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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.1 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).2 The mutuality of the obligation to disclose was most weightily laid down by Lord Mansfield in Carter v. Boehm, 1776.3 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 concealment. 1 The parties to the insurance must be ad idem. Mathew, J. in Laing v. Union Marine, 11 Times L. R. 359. 2 L.R. 8 Ex. 40.

3

3 Burr. 1905.

There is an interesting pair of cases arising out of one risk respecting concealment as it affects insurances done through brokers, Blackburn v. Vigors, 1887,1 and Blackburn v. Haslam, 1888.2 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 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),3 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.)

1 L.R. 12 App. Cas. 531.

3 21 Q. B. D. 144.

2

21 Q.B.D. 144.

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.

In the Digest of Justinian, Book xiv. Tit. 2, headed “On the Rhodian Law respecting Jettison," issued about A.D. 530, the words of Paulus are found put thus (f. 1) :—

By the Rhodian law it is provided that when a jettison of goods takes place for the purpose of lightening a ship, that which has been jettisoned on behalf of all is restored by the contribution of all.

In the same title at f. 9 an extract is given from Volucius Maecianus, who flourished about A.D. 150:—

The petition of Eudaimon of Nicomedia to the Emperor Antonine: Lord Emperor Antonine, having made shipwreck in Italy, we were pillaged by the customs-farmers inhabiting the Cyclades Islands.. Antonine replied to Eudaimon, "I indeed am lord of the world, but the law [is lord] of the sea. Let this be settled by the Rhodian law (which has been devised for nautical matters) in so far as it is not opposed to our laws. Such also was the judgment of the late [Emperor] Augustus."

Earlier references in Roman literature acquaint us with the commercial fame of the Rhodians, and a compilation of sea laws exists which was known as the Maritime Law of the Rhodians. The best authorities consider that this compilation is not genuine in the sense of being the Rhodian law which is referred to in the Digest.1 It is striking that the first extract from the Digest given above is word for word what appears in Paulus prefixed by the reference to Rhodian law. It would almost appear as if Paulus had taken his wording from an actual Rhodian statute, the existence of which was known to the compilers of the Digest. Certainly the first paragraph of Paulus is of entirely different grammatical construction from the following four. Had the writer desired to convey that all five paragraphs came from the Rhodian law he could easily have done so. Besides, the phraseology of the Digest seems to indicate that (1) Paulus took his wording from what the compilers of the Digest believed or knew to be some Rhodian statute, and that (2) the Rhodians had a statutory or a customary law dealing with maritime affairs of all kinds. Otherwise there would be no point in giving the title its very definite

1 See Robert D. Benedict, What do we know of the Rhodian Maritime Law? (Brooklyn Institute Lecture, 25th Feb. 1897).

heading, and in relating the petition of Eudaimon which had nothing to do with jettison.

It is, of course, quite possible that the name Rhodian Law was also applied to what was not so much the statutory law of Rhodes as the customary law of the Levant. In any case, the provision regarding jettison quoted above has been cited as "the Rhodian Law from the days of the Digest until the date of decisions given in the English courts within the last decade.1 The practice sanctioned in the Digest with regard to losses by jettison has been extended to other losses. Even in Roman law it was applied to many sacrifices of somewhat similar nature, and it has later been developed into a principle according to which all extraordinary sacrifices and expenditures made or incurred voluntarily in order to avert from the whole venture some threatening peril, are divided pro rata over the whole of the items composing the venture. It is this involution of the whole venture in the payment for the loss or damage that is indicated by the word general, or common, or gross, in the phrase general average, common average, or gross average (avarie grosse, grosse havarei), which is the name used in modern commerce to denote loss arising from voluntary jettison and other similar casualties.

General Average not primarily an Insurance Liability. -It is clear, from the preceding, that the thing called general average is not in any way dependent on insurance for its existence: there is a liability of cargo-owner and shipowner to one another for general average quite independent of any contract of either with third parties, such as the contract of insurance is. In other words, general average properly and originally forms part of the obligations that arise out of the contract of affreightment,2 and is only secondarily connected with insurance. The late Mr.

1 E.g. Brett, L. J., in Burton v. English, 1883; Watson, L., in Strang v. Scott, 1882; Blackburn, L., in Aitchison v. Lohre, 1879.

2 But in Pirie v. Middle Dock Company, 1881, 4 Asp. 390, Watkin Williams, J., said: "This right and its correlative obligation are not founded upon any contract, nor do they arise out of any relation created by contract between the parties: they spring from a rule of

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