Insurance. It is doubtless within the province of a court, in
the exercise of its discretion, to sum up the facts in the case to
the jury and submit them with the inferences of law deducible
therefrom to the free judgment of the jury. But care must be taken
in all such cases to separate the law from the facts and to leave
the latter in unequivocal terms to the jury as their true and
peculiar province.
An application for a new trial on motion after verdict addresses
itself to the sound discretion of the court, and if, upon the whole
case, the verdict is substantially right, no new trial will be
granted, although there may have been some mistakes committed on
the trial. The application is not a matter of absolute right, but
rests in the judgment of the court, and is to be granted only in
furtherance of justice. On a writ of error bringing the proceedings
on the trial by bill of exceptions to the cognizance of the
appellate court, the directions of the court below must then stand
or fall upon their own intrinsic propriety as matters of law.
Every ship must, at the commencement of the voyage insured,
possess all the qualities of seaworthiness and be navigated by a
competent master and crew.
Seaworthiness in port, or lying in the offing, may be one thing,
and seaworthiness for a whole voyage quite another.
A policy on a ship "at and from a port" will attach although the
ship be at the time undergoing extensive repairs in port so as, in
a general sense, for the purposes of the whole voyage, to be
utterly unseaworthy.
What is a competent crew for the voyage -- at what time such
crew should be onboard -- what is proper pilot ground -- what is
the course and usage of trade, in relation to the master and crew
being on board when the ship breaks ground for the voyage -- are
questions of fact dependent upon nautical testimony and exclusively
within the province of the jury.
The contract of insurance is one of mutual good faith, and the
principles which govern it are those of an enlightened moral
policy. The underwriter must be presumed to act upon the belief
that the party procuring insurance is not at the time in possession
of any fact material to the risk which he does not disclose, and
that no known loss had occurred which by reasonable diligence might
have been communicated to him.
If a party, knowing that his agent is about to procure insurance
for him, withholds information for the purposes of misleading the
underwriter, it is a fraud and vitiates the insurance.
Where a party orders insurance and afterwards receives
intelligence material to the risk or has knowledge of a loss, he
ought to communicate it to the agent by due and reasonable
diligence, to be judged under all the circumstances of each
particular case, if it can be communicated, for the purpose of
countermanding the order or laying the circumstances before the
underwriter.
What constitutes due and reasonable diligence is a question of
fact for the jury.
Page 26 U. S. 171
The accidental concealment of the time of the sailing of a
vessel would not prejudice the insurance unless material to the
risk; if fraudulently intended, it might not mislead, and whether
fraudulent or not is matter of fact for the jury.
The material ingredients of a question of the importance of
concealing the time of a vessel's sailing are mixed up of nautical
skill, information, and experience, and are in no sense judicially
cognizance as matters of law. It seems that this question does not
cease to be a question of fact when the vessel is to sail from a
port abroad.
Little stress ought to be laid upon general expressions falling
from judges in the course of trials. Where the facts are not
disputed, the judge often suggests in a strong and pointed manner
his opinion as to their materiality and importance, and his leading
opinion of the conclusion to which the facts ought to conduct the
jury. This ought not to be deemed an intentional withdrawal of the
facts or the inferences deducible therefrom from the cognizance of
the jury, but rather as an expression of opinion addressed to the
discretion of counsel, whether it would be worthwhile to proceed
further in the cause. And the like expression in summing up any
cause to the jury must be understood by them merely as a strong
exposition of the facts, not designed to overrule their verdict,
but to assist them in forming it. And there is the less objection
to this course in the English practice because, if the summing up
has had an undue influence, the mistake is put right by a new trial
upon an application to the discretion of the whole court. This is
so familiarly known that it needs only be stated to be at once
admitted.
The question of materiality of the time of the sailing of the
ship to the risk is a question for the jury under the direction of
the court, as in other cases. The court may aid the judgment of the
jury by an exposition of the nature, bearing, and pressure of the
facts, but it has no right to supersede the exercise of that
judgment, and to direction absolute verdict as upon contested
matter of fact, resolving itself into a mere point of law.
The action, in the Circuit Court for the District of Maryland,
was instituted by the plaintiffs in error on a policy of insurance
in the usual form, and a verdict was rendered for the defendants,
under the opinion of the court, upon the first of nine exceptions
taken by the plaintiffs.
The material facts in the case were:
Insurance was effected in Baltimore in the name of Thomas
Tenant, to the amount of $10,000, on the brig
Creole for a
voyage from Havre de Grace to New Orleans, with liberty to touch
and trade at Havana.
The policy was dated upon 22 December,
1823. The insurance was made for the plaintiffs, the sole
owners of the vessel, under the following circumstances:
John Joseph Coiron, one of the plaintiffs, while at Havre de
Grace, on 19 October, 1823, addressed to Mr. John Stoney of
Charleston, the following letter:
"Havre, October 19, 1823"
"Mr. John Stoney, Charleston:"
"DEAR SIR: Please to have in red, for my account, for the
Page 26 U. S. 172
account and risk of whom it may concern, $10,000 on the brig
Creole, of New Orleans, Captain Jacob Goodrich, for New
Orleans, touching at the Havana. The brig and boats in the best
order, having a roundhouse on deck, containing fourteen births; the
crew are seventeen in all. We intend sailing tomorrow. I have with
me my family, consisting of two children and two nephews. The wind
having shipped round suddenly, I write this in haste; my first will
be more satisfactory to you, for particulars. The new Georgia
upland cotton, twenty sous; rice, thirty francs."
"Your devoted servant and friend,"
"JOHN JOSEPH COIRON"
And also another letter, as follows:
"Duplicate"
"Havre, October 20 1823"
"Mr. John Stoney, Charleston:"
"DEAR SIR: I have yesterday requested you to have insured, on my
account, for the account of whom it may concern, $10,000 on the
brig
Creole, of New Orleans, Captain Jacob Goodrich, from
this port back to New Orleans, touching at the Havana, the vessel
and boats in the best order, having a roof on deck containing
fourteen births, manned by seventeen hands. You know the vessel --
I have only to add, that I have made a thousand dollars' worth more
of repairs and improvements on her. She is now a very convenient
packet. I will feel gratified to hear from you at the Havana. I
intend but making a very short stay there, having two children and
two nephews with me and being anxious to meet Mrs. C., I cannot
give you any favorable information respecting business in this part
of Europe."
"With the pleasing expectation of being soon near you, I remain,
respectfully, dear Sir, your devoted servant and friend,"
"JOHN JOSEPH COIRON"
This letter was enclosed in another, addressed by Quartier &
Drogy, of Havre, to Mr. Stoney, dated 23 October, 1823, and
stamped with the postmark of Savannah, December 10, which,
with the endorsements thereon, were as follows:
"P. Hesperus"
"Havre, October 23 1823"
"John Stoney, Esq., Charleston:"
"SIR: We are indebted to our mutual friend, Mr. J. J. Coiron,
from whom we beg leave to hand you the enclosed letter for an
introduction to your respectable firm, and should feel
Page 26 U. S. 173
particularly happy if it became the means of an active
correspondence between us, the produce of your country, and
particularly cotton being always of an easy and frequently
advantageous sale in this part of France on account of the vicinity
of the metropolis and the principal manufacturing towns, which
gives Havre a decided preference over the other commercial ports of
France. Georgia short staple sells at 27 c. 29, and the stock on
hand not considerable, few arrivals being expected until the new
crop, which can hardly reach our market before the month of
December. It would, however, not be prudent to speculate on the
present prices, as they will be likely to give way on arrival of
the new crop and occasion considerable losses. Our opinion is that
purchases ought to be made at from 11 to 13
d, and not to
exceed 14
d, to offer a benefit here."
"Should you feel disposed to enter into a connection of business
with us and honor us with an answer, we could, if you are so
inclined, commence with an adventure of a hundred bales of cotton
for mutual account, and successively enlarge the speculation if the
result prove satisfactory. As to the reimbursement for our share,
we authorize you to draw on us, at Paris, at sixty or ninety days
sight, if the exchange be advantageous, else we may either make you
remittance or open you a credit at New York. In case it should suit
you to speculate for your own account, we beg to offer you the
facility of an anticipation of half the amount of the consignments
you may please to entrust to our care on receipt of the bills of
lading and order for insurance. We are also ready to offer the same
facilities on shipments which you may sway to us for account of
other houses, and to grant you a share in the commission on the
same."
"Would oblige us to render us the following service,
viz., to procure acceptance of the enclosed bill of $420,
sixty days sight, on Barbet & Esnard, of your city, and when
accepted to hand the same to Mr. Sam Simon at Augusta, &c."
"Believe us, with due regard, Sir, your most obedient
servants,"
"A. QUARTIER & DROGY"
"John Stoney, Esq., Charleston, S.C."
"No. 9, 1823 -- QUARTIER & DROGY, Havre, Oct. 23 -- Received
13 December."
"
Hesperus"
The letter of 19 October, was dispatched in a single form from
Havre on the 20th by a vessel sailing on that day for Philadelphia,
and was received by Mr. Stoney on 15 December -- a duplicate of the
letter of the 20th was dispatched on 23 October, by the
Hesperus via Savannah.
Page 26 U. S. 174
On 12 December, 1823, Mr. Stoney applied to the Fire &
Marine Insurance Company, and to the Union Insurance Company in
Charleston, for insurance on the Creole, and both offices refused
the risk, upon the ground that they ought to have received account
of the arrival of the brig before that time. The offers were
withdrawn, and upon 13 December, he wrote to Thomas Tenant, Esq.,
at Baltimore, the following letter. The letter was postmarked at
Charleston on the day of its date, and was received in Baltimore by
Mr. Tenant on Saturday, 20 December, in due course of mail.
"Charleston, 13 December, 1823"
"THOMAS TENANT Esq., Baltimore: "
"DEAR SIR -- I received the day before yesterday a letter from
John Joseph Coiron, via Savannah (extract annexed), in which he
requests me to have insurance effected on the
Creole on
his account and others, valued at $10,000. The two offices here are
afraid of their own shadow, and will not underwrite her. I must
therefore request the favor of your having the insurance done
agreeable to his order annexed, and I will be answerable to you for
the premium, &c. Good upland cotton 14 cents and declining. I
have only to confirm my respects of the 3d inst, which I hope you
have received before this. If the insurance cannot be done with
you, please write to New York to have the same effected."
"Expecting the pleasure of hearing from you soon, I am, very
respectfully,"
"Your most obedient servant,"
"JOHN STONEY"
"Duplicate. (Enclosed)"
"Havre, 20 October, 1823"
"MR. JOHN STONEY, Charleston: "
"DEAR SIR -- I have yesterday requested you to have insured, on
my account, for the account of whom it may concern, $10,000 on the
brig
Creole, of New Orleans, Captain Jacob Goodrich, from
this port, back to New Orleans, touching at the Havana. The vessel
and boats in the best order, having a roof on deck, roundhouse
containing 14 births, manned by 17 hands; you know the vessel. I
have only to add that I have made $1,000 worth more of repairs and
improvements on her. She is now a very convenient packet."
"Extract Thomas Tenant, Esq., of Baltimore, Maryland."
"No. 1. John Stoney, Charleston, 13 Dec., 1823, and 20 Dec.
[mail], order for insurance. "
Page 26 U. S. 175
On 22 December, 1823, Mr. Tenant applied to the defendants, the
Universal Insurance Company for insurance by the following written
order for the same, and, upon the contract thus made, the policy
was on the same day filled up and executed.
"I want insurance for account whom it may concern on the brig
Creole, Jacob Goodrich master, at and from Havre de Grace
to New Orleans, with liberty to touch and trade at Havana, against
all risks -- and in case of loss, the same to be paid to me. The
vessel valued, independent of freight, to this sum -- $10,000."
"The
Creole was completely rebuilt and coppered at
Charleston, S.C., in last summer, at great expense, and is now
considered a remarkably fine vessel. She was, and I presume still
is, owned by McLanahan and Bogart, and J. J. Coiron. The latter
gentleman was on board her, and I presume is returning in her to
New Orleans. He writes from Havre, under date of 20 October, but
does not say when the brig would sail. She sails under a
certificate of ownership. What will be the premium on the above
risk?"
"THOMAS TENANT"
"By RICHARD G. COX"
"Baltimore, 22 Dec. 1823"
"8 percent"
"Accepted. T. Tenant"
On the day the insurance was so made, Mr. Tenant had made
application in the same terms, to the Maryland, Chesapeake and
Baltimore Insurance Companies, all of which declined the risk. The
Phoenix Insurance Company, upon application, declined on the ground
that the time of sailing was not ascertained; and the Patapsco
Company were willing to take $5,000 dollars at 5 percent premium.
The insurance effected by Mr. Tenant was the only one made upon the
Creole.
No information relative to the loss of the
Creole was
received in Charleston, nor was her loss known there until 15
December, on which day the brig
Panther arrived at
Charleston, and about 2 o'clock, Mr. Stoney was informed
thereof.
On 19 October, 1823, by entries in the log book of the
Creole, at Havre, it was shown that "the brig was getting
ready for sea on the 20th; at 9 A.M., the pilot came on board, and
warped out into the basin, made sail, hove to in the offing, for
the captain, owner, and passengers and crew." At 10 A.M. they came
off, and the pilot left the vessel. Tuesday, 21 October, 1823, the
following entry was made in the log book:
Page 26 U. S. 176
----------------------------------------------------------------------
TUESDAY, OCTOBER 21, 1823
----------------------------------------------------------------------
H. K. COURSES WINDS
----------------------------------------------------------------------
1 7 Commences with fine breezes and pleasant
2 7 weather. This day contains 12 hours, ending
3 7 at noon. At the commencement of the civil
4 7 account, that at midnight, Cape De Here bore
5 7 per compass S.S.E. distant five leagues. The
6 7 detention of Captain on shore, being in want
7 7 of the national certificate of the owners of
8 7 this brig, having been carried off by the former
9 7 captain, Leonard Fash, who was dismissed. It
10 7 was therefore necessary for the present
11 7 captain to go through the requisite formalities
12 7 before the American consul to prove the want of
this important document.
----------------------------------------------------------------------
The protest of Captain Goodrich, master of the
Creole,
stated that the
Creole sailed from the port of Havre de
Grace, on 21 October, 1823, bound for Havana in Cuba; that on 29
December, the brig was wrecked and lost on Sugar Key while on the
voyage, and himself, the passengers and crew, were picked up, and
some of them carried to New Orleans, by the ship
Trumbull,
which ship arrived on 17 December, 1823. The second mate of the
Creole and five passengers, among whom were Mr. Coiron and
his family, left the ship
Trumbull off the Havana in the
small boat of the
Creole, and were landed there upon the
same day. It also appeared from the evidence on the part of the
defendants that the schooner
Chase, Captain Richard S.
Pinckney, master, sailed from Havana for Charleston from 1 to 3
December, 1823, and arrived at Charleston on the 12th of the same
month. Captain Pinckney stated that he did not hear in Havana any
report of the loss of the
Creole. The schooner
Eliza
and Polly sailed from Havana for Charleston three hours before
the
Chase, and Captain Pinckney left Havana to go on board
the
Chase three hours after the sailing of the
Eliza
and Polly.
The following letter from Lemuel Taylor to Mr. Tenant was also
admitted as evidence:
"Havre, June 28 1824"
"MY DEAR SIR: Your favor of the 5th instant was received
yesterday, and in reply I have only to say that I left Havana on 3
December last in the schooner
Chase,
Page 26 U. S. 177
Captain Pinckney, for Charleston, and that some days previous to
my departure from Havana I see a person land on the wharf, a crowd
seemed to get round him, and I see several taking him by the hand;
I asked who he was; his name was mentioned, but I do not now
recollect it, and that he was passenger in the brig
Creole, from Havre, for Havana, and lost on some of the
Keys; and that he was an old trader to Havana, from France, and had
a large adventure on board. His name, and time of landing, can be
ascertained at Havana if wanted. I never heard the case mentioned
on the passage or in Charleston, and I am sure I never thought or
heard of it after leaving Havana till one day, while in Baltimore,
Mr. Parker, speaking of losses, mentioned the
Creole, and
I observed I heard of her loss while in Havana; he then observed
they should have to refuse to pay the loss, and that it would be
one of the most painful disputes he ever had as president on
account of the great respectability of yourself and Mr. Stoney, and
mentioned something about dates. From that time until I received
your letter yesterday, I never heard or thought of the case. And I
again repeat that I am sure I did not hear the loss mentioned on
the passage or in Charleston, and that I see the passenger land as
mentioned; and that his name and date can be furnished from Havana
if wanted."
"I am, dear Sir, very sincerely, your friend and servant,"
"LEMUEL TAYLOR"
It was also proved that the northern mail closed in Charleston
at ten o'clock in the morning, and generally arrived in Baltimore
in seven days, exclusive of the day the letter was mailed, but
never at an earlier day, though sometimes in eight or nine days;
that it generally arrived from half past one to two o'clock, and
the letters of Mr. Tenant were never delivered by the penny post to
him, until after three o'clock on the day of the arrival of the
mail. The hours of business of the insurance companies in
Baltimore, terminated daily at two o'clock.
The fullest testimony was given of the high character of Mr.
Stoney and Col. Tenant to negative the possibility of a presumption
of intentional fraud or concealment on the part of either of those
gentlemen relative to the loss of the
Creole.
The plaintiff on the trial tendered nine exceptions to the
opinions of the circuit court, all of which are stated on the
record, but as in the opinion of this Court no notice is taken of
any other than the first exception, and the court justified the
refusal of the judges of the circuit court to sign the bill of
exceptions to any other than the first, it is deemed necessary to
insert the first exception only. That exception is as follows:
"The defendants, by their counsel, prayed the court to
instruct
Page 26 U. S. 178
the jury that upon the whole evidence in the case, the
plaintiffs are not entitled to recover and the verdict of the jury
ought to be for the defendants, which instruction and opinion the
court accordingly gave, and thereupon the plaintiffs, by their
counsel, prayed leave to except, and that the court would sign and
seal this, their bill of exceptions, which is accordingly done,
this 10 January, 1826."
"G. DUVALL [Seal]"
"ELIAS GLENN [Seal]"
Page 26 U. S. 181
MR. JUSTICE STORY delivered the opinion of the Court.
The original action was brought by the plaintiffs in error
against the defendants upon a policy of insurance
Page 26 U. S. 182
underwritten by the defendants
"whereby they caused Thomas Tenant,
for whom it may
concern, to be insured, lost or not lost, at and from Havre de
Grace to New Orleans, with
liberty to touch and trade at
Havana,"
$10,000 upon brig
Creole and appurtenances. The
declaration averred the interest in the plaintiffs and a total loss
by the perils of the seas. The defendants pleaded the general
issue, and upon the trial, after the whole evidence on both sides
had been given in, the court, upon the prayer of the defendants'
counsel, instructed the jury, "that upon
the whole evidence in
the case," as stated, the plaintiffs are not entitled to
recover, and the verdict of the jury, "ought to be for the
defendants." Nine different instructions were then prayed for on
behalf of the plaintiffs, which were all refused by the court upon
the ground that the opinion already given, disposed of the whole
cause upon its merits. If that opinion was correct, this refusal
was entirely justifiable, for the court was under no obligation to
discuss or decide other points when the plaintiffs' case was
already shown to possess a fatal defect.
The general question, then, before this Court is upon the
propriety of the instruction so given to the jury.
A suggestion has been thrown out at the bar that this
instruction was not intended to be positive and absolute, but
merely advisory to the jury; that it was not meant to take away the
right of the jury to decide freely on the facts, but merely to
offer for its consideration those views which the court had arrived
at and which it might at all times properly suggest to the jury. It
is doubtless within the province of a court, in the exercise of its
discretion, to sum up the facts in the case to the jury and submit
them, with the inferences of law deducible therefrom, to the free
judgment of the jury. But care should be taken in all such cases to
separate the law from the facts and to leave the latter in
unequivocal terms to the jury as its true and peculiar province. We
do not, however, understand that the present instruction was in
fact or was intended to be merely in the nature of advice to the
jury. It is couched in the most absolute terms, and imposed an
obligation upon the jury to find a verdict for the defendants. It
assumed there were no disputable facts or inferences proper for the
consideration of the jury upon the merits, and that upon the
unquestioned facts the plaintiffs had no legal right of recovery.
It is in this view that it is open for the consideration of this
Court, and in this view it will now be discussed as it was
discussed in the argument at the bar.
Four grounds have been presented to justify the opinion of the
circuit court, which, it is said, are apparent from the record
itself, and each of them is decisive upon the case. The first
is
Page 26 U. S. 183
the unseaworthiness of the ship at the time when she broke
ground at Havre and commenced the homeward voyage, by reason of the
master and a sufficient crew not being then on board. The second is
the laying off and on, near the port of Havre, after departure on
the voyage, for several hours waiting for the master to come on
board, which, it is said, was an improper detention and amounted to
a deviation. The third is the omission of Coiron to communicate to
his agent or other persons in America the knowledge of the loss by
the way of Havana, so as to countermand the order of insurance,
which it contended was a fatal omission of duty. The fourth is the
omission to mention the time of the vessel's sailing from Havre, in
the letter of 20 October ordering the insurance, which, whether
fraudulent or not, was a material concealment and misled the
underwriters in the same manner as if there had been a
representation that the time of the sailing was uncertain.
It is to be considered that these points do not come before this
Court upon a motion for a new trial after verdict, addressing
itself to the sound discretion of the court. In such cases, the
whole evidence is examined with minute care, and the inferences
which a jury might properly draw from it are adopted by the court
itself. If, therefore, upon the whole case, justice has been done
between the parties and the verdict is substantially right, no new
trial will be granted, although there may have been some mistakes
committed at the trial. The reason is that the application is not
matter of absolute right in the party, but rests in the judgment of
the court, and is to be granted only when it is in furtherance of
substantial justice. The case is far different upon a writ of error
bringing the proceedings at the trial by a bill of exceptions to
the cognizance of the appellate court. The directions of the court
must then stand or fall upon their own intrinsic propriety as
matters of law.
The first and second points appear to us in the present case to
resolve themselves into matters of fact, and the facts are too
imperfect and too general to enable the Court to draw any legal
conclusion from them either as to seaworthiness or deviation. There
is no doubt that every ship must, at the commencement of the voyage
insured, possess all the qualities of seaworthiness and be
navigated by a competent master and crew. But how is this Court to
arrive at the conclusion that the brig
Creole was not in
that predicament at the commencement of the present voyage? The
argument assumes that the ship ought not to have got under weigh or
proceeded into the offing until the master and all the crew
necessary not for that act, but for the entire voyage, were on
board. If the law were so, we have no means of ascertaining what
crew was
Page 26 U. S. 184
actually on board at the time, nor whether the voyage was
absolutely intended to be commenced on that day, nor whether the
departure was merely contingent and dependent upon the master's
procuring the proper ship's papers, and the breaking ground and
standing off and on in the offing were preparatory steps only for
this purpose, nor whether for such purposes the pilot and crew on
board were not amply sufficient. But we are far from being
satisfied that the law has interposed any such positive rule as the
argument supposes. Seaworthiness in port, or for temporary
purposes, such as mere change of position in harbor, or proceeding
our of port, or lying in the offing, may be one thing, and
seaworthiness for a whole voyage quite another. A policy on a ship
at and from a port will attach although the ship be at the time
undergoing extensive repairs in port, so as in a general sense, for
the purposes of the whole voyage, to be utterly unseaworthy. What
is a competent crew for the voyage; at what time such crew should
be on board; what is proper pilot ground; what is the course and
usage of trade in relation to the master and crew being on board
when the ship breaks ground for the voyage are questions of fact,
dependent upon nautical testimony, and are incapable of being
solved by a court without assuming to itself the province of a jury
and judicially relying on its own skill in maritime affairs. In
this view of the point, it is not necessary to rely on the doctrine
of Lord Chief Justice Abbott in
Weir v. Aberdeen, 2 Barn.
& Ald. 320, which goes the length of asserting that if there be
unseaworthiness at the commencement of the voyage and the defect is
cured before loss, a subsequent loss is recoverable under the
policy. This is an important doctrine and well worthy of discussion
whenever it come directly in judgment.
The like answer may be given to the point of deviation. This
Court cannot intend that here there was any unnecessary delay in
the commencement or course of the voyage. The delay, for the want
of papers, may have been entirely justifiable, and indeed may have
conduced to an earlier inception of the voyage by putting the ship
in a situation to depart at a moment's warning. The usage of trade
may be generally, or at least in that particular part, to get the
ship under weigh as in this case and wait in the offing until the
master is ready to come on board -- and that usage may be not only
convenient and beneficial to all parties, but absolutely necessary
in given cases from the nature of the port and the winds and
seasons. How then can this Court undertake to decide as matter of
law, apparent upon the record, that any delay admitting of such
explanations, amounts to a deviation?
The next point is the omission of Coiron to communicate
Page 26 U. S. 185
information of the loss to his agent so as to countermand the
order for insurance. The contract of insurance has been said to be
a contract
uberrimae fidei, and the principles which
govern it are those of an enlightened moral policy. The underwriter
must be presumed to act upon the belief that the party procuring
insurance is not at the time in possession of any facts material to
the risk which he does not disclose, and that no known loss had
occurred which by reasonable diligence might have been communicated
to him. If a party having secret information of a loss procures
insurance without disclosing it, it is a manifest fraud which
avoids the policy. If, knowing that his agent is about to procure
insurance, he withholds the same information for the purpose of
misleading the underwriter, it is no less a fraud, for under such
circumstances the maxim applies
qui facit per alium, facit per
se. His own knowledge in such a case infects the act of his
agent in the same manner and to the same extent which the knowledge
of the agent himself would do. And even if there be no intentional
fraud, still the underwriter has a right to a disclosure of all
material facts which it was in the power of the party to
communicate by ordinary means, and the omission is fatal to the
insurance. The true principle deducible from the authorities on
this subject is that where a party orders insurance and afterwards
receives intelligence material to the risk or has knowledge of a
loss, he ought to communicate it to the agent as soon as, with due
and reasonable diligence, it can be communicated, for the purpose
of countermanding the order or laying the circumstances before the
underwriter. If he omits so to do, and by due and reasonable
diligence the information might have been communicated so as to
have countermanded the insurance, the policy is void. This doctrine
is supported by the English as well as the American authorities,
and particularly by
Watson v. Delafield, 21 John. 152; 2
Caines 224; 2 John. 526, where most of the early cases are
collected and commented upon, and it is well summed up by Mr.
Phillips in his treatise on insurance, p. 96. We do not go over the
cases at large, because there is no controversy as to the general
result. The only matter for observation is whether the rule as to
diligence, may not in certain cases be somewhat more strict, so as
to require what in
Andrew v. Marine Insurance Company, 9
John. 32, is called "extreme diligence," or what in
Watson v.
Delafield is left open for discussion as extreme diligence,
the duty of communication where the countermand may not only
probably but possibly arrive in season. We think, however, that the
principle of the rule requires only due and reasonable diligence,
to be judged of under all the circumstances of
Page 26 U. S. 186
each particular case, and that the expressions thrown out in the
cases above mentioned were not so much intended to point out a
stricter rule as to intimate that there might be cases in which a
very prompt effort for communication might be fairly deemed not due
and reasonable diligence, as where the loss takes place very near
the port at which the insurance is to be made, and the means of
communication, by mail or otherwise, are regular or numerous, or
where, from the lapse of time and the date of the order for
insurance, the party cannot but feel that every moment's delay adds
many chances in favor of the insurance being made before knowledge
of the loss. Under such circumstances, in proportion as the delay
would properly give rise to stronger suspicion of intentional
concealment, the duty of prompt communication would naturally seem
to press upon the party a more vigilant diligence. The case of
Wake v. Atty, 4 Taunton 494, lays down no new rule, but
merely applies the old one to circumstances somewhat nice and
peculiar in their presentation.
What constitutes due and reasonable diligence in cases of this
nature is principally matter of fact for the consideration of a
jury. When, indeed, all the facts are given and the inferences
deducible therefrom, the question may resolve itself into a mere
question of law. But it is in general impossible to lay down a
fixed rule on the subject from the almost infinite variety of
circumstances which may affect its application; much must depend
upon the means of communication, the situation of the parties, the
knowledge of conveyances, the fair exercise of discretion, as to
time, mode, and place of conveyance, the course of trade, and
nature of the voyage, and the probable chances of the countermand's
being effectual. All these are matters of fit inquiry before the
jury, and must from their very nature apply with very different
force to different cases.
To bring these remarks home to the present case, there are
certainly circumstances which deserve the most careful
consideration of a jury upon the point of due diligence. The loss
occurred at no given distance from the port of Havana, and if
letters had been sent ashore at that port, there is strong reason
to believe that they could have reached Mr. Stoney in time for a
countermand, and at all events, if the loss had been made generally
public at the Havana, the news might have reached Baltimore before
the insurance. But the record does not contain facts enough to
establish a want of reasonable diligence on the part of Mr. Coiron.
It is nowhere stated that he was in a situation to make such a
communication, or that he knew of the mate and crew being landed or
that vessels were about to depart for the United States from
Havana. Nor is it shown what were the means and facilities of
communication
Page 26 U. S. 187
in the course of trade and voyages between that port and the
United States, regular or irregular, from which we might deduce his
knowledge of these means and facilities. Nor is it shown that the
parties contemplated a stoppage off the Havana, so as to put him
upon diligence in writing; nor that this mode of conveyance of news
was more certain or quicker than others which might have been
resorted to in the ordinary course of the voyage of the ship
Trumbull to New Orleans. We may indeed conjecture how
these matters were by general surmise or personal information, but
judicially we can know nothing beyond what the record presents of
the facts; yet all these circumstances must or may be material to
the point of due diligence. In their very essence they are matters
of fact, and not conclusions of law.
The opinion, therefore, to which the learned counsel wish to
conduct us, that the policy is void because there has been gross
negligence in not countermanding the order for insurance, is one to
which, upon this record, we cannot judicially arrive. It would be
assuming the rights and exercising the functions of the jury upon
matters not proved or wholly indeterminate in their own nature.
This ground for maintaining the instruction of the circuit court,
must then be abandoned.
The next point is the omission in the letter of 20 October of
any mention of the time of the vessel's sailing. This is put to the
court in a double aspect -- first as the concealment of a material
fact and secondly, connecting the language of the letter with the
accompanying circumstances, as a virtual representation that the
vessel was not then ready or about to sail on the voyage.
Whether this omission in the letter was merely accidental or
with design to mislead the underwriters, and whether, if so
designed, it had the effect (which, upon the testimony in the case,
would be a matter of serious doubt) it is not now necessary to
inquire. If accidental, it would not prejudice the insurance unless
material to the risk; if fraudulently intended, it might not in
fact mislead, and whether fraudulent or not was matter of fact for
the jury. That there was no virtual representation as to the time
of sailing seems to us conclusively established by the language of
the letter of Colonel Tenant requesting insurance. He there says
"He (Coiron) writes from Havre, under date of 20 October, but does
not say when the brig would sail." Now this letter in direct terms
negatives any intention to represent any particular time of
sailing. It leaves the question freely open to the underwriters,
either for further inquiry or for any presumptions most unfavorable
to the assured. The natural result ought to be that the
underwriters should calculate the time of sailing as very
Page 26 U. S. 188
near the date of the letter, so as to ask a premium equal to the
widest range of risk, from the intermediate lapse of time. The
underwriters had no right to presume that the ship would sail at
some future indefinite period and to bind the assured to that
presumption. The letter told them in effect that the assured would
bind themselves to no representation as to the time of sailing, but
asked for insurance whenever the ship might sail, be it on that day
or any future day. In this view, the point as to representation
vanishes, and the like consideration would in a great measure
dispose of that of concealment.
But the question as to this latter point has been argued at the
bar upon much more broad and comprehensive principles, upon which
it seems proper for this Court to express an opinion, especially as
this case may again undergo the consideration of a jury.
It is admitted that a concealment, to be fatal to the insurance,
must be of facts material to the risk, and certainly of this
doctrine there cannot at this time be any legal doubt. It is
further admitted (and so is the unequivocal language of the
authorities) that generally the materiality of the concealment is a
question of fact for the jury. But it is said that there are
exceptions from the rule, and that concealment of the time of
sailing belongs to the class of exceptions, and is a question of
law for the exclusive decision of the court. It is necessary to
maintain this position in its full extent to extricate the present
case from its pressing difficulties, and if this shall be
successfully made out, it will still remain to be decided whether
the facts stated in the record are sufficient to enable the court
to pronounce the conclusion of law.
That the time of sailing is often very material to the risk
cannot be denied; that it is always so is a proposition that will
scarcely be asserted and certainly has never yet been successfully
maintained. How far it is so must essentially depend upon the
nature and length of the voyage, the season of the year, the
prevalence of the winds, the conformation of the coasts, the usages
of trade as to navigation and touching and staying at port, the
objects of the enterprise, and other circumstances, political and
otherwise, which may retard or advance the general progress of the
voyage. The material ingredients of all such inquiries are mixed up
with nautical skill, information, and experience, and are to be
ascertained in part upon the testimony of maritime persons, and are
in no sense judicially cognizable as matter of law. The ultimate
fact itself which is the test of materiality -- that is, whether
the risk be increased so as to enhance the premium -- is in many
cases an inquiry dependent upon the judgment of underwriters and
others who are conversant with the subject of insurance. In this
very case
Page 26 U. S. 189
the introduction of testimony was indispensable to show the
usual length of the voyage, and it was quite questionable whether
in a just sense the vessel could be deemed a missing vessel at the
time of the insurance. Upon such a point it would not be a matter
of surprise if different underwriters should arrive at different
results. In the nature of the inquiry, then, there is nothing to
distinguish the time of sailing of the ship from any other fact the
representation of concealment of which is supposed to be material
to the risk. It must still be resolved into the same element.
It has been said that there is no case in which the materiality
of the time of sailing has been doubted where the ship was abroad
at the time; whether this be so or not it is not important to
ascertain, unless it could be universally affirmed (which we think
it cannot) that the time of sailing abroad must always be material
to the risk. If it may not always be material, the question whether
it be so in the particular case is to be decided upon its own
circumstances. Indeed we cannot perceive how the place of sailing,
whether from a home or foreign port, can make any difference in the
principle. The time of sailing from a home port may be material to
the risk, and if so, the concealment of it will vitiate the policy,
but whether material or not, opens the same inquisition into facts
as governs in cases of foreign ports. There may be less intricacy
in conducting it or less difficulty in arriving at a proper
conclusion, but it is essentially the same process. The case of
Fort v. Lee, 3 Taunt. 381, did not proceed upon the ground
that the time of sailing from a home port was never material to be
communicated, but that under the circumstances of that case, the
underwriter, if he wished to know whether the ship had sailed,
ought to have made inquiry. It was a mere application to the
discretion of the court to grant a new trial where the plaintiff
had obtained a verdict and there was no pretense of any
misdirection at the trial. In
Foley v. Moline, 5 Taunt.
145, the court said that there was no pretense for the proposition,
as a general rule, that it was necessary to communicate to the
underwriters whether the vessels on which an insurance was proposed
had sailed or not. There might be circumstances that would render
that fact highly material, as if the ship were a missing ship, or
out of time. So that here, a denial of the proposition now asserted
before us was in the most explicit terms avowed and acted on.
Two
nisi prius cases before Lord Mansfield have been
relied on to establish the supposed exception to the general rule
of cases relative to the time of the sailing of the ship, in which
it is argued that his lordship undertook to decide the point of
materiality as matter of law and to give it as a rule to the
Page 26 U. S. 190
jury. It is proper to remark that little stress ought to be laid
upon general expressions of this sort by judges in the course of
trials. Where the facts are not disputed, the judge often suggests
in a strong and pointed manner his opinion as to the materiality of
the concealment and his leading opinion of the conclusion to which
facts ought to conduct the jury. This ought not to be deemed an
intentional withdrawal of the facts or the inferences deducible
therefrom from the cognizance of the jury, but rather as an
expression of opinion addressed to the discretion of counsel
whether it would be worthwhile to proceed further in the cause. And
the like expression in summing up any cause to the jury, must be
understood by them merely as a strong exposition of the facts, not
designed to overrule their verdict, but to assist them in forming
it. And there is the less objection to this course in the English
practice because, if the summing up has had an undue influence, the
mistake is put right by a new trial upon an application to the
discretion of the whole court. This is so familiarly known that it
needs only to be stated to be at once admitted. It is with
reference to these considerations that the cases above alluded to
should be examined.
The first is
Ratcliff v. Shoobred, cited from Marshall
on Insurance 290. It would certainly seem at the first view that
Lord Mansfield did decide that concealment was material. But even
by Mr. Marshall's report, brief as it is, it by no means appears
that the materiality was in question at the trial, but only the
effect of the concealment in avoiding the policy. The same case is
reported more fully and more accurately by Mr. Park on Insurance,
p, 290, where it is perfectly clear that the point of materiality
was left to the jury.
"The question is [said his lordship] whether this be one of
those cases which is affected by misrepresentation or concealment.
If the plaintiffs concealed any material part of the information
they received, it is a fraud, and the insurers are not liable,"
and the jury found a verdict for the defendant under this
direction. So that the point was left fully open to them.
The next case is
Fillis v. Berton, cited in Marshall on
Insurance, p. 467, and reported also in Park on Insurance, p. 292.
The insurance was on a ship from Plymouth to Bristol, and it
appeared that the broker's instructions stated that the ship was
ready to sail on 24 December, when in fact she had sailed on the
23d. Mr. Marshall states that Lord Mansfield ruled that this was a
material concealment and misrepresentation, but Mr. Park, from
whose work the report is professedly taken, uses no such
expression. His words are Lord Mansfield
said this was a
material concealment and misrepresentation, and the jury
hesitating, he proceeded to expound to
Page 26 U. S. 191
it the general principles of law on the subject of
misrepresentation and concealment, and he seems to have taken it
for granted that the misrepresentation was material (as from the
short duration of such a voyage might naturally be inferred), and
that the only point was whether the ship had sailed or not. The
same explanation disposes of the case of
McAndrews v.
Bell, 1 Esp. 373. Indeed, in any other view it would be
impossible to reconcile these decisions with the judgment
pronounced by Lord Mansfield and other judges upon more mature
deliberation, when causes have been brought before them in bank.
Take for instance what fell from the court upon the motion for a
new trial in
McDowell v. Praza, Doug. 247, 260;
Shirley v. Wilkinson, Doug. 236;
Hodgson v.
Richardson, 1 Bl. 289;
Littledale v. Dixon, 4 Bos.
& Pul. 151, and
Hull v. Cooper, 14 East 79. In the
case of
Maryland Insurance Company v.
Ruden's Administrators, 6 Cranch 338, this Court
expressed the opinion that
"it was well established that the operation of any concealment
on the policy depends on its materiality to the risk, and that this
materiality is a subject for the consideration of a jury."
That opinion was acted upon by the Court of Errors of New York
in the case of
New York Fireman Insurance Company v.
Walden, 12 John. 513, where Mr. Chancellor Kent in a very
elaborate judgment reviewed the authorities and laid down the
doctrine in a manner that merits our entire approbation.
We think, then, that the exception insisted upon at the bar
cannot upon principle or authority be supported, and that the
question of materiality of the time of the sailing of the ship to
the risk is a question for the jury under the direction of the
court, as in other cases. The court may aid the judgment of the
jury by an exposition of the nature, bearing, and pressure of the
facts, but it has no right to supersede the exercise of that
judgment and to direct an absolute verdict as upon a contested
matter of fact, resolving itself into a mere point of law. If,
indeed, the rule were otherwise, the facts in the record are not so
full as to enable the Court to reach the desired conclusion. There
is not sufficient matter upon which we could positively say that
the time of sailing was in this case necessarily material to the
risk.
For these reasons, the judgment of the circuit court must be
Reversed and the cause remanded with directions to award a
venire facias de novo.
This cause came on, &c., on consideration whereof, it is
considered by this Court that there is error in the opinion of the
circuit court given to the jury upon the prayer of the
Page 26 U. S. 192
defendants' counsel, that upon the whole evidence in the case as
stated in the record, the plaintiffs are not entitled to recover,
and that the verdict of the jury ought to be for the defendant,
that opinion having withdrawn from the proper consideration of the
jury matters of fact in controversy between the parties.
It is therefore further considered and adjudged that the
judgment of the said circuit court in this case be and the same is
hereby reversed, and that the cause be remanded to the said circuit
court with directions to award a
venire facias de
novo.
