« PreviousContinue »
For such facts are presumed to be known. An expressed intention to depart from a usage it is said will authorize the departure, unless the policy expressly forbids it, which it may do directly or indirectly; but this may perhaps be doubted.1
If enough is honestly said by either party to suggest a doubt to the other party and put him on an inquiry which would have set him right, and he remains in ignorance because he neglects to make such inquiry, this ignorance is not to be imputed to the assured as his concealment.2
That intention need not be stated, which, if it be carried into effect, will avoid the insurance or give the insurers a defence; such at least seems to be the rule in respect to an intention to deviate; for if there be no deviation the intention does not discharge the insurers, and if there be one it discharges them, although unintended by the owner. It is, however, obvious that in some cases the mere intention may be such as of itself to enhance the risk; and then, on general principles, it should be disclosed.3
v. Bell, 5 B. & Ald. 238; De Longuemere v. New York Fire Ins. Co., 10 Johns. 120; Bell v. Marine Ins. Co., 8 S. & R. 98. In Stewart v. Bell, the insurance was on goods from London to Jamaica. The goods were discharged into shallops at a port near their destination, and were lost in their conveyance to that place. This was shown to be the usual mode of landing goods at that port, and the underwriters were held liable. See also, Mobile Mar. Dock & Mut. Ins. Co. v. McMillan, 27 Ala. 77. In De Longuemere v. N. Y. Fire Ins. Co., the insurance was from New York to the port of Sisal. There was no harbor at that place, and the vessel lay out several miles from the shore to receive her cargo. The trade with Sisal was recent, and the assured did not communicate the nature of the port to the underwriters. Kent, C. J., said: “The defendants took upon themselves the risk of the vessel while at Sisal with all the inconveniences of such an open and exposed shore, equally as they assured the extraordinary perils, if any, of the navigation of the Mexican sea."
1 Sec 2 Duer on Ins. p. 668, lect. xiv. § 17; 1 Phillips, Ins. ♡ 602; Middlewood v. Blakes, 7 T. R. 162.
2 See Court v. Martincau, 3 Doug. 161; Fort v. Lee, 3 Taunt. 381; Alsop v. Com. mercial Ins. Co., 1 Sumner, 451 ; Carr v. Hilton, 1 Curtis, C. C. 390 ; Freeland v. Glover, 6 Esp. 14, 3 Smith, 424, 7 East, 457.
3 In N. Y. Firem. Ins. Co. v. Lawrence, 14 Johns. 46, 59, it was agreed by the whole court that an intention to deviate did not avoid the insurance. See also, Henshaw v. Mar. Ins. Co., 2 Caines, 274; Houston v. N. E. Ins. Co., 5 Pick. 89. The other rule laid down by Kent, J., on the authority of Middlewood v. Blakes, that positive instructions given to the master to deviate or change the risk should be disclosed, does not seem to be settled.
In Middlewood v. Blakes, 7 T. R. 162, the insurance was from England to Jamaica. The captain was instructed to stop at Cape Nicholas Mole. The vessel was captared
It seems, that one requesting insurance need not disclose that he has applied to other insurers and been refused; and if he expresses his opinion as to the terms on which he believes others would insure, this, even if it be false, is said not to discharge the insurers as a material misrepresentation. But a statement, whether direct or implied, that other insurers have insured the property when they have not, or at less than the actual rate, is a misrepresentation. A past damage to goods need not generally be stated, because the insurer indemnifies only for future dam. age; but it should be otherwise if the past damage affects their present probability of preservation or decay. And a person
before her arrival at the latter place, and while on one of the three regular routes to Jamaica. But it appeared that at a certain point in the course it was usual for the captain to select one of the three routes, according to his discretion at that time. The instructions took away that discretion, and he took the route in which he was lost, for the sole purpose of touching at Nicholas Mole. It was held that the underwriters were discharged; and a majority of the court, including Lord Kenyon, C. J., placed the decision on the ground that the instructions had not been disclosed; but Lawrence, J., placed it on the ground that there had been an actual deviation. The decision has been supported upon the ground taken by Lawrence, J., in Talcot v. Mar. Ins. Co., 2 Johns. 130, and in Marine Ins. Co. v. Tucker, 3 Cranch, 357, and it was intimated that had the loss occurred before the vessel arrived at the dividing line, the insurers would have been liable, thus approving the doctrine that the concealment of instructions to deviate or change the risk in any way would not avoid a policy. And this doctrine seems to be supported on principle. If we are to look merely to the question of materiality, we should say that both an intention to deviate and instructions to deviate should be disclosed, for it is obvious that either of them might influence the mind of the underwriter as to whether he would take the risk, or as to the amount of premium. But the further question arises whether the underwriters are not understood to waive representations of this kind. There seems to be no substantial difference between the concealment of these facts and the concealment of information respecting sea-worthiness. A deviation or any change of risk will discharge the underwriters as well as unseaworthiness, and there appears to be no reason why facts which affect the estimate of the probabilities of the one should be disclosed, while they are not required in the case of the other. In this view there appears to be no difference between a concealment of a mere intention to deviate, and that of instructions to the captain to deviate, as either of them could only have the effect of increasing the probabilities of an event which would discharge the underwriters. See 2 Duer on Ins. 491 ; 1 Phillips on Ins. ý 582, and the able dissenting opinion of Chancellor Kent in N. Y. Firem. Ins. Co. v. Lawrence, supra.
1 See Ruggles v. Gen. Int. Ins. Co., 4 Mason, 74, 83, cited ante, p. 166, note, and Clason v. Smith, 3 Wash. C. C. 156, ante, p. 156, n. 4.
2 See Sibbald v. Hill, 2 Dow. P. C. 263, cited ante, p. 155, n. 4.
8 In Boyd v. Dubois, Camp. 133, a lot of hemp insured was destroyed by fire. “The defendant's counsel undertook to prove that the hemp was damaged; and for this reason it was apt to ferment, and take fire.” Lord Ellenborough said : “If the bemp was put on board in a state liable to effervesce, and it did effervesce and generate
obtaining insurance on a vessel need not generally state the nature and condition of her cargo.1
There is one general rule of some importance; it is, that there need be no representation or disclosure of any thing which is distinctly provided for by the policy, whether this is done by an express agreement or warranty, or by a warranty or stipulation which is implied by the law. But even in reference to such things as these, if the insured be interrogated by the insurers, he is bound to make true answers. So, if he volunteers information, it must be true; or not such as would or could mis
the fire which consumed it; upon the common principles of insurance law, the assured cannot recover for a loss which he himself has occasioned. But I most positively say, that they were not bound to represent to the underwriters the state of the goods. It would introduce endless confusion and perpetual controversies, if such a duty were to be imposed upon the assured.” See Gladstone v. King, 1 M. & S. 35, ante, p. 162, n. 4.
1 Chesapeake Ins. Co. v. Allegre, 2 Gill & J. 164.
2 In De Wolf v. N. Y. Firem. Ins. Co., 20 Johns. 214, the property was warranted neutral. It was contended that a contract which might have affected its neutral character should have been disclosed. Spencer, C. J., said: “If it be conceded that those circumstances did enhance the risk, the answer is decisive that a party need not communicate any thing with respect to a fact, in regard to which there is an express or implied warranty.” s. c. in error, 2 Cow. 56. So the age of the vessel, and the place where she was built, need not be disclosed. Popleston v. Kitchen, 3 Wash. C. C. 138. See also, Walden v. N. Y. Firem. Ins. Co., 12 Johns. 128; Dennis v. Ludlow, 2 Caines, 111; Haywood v. Rodgers, 4 East, 590 ; Shoolbred v. Nutt, Park, Ins. 300. So a stipulation in a charter-party that the vessel shall carry goods both on and under deck need not be disclosed to the underwriters of a general policy on the freight. Adams v. Warren Ins. Co., 22 Pick. 163.
It is said by Mr. Duer, and we think, with reason, that this rule should be confined to facts that prove, or tend to prove, the existence of the risk that the warranty is designed to exclude. 2 Duer, Ins. 573. In Murgatroyd v. Crawford, 3 Dall. 491, the vessel was warranted to be an American bottom. A contract of sale had been made with an Englishman, by which the original owner was to retain the register of the vessel and insure her, as the voyage on which it was intended to send the vessel was one, which by the laws of England subjected the vessel to forfeiture if owned by an Eng. lishman. It was agreed that after the insurance was effected, the vessel should be delivered up to the vendee, and be sent on the voyage, and that the owner should empower a passenger to transfer the vessel to the vendee at a certain time when he would have become an American citizen. Shippen, J., said: “ The plaintiff warranted the ship to be an American bottom, which of itself superseded, in our opinion, the necessity of making any communication on the subject of the property. But still, if in the opinion of the jury a knowledge of the circumstances that were suppressed, would have induced the insurer to demand a higher premium, or to refuse altogether to underwrite, it will be sufficient on commercial principles to invalidate the pol. icy.”
lead the insurers. But they would have no right to incorporate by evidence such a representation or statement into their contract, if it be distinctly inconsistent with, or if the subject matter be distinctly included within the policy; for the rules of evidence do not permit any written contract to be enlarged, diminished, or varied by parol evidence. This last remark applies only to an express warranty or agreement; for so far as a representation extends an implied warranty ceases.
OF THE CONSTRUCTION OF A REPRESENTATION, AND A COMPLIANCE
In general, every representation or statement will be construed according to the fair and obvious meaning of the words, and will include all just and rational inferences from the words; and
1 Haywood v. Rodgers, 4 East, 590.
2 In Redman v. Lowdon, 5 Taunt. 462, 3 Camp. 503, the insurance was “at and from London to Berbice,” and the words “at sea” were inserted. A deviation was set up in defence. The assured offered in evidence a letter shown to the underwriters, and other statements made to them, to show that the intention was to insure from the place where the vessel was at sea, to Berbice. Mansfield, C. J., at Nisi Prius, said: “Whatever the intention of the parties might be, I see nothing in this policy to show that it was not to attach at London. I must therefore hold that the underwriters were discharged by the deviation at Madeira.” See also, Atherton v. Brown, 14 Mass. 152, and ante, p. 50, n. 2.
Bat a subsequent written agreement changing the construction of a clause in a policy, has been admitted in evidence. Lothian v. Henderson, 3 B. & P. 499; and We have no doubt that in many of the States of this country a subsequent parol agreement would be binding. See ante, p. 36, n. 1.
3 Walden v. N. Y. Firem. Ins. Co., 12 Johns. 128, 135, per Platt, J. In Parks v. Gen. Int. Ins. Co., 5 Pick. 34, 37, Wilde, J., said: “A condition, or an implied undertaking, not expressed in the policy, may be superseded by a verbal or written statement.” See also, Emerigon, Meredith’s Ed., p. 138.
4 In Sibbald v. Hill, 2 Dow, P. C. 263, the representation was contained in letters. Lord Eldon said: “The letters must be taken in their fair and obvious construction, and that an attempt by nice criticisms, to show that they were susceptible of a different meaning, would not do.” See Livingston v. Maryland Ins. Co., 7 Cranch, 506.
indeed all facts, which, although distinct, are yet necessarily connected with it; as a statement that a ship is American, includes in its meaning that she has the proper documents to prove her so. So, too, a substantial compliance with a repre. sentation will be sufficient; and a literal compliance, which is not substantial, will not be sufficient; as where a ship, represented to sail as soon as convoy, sails before, it is no compliance with the warranty.3
The question as to construction, or compliance, has been found difficult, when the representation has one meaning where it is uttered or where it is sent, and another meaning where the insurance is effected. Thus, a ship owned in New York is insured in Boston on a proposition made in a letter from New York, which letter declares her to be “coppered;" — and this is true of her according to the New York usage and meaning of the word, but not true according to the Boston usage and meaning. Mr.
1 Steel v. Lacy, 3 Taunt. 285. In Kirby v. Smith, 1 B. & Ald. 672, there was a representation that the vessel “ was all well at Elsineur on the 26th of July.” It appeared that she sailed from that port on that day six hours before the vessel, in which the party insured sailed from the same port. Bayley, J., remarked: “It is said that communication was made that the ship was all well at Elsineur on the 26th July; but the natural conclusion from that representation would be that she was left there well at that time, which was contrary to the fact." See also, Ratcliffe v. Shoolbred, Park, Ins. 249.
2 In Chase v. Wash. Mut. Ins. Co., 12 Barb. 595, it was held that a policy which stated that the underwriters insure S. G. C. & Co. on account of the Western Transp. Co. on merchandise by certain specified boats, although it might justify the inference that the assured were common carriers, would not imply that they were the owners of the boats. In Suckley v. Delafield, 2 Caines, 222, it was held that a representation in time of peace, that a vessel should sail in ballast, was substantially complied with, though there was a trunk of merchandise and ten barrels of gunpowder on board. See also, Pawson v. Watson, 2 Cowp. 785; De Hahn v. Hartley, 1 T. R. 343, 345, per Lord Mansfield, C. J.; Farmers' Ins. & Loan Co. v. Snyder, 16 Wend. 481. In Sawyer v. Coasters' Mutual Ins. Co., 6 Gray, 221, a representation that the vessel had arrived safely at a place on a given day, and was clear of her cargo of grain in bulk, was held not to be substantially complied with by her having entered the harbor with a cargo of grain in bulk on board, on that day.
8 Thus a representation that a vessel will sail as soon as some others, “calculating to take advantage of their protection,” is not complied with by a sailing before them. Alsop v. Coit, 12 Mass. 40. In Murray v. Alsop, 3 Johns. Cas. 47, it was represented that a bill of sale would be on board to prove the nationality of the vessel. The bill of sale was actually on board. The vessel was captured and the captain denied having it. Held that a substantial compliance with the representation required that it should be produced when the occasion required. See also, Steel v. Lacy, 3 Taunt. 285, supra; Houghton v. Manuf. Mut. F. Ins. Co., 8 Met. 114, 123.