Walden v. New-York Firemen Insurance

Platt, J.

.deli vered the opinion of the court* This " case is presented in the form of a bill of exceptions,, and the' counsel' for thedefendants move to" set aside the verdict on the following .grounds: "viz. ' i •• 1 '• T --

I. That improper evidence was admitted.

2, That the judge.misdirected the jury*

3. That the:.verdict is against laW'.and .evidence.

The question of undue concealment in-this ,case presents hvo aspects: . '

■ ' First, in regard to secmbrihiness, which-implies a. warranty on the part of the . assured tiiat the. ship shall be in a fit- condition" for-the voyage,, with all her'equipments; and,' also, that she-shall have, a competent .master'and. crexv. -".

Secondly,"the express, warranty in the, policy, against bar-, miry. ■ " : "" , ;

. With respect to the first,!' it.is not- necessary- that there-should, be any. representation,; because the seaworthiness of the ship;is;,, an implied condition .of the contract of insurance.

The rule is, that thére should-be’a representation of every fact within the knowledge of the" assured which is material to the risk incurred by the underxvritef ; '"except it be coxcred by a warranty on the part of the" assured! (Shoolbred v. Nutt, Park, 300.) Both "parties,. therefore, as to the facts-which constitute seaxvorthinéss,'have a .right to.remain silent at the timé of making the contract; ?.nd then, if, in fact, the ship" be not in all-respects seaxvorthy at the time when, the risk .was to com-,1 menee, the policy is void.;

Unseaxvorthiness,. under' this policy, ,(xyhich is in vthe- com-. moil form,) is at thé risk of the assured; and,- therefore, they-' are not. bourid to disclose any thing, ■ unsolicited, on that subject. . ;■ ■ /■: ' ;' V ; - ;.' .

*135If we suppose a policy wherein the underwriter expressly warrants the ship to be seaworthy, then, indeed, the duty of making disclosures would apply with full force against the assured. If the underwriter, however, (upon the ordinary policy,) chooses to make inquiries, the assured is bound to answer truly. (Haywood v. Rodgers, 4 East, 590.)

The practice of omitting to make inquiries as to seaworthiness, arises, I presume, from this prudent consideration, that every material disclosure on that subject would lessen the obligation of the implied warranty on the part of the assured; and the underwriter, wishing to leave that obligation unimpaired and unqualified, generally chooses to receive no communications as to the condition of the ship or the character of the master. For so far as the representation extends, according to the truth of facts, the implied warranty of seaworthiness ceases on the part of the assured.

The case of Shoolbred v. Nutt, (Park, 300. 1 Marsh. 475.) was an insurance upon a ship from Madeira to Charleston. The ship had sailed from London to Madeira. The plaintiff procured insurance, without communicating to the underwriters two letters which he had received from liis captain the day before he effected the insurance, stating “that the ship had arrived at-Madeira, but was very leaky; and that the pipes of wine oh board of her had been half covered with water.” But it was proved at the trial, that the leak had been completely stopped before she sailed from Madeira. Lord Mansfield decided, that it was enough that the ship actually sailed in good condition when the risk commenced, and that the assured wrere not bound to disclose the information contained in the letters.

The case of Haywood v. Rodgers, (4 East, 590. 1 Marsh. 476.) was an insurance upon a ship from Trinidad to London. The assured had received a letter from his captain, informing him, “ that he had been obliged to have a survey on the ship at Trinidad, on account of her bad character.” But the survey which accompanied the letter gave the ship a good character; and it was held, that the non-disclosure of the letter and survey to the underwriters, did not vacate the policy, although it appeared in evidence, that such circumstance, if known, would have enhanced the premium. -■ •

In all the numerous cases cited by the counsel for the defendants, to exemplify the rule that the assured is bound to disclose *136every material fact within his knowledge, the risks to which the concealments related, were directly assumed, by the underWriters. ’

If the. letters charged to have been concealed in this case relatednierely to .the risk of uñseawórthiness, it is a sufficient. answer, that , the assured never- sought indemnity' against that risk; on'the contrary, it was an essential part of this contract, ¿hat the assured should, warrant every ingredient of sea wort hi-íiéss. . ' .

The- rule applicable to this subject is. expressed with great precision and accuracy by Washington, J. in the case of Kohne v. Insurance Company of North America, (1 Marsh. 473. note 75. by Condy,) viz. “ Thé underwriter takes upon himself the risk-which the assured^ is not willing to bear, always under . the implied condition, that he shall, as to all facts within the privote knowledge of the assured, be equally informed as himself” •

In this view of the case, therefore, If appears to me, that the judge very properly charged the jury that the assured were not bound to disclose the letters and other facts in , regard to the character and conduct of the captain.

I am: also satisfied, that upon the question of seaworthiness, embracing the character of the captain, the. verdict is not against the weight of evidence. - - ' • .

In examining this case, in the sebond point of view proposed ; that.is, as an insurance against barratry, it presents a contract of a complicated and extraordinary kind, “ making the underwriter-fas Lord Mansfield expresses it) become insurer of the, conduct of the, captain" whom he does not appoint, and cannot dismiss, to the owners who can do either,” It is hero worthy of remark, that the qualities and condition of the ship and her apparel may be certainly known by survey and inspection, but theffieart of man, and his moral structure, are in a great measure unsearchable by human discernment. "To seek indemnification, 'therefore, against'human frailties, by insurance-against barratry,; is, a legitimate object; and favourable to commerce..

I consider .the contract to be essentially this: that the assured shall, in good faith, employ, á captain - of competent nautical skill and general good character; and if he do so, then, and not otherwise, - the insurer is,liable for barratry;

*137Here it is important to ascertain, with precision, the true definition of «barratry”

According to Valin, Pothier, Emerigon, and Le Guidon, st Barratry comprehends every fault of the master by which a loss is occasioned, whether arising from fraud, negligence, unskilfulness, or mere imprudence.” But in the English law, it has a more limited signification. No fault of the master amounts to barratry, unless it proceed from a fraudulent purpose; (2 Marsh. 518.) or, in the language of Ch. J. Lee, (cited and recognised as law in Phin v. Royal Exchange Assurance Company, 7 Term Rep. 508.) Barratry must be some breacli of trust in the master, ex maleficio ,•” or, as defined by Lord Ellenborough, (Earl v. Rowcroft, 8 East, 126. Park, 121.) “ there must be fraud, or crime, to constitute barratry.”

According, then, to the established meaning of the term barratry, in the English law, the underwriters, in this case, insured against the acts of the captain which might he fraudulent or criminal, and his breaches of trust, ex maleficio. Now, the question properly occurs, did the assured conceal from the underwriters any information material to that risk ?

The facts here charged to have been unduly concealed, are,

First, that the captain, on his outward voyage, several months before this policy was signed, touched at the Havanna for water, and there drew a bill on his owners, the assured, for about 800 dollars, which they refused to pay ;> alleging, as a reason for such refusal, that the bill was not accompanied by a letter of advice from the captain.

Secondly, the written correspondence between Harvey, Deaves & Harvey, of Cork, Cropper, Benson & Co. of Liverpool, and the assured, of New-York.

The inference attempted to be drawn from the transaction of the protested bill, seems to me so remote and equivocal as to deserve little consideration.

The letters of Harvey, Deaves & Harvey, and Cropper, Benson & Co., strongly imply a charge against Captain Cartwright of negligence and want of economy in the repairs of the ship, then at Cork. They say, “ we fear he is careless of his business, and that his amount of repairs and expenses will astonish us all.” « His detention has been very great, yet he seems very easy *138under it.” But there is no charge nor -surmise in these letters, which goes to impeach the honesty of the captain. They do not' «ven intimate that he was .addicted to any practices that would naturally, lead him to commit a breach of trust,, ex nialefcio ; although the assured, by their fetters, of the 10th and 13th ■•'May,,. 1311, seem to have yielded to the- suggestions against the captain, and directed their agents to discharge him, and to. era? ploy another ih.his stead, if their agents should think it.necessary for their interest; yet it.is fair to"conclude, that the assured were thus actuated, merely fro,ni the! considerations stated in the letters of Harvey, Deaves & Harvey, and Cropper, Benson & Co.

■. For aught'that appears, therefore,, the oply groúnd-of dissatisfaction in the minds of the assured Or .their agents, was the careless delay and want of economy in the captain, which are characteristic of seamen; and which are' so' frequently united with strict.honour and fidelity in that class of "men. . " , .

My Conclusion, therefore, is, that,1 although the .'contents of those fetters might seriously affect the interest of the owners, who were, solely responsible for the port-charges referred to iir those letters, yet’they did not relate to the risk of barratry as-' sumed by the'underwriters in this.-policy,; and that the opinion of .the judge-at the trial was correct, instating that theassured' were not bound, to communicate them.- ,

' The letters of the 10th andlSth'of 1811, were,written .by tlie assured in' New-York, to their agents, Cropper, Benson & Co. of Liverpool. The policy was signed, at New-York on the 12th .Of Avgust,'181.1, the ship Suffolk'being then at Belfast; and although, Captain Cartwright Was named as master in the policy, that could only have been intended to identify the ship. The-question here is the same as if the po.licy had been .blan/c as,to the master. •“ •

The absolute right of the owners to. change, the master at .any time, without the knowledge or consent of the underwriters, is unquestionable. ’ The instructions which the assured had given to their ágents in Liverpool, in regard to the master, were prudent and discreet". - ...

.' Considering- that the’ ship was in a foreign port ythat ,the assured were' under a'general" and Unqualified obligation- to provide' a- suitable master, and that neither the, law nor usage required that they 'should consult with the underwriters as to *139the selection of a master, it was sufficient, in this case, if the assured and their agents acted discreetly, and bona fide, in retaining Captain Cartwright.

It would be unreasonably severe, and would defeat almost every policy of insurance against barratry, if the assured, were held strictly bound to disclose every immoral act imputable to the master, and every unfavourable report respecting him, which had reached the ear of the assured previous to signing the policy. Such a rigorous application of the rule in the varied fortunes and vicissitudes of a seaman’s life, would be impolitic and unjust.

There must be some limits to this duty of making disclosures in such cases. It cannot be necessary that the assured should give to the underwriter a minute history of every thing which they have known or heard of, touching the moral character of the intended master.

If his general character be good, and the assured have no knowledge or information of any fapt impeaching the honesty of the master; the charge of undue concealment has no legal foundation.

In this case the unfavourable opinions expressed in the letters of Harvey, Deaves & Harvey, and of Cropper, Benson & Co., respecting Captain Cartwright, were repelled by the evidence of his good character as a sailing master in New-York, where he had been long known.

I cannot entertain a doubt of the propriety of allowing the plaintiffs to give in evidence their letter of the 13th of May, 1811, because it formed part of the contents of a paper, an extract of which had been read in evidence by the defendants. It was, altogether, one entire communication, though composed of an original letter, and a copy of another letter,; and neither party had a right to read part, without the whole.

It was fully proved, (and admitted on the argument,) that the captain did commit barratry.

Upon the whole case, therefore, 1 am of opinion, that the plaintiffs are entitled to judgment.

Judgment for the plaintiffs.