that a ship sailed on the 24th of November, after which an insurance was made, and the agent of the assured told the insurer, that the ship sailed the latter end of December; this was holden, by Lee, C. J. to be a fraud. So where a ship was insured in London, on the 30th of January, on a voyage from New York to Philadelphia, and the broker represented the ship to be safe in the Delaware, on the 11th of December, whereas in fact it was lost in that river on the 9th of December; it was holden, that as the representation was false in point of fact, and as it related to a material circumstance, namely, the safety of a ship at a certain time, the contract was annulled; and although it appeared that the assured, at the time, believed the representation to be true, yet the court were of opinion that this did not vary the case; for it was incumbent on the assured to make a fair and true representation, and if he represented material facts to the underwriter, without knowing the truth, he took the risk on himself (39). b Macdowall v. Fraser, Doug. 260. See also Stewart v. Dunlop, 4 Bro. (39) It was said by Lord Mansfield, in Barber v. Fletcher, Doug. 306, that it had been determined in a variety of cases, * that a representation to the first underwriter extended to the others. "By an extension of an equitable relief, in cases of fraud, if a man is a knave with respect to the first underwriter, and makes a false representation to him in a point that is material, as where, having notice of a ship being lost, he says she was safe, that shall affect the policy with regard to all the subsequent underwriters who are presumed to follow the first." Per Lord Mansfield, C. J. in Pawson v. Watson, Cowp. 789. Agreeably to this doctrine, the Court of King's Bench, in the case of Marsden v. Reid, 3 East, 573, intimated an opinion, that where it appears that a material fact has been represented to the first underwriter, to induce him to subscribe the policy, it shall be taken to be made to all the rest without the necessity of repeating it to each. † A representation made by an insurance broker, when the names of the underwriters are put upon a slip, is binding on the assured, unless there is evidence of its being altered or withdrawn between that time and the execution of the policy. Edwards v. Footner, 1 Campb. 530. The authority of the broker is revocable even after the underwriters have signed the slip, and until they have actually subscribed the policy. Warwick v. Slade, 3 Campb. 127. * Q. If there be any in the printed books? + But a representation made to any underwriter, except the first, is not to be considered as made to subsequent underwriters. Bell v. Carstairs, 2 Campb. 543. The same rule holds, where the misrepresentation is made by the proper agent of the assured, although the assured be not guilty of any improper conduct; for the act of the agent binds the principal, and it will be presumed, that the principal knows whatever the agent knows. In a case where the word expected was used, as that the vessel insured was expected to set sail at such a time, this was holden not to amount to a representationd. A representation by the owner of goods insured as to the time of the ship's sailing is matter of expectation, and if made bona fide does not conclude him. In effecting a policy of insurance from Russia to this country while the ship was on the outward voyage, the broker represented to the underwriters that a cargo was ready for her, and she was sure to be an early ship. It was holden1, that this amounted only to a representation of what was expected on the part of the assured, and that the underwriters were liable, although from the delay in beginning to load the cargo, the voyage home was turned from a summer to a winter risk. A representation, as it does not form any part of the written policy, requires only to be substantially performed. It is distinguishable in this respect from a warranty, which being part of the policy, must be strictly performed. Insuring a ship by an English name does not amount to a warranty, or a representation, that she is an English ships. A merchant having received intelligence that a ship described like his was taken, insured her, without giving any information to the insurers of what he had heard; it was holden, that the concealment was a fraud on the underwriters. So where in an action on a policy of assurance of a ship on a voyage Lisbon to London', it appeared that the plaintiff had, on the 24th of November, received information of the ship having sailed on the 8th; it appeared also, that another vessel, which had sailed at the same time with the ship insured, had arrived in safety; after which, viz. on the 2nd of December the plaintiff had effected the insurance in question, without making any disclosure to the underwriter; it was holden, that there was a concealment of circumstances sufficient to avoid the policy. But where a broker, in pursuance of instructions previously received from Sunderland, effected a policy at Lloyd's at a time when a letter lay on his table at the coal-exchange unopened, announcing the ship's loss: it c Fitzherbert v. Mather, 1 T. R. 12. from h De Costa v. Scandret, 2 P. Wms. 170. i M'Andrew v. Bell, 1 Esp. N. P. C. 373. was holdenk, that the conduct of the broker did not avoid the policy; for he had a right to presume that he had possession of all the information on which he was to effect the policy (40). Where the plaintiffs effected a policy of assurance on wines from Oporto to London, on the 12th of November, at which time they were in possession of two letters from their correspondents at Oporto; the first of which, dated 11th of October, stated thus; "We are loading the wines on the Stag, Captain Wheatley, who pretends to sail after to-morrow;" the other dated the 13th of October, enclosed the bills of lading, which were filled up "with convoy;" which letter the plaintiffs did not communicate to the underwriters; it was holden', that it was a material concealment. "The reason of the rule which obliges the party to disclosem, is to prevent fraud, and encourage good faith: it is adapted to such facts as vary the nature of the contract, which one privately knows, and the other is ignorant of, and has no reason to suspect." The question, therefore, in cases of this kind is, "Whether there were, under all the circumstances, at the time the policy was underwritten, a fair statement or a concealment, fraudulent, if designed, or, though not designed, varying materially the object of the policy, and changing the risk understood to be run?" Information respecting the subject matter of warranty, either expressed or implied, need not be communicated to the underwriter, unless there be a specific request on his part for such information. Hence in the case of Shoolbred v. k Wake v. Atty, 4 Taunt. 493. 1 Bridges and others v. Hunter, 1 M. and S. 15. m Per Ld. Mansfield, C. J. in Carter v. Boehm, 3 Burr. 1905. cited by Lord Ellenborough, C. J. delivering judgment in Haywood v. Rogers, 4 East, 596. (40) The nature of this work will not permit the insertion of all the cases relating to concealment; neither is it necessary, since the reader will perceive that they are cases depending wholly on their own special circumstances. If he is desirous of pursuing the subject, he may peruse the following cases: Seaman v. Fonereau, Str. 1183. Carter v. Boehm, 3 Burr. 1905. 1 Bl. R. 594. Shirley v. Wilkinson, 3 Doug. 41. Court v. Martineau, 3 Doug. 161. Webster v. Foster, 1 Esp. N. P. C. 407. Willes v. Glover, 1 Bos. and Pul. N. R. 14. Littledale v. Dixon, 1 Bos. and Pul. N. R. 151. Freeland v. Glover, 7 East, 457. Lynch v. Hamilton, 3 Taunt. 37. Bell v. Bell, 2 Campb. 479. Kirby v. Smith, 1 B. and A. 672. Weir v. Aberdein, 2 B. and A. 320. Bufe v. Turner, 6 Taunt. 338. 2 Marsh. Rep. 46. S. C. Rickards v. Murdock, 10 B. and C. 527. Elton v. Larkins, 8 Bingh. 198, 1 M. and Sc. 323. Nutt, Park, 346, where the owner had received letters from his captain the day before he effected the insurance, stating, that the ship had arrived at Madeira, but was very leaky, and that the pipes of wine had been half covered with water, which letters were not communicated to the underwriters; Lord Mansfield told the jury, "That there should be a representation of every thing relating to the risk which the underwriter has to run, except it be covered by a warranty. It is a condition, or implied warranty, in every policy, that the ship is seaworthy, and therefore there need be no representation of that. If she sail without being so, there is no valid policy. Here the leak was stopped before she sailed from Madeira, and she sailed in good condition from thence, and there is no occasion to state the condition of a ship or cargo at the end of the former voyage." Verdict for plaintiff. So where in an action on a policy of insurance upon a ship from Trinidad to London, it appeared that the assured had received a letter from his captain, informing him that he had been obliged to have a survey on the ship at Trinidad, on account of her bad character, but the survey, which accompanied the letter, gave the ship a good character: it was holden, that the concealment of the letter and survey from the underwriter, did not vacate the policy, inasmuch as the assured impliedly warranted the ship to be seaworthy, and it did not appear that he had concealed any circumstance relative to the seaworthiness of the ship, or that at the time of effecting the policy he knew of any fact which rendered her, with reference to the risk, otherwise than seaworthy. It will be presumed that the underwriter is acquainted with the usage and circumstances of the branch of trade to which the policy relates", and consequently the assured is not bound to make a disclosure thereof; e. g. upon an insurance on an East India voyage, the underwriters are bound to know the course of the East India Company's charter-parties and trade, and that the ship's destination is liable to be changed after the policy is effected. If the usage of the trade is general, it is immaterial for this purpose that it is not uniformP. m Haywood v. Rogers, 4 East, 590. Kingston v. Knibbs, ib. 508. n. o Grant v. Paxton, 1 Taunt. 463. Another ground of defence which may be taken by the underwriter to defeat the action, is the noncompliance with a warranty, either express or implied. Every warranty incorporated in the body of the policy, or appearing on the face of the instrument, e. g. in the margin, or at the bottom of the policy, or inserted in any print or writing, which is by reference incorporated with the policys, must be strictly and literally complied with (41): and in this respect it is distinguishable from a mere representation, which, if it be substantially fulfilled, it is sufficient. The most usual kinds of warranties inserted in policies, are, 1. As to the time of sailing. 2. The safety of the ship at a particular time. 3. Departing with convoy. 4. That the thing insured is neutral property. I shall proceed to consider the nature of these warranties in the preceding order. Express Warranty, 1. Time of sailing.-This means, that the ship shall be on her voyage on the given day; for which purpose she must be completely unmoored; it will not suffice that she then had cargo and passengers on board, and was only prevented from sailing by stress of weathert. But if a q Bean v. Stupart, Doug. 11. De Hahn v. Hartley, 1 T. R. 343. r 3 T. R. 360. 8 Worsley v. Wood, 6 T. R. 710. Routledge v. Burrell, 1 H. Bl. 254. t Nelson v. Salvador, M. & Malk.309. (41) "A warranty in a policy of insurance is a condition or a contingency, and unless that be performed, there is not any contract. It is perfectly immaterial for what purpose a warranty is introduced; but being inserted, the contract does not exist, unless it be literally complied with." Per Lord Mansfield, C. J. 1 T. R. 345, 6. The very meaning of a warranty is to preclude all questions, whether it has been substantially complied with; it must be literally so.” Ashhurst, J. 1 T. R. 346. Per |
