
    CONSTITUTIONAL COURT,
    CHARLESTON,
    MAY, 1802.
    Marsh & Dabney v. Muir & Boyd.
    The insured is not bound to anticipate a capture and condemnation, in violation of the law of nations, and is under no obligation to communicate facts aud circumstances, from which sucli capture and condemnation might be apprehended, unless they be such as to creato so ge- . ueral an impression of danger, as must enhance the premium of insurance. But a knowledge of facts and circumstances of the latter description, is not to bo presumed against the insured ; and although he may be aware that certain circumstances may become grounds of condemnation, in violation of the law of nations, there is no implied warranty that they do not exist in relation to the property insured.
    The American brig Hannah, sailed from Newbern, N. C., in January, 1797, for Curacoa, and Jamaica, but having sold her cargo at Curaeoa, put in at Aux Cayes, without going to Jamaica. At Aux Cayes the plaintiffs’ agent shipped certain wines on board, for Newbern, and gave notico to the plaintiffs in Charleston, by whom insurance was effected on the wines. The vessel having sailed from Aux Cayes, was captured by a French privateer, and afterwards condemned by a French court of admiralty. The French authorities in tha West Indies, had, by proclamation, hi November, 1796, prohibited all American vessels entering .oiy British port in the West Indios ; and by another proclamation, ih February, 1797, subjected to capture and condemnation all vessels, belonging to neutral powers, destined to the Windward, or Leeward Islands, in possession of the British, or Emigrants. The grounds of condemnation, alleged in tho sentence, against the Hannah, were, that she was destined for a British port, and that she had 'on board articles suitable for exchange with the British, and which wore intended for them. The insurance was effected in May, 1797, and the insured neither disclosed to the underwriters, that the Hannah was destined for Jamaica on the outward voyage, nor gave them notice of the French proclamations of 1796, and 1797. But it did not appear, that either tho plaintiffs, or their agent, knew that the vessel had been destined for Jamaica j nor was there any direct evidence that the defendants were fully acquainted with the French proclamations. Held, in an action on the policy, that the capture was in violation of the law of nations; and that tho case was properly submitted to tho jury, upon the question, whether there had been any concealment of facts, known to the insured, or their agont, and not known to the underwriters, and which, if known, must have enhanced the premium: and the jury having found for the plaintiffs, a new trial was refused.
    In an action on a policy of insurance, it appeared, that the plaintiffs had assigned it to A., who assigned it to B.; and tho defendants, in order to let in a discount against A., produced B. as a witness, who testified, that ho had relinquished the assignment to him, and that the right to the policy had again become vested in A. Held, that it was competent to tho plaintiffs to shew, by extrinsic proof, that notwithstanding the assignment to A., he had, in fact, no interest in the policy, hut that it was the property erf other persons at tho time of the action brought.
    This was an action upon a policy of insurance, in which the plaintiffs obtained a verdict; and the defendants now moved that the verdict might be set aside, and a new trial awarded. Tho case appeared to be this : The brig Hannah bad sailed from Newborn, in North Carolina, in January, 1797, for Curacoa, and-Jamaica, but meeting with damage at soa, püt into Aux Cayes, without going to Jamaica, after having disposed of her cargo at Curacoa. While the vessel lay at Aux Cayes, one Hall, the plaintiff’s agent, shipped certain wines on board, to be carried to Newbern, on the homeward voyage, and effected the policy in question, by writing to his employers, in Charleston,'to insure the cargo. The vessel sailed, and was taken by a French privateer, and condemned by the sentence of a French admiralty court; and to recover for this loss the present action ivas brought.
    It appeared that on the 5th February, 1797, the special agents of the French directory for the Windward Islands, published a decree, or proclamation, subjecting to capture, and condemnation, all vessels belonging to neutral powers,, destined to the Windward of' Leeward Islands, in the possession of the British, or Emigrants ¡ and all vessels cleared out for the West Indies, generally, (generic destination.) The French delegation in the West Indies, had, previously, in November, 1796,-prohibited, by proclamation, all American vessels from entering any British port in the West India Islands. The policy in question, was dated in May,-1797. The ground of condemnation was, that the vessel was déstined for á British port, although she never touched thereat,* and that she had-articles on board suitable for exchange with' the British, and which the French decree asserts, were intended* for the British. The destination did not positively appear; and, therefore, another' ground of condemnation was alleged in the sentence, viz., that her destination was generic. The decree of the French eourt of admiralty, which condemned the vessel and cargo, appeared to be' very loose and contradictory; and tbe proclamation on which it was founded, contrary to the law of nations,- It did not appear that Ilall, the agent, who negotiated the policy, knew that the ves. sel had been destined to a British port : nor did it appear that the underwriters were fully acquainted with the nature and extent of the French ordinances respecting American vessels. The defence set up by the defendants, at the trial, was a conceaU ment of material circumstances relating to the vessel insured, which ought to have been disclosed to the underwriters .* and that Hall being present in the West Indies, where the vessel was, and acquainted with the principles and practice of French spoliation, it was highly presumable, that he knew what had been the destination of the vessel on her outward voyage, and that she fan great risque on her return home, of being captured and condemned ;■ all which he ought to have fully and fairly represented to the underwriters, when insurance was applied for. And the same ground was now relied on in support of the motion for a new trial, it being alleged, that the presiding judge had not properly instructed the jury in re. lation to it, and that the verdict was contrary to law and evidence.
    There was also another principal ground, the circumstances re. lating to which, were these : The policy of insurance in question was assigned by Marsh & Dabney to Thayers <fc Sturgis, on the 5th February, 1798 ; and it was assigned by Thayers & Sturgis to Nathaniel Russell, on the 23d February. 1798. At the trial the de. fendants set up, by way of discount, a bill of exchange, indorsed by Thayers & Sturgis, which liad been protested for non-payment, and gave evidence that Nathaniel Russell, to whom the policy Was last assigned, had relinquished his claim thereto, not long after that assignment, to' Thayers & Sturgis ; and that this action, although nominally prosecuted by Marsh & Dabney, was, in fact, the action of Thayers & Sturgis, whose protested bill of exchange ought to be received as a good discount, in case the plaintiffs should be entitled to recover. To rebut this discount; the plaintiffs were allowed to give evidence to shew that this policy of insurance; which had been so often transferred, was, in truth, the property of William and James Thayer, at the time when this action was com* menced, and net the property of Thayers & Sturgis; The evidence giveu in this behalf, shewed that William and James Thayer ivere co-partners in trade; and that they took into partnership Josiah Sturgis, and assumed the firm of Thayers and Sturgis : that they failed ; and there was a great contest among the creditors of the two firms, with respect to the effects that remained; That in order to determine this dispute a suit was brought by the Thayers against Sturgis, in which a verdict was obtained by the plaintiffs to a con. siderable amount; so that it appeared that Sturgis being largely indebted to the Thayers, had, in fact, no property in this policy; but that the Thayers were entitled to it, or at least their creditors, exclusively. The jury disallowed the discount. The defendants'objected to the admission of the evidence to rebut the discount; and made this a ground for anew trial.
    Foru, for the defendants.
    The commission of French delega» tion for the French Windward and Leeward Islands, by proclamation dated the 27ih November, 17 ¡-6, resolved and decreed, that no American vessels should enter any British port, or sail for ány British port, in the West Indies, on pain of confiscation. As soon as this proclamation was known in Charleston, premiums of insurance rose from eight, to twenty per cent. The underwriters had knowledge of this proclamation when the policy was negotiated ; but they did not know that the vessel had been instructed to touch at Jamaica,- on her outward voyage, nor that she had on board articles which the French might consider as contraband. They, therefore, insured at eight per cent.; whereas, if they had known the real state of things, which ought to have been represented to them, they would not have insured under twenty per cent. It is possible they might have known of the French proclamation, oir decree, of 1797 ; but if they did, they were not acquainted with the circumstances relative to the vessel which rendered her liable to eapture, and her cargo to confiscation; But Hall had every opportunity to know these things: he was under an obligation to m-
      quire and know them, and it must be presumed that he did know }' and he ought to have communicated every material circumstance >n bis knowledge, which, in its nature, would be likely to affect the premium. This is the duty of the person procuring an insurance. The underwriters rely on the representation they receive from the insured. Good faith requires that such representation should be full and true, other wise it will- be deemed a fraudulent concealment, and will vitiate the policy. Park, 178, 184, 208. Insurance is a species of speculation ; yet if there is a deceptive representation, made through mistake, without any intention to deceive, if it be such as to induce the insurers to run a risk which-otherwise they would not have run, this will avoid the policy for mistake is equal to fraud, where it has the same effect. The plaintiffs'are responsible for the conduct of their agent. What he did for them on the occasion, must be considered as done by themselves; They are liable for his faults of omission, as well as of commission. 1 T.- R-,-10. He ought to have disclosed many material circumstances* which he certainly was acquainted with, and did not communicate to the insurers, and which they were ignorant of. This concealment on his part was fraudulent, because they were drawn into the bargain from their ignorance of these circumstances, and believing the contrary, while he privately had knowledge of them. Park, 184. 3 Burr. 1905. 1 Bl. Rep. 593. 1 T. R. 12.
    As to the discount; it ought to have been allowed. Evidence should not have been admitted to shew that the policy did not belong to Thayers & Sturgis ; because they have received, and anadean assignment pf it. Their names are indorsed- upon it; and they ought not to have been permitted to invalidate their own assignment, 1 T. R. 300. Sturgis was admitted as a witness to prove that the policy belonged to the Messrs. Thayers, contrary to his own assignment, to-Russell,-in behalf of Thayers & Sturgis* and. thus to invalidate his own act.
    Drayton, for the plaintiffs.
    The vessel- was' condemned-for speculation with the enemies of the French-republic. The speculation was made prior to the insurance ; and before the vessel arrived, at Aux Cayes. There was no evidence on which to found a presumption, that Hall, was acquainted with the previous circumstances in question ; and if. there was such evidence, the jury have considered-it as insufficient to establish the fact. This evidence was for their consideration, and they were the proper judges of its-weight and effect. They have decided against it; and this court ought not to question- the propriety of their decision, or. control -their verdict, on that account. The doctrine of concealment is •founded on the knowledge of the party insured. Park, 230. Lord •Mansfield has fully explained the doctrine, in the case of the Mills frigate. Park, 222. And the case of March v. Pigot. 5 Burr. •2802. Park, 229. If the party insured acts fairly with the insurer, and is ignorant himself of facts that exist, and which, if -known, would enhance the premium, the existence of such circumstances, which increase the risk, will not, in such case, avoid •the policy. The sentence of condemnation states as a ground for ■condemnation, that the vessel had instructions to go into, and in. tended to go into, a port inimical to the French republic. This was certainly no sufficient reason for condemnation; and, therefore, if Hall had known of such instructions, and intention, he was under no obligation to communicate his knowledge in this respect to the underwriters : unless he had also known, what he certainly had no right to suspect, that the vessel would be taken and condemned for such intention. An intention to commit an offence cannot be construed into an offence, in the administration of civil law. An intent to deviate, is no deviation. Doug. 18. 2 Str. 1249. 2 H. ¡B1. 343. An intention to enter a blockaded place, is no breach of blockade. Both parties were ignorant of the previous circumstances, and could not calculate on their consequences : the insurers, therefore, are liable. Park, 363. So far as the case is affected by the French proclamations, both parties had an equal opportunity of knowing what might be necessary to know in that respect. Park, 363.
    As to .the discount: the relative rights of parties' cannot bo changed by the insolvency of one of them. Before the failure, Thayers & Sturgis were, unquestionably, the owners of the policy ; and they were indebted to the defendants in this action : but Sturgis was indebted to his co-partners, and the house in which he was concerned, was indebted to the house of William and James Thayer ; and the right to the policy attached in the Thayers, before this action was brought. All the parties became insolvent, and their property, including the present policy, was assigned to trustees, under the insolvent debtors act. It was insisted at the trial, that the assignees'of Thayers & Sturgis are the real owners of the policy. The creditors of William and James Thayer, however, SMist appear to be entitled to the money when recovered, and, therefore, no sett.off against the house of Thayers & Sturgis ought to be allowed, because it is not between the same parties. Their petition to take the benefit of the act made for the relief of frísolvent debtors, was preferred in May, 1798. The property of the policy had attached in the Thayers in February, 1798; for though Star* gis assigned to Russell, in behalf of Thayers & Sturgis, yet the property in the policy was, at that time, in the Thayers, exclusively, by being creditors to the value of all the effects : and, therefore, when Russell gave back the policy, which was, in fact, only as. signed to him as a collateral security, it was returned as the pro. perty of the Messrs. Thayers. But it has been contended, that evi. dence ought not to have been admitted to shew that the Thayers were not the real owners, because such evidence would invalidate their assignment. But the case relied on to support this objection does not apply. No person ought to be allowed to invalidate a negotiable instrument to which he has given credit, and currency. 1 T. R. 296. This is not a negotiable instrument; neither was the evidence, allowed in relation to it, given to impeach or discredit the instrument, but only to ascertain who was the true owner. Mr, Russell was admitted to prove that he was not the true owner, although from the instrument itself it would appear he was. It was objected that he was an interested witness ; but his evidence was against his interest, and, therefore, he was allowed to be a good witness. 1 Lofft’s Gilb. 69, 60. Sturgis was admitted to explain circumstances relative to the assignment, not to invalidate the as. signment. T° prove who was the real owner owner, against his own interest.
    Simons, on the same side,
    was desired by the court to confine himself to the last point, It has been insisted that parol evidence ought not to have been admitted to shew that William and James Thayer are the real owners of the policy, contrary to the assignment, which appears to be to Thayers and Sturgis. Let us take the gentlemen on their own ground. The policy, on the face of it, imports that it belongs to Marsh & Dabney. An assignment was produced, by which it appeared to be transferred to Thayers & Sturgis. Another assignment was produced from Thayers and Sturgis, to Nathaniel Russell. Here the written evi. dence closed, by which it appears that Russell is the owner. If we stop here, the discount is inadmissible. But the defendants say they shall be allowed to resort to parol evidence, to shew that Russell relinquished his claim under the assignment to him, by which the property resulted back to the former assignees, Thayers & Sturgis : and yet they contend, that we shall not b.e permitted the benefit of parol evidence, to shew that although Russell did release and discharge the assignment to him, yet it did not revert to Thayer» .& Sturgis, so as to vest in them the property, but vested in the Messrs. Thayers, and became their exclusive property. Mr. Star.gis, whose evidence operated against his own interest, proved that the assignment to Thayers & Sturgis, was, in truth, intended to transfer the property to Messrs. Thayers alone, and that it was th'eir exclusive property. This evidence cannot be said to invalidate the instrument, or impair its credit. It can have no such effect; and, therefore, the rule of law, insisted on, has no application to the point it is brought to bear on. Bac. Abr. Evidence. G. The assignment to Thayers & Sturgis was by mistake.
    Cheves, for the defendants,
    confined himself to the last point. The verdict given in the case of Thayers v. Sturgis, which was produced in evidence to shew that the Thayers alone are entitled to the policy, and by that means to defeat the discount set up by the defendants, ought not to have been admitted, because not between the same parties, or privies. Bull. N. P. 203. A court of common law is incompetent to settle the equitable claim of the Thayers, and give them an exclusive right to the partnership effects. The right to this discount attached in the defendants before the exclusive right of the Thayers could be established: and though they •might have had an equitable, they had not a legal and exclusive, right; and the right having attached, could not afterwards be detached, or defeated, by any subsequent event. Being assigned to trustees, under the insolvent debtors act, it was subject to the same .equity as before, and might be pleaded in discount, the same as if jt had not been assigned. 3 T. R. 435,
    Desaussure, for the defendants, in reply.
    The plaintiffs were not entitled to a yerdict. The premium ought to be adequate to .the risk. The insurers are not bound by the policy where there are circumstances, not known to them, materially increasing the risk, although the insured may also be ignorant thereof. In such case the contract is founded on mistake, and, therefore, not binding. The premium in this case was predicated on the belief, that the yessel had sailed for a French port, and had not touched at a British port; and eight per cent, only, was, consequently, the price of insurance stipulated. But had the insurers known the circumstances, which had previously happened in this case, they would not have insured under twenty per cent. Twenty per cent, was given in February, 1797, to Gape Nichola Mole, a British port. There was a suppression and misrepresentation of material circumstances, whether from design, or inattention, or from ignorance, is immaterial, The underwriters were deceived, and ought cot to Su'®'ei' such misrepresentation, or concealment. Park, 175, Doubtful circumstances ought to be disclosed. Hall ought to have represented and explained every circumstance of doubt and ap, prehension; but lie was totally silent on this head. 3 Burr. 1909. Park, 179. The Genoa case. 1 Bl. R. 463, Park, 208. And the principal is responsible for the act of bis agent. It is conceded, that had Hall been acquainted with the previous circumstances, he ought to have communicated them' to the underwriters, and the concealment would have been material. There was no positive proof' that he did know these circumstances; but there was very strong circumstantial evidence, which was not attempted to be controverted, that he was not ignorant of them. The captain of the Hannah was his countryman •; and they were together in a foreign country, sore pressed by the hand of a' tyrannical government. They must have opened themselves fully to each other, and Hall must have obtained a full history of the captain’s outward voyage, the destination of his vessel, and other circumstances.
    The discount ought to have been allowed. 'I he evidence to prove that Thayers & Sturgis were not the real owners of the policy ought not to have been admitted. The evidence was multifarious, and led to infinity. It inyolved matters, which to have investigated thoroughly, and decided rightly on, would have required much time, and could only be done in a court of equity. The evidense establishing the right of property in Thayers and Sturgis, was simple, plain, and direct, and perfectly compatible'with the jurisdiction of a court of law.
   Brevard, J.

Two questions have been made and argued, and are submitted for the decision of this court: 1. Whether the plaintiffs are entitled to recover. 2, Whether the discount set up ought not to have been allowed.

With respect to the first point, from the information I have been able to collect from the 'arguments, and the statement of the judge, who presided at the trial, as to the evidence ; and from the best judgment I have able to form thereon, I am of opinion that the plaintiffs are entitled to recover. No proof seems to have been brought home to the jury, to persuade them that Hall, the agent, was acquainted with any circumstances, at the time when he procured the policy to be underwritten, which, in the then state of things, it was incumbent on him to disclose. It could not have been foreseen, nor could he reasonably presume, that the vessel in question would be captured, and condemned by the French, contrary to the law of nations, and contrary even to the regulation of the French themselves: for the condemnation does not appear to be warranted by either of the French proclamations cited in the argument. If this policy is avoidable, it must be on the ground .of concealment, for it does not appear that there was any positive misrepresentalion. It has been contended that the state of things in the West Indies, where Hall was, was critical, and doubtful, and such as must have inspired him with apprehensions respecting the risk of the vessel on her homeward passage; which doubts and apprehensions he ought to have communicated, for that these circumstances, if they had been disclosed, would have enhanced the premium : and these being suppressed, and concealed from the insurers was such a deceit as vitiates and nullifies the policy. But, I think, the insured is not bound to discover this kind of circum. stances, which lie in speculation and apprehension only; unless the general impression should be such as to make the idea of greater risk, induce a general inclination to raise the premium. But this was not the case here from any thing that has appeared to us. Upon the whole, as the question of concealment turned altogether on matters of fact, and depended on the weight of evidence, which the jury ought to consider and decide on, being a' matter entirely within their province ; I must presume they have done their duty impartially and justly, as I have no right to presume otherwise : and therefore, I think their verdict ought to stand. 2 Str. 1142. 3 Wils. 47. Doug. 359. 2 Burr. 665. Cowp. 37. 2 Wils. 240. 1 Wils. 22.

With respect to the other point, I have had considerable doubts. If we are to look no further than the policy, and the assignments, it will appear to be the property of Russell. Mr. Russell was allowed to disclaim his interest, and to nullify the assignment to himself ; whereupon it appeared to revert to Thayers & Sturgis, who had assigned it to Russell, and to whom it had been previously assigned by the present plaintiffs. If we stop here, Thayers & Sturgis must appear to be the real plaintiffs in this action, and in that case the discount is admissible. Russell’s testimony did not go to impair or discredit the instrument assigned to him, but to support and explain it. He swore against his own interest, and, therefore, was the best witness that could be brought. I think his evidence was properly admitted, and that it fully proved the fact it was produced to prove. But, on the other side, it has been insisted, that' the plaintiff had a right to shew, that when this action was instituted the real owners of this policy were not Thayers & Sturgis, but William and James Thayer; and, consequently, that the discount was not between the same parties. The evidence to cstaiiPosi^o*1 v,,as admitted and on the same principle that Russell’s was. The whole evidence as to that, seems somewhat' complicated and doubtful; but as the jury had it all before them," and have decided on it, I cannot pretend to say they have not decided rightly. As to the propriety of admitting such proof, I am of opinion that it is warranted by former decisions in this State, turning on the same principle, and, particularly, by the decision in the case of Russell v. Lithgow. 1 Bay, 437.

Tkezevant, J.

I think Hall fnusl have known the material circumstances in question previously to the prosecution of the policy. The presumption arising from the nature of the case, and facts conceded, is extremely strong to induce this belief; and there was no evidence it seems to contradict such a presumption. This presumption, therefore, I am of opinion ought to have been deemed sufficient, until it was rebutted by some other evidence.- These circumstances, which I think he did know, he ought to have disclosed, and his not having done so, was such a concealment as vitiates the policy. He must have known of the French proclama, tions, and he ought to have made known to the underwriters, that such proclamations had been made, for he might suspect they were not acquainted therewith ; and it does not appear that they did know of them in time. It is not known when they were promulgated, and known in this country. I, therefore, think there should be a new trial on this ground.

It is not necessary that I should deliver any opinion on the other point respecting the discount.

Johnson, J.

Fair dealing is the great principle by which all policies of this kind must be supported. Hall must be considered in the light of an ordinary correspondent, and not in that of a special agent, writing expressly with a view to insurance ; and, there, fore, his neglect in making a full representation, shall not be im* puted to the plaintiffs as if he had been specially employed by them to negotiate the policy. But admitting their liability in its greatest legal extent, it does not appear, satisfactorily, that there was such a concealment of material circumstances, which were in the knowledge of Hall, or the plaintiffs, at the time when the policy was effected, as ought to avoid the policy. On the part of Hall I cannot think there was, either a suppressio veri, or suggestio falsi. 1 do not feel myself authorised to presume any thing of this sort against the finding of the jury.

This case as it respects the discount, is clearly withitj the pritjciple established in the case of Russell v. Lithgow. supra. That ease was stronger than this, for Lithgow’s discount was merely equitable, and set up against a legal claim. -

Bay, J.,

agreed with j ohnson, and Brevard, Justices. On tlie .second point he was of opinion, that the discount ought not to-have been allowed. He said it would be attended with great mischief to allow third persons, strangers to a-deed, or contract, to vary the rights of, the parties in a collateral question.

Waties, J.

• The vessel did not touch at a British.port. There was no violálion of the French ordinances; no breach of neutrality ; no infraction of the law of nations. The sentence of condemnation was arbitrary and unjust; and the plaintiffs were not in fault. No representation on their part was necessary, in order to put the insurers on their guard against oppressive and illegal captures, and confiscation ; or acts contrary to the laws and usages observed among civilized nations.

. The evidence as to the discount was properly allowed. It would not have, been equitable and just to have restrained the evidence, to what appeared, on the face of the policy, or to the assignment;. and having allowed. the defendants to shew by evidence dehors these writings, that the right to the money due on the policy was . in Thayers & Sturgis,, for the purpose of .establishing the discount set up against this action ; it.was certainly equally.proper to allow the plaintiifs to rebut this proof, and shew by other evidence, that this right was not in Thayers &, Sturgis, when this action was. brought, but had been previously transferred to, and vested in, other, persons, and that the discount could not be allowed, being between other parties. ., ;. i

- Grimk-e, J.,

concurred in ophl’.bn with the majority of the court. He presided at the trial, and thought that the evidence, which was proper for the jury to determine on, was fairly submitted to them. 3 Wils. 47. On the second question, he observed, that Sturgis, who had signed the assignment to Russell for himself and partners, after this assignment was annulled, and it appeared to belong to the house of which he was a partner, was, undoubtedly, a competent witness, to prove that he himself had not any right to the policy.' This was no more than Russell had been allowed to do; and it was either wrong or right in both cases : and, therefore, taking it either way, the discount could not be allpwed.

Motion for new trial discharged.  