Elting v. Scott — 2 Johns. 156

Majority

p. 156

Elting, Dunlap and Grant against Scott and Seamen .

Headnote

A representa-SenvHterls111 not eveidence tationtoasub-sequent undei-writei' on a different poli« cy, though on the same vessel, andagamst the same risks. A case made between the assurers and assured, in an action on a policy of in-surau ce, wifi not bereceived in evidence in another suit in •which the parties are different, though it relate to the samesubjector policy. Where a policy contains no warranty of neutrality, or of the character of the vessel, the assurers take upon themselves all risks, belligerent as well as neutral. Evidence, _ ' therefore, that the owner resided in a belligerent country is irrelevant, as it does vary the risk, or the responsibility of the assurers. Where the national character of a vessel is not warranted or,represented, it is not incumbent on the assured to show, that she had a sea-letter, or other papers required by the laws of the country, or by treaties with foreign nations. The implied warranty of seaworthiness, does not extend so far as to warrant that the vessel shall have all proper documents or papers on board; it being material only toshow thatsuch papers were on board, when thenational character of the vessel appears on the policy, or is represented to the assurer. The assurer who has paid a loss on a policy, cannot recover it back, unless be make out, affirmatively, a clear case of mistake, as to the fact or the law. Whether an assurer, who has paid a loss, under a full knowledge of all the facts, can recover back the money, on the ground of a mistake as to the law, debitatur.

This was an action of assumpsit for money had and received to the use of the plaintiff. The cause was tried before Mr. Justice Spencer at the New- York sittings, the 16th April, 1806. On the 30th December, 1797, the p]ajnt¡¿fs underwrote a policy of insurance, effected in the name of the defendants, “ for themselves, or whom-a verdict was found in their favour in 1799; and in 1801 a final judgment was .given on the verdict. From the soever else might have any interest therein,” on goods, on board the schooner Betsy, on a voyage from Curracoa to Netv-Yorlc. On the 11th April, 1798, the defendants claimed a total loss', by reason of capture and condemnation by the French, and the amount of loss was paid to them. The persons whose names were first underwritten on the policy,' were Rhinelander, liartskorne §■ Co.; the plaintiffs underwrote next, and there were several other names subscribed. A suit was brought by the defendants against B.hinelander, Hartshorn'e, ¡y Co. and record in that suit produced in evidence, it appeared, that the interest was averred to be in the present defendants. The policy was in the ordinary form, and without any warranty. A separate policy had been underwritten by Marie Speyer and others, on the same cargo, and for the same voyage, in January, 1798. In

p. 157

a suit by the present defendants against'Af. &• S. a verdiet was given in 1799, .for the defendants, Marie Speyer, on which a final judgment was entered, in October, 1801. The declaration in that suit averred the interest to be in the present defendants. The plaintiffs offered in evidence a special case made for the argument of that cause which Was rejected by the judge. It was proved, that one George Scoti, a citizen of the United States, was a joint partner with the present defendants, in the cargo insured by the plaintiffs,and that he had resided inCurracoa, which is a belligerent colony, near a year, having continued there part of 1796 and 1797, and returned there again in December, 1797, after coming to New-Yorle. While at Curracoa, Scott transacted business as a commission merchant, for the defendants and others. It appeared also, that one of the present defendants had said, that the vessel in which the cargo insured was shipped, ■ had not a sea-letter on board, at the time of her capture; and that the want of that, or some other papers, was the cause of her capture and condemnation, the vessel having sailed without her papers. A copy of the condemnation was shown to the underwriters. The plaintiffs offered to prove, that the fact of the interest of George Scott in the cargo, was not communicated to the insurers when the policy was underwritten'; and that had they known that fact, the premium would have been increased, the actual premium having been calculated on the belief, that the property was neutral, and exclusively owned by the defendants. This testimony Was overruled by the judge. It did not appear that any representation was made to the insurers, as to the property insured. Upon this evidence, the judge-directed the plaintiffs to be called, and a nonsuit was entered.

A motion ivas now made to set aside the nonsuit, on the following grounds:

1. Because the judge rejected testimony which ought to have been admitted.

p. 158

2. Because there was a concealment of the residence and interest or George Scott.

8. Because the vessel sailed without papers, and was captured and condemned.

4. Because the cause ought to have been submitted to the jury, on the ground, that all the facts were not disclosed to, or known by the plaintiffs, when the loss was paid; and if they had been disclosed or known, the plaintiffs acted under a mistake as to the law.

Bogert, for the. plaintiffs.

1. The case made in the suit of Marie and Speyer, was on the.same policy, which involved the same question.

Kent. Ch. J. Has not this point already been decided in the case of Neilson v. The Columbian Insurance Company ?^[4] ]

Bogert. The point there decided was, that a case made at a former trial could not be adduced to impeach the tes-mony of a witness given on a second trial. A judgment or verdict is evidence against a person, not a party, but who claims under a party, or under the same .deed or where the controversy relates to the same subject matter.^[2] Here the action was on the same policy or instrument, and related to the same question or right, and by parity of reasoning, the admissions of the party in the former case ought to have been received in evidence.

2. Scott being an adopted alien, or resident in abelligerent country, was a material fact which ought to have been communicated to the plaintiffs, since it enhanced the risk of capture. It is true, that where there is no warranty or representation, the assured takes upon himself all war-risks.t There was a sufficient evidence offered to the jury to make it a question for them to decide whether there was a representation, that the property was neutral or not. In the case of Marie Speyer, there was an averment of representation.

3. The case states, that the vessel sailed without her papers. It is an implied condition in regard to every ves

p. 159

sel, that she shall be’ n'avigate'd- and eonddeled according', to the law of nations, and the laws of the country to which she belongs.-§ If she be condemned for want of the proper documents', or for a violation, of the provisions of existing treaties, the' policy is void. The vessely in this case, was condemned as enemy’s property.-

[Kent,- Gh.-J. It does hot appear in the’policy,-that the vessel was American,-or to what nation she belonged.]!

It is sufficient if she was in fact Americaft.- By the la# of nation's, every vessel must have'a sea-letter, ox passport. This is required by the the law" of the United States,- and hy treaties-existing vvitlrforeign countries.-'

[Livingston, J.- But must not (he' vessel, to make' .this a valid objection,- be warranted neutral ?■”],

The insured on the cargo may object to'fh'e seaworthiness of the' vessel ;■ and a vessel- sailing' without’ proper' documents,-cannot be said to be seaworthy. So if the' Vessel have no pilot on board, in sailing up a river, or’ into a port, the assurer is not answerable in ease' of loss.-^[4] And it scéms to be the opinion, that she must not only have a pilot on board* but one duly qualified according to' the laws of the country.- For all faults- which do- not' amount to barratry,- the owner,- and not the insurer,- is lihble.‡

4. A- person who pays ni'oncy under mistake either as' (o the law or fact, may recover it back, unless he was: under a moral obligation to- pay, or bas paid' urid’er judicial process^ A- person who' promises't'o pay under á mistake as to liis legal responsibility, is not liable on such promise.^[5] If an adjustment of a loss to be agreed to,; Under a-misconception of law or fact',- it is not binding and if money has been paid by mistake on. such adjustment,, it may be recovered' back-.^[6] This was Coiisidered-as a principle of the English law,, as well as of the civil law,- until it was questioned by Mr. iasúca BuTler, in the' case of Bilbie v. Lumley,^[7] whether money paid’ under', a full knowledge of alL the facts, could1 be recovered-

p. 160

back on the ground of its having been paid under aii ignorance of the law.^[8] From the reasoning of this court in the case of Dow v. Smith,^[9] it would seem that the notion of Mr. Justice BuUer had not been adopted here, and that an adjustment of a policy, though made with a knowledge of all the facts, would not become conclusive on the insurers, if it appeared that they were not legally responsible.

Wells and Hoffman, contra.

The plaintiffs, to- make • 'out their case, must show either a mistake or a fraudulent concealment of facts. To prove a concealment of a material fact, they offered in evidence a case made in a cause between the present defendants and Marie and Speyer. It would be a mischievous and dangerous rule to allow these cases to be read in evidence, even between the same parties, but far more so between different parties, though relating to the same subject of controversy. Cases came into' practice in place of the reports of the judge of what passed at the trial- They are generally made up by consent, and contain, admissions of the counsel which never ought to conclude the parties, who may be absent, or ignorant of what is done on these occasions. That a knowledge of the fact of the residence and ownership of Scott, or that the vessel sailed without papers, would have enhanced the premium, is not sufficient evidence of a misrepresentation ; or to make out a contract to indemnify against a belligerent, or neutral risk. The rates of premium on lije same risks, by different underwriters are various, and can afford no satisfactory criterion of the nature or extent of the risk insured against. The plaintiffs come here to recover .back money already paid, and the onus probandi lies upon them ; they must clearly show that there was a representation that the vessel sailed without papers ; and that there has been a fraudulent concealment by the defendants ; otherwise, as this is a general policy, without warranty, they must be considered as liable for all risks.

p. 161

The want of papers was not insisted on at the trial. It does not appear from the case that the vessel was American, so that the assured would be obliged to have the papers on board requisite to support the character, of an American-.

Radcliff, in reply.

This being’ a motion to set aside nonsuit, itoughtto begranted,ifthe colirt should be satis-fiedthat thei;e was evidence enough to justify the jury in giving a verdict for the plaintiff. It is not pretended, that a case made, is evidence against third persons, but only against the parties. Would the facts contained in a special verdict be evidence against the party ?' If so, why not a case ? Both contain the facts proved, or admitted at the trial. In Neilson v. The Columbian Insurance Company, the court considered the case as conclusive between the parties. But admitting it to be prima facie evidence only, it ought to.have been received. . A representation to the first underwriter on the same policy, is a representation to all the subsequent underwriters. There is a wide difference between a war-risk, and a peace or neutral risk. A representation to some of the underwriters on the same risk, is some evidence, at least, of a similar representation to the others ; and the evidence offered to show a peace-risk, was proper to be submitted to the jury, from which, when connected with the other facts, they might find that the parties did not contract to insure against war-risks.

Though the case submitted to the court is silent as to the character of the vessel; yet as the parties reside here, the presumption is that she was American, and therefore bound to have a sea-letter and other necessary papers on board.

delivered the opinion of the court. The court in the first place, rejected the evidence of a case which had been made in an action brought by the -present defendants against Mark and Speyer. This case was offered, in order to raise a presumption, that the defen

p. 162

dants had represented the property to he neutral. It is, Jjoweyer, a sufficient ..answer to this, to observe, that a representation to one insurer cannot be evidence of a like ¡representation to another insurer, on a different policy, The inference is too remote, and has .no'-solid ground to support it. These cases are a species of testimony which ought not, perhaps in any case, to be admitted, unless where the admission is made a condition of granting a mew trial; nor has it beeii the practice to admit them. They are generally drawn by counsel, without any communication with the parties, and often with a view to bring .before the court some particular point unconnected with much of the narrative' part of the case, and which, for thatwery reason, may have passed without criticism or attention, The other testimony refused, wasthajt which was offered to show, that the interest of George Scott was not co.mmnm.caied to the plaintiffs, and that the ■knowledge of that fact would have increased the premium, I am also of opinion, that this testimony was properly rejected us impertinent. The policy stated, that the plaintiffs underwrote for the defendant or whomsoever else might have an interest; it was a policy without any warranty of neutrality, and, as I am bound to conclude, without any representation to that effect, because there is po evidence of such representation. The plain? tiffs then took upon themselves the risk of the property, whether neutral or belligerent, according to the decision in Murray v. The U. I. Company. (April Term, 1801.) It would appear, therefore, to have been perfectly inirna? terial whether the interest of George Scott was or was pot disclosed, That interest made no alteration in the risk assumed, and there is no sufficient cause why it should have affected the premium, As the plaintiffs as? sumed war-risks, it must be presumed that they toojc what was deemed in that case an adequate premium, Whan the legal operation of a policy is ascertained by a spre and decisive test, the rate of premium is a circum?

p. 163

stance wholly immaterial, and cannot alter its constóme- , _ . „ :tion. it is m this view that 1 consider the testimony ot-fered as inadmissible, •

2, The second point has been -already anticipated -; ;and if the residence and interest of George Scott were concealed, it \yas not a material concealment, because his interest did not vary the risk. But there is no evidence that his interest was concealed; and any inference to that ,effect would be too remote. The facts in the casé were not sufficient to warrant a jury to .draw the inference.

3. The third point is, that the, vessel sailed without 'her "papers. A confession was made by one of the defendants that the vessel sailed without a sea-letter, and the witness thinks that the defendants also said, that she had sailed without her papers. But I very much doubt whether it be a part of the implied warranty,of-seaworthiness, that a vessel shall have her-.proper documents -on board. There is no case that' goes to that length, These documents are only material when the national .character of t he vessel is warranted or represent ed. In the present case, it does not -appear to what nation, or to what individual the vessel belonged. All that is stated is, that she was to sail on a voyage from Curacoa to New-YorTc ; the’plaintiffs, as insurers ofthe cargo on board, took upon themselves belligerent risks. The' sea-letter and other documents could only have been requisite to protect the vessel as a neutral, but it was no part .ofthe contract that she was to sail in that character ; or to protect her against the revenue laws of Curracoa, but those laws we are not to notice; or to comply with the laws. .of our own country, to which the vessel was bound ; but there is no evidence that she was sailing in contravention of our laws. (Christie v. Secretan.^[2] ) A vessel may be competent to perform the voyage insured without the possession of these documents; and although we do not profess to declare a very strong opinion pri this point, we .are-

p. 164

hiclinedto think that the want of those documents could not have furnished to the plaintiff a valid defence against the policy.

4. The last ground for the present motion is, that it ought to have been submitted to the jury to determine whether there was a due disclosure of the facts at the time the loss was paid ; or if disclosed, whether the plaintiffs did not act under a misapprehension of the law.

As a question of fact, there is no evidence of a want of due disclosure; and the jury would not have been warranted to have drawn that inference against the defendants. The sentence of condemnation was exhibited, and we must intend, that such senterice contained the material facts. If it did not, the plaintiffs ought to have produced it, to show what it did contain. That sentence must be presumed to have contained all that was requisite to be'disclosed, to entitle, the assured to call upon the plaintiffs for their indemnity; and as the plaintiffs paid a total loss upon that disclosure, they have not shown any just ground for reclaiming the money. It was incumbent on them to have made out, affirmatively, a clear case of mistake, but they have failed in showing any mistake, either of the fact or of the law. It will be unnecessary, to consider the question which was agitated upon the argument, whether a payment made under a mistake of the law, and with full knowledge of the facts, will, in any case, upon that ground only, sustain an action for .money had arid received. This question has been very ably discussed, and different opinions formed upon it by the civilians ; but it is considered as settled in England, by the late case of Bilbie v. Lumley; (2 East. 409.) and that decision seems to be in conformity with the doctrine anciently taught' in the Doctor and Student.^[2] But on this point we mean not to give any opinion ; as the plaintiffs did not make out a case which would entitle them to a verdict, the nonsuit ivas properly directed, and the motion so set it aside ought to be denied.

Rule refused.

* P. 79. 147, 152, 251.

Footnotes

* 8 Term, 192. Opinion of Lawrence, J.
‡ ‡ 1 Caine's, 237, Barnewell v. Church, Murray v. United Insurance company, July Term, 1800.
† † 1 Caine's Cases in Erro 1 Vos. 7 Graves v . United Insu. Company.