Incomplete or false information or concealment vacates the policy.
Thomson v. Buchanan, and Others
Date: 20 June 1781 Case No. No 8.
What concealment sufficient to vacate the policy.
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In summer 1778, the pursuer had freighted a ship with a cargo to Gibraltar, from which it was to proceed to Malaga, and then with a new cargo to return home to Leith.
The master of the ship, on his arrival at Gibraltar, wrote to his owner the following letter, dated 28th September 1778. “Sir, This is to acquaint you of my arrival here yesterday, after a long hard passage; and to acquaint you there is as much danger going from here to Malaga, as coming from England here. I hear that the merchants at Malaga wont ship any goods on board English ships, before they hear of a convoy to take them from there. I am going to write Mr Ferry to-morrow by post, to hear what he thinks of it; for there is a great number of ships at Malaga that is chartered, and the merchants wont ship on board of them. They are shipping on board of Spanish ships for London.”
After receiving this letter, the pursuer got the ship insured by the defenders, to the extent of L. 600, at the rate of 25 guineas per cent. and subjoined to the policy was a note, in these words:
“The last advice from Gibraltar was, the 28th September 1778; and the vessel arrived only the day before, and had a cargo to discharge. If said ship sails with convoy from Malaga or Gibraltar, bound for England, and arrives safe, L. 5 per cent. shall be returned.”
But the letter itself was neither communicated to the underwriters, nor put into the broker's hands.
The ship was taken on the very day it sailed from Gibraltar; and intelligence of the capture was received on the very morning after the policy was underwritten.
Action for payment of the insurance-money was brought before the Court of Admiralty: And the chief defence pleaded by the insurers was, that the policy was vacated by the concealment of the letter of advice from Gibraltar. The Judge of the Admiralty repelled the defence; but the cause being carried to the Court of Session by suspension,
The Lords 'suspended the letters, sustained the defences, and assoilzied.'
The same general arguments on both sides were pleaded in this case, as in the case, Stewart contra Morison, decided 19th January 1779; No 6. p. 7080. (collected by Mr Ogilvie) and the Court considered the rule laid down in that decision as established law, viz. “That the person who applies for insurance of a ship or cargo in foreign parts, is not bound to produce all his letters of intelligence concerning the voyage or adventure; yet he is bound, fully and fairly, to communicate every material circumstance of his intelligence, from which any probability of hazard may arise.”
Reporter, Lord Justice Clerk.Act. Il. Campbell.Alt. Jo. M'Laurin.Clerk, M'Kenzie.
Fol. Dic. v. 3. p. 327. Fac. Col. No 61. p. 99.*** This case was appealed.
The House, of Lords (13th March 1782) Ordered and Adjudged, That the interlocutors complained of be reversed, and that the decreet of the Judge, Admiral in Scotland be affirmed.
