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Where the representation is made in terms so ambiguous Ambiguous
. as to suggest doubts to the underwriter, and to make it statements. his duty to ask the insured for an explanation, if he neglect to do so, the underwriter will not be able afterwards to plead misrepresentation or concealment (?). Therefore, where an insurance broker states, merely by way of inference, that the ship insured is at a certain place at the date of the policy, that will not be a ground for avoiding the policy, though the broker was entirely mistaken, if the underwriter does not make inquiries into the facts on which the broker based his conclusions (m).
Where the description in a policy of insurance designates the object with sufficient certainty, or even where it suggests the means of doing so, a mere mistake in the name of the ship or other particulars will not be such a misrepresentation as to avoid the policy. Neither will a mistake in the name of the vessel, which does not prejudice the underwriter, produce that effect (1).
CASES. 1. A policy was effected on a ship at and from London to Jamaica. The ship sailed intending to touch at C., an intermediate port. To a certain point the voyage to Jamaica is the same; but from that point there are three tracks thither, one being by way of C. The ship took the track by way of C., but was captured before actually reaching the point where she must have turned out of the track to Jamaica, in order to put into the harbour of C. The master had no liberty to exercise his discretion as to the track to be selected, but was bound by the orders of his owners to call at C. IIeld, that this was an important fact which should have been communicated to the underwriters, and that therefore the insured could not recover on his policy (o).
2. A London merchant, when effecting a policy of marine insurance at Leith, represented, contrary to the fact, that he had effected
530; Fitzherbert v. Vather, 1 T. R. 12.
(1) Freeland v. Glover, 7 East, 457; Brine v. Featherstone, 4 Taunt. 867.
(m) Brine v. Featherstone, 4 Taunt. 867.
(n) Ionides v. Pacific F. f. M. Ins. Co., L. R., 6 Q. B. 671.
(0) Viddlewood v. Blakes, 7 T. R.
some insurances at Lloyd's upon the same voyage, and at a premium similar in amount to that paid to the Leith underwriters. Thereupon the latter, though not well acquainted themselves with the nature of the risk, subscribed the policy from the confidence they placed in the skill and judgment of the London underwriters. Held, that the misrepresentation, though it did not affect the nature of the risk, vitiated the policy (o).
3. A ship insured sailed from Elsinore on her voyage to Hull six hours before the owner. The owner followed in another vessel on the same day, and having encountered rough weather on his passage arrived first. IIe then effected an insurance on his own ship, but without informing the underwriter of the above facts, merely stating that the ship insured was “all well at Elsinore on the 26th July.” Held, the circumstances were material, and should have been communicated to the underwriter, and that the insured could not recover on the policy (p).
4. When a policy on a ship was effected, the assured represented that she had been seen safe on a certain day, and had completed two-thirds of her voyage. As a matter of fact the ship had got as far as was represented, but was lost two days before the day specified. Held, that the mistake was material and avoided the policy (2).
$ 170. A misrepre- In the case of a policy of insurance, a representation sentation
differs from a warranty in that the representation may be differs from a warranty, either written or oral, and is never inserted in the policy; how.
while a warranty must always be in writing and contained in the policy, unless, of course, it be a warranty implied by law (r).
Hence it follows that it will be sufficient if a representation be substantially complied with, while a warranty must always be fulfilled to the letter (s).
Another difference between a representation and a warranty in a policy is, that in the case of a representation the fact misrepresented must be a material one; while in the
(6) Sibbald v. Hill, 2 Dow, H. L. Cas. 263.
(p) Kirby v. Smith, 1 B. & Ald. 672.
(g) Macdowall v. Fraser, 1 Doug. 260.
(r) Parson v. Watson, 2 Cowp. 785; Cornfoote v. Fowke, 6 M. & W. 358, 378.
(s) Dent v. Smith, L. R., 4 Q. B. 414; Pawson v. Watson, 2 Cowp. 785.
case of a warranty it does not matter whether it be material or not. In all cases, however, where it is proved that the assured intended to deceive the underwriter by his representation, the materiality or immateriality of the fact misrepresented will make no difference. But the policy will in either case be avoided (t).
The insured or his agent must not conceal from the Concealment,
effect of, on a underwriter any material fact (u) lying within his private policy. knowledge; for any such concealment, whether by design or mistake, will vitiate the policy ab initio (x), and entitle the underwriter to have it set aside and cancelled. Not only will it be the duty of the insured to communicate to the underwriter any articles of intelligence which may affect the judgment of a rational underwriter, governing himself by the rules and calculations on which underwriters in practice act in deciding whether they will insure or not, and at what premium they will insure; but he must also communicate all reports and rumours which may tend to enhance the risk (y). Therefore, if an owner after receiving a doubtful account of his ship effect an insurance on her without informing the underwriters of any peril she may be in, the policy will be held fraudulent and will be set aside ().
The insured, however, need not inform the underwriter
() Per Maulo, J., Erans v. EdInonds, 13 C. B. 777, 786; Pawson v. Watson, 2 Cowp. 785.
(4) Durrell v. Bederley, Holt, 283; Ionides v. Pender, L. R., 9 Q. B. 531; see “Cases” (1) at end of this ș ; De Costa v. Scandret, 2 P. Wms. 170; Mackintosh v. Marshall, 11 M. & W. 116; Anderson v. Thornton, 8 Exch. 425; Gladstone v. King, 1 M. & S. 35; see Cases' (2) at end of this $; Carter v. Boehm, 3 Burr. 1905; Scaman v. Fonereau,
2 Str. 1183; Mc Androw v. Bell, 1
(4) Riraz v. Gerussi, 6 Q. B. D.
“ Cases" (8) at end of this į; Vercantile Steamship Co. v. Tyser, 7 Q. B. D. 73; 29 W. R. 790.
(y) Durrell v. Bederley, Holt, 283; Ionides v. Pender, L. R., 9 Q. B. 531.
(z) Dc Costa v. Scandret, 2 P. Wms. 170.
of what he ought to know, as, for example, of a usage of trade (a); or of general topics of speculation, e.g., the probability of a war or a tempest (V); or of what is warranted, e.g., seaworthiness of the vessel insured (c); or of anything as to which the underwriter impliedly dispenses with the insured giving him any information (?).
Though the insured is under no obligation to inform the underwriter of facts which he ought to know, at the same time he must not make misleading statements as to those facts. For instance, though the underwriter will be presumed to know everything in the Shipping List at Lloyd's, yet if the insured make a false statement as to any fact therein stated, and so indu.ce the underwriter to execute a marine policy without examining the list, the policy will not be valid (e).
The non-communication of a material fact, which was not present to the mind of the underwriter when he effected a policy of insurance, will avoid the policy, even supposing that the fact had once been known to the underwriter (J). This rule will not be affected by the mere fact that the particulars supplied by the insured, coupled with the underwriter's previous knowledge, would, had the underwriter given sufficient consideration to the matter, have reminded him of the material fact in question (9).
The following may be material facts :
The date of the ship's sailing, or the time when she was last heard of; her national character (1); facts ren
(a) Voble v. Kennouay, 2 Doug. 510; Moxon v. Atkins, 3 Camp. 200; Stewart v. Bell, 5 B. & Ald. 238; see Cases” (3) at end of
(6) Carter V. Boehm, 3 Burr. 1905.
(c) Haywood v. Rogers, 4 East, 590; see “ Cases” (4) at end of this $; Shoolbred v. Vutt, Park, 346.
(d) Per Lord Mansfield in Carter v. Boehm, 3 Burr. 1905; Fort v. Lee, 3 Taunt. 381.
(e) Mackintosh v. Marshall, 11 M. & W. 116.
(f) Bates v. Hewitt, L. R., 2 Q. B. 595; see “ Cases"' (6) at end of this s.
() Campbell v. Innes, 4 B. & Ald. 423.
dering her liable to capture (i); sailing without convoy (j); character of her cargo; nature of her crew; her port of loading; the state of the weather; and the condition of the vessel ()
The mere fact of the information as to these facts being Concealment false, will not excuse the insured for not communicating by the infor
not excused them, if the information would have influenced, in any mation being
incorrect. degree, the underwriter (?). Again, the mere fact of the loss not occurring through the intervention of a material danger, which has been concealed, will not excuse the insured (m). If the owner, after ordering his broker to insure his Concealment
of facts subvessel, receives further information material to the insu- sequently rance, but the insurance is effected before he is able to known. inform his broker of it, the policy will be valid (n). If on the contrary he could have informed the broker, and did not through fraud or negligence, the policy will be vitiated. So, in cases where information is received after the slip is initialed, though before the policy is executed, the policy will be valid, even though ratification of the policy by the insured is necessary to make the policy binding (0).
CASES. 1. In an action on a marine policy it was proved that the insured had valued his goods for the purposes of the insurance at a sum very greatly in excess of their real value, without disclosing to the underwriter the fact of the over-valuation. It was further proved that it is customary among underwriters to act on the principle of taking into consideration whether the orer-valuation is so great as to
(i) Bates v. Heritt, L. R., 2 Q. B. 595; see “ Cases" (5) at end of this $.
(0) Sautell v. Loudon, 5 Taunt. 359; see “ Cases" (6) at end of this g.
(k) Nicholson v. Pouer, 20 L. T., N. S. 580 ; Gladstone v. L'ing, 1 M. & Sel, 35; see “Cases" (2) at end of this $; Harrouer v. Hutchinson,