See also was necessary; and that the case was the same as if the property had remained in specie at Antigua, and had not been sold (a). That the assured is not bound to abandon in any case; and might, in case the sales had been very advantageous, have taken the benefit of them in the same manner as they might have retained this property, if it had remained in specie. But the assured must make his election speedily, whether he will abandon or not, and put the underwriter into a situation to do all that is necessary for the preservation of the Company, property, whether sold or unsold. He cannot lie by and treat 7 East, 38, the loss as an average loss, and take measures for the recovery of it, without communicating that fact to the underwriters, and letting them know that the property is abandoned to them." Anderson v. Exch.Assur. and Barker v. 9 East, 283. Acc.ante, See also Parmeter v. Todhunter Verdict for plaintiff, subject to an account as for an average Sittings af loss. The making the election to abandon speedily, or in the first instance, means the earliest opportunity after they have examined into the state of the cargo; but they are not to lie by, in order to govern their determination by the rise or fall of the market. Nor can the assured, when they have not abandoned in the first instance, afterwards do so, when they find in the result that the salvage and expences exceed the value of the ship. But if the insured, hearing that his ship is much disabled and has put into port to repair, express his desire to the underwriters to abandon, and be dissuaded from it by them, and they order the repairs to be made; they are liable to the owner for all the subsequent damage occasioned by that refusal, though it should amount to the whole sum insured. Because the reason why notice of abandonment is deemed necessary, is to prevent surprize or fraud upon the underwriter: but in the case put, they have, by their own act, superseded the necessity of notice. (a) In the case of Hodgson and another v. Blackiston, Sittings after HiJary Term, 38 G. 3. in the King's Bench, it was held, that a notice of abandonment was necessary, though the ship and cargo had been sold and converted into money when the notice of the loss was received. ter Mich. 1808. We We have thus taken a view, in this and the eight preceding chapters, of the nature of that instrument by which the contract of insurance is effected; and of the different modes, by which it may be construed; we have treated of the various losses, to which the underwriter subjects himself by that contract; we have shewn, when the losses are to be considered as partial, when as total; and in what cases, and under what circumstances the insured shall be allowed to abandon to the underwriter. The course of our inquiry now naturally leads us to observe, in what instances the insurer is discharged from any responsibility; either on account of the contract being void, from its commencement, by reason of some radical defect; or because the insured has failed to perform some of those conditions, necessary to be fulfilled on his part, before he can call upon the insurer for an indemnity. CHAPTER X. Of Fraud in Policies. N treating of those causes, which make policies void from IN the beginning, or in other words, which absolutely annul the contract, it will be proper in the first place to consider, how far it will be affected by any degree of fraud. In every contract between man and man, openness and sincerity are indispensably necessary to give it its due operation; because, fraud and cunning once introduced, suspicion soon follows, and all confidence and good faith are at an end. No contract can be good, unless it be equal; that is, neither side must have an advantage by any means, of which the other is not`aware. This being admitted of contracts in general, it holds with double force in those of insurance; because the underwriter com- 1 Blac.Com. putes his risk entirely from the account given by the person insured, and therefore it is absolutely necessary to the justice and validity of the contract, that this account be exact and complete. Accordingly the learned Judges of our courts of law, feeling that the very essence of insurance consists in a rigid attention to the purest good faith and the strictest integrity, have constantly held that it is vacated and annulled by any the least shadow of fraud or undue concealment. After what has been said, it will hardly be necessary to mention, that both parties, the insurer and insured, are equally bound to disclose circumstances that are within their knowledge; and therefore if the insurer, at the time he underwrites, can be proved to have known that the ship was safe arrived, the contract will be equally void, as if the insured had concealed from him some accident, which had befallen the ship. 460. Grot. de jure belli, lib. 2. c. 12. s. 23. Puf fendorf de jure nat. 1. 5. c. 9. s. 8. shoek. quest. Ord.de Lew. In perusing the numerous cases and decisions, which, I am sorry to say, are to be found in our books under this head, it occurred to me, that they were liable to a threefold division: 1st, The allegation of any circumstances, as facts, to the underwriter, which the person insured knows to be false: 2dly, The suppression of any circumstances, which the insured knows to exist; and which, if known to the underwriter, might prevent him from undertaking the risk at all, or if he did, might entitle him to demand a larger premium; and, lastly, a misre presentation. The last of these, a misrepresentation, seems to Doug. 247. fall under the first head, the allegatio falsi and so in some measure it does; because wherever a person knowingly and wilfully misrepresents any thing, he asserts a falsehood. But it was thought necessary to make a division for itself; because if a material fact be misrepresented, though by a mistake, the contract is void, as much as if there had been actual fraud: for the underwriter has computed his risk upon information, which was false. Of each of these in order. (a) Nothing can be so clear a proof of fraud, as the assertion of the truth of some circumstance, which the person asserting it must know to be false. In our reporters, we do not meet with so many cases under this division of the subject, as under the two following: and indeed, from the nature of the thing, it is impossible we should; because in such a case, the only question is, did the insured assert this to be the truth. If he did, the inquiry is at an end; because we are now presuming it to be the assertion of a circumstance within his own knowledge. This being a mere question of fact, is not a subject for a reporter. But in the other cases, there is greater room for investigation; we may properly inquire, for instance, whether the insured was bound to disclose this fact; whether the misrepresentation was in a material part; and many other similar questions of which we shall see the necessity hereafter. The few following cases will evidently shew, that our idea (a) A distinction has lately occurred, where the person, representing the time of the ship's sailing, was an owner of goods only, and did it upon a bona fide expectation; the Court held this did not conclude him, for he could have no control over the event.-Bowden v. Vaughan, 10 East, 416, was was right, when we supposed, that under the head of the allegatio falsi, the only inquiry would be, whether the person insured, knowing the contrary, asserted a particular thing to be true. In a case before Lord Chief Justice Holt, in the reign of Skinner, William and Mary, that learned Judge held, that if the goods 327. were insured as the goods of an Hamburgher, who was an ally, and the goods were, in fact, the goods of a Frenchman, who was an enemy; it was a fraud, and that the insurance was not good. In another case, a letter being received, stating, that a ship Roberts v. sailed from Jamaica for London, on the 24th of November, Fonnereau, Sittings at after which an insurance was made, and the agent told the Guildhall insurer, that the ship sailed the latter end of December; this after Trin. was also held by Lord Chief Justice Lee to be a fraud, and the defendant had a verdict upon this point, there being an- MSS. penes other in the cause not material to be mentioned here. 1742. me. Upon a special case reserved for the opinion of the Court, Woolmer v. the following circumstances appeared: It was an action on the case, brought for the recovery of a total loss, on a policy of insurance made on goods and merchandizes on board the ship Bona Fortuna, at and from North Bergen to any ports or places whatsoever, until her safe arrival in London. It was underwritten thus: "War"ranted neutral ship and property." The defendant underwrote the policy for 150l. The defendant pleaded the general issue, and paid into Court the premium received by 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 merchandizes so loaden, 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 merchandizes were thereby wholly lost. It was expressly stated, "that the ship or ves ❝sel, Muilman, 3 Burr. 1419. 1 Black.427. |