UNITED STATES SUPREME COURT DECISIONS ON-LINE

Insurance. To affirm that "in policies for whom it may concern, there can be no undue concealment as to the parties interested in the property to be insured" is obviously going much too far, since the underwriter has an unquestionable right to be informed if he makes the inquiry. The assured may be silent, it is true, if he will, and let the premium be charged accordingly, but if the inquiry, when made, should be responded to by information contrary to the verity of the case, this obviously, gives a conventional signification to the terms of the, policy which may differ from the known and received signification in ordinary cases.

A policy "for whom it may concern" will, in ordinary cases, cover belligerent property.

A knowledge of the state of the world -- of the allegiance of particular countries -- of the risks and embarrassments affecting their commerce, of the course and incidents of the trade on which they insure, and of the established import of the terms used in their contracts, "must necessarily be imputed to underwriters."

The term "interest," as used in application to the right to insure, does not necessarily imply property, in: the subject of insurance.

The master of a vessel to whom property shipped on board the vessel under his command is to be consigned, in the absence of proof that the owner of the property had not given authority to order insurance, has an insurable interest in the property on board his vessel, and this interest is sufficient to authorize the recovery of a loss on the policy.

As to the effect of certain instructions in a letter relative to insurance and circumstances connected with the same constituting a representation to vitiate a policy made under the authority and directions of the letter.

This case came before the Court, upon a division of opinion of the judges of the Circuit Court of the United States for the District of Maryland. The action was brought upon two policies of insurance, upon a cargo of sugar on board the brig Columbia in the name of the plaintiffs for the use of Daniel Fitch, who was an American citizen, a sea captain, sailing out of the port of Baltimore, and the owner and commander of the Columbia, and of Gregorio Medina, of Ponce, in the Island of Porto Rico.

The plaintiffs were the agents of Daniel Fitch, and, by two distinct orders under different dates, had policies effected upon their application by the Chesapeake Insurance Company.

The amount of the separate interests of captain Fitch and G. Medina was shown by the following statement, which was admitted to be correct: clubjuris

Page 26 U. S. 152

The entire cargo embraced in the two policies,

was . . . . . . . . . . . . . . . . . . . . . . . . . $8,413.75

All marked F. in the bill of lading, belonging to

captain Fitch, viz., thirteen hogsheads, five

tierces, and ninety-two barrels of sugar, amounting to 2,076.75

Add charges -- 198.50

---------

Amount of the absolute and legal or equitable

property of captain Fitch $2,275.25

The residue belonged to G. Medina, the legal title

to which, was in captain Fitch, amounting to -- $5,610.65

Add charges -- 527.55

---------

$8,413.75

Amount of the two policies -- 8,000.00

---------

Not covered -- $ 413.75

The Columbia, with her cargo, sailed from Porto Rico for Baltimore, the cargo consigned to captain Fitch and documented as such, G. Medina being on board of the vessel on a visit to the United States. Both vessel and cargo were totally lost near Norfolk by the perils of the sea.

The circumstances attending the insurance and the facts out of which the controversy arose were as follows:

On 6 May, 1822, the plaintiff presented to the office the following order:

"Insurance is wanted against all risks for account of whom it may concern, $3,000 on the brig Columbia, Daniel Fitch master, and on cargo, $6,000 as interest may appear at and from Ponce, Porto Rico, to Baltimore, by a letter from captain Fitch dated 19 April; he says he expects to sail about 5 to 10 May, that the brig is in good order, perfectly tight and seaworthy -- what premium?"

"1 1/4 percent (written on the order by the office)."

"Accepted, BUCK & HEDRICK"

A policy was executed on the same day on cargo, $6,000, insuring Buck & Hedrick, "for whom it may concern." The perils insured against are

"of the seas, men of war, fire, enemies, pirates, rovers, thieves, letters of marque, arrests, taking at sea, restraints of princes, and all other perils, losses, and misfortunes for which assurers are legally accountable."

No inquiry was made by the office for the letter of 19 April, alluded to in the above order, nor was any warranty or representation of any kind made or asked for in regard to said cargo, but the office executed said policy on said order. clubjuris

Page 26 U. S. 153

On the 24 May, Buck and Hedrick made application for further insurance on cargo, and the following letter from Captain Fitch, dated 27 April, was presented to the office with an order written on the back of said letter, and a like policy was executed for "whom it may concern," without any inquiry for the said letter, of 19 April and for the same premium.

"Ponce, April 27, 1822"

"Messrs. BUCK & HEDRICK:"

"Gentlemen -- I wrote you a few days ago, by the brig Ospray, Captain Perkins, direct for Baltimore, requesting you to have insurance done for me on the brig Columbia and her cargo, owned and commanded by me, to sail from this for Baltimore, about 5 to 10 May with a cargo of sugar. When I wrote to you by the Ospray, I could not say what amount of cargo to have insured for me; I now think I shall have on board about 130,000 lbs. valued at $8,000, which amount I wish you to have insured for me at as low a premium as you can. I wish you to understand that the above sum of $8,000 is not in addition to that mentioned in my last. The whole amount I want insured is $8,000 on cargo and $3,000 on the vessel and freight. She is in perfect good order, tight in every part, built in New Jersey in 1814, and well found."

"Your attention to the above will oblige"

"Your obedient servant,"

"DANIEL FITCH"

On the back of this letter was written the following:

"What will $2,000 be insured at, agreeable to within letter, on cargo, of which you have $6,000 insured some time since."

"BUCK & HEDRICK"

"1 1/4 percent (agreed as interest may appear)."

"BUCK & HEDRICK"

Buck and Hedrick applied to the defendant for payment on said policies, and all the papers to prove the distinct interests of Medina and Fitch were shown, but the office declined to pay either on the ground that said policy covered no one but Fitch, and that the letter of 27th April was a representation that the whole cargo was Captain Fitch's, and therefore affected both policies.

The plaintiff, on the trial, prayed the court to charge the jury:

"1st. That as the policies of insurance in this case purport to insure the plaintiff 'for whom it might concern,' they are not bound to prove that at the time of effecting said insurance or any other time, they disclosed to the defendants that Spanish

Page 26 U. S. 154

property was intended to be covered by said insurance, and that in policies of such description, there can be no undue concealment as to the parties interested in the property to the insured."

"2d. That if the jury believed the policy of 6 May, 1822, was founded on the order of the same date, the policy being 'for whom it may concern,' does cover belligerent as well as neutral property."

"3d. That if the jury believed that the policy dated 24 May, 1822, was founded on the letter of 27 April, 1822, and the order written therein, the policy being 'for whom it may concern' does cover belligerent as well as neutral property."

"4th. That if the said Daniel Fitch, at the date of said policies, was legal and equitable owner of a part of the cargo insured and the legal, though not equitable owner of the residue, the policies 'for whom it may concern' do cover the entire cargo, and said Daniel Fitch is competent in law to recover the whole in his own name, though the belligerent character of a part of the said cargo was not disclosed at the time of effecting said policies of insurance."

"5th. That the court instruct the jury that the letter of 27 April, 1822, with the order written thereon, do not in law amount to a representation that the property to be insured was the sole property of Daniel Fitch or that the whole or any part thereof was not belligerent."

Upon these several prayers, numbered in the record, 1, 2, 3, 5 and 6, the Judges of the circuit court differed in opinion and certified the same to this Court. clubjuris

Page 26 U. S. 158