Moral fraud avoids the rial or not. since entirely abandoned, and the principle now established is, that misrepresentation from mistake, ignorance or accident, of any material fact, however innocently made, avoids the policy, and this upon the principle in law already expressed on a previous page.2 Of course, if the purpose of the representation be fraudu policy, mate- lent, that is, to deceive the underwriter, by inducing him to believe that which the assured, at the time, knows to be false, or does not know to be true, the policy is equally avoided, whether the false statement be material to the risk or not, and this on the broad ground of moral fraud. The loss need not be connected with the misrepresentation. 3 It is not necessary, in order to avoid the policy on the ground of misrepresentation, that the loss should have arisen from a cause connected with the fact or circumstance misrepresented. In cases of moral fraud, no matter how trivial the circumstance, or how utterly unconnected with the cause of loss, the assured will be precluded from recovering on the policy. And the rule is the same, even in cases of misrepresentation from ignorance, accident, or mistake, if the fact were material to the risk, however foreign to the cause of loss. Thus, if the assured represent that the ship or goods are neutral property, and they are, in fact, enemy's property, he shall not recover even for a loss occasioned by shipwreck, Bize v. Fletcher, 1 Dougl. 12; the 1 The cases that establish this posi- time, made with the intent that it 31 Marshall, Ins. 452; 3 Kent, Com. 283; 2 Duer, Ins. 692; 1 Park, Ins. 405; and Roberts v. Fonnereau, there cited; 3 Kent, Com. 283. Per Maule, J., Evans v. Edmonds, 13 C. B. 777, 785; Pawson v. Watson, 2 Cowp. 785; see also Fillis v. Brutton, 1 Park, Ins. 414; 1 Phillips, Ins. no. 542. whether the mis-statement were made through mistake, or from design to deceive.1 premium. If the policy be avoided by a mere misrepresentation Return of without moral fraud, the assured is entitled to a return of premium; not so, however, if the representation were false within his own knowledge, and made with the intention to deceive.3 Positive representations have been subdivided into-1. Classification of positive reAffirmative;-2. Promissory; the former averring the actual presentations. existence of the fact to which it relates; the latter, that such fact shall or will thereafter exist. This distinction, however, is one more of form than substance; as, in fact, most positive representations, even when in terms affirmative, in effect are promissory. As, where it is represented that a vessel is neutral, or has a licence to trade, or has a certain armament, or a certain kind of cargo, the mere affirmation of these facts as existing at the time, is unimportant; it is the implied promise that, as far as depends on the assured, they shall be and continue unchanged throughout the duration of the risk, which alone gives value to the representation. To take an instance in point. In the case of Pawson v. Representations, though Watson, the representation made by the broker in effecting affirmative a policy on the ship was in these words:-" She mounts in form, are promissory in twelve guns and twenty men." Although affirmative in effect. point of form, it is plain that this representation was promissory in its meaning; for, when the policy was effected, the ship, which, as appears by the report, did not sail for a month afterwards, had not a single gun or man on board; so that the representation, unless construed to refer to a future event, was false when made. The whole judgment of Lord Mansfield plainly shows that he took it to be, what 1 Per Holt, C. J., Skinner's Rep. 327; 1 Marshall, Ins. 452; 1 Park, Ins. 405; Lynch v. Hamilton, 3 Taunt. 36; S. C. (in error), Lynch v. Dunsford, 14 East, 494. 2 Tyler v. Horne, 1 Park, Ins. 455; Chapman v. Fraser, ibid. 456. 3 Feise v. Parkinson, 4 Taunt. 639. Is there any difference of effect? Flinn v. Flinn v. Headlam. undoubtedly it was, not a mere assertion of the actual force of the vessel at the time, but a stipulation that she would sail with the armament described on the voyage insured.1 Had the representation just stated been thus expressed :"She is to (or 'She will') mount twelve guns and twenty men," it would have been an instance of a representation promissory in terms as well as in effect. It is an important question, whether there is any difference between an affirmative representation and a promissory representation, as to the ground on which, if false, they will avoid the policy? In other words, whether the positive misrepresentation of a future fact, material to the risks, will just as much avoid the policy, in the absence of moral fraud, as the positive misrepresentation of a past or existing fact, equally material? The distinction seems first to have been taken in Flinn v. Tobin, before Lord Tenterden, at Nisi Prius. That case was this-To induce an underwriter to take a risk on a ship about to sail with a cargo of rock salt, the broker falsely, but not fraudulently, represented that "the ship would only take fifty or sixty tons of rock salt, which would put her in light ballast trim." The ship sailed the day after the policy was signed, with 160 tons of rock salt on board, being a full and very heavy cargo. The counsel for the plaintiff, though they admitted that the misrepresentation of past facts might, if false, avoid the policy, even without actual fraud, yet contended that the misrepresentation of facts which are hereafter to happen, being properly a matter of stipulation and contract, could not have that effect, unless inserted in the policy. It appears by a subsequent case involving the same facts, that his Lordship, in terms, took the distinction in question, and advised the jury to find for the defendant if they thought that a material misrepresentation was made by the broker as to the quantity of rock salt actually on 1 See 2 Duer, 766. I have adopted the language of this able writer almost without a change. 2 Flinn v. Tobin, 1 Mood. & Malk. 367. board, but to find for the plaintiff if they thought that the representation was respecting the cargo expected to be shipped.1 But this distinction, even when confined to the sole case of promissory representations, is totally irreconcilable with principle or with express authorities of the greatest weight. The principle on which the false affirmation of the actual or past existence of a material fact avoids the contract in cases where there is no moral fraud, is, that the underwriter only engaged to be liable upon the faith that such fact existed; so that the falsity of the statement is the breach of a condition precedent that the contract should be free from misrepresentation. On principle there is no ground for the distinction, and it is also quite irreconcilable with authority. Instead of citing all the cases to show that the doctrine of the Courts has been, that such representation, although made in good faith, must be substantially complied with, in order to sustain the policy, a single decision to this effect in the House of Lords whilst it was presided over by Lord Eldon, may suffice. Lillie. A policy on ship and goods from Nassau (New Providence) Dennistoun v. to the Clyde (in Scotland), was effected on the 18th June, 1814. On that occasion the broker showed the underwriters a letter, dated the 2nd April, and received by the owners the day before the policy was effected, in which it was stated, "The Brilliant," the ship insured, "will sail on the 1st of May." In point of fact, it turned out that the ship had sailed on the 20th April, and on the 11th of May had been captured by an American privateer. These facts were wholly unknown to the parties by whom the representation was made; yet it was held, that the policy was avoided by the 694. Flinn. Headlam, 9 B. & Cr. 2 See Steel v. Lacy, 3 Taunt. 285; Feise v. Parkinson, 4 Taunt. 639; Edwards v. Footner, 1 Camp. 530; Dennistoun e. Lillie, 3 Bligh, P. C. Edwards v. Representations of belief or expectation. misrepresentation. "There is a difference," said Lord Eldon, "between the representation of an expectation and the representation of a fact. The former is immaterial, but the latter avoids the policy if the fact misrepresented be material to the risk.”1 This case, then, is an explicit authority for the position, that a positive promissory representation of a material fact, will, if false, avoid the policy though no moral fraud can be alleged. Accordingly, where a representation was made some time before the ship sailed, to the effect that she "was to sail " with convoy and a certain armament, so that the representation was both promissory in its terms, and related to an actually future fact, Lord Ellenborough held, that as it had not been substantially complied with, it avoided the policy, though made without moral fraud.2 Upon the authority of previous cases, then, the distinction assumed by Lord Tenterden appears to be untenable; and, in point of fact, it seems on further reflection to have been abandoned by himself.3 It may, therefore, safely be laid down, as the conclusion to be derived from all the authorities, that the positive representation of a future fact material to the risks, will, if false, avoid the policy, though it may not be morally fraudulent. Second,--There is a great distinction to be drawn between such positive promissory representations, and representations of belief or expectation which we have placed in a distinct class and come now in the course of this inquiry to consider. The former are positive engagements that certain material facts do, or will, exist; the latter, merely expressions of an expectation or belief that they either do, or will, exist. The former involve a stipulation, that, unless facts take 1 Dennistoun v. Lillie, 3 Bligh's 530. P. C. 202. 2 Edwards v. Footner, 1 Camp. 3 Flinn v. Headlam, 9 B. & Cr. 693, 696. |