Delavigne v. United Insurance Company.

of law be not, that the subject insured must be either actually lost or so injured, as thereby to occasion a loss of the voyage, before it can be abandoned. (See Pole v. Fitzgerald, Willes' Rep. 647.) But as I observed, it is not necessary, and therefore, I give no opinion on this point. It is sufficient to say, that here does not appear to exist a case constituting a total loss, and that the plaintiff is entitled only to an average loss.

It may further be observed, as a strong auxiliary consideration in favor of granting a new trial, that the thing in controversy is of great value, and the testimony considerably nice and complex.

I am accordingly of opinion, that the verdict should be set aside, and a new trial granted, an the payment of costs. Rule granted accordingly.(a)

[*310] *DELAVIGNE against THE UNITED INSURANCE COMPANY.

Where a policy becomes void, by a failure of the warranty, the insured is entitled to a return of the premium, if there be no actual fraud.

THIS was an action for money had and received, brought to recover back the premium which had been paid by the plaintiff to the defendants, for insuring the brig Norge and her cargo, from St. Thomas to New York.

The cause was tried before Mr. Justice Radcliff, on the 20th day of November, 1799, at a circuit court held in the city of New York.

The jury found a verdict for the plaintiff for 1460 dollars

(a) The cause was again brought to trial, when a special verdict was found, containing, in substance, the facts as above stated. A judgment was given for the plaintiffs in this court, for a partial loss, upon which a writ of error was brought, and, after argument, the court of errors, in February, 1801, affirmed the judgment of this court as above delivered by Lansing, Ch. J. Radcliff, J. and Kent, J.

Delavigne v. United Insurance Company.

and 54 cents, subject to the opinion of the court on the following case:

On the 12th of December, 1798, the defendants insured for the plaintiff, the brig Norge and her cargo, by two separate policies, at a premium of 17 per cent, from St. Thomas to New York. The vessel was described as the "Danish brig called the Norge," but there were no other words importing any warranty.

In the policy on the cargo there was a written warranty in these words: "Warranted the property of Casimire Delavigne, a citizen of the United States." The Norge was captured during her voyage, and the vessel and cargo were condemned in the admiralty court at New Providence, as being "French property." The plaintiff insisting that the cargo was his property, and the vessel the property of Joseph Gilbert, a naturalized Danish burgher, resident in the island of St. Thomas, and claiming a total loss on each of the policies, the parties thereupon submitted the liability of the defendants to pay the sums assured, to three arbitrators, who, on the 27th of January, 1799, made the following award:

"Having duly examined and considered the case of the the brig Norge and her cargo, submitted to our decision, and the evidence and arguments produced by the parties, we are of opinion, that the assured are not entitled

to *recover against the assurers for the said brig [*311] and cargo; because,

"1. By the English books of law it is a settled principle, that when the precise point at issue between the parties has been decided by a foreign court, and the grounds of that decision are manifest, it is conclusive and binding, which principle, we understand, has been recognized and adopted as law in the supreme court of judicature of this state, (see ante, p. 16,) and the vice admiralty court of New Providence did expressly decree the brig Norge and her cargo to be French property, and, therefore, not the property warranted in the policies of insurance.

"2. Admitting the sentence of a foreign court not to be

Delavigne v. United Insurance Company.

binding in the courts of this country, yet the evidence produced on the trial before the admiralty court, particularly the instructions of Joseph Gilbert to the captain, and the contradictory swearing of the captain himself, afford such circumstances of doubt, as do not permit us to say that the decision. of the court was inconsistent and contradictory, or so manifestly against law and justice on the face of it, as that it ought to be disregarded; we, therefore, determine, that the insured ought not to recover against the said United Insurance Company, for the total loss of the said brig and cargo, and that the policies thereupon be cancelled."

The policies were cancelled accordingly.

Among the proofs exhibited by the plaintiff to the arbitrators, was the affidavit of James La Rue, one of his clerks, who swore positively that the cargo belonged to the plaintiff. Nothing was said by either party to the arbitrators respecting the return of premium, which had been actually paid by the plaintiff; nor was that question either considered by, or submitted to them.

The plaintiff was admitted to be a naturalized citizen of the United States.

It was agreed that the court might draw such inferences as to facts, as a jury might draw; and, if the court, under all the circumstances of the case, should be of opinion [*312] *that the plaintiff was entitled to a return of premium, the verdict was to stand, and a judgment to be entered accordingly if not, then judgment was to be entered for the defendants, with costs.

B. Livingston, for the plaintiff.
Troup, for the defendant.

LEWIS, J. delivered the opinion of the court. It was admitted as a general principle, that where the policy never attaches, but is void ab initio, that the premium must be returned, because the contract is without consideration, and the insurer ought not to retain the premium where no risk has been run. But it was insisted that here was a fraud on the insurer, which enhanced the risk, and that, therefore, the

Delavigne v. United Insurance Company.

plaintiff ought not to be allowed to maintain an action for a return of premium.

If the defendants had sought relief in a court of equity against the policy, on the ground of fraud, they would have been obliged, according to the course of that court, to have refunded the premium, before any aid would have been afforded them. Whether in a suit on the policy in this court, they would not have been held to do the same, and to bring the money into court, it is not necessary now to decide. As no risk was run, the plaintiff will be clearly entitled to a return of the premium, unless some positive bar can be shown. It has been agreed by the parties, that the court may make such inferences as to facts as might be drawn by a jury. If, therefore, we do not find sufficient grounds for an inference of fraud, it will be unnecessary to consider the propriety of some late decisions of the English courts, that actual and gross fraud will defeat the right to a return of premium. In the present case no positive or direct fraud appears. In the policy on the vessel, she is described as Danish, and there is no one circumstance from which we can infer that the plaintiff knew her to be otherwise. The vice-admiralty court founded its sentence of condemnation on the circumstance of the bill of sale made by Gilbert to Michel, in a foreign country, which we cannot presume was known *to [*313] the plaintiff. There is no pretence that Gilbert was not a Dane. As to the policy on the ship, there cannot be the least doubt, but that the plaintiff is entitled to a return of the premium. As to the warranty in the policy on the cargo, there may be some room for doubt, but from a consideration of all the facts, we are not authorized to conclude that the plaintiff knew that the warranty was false. It is not easy to imagine any motive of fraud. The plaintiff had every thing to lose, and nothing to gain by practising it. At most it is a bare constructive fraud. We are, therefore, clearly of opinion, that the plaintiff is entitled to judgment.

Judgment for the plaintiff.(a)

(a) This case is an illustration of the familiar principle that where the insurance is void ab initio, or the risk has not been commenced, the insured is entitled

Delavigne v. United Insurance Company.

Steinbach v.

to a return of the premium where the case is free from fraud on the part of the assured or his agent. The warranty being in the nature of a condition precedent required a strict performance to entitle the party to his right of action, and a breach of it avoided the contract ab initio. Colby v. Hunter, M. & M. 81; 3 C. & P. 7. Duguet v. Rhinelander, infra, 360. Murray v. United Ins. Co. infra, vol. 2, p. 168. Jackson v. New York Ins. Co. id. 191. And Elbers v. United Ins Co. 16 Johns. R. 128. See also Hendricks v. The Commercial Ins. Co. 8 Johns. R. 1. The general rule is asserted in the following cases. Tyne v. Fletcher, Cowp. 666. 2 Phill. on Ins. 526, 537. Stevenson v. Snow, 3 Burr. 1240. Lorraine v. Tomlinson, Doug. 585. 8 Term. R. 156, arg. Vorce v. Bruce, 12 East, 225. Vide etiam, Routh v. Thompson, 11 East, 428. Hentig v. Staniforth, 5 M. & S. 122. Frise v. Parkinson, 4 Taunt. 640. Robinson v. United Ins. Co. iufra, vol. 2, 250. Holmes v. The Same, id. 329. Forbes v. Church, 3 id. 159. Rhinelander, id. 269. Graves v. Marine Ins. Co. 2 Caines' R. 339. Murray v. Columbian Ins. Co. 4 Johns. R. 443. Vredenberg v. Gracie, 4 id. 444, n. (a) Richards v. Marine Ins. Co. 3 id. 307. Taylor v. Sumner, 4 Mass. R. 56. Donath v. Ins. Co. of N. America, 4 Dallas. R. 463. Per Tilghman, J. 471. Scriba v. The Same, 2 Wash. C. C. R. 107 If, however, the insured or his agent commit a fraud upon the underwriter in relation to the insurance, the latter shall retain the premium, as, if by deception and false pretences, the latter is induced to undertake a risk, which if the truth had been disclosed, he would either not have taken at all, or have taken on different terms, it is such a fraud as will defeat his right to maintain an action for a return of the premium. Schwartz v. United States Ins. Co. 3 Wash. C. C. R. 170. Himely v. South Car. Ins. Co. 1 M. Con. Rep. 154. Hoyt v. Gilman, 8 Mass. R. 336. Tyler v. Horne, 1 Park. Ins. 329. Chapman v. Kennet, 1 Park. Ins. 329. S. C. nom. Chapman v. Frazer, 2 Marsh. Ins. 661. Frauds in contracts of insurances have not as yet had any punishment affixed to them by the laws of England, Park. on Ins. 330; or of this state. But by several of the foreign ordinances the punishment of fraud in matters of insurance is exceedingly severe. By those of Amsterdam it is declared "that as contracts of insurance are contracts of good faith wherein no fraud or deceit ought to take place, in case it be found that the insured or insurers, captains, shipping pilots or others used fraud, deceit or craft they shall not only forfeit by their deceit and craft, but shall also be liable to the loss and damage occasioned thereby, and be corporally punished for a terror and example to others, even with death as pirates and manifest thieves if it be found that they have used notorious malversation or craft." The ordinances of Middleberg contain a provision exactly in the same words. At Stockholm also, it has been declared that such an offender, besides restitution to the party injured shall, according to the circumstances of every particular affair, be punished in his estate, honor and life. 3 Steph. N. P. 2184, n. (98.)