May, 1804. D. Williams V. NEW-YORK, bond, has not an insurable interest, without there is a special clause inserted in the policy, 'designating the particular interest insured. There is nothing I think in the conduct of the plaintiff shewing want of good faith; all the witnesses concur in representing that he was extremely solicitous to pursue the voyage to Algiers, but that he was obliged to abandon it for want of funds. P. N. Smith. The same V. The same. arise between cases in Eng land, and cases here,on account countries. Lewin v. cery. This was on the argument admitted by the defendant's counsel, to be, as a general principle, sufficient cause for abandonment, of the wordings and breaking up the voyage. I see nothing in this case of the register acts of the two to take it out of the general rule. The difficulty and embarrassment which the plaintiff met with in raising Suasso,in chan- funds, were not occasioned by the bottomry bond. No claim was made on this vessel by virtue of that bond, until after the captain had determined to abandon the voyage. The next question then will be, as to the amount of the loss on the ship. The underwriter, I think, clearly ought not to suffer in consequence of the incumbrance on the ship by the bottomry bond; this is a loss that must be sustained by the plaintiff; or, for which he must look to the person from whom he purchased the vessel. In ordinary cases, immediately on the abandonment, the subject insured would become the property of the underwriter, and he would be entitled to receive its full value. If then the underwriter has been deprived of this property in consequence of a lien or incumbrance for which he is not answerable, the assured must put him in the same situation he would have been in, had no such lien existed; that is, in the present case by deducting the value of the vessel at the time of abandonment, from the amount of the insurance. And I know of no better rule, by which to ascertain that value, than by the sale, provided there was no fraud or collusion. Had not the ship been seized under this bottomry bond, the captain would have been obliged to sell her, as the voyage must have been broken up: the sale would have been at the same place, and under equally unfavourable circumstances. I can discover no fraud or unfair conduct in the transaction. She was sold at public auction under the direction of a public officer, and I think the price for which she sold, must prima facie be considered her true value, and D. Williams V. The same V. The same. and this being less than one half her value there, was of NEW-YORK May, 1804. course a total loss. I am therefore of opinion the verdict was against evidence, and that a new trial be granted on payment of costs. With respect to the case on the freight, I am satisfied with the verdict of the jury, that there was a pro rata freight earned, to wit, fourfifths of the whole, amounting to $2400. The owner of the vessel was also master, and part owner of the goods. I take it to be a rule well settled, that where a ship by reason of any disaster, goes into a port short of the place of destination, and is unable to prosecute and complete the voyage, and the goods are there received by the owner, freight must be paid according to the proportion of the voyage performed. This rule is certainly founded in justice and equity, and ought to receive a liberal application. The master here, acting in the double capacity of captain of the vessel and owner of the cargo, interfered, and disposed of the goods, and although, perhaps it may be difficult to say, whether in such disposition he acted in his capacity of owner or master, yet I think prima facie, he ought to be considered as acting in that capacity which leads to the most equitable result, and best answers the end of justice. The circumstances under which the cargo was received and disposed of by the plaintiff, were submitted to the jury, who by their decision, must have considered him in that transaction, as acting in his capacity of owner; and in doubtful cases where the justice of the case is with the verdict, I think the court ought not to interfere and set it aside. The opinion of the court therefore is, that the plaintiff take nothing by his motion. Livingston, J. Judgment was given in favour of the plaintiff on two other policies on this voyage; the one on ship, and the other on cargo. I concur in all the points determined, except as to the effect of the bottomry on the insurance, and in the conclusion that the voyage was finally defeated from a want of funds. Here, also, I agree in the opinion just delivered, that a pro rata freight was earned as far as Cadiz, and that if the plaintiff be entitled to recover at all, the verdict is right: but I cannot think the defendants are liable for any thing on this policy, NEW-YORK, D. Williams V. The same every It is essential to the validity of every contract of this kind, that an account be given to the underwriters of material fact, which enhances the risk. This acP. N. Smith. count, in other words, should be exact and complete, because the insurer computes his risk by it. If, therefore, any circumstance be suppressed or concealed, which the insurer knows to exist; and which, if disclosed, would entitle the other party to demand a higher premium, the contract is void; for every intentional concealment of circumstances which vary the risk, is regarded as a fraud. But it is not only a fraudulent concealment or misrepresen. tation that will vacate a policy. If a representation be made from oversight or with the utmost good faith, and without any design to impose, still, if it be of a material fact, and not true, there is an end to the policy. There is no reason why the same rule should not apply to an unintentional concealment: nor ought it to form any excuse that the assured knew nothing of the fact concealed. He is supposed and ought to know every thing material that relates to the subject of insurance, and is presumed to be in a situation to lay before the underwriters every matter necessary to form a just estimate of the risk he is about to assume. The property is his, and by a mode rate degree of attention, he might obtain every necessary information respecting it. If he does not, he must be deemed guilty of negligence for which he alone ought to suf fer. If neither of the parties know of a circumstance which subsequent events have discovered to be impor tant, the contract is founded in mutual error, in which case the parties cannot be said to have assented to it. If the assured had known the circumstances, he would not have effected an insurance at all; or would have disclosed it to the underwriters, who would have declined the risk altogether, or have asked an increase of premium. These principles accord with those which are laid down and illustrated by Mr. Miller in his law of Insurance. "Every instance of misrepresentation and concealment," says this learned author, "however unintentional, if it "varies the risk undertaken, in the minutest particular, “from that understood, destroys the consent of parties, "and annuls the contract." "It implies not only mis May, 1804. "take, but mistake founded in fault. "Culpa lata, say NEW-YORK, the civilians, "equiparatur dolo." Page 49. It remains to shew the application of these principles to the present case, I am now considering. Whether, in virtue of the abandonment at Cadiz, the plaintiffs be entitled to call on the defendants for payment of their subscription to the policy, inasmuch as she was within ten days thereafter and before the defendant could by any possibility have heard of the abandonment, seized to satisfy a bottomry bill of which they knew nothing? The insured, before an indemnity can be demanded of an underwriter for a technical total loss, must abandon or cede to him all the property that may be recovered from shipwreck or any other peril enumerated in the policy.In virtue of this abandonment, the underwriter is entitled to the property saved, and to dispose of it as he may think proper. But if the property thus ceded be withheld from any other cause than from one of the perils insured against; or if he cannot obtain possession for any other reason than on account of such peril, he ought not to be held to pay for the loss. It is certainly part of the contract, that in case of abandonment, the assurer shall have the property saved so far as his insurance extends; and if this right be defeated by any act of the assured, or by any circumstance not within the perils insured against, and not known to the underwriter, he cannot without manifest injustice be chargeable. In this case the property was kept from the defendants, and the object of the abanment thus defeated, not by any accident within the policy, but by enforcing a mortgage which existed long before the insurance was effected. It cannot be pretended, that the defendants assumed this risk, nor that they would, but for a very large premium, have exposed themselves to it. It is not enough that the plaintiff is willing to credit them, with the proceeds of the sale under the sentence of the Spanish tribunal, which were applied to extinguish the bond. It is the sale itself of which they complain. No one can say that a compulsory disposition, in a foreign port, of any American vessel, and that for cash, will furnish a fair criterion of her real value; nor is it probable that the defendants, if left at liberty, as they ought to have been, would have sold her D. Williams V. The same V. The same. NEW-YORK, in D. Williams V. The same V. The same. fice. way, which could not but be attended with great sacri They would probably have ordered her to this country, or pursued other measures to make the most of the P. N. Smith. property. This reasoning may at first appear more applicable to an insurance on the vessel, but I have not thought it necessary to make any distinction; for, on the principles on which I proceed, if the voyage were impeded or finally defeated by occasion of the bottomry, the underwriters on freight ought to be no more liable than those on the ship. But it is alleged, that it being determined to abandon the voyage previous to any proceeding on the bottomry, and the underwriters being fixed by such abandonment, it is of no importance what became of the property afterwards. Without examining the effect of an abandonment of a voyage, thus declared abroad before a Consul, and without any commmunication of it until long after to the underwriters, I think it has been already shewn that even if the abandonment were good, yet if its object, as it regarded the defendants, were defeated by judicial process not grounded on any marine peril, there ought to be no recovery. The want of funds, I am satisfied, was a mere pretence to break up the voyage, before a seizure took place under the bottomry. It is incredible that in such a city as Cadiz, between which and New-York there is a constant commercial intercourse, it should not be practicable to raise funds necessary to repair the Prosper; but if such difficulty existed, it may fairly be imputed to the owner's inability to give an adequate security on the vessel in consequence of the antecedent hi*pothecation, and this furnishes another reason for not rendering the underwriters liable. But for this obstacle, no doubt, money would have been raised. My own belief is, and it is warranted by the whole course of the transaction, that no idea was entertained of abandoning the voyage to Algiers until after Williams discovered that the bottomry bill was in Cadiz; and that to avoid an arrest on that account, he contrived to put a period to the voyage, pretending that no funds were to be had to pay for or finish the repairs. How could this be possible? Mr. Terry, the American Consul, had already paid for all the repairs, which had been put on previous to her being blown to sea; and it is very evident that when she was thus forced out of |