Incomplete or false information or concealment vacates the policy.
William Keay v. Robert Young
Date: 28 November 1783 Case No. No 11.
Incomplete, though not fraudulent information, on the part of the insured, vacates the policy.
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By a letter, dated at Elsineur on 9th August, 1780, William Keay directed his correspondent, at Borrowstounness, to make insurance of his ship and cargo from Elsineur to Leith, and mentioned his purpose of sailing that evening.
On 26th August, this letter, in course of post, reached the correspondent, who, on 27th, upon the insurance being made by Robert Young, mentioned to him the time when the letter was received, and that Keay's intention was to sail immediately, but omitted to inform him of the particular day specified in the letter.
The ship having been taken, and an action brought for the insured values, the underwriter
Pleaded in defence, It is the indispensable duty of the insured to communicate every circumstance which is material in estimating the risk, and at the same time cannot be known to the underwriter from other sources of intelligence; Fac. Coll. 19th January, 1779, Stewart against Morrison, No 6. p. 7080. Although the keeping back of such a circumstance should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived, and the policy is void; because, the risk run is really different from the risk understood, and intended to be run, when the agreement was made; Burrow's Reports, p. 1909. Here, then, the policy in question was essentially defective. Had it been mentioned that the vessel was to sail on the 9th day of August, it must, on the 27th, have been reckoned a missing ship, which few underwriters would have ventured to insure.
Answered, The precise period of the ship's departure is not said to have been fraudulently concealed; nor was the intimation of that circumstance necessary. The insurer had no reason to imagine, that the orders to procure insurance had been conveyed in a manner more expeditious than usual. And, from the established intercourse by post between the towns on the Baltic and Scotland, he could not be ignorant, that a letter, received on the 26th day at Borrowstounness, could not have been written at Elsineur later than the beginning of the month. At all events, the defect in his information, which originated entirely from his own neglect in not making a further enquiry, is imputable to himself alone.
At first the Lord Ordinary assoilzied the defender, “in respect proper information was not given,”
Afterwards, on advising a representation for the pursuer, with answers for the defender, his Lordship recalled that judgment, and found the defender liable in the insured values, “in respect there was no fraudulent concealment of any circumstance of hazard, in order to deceive the underwriter.”
The defender reclaimed; and the petition being followed with answers, the Lords altered the Lord Ordinary's interlocutor; thus returning to the judgment first given.
Lord Ordinary, Elliock.Act. Rolland.Alt. Blair.Clerk, Robertson.
Fol. Dic. v. 3. p. 326. Fac. Coll. No 124. p. 196.
