Upon those principles of good faith which should govern all contracts of insurance, the assured is bound to communicate every species of intelligence that he has, which may affect the mind of the underwriter in either of these two ways. 1. As to the point, whether he will insure at all. 2. As to the point, at what premium he will insure. There are some old cases, upon the subject of concealment, which, have never been shaken; though, as we shall shew, some reasonable qualifications have been engrafted upon them.

We shall first consider what concealments will vitiate the policy; and, secondly, what disclosures are unnecessary.

1. A merchant, having a doubtful account that a ship, like his, was taken, insured her without any communication to the underwriters; Lord Macclesfield, Chancellor, held, that be ought to have disclosed what intelligence be bad of the ship's danger, and which might induce him, at least, to fear that she was lost, though he had no

certain account of it; for if this had been discovered, the underwriters would not have insured at so small a premium; but would either not have insured at all, or at a higher premium; therefore, he thought that the concealment of this intelligence was a fraud. Dacosta v. Scandrett, 2 P. Wms.

170.

So, in Seaman v. Fonereau, 2 Str. 1183. Two days before the subscription of the policy, the plaintiff's agent received a letter to this effect: "The 12th of this month I was in company with the ship Davy, (the ship in question); at 12 o'clock in the night lost sight of her all at once; the captain spoke to me the day before that he was leaky, and the next day we had a hard gale." The ship, however, continued her voyage till the 19th, when she was taken; and there was no pretence of any knowledge of the actual loss at the time of the insurance. This letter was not communicated to the underwriter. The Chief Justice (Lee) held, that the letter

18:6.

DURRELL

บ.

BELERLEY.

ought to have been disclosed; for either the defendant would not have underwritten, or have and Another insisted on a higher premium. So, in Willes v. Glover, 1 New Rep. 14., the contents of a letter, which stated the probable time of the ship's sailing, were withholden from the underwriters; and, although that expectation was not correct, as the ship did not sail till several days afterwards, yet it was deemed a material concealment.

So, in Beckwaite v. Nalgrove, MS. Guildhall (cited 3 Taunt. 41.), the plaintiff concealed from the underwriters the fact that he had received a letter from the Cape of Good Hope, stating that there were then two or three French privateers in those seas; and, upon the ground of that concealment, he was nonsuited. So, in Lynch v. Hamilton supra, it was held that the owner was bound to communicate to the underwriters any intelligence he had, which might affect his choice, whether he would insure at all, and at what premium he would insure; whether the fact was true or false. Therefore, where some ships were advertised to be in danger, and the insurer effected a policy on "ship or ship," knowing that the ship in danger was one of them, without

stating the ships' names, the Court of C. P. held, that the concealment avoided the policy, though the rumour was false. 3 Taunt. 37. See likewise Webster v. Fosten, 1 Esp. 407. Fillis v. Brutton, Park. 250. Ratcliffe v. Schoolbred, Marsh. 488. Lynch v. Dunsford, in error, 14 East 495. Sawtell v. London, 5 Taunt. 363. Gladstone v. King, 1 M. and S. 35.

The same rule applies to policies of every other description. In contracts of chance, the circumstances of every case should be fully and fairly disclosed. Therefore, where A., abroad, having two warehouses, wrote to this country to effect an insurance upon one of them only, without stating, as was the fact, that a house nearly adjoining it had been on fire on that evening, and that there was danger of the fire again breaking out, and sent his letter after the regular post time; and the fire, having broken out on the next day but one following, consumed A.'s warehouse; it was held to be a material concealment, though A's letter was written without any fraudulent intention. Buff v. Turner and Others, 2 Marsh. Rep. 46.

2. As to what disclosures are not necessary. The assured is not bound to communicate any fact which the underwriter may be presumed to know equally with himself. In Vallance v. Dewar, 1 Campb. 503, Lord Ellenborough thus lays down the rule of disclosure "The rule is, that the broker must communicate what is in the special knowledge of the assured, not what is in the middle between them and the underwriter. He is not bound to make a laborious disclosure of what is known to all." Therefore the underwriters are bound to know the nature and circumstances of the branch of trade to which the policy refers; and if the usage is general, it makes no difference that it is not uniform. See Kingston v. Knibbs, 49 Geo. III. Sittings after M. T. 1 Campb. 508. Pelly v. Royal Exchange Assurance, 1 Burr. 341. Tierney v. Etherington, ibid. 348. Lyons v. Bridge, Doug. 512. Hoskins v. Pickersgill, Marsh. 727.

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v.

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Although, at the time of effecting the insurance, the underwriter is entitled to be informed of all the circumstances and Another relative to the actual state of the vessel, it is not necessary that he should be apprised of all the calamities which have previously befallen her in the course of the voyage. Freeland v. Glover, 6 Esp. 14. 7 East 457. Acc. Schoolbred v. Nutt, Park. 300. S. C. Mar. shall 475.

And the broker is only bound to communicate facts to the underwriters, and not the opinions and apprehensions occasioned by those facts. Bell v. Bell, 2 Campb. 475. The particular circumstances of that case, however, distinguish it from Lynch v. Humilton,

supra.

The non-communication of the damaged state of goods shipped, from which danger is likely to ensue, does not vitiate the policy, where these circumstances are unconnected with the cause of the loss. Boyd v. Dubois, 3 Campb. 133.