will be seen that the damages for delay are now reduced to two heads-firstly, an agreed period of 10 months before delivery, and secondly the 4 months' lay-up between the third and fourth voyages. This second point, however, is after purchase by the companies, and is therefore irrecoverable by the defendants. With regard to the first point, the plaintiffs agreed that if damage resulted from this delay they (the plaintiffs) must pay. The facts are that owing to low freights the ship made continual heavy losses out of all proportion to the total cost of repairs and lubricating oil on every voyage. But the freights during those ten months would have been even worse and the loss heavier. The anticipated trading profit is the true measure of damage on well-known authority. There was no broken contract with third parties, and therefore there was no loss under this head. The freights during the second period of four and a half months were at their lowest ebb. Further, on the evidence, it is practically admitted that the defendants kept the boat tied up during this period because of the low freights, and not because of any delay in repairs or alterations by the plaintiffs. There is therefore no delay damage. With regard to the remaining head of damage there are two minor matters agreed between the parties. In the matter of tank top alteration we have agreed to pay the defendants half of this amount, thus accepting liability on the counterclaim for £300. Being already admittedly under contract to pay excess lubricating oil used over 60 gallons a day on voyages four and five we agreed to treat the first three voyages and the first half of the sixth on the same basis as a concession. This ought not to be treated as an admitted liability under the counterclaim. But if it is we have an admitted liability of some £700 or £800 which can easily be ascertained by agreement. In the result we must submit on the counterclaim to a liability of £1000 to £1100.

"There remains the only outstanding and main question: What is the difference between the value of engines as per contract and as delivered?' That is the true measure of damage. There are three main complaints. (a) By reason of overheating and other points of bad design this ship was unfit to go to sea and is therefore worthless. Our evidence, with the admission obtained in cross-examination will, we hope, dispose of that. The next two objections go to the diminishing rather than the extinguishing of price. (b) The engines use grossly excessive amounts of lubricating oil, thus much diminishing their value, and (c) the repair bill is much too high and will remain so. As to (b) there was no warranty as to lubricating oil figures in contradistinction to fuel oil. All the defendants were entitled to was a commercial engine. If the total running costs are less than, or do not exceed, that of any known efficient type, they have no complaint, except in so far as an excess of lubricating oil may damage

the engines. The figures are as followsthese are the per annum figures: Losses : 15 gallons of oil per day for 200 days£450 for the year. Profits: In capital account at 6 per cent. on £17,000 saved over a full Diesel, £1020 per year; saving on fuel oil as per evidence at least £1000 per year; saving in cargo space 140 tons, which was worth, in fairness, £500. Thus there was £450 on one side and £2500 on the other. In the result there is a profit per annum to the defendants of over £2000 a year. Taking 6 per cent. annuity basis for 13 years this would represent a saving to the defendants of £17,700.

and

"As to her commercial performance, she has run 30,000 miles, has never been held up in port for repair, and she has always carried her freight. We hope to prove that even as she is, apart from neglect carelessness in running, and in and after dismantling, to put her in running condition would not cost more than the ordinary fair wear and tear expenses. Much has been said as to mechanical breakdowns at sea, but if the defendants are entitled to any damage under this head there appears to be ample advantage to cover this damage many times. As to (c) we deny it in toto, and we hope to prove that the repairs, even as done, are more than moderate for large marine internal combustion engines, and, when we allow a discount for the results of carelessness of defendants' servants, are much lower than would be expected."

Monday, Oct. 17, 1927.

Mr. DUNLOP said he was glad to be able to state that a settlement had been arrived at, and he asked that judgment should be entered in the terms endorsed on Counsel's briefs. He believed it was the view of both parties-and certainly it was the view of the defendants-that a settlement could not have been reached unless the investigation of the facts had been as full as they had been. Both parties considered themselves fortunate when they knew that the case was to be taken by Mr. Justice Finlay, and it would only be fitting to express their appreciation of the large and indispensable part which his Lordship had taken in the investigation of the case.

Mr. MORITZ associated himself with the remarks made by Mr. Dunlop, and said that although the costs were lamentable they had not been thrown away, because the settlement could not have been arrived at without the investigation which both sides had had, and without the matter being thrashed out as far as it was.

Mr. Justice FINLAY said the case had been a troublesome one, and he had been enormously assisted by the zeal and ability with which it had been conducted on both sides. He also desired to express his appreciation of the assistance that had been given to him by the expert witnesses. He accepted the terms of settlement.

KING'S BENCH DIVISION.

Thursday, Oct. 13, 1927.

DENT v. BLACKMORE AND OTHERS.

Before Mr. Justice MCCARDIE. Insurance (motor car)-Policy-ValidityRepudiation by insurers upheld on ground (1) that answers given in proposal form were untrue; (2) that there was non-disclosure-Plea of ambiguity not accepted by learned Judge.

This case concerned a dispute regarding the repudiation of a motor car insurance policy, and was brought by Mr. Reuben Henry Dent, of Wigmore Street, London, against Mr. Ernest Blackmore and Others, Underwriting Members of Lloyd's.

Plaintiff asked for a declaration that the policy, dated May 13, 1925, was on July 27, 1925, and still was, a valid and subsisting policy, and that he was entitled to be indemnified and paid by the defendants in respect of all claims by third parties for compensation and legal costs, together with the legal costs incurred and to be incurred by him. Plaintiff also claimed to be paid £325 in respect of damage to the car; £52 103. medical expenses, and in the alternative damages for wrongful repudiation.

The defence was that inaccurate answers were given to the questions in the proposal form and that there was a concealment of material facts.

Mr. Norman Birkett, K.C., and Mr. Thomas Dawson (instructed by Messrs. Lawson & Lawson) appeared for the plaintiff; Mr. F. P. M. Schiller, K.C., and Mr. Malcolm Hilbery (instructed by Messrs. Leonard Bingham & Sharp) represented the defendants.

Mr. DAWSON, in opening, said that on the proposal form there was a question : "What accidents have occurred in connection with your motor cars during the past two years, including cost?" The answer written by the plaintiff was Damaged wings;" and the defendants said that that answer was untrue. Another question on the form was: "Has any company or underwriter at any time in respect of any motor car declined your proposal, or asked an increased premium or quoted special terms, or cancelled or refused to renew?" The answer was "No," and the defendants contended that that answer was untrue. It was also contended for the defence that there had been certain material concealments by the plaintiff, and that he had not disclosed that he had had a policy with another insurance company and had made six claims totalling £107. Those claims were made prior to the period of two years mentioned in the proposal form. During the previous two years, while he was insured with the Sun Insurance Office, plaintiff had a series of six accidents with his car, and they all resulted in damage to wings. The claims made were for small amounts. On

Apr. 7, 1924, plaintiff's car knocked down a woman in London, and he subsequently received a claim for compensation in respect of her injuries. He sent the writ to the Sun Insurance Office, and did not hear any more about the matter. It was not until the present policy was repudiated that he learned that the action brought by the woman's husband had been settled by the payment of £20 and 10 guineas costs. Plaintiff imagined that the claim had been withdrawn or had been disposed of without payment.

Mr. Justice MCCARDIE asked if the answer, "Damaged wings did not suggest that there had been only one accident, and Mr. DAWSON replied that he did not think so, as it was possible for a motorist to have more than one accident in which his car was similarly damaged.

Mr. DAWSON added that it was alleged by the defendants that in June, 1923, plaintiff was informed by the Sun Insurance Office that they would require altered terms for the renewal of his policy, but plaintiff had no knowledge of that fact.

Evidence was given by Mr. DENT regarding accidents in which his car, a Sizaire Berwick, was concerned. In cross-examination he said he had had three motor car insurance policies in a period of five years. From June, 1922, to June, 1923, he had a policy with the Car & General Insurance Corporation, and for two years he was insured with the Sun Insurance Office. One proposal form which he received from the latter company was blank when he signed it.

Mr. SCHILLER: The answer to the question "What accidents have occurred during the past two years in connection with any motor car owned or driven by you" is given as "Nil." Was that true? Are you suggesting that it was in the proposal form when you signed it?-Mr. DENT: I am suggesting nothing, but I am positive it was blank when I signed it.

Asked by his LORDSHIP why he changed his insurance company, Mr. DENT said there were rumours about the Car & General Insurance Corporation, and he thought that the sooner he was out of it the better.

Mr. SCHILLER: Did you change because they asked you to carry the first £10 worth of risk, as you had had so many accidents? -WITNESS: No, it is rubbish to say so.

Mr. FREDERICK GIDDEN, clerk in the accident department of the Sun Insurance Office, stated that during 1924 and 1925 seven claims were made by Mr. Dent under his insurance policy. There was a third party claim in respect of an accident in April, 1924, but so far as the company were aware Mr. Dent's car was not damaged on that occasion.

Mr. SCHILLER submitted that plaintiff's claim must fail on the evidence given, as some of the answers to questions on the proposal form were inaccurate. The object of questions put by insurance companies was to ascertain in detail the history of the car concerned. In this case Mr. Dest took out a policy with the Car & General

Insurance Corporation, and he had six accidents. On the day that the renewal of the policy was due he was negotiating with another company, and though he had had six accidents, the claims totalling £107, he mentioned only two of the accidents. Mr. Dent did not give reasonable and proper answers to the questions, and it was perfectly immaterial what his view was of what he was doing if he conveyed a wrong impression to the insurance company and did not tell them all the facts.

Giving evidence for the defence, Mr. CHARLES CALLIEU, manager of the Chancery Lane branch of the Car & General Insurance Corporation, said that during the year ended June, 1923, Mr. Dent's car was insured by that company. During the year the claims made by Mr. Dent and paid by the company amounted to £107 1s. 6d., and at the end of the year, when renewal of the policy was desired, Mr. Dent would be asked to bear the first £10 of any claim. Asked by Mr. HILBERY if he was aware of rumours in 1923 that the Car & General Insurance Corporation was in an unstable condition, witness replied that he never heard the rumours, and said that the company was, both in 1923 and at present, one of the premier companies carrying that type of risk.

Cross-examined by Mr. Birkett, WITNESS said he told Mr. Dent on the telephone that he would have to bear the first £10 of risk, but it was purposely not mentioned in correspondence. Such a condition of renewal would have been endorsed on the policy, but in the present case the policy was not renewed.

Friday, Oct. 14, 1927.

Mr. BIRKETT, commenting on the evidence of Mr. Callieu, who said he telephoned to Mr. Dent informing him of altered terms on which the policy would be renewed, said he did not question the integrity of Mr. Callieu. In the letter confirming the telephone conversation there was no reference to altered terms, and there was no suggestion of an endorsement of the policy or of a new policy containing the altered terms being issued. No request was made for the surrender of the old policy. Referring to the question on the proposal form: "IIave you previously held a motor car insurance policy? to which plaintiff had replied, 'Sun," and had not mentioned that he had also had a policy with the Car & General Insurance Corporation, Counsel contended that the question was ambiguous, and that the answer given by Mr. Dent was a truthful one and was not misleading in any way. The question allowed a man of good intent to believe that it was directed to the question: "Are you a new proposer, or have you previously been insured? If it was intended to have a wider meaning the question ought to have been differently worded,

and should have read: "How many insurance policies have you held, and with what companies?' If the defendants wanted a complete record of all Mr. Dent's insurance policies they should have asked a question which left no room for doubt or ambiguity. Dealing with what he described as the really serious part of the case-the answer Damaged wings to the question as to what accidents had occurred to his cars during the past two years, Counsel submitted that the answer was a strictly truthful one, and accurately described the damage to the cars.

The question contained no reference to third party claims, and it might reasonably be construed as meaning what accidents had occurred to the car. It was a coincidence that in all the seven accidents Mr. Dent's car sustained damaged wings, but it was a fact, and the answer was therefore a truthful one. Once an insurance company had pledged itself to certain questions, the answers to which formed the basis of the contract, it could not go outside them. If a person answered the questions truthfully and honestly, no insurance company should be allowed to ask for a wider interpretation which would have the effect, when the person had been involved in an accident costing hundreds of pounds, and for which he thought he was covered, of enabling the company to say: Pay it yourself."

JUDGMENT.

Mr. Justice MCCARDIE, in giving judgment, said: This action is brought by Mr. Dent against the defendants, who underwrote a Lloyd's policy of insurance. The policy was dated May 13, 1925, and it insured Mr. Dent in respect of a motor car against claims by the public, damage to the car, burglary, theft

and other matters. The car insured was a Sizaire Berwick. Defendants repudiated liability on the ground that the answers given by Mr. Dent in the proposal form were untrue, and also upon the ground that Mr. Dent failed to disclose material facts to the defendants.

The proposal form signed by the plaintiff was dated May 9, and it contains several questions and several answers which have been discussed before me. The earlier questions are not the subject of debate. The first question for consideration is this: "What accidents have occurred in connection with your motor cars during the past two years, including cost? The answer given by Mr. Dent to that question was in two words, i.e., "Damaged wings."

It is right that I should point out here that opposite to the body of the question in the proposal form are set the words, printed in conspicuous type: "Please answer each question fully." The first ground taken by the defendants in this action is that that answer by Mr. Dent was untrue. I should mention that the car owned by Mr. Dent before he bought his Sizaire Berwicke was a Fiat. The question

is whether that answer is untrue or not; and in connection with that point I bear in mind the submission of the learned Counsel (Mr. Birkett) for the plaintiff, that the question was ambiguous.

Was the question ambiguous? In my view there is no ambiguity at all. No honest and intelligent man could doubt the meaning of the question, and it certainly has no more ambiguity, if ambiguity exists at all, than existed in the question found in the policy of insurance dealt with by the Privy Council in Condogianis v. Guardian Assurance Co., Ltd., [1921] 2 A.C. 125; 7 LI.L.Rep. 155.

Now, the answer "Damaged wings conveys to my mind the clear impression that Mr. Dent had suffered during the two years mentioned one accident, and one accident only, of trivial character-an accident that could rightly be described as one which had resulted only in the unimportant injury of damaged wings.

Now, what were the facts? Prior to the insurance with the defendants, that is, for the year preceding the plaintiff's insurance with the defendants, he had been insured with the Sun Insurance Company under a policy which was substantially similar, and while that insurance policy was running and during the period, January, 1924, to January, 1925, plaintiff had had no less. than seven accidents to his motor car. It is an extraordinary number of accidents for such a period, and not only that but in my view it is quite plain that the results of those accidents were not confined to damaged wings at all. It is quite true that in each of the accidents there appears to have been damage to the wings of plaintiff's car, but in one of them, that of Apr. 12, 1924, substantial injury was caused to a lady by plaintiff's motor car. A writ was issued against plaintiff and he handed it on to the Sun Insurance Company, and the result of that accident was a cost to the Sun Insurance Company of no less than £20 and 10 guineas costs in settlenient. And, moreover, in the last of the accidents during this period, that in January, 1925, in addition to injuries to both wings there was a strained steering, which is not without significance. The total cost of those seven claims was well over £100.

In view of those circumstances, to my mind, the answer of the plaintiff was wholly untrue; and I hold beyond that in this case, because I deem it my duty to do so, that Mr. Dent must have known it was untrue, because he had full knowledge, as appears from his evidence in the witness-box, of the nature of each accident. On that ground I should hold without hesitation that the plaintiff was guilty of giving an untrue answer to the question put as I have mentioned. The proposal form was the basis of the policy, and therefore on the principle of Thomson v. Weems, 9 App. Cas. 671, the policy would be void.

I desire to deal briefly with the other grounds put forward and argued so ably

by Counsel on both sides. There is another question put to Mr. Dent in this proposal forin, and it is this: Have you previously held a motor insurance policy; if so, please state the name of the insurance company?" The answer given by Mr. Dent to that question was: "The Sun Insurance Co." I quite agree that there may be force in Mr. Birkett's submission that a man is not bound as a rule and normally to mention an insurance policy of a generation ago which can have no bearing at all upon the position at the present time.

What are the facts here? I have mentioned the Sun Insurance Company policy which ran from the spring of

1924

to the spring of 1925, and resulted in the seven claims but I indicated, immediately before that policy Mr. Dent had been insured with the Car & General Insurance Corporation under a policy which again was substantially in the same form as the one in this case. That policy ran from the spring of 1922 to the spring of 1923-a policy not in remote times, but a policy which Mr. Dent held in the immediate past, and a policy which it is important to remember because a significant series of accidents took place during the period that that policy was running. There were no less than five accidents at least, possibly six, while the Car & General Insurance Corporation policy was running, and the total of the claims against the insurance company under that policy was no less than £107. To my mind, the answer of Mr. Dent was wholly untrue when he mentioned the Sun Insurance Company. He kept back the fact that in 1922 and 1923 he had been insured with the Car & General Insurance Corporation, and in my opinion he kept back that fact because if he had mentioned the Car & General Insurance Corporation the Lloyd's gentlemen who underwrote this policy would at once have inquired and most probably have refused to issue a policy at all. There is no ambiguity in my view in this question at all; and the answer, as I have said, was untrue.

There is a further point still which has been raised by the defence, and that is in substance this. It arises out of the last question on the proposal form; and that question runs as follows: "Has any company or underwriter at any time in respect of any motor insurance "separate answers are necessary-" either declined your proposal"-and to that Mr. Dent answered "No"" required an increased premium or altered or special terms "-and to that Mr. Dent answered "No"-" or cancelled or refused to renew," and to that Mr. Dent answered "No." The defendants say that "the second question put to you was wrongfully answered because when you told us that no insurance company had required an increased premium or altered or special terms you said that which was untrue, because the Car & General Insurance Corporation refused to renew your policy, in view of the number of claims made against them, unless you accepted a restrictive condition.” This gives rise to questions of fact.

Mr.

Dent says that the Car & General Insurance Corporation never sought to impose upon him a restrictive condition as a prelude to renewal. On the other hand, Mr. Callieu, the representative of the Car & General Insurance Corporation, said frankly: Without the documents before me I cannot remember the details of a telephone interview, but with the documents before me I have no doubt at all about it, and, looking at the record and refreshing my memory, I have no doubt that I did tell Mr. Dent that he could only renew subject to that condition." I accept without hesitation the evidence of Mr. Callieu. I quite agree with the points made by Mr. Birkett on the letters, but if the letters are looked at carefully they show that a state of things had arisen which would lead the company to impose a restrictive condition, and I think on the whole that the letters corroborate Mr. Callieu and I accept his evidence. I rule that the plaintiff said that which was untrue when he told defendants that no insurance company had required altered or special terms.

That is the third ground of defence, and there is still a fourth ground. It is this: The defendants say: 64 Here are a number of facts (the facts which I have indicated briefly in my judgment) with regard to the Car & General Insurance Corporation, with regard to the claims against them, and with regard to the number of accidents in connection with the Sun Insurance Company policy -none of which facts was disclosed. In my view that point is also sound. There is a body of outstanding material facts which plaintiff omitted to mention to the defendants, and in my view those facts are most material. They would have affected any insurance company in deciding whether to issue a policy, or if it was issued whether a higher rate should be demanded.

On all those grounds I hold that the defendants were fully justified in repudiating this policy, and I hold that it is void, and that the action by the plaintiff for a declaration of validity therefore fails in toto. There will be judgment for the defendants, with costs.

Mr. BIRKETT: I submit that, as his Lordship has found that the policy was void ab initio, and that therefore defendants never had any risk, the premium is returnable.

Mr. SCHILLER: His Lordship has found that Mr. Dent made statements knowing them to be untrue, and in those circumstances the premium would not be returnable.

Mr. Justice MCCARDIE: The point does not arise, and I cannot deal with it now.

This case was a claim by the Sutton Shipping Company, Ltd., of St. Mary Axe, London, for the sum of £222 14s. 10d., money, they alleged, had and received by the defendants, Graham's Trading Company, Ltd., of St. Helen's Place, London, for the use of the plaintiffs.

It was the plaintiffs' case that this sum was made up of amounts paid to defendants on account of charges and disbursements to bo incurred on their behalf in connection with the steamship Latchmere at Karachi and Bombay. This amounted to £721 0s. 10d., but against this sum were set off charges and disbursements made by defendants on behalf of the plaintiffs totalling £360 13s. 5d. and £137 12s. 7d., moneys returned to the plaintiffs, leaving a balance alleged to be due to the Sutton Shipping Company, Ltd., of the amount claimed.

The defendants admitted the payment to them by the plaintiffs of the amount set out in the claim and the repayment by them to the plaintiffs of £137 12s. 7d. They denied, however, that the amount of charges or disbursements made by them was only £360 13s. 5d. It reached £583 8s. 3d., and, therefore, they were not indebted to the plaintiffs.

Alternatively, the Graham's Trading Company, Ltd., said the sum of £222 14s. 10d. represented disbursements made by them for the charterers of the steamship, the Armement Gylsen, of Antwerp. Under an agreement by letter of Mar. 30, 1926, addressed by the plaintiffs to the defendants, it was provided that all charges and disbursements should be debited to the plaintiffs by the defendants. Further, that any charges or disbursements which the plaintiffs considered were for account of the charterers of the steamship should be debited by the plaintiffs to the charterers. This agreement was duly performed, and the defendants paid to the plaintiffs £137 12s. 7d., being the amount overpaid by and due to the Sutton Shipping Company, Ltd.