In some instances the rate of premium may help to determine the question of misrepresentation. If, for instance, the case is one of extraordinary risk, the nature of which must have been known to the insured, and only an ordinary premium is paid, this fact may be used with others to lead to the inference that the contract was made under an ignorance on the part of the insurer for which the insured is responsible.1

As insurance, like most other contracts, may be made through an agent, it is of importance to ascertain what effect the misrepresentation or concealment of an agent has upon the policy. If this were with the knowledge and by the instruction of the principal, it need not be said that it must have precisely the same effect as if made by the principal himself. The law, however, seems to go further than this; for the misrepresentation or concealment of an agent, without the authority, assent, or even knowledge of his principal, will, nevertheless, discharge the underwriters. Some one must suffer for this wrong doing; and it should be the party who employs the wrongdoer, rather than

the master wrote a letter to the insured, without alluding to the injury, and the insurance was effected after that letter had been received. It was held, that the insured could not recover for the injury. The same principle seems to have been adopted in Fitzherbert v. Mather, 1 T. R. 12.

But a similar question arose in Ruggles v. Gen. Int. Ins. Co., 4 Mason, 74. The insurance was effected Feb. 9th, on the sloop Harriet "lost or not lost," beginning on the 12th of January preceding. On the 19th of January the vessel was totally lost, and the master had neglected to give notice of the loss to the owner, for the avowed purpose of allowing him time to effect an insurance. It was held, that the insurers were liable. Story, J., sustained the English cases cited above, on the ground that in both there was an actual misrepresentation by the party procuring the insurance. The case was carried to the Supreme Court and is reported, 12 Wheat. 408. The opinion of the court, by Thompson, J., sustains the decision below, on the ground that the concealment must be by an agent employed to procure insurance, in order to defeat a policy, and that, after a total loss, the master was the agent of the underwriter rather than of the insured. But this decision is questioned by Mr. Duer (2 Duer on Ins. 415, et seq., and note XI. to chap. XIV.), and by Mr. Phillips (1 Phillips, Ins. § 549).

1 Westbury v. Aberdein, 2 M. & W. 267; Bridges v. Hunter, 1 M. & S. 15, 18; Clason v. Smith, 3 Wash. C. C. 156; Burr v. Foster, 2 Dane, Abr. 122. In Nicoll v. American Ins. Co., 3 Woodb. & M. 529, 535, Woodbury, J., said: "Perhaps the best test as to the materiality of the variance is, that it increases the risk so as to require a larger premium. The rule that it must be material, and the test of its being material, that it increases the risk is such that when the shade of difference in the risk is so slight as not to require an increased premium, perhaps it will be safe to say this is proof that the difference is not material."

the equally innocent party who had nothing to do with his appointment.1

Still, if the insured communicate to the insurers, in good faith, information acquired only from newspapers or other sources having no particular connection with the insured, and the information proves erroneous, the policy is, nevertheless, valid, even if made on the credit of that information. Because here is no misrepresentation; the insured does not state facts as being so, but only that he is so informed, which is true; and the insurers can estimate the value or credibility of the information for themselves; and the insured is not responsible for the truth or good sense of persons equally independent of him, as of the insurers.2

An agent to obtain insurance, who has made a proposal for that purpose, and afterwards receives material information enhancing the risk, is as much bound to disclose it or withdraw his offer as the owner himself would be; and if he fails to do so, the policy is not binding.3

Some question exists how far facts known to any officer of a company, are to be considered as known or disclosed to all. It is obvious, however, that this must depend on the kind and degree of authority or agency with which the agent is clothed, either by his office, by usage, or by the direct act of the company. It has been held, that facts known to a director, were not, therefore, known to the company; but we should

1 Sawyer v. Coasters' Mutual Ins. Co., 6 Gray, 221; Stewart v. Dunlop, 4 Brown, 483, note; Fitzherbert v. Mather, 1 T. R. 12. In Carpenter v. Am. Ins. Co., 1 Story, 57, 63, Mr. Justice Story said: "The misrepresentation made by an agent in procuring a policy, is equally fatal, whether made with the knowledge or consent of the principal or not. The ground in each case is the same. The underwriters are deceived. They execute the policy upon the faith of statements, material to the risk, which turn out to be untrue. The mistake is, therefore, fatal to the policy, as it goes to the very essence of the contract."

2 Tidmarsh v. Washington F. & M. Ins. Co., 4 Mason, 439, 443, per Story, J. "Where a letter contains a representation of facts not known to the party, but from the information of others, and so the letter states the facts, or it is a necessary inference from the nature of them, there the representation is not falsified by the mere proof, that the facts are not so, if the party communicating the facts did receive such information, and bonâ fide confided in it. He undertakes there, not for the truth of the facts, but for the truth of his information."

8 Fitzherbert v. Mather, 1 T. R. 12.

think that the decisions might often, if not generally, be the other way.1

SECTION III.

WHAT THINGS SHOULD BE COMMUNICATED.

It may be useful to state the principal things which it has been held necessary, and what unnecessary, to communicate. In the first place, the assured is bound to communicate not only ascertained facts, but all intelligence and even all rumors, not manifestly frivolous; if they are of a character to enter into the estimate of the risk. And a concealment of these things will avoid the policy, although the intelligence or rumors were of a doubtful character at the time, and have since been found to be wholly false. But the assured is bound to disclose only facts,

1 Himely v. South Car. Ins. Co., 3 Const. Rep. 154. It does not appear distinctly in the report of this case whether the facts came to the knowledge of the director at the time when he was a director or before. The company had been recently formed, and it is expressly stated that it did not exist at the time the intelligence was published in the newspapers. We may, therefore, infer that the facts were not known to the director in his official capacity.

In Lynch v. Hamilton, 3 Taunt. 37, 44, Mansfield, C. J., said: "No doubt, upon established principles, a person insuring is bound to communicate every intelligence he has that may affect the mind of the underwriter in either of these two ways; first, as to the point whether he will insure at all; and, secondly, as to the point at what premium he will insure." Thus, in Walden v. La. Ins. Co., 12 La. 134, the insured was induced, by a rumor of an attempt to set fire to an adjacent ropewalk, to have his own house insured, and withheld this circumstance from the underwriters. The ropewalk was so near his house that if one had caught fire the other would probably have been destroyed. Held, that this was a concealment of a fact material to the risk. So a rumor of cruisers being on the coast should be communicated. Durrell v. Bederley, Holt, N. P. 283; Beckwaite v. Nalgrove, Holt, N. P. 288, n., cited 3 Taunt. 41. In Seaman v. Fonereau, 2 Stra. 1183, the insured had received a report that the vessel had been seen in the night leaky, and had disappeared the next day. The concealment of this fact was held to avoid the policy, although the report proved to be false, and the ship was afterwards lost by capture. In Burr v. Foster, 2 Dane, Abr. 122, insurance was effected in Boston on horses, from New London to Barbadoes in the brig Aurora of Hartford. Three months after the vessel sailed, a captain of a vessel arrived at New York and reported that he saw the brig Deborah of Hartford a wreck in lat. 24 N. In consequence of this report the underwriters in New York refused to take the risk, and insurance was then obtained in Boston, the underwriters there not knowing of these facts. The captain described the wreck as the Deborah, a half-rigged brigan

or intelligence, and not a mere opinion, or hope or fear of his own, which does not rest upon some definite fact or ground.1

tine, one hundred and fifty tons, no head, cabin not painted. The Aurora was a full rigged brigantine, one hundred and eight tons, figure-head, and cabin painted. No evidence was produced that there ever had been a vessel in Hartford called The Deborah. Held, that the underwriters should have been informed of the report. See De Costa v. Scandret, 2 P. Wms. 170; Lynch v. Hamilton, 3 Taunt. 37; Lynch v. Dunsford, 14 East, 494; Hoyt v. Gilman, 8 Mass. 336.

But if a fact be such that it cannot affect the risk, but only the underwriters' estimate of it, as in the case of Sibbald v. Hill, ante, p. 155, n. 4, although a false representation with regard to it would defeat the policy, it seems that a concealment of it would not. Lexington Ins. Co. v. Paver, 16 Ohio, 324. In Haywood v. Rodgers, 4 East, 590, the ship had been surveyed at Trinidad on account of her bad character. The survey gave her a good character. As there was a warranty of sea-worthiness, it was held, that whatever formed an ingredient of that need not be disclosed, although it might have enhanced the premium.

In Ruggles v. Gen. Int. Ins. Co., 4 Mason, 74, 83, the insured's offers of higher premiums had been refused. Story, J., said: "But he was not bound to communicate his other offers, or his fears or hopes, but only to communicate any facts which justified them; and the material fact, as to time, was stated. Underwriters must judge for themselves as to matters of opinion." See Shoolbred v. Nutt, Park, Ins. 300; Carter v. Boehm, 3 Burr. 1905; Rickards v. Murdock, 10 B. & C. 527; Beckwith v. Sydebotham, 1 Camp. 116, 2 Duer on Ins. 388, et seq., where this question is considered with great ability.

1 In Bell v. Bell, 2 Camp. 475, the insured had received information, by letter, that all vessels arriving at Riga were ordered to send their letters to St. Petersburgh, and that this order "had produced a great sensation on account of the detention which it would occasion of the vessels; and that the Rising Sun (the vessel insured) must share the same fate." The letter was not shown to the underwriter, but the act was communicated that the ship's papers had been sent to St. Petersburgh for examination. Lord Ellenborough said: "The assured are only bound to communicate facts. The broker was not bound to communicate the sensations and apprehensions which that fact produced at Riga." But in many cases expectations or belief must be communicated, if they would lead to inquiry or to an inference of fact so as to affect the underwriters' estimate of the risk. In Willes v. Glover, 4 B. & P. 14, the shippers wrote the consignees, "I think the captain will sail to-morrow; but should he not be arrived in your port, you will be so kind as to make the insurance as low as you possibly can, for my account." The captain did not sail until more than twenty days after the letter was written; but the omission to communicate this letter was held fatal to the policy. See also, Marshall v. Union Ins. Co., 2 Wash. C. C. 357; Ely v. Hallett, 2 Caines, 57. In Marsh v. Muir, 1 Brev. 133, it was held, that the insured is not bound to anticipate a capture and condemnation in violation of the law of nations, and is under no obligation to communicate facts and circumstances from which such capture and condemnation might be apprehended, unless they are such as to create so general impression of danger as must enhance the premium of insurance. But a knowledge of facts and circumstances of the latter description is not to be presumed against the insured; and, although he may be aware that certain circumstances may become grounds of condemnation in violation of the law of nations, there is no implied warranty that they do not exist in relation to the property insured.

If the policy be retrospective, the assured is of course bound to disclose any loss which may have occurred within the period of the risk; and he must also disclose any facts which may have occurred within that period, that would affect the risk, although he does not know how they have affected the vessel. Thus, one insuring his ship for the whole voyage, "lost or not lost," by a policy dated three months after she sailed, is bound to communicate any knowledge or intelligence he has of a storm, occurring in any part of these three months in any place in which the ship may probably have been.1

For similar reasons, an insurer who obtains a policy of reinsurance, is bound to state such things as he knows relative to the character of the party originally insured, or the risk origi nally assumed, as may be material to the risk of reinsurance.2

An agent may be bound to disclose what is known to him only because he is an agent; as, if the order to him to effect insurance had been sent by express, or by any way indicating unusual urgency, it is said that he should communicate that fact, unless the dates and distances of the parties implied it; but this is carrying the obligation of disclosure very far.3

1 Moses v. Delaware Ins. Co., 1 Wash. C. C. 385; Ely v. Hallett, 2 Caines, 57; Fiske v. N. E. Mar. Ins. Co., 15 Pick. 310; Gladstone v. King, 1 M. & S. 35. In Moses v. Delaware Ins. Co. the vessel was on a voyage from Philadelphia to Charleston, and the owner had received private information that there had been a storm "more dreadful than had ever been experienced," at Charleston, near the place where the vessel might be reasonably supposed to be. He procured insurance without communicating the fact. The policy was held to be void, although the underwriters knew that there had been severe gales in that vicinity, and charged a double premium on that account. In Ely v. Hallett, the plaintiff was possessed of information that a violent storm had taken place at Norfolk eleven hours after the vessel sailed. This he did not communicate to the defendants, but stated that there had been blowing weather and severe storms on the coast after the vessel had sailed, but made no reference to the particular storm. This was held to be a material concealment, the jury having found that it increased the risk. But in Fiske v. New Eng. Mar. Ins. Co. it was held not to be a material concealment that no mention was made of a storm that took place three or four days after the vessel sailed. In Coles v. Mar. Ins. Co., 3 Wash. C. C. 158, the insurance was effected on a letter from the captain, who was a part-owner, dated the 13th of August, in which no mention was made of a storm. By the protest it appeared that on the 14th of August the vessel was injured by stormy weather which she had encountered. Mr. Justice Washington left it to the jury to decide whether the protest referred to injuries received prior to the 13th, and whether it was material intelligence. 2 New York Bowery F. Ins. Co. v. N. Y. Fire Ins. Co., 17 Wend. 359. * Pothier, Ins. n. 12; Court v. Martineau, 3 Doug. 161.