Insurable interest in profits.

Insurable interest of charterer.

chartered voyage."—Gordon vs. Com. Ins. Co., 4 Denio, p. 362; Thompson vs. Taylor, 6 T. R., p. 478; Horncastle vs. Suart, 7 East, p. 400. "Both ship and goods are ready for the specified voyage."-Forbes vs. Aspinall, 13 East, p. 331; Montgomery vs. Eggington, 3 T. R., p. 362; see notes to Secs. 2655 and 2546.

2664. One who has an interest in the thing from which profits are expected to proceed, has an insurable interest in the profits.

NOTE.-Abbott vs. Sebor, 3 Johns. Cas., p. 39. See notes to Secs. 2655 and 2546.

2665. The charterer of a ship has an insurable interest in it, to the extent that he is liable to be damnified by its loss.

NOTE.-Oliver vs. Greene, 3 Mass., p. 133; Bartlet vs. Walker, 13 Mass., p. 267. See notes to Secs. 2655 and 2546.

Informa

tion must

ARTICLE III.

CONCEALMENT.

SECTION 2669. Information must be communicated.
2670. Material information.

2671. Presumption of knowledge of loss.

2672. Concealments which only affect the risk in question.

2669. In marine insurance each party is bound to be commu- communicate, in addition to what is required by Section 2563, all the information which he possesses,

nicated.

material to the risk, except such as is mentioned in Section 2564, and to state the exact and whole truth in relation to all matters that he represents, or upon inquiry assumes to disclose.

NOTE.-2 Duer Ins., pp. 381, 388; Ang. Ins., p. 200; 2 Pars. Mar. L., p. 165; see Russell vs. Thornton, 4 H. & N., p. 788. In marine insurance it is necessary that each party preserve the utmost good faith in dealing with the other. The party to be insured must give all the information he possess. Says Mr. Duer, in his work on Insurance (Vol. 2, Lect. 13, Part I, Sec. 35, p. 433): "It would be vain to attempt an enumeration

of all the facts and circumstances that either separately or by their combination may be material to the risks of the policy. They are infinite in their variety." As a practical guide, the merchant should constantly bear in mind the rule laid down by Mr. Marshall (Ins., Vol. 1, p. 465a), that "the insured is bound, from motives of common prudence, to inform himself of every fact and circumstance that may throw the smallest light on the nature and perils of the proposed adventure, and to communicate to the underwriter (insurer), with no reserve, all the information he possesses. It is dangerous to speculate on the smallest amount of information that may safely be given, and the possible immateriality of any of the facts that it embraces, since the suppression of any circumstance that may be thought to have a bearing on the risks to be covered may raise a presumption of its materiality and create a suspicion as to the motives of the party that will suffice to determine the verdict of a jury, and it is only in cases wholly free from doubt that the Court, upon such a question, will undertake to disturb an unfavorable verdict (for the insured.)" Although a complete enumeration is impracticable, yet it is possible to state the leading and most important subjects on which the insurer has the right to expect information. "The information usually necessary to be given may be distributed under the following general heads: 1. The state and condition of the ship or property insured; 2. The nature and extent of the interest of the insured; 3. The extraordinary perils arising from extrinsic causes to which the property has been or will probably be exposed."-Duer Ins., p. 434. For a full discussion of what may be concealed and what information must be given, see 2 Duer on Ins., Lect. 13, Parts I and II. See notes to Secs. 2561-2582, ante, inclusive. For full information respecting concealment, see the cases cited below: Carter vs. Boehm, 3 Burr., p. 1905; 1 Wm. Black., p. 593; De Costa vs. Scandret, 2 P. Wms., p. 170; Seaman vs. Fonnereau, 2 Strange, p. 1183; Radcliff vs. Shoolbred, 1 Park., (8th ed.), b. 413; Marsh., p. 268; Shirley vs. Wilkinson, 3 Doug., p. 41; S. C., 1 Doug., p. 306; Thompson vs. Buchanan, 4 Brown's P. C. (Tomlin's ed.), p. 483; Willis vs. Glover, 1 B. & Pul. N. R., p. 14; Bridges vs. Hunter, 1 M. & S., p. 15; Lynch vs. Hamilton, 3 Taunt., p. 37; Lynch vs. Dunsford, 14 East, p. 494; Durrell vs. Bedesly, 1 Holt, p. 104; Hoyt vs. Gilman, 8 Mass., p. 336; Curry vs.

23-vol. ii.

The Commonwealth Ins. Co., 10 Pick., p. 535; Kohne vs. Ins. Co. of N. A., 1 Wash. C. C. R., p. 161; Maryland Ins. Co. vs. Ruden's Administrs., 6 Cranch., p. 338; Livingston vs. Maryland Ins. Co., 6 Cranch., p. 279; Seaton vs. Lewis, 1 Johns. Cas., p. 1; Ely vs. Hallett, 2 Caines, p. 57; Hubbard vs. Coolidge, 2 Gallis, p. 353; Union Ins. Co. vs. Stoney, Harper, p. 235; Burr vs. Forster, see 1 Phillips, p. 258. Mr. Duer (Ins., pp. 506-518), after carefully reviewing most of these cases above cited, claims that they support the positions "that in order to avoid a policy it is not necessary that the concealment should be fraudulent, nor that the facts concealed should have had any influence on the actual loss, nor that the intelligence suppressed should be positive in its nature or true in the event. These positions being in fact only varied applications or necessary consequences of the principle that the materiality of the facts concealed depends solely upon their probable influence on the judgment of the insurer as to the true nature and value of the risks.

Mr. Marshall (Ins., p. 467) says, every fact and circumstance which can possibly influence the mind of any prudent and intelligent insurer in determining whether he will underwrite the policy at all, or at what premium he will underwrite it, is material. Mr. Duer comments on this and says (Ins., p. 518): "It is plain that this definition embraces facts extraneous to the risks, for there are many such facts that not only possibly may, but probably will, influence the mind and control the determination of a prudent insurer." *** "The obligation of the assured is limited to the communication of those facts which are connected with the real nature of the risks." "It is the risk itself

that the concealment must change not the mere opinion of the underwriter as to the prudence of assuming it." And sustaining this view, see Haywood vs. Rodgers, 4 East (commenting on and explaining Carter vs. Boehm); Shoolbred vs. Nutt, 1 Park, (8 ed.), pp. 492-3; Beckwith vs. Lydebotham, 1 Camp., p. 116; Rickards vs. Murdock, 10 B. & C., p. 527. In the United States the Judges have in some cases expressed themselves as implying that the only test of the materiality of a concealment is the probable influence of the facts if disclosed upon the mind of the insurer. But, says Mr. Duer (Ins., p. 523): “In every decided case that I have examined in which the concealment has been held to discharge the underwriter the facts concealed were material to the risks in the strict and proper sense of the term."-See Clason vs. Smith, 3

Wash., C. C. R., p. 156; Ruggles vs. Gen. Int. Ins. Co., 4 Mason, p. 74. It is the duty of the insured to employ every necessary and usual means for procuring the information which he is bound to impart to the insurer; and if the insured employs an agent to effect the policy he must be diligent and careful in imparting all knowledge to such agent. If subsequently he receives news of a loss he must also be prompt to communicate the same to the agent. Care, diligence, and dispatch are required. Mr. Millar gives the following report of the case of Grieve vs. Young (Millar on Ins., p. 65): "On the 10th December, 1779, William Grieve, merchant, in Eyemouth, wrote to Messrs. Muat & Aitkin, his correspondents in Edinburgh, as follows: 'Dear Sir: The Jean, of Dunbar, Thomas Neilson, master, sailed this afternoon's tide, with a fair wind, for Alloa. If you please you may get £160 done upon her with Messrs. Kinnear, in case you should find the morning coarse; our mutual friend having left that for me, as I found cause. You will do as you see prudent for our interest.' As Eyemouth is not a post town, the method in which the merchants there carry on their correspondence with Edinburgh is by sending their letters in the evening to the Press, or to Ayton, two stages upon the London road, where they are taken up by the post early next morning. This letter in question was sent to the Press on the evening of the tenth, and arrived in Edinburgh about six o'clock, afternoon of the eleventh. About eight o'clock, afternoon of the eleventh, Mr. Grieve's correspondent got insurance done accordingly. The vessel, on the evening of the tenth, after the letter was dispatched to the Press, was driven back to Coldingham Bay, within two or three miles of Eyemouth, and Mr. Grieve was informed of the disaster in consequence of the crew having about half an hour after eight in the morning of the eleventh been taken ashore in a fishing boat. The ship went to the bottom about ten o'clock, in sight of Mr. Grieve himself. The departure of the London post from the Press usually happens before seven in the morning, but on many occasions it is so late as nine, ten, or eleven o'clock, and sometimes, though seldom, not before one or two, afternoon. On the eleventh December, the day in question, the post did not leave the Press till near ten o'clock, so that the loss of the vessel not only happened and was known to the assured before the insurance was made, but even before his letter had come into the hands of the post. Ayton is two and the Press five miles distant from Eyemouth. The underwriters

having insisted that it was Mr. Grieve's duty to have sent another letter to the Press on the morning of the eleventh of December countermanding his order, or to have got back his letter from the Postmaster there. The question came before the Judge Admiral, who found: That it was incumbent on Mr. Grieve, by express, to have informed his correspondents of the disaster, in order that the making of the insurance might have been stopped, which he had reason to think would have reached Edinburgh time enough for that purpose.' The cause having been removed into the Court of Session, the assured contended that there was no obligation upon any merchant to convey intelligence with greater expedition than by the ordinary course of post. That the same reason which made it necessary to send an express from Eyemouth to Edinburgh in the present case would make it equally incumbent to send expresses, though at greater distances, from Edinburgh to London, or from London to the West Indies, whereever there was a bare possibility of outstripping the ordinary post or packet. The underwriters, on the other hand, argued that if the case had been reversed, and Mr. Grieve had wanted to save insurance by notifying the arrival of a vessel, he would have found no difficulty in accomplishing this, and he would have made no scruple of sending an express to Edinburgh. On such occasions the duties ought to be equal and reciprocal. But if it was not necessary to send an express it was surely incumbent on Mr. Grieve, if he meant to act fairly, the moment he knew of the ship's being driven back, to have dispatched a messenger to the Press or to Ayton, either to bring back his letter from the Post Office, or to put in another, explaining the circumstances as they then stood; and in either of these cases no insurance would have taken place. The Court were of opinion that it was not incumbent to send an express to Edinburgh, but being satisfied that Mr. Grieve had time to countermand the insurance, in the ordinary course of post, and that it was his duty to have done so, gave judgment for the underwriters." See, also, on these points Watson vs. Delafield, 2 Caines, p. 224; (commenting on Grieve vs. Young, and Fitz Herbert vs. Mather, S. C. 1 Johns., p. 152; S. C. 2 Johns., p. 526); see, also, Andrews vs. the Marine Ins. Co., 9 Johns., p. 32; McLanahan vs. Universal Ins. Co., 1 Peters, p. 170; Green vs Merchants Ins. Co., 10 Pick., p. 402; Johnson vs. Phoenix Ins. Co., 1 Wash. C. C. R., p. 378; and see Mr. Duer's comments on some of these cases.-Vol. 2 Ins., p. 533.