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.
