Marine Insurance Company of Alexandria v. Hodgson
11 U.S. 332 (1813)

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U.S. Supreme Court

Marine Insurance Company of Alexandria v. Hodgson, 11 U.S. 7 Cranch 332 332 (1813)

Marine Insurance Company of Alexandria v. Hodgson

11 U.S. (7 Cranch) 332

APPEAL FROM THE CIRCUIT COURT FOR THE

DISTRICT OF COLUMBIA AT ALEXANDRIA

Syllabus

Upon an action on a valued policy, if a misrepresentation of the age and tonnage of the vessel whereby the underwriters were induced to agree to a high valuation be a defense, it is at law and not in equity.

There may be cases in which relief ought to be extended to a person who might have defended but has omitted to defend himself at law, but such cases do not frequently occur. The equity of the applicant must be free from doubt.

Any fact which clearly proves it to be against conscience to execute a judgment and of which the injured party could not avail himself in a court of law, or of which he could have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery.

This was an appeal from the decree of the Circuit Court for the District of Columbia sitting at Alexandria in a suit in equity brought by the Marine Insurance Company of Alexandria against Hodgson to enjoin so much of a judgment at law obtained by the latter against the former as exceeded the value of the brig Hope as found by the jury in a special verdict upon a valued policy.

It was contended in the bill that the age and tonnage of the vessel was misrepresented, and that such misrepresentation induced the complainants to value the ship at $10,000, when in fact she was worth only $3,300, as specially found by the jury on the trial at law. She was represented to be about 250 tons burden when she was only 161 tons, and to be from six to seven years old when she was between nine and ten years old.

The bill also alleged as a ground for relief the refusal of the court below to receive two pleas offered by the complainants on the trial at law, the rejection of which pleas had been assigned for error in this Court when the cause was here last (see ante, 10 U.S. 10 U. S. 206) but this Court thought the rejection of a plea no ground for a writ of error, and therefore gave no opinion as to the propriety of admitting them.

Page 11 U. S. 333

The first of those pleas stated the above misrepresentation as to the age, tonnage, and value of the vessel, and averred it to be material in regard to the risk of the voyage. The other plea stated in general terms that the policy was obtained by fraud with intent to defraud the complainants of the difference between the true and the represented value of the vessel, which difference it averred to be more than $4,000.

Upon the answer of Hodgson and the other evidence in the cause, the court below dissolved the injunction and dismissed the bill.

Page 11 U. S. 335

MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court as follows:

This suit was brought in the circuit court sitting in chancery for the purpose of obtaining a perpetual injunction to a judgment rendered against the plaintiffs in favor of the defendant, on a policy of insurance effected by him as agent for G. F. Straas and others, of

Page 11 U. S. 336

Richmond, on the brig called the Hope. The allegations of the bill are entirely unsupported by testimony, except those which relate to the value of the vessel insured. The Hope was valued in the policy at $10,000, and $8,000 were insured upon her. She is stated to have been in fact worth less than $4,000.

The underwriters contend that they were in the practice of refusing to ensure on any vessel more than four fifths of her value, and that they were led to make this insurance by a misrepresentation respecting the value of the Hope. They therefore pray to be relieved from so much of the verdict and judgment rendered thereon as exceeds that value.

On the part of the defendants it is contended that the plaintiffs have not made out a case which entitles them to the aid of a court of equity.

Without attempting to draw any precise line to which courts of equity will advance, and which they cannot pass, in restraining parties from availing themselves of judgments obtained at law, it may safely be said that any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party could not have availed himself in a court of law, or of which he might have availed himself at law, but was prevented by fraud or accident unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery.

On the other hand, it may with equal safety be laid down as a general rule that a defense cannot be set up in equity which has been fully and fairly tried at law, although it may be the opinion of that court that the defense ought to have been sustained at law.

In the case under consideration, the plaintiffs ask the aid of this Court to relieve them from a judgment, on account of a defense which, if good anywhere, was good at law and which they were not prevented, by the act of the defendants or by any pure and unmixed accident from making at law.

It will not be said that a court of chancery cannot interpose in any such case. Being capable of imposing

Page 11 U. S. 337

its own terms on the party to whom it grants relief, there may be cases in which its relief ought to be extended to a person who might have defended, but has omitted to defend himself at law. Such cases, however, do not frequently occur. The equity of the applicant must be free from doubt. The judgment must be one of which it would be against conscience for the person who has obtained it to avail himself.

The Court is of opinion that this is not such a case.

William Hodgson, as agent for the insured, applied for insurance on the brig Hope on a voyage from St. Domingo to her port of discharge in the Chesapeake, and laid before the board the following certificate:

"This may certify that I was master of the schooner Sophia of this place, and Alexander Burot supercargo; that while we were at the City of St. Domingo in July last, Mr. Burot purchased the brig Hope, of Boston, and I was called on with a carpenter to examine her, and found her to be a stout well built vessel of about 250 tons, in good order and well found with sails, rigging, &c., was built in the State of Massachusetts and is from 6 to 7 years old. I left the City of St. Domingo on 27 July, and Mr. Burot expected to sail from there about 15 or 20 August up the coast to take in mahogany."

"JAMES MAXWELL"

"Sept. 24, 1799"

Upon view of this certificate the vessel was valued at $10,000, and the insurance made at $8,000. On the voyage the vessel was captured.

In fact the Hope was of 160 tons burden, and was from eight to nine years old. There is reason to believe that she was not worth more than $3,000.

It does not appear that the loss was fraudulent or that the cargo was insured.

The plaintiffs contend that this misrepresentation led them to value the vessel much higher, and to ensure a

Page 11 U. S. 338

much larger sum on her than they would have done had a true description been given of her size and age.

To support this allegation they state their practice never to insure on any vessel more than four fifths of her real value, and their rule, which was known to Hodgson (he being himself one of the directors) to require that every order for insurance should be in writing, and should contain, among other things, "as full a description of the vessel and voyage as can be given."

The answer asserts that when the certificate was laid before the board of directors, Hodgson was asked if he would vouch for its truth, which he refused to do, whereupon the board agreed to value the vessel at $10,000, and to make the insurance required. He himself believed the certificate to be accurate, and is persuaded that the insured entertained the same opinion. He does not think that the tonnage of the vessel weighed much with the parties. It is not mentioned in the policy.

Straas and Leeds, whose agent Hodgson was, and for whom the insurance was made, are not parties to the bill.

No fraud is proved on them other than what is to be inferred from the error in the certificate given by Maxwell, nor ought their conduct to be decided on or their interests affected in a suit to which they are not parties, although they might have been made defendants.

The Court will not undertake to say what influence this certificate might have had or ought to have had at law. But since the plaintiffs were not prevented from using it at law by the act of the defendants or by any positive rule which disabled them from doing so, they have not made out a case of such clear equity, a case in which it would be so obviously against conscience for the defendant to enforce the judgment at law as to justify the interposition of a court of chancery.

The judgment is to be affirmed with costs.

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