. 1905.

2 L.R. 12 App. Cas. 531.

3 21 Q.B. D. 144.

the risk with the defendant Vigors, neither the principal nor the second broker being aware of the information which had come within the knowledge of the first broker. Mr. Justice Day held that the plaintiff was entitled to recover, there being no concealment on the part of the plaintiff, the knowledge of the first broker not having become the knowledge of the plaintiff, nor of the second broker. The Court of Appeal reversed this judgment, but the House of Lords restored it. In the second case (Blackburn v. Haslam),1 where the policy was effected by the first broker after the unfavourable news had come into his possession, it was held in Queen's Bench that his concealment vitiated the policy. There was no appeal. The comparison of the cases is instructive; the difference of the knowledge of the two brokers was decisive as regarded the validity of the policies they effected.

Summary.—The results of the preceding discussion may be put briefly thus: misrepresentation and concealment can never occur when a statement is made of what is substantially the truth, and the whole truth, respecting the risk under submission, an obligation which in the case of concealment is incumbent on the underwriter as well as on the intending assured. From this it is evident that in a genuine valid insurance neither party is permitted to forget the cardinal requirement of perfect, unbroken good faith (uberrima fides.)

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CHAPTER XVII

GENERAL AVERAGE

AT the close of the discussion of the expenses dealt with under the Sue and Labour Clause (p. 126) it became necessary to distinguish and separate them from certain other classes of expenditure which were designated General Average Expenditures. The opportunity will now be taken to consider not only these expenditures, but also the nature of General Average and the forms it may assume.

Early Sea Law. It must first of all be noted that one of the earliest remnants of ancient maritime law preserved to us deals with jettison made for the sake of saving ship and cargo, and with the way in which loss arising out of such jettison was to be treated both as to its final incidence and to its apportionment.

In the Sententiæ of Paulus, written about A.D. 200, the following passage occurs (Book ii. Tit. 7):—

On the Rhodian law :

(1) When jettison of goods takes place for the purpose of lightening a ship, let that which has been jettisoned on behalf of all be restored by the contribution of all.

(2) If a ship or mast be lost by the force of a tempest, the shippers are not held to contribution, unless the ship was saved by their tearing out the mast for safety sake.

(3) If after lightening by jettison a ship perishes and the goods of some are hauled out by divers, it is decided that account is to be taken of him who jettisoned goods while the ship was safe.

(4) It is proper that goods discharged into boats for the sake of lightening the ship, and in consequence lost, be made good by the contribution of the goods saved in the ship, but if the ship is lost no account is taken of the boat saved with goods.

(5) A collection of the contribution for jettison shall be made when the ship is saved.

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