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Where a ship was warranted "a Portu

guese,"

" and

a

bill in Chancery admitted that she was condemned for not being a Portuguese. Policy void.

him for the said insurance. This cause came on to be tried at Guildhall before Lord Mansfield; when it was admitted, that the plaintiff had interest on board the ship to a large value, to the amount of the sum insured. The ship with the goods and merchandises so laden, and being on board her, after her departure from North Bergen, and before her arrival in London, proceeding on her voyage, was, by the force of winds and stormy weather, wrecked, cast away, and sunk in the seas; and the said goods and merchandises were thereby wholly lost. It was expressly stated, "that the ship or vessel, called the Bona Fortuna, and the property on board, at and before the time she was lost, were not neutral property, as warranted by the said policy."

Lord Mansfield, and the rest of the Court, were of opinion, that it was too clear a case to bear an argument. This was no contract; for there was a falsehood, in respect of the condition of the thing insured: because the plaintiff insured neutral property, and this was not neutral property.

After the case of Woolmer against Muilman had been decided, another very similar case of Fernandes v. Da Costa (a), came on at Guildhall before Lord Mansfield.

It was an action on a policy of insurance on goods laden on board such a ship, warranted a Portuguese. The insurance was made during the French war, when the premium would the assured by his answer to have been much higher on an English ship. The plaintiff gave partial evidence of her being a Portuguese; and that she was obliged, on account of the perils of the sea, to put into a French port, by which the cargo was spoiled. This was admitted by the defendant, who contended that during her stay at the French port, she was libelled, and condemned as not being Portuguese; and that although the goods were lost by a different peril, yet in fact the ship was not Portuguese, (being insured as such,) and that this vitiated the policy ab initio-and this was agreed to be law. In order to prove that she was not Portuguese, the defendant produced

(a) Sit. aft. Hil. 4 Geo. 3; Park Ins. 407.

the sentence of condemnation, and the confirmation thereof in the courts of France; and an answer of the present plaintiff in the Court of Chancery here, by which it was admitted, that the ship was condemned as not being, or under pretence of not being, Portuguese.

Lord Mansfield.-" As the sentence is always general, (without expressing the reason of the condemnation,) attested copies of the libel ought in strictness to have been produced, to shew upon what ground the ship was libelled against. But as the plaintiff has, by his answer in Chancery, admitted that she was condemned as not being Portuguese; when, added to the expression used in the sentence of confirmation, that the ship was condemned in the Court of Prizes, there is sufficient evidence for us to proceed upon." The defendant, the underwriter, had a verdict.

In a case in the House of Lords, of Sibbald v. Hill (a), where a London merchant insuring at Leith, represented, contrary to the fact, that he had insured the same voyage at Lloyd's at the same premium offered to the Leith underwriters; who accordingly subscribed the policy, confiding in the skill and judgment of the London underwriters: it was held that this misrepresentation avoided the policy, though it was not such as affected the nature of the risk. Lord Eldon said, "that it appeared to him settled that, if a person meaning to make an insurance, exhibited a policy, underwritten by a person of skill and judgment, knowing that this would weigh with the other party, and disarm the ordinary prudence exercised in the common transactions of life; and it turned out that, in fact, this person had not underwritten the policy, or had done so under such terms that he became under no obligation to pay; this would vitiate the policy. The Courts in this country would say that this was a fraud, not on the ground that the misrepresentation affected the risk, but because it induced a confidence, without which the party would not have acted."

Secondly, the next instance in which fraud will vacate the

(a) 2 Dow. 263.

A representato the truth) tion (contrary that the insur

ance sought to be effected, had been done by other under

writers at the same premium,

will vitiate the policy effected by means of such misrepresentation.

assured has

stated something to be

2. Where the policy, is "where the assured or his agent, states something to be true which he does not know to be true; and at the same time omitting to give such information to the other does not know contracting party, as would enable him to judge equally with himself as to the risk which he proposes for him to take.

true, which he

to be true, and,

at the same time, suppressing material circumstances.

Lord Abinger, in the case of Cornfoot v. Fowke (a), says "in the case of Hodgson v. Richardson (b), Yates, J., lays it down as a general proposition that, the concealment of material circumstances vitiates all contracts upon the principle of natural law.'" If this be true, can it be doubted the false representation of a material circumstance also vitiates a contract? These principles are familiar to every person conversant with the law of insurance. But a policy of insurance is a contract, and is to be governed by the same principles govern other contracts. When it is said to be a contract "uberimæ fidei," this only means that the good faith, which is the basis of all contracts, is more especially required in that species of contract, in which one of the parties is necessarily less acquainted with the details of the subject of the contract than the other. Now, nothing is more certain than that the concealment, or misrepresentation, whether by principal or by agent, by design or by mistake, of a material fact, however innocently made, avoids the contract on the ground of a legal fraud." And a little further in his judgment, he says that "in the case of Pawson v. Watson (c), Lord Mansfield lays it down generally, "that in a representation to induce a party to make a contract, it is equally false for a man to affirm that of which he knows nothing, as it is to affirm that to be true which he knows to be false." This maxim is neither negatived nor qualified by the doctrine laid down in that class of cases derived from Pasley v. Freeman (d). The plaintiffs in those cases sought to charge a party with damages for stating that which he believed to be

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true, though he did not know it to be so." His Lordship then alluding to the case before him, continued :-" whether his concealment was consistent with good faith and free from moral turpitude, may be determined by a reference to the case put by Cicero, in the third book of his Treatise de Officiis, which I the rather mention, because the sale of the house he puts, hypothetically, by way of example, was liable to an objection that bears some analogy to the present (a).

"Vendat ædes vir bonus propter aliqua vitia quæ ipse norit cæteri ignorent: pestilentes sint, et habeantur salubres; ignoretur in omnibus cubiculis apparere serpentes; male materiatæ, ruinosæ sed hoc præter dominum nemo sciat: quæro, si hoc emptoribus venditor non dixerit, ædesque vendiderit pluris multo, quam se venditurum putarit, num id injustè an improbe fecerit?" He then gives the argument on both sides, and concludes that the vendor ought not to have concealed these defects in the house from the buyer. "Neque enim id est celare, quicquid reticeas: sed cum, quod tu scias, id ignorare emolumenti tui causâ, velis eos, quorum intersit id scire." Then this illustrious moralist gives his own opinion of the moral turpitude of such a concealment; for he says.-" Hoc autem celandi genus quale sit, et cujus hominis, quis non @ videt? Certe non aperti, non simplicis, non ingenui, non justi, non boni viri; versuti potius obscuri, astuti, fallacis, malitiosi, callidi, veteratoris, vafri." Now the present is a case in which the fraudulent concealment of a material fact by the principal, and the false representation of the agent, combine to constitute a degree of fraud, even morally speaking, to sustain the defendant's plea, that he was induced by fraud, covin, and false representation to sign the contract."

Let us now proceed to refer to the reported cases on this head.

Where in the case of Da Costa v. Scandret (b), one having a doubtful account of his ship, that was at sea, namely, that

(a) In Cornfoot v. Fowke," the adjoining house to the one the subject of action was a notorious

P P

brothel."

(b) In Chancery, 2 P. Wms. 170.

Where the assured having

heard a report

that a ship described like

his was taken,

went and insured her without

a ship, described like his, was taken, insured her, without giving any notice to the insurers of what he had heard either as to the hazard, or the circumstances, which might induce him to believe that his ship was in great danger, if not actually circumstance of lost. The insurers bring a bill for an injunction, and to be relieved against the insurance as fraudulent.

mentioning the

the rumour to the underwriter. Policy held to be void.

Lord Chancellor Macclesfield.-"The insured has not dealt fairly with the insurers in this case; he ought to have disclosed to them what intelligence he had of the ship's being in danger, and which might induce him, at least, to fear that it was lost, though he had no certain account of it. For if this circumstance had been discovered, it is impossible to think, that the insurers would have insured the ship at so small a premium as they have done; but either would not have insured at all, or would have insisted on a larger premium, so that the concealment of this intelligence is a fraud." Whereupon the policy was decreed to be delivered up with costs, but the premium to be paid back, and allowed out of the costs.

In another case of Seaman v. Fonnereau (a), it appeared, that on the 25th of August, 1740, the defendant underwrote a policy from Carolina to Holland. It came out in evidence, that the agent for the plaintiff had, on the 23rd of August, (two days before the insurance was made), received a letter from Cowes, dated the 21st of August, wherein it is said:"On the 12th of this month, I was in company with the ship Davy (the ship in question); at twelve at night lost sight of her all at once; the captain spoke to me the day before that he was leaky, and the next day we had a hard gale." The ship, however, continued her voyage till the 19th of August, when she was taken by the Spaniards; and there was no pretence of any knowledge of the actual loss at the time of the insurance, but it was made in consequence of a letter received that day from the plaintiff abroad, dated the 27th June before.

(a) 2 Stra, 1183.

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