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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Messrs. Dennistoun, Buchanan and Company, Merchants in Glasgow v. David Lillie and Others, Underwriters in Glasgow [1821] UKHL 3_Bligh_202 (00 January 1821)
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Cite as: [1821] UKHL 3_Bligh_202
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SCOTTISH_HoL_JURY_COURT
Page: 202↓
(1821) 3 Bligh 202
REPORTS OF CASES HEARD IN THE HOUSE OF LORDS UPON APPEALS AND WRITS OF ERROR, And decided during the Session 1821, 2 Geo. IV.
SCOTLAND.
COURT OF SESSION.
No. 12
v.
Agents of the owners of a ship, by a letter, saying, “The Brilliant will sail from Nassau for Clyde on the 1st of May, a running ship,” instruct their correspondents to effect an insurance on the ship, which is done accordingly by them, showing this letter to the underwriters. There being a favourable opportunity of convoy, the ship sailed on the 23d of April. On the 11th of May she was captured. Held, in the court below, and on appeal, that the expression of the letter was positive, and hot the statement of an expectation; and that the exhibition of the letter being a representation material to the risk covered by the policy, which was not true in fact or in the event, vitiated the policy.
Upon the 17th of June 1814 the Appellants, Messrs. Dennistoun, Buchanan and Company, merchants in Glasgow, received a letter of advice from Messrs. William Duff and Company, their correspondents at New Providence, dated 2d April 1814, containing copies of their letters to the Appellants of the 19th and 24th of March preceding.
The following are extracts of such parts of the letters as relate to the subject of insurance. By the
Page: 203↓
“At a prize sale of a South Sea whaler and her cargo of oil, that took place here yesterday, we purchased on your account about 40,000 gallons of spermaceti oil, at 3 s. 9 ½ d. sterling per gallon; 14,000 gallons of which we intend to ship upon that remarkable fast-sailing schooner Brilliant, of 157 tons burthen, mounting six nine-pounders, to sail, with or without convoy, about the first of May; and on the value of which shipment you will please to make insurance. Messrs. Seton and Elliot will ship on board the Jessie 60,000 lbs. St. Domingo coffee, which they wish you to have insurance done for at 50 s. per 100 lbs., and 17,000 lbs. Cuba coffee, at 60 s. per 100 lbs. They also wish you to have insurance effected on the Brilliant from hence to Greenock, valuing her at 1,400 l. sterling; to all of which we beg your attention.”
The letter of the 24th says, that the Brilliant would be cleared out as bound to Greenock and a port on the Continent. And in the letter of 2d April Messrs. Duff and Company state, towards the conclusion of the letter, which relates to a variety of other matters, “The Brilliant will sail on the 1 st of May, a running vessel, in which the writer of this will take his passage.”
Upon these advices an insurance was effected, on ship and goods, on the 18th of June, being the day after receiving the letters above quoted, although the contract or policy bears date on the 21st of June, three days later. At the time of entering into the contract the letters of advice were shown to the Respondents, who were some of the underwriters
Page: 204↓
The terms of the policy were, “From Nassau to Clyde, with leave to call at all ports and places whatsoever, for convoy, or for any other purpose whatever, without being deemed a deviation; and with or without letters of marque, leave to chase, capture, man and convoy, or send into port or ports, any vessel or vessels.”
The insurance was done at the rate of six guineas per cent., to return three pounds per cent. “for convoy for the voyage, or two pounds per cent. for partial convoy and arrival.”
About the 20th of April His Majesty's ship Martin came into the harbour of Nassau, and being bound for Halifax, the commander offered to take the Brilliant under his protection. This being considered a great advantage, as the risk of capture between Nassau and Halifax was imminent, extraordinary exertions were used to complete the loading of the Brilliant, and she sailed under convoy of the Martin on the 23d of April, being about eight days earlier than the date of sailing proposed in the foregoing letters.
Upon the 11th of May the Brilliant was captured by an American privateer, and carried into Boston.
When the intelligence of the capture arrived, the Appellants applied to the underwriters, and many of them settled the loss. But the Respondents resisted payment; whereupon the Appellants brought an action before the Court of Admiralty, concluding for payment of the sums respectively underwritten for them; and, after the usual pleading, the Judge Admiral pronounced the following interlocutor:—
Page: 205↓
“The Judge Admiral, having advised the libel, defences, answers, replies, and writings produced, finds, that by a letter, dated the 19th of March 1814, from William Duff and Company, the correspondents of the pursuers, of New Providence, to them, they mentioned the ship Brilliant, a remarkable fast-sailing schooner, was to sail, with or without convoy, about the 1st of May; and that by an after letter dated the 2d of April last, 1814, the incorrectness of the word ‘ about’, as applicable to the 1st of May, was explained by the same correspondents informing the pursuers that the Brilliant was to sail for New Providence on the 1st of May, a running vessel, ‘and in which the writer of this (William Duff) will take his passage:’ Finds it admitted, that these letters were communicated to the defenders, whereby they saw that the vessel was positively intended to remain in New Providence, and not to sail therefrom till the 1st of May last, and under this impression subscribed the policy in question: Finds, that the Brilliant sailed on the 23d of April from New Providence, and, for any thing known, may have been captured before the 1st day of May, when she was held forth to the defenders as remaining in the harbour: Finds, therefore, that although the representation made by the pursuers was absolutely innocent on their part, the fact stated by them to the defenders was not verified, and a material change was thereby made in the risk undertaken by the latter; and therefore assoilzies the defenders, and finds them entitled to expenses.”
Page: 206↓
The Appellants brought the foregoing interlocutor under review of the Judge Admiral, by petition, and the interlocutor thereon was, “The Judge Admiral having advised this petition, and another dated 23d February last, with the writings produced, remains of the same opinion, that the risk which the underwriters undertook, being confessedly that on a vessel to sail on the 1st of May, was perfectly different from one on a vessel which sailed on the 23d April, inasmuch as the defenders undertook a risk on a vessel understood to be in the harbour, and safe on the 1st of May, when in fact she had been eight days at sea, Refuses this petition, and adheres to the interlocutor complained of.”
“ Note.—The petitioners do not seem to dispute, that if the vessel had been taken before the 1st of May they would have had no argument. They however state that the vessel was not captured till 11th May. This, in real reasoning, makes no difference, since it is a thousand chances to one that if she had not sailed till 1st May she would not have fallen in with the vessel which took her. The case of a vessel sailing the day before she is represented to sail is quite different from that of a ship being detained by unavoidable accidents beyond that day. In fact, it is an insurance on a vessel in jeopardy, when she is represented to be comparatively safe.” And on the 19th of April 1815, the Judge Admiral modified the defenders account of expenses to £. 10. 1 s. 4 ½ d., and decerned against the Appellants for payment of the same, and for the fees of extracting the decree.
Page: 207↓
The Appellants pursued an action of reduction before the Lords of Council and Session of the foregoing interlocutors pronounced by the Judge Admiral. This action was discussed before Lord Pitmilly, Ordinary, who pronounced an interlocutor, repelling the reasons of reduction, &c.
The Appellants submitted the question to review in a representation, to which answers were given in; but the Lord Ordinary adhered to the interlocutor.
The Appellants then brought these interlocutors under review of the Second Division of the Court of Session by a petition. The Lords adhered to the interlocutors complained of, &c.
The appeal was against the foregoing interlocutors.
On the part of the Appellants distinctions were taken between a warranty and a representation
*, and it was contended that the letters exhibited did not amount to a warranty, or any thing more than a representation, which was not material; and that the statement of a future event, as an intended day of sailing, can be no more than an expectation.—
Bowden v. Vaughan
†;
Hubbard v. Glover
‡;
Barber v. Fletcher
§;
Bize v. Fletcher
||. It was
_________________ Footnote _________________ *
Pawson v. Watson, Cowper, 790; Park on Insur. c. 10, 203, 205, c. 18, pp. 321, 322; Marsh on Insur. c. 9, s. 2, P. 342. † 10 East, 415. ‡ 3 Camp. N. P. C. 313. § Doug. 305. In this case the word expected was used. || Doug. 271. See also Park, p.
Page: 208↓
For the Respondents it was contended, 1. That the day of sailing was a fact material to the risk, and being within the control of the Appellants, a statement of intention was equivalent to a statement of fact. 2. That the vessel having sailed on the 23d of April, was, at the time when the insurance was effected, what is termed “a missing ship.”— Ratcliffe v. Shoolbred *; Tillis v. Brutton †.
Counsel: For the Appellants,
The Attorney General,
Mr. Abercrombie.
For the Respondents,
Mr. Wetherell,
Mr. Denman.
[In the course, and at the conclusion of the argument, the Lord Chancellor made the following observations.]
The second letter, in which it is expressed that the vessel will sail on the 1st of May, was shown to the underwriters, and is it not the same thing whether the party means to misrepresent, or whether the thing actually communicated is a misrepresentation? The authorities turn upon the difference between expectation and representation. In the case of
Barber v. Fletcher the representation is, that the ship is
expected to sail. If the accuracy of a representation as to time is to be given up, that doctrine must apply equally to the question
_________________ Footnote _________________ * Park, 180; Marshall, 1,468. † Park, 182; Marshall, 467.
Page: 209↓
19 March 1821.
The
I have formed an opinion upon the subject, but wish to give it further consideration; and this is the more necessary, as this branch of law is not well understood in Scotland. The case is to be determined upon a consideration of the facts, as a jury would decide under the direction of a judge as to the law applicable to those facts. The question for a jury would be, Was there in this case a misrepresentation
Page: 210↓
The
5 April 1821.
The
Judgment affirmed.
_________________ Footnote _________________
* Before the motion for judgment was finally made, the Lord Chancellor intimated that the House would (if desired) hear a further argument on the terms of the policy; but the proposal was declined by the agents.
† Redesdale.